EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT
dated as
of December 28, 2006 between AMERICAN MEDICAL ALERT CORP., a New York
corporation (the "Company"), with offices located at 0000 Xxxxxx Xxxxxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000 and Xxxxx Xxxxxxx, an individual having an address
at
______________________________ ("Employee").
W I T N E S S E T
60;H:
WHEREAS,
the
Company desires to retain the services of Employee upon the terms and conditions
stated herein; and
WHEREAS,
Employee desires to continue to be employed by the Company upon the terms and
conditions stated herein.
NOW,
THEREFORE,
in
consideration of the mutual covenants, conditions and promises contained herein,
the parties hereby agree as follows:
1. Employment.
The
Company hereby employs Employee for the period beginning as of November 1,
2006
and ending October 31, 2009, unless earlier terminated pursuant hereto (the
"Employment Period").
2. Duties.
Subject
to the authority of the Company's President, Employee shall be employed as
the
Company's Vice President, Communications and Marketing. Employee will perform
such duties and services as a member of senior management team, and commensurate
with her position as the Vice President, Communications and Marketing, as may
from time to time be assigned to her by the President and or his
designee.
3. Full
Time.
Employee agrees that she will devote her full time and attention during regular
business hours to the business and affairs of the Company. The foregoing shall
not prevent the purchase, ownership or sale by Employee of investments or
securities of publicly held companies and any other business that is not
competitive with the Company or any subsidiary of the Company so long as such
investment does not require active participation of Employee in the management
of the business of such publicly held companies, does not interfere or conflict
with the performance of Employee's duties hereunder and does not otherwise
violate any of the provisions of this Agreement, or Employee's participation
in
philanthropic organizations to the extent that such participation does not
interfere or conflict with the performance of Employee's duties hereunder and
does not otherwise violate any provision of this Agreement.
4. Compensation.
In
consideration of the duties and services to be performed by Employee hereunder,
the Company agrees to pay, and Employee agrees to accept the amounts set forth
below:
(a) A
base
salary, to be paid on a bi- weekly basis, according to the following
schedule:
| Effective | Amount | |
| 11/01/06- | $140,000 per annum, | |
| 11/01/07- | $147,000 per annum | |
| 11/01/08- | $155,000 per annum |
(b) The
Employee shall be eligible for bonus payments which may be awarded by the Board
of Directors of the Company in its sole discretion.
(c) The
compensation provided for herein shall be in addition to any retirement, profit
sharing, insurance or similar benefit which may at any time be payable to
Employee pursuant to any plan or policy of the Company relating to such
benefits, which additional benefits shall be made available to Employee on
the
same basis as they are generally made available to other executive officers
of
the Company. Such compensation shall be in addition to any options which may
be
granted under any stock option plan of the Company.
(d) The
Company shall reimburse Employee in accordance with the Company's normal
policies for all reasonable travel, hotel, meal and other expenses properly
incurred by her in the performance of her duties hereunder.
(e) The
Company shall provide Employee with a monthly automobile stipend in the amount
of $700.00.
(f) The
Company has also granted Employee a one time sign on award of options to
purchase 7,500 shares of AMAC common stock. The stock option grant was awarded
on November 15, 2006 and the strike price of these options is equal to the
fair
market value of the stock at the close of business on November 15, 2006. The
stock option will be subject to the terms of the Company's 2005 Stock Incentive
Plan.
5. Vacation.
Employee shall be entitled to three (3) weeks vacation each fiscal year, to
be
taken at such time as is mutually convenient to the Company and
Employee.
6. Death.
In the
event of the death of Employee during the Employment Period, this Agreement
and
the employment of Employee hereunder shall terminate on the date of the death
of
Employee. The estate of Employee (or such person(s) as Employee shall designate
in writing) shall be entitled to receive, and the Company agrees to continue
to
pay, in accordance with the normal pay practice of the Company, the base salary
of Employee provided by paragraph 4(a) and the additional benefits, if any,
provided by paragraph 4(c), in each instance for a period of one (1) year
following the date of death of Employee.
7. Disability.
In the
event that Employee shall be unable to perform because of illness or incapacity,
physical or mental, the duties and services to be performed by her hereunder
for
a period of one hundred and eighty (180) consecutive days or an aggregate period
of more than one hundred and eighty (180) days in any 12-Month period, the
Company may terminate this Agreement after the expiration of such period. Upon
such termination, Employee shall be entitled to receive the base salary provided
by paragraph 4(a) and the additional benefits, if any, provided by paragraph
4(c), in each instance through the date of such termination.
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8. Non-Compete,
Non-Solicitation and Non-Disclosure.
1)
Employee
covenants and agrees that throughout the Employment Period and for a period
of
twelve (12) months thereafter, she will not, directly or indirectly, own,
manage, operate or control, or participate in the ownership, management,
operation or control of, any business competing directly in the United States
of
America with the business conducted by the Company or any subsidiary of the
Company during the Employment Period; provided,
however,
that
Employee may own not more than 5% of the outstanding securities of any class
of
any corporation engaged in any such business, if such securities are listed
on a
national securities exchange or the NASDAQ Stock Market regularly traded in
the
Over the Counter market by a member of a national securities
association.
(b) Employee
covenants and agrees that, (i) throughout the Employment Period, she will not
directly or indirectly solicit, entice or induce any person (collectively,
“Solicit”) who during the Employment Period is associated with, employed by or
is a customer of the Company or any subsidiary, and (ii) for a period of twenty
four (24) months following the Employment Period, she will not Solicit any
person who is, or within the last three months of Employee's employment by
the
Company was, associated with, employed by, or was a customer of the Company
or
any subsidiary of the Company, in each case, to leave the employ of, terminate
his or her association or its relationship with the Company, or any subsid-iary
of the Company, or solicit the employment or business of any such person on
her
own behalf or on behalf of any other business enterprise.
(c) Employee
covenants and agrees that, throughout the Employment Period and at all times
thereafter, she will not use, or disclose to any third party, trade secrets
or
confidential information of the Company, including, but not limited to,
confidential information or trade secrets belonging or relating to the Company,
its subsidiaries, affiliates, customers and clients or proprietary processes
or
procedures of the Company, its subsidiaries, affiliates, customers and clients,
or the Company’s or its subsidiaries’ business, business plans, investments,
customers, strategies, operations, records, financial information, assets,
technology, data and information that reveals the processes, methodologies,
technology or know-how of the Company or its subsidiaries. Trade secrets and
confidential information shall include, but shall not be limited to, all
information which is known or intended to be known only by employees of the
Company, its respective subsidiaries and affiliates or others in a confidential
relationship with the Company or its respective subsidiaries and affiliates
which relates to business matters.
(d) If
any
term of this paragraph 8 is found by any court having jurisdiction to be too
broad, then and in that case, such term shall nevertheless remain effective,
but
shall be considered amended (as to the time or area or otherwise, as the case
may be) to a point considered by said court as reason-able, and as so amended
shall be fully enforceable.
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(e) In
the
event that Employee shall breach or threaten to breach any provision of this
Agreement (including but not limited to the provisions of this paragraph 8),
then Employee hereby consents to the granting of a temporary or permanent
injunction against her by a court of competent jurisdiction prohibiting her
from
violating any provision of this Agreement. In any proceeding for an injunction
and upon any motion for a temporary or permanent injunction, Employee agrees
that her ability to answer in damages shall not be a bar or interposed as a
defense to the granting of such temporary or permanent injunction against
Employee. Employee further agrees that the Company will not have an adequate
remedy at law in the event of any breach or threatened breach by Employee
hereunder and that the Company will suffer irreparable damage and injury if
Employee breaches any of the provisions of this Agreement.
(f) The
provisions of this Paragraph 8 shall survive any termination or expiration
of
this Agreement, irrespective of the basis therefore.
9. Termination.
(a) The
Company may terminate this Agreement without liability (other than for the
base
salary pro-vided in paragraph 4(a) accrued to the date of termination) in the
event of (i) a material breach by Employee of the provisions of this Agreement,
which breach shall not have been cured by Employee within thirty (30) days
following notice thereof by the Company to Employee, (ii) the commission of
gross negligence or bad faith by Employee in the course of her employment
hereunder, which commission has a material adverse effect on the Company, (iii)
the commission by Employee of a criminal act of fraud, theft or dishonesty
causing material damages to the Company or any of its subsidiaries, (iv) the
conviction of Employee of (or plead nolo contendere
to) any
felony, or misdemeanor involving moral turpitude if such misdemeanor results
in
material financial harm to or materially adversely affects the goodwill of
the
Company, or (v) any violation by Employee of the Company’s Code of Business
Conduct and Ethics or the Company’s sexual harassment and other forms of
harassment policy or drug and alcohol abuse policy, as set forth in the
Company’s employee handbook.
(b) After
a
Change in Control (as hereinafter defined) has occurred, Employee may terminate
her employment upon thirty (30) days' written notice to the Company within
one
hundred and eighty (180) days following such a Change in Control and after
he
has obtained actual knowledge of the occurrence of any of the following
events:
(i) Failure
to elect or appoint, or re-elect or re-appoint, Employee to, or removal of
Employee from, her office and/or position with the Company or its successor
as
in effect prior
to
the Change in Control, except in connection with the termination of Employee's
employment pursuant to Section 9(a) hereof;
(ii) A
reduction in Employee's overall compensation (including any reduction in pension
or other benefit programs or perquisites) or a material adverse change
in
the
nature or scope of the authorities, powers, functions or duties normally
attached to Employee's position with the Company as referred to in Section
2
hereof;
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(iii) A
determination by Employee made in good faith that, as a result of a Change
in
Control, she is unable effectively to carry out the authorities, powers,
functions or duties attached to her position with the Company as referred to
in
Section 2 hereof, and the situation is not remedied within thirty (30) days
after receipt by the Company of written notice
from Employee of such determination;
(iv) A
breach
by the Company of any provision of this Agreement not covered by clauses (i),
(ii) or (iii) of this Section 9(b), which is not remedied within thirty (30)
days after receipt by the Company of written notice from Employee of such
breach;
(v) A
change
in the location at which substantially all of Employee's duties with the Company
are to be performed to a location which is not within a 00-xxxx xxxxxx xx
Xxxxxxxxx, XX;
or
(vi) Failure
by the Company to obtain the assumption of, and the agreement to perform, this
Agreement by any successor (pursuant to a transfer described in Section
15).
An
election by Employee to terminate her employment under the provisions of this
paragraph 9(b) shall not be deemed a voluntary termination of employment by
Employee for the purpose of interpreting the provisions of any of the Company's
employee benefit plans, programs or policies. Employee's right to terminate
her
employment pursuant to this paragraph 9(b) shall not be affected by her illness
or incapacity, whether physical or mental, unless the Company shall at the
time
be entitled to terminate her employment under paragraph 7 of this Agreement.
Employee's continued employment with the Company for any period of time less
than one hundred and eighty (180) days after a Change in Control shall not
be
considered a waiver of any right she may have to terminate her employment
pursuant to this paragraph 9(b).
(c) After
a
Change in Control has occurred, if Employee terminates her employment with
the
Company pursuant to paragraph 9(b) hereof or if Employee's employment is
terminated by the Company for any reason other than pursuant to paragraph 9(a)
hereof, Employee (i) shall be entitled to her base salary in effect at the
time
of such termination, bonuses, awards, perquisites and benefits, including,
without limitation, benefits and awards under the Company's stock option plans
and the Company's pension and retirement plans and pro-grams, through the date
specified in the notice of termination as the last day of Employee's employment
by the Company (the "Termination Date") and, in addition thereto, (ii) shall
be
entitled to be paid in a lump sum, on the Termination Date, an amount of cash
(to be computed, at the expense of the Company, by the independent certified
public accountants utilized by the Company immediately prior to the Change
of
Control (the "Accountants"), whose computation shall be conclusive and bind-ing
upon Employee and the Company) equal to the greater of (i) an amount equal
to
the remainder of Employee's salary which would be payable through the expiration
of this Agreement had the Agreement continued in effect for the remainder of
the
Employment Period or (ii) an amount equal to twelve (12) months of the salary
in
effect under this Agreement at the time of such termination. Such lump sum
payment is hereinafter referred to as the "Termination Compensation." All health
insurance benefits otherwise payable to Employee shall also be paid for the
greater of the duration of the Employment Period or twelve (12)
months.
5
(d) It
is
intended that the "present value" of the payments and benefits to Employee,
whether under this Agree-ment or otherwise, which are includable in the
computation of "parachute payments" shall not, in the aggregate, exceed 2.99
times the "base amount" (the terms "present value", "parachute payments" and
"base amount" being determined in accordance with Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code")). Accordingly, if Employee
receives payments or benefits from the Company prior to payment of the
Termination Compensation which, when added to the Termination Compensation,
would, in the opinion of the Accountants, subject any of the payments or
benefits to Employee to the excise tax imposed by Section 4999 of the Code,
the
Termination Compensation shall be reduced by the smallest amount necessary,
in
the opinion of the Accountants, to avoid such tax. In addition, the Company
shall have no obligation to make any payment or provide any benefit to Employee
subsequent to payment of the Termination Compensation which, in the opinion
of
the Accountants, would subject any of the payments or benefits to Employee
to
the excise tax imposed by Section 4999 of the Code. No reduction in Termination
Compensation or release of the Company from any payment or benefit obligation
in
reliance upon any aforesaid opinion of the Accountants shall be permitted unless
the Company shall have provided to Employee a copy of any such opinion that
specifically entitles Employee to rely thereon, no later than the date otherwise
required for payment of the Termination Compensation or any such later payment
or benefit.
(e) "Change
of Control" as used in this Agreement shall mean the occurrence of any of the
following:
(i) any
"person" or "group" (as such terms are used in Section 3(a)(9) and 13(d)(3)
of the Securities Exchange Act of 1934, as amended (the "Act")), except for
an
employee stock ownership trust (or any of the trustees thereof), becomes a
"beneficial owner" (as such term in used in Rule 13d-3 promulgated under
the Act), after the date hereof, directly or indirectly, of securities of the
Company representing 35% or more of the combined voting power of the Company's
then outstanding securities;
(ii) a
change
in "control" of the Company (as the term "control" is defined in Rule 12b-2
or any successor rule promulgated under the Act) shall have
occurred;
(iii) during
the Employment Period, individuals who at the beginning of such period
constitute the entire Board of Directors cease for any reason to constitute
at
least a majority thereof, unless the election, or the nomination for election,
by shareholders of the Company of each new director was approved or ratified
by
a vote of at least a majority of the directors then still in office who were
directors at the beginning of the Employment Period or who were new directors
approved by such a vote;
(iv) the
shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets; or
6
(v) the
shareholders of the Company approve a merger or consolidation of the Company,
or
a wholly owned subsidiary of the Company, with any other company, other than
a
merger or consolidation which would result in the combined voting power of
the
Company's voting securities outstanding immediately prior thereto continuing
to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) 50% or more of the combined voting power
of
the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation. Notwithstanding the foregoing,
any transaction involving a leveraged buyout or other acquisition of the Company
which would otherwise constitute a Change in Control, in which Employee
participates in the surviving or successor entity (other than solely as an
employee or consultant), shall not constitute a Change in Control.
(f) Company
may request that Employee transfer to any Company designated office; provided,
however that if the Company requests that Employee transfer to an office that
is
not within 50 miles of Oceanside, N.Y., Employee may terminate this Agreement,
which shall be deemed a termination by the Company without justification or
cause.
(g) The
Company may terminate this Agreement without Cause. If the Company so terminates
the Agreement, Employee shall receive her base salary at the level last in
effect prior to such termination, for a period of 12 months, with no duty to
mitigate damages and irrespective of any employment obtained by Employee during
such period. In addition, if the Company fails to renew this Agreement after
the
expiration of the initial 3 year term of this Agreement, on terms and conditions
substantially equivalent to the terms and conditions herein, then unless
Employee has committed an act constituting "Cause" prior to the expiration
of
the Employment Period, the Company shall pay to Employee the same payments
specified in the first sentence of this Subparagraph 9(g), based on the
Employee's base salary as in effect at the expiration of such Employment Period.
This paragraph shall not apply in the event of a Change in Control, which shall
be governed by Paragraphs 9(b)-9(e). Under no circumstance shall the payment
provided for in this Paragraph 9(g) be duplicative, i.e., only one 12 month
payment would be made if this Paragraph 9(g) is applicable, and this Paragraph
9(g) shall not be construed so as to consider a termination without Cause and
a
non-renewal as being occasioned from the same incident and requiring two
separate 12 month payments.
10. No
Impediments.
Employee warrants and represents that he is free to enter into this Agreement
and to perform the services contemplated thereby and that such actions will
not
constitute a breach of, or default under, any existing agreement.
11. No
Waiver.
The
failure of any of the parties hereto to enforce any provision hereof on any
occasion shall not be deemed to be a waiver of any preceding or succeeding
breach of such provision or of any other provision.
12. Entire
Agreement.
This
Agreement constitutes the entire agreement and understanding of the parties
hereto and no amendment, modification or waiver of any provision herein shall
be
effective unless in writing, executed by the party charged therewith. This
Agreement replaces and supersedes the Agreement between Employee and the Company
dated as of January 1, 2005.
7
13. Governing
Law.
This
Agreement shall be con-strued, interpreted and enforced in accordance with
and
shall be governed by the laws of the State of New York applicable to agreements
to be wholly performed therein, other than those which would defer to the
substantive laws of another jurisdiction.
14. Binding
Effect.
This
Agreement shall bind and inure to the benefit of the parties, their successors
and assigns.
15. Assignment
and Delegation of Duties.
This
Agreement may not be assigned by the parties hereto except that the Company
shall have the right to assign this Agreement to any successor in connection
with a sale or transfer of all or sub-stantially all of its assets, a merger
or
consolidation. This Agreement is in the nature of a personal services contract
and the duties imposed hereby are nondelegable.
16. Paragraph
Headings.
The
paragraph headings herein have been inserted for convenience of reference only
and shall in no way modify or restrict any of the terms or provi-sions
hereof.
17. Notices.
Any
notice under the provisions of this Agreement shall be in writing, shall be
sent
by one of the following means, directed to the address set forth on the first
page of this Agreement or to such other address as shall be designated hereunder
by notice to the other party, effective upon actual receipt and shall be deemed
conclusively to have been given: (i) on the first business day following the
day
timely deposited for overnight delivery with Federal Express (or other
equivalent national overnight courier service) or United States Express Mail,
with the cost of delivery prepaid or for the account of the sender; (ii) on
the
fifth business day following the day duly sent by certified or registered United
States mail, postage prepaid and return receipt requested; or (iii) when
otherwise actually received by the addressee on a business day (or on the next
business day if received after the close of normal business hours or on any
nonbusiness day).
18. Unenforceability;
Severability.
If any
provision of this Agreement is found to be void or unenforceable by a court
of
competent jurisdiction, the remaining provisions of this Agreement shall,
nevertheless, be binding upon the parties with the same force and effect as
though the unenforceable part has been severed and deleted.
19. Code
Section 409A.
The
Company and the Employee agree to work together in good faith to consider
amendments to this Agreement necessary or appropriate to avoid imposition of
any
additional tax or income recognition prior to actual payment to Employee under
Internal Revenue Code Section 409A and any temporary or final Treasury
Regulations and Internal Revenue Service guidance thereunder. Any provision
of
this Agreement not in compliance with Section 409A shall be void and the Company
reserves the discretion to revise the Agreement as necessary, without the
consent of the Employee, to comply with Code Section 409A. Further, and
notwithstanding anything to the contrary in this Agreement, any cash severance
payments due to Employee pursuant to this Agreement or otherwise will not be
paid during the six-month period following Employee’s termination of employment
unless the Company determines, in its good faith judgment, that paying such
amounts at the time or times indicated above would not cause Employee to incur
an additional tax under Code Section 409A. If the payment of any amounts are
delayed as a result of the previous sentence, any cash severance payments due
to
Employee pursuant to this Agreement or otherwise during the first six (6) months
after Employee’s termination will accrue and will become payable in a lump sum
payment on the date six (6) months and one (1) day following the date of
Employee’s termination. Thereafter, payments will resume in accordance with the
applicable schedule set forth in this Agreement.
8
IN
WITNESS WHEREOF,
the
parties hereto have caused this Agreement to be executed as of the date first
above writ-ten.
| |
EMPLOYEE: | |
| /s/ Xxxxx Xxxxxxx | ||
|
Xxxxx Xxxxxxx |
||
| |
COMPANY: | |
| AMERICAN MEDICAL ALERT CORP. | ||
| By :/s/ Xxxx Rhian | ||
|
Name: Xxxx Rhian |
||
| Title: President | ||
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