Unassociated Document


    AMERICAN
      MEDICAL ALERT CORP.

    2005
      STOCK INCENTIVE PLAN 

     

    STOCK
      PURCHASE AGREEMENT

     

    STOCK
      PURCHASE AGREEMENT dated as of January 20, 2006 by and between American
      Medical Alert Corp., a New York corporation (the "Company"),
      and
      Richard Rallo, having an address at 3 Byfield Place, Melville, NY 11747 (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 Shareholder’s
      to grant the shares provided for in this Restricted 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 Ten Thousand (10,000) 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 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 $100.00.

     

    (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
      Shares (as hereinafter defined) 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, 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 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 JANUARY __, 2006,
      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").

     

    
      
        
        

      

      
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    (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.

     

    
      
        
        

      

      
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    5. Securities
      Law Compliance

     

    (a) Registration
      of Securities. The Restricted Shares, have been registered under the 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, that (a) the proposed disposition does
      not require registration of the 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.

     

    (d) The
      Company shall not be required (i) to transfer on its books any 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.

     

    
      
        
        

      

      
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    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.

     

    
      
        
        

      

      
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    (g) "Employment
      Agreement"
shall
      mean that certain Employment Agreement dated as
      of January 1 2006,
      between
      the Company and Holder." (emphasis added to show the change only - do not make
      it bold in the filing).

     

    (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.

     

    
      
        
        

      

      
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    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.

     

    
      
        
        

      

      
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    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/
                Howard M.
                Siegel                              
                

              Name:
                Howard M. Siegel

              Title:
                Chairman and CEO

            
	 	
               

               

                
                /s/ Richard
                Rallo                                        
                

              Holder:
                Richard Rallo

               

            


    

    


    
      
        
        

      

      
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    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

    Employee.

    


    


    
      
        
        

      

      
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    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 [_____ __], 2006.

     

    (4) The
      taxable year in which the election is being made is the calendar year
      2006.

    


    (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.

    


    
      
        
        

      

      
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