**Exhibit 10.1**

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**EMPLOYMENT AGREEMENT**

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**EMPLOYMENT AGREEMENT** dated as of November 11, 2005 betweenAMERICAN MEDICAL ALERT CORP., a New York corporation (the “Company”), withoffices located at 3265 Lawson Boulevard, Oceanside, New York 11572 and JACKRHIAN, an individual having an address at 32 Everdell Drive, East Rockaway NewYork, NY 11515 (“Employee”).

 

**W****ITNESSETH:**

 

**WHEREAS**, the Company desires to retain theservices of Employee upon the terms and conditions stated herein; and

 

**WHEREAS**, Employee desires to continue to beemployed by the Company upon the terms and conditions stated herein.

 

**NOW,THEREFORE**, inconsideration of the mutual covenants, conditions and promises containedherein, the parties hereby agree as follows:

 

# 1.     Employment.  The Company hereby employs Employee for theperiod beginning as of January 1, 2006 and ending December 31, 2010 (the “ExpirationDate”), unless earlier terminated pursuant hereto (the “Employment Period”).

 

# 2.    Duties.  Subject to the authority of the Board of Directorsof the Company, Employee shall be employed as the Company’s President and ChiefOperating Officer.  Employee will performsuch duties and services of an executive nature, commensurate with his positionas the President and Chief Operating Officer, as may from time to time beassigned to him by the Board of Directors.

 

# 3.     Full Time.  Employee agrees that he will devote his fulltime and attention during regular business hours to the business and affairs ofthe Company.  The foregoing shall notprevent the purchase, ownership or sale by Employee of investments orsecurities of publicly held companies and any other business that is notcompetitive with the Company or any subsidiary of the Company so long as suchinvestment does not require active participation of Employee in the managementof the business of such publicly held companies, does not interfere or conflictwith the performance of Employee’s duties hereunder and does not otherwiseviolate any of the provisions of this Agreement, or Employee’s participation inphilanthropic organizations to the extent that such participation does notinterfere or conflict with the performance of Employee’s duties hereunder anddoes not otherwise violate any provision of this Agreement.

 

# 4.     Compensation.  In consideration of the duties and servicesto be performed by Employee hereunder, the Company agrees to pay, and Employeeagrees to accept the amounts set forth below:

 

 

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## (a)   A basesalary, to be paid on a bi weekly basis, at the rate of:

 

### (i)            $240,000 per annum,for the period beginning January 1, 2006 and ending December 31, 2006;

 

### (ii)           $260,000 per annum,for the period beginning January 1, 2007 and ending December 31, 2007;

 

### (iii)          $280,000 per annum,for the period beginning January 1, 2008 and ending December 31, 2008;

 

### (iv)          $300,000 per annum,for the period beginning January 1, 2009 and ending December 31, 2009; and

 

### (v)           $300,000 per annum,for the period beginning January 1, 2010 and ending December 31, 2010.

 

## (b)   In addition to the basesalary payable pursuant to Section 4(a) above, and subject to subparagraph (c)below, the Employee shall be eligible for the following stock grants payable inthe Company’s common stock:

 

### (i)            Up to 80,000 sharesover the Employment Period based on the Company’s earnings before deduction ofinterest and taxes (“EBIT”), as set forth in the Company’s audited financialstatements for the applicable fiscal year, meeting or exceeding the followingtargets:

 

For 2006 — 2010

 

| **EBIT growth over prior fiscal  year** | ** ** | **# of Shares** | ** ** |
|-----------------------------------------|------------|-----------------|------------|
|                                    |       |            |       |
| 15.0 — 17.49%                      |       | 8,000 shares    |       |
| 17.5 — 19.99%                      |       | 9,000 shares    |       |
| 20.0 — 22.49%                      |       | 10,500 shares   |       |
| 22.5 — 24.99%                      |       | 13,000 shares   |       |
| 25.0% - or more                         |       | 16,000 shares   |       |

 

In the event that theminimum EBIT growth percentage is not met for a particular fiscal year, Employeewill have the opportunity to earn back the minimum performance bonus grant forsuch fiscal year as follows: if the EBIT growth percentage in the subsequentfiscal year combined with the EBIT growth percentage of the prior fiscal year meetsor exceeds 30%, then the number of percentage points needed to be added to theprior fiscal year’s EBIT growth percentage to equal 15%, shall be deducted fromthe subsequent fiscal year EBIT growth percentage and added to the prior fiscalyear EBIT growth percentage, and Employee shall be granted 8,000 shares ofcommon stock for the prior fiscal year, and an additional number of shares ofcommon stock determined based on the above formula and the reduced subsequentyear EBIT growth percentage.  Forexample, if in 2006, 2007 and 2008 EBIT growth percentage was 14%, 13% and 20%,respectively, then Employee would be deemed (i) not to have met the fiscal year2006 EBIT growth percentage,

 

 

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(ii) to have met the minimum (15%) EBIT growthpercentage (by virtue of deducting 2% percentage points from the fiscal year2008 EBIT growth percentage and adding those to the 2007 fiscal year EBITgrowth percentage), and (iii) to have met the 17.5 — 19.99% EBIT growthpercentage for fiscal 2008 (20% - 2% =18%), thereby earning a total 17,000shares of common stock (8,000 shares relating to 2007 and 9,000 shares relatingto 2008); and

 

### (ii)           2,000 shares ofcommon stock per year, for a total of up to 10,000 shares of common stock over theEmployment Period, based on the Company’s total revenues, as set forth in theCompany’s audited financial statements for the applicable fiscal year, meetingor exceeding an amount equal to at least 115% of the Company’s total revenuesfor the prior fiscal year.

 

In addition, to the extent that the number of sharesof common stock earned by Employee pursuant to subparagraphs (b)(i) and (ii)above exceeds a total of 50,000 shares, the grant of such shares shall besubject to obtaining shareholder approval. If such shareholder approval is not obtained prior to the timeany such shares are earned by Employee, then Employee shall not be entitled toand shall not be granted any such shares. Any shares to be issued under (b)(i) or (b)(ii) shall be issued on April15 of the year following the fiscal year for which the shares were earned.

 

### (iii)          50,000 shares of commonstock, to vest, subject to the condition that Employee is employed by theCompany at the applicable date, as follows: 10,000 shares on December 31, 2006,10,000 shares on December 31, 2007, 10,000 shares on December 31, 2008, 10,000shares on December 31, 2009 and 10,000 shares on December 31, 2010; provided,however, that in the event of a Change in Control (as hereinafterdefined), if the Company or its successor pursuant to such Change in Control,as applicable, and the Employee either agree to continue this Agreement or toenter into a new employment agreement mutually acceptable to the Company or itssuccessor and the Employee in lieu of this Agreement, then any such shareswhich remain unvested, shall vest immediately upon the mutual agreement of theCompany or its successor and the Employee to continue this Agreement or toenter into a new agreement.

 

## (c)   Thebonus stock grant provided for in subparagraph (b)(iii) above shall be issuedto the Employee following the negotiation and execution of a stock grantagreement between the Company and the Employee, and shall only be issued afteran applicable Form S-8 registration statement has been filed by the Companywith the U.S. Securities and Exchange Commission. The bonus stock issuedpursuant to subparagraph (b)(iii) shall be subject to forfeiture to the extentsuch shares do not vest.  The bonus stockgrants provided for in subparagraphs (b)(i) and b(ii) above shall also besubject to such stock grant agreement and shall be issued when earned. Allshares to be issued pursuant to such stock grant agreement shall be issued outof the Company’s 2005 Stock Incentive Plan (the “Plan”), except that to theextent the shares to be issued under b(i) and b(ii) exceed 50,000 shares, suchshares shall be issued as a separate individual grant to Employee and not outof the Plan.  The adjustment features ofSection 10 of the Plan shall also be applied in the stock grant agreement tothe separate grant.

 

 

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## (d)   Thecompensation provided for herein shall be in addition to any retirement, profitsharing, insurance or similar benefit which may at any time be payable to Employeepursuant to any plan or policy of the Company relating to such benefits, whichadditional benefits shall be made available to Employee on the same basis asthey are generally made available to other executive officers of the Company.

 

## (e)   TheCompany shall reimburse Employee in accordance with the Company’s normalpolicies for all reasonable travel, hotel, meal and other expenses properlyincurred by him in the performance of his duties hereunder.

 

## (f)    TheCompany shall provide Employee with the use of an automobile stipend to cover expensesof operation such as insurance, gas, oil and repair Company not to exceed **[1,000.00]** monthly.

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# 5.     Vacation.  Employee shall be entitled to three (3) weeksvacation each fiscal year, to be taken at such time as is mutually convenientto the Company and Employee.

 

# 6.     Death.  In the event of the death of Employee duringthe Employment Period, this Agreement and the employment of Employee hereundershall terminate on the date of the death of Employee.  The estate of Employee (or such person(s) asEmployee shall designate in writing) shall be entitled to receive, and theCompany agrees to continue to pay, in accordance with the normal pay practiceof the Company, the base salary of Employee provided by paragraph 4(a) and theadditional benefits, if any, provided by paragraph 4(d), 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 toperform because of illness or incapacity, physical or mental, the duties andservices to be performed by him hereunder for a period of one hundred andeighty (180) consecutive days or an aggregate period of more than one hundredand eighty (180) days in any 12-Month period, the Company may terminate thisAgreement after the expiration of such period. Upon such termination, Employee shall be entitled to receive the basesalary provided by paragraph 4(a) and the additional benefits, if any, providedby paragraph 4(d), in each instance through the date of such termination.

 

# 8.     NonCompetition andNonDisclosure.  (a) Employeecovenants and agrees that throughout the Employment Period and for a period oftwelve (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 Statesof America with the business conducted by the Company or any subsidiary of theCompany during the Employment Period; provided, however, thatEmployee may own not more than 5% of the outstanding securities of any class ofany corporation engaged in any such business, if such securities are listed ona national securities exchange or the NASDAQ Stock Market regularly traded inthe Over the Counter market by a member of a national securities association.

 

## (b)   Employee covenants andagrees that, (i) throughout the Employment Period, he will not directly orindirectly solicit, entice or induce any person (collectively, 

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## “Solicit”) who duringthe Employment Period is associated with, employed by or is a customer of theCompany or any subsidiary, and (ii) for a period of twenty-four (24) monthsfollowing the Employment Period, he will not Solicit any person who is, orwithin the last three months of Employee’s employment by the Company was,associated with, employed by, or was a customer of the Company or anysubsidiary of the Company, in each case, to leave the employ of, terminate hisassociation or its relationship with the Company, or any subsid­iary of theCompany, or solicit the employment or business of any such person on his ownbehalf or on behalf of any other business enterprise.

 

## (c)   Employee covenants andagrees that, throughout the Employment Period and at all times thereafter, hewill not use, or disclose to any third party, trade secrets or confidentialinformation of the Company, including, but not limited to, confidentialinformation or trade secrets belonging or relating to the Company, itssubsidiaries, affiliates, customers and clients or proprietary processes orprocedures 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 shallinclude, but shall not be limited to, all information which is known orintended to be known only by employees of the Company, its respectivesubsidiaries and affiliates or others in a confidential relationship with theCompany or its respective subsidiaries and affiliates which relates to businessmatters.

 

## (d)   If any term of thisparagraph 8 is found by any court having jurisdiction to be too broad, then andin that case, such term shall nevertheless remain effective, but shall beconsidered amended (as to the time or area or otherwise, as the case may be) toa point considered by said court as reason­able, and as so amended shall befully enforceable.

 

## (e)   In the event that Employeeshall breach or threaten to breach any provision of this Agreement (includingbut not limited to the provisions of this paragraph 8), then Employee herebyconsents to the granting of a temporary or permanent injunction against him bya court of competent jurisdiction prohibiting him from violating any provisionof this Agreement.  In any proceeding foran 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 orinterposed as a defense to the granting of such temporary or permanentinjunction against Employee.  Employeefurther agrees that the Company will not have an adequate remedy at law in theevent of any breach or threatened breach by Employee hereunder and that theCompany will suffer irreparable damage and injury if Employee breaches any ofthe provisions of this Agreement.

 

# 9.     Termination;Non-Renewal.

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## (a)   The Company may terminatethis Agreement without liability (other than for the base salary and any othercompensation pro­vided in paragraph 4 accrued to the date of termination) inthe event of (i) a material breach by Employee of the provisions of thisAgreement, which breach shall not have been cured by Employee within onehundred twenty 

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## (120) daysfollowing notice thereof by the Company to Employee, (ii) the commission ofgross negligence or bad faith by Employee in the course of his employmenthereunder, which commission has a material adverse effect on the Company, (iii)the commission by Employee of a criminal act of fraud, theft or dishonestycausing material damages to the Company or any of its subsidiaries, (iv) theconviction of Employee of (or plead nolocontendere to) anyfelony, or misdemeanor involving moral turpitude if such misdemeanor results inmaterial financial harm to or materially adversely affects the goodwill of theCompany, or (v) any violation by Employee of the Company’s Code of BusinessConduct and Ethics or the Company’s sexual harassment and other forms ofharassment policy or drug and alcohol abuse policy, as set forth in the Company’semployee handbook.  The circumstancesspecified in (i) through (v) above shall be defined as “Cause.”

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## (b)   Unless the Employee isterminated for Cause pursuant to Section 9(a) above on or prior to the ExpirationDate, and other than in the circumstances described in Section 9(d), in theevent that the Company does not offer Employee to enter into a writtenemployment agreement with terms and conditions no less favorable than substantiallythe same terms and conditions as this Agreement to begin immediately followingthe Expiration Date, Employee shall receive, in consideration of his continuingobligations under Section 8 hereof, payment of base salary, based on the thenapplicable salary level, for a period of twelve (12) months, commencing seven monthsfollowing the date of the expiration of the Employment Period.  Employee’s right to any payments pursuant tothis Section 9(b) shall be in addition to, and not in lieu of, any damages forthe termination by the Company of this Agreement prior to the Expiration Datefor any reason other than those set forth in Section 9(a) above.

 

## (c)   After a Change in Control(as hereinafter defined) has occurred, Employee may terminate his employmentupon thirty (30) days’ written notice to the Company within one hundred andeighty (180) days following such a Change in Control and after he has obtainedactual knowledge of the occurrence of any of the following events:

 

### (i)            Failure to elect orappoint, 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 Changein Control, except in connection with the termination of Employee’s employmentpursuant to Section 9(a) hereof;

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### (ii)           A reduction inEmployee’s overall compensation (including any reduction in pension or otherbenefit programs or perquisites) or a material adverse change in the nature orscope of the authorities, powers, functions or duties normally attached toEmployee’s position with the Company as referred to in Section 2 hereof;

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### (iii)          A determination byEmployee made in good faith that, as a result of a Change in Control, he isunable effectively to carry out the authorities, powers, functions or dutiesattached 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 theCompany of written notice from Employee of such determination;

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### (iv)          A breach by theCompany 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 afterreceipt by the Company of written notice from Employee of such breach;

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### (v)           A change in thelocation at which substantially all of Employee’s duties with the Company areto be performed to a location which is not within a 50-mile radius of theaddress of the place where Employee is performing services prior to the date ofthe Change in Control; or

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### (vi)          failure by the Companyor its successor pursuant to such Change in Control, as applicable, and theEmployee to either agree to continue this Agreement or to enter into a newemployment agreement mutually acceptable to the Company or its successor andthe Employee in lieu of this Agreement.

 

An election by Employee to terminate his employmentunder the provisions of this paragraph 9(c) shall not be deemed a voluntarytermination of employment by Employee for the purpose of interpreting theprovisions of any of the Company’s employee benefit plans, programs orpolicies.  Employee’s right to terminatehis employment pursuant to this paragraph 9(c) shall not be affected by hisillness or incapacity, whether physical or mental, unless the Company shall atthe time be entitled to terminate his employment under paragraph 7 of thisAgreement.  Employee’s continuedemployment with the Company for any period of time less than one hundred andeighty (180) days after a Change in Control shall not be considered a waiver ofany right he may have to terminate his employment pursuant to this paragraph9(c).  A termination by Employee underthis paragraph 9(c) shall be deemed a termination by the Company of thisAgreement without Cause.

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## (d)   After a Change in Controlhas occurred, in the event that this Agreement is terminated by the Company orits successor without Cause or by the Employee pursuant to Section 9(c), and ifthe Company or its successor and the Employee do not agree  to enter into a new employment agreement inlieu hereof, then Employee shall be entitled to be paid in a lump sum, withinthirty days of such termination, an amount of cash (to be computed, at theexpense of the Company or its successor, by the independent certified publicaccountants utilized by the Company immediately prior to the Change of Control(the “Accountants”), whose computation shall be conclusive and bind­ing uponEmployee and the Company or its successor) equal to 2.99 times Employ­ee’s “baseamount” as defined in Section 280G(b)(3) of the Internal Revenue Code of 1986,as amended (the “Code”).  Any suchpayment shall be in full satisfaction of all of the Company’s or its successor’sobligations hereunder, and upon payment made pursuant to this paragraph 9(d), allof the Company’s or its successor’s obligations pursuant to this Agreement shallterminate in full and Employee shall have no further rights hereunder orrecourse against the Company or its successor pursuant to this Agreement; provided,however, nothing in this paragraph 9(d) shall be interpreted to precludethe Employee receiving his accrued salary and other compensation payablepursuant to paragraph 4 through the date of termination.  Such lump sum payment is hereinafter referredto as the “Termination Compensation.”

 

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It is intended that the “present value” of thepayments and benefits to Employee, whether under this Agree­ment or otherwise,which are includable in the computation of “parachute payments” shall not, inthe aggregate, exceed 2.99 times the “base amount” (the terms “present value”, “parachutepayments” and “base amount” being determined in accordance with Section 280G ofthe Code).  Accordingly, if Employeereceives payments or benefits from the Company prior to payment of the TerminationCompensation which, when added to the Termination Compensation, would, in theopinion of the Accountants, subject any of the payments or benefits to Employeeto the excise tax imposed by Section 4999 of the Code, the TerminationCompensation shall be reduced by the smallest amount necessary, in the opinionof the Accountants, to avoid such tax. In addition, the Company shall have no obligation to make any payment orprovide any benefit to Employee subsequent to payment of the TerminationCompensation which, in the opinion of the Accountants, would subject any of thepayments or benefits to Employee to the excise tax imposed by Section 4999 ofthe Code. No reduction in Termination Compensation or release of the Companyfrom any payment or benefit obligation in reliance upon any aforesaid opinionof the Accountants shall be permitted unless the Company shall have provided toEmployee a copy of any such opinion that specifically entitles Employee to relythereon, no later than the date otherwise required for payment of theTermination Compensation or any such later payment or benefit.

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## (e)   “Change in Control” as usedin this Agree­ment shall mean the occurrence of any of the following:

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### (i)            any “person” or “group”(as such terms are used in Section 3(a)(9) and 13(d)(3) of the SecuritiesExchange Act of 1934, as amended (the “Act”)), except for an employee stockownership 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 thedate hereof, directly or indirectly, of securities of the Company representing 35%or more of the combined voting power of the Company’s then outstandingsecurities;

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### (ii)           during any twelve(12) month period during the Employment Period, individuals who at thebeginning of such period constitute the entire Board of Directors cease for anyreason to constitute at least a majority thereof, unless the election, or thenomination for election, by shareholders of the Company of each new directorwas approved or ratified by a vote of at least a majority of the directors thenstill in office who were directors at the beginning of the Employment Period orwho were new directors approved by such a vote;

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### (iii)          the consummation ofthe sale or disposition by the Company of all or substantially all of theCompany’s assets; or

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### (iv)          the consummation ofa merger or consolidation of the Company with any other company, other than amerger or consolidation which would result in the combined voting power of theCompany’s voting securities outstanding immediately prior thereto continuing torepresent (either by remaining outstanding or by being converted into votingsecurities of the surviving entity or the parent company of such survivingentity) 50% or more of the combined voting power of the voting securities ofthe Company or such 

 

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### surviving entityor the parent company of such surviving entity outstanding immediately aftersuch merger or consolidation.  Notwithstandingthe foregoing, any transaction involving a leveraged buyout or otheracquisition of the Company which would otherwise constitute a Change inControl, in which Employee participates in the surviving or successor entity(other than solely as an employee or consultant), shall not constitute a Changein Control.

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# 10.   No Impediments.  Employee warrants and represents that he isfree to enter into this Agreement and to perform the services contemplatedthereby and that such actions will not constitute a breach of, or defaultunder, any existing agreement.

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# 11.   No Waiver.  The failure of any of the parties hereto toenforce any provision hereof on any occasion shall not be deemed to be a waiverof any preceding or succeeding breach of such provision or of any otherprovision.

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# 12.   Entire Agreement.  This Agreement constitutes the entireagreement and understanding of the parties hereto and no amendment,modification or waiver of any provision herein shall be effective unless inwriting, executed by the party charged therewith.

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# 13.   Governing Law.  This Agreement shall be con­strued,interpreted and enforced in accordance with and shall be governed by the lawsof the State of New York applicable to agreements to be wholly performedtherein, other than those which would defer to the substantive laws of anotherjurisdiction.

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# 14.   Binding Effect.  This Agreement shall bind and inure to thebenefit of the parties, their successors and assigns.

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# 15.   Assignment and Delegationof Duties.  This Agreement may not beassigned by the parties hereto except that the Company shall have the right toassign this Agreement to any successor in connection with a sale or transfer ofall or sub­stantially all of its assets, a merger or consolidation.  This Agreement is in the nature of a personalservices contract and the duties imposed hereby are non-delegable.

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# 16.   Paragraph Headings.  The paragraph headings herein have beeninserted for convenience of reference only and shall in no way modify orrestrict any of the terms or provi­sions hereof.

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# 17.   Notices.  Any notice under the provisions of thisAgreement 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 tosuch other address as shall be designated hereunder by notice to the otherparty, effective upon actual receipt and shall be deemed conclusively to havebeen given: (i) on the first business day following the day timely depositedfor overnight delivery with Federal Express (or other equivalent nationalovernight courier service) or United States Express Mail, with the cost ofdelivery prepaid or for the account of the sender; (ii) on the fifth businessday following the day duly sent by certified or registered United States mail,postage prepaid and return receipt requested; or (iii) when otherwise actuallyreceived by the addressee on a business day (or on the next business day ifreceived after the close of normal business hours or on any nonbusiness day).

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# 18.   Unenforceability;Severability.  If any provision ofthis Agreement is found to be void or unenforceable by a court of competentjurisdiction, the remaining provisions of this Agreement shall, nevertheless,be binding upon the parties with the same force and effect as though theunenforceable part has been severed and deleted.

 

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**INWITNESS WHEREOF**,the parties hereto have caused this Agreement to be executed as of the datefirst above writ­ten.

 
| ** ** | **EMPLOYEE:**                 |
|------------|-------------------------------|
|       |                          |
|       |                          |
|       | /s/ Jack Rhian                |
|       | Jack Rhian                    |
|       |                          |
|       |                          |
|       |                          |
|       |                          |
| ** ** | **COMPANY**:                  |
|       |                          |
|       | AMERICAN MEDICAL ALERT  CORP. |
|       |                          |
|       |                          |
|       | By:                           | /s/ Howard M. Siegel |
|       |                          | Name: Howard M. Siegel |
|       |                          | Title: Chairman of the  Board, |
|       |                          | Chief Executive Officer |
|       |                          |

 

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