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:
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:
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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;
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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
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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.
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All terms used
in this Section 1 shall be interpreted in a manner consistent with
the ’34 Act.
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Termination of
Employment Following a Change in Control.
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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.
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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:
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A felony or
crime of moral turpitude by the Executive;
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An act of
fraud, embezzlement, misappropriation of assets, dishonesty or
disloyalty by the Executive;
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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;
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The
Executive’s material breach of this Agreement or any other
agreement between the Executive and the Company;
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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;
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Any act by the
Executive which brings material adverse publicity to the Company;
or
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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.
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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.
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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:
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A material
diminution in the Executive’s authorities, duties, and/or
responsibilities;
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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;
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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;
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The failure by
the Company to pay the Executive any amount of his salary, bonus or
other compensation when due and payable;
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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;
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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
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A material
breach by the Company of any the terms and conditions of this
Agreement.
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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.
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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.
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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.
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Benefits Payable Upon
Termination.
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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:
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Lump Sum
Payment. The
Company shall pay the Executive a lump sum cash amount equal to the
sum of:
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(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 seve
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