Exhibit 10(c)(ii)
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of March 26,1999, by and between
AMERICAN MEDICAL ALERT CORP., a New York corporation (the "Company"), with
offices at 0000 Xxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000, and Xxxxx X.
Xxxxxx, an individual having an address at 0000 Xxxxxxx Xxxx, Xxxxxxxxx, Xxx
Xxxx 00000 ("Employee").
W I T N E S S E T H:
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WHEREAS, Employee is currently employed by the Company; and
WHEREAS, the Company desires that Employee continue to be
employed by it and render services to it, and Employee is willing to be so
employed and to render such services to the Company, all upon the terms and
subject to the conditions contained 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 the date hereof and ending on August 31, 2000 unless
earlier terminated pursuant hereto (the "Employment Period").
2. Duties. Subject to the authority of the Board of
Directors of the Company, Employee shall be employed as the Company's Chief
Financial Officer. Employee will perform such duties and services of an
executive nature, commensurate with such position, as may from time to time be
assigned to him by the Board of Directors.
3. Full Time. Employee agrees that he will devote his full
time and attention to the business and affairs of the Company. Employee further
agrees to use his best efforts to perform his duties hereunder.
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:
(1) A base salary, to be paid in accordance with the
Company's normal payroll procedures, during the Employment Period.
a) $ 120,000 09/01/98 through 08/31/99
b) $ 130,000 09/01/99 through 08/31/00
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(2) Stock Options - As an inducement for the Company to
continue Employee=s employment with the Company, the
Company hereby grants to the Employee 15,000
Incentive Stock Stock Options pursuant to the terms
of the Company=s 1997 Stock Option Plan as of the
date of this agreement.
(3) Additional Compensation - as determined by the Board
of Directors.
(4) 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.
(5) 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 him in the performance of his
duties hereunder.
(6) The Company shall provide Employee with the use of
an automobile, selected by Employee with consent of
the Company and leased by the Company, with all
expenses of operation, such as insurance, gas, oil
and repair, paid for by the Company and having a
cost to the Company of up to $1,000.00 per month.
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 salary of Employee provided by Section 4, for a
period of one (1) year following the date of death of Employee.
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7. Disability. In the event that Employee shall be unable
to perform his duties hereunder as a result of physical or mental illness or
incapacity 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 salary
in accordance with Section 4 hereof computed up to the date of termination.
8. Non-Competition and Non-Disclosure. (a) Employee
covenants and agrees that, throughout the Employment Period and for a period of
two (2) years thereafter, he 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 on the
date of termination hereof; 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 regularly traded in the over-the-counter market by a member of a
National Securities Association.
(b) Employee covenants and agrees that, throughout the
Employment Period and for a period of two (2) years thereafter, he will not
directly or indirectly solicit, entice or induce any person who on the date of
termination of employment of Employee is, or within the last three months of
Employee's employment by the Company was, associated with or employed by the
Company or any subsidiary of the Company to leave the employ of or terminate his
association with the Company, or any subsidiary of the Company, solicit the
employment of any such person on his 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, he 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. Proprietary processes and
procedures shall include, but shall not be limited to, all information which is
known or intended to be known only to 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 Section 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
reasonable, and as so amended shall be fully enforceable.
(e) In the event that Employee shall violate any provision
of this Agreement (including but not limited to the provisions of this Section
8), then Employee hereby consents to the granting of a temporary or permanent
injunction against him by a court of competent
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jurisdiction prohibiting him 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 his 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 by
Employee hereunder and that the Company will suffer irreparable damage and
injury if Employee breaches any of the provisions of this Agreement.
9. Termination. (a) The Company may terminate this
Agreement without liability (other than for the base salary provided in Section
4 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 sixty (60) days following written notice thereof by the
Company to Employee, (ii) the commission of gross negligence or bad faith by
Employee in the course of his 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 or (iv) Employee shall be convicted 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.
(1) Employee may terminate this Agreement without liability
at any time upon at least three (3) months prior written notice.
(2) After a Change in Control (as hereinafter defined) has
occurred, Employee may terminate his employment at any time upon written notice
to the Company within six (6) months 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, his office and/or position
with the Company as constituted 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;
(iii) A determination by Employee made in good faith
that, as a result of a Change in Control, he is unable effectively to carry out
the authorities, powers, functions or duties attached to his 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;
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(iv) A breach by the Company of any provision of this
Agreement not covered by clauses (i), (ii) or (iii) of this Section 9(c), 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 50-mile radius of the address of the place where Employee is
performing services prior to the date of the Change in Control; 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 his employment under
the provisions of this Section 9(c) 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 his employment pursuant to this Section 9(c) shall not be affected
by his illness or incapacity, whether physical or mental, unless the Company
shall at the time be entitled to terminate his employment under Section 7 of
this Agreement. Employee's continued employment with the Company for any period
of time less than six (6) months after a Change in Control shall not be
considered a waiver of any right he may have to terminate his employment
pursuant to this Section 9(c).
(3) After a Change in Control has occurred, if Employee
terminates his employment with the Company pursuant to Section 9(c) hereof or if
Employee's employment is terminated by the Company for any reason other than
pursuant to Section 9(a) hereof, Employee (i) shall be entitled to his base
salary, the additional compensation determined in accordance with Section 4(b)
hereof, and any 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 programs, 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 binding
upon Employee and the Company) equal to [1] times Employee's "base amount" as
defined in Section 280G(b)(3) of the Internal Revenue Code of 1986, as amended
(the "Code"). Such lump-sum payment is hereinafter referred to as the
"Termination Compensation."
(4) Notwithstanding anything in this Agreement to the
contrary, Employee shall have the right, prior to the receipt by him of any
amounts due hereunder, to waive the receipt thereof or, subsequent to the
receipt by him of any amounts due hereunder, to treat some
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or all of such amounts as a loan from the Company which Employee shall repay to
the Company, within ninety (90) days from the date of receipt, with interest at
the rate provided in Section 7872 of the Code. Notice of any such waiver or
treatment of amounts received as a loan shall be given by Employee to the
Company in writing and shall be binding upon the Company.
(5) It is intended that the "present value" of the payments
and benefits to Employee, whether under this Agreement or otherwise, which are
to be included in the computation of "parachute payments" shall not, in the
aggregate, exceed [1] times the "base amount" (the terms "present value",
"parachute payments" and "base amount" being determined in accordance with
Section 280G of 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.
(6) "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 30% 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) the majority of the Board of Directors, as such
entire Board of Directors is composed at the date of this Agreement, no longer
serve as directors of the Company, except that there shall not be counted toward
such majority who no longer serve as directors any director who ceased to serve
prior to the date of a Change in Control, for any reason, or at any other time
due to his death, disability or termination for cause;
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(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
(v) the shareholders of the Company approve a merger or
consolidation 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) more than 70% 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.
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.
9. 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.
10. 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.
11. Governing Law. This Agreement shall be construed,
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
without giving effect to principles of conflict or choice of law thereof. . 12.
Binding Effect. This Agreement shall bind and inure to the benefit of the
parties, their successors and assigns.
13. 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 substantially 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 non-delegable.
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14. Section Headings. The section headings herein have
been inserted for convenience of reference only and shall in no way modify or
restrict any of the terms or provisions hereof.
15. 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 non-business day).
16. 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.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
AMERICAN MEDICAL ALERT CORP.
By: /s/Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
President
By /s/Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Chief Financial Officer
