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Exhibit 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated
as of May 24, 2007 between AMERICAN MEDICAL ALERT CORP., a New York
corporation (the "Company"), with offices located at 3265 Lawson
Boulevard, Oceanside, New York 11572 and FREDERIC SIEGEL, an
individual having an address at ___________________________________
("Employee").
W
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:
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
January 1, 2007 and ending December 31, 2010 (the "Expiration
Date"), unless earlier terminated pursuant hereto (the "Employment
Period").
2.
Duties .
Subject to the authority of the Board of Directors and the Chief
Executive Officer of the Company, Employee shall be employed as the
Company's Executive Vice President. Employee will perform such
duties and services of an executive nature, commensurate with his
position as the Executive Vice President, as may from time to time
be assigned to him by the Chief Executive Officer of the Company.
Specifically, the Employee shall have overall responsibility for
the operating results of the Company's Health and Safety Monitoring
Systems ("HSMS") division, including delivery of top line and
pre-tax profit. Employee shall also have such duties and
responsibilities on a Company wide basis as shall be directed by
the Board of Directors or the CEO from time to time. The Employee
shall report to the Company's Chief Executive Officer.
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)
$190,000
per annum, for the period beginning January 1, 2007 and ending
December 31, 2007 (it is agreed that Employee’s
bi-weekly payments will be reduced to account for the higher
annual base salary payments made to Employee in 2007, to date,
such reduction to be pro-rated equally over each bi-weekly
payment in the remainder of 2007);
(ii)
$200,000
per annum, for the period beginning January 1, 2008 and ending
December 31, 2008;
(iii)
$210,000
per annum, for the period beginning January 1, 2009 and ending
December 31, 2009; and
(iv)
$220,000
per annum, for the period beginning January 1, 2010 and ending
December 31, 2010.
(b)
In
addition to the base salary payable pursuant to Section 4(a)
above, the Employee shall be eligible for the following stock
grant payable in the Company's common stock: 22,000 shares of
common stock, to vest, subject to the condition that Employee
is employed by the Company at the applicable date, as follows:
5,500 shares on each of December 31, 2007, 2008, 2009 and
2010;
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. The bonus stock grant provided for in
this subparagraph (b) shall be issued to the Employee upon the
execution of a stock grant agreement between the Company and the
Employee, and the shares granted pursuant to this subparagraph (b)
shall be subject to forfeiture to the extent such shares do not
vest.
(c)
In
addition to the base salary payable pursuant to Section 4(a)
above and the grant of stock pursuant to Section 4(b) above,
Employee will be eligible to receive additional bonuses
payable in cash and shares of the Company's common stock based
on certain revenue and earnings before deduction of interest
and taxes (“EBIT”) targets, as set forth
below.
(i)
a
cash bonus equal to one of the following percentages of the
dollar amount of yearly revenue growth in excess of 7% in the
Company’s Health and Safety Monitoring Systems
(“HSMS”) segment for each of the fiscal years
ending December 31, 2007, 2008, 2009 and 2010:
2%,
if the HSMS revenue grows by more than 7% but less than
10%;
3%,
if the HSMS revenue grows by 10 % or more but less than
13%;
4.25%,
if the HSMS revenue grows by 13% or more but less than
16%;
5.75%,
if the HSMS revenue grows by 16% or more but less than
19%;
or
7.5%, if the HSMS revenue grows by 19% or more.
(ii)
a
cash bonus equal to one of the following percentages of the
Company’s EBIT from its HSMS segment for each of the
fiscal years ending December 31, 2007, 2008, 2009 and 2010,
plus one of the following number of shares:
2%
plus 500 shares, if the HSMS EBIT equals to 5% or more but
less than 6% of the HSMS revenues for the applicable year;
2.5% plus 1,000 shares, if the HSMS EBIT equals to 6% or more
but less than 7% of the HSMS revenues; for the applicable
year; 3.0% plus 1,500 shares, if the HSMS EBIT equals to 7% or
more but less than 8% of the HSMS revenues for the applicable
year; 3.5% plus 2,000 shares, if the HSMS EBIT equals to 8% or
more but less than 9% of the HSMS revenues for the applicable
year; 4.0% plus 2,500 shares, if the HSMS EBIT equals to 9% or
more but less than 10% of the HSMS revenues for the applicable
year; or 4.5% plus 3,000 shares, if the HSMS EBIT equals to
10% or more of the HSMS revenues for the applicable year;
and
(iii)
one
of the following number of shares based on the year-over-year
growth of the Company’s EBIT on a consolidated basis for
each of the fiscal years ending December 31, 2007, 2008, 2009
and 2010:
3,000
shares, if EBIT grows by 15% or more but less than 17.5%;
4,000 shares, if EBIT grows by 17.5% or more but less then
20%; 5,250 shares, if EBIT grows by 20% or more but less than
22.5%; 6,500 shares, if EBIT grows by 22.5% or more but less
than 25%; or 8,500 shares, if EBIT grows by 25% or
more.
It
is hereby agreed and understood that the above performance
targets were arrived at based on the Company’s method of
calculating EBIT by segment for the fiscal year ended December
31, 2005 (the “2005 Methodology”). In the event
that the Company uses a method of calculating EBIT by segment
in the future which is different than the 2005 Methodology,
the Company shall have the option to either (i) use the 2005
Methodology for the purposes hereof, in which case, the above
performance targets shall be used, or (ii) use an EBIT by
segment calculation consistent with its year end financial
statements, in which case, the above performance targets shall
be appropriately adjusted in a manner which would not cause
either a benefit to the Employee or detract from
Employee’s rights hereunder, in comparison to the use of
the 2005 Methodology.
(d)
All
shares to be issued pursuant to this Agreement shall be issued
out of the Company's 2005 Stock Incentive Plan. To the extent
that the number of shares earned pursuant to paragraph (c)(ii)
and (c)(iii) above exceed 37,500 (the number of shares in the
Company’s 2005 Incentive Plan currently reserved for
Employee’s performance based grants), the grant of any
such excess shares shall be subject to shareholder approval
prior to issuance. If such shareholder approval is not
obtained
prior to
the time any such shares are earned by Employee, then Employee
shall not be entitled to and shall not be granted any such shares.
Any shares to be issued under (c)(ii) or (c)(iii) shall be issued
on April 15 of the year following the fiscal year for which the
shares were earned.
(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
.
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 twenty four (24) 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 subsid-iary of the
Company, or solicit the employment or business of any such
person on his own behalf or on behalf of
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