EX-10.1






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 Dr. Jeffrey A. Green (“Employee”) on the dates written
below.



W I T N E S S E T H:




WHEREAS, pursuant to an Employment Agreement between the Company and Employee dated February
5, 2001, as subsequently amended on December 31, 2008 (the “Employment Agreement”), Employee has
been employed by the Company, most recently as its Chief Executive Officer; and



WHEREAS, in connection with a mutually desired management transition, Employee will be
separated from the employment of the Company effective January 21, 2009; 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 January 21, 2009 (the “Date of Separation”).
The parties acknowledge and agree that Employee’s separation will be treated as a “Termination by
Employee for Good Reason” under the provisions of Section 8.6 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 twenty-four (24) months, thereby extending Employee’s pay through
and including January 20, 2011 (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, in accordance with the Company’s standard policy, pay
Employee for all earned but unused paid time off, less applicable payroll taxes and withholdings,
up to a maximum of 200 hours.



Section 1.3. Benefit Continuation. The Company will provide Employee with the medical
benefits he was receiving prior to the Date of Separation, on the same basis as such benefits were
provided prior to the Date of Separation, through and including January 21, 2009. 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 January 21, 2009 through April 20, 2009, in the event that Employee is not
otherwise eligible for health/medical insurance from his then-current employer (if any), 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 April 20, 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 twenty-four (24) month period through and including
January 20, 2011, 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, including, without limitation, matters
related to customer relationships, strategic initiatives, investor relations and capital raising
activities, as may be reasonably requested from time-to-time by the Company’s then Chief Executive
Officer or other executives as directed by the then Chief Executive Officer; provided, however,
that such services shall not exceed 150 hours per calendar quarter. In determining reasonable
availability, due consideration shall be given to Employee’s other business, employment and
personal commitments.



(c) Consulting Retainer and Expenses. The Company shall, upon the date this
Agreement becomes effective pursuant to Section 4.8 hereof, pay Employee a one-time retainer of
$1,000.00 as additional consideration for his consulting services. Other than as set forth in
Section 1.1 ,Section 1.3 and the retainer described in Section 1.4(c) hereof, Employee shall not be
entitled to receive any further compensation for his consulting services. However, the Company will
compensate Employee for reasonable expenses incurred in connection with the performance of his
consulting services. Within thirty days of the end of each month in which Employee incurs expenses
in his capacity as Consultant, Employee shall submit to the Company an invoice detailing such
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.” 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 (the “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. Notwithstanding anything to the contrary in any of the
Stock Option Agreements between the Company and Employee dated December 9, 1999, June 4, 2002,
December 23, 2003 and December 28, 2004 (collectively, the “Stock Option Agreements”) or any of the
Company’s stock option plans governing such Stock Option Agreements, Employee shall only have the
right to exercise stock options under such Stock Option Agreements for a period of ninety (90) days
following the Date of Separation, subject to the other terms and conditions set forth in such Stock
Option Agreements. Notwithstanding the foregoing, Employee acknowledges that the failure to
exercise any Stock Option Agreement intended to qualify as an Incentive Stock Option (an “ISO”)
under Section 422 of the Internal Revenue Code (the “Code”) within the limited exercise period set
forth in such Stock Option Agreement shall cause such stock option to be disqualified as an ISO and
may, if later exercised, subject Employee to significant negative tax consequences under Section
409A of the Code.



Section 1.6. Adequacy of Consideration. Employee hereby agrees and acknowledges that
the items described in Sections 1.1, 1.2, 1.3, 1.4, 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.



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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), 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.



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, Mayfield Heights, 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.



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ARTICLE III




OTHER OBLIGATIONS OF EMPLOYEE




Section 3.1. Company Property. On or before January 23, 2009, 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.



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. 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
director of the Company and, to the extent applicable, as an officer and/or director of each of its
related/affiliated business entities, including but not limited to DATATRAK, Inc. and 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
“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.



Section 4.9. Compliance with Code Section 409A. It is the intention and purpose of
the Company that this Agreement shall be, at all relevant times, in compliance with (or exempt
from) Code Section 409A and all other applicable laws, and this Agreement shall be so interpreted
and administered. The Company specifically retains the unilateral right (but not the obligation)
to make, prospectively or retroactively, any amendment to this Agreement or any related document as
it deems necessary or desirable to more fully address issues in connection with compliance with (or
exemption from) Code Section 409A and such other laws. In no event, however, shall this Section
4.9 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 payments under, this Agreement and the
Company shall have no responsibility for tax or legal consequences to Employee (or his beneficiary)
resulting from the terms or operation of this Agreement.



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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:

1/20/09
	 	SIGNATURE OF EMPLOYEE

ACKNOWLEDGING DATE OF

RECEIPT:

	 	 	/s/ Jeffrey A. Green

	 	 	 

	 	 	RECEIPT WITNESSED BY:

	 	 	/s/ Varnesh Sritharan

	 	 	 

	DATE OF EXECUTION BY EMPLOYEE:
	 	AGREED TO AND ACCEPTED BY:

	1/20/09
	 	/s/ Jeffrey A. Green

	 	 	 

	 	 	EXECUTION WITNESSED BY:

	 	 	/s/ Varnesh Sritharan

	 	 	 

	DATE OF EXECUTION BY COMPANY:
	 	AGREED TO AND ACCEPTED BY:

	1/20/09
	 	DATATRAK INTERNATIONAL, INC.

BY: /s/ Laurence P. Birch

	 	 	 

	 	 	TITLE: Chairman of the Board

	 	 	 

	 	 	EXECUTION WITNESSED BY:

	 	 	/s/ Raymond J. Merk

	 	 	 








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