AMERICAN MEDICAL ALERT CORP. STOCK PURCHASE AGREEMENT
2005
STOCK INCENTIVE PLAN
STOCK
PURCHASE AGREEMENT dated as of January 31, 2009 by and between American
Medical Alert Corp., a New York corporation (the "Company"), and
Xxxxxxx Xxxxx, having an address at 0 Xxxxxxx Xxxxx, Xxxxxxxx, XX 00000 (the
"Holder").
W
I T N E S S E T H:
WHEREAS,
the Company has adopted the 2005 Stock Incentive Plan (the "Plan");
WHEREAS,
the Company regards Holder as a valuable contributor to the Company and has
determined that it would be in the interest of the Company and its shareholders
to grant the shares provided for in this Stock Purchase Agreement ("Agreement") to Holder
in consideration of the services he has or will perform for the
Company;
WHEREAS,
pursuant to the Plan, the Administrator has determined that the Holder is
entitled to a grant of shares, subject to the terms of the Plan and this
Agreement (the defined terms in such Plan shall, except as otherwise provided
herein, also be applicable to such terms as utilized herein); and
WHEREAS,
the parties now desire to enter into the Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants and promises contained
herein, and for other valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
1. Award of
Restricted Shares. (a) Subject to the restrictions, terms and
conditions of this Agreement, the Company hereby awards to the Holder Twenty One
Thousand Five Hundred (21,500) shares (the "Restricted Shares")
of Common Stock of the Company in consideration of services actually rendered
and to be rendered to the Company by Holder. Such Restricted Shares shall be
subject to the Repurchase Right set forth in Section 4, below. The
Company and Holder acknowledge and agree that the value of the services actually
rendered to the Company prior to the date hereof by the Holder as consideration
for the issuance of the Restricted Shares, exceeds $215.00.
(b) The
Restricted Shares, when issued pursuant to the provisions hereof, shall
constitute issued and outstanding shares for all corporate
purposes. Subject to the restrictions set forth herein, the Holder
will have the right to exercise all rights, powers and privileges of a holder of
Common Stock with respect to the Restricted Shares, including the right to vote,
receive stock or cash dividends (but subject to the Repurchase Right with
respect to Unvested Shares (as hereinafter defined)), participate in stock
splits or other recapitalizations and exchange such shares in a merger,
consolidation or other reorganization. The term "Restricted Shares" in addition
to the shares received pursuant to this Agreement, also refers to all securities
received in replacement of the Restricted Shares, as a stock dividend or as a
result of any stock split, recapitalization, merger, reorganization, exchange or
the like, and all new, substituted or additional securities or other properties
to Holder is entitled by reason of Holder’s ownership of the Restricted
Shares.
(c) The
Company shall hold the certificates representing any Restricted Shares which are
subject to the Repurchase Right (as defined below) in escrow, provided that, any
Restricted Shares held in escrow shall be released from escrow and delivered to
Holder as and when such shares are no longer subject to the Repurchase
Right. In addition, Holder shall execute an assignment in the form
attached hereto as Exhibit A, with
respect to the Restricted Shares.
2. Legends.
(a) The
Restricted Shares shall be represented by a stock certificate or certificates
registered in the name of the Holder.
(b) From
and after the date of original issuance, until the Repurchase Right has lapsed,
stock certificates representing the Restricted Shares shall bear a legend in
substantially the following form:
"THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE UNVESTED AND ARE SUBJECT TO CERTAIN
REPURCHASE RIGHTS GRANTED TO THE AMERICAN MEDICAL ALERT CORP. ("COMPANY") AND
ACCORDINGLY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED, OR IN ANY MANNER
DISPOSED OF EXCEPT IN CONFORMITY WITH THE TERMS OF A STOCK PURCHASE AGREEMENT,
DATED AS OF JANUARY 31, 2009, BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF
THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES). A COPY OF SUCH
AGREEMENT IS MAINTAINED AT THE COMPANY'S PRINCIPAL CORPORATE
OFFICES."
3. Transfer
Restrictions
(a) Restriction on
Transfer. Except for any Permitted Transfer, Holder
shall not transfer, assign, encumber or otherwise dispose of any of the
Restricted Shares which are subject to the Repurchase Right.
(b) Transferee
Objections. Each Person (other than the Company) to whom the Restricted
Shares are transferred by means of a Permitted Transfer must, as a condition
precedent to the validity of such transfer, acknowledge in writing to the
Company that such Person is bound by the provisions of this Agreement and that
the transferred shares are subject to the Repurchase Right.
4. Repurchase
Right.
(a) Grant. The Company is
hereby granted the right (the "Repurchase Right"),
exercisable at any time during the ninety (90)-day period following the date
Holder ceases for any reason to remain in Service, to repurchase at the Per
Share Purchase Price all or any portion of the Restricted Shares in which Holder
is not, at the time of his or her cessation of Service, vested in accordance
with the Vesting Schedule (such shares to be hereinafter referred to as the
"Unvested
Shares").
(b) Exercise of the Repurchase
Rights. The Repurchase Right shall be exercisable by written notice
delivered to each Owner of the Unvested Shares prior to the expiration of the
ninety (90)-day exercise period. The notice shall indicate the number of
Unvested Shares to be repurchased and the date on which the repurchase is to be
effected, such date to be not more than thirty (30) days after the date of such
notice. In order to effect any such repurchase, the Company shall pay to Owner,
in cash or cash equivalents, an amount equal to the Per Share Purchase Price
multiplied by the number of Unvested Shares which are to be repurchased from
Owner.
(c) Termination of the
Repurchase Right. The Repurchase Right shall terminate with respect to
any Unvested Shares for which it is not timely exercised under Paragraph 4(b).
In addition, the Repurchase Right shall terminate and cease to be exercisable
with respect to any and all Restricted Shares in which Holder vests in
accordance with the Vesting Schedule.
(d) Recapitalization. Any
new, substituted or additional securities or other property (including cash paid
as a dividend or otherwise) which is by reason of any Recapitalization
distributed with respect to or in exchange for the Restricted Shares shall be
immediately subject to the Repurchase Right, but only to the extent the
Restricted Shares are at the time covered by such right. Appropriate adjustments
to reflect such distribution shall be made to the number and/or class of
Restricted Shares subject to this Agreement and to the Per Share Purchase Price
to be paid upon the exercise of the Repurchase Right in order to reflect the
effect of any such Recapitalization upon the Company's capital structure; provided, however,
that the aggregate of the Per Share Purchase Price applicable to all Unvested
Shares shall remain the same. Any securities or other property (including cash)
distributed with respect to the Restricted Shares as a dividend or otherwise
which are subject to the Repurchase Right shall be held in escrow.
(e) Special Tax Election.
The grant of the Restricted Shares may result in adverse tax consequences which
may be avoided or mitigated by filing an election under Code Section 83(b). Such
election must be filed within thirty (30) days after the date of this Agreement.
The form for making the Code Section 83(b) election are set forth in Exhibit B
hereto. HOLDER SHOULD CONSULT WITH HIS OR HER TAX ADVISOR TO
DETERMINE THE TAX CONSEQUENCES OF ACQUIRING THE RESTRICTED SHARES AND THE
ADVANTAGES AND DISADVANTAGES OF FILING THE CODE SECTION 83(B)
ELECTION. HOLDER ACKNOWLEDGES THAT IT IS HOLDER'S SOLE
RESPONSIBILITY, AND NOT THE COMPANY'S, TO FILE A TIMELY ELECTION UNDER CODE
SECTION 83(B), EVEN IF EMPLOYEE REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO
MAKE THIS FILING ON HIS OR HER BEHALF.
5. Securities
Law Compliance
(a) Registration
of Securities. The Restricted Shares have been registered under the 1933 Act and
are being issued to Holder pursuant to a Form S-8 registration
statement.
(b) Restrictions
on Disposition of Restricted Shares. Holder shall make no disposition
of the Restricted Shares (other than a Permitted Transfer) unless and until
there is compliance with all of the following requirements:
(i)
Holder shall have provided the Company with a written summary of the terms and
conditions of the proposed disposition; and
(ii)
Holder shall have complied with all requirements of this Agreement applicable to
the disposition of the Restricted Shares.
(c) In
addition, Holder shall make no disposition of the Restricted Shares unless
Holder shall have provided the Company with written assurances, in form and
substance satisfactory to the Company in its sole discretion, that (a) the
proposed disposition does not require registration of the Restricted Shares
under the 1933 Act or (b) all appropriate action necessary for compliance with
the registration requirements of the 1933 Act or any exemption from registration
available under the 1933 Act (including Rule 144) has been taken in connection
with the proposed disposition.
(d) The
Company shall not be required (i) to transfer on its books any Restricted Shares
which have been sold or transferred in violation of the provisions of this
Agreement or (ii) to treat as the owner of the Restricted Shares, or otherwise
to accord voting, dividend or liquidation rights to, any transferee to whom the
Restricted Shares have been transferred in contravention of this
Agreement.
6. No Right
to Employment. Nothing in this Agreement shall be construed to
give the Holder any right to be awarded any additional awards of shares or
options under the Plan, or to confer on the Holder any right to continue in the
employ of the Company or to be evidence of any agreement or understanding,
express or implied, that the Company or any of its Subsidiaries or Parent will
employ the Holder in any particular position or at any particular rate of
remuneration, or for any particular period of time or to interfere in any way
with or otherwise restrict in any way the rights of the Company or of the
Holder, other as set forth in the Employment Agreement.
7. Amounts
Not Salary or Bonus. The Holder agrees that the award of the
Restricted Shares hereunder is special incentive compensation and that it will
not be taken into account as "salary" or "compensation" or "bonus" in
determining the amount of any payment under any pension, retirement,
profit-sharing, savings or stock ownership plan of the Company, its Parent or
any of its Subsidiaries, unless expressly provided pursuant to the terms of such
plan.
8. Forfeiture
for Violation of Employment Agreement. In the event that
Holder violates any of his or her Confidentiality or Non-Competition obligations
arising under the Employment Agreement or other agreement with the Company, then
all profits or gains realized by Holder as a result of the sale of any of the
Restricted Shares, shall be forfeited and returned to the Company.
9. Amendments. Except
as otherwise provided in the Plan, this Agreement may only be amended or
modified by written agreement of the Company and the Holder.
10. Successor
and Assigns. This Agreement shall be binding upon and inure to
the benefit of the Company and its successors and assigns, and shall be binding
upon and inure to the benefit of the Holder and his legatees, distributees and
Legal Representatives. The Company may assign the Repurchase Right to
any Person selected by the Board, including (without limitation) one or more
shareholders of the Company.
11. Governing
Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of New
York, other than those laws which would defer to the substantive laws of another
jurisdiction.
12. Shares
Award Subject to Plan. By entering into this Agreement, the
Holder agrees and acknowledges that the Holder has received and read a copy of
the Plan. The Restricted Shares are subject to the Plan. The terms and
provisions of the Plan as it may be amended from time to time are hereby
incorporated herein by reference. Capitalized terms used herein and not
otherwise defined herein shall have the meaning provided for such terms in the
Plan. In the event of a conflict between any term or provision contained herein
and a term or provision of the Plan, the applicable terms and provisions of the
Plan will govern and prevail.
13. Signature
in Counterparts. This Agreement may be signed in one or more
counterparts and delivered by facsimile, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.
14. Definitions.
As used herein, the following definitions shall apply:
(a) "Agreement" shall mean
this Stock Purchase Agreement.
(b) "Board" shall mean the
Company's Board of Directors.
(c) "Change in Control"
shall have the same meaning as defined in the Employment Agreement.
(d) "Code" shall mean the
Internal Revenue Code of 1986, as amended.
(e) "Common Stock" shall
mean the Company's common stock, $.01 par value per share, as well as all
securities received in replacement of the Company's common stock, as a stock
dividend, or as a result of any stock split, recapitalization, merger,
reorganization, exchange or the like, and all new, substituted or additional
securities or other properties that a holder of common stock is entitled to by
reason of the holder's ownership of the common stock.
(f) "1933 Act" shall mean
the Securities Act of 1933, as amended.
(g) "Employment Agreement"
shall mean that certain Employment Agreement dated January 1, 2009, between the
Company and Holder.
(h) "Owner" shall mean
Holder and all subsequent holders of the Restricted Shares who derive their
chain of ownership through a Permitted Transfer from Holder.
(i) "Permitted Transfer"
shall mean (i) a gratuitous transfer of the Restricted Shares to any “family
member” as such term is defined in Section 1(a)(5) of the General Instructions
to Form S-8 under the 1933 Act, provided and only if Holder obtains the
Company's prior written consent to such transfer, or (ii) a transfer of title to
the Restricted Shares effected pursuant to Holder's will or the laws of descent
and distribution following Holder's death.
(j) "Person" means an
individual, a partnership, a corporation, a trust, a joint venture, a limited
liability company, an unincorporated organization, a government or any
department or agency thereof or any other entity.
(k) "Per Share Purchase
Price" means $.01.
(l) "Recapitalization"
shall mean any stock split, stock dividend, recapitalization, combination of
shares, merger, consolidation, exchange of shares or other change affecting the
Company's outstanding Common Stock as a class.
(m) "SEC" shall mean the
Securities and Exchange Commission.
(n) "Service" shall mean
Holder's provision of services to the Company (or a Parent or Subsidiary)
pursuant to the Employment Agreement.
(o) "Vesting Schedule"
shall mean the vesting schedule specified Section 4(b) in the Employment
Agreement pursuant to which Holder is to vest in the Restricted Shares in a
series of installments over his period of Service, subject to certain
acceleration events in the event of a "Change in Control."
15. Notices.
Any notice required to be given under this Agreement shall be in writing and
shall be deemed effective upon personal delivery or upon delivery through the U.
S. mail, registered or certified, postage prepaid and properly addressed to the
party entitled to such notice at the address indicated below such party's
signature line on this Agreement or at such other address as such party may
designate by ten (10) days' advance written notice under this paragraph to all
other parties to this Agreement.
16. No
Waiver. The failure of the Company in any instance to exercise the
Repurchase Right shall not constitute a waiver of any other repurchase rights
that may subsequently arise under the provisions of this Agreement or any other
agreement between the Company and Holder. No waiver of any breach or condition
of this Agreement shall be deemed to be a waiver of any other or subsequent
breach or condition, whether of like or different nature.
17. Cancellation
of Restricted Shares. If the Company shall make available, at the time
and place and in the amount and form provided in this Agreement, the
consideration for the Restricted Shares to be repurchased in accordance with the
provisions of this Agreement, then from and after such time the person from whom
such shares are to be repurchased shall no longer have any rights as a holder of
such shares (other than the right to receive payment of such consideration in
accordance with this Agreement). Such shares shall be deemed purchased in
accordance with the applicable provisions hereof, and the Company shall be
deemed the owner and holder of such shares, whether or not the certificates
therefor have been delivered as required by this Agreement.
18. Holder
Undertaking. Holder hereby agrees to take whatever additional action and
execute whatever additional documents the Company may deem necessary or
advisable in order to carry out or effect one or more of the obligations or
restrictions imposed on either Holder or the Restricted Shares pursuant to the
provisions of this Agreement.
IN
WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by
its agent thereunto duly authorized, and the Holder has hereunto set his hand,
all as of the date first above written.
| AMERICAN MEDICAL ALERT CORP. | |||
|
|
By:
|
/s/ Xxxx Rhian | |
| Name: Xxxx Rhian | |||
| Title: President and Chief Executive Officer | |||
| /s/ Xxxxxxx Xxxxx | |||
| Holder: Xxxxxxx Xxxxx | |||
EXHIBIT
A
ASSIGNMENT
SEPARATE FROM CERTIFICATE
FOR
VALUE RECEIVED _________________________ hereby sell(s), assign(s)and
transfer(s) unto American Medical Alert Corp. (the "Company"),
_________________________ (__________) shares of the Common Stock of the Company
standing in his or her name on the books of the Company represented by
Certificate No. _________________________ herewith and do(es) hereby irrevocably
constitute and appoint _________________________ Attorney to transfer the said
stock on the books of the Company with full power of substitution in the
premises.
Dated:
_________________________
Signature:
_________________________
INSTRUCTION:
Please do not fill in any blanks other than the signature line.
Please
sign exactly as you would like your name to appear on the issued
stock
certificate.
The purpose of this assignment is to enable the Company to exercise
the
Repurchase Right without requiring additional signatures on the part
of
Holder.
EXHIBIT
B
SECTION
83(B) ELECTION
This
statement is being made under Section 83(b) of the Internal Revenue Code,
pursuant to Treas. Reg. Section 1.83-2.
(1)
The taxpayer who performed the services is:
Name:
Address:
Taxpayer
Ident. No.:
(2)
The property with respect to which the election is being made is ____________
shares of the common stock of American Medical Alert Corp. (the
"Company")
(3) The
property was issued on [_____ __], 2009.
(4) The
taxable year in which the election is being made is the calendar year
2009.
(5) The
property is subject to a repurchase right pursuant to which the issuer has the
right to acquire the property at the original purchase price if taxpayer's
employment with the issuer is terminated under certain
circumstances.
(6) The
fair market value at the time of transfer (determined without regard to any
restriction other than a restriction which by its terms will never lapse) is [$
] per share.
(7) The
amount paid for such property is [$ ] per share.
(8) A
copy of this statement was furnished to the Company.
(9)
This statement is executed [____ __], 200__.
------------------------------ ------------------------------------------
Spouse
(if
any) Taxpayer
THIS
ELECTION MUST BE FILED WITH THE INTERNAL REVENUE SERVICE CENTER WITH WHICH
TAXPAYER FILES HIS OR HER FEDERAL INCOME TAX RETURNS AND MUST BE MADE WITHIN
THIRTY (30) DAYS AFTER THE EXECUTION DATE OF THE STOCK PURCHASE AGREEMENT. THIS
FILING SHOULD BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED. TAXPAYER MUST RETAIN TWO (2) COPIES OF THE COMPLETED FORM
FOR FILING WITH HIS OR HER FEDERAL AND STATE TAX RETURNS FOR THE CURRENT TAX
YEAR AND AN ADDITIONAL COPY FOR HIS OR HER RECORDS.
