American Medical Alert Corp - Proxy Statement (definitive) (DEF 14A)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

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o Soliciting Material Pursuant to §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)

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AMERICAN MEDICAL ALERT CORP.

3265 LAWSON BOULEVARD

OCEANSIDE, NEW YORK 11572

July 22, 2008

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 Tuesday, August 26, 2008, commencing at 10:00 a.m. Eastern Daylight Time at Moses & Singer LLP, 405 Lexington Avenue, 12th Floor, New York, New York 10174. The matters to be acted upon at the 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 of the Board of Directors

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 26, 2008

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 Tuesday, August 26, 2008, commencing at 10:00 a.m. Eastern Daylight Time at Moses & Singer LLP, 405 Lexington Avenue, 12th Floor, New York, New York 10174 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, 2008; 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 8, 2008 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 22, 2008

IT IS IMPORTANT THAT YOUR SHARES ARE 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 (the “ 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 the Company’s board of directors (the “ Board of Directors ”) of proxies (“ Proxy ” or “ Proxies ”) for use at the Annual Meeting of Shareholders (the “ Meeting ”) to be held on Tuesday, August 26, 2008, commencing at 10:00 a.m. Eastern Daylight Time at Moses & Singer LLP, 405 Lexington Avenue, 12th Floor, New York, New York 10174, and at any adjournment or postponement thereof, for the purposes set forth in the accompanying Notice of Annual Meeting of Shareholders.

The costs of preparing, assembling, printing, mailing and distributing the Notice of Annual Meeting of Shareholders, the Proxy Statement, the Proxies and the annual report will be borne by the Company. The Company may engage an independent proxy solicitor to assist in the distribution of proxy materials and the solicitation of votes. 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 accompanying materials to the beneficial holders of such Common Stock. 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 22, 2008.

Unless otherwise specified thereon, 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, 2008. The persons named in the Proxy shall have discretionary authority to vote the shares represented by a Proxy on any matter that may properly come before the Meeting, including matters incident to the conduct of the Meeting.

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, as promptly as possible, to mark, sign, date and return the enclosed proxy card in the enclosed pre-paid envelope (which requires no postage if mailed in the United States). 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 8, 2008 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 9,484,527 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 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, 2008 requires the affirmative vote of a majority of votes cast at the Meeting on this proposal. Abstentions and broker non-votes, if any, will not be counted as votes “cast” with respect to such matter.

Proposal 1

ELECTION OF DIRECTORS

The Board of Directors consists of seven directors. The number of directors constituting the Board of Directors is subject to change by action of the shareholders, or by action of the Board of Directors, as provided in the Company’s Bylaws. At the Meeting, shareholders will elect 7 directors to serve on the 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, Jack Rhian, Frederic S. Siegel, John S.T. Gallagher, Ronald Levin , Yacov Shamash and Gregory Fortunoff (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 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 Board of Directors, subject to prior recommendation by the Nominating Committee.

DIRECTORS AND EXECUTIVE OFFICERS

The current directors and executive officers of the Company, along with their ages and present positions with the Company, are as follows:

Name	Age	Position with the Company

Howard M. Siegel	74	Chairman of the Board of Directors, Senior Advisor and Director
Jack Rhian	53	Chief Executive Officer, President and Director
Frederic S. Siegel	38	Executive Vice President and Director
Ronald Levin	74	Director
Yacov Shamash, Ph.D	58	Director
John S.T. Gallagher	76	Director
Gregory Fortunoff	37	Director
Richard Rallo	44	Chief Financial Officer
Randi M. Baldwin	39	Senior Vice President, Marketing and Program Development

Information about Directors and Nominees

All of our directors are elected for a one-year term, and serve until the next subsequent annual meeting of shareholders. Set forth below is certain information with respect to each of the Nominees.

HOWARD M. SIEGEL, 74, has been the Chairman of the Board of Directors and a director for the past five years. Mr. Siegel served as the Company’s Chief Executive Officer until December 31, 2006, at which time he resigned his position and became the Senior Advisor for the Company. Mr. Siegel also served as the Company’s President prior to July 2004 and Chief Financial Officer prior to September 1996.

JACK RHIAN, 53, was named the Company’s Chief Executive Officer effective January 1, 2007. He has been a director of the Company since October 2002 and has been the Company’s President since July 2004. Up until January 1, 2007, Mr. Rhian also served as the Chief Operating Officer, and was Executive Vice President from August 2002 and prior to becoming the President. 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 Operating Officer of Nationwide 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, 38, has been a director of the Company since September 1998, and the Company’s Executive Vice President since January 2007. Prior to that he was the Company’s Senior Vice President - Business Development and prior to that 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, 74, 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 Ernst & Co. He served as Executive Vice President of D.A. Campbell Co., an international institutional stock brokerage firm, from 1965 through 1998.

YACOV SHAMASH, PH.D., 58, 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. Dr. Shamash has been a member of the Board of Directors of (i) KeyTronic Corporation, a contract manufacturer, since 1989, and (ii) Applied DNA Sciences Inc., a provider of DNA encryption for authentication solutions, since March 2006.

JOHN S.T. GALLAGHER, 76, has been a director of the Company since May 2005. He has been the Chief Executive Officer and Chairman of the Board of Directors of Vanguard Health Care Management, LLC since September 2006. He is also the deputy county executive for health and human services in Nassau County, New York. He has been a senior executive officer of North Shore University Hospital and North Shore - Long Island Jewish Health System since 1982, having served as executive vice president of North Shore from 1982 until 1992, president from 1992 until 1997 and chief executive officer of the combined hospital system from 1997 until January 2002. In January 2002, he became co-chairman of the North Shore—Long Island Jewish Heath System Foundation and continues to serve in this position. Mr. Gallagher has also been a director of Perot Systems Corporation, a worldwide provider of information technology services, since May 2001.

GREGORY FORTUNOFF, 38, has been a director of the Company since April 2006. Since May 2008, Mr. Fortunoff has been a partner with First New York Securities, L.L.C., an equity trading firm, where Mr. Fortunoff was previously employed in the same capacity from December 1993 to August 2004. Mr. Fortunoff was an equity trader at the Royal Bank of Canada from April 2006 to April 2008 and was a portfolio manager at X Mark Funds, a health care hedge fund, from November 2004 to September 2005.

Non-Director-Significant Officers

RICHARD RALLO, 44, joined the Company in February 2001 as the Controller and became Chief Financial Officer in April 2003. 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 ROGERS, 61, 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.

RANDI M. BALDWIN, 39, is the Company’s Senior Vice President, Marketing and Program Development since January 2007. Prior to that, she was the Company’s Vice President - Marketing and Communications. Ms. Baldwin joined the Company in March 1999 as the Director of Marketing. Prior to joins the Company, she held executive level positions at various advertising agencies in the NY metropolitan area.

Family Relationships

The Company employs Howard M. Siegel as Senior Advisor. In 2007, he earned compensation of $301,459. Howard M. Siegel is the father of Frederic S. Siegel.

The Company employs Frederic S. Siegel as Executive Vice President. In 2007, he earned compensation of $293,837. Frederic S. Siegel is the son of Howard M. Siegel.

The Company employs Joy Siegel as Vice President of Provider Relations. In 2007, she earned compensation of $97,167. Joy Siegel is the daughter of Howard M. Siegel and the sister of Frederic S. Siegel.

CORPORATE GOVERNANCE

Director Independence; Meetings and Committees

The following members of, and nominees for, the Board of Directors are independent as defined in Rule 4200(a)(15) of the National Association of Securities Dealers’ Marketplace Rules of the Nasdaq Stock Market (the “ NASDAQ Rules ”): Mr. Levin, Mr. Shamash, Mr. Gallagher and Mr. Fortunoff. During 2007, the Board of Directors held 11 meetings and took action by unanimous written consent once. All of the directors attended at least 75% of the meetings of the Board of Directors during fiscal year 2007. The Board of Directors encourages all of its members to attend the Company’s annual meeting of shareholders so that each director may listen to any concerns that shareholders may have that are raised at the annual meeting. Other than James LaPolla (who passed away prior to the Company’s 2007 annual meeting of shareholders), all of the members of the Board of Directors who served during 2007 attended the Company’s 2007 annual meeting of shareholders. The Board of Directors has a separately designated Audit Committee, Compensation Committee and Nominating Committee.

Audit Committee

The Audit Committee is a separately designated standing committee, established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), which currently consists of Mr. Shamash, Mr. Levin, Mr. Fortunoff and Mr. Gallagher, each of whom is an independent director as defined in Rule 4200(a)(15) of the NASDAQ Rules and in Rule 10A-3 of the Exchange Act. The Board of Directors has determined that Mr. Gallagher meets the standard of an “audit committee financial expert,” as defined by Item 407(d) of Regulation S-K. The function of the Audit Committee is to review and advise the Board of Directors with respect to matters concerning the financial condition and operations of the Company, including reviewing and discussing the Company’s annual audited and quarterly financial statements and disclosures, to select the independent auditors for the Company and determine the scope of their engagement and their compensation, to review the effectiveness of the Company’s internal accounting methods and procedures and financial reporting and disclosure controls, 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. A copy of the Audit Committee Charter was included as Appendix A to the Company’s 2007 proxy statement, which can be viewed on the SEC’s EDGAR website, and has been posted to the Company’s website at www.amac.com . For the fiscal year 2007, the Audit Committee held 6 meetings and took no action by unanimous written consent. All of the members attended at least 75% of the meetings of the Audit Committee during fiscal year 2007.

Audit Committee Report

During fiscal year 2007, 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, 2005, 2006 and 2007, 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 Board of Directors the inclusion of the Audited Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.

Audit Committee

Yacov Shamash

Ronald Levin

Gregory Fortunoff

John S.T. Gallagher

Compensation Committee

The Compensation Committee currently consists of Mr. Levin, Mr. Gallagher and Mr. Shamash, each of whom is an independent director as defined in Rule 4200(a)(15) of the NASDAQ Rules. The function of the Compensation Committee is to recommend to the Board of Directors relevant compensation actions for executive officers and to attend to such matters relating to compensation as may be prescribed by the Board of Directors. The Compensation Committee does not have a charter. For a description of the Company’s processes and procedures for the consideration and determination of executive and director compensation, see the discussion contained herein under the caption “Executive Compensation - Compensation Discussion and Analysis” beginning on page 10. For the fiscal year 2007, the Compensation Committee held 5 meetings and took no action by unanimous written consent. All of the members attended at least 75% of the meetings of the Compensation Committee during fiscal year 2007.

Compensation Committee Interlocks and Insider Participation

Each of James Lapolla (a former director), Mr. Shamash, Mr. Levin and Mr. Gallagher served as members of the Compensation Committee during fiscal year 2007, none of whom (i) was during such fiscal year an officer or employee of the Company, (ii) formerly an officer of the Company, or (iii) had any relationship requiring disclosure under any paragraph of Item 404 of Regulation S-K.

During fiscal year 2007, no executive officer of the Company served as a member of a compensation committee (or other board committee performing similar functions) of another entity, one of whose executive officers served on the Compensation Committee.

During fiscal year 2007, no executive officer of the Company served as a director of another entity, one of whose executive officers served on the Compensation Committee.

During fiscal year 2007, no executive officer of the Company served as a member of the compensation committee (or other board committee performing similar functions) of another entity, one of whose executive officers served as a director of the Company.

Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis section included in this annual report on Form 10-K with management of the Company. Based on such review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis section be included in the Company’s annual report on Form 10-K.

Yacov Shamash

Ronald Levin

John S.T. Gallagher

Nominating Committee

The Nominating Committee currently consists of Mr. Levin and Mr. Shamash, each of whom is an independent director as defined in Rule 4200(a)(15) of the NASDAQ Rules. The function of the Nominating Committee is to consider and recommend to the Board of Directors candidates for appointment or election as directors. The specific functions and responsibilities of the Nominating Committee are set forth in a written charter of the Nominating Committee, adopted by the Board of Directors. A copy of the Nominating Committee Charter was included as Appendix B to the Company’s 2007 proxy statement, which can be viewed on the SEC’s EDGAR website, and and has been posted to the Company’s website at www.amac.com . For the fiscal year 2007, the Nominating Committee held 1 meeting and took no action by unanimous written consent. All of the members attended at least 75% of the meetings of the Nominating Committee during fiscal year 2007.

A nominee to the Board of Directors must have such experience in business or financial matters as would make such nominee an asset to the Board of Directors. In recommending director candidates, the Nominating Committee takes into consideration such factors as it deems appropriate based on the Company’s current needs. These factors may include diversity, age, skills such as an understanding of the healthcare industry, decision-making ability, interpersonal skills, experience with businesses and other organizations of comparable size, community activities and relationships, and the interrelationship between the candidate’s experience and business background, and other Board of Directors members’ experience and business background, as well as the candidate’s ability to devote the required time and effort to serve on the Board of Directors.

The Nominating Committee will consider for nomination candidates recommended by shareholders if the shareholders comply with the following requirements, as well as the requirements set forth in Article II, Section 14 of the Company’s Bylaws (filed as Exhibit 3(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2007). If a shareholder wishes to recommend a candidate to the Nominating Committee for consideration as a Board of Directors’ nominee, such shareholder must submit in writing to the Nominating Committee the recommended candidate’s name, a brief resume setting forth the recommended candidate’s business and educational background and qualifications for service, any other information relating to the recommended candidate that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act, and a notarized consent signed by the recommended candidate stating the recommended candidate’s willingness to be nominated and to serve. This information must be delivered to the Nominating Committee at the Company’s address and must be received in a timely manner as specified in the Company’s Bylaws (these requirements are not applicable to persons nominated by or at the direction of the Board of Directors). The timing requirements with respect to next year’s annual meeting of shareholders are described in the section of the Proxy Statement entitled “Shareholder Proposals.” The Nominating Committee may request further information if it determines a recommended candidate may be an appropriate nominee. The Nominating Committee has recommended the nomination of the Nominees included in the Proxy Statement.

SHAREHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS

Any shareholder who wishes to send communications to the Board of Directors should mail such communications to the intended recipient by name or position in care of: Corporate Secretary, American Medical Alert Corp., 3265 Lawson Blvd., Oceanside, NY 11572. Upon receipt of any such communications, the Corporate Secretary will determine the identity of the intended recipient and whether the communication is an appropriate shareholder communication. The Corporate Secretary will send all appropriate shareholder communications to the intended recipient. An “appropriate shareholder communication” is a communication from a person claiming to be a shareholder in the communication, and the subject of which relates solely to the sender’s interest as a shareholder and not to any other personal or business interest.

In the case of communications addressed to the Board of Directors, the Corporate Secretary will send appropriate shareholder communications to the Chairman of the Board of Directors. In the case of communications addressed to the independent directors, the Corporate Secretary will send appropriate shareholder communications to the Chairman of the Audit Committee. In the case of communications addressed to committees of the Board of Directors, the Corporate Secretary will send appropriate shareholder communications to the Chairman of such committee.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as to the ownership of shares of Common Stock, as of July 8, 2008, with respect to (a) holders known to the Company to beneficially own more than five percent of the outstanding Common Stock, (b) each director, (c) the named executive officers in the Summary Compensation Table and (d) all directors and named 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
Title of Class	Beneficial Owner ⁽¹⁾		Beneficial Ownership			Class ⁽²⁾

Common Stock		Howard M. Siegel		1,106,731			11.7	%

Common Stock		Ronald Levin 184 Greenway Road Lido Beach, NY 11561		171,884	⁽³⁾		1.8	%

Common Stock		John S.T. Gallagher 26 Woodfield Road Stony Brook, NY 11790		27,584	⁽⁴⁾		*

Common Stock		Frederic S. Siegel		384,601	⁽⁵⁾		4.0	%

Common Stock	Yacov Shamash, Ph.D. 7 Quaker Hill Road Stony Brook, NY 11790	55,184	⁽⁶⁾	*

Common Stock	Jack Rhian	334,353	⁽⁷⁾	3.5	%

Common Stock	Richard Rallo	119,926	⁽⁸⁾	1.3	%

Common Stock	Randi M. Baldwin	58,351	⁽⁹⁾	*

Common Stock	Gregory Fortunoff 200 East 72nd Street New York, NY 10021	806,884	⁽¹⁰⁾	8.5	%
Common Stock	Discovery Group 191 North Wacker Drive Suite 1685 Chicago, IL 60606	861,418		9.1	%
	All directors and named executive officers as a group (10 persons)	3,065,498	⁽¹¹⁾	30.8	%

__________________________________________________

(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 40,000 shares subject to currently exercisable stock options. Includes 15,200 shares owned by Mr. Levin's wife, to which Mr. Levin disclaims beneficial ownership.

(4)	Consists of 20,000 shares subject to currently exercisable stock options.

(5)	Includes 123,926 shares subject to currently exercisable stock options.

(6)	Includes 40,000 shares subject to currently exercisable stock options.

(7)	Includes 93,199 shares subject to currently exercisable stock options, and 48,000 shares owned by Mr. Rhian's wife.

(8)	Includes 81,926 shares subject to currently exercisable stock options.

(9)	Includes 55,180 shares subject to currently exercisable stock options.

(10)	Includes 10,000 shares subject to currently exercisable stock options.

(11)	Includes currently exercisable options indicated in notes (3), (4), (5), (6), (7), (8), (9), (10) and (11).

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Overview of Compensation Policy

The Compensation Committee is responsible for establishing, implementing, and monitoring the Company’s compensation strategy and policy and reviewing and recommending for the approval of the full Board of Directors the compensation for the named executive officers of the Company. Among its principal duties, the Compensation Committee ensures that the total compensation of the named executive officers is fair, reasonable and competitive. For purposes herein, “named executive officers” shall have the meaning given to such term in the Summary Compensation Table on page 15.

Objectives and Policies of Compensation

The primary objective of the Company’s compensation policy, including the executive compensation policy, is to help attract and retain qualified, energetic managers who are enthusiastic about the Company’s mission and products. The policy is designed to reward the achievement of specific annual and long-term strategic goals, aligning executive remuneration with company growth and shareholder value. In addition, the Board of Directors strives to promote an ownership mentality among key managers.

Setting Executive Compensation

The compensation policy is designed to reward the named executives officers based on both individual and Company performance. In measuring named executive officers’ contribution to the Company, the Compensation Committee considers numerous factors including the named executive officer’s individual efforts, Company’s growth and financial performance as measured by revenue and earnings before interest and taxes of named executive officers among other key performance indicators.

Regarding most compensation matters, management provides recommendations to the Compensation Committee; however, the Compensation Committee does not delegate any of its functions to others in recommending compensation of executive officers to the Board of Directors. The Compensation Committee periodically engages outside compensation consultants with respect to executive and/or director compensation matters.

Stock price performance has not been a factor in determining annual compensation because the price of the Common Stock is subject to a variety of factors outside of management’s control. The Company does not subscribe to an exact formula for allocating between cash and non-cash compensation or allocating between incentive or performance based compensation and non-performance compensation, each of which is determined on a case by case basis, balancing the need to offer competitive base salaries, with the goal of incentivizing executives to contribute to the Company’s growth. A portion of total compensation for each named executive officer, other than the compensation of the Chief Financial Officer and the Senior Vice President, Marketing and Program Development, is performance-based, taking into consideration the nature of each executive’s position and the opportunity to contribute to realizing the Company’s performance targets. Historically, the majority of the performance based compensation for executives has been in the form of equity incentives in order to better align the goals of executives with the goals of shareholders.

Elements of Company’s Compensation Plan

The principal components of compensation for the Company’s named executive officers are:

base salary

nonperformance-based stock compensation

performance-based incentive stock compensation

Base Salary

The Company provides named executive officers and other employees with base salaries to compensate them for services rendered during the fiscal year. Base salary ranges for named executive officers are determined for each executive based on his or her position and responsibility.

During its review of base salaries for executives, the Compensation Committee primarily considers:

Comparable salaries of executives of similar positions employed by companies of similar size as the Company;

internal review of the executives’ compensation, both individually and relative to other officers; and

Past performance of the executive.

Salary levels are typically evaluated annually as part of the Company’s performance review process, as well as upon a promotion or other change in job responsibility, but are usually set at the time of execution of the applicable employment contracts. Employment contracts for named executive officers range between 2-5 years in length and usually provide for a graduated increase in base salary.

Non Performance-Based Stock Compensation

As part of executing employment agreements with its named executive officers, the Company granted stock options and made stock grants to its named executive officers. The stock grant shares vest over time, subject to the condition that the executive is employed by the Company at particular yearly intervals. These grants are made to encourage longevity of service and to provide the executives with an ownership interest in the Company. The amount of shares granted is determined based on revenue and earnings before interest and taxes (“ EBIT ”) thresholds.

The majority of the stock options granted by the Board of Directors vest immediately and have terms anywhere from five to ten years. Vesting and exercise rights cease 90 days after the termination of employment for executives. Prior to the exercise of an option, the holder has no rights as a shareholder, including voting rights, with respect to the shares subject to such option.

Performance-Based Incentive Stock Compensation

The Company’s stock and option plans give the Compensation Committee the ability to design stock-based incentive compensation programs to promote high performance and achievement of corporate goals, encourage the growth of shareholder value and allow key employees to participate in the long-term growth and profitability of the Company.

For stock-based programs, the Compensation Committee may recommend granting to participants stock, stock options and stock appreciation rights, which are the only non-cash incentives currently approved by the shareholders of the Company. In granting these stock, stock options and stock appreciations rights, the Compensation Committee recommends parameters such as vesting schedules and terms of the grants.

Equity award levels are determined based on the Company’s assessment of the named executive officer’s contribution to the achievement of the Company’s performance targets, and vary among executives based on their positions within the Company. These awards are granted or approved at the Board of Directors’ regularly or special scheduled meeting. Stock options are awarded at the closing price of the Common Stock as reported by NADSAQ on the date of the grant.

Equity awards to executives are generally granted or determined at the time of the execution of the applicable employment agreement.

Individual Compensation Considerations

With respect to each of the named executive officers, in additional to the general considerations described above, the Compensation Committee evaluated the following criteria in determining such executive’s compensation structure:

Howard M. Siegel

In 2006, the Compensation Committee based its recommendations with respect to the compensation of Mr. Siegel, who was the long time Chief Executive Officer, on Mr. Siegel’s anticipated resignation from such position effective as of January 1, 2007, and increasingly reduced role in the management of the operations of the Company. The Compensation Committee recommended that Mr. Siegel be employed as Senior Adviser and devote his full time to the Company for one year, with a reduced time commitment over the final two years of a three year employment contract. As a result, the Compensation Committee recommended that Mr. Siegel’s base salary be reduced, in each of the three years covered by his employment agreement in light of the reduced role and time commitment expected of Mr. Siegel. The Compensation Committee also believed that Mr. Siegel’s continued contributions to the Company in his new role were important and could impact the Company’s overall performance and, therefore, recommended that equity incentive compensation be awarded based on performance targets related to the overall performance of the Company and based on Mr. Siegel’s contribution to the achievement of such targets. In recommending the specific performance criteria, the committee determined that the award should primarily be based on EBIT, which it believes is the best indicator of the Company’s overall performance.

In determining the compensation structure, the compensation committee considered the following metrics:

Evaluation of past individual performance and expected future contribution.

Use of an outside third party consultant

Overall past performance and desired future performance of the Company

Jack Rhian

In 2005, the Compensation Committee recommended that Mr. Rhian’s pay structure, who was then the President and Chief Operating Officer, should be comprised of a (i) base salary, (ii) performance based stock compensation and (iii) non-performance stock compensation. In light of Mr. Rhian’s past and future position with the Company as President and Chief Operating Officer, the committee felt that since Mr. Rhian would be responsible for overseeing the Company’s overall performance, a significant portion of his compensation should be based on Company performance criteria. In recommending the specific performance criteria, the Compensation Committee determined that the award should primarily be based on EBIT, which it believes is the best indicator of the Company’s overall performance. In addition, to provide incentive to Mr. Rhian to remain with the Company, the Compensation Committee also recommended compensating Mr. Rhian with non-performance shares which would vest annually over his employment agreement.

In determining the various levels of performance targets, the Compensation Committee considered the following metrics:

Evaluation of past individual performance and expected future contribution.

A review of compensation packages with comparable companies.

Use of an outside third party consultant

Overall past performance and desired future performance of the Company

Frederic S. Siegel

In 2007, the Compensation Committee recommended that Mr. Siegel’s pay structure, who is the Executive Vice President, be comprised of a (i) base salary, (ii) performance based stock compensation and (iii) non-performance stock compensation. Due to Mr. Siegel’s overall responsibility for the operating results of the Company’s HSMS segment, including delivery of top line growth and pre-tax profit, the Compensation Committee believed that a portion of his compensation should be based on Company performance targets. As part of this structure, the Compensation Committee also recommended to reduce the base salary earned by Mr. Siegel over the two years preceding his new agreement (2005 and 2006) in order to appropriately balance the allocation between performance based and non-performance based compensation. In recommending the specific performance criteria, the Compensation Committee determined that the performance incentives should be broken out into three areas; (i) HSMS revenue growth, (ii) HSMS EBIT growth and (iii) total Company EBIT growth, with the majority of the performance incentive being weighted towards the first two areas. In addition, to provide incentive to Mr. Siegel to remain with the Company, the Compensation Committee recommended compensating Mr. Siegel with non-performance shares which would vest annually over his employment agreement.

In determining the various levels of performance targets, the Compensation Committee considered the following metrics:

Evaluation of past individual performance and expected future contribution.

A review of compensation packages with comparable companies.

Use of an outside third party consultant

Overall past performance and desired future performance in the HSMS segment as well as the Company

Richard Rallo

In 2005, the Compensation Committee recommended that Mr. Rallo’s pay structure, who is the Chief Financial Officer, be comprised of a base salary and non-performance stock compensation. Due to his unique position as Chief Financial Officer, the Compensation Committee did not believe it was appropriate to provide performance based compensation as part of Mr. Rallo’s pay structure. In addition, to provide incentive to Mr. Rallo to remain with the Company, the Compensation Committee recommended compensating Mr. Rallo with non-performance shares which would vest annually over his employment agreement.

In determining the structure of Mr. Rallo’s compensation, the Compensation Committee considered the following metrics:

Evaluation of past individual performance and expected future contribution.

A review of compensation packages with comparable companies.

Use of an outside third party consultant

Randi M. Baldwin

In 2006, the Compensation Committee recommended that Ms. Baldwin’s pay structure, who is the Senior Vice President, Marketing and Program Development, be comprised of a base salary and non-performance stock option compensation. Due to her position as Senior Vice President, Marketing and Program Development, the Compensation Committee did not believe it was appropriate to provide performance based compensation as part of Ms. Baldwin’s pay structure.

In determining the structure of Ms. Baldwin’s compensation, the Compensation Committee considered the following metrics:

Evaluation of past individual performance and expected future contribution.

A review of compensation packages with comparable companies.

Use of an outside third party consultant

Retirement and Other Benefits

All employees in the United States are eligible to participate in the Company’s 401(k) Retirement Plan.

401(k) Retirement Plan

In 1997, the Company instituted a 401(k) Retirement Plan covering substantially all full-time employees with six months of service. Under the 401(k) Retirement Plan, employees may elect to defer up to 15% of compensation (subject to certain limitations). Matching contributions are discretionary and may be contributed at the option of the Company. The Company currently matches 15% of up to 4% of the employee contributions. In addition, the Company may make an annual discretionary profit-sharing contribution. Employee contributions, Company matching contributions and related earnings are always 100% vested.

Accounting and Tax Considerations

Beginning on January 1, 2006, the Company began accounting for stock-based payments in accordance with the requirements of FASB Statement 123(R).

The Company’s equity grant policy has been impacted by the implementation of SFAS No. 123R. Under this accounting pronouncement, the Company is required to value unvested stock options granted prior to the adoption of SFAS 123 under the fair value method and expense those amounts in the income statement over the stock option’s remaining vesting period.

Section 162(m) of the Internal Revenue Code restricts deductibility of executive compensation paid to the Company’s chief executive officer and each of the four other most highly compensated executive officers holding office at the end of any year to the extent such compensation exceeds $1,000,000 for any of such officers in any year and does not qualify for an exception under Section 162(m) or related regulations. The Board of Directors’ policy is to qualify its executive compensation for deductibility under applicable tax laws to the extent practicable. Income related to stock and stock options generally qualifies for an exemption from these restrictions imposed by Section 162(m). In the future, the Board of Directors will continue to evaluate the advisability of qualifying its executive compensation for full deductibility.

Summary Compensation Table

The following table includes information concerning compensation for the one year period ended December 31, 2007 with respect to our Chief Executive Officer, Chief Financial Officer and three of our other most highly compensated executive officers for such period (the “ named executive officers ”).

Name And Principal Position	Year		Salary ($)		Bonus ($)		Stock Awards ⁽¹⁾ ($)		All Other Compen- sation ($)			Total ($)
Howard M. Siegel, Senior Advisor		2007	$	300,000		-		-	$	1,459	(2)	$	301,459

Jack Rhian, President and Chief Executive Officer		2007	$	260,000		-	$	98,935	$	13,558	(3)	$	372,493

Frederic S. Siegel, Executive Vice President		2007	$	190,000	$	5,253	$	86,538	$	12,046	(4)	$	293,837

Richard Rallo, Chief Financial Officer		2007	$	185,000		-	$	41,390	$	10,708	(5)	$	237,098

Randi M. Baldwin, Senior Vice President, Marketing and Program Development		2007	$	141,167	$	10,100	$	21,390	$	9,247	(6)	$	181,904

(1)

The amounts in the “Stock Awards” column reflect the dollar amounts recognized as compensation expense for financial statement reporting purposes for stock grants for the fiscal year ended December 31, 2007 in accordance with SFAS 123R. The assumptions we used to calculate these amounts are discussed in Note 1 to our consolidated financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2007.

(2)	Includes employer 401(k) contribution of $1,459.

(3)	Includes employer 401(k) contribution of $1,558 and auto stipend of $12,000.

(4)	Includes employer 401(k) contribution of $646 and auto stipend of $11,400.

(5)	Includes employer 401(k) contribution of $1,108 and auto stipend of $9,600.

(6)	Includes employer 401(k) contribution of $847 and auto stipend of $8,400.

Grants of Plan-Based Awards

The following table provides information on stock options, stock units and performance stock units granted in 2007 to each of our named executive officers. There can be no assurances that the Grant Date Fair Value of Stock and Option Awards will ever be realized. The amount of these awards that were expensed is shown in the Summary Compensation Table.

			Estimated Future Payouts Under Non-Equity Incentive Plan Awards							Estimated Future Payouts Under Equity Incentive Plan Awards									All Other Stock Awards Number Of Shares			Grant Date Fair Value
Name	Grant Date		Thresh-Old (#)		Target (#)			Maxi- Mum (#)		Thresh- Old (#)			Target (#)			Maxi- Mum (#)			of Stock or Units (#)			Of Stock and Option Awards ⁽¹⁾
Howard M. Siegel				-		-			-		-			-			-			-			-

Jack Rhian				-		-			-		-			-			-			-			-

Frederic S. Siegel		5/24/07		-		-			-		-			-			-			22,000	⁽²⁾	$	177,100
		5/24/07			$	21,012	⁽⁷⁾		-		2,000	⁽³⁾		21,000	⁽⁴⁾		46,000	⁽⁵⁾				$	21,390

Richard Rallo		12/27/07		-		-			-		-			-			-			3,000	⁽⁶⁾	$	21,390

Randi M. Baldwin		12/27/07		-		-			-		-			-			-			3,000	⁽⁶⁾	$	21,390

(1)

The amounts in the “Grant Date Fair Value of Stock and Stock Option Awards” column reflect the grant date fair value of the applicable award as of the date of grant as determined in accordance with SFAS 123R. The assumptions we used to calculate these amounts are discussed in Note 1 to our consolidated financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2007 and 2006.

(2)	Represents stock granted subject to repurchase rights. The repurchase right lapse with respect to 5,500 shares each on December 31, 2007, 2008, 2009 and 2010.

(3)	Represents the minimum amount of shares (500) that may be earned in each year ending December 31, 2007, 2008, 2009 and 2010, based on the Company’s EBIT for the HSMS segment increasing by 5% year over year for each such period.

(4)	Represents the total number of shares to assuming the Company’s overall EBIT growth is equal to the growth experienced in 2007. 5,250 shares were earned for the year ended December 31, 2006.

(5)	Represents the total number of shares that can be awarded under the executive’s employment agreement if all of the highest performance thresholds are met.

(6)	Represents stock grants awarded on December 27, 2007.

(7)

Mr. Siegel’s non-equity incentive award provides for a single estimated payout, comprised of a component related to HSMS revenue and a component related to HSMS EBIT. Since the target is not currently determinable, except for fiscal year 2007, the target amount set forth on the table includes a representative amount for fiscal years 2008, 2009 and 2010, respectively, based on the Company’s fiscal year 2007 performance. In 2007, Mr. Siegel received $5,253. The terms of the award are as follows. For the component related to HSMS revenue, Mr. Siegel is entitled to receive in 2008, 2009 and 2010, respectively, as follows: a cash bonus equal to one of the following percentages of the dollar amount of the yearly revenue growth in excess of 7% in the Company’s HSMS segment - (i) 2%, if the HSMS revenue grows by more than 7% but less than 10%; (ii) 3%, if the HSMS revenue grows by 10% or more but less than 13%; (iii) 4.25%, if the HSMS revenue grows by 13% or more but less than 16%; (iv) 5.75%, if the HSMS revenue grows by 16% or more but less than 19%; or (v) 7.5%, if the HSMS revenue grows by 19% or more. For the component related to HSMS EBIT, Mr. Siegel is entitled to receive in 2008, 2009 and 2010, respectively, as follows: a cash bonus equal to one of the following percentages of the Company’s EBIT from the HSMS segment - (a) 2%, if the HSMS EBIT equals 5% or more but less than 6% of the HSMS revenues for such year; (b) 2.5%, if the HSMS EBIT equals 6% or more but less than 7% of the HSMS revenues for such year; (c) 3.0%, if the HSMS EBIT equals 7% or more but less than 8% of the HSMS revenues for such year; (d) 3.5%, if the HSMS EBIT equals 8% or more but less than 9% of the HSMS revenues for such year; (e) 4.0%, if the HSMS EBIT equals 9% or more but less than 10% of the HSMS revenues for such year; or (f) 4.5%, if the HSMS EBIT equals 10% or more of the HSMS revenues for such year.

Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards

On December 13, 2006, we entered into an employment agreement with Howard M. Siegel, whereby he is employed for a period of three years beginning January 1, 2007 as our Senior Advisor. Until December 31, 2006, Mr. Siegel was our Chief Executive Officer. Mr. Siegel’s new employment agreement provides for the following base salary amounts: $300,000 in 2007, $225,000 in 2008 and $175,000 in 2009.

In connection with his employment agreement, Mr. Siegel will be granted, subject to a determination by the Board of Directors of Mr. Siegel’s contribution to the Company’s performance, the following bonus compensation grants of up to 23,500 shares based on EBIT, as set forth in our audited financial statements for the applicable fiscal year, meeting or exceeding the EBIT performance goals as follows: (i) for 2007, 6000 shares if we achieve 15% year over year EBIT growth (over 2006 results), plus a proportional number of additional shares for each 1% above 15%, up to a maximum of 10,000 shares in the aggregate on 25% EBIT growth; (ii) for 2008, 4,500 shares if we achieve 15% year over year EBIT growth (over 2007 results), plus a proportionate number of additional shares, for each 1% above 15%, up to a maximum of 7,500 shares in the aggregate on 25% EBIT growth and (iii) for 2009, 3,600 shares if we achieve 15% year over year EBIT growth (over 2008 results) plus a proportional number of additional shares for each 1% above 15%, up to a maximum of 6,000 shares in the aggregate on 25% EBIT growth.

In addition, the Board of Directors may in its discretion grant Mr. Siegel additional shares, not to exceed an aggregate total of 50,000 shares currently reserved for Mr. Siegel pursuant to our 2005 Stock Incentive Plan (inclusive of any shares granted pursuant to the EBIT growth targets above), based on significant contributions made by Mr. Siegel as determined by our Compensation Committee and approved by the Board of Directors. Any shares granted pursuant to the above arrangements would be issued from our 2005 Stock Incentive Plan.

In 2007, no shares were awarded by the Board of Directors to Mr. Siegel in connection with any of the foregoing arrangements.

On November 11, 2005, we entered into an employment agreement with Jack Rhian, whereby he is employed for a period of five years beginning on January 1, 2006 as our President and Chief Operating Officer. Subsequently, effective January 1, 2007, Mr. Rhian was appointed as our Chief Executive officer. Mr. Rhian’s employment agreement provides for the following base salary amounts: $240,000 per annum, for the period beginning January 1, 2006 and ending December 31, 2006; $260,000 per annum, for the period beginning January 1, 2007 and ending December 31, 2007; $280,000 per annum, for the period beginning January 1, 2008 and ending December 31, 2008; $300,000 per annum, for the period beginning January 1, 2009 and ending December 31, 2009; and $300,000 per annum, for the period beginning January 1, 2010 and ending December 31, 2010.

In connection with his employment agreement, on January 20, 2006, we entered into a stock purchase agreement with Mr. Rhian. Pursuant to this stock purchase agreement, Mr. Rhian was granted 50,000 shares of restricted common stock subject to a repurchase right in our favor. We have the right to repurchase the shares for $.01 per share if Mr. Rhian ceases to be employed by us. The repurchase right lapsed with respect to 10,000 shares on December 31, 2006, and lapses with respect to (i) 10,000 shares on December 31, 2007, (ii) 10,000 shares on December 31, 2008, (iii) 10,000 shares on December 31, 2009, and (iv) 10,000 shares on December 31, 2010, subject to the condition that Mr. Rhian remains employed by us on each such applicable date; provided, however, that in the event of a change in control (as defined in Mr. Rhian’s employment agreement) if we or our successor pursuant to such change in control, as applicable, and Mr. Rhian either agree to continue the employment agreement or to enter into a new employment agreement mutually acceptable to us or our successor and Mr. Rhian in lieu of his current employment agreement, then any such shares which remain unvested, shall vest immediately upon our or our successor’s mutual agreement with Mr. Rhian to continue his current employment agreement or to enter into a new employment agreement.

In addition, Mr. Rhian is entitled to the following bonus compensation stock grants: (i) up to 80,000 shares based on our EBIT, as set forth in our audited financial statements for the applicable fiscal year, meeting or exceeding the EBIT performance goals set forth below, and (ii) 2,000 shares of common stock per year, for a total of up to 10,000 shares of common stock over the employment period, based on our total revenues, as set forth in our audited financial statements for the applicable fiscal year, meeting or exceeding an amount equal to at least 115% of the Company’s total revenues for the prior fiscal year.

EBIT Targets 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

For the fiscal year ended December 31, 2007 and 2006, our EBIT growth was 22% and 36%, respectively and our year over year revenue growth for 2007 and 2006 exceeded 115% and therefore, Mr. Rhian is entitled to 12,500 bonus shares in 2007. On December 27, 2007, Mr. Rhian elected to forfeit 6,000 of these shares. Mr. Rhian was entitled to and was issued 18,000 bonus shares in 2006.

In the event that the minimum EBIT growth percentage is not met for a particular fiscal year, Mr. Rhian will have the opportunity to earn back the minimum performance bonus grant for such fiscal year as follows: if the EBIT growth percentage in the subsequent fiscal year combined with the EBIT growth percentage of the prior fiscal year exceeds 30%, then the number of percentage points needed to be added to the prior fiscal year's EBIT growth percentage to equal 15%, shall be deducted from the subsequent fiscal year EBIT growth percentage and added to the prior fiscal year EBIT growth percentage, and Mr. Rhian shall be granted 8,000 shares of common stock for the prior fiscal year, and an additional number of shares of common stock for the subsequent fiscal year shall be granted determined based on the above formula taking into account the reduced subsequent year EBIT growth percentage.

In the event that Mr. Rhian 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) consecutive days in any 12 month period, we may terminate the his employment agreement after the expiration of such period.

On May 29, 2007, we entered into a four year employment agreement, commencing as of January 1, 2007, pursuant to which Mr. Frederic Siegel is employed as our Executive Vice President. Under the terms of the agreement, Mr. Siegel will be paid a base salary of $190,000 in 2007, $200,000 in 2008, $210,000 in 2009 and $220,000 in 2010. Mr. Siegel will also be granted 5,500 shares of our common stock for each year of service under the agreement as a retention bonus. In addition, Mr. Siegel will be eligible to receive additional bonuses payable in cash and shares of our common stock based on certain revenue and EBIT targets, as set forth below:

(i) a cash bonus equal to one of the following percentages of the dollar amount of yearly revenue growth in excess of 7% in the our Health and Safety Monitoring Systems (“HSMS”) segment for each of the fiscal years ending December 31, 2007, 2008, 2009 and 2010: 2%, if the HSMS revenue grows by more than 7% but less than 10%; 3%, if the HSMS revenue grows by 10% or more but less than 13%; 4.25%, if the HSMS revenue grows by 13% or more but less than 16%; 5.75%, if the HSMS revenue grows by 16% or more but less than 19%; 7.5%, if the HSMS revenue grows by 19% or more.

(ii) a cash bonus equal to one of the following percentages of the our EBIT from our HSMS segment for each of the fiscal years ending December 31, 2007, 2008, 2009 and 2010, plus one of the following number of shares: 2% plus 500 shares, if the HSMS EBIT equals to 5% or more but less than 6% of the HSMS revenues for the applicable year; 2.5% plus 1,000 shares, if the HSMS EBIT equals to 6% or more but less than 7% of the HSMS revenues for the applicable year; 3.0% plus 1,500 shares, if the HSMS EBIT equals to 7% or more but less than 8% of the HSMS revenues for the applicable year; 3.5% plus 2,000 shares, if the HSMS EBIT equals to 8% or more but less than 9% of the HSMS revenues for the applicable year; 4.0% plus 2,500 shares, if the HSMS EBIT equals to 9% or more but less than 10% of the HSMS revenues for the applicable year; 4.5% plus 3,000 shares, if the HSMS EBIT equals to 10% or more of the HSMS revenues for the applicable year; and

(iii) one of the following number of shares based on the year-over-year growth of our EBIT on a consolidated basis for each of the fiscal years ending December 31, 2007, 2008, 2009 and 2010: 3,000 shares, if EBIT grows by 15% or more but less than 17.5%; 4,000 shares, if EBIT grows by 17.5% or more but less then 20%; 5,250 shares, if EBIT grows by 20% or more but less than 22.5%; 6,500 shares, if EBIT grows by 22.5% or more but less than 25%; and 8,500 shares, if EBIT grows by 25% or more.

To the extent that the number of shares earned pursuant to paragraph (ii) and (iii) above exceed 37,500 (the number of shares in the Company’s 2005 Incentive Plan currently reserved for Mr. Siegel’s performance based grants), the grant of any such excess shares shall be subject to shareholder approval prior to issuance.

For the fiscal year ended December 31, 2007, our HSMS segment revenue grew 8.7%; therefore, Mr. Siegel was entitled to a cash bonus of $5,253. Additionally, for the fiscal year ended December 31, 2007 our HSMS segment EBIT grew 22%; therefore, Mr. Siegel was entitled to 5,250 bonus shares in 2007. However, based on agreed to methodologies, the EBIT target for HSMS was not realized in 2007 and Mr. Siegel was not entitled to a cash bonus or bonus shares in 2007 in connection with the EBIT target for HSMS.

In the event that Mr. Siegel 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) consecutive days in any 12 month period, the Company may terminate the employment agreement after the expiration of such period.

On January 20, 2006, we entered into an employment agreement with Richard Rallo, whereby he is employed for a period of three years, beginning on January 1, 2006, as our Chief Financial Officer. Mr. Rallo’s employment agreement provides for the following base salary amounts: $170,000 per annum, for the period beginning January 1, 2006 and ending December 31, 2006; $185,000 per annum, for the period beginning January 1, 2007 and ending December 31, 2007; and $200,000 per annum, for the period beginning January 1, 2008 and ending December 31, 2008. Mr. Rallo’s employment agreement is only terminable upon certain specified events constituting cause, and in certain circumstances upon a change in control. In addition, Mr. Rallo received a $5,000 cash bonus in connection with the execution of his employment agreement.

In connection with his employment agreement, on January 20, 2006, we entered into a stock purchase agreement with Mr. Rallo. Pursuant to this stock purchase agreement, Mr. Rallo was granted 10,000 shares of restricted common stock subject to a repurchase right in our favor. We have the right to repurchase the shares for $.01 per share if Mr. Rallo ceases to be employed by us. The repurchase right lapsed with respect to 2,500 shares on December 31, 2006, and lapses with respect to (i) 3,500 shares on December 31, 2007, and (ii) 4,000 shares on December 31, 2008, subject to the condition that Mr. Rallo remains employed by us on each such applicable date; provided, however, that in the event of a change in control (as defined in his employment agreement) if we or our successor pursuant to such change in control, as applicable, and Mr. Rallo either agree to continue his current employment agreement or to enter into a new employment agreement mutually acceptable to us or our successor and Mr. Rallo in lieu of his current employment agreement, then any such shares which remain unvested, shall vest immediately upon our or our successor’s mutual agreement with Mr. Rallo to continue is current employment agreement or to enter into a new employment agreement.

In the event that Mr. Rallo 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) consecutive days in any 12 month period, we may terminate his employment agreement after the expiration of such period.

On November 15, 2006, we entered into an employment agreement with Randi M. Baldwin, whereby she is employed for a period of three years, beginning on November 1, 2006, as our Vice President - Marketing and Communications. Ms. Baldwin’s employment agreement provides for the following base salary amounts: $140,000 per annum, for the period beginning November 1, 2006 and ending October 31, 2007; $147,000 per annum, for the period beginning November 1, 2007 and ending October 31, 2008; and $155,000 per annum, for the period beginning November 1, 2008 and ending October 31, 2009. Ms. Baldwin’s employment agreement is only terminable upon certain specified events constituting cause, and in certain circumstances upon a change in control.

As part of this agreement, Ms. Baldwin was also granted options to purchase 7,500 shares of common stock as a one-time sign on award. The stock option grant was awarded on November 15, 2006 with the exercise price fixed at the value of the Company’s common stock on the close of business on November 15, 2006.

In the event that Ms. Baldwin should become disabled and be unable to perform her duties for a period of one hundred eighty (180) consecutive days or an aggregate of more than one hundred eighty (180) consecutive days in any 12 month period, we may terminate her employment agreement after the expiration of such period.

Outstanding Equity Awards at Fiscal Year-End

The following table shows the number of shares covered by exercisable and unexercisable stock options and stock grants held by our named executive officers on December 31, 2007.

	Option Awards						Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable ⁽¹⁾		Option Exercise Price ($)		Option Expiration Date		Number of Shares or Units of Stock that Have Not Vested (#) ⁽²⁾		Market Value of Shares or Units of Stock that Have Not Vested ($) ⁽³⁾		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) ⁽⁴⁾		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) ⁽³⁾
Howard M. Siegel		8,500	$	2.519		1/27/08

Jack Rhian								30,000	$	210,900		72,000	$	506,160
		50,000	$	2.00		1/31/08
		4,343	$	2.87		12/31/11
		30,000	$	3.25		1/30/12
		25,000	$	3.50		1/30/13
		25,000	$	4.00		1/30/14
		3,856	$	2.30		8/12/12
		5,000	$	2.29		1/27/13

Frederic S. Siegel								16,500	$	115,995		34,500	$	242,535
		25,000	$	2.87		12/31/11
		8,252	$	2.87		12/31/11
		4,827	$	2.30		8/12/12
		6,400	$	2.29		1/27/13
		13,917	$	1.98		4/08/13
		65,530	$	4.24		5/27/14

Richard Rallo								4,000	$	28,120
		5,088	$	2.87		12/31/11
		10,000	$	3.25		1/30/12
		3,038	$	2.30		8/12/12
		3,800	$	2.29		1/27/13
		10,000	$	2.00		2/01/08
		30,000	$	2.50		11/14/13
		5,000	$	4.24		5/27/14
		25,000	$	5.96		12/07/10

Randi M. Baldwin		1,845	$	2.87		12/31/11
		25,000	$	3.64		3/12/12
		2,135	$	2.30		8/12/12
		2,200	$	2.29		1/27/13
		4,000	$	3.98		3/25/14
		12,500	$	6.20		12/29/10
		7,500	$	6.09		11/14/11

(1)	All stock options were fully vested at December 31, 2007.

(2)	The stock grants for Mr. Rhian and Mr. Siegel vest on a yearly basis on each December 31 at 10,000 and 5,500 shares, respectively, per year for the next three years. The stock grants for Mr. Rallo vest on December 31, 2008.

(3)	Based on the closing market price of the Company’s common stock at the end of the last completed fiscal year ($7.03), multiplied by the number of shares reported.

(4)

Mr. Rhian may earn up to a potential maximum of 18,000 shares per year based on certain performance criteria as described in the Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards. Mr. Siegel may earn to a potential maximum of 11,500 shares per year based on certain performance criteria as described in the Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards.

Option Exercises and Stock Vested

The following table provides information on stock option exercises and vesting of stock grants with respect to each of our named executive officers during the fiscal year ended December 31, 2007.

	Option Awards				Stock Awards
Name	Number of Shares Acquired on Exercise (#)		Value Realized On Exercise ($) ⁽¹⁾		Number of Shares Acquired on Vesting (#)		Value Realized on Vesting ($) ⁽²⁾
Howard M. Siegel		27,942	$	100,173		-		-
Jack Rhian						10,000	$	70,300
						18,000	$	107,820
Frederic S. Siegel						5,500	$	38,665
Richard Rallo		5,000	$	10,000		6,500	$	45,995
Randi M. Baldwin						3,000	$	21,390

(1)

Based on the difference between the market price of the underlying securities at exercise and the exercise price of the options.

(2)

Based on the market value of the shares on the day of vesting.

Potential Payments upon Termination or Change-in-Control

Unless Mr. Rhian is terminated for cause (as defined in his employment agreement), in the event that we do not offer Mr. Rhian to enter into a written employment agreement with terms and conditions no less favorable than substantially the same terms and conditions as his current employment agreement to begin immediately following the expiration of his current employment agreement, Mr. Rhian shall receive payment of base salary, based on the then applicable salary level, for a period of twelve (12) months from the date of the expiration of his current employment agreement.

In the event of his death during the term of the employment agreement, Mr. Rhian’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 (as defined in his employment agreement) and Mr. Rhian’s employment with us is terminated within 180 days following such change in control without cause or through a constructive termination, then Mr. Rhian will be entitled to a lump sum cash payment equal to 2.99 times his average annual total compensation, as measured for the past 5 years, in lieu of any remaining obligations from us under his employment agreement. Had such termination occurred on December 31, 2007, Mr. Rhian would have been entitled to receive a $669,760 payment as a result of such termination.

Unless Mr. Frederic Siegel is terminated for cause (as defined in his employment agreement), in the event that the Company does not offer Mr. Siegel to enter into a written employment agreement with terms and conditions no less favorable that substantially the same terms and conditions as his current employment agreement to begin immediately following the expiration of his current employment agreement, Mr. Siegel shall receive payment of base salary, based on the then applicable salary level, for a period of twelve (12) months from the date of the expiration of his current employment agreement.

In the event of his death during the term of the employment agreement, Mr. 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 (as defined in his employment agreement) and Mr. Siegel’s employment with us is terminated within 180 days following such change in control without cause or through constructive termination, Mr. Siegel will be entitled to a lump sum payment equal to 2.99 times his average annual total compensation, as measured for the past 5 years, in lieu of any remaining obligations of the Company under his employment agreement. Had such termination occurred on December 31, 2007, Mr. Siegel would have been entitled to receive a $570,375 payment as a result of such termination.

Unless Mr. Rallo is terminated for cause (as defined in his employment agreement), in the event that we do not offer Mr. Rallo to enter into a written employment agreement with terms and conditions no less favorable than substantially the same terms and conditions as the his current employment agreement to begin immediately following the expiration of his current employment agreement, Mr. Rallo shall receive payment of base salary, based on the then applicable salary level, for a period of twelve (12) months from the date of the expiration of his current employment agreement.

In the event of his death during the term of his employment agreement, Mr. Rallo’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 (as defined in the Mr. Rallo’s employment agreement) and Mr. Rallo’s employment with us is terminated within 180 days following such change in control without cause or through a constructive termination, then Mr. Rallo will be entitled to a lump sum payment equal to 2.99 times his average annual total compensation, as measured for the past 5 years, in lieu of any remaining obligations from us under his employment agreement. Had such termination occurred on December 31, 2007, Mr. Rallo would have been entitled to receive a $460,460 payment as a result of such termination.

Unless Ms. Baldwin is terminated for cause (as defined in her employment agreement), in the event that we do not offer Ms. Baldwin to enter into a written employment agreement with terms and conditions no less favorable than substantially the same terms and conditions as her current employment agreement to begin immediately following the expiration of her current employment agreement, Ms. Baldwin shall receive payment of base salary, based on the then applicable salary level, for a period of twelve (12) months from the date of the expiration of her current employment agreement.

In the event of her death during the term of his employment agreement, Ms. Baldwin’s estate or such other person as she designated will be entitled to receive her base salary for a period of one year from the date of her death.

In addition, in the event there is a change in control (as defined in the Ms. Baldwin’s employment agreement) and Ms. Baldwin’s employment with us is terminated within 180 days following such change in control without cause or through a constructive termination, then Ms. Baldwin will be entitled to the greater of (i) an amount equal to the remainder of Ms. Baldwin’s salary which would be payable through the expiration of her employment agreement or (ii) an amount equal to twelve (12) months of the salary in effect under this agreement at the time of such termination. Had such termination occurred on December 31, 2007, Ms. Baldwin would have been entitled to receive a $269,500 payment as a result of such termination.

DIRECTOR COMPENSATION

The table below shows the annual compensation for the Company’s non-employee directors during 2007.

Name	Fees Earned or Paid In Cash ($)		Stock Awards ⁽¹⁾ ($)		Option Awards ($)		Total ($)
Ronald Levin		-	$	34,047		-	$	34,047
Yacov Shamash, Ph.D.		-	$	34,047		-	$	34,047
James LaPolla		-		-		-	$	-
John S.T. Gallagher		-	$	34,047		-	$	34,047
Gregory Fortunoff		-	$	28,794		-	$	28,794

(1)

Represents the compensation expense recognized for the fiscal year ended December 31, 2007 in accordance with SFAS 123R for restricted stock awards granted as long-term incentives pursuant to our Equity Compensation Plan.

(2)

Mr. LaPolla waived his compensation while serving on the Board of Directors from January 1, 2007 to April 3, 2007.

(3)

Mr. Fortunoff’s compensation reflects his membership on fewer committees of the Board of Directors than Mr. Levin, Mr. Shamash and Mr. Gallagher.

Narrative Disclosure to Directors Compensation Table

We do not compensate our directors who are also employees for their service as Directors. Our non-employee directors receive restricted stock for their service as directors, as determined on a yearly basis by our Board of Directors.

In April 2007, the Board of Directors adopted a new compensation plan for its non-employee directors. Under the new plan, each non-employee director will receive quarterly stock grants, in lieu of cash payments which existed under the prior plan. Each non-employee director will receive common stock ranging in value from $15,000 up to $24,000 per year, depending on the number of committee memberships, to be granted for each quarter of service, based on the closing price of the stock at the end of the relevant quarter.

In addition, each non-employee director was granted 1,018 restricted shares of common stock upon their election at the annual meeting of shareholders in 2007.

Transactions with Related Persons

The Company’s executive offices and back-up 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 for this space with Howard M. Siegel, Chairman of the Board of Directors and Senior Advisor. 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 ”) and subsequently extended through September 2008. 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.

Howard M. Siegel owed the Company $123,532 at December 31, 2001 for certain advances made to him. In July 2002, the amount owed by Mr. Siegel, plus accrued interest, was converted into a term promissory note. The term promissory note bears interest at a rate of 5% per annum and is payable in monthly installments of principal and interest through September 1, 2009. The amounts outstanding at December 31, 2007 and 2006 were $48,071 and $73,713, respectively.

Review, Approval or Ratification of Transactions with Related Persons

The Compensation Committee has an established procedure for reviewing and recommending for approval to the Board of Directors any compensation-related transaction with a related party that would require disclosure under Item 404 of Regulation S-K. The Audit Committee has an established procedure for reviewing and recommending for approval to the Board of Directors any noncompensation-related transaction with a related party that would require disclosure under Item 404 of Regulation S-K. All of the members of the Compensation Committee and the Audit Committee are independent as defined in Rule 4200(a) of the NASDAQ Rules.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Company’s officers and directors and persons who beneficially own more than 10% of the Common Stock to file initial reports of ownership and reports of changes of ownership with the SEC and furnish copies of those reports to the Company.

Specific due dates for such reports have been established by the SEC and the Company is required to disclose any failure to file reports by such dates. Based solely upon the review of the Forms 3 and 4 and amendments thereto furnished to the Company, there was one late report for one transaction that was not reported on a timely basis during fiscal year 2007. Ronald Levin, a director of the Company, filed a Form 4 on October 9, 2007 for a transaction that occurred on October 4, 2007. The Company knows of no other failure to timely file a required Form by any person required to do so.

Code of Ethics

The Company has adopted a Code of Ethics which applies to all of the Company’s directors, executive officers and employees. The Code of Ethics has been posted to the Company’s website at www.amac.com and is also available to any person without charge upon written request to the Company’s Chief Executive Officer at 36-36 33rd Street, Long Island City, NY 11106.

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 generally have discretionary authority to vote such shares on this proposal 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 Board of Directors.

THE BOARD OF DIRECTORS

UNANIMOUSLY RECOMMENDS A

VOTE “FOR” EACH NOMINEE NAMED

IN THE PROXY.

Proposal 2

RATIFICATION OF SELECTION

OF INDEPENDENT AUDITORS

The Board of Directors believes that it is desirable to request that the shareholders of the Company ratify the Audit Committee’s selection of Margolin, Winer & Evens, LLP as the Company’s independent auditors for the fiscal year ended December 31, 2008. Ratification of the selection is not required by law, and the Company 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 Audit Committee has appointed Margolin, Winer & Evens, LLP to continue as the independent auditors of the Company for the fiscal year ending December 31, 2008.

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 statements and for its review of the financial statements included in the Company’s Quarterly Reports on Form 10-Q filed with the SEC for 2007 and 2006 totaled $238,000 and $195,000, respectively.

Audit Related Fees

Audit related fees billed to the Company by Margolin, Winer & Evans, LLP during 2007 and 2006 totaled $55,000 and $45,900, respectively. Such amounts include employee benefit plan audits, due diligence relating to acquisition transactions and consultations concerning financial accounting and reporting.

Tax Fees

Tax fees billed to the Company by Margolin, Winer & Evens, LLP during 2007 and 2006 were $58,000 and $50,000, respectively. Such fees involved the preparation of tax returns.

All Other Fees

Other fees billed to the Company by Margolin, Winer & Evens, LLP during 2007 and 2006 totaled $172,713 and $0, respectively. Such fees involved the evaluation of the Company’s internal controls under Section 404 of the Sarbanes-Oxley Act of 2002 and services on tax related matters.

Audit Committee Pre-Approval Policies

The Audit Committee has adopted a procedure under which all fees charged by Margolin, Winer & Evens, LLP must be pre-approved by the Audit Committee, subject to certain permitted statutory de minimus exceptions. In 2007, the Audit Committee pre-approved all Audit-Related Fees, Tax Fees and All Other Fees paid to Margolin, Winer & Evens, LLP.

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 2007.

Required Vote

The affirmative vote of a majority of the votes cast on this proposal will be required to ratify the appointment of Margolin Winer & Evens, LLP as the independent auditors of the Company for the fiscal year ending December 31, 2008. 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, 2008. Brokers who hold shares of Common Stock as nominees generally have discretionary authority to vote such shares on this proposal if they have not received voting instructions from the beneficial owners by 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, 2008.

MISCELLANEOUS

Shareholder Proposals

Under SEC regulations and the Company’s Bylaws, shareholder proposals intended to be presented at the Company’s annual meeting of shareholders to be held in 2009 and to be included in the proxy statement relating to that annual meeting must be received by the Company no later than March 23, 2009. Such proposals relating to possible director nominees should be addressed to the attention of the Nominating Committee, c/o John Rogers, the Corporate Secretary, and all other proposals should be addressed to John Rogers, the Corporate Secretary, in each case at the address set forth above. Under SEC regulations and the Company’s Bylaws, notices of shareholder proposals submitted outside the processes of Rule 14a-8 of the Exchange Act (relating to proposals to be presented at the meeting but not to be included in the 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 March 23, 2009. Under the Company’s Bylaws, shareholder proposals submitted prior to February 21, 2009, or after March 23, 2009, will be excluded from consideration at the 2009 annual meeting of shareholders.

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 Sections 725 and 726 of the Business Corporation Law of the State of New York.

Effective April 21, 2008, the Company purchased Directors & Officers Liability (“D&O”) 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 Federal Insurance Company. The total cost of the D&O insurance through April 20, 2009 was $40,000. The Company is also a 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 in 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.

Annual Report to Shareholders

The Company’s 2007 Annual Report to Shareholders has been mailed to shareholders simultaneously with the mailing of the 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 22, 2008	Secretary

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 Jack Rhian 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 Moses & Singer LLP, 405 Lexington Avenue, 12th Floor, New York, New York 10174 on Tuesday, August 26, 2008 at 10:00 a.m. Eastern Daylight 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, including matters incident to the conduct of 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, 2008).

PLEASE MARK, DATE AND SIGN THIS PROXY ON THE REVERSE SIDE

PROXY	Please mark your votes like this	x
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSALS 1 AND 2.

	FOR	WITHHOLD AUTHORITY	The Board of Directors recommends a vote FOR the following proposal:
1. The Board of Directors recommends a vote FOR all listed nominees.	o all nominees listed (except as marked to the contrary * )	o to vote for all listed nominees	2. To ratify the selection of Margolin, Winer & Evens, LLP as independent auditors of the Company for the fiscal year ending December 31, 2008.	FOR o	AGAINST o	ABSTAIN o

*( Instruction : To withhold authority to vote for any individual nominee, circle that nominee’s name in the list provided below.) NOMINEES:	1. Howard M. Siegel 2. Jack Rhian		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, including matters incident to the conduct of 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 shares represented by this proxy for one or more alternative nominees who will be designated by the existing Board of Directors.
	3. Frederic S. Siegel
	4. John S.T. Gallagher
	5. Ronald Levin		PLEASE MARK YOUR VOTE ON PROPOSALS 1 AND 2 ABOVE, DATE AND SIGN BELOW,
	6. Yacov Shamash		AND RETURN PROMPTLY
	7. Gregory Fortunoff


			COMPANY ID:

Signature __________________	Signature _________________		PROXY NUMBER:

(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. )			ACCOUNT NUMBER:


			Date: _________________________________, 2008

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