SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
American Medical Alert Corp.
----------------------------
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
AMERICAN MEDICAL ALERT CORP.
3265 LAWSON BOULEVARD
OCEANSIDE, NEW YORK 11572
-------------------------
July 17, 2003
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
American Medical Alert Corp., a New York corporation (the "Company"), to be held
on Thursday, August 21, 2003, commencing at 10:00 A.M., Eastern time, at 36-36
33rd Street, Long Island City, New York 11106. The matters to be acted upon at
that meeting are set forth and described in the Notice of Annual Meeting and
Proxy Statement, which accompany this letter. We request that you read these
documents carefully.
We hope that you plan to attend the meeting. However, if you are not able
to join us, we urge you to exercise your right as a shareholder and vote. Please
promptly mark, date, sign and return the enclosed proxy card in the accompanying
postage prepaid envelope. You may, of course, attend the Annual Meeting of
Shareholders and vote in person even if you have previously mailed your proxy
card.
Sincerely,
HOWARD M. SIEGEL
Chairman and Chief Executive Officer
IT IS IMPORTANT THAT YOU MARK, DATE, SIGN AND RETURN THE ACCOMPANYING PROXY CARD
AS SOON AS POSSIBLE.
AMERICAN MEDICAL ALERT CORP.
3265 LAWSON BOULEVARD
OCEANSIDE, NEW YORK 11572
-------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 21, 2003
To the Shareholders of American Medical Alert Corp.:
NOTICE IS HEREBY GIVEN, that the Annual Meeting of Shareholders (the
"Meeting") of American Medical Alert Corp. (the "Company") will be held on
Thursday, August 21, 2003, commencing at 10:00 A.M., Eastern time, at 36-36 33rd
Street, Long Island City, New York 11106, to consider and act upon the following
matters:
1. The election of 7 directors to serve until the next annual
meeting of shareholders and until their respective successors
are elected and qualified;
2. The ratification of the appointment of Margolin, Winer &
Evens, LLP as the Company's independent auditors for the
fiscal year ending December 31, 2003; and
3. The transaction of such other business as may properly come
before the Meeting or any adjournment or postponement thereof.
Information regarding the matters to be acted upon at the
Meeting is contained in the accompanying proxy statement. The close of business
on July 7, 2003, has been fixed as the record date for the determination of
shareholders entitled to notice of, and to vote at, the Meeting or any
adjournments or postponements thereof.
By Order of the Board of Directors,
JOHN ROGERS
Secretary
Oceanside, New York
July 17, 2003
================================================================================
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. EACH SHAREHOLDER
IS URGED TO MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD, WHICH IS BEING
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY. AN ENVELOPE
ADDRESSED TO THE COMPANY'S TRANSFER AGENT IS ENCLOSED FOR THAT PURPOSE AND
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
================================================================================
AMERICAN MEDICAL ALERT CORP.
3265 LAWSON BOULEVARD
OCEANSIDE, NEW YORK 11572
-------------------------
---------------------
PROXY STATEMENT
---------------------
This proxy statement is furnished to the holders of common
stock, par value $.01 per share (the "Common Stock"), of American Medical Alert
Corp., a New York corporation (the "Company"), in connection with the
solicitation by and on behalf of its Board of Directors of proxies (the "Proxy"
or "Proxies") for use at the Annual Meeting of Shareholders (the "Meeting") to
be held on Thursday, August 21, 2003, commencing at 10:00 A.M., Eastern time, at
36-36 33rd Street, Long Island City, New York 11106, and at any adjournment or
postponement thereof, for the purposes set forth in the accompanying Notice of
Annual Meeting of Shareholders.
The cost of preparing, assembling, printing, mailing and
distributing the Notice of Annual Meeting of Shareholders, this proxy statement,
Proxies and annual report is to be borne by the Company. The Company also will
reimburse brokers who are holders of record of Common Stock for their reasonable
out-of-pocket expenses in forwarding Proxies and Proxy soliciting material to
the beneficial owners of such shares. In addition to the use of the mails,
Proxies may be solicited without extra compensation by directors, officers and
employees of the Company by telephone, telecopy, telegraph, email or personal
interview. The mailing date of this Proxy Statement is on or about July 17,
2003.
Unless otherwise specified, all Proxies, in proper form,
received by the time of the Meeting will be voted FOR the election of all
nominees named herein to serve as directors, and FOR the ratification of the
appointment of Margolin, Winer & Evens, LLP as the Company's independent
auditors for the fiscal year ending December 31, 2003.
It is important that your shares are represented at the
Meeting, and, therefore, all shareholders are cordially invited to attend the
Meeting. However, whether or not you plan to attend the Meeting, you are urged
to, as promptly as possible, mark, sign, date and return the enclosed proxy
card, which requires no postage if mailed in the United States in the enclosed
pre-paid envelope. If you hold shares directly in your name and attend the
Meeting, you may vote your shares in person, even if you previously submitted a
proxy card. Your proxy may be revoked at any time before it is voted by
submitting a written revocation or a proxy bearing a later date to John Rogers,
the Secretary of the Company, at the address set forth above, or by attending
the Meeting and electing to vote in person. Attending the Meeting will not, in
and of itself, constitute revocation of a Proxy. If you hold your shares in
"street name" you may revoke or change your vote by submitting new instructions
to your broker or nominee.
OUTSTANDING VOTING SECURITIES, QUORUM AND VOTING REQUIREMENTS
The close of business on July 7, 2003, has been fixed by the
Board of Directors as the record date (the "Record Date") for the determination
of shareholders entitled to notice of, and to vote at, the Meeting or any
adjournments or postponements thereof. As of the Record Date, there were
7,437,503 shares of Common Stock outstanding. Each share of Common Stock
outstanding on the Record Date will be entitled to one vote on each matter to
come before the Meeting.
A majority of the total number of shares of the Company's
Common Stock, issued and outstanding and entitled to vote, represented in person
or by Proxy, is required to constitute a quorum for the transaction of business
at the Meeting. Votes withheld in the election of directors, and abstentions and
broker non-votes on any matter, are included in determining whether a quorum is
present.
Directors are elected by a plurality of the votes cast at the
Meeting. Votes withheld in the election of directors and abstentions or broker
non-votes, if any, will not be counted towards the election of any person as a
director.
Ratification of the appointment of Margolin, Winer & Evens,
LLP as the Company's independent auditors for the fiscal year ending December
31, 2003, requires the affirmative vote of a majority of votes cast at the
Meeting; abstentions and broker non-votes, if any, will not be counted as votes
"cast" with respect to such matter.
-2-
---------------------------------------------------------------
PROPOSAL 1
ELECTION OF DIRECTORS
---------------------------------------------------------------
At the Meeting, shareholders will elect 7 directors to serve
on the Company's Board of Directors until the next annual meeting of
shareholders and until their respective successors are elected and qualified.
Unless otherwise directed, the persons named in the Proxy intend to cast all
Proxies received FOR the election of Howard M. Siegel, James LaPolla, Frederic
Siegel, Ronald Levin, Yacov Shamash, Delphine Mendez de Leon and Jack Rhian
(collectively, the "Nominees") to serve as directors upon their nomination at
the Meeting. All Nominees currently serve on the Board of Directors. Each
Nominee has advised the Company of his or her willingness to serve as a director
of the Company. In case any Nominee should become unavailable for election to
the Board of Directors for any reason, the persons named in the Proxies will
have discretionary authority to vote the Proxies for one or more alternative
nominees who will be designated by the existing Board of Directors.
DIRECTORS AND EXECUTIVE OFFICERS
The current directors and current executive officers of the
Company, their ages and present positions with the Company are as follows:
NAME AGE POSITION WITH THE COMPANY
- ---- --- -------------------------
Howard M. Siegel 69 Chairman of the Board, President,
Chief Executive Officer and Director
Jack Rhian 48 Executive Vice President, Chief Operating Officer and
Director
Frederic S. Siegel 33 Vice President - Business Development and Director
Ronald Levin 68 Director
Yacov Shamash, PH.D 53 Director
James F. LaPolla 53 Director
Delphine Mendez de Leon 47 Director
Richard Rallo 39 Chief Financial Officer
INFORMATION ABOUT DIRECTORS AND NOMINEES
All of our directors are elected for a one-year term, and
serve until the next subsequent annual meeting. Set forth below is certain
information with respect to each of the Nominees.
HOWARD M. SIEGEL, 69, has been the Company's Chairman of the
Board, President and Chief Executive Officer and a director over the past five
years. Mr. Siegel also served as the Company's Chief Financial Officer prior to
September 1996.
JACK RHIAN, 48, has been a director of the Company since
October 2002 and Executive Vice President and Chief Operating Officer since
August 2002. He joined the Company in January 2000 as Vice President and Chief
Operating Officer. From November 1994 until February 1999, he served as
Executive Vice President and Chief Operating Officer of Transcare New York,
Inc., a medical transportation company. From March 1988 through November 1994 he
served as Chief
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Operating Officer of Nationwide Nassau Ambulance Service. Previously, Mr. Rhian
held senior management positions in companies which deliver healthcare services.
Mr. Rhian holds a Masters degree in Public Administration from New York
University.
FREDERIC S. SIEGEL, 33, has been a director of the Company
since September 1998, is the Company's Vice President - Business Development and
had also served as Vice President of Sales and Marketing for the Company since
July 1998. Mr. Siegel joined the Company in April 1994 and has held various
sales and marketing positions with the Company. From October 1991 to October
1994, Mr. Siegel served as a benefits consultant for J.N. Savasta Corp. Mr.
Siegel also serves as a director of Nursing Sister Homecare, a division of
Catholic Health Services of Long Island.
RONALD LEVIN, 68, has been a director of the Company since
August 2001. He has also been the President of Ron Levin Associates, a financial
consulting firm, since 1984. Since 1997, Mr. Levin has been a member at Eye
Contact LLC, a Cohen's Fashion Optical franchise and since 1996, a member at
Bayshore Eyes LLC, a Sterling Optical franchise. Mr. Levin is currently a
licensed stock broker with Investec Earnst & Co. He served as Executive Vice
President of D.A. Campbell Co., an international institutional stock brokerage
firm, through 1998.
YACOV SHAMASH, PH.D., 53, has been director of the Company
since August 2001. He also serves as the Dean of the College of Engineering of
the State University of New York at Stony Brook, a position he has held since
1992. Since 1990, he has also served on the Board of Directors of KeyTronic
Corporation, a computer hardware manufacturer.
JAMES F. LAPOLLA, 53, has been a director of the Company since
being appointed in September 2000. Since 1982, Mr. LaPolla has been the
President and Chief Executive Officer of Home Health Management Services, Inc, a
Not-for-Profit community based home care program.
DELPHINE MENDEZ DE LEON, 47, has been a director of the
Company since August 2002. Ms. Mendez de Leon has been, since 2001, a manager at
Cap Gemini Ernst & Young, Inc., a healthcare strategy transformation consulting
firm, where she managers healthcare system strategy transformation, span of
control and overhead improvement efforts. From 2000 and prior to joining Cap
Gemini Ernst & Young, Inc. Ms. Mendez de Leon was an independent consultant and
advised various healthcare companies and hospitals, including the Company, in
connection with the development of business plans, market research and program
development. From 1994 to 2000, Ms. Mendez de Leon was with The Brooklyn
Hospital Center, where she served as Vice-President of Operations and Planning
and was responsible for administrative oversight of various medical departments,
was involved in market and financial analysis, business planning, and directed
250 employees. Ms. Mendez de Leon holds an MBA from Columbia University School
of Business and a Masters in Public Health from Columbia University School of
Public Health.
NON-DIRECTOR-SIGNIFICANT OFFICERS
RICHARD RALLO, 39, has been the Company's Chief Financial
Officer since April 1, 2003 and joined the Company in February 2001 as the
Controller. From May 1997 to February 2001, Mr. Rallo served as the Chief
Financial Officer of Tradewell, Inc., a barter company. From October 1994 to
April 1997, Mr. Rallo served as the Controller of Connoisseur Communications
Partners L.P., a company that owned and operated radio stations. Mr. Rallo is a
Certified Public Accountant and has a BS in accounting from the University of
Denver.
JOHN LESHER, 48, became the Company's Vice President,
Engineering in March 1991. Prior thereto and from 1989, Mr. Lesher served as a
senior engineer at the Company's former Bristol, Pennsylvania facility. From May
1984 to November 1988, Mr. Lesher served as the Operations and
-4-
Manufacturing Director of Advanced Graphic Systems, Inc. (a subsidiary of
Automation and Printing International Technology, Inc.), a company engaged in
the sale and marketing of computerized printing equipment. Mr. Lesher holds a
Doctorate degree in Electrical Engineering/Computer Engineering from Drexel and
LaSalle University.
JOHN ROGERS, 56, joined the Company in 1984 as the Manager of
the Emergency Response, Installation and Service Center. He became the Company's
Vice President, Operations in July 1993. Additionally, he has been the Secretary
of the Company since July 1993. Prior to joining the Company he was employed at
Technical Liaison Corporation, a burglar alarm Company from 1969 through May
1984 as Installation & Service Manager.
There is no family relationship between any of the directors,
executive officers or significant officers of the Company, with the exception of
Howard M. Siegel and Frederic S. Siegel. Howard M. Siegel is the father of
Frederic S. Siegel.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held 9 meetings and took action by
unanimous written consent 3 times during fiscal year 2002. All of the directors
attended at least 75% of the meetings of the Board of Directors during fiscal
year 2002.
The Company's Board of Directors has an Audit Committee, a
Compensation Committee and a Stock Option Committee.
The Audit Committee currently consists of Mr. LaPolla, Mr.
Shamash, and Mr. Levin each of whom are independent directors as defined in Rule
4200(a)(15) of the National Association of Securities' Dealers' listing
standards. The function of the Audit Committee is to review and advise the Board
of Directors of the Company with respect to matters concerning the financial
condition and operations of the Company, to recommend the nomination of the
independent auditors for the Company, the scope of their engagement and their
compensation, to review the effectiveness of the Company's internal accounting
methods and procedures and to determine through discussions with the independent
auditors whether any instructions or limitations have been placed upon them in
connection with the scope of their audit or its implementation. The specific
functions and responsibilities of the Audit Committee are set forth in a written
charter of the Audit Committee, adopted by the Board of Directors. The Audit
Committee reviews and reassesses its Charter annually and recommends any changes
to the Board of Directors for approval. A report of the Audit Committee appears
under the caption "Audit Committee Report" below. For the fiscal year 2002, the
Audit Committee held 4 meetings, at which all committee members attended, and
took no action by unanimous written consent for fiscal year 2002.
The Compensation Committee currently consists of Mr. Howard M.
Siegel, Mr. LaPolla, Mr. Levin and Mr. Shamash. The function of the Compensation
Committee is to recommend to the Board of Directors relevant compensation
actions and to attend to such matters relating to compensation as may be
prescribed by the Board of Directors. For the fiscal year 2002, the Compensation
Committee held 1 meeting, at which all committee members attended, and took no
action by unanimous written consent for fiscal 2002.
The Stock Option Committee currently consists of Mr. LaPolla,
Mr. Levin and Mr. Shamash. The function of the Stock Option Committee is to
administer the Company's employee stock option plans. For the fiscal year 2002,
the Stock Option Committee held no meetings, and took no action by unanimous
written consent for fiscal year 2002.
-5-
New members will be appointed for each of the committees of
the Board of Directors, following the Meeting.
The Company's Board of Directors has no executive or
nominating committee.
AUDIT COMMITTEE REPORT
During fiscal year 2002, the Audit Committee reviewed and
discussed with management of the Company and with Margolin, Winer & Evens, LLP
the independent auditors of the Company, the audited financial statements of the
Company as of December 31, 2000, 2001 and 2002, and for each of the three years
then ended, respectively (the "Audited Financial Statements"). In addition, the
Audit Committee discussed with Margolin, Winer & Evens, LLP the matters required
by Codification of Statements on Auditing Standards No. 61, as amended by
Statement on Auditing Standards No. 90.
The Audit Committee also received and reviewed the written
disclosures and the letter from the independent auditors required by
Independence Standards Board Standard No. 1, and has discussed with them their
independence from the Company. The Audit Committee also discussed with
management of the Company and the independent auditors such other matters and
received such assurances from them as it deemed appropriate.
Management is responsible for the Company's internal controls
and the financial reporting process. Margolin, Winer & Evens, LLP is responsible
for performing an independent audit of the Company's financial statements in
accordance with generally accepted auditing standards and issuing a report
thereupon. The Audit Committee's responsibility is to monitor and oversee these
processes.
Based on the foregoing review and discussions and a review of
the report of the independent auditors with respect to the Audited Financial
Statements, and relying thereon, the Audit Committee has recommended to the
Company's Board of Directors the inclusion of the Company's Audited Financial
Statements in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 2002.
Audit Committee
James LaPolla
Yacov Shamash
Ronald Levin
COMPENSATION OF DIRECTORS
Pursuant to the Company's 1997 and 2000 Stock Option Plans,
the Board has the authority to grant options to directors in its discretion. The
Board may from time to time authorize the grant of stock options to directors in
connection with attendance at Board of Director meetings, at such times and in
amounts as determined by the Board in its sole discretion. The Board of
Directors generally grants 10,000 options to each director per calendar year for
participation in meetings of the Board. In addition, each director receives $750
for each meeting of the Board of Directors attended and receives $250 in
connection with attendance at meetings of committees of the Board of Directors.
-6-
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
EQUITY COMPENSATION PLAN INFORMATION
The following table contains a summary of the number of shares
of Common Stock of the Company to be issued upon the exercise of options,
warrants and rights outstanding at December 31, 2002, the weighted-average
exercise price of those outstanding options, warrants and rights, and the number
of additional shares of Common Stock remaining available for future issuance
under the plans as at December 31, 2002.
Number of securities
remaining available for
Number of Securities to Weighted-average the future issuance under
be issued upon exercise exercise price of equity compensation
of outstanding options, outstanding options, plans (excluding securities
Plan Category warrants and rights warrants and rights reflected in column (a))
- ------------- ---------------------------- ------------------- ------------------------
Equity Compensation plans
approved by security holders 1,747,713 $2.69 264,781
Equity Compensation plans
not approved by security
holders - - -
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as to the ownership
of shares of the Company's Common Stock, as of July 7, 2003, with respect to (a)
holders known to the Company to beneficially own more than five percent of the
outstanding Common Stock of the Company, (b) each director, (c) the executive
officers named in the Summary Compensation Table under the caption "Executive
Compensation" and (d) all directors and executive officers of the Company as a
group. The Company understands that, except as noted below, each beneficial
owner has sole voting and investment power with respect to all shares
attributable to such owner.
Name and Address Amount and Nature of Percent of
Beneficial Owner(1) Beneficial Ownership Class(2)
------------------- -------------------- --------
Howard M. Siegel 1,279,824(3) 16.5%
Ron Levin 174,050(4) 2.3%
184 Greenway Road
Lido Beach, NY 11561
Delphine Mendez de Leon 15,000(5) *
119 McCormack Road North
Slingerlands, New York 12159
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Name and Address Amount and Nature of Percent of
Beneficial Owner(1) Beneficial Ownership Class(2)
------------------- -------------------- --------
Frederic S. Siegel 337,704(6) 4.4%
James F. LaPolla 20,000(7) *
Home Health Management Services, Inc.
853 Broadway
New York, NY 10003
22,000(8) *
Yacov Shamash, PH.D.
7 Quaker Hill Road
Stony Brook, NY 11790
Jack Rhian 234,853(9) 3.1%
John Lesher 151,137(10) 2.0%
Richard Rallo 46,926(11) *
Gregory Fortunoff 538,800(12) 7.2%
200 East 72nd Street
New York, NY 10021
All directors and executive 2,281,494(13) 26.9%
officers as a group
(9 persons)
(1) Except as otherwise indicated, the address of each individual listed is
c/o the Company at 3265 Lawson Boulevard, Oceanside, New York 11572.
(2) Asterisk indicates less than 1%. Shares subject to options are considered
outstanding only for the purpose of computing the percentage of
outstanding Common Stock which would be owned by the optionee if the
options were so exercised, but (except for the calculation of beneficial
ownership by all directors and executive officers as a group) are not
considered outstanding for the purpose of computing the percentage of
outstanding Common Stock owned by any other person.
(3) Includes 289,105 shares subject to currently exercisable stock options.
(4) Includes 20,000 shares subject to currently exercisable stock options.
Includes 25,000 shares owned by Mr. Levin's wife, to which Mr. Levin
disclaims beneficial ownership.
(5) Consists of 15,000 shares subject to currently exercisable stock options.
(6) Includes 238,104 shares subject to currently exercisable stock options.
(7) Consists of 20,000 shares subject to currently exercisable stock options.
(8) Includes 20,000 shares subject to currently exercisable stock options.
-8-
(9) Consists of 186,853 shares subject to currently exercisable stock options,
and 48,000 shares owned by Mr. Rhian's wife.
(10) Consists of 151,137 shares subject to currently exercisable stock options.
(11) Consists of 46,926 shares subject to currently exercisable stock options.
(12) Based on information provided in a Schedule 13G filed by the reporting
person on January 2, 2003.
(13) Includes options indicated in notes (3), (4), (5), (6), (7), (8), (9),
(10) and (11).
EXECUTIVE COMPENSATION
The following table sets forth information concerning the
annual and long-term compensation of the Company's Chief Executive Officer, and
the four most highly compensated employees, including three executive officers
who were serving at the end of the fiscal year ended December 31, 2002, each of
whose salary and bonus exceeded $100,000 for the fiscal year ended December 31,
2002, for services rendered in all capacities to the Company and its
subsidiaries during the Company's 2000, 2001 and 2002 fiscal years. The listed
individuals shall be hereinafter referred to as the "Named Executive Officers."
Long-Term
Annual Compensation Compensation
Name and Principal ------------------------ ------------
Position Year Salary Bonus Options(#)
- ---------------------- ---- ------ ----- ----------
Howard M. Siegel 2002 $320,000 $5,000 35,730
Chairman of the 2001 $290,000 $7,500 18,750
Board, President 2000 $259,098 -- 181,500
and Chief Executive
Officer
Jack Rhian 2002 $161,667 $5,000 88,199
Executive Vice 2001 $125,000 $6,000 18,654
President and Chief 2000 109,979 -- 100,000
Operating Officer
John Lesher 2002 $132,083 $3,000 81,645
Vice President- 2001 $113,077 $3,000 15,000
Engineering 2000 $100,001 $3,500 8,175
Frederic S. Siegel 2002 $200,000(1) $7,500 13,079
Vice President- 2001 $175,000 $7,500 108,154
Sales and Marketing 2000 $107,736 $108,000 39,659
Richard Rallo 2002 $123,750 $2,500 23,126
Chief Financial Officer 2001 100,833 2,500 10,000
2000 -- -- --
- ---------------------
(1) Includes $38,000 accrued by the Company at December 31, 2002. As of July
7, 2003, $30,000 has been paid.
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OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table contains information concerning options
granted during the Company's 2002 fiscal year to the Named Executive Officers.
All such options were granted under the Company's 2000 Stock Option Plan or the
1997 Stock Option Plan.
Percent of
Total Options
Granted to
Employees in Exercise Price
Name Number of Options Fiscal Year Per Share Expiration Date
---------------- ------- ----------- --------------- ---------------
Howard M. Siegel 7,788 1.1% $3.157 12/31/06
20,000 2.7% $4.004 03/13/07
7,942 1.1% $2.53 08/12/07
Jack Rhian 4,343 0.6% $2.87 12/31/11
30,000 4.0% $3.25 01/30/12
25,000 3.4% $3.50 01/30/12
25,000 3.4% $4.00 01/30/12
3,856 0.5% $2.30 08/12/12
John Lesher 3,333 0.5% $2.87 12/31/11
30,000 4.0% $3.25 01/30/12
30,000 4.0% $3.50 01/30/12
15,000 2.0% $4.00 01/30/12
3,312 0.4% $2.30 08/12/12
Frederic S. Siegel 8,252 1.1% $2.87 12/31/11
4,827 0.7% $2.30 08/12/12
Richard Rallo 5,088 0.7% $2.87 12/31/11
5,000 0.7% $2.00 01/31/07
10,000 1.3% $3.25 01/31/07
3,038 0.4% $2.30 08/12/12
OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUE
The following table sets forth certain information concerning
the number of shares of Common Stock acquired upon the exercise of stock options
during the year ended December 31, 2002 and the number and value at December 31,
2002 of shares of Common Stock subject to unexercised options held by the Named
Executive Officers.
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Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs at
at FY-End (#) FY-End ($)
Shares Acquired Exercisable/ Exercisable/
Name On Exercise (#) Value Realized ($) Unexercisable Unexercisable
---- --------------- ------------------ ------------- -------------
Howard M. Siegel -- -- 290,605/0 $7,795/0
Jack Rhian -- -- 106,853/100,000 $30,378/$23,000
John Lesher -- -- 122,637/45,000 $18,770/0
Frederic S. Siegel -- -- 217,537/0 $123,426/0
Richard Rallo -- -- 33,126/0 $7,886/0
EMPLOYMENT AGREEMENTS:
The Company and Mr. Howard M. Siegel, the Company's Chairman
of the Board, President and Chief Executive Officer, were parties to a
three-year Employment Agreement which expired on December 31, 2002, under the
terms of which, the President received annual base salaries of $320,000 in 2002,
$290,000 in 2001 and $260,000 in 2000. The agreement also provided for
additional compensation based upon the Company achieving certain pre-tax income
levels. No additional compensation was paid during the three years ended
December 31, 2002. The Company and Mr. Howard M. Siegel are in the process of
completing a new employment agreement. Until a new agreement is finalized, Mr.
Howard M. Siegel is being compensated at the same base salary as he earned in
2002.
On November 6, 2001, the Company entered into an employment
agreement with Mr. Frederic S. Siegel pursuant to which he is employed full-time
as the Company's Vice President of Sales and Marketing. The agreement has a term
of three years and expires in December 2003. The agreement provides for an
annual base salary of $175,000, $200,000 and $163,804 in each fiscal year of the
contract. Mr. Siegel also received options to purchase up to 25,000 shares of
the Company's Common Stock, at an exercise price of $2.87 per share.
In addition to the base salary in 2003, Mr. Frederic S. Siegel
shall receive compensation based on the sales and operating results of the
Company in the year 2003 as follows:
2003 COMMISSION SCHEDULE
COMMISSION ON GROSS REVENUE COMMISSION ON EBIT
--------------------------- ------------------
$12 Million - 14 Million .25% $ 250,000 - $1 Million 0.00%
$14 Million - 17 Million .50% $ 1 Million - $1.5 Million 1.0%
$17 Million - 20 Million 1.25% $ 1.5 Million - 2 Million 1.5%
$20 Million - 25 Million 2.0% $ 2.0 Million - 2.5 Million 3.0%
$25 Million Plus 3.0% >$ 2.5 Million 4.0%
Additionally, in each of the three years under the agreement,
the employee is entitled to receive additional stock options to purchase a
number of shares of common stock equal to 2.5% of the
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Company's earnings before interest and taxes ("EBIT"). The number of stock
options will be calculated at the end of the Company's calendar year, and will
be issued with an exercise price equal to the market price at such date. The
maximum number of stock options that can be issued under this agreement during
any one-year period is 100,000.
In the event that Mr. Frederic S. Siegel should become
disabled and be unable to perform his duties for a period of than one hundred
eighty (180) consecutive days or an aggregate of more than one hundred eighty
(180) consecutive days in any 12 month period, the Company may terminate the
employment agreement after the expiration of such period. In such event, Mr.
Frederic S. Siegel shall be entitled to receive his base salary and additional
compensation earned for such fiscal year, if any, prorated to the date of
termination.
In the event of his death during the term of the employment
agreement, Mr. Frederic S. Siegel's estate or such other person as he designated
will be entitled to receive his base salary for a period of one year from the
date of his death.
In addition, in the event there is a change in control and Mr.
Siegel terminates his employment with the Company within 180 days following such
change in control, Mr. Siegel will be entitled to his base salary, the
additional compensation described in the preceding paragraph, any benefits or
awards earned through his last day of employment and a lump sum payment equal to
2.99 times his average annual total compensation for the past 5 years.
On February 1, 2002, the Company entered into an amended
employment agreement with Mr. Jack Rhian. The amended agreement has a term of
three years and expires in January 2005, unless earlier terminated pursuant to
the provisions of the Agreement dated January 31, 2000 and the provisions set
forth in this agreement. The agreement provides for an annual base salary of
$165,000, $180,000 and $200,000 in each fiscal year of the contract. In
addition, Mr. Rhian received options to purchase up to 80,000 shares of the
Company's Common Stock, of which options to purchase 30,000 shares were granted
at an exercise price of $3.25 per share, 25,000 shares at an exercise price of
$3.50 and 25,000 shares at an exercise price of $4.00. Options to purchase
30,000 shares vested on January 31, 2002, 25,000 shares vested on January 31,
2003 and 25,000 shares vest on January 31, 2004. The term of the options is ten
years from the date of grant.
Mr. Rhian will receive additional compensation for any year
that the Company's pre-tax income, as defined in the employment agreement,
exceeds certain thresholds. Mr. Rhian will receive an amount equal to 1% of the
Company's EBIT between $1,000,000 and $1,500,000, 1.5% of the Company's EBIT
between $1,500,000 and $2,000,000, 3.0% of the Company's EBIT between $2,000,000
and $2,500,000 and 4.0% of the Company's EBIT in excess of $2,500,000. In the
event the Company realizes an EBIT of $3,000,000 or more in calendar year 2003
or 2004, the Company will provide Mr. Rhian with an option to purchase an
additional 25,000 shares of Common Stock of the Company at a price of $3.50 per
share.
In the event that Mr. Rhian should become disabled and be
unable to perform his duties for a period of than one hundred eighty (180)
consecutive days or an aggregate of more than one hundred eighty (180)
consecutive days in any 12 month period, the Company may terminate the
employment agreement after the expiration of such period. In such event, Mr.
Rhian shall be entitled to receive his base salary for a period of one (1) year
from the date of such termination.
In the event of his death during the term of the employment
agreement, Mr. Rhian's estate or such other person as he designated would have
been entitled to receive an amount equal to (i) four (4) months of Mr. Rhian's
base salary, in the event of death during the first year of the employment
agreement, eight (8) months of Mr. Rhian's base salary, in the event of death
during the second year of
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the employment agreement, or (ii) twelve (12) months of Mr. Rhian's base salary,
in the event of death during the third year of the employment agreement.
In addition, in the event there is a change in control and Mr.
Rhian terminates his employment with the Company within 180 days following such
change in control, Mr. Rhian will be entitled to his base salary, the additional
compensation described above, any benefits or awards earned through his last day
of employment and a lump sum payment equal to 2.99 times his average annual
total compensation for the past 5 years.
On February 1, 2002 the Company has entered into an employment
agreement with Dr. John Lesher pursuant to which he is employed full-time as the
Company's Vice President of Engineering. The agreement has a term of three years
and expires in January 2005. The agreement provides for an annual base salary of
$135,000, $150,000 and $170,000 in each fiscal year of the contract. In
addition, Dr. Lesher received options to purchase up to 75,000 shares of the
Company's Common Stock, of which options to purchase 30,000 shares were granted
at an exercise price as of $3.25 per share, 30,000 at an exercise price of $3.50
and 15,000 shares at an exercise price of $4.00. Options to purchase 30,000
shares vested on January 31, 2002, 30,000 vested on January 31, 2003, and 15,000
vest on January 31, 2004. The term of the options is ten years from the date of
grant.
In the event that Dr. Lesher should become disabled and be
unable to perform his duties for a period of one hundred eighty (180)
consecutive days or an aggregate of more than one hundred eighty (180) days in
any 12 month period, the Company may terminate the employment agreement after
the expiration of such period. In such event, Dr. Lesher shall be entitled to
receive his base salary for a period of one (1) year from the date of such
termination.
In the event of his death during the term of the employment
agreement, Dr. Lesher's estate or such other person as he designated would have
been entitled to receive his base salary for a period of one year from the date
of his death.
In addition, in the event there is a change in control and Dr.
Lesher terminates his employment with the Company within 180 days following such
change in control, Dr. Lesher will be entitled to his base salary, the
additional compensation described above, any benefits or awards earned through
his last day of employment and a lump sum payment equal to 2.99 times his
average annual total compensation for the past 5 years.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's executive offices and primary Emergency Response
Center are located in a 5,600 square foot facility at 3265 Lawson Boulevard,
Oceanside, New York. On January 1, 1995, the Company entered into a five-year
operating lease with Howard M. Siegel, Chairman of the Board, Chief Executive
Officer and President of the Company. In February 1998 the lease for this space
and the adjoining 8,000 square foot parking lot was extended until September 30,
2007 (the "Lease"). The Lease provides for a base annual rent of $74,600,
subject to a 5% annual increase plus reimbursements for real estate taxes and
other operating expenses. In October 1997, the Company entered into a separate
ten-year operating lease (the "1997 Lease"), for an additional 2,200 square feet
of office space located in an adjacent building owned by Add on Properties, LLC,
owned by Mr. H. Siegel. The 1997 Lease calls for an initial minimum annual rent
of $36,000, subject to a 5% annual increase plus reimbursement for real estate
taxes. In November 1999, an Addendum to the 1997 Lease was entered into for an
additional 2,200 square feet at an annual rent of $39,600 subject to the same
terms and conditions stated in the original lease. The Company believes that
both leases have terms which are competitive and customary.
-13-
The Company purchases all of its business insurance through
Breitstone & Co., Ltd., an insurance brokerage and consulting firm that is owned
by Mr. Peter Breitstone, a former director of the Company. The annual commission
currently earned by Breitstone & Co., Ltd. on such insurance is approximately
$18,000. The Company believes that the premiums paid to the various insurance
carriers are competitive and the commissions paid to Breitstone & Co., Ltd. are
customary in the insurance industry. Mr. Breitstone resigned as director of the
Company in 2001.
The Company has entered into an employment agreements with Mr.
Frederic S. Siegel and Mr. Jack Rhian. See "Employment Agreements" above.
The Company employs Joy Siegel as Vice President of Provider
Relations. In 2002, the Company paid Ms. Siegel a salary of $80,000. Ms. Siegel
is the daughter of Mr. H. Siegel.
Mr. H. Siegel owed the Company $123,532 at December 31, 2001
for certain advances made to him. In July 2002, the amount due from Mr. H.
Siegel, plus accrued interest, was converted into a promissory term loan. The
loan bears interest at a rate of 5% per annum and is payable in monthly
installments of principal and interest through September 1, 2009. The amount
outstanding at December 31, 2002 was $164,394.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act requires the
Company's officers and directors, and persons who beneficially own more than 10%
of the Company's Common Stock, to file initial reports of ownership and reports
of changes of ownership with the Securities and Exchange Commission and furnish
copies of those reports to the Company. Ms. Mendez de Leon failed to timely file
an Initial Statement of Beneficial Ownership on Form 3, and her holdings have
since been reported on a Form 5. The Company is not aware of other late filings,
or failures to file, any other reports required by Section 16(a) of the Exchange
Act during the fiscal year ended December 31, 2002.
REQUIRED VOTE
Directors are elected by a plurality of the votes cast at the
Meeting. Votes withheld in the election of directors and abstentions or broker
non-votes, if any, will be deemed as present for the purposes of determining the
presence of a quorum at the Meeting, but will not be counted towards the
election of any person as a director. Brokers who hold shares of common stock as
nominees will have discretionary authority to vote such shares if they have not
received voting instructions from the beneficial owner by the tenth day before
the Meeting, provided that this proxy statement has been transmitted to the
beneficial holder at least 15 days prior to the Meeting. In the event that any
of the nominees should become unavailable before the Meeting, it is intended
that shares represented by the enclosed proxy will be voted for such substitute
nominee as may be nominated by the current Board of Directors.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS HAS UNANIMOUSLY RECOMMENDED A VOTE IN FAVOR OF EACH
NOMINEE NAMED IN THE PROXY.
- --------------------------------------------------------------------------------
-14-
---------------------------------------------------------------
PROPOSAL 2
RATIFICATION OF SELECTION
OF INDEPENDENT AUDITORS
---------------------------------------------------------------
The Board of Directors believes that it is desirable to
request the shareholders of the Company to ratify its selection of Margolin,
Winer & Evens, LLP as the Company's independent auditors for the fiscal year
ended December 31, 2003. Ratification of the Board's selection is not required
by law, and the Board is not required to take any action if the shareholders
fail to ratify the selection of Margolin, Winer & Evens, LLP as the Company's
independent auditors.
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Margolin, Winer & Evens, LLP has served as the
independent auditors of the Company since 1995. The Board of Directors has
appointed Margolin, Winer & Evens, LLP to continue as the independent auditors
of the Company for the fiscal year ending December 31, 2003.
A representative of Margolin, Winer & Evens, LLP is expected
to be present at the Meeting to respond to appropriate questions from
shareholders and to make a statement if such representative desires to do so.
AUDIT FEES
Audit fees billed to the Company by Margolin, Winer & Evens,
LLP for its audit of the Company's financial statement for the fiscal year 2002
and for its review of the financial statements included in the Company's
Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission
for that period totaled $130,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
The Company did not engage Margolin, Winer & Evens, LLP to
provide advice to the Company regarding financial information systems design and
implementation during fiscal year 2002.
ALL OTHER FEES
Fees billed to the Company by Margolin, Winer & Evens, LLP
during fiscal year 2002 for all other non-audit services rendered to the
Company, including tax related services, totaled $52,934. In connection with the
recently revised standards for independence of the Company's independent public
accountants promulgated by the Securities and Exchange Commission, the Audit
Committee has considered whether the provision of such services is compatible
with maintaining the independence of Margolin, Winer & Evens, LLP.
REQUIRED VOTE
The affirmative vote of a majority of the votes cast at the
Meeting will be required to ratify the appointment of Margolin Winer & Evens,
LLP as auditors of the Company for the fiscal year ending December 31, 2003.
Abstentions and broker non-votes, if any, will not be counted as votes "cast"
with respect to this matter. Unless otherwise directed, persons named in the
Proxy intend to cast all properly executed Proxies received by the time of the
Meeting FOR the ratification of the appointment of Margolin, Winer & Evens, LLP
as the Company's independent auditors for the fiscal year ending December 31,
2003. Brokers who hold shares of Common Stock as nominees will have
discretionary authority to vote such shares if they have not received voting
instructions from the beneficial owners by
-15-
the tenth day before the Meeting, provided that this proxy statement is
transmitted to the beneficial owners at least 15 days before the Meeting.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE RATIFICATION OF
THE SELECTION OF MARGOLIN, WINER & EVENS, LLP AS THE COMPANY'S INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2003
- --------------------------------------------------------------------------------
-16-
MISCELLANEOUS
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the
Company's annual meeting of shareholders to be held in 2004 and to be included
in the Company's proxy statement relating to that meeting must be received by
the Company not later than March 19, 2004. Such proposals should be addressed to
John Rogers, the Company's Secretary, at the address set forth above. Notices of
shareholder proposals submitted outside the processes of Rule 14a-8 of the
Securities Exchange Act of 1934 (relating to proposals to be presented at the
meeting but not to be included in the Company's proxy statement and form of
proxy), will be considered untimely, and thus the Company's proxy may confer
discretionary voting authority on the persons named in the proxy with regard to
such proposals, if received after June 2, 2004.
CERTAIN INFORMATION AS TO INSURANCE AND INDEMNIFICATION
No shareholder action is required with respect to the
following information that is included to fulfill the requirements of Section
725 and 726 of the Business Corporation Law of the State of New York.
Effective April 21, 2003, the Company purchased Directors &
Officers ("D&O") Liability insurance for a one year term providing for
reimbursement, with certain exclusions and deductions, to: (a) the Company and
its subsidiaries for payment they make to indemnify directors, trustees,
officers and assistant officers of the Company and its subsidiaries (b)
directors, trustees, officers and assistant officers for losses, costs and
expenses incurred by them in actions brought against them in connection with
their acts in those capacities for which they are not indemnified by the Company
and its subsidiaries, and (c) the Company and its subsidiaries for any payments
they make resulting from a securities claim. The insurer is Great American
Insurance Company. The total cost of the D&O Liability insurance through April
21, 2004 was $30,000. The Company is also party to indemnification agreements
with its directors and officers, pursuant to which the Company has agreed to
indemnify such directors and officers from certain expenses incurred in
connection with certain actions taken by such director or officer in their
capacity as such.
OTHER MATTERS
The Board of Directors is unaware of other business to be
brought before the Meeting. If, however, any other business should properly come
before the Meeting, the persons named in the accompanying Proxy will vote
Proxies as in their discretion they may deem appropriate, unless they are
directed by a Proxy to do otherwise.
PROXIES
All shareholders are urged to fill in their choices with
respect to the matters to be voted on, sign and promptly return the enclosed
form of Proxy.
-17-
ANNUAL REPORT TO SHAREHOLDERS
The Company's 2002 Annual Report to Shareholders has been
mailed to shareholders simultaneously with the mailing of this proxy statement.
Such report is not incorporated herein and is not deemed to be a part of this
proxy solicitation material.
By Order of the Board of Directors,
JOHN ROGERS
July 17, 2003 Secretary
-18-
PROXY CARD
PROXY PROXY
- ----- -----
AMERICAN MEDICAL ALERT CORP.
(SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS)
The undersigned holder of Common Stock of AMERICAN MEDICAL
ALERT CORP. (the "Company"), revoking all proxies heretofore given, hereby
constitutes and appoints Howard M. Siegel and John Rogers and each of them,
Proxies, with full power of substitution, for the undersigned and in the name,
place and stead of the undersigned, to vote all of the undersigned's shares of
said stock, according to the number of votes and with all the powers the
undersigned would possess if personally present, at the Annual Meeting of
Shareholders of the Company (the "Meeting"), to be held at 36-36 33rd Street,
Long Island City, New York 11106, on Thursday, August 21, 2003 at 10:00 A.M.,
Eastern time, and at any adjournments or postponements thereof.
The undersigned hereby acknowledges receipt of the Notice of
Meeting and Proxy Statement relating to the Meeting and hereby revokes any proxy
or proxies heretofore given.
Each properly executed Proxy will be voted in accordance with
the specifications made on the reverse side of this Proxy and in the discretion
of the Proxies on any other matter that may come before the Meeting. Where no
choice is specified, this Proxy will be voted FOR all listed nominees to serve
as directors, and FOR proposal 2 (ratification of the selection of Margolin,
Winer & Evens, LLP as the Company's independent auditors for the fiscal year
ending December 31, 2003).
PLEASE MARK YOUR CHOICE ON ALL PROPOSALS,
AND DATE AND SIGN THIS PROXY ON THE REVERSE SIDE
- --------------------------------------------------------------------------------
PLEASE MARK YOUR CHOICE LIKE [X]
THIS IN BLUE OR BLACK INK
- --------------------------------------------------------------------------------
The Board of Directors Recommends a Vote FOR all
listed nominees
(1) Election of directors:
- -------------------------
Nominees: 1. Howard M. Siegel 5. Frederic S. Siegel
- -------- 2. Delphine Mendez de Leon 6. Ronald Levin
3. James F.LaPolla 7. Yacov Shamash
4. Jack Rhian
FOR all nominees listed WITHHOLD AUTHORITY to vote
(except as marked to the contrary*) for all listed nominees above
[ ] [ ]
(*Instruction: To withhold authority to vote for any individual nominee,
circle that nominee's name in the list provided above.)
The Board of Directors recommends a vote FOR the following proposal:
FOR AGAINST ABSTAIN
(2) To ratify the selection of Margolin,
Winer & Evens, LLP as independent public
accountants of the Company for the
fiscal year ending December 31, 2003. [ ] [ ] [ ]
The shares represented by this proxy will be voted in the manner
directed. In the absence of any direction, the shares will be voted FOR each
nominee named in Proposal 1, FOR Proposal 2, and in accordance with the
discretion of the persons appointed as Proxies on such other matters as may
properly come before the Meeting. In case any nominee should become unavailable
for election to the Board of Directors for any reason, the persons appointed as
Proxies shall have discretionary authority to vote the Proxies for one or more
alternative nominees who will be designated by the existing Board of Directors.
Dated: _____________________, 2003
----------------------------------
----------------------------------
Signature(s)
(Signature(s) should
conform to names as
registered. For jointly
owned shares, each owner
should sign. When signing
as attorney, executor,
administrator, trustee,
guardian or officer of a
corporation, please give
full title.)
PLEASE MARK YOUR CHOICE ON ALL PROPOSALS,
AND DATE AND SIGN ABOVE AND RETURN PROMPTLY