Health Discovery Corp (HDVY)

[jazz710]

An Update on the Tobin Situation

http://biz.yahoo.com/e/101007/hdvy.ob8-k.html


7-Oct-2010

Entry into a Material Definitive Agreement, Change in Directors or Principa


Item 1.01 Entry into a Material Definitive Agreement.
On October 2, 2010, Health Discovery Corporation (the "Company") entered into a Release Agreement with Richard Scott Tobin, its President, General Counsel, Principal Financial Officer, Principal Accounting Officer and a member of the Board of Directors. Under the terms of the Release Agreement, Mr. Tobin will resign from all such positions effective October 10, 2010. Due to applicable age discrimination laws, Mr. Tobin has the right to revoke the Release Agreement at any time prior to October 10, 2010.

On July 13, 2010, Mr. Tobin was informed by the two independent members of the Board of Directors that the Company was not going to renew his employment agreement when it expired on October 15, 2010, as previously announced by the Company.

On August 9, 2010, Mr. Tobin stepped down from his day-to-day management responsibilities, while remaining on Board of Directors.

As part of his employment agreement, Mr. Tobin's 4.5 million options have vested. The Company has agreed (i) to pay Mr. Tobin $271,931.07, (ii) to extend his options until January 15, 2012, and (iii) to allow Mr. Tobin to pay with a portion of his HDC shares up to $170,000 related to any option conversion tax liability. The Company expects to incur an expense of $127,164 in the fourth quarter relating to the Release Agreement.

Mr. Tobin has further agreed that for a period of three years, he will not (i) solicit proxies or consents to vote any securities HDC, (ii) engage in short selling the common stock of HDC, (iii) act alone or in concert with others to seek to control or influence the management, board of directors or policies of HDC, and (iv) cooperate with any party seeking to do any of the foregoing.

Since August 9, 2010, Thomas L. Gallagher, Executive Vice President at Health Discovery Corporation, and formerly a Vice President at Goldman, Sachs & Co. (NYSE: GS), has assumed all of Mr. Tobin's management responsibilities, in addition to his current duties. It is expected that Mr. Gallagher will be appointed President, General Counsel, Principal Financial Officer and Principal Accounting Officer.