-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E+srMPqfAPs9QbXhiY4rCBuXdEU1Y2PEevlul3LfZjdObZhj4XIaOOgkAyPez/Mm MapR+IZ0+DzSYKgUb0RpHQ== 0000100716-97-000006.txt : 19970423 0000100716-97-000006.hdr.sgml : 19970423 ACCESSION NUMBER: 0000100716-97-000006 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970606 FILED AS OF DATE: 19970421 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNICO AMERICAN CORP CENTRAL INDEX KEY: 0000100716 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 952583928 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-03978 FILM NUMBER: 97584174 BUSINESS ADDRESS: STREET 1: 23251 MULHOLLAND DR CITY: WOODLAND HILLS STATE: CA ZIP: 91364 BUSINESS PHONE: 8185919800 MAIL ADDRESS: STREET 1: 23251 MULHOLLAND DRIVE CITY: WOODLAND HILLS STATE: CA ZIP: 91364 FORMER COMPANY: FORMER CONFORMED NAME: UNIVERSAL COVERAGE CORP DATE OF NAME CHANGE: 19730823 DEF 14A 1 DEF 14A SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant [ X ] Filed by party other than Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only(as permitted by Rule 14a-6(e) (2)) [ X ] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Rule 14a-11 (c) or Rule 14a-12 _______________________________________________________________________ UNICO AMERICAN CORPORATION (Name of Registrant as Specified in its Charter) _______________________________________________________________________ (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [ X ] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a(6(i)(4) and 0-11. (1) Title of Each class of securities to which transaction applies: _______________________________________________________________________ (2) Aggregate number of securities to which transaction applies: _______________________________________________________________________ (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined: _______________________________________________________________________ (4) Proposed maximum aggregate value of transaction: _______________________________________________________________________ (5) Total fee paid: _______________________________________________________________________ [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: ________________________________________________________________________ 2) Form, Schedule or Registration Statement No.: ________________________________________________________________________ 3) Filing Party: ________________________________________________________________________ 4) Date Filed: ________________________________________________________________________ UNICO AMERICAN CORPORATION 23251 Mulholland Drive Woodland Hills, California 91364-2732 _____________________ NOTICE OF ANNUAL MEETING OF SHAREHOLDERS To Be Held Friday, June 6, 1997 Dear Shareholder: You are cordially invited to attend the Annual Meeting of shareholders of Unico American Corporation (the "Company") to be held at the Warner Center Marriott, 21850 Oxnard Street, Woodland Hills, California 91367, at 2:00 p.m. local time, to consider and act upon the following matters: 1. The election of seven (7) directors to hold office until the next annual meeting of shareholders and thereafter until their successors are elected and qualified; and 2. The transaction of such other business as may properly be brought before the meeting. The Board of Directors has fixed the close of business on April 18, 1997, as the record date for the determination of shareholders who will be entitled to notice of and to vote at the meeting. The voting rights of the shareholders are described in the Proxy Statement. IT IS IMPORTANT THAT ALL SHAREHOLDERS BE REPRESENTED AT THE ANNUAL MEETING. SHAREHOLDERS WHO DO NOT PLAN TO ATTEND THE MEETING IN PERSON ARE REQUESTED TO VOTE, DATE, AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING POSTAGE-PAID AND ADDRESSED RETURN ENVELOPE. PROXIES ARE REVOCABLE AT ANY TIME, AND SHAREHOLDERS WHO ARE PRESENT AT THE MEETING MAY WITHDRAW THEIR PROXIES AND VOTE IN PERSON IF THEY SO DESIRE. By Order of the Board of Directors, Erwin Cheldin Chairman of the Board, President, and Chief Executive Officer Woodland Hills, California April 21, 1997 UNICO AMERICAN CORPORATION PROXY STATEMENT ---------------------- ANNUAL MEETING OF SHAREHOLDERS June 6, 1997 This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of Unico American Corporation, a Nevada Corporation (the "Company"), for use at the Annual Meeting of Shareholders of the Company to be held at the Warner Center Marriott, 21850 Oxnard Street, Woodland Hills, California 91367 on June 6, 1997, at 2:00 p.m. local time. Accompanying this Proxy Statement is a proxy card, which you may use to indicate your vote as to each of the proposals described in this Proxy Statement. All proxies which are properly completed, signed, and returned to the Company prior to the Annual Meeting, and which have not been revoked, will be voted. A shareholder may revoke his or her proxy at any time before it is voted either by filing with the Secretary of the Company at its principal executive offices a written notice of revocation or a duly executed proxy bearing a later date, or by appearing in person at the Annual Meeting and expressing a desire to vote his or her shares in person. The close of business on April 18, 1997, has been fixed as the record date for the determination of shareholders entitled to notice of and to vote at the Annual Meeting or any adjournment thereof. As of the record date, the Company had outstanding 6,120,081 shares of common stock, the only outstanding voting securities of the Company. For each share held on the record date, a shareholder is entitled to one vote on all matters to be considered at the Annual Meeting. The Company's Articles of Incorporation do not provide for cumulative voting. Directors are elected by a plurality of the votes cast and abstentions and broker non-votes are counted for the purposes of determining the existence of a quorum at the meeting, but not for purposes of determining the results of the vote. The Company will bear the cost of the Annual Meeting and the cost of soliciting proxies, including the cost of preparing, assembling and mailing the proxy material. In addition to solicitation by mail, officers and other employees of the Company may solicit proxies by telephone, facsimile, or personal contact without additional compensation. In December 1996, the Company changed its fiscal year from a year ending March 31 to a year ending December 31, effective December 31, 1996. As a result of this change, the Company's fiscal year ended December 31, 1996, consists of nine months and all references herein to the fiscal year ended December 31, 1996, are references to such nine-month period. The Company's principal executive offices are located at 23251 Mulholland Drive, Woodland Hills, California 91364-2732. The approximate mailing date of this Proxy Statement and the Company's proxy is April 21, 1997. ELECTION OF DIRECTORS The Company's By-Laws provide for a range of three to eleven directors and allow the Board of Directors to set the exact number of authorized directors within that range. The current number of authorized directors established by the Board of Directors is eight (8). There is a vacancy on the Board of Directors and the Board has determined not to nominate any person to fill such vacancy at this time. Directors are elected at each Annual Meeting of Shareholders to serve thereafter until their successors have been duly elected and qualified. Each nominee is currently a director, having served in that capacity since the date indicated in the following table. All nominees have advised the Company that they are able and willing to serve as directors. If any nominee refuses or is unable to serve (an event which is not anticipated), the persons named in the accompanying proxy will vote for another person nominated by the Board of Directors, provided, however, that the proxies cannot be voted for a greater number of persons than 7. Unless otherwise directed in the accompanying proxy, the persons named therein will vote FOR the election of the seven nominees listed in the following table. 1 The following table provides certain information as of April 18, 1997, for each person named for election as a director, which includes all executive officers of the Company Present Position with Company or First Principal Occupation Elected Age and Prior History Director Erwin Cheldin 65 President, Chief Executive 1969 Officer and Director since 1969. Chairman of the Board since 1987. Cary L. Cheldin 40 Executive Vice President since 1991. 1983 Vice President 1986 to 1991 and Secretary 1991 to 1992. Lester A. Aaron, CPA 51 Treasurer and Chief Financial 1985 Officer since 1985. Secretary 1991 to 1992. George C. Gilpatrick 52 Vice President, Management 1985 Information Systems, since 1981. Secretary since 1992. Roger H. Platten 47 Vice President since 1988 and 1987 General Counsel since 1985. David A. Lewis, CPCU 75 Director. 1989 Retired insurance executive with over 40 years insurance experience. The last 27 years were with the Transamerica group of insurance companies. Bernard R. Gans 48 Director. 1989 Attorney specializing in intellectual property since 1973. Except for Cary Cheldin, who is the son of Erwin Cheldin, none of the executive officers or directors of the Company is related to any other officer or director of the Company. The executive officers of the Company are elected by the Board of Directors and serve at the pleasure of the Board. During the nine month fiscal year ended December 31, 1996, the Company's Board of Directors held one meeting at which all directors were present. Non-management directors receive $1,000 for each board meeting they attend. The Board of Directors has established an Audit Committee presently consisting of Messieurs Lewis, Gans and Aaron. The Audit Committee of the Board of Directors is responsible for coordinating matters with the outside independent auditors and reviewing internal and external accounting controls. The Audit Committee held one meeting subsequent to the end of the fiscal year ended December 31, 1996, to discuss accounting and financial statement matters related to the fiscal year ended December 31, 1996. The Board of Directors has also established a Compensation Committee presently consisting of Messieurs Cary Cheldin, Aaron and Gans. This Committee considers and recommends to the Board of Directors compensation for executive officers. The Compensation Committee held one meeting during the nine month fiscal year ended December 31, 1996. 2 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth, as of April 18, 1997, the names and holdings of all persons who are known by the Company to own beneficially more than 5% of its outstanding common stock, its only class of outstanding voting securities, and the beneficial ownership of such securities held by each Director and all Executive Officers and Directors as a group. Unless otherwise indicated, the Company believes that each of the persons set forth below has the sole power to vote and dispose of the shares listed opposite his name.
Amount Beneficially Owned (1) (1) Options Percent Without Currently of Name of Beneficial Owner Options Exercisable Total Class Certain Beneficial Owners Erwin Cheldin 23251 Mulholland Drive 2,255,969 0 2,255,969 36.9% Woodland Hills, CA 91364 National Reinsurance Corp. 777 Long Ridge Road 432,092 (2) 0 432,092 7.1% Stamford, CT 06904 Dimensional Fund Advisors Inc. 378,100 (3) 0 378,100 6.2% 1299 Ocean Avenue Santa Monica, CA 90401 Executive Officers and Directors Erwin Cheldin 2,255,969 0 2,255,969 36.9% Cary L. Cheldin 225,252 21,926 247,178 4.0% Lester A. Aaron 106,417 78,334 184,751 3.0% George C. Gilpatrick 107,017 78,333 185,350 3.0% Roger H. Platten 18,894 117,204 136,098 2.2% David Lewis 3,000 0 3,000 0.0% Bernard R. Gans 0 0 0 0.0% All executive officers & directors as a group (7 Persons) 2,716,549 295,797 3,012,346 47.0% (1) Includes for each person or group, shares issuable upon exercise of presently exercisable options or options exercisable within 60 days, held by such person or group. (2) Per Schedule 13D dated January 15, 1993. (3) Per Schedule 13G dated February 7, 1996. Of the 378,100 shares beneficially owned, Dimensional Fund Advisors Inc. has sole voting power over 227,400 shares and shared voting power over 150,700 shares.
3 EXECUTIVE COMPENSATION AND OTHER INFORMATION Summary of Executive Compensation The following table sets forth information as to executive compensation paid to the chief executive officer and the other four most highly compensated executive officers of the Company for the nine month period ended December 31, 1996, and the fiscal years ended March 31, 1996, and March 31, 1995.
SUMMARY COMPENSATION TABLE Annual Compensation Long Term Compensation Awards Payouts Other Securities Annual Restricted Underlying All other Compen- Stock Options/ LTIP Compen- Name and Position Salary Bonus sation Awards SARs Payouts sation (1) Principal Position Year ($) ($) ($) ($) (#) ($) ($) ------------------ ---- --- --- --- --- --- --- --- Erwin Cheldin 1996 (2) 323,531 50,000 - - - - 16,875 President, Chief 1996 (3) 426,594 48,000 - - - - 22,500 Executive Officer 1995 (4) 423,264 48,000 - - - - 22,500 and Chairman of the Board. Cary L. Cheldin 1996 (2) 153,750 65,000 - - - - 16,875 Executive Vice 1996 (3) 197,500 48,000 - - - - 22,500 President 1995 (4) 175,560 48,000 - - 25,164 - 22,500 Lester A. Aaron 1996 (2) 128,712 30,000 - - - - 16,875 Treasurer and 1996 (3) 169,714 45,000 - - - - 22,500 Chief Financial 1995 (4) 169,080 45,000 - - - - 22,500 Officer George C. Gilpatrick 1996 (2) 119,516 45,000 - - - - 16,875 Vice President 1996 (3) 157,589 45,000 - - - - 22,500 and Secretary 1995 (4) 154,968 45,000 - - - - 22,500 Roger H. Platten 1996 (2) 131,250 60,000 - - - - 16,875 Vice President 1996 (3) 170,560 48,000 - - - - 22,500 1995 (4) 152,520 46,000 - - 65,000 - 22,500
(1) Represents amounts contributed or accrued to the person's account under the Company's profit sharing plan, all of which is fully vested. The Company's profit sharing plan has a March 31 fiscal year end. See "Profit Sharing Plan." (2) Covers the nine month fiscal year ended December 31, 1996. (3) Covers the twelve month fiscal year ended March 31, 1996. (4) Covers the twelve month fiscal year ended March 31, 1995. 4 Option / SAR Grants in Last Fiscal Year No stock options were granted to any executive officer during the nine month fiscal year ended December 31, 1996. The Company has no stock appreciation rights. Incentive Stock Option Plan On March 29, 1985, the Board of Directors unanimously adopted the Unico American Employee Incentive Stock Option Plan (the "1985 Plan"), which was approved by the shareholders of the Company in January 1986. The 1985 Plan provides for the grant of "incentive stock options" as defined in Section 422 of the Internal Revenue Code of 1986 to key employees of the Company (including officers, whether or not they are directors of the Company) and its subsidiaries. Directors who are not also employees of the Company are not eligible to participate in the 1985 Plan. The 1985 Plan includes an aggregate of 1,500,000 of the Company's Common Stock. The 1985 Plan expired in March 1995, and as of December 31, 1996, there were no options available for future grant. Under the terms of the Plan, options were required to be granted at exercise prices of not less than 100% of the fair market value of the Common Stock on the date the option was granted. In the case of grants of options to employees owning over 10% of the voting stock of the Company, the exercise price was required to be not less than 110% of the fair market value of the Common Stock on the date of grant. The 1985 Plan is administered by the Board of Directors or a committee thereof, which had the authority to determine the optionees, the number of shares to be covered by each option, the time during which each option is exercisable and certain other terms of the options. An option may not be exercised later than 10 years from the date of grant and may sooner expire upon, among other things, the death, disability or other termination of the employment of the optionee by the Company. Options granted to employees owning over 10% of the voting stock of the Company could not be exercised later than 5 years from the date of grant. The exercise price of all outstanding options is equal to the fair market value of the common stock as of the date of grant of each option. AGGREGATED OPTION / SAR EXERCISED IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
Number of Securities Value of Unexercised Shares Underlying Unexercised in-the-Money Acquired Options/SARs Options/SARs on Value At Fiscal Year End (#) At Fiscal Year End ($) Excercise Realized Exercisable/ Exercisable/ (#) ($) Unexercisable Unexercisable --- --- ------------- ------------- Name - ----- Erwin Cheldin 81,943 585,892 0 0 0 0 Cary L.Cheldin 13,500 43,875 129,355 127,473 953,993 918,095 Lester A.Aaron 0 0 78,334 0 579,797 0 George A.Gilpatrick 0 0 78,333 0 579,789 0 Roger H. Platten 18,858 88,535 117,204 0 808,409 0
5 Profit Sharing Plan During the fiscal year ended March 31, 1986, the Company adopted the Unico American Corporation Profit Sharing Plan. Company employees who are at least 21 years of age and have been employed by the Company for at least two years are participants in such Plan. Pursuant to the terms of such Plan, the Company annually contributes for the account of each participant an amount equal to a percentage of the participant's eligible compensation as determined by the Board of Directors. Participants are entitled to receive benefits under the Plan upon the later of the following: the date 60 days after the end of the Plan year in which the participant's retirement occurs or one year and 60 days after the end of the Plan year following the participant's termination with the Company. However, the participant's interest must be distributed in its entirety no later than April 1 of the calendar year following the calendar year in which the participant attains age 70 1/2 or otherwise in accordance with the Treasury Regulations promulgated under the Internal Revenue Code of 1986, as amended. Compensation Committee Interlocks and Insider Participation in Compensation Decisions The Compensation Committee consists of the following Company directors: Cary L. Cheldin, Lester A. Aaron and Bernard R. Gans. Cary Cheldin is the son of Erwin Cheldin, the President, Chief Executive Officer and Chairman of the Board. During the nine month period ended December 31, 1996, Cary Cheldin was the Executive Vice President of the Company and Mr. Aaron was Treasurer and Chief Financial Officer of the Company. Mr. Gans is a partner in the law firm of Oppenheimer Poms Smith which has rendered legal services to the Company during the nine month fiscal year ended December 31, 1996, and has been retained to render legal services in the current fiscal year. Executive Compensation Committee Report The Company's compensation package for executive officers primarily consists of a base salary, an annual incentive bonus, and long-term incentive or non-cash awards in the form of stock options. The executive compensation program is designed to retain and reward individuals who are capable of leading the Company in achieving its business objectives. The Compensation Committee submits its recommendation to the entire Board of Directors. The philosophy of the Compensation Committee is to maintain a competitive base salary for executive officers and to provide an incentive program that rewards executive officers for achieving certain financial results. Base compensation is determined on a calendar year basis and other incentives are determined when deemed appropriate. Bonuses for the nine month fiscal year ended December 31, 1996, were determined as of the calendar year end. Bonuses for the fiscal years ended March 31, 1996, and March 31, 1995, were determined on the fiscal year periods ended March 31. When determining base compensation for the executive officers, the Committee takes into account competitive pay levels in the industry with its emphasis on the median of the survey data. The Committee recommends adjustments to base compensation when it determines that an executive officer's base compensation is not competitive. When determining bonuses for the executive officers, the Committee first evaluates, and gives primary weight to, the operational and financial performance of the executive management team, including the chief executive officer, as a group. After the team results are determined, individual effectiveness in contributing to the achievement of those results is considered. The financial results, which are reviewed by the Committee, include the Company's net income, revenues and expenses. The Committee's base compensation review determined that the base salary for the chief executive officer was competitive with that of others in the industry. As a result, the Committee recommended that the chief executive officer receive only cost of living increases in base compensation for the calendar years 1995 and 1996. 6 The Committee's bonus review considered and evaluated the growth in earnings and the growth in revenues since March 31, 1996, and determined that the chief executive officer contributed to this growth and performed well. Although the Company's net earnings increased 21.1% during the nine months ended December 31, 1996, when compared to the same period of the prior year, revenues only reflected an increase of 10.8%. Primarily due to this modest growth in revenues, the Committee recommended that the chief executive officer's bonus for the nine month fiscal year ended December 31, 1996, should be increased by $2,000 over the amount that was paid to him for the fiscal year ended March 31, 1996. The committee also recommended that the aggregate bonuses paid for the nine month fiscal year ended December 31, 1996, to all other executive officers as a group, remain approximately the same as the prior fiscal year. Section 162(m) of the Internal Revenue Code, enacted as part of the Omnibus Budget Reconciliation Act of 1993 ("OBRA"), limits to $1,000,000 the deductibility for any year beginning after December 31, 1993, of compensation paid by a public corporation to the chief executive officer and the next four most highly compensated executive officers unless such compensation is performance-based within the meaning of the Section 162(m) and the regulations thereunder. For the nine month fiscal year ended December 31, 1996, the Company does not contemplate that there will be nondeductible compensation for the five Company positions in question. THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS Cary L. Cheldin Lester A. Aaron Bernard R. Gans 7 Performance Graph The following graph compares the cumulative total shareholder return on the Company's Common Stock with the cumulative total return of equity securities traded on the National Association of Securities Dealers Automated Quotation System (NASDAQ) and a peer group consisting of all NASDAQ Property & Casualty Companies. The comparison assumes $100.00 was invested on March 31, 1992 in the Company's Common Stock and in each of the comparison groups, and assumes reinvestment of dividends. It should be noted that this graph represents historical stock price performance and is not necessarily indicative of any future stock price performance. Unico American Corporation 12-96 Proxy Graph
3/31/92 3/31/93 3/31/94 3/31/95 3/29/96 12/31/96 Unico American Corp $100.00 $73.172 $94.687 $85.534 $116.228 $185.626 NASDAQ Market Index $100.00 $114.955 $124.083 $138.031 $187.423 $220.234 Peer Group Index $100.00 $143.908 $126.737 $138.472 $177.621 $197.017
CERTAIN TRANSACTIONS The Company presently occupies a 46,000 square foot building located at 23251 Mulholland Drive, Woodland Hills, California, under a master lease expiring March 31, 2007. The lease provides for an annual gross rental of $1,025,952. Erwin Cheldin, the Company's president, chairman and principal stockholder, is the owner of the building. On February 22, 1995, the Company signed an extension to the lease with no increase in rent to March 31, 2007. The terms of the lease at inception and at the time the lease extension was signed were at least as favorable to the Company as could have been obtained from unaffiliated third parties. The Company utilizes for its own operations 100% of the space it leases. Bernard R. Gans, a director of the Company, is an attorney with the law firm of Oppenheimer Poms Smith which has provided and continues to provide certain legal services to the Company. 8 SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934 requires the Company's directors and executive officers, and persons who own more than 10% of a registered class of the Company's equity securities, to file with the Securities and Exchange Commission (SEC) initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Executive officers, directors and greater than 10% shareholders are required by regulation of the SEC to furnish the Company with copies of all Section 16(a) forms they file. To the Company's knowledge, based solely on review of copies of such reports furnished to the Company and written representations that no other reports were required during the nine month fiscal year ended December 31, 1996, all Section 16(a) filing requirements applicable to its executive officers, directors and greater than 10% beneficial owners were complied with. APPOINTMENT OF AUDITORS The Company has selected Getz, Krycler & Jakubovits, independent accountants, to continue as the Company's auditors and to audit the books and other records of the Company for the fiscal year ending December 31, 1997. Getz, Krycler & Jakubovits has audited the Company's financial statements since 1988. The Company does not anticipate that a representative of Getz, Krycler & Jakubovits will be present at the Annual Meeting. OTHER MATTERS The Board of Directors is not aware of any business to be presented at the Annual Meeting except for the matters set forth in the Notice of Annual Meeting and described in this Proxy Statement. Unless otherwise directed, all shares represented by proxy holders will be voted in favor of the proposals described in this Proxy Statement. If any other matters come before the Annual Meeting, the proxy holders will vote on those matters using their best judgment. SHAREHOLDERS PROPOSALS Shareholders desiring to exercise their right under the proxy rules of the Securities and Exchange Commission to submit proposals for consideration by the shareholders at the 1998 Annual Meeting are advised that their proposals must be received by the Company no later than December 22, 1997. ANNUAL REPORT TO SHAREHOLDERS The Company's 1996 Annual Report on Form 10-K includes financial statements for the nine month fiscal year ended December 31, 1996, and the fiscal years ended March 31, 1995, and 1996 and is being mailed to the shareholders along with this Proxy Statement. The Form 10-K is not to be considered a part of the soliciting material. By Order of the Board of Directors, Erwin Cheldin Chairman of the Board, President and Chief Executive Officer Woodland Hills, California April 21, 1997 9 PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF UNICO AMERICAN CORPORATION The undersigned hereby constitutes and appoints LESTER A. AARON and ROGER H. PLATTEN, and each of them, with full power of substitution, the proxies of the undersigned to represent the undersigned and vote all shares of common stock of UNICO AMERICAN CORPORATION (the "Company"), which the undersigned would be entitled to vote if personally present at the Annual Meeting of Shareholders to be held at the Warner Center Marriott, 21850 Oxnard Street, Woodland Hills, California 91367, on June 6, 1997, at 2:00 p.m. local time and at any adjournments thereof, with respect to the matters described in the accompanying Notice of Annual Meeting of Shareholders and Proxy Statement, receipt of which is hereby acknowledged, in the following manner. 1. ELECTION OF DIRECTORS FOR all nominees listed WITHHOLD AUTHORITY (except as marked to the to vote all nominees contrary below) listed below ERWIN CHELDIN, CARY L. CHELDIN, LESTER A. AARON, GEORGE C. GILPATRICK ROGER H. PLATTEN, DAVID A. LEWIS, BERNARD R. GANS INSTRUCTIONS TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE: STRIKE A LINE THROUGH THE NOMINEE'S NAME ON THE LIST ABOVE. 2. IN ACCORDANCE WITH THEIR BEST JUDGMENT, with respect to any other matters which may properly come before the meeting and any adjournment or adjournments thereof. Please sign and date on reverse side. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE VOTED AS DIRECTED HEREIN. When this proxy is properly executed and returned, the shares it represents will be voted at the Annual Meeting in accordance with the choices specified herein. IF NO CHOICES ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR ALL NOMINEES. DATED:________________________________________________, 1997. ________________________________________________ (Signature) ________________________________________________ (Signature if jointly held) Please date and sign exactly as your name or names appear herein. If more than one owner, all should sign. When signing as attorney,executor, administator or guardian, give your full title as such. If the signatory is a corporation or partnership sign the full corporate or partnership name by its duly authorized officer or partner. PLEASE COMPLETE, SIGN, AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE. -----END PRIVACY-ENHANCED MESSAGE-----