EX-10.2







	 	 	 	 	 



Exhibit 10.2




DATATRAK INTERNATIONAL, INC.

2005 OMNIBUS EQUITY PLAN




NONQUALIFIED STOCK OPTION AGREEMENT

FOR EMPLOYEES




DATATRAK International, Inc.

6150 Parkland Boulevard

Suite 100

Mayfield Heights, OH 44124




Attention:           Compensation Committee of DATATRAK International, Inc.




Members of the Committee:





	 	I acknowledge that, effective                     , 200     , I have been awarded:
	 
	 	a.                                          nonqualified stock options (the “Options”);

	 
	 	b.	 	to purchase common shares, without par value, of DATATRAK International, Inc.
(the “Shares”) at a per share Exercise Price of $     .







This award is made under and pursuant to the DATATRAK International, Inc. 2005 Omnibus Equity Plan,
as it may be amended from time to time (the “Plan”), which is hereby incorporated by
reference, and this Nonqualified Stock Option Agreement (“Agreement”). In the event of a
conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan will
govern. A copy of the Plan may be obtained by written request to the Committee at the address
provided below:



DATATRAK International, Inc.

6150 Parkland Boulevard

Mayfield Heights, Ohio 44124

Attention: Chief Financial Officer




          Without limiting the generality of the forgoing, in consideration of this grant of Options, I
hereby acknowledge, understand and agree as follows:



   1. Definitions. For purposes of this Agreement, the following definitions apply:




	 	a.	 	Exercise Date. The “Exercise Date” is the date
that the Committee accepts delivery of a properly executed form evidencing an
intention to exercise my Options.
	 
	 	b.	 	Exercise Price. The “Exercise Price” is the
closing price of a Common Share (as reported in the principal consolidated
transaction reporting system for The Nasdaq Stock Exchange) on the date of this
Agreement. For administrative purposes, the Exercise Price has been recorded by
the Committee at the top of this Agreement. Except as otherwise contemplated in
Section 11(c), the aggregate Exercise Price shall never be less than the Fair
Market Value of the Common Shares underlying the Options on the Date of Grant.




The capitalized terms in this Agreement shall have the meaning ascribed to them under the Plan,
unless otherwise specified herein.




     2. Termination of Agreement. Except as the Committee may otherwise determine, this
Agreement will terminate by the earliest of: (a) the first (1st) anniversary of the date
of my death; (b) the first (1st) anniversary of the date of my Disability; (c) the second (2nd)
anniversary of the date of my Retirement; (d) the three-month anniversary of the date my employment
with the Company and its Affiliates terminates for reasons other than death, Disability or
Retirement; and (e) the tenth (10th) anniversary of the Date of Grant. The Committee
may unilaterally terminate this Agreement, in whole or in part, retroactively or prospectively, to
comply with or meet



 









 







its obligations under applicable laws or regulations, including without limitation, Securities and
Exchange Commission and stock exchange requirements related to the Company’s status as a
publicly-traded company. Upon termination of this Agreement for any reason, neither me nor any of
my successors, heirs, assigns, legatees, beneficiaries or legal representatives shall have any
further rights or interest in the Options. Any terms or conditions of this Agreement that the
Committee determines are reasonably necessary to effectuate its purposes will survive the
termination of this Agreement.



     3. Vesting. Subject to the termination provisions of Section 2, the Options shall
vest and become exercisable in three (3) equal installments on each of the first three
anniversaries of the Date of Grant.



     4. Exercise of Options.




	 	a.	 	Timing. Vested Options may be exercised at any time prior
to the termination of this Agreement. Except in the event of my death,
Disability or incapacity, a limited transfer pursuant to Section 13.3 of the Plan
or as contemplated by a court order recognized by the Committee as a qualified
domestic relations order, the Options shall only be exercisable by me during my
lifetime.
	 
	 	b.	 	Delivery of Notice of Exercise. I must submit to the
Committee at the address listed in Section 11(g): (i) a properly executed Notice
of Exercise of Options (in a form prescribed by, and obtainable upon written
request from, the Committee) evidencing my intention to exercise the Options; and
(ii) a certified check or cashier’s check payable to the Company or certificates
for Common Shares properly endorsed for transfer, or a combination thereof, in
the amount of the Exercise Price. To simplify administration, the Committee may
require that I exercise a minimum number of Options.
	 
	 	c.	 	Distributions. Subject to adjustments under Section 11(c),
upon exercise of Options and payment of the Exercise Price, I will be entitled to
a distribution of a number of Common Shares equal to the number of Options being
exercised. The Committee will distribute such Common Shares to me as soon as
practical after the Exercise Date.





     5. Tax Withholding. The Board of Directors will cause the Company to satisfy any tax
withholding obligation under federal, state and local laws. The Committee will cause the Company
to deliver the tax withholding proceeds to the appropriate taxing authorities in satisfaction of my
tax liabilities. The Committee may, in its sole discretion, make such withholding from any
distributions to my estate, legatee, heir or other successors as it deems necessary under the terms
of the Plan and the law.




     6. Delivery of Share Certificates. As soon as practicable following receipt of
written notice of the exercise of the Options and payment or deemed payment of the Exercise Price,
the Committee will cause a certificate or certificates representing the Common Shares distributable
upon exercise of the Options to be delivered to me or my estate, legatee, heir or other successor,
as applicable. The Committee and the Company shall not be liable to any person or entity for
damages relating to any delays in issuing the certificates, any loss of the certificates or any
mistakes or errors in the issuance of the certificates or in the certificates themselves.



     7. Shareholder Rights. I will not be entitled to receive dividends with respect to,
or to vote, the Common Shares which may be purchased pursuant to the Options prior to their
exercise and my receipt of the certificates representing such shares.



     8. Limitation of Liability. The liability of the Company and its Affiliates, the
Board of Directors and its members, the Committee and its members, and the number and value of any
Shares distributed under this Agreement, will be limited to the obligations set forth herein with
respect to such distribution. No provision of this Agreement shall be construed to impose any
liability on such persons or entities or Company employees who perform administrative functions
relative to this Agreement, in favor of any person with respect to any loss, cost or expense
(whether or not foreseeable on the date hereof) which the person may incur in connection with, or
arising out of, this Agreement. This Agreement is not intended to provide, and shall be not be
construed as providing, greater rights to my heirs, assigns, legatees, estate or other successors
than those granted to me.



     9. Non-Transferability of Common Shares and Certificate Legends. The Common Shares
may not be sold, transferred or otherwise disposed of unless a registration statement under the
Securities Act of 1933, as amended, with respect to the Shares has become effective or unless I
establish to the satisfaction of the Company that an exemption from such registration is available.
I further acknowledge and agree that the certificates representing the Shares shall bear a legend
stating the substance of such restrictions, as well as any other restrictions the Committee deems
necessary or appropriate.




     10. Internal Revenue Code Section 409A. This Agreement and the compensation and
benefits hereunder are intended to meet the requirements for exemption from Code Section 409A set
forth in Treas. Reg. Section 1.409A-1(b)(5), as well as any other such



 









 







applicable exemption, and this Agreement shall be construed and administered accordingly.
Notwithstanding anything in the Plan or elsewhere in this Agreement to the contrary, if the
Committee determines that any compensation or benefits awarded or payable under this Agreement may
be subject to taxation under Code Section 409A, the Committee shall have the authority (but not the
obligation) to unilaterally adopt, prospectively or retroactively, such amendments to this
Agreement or to unilaterally take any other actions it deems necessary or appropriate to fully
address issues relating to compliance with, or exemption from, Code Section 409A and other laws
and, more generally, to avoid adverse tax consequences thereunder. In no event shall this Section
or any other provisions of this Agreement be construed to require the Company to provide any
gross-up for the tax consequences of any provisions of, or awards or payments under, this
Agreement. The Company makes no representations or warranties as to the tax effects of this
Agreement or any transactions or events contemplated hereunder. Except and only to the extent as
may be provided under a separate written agreement to which the Company is bound, the Company shall
have no responsibility for tax or legal consequences of any kind to me or my beneficiaries
resulting from the terms or operation of this Agreement.



     11. Miscellaneous Provisions.




	 	a.	 	Authority of the Committee. The Plan is administered by
the Committee, which has sole and exclusive power and discretion to interpret,
administer, implement and construe the Plan and this Agreement.
	 
	 	b.	 	Transfer Restrictions. Except as otherwise provided below,
I cannot sell, transfer, assign, hypothecate or otherwise dispose of the Options
or pledge them as collateral for a loan and the Options shall not be subject to
execution, attachment, garnishment or similar process. Any purported sale,
transfer, assignment, hypothecation, pledge or other disposition of the Options
in a manner inconsistent with the Plan and this Agreement, and the levy of any
execution, attachment, garnishment or similar process upon the Options, shall be
void and of no effect.
	 
	 	 	 	The Options shall not be transferable by me other than by will and the laws of
descent and distribution or, solely if and to the extent approved by the
Committee from time to time in its sole discretion, pursuant to Section 13.3 of
the Plan or a qualified domestic relations order, as defined in the Code. In
addition, the Options will be subject to such other restrictions as the Board
of Directors deems necessary or appropriate.
	 
	 	c.	 	Effect of Corporate Reorganization or Other Changes Affecting
Number or Type of Shares. The provisions of this Agreement will be
applicable to the Options and to any options or other equity rights which may be
acquired by me as a result of a reclassification, recapitalization,
reorganization, redesignation, merger, consolidation, stock split, stock
dividend, spin-off, split-off, split-up, combination or exchange of shares,
special dividend or other distribution to stockholders, exchange for other
securities, a sale of all or substantially all assets or the like. I understand
and agree that the Committee may appropriately adjust the terms, number and kind
of the Options to reflect such a change. Any such adjustment shall not duplicate
the value of any benefit under this Agreement. Any such adjustment, which may
include the elimination of fractional shares if the Committee so directs, shall
be final, binding and conclusive as to me and my beneficiaries. As used in this
Agreement, the term “Options” will be deemed to include any such options
or other equity rights.
	 
	 	d.	 	Successors and Legal Representatives. This Agreement will
bind and inure to the benefit of the Company and me, and its and my respective
successors, legal representatives, heirs, estates, personal representatives and
beneficiaries.
	 
	 	e.	 	Integration. This Agreement, as it may be amended from
time to time, together with the Plan and all amendments thereof, constitutes the
entire agreement between me and the Company with respect to the subject matter
hereof.
	 
	 	f.	 	Amendment. This Agreement may not be modified, amended,
renewed or terminated, nor may any term, condition or breach of any term or
condition be waived, except pursuant to the terms of the Plan, Sections 2 and 10
of this Agreement or by a writing signed by the person or persons sought to be
bound by such modification, amendment, renewal, termination or waiver. Any
waiver of any term, condition or breach thereof shall not be a waiver of any
other term or condition or of the same term or condition for the future, or of
any subsequent breach.




 









 






	 	g.	 	Notice. Any notice sent to me or the Company relating to
this grant must be in writing and shall be deemed effective upon receipt by the
addressee. All elections, notices, designations and other correspondence with
the Company should be directed to the Committee at:




DATATRAK International, Inc.

6150 Parkland Boulevard

Suite 100

Mayfield Heights, OH 44124

Attn: Chief Financial Officer





	 	 	 	Any notices or other correspondence with me will be sent to the last address
for me on file with the Company. I am responsible for advising the Company of
any changes of my address.
	 
	 	h.	 	No Rights to Continued Employment. Nothing in this
Agreement shall be construed to confer upon me the right to continue as an
employee of the Company or any of its Affiliates, or to serve in any particular
position therewith, or limit any right which the Company, its Affiliates or their
stockholders may have to terminate my employment.
	 
	 	i.	 	Separability. In the event of the invalidity of any part
or provision of this Agreement, such invalidity shall not affect the
enforceability of any other part or provision of this Agreement.
	 
	 	j.	 	Section Headings. The section headings of this Agreement
are for convenience and reference only and are not intended to define, extend or
limit the contents of the sections.
	 
	 	k.	 	Governing Law. This Agreement shall be governed by,
performed, construed and enforced in accordance with the internal laws of the
State of Ohio, without reference to principles of conflict of laws.





     I am a sophisticated investor and I possess sufficient knowledge of the risks inherent in
holding the Options. I have received and read a copy of the Plan. I have had an opportunity to
consult with my tax, legal and accounting advisers regarding the rules and restrictions under Code
Section 409A. Moreover, I have carefully read the above Agreement and hereby accept the above
grant under the terms, conditions and restrictions of this Agreement and the Plan, and I agree to
be bound thereby and by the actions of the Committee.




Very truly yours,




                                        




Print Name:                     




Address:                    




                                        




Social Security No.:                     




ACKNOWLEDGMENT AND RECEIPT



DATATRAK International, Inc. hereby accepts and agrees to be bound by the terms of the foregoing
Nonqualified Stock Option Agreement for Employees under the DATATRAK International, Inc. 2005
Omnibus Equity Plan.




DATATRAK International, Inc.




	 	 	 
	Effective Date:                                                   

	 	By: