EXHIBIT
10.1
CONFIDENTIAL SEVERANCE AND
RELEASE AGREEMENT
THIS SEVERANCE AND RELEASE
AGREEMENT (“Severance Agreement”) is made by
and between Fred Lash (hereinafter “LASH”) and Hooper
Holmes, Inc. (“HOOPER”):
RECITALS
WHEREAS , for purposes of this Severance Agreement,
“HOOPER” means HOOPER HOLMES, INC., and each and all of
its present and former parent and subsidiary corporations,
departments, divisions, affiliates, representatives and agents,
employees, directors, officers, attorneys, current or former board
members and administrators, whether in their official or individual
capacities, or any pension or benefit plan applicable to the
present and former employees of HOOPER, and all predecessors,
and/or successors in interest; and
WHEREAS , as a result of LASH’s separation of
employment with HOOPER, and to fully and finally resolve any and
all issues concerning LASH’s employment relationship with
HOOPER, from the beginning of time up to the date of this Severance
Agreement, HOOPER and LASH have decided to enter into this
Severance Agreement.
NOW, IN CONSIDERATION
of the payments to LASH provided for
herein, and other good and valuable consideration, the receipt and
sufficiency of which the parties acknowledge, and the mutual
promises and covenants contained herein, the parties agree as
follows:
1. Resignation as CFO/Separation
of Employment . HOOPER and LASH agree that LASH will resign as
Chief Financial Officer (“CFO”) and as an officer of
Hooper effective September 15, 2005 (“Resignation
Date”). HOOPER and LASH further agree that he will remain an
employee of HOOPER on inactive status beginning on September 16,
2005 and continuing for twenty-four (24) months through September
15, 2007. LASH’s employment relationship with HOOPER will be
terminated with his retirement on September 15, 2007 or upon his
death, whichever event occurs sooner (“Termination
Date”).
(a) Severance . As
consideration for LASH’s execution of and compliance with
this Severance Agreement, in addition to those items set forth in
subparts (b)-(g) of this Paragraph, HOOPER agrees to pay LASH
twenty-four (24) months of pay based upon an annual rate of
$249,952 (“Severance”). Semi-monthly payments in the
gross amount of $10,414.69 will be made on the regular pay days for
HOOPER employees. This Severance shall be subject to all
appropriate federal and state withholding, employment taxes and
wage garnishments. LASH will not be eligible to receive any cash or
non-cash compensation that may hereafter be awarded to one or more
executive officers of HOOPER.
(b) Auto . HOOPER agrees to
purchase for LASH his present automobile pursuant to his GMAC
“Smart Buy” retail installment sales contract and to
turn over title to LASH within a reasonable time after June 30,
2006. HOOPER agrees to compensate LASH for any direct tax
consequences associated with this purchase.
(c) Outplacement . HOOPER
agrees to provide LASH with outplacement services up to a maximum
of $10,000. LASH may select the outplacement company and upon
submission of a receipt for the payment for such services, HOOPER
shall reimburse LASH for such expenses. HOOPER agrees to compensate
LASH for any tax consequences directly associated with the
outplacement reimbursement.
(d) Legal Fees . HOOPER
agrees to reimburse LASH for legal fees related to the negotiation
and execution of this Agreement, up to a maximum of
$10,000.
(e) Benefits Continuation .
As further consideration for LASH’s execution of and
compliance with this Severance Agreement, HOOPER will continue to
provide all benefits available to LASH presently, except long term
disability, for six months through March 15, 2006. Beginning March
15, 2006 and continuing through September 15, 2007, HOOPER will
continue to maintain LASH on its health, dental and life insurance
plans. In addition, LASH will have the opportunity and
responsibility to elect COBRA continuation coverage pursuant to the
terms of that law and will thus be responsible for the execution of
the continuation of coverage forms upon termination of his
insurance coverage. LASH will be responsible for all
COBRA
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payments. LASH acknowledges and agrees that he
is required to immediately contact HOOPER in writing if he becomes
eligible to receive medical benefits through a new employer, if he
obtains medical benefits from another source, or if he otherwise
becomes disqualified for medical benefits or COBRA from HOOPER.
Further, HOOPER reserves the right to amend, modify or terminate
its benefit coverages as presently afforded to LASH, including but
not limited to health, dental and life, at any time at the sole
discretion of HOOPER, provided that any such amendment,
modification or termination of such benefit coverages are not made
solely to deny LASH or his dependents coverage
thereunder.
(f) SERP . HOOPER agrees to
make the annual payments into Mr. LASH’s life insurance
policy in February 2006 and February 2007, assuming the policy
remains in existence and is not terminated by Lash or upon his
death.
(g) Future Employment/Continued
Payments/Non-compete. Nothing herein prevents LASH from obtaining
new employment prior to September 15, 2007. Lash agrees and
acknowledges, however, that any new employment shall not result in
the disclosure or inevitable disclosure of confidential information
protected in Paragraphs 6 and 7 hereof. LASH further agrees that he
will only accept employment with a non-competitor of
HOOPER.
(i) Employment with
Non-Competitor . LASH and HOOPER agree that LASH may obtain
employment with a non-competitor of HOOPER. In the event of
employment with a non-competitor, LASH’s right to the
twenty-four (24) months of severance and SERP payments noted above
shall continue, however his employment with Hooper shall be deemed
to be terminated as of the date of his new employment and all
benefits set forth in Paragraph 1(e) shall cease.
(ii) Non-Compete . LASH
further agrees that in exchange for the consideration provided by
HOOPER, as set forth herein, LASH shall not for a period of two (2)
years following September 15, 2005 provide any services as an
employee, agent, owner, stockholder, partner, officer, director,
contractor, consultant, advisor or investor for any company, entity
or other organization that provides the same services as HOOPER.
LASH
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acknowledges that this non-compete is necessary
and reasonable to protect HOOPER’s business interests and to
prevent inevitable disclosure of HOOPER’s Confidential
Information. LASH acknowledges that HOOPER will suffer irreparable
harm and other damage in the event of a breach of this provision
and agrees that HOOPER shall be entitled to injunctive relief, and
such other relief as the courts shall grant it, in the event of any
breach or threatened breach of this provision. LASH agrees that the
term and scope of the covenants contained herein are reasonable.
However, in the event that a court finds this provision to be
unreasonable in terms of duration or territory, the court may
modify this provision as it deems appropriate and
reasonable.
(iii) Payment in the Event of
Death . Should LASH die prior to September 15, 2007, any
remaining severance shall be paid, in a lump sum less the value of
LASH’s company life insurance policy of $50,000, which will
be separately paid to his estate, within thirty (30) days of
notification of LASH’S death. Benefits continuation for
eligible surviving family members shall be governed by the
applicable plans and applicable laws.
(h) Sufficiency of Consideration;
No Admission of Liability . The parties agree that the
consideration paid to LASH is good and sufficient consideration for
this Severance Agreement. The parties further agree that these
amounts are greater than what LASH is entitled to receive from
HOOPER under HOOPER’s policies and applicable law. LASH
acknowledges that neither this Severance Agreement, nor payment of
any consideration pursuant to this Severance Agreement, shall be
taken or construed to be an admission or concession of any kind
with respect to alleged liability or alleged wrongdoing by
HOOPER.
2. (a) General and Specific
Release and Waiver of Claims by LASH . LASH, in consideration
of the promises and covenants made by HOOPER in this Severance
Agreement, hereby knowingly and voluntarily compromises, settles
and releases and forever discharges HOOPER, its present and former
parent, subsidiaries, divisions, affiliates, agents, employees,
directors, officers, predecessors, successors, and assigns from any
and all actions, causes of action, suits, claims, charges or
complaints, known or unknown, which LASH has, may have, or claim to
have, for everything and anything that has occurred from the
beginning of time through the date of this Severance Agreement,
including all of LASH’s asserted claims.
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LASH acknowledges that the above
general and specific releases include, but are not limited to,
claims arising under federal,
