Exhibit 10.1
EMPLOYMENT
AGREEMENT
EMPLOYMENT AGREEMENT dated as of January 1, 2009 between AMERICAN
MEDICAL ALERT CORP., a New York corporation (the
“Company”), with offices located at 3265 Lawson
Boulevard, Oceanside, New York 11572 and RICHARD RALLO, an
individual having an address at 3 Byfield Place, Melville, NY 11747
(“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 January 1, 2009 and ending December 31, 2011 (the
“Expiration Date”), unless earlier terminated pursuant
hereto (the “Employment Period”).
2. Duties
. Subject to the authority of the Board of Directors,
the Chief Executive Officer and President of the Company, Employee
shall be employed as the Company’s Chief Financial Officer
and Chief Operating Officer of the Company’s HSMS
division. Employee will perform such duties and services
of an executive nature, commensurate with his position as the Chief
Financial Officer and Chief Operating Officer of the
Company’s HSMS division, as may from time to time be assigned
to him by the Board of Directors or Chief Executive Officer and
President of the Company. The Company’s Board of Directors
has also authorized the CEO to appoint the employee as Chief
Operating Officer of the Company’s TBCS division, at the
CEO’s discretion, at anytime during the term of this
agreement. The Employee shall report to the
Company’s Chief Executive Officer and President, and as
necessary or appropriate, and in any event as required by law, to
the audit committee of the Board of Directors.
3. Full Time
. Employee agrees that he will devote his 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, at the rate
of:
(i) $215,000
per annum, for the period beginning January 1, 2009 and ending
December 31, 2009;
(ii) $232,500
per annum, for the period beginning January 1, 2010 and ending
December 31, 2010; and
(iii) $250,000
per annum, for the period beginning January 1, 2011 and ending
December 31, 2011.
(b) In
addition to the base salary payable pursuant to Section 4(a) above,
and subject to subparagraph (c) below, the Employee shall be
eligible for the following stock grant payable in the
Company’s common stock:
21,500 shares
of common stock, to vest, subject to the condition that Employee is
employed by the Company at the applicable date, as follows: 6,500
shares on December 31, 2009, 7,000 shares on December 31, 2010 and
8,000 shares on December 31, 2011; provided , however
, that in the event of a Change in Control (as hereinafter
defined), if the Company or its successor pursuant to such Change
in Control, as applicable, and the Employee, 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, then any such shares which
remain unvested, shall vest immediately upon the mutual agreement
of the Company or its successor and the Employee to continue this
Agreement or to enter into a new agreement.
(c) The
bonus stock grant provided for in subparagraph (b) above shall be
issued to the Employee following the negotiation and execution of a
stock grant agreement between the Company and the Employee. The
bonus stock issued pursuant to subparagraph (b) shall be subject to
forfeiture to the extent such shares do not vest. All
shares to be issued pursuant to such stock grant agreement shall be
issued out of the Company’s 2005 Stock Incentive
Plan.
(d) The
Employee shall be eligible for additional cash or equity bonus
payments which may be awarded by the Board of Directors of the
Company in its sole discretion.
(e) 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.
(f) 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.
(g) The
Company shall provide Employee with a monthly automobile stipend in
the amount of $950.00.
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(e), 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 him 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(e), in
each instance through the date of such termination.
8.
Non-Competition, Non-Solicitation and Non-Disclosure
. (a) Employee covenants and agrees that throughout the
Employment Period and for a period of twelve (12) months
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 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, the NASDAQ Stock Market
or 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, he
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 twelve
(12) months following the Employment Period, he 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
association or its relationship with the Company, or any subsidiary
of the Company, or solicit the employment or business 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, 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 reasonable, and as so
amended shall be fully enforceable.
(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 him by
a court of competent 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 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.
9. Termination;
Non-Renewal .
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