EMPLOYEE RETENTION AGREEMENT

EXHIBIT 10.1

EMPLOYEE RETENTION AGREEMENT

AGREEMENT by and between Hooper Holmes, Inc., a New York corporation (the “Company”), and John L. Spenser, (the “Employee”), dated as of the 18th day of May, 2005.

The Board of Directors of the Company (the “Board”), has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication of the Employee, notwithstanding the possibility, threat, or occurrence of a Change in Control (as defined below) of the Company. The Board believes it is imperative to diminish the inevitable distraction of the Employee by virtue of the personal uncertainties and risks created by a pending or threatened Change in Control, to encourage the Employee’s full attention and dedication to the Company currently and in the event of any threatened or pending Change in Control, and to provide the Employee with compensation arrangements upon a financial security and which are competitive with those of other corporations and, in order to accomplish these objectives, the Board has caused the Company to enter into this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. Certain Definitions.

(a) Effective Date. The “Effective Date” shall be the first date during the “Change in Control Period” (as defined in Section 1(b)) on which a Change in Control occurs. Anything in this Agreement to the contrary notwithstanding, if the Employee’s employment with the Company is terminated prior to the date on which a Change in Control occurs, and it is reasonably demonstrated that such termination (1) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control or (2) otherwise arose in connection with or anticipation of a Change in Control, then for all purposes of this Agreement the “Effective Date” shall mean the date immediately prior to the date of such termination.

(b) Change in Control Period. The “Change in Control Period” is the period commencing on the date hereof and ending on the second anniversary of such date; provided, however, that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof is hereinafter referred to as the “Renewal Date”), the Change in Control Period shall be automatically extended so as to terminate two years from such Renewal Date, unless at least 60 days prior to the Renewal Date the Company shall give notice to the Employee that the Change in Control Period shall not be so extended.

(c) Change in Control. A “Change in Control” shall occur or be deemed to have occurred only if any of the following events occur (i) any “person”, as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportion as their ownership of stock of the Company, or the John J. King Trust or the Trustees of the John J. King Trust) is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities (other than as a result of acquisitions of such securities from the Company); (ii) individuals who, as of the date hereof, constitute the Board (as of the date hereof 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 Exchange 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; (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation or (B) a merger or consolidation effected to implement a re-capitalization of the Company (or similar transaction) in which no “person” (as hereinabove defined) acquires more than 20% of the combined voting power of the Company’s then outstanding securities; or (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets.

2. Employment Period. The Company hereby agrees to continue the Employee in its employ, and, subject to Section 4(c), the Employee hereby agrees to remain in the employ of the Company, for the period commencing on the Effective Date and ending on the first anniversary of such date (the “Employment Period”).

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3. Terms of Employment.

(a) Position and Duties.

(i) During the Employment Period, (A) the Employee’s position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 90-day period immediately preceding the Effective Date and (B) the Employee’s services shall be performed at the location where the Employee was employed immediately preceding the Effective Date or any office or location less than 25 miles from such location and less than 10 miles in commuting distance further than the Employee’s commuting distance to the location at which the Employee performed such services prior to the Change in Control.

(ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Employee is entitled, the Employee agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Employee hereunder, to use the Employee’s reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period it shall not be a violation of this Agreement for the Employee to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Employee’s responsibilities as an employee of the Company in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Employee prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Employee’s responsibilities to the Company.

(b) Compensation.

(i) Base Salary. During the Employment Period, the Employee shall receive a base salary (“Base Salary”) payable no less frequently than semi-monthly at a monthly rate at least equal to the highest monthly base salary paid or payable to the Employee by the Company during the twelve-month period immediately preceding the month in which the Effective Date occurs.

(ii) Annual Bonus. In addition to Base Salary, the Employee shall be awarded, for each fiscal year ending during the Employment Period, an annual bonus (an “Annual Bonus”) in cash at least equal to the greater of the guaranteed bonus to which the Employee is entitled under any contractual arrangements

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between the Employee and the Company as of the date hereof or the highest bonus which the Employee received during the three (3) years preceding the Effective Date.

(iii) Incentive, Savings and Retirement Plans. During the Employment Period, in addition to Base Salary and Annual Bonus payable as hereinabove provided, the Employee shall be entitled to participate in the Company provided SERP benefit, all other incentive, savings and retirement plans, practices, policies and programs applicable to other key employees of the Company and its subsidiaries (including the Company’s employee benefit plans, in each case providing benefits which are the economic equivalent to those in effect or as subsequently amended). Such plans, practices, policies and programs, in the aggregate, shall provide the Employee with compensation, benefits and reward opportunities at least as favorable as the most favorable of such compensation, benefits and reward opportunities provided by the Company for the Employee under such plans, practices, policies and programs as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee, as provided at any time during the Employment Period with respect to other key employees of the Company.

(iv) Welfare Benefit Plans. During the Employment Period, the Employee and/or the Employee’s family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs), at least as favorable as the most favorable of such plans, practices, policies and programs in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee and/or the Employee’s family, as in effect at any time during the Employment Period with respect to other key employees of the Company.

(v) Expenses. During the Employment Period, the Employee shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Employee in accordance with the most favorable policies, practices and procedures of the Company in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee, as in effect at any time during the Employment Period with respect to other key employees of the Company.

(vi) Fringe Benefits. During the Employment Period, the Employee shall be entitled to fringe benefits and perquisites in accordance with the most favorable plans, practices, programs and policies of the Company in effect at any time during the 90-day period immediately preceding the Effective date or, if more favorable to the Employee, as in effect at any time during the Employment Period with respect to other key employees of the Company.

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(vii) Office and Support Staff. During the Employment Period, the Employee shall be entitled to an office or offices of a size and with furnishings and other appointments, and to secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Employee by the Company at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee, as provided at any time during the Employment Period with respect to other key employees of the Company.

(viii) Vacation. During the Employment Period, the Employee shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee, as in effect at any time during the Employment Period with respect to other key employees of the Company.

(ix) Indemnity Agreement. During the Employment Period, the Company shall keep in full force and effect and shall not purport to amend or terminate the indemnity agreement between the Employee and the Company in the form attached as Exhibit A hereto.

4. Termination.

(a) Death or Disability. This Agreement shall terminate automatically upon the Employee’s death during the Employment Period. If during the Employment Period, as a result of incapacity due to physical or mental illness which is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Employee or the Employee’s legal representative, the Employee shall have been absent from the full-time performance of the Employee’s duties with the Company for six (6) consecutive months and, within thirty (30) days after written notice of termination is given to the Employee, the Employee shall not have returned to the full-time performance of the Employee’s duties, the Employee’s employment may be terminated for “Disability”. Any termination for Disability under this Agreement shall not affect any rights the Employee may otherwise have under the Company’s Long-Term Disability Plan. If the Company determines in good faith that the Disability of the Employee has occurred (pursuant to the definition of “Disability” set forth above), it may give to the Employee written notice of its intention to terminate the Employee’s employment. In such event, the Employee’s employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Employee (the “Disability Effective Date”), provided that, within the 30 days after such receipt, the Employee shall not have returned to full-time performance of the Employee’s duties.

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(b) Cause. The Company may terminate the Employee’s employment during the Employment Period for “Cause”. For purposes of this Agreement, “Cause” shall mean termination (A) upon the Employee’s willful and continued failure to substantially perform the Employee’s duties with the Company (other than any such failure resulting from the Employee’s incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination by the Employee), provided that a written demand for substantial performance has been delivered to the Employee by the Company specifically identifying the manner in which the Company believes that the Employee has not substantially performed the Employee’s duties and the Employee has not cured such failure within 30 days after such demand, or (B) by reason of the Employee’s willful engaging in conduct which is demonstrably and materially injurious to the Company, or (C) the Employee’s willful violation of any material provision of any confidentiality, nondisclosure, non-competition or similar agreement entered into by the employee in connection with the Employee’s employment by the Company. For purposes of this paragraph, no act or failure to act on the Employee’s part shall be deemed “willful” unless done or omitted to be done by the Employee not in good faith and without reasonable belief that the Employee’s action or omission was in the best interest of the Company.

(c) Termination by Employee. The Employee may terminate his employment with he Company (i) in the event of a breach of this Agreement by the Company, or (ii) during the Window Period for any reason. For purposes of this Agreement, the term “Window Period” shall mean the thirty (30) day period immediately following the nine (9) month anniversary of the Effective Date.

(d) Notice