Change in Control



EX-10.8 2 exhibit10-8.htm EXHIBIT 10.8 ROY BUBB'S EMPLOYMENT AGREEMENT







Employment Agreement


This Employment Agreement ("Agreement") is made as of the 4th day of April, 2008 (the “Effective Date”), by and between Hooper Holmes, Inc., a New York corporation, with its principal office at 170 Mt. Airy Road, Basking Ridge, New Jersey 07920 (the "Company") and Roy H. Bubbs ("Executive").


RECITALS


WHEREAS, the Company desires to embody in this Agreement the terms and conditions of Executive’s employment with the Company.


NOW, THEREFORE, in consideration of the mutual promises and agreements contained in this Agreement, including the compensation to be paid to Executive, the parties hereby agree as follows:


1.           Employment; Term; Duties and Responsibilities; Board Membership.


1.1.           Appointment as President and Chief Executive Officer.  The Company hereby  employs Executive as its President and Chief Executive Officer, and Executive hereby accepts such employment, subject to the terms and conditions of this Agreement.  Executive represents and warrants to the Company that he is not a party to any agreement that would restrict or prohibit him from being employed by the Company.  The Company and Executive acknowledge that Executive has been serving as the Company’s interim President and Chief Executive Officer since February 5, 2008.


1.2.           Employment Period.  The initial term of Executive’s employment under this Agreement shall have commenced on the Effective Date and shall continue until the second anniversary of the Effective Date or the termination of Executive’s employment as provided in Section 3 of this Agreement, whichever shall occur first.  This Agreement will automatically renew for a one-year term upon its initial expiration unless the employment of Executive has been terminated prior to the second anniversary of the Effective Date.  The “Term” of this Agreement shall refer to the period commencing on the Effective Date and ending on the earlier to occur of: (i) the expiration of the Agreement; (ii) or the termination of Executive’s employment with the Company.


1.3.           Location of Employment.  Executive shall be based at the Company’s headquarters in Basking Ridge, New Jersey.


1.4.           Duties and Responsibilities.  In his capacity as President and Chief Executive Officer of the Company, Executive shall report directly to the Board of Directors of the Company (the “Board”).  Executive shall have such duties and responsibilities, and the power and authority, normally associated with the position of President and Chief Executive Officer, as well as any additional duties and  responsibilities of an executive character as shall, from time to time, be delegated or assigned to him by the Board.  As President and Chief Executive Officer, Executive shall keep the Board fully informed of any and all matters of a material nature, from an operational or financial perspective, and seek Board approval of appropriate matters, in accordance with his fiduciary duties to the Company and its shareholders.


1.5.           Devotion of Time.  During the Term, Executive shall expend all of his working time, care and attention to his duties, responsibilities and obligations to the Company.  Executive may serve on the board of (i) civic and charitable  entities, and (ii) with the prior written consent of the Board, other corporate entities; provided, however, that such activities do not, either individually or in the aggregate, interfere with Executive’s duties and responsibilities as President and Chief Executive Officer of the Company.


1.6.           Board Membership.  The Company and Executive acknowledge that Executive currently serves as a member of the Board.  During the Term, the Company shall cause Executive to be re-nominated to serve on the Board if and when the term of his Board membership is set to expire, and use reasonable efforts to cause Executive to be re-elected to the Board.  If elected or appointed to serve as a director or officer of the Company and/or any of its subsidiaries, Executive shall serve in such capacities in each case without any additional compensation for such services.


2.           Compensation; Benefits.


As compensation and consideration for the services to be rendered by Executive as President and Chief Executive Officer of the Company in accordance with the terms and conditions of this Agreement, Executive shall be entitled to the compensation and benefits set forth in this Section 2 (subject, in each case, to the provisions of Section 3 of this Agreement).


2.1.           Base Salary.  Executive shall receive an annual base salary (“Base Salary”) of Five Hundred Thousand Dollars ($500,000) per year, payable on a pro rated basis in accordance with the Company’s standard payroll dates, provided such payments shall not be made less frequently than twice in each calendar month.  The Base Salary shall be reviewed at least annually by the Compensation Committee (the “Committee”) of the Board and may be adjusted by the Committee, in its sole discretion, based on the Committee’s consideration of the Company’s performance, financial and otherwise.  If the Base Salary is adjusted, the adjusted amount will thereafter be the Base Salary for all purposes of this Agreement.  However, the Based Salary shall never be lower than $500,000 per year.


2.2.           Annual Bonus.  Executive shall be eligible to participate in such annual bonus or incentive compensation plans and programs as may be in effect from time to time in accordance with the Company’s compensation practices and the terms and provisions of any such plans or programs.  Executive’s annual target bonus opportunity under the Company’s 2008 Executive Pay for Performance Plan will be equal to 50% of his Base Salary, with the opportunity to earn a maximum bonus equal to 100% of his Base Salary.  The actual bonus amount, and the performance measures and other factors bearing on such amount, under that plan were approved by the Committee at its meeting held on March 3, 2008.  Except as otherwise provided by the terms of this Agreement, any annual bonus earned shall be paid at the same time and in the same manner as corresponding awards to other senior executives of the Company generally.


2.3.           Long-Term and Equity Compensation.  Executive shall be eligible to participate in any long-term incentive compensation plan (including any equity-compensation plan) that may be adopted by the Company from time to time during the Term.  The specific awards under any such plan will be made by the Committee in its sole discretion, commensurate with Executive’s position as President and Chief Executive Officer.


2.4.           Initial Equity-Based Award.  The parties acknowledge that they have memorialized in an option agreement the Committee’s action, on April 4, 2008, to grant Executive an option to acquire 100,000 shares of the Company’s common stock under the terms of the Company’s 2002 Stock Option Plan at an exercise price equal to the closing price of the Company’s common stock on the American Stock Exchange on that date.


2.5.           Health Care Allowance; Participation in Other Benefit Plans. While Executive is employed with the Company:


(a)           The Company shall provide him with a monthly health care allowance paid each month during the Term equal in amount to the monthly cost the Company would bear if Executive were insured under the Company’s group health insurance plan, it being understood that such allowance is in lieu of Mr. Bubbs’ participation in such plan and that Executive shall be responsible for any taxes that may be due on such allowance; and


(b)           Other than the Company’s group health insurance plan, Executive shall be eligible to participate in all retirement and other benefit plans and programs of the Company generally available from time to time to employees of the Company and for which Executive qualifies under the terms thereof.  Nothing in this Agreement shall limit the Company’s ability to change, modify, cancel, amend or discontinue any of such plans.


2.6.           Reimbursement of Expenses.  The Company shall pay directly or reimburse Executive for reasonable business-related expenses and disbursements incurred by him for and on behalf of the Company in connection with the performance of his duties as the President and Chief Executive Officer of the Company, subject, however, to the Company’s written policies relating to business-related expenses as in effect from time to time.  Executive shall submit to the Company, no later than the month after the month during which he incurred any such business-related expenses and disbursements, a report of such expenses and disbursements in the form normally used by the Company and receipts with respect thereto, and the Company’s obligations under this Section 2.6 shall be subject to compliance therewith.  Reimbursement of any business-related expenses and disbursements shall be made in accordance with the Company’s written policies relating to business-related expenses as in effect from time to time.  In no event will reimbursement of any business-related expenses and disbursements be made later than the last day of the calendar year following the calendar year in which any such expense or disbursement was incurred.


2.7.           Vacation.  Executive shall be entitled to paid vacation in accordance with the Company’s policy in effect from time to time.


2.8.           Car Allowance.  While Executive is employed with the Company, the Company shall provide him with an automobile allowance paid each month during the Term in the amount of Seven Hundred Dollars ($700) per month.  Executive shall be responsible for taxes that may be due, if any, as a result of this allowance.


2.9           Executive Change-in-Control Agreement.  Executive acknowledges that in connection with Executive’s entering into this Agreement, Executive has entered into an Executive Change-in-Control Agreement with the Company (the “CIC Agreement”).


2.10.                      Indemnification; Insurance.


(a)           Executive shall be entitled to indemnification in accordance with the Company’s bylaws as in effect on the date of this Agreement and the terms of the Company’s form indemnity agreement for officers and directors (a copy of which is attached to this Agreement as Exhibit A), in each case subject to applicable law.


(b)           Executive shall be covered by directors’ and officers’ liability insurance during the Term and for any applicable statute of limitations period thereafter, to the same extent as other officers of the Company.


2.11.                      Deductions; Withholdings.  All compensation payable to Executive under the terms of this Agreement shall be subject to any applicable income, payroll or other tax withholding requirements and such other deductions or amounts, if any, as may be authorized by Executive.


3.           Termination.


3.1.           Termination by the Company.  The Company shall have the right, subject to the terms of this Agreement, to terminate Executive’s employment at any time, with or without “Cause.”  The Company shall give Executive written notice of a termination for Cause (the “Cause Notice”) in accordance with Section 7.2 of this Agreement.  The Cause Notice shall state the particular action(s) or inaction(s) giving rise to the termination for Cause.  No action(s) or inaction(s) will constitute Cause unless:


(a)           a resolution finding that Cause exists has been approved by a majority of all of the members of the Board (excluding Executive), at a meeting at which Executive is allowed to appear with his legal counsel; and


(b)           where remedial action is feasible, Executive fails to remedy the action(s) or inaction(s) within ten (10) days after receiving the Cause Notice.


If Executive effects a cure to the satisfaction of the Board within the 10-day period following his receipt of the Cause Notice, the Cause Notice shall be deemed rescinded and of no force or effect.


For purposes of this Agreement, “Cause” shall mean:


·  

participation by Executive in fraudulent conduct against the Company, or a material misrepresentation or omission by Executive that, in the Board’s reasonable judgment, has resulted or will likely result in injury to the business, operations or financial condition of the Company;


·  

conviction of or a plea of guilty or nolo contendere with respect to a felony involving theft or moral turpitude;


·  

Executive’s violation of any statutory or common law duty of loyalty, good faith or care to the Company or any of its subsidiaries.


·  

Executive’s continued violation of a material policy of the Company for a period of thirty (30) days after Executive’s receipt of a written notice specifying the nature of such violation from the Company;


·  

any refusal by Executive to follow the lawful directives of the Board that are consistent with the scope and nature of Executive’s duties and responsibilities as set forth in this Agreement;


·  

any misconduct by Executive in connection with performance of his duties hereunder for a period of thirty (30) days after having received a written notice specifying the nature of such misconduct from the Company; or


·  

any breach by Executive of any one or more of the covenants contained in Sections 4 and 5.


 3.2           Termination by Executive.  Executive shall have the right, subject to the terms of this Agreement, to terminate his employment at any time with or without “Good Reason.”


For purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following during the Term without Executive’s prior written consent:


·  

a material diminution in Executive’s authorities, duties and/or responsibilities as contemplated by this Agreement;


·  

a material diminution in Executive’s Base Salary, or unless the diminution is a result of a Company-wide diminution in the annual bonus opportunity, target incentive awards and/or benefits of all similarly situated employees as Executive, a material diminution in the amount of Executive’s annual bonus opportunity, target incentive award and/or benefits, including health, retirement and fringe;


·  

a material failure by the Company to comply with the provisions of Section 2 of this Agreement (provided that an isolated, insubstantial or inadvertent action or omission that is not in bad faith and is remedied by the Company promptly after receipt of notice thereof given by Executive shall not constitute Good Reason);


·  

a change in Executive’s principal place of employment, such that the Executive’s commuting distance as of the date of this Agreement increases by more than 50 miles;


·  

in the event of the occurrence of a Change in Control (as defined in the  Executive Change-in-Control Agreement, dated as of April 4, 2008, between the Company and Executive (the “Executive Change-in-Control Agreement)), the failure of a successor to the Company to explicitly assume and agree to be bound by the terms of such agreement, in accordance with Section 5(a) of such agreement; or


·  

a material breach by the Company of any of the terms and conditions of the Executive Change-in-Control Agreement.


Executive must give the Company written notice, in accordance with Section 7.2 of this Agreement, of any Good Reason termination of employment.  Such notice must be given within 60 days following Executive’s knowledge of the first occurrence (as determined without regard to any prior occurrence that was subsequently remedied by the Company) of a Good Reason circumstance and must specify which of the Good Reason circumstances Executive is relying on, the particular action(s) or inaction(s) giving rise to such circumstance, and the date that Executive intends to separate from service, as defined under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), which shall be no earlier than thirty (30) days following the date of the Company’s receipt of the notice.  Executive’s termination shall not be deemed a Good Reason termination of employment if (i) within 30 days of the Company’s receipt of such notice, the Company remedies the circumstance(s) giving rise to the notice, or (ii) Executive’s termination of his employment does not occur within 60 days after the end of the 30-day period provided to the Company to remedy the circumstances giving rise to the notice.


3.3           Death.  If Executive dies during the Term, Executive’s employment shall automatically terminate, such termination to be effective on the date of Executive’s death.


3.4           Disability.  If Executive shall suffer a Disability, the Company shall have the right to terminate Executive’s employment, such termination to be effective upon the giving of notice to Executive in accordance  with Section 7.2 of this Agreement.  For purposes of this Agreement, a Disability shall mean any physical or mental incapacity as a result of which Executive is unable to perform substantially all of his essential duties for an aggregate of four (4) months, whether or not consecutive, during any calendar year, and which cannot be reasonably accommodated by the Company without undue hardship.  Executive cannot be terminated for Disability unless the Company has delivered a written demand for substantial performance to Executive, specifically identifying the manner in which Executive has not substantially performed his duties, and Executive does not cure such failure within thirty (30) days of such demand.


3.5           Effect of Termination.


(a)           In General.  Subject to the terms of Section 3.5(c), in the event of the termination of Executive’s employment for any reason during the Term, the Term shall end as of the date of termination and the Company shall pay to Executive (or his beneficiary, heirs or estate, in the event of his death), as provided in Section 3.6 of this Agreement: (i) any Base Salary, to the extent not previously paid, to the date of termination; and (ii) any reimbursable business expenses that have not yet been reimbursed (collectively, the “Accrued Obligations”).  The Accrued Obligations shall be paid within 30 days after the date of termination.


(b)           Termination Resulting from Executive’s Death or Disability.  In the event of termination of Executive’s employment as a result of Executive’s death or Disability, Executive (or, in the case of death, his beneficiary, heir or estate) shall be entitled to the compensation payable in accordance with Sections 3.5(a)(i) and (ii).  In addition, any unvested stock rights, stock options and other unvested incentives or awards previously granted to Executive by the Company shall be subject to the terms of the applicable plan(s) under which such rights, options, incentives or awards were granted pertaining to the consequences of a plan participant’s death or disability.


(c)           Termination by the Company for Cause and by Executive other than for Good Reason.  In the event of termination of Executive’s employment by the Company for Cause, or by Executive other than for Good Reason, neither Executive nor any beneficiary, heir or estate of Executive shall be entitled to any compensation other than the payments made or provided in accordance with Sections 3.5(a)(i) and (ii).  Executive shall immediately forfeit any right to or incentive compensation not yet paid or payable as of the date of termination, and all unvested stock rights, stock options and other such unvested incentives or awards previously granted to him by the Company.  Nothing in this Agreement shall be construed to limit the rights and remedies which may be available to the Company in the event of a termination of Executive’s employment by the Company for Cause.


(d)           Termination by the Company without Cause; by Executive for Good Reason.  In the event of a termination of Executive’s employment by the Company without Cause, or by Executive for Good Reason, Executive shall receive the payments provided for in Sections 3.5(a)(i) and (ii).  In addition:


(i)         Executive shall receive a lump-sum payment equal to the amount of Base Salary (at the rate in effect immediately prior to his termination) that would have been payable to him if he had continued in employment through the longer of (A) the balance of the initial term of Executive’s employment under this Agreement, or (B) the one-year period following the date of termination. Such lump-sum payment shall be made within fifteen (15) days after Executive’s termination date; provided, however, that if at the time of Executive’s termination for Good Reason, the Employee is a “specified employee” as defined in Section 409A of the Code, then the Company will defer the payment until the first day of the seventh (7th) month following the date of termination or, if earlier, Executive’s death or such earliest other date as is permitted under Section 409A.  In the event a lump sum payment would be subject to a delay under Section 409A, Executive may elect to receive payments on the Company’s regularly scheduled pay dates, and the Company shall make such payments to the extent permitted by Section 409A and any other applicable law or regulation.


(ii)           All rights to exercise any outstanding award of stock options or stock appreciation rights with respect to the Company’s common stock, or shares of restricted stock, held by Executive at the date of termination shall be governed by the terms of the applicable plan under which such award was granted.


(iii)           For the longer of (A) the balance of the initial term of Executive’s employment under this Agreement, or (B) the one-year period following the date of termination, Executive shall have the right to continue his participation in the benefit plans and programs in which Executive was participating at the time of the termination of his employment, to the extent permitted by the applicable plan or program and subject to any subsequent modifications or amendments to any such plan or program.


(iv)           For the longer of (A) the balance of the initial term of Executive’s employment under this Agreement, or (B) the one-year period following the date of termination, Executive shall also receive the monthly health care and car allowances provided for in this Agreement.


 

To the extent the payments under subsections (iii) or (iv) are not exempt from Section 409A, any payments that cannot be paid during the 6-month period after the date of termination described in Section 7.10(a) will be postponed until the time for payment permitted under Section 7.10.


3.6           Conditions of Payment.  Any payments or benefits made or provided in connection with the termination of Executive’s employment with the Company in accordance with Section 3.5 (other than payments made or provided in accordance with Section 3.5(a)(i) and (ii) or due to a termination of Executive’s employment due to his death) are subject to Executive’s:


(a)           compliance with the provisions of Sections 3.8, 4 and 5 of this Agreement; and


(b)           delivery to the Company of a resignation from all offices, directorships and fiduciary positions with the Company, its affiliates and employee benefit plans prior to the scheduled date for which the applicable payment or benefit is be made or provided.


Payment of the amounts specified in Sections 3.5(d)(i) and (iv) will be conditioned upon delivery by Executive of an executed General Release, substantially in the form attached to this Agreement as Exhibit B, with such changes or additions as needed under then applicable law to give effect to its intent and purpose.


3.7           Mitigation.  Executive shall be under no obligation to seek other employment following a termination of his employment with the Company or any subsidiary for any reason.  In addition, there shall be no offset against amounts due Executive under this Section 3 or otherwise on account of any compensation attributable to any subsequent employment.


3.8           Cooperation; Assistance.  Executive agrees to cooperate fully, subject to reimbursement by the Company of reasonable out-of-pocket costs and expenses, with the Company or any subsidiary and its or their counsel with respect to any matter (including any litigation, investigation or governmental proceeding) which relates to matters with which Executive was involved or about which he had knowledge during his employment with the Company or any subsidiary.  Such cooperation shall include appearing from time to time at the offices of the Company or any subsidiary or its or their counsel for conferences and interviews and, in general, providing the officers of the Company or any subsidiary and its or their counsel with the full benefit of Executive’s knowledge with respect to any such matter.  Executive further agrees, upon termination of his employment for any reason and if the Board requests, to assist his successor in the transition of his duties and responsibilities to such successor.  Executive agrees to render such cooperation in a timely fashion and at such times as may be mutually agreeable to the parties.  The Company shall compensate Executive for time spent providing assistance to the Company, based on the number of hours spent by Executive in providing such assistance.  The hourly rate of compensation shall be $250.


3.9           Effect of the Occurrence of a Change in Control under the CIC Agreement.  Upon the occurrence of a Change in Control (as defined in the CIC Agreement), the terms of this Section 3 (other than this Section 3.9) shall cease to have any further force or effect, except under the following circumstances: (i) a Change in Control occurs, (ii) no Triggering Event (as defined in the CIC Agreement) occurs within the 12-month period following the Change in Control (defined in the CIC Agreement as the “Employment Period”), and (iii) subsequent to the end of such Employment Period, either the Company terminates Executive’s employment without Cause or Executive terminates his employment for Good Reason.  Under such circumstances (and assuming this Agreement is in effect at the time of such termination), Section 3 shall continue to apply to such termination.


 

4.           Confidentiality.


4.1           Executive acknowledges and agrees that:


(a)           by reason of his employment with the Company and his service as a member of the Board, Executive will have knowledge of all aspects of the Company’s operations and will be entrusted with and have access to confidential and secret proprietary business information and trade secrets of the Company, including but not limited to:


(i)           information regarding the Company’s business priorities and strategic plans;


(ii)           information regarding the Company’s personnel;


(iii)           financial and marketing information (including but not limited to information about costs, prices, profitability and sales information not available outside the Company);


(iv)           secret and confidential plans for and information about new or existing services, and initiatives to address the Company’s competition;


(v)           information regarding customer relationships; and


(vi)           proprietary or confidential information of customers or clients for which the Company may owe an obligation not to disclose such information.


(all such information shall be collectively referred to as “confidential information”);


(b)           the Company and its subsidiaries, affiliates and divisions will suffer substantial and irreparable damage that will not be compensable through money damages if Executive should divulge or make use of confidential information acquired by Executive in the course of his employment with the Company and service on the Board other than as may be required or appropriate in connection with Executive’s work as an employee of the Company; and


(c)           the provisions of this Agreement are reasonable and necessary for the protection of confidential information, the business of the Company and its subsidiaries, affiliates and divisions, and the stability of their workforces.


4.2           Executive  shall keep confidential all confidential information he learns of during his employment with the Company regarding the Company, its business, operations, systems, employees, customers, clients and prospective clients.  In addition, Executive agrees that he will not disclose confidential information obtained from the Company or its officers, directors or management during his employment, including, but not limited to, information regarding, or statements by, the Company or its officers, directors or management, to anyone other than as required by law or in response to a lawful court order or subpoena.


4.3           Nothing in this Section 4 shall prohibit Executive from participating as a witness at the request of the Company or a third party in any investigation by the SEC or any other governmental agency charged with the investigation of any matters related to Executive’s employment with the Company, nor shall Executive be prohibited from testifying in response to a subpoena, court order or notice of deposition.  Executive agrees to notify the Company’s General Counsel, in writing, at least ten (10) days prior to the response deadline or appearance date (whichever is earlier) for any such subpoena, court order or notice of deposition issued by a court or investigating agency which seeks disclosure of any confidential information.  Executive further agrees to take any actions reasonably requested by the Company to allow the Company to protect the release of information regarding Executive’s employment from the Company in such court or agency proceeding.


4.4           Executive agrees that:


(a)           he will not, at any time, remove from the Company’s premises any notebooks, software, data or other confidential information relating to the Company, except to the extent necessary to perform his duties and responsibilities under the terms of this Agreement;


(b)           upon the expiration or termination of the Term for any reason whatsoever, he shall promptly deliver to the Company any and all notebooks, software, data and documents and material, including all copies thereof, in his possession or under his control relating to any confidential information, or which is otherwise the property of the Company; and


(c)           he will not use any confidential information for his own benefit or for the benefit of any new employer or any third person.


4.5           For purposes of this Section 4, the term “Company” shall mean and include the Company and any and all subsidiaries and affiliated entities of the Company in existence from time to time.


5.           Non-Competition and Non-Solicitation.


5.1           Executive acknowledges that the Company is, as of the Effective Date, engaged principally in the business of providing health information risk assessment services to insurance companies and health and wellness providers, performing lab testing services, providing underwriting services in connection with the processing of life insurance applications, and arranging for independent medical examinations, peer reviews and related services – throughout the United States.  By virtue of Executive’s position with the Company, Executive will be exposed to and acquire significant confidential information about the Company and its existing and future plans and strategies.  As a result, Executive acknowledges that the Company has a legitimate business interest supporting the restrictive covenants set forth in this Section 5.


5.2           During Executive’s employment with the Company and until the first anniversary of the date of termination of Executive’s employment with the Company, Executive shall not in any manner, directly or indirectly, within the United States (without the prior written consent of a duly authorized officer of the Company):


(a)           act as a Competitive Enterprise or accept any engagement in any capacity that involves Executive performing management, consultation, advisory or other services of any kind with a Competitive Enterprise (as defined in Section 5.3 below);


(b)           Solicit (as defined in Section 5.3 below) any Customer (as defined in Section 5.3 below) to transact business with a Competitive Enterprise or to reduce or refrain from doing any business with the Company or any of its subsidiaries;


(c)           transact business with any Customer that would cause Executive to be a Competitive Enterprise;


(d)           interfere with or damage any relationship between the Company or any its subsidiaries with a Customer; or


(e)           Solicit anyone who is then an employee of the Company or any of its subsidiaries (or who was an employee of the Company or any of its subsidiaries within the prior 12 months) to resign from the Company or any of its subsidiaries or to apply for or accept employment with any other business or enterprise.


5.3           For purposes of this Agreement:


Competitive Enterprise” means any business enterprise that either (A) engages in a business that competes anywhere in the United States with any business in which the Company or any of its subsidiaries is then engaged in, or (B) holds a 5% or greater equity, voting or profit participation interest in any enterprise that competes anywhere in the United States with any activity that the Company or any of its subsidiaries is then engaged in; provided, however, that if (i) the Company, including any subsidiary, ceases to do, and exits, a particular type of business activity, then following such exit the Company and its subsidiaries will be deemed not to be “then engaged” in such business; or (ii) the Company, including any of its subsidiaries, was not engaged in a particular type of business activity (and was not contemplating such business activity), while Executive was employed by the Company, then for the purposes of this Agreement, the Company and its subsidiaries will be deemed not to be “then engaged” in such business.


Customer” means any customer or prospective customer of the Company or any of its subsidiaries whose identity became known to Executive in connection with Executive’s relationship with or employment by the Company or any of its subsidiaries.


Solicit” means any direct or indirect communication of any kind, regardless of who initiates it, that in any way invites, advises, encourages or requests any person to take or refrain from taking any action.


6.           Injunctive Relief.  If Executive commits a breach, or threatens to commit a breach, of any of the provisions of Section 4 or 5 of this Agreement, the Company shall have the right and remedy (which shall be in addition to, and not in lieu of, any other rights and remedies available to the Company at law or in equity) to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction, it being acknowledged by Executive that any such breach or threatened breach will or may cause irreparable injury to the Company and that money damages will or may not provide an adequate remedy to the Company.

   

7.           Miscellaneous.


7.1           Benefit of Agreement, Assignment; Beneficiary.  This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.  This Agreement shall also inure to the benefit of, and be enforceable by, Executive and his personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.  If Executive should die while any amount would still be payable to Executive under this Agreement if he had continued to live, all such amounts shall be paid in accordance with the terms of this Agreement to Executive’s beneficiary, devisee, legatee or other designee, or if there is no such designee, to Executive’s estate.


7.2           Notices.  Any notice required or permitted under this Agreement shall be in writing and shall be sufficiently given if personally delivered or if sent by certified mail, postage prepaid, with return receipt requested or by reputable overnight courier, addressed: (a) in the case of the Company, to the General Counsel of the Company at the Company’s then-current corporate headquarters, and (b) in the case of Executive, to Executive’s last known address as reflected in the Company’s records, or to such other address as either party shall designate by written notice to the other party.  Any notice given hereunder shall be deemed to have been given at the time of receipt thereof by the person to whom such notice is given if personally delivered or at the time of mailing if sent by certified mail or by courier.


7.3.           Entire Agreement; Amendment.  Except as specifically provided in this Agreement, this Agreement contains the entire agreement of the parties to this Agreement with respect to the terms and conditions of Executive’s employment during the Term, and supersedes all prior agreements and understandings, whether written or oral, between the parties with respect to compensation due for services rendered under this Agreement.  For the avoidance of doubt, in the event of any inconsistency between this Agreement and any plan, program or arrangement of the Company or its affiliates, the terms of this Agreement shall control.  This Agreement may not be changed or modified except by an instrument in writing signed by both of the parties.


7.4           Waiver.  The waiver of either party of a breach of any provision of this Agreement shall not operate or be construed as a continuing waiver or as a consent to or waiver of any subsequent breach.


7.5           Headings.  The section headings in this Agreement are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or affect any of the provisions of this Agreement.


7.6           Governing Law.  This Agreement shall be governed by, and construed and interpreted in accordance with, the internal laws of the State of New Jersey, without reference to the principles of conflicts of laws.


7.7           Survivorship.  The respective rights and obligations of the parties under this Agreement shall survive any termination of this Agreement to the extent necessary to effectuate the intended preservation of such rights and obligations, including, without limitation, Section 4 and 5 of this Agreement.


7.8           Validity.  The invalidity on unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision or provisions of this Agreement, which shall remain in full force and effect.  If any provision of this is held to be invalid, void or unenforceable, any court so holding shall substitute a valid, enforceable provision that preserves, to the maximum lawful extent, the terms and intent of this Agreement.


7.9           Construction.  The parties have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.  Any reference to any federal, state or local statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise.  The word “including” shall mean including without limitation.


7.10           Section 409A.


(a)           Notwithstanding the due date of any post-employment payments, if at the time of the termination of Executive’s employment Executive is a “specified employee” (as defined in Section 409A, Executive will not be entitled to any payments upon termination of employment that are subject to Section 409A until the later of (i) the date that payments are scheduled to be made under this Agreement, or (ii) the  earlier of (A) the first day of the seventh month following the date of termination of his employment with the Company for any reason other than death, or (B) the date of Executive’s death.  The provisions of this paragraph will only apply if and to the extent required to avoid any “additional tax” under Section 409A.  The parties to this Agreement intend that the determination of Executive’s termination of employment shall be made in accordance with Treasury Reg. Section 1.409A-1(h).


(b)           The parties to this Agreement intend that this Agreement and Company’s and Executive’s exercise of authority or discretion hereunder shall comply with the provisions of Section 409A and the Treasury regulations relating thereto so as not to subject Executive to the payment of interest and tax penalty which may be imposed under Section 409A.  In furtherance of this objective, to the extent that any regulations or other guidance issued under Section 409A would result in Executive being subject to payment of “additional tax” under Section 409A, the parties agree to use their best efforts to amend this Agreement in order to avoid the imposition of any such “additional tax” under Section 409A, which such amendment shall be designed to minimize the adverse economic effect on Executive without increasing the cost to the Company (other than transactions costs), all as reasonably determined in good faith by the Company and Executive to maintain to the maximum extent practicable the original intent of the applicable provisions.  This Section 7.10 does not guarantee that payments under this Agreement will not be subject to “additional tax” under Section 409A.



-  -

 

 



 



7.11           Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which will constitute one and the same instrument.


IN WITNESS WHEREOF, each of the parties has duly executed this Agreement on the date indicated below.  The Company represents that its execution of this Agreement has been authorized by the Committee.


Hooper Holmes, Inc.


Date:                      ___August 1, 2008                                           By:    /s/Benjamin .A Currier

Name:          Benjamin A. Currier

Title:             Chairman of the Board




Date:                           August 4, 2008                                                    /s/Roy H. Bubbs

       Roy H. Bubbs



-  -

 

 



 







EX-10.9 3 exhibit10-9.htm EXHIBIT 10.9 EXEC. CHANGE-IN CONTROL AGREEMENT





 

Executive Change-in-Control Agreement

 

 

This Executive Change-in-Control Agreement is made, entered into, and is effective this 9th day of April, 2008, by and between Hooper Holmes, Inc., a New York corporation, having its principal place of business at 170 Mt. Airy Road, Basking Ridge, New Jersey 07920 (the “Company”) and Roy H. Bubbs, having an address at 66 Toll Gate Lane, Avon, Connecticut 06001 (the “Executive”).

 

 

Whereas, the Executive is currently employed by the Company; and

 

 

Whereas, the Executive possesses considerable experience and knowledge of the business and affairs of the Company concerning its policies, methods, personnel, and operations; and

 

 

Whereas, the Company is desirous of assuring, insofar as possible, that it will continue to have the benefit of the Executive’s services and the Executive is desirous of having such assurances; and

 

 

Whereas, the Company recognizes that circumstances may arise in which a Change in Control (as defined in Article 1 of this Agreement) occurs, thereby causing uncertainty of employment without regard to the Executive’s competence or past contributions.  Such uncertainty may result in the loss of the valuable services of the Executive to the detriment of the Company and its shareholders; and

 

 

Whereas, the Executive will be in a better position to consider the Company’s best interests if the Executive is afforded reasonable security, as provided in this Agreement, against altered conditions of employment which could result from any Change in Control;

 

Now, Therefore, in consideration of the foregoing and of the mutual covenants and agreements of the parties set forth in this Agreement, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

 

1.  

Change in Control.

 

A “Change in Control” shall be deemed to have occurred as of the first day any one or more of the following conditions shall have been satisfied:

 

(a)  

Any person (other than (i) the Company or any subsidiary of the Company, (ii) a corporation or other entity owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of the Company, or (iii) an employee benefit plan (or related trust) sponsored or maintained by the Company or any subsidiary of the Company), becomes the beneficial owner, directly or indirectly, of securities of the Company, representing thirty-five percent (35%) or more of the combined voting power of the Company’s then outstanding securities; provided, however, that no crossing of such 35% threshold shall be a "Change in Control" if it is caused (A) solely as a result of an acquisition by the Company of its voting securities or (B) solely as a result of an acquisition of the Company’s voting securities directly from the Company, in either case until such time thereafter as such person acquires additional voting securities other than directly from the Company and, after giving effect to such transaction, such person owns 35% or more of the then outstanding common stock or voting power of the Company;

 

(b)  

Individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”; such individuals being referred to as the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange Act of 1934 (the “’34 Act”) relating to the election of the directors of the Company) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board; or

 

(c)  

A merger, consolidation, reorganization or share exchange, or sale of all or substantially all of the assets, of the Company, unless, immediately following such transaction, all of the following shall apply: (A) all or substantially all of the beneficial owners of the Company immediately prior to such transaction will beneficially own in substantially the same proportions, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities of the corporation or other entity resulting from such transaction (including, without limitation, a corporation or other entity which, as a result of such transaction, owns the Company or all or substantially all of the Company's assets, either directly or through one or more subsidiaries) (the "Successor Entity"), (B) no person will be the beneficial owner, directly or indirectly, of 35% or more of the combined voting power of the then outstanding voting securities of the Successor Entity, and (C) at least a majority of the members of the board of directors of the Successor Entity will be Incumbent Directors.

 

(d)  

All terms used in this Section 1 shall be interpreted in a manner consistent with the ’34 Act.

 

2.  

Termination of Employment Following a Change in Control.

 

(a)  

Triggering Event.  If, following a Change in Control, a Triggering Event occurs, the Executive will be entitled to the compensation and benefits described in Sections 3(a)-(c) below.  For the purposes of this Agreement, a “Triggering Event” means a termination of the Executive’s employment with the Company at any time prior to the end of the twelve (12) month period following the Change in Control (such period of time being referred to as the “Employment Period”), unless (i) such termination is by reason of the Executive’s Total Disability or death, (ii) the Company terminates the Executive’s employment with the Company for Cause, or (iii) the Executive terminates his employment with the Company for other than Good Reason.

 

(b)  

Cause.  For purposes of this Agreement, the termination of the Executive’s employment with the Company shall be deemed to be for “Cause” only in the event of:

 

 

A felony or crime of moral turpitude by the Executive;

 

 

An act of fraud, embezzlement, misappropriation of assets, dishonesty or disloyalty by the Executive;

 

 

The Executive’s failure to substantially perform  his or her duties as such duties exist at the time of a Change in Control (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Executive by the Company, specifically identifying the manner in which the Executive has not substantially performed his or her duties, and the Executive does not cure such failure within thirty (30) days of such demand;

 

 

The Executive’s material breach of this Agreement or any other agreement between the Executive and the Company;

 

 

The Executive’s deliberate and persistent disregard of the Company’s polices or procedures, after a written demand for compliance with the Company’s policies or procedures is delivered to the Executive by the Company, specifically identifying the manner in which the Executive has not complied with the Company’s policies or procedures, and the Executive does not cure such noncompliance within thirty (30) days of such demand;

 

 

Any act by the Executive which brings material adverse publicity to the Company; or

 

 

An act, or failure to act, which constitutes gross negligence or a material breach of any fiduciary duty owed by the Executive to the Company.

 

Any determination of Cause under this Agreement shall be made by resolution duly adopted by the affirmative vote of not less than a majority of the entire membership of the Board at a regular meeting of the Board or a special meeting called and held for that purpose.  The Executive shall be provided with reasonable notice of such meeting and shall be given the opportunity to be heard before such vote is taken by the Board.  The Executive’s employment shall not be terminated for Cause if the Board determines that the Executive’s act or failure to act was done in good faith and with reasonable belief that the act or failure to act was in the best interest of the Company.

 

(c)  

Good Reason.  For purposes of this Agreement, the Executive’s termination of his employment with the Company shall be deemed to be for “Good Reason” if for any of the following reasons:

 

 

A material diminution in the Executive’s authorities, duties, and/or responsibilities;

 

 

A material diminution in the budget over which the Executive retains authority, unless the diminution is a result of a company-wide diminution in total budget;

 

 

A material diminution in the Executive’s base salary, or unless the diminution is a result of a Company-wide diminution in the annual cash bonuses, target incentive awards, and/or benefits of all similarly situated employees as the Executive, a material diminution in the Executive’s annual cash bonus, target incentive award, and/or benefits, including health, retirement and fringe;

 

 

The failure by the Company to pay the Executive any amount of his salary, bonus or other compensation when due and payable;

 

 

A change in the Executive’s principal place of employment; such that the Executive’s commuting distance as of the date of this Agreement, or as of the Termination Date, whichever is longer, increases by more than fifty miles;

 

 

The failure of a successor to the Company to explicitly assume and agree to be bound by this Agreement, in accordance with the terms of Section 5(a) of this Agreement; or

 

 

A material breach by the Company of any the terms and conditions of this Agreement.

 

(d)  

Total Disability.  For the purposes of this Agreement, the term “Total Disability” means any physical or mental incapacity as a result of which the Executive is unable to perform substantially all of the Executive’s essential duties for an aggregate of four (4) months, whether or not consecutive, during any calendar year, and which cannot be reasonably accommodated by the Company without undue hardship.  An Executive cannot be terminated for Total Disability unless the Company has delivered a written demand for substantial performance to the Executive, specifically identifying the manner in which the Executive has not substantially performed his or her duties, and the Executive does not cure such failure within thirty (30) days of such demand.

 

(e)  

Notice of Termination.  Any termination by the Company or by the Executive under this Agreement shall be communicated by a Notice of Termination to the other party hereto.  For purposes of this Agreement, a “Notice of Termination” shall mean a notice in writing which shall indicate (i) the specific termination provision in this Agreement relied upon to terminate the Executive’s employment, (ii) the facts and circumstances, in reasonable detail, claimed to provide a basis for termination of employment under the provision so indicated, and (iii) the date that the Executive separates from service as defined under Section 409A of the Internal Revenue Code (the “Code”) from the Company or any affiliate.

 

(f)  

Termination Date.  As used in this Agreement, “Termination Date” means (i) if the Executive’s employment is terminated because of death, the date of the Executive’s death, (ii) if the Executive’s employment terminates for any other reason, the date specified in the Notice of Termination, which will be the date the Executive “separates from service” as defined under Section 409A of the Code from the Company or any affiliate.  If the Executive terminates his or her employment for Good Reason, then the date specified by the Executive in the Notice of Termination (i.e., the date the Executive ceases to provide services to the Company or affiliates) shall be at least thirty (30) days after the date of the notice.

 

3.  

Benefits Payable Upon Termination.

 

Triggering Event. Subject to Sections 4(a) and 9, if, following a Change in Control, a Triggering Event occurs, the Company will provide the compensation and benefits set forth in (a), (b), and (c) to the Executive:

 

(a)  

Lump Sum Payment.  The Company shall pay the Executive a lump sum cash amount equal to the sum of:

 

(i) two times the Executive’s base salary at the time of the occurrence of the Change in Control;

 

(ii) the cash equivalent of any unused vacation that Executive has accrued or is otherwise currently entitled to, prorated on a per diem basis in accordance with the Executive’s  base salary at the time of the occurrence of the Change in Control;

 

(iii) two times the Executive’s annual bonus, if any, paid to the Executive with respect to the Company’s most recently completed fiscal year preceding the fiscal year in which the Termination Date occurs; provided, however, that if no annual bonus was paid with respect to the most recently completed fiscal year, then the Executive shall receive two times the Executive’s most recent annual bonus, if any, paid with respect to any of the Company’s three fiscal years immediately preceding the Termination Date;

 

(iv) the amount of any annual bonus (or portion thereof) for the calendar year in which the Termination Date occurs, prorated on a per diem basis from the beginning of the calendar year to the Termination Date; and

 

(v) all other amounts payable to the Executive as of the Termination Date  (other than retirement benefits and other deferred compensation, if any, which shall be paid pursuant to applicable terms, conditions and provisions), to the extent unpaid as of the Termination Date.

 

Under Section 9(b) hereof, the portion of the lump sum payment under this Section 3(a) that is not exempt from Section 409A shall be paid on the first of the seventh month after the Executive’s Termination Date (or, if earlier, on the date the Executive dies after meeting the other conditions for payment).  Any portion exempt from Section 409A shall be paid to Executive no earlier than the Termination Date, on or before the 30th day after the Termination Date (or, if later, the end of the seven-day period during which the Executive may revoke his consent to providing a Release, in accordance with Section 4(a) hereof); provided, however, that any amount payable in accordance with Section 3(a)(iv) hereof will be paid during the 2 ½ month period between the beginning of the fiscal year following the fiscal year in which the Termination Date occurs (i.e., between the following January 1 and March 15 for fiscal years ending December 31).

 

(b)  

Medical and Dental Benefits.  The Company, at its sole cost and expense, will continue for the Executive and the Executive’s eligible dependents, all Company-sponsored or provided medical, dental, vision, and prescription drug, plans, programs and arrangements that provide for medical or dental benefits, whether group or individual, in which the Executive was entitled to participate at any time during the twelve (12)-month period prior to the Termination Date, until the later to occur of (i) the last day of the Employment Period or (ii) the six (6) – month anniversary of the Termination Date; provided, however, that payment of benefits shall terminate upon the Executive’s death (other than benefits payable to the Executive’s beneficiaries).  In the event that the Executive’s participation in any such plan, program or arrangement of the Company is prohibited, the Company will arrange to provide the Executive with benefits substantially similar to those which the Executive would have been entitled to receive under such plan, program or arrangement, for such period.  The Company shall make the payments necessary to continue such benefits on the Company’s customary payment date for such payments (whether to the Executive or to a third party, as applicable).

 

(c)  

Company Automobile.  The Company will continue to provide the Executive with the use of his or her Company automobile, if any, under the terms available to the Executive on the Termination Date, until the earlier to occur of (i) the expiration of the applicable automobile lease or (ii) the last day of the Employment Period.  The Company will make such payments at the times as are necessary to continue the benefit and in accordance with the terms of the applicable lease.

 

To the extent the medical benefits or automobile lease payments described in subsections (b) and (c) above are not exempt from Section 409A of the Code, during the 6-month period described in Section 9(b), the Executive will pay such expenses and be reimbursed at the end of the 6-month period in accordance with Section 9(b).

 

Total Disability  or Death.  If, following a Change in Control, the Executive’s employment with the Company terminates as a result of his Total Disability or death, the Company will provide to the Executive or the Executive’s estate, as the case may be,

 

(i) the Executive’s base salary at the time of the Executive’s Total Disability or death that is unpaid at his Termination Date, through the Termination Date;

 

(ii) the Executive’s annual bonus for the fiscal year prior to which the Executive suffered a Total Disability or died, prorated on a per diem basis from the beginning of the fiscal year in which the Terminate Date occurs through the Termination Date; and

 

(iii) any other benefits to which the Executive is/was entitled but have yet to be paid.

 

Payments of amounts due in connection with a termination of the Executive’s employment with the Company s a result of the Executive’s Total Disability or death will be made at the same time as specified for lump sum payments under Section 3(a) above, except that the annual bonus with respect to the fiscal year of termination will be paid during the 2 ½ month period between the beginning of the fiscal year following the fiscal year in which the Termination Date occurs and the 15th day of the third month following the fiscal year in which the Termination Date occurs (i.e., between the following January 1 and March 15 for fiscal years ending December 31).

 

In addition, all Company-sponsored or provided medical, dental, vision, and prescription drug, plans, programs and arrangements, whether group or individual, in which the Executive and the Executive’s eligible dependants participated in as of the Termination Date shall be continued, at the Company’s sole expense and cost, for a period of six (6) months from the Termination Date.  In the event that the Executive’s participation in any such plan, program or arrangement of the Company is prohibited, the Company will arrange to provide the Executive with benefits substantially similar to those which the Executive would have been entitled to receive under such plan, program or arrangement, for such period.. To the extent the medical payments described herein are not exempt from Section 409A of the Code, during the 6-month period described in Section 9(b), the Executive will pay such expenses and be reimbursed at the end of the 6-month period in accordance with Section 9(b).  The Company shall make the payments necessary to continue such benefits on the Company’s customary payment date for such payments (whether to the Executive or to a third party, as applicable).

 

Company’s Termination of Executive’s Employment with the Company for Cause or Executive’s Termination of Employment with the Company for other than for Good Reason. If, following a Change of Control, the Company terminates the Executive’s employment with the Company for Cause or the Executive terminates his employment with the Company other than for Good Reason, the Company’s only obligation to the Executive will be to pay the Executive’s base salary (as of the date of such termination) that is unpaid on the Termination Date, through the Termination Date.


4.  

Covenants of Executive.

 

(a)  

Release of Claims.  The Company’s payment and other obligations set forth in Section 3(a)-(c) of the Agreement shall be subject to the Executive’s executing and delivering to the Company a written release of any and all claims against the Company and all related parties with respect to all matters arising out of the Executive’s employment with the Company or the termination thereof (the “Release”), substantially in the form attached hereto.  Such release must be executed no later than thirty (30) days after the Termination Date.  The Company will not be obligated to perform its obligations under Section 3(a)-(c) until the Executive submits the executed Release, and then only if the Executive does not revoke his consent to the Release for a period of seven (7) days following the Executive’s execution of the Release.

 

(b)  

Non-Solicitation of Company Employees.  For a period of two (2) years after the Termination Date, the Executive will not solicit (i) any employee of the Company to discontinue that person’s employment relationship with the Company, (ii) any independent contractor to the Company to terminate that person’s contractual relationship with the Company, or (iii) any customer of the Company to terminate its business relationship with the Company.

 

(c)  

Confidentiality.  The Executive agrees to maintain for the benefit of the Company all secret or confidential information, knowledge or data (“Confidential Information”) relating to the Company and its businesses, disclosed to the Executive or known, learned, created or observed by the Executive as a consequence of or through employment by the Company, which information is not generally known in the relevant trade or industry, about the Company's business activities, services and processes, including, but not limited to, information concerning the Company's contracts, marketing strategies, management policies, data bases, government relations, regulatory compliance, manuals, publicity, research, finances, accounting, trade secrets, business plans, client or supplier lists and records, potential client or supplier lists, and client and supplier billing.  The Executive acknowledges that the Confidential Information is confidential to and a valuable asset of the Company and is proprietary to and includes trade secrets of the Company, and is an integral part of the goodwill of the Company.

 

Notwithstanding anything to the contrary contained in this Agreement, the restrictions on the Executive’s disclosure and use of the Confidential Information shall not apply to: (i) information, processes or techniques which are or become generally known, other than through disclosure (whether deliberate or inadvertent) by the Executive; (ii) disclosure of Confidential Information in judicial or administrative proceedings to the extent the Executive is legally compelled to disclose such information, provided that the Executive shall have used his or her best efforts and shall have afforded the Company the opportunity to obtain an appropriate protective order or other assurance reasonably satisfactory to the Company of confidential treatment for the information required to be so disclosed; or (iii) information that was or becomes available to the Executive on a non-confidential basis from a third party that is not, to the Executive’s knowledge after due inquiry, either bound by a confidentiality agreement with the Company or otherwise prohibited from transferring the information to the Executive.

 

(d)  

Construction.  If one or more of the provisions in Section 4 of this Agreement is for any reason held to be excessively broad as to scope, activity, subject or otherwise, so as to be unenforceable by law, such provision or provisions shall be construed by the appropriate judicial body by limiting or reducing them, so as to be enforceable to the maximum extent compatible with the applicable law as it shall then appear.

 

(e)  

Injunctive Relief.  In addition to any other remedies that may be available at law, the Executive understands that any breach of the terms of Section 4 of this Agreement will result in irreparable injury to the Company, such as to entitle the Company to equitable relief, including, but not limited to, injunctive relief or the specific enforcement of this Agreement, as is appropriate.

 

5.  

Successors and Assigns.

 

Except as otherwise provided in this Agreement, this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, representatives, successors and assigns.

 

(a)  

Company Successor.  The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Company would be required to perform it if no such succession had taken place.  Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Executive to compensation from the Company in the same amount and on the same terms as the Executive would be entitled to hereunder if the Executive had given notice of termination for Good Reason as of the day immediately before such succession became effective and had specified that day in the notice of termination.  As used in this Agreement, the “Company” shall mean the Company as defined in the first sentence of this Agreement and any successor to all or substantially all its business or assets or which otherwise becomes bound by all the terms and provisions of this Agreement, whether by the terms hereof, by operation of law or otherwise.

 

(b)  

Executive’s Successor.  This Agreement shall inure to the benefit of and be enforceable by the Executive and the Executive’s personal or legal representatives and successors in interest under this Agreement.

 

6.  

Notice.

 

Any notice, demand or other communication required or permitted under this Agreement shall be effective only if it is in writing and delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, or reputable overnight courier service, addressed to the respective addresses set forth on the first page of this Agreement, provided that all notices to the Company shall be directed to Chairman of the Compensation Committee, or to such other address as either party may designate by notice to the other and shall be deemed to have been given as of the date so personally delivered or mailed.

 

7.  

Miscellaneous.

 

(a)  

No Waiver.   No term or condition of this Agreement may be waived in whole or in part unless by the party against whom enforcement of the modification or waiver is sought agrees in writing to such modification or waiver.  The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver thereof or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

 

(b)  

Section Headings.   Section headings are only for convenience of reference and do not affect the meaning of any provision of this Agreement.

 

(c)  

Severability.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

 

8.  

Employment Status.

 

This Agreement is not, and nothing herein shall be deemed to create, an employment contract between the Executive and the Company or change the Executive’s employment-at-will status. The Executive acknowledges that the rights of the Company remain wholly intact to change or reduce at any time and from time to time the Executive’s compensation, title, responsibilities, location, and all other aspects of the employment relationship, or to discharge the Executive (or for the Executive voluntarily to resign) prior to a Change in Control.

 

9.  

Section 409A Compliance.

 

(a)

Intent to comply; interpretation.   Payments under this Agreement are intended to comply with Section 409A of the Code and this Agreement shall be interpreted to comply with Section 409A.

 

(b)

Six-month delay for certain “specified employees.”  Because Executive is a “specified employee” as defined under Section 409A of the Code, Section 409A(a)(2)(B)(i) of the Code requires a 6-month delay for any payments that are not exempt from Section 409A and that are payable upon termination of employment.  Therefore, any such payments shall be made no earlier than the first day of the seventh month following the date of Executive’s separation from service or, if earlier, the date the Executive dies after his separation from service.


10.  

Tax Matters.

 

(a)

Withholdings.  The Company may withhold from any benefits payable under this Agreement all federal, state, city or other taxes as shall be required pursuant to any law or governmental regulation or ruling.

 

(b)

Section 280G (golden parachutes).  The Company,  or a public accounting firm or other entity chosen by the Company, shall determine if any payments made pursuant to this Agreement, any supplement to this Agreement, or any other payment received or deemed to be received by Executive from the Company or any of its subsidiaries and affiliates, or from any pension, welfare or other compensation plan sponsored by the Company or its affiliates, is or will become subject to any excise tax under Section 4999 of the Code, or any similar tax payable under any federal or state, local or other law (“Excise Taxes”). If it is determined that any payment is or will become subject to any Excise Taxes, then the Company or its designate shall determine if the payment of the Excise Taxes, in addition to any federal, state, local or other income, excise or other taxes (“Other Taxes”) payable by the Executive with respect to the payments to be received, will cause the Executive to pay an amount of Excise and Other Taxes such that the net payment the Executive will receive after payment of all Excise and Other Taxes on such payment is less than what he would receive if the payment he would receive was reduced to the maximum amount payable  without imposition of any Excise Taxes (“Economic Detriment”).  If it is determined that the Executive will incur an Economic Detriment as the result of the receipt of  payments under this Agreement, the payment to the Executive under this Agreement shall be reduced to the maximum possible payment that can be paid to the Executive without his incurring any Excise Taxes.  If any payments are reduced under this Section 10(b), they shall be payments that would cause the Executive to incur an Economic Detriment as described above and  shall come  from first, any lump sum payments due to the Executive other than the annual bonus payable for the fiscal year of termination under Section 3(a)(iv) or 3(ii) in the case of Total Disability or death, next, from the bonus payable for the fiscal year of termination under Section 3(a)(iv), followed by any automobile reimbursement and then by any medical payments due to the Executive.


11.  

Non-assignability.


This Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign or transfer this Agreement or any rights or obligations hereunder, except as provided in Article 5 hereof.  Without limiting the foregoing, the Executive’s right to receive payments hereunder shall not be assignable or transferable, whether by pledge, creation of a security interest or otherwise, other than a transfer by the Executive’s will or by the laws of intestacy, and in the event of any attempted assignment or transfer contrary to this Article 10, the Company shall have no liability to pay any amount so attempted to be assigned or transferred.

 

12.  

Mediation/Arbitration.

 

With the exception of the covenants of the Executive set forth in Section 4 of this Agreement, the parties shall endeavor to resolve any dispute arising out of, or relating to, this Agreement by mediation under the International Institute for Conflict Prevention and Resolution (“CPR”) Mediation Procedure for Business Disputes. Unless the parties agree otherwise, the mediator will be selected from the CPR Panel of Neutrals with notification to CPR. Any controversy or claim arising out of or relating to this contract or the breach, termination or validity thereof, which remains unresolved forty-five (45) days after appointment of a mediator, shall be settled by arbitration by a sole arbitrator in accordance with the CPR Non-administered Arbitration Rules, and judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof.

 

13.  

Governing Law.

 

This Agreement shall be governed by applicable federal law and the internal law of the State of New Jersey without reference to its choice of law rules or to any other rule of any jurisdiction that would cause the application of rules other than the jurisdiction of the State of New Jersey.

 

14.  

Entire Agreement.

 

This Agreement constitutes the entire understanding of the parties relating to the subject matter hereof and supersedes all prior agreements, understandings and representations, whether oral or written, relating to the subject matter hereof.

 

15.  

term; Termination of agreement.

 

Subject to the terms of the next sentence, the term of this Agreement shall commence on the date first set forth above and shall end on April 8, 2011; provided, however, that the Agreement shall continue in effect for successive periods of one year thereafter unless either the Company or the Executive gives written notice of intent to terminate the Agreement at least six (6) months prior to the expiration of the then-current term of the Agreement.  This Agreement shall automatically terminate if, before a Change in Control occurs, either the Company terminates the Executive's employment or the Executive terminates his employment with the Company, in either case for any reason.  For purposes of this Agreement, a termination of the Executive's employment shall be deemed to have occurred when the Executive ceases active employment with the Company, even if the Executive remains on the Company’s payroll as an inactive employee.  The termination of this Agreement will not affect the obligation of the Company to make payments or provide benefits to which the Executive became entitled before such termination.

 

16.  

Counterparts.

 

This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, and such counterparts will together constitute but one Agreement.

 



 

 

 



 


In Witness Whereof, the Company and the Executive have executed and delivered this Agreement as of the date first above written.

 


 

Hooper Holmes, Inc.




By: /s/ William F. Kracklauaer

      Name:  William F. Kracklauer

      Title: Sr. Vice President,

    General Counsel,

                                                                                                                    Secretary


Executive




/s/ Roy H. Bubbs

Name: Roy H. Bubbs