Exhibit 10.1
SEPARATION AGREEMENT AND RELEASE OF CLAIMS
          THIS SEPARATION AGREEMENT AND RELEASE (“Agreement”), is made and
entered into by and between DATATRAK International, Inc. (“Company”) and Terry
C. Black (“Employee”) on the dates written below.
WITNESSETH:
          WHEREAS, pursuant to an Employment Agreement between the Company and
Employee dated February 5, 2001 (the “Employment Agreement”), Employee has been
employed by the Company, most recently as its Chief Operating Officer and
Assistant Secretary; and
          WHEREAS, by action of the Company’s Board of Directors effective as of
May 15, 2008 and communicated to Employee on or about May 10, 2008, the Company
has eliminated the position of Chief Operating Officer, and as a result of that
decision, Employee will be separated from the employment of the Company
effective June 20, 2008; and
          WHEREAS, the Company and Employee wish to resolve all matters and
issues between them arising from or relating to Employee’s employment by the
Company and Employee’s separation from employment by the Company, and to provide
for Employee’s performance of transition consulting services.
          NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, Employee and the Company hereby agree as follows:
ARTICLE I
CONSIDERATION
          Section 1.1. Separation from Employment & Salary Continuation.
Employee will be separated from the employment of the Company effective June 20,
2008 (the “Date of Separation”). The parties acknowledge and agree that
Employee’s separation will be treated as a Termination Other Than For Cause,
Death, of Disability under the provisions of Section 8.7 of the Employment
Agreement. After the Effective Date of this Agreement as set forth in
Section 4.8 herein, and beginning on the first regular payday of the Company
following the Date of Separation, the Company will continue Employee’s pay for a
period of twelve (12) months, thereby extending Employee’s pay through and
including June 19, 2009 (the “Salary Continuation Period”). Any and all payments
hereunder shall be paid at Employee’s rate immediately preceding Employee’s
termination, less applicable payroll taxes and withholdings, payable through the
Company’s normal payroll process.
          Section 1.2. Paid Time Off. On the first regular payday of the Company
following the Date of Separation, the Company will pay Employee for all earned
but unused paid time off, less applicable payroll taxes and withholdings.
          Section 1.3. Benefit Continuation. The Company will provide Employee
with the medical benefits he was receiving as of the Date of Separation, on the
same basis as such

 

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benefits were provided as of the Date of Separation, through and including
June 20, 2008. Thereafter, Employee shall be entitled to continuation of
coverage under the Company’s health/medical insurance plan pursuant to any
rights he may have under the federal Consolidated Omnibus Budget Reconciliation
Act, as amended (“COBRA”), part VI of Subtitle B of Title I of the Employee
Retirement Income Security Act of 1974 (“ERISA”), as amended; Internal Revenue
Code §4980(B)(f). During the period July 1, 2008 through June 30, 2009 the
Company will pay that portion of the COBRA premium that it pays toward the cost
of the medical benefit coverage for active senior executives, with the remainder
of the monthly COBRA premium during that period payable by Employee. Any COBRA
coverage beyond June 30, 2009 will be at Employee’s sole expense.
          Section 1.4. Consulting Services.
(a) Consulting Period. Beginning on the Date of Separation, Employee shall serve
the Company in the capacity of Consultant for a twelve (12) month period through
and including June 19, 2009, which period may be extended by mutual agreement of
the parties (“the Consulting Period”).
(b) Consulting Services. Throughout the Consulting Period, Employee shall make
himself reasonably available to perform in person, by telephone, or by other
means of communication as deemed appropriate by the Company and Employee, such
advisory and consulting services with respect to matters concerning the business
of the Company as may be reasonably requested from time-to-time by the Company’s
Chief Executive Officer or other executives as directed by the Chief Executive
Officer; provided, however, that such services shall not exceed one hundred
(100) hours per calendar quarter. In determining reasonable availability, due
consideration shall be given to Employee’s other business, employment and
personal commitments.
(c) Consulting Fees and Expenses. The Company will compensate Employee for his
consulting services provided under this Section 1.4 at the hourly rate of
$120.00 per hour. Within thirty days of the end of each month in which Employee
performs services or incurs expenses in his capacity as Consultant, Employee
shall submit to the Company an invoice detailing such services and expenses,
payable within thirty days following receipt by the Company.
(d) Independent Contractor Status. During the Consulting Period, Employee shall
be deemed for all purposes to be an independent contractor and not an
“employee,” and shall not participate in any employee benefit program of the
Company by reason of the consulting relationship between the parties created by
this Agreement. Except as otherwise required by law, the Company shall not
withhold any sums from the payments to be made to Employee for Social Security
or other federal, state, or local tax liabilities or contributions, and all
withholdings, liabilities, and contributions are hereby acknowledged and agreed
as solely the responsibility of Employee. The Company will deliver to Employee
Internal Revenue Service Form 1099 indicating the payments made to Consultant

 

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during the Consulting Period under this Agreement. The parties agree that the
advisory and consulting services with respect to matters concerning the business
of the Company performed by Employee pursuant to this Section 1.4 during the
term of this Agreement and the Consulting Period will be subject to the
Indemnification Agreement dated February 29, 1996 between the parties
(“Indemnification Agreement”).
(e) Confidentiality. Any Proprietary Information, as defined in section 9.2 of
the Employment Agreement, which Employee learns, develops or otherwise obtains
during the course of providing the Consulting Services shall be subject to all
confidentiality obligations set forth in section 9.2 of the Employment
Agreement.
          Section 1.5. Stock Options. Upon the Effective Date of this Agreement,
and for the duration of the Consulting Period, Employee shall continue to have
the rights to vest and exercise stock options under each of the Stock Option
Agreements between the Company and Employee dated on December 9, 1999, June 4,
2002, December 23, 2003, and December 28, 2004 (collectively, the “Stock Option
Agreements”). The vesting and exercise of Employee’s stock options, and all
other terms and conditions of the options, shall be governed by the Stock Option
Agreements.
          Section 1.6. Outplacement Services. During the twelve month period
following the Date of Separation, the Company will provide to Employee, at
Company expense, outplacement services through a provider of outplacement
services to be mutually selected by the Company and Employee, in an amount not
to exceed Ten Thousand Dollars ($10,000.00). If Employee commences employment or
consulting services during the twelve month period following the Date of
Separation, other than the consulting services described in Section 1.4 of this
Agreement, the Company’s obligation to provide outplacement services as
described in this Section 1.6 shall terminate as of the date the Employee
commences such employment or consulting services. To that end, Employee agrees
to notify the Company of any employment or consulting services commenced by
Employee during the twelve month period following the Date of Separation.
          Section 1.7. Adequacy of Consideration. Employee hereby agrees and
acknowledges that the items described in §§ 1.3, 1.4, 1.5, and 2.2 of this
Agreement are over and above any entitlements, severance or otherwise, that he
may have by reason of his separation from employment with the Company, and that
such payments and amounts constitute adequate consideration for all of
Employee’s covenants and obligations set forth herein, including, but not
limited to, the Release of Claims set forth in Article II of this Agreement.
ARTICLE II
RELEASE OF CLAIMS
          Section 2.1. Employee’s Release. In consideration of the promises and
agreements set forth herein, Employee does hereby for himself and for his heirs,
executors, successors and assigns, release and forever discharge the Company,
its parent company(ies),

 

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subsidiaries, divisions, and affiliated businesses, direct or indirect, if any,
together with its and their respective officers, directors, shareholders,
management, representatives, agents, employees, successors, assigns, and
attorneys, both known and unknown, in both their personal and agency capacities
(collectively, “the Company Entities”) of and from any and all claims, demands,
damages, actions or causes of action, suits, claims, charges, complaints,
contracts, whether oral or written, express or implied and promises, at law or
in equity, of whatsoever kind or nature, including but not limited to any
alleged violation of any state or federal anti-discrimination statutes or
regulations, including but not limited to Title VII of The Civil Rights Act of
1964 as amended, ERISA, The Americans With Disabilities Act, the Age
Discrimination in Employment Act, the Older Workers Benefit Protection Act,
breach of any express or implied contract or promise, wrongful discharge,
violation of public policy, or tort, all demands for attorney’s fees, back pay,
holiday pay, vacation pay, bonus, group insurance, any claims for reinstatement,
all employee benefits and claims for money, out of pocket expenses, any claims
for emotional distress, degradation, humiliation, that Employee might now have
or may subsequently have, whether known or unknown, suspected or unsuspected, by
reason of any matter or thing, arising out of or in any way connected with,
directly or indirectly, any acts or omissions of the Company or any of its
directors, officers, shareholders, employees and/or agents arising out of
Employee’s employment and termination from employment which have occurred prior
to and throughout the term of this Agreement, except those matters specifically
set forth herein and except for any pension or retirement benefits which may
have vested on Employee’s behalf, if any. Notwithstanding the foregoing, nothing
herein shall be construed to release any claim or obligation arising under this
Agreement, or the obligation of the Company to indemnify or advance expenses
pursuant to the Indemnification Agreement, any director and officer or other
insurance coverage of the Company, the general corporate laws of any applicable
jurisdiction, the Company’s articles of incorporation, by-laws, code of
regulations or other charter documents, or any other agreement between the
Company and Employee.
          Section 2.2. Release by Company Entities. The Company Entities hereby
release and forever discharge Employee, his heirs, executors, successors, and
assigns, from any and all claims, demands, actions or causes of action, charges,
complaints, damages, liabilities or suits at law or equity, of whatsoever kind
or nature, both known or unknown, that the Company Entities have or may have by
reason of any matter or thing arising out of, or in any way connected with,
directly or indirectly, any act, omission, or event that has occurred prior to
the Effective Date of this Agreement. This Release by Company Entities does not
apply to the rights and entitlements of the Company Entities under this
Agreement.
          Section 2.3. Older Workers Benefit Protection Act (“OWBPA”). Employee
recognizes and understands that, by executing this Agreement, he shall be
releasing the Company Entities from any claims that he now has, may have, or
subsequently may have under the Age Discrimination in Employment Act of 1967, 29
U.S.C. §§621, et seq., as amended, by reason of any matter or thing arising out
of, or in any way connected with, directly or indirectly, any acts or omissions
which have occurred prior to and including the Effective Date of this Agreement.
In other words, Employee will have none of the legal rights against the
aforementioned that he would otherwise have under the Age Discrimination in
Employment Act of 1967, 29 U.S.C. §§621, et seq., as amended, by his signing
this Agreement.

 

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          Section 2.4. Consideration Period. The Company hereby notifies
Employee of his right to consult with his chosen legal counsel before signing
this Agreement. The Company shall afford, and Employee acknowledges receiving,
not less than twenty-one (21) calendar days in which to consider this Agreement
to ensure that Employee’s execution of this Agreement is knowing and voluntary.
In signing below, Employee expressly acknowledges that he has been afforded the
opportunity to take at least twenty-one (21) days to consider this Agreement and
that his execution of same is with full knowledge of the consequences thereof
and is of his own free will.
          Notwithstanding the fact that the Company has allowed Employee
twenty-one (21) days to consider this Agreement, Employee may elect to execute
this Agreement prior to the end of such 21-day period. If Employee elects to
execute this Agreement prior to the end of such 21-day period, then by his
signature below, Employee represents that his decision to accept this shortening
of the time was knowing and voluntary and was not induced by fraud,
misrepresentation, or any threat to withdraw or alter the benefits provided by
the Company herein, or by the Company providing different terms to any
similarly-situated employee executing this Agreement prior to end of such 21-day
consideration period.
          Section 2.5. Revocation Period. Both the Company and Employee agree
and recognize that, for a period of seven (7) calendar days following Employee’s
execution of this Agreement, Employee may revoke this Agreement by providing
written notice revoking the same, within this seven (7) day period, delivered by
hand or by certified mail, addressed to Varnesh Sritharan, DATATRAK
International, Inc., 6150 Parkland Boulevard, Suite 100, Cleveland, Ohio 44124,
delivered or postmarked within such seven (7) day period. In the event Employee
so revokes this Agreement, each party will receive only those entitlements
and/or benefits that he/it would have received regardless of this Agreement.
          Section 2.6. Acknowledgments. Employee acknowledges that Employee has
carefully read and fully understands all of the provisions of this Agreement,
that Employee has not relied on any representations of the Company or any of its
representatives, directors, officers, employees and/or agents to induce Employee
to enter into this Agreement, other than as specifically set forth herein and
that Employee is fully competent to enter into this Agreement and has not been
pressured, coerced or otherwise unduly influenced to enter into this Agreement
and that Employee has voluntarily entered into this Agreement of Employee’s own
free will.
ARTICLE III
OTHER OBLIGATIONS OF EMPLOYEE
          Section 3.1. Company Property. On or before June 20, 2008, Employee
shall return the original and all copies of all property belonging to the
Company, including, but not limited to, all confidential and/or proprietary
information, keys, business equipment, computer software and/or hardware, PC and
accessories, connectors, holster, Orinco card, printer, projector, marketing and
sales materials (including all bids and related paperwork), customer lists and
contact information, backup tapes, and files, and technical manuals and other
information.

 

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          Section 3.2. Non-Disparagement. Employee and the Company each agree
that they will not defame, disparage, criticize or otherwise speak of the other
party or their products, services, subsidiaries, divisions, parents, affiliates,
successors, predecessors, or current or former employees, managers, directors,
officers or agents in a negative, derogatory or unflattering manner. Further,
Employee and the Company agree that under no circumstances may they disclose or
cause to be disclosed to the media any material, negative or detrimental
information relating to the other party or their products, services,
subsidiaries, divisions, affiliates, parents, successors or current or former
officers, directors, employees, managers or agents.
ARTICLE IV
MISCELLANEOUS PROVISIONS
          Section 4.1. Entire Agreement. This Agreement contains the entire
agreement between the parties hereto and, with the exceptions of any provision
of Section 9 of the Employment Agreement, the provisions of the Stock Option
Agreements, and all provisions of the Indemnification Agreement, replaces any
prior agreements, contracts and/or promises, whether written or oral, with
respect to the subject matters included herein. This Agreement may not be
changed orally, but only in writing, signed by each of the parties hereto.
          Section 4.2. Warranty/Representation. Employee and the Company each
warrant and represent that, prior to and including the Effective Date of this
Agreement, no claim, demand, cause of action, or obligation which is subject to
this Agreement has been assigned or transferred to any other person or entity,
and no other person or entity has or has had any interest in any such claims,
demands, causes of action or obligations, and that each has the sole right to
execute this Agreement.
          Section 4.3. Invalidity. The parties to this Agreement agree that the
invalidity or unenforceability of any one (1) provision or part of this
Agreement shall not render any other provision(s) or part(s) hereof invalid or
unenforceable and that such other provision(s) or part(s) shall remain in full
force and effect.
          Section 4.4. Resignation as Officer and Director. To the extent
applicable, by way of his execution of this Agreement, unless further action on
his part is necessary or advisable (in which case Employee hereby agrees to take
such action at the Company’s expense), Employee resigns as an officer and/or
director of the Company and each of its related/affiliated business entities,
including but not limited to DATATRAK Deutschland GmbH, and further resigns as a
trustee of their respective benefit plans.
          Section 4.5. No Assignment. This Agreement is personal in nature and
shall not be assigned by Employee. All payments and benefits provided Employee
herein shall be made to his estate in the event of his death prior to his
receipt thereof.
          Section 4.6. Originals. Two (2) copies of this Agreement shall be
executed as “originals” so that both Employee and the Company may possess an
“original” fully executed document. The parties hereto expressly agree and
recognize that each of these fully executed

 

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     “originals” shall be binding and enforceable as an original document
representing the agreements set forth herein.
     Section 4.7. Governing Law. This Agreement shall be governed under the laws
of the State of Ohio.
          Section 4.8. Effective Date. This Agreement shall become effective
only upon (a) execution of this Agreement by Employee after the expiration of
the twenty-one (21) day consideration period described in Section 2.4 of this
Agreement, unless such consideration period is shortened as provided by law; and
(b) the expiration of the seven (7) day period for revocation of this Agreement
by Employee described in Section 2.5 of this Agreement.
CAUTION TO EMPLOYEE: READ BEFORE SIGNING. THIS DOCUMENT CONTAINS A RELEASE OF
ALL CLAIMS AGAINST THE COMPANY ENTITIES PRIOR TO THE EFFECTIVE DATE OF THIS
AGREEMENT.
          IN WITNESS WHEREOF, Employee and the Company agree as set forth above:

                  DATE OF RECEIPT BY EMPLOYEE       SIGNATURE OF EMPLOYEE    
 
      ACKNOWLEDGING DATE OF RECEIPT:    
 
                July 7, 2008       /s/Terry C. Black                            
RECEIPT WITNESSED BY:    
 
                        /s/ Varnesh Sritharan                  
 
                DATE OF EXECUTION BY EMPLOYEE:       AGREED TO AND ACCEPTED BY:
   
 
                July 7, 2008       /s/Terry C. Black                          
TERRY C. BLACK    
 
                        EXECUTION WITNESSED BY:    
 
                        /s/ Varnesh Sritharan                  
 
                DATE OF EXECUTION BY COMPANY:       AGREED TO AND ACCEPTED BY  
          DATATRAK INTERNATIONAL, INC.    
 
               
July 7, 2008
      BY:   /s/Dr. Jeffrey A. Green    
 
               
 
      TITLE:   Chief Executive Officer    
 
                        EXECUTION WITNESSED BY:             /s/ Varnesh
Sritharan