Exhibit 10.1
SEPARATION AGREEMENT
     This Separation Agreement (this “Agreement”) is made and entered into by
TRANS1 INC., a Delaware corporation (“Company”) and MICHAEL LUETKEMEYER
(“Luetkemeyer”).
     WHEREAS, Luetkemeyer has been employed by the Company since April 15, 2007,
and has served as its Chief Financial Officer.
     WHEREAS, the parties now wish to terminate Luetkemeyer’s regular full-time
employment effective March 31, 2010 (the “Effective Date”). In order to assure
an orderly transition, the Company is willing to provide Luetkemeyer with
special compensation pay and benefits beyond what he is entitled to under his
existing agreements with the Company or the Company’s policies in consideration
for his continued service as an employee through the Effective Date, on a
full-time basis, and to provide services as the Company may request from time to
time with financial reporting and internal controls of the Company and generally
as an advisor to management of the Company until December 31, 2010.
     WHEREAS, the parties also wish to mutually release all claims, known or
unknown, that they may have against each other.
     NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. Voluntary Resignation. Luetkemeyer hereby resigns voluntarily from his
employment with the Company, and relinquishes his current titles of Chief
Financial Officer, as well as any other positions, titles, or directorships he
may hold with the Company or any of its affiliated companies, effective on the
Effective Date.
2. Accrued Salary, Vacation, and Expenses. The Company shall pay Luetkemeyer an
amount equal to his current base salary at the rate of $20,833.33 per month
through the Effective Date, and thereafter shall continue to pay Luetkemeyer at
such current base salary amount, without accrual for vacation or the provision
of benefits through December 31, 2010, all payable through the Company’s regular
payroll, minus appropriate withholding and payroll deductions, so long as he
continues to meet all requirements of his position through the Effective Date
and he continues in compliance with the terms of this Agreement thereafter. All
accrued vacation and other accrued paid time off shall be paid in full as of the
Effective Date, as determined in the discretion of the Company. The Company
shall pay the premiums to continue Luetkemeyer’s current coverage under the
Company’s group health plans as it has done prior to the date hereof until the
end of the Consulting Period, and thereafter, Luetkemeyer shall pay for his
health coverage under COBRA; provided Luetkemeyer makes a timely election to
continue such coverage beyond the end of the Consulting Period, pursuant to
COBRA. The Company shall reimburse Luetkemeyer for all reasonable and necessary
business expenses he has incurred through his date of resignation in accordance
with Company policy provided Luetkemeyer promptly submits acceptable
documentation.
3. Bonus Compensation.
     A. Annual. Luetkemeyer acknowledges that he has not earned and is not
entitled to any cash or stock compensation pursuant to any bonus program the
Company may have or any other agreement or understanding for incentive cash or
stock compensation for 2010 and will not be

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eligible for any annual bonus or any portion thereof for 2010, but that while he
is eligible to receive a 2009 bonus, he shall receive no bonus for 2009 in
accordance with the terms of the 2009 bonus program. All payments hereunder,
shall be, subject to usual and customary withholdings and deductions.
     B. Transition. Luetkemeyer shall take all action necessary or otherwise
deemed appropriate by the Company to complete the following between the date
hereof and March 31, 2010:
          (i) complete the audit of the Company’s financial statements and take
all actions required to prepare the Company’s Exchange Act of 1934 filings for
the year ended December 31, 2009 including the Company’s Annual Report on Form
10-K and working with the Company’s independent auditors to complete the 2009
audit; and
          (ii) work with his replacement to make for a smooth transition of
financial officers.
4. Return of Company Property. Luetkemeyer shall gather up and return all
property of the Company in his possession or control by March 31, 2010,
excluding his cell phone and laptop computer and including but not limited to
any keys or other office equipment, and the originals and copies of all paper or
electronic files, records, or other documents.
5. Consulting Agreement. From the Effective Date, and continuing until
December 31, 2010, on an on-call basis, or until terminated earlier in
accordance with this Agreement, Luetkemeyer shall provide consulting services to
the Company (“Consulting Period”). Luetkemeyer shall be reasonably available to
provide consulting services as provided for herein as called upon from time to
time by the Chief Executive Officer, or another member of management so
expressly directed by the Chief Executive Officer, within his areas of
expertise.
     A. Other Commitments. The Company acknowledges that Luetkemeyer may seek
and accept employment and other opportunities elsewhere during the Consulting
Period, from and after March 31, 2010, and subject to the limitations set forth
in this Agreement. The Company will make every reasonable effort to accommodate
Luetkemeyer’s other commitments in requesting Consulting Services under this
Agreement.
     B. No Authority. During the Consulting Period, Luetkemeyer shall have no
authority to act on behalf of the Company or to enter into any agreement or
obligation without the express prior authorization of the Chief Executive
Officer.
     C. No Offset for Other Income. The compensation provided under this
Agreement during the Consulting Period shall not be offset by any income
Luetkemeyer earns from any other source subject to the terms of Section 5.A
above; provided , however, all compensation hereunder shall cease upon a breach
of any term of this Agreement by Luetkemeyer.
     D. Trade Secrets and Unfair Competition. Luetkemeyer acknowledges that he
has been entrusted with access to the Company’s most valuable trade secrets and
proprietary data, including but not limited to detailed knowledge concerning the
Company’s current and planned products and services, clinical trials, know-how,
design and manufacturing techniques, research and development, business plans,
marketing and sales programs, financial records, prices and costs, personnel
files, potential mergers and acquisitions, and the identities, needs, and
preferences of the Company’s customers, prospects, vendors, and partners. Upon
any violation of this provision, the

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Consulting Period and all further compensation or reimbursement of the group
health benefits shall immediately cease.
     E. Independent Contractor. During the period between April 1, 2010 and
December 31, 2010, with respect to any services provided by Luetkemeyer for the
Company, it is the express intention of the Company and Luetkemeyer that
Luetkemeyer shall perform such services as an independent contractor to the
Company. During the Consulting Period nothing in this Agreement shall in any way
be construed to make Luetkemeyer an agent, employee or representative of the
Company. Without limiting the generality of the foregoing, Luetkemeyer is not
authorized to bind the Company to any liability or obligation or to represent
that Luetkemeyer has any such authority. Luetkemeyer agrees to furnish (or
reimburse the Company for) all tools and materials necessary to accomplish this
Agreement and shall incur all expenses associated with performance of such
services.
     F. Stock Options. The Company shall permit the continued vesting of the
225,000 incentive stock options granted to Luetkemeyer on or about May 16, 2007,
and the 20,000 nonqualified stock options granted to Luetkemeyer on or about
April 2, 2008, such that all such stock options granted to Luetkemeyer shall
become exercisable in accordance with the terms of the Company’s stock option
plan and the applicable stock option agreements through March 31, 2010. Based on
Luetkemeyer’s termination of employment on the Effective Date, Luetkemeyer
hereby acknowledges that all such stock options not then vested shall expire.
Luetkemeyer’s services to the Company under this Agreement after March 31, 2010
shall not constitute “continuous service” for purposes of the Company’s stock
option plans and Luetkemeyer’s stock option agreements and all stock options
which have become vested stock options on the Effective Date shall continue to
be exercisable in accordance with their terms.
6. Mutual Release of All Claims. Luetkemeyer and the Company agree that this
Agreement constitutes a full and final settlement of any and all claims they may
have against each other, known or unknown, as of the date they execute this
Agreement. Concurrently with the execution of this Agreement, the parties shall
also execute the Mutual Release attached as Exhibit A in accordance with its
terms, and this Agreement shall not take effect until the Mutual Release has
taken effect.
7. Confidentiality of Agreement. Luetkemeyer and the Company shall keep the
terms of this Agreement confidential, except that Luetkemeyer may disclose it to
his spouse and both parties may make necessary disclosures to their accountants
and attorneys, provided the recipient of any such disclosure maintains
confidentiality. The parties may also make such disclosures as are required by
law, or by a subpoena or court order, provided that the party receiving such
subpoena or order will promptly notify the other party of such receipt.
8. Confidentiality. Luetkemeyer acknowledges and agrees that he remains subject
to all obligations imposed by the Employee Proprietary Information Agreement he
signed in connection with his employment dated April 15, 2007, and all other
policies and agreements concerning the confidentiality of the Company’s trade
secrets and proprietary data, and ownership of patents, copyrights, trademarks,
inventions, and discoveries. Luetkemeyer acknowledges that these obligations
shall survive the Consulting Period and are not impaired or limited by the terms
of this Agreement.
9. No Solicitation. For a period of one year following the last day of the
Consulting Period, Luetkemeyer shall not directly or indirectly solicit or
induce, or attempt to solicit or induce, any

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employee or consultant of the Company to terminate their employment or cease
rendering services to the Company.
10. Non-Disparagement. Luetkemeyer shall refrain from making any false or
disparaging remarks about the Company and its officers, employees, products, and
services. The Company will direct management of the Company to refrain from
making any false or disparaging remarks about Luetkemeyer or his character,
abilities and work performance. If asked about the circumstances surrounding
Luetkemeyer’s separation from employment, the parties may state that Luetkemeyer
left the Company by mutual agreement on amicable terms. In response to inquiries
about Luetkemeyer from prospective employers, the Company shall confirm only his
titles, dates of employment, final compensation and benefits, and the fact that
he resigned by mutual agreement.
11. Non-Admission. Neither Luetkemeyer nor the Company admits any wrongdoing or
liability. If this Agreement is not executed or does not become effective for
any reason, it shall be null and void.
12. Amendment. This Agreement can be modified or amended only in a subsequent
written document signed by both Luetkemeyer and the Company. A waiver of any
breach of this Agreement shall not constitute a waiver of any future breach.
13. Withholding. All payments to Luetkemeyer under this Agreement through the
Effective Date, shall be subject to appropriate withholding and payroll
deductions as required by applicable law or Company policy and thereafter all
payments will continue to be subject to appropriate withholding.
14. Severability. If any provision of this Agreement is found to be invalid, all
other provisions shall remain in effect.
15. Arbitration and Equitable Relief. Any dispute arising out of or relating to
this Agreement shall be settled by final and binding arbitration to be held in
Wilmington, North Carolina, in accordance with the National Rules for the
Resolution of Employment Disputes then in effect of the American Arbitration
Association. The arbitrator may grant injunctions and all other forms of relief
available in a court of law. Payment of the fees and expenses of the
Arbitrator(s) shall be allocated as provided by applicable law. The parties
shall be entitled to reasonable discovery. The decision of the arbitrator shall
be final and binding on the parties, except to the extent that review in court
is allowed by law. Judgment may be entered on the arbitrator’s decision in any
court having jurisdiction. Luetkemeyer and the Company understand that they are
voluntarily waiving the right to trial by jury.
16. Successors. The Company shall require any successor or assignee, whether
direct or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Company, to assume the Company’s
obligations under this Agreement.
17. Entire Agreement. This Agreement and the documents it preserves or
incorporates shall constitute the entire agreement between the parties, and
supersede all other agreements, whether oral, written, or implied, regarding the
subject matter hereof.

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18. Counterparts. This Agreement may be executed in one or more counterparts,
and the signature pages may be transmitted by facsimile, each of which shall be
deemed an original and all of which together shall be considered one and the
same agreement.
19. Voluntary Agreement. Luetkemeyer has entered into this Agreement freely and
voluntarily, after having been advised to seek advice of legal counsel and
having had adequate opportunity to do so.
     IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Agreement as of the 23rd day of February, 2010.

                  /s/Michael Luetkemeyer       Michael Luetkemeyer             
TRANS1 INC.,
a Delaware corporation
      By:   /s/ Richard Randall         Richard Randall,        Chief Executive
Officer   

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EXHIBIT A
MUTUAL RELEASE
     This Mutual Release (“Release”) is made and entered into by MICHAEL
LUETKEMEYER (“Luetkemeyer”) and TRANS1 INC., a Delaware corporation (“Company”).
     In consideration of the promises set forth in the Separation and Consulting
Agreement between Luetkemeyer and the Company of the same date as this Agreement
(“Separation Agreement”) and for other valuable consideration, Luetkemeyer and
the Company agree as follows:
1. Mutual Release and Waiver of Claims

  (a)   Except as provided in Section 1(b), Luetkemeyer, for himself and on
behalf of his spouse, dependents, heirs, executors, administrators, legal
representatives, successors, and assigns (collectively referred to in this
Release as “Luetkemeyer”), hereby unconditionally and forever releases,
discharges, and waives any and all claims of any nature whatsoever, whether
legal, equitable or otherwise, known or unknown, that Luetkemeyer may have
against the Company, its subsidiaries and affiliates, and their employees,
officers, directors, shareholders, insurers, representatives, agents,
successors, assigns, and third party administrators, including but not limited
to TriNet HR Corporation and their affiliates, officers, agents, administrators,
servants, employees, attorneys, successors, parent, subsidiaries, assigns and
affiliates, arising prior to the date he signs this Agreement, including but not
limited to claims relating to his hiring, compensation, benefits, assignments,
or termination, or arising under any state or federal equal employment law such
as Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act
of 1991; the Age Discrimination in Employment Act of 1967, as amended (as
further described in Section 2 below); the Older Workers Benefit Protection Act,
the Americans with Disabilities Act; claims under the Employee Retirement Income
Security Act of 1974, as amended; the California Fair Employment and Housing
Act; or any other federal, state or local laws or regulations regarding
employment discrimination or termination of employment. This Release also
includes claims for wrongful discharge; fraud or fraudulent inducement; breach
of contract, both express and implied; breach of the covenant of good faith and
fair dealing, both express and implied; negligent or intentional infliction of
emotional distress; negligent or intentional misrepresentation; negligent or
intentional interference with contract or prospective economic advantage; and
defamation under any statute, rule, regulation or under the common law.     (b)
  Notwithstanding the foregoing, Luetkemeyer does not release, discharge or
waive: (i) any rights to receive any benefits provided under the provisions of
any Company-maintained qualified retirement plan in which Luetkemeyer
participates, (ii) any conversion or COBRA rights under a Company-sponsored
group term life insurance plan in which Luetkemeyer participates,
(iii) Luetkemeyer’s right to indemnification from the Company to the fullest
extent permitted under Delaware General Corporation Law, (iv) Luetkemeyer’s
right to enforce the terms of the Separation and Consulting Agreement and this
Release; and (v) any future rights Luetkemeyer may have as a stockholder.

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  (c)   The Company, for itself and its subsidiaries and affiliates, and their
respective officers, directors, employees, agents, successors, and assigns
(collectively referred to in this Release as “Company”) hereby unconditionally
and forever releases, discharges, and waives any and all claims of any nature
whatsoever, whether legal, equitable or otherwise, known or unknown, that the
Company may have against Luetkemeyer or his spouse, dependents, heirs,
executors, administrators, legal representatives, successors, and assigns,
including but not limited to claims relating to Luetkemeyer’s employment with
the Company or arising under state or federal law, arising prior to the date the
Company signs this Agreement.

2. Limit of Release
The parties understand that they are waiving all claims encompassed by this
Release, known or unknown, arising prior to the date they sign this Agreement.
3. Proceedings
Luetkemeyer and the Company represent that they have not filed any charges,
claims, or proceedings of any kind against the other any court or state or
local, state or federal agency. To the fullest extent allowed by law,
Luetkemeyer and the Company agree not to participate in any such proceeding and
waive any right to recover against the other in any such proceeding instituted
by any other person or entity.
4. Severability Clause
In the event any provision or part of this Release is found to be invalid or
unenforceable, all other provisions shall remain in effect.
5. Non-Admissions
The parties expressly deny any and all liability or wrongdoing and agree that
nothing in this Release shall be deemed to represent any concession or admission
of such liability or wrongdoing or any waiver of any defense.
6. Amendment
This Release can be amended or modified only in a subsequent written document
signed by Luetkemeyer and the Company. A waiver of any breach shall not
constitute a waiver of any future breach.
7. Controlling Law
This Release shall be governed by the laws of the State of North Carolina,
without regard to conflicts of law principles.
8. Counterparts
This Release may be executed in one or more counterparts, each of which shall be
deemed an original and all of which together shall be considered one and the
same agreement.

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9. Entire Agreement
This Release, the Separation Agreement, and the agreements it incorporates shall
constitute the complete agreement of the parties concerning the subject matter,
and shall supersede all other agreements or understandings whether oral,
written, or implied.
          IN WITNESS WHEREOF, Luetkemeyer and the Company have executed this
Release this 23rd day of February, 2010.

            LUETKEMEYER ACKNOWLEDGES THAT HE HAS READ THIS RELEASE AND THAT HE
FULLY KNOWS, UNDERSTANDS, AND APPRECIATES ITS CONTENTS, THAT HE HAS HAD AT LEAST
21 CALENDAR DAYS TO CONSIDER THIS RELEASE, THAT THIS RELEASE MAY BE REVOKED
WITHIN 7 CALENDAR DAYS AFTER ITS EXECUTION, AND THAT HE HEREBY EXECUTES THE SAME
AND MAKES THIS RELEASE AND THE RELEASES PROVIDED FOR HEREIN VOLUNTARILY AND OF
HIS OWN FREE WILL.
      /s/ Michael Luetkemeyer       Michael Luetkemeyer              TRANMS1
INC.,
a Delaware corporation
      By:   /s/ Richard Randall         Richard Randall,        Chief Executive
Officer     

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