EMPLOYMENT AGREEMENT
Exhibit
10.1
EMPLOYMENT AGREEMENT dated as
of July 1, 2009 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 0 Xxxxxxxxxx
Xxxx, Xxxxxxxxxx, XX 00000 ("Employee").
WITNESSETH:
WHEREAS, the Company desires
to continue 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 July 1, 2009 and
ending June 30, 2012, unless earlier terminated pursuant hereto (the "Employment
Period").
2.
Duties. Subject
to the authority of the Company's President and CEO, Employee shall be employed
as the Company's Senior Vice President, Marketing and Program
Development. Employee will perform such duties and services as a
member of senior management team, and commensurate with her position as the
Senior Vice President, Marketing and Program Development, as may from time to
time be assigned to her by the President and CEO 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:
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(a)
A base salary, to be paid on a bi-weekly basis, according to the following
schedule:
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Effective
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Amount
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07/01/09-
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$170,000 per annum
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07/01/10-
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$180,000 per annum
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07/01/11-
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$190,000 per annum
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(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 $800.00
(f)
In addition to the base salary payable pursuant to Section 4(a) above, the
Employee will be granted the following stock options:
Options
to purchase 4,000 shares of the Company’s common stock, vesting on July 1,
2009.
Options
to purchase 5,000 shares of the Company’s common stock, vesting on July 1,
2010.
Options
to purchase 6,000 shares of the Company’s common stock, vesting on July 1,
2011.
The stock
options will be subject to the terms of the Company's 2000 Stock
Option Plan and the applicable stock option agreement under such plan, and will
be exercisable for a 5 year term from the date of grant. The exercise
price of each stock option will be equal to the fair market value of the
Company’s common stock on the applicable date of grant, as determined in
accordance with the 2000 Stock Option Plan. Vesting is dependent on
continued employment on the vesting date, as provided under the 2000 Stock
Option 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.
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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.
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 subsidiary 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 provided 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 one hundred
and twenty (120) 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 pleading of 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. The circumstances specified in (i)
through (v) above shall constitute “Cause.”
(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 she 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;
(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;
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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(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 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 or its successor pursuant to such Change in Control, as
applicable, and the Employee to either agree to continue this Agreement or to
enter into a new employment agreement mutually acceptable to the Company or its
successor and the Employee in lieu of this Agreement.
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 without Cause within one hundred and eighty (180)
days following such a Change in Control, 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 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
("Change in Control Termination Compensation"), 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 the greater of
(x) 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 (y) an amount equal to twelve (12)
months of the salary in effect under this Agreement at the time of such
termination. Notwithstanding anything contained herein, if the amount described
in clause (x) of the preceding sentence exceeds the amount described in Treasury
regulations section 1.409A-1(b)(9)(iii)(A), such excess shall be paid on the
date seven months following the Termination Date. 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.
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(d)
It is intended that the "present value" of the payments and benefits to
Employee, whether under this Agreement 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 or
contemporaneous with payment of the Change in Control Termination Compensation
which, when added to the Change in Control 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 Change in
Control 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 Change in Control 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 the Change in Control 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 Change in Control 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), which takes place over not greater than a twelve (12) month period, 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)
during any twelve (12) month period 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;
(iii) the
consummation of the sale or disposition by the Company, which takes place over
not greater than a twelve (12) month period, of all or substantially all of the
Company's assets to a non-affiliate (as the term “affiliate” is defined in Rule
405 promulgated under the Securities Act of 1933, as amended); or
(iv) the
consummation of 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 or the parent company of such
surviving entity) more than 50% of the combined voting
power of the voting securities of the Company or such surviving entity or the
parent company of 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 and other than with respect to securities received in
exchange for Employee’s stock in the Company owned prior to the transaction),
shall not constitute a Change in Control.
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(f)
The 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 a 50-mile radius of the address of the place where
Employee is performing services prior to the date of such request for transfer,
Employee may terminate this Agreement, which shall be deemed a termination by
the Company without Cause.
(g)
The Company may terminate the Agreement at any time 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. The compensation described in 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 with respect to the subject matter hereof and no amendment, modification
or waiver of any provision herein shall be effective unless in writing, executed
by the party charged therewith. The parties hereto further
acknowledge and agree that the Employment Agreement dated December 28, 2006
between the Company and the Employee, is hereby terminated in full, shall be
null and void and of no further force or effect, and that all of the parties'
obligations thereunder are hereby extinguished in full.
13. 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, other than those which would defer to the
substantive laws of another jurisdiction.
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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 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 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 provisions
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.
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20. Counterparts;
Facsimile. This Agreement may be executed in one or more
counterparts and delivered by facsimile, each of which shall constitute an
original, and which when taken together, shall constitute one and the same
agreement.
9
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed as of the date first
above written.
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EMPLOYEE:
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/s/ Xxxxx Xxxxxxx
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Xxxxx
Xxxxxxx
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COMPANY:
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By: /s/ Xxxx Rhian
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Name:
Xxxx Rhian
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Title:
President
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