exv10w1






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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