Exhibit 10(d)
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of February 1, 2002 by and between
AMERICAN MEDICAL ALERT CORP., a New York corporation (the "Company"), with
offices at 0000 Xxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000, and Dr. Xxxx
Xxxxxx, an individual having an address at 00 Xxxxxxxxx Xxxx, Xx. Xxxxxx, XX,
00000 ("Employee").
W I T N E S S E T H:
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 Employee is currently employed by the Company. The
terms and conditions of said employment, compensation, benefits, etc. contained
herein shall become effective on February 1, 2002.
The Company hereby renews and continues the employment of the Employee
for the period commencing on February 1, 2002, through January 31, 2005, unless
terminated earlier pursuant to the provisions set forth herein.
2. Duties. Subject to the authority of the Board of Directors of the
Company, Employee shall be employed as the Company's VP of Engineering .
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:
(a) A base salary, to be paid in accordance with the Company's
normal payroll procedures, at the rate of $135,000 per annum for the first
twelve (12) months; $150,000 per annum during the second twelve (12) months and
$170,000 per annum during the third twelve (12) month period.
(b) As additional compensation, the Employee shall receive
additional stock options under the Company Stock Option Plan to purchase up to
an additional 75,000 shares of the Company's Common Stock. The term of exercise
will be five (5) years from the date of vesting of each installment. As long as
the Employee remains employed by the Company hereunder,
the option to purchase 30,000 shares shall vest on January 31, 2002 at an
exercise price of the closing price as of January 31, 2002; 30,000 shares
shall vest on January 31, 2003, at an exercise price of $3.50 per share and
15,000 shares shall vest as of January 31, 2004 at an exercise price of
$4.00 per share.
(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 him in the performance of his duties hereunder.
(e) The Company shall provide Employee with the use of an
automobile, selected by Employee 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 $800.00 per month.
(f) In the event the Employee breaches Section 8 of this
Agreement or is terminated for cause, then in such event, all profits or gains
realized by the Employee as a result of the exercise of any portion of the
options granted pursuant to this Agreement or the sale of any of the shares
underlying such options shall be forfeited and returned to the Company. In
addition, any of the unexercised portion of the options shall be immediately
terminated , including any provisions with respect to termination of limited
exercise periods in the event of termination of Employee's employment hereunder.
5. Vacation. Employee shall be entitled to three 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 Section 4(a) of this
Agreement, 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
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 his base
salary, in
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accordance with Section 4(a) hereof for an additional one (1) year period from
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, Canada and
Mexico 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 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
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the Company will suffer irreparable damage and injury if Employee breaches any
of the provisions of this Agreement.
(f) In connection with the employment of the Employee, the
Employee may acquire, develop or pursue certain ideas, inventions, trademarks,
patents and other developments or improvements conceived by the Employee, alone
or in conjunction with others, during the term of his employment, and whether or
not during normal working hours. It is specifically understood and agreed that
any said idea, invention, trademark, patent or other development or improvement
that in any way relates to the Company work, products or services, they shall be
and remain the exclusive property of the Company and the Employee shall have no
rights with reference thereto. The Employee agrees to assist the Company, at
Company expense, to obtain patents on any such patentable ideas, inventions,
trademarks and other improvements or developments and agrees to execute any and
all documents that may be necessary in order to effectuate the purposes and
intents of this provision in order to obtain such patents and/or trademarks in
the name of the Company. The Employee also agrees to disclose to the employer
any and all ideas, inventions, trademarks, patents or other developments or
improvements conceived by the Employee during the course of his employment with
the Company that relate to or have a bearing on the business of the Company.
9. Termination. (a) The Company may terminate this Agreement without
liability (other than for the base salary provided in Section 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 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.
(b) [Employee may terminate this Agreement without liability at
any time upon at least one (1) year prior written notice.]
(c) 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
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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;
(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).
(d) 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 [2.99] times
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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."
(e) 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 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.
(f) 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 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.
(g) "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; excluding, however, any
acquisition directly from the Company and any merger of consolidation which does
not constitute a transaction specified under subparagraph (iv) below.
(ii) "during any period of not more than two consecutive
years (not including any period prior to the date of this Agreement),
individuals who at the beginning of
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such period constitute the Board 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 period or who were new directors approved by
such a vote."
(iii) 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
(iv) the shareholders of the Company approve a merger or
consolidation or exchange of outstanding shares, of the Company with any other
company, other than a merger or consolidation or exchange of outstanding shares,
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 [50]% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation or exchange of outstanding shares. 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.
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 and no amendment, modification or waiver
of any provision herein shall be effective unless in writing, executed by the
party charged therewith.
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 without giving
effect to principles of conflict or choice of law thereof.
14. Binding Effect. This Agreement shall bind and inure to the benefit
of the parties, their successors and assigns.
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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 non-delegable.
16. 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.
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 non-business 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
EMPLOYEE AMERICAN MEDICAL ALERT CORP.
By: /s/ Xxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
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Dr. Xxxx Xxxxxx Xxxxxx X. Xxxxxx
VP Engineering President
Date: 2/26/02 Date: 2/26/02
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Approved Unanimously by the
Compensation Committee
on: 2/06/02
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Refer to the minutes:
cc minutes, 2/06/02, 5:00 PM
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