Executive Change-in-Control Agreement

 

        

This Executive Change-in-Control Agreement is made, entered into, and is effective this ____ day of ____________, 2010, 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 ______________________ (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:

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

 

 

 

 

 

 

 

 

 

 

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. Executive must give the Company written notice in accordance with Section 6 of the 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 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.

 

 

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:

 

(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 30^th 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).

 

 

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 15^th 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.

 

 

 

 

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.

 

 

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.

 

 

 

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 Chairperson 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.

 

 

 

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.

(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.

 

(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.

 

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.

 

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.

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.

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.

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 ___________; 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.

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.

 

 

 

 

By: ____________________

Name:

Title:

 

 

 

 

________________________

Name: