Document:

EX-10.30(F)(1)

Exhibit 10.30(f)(1)

KENDLE INTERNATIONAL INC.

2007 STOCK INCENTIVE PLAN

PERFORMANCE-BASED STOCK UNIT AGREEMENT

Summary of Performance-Based Stock Unit Grant

     Kendle International Inc., an Ohio corporation (the “Company”), grants to the Grantee named
below, in accordance with the terms of the Kendle International Inc. 2007 Stock Incentive Plan (the
“Plan”) and this Performance-Based Stock Unit Agreement (the “Agreement”), the following number of
Stock Units, on the Grant Date set forth below:

	 	 	 
	Name of Grantee:
	 	 
	 

	 	 
	 
	 	 
	Number of Stock Units:
	 	 
	 

	 	 
	 
	 	 
	Grant Date:
	 	 
	 

	 	 
	 
	 	 
	EPS Goal:
	 	 
	 

	 	 
	 
	 	 
	Performance Period:

	 	                    , 20___through                     , 20___

Terms of Agreement

     Grant of Performance-Based Stock Units. Subject to and upon the terms, conditions, and
restrictions set forth in this Agreement and in the Plan, the Company hereby grants to the Grantee
as of the Grant Date, the total number of Stock Units (the “Performance-Based Stock Units”) set
forth above. Each Performance-Based Stock Unit shall represent one hypothetical Share and shall at
all times be equal in value to one Share. The Performance-Based Stock Units shall be credited in a
book entry account established for the Grantee until payment in accordance with Section 3 or 4
hereof. 

     Earning of Performance-Based Stock Units. 

          Except as provided in Section 4, the Performance-Based Stock Units shall be earned as follows,
provided that the Grantee has remained continuously employed by the Company or any Subsidiary from
the Grant Date through the end of the Performance Period:

 

 

               (i) If, upon the conclusion of the Performance Period, the Company’s earnings per share
(“EPS”) equals or exceeds the EPS Goal, then the Grantee shall earn the number of Performance-Based
Stock Units set forth above.

               (ii) If, upon the conclusion of the Performance Period, the Company’s EPS is at least ___% of
the EPS Goal but less than ___% of the EPS Goal, then the Grantee shall earn one-half of the
number of Performance-Based Stock Units set forth above.

               (iii) If, upon completion of the Performance Period, the Company’s EPS is less than ___% of
the EPS Goal, then Grantee’s right to earn the Performance-Based Stock Units shall be forfeited
automatically without further action or notice.

          Prior to the payment of any Performance-Based Stock Units as provided herein, the Committee
shall determine in writing the extent, if any, that the EPS Goal has been satisfied and shall
determine the number, if any, of Performance-Based Stock Units that shall have become earned
hereunder. All determinations involving EPS shall be based on Generally Accepted Accounting
Principles in effect at the time the objectives are established, subject to such adjustments as set
forth on Exhibit A. The Committee may in its sole discretion modify the definition of EPS
and the EPS Goal, in whole or in part, as the Committee deems appropriate and equitable to reflect
a change in the business, operations, corporate structure or capital structure of the Company or
its Subsidiaries, the manner in which it conducts its business, or other events or circumstances.

     Payment of Performance-Based Stock Units. 

          Except as otherwise provided in this Section 3, if earned pursuant to Section 2 above, the
Company shall deliver to the Grantee the Shares underlying the earned Performance-Based Stock Units
(and cash in lieu of any fractional Shares) in three equal installments as follows: (i) One third
(1/3) of the Performance-Based Stock Units shall be delivered to the Grantee after the end of the
Performance Period but in no event later than ninety (90) days following the end of the Performance
Period; (ii) One third (1/3) of the Performance-Based Stock Units shall be delivered to the Grantee
within sixty (60) days after the first business day immediately following the first anniversary of
the Performance Period; and (iii) One third (1/3) of the Performance-Based Stock Units shall be
delivered to the Grantee within sixty (60) days after the first business day immediately following
the second anniversary of the Performance Period. Except as otherwise provided in Section 3(b) and
3(c) or as otherwise provided by the Committee, the Grantee must be employed by the Company or a
Subsidiary on the date the Performance-Based Stock Unit (or any portion thereof) is to be paid in
order to be entitled to payment of any such Shares.

          In the event that the Grantee’s continuous employment with the Company and its Subsidiaries
terminates due to death or permanent and total disability within the meaning of Section 22(e)(3) of
the Code, in each case after the end of the Performance Period but prior to the full payment of the
Performance-Based Stock Units, then the Company shall deliver the unpaid Shares underlying the
earned Performance-Based Stock Units (and cash in lieu of any fractional Shares) to the Grantee (or
the Grantee’s estate in the event of death) on the earlier of (i) the date set forth in Section
3(a) or (ii) within sixty (60) days after the Grantee’s termination of employment.

          In the event that a transaction described in Sections 10.1 or 10.2 of the Plan occurs at any
time after the end of the Performance Period but prior to the full payment of the Performance-Based
Stock Units, and while the Grantee is employed by the Company or any Subsidiary, then the Company
shall deliver the unpaid Shares underlying the earned
Performance-Based Stock Units (and cash in lieu of any fractional
Shares) to the Grantee on
the earlier of (i) the date set forth in Section 3(a) or (ii) within sixty (60) days after the date
of that transaction.

 

 

     Impact of Death, Disability or Change in Control During Performance Period, or Other
Circumstances. 

          If, prior to the end of the Performance Period, (i) the Grantee dies while in the employ of
the Company or any Subsidiary; (ii) the Grantee terminates employment with the Company and its
Subsidiaries as a result of a permanent and total disability within the meaning of Section 22(e)(3)
of the Code; or (iii) an event described in Sections 10.1 or 10.2 of the Plan occurs while the
Grantee is employed by the Company or any Subsidiary, then the Company shall deliver to the Grantee
(or the Grantee’s estate in the event of death) the Shares underlying the Performance-Based Stock
Units in a single lump within sixty (60) days of the applicable event. Notwithstanding the
foregoing, the number of earned Shares shall be reduced by 50% in the event that the Grantee’s
death or disability occurs within the first half of the Performance Period.

          Notwithstanding anything contained in this Agreement to the contrary, the Committee may, in
its sole discretion, accelerate the time at which the Performance-Based Stock Units become vested
and nonforfeitable on such terms and conditions as it deems appropriate.

     Transferability. The Performance-Based Stock Units may not be Transferred and shall not
be subject in any manner to assignment, alienation, pledge, encumbrance or charge, unless otherwise
provided under the Plan. Any purported Transfer or encumbrance in violation of the provisions of
this Section 5 shall be void, and the other party to any such purported transaction shall not
obtain any rights to or interest in such Performance-Based Stock Units. 

     Dividend, Voting and Other Rights. The Grantee shall not possess any incidents of
ownership (including, without limitation, dividend and voting rights) in the Shares underlying the
Performance-Based Stock Units until such Shares have been delivered to the Grantee in accordance
with Section 3 or 4 hereof. The obligations of the Company under this Agreement will be merely
that of an unfunded and unsecured promise of the Company to deliver Shares in the future, and the
rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of
the Company will be held or set aside as security for the obligations of the Company under this
Agreement.

     Continuous Employment. For purposes of this Agreement, the continuous employment of the
Grantee with the Company and its Subsidiaries shall not be deemed to have been interrupted, and the
Grantee shall not be deemed to have ceased to be an employee of the Company and its Subsidiaries,
by reason of the transfer of his employment among the Company and its Subsidiaries or a leave of
absence approved by the Committee. 

     No Employment Contract. Nothing contained in this Agreement shall confer upon the Grantee
any right with respect to continuance of employment by the Company and its Subsidiaries, nor limit
or affect in any manner the right of the Company and its Subsidiaries to terminate the employment
or adjust the compensation of the Grantee.

     Relation to Other Benefits. Any economic or other benefit to the Grantee under this
Agreement or the Plan shall not be taken into account in determining any benefits to which the
Grantee may be entitled under any profit-sharing, retirement or other benefit or
compensation plan maintained by the Company or a Subsidiary and shall not affect the amount of any
life insurance coverage available to any beneficiary under any life insurance plan covering
employees of the Company or a Subsidiary. 

 

 

     Taxes and Withholding. To the extent that the Company or any Subsidiary is required to
withhold any federal, state, local, foreign or other tax in connection with the Performance-Based
Stock Units pursuant to this Agreement, it shall be a condition to earning the award that the
Grantee make arrangements satisfactory to the Company or such Subsidiary for payment of such taxes
required to be withheld. Without limiting the foregoing, to the extent that the Performance-Based
Stock Units are deferred pursuant to Section 20 hereof, then the Company or Subsidiary shall have
the right in its sole discretion to (a) require the Grantee to pay or provide for payment of the
required tax withholding, or (b) deduct the required tax withholding from any amount of salary,
bonus, incentive compensation or other payment otherwise payable in cash to the Grantee. The
Committee may, in its sole discretion, require the Grantee to satisfy such required withholding
obligation by surrendering to the Company a portion of the Shares earned by the Grantee hereunder,
and the Shares so surrendered by the Grantee shall be credited against any such withholding
obligation at the Fair Market Value of such Shares on the date of surrender. In no event shall
the Fair Market Value of the Shares to be surrendered pursuant to this section to satisfy
applicable withholding taxes exceed the minimum amount of taxes required to be withheld or such
other amount that will not result in a negative accounting impact. 

     Adjustments. The number and kind of Shares deliverable pursuant to the Performance-Based
Stock Units are subject to adjustment as provided in Section 4.2 of the Plan. 

     Compliance with Law. The Company shall make reasonable efforts to comply with all
applicable federal and state securities laws and listing requirements with respect to the
Performance-Based Stock Units; provided, however, notwithstanding any other provision of this
Agreement, the Company shall not be obligated to deliver any Shares pursuant to this Agreement if
the delivery thereof would result in a violation of any such law or listing requirement. 

     Amendments. Subject to the terms of the Plan, the Committee may modify this Agreement
upon written notice to the Grantee. Any amendment to the Plan shall be deemed to be an amendment
to this Agreement to the extent that the amendment is applicable hereto. Notwithstanding the
foregoing, no amendment of the Plan or this Agreement shall adversely affect the rights of the
Grantee under this Agreement without the Grantee’s consent unless the Committee determines, in good
faith, that such amendment is required for the Agreement to either be exempt from the application
of, or comply with, the requirements of Section 409A of the Code, or as otherwise may provided in
the Plan. 

     Compliance with Section 409A of the Code. It is intended that this Agreement shall either
be exempt from the application of, or comply with, the requirements of Section 409A of the Code.
This Agreement shall be construed, administered, and governed in a manner that effects such intent,
and the Committee shall not take any action that would be inconsistent with such intent. Without
limiting the foregoing, the Performance-Based Stock Units shall not be deferred, accelerated,
extended, paid out, settled, adjusted, substituted, exchanged or modified in a manner that would
cause the award to fail to satisfy the conditions of an applicable exception from the requirements
of Section 409A of the Code or otherwise would subject the Grantee to the additional tax imposed
under Section 409A of the Code. The amounts payable pursuant to
this Agreement are intended to be separate payments that qualify for the “short-term
deferral” exception to Section 409A of the Code to the maximum extent possible.

 

 

     Severability. In the event that one or more of the provisions of this Agreement shall be
invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall
be deemed to be separable from the other provisions hereof, and the remaining provisions hereof
shall continue to be valid and fully enforceable.

     Relation to Plan. This Agreement is subject to the terms and conditions of the Plan.
This Agreement and the Plan contain the entire agreement and understanding of the parties with
respect to the subject matter contained in this Agreement, and supersede all prior written or oral
communications, representations and negotiations in respect thereto. In the event of any
inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern.
Capitalized terms used herein without definition shall have the meanings assigned to them in the
Plan. The Committee acting pursuant to the Plan, as constituted from time to time, shall, except
as expressly provided otherwise herein, have the right to determine any questions which arise in
connection with the grant of the Performance-Based Stock Units.

     Successors and Assigns. Without limiting Section 5, the provisions of this Agreement
shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal
representatives and assigns of the Grantee, and the successors and assigns of the Company.

     Governing Law. The interpretation, performance, and enforcement of this Agreement shall
be governed by the laws of the State of Ohio, without giving effect to the principles of conflict
of laws thereof.

     Electronic Delivery. The Grantee hereby consents and agrees to electronic delivery of any
documents that the Company may elect to deliver (including, but not limited to, prospectuses,
prospectus supplements, grant or award notifications and agreements, account statements, annual and
quarterly reports, and all other forms of communications) in connection with this and any other
award made or offered under the Plan. The Grantee understands that, unless earlier revoked by the
Grantee by giving written notice to the Secretary of the Company, this consent shall be effective
for the duration of the Agreement. The Grantee also understands that he or she shall have the
right at any time to request that the Company deliver written copies of any and all materials
referred to above at no charge. The Grantee hereby consents to any and all procedures the Company
has established or may establish for an electronic signature system for delivery and acceptance of
any such documents that the Company may elect to deliver, and agrees that his or her electronic
signature is the same as, and shall have the same force and effect as, his or her manual signature.
The Grantee consents and agrees that any such procedures and delivery may be effected by a third
party engaged by the Company to provide administrative services related to the Plan. 

     Deferral of Performance-Based Stock Units. Notwithstanding anything contained herein to
the contrary, the Grantee may elect to defer receipt of the Performance-Based Stock Units in
accordance with the terms and subject to the conditions of the Kendle International Inc.
Nonqualified Deferred Compensation Plan (or any successor plan). 

       IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its
behalf by its duly authorized officer and the Grantee has also executed this Agreement, as of the
Grant Date.

 

 

	 	 	 	 	 
	 	KENDLE INTERNATIONAL INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

     The undersigned hereby acknowledges that a copy of the Plan, Plan Summary and Prospectus, and
the Company’s most recent Annual Report and Proxy Statement (the “Prospectus Information”) are
available for viewing on the Company’s intranet site at                     . The Grantee hereby consents to
receiving this Prospectus Information electronically, or, in the alternative, agrees to contact
                     at                      to request a paper copy of the Prospectus Information at no charge. The
Grantee represents that he or she is familiar with the terms and provisions of the Prospectus
Information and hereby accepts the award of Performance-Based Stock Units on the terms and
conditions set forth herein and in the Plan.

                                                            

Grantee

Date:                                                             

ALTERNATIVE FOR ELECTRONIC SIGNATURE

     You may accept the award online or by telephone in accordance with the procedures established
by the Company and the Plan administrator. By accepting your award in accordance with these
procedures, you acknowledge that a copy of the Plan, Plan Summary and Prospectus, and the Company’s
most recent Annual Report and Proxy Statement (the “Prospectus Information”) either have been
received by you or are available for viewing on the Company’s intranet site at                     , and
consent to receiving this Prospectus Information electronically, or, in the alternative, agree to
contact                      at                      to request a paper copy of the Prospectus Information at no
charge. You also represent that you are familiar with the terms and provisions of the Prospectus
Information and hereby accept the award on the terms and conditions set forth herein and in the
Plan. These terms and conditions constitute a legal contract that will bind both you and the
Company as soon as you accept the award as described above.EX-10.1

	 	 	 	 	 

Exhibit 10.1

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT is made and effective as of the date indicated below by and between
DATATRAK INTERNATIONAL, INC., an Ohio corporation with its principal place of business at 20600
Chagrin Boulevard, Suite 1050, Cleveland, Ohio 44122 (“Company”) and RAYMOND J. MERK (“Employee”).

WITNESSETH:

     WHEREAS, on or about July 12, 2006, Employee was retained by the Company to serve as Vice
President and Controller;

     WHEREAS, on or about August 10, 2007, Employee was appointed as the Company’s Vice President
of Finance, Chief Financial Officer and Treasurer;

     WHEREAS, the Company desires to retain Employee as its Vice President of Finance, Chief
Financial Officer and Treasurer, and Employee desires to be so retained; and

     WHEREAS, the Employee and the Company desire to enter into an agreement expressly indicating
the terms and conditions of their relationship.

     NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the
Company and the Employee agree as follows:

     1. DUTIES. The Company employs Employee in the position of Vice President of Finance,
Chief Financial Officer and Treasurer. Employee shall perform his duties under the direction of
the Company’s Chief Executive Officer or other designee of the Company. Employee agrees to accept
election to and serve as an officer of the Company. During the Term of this Agreement, as those
terms are defined herein, Employee shall at all times, faithfully, industriously and to the best of
his abilities, perform all duties that reasonably may be required of him by virtue of his position.
Employee shall devote his full business time and efforts to the affairs of the Company.

     2. SALARY. The Company will pay Employee a base salary of One Hundred Fifty Thousand
($150,000) per year in accordance with the Company’s payroll practices, or in such other periodic
method to which both parties agree, minus appropriate withholdings and deductions. The Company will
review Employee’s compensation hereunder on an annual basis, and may adjust the above-indicated
level, in its sole discretion, based on Employee’s performance of his duties hereunder and/or the
performance of the Company, provided, however, that the Company shall not reduce the Employee’s
salary to be paid in any succeeding year to an amount less than the Employee’s base salary as
established herein or as increased over time without Employee’s written agreement. Both parties
agree that the above reference to an “annual base salary” or to other benefits of employment,
including but not limited to bonuses, does not in any way guarantee and/or add to the express
length of employment of Employee, other than as set forth herein.

     3. BONUS PLANS. The Company may pay Employee additional compensation in the form of a
discretionary bonus and/or pursuant to an established bonus plan(s) that the Company may have in
effect from time to time for similarly situated employees. The Company reserves the right to modify
or cancel any bonus plan(s) that it may have in effect at any given time. The Company will be
obligated to pay all amounts earned and due to Employee prior to the modification or cancellation
of any established bonus plans. The bonus may be paid in cash, in equity securities of the Company,
in stock options, or in any combination thereof at the Company’s discretion.

     4. STOCK OPTION PLAN. Employee shall be eligible to participate in any stock option
plans that the Company may make available from time to time for similarly situated employees. The
granting of stock options will be pursuant to the terms and conditions of a separate Stock Option
Agreement.

     5. BENEFITS. During the Term of this Agreement, Employee shall be entitled to
participate in any employment benefit plans which are maintained or established by the Company for
its similarly situated employees, including enrollment in medical, dental, and life insurance
policies or plans, as well as a 401K plan, and all paid holidays afforded to other similarly
situated employees.

 

 

     6. VACATIONS. During the Term of this Agreement, Employee shall be entitled to annual
paid vacation time equal to fifteen (15) days, to be taken at a time or times acceptable to the
Company and otherwise consistent with the terms and conditions of this Agreement and the Company’s
vacation pay policy.

     7. RELOCATION EXPENSES. During the Term of this Agreement, if Employee is required by
the Company to relocate his permanent residence to a location outside of Northeastern Ohio, then
the Company will reimburse Employee for all reasonable relocation expenses, including the expense
of moving Employee’s possessions and reasonable expenses incurred in travel to the new location for
the purpose of locating housing. The Company will further reimburse Employee for all reasonable
temporary housing expenses at the new location for the first 90 days after the date requested by
the Company for the Employee’s relocation.

     7.1 REAL ESTATE BROKER’S COMMISSIONS. The Company will reimburse Employee for
reasonable licensed real estate broker’s commission (Broker’s Fee) incurred by Employee in the sale
of the Employee’s permanent residence if Employees is required by the Company to relocate his
permanent residence to a location outside of Northeastern Ohio. The Employee will provide the
Company with appropriate documentation to support the Broker’s Fee incurred by Employee.

     8. TERM AND TERMINATION OF AGREEMENT. This Agreement shall commence on the effective
time indicated below and shall continue for a period of one (1) year (the “Initial Term”), unless
sooner terminated as provided in paragraphs 8.1, 8.2, 8.3, 8.5, 8.6, 8.7 or 8.8 of this Agreement.
This Agreement will renew automatically for successive one (1) year periods (the “Renewal Period,”
and collectively with the Initial Term, the “Term”) unless previously terminated or either party
gives notice of non-renewal at least 90 days prior to the commencement of such Renewal Period.

     8.1 TERMINATION FOR DEATH. This Agreement shall terminate automatically upon the
Employee’s death. With the exception of any benefits under the Company’s employee benefit plans,
and any stock options that have vested under the Company’s Stock Option Plan(s) which may inure to
the benefit of Employee’s beneficiaries, upon Employee’s death, the Company shall have no further
obligations under the terms and conditions of this Agreement. If Employee’s employment is
terminated pursuant to this section during the Term of this Agreement, employee shall be entitled
to his salary through the date of such termination, payment for any pro-rata bonus earned and due
at the time of termination pursuant to any (if any) bonus plan(s) the Company may have in effect at
the time of termination, and to any other employee benefits maintained or established by the
Company for its similarly situated employees.

     8.2 TERMINATION FOR DISABILITY. The Company and the Employee acknowledge and agree
that the essential functions of the Employee’s position are unique and critical to the Company and
that a disability condition which causes the Employee to be unable to perform the essential
functions of his position with or without reasonable accommodations for a period in excess of one
hundred twenty (120) calendar days will constitute an undue hardship on the Company. If the Company
determines in good faith upon medical certification and in consultation with Employee and, if
necessary or appropriate, with Employee’s physician(s), that the Employee is disabled and unable to
perform the essential function of his position with or without reasonable accommodations, it may
give Employee written notice of its intention to terminate Employee’s employment. If Employee’s
employment is terminated pursuant to this section during the Term of this Agreement, employee shall
be entitled to his salary through the date of such termination, payment for any pro-rata bonus
earned and due at the time of termination pursuant to any (if any) bonus plans the Company may have
in effect at the time of termination, and to any other employee benefits maintained or established
by the Company for its similarly situated employees.

     8.3 TERMINATION BY COMPANY FOR CAUSE. During the Term of this Agreement, the Company
may terminate Employee’s employment for cause by written notification citing the specific reasons
for termination. For purposes of this Agreement, “Cause” means:

          (1) Employee’s conviction of a felony involving moral turpitude or a felony in connection with
his employment;

          (2) Employee’s theft, fraud, embezzlement, material willful destruction of property or
material disruption of the operations of the Company;

          (3) Employee’s use or possession of illegal drugs and/or unauthorized use or possession of
alcohol on Company premises or reporting to work under the influence of same; or

          (4) Employee’s engaging in conduct, in or out of the workplace, which in the Company’s
reasonable determination has an adverse effect on the reputation or business of the Company;

 

 

     Under any such termination for Cause, all rights, benefits, obligation and duties of the
parties hereunder shall immediately cease, except any compensation due and owing through the date
of termination and/or fringe benefits which have vested on Employee’s behalf prior to such
termination, if any, and except for the covenants of Employee set forth in Section 9 of this
Agreement.

     8.4 SUSPENSION. In the event Employee engages in conduct subjecting Employee to
potential civil or criminal liability which could have an adverse effect upon the Company’s
reputation or business or is related to Employee’s duties and responsibilities, the Company
reserves the right to immediately suspend Employee with pay, pending investigation and/or the
outcome of the matter.

     8.5 TERMINATION BY EMPLOYEE WITHOUT GOOD REASON/NON-RENEWAL BY EMPLOYEE. During the
Term of this Agreement, Employee may terminate his employment and this Agreement at any time for
any or no reason upon at least 30 days written notice by the Employee directly to the Company’s
President. Prior to and/or during any Renewal Period, Employee may also terminate this Agreement by
giving a notice of non-renewal at least 120 days prior to the commencement of the next Renewal
Period. Employee acknowledges and agrees that a voluntary resignation, termination or retirement by
Employee during the Term of this Agreement as described in this Section 8.5, and/or a notice of
non-renewal by Employee prior to and/or during any Renewal Period as described in this Section 8.5,
shall result in the termination of this Agreement and all rights and obligations under this
Agreement shall immediately cease, except any fringe benefits or stock options which have vested on
Employee’s behalf prior to such termination.

     8.6 TERMINATION BY EMPLOYEE FOR GOOD REASON. Employee may terminate his employment at
any time during the Term of this Agreement for “Good Reason.” “Good Reason” shall mean (a) any
material reduction by the Company of Employee’s duties, responsibilities, base salary, title or
position, or (b) any involuntary removal of Employee from any position previously held (except in
connection with a promotion or a termination for Cause, Death, or Disability, or the voluntary
termination by the Employee Without Good Reason). Prior to any Termination by Employee for Good
Reason pursuant to this Section 8.6, Employee shall provide the President with sixty (60) calendar
days’ written notice of the acts and/or omissions of the Company which Employee asserts constitute
“Good Reason,” and if, at the conclusion of that sixty (60) calendar day period, the Company has
not undertaken reasonable efforts to cure or correct the alleged acts and/or omissions, then
Employee may terminate his employment pursuant to this Section 8.6. In the event of such
termination by Employee for Good Reason, Employee shall be entitled to receive (i) his salary
through the date of such termination and for a period of one (1) year after such termination, and
(ii) outplacement services from an agency to be selected by the Company in an amount not to exceed
Ten Thousand ($10,000) Dollars.

     8.7 TERMINATION OTHER THAN FOR CAUSE, DEATH, OR DISABILITY; TERMINATION BY
NON-RENEWAL. During the Term of this Agreement, the Company may terminate Employee for other
than Cause, Death, or Disability at any time during the Term of this Agreement, upon not less than
thirty (30) days notice. Prior to and/or during any Renewal Period, the Company may also terminate
this Agreement by giving a notice of non-renewal at least 90 days prior to the commencement of the
next Renewal Period. In the event the Company exercises its right to terminate the Employee other
than for Cause, Death, or Disability at any time during this Agreement, during the Term of this
Agreement as described in this Section 8.7, and/or gives a notice of non-renewal prior to and/or
during any Renewal Period as described in this Section 8.7, Employee shall at the time of such
termination be entitled to receive (i) his salary through the date of such termination and for a
period of one (1) year after such termination, and (ii) outplacement services from an agency to be
selected by the Company in an amount not to exceed Ten Thousand ($10,000) Dollars.

     8.8 CHANGE OF CONTROL. If a Change of Control (as defined in this paragraph) shall
occur during the Term of this Agreement, and Employee’s employment is (a) not continued by the
purchaser or successor or (b) there is a material change in Employee’s role, duties, responsibility
or title following a Change of Control and Employee voluntarily terminates his employment and this
Agreement therefor, Employee shall be entitled to receive (i) his salary through the date of such
non-continuation and for a period of one (1) year after such non-continuation, and (ii)
outplacement services from an agency to be selected by the Company in an amount not to exceed Ten
Thousand ($10,000) Dollars. For purposes hereof, the term “Change of Control” shall mean (A) the
sale of all or substantially all of the assets of the Company, (B) the sale of a majority of the
outstanding shares of capital stock of the Company entitled to vote in a single transaction or
series of related transactions (except with respect to a public offering of the Company’s shares of
capital stock), (C) the consummation of a merger, consolidation or similar transaction involving
the Company in which the holders of the Company’s capital stock immediately prior to the
transaction do not retain at least a majority of the voting power of the Company surviving the
merger or its parent Company, or (D) the complete liquidation or dissolution of the Company.

 

 

     8.9 BINDING ARBITRATION. In the event, upon termination of Employee’s employment, a
disagreement exists between Employee and the Company as to which section of this Section 8 governs
such termination (i.e., if the party terminating Employee’s employment (the “Terminating Party”)
claims that “Cause”, “Good Reason” or “Disability” exists and the other party (the “Disputing
Party”) disputes such claim), the issue of which section should govern such termination shall be
submitted by the parties to binding arbitration in accordance with the provisions of this Section
8.9. Within thirty (30) days after termination of Employee’s employment the Disputing Party may
challenge the claimed basis for termination by giving written notice (the “Dispute Notice”) of such
challenge to the Terminating Party. Within thirty (30) days after delivery of such Dispute Notice,
the parties shall appoint an independent arbitrator experienced in employment matters who shall
determine which section of this Section 8 applies to the termination. In the event the parties
cannot agree on an arbitrator within thirty (30) days after delivery of the Dispute Notice, then
each party shall appoint one arbitrator, and the two arbitrators shall appoint a third arbitrator.
In either case, the determination of the arbitrator or the majority of the arbitrators, as the case
may be, shall be final and binding upon both Employee and the Company. The authority of the
arbitrators hereunder shall be limited to determining which section of this Section 8 governs, and
the arbitrators shall not have authority to reinstate Employee, to alter the amount of the payment
due to Employee under the applicable section of this Section 8, or to award Employee or the Company
any other amounts by way of damages or otherwise. Any arbitration hereunder shall be conducted in
Cleveland, Ohio in accordance with the National Rules for the Resolution of Employment Disputes of
the American Arbitration Association. In the event the Disputing party fails to give the Dispute
Notice within the thirty (30) day period provided above, all rights of the Disputing Party to
challenge the claimed basis for termination shall expire.

     9. RESTRICTIVE COVENANTS OF EMPLOYEE. Employee acknowledges that the services rendered
to the Company are special, unique, and of extraordinary character; that the market for the
Company’s services and products is worldwide; and that through the Internet, World Wide Web, and/or
other media of electronic commerce, the Company regularly transacts business on a worldwide basis.
In light of those factors, Employee acknowledges that the following covenants are reasonable and
necessary for the protection of the Company’s reasonable business interests.

     9.1 NON-COMPETITION. During the period of Employee’s employment by the Company and, in
the case of the termination of Employee’s employment under Sections 8.2, 8.6, 8.7, or 8.8 hereof,
for a period of one (1) year thereafter, or (ii) in the case of the termination of Employee’s
employment under any provision of Section 8 hereof other than Sections 8.2, 8.6, 8.7, or 8.8 for a
period of eighteen (18) months (the “Non-competition Period”), Employee shall not, directly or
indirectly, whether as an individual on his own account, or as a partner, joint venturer, director,
officer, employee, consultant, creditor and/or agent or otherwise, in any place in which the
Company now or hereafter conducts business:

     (a) Enter into or engage in any business which provides software and related web hosting,
educational and training services, and/or other Applications Services Provider (“ASP”) services, to
customers in the pharmaceutical, biotech, and/or medical device industries to assist in the
electronic capture of clinical trial patient data from clinical trial sites;

     (b) Solicit customers, business, patronage or orders from, or perform other services for, any
person, firm, association, corporation or other entity, engaged in any business, including without
limitation, an Applications Services Provider, which directly or indirectly competes with the
business of the Company or parent or subsidiary of, or entity controlling, controlled by or under
common control with the Company (“Company Affiliate”); or

     (c) Promote or assist, financially or otherwise, any person, firm, association, corporation or
other entity, engaged in any business, including without limitation, an Applications Services
Provider, which competes with the current or future business of the Company or any Company
Affiliate; provided, however, that the foregoing covenant shall not be deemed to have been violated
solely by (i) the ownership of equity securities of an entity which competes with a future business
of the Company or any Company Affiliate, to the extent that such securities are acquired prior to
the date that the Company or Company Affiliate commences such future business; or (ii) the
ownership for investment purposes of less than five percent (5%) of the equity securities of any
entity which has equity securities listed on a national securities exchange or publicly traded in
the over-the-counter market.

     9.2 CONFIDENTIALITY AND WORK PRODUCT. Employee acknowledges that during his employment
with the Company he has had and will have access to confidential information, knowledge, and data
regarding the business of the Company and Company Affiliates, whether received, acquired or
developed by him or otherwise, including, without limitation, trade secrets, design information,
software programs, research methods and techniques, scientific data and formulae, pricing data,
customer information and all other information or data relevant to the business of the Company
(collectively, except any of the foregoing which is at the time generally known to the public and
which did not become generally known through the breach of any agreement restricting its
disclosure, “Proprietary Information”). Employee further acknowledges that in the course of his
employment he may be producing designs, analyses, recommendations, reports, complications,
software, studies and other worth product, acquiring information on behalf of the Company and any
conceive of ideas, innovations, processes and improvements relating to the business of

 

 

the Company (collectively, “Work Product”). As to the ownership, disclosure and use of Proprietary
Information and Work Product, Employee agrees that, from and after the date hereof:

     (a) he will promptly disclose in writing to the Company all Work Product;

     (b) all Proprietary Information, all Work Product and all rights therein are and shall be the
sole and exclusive property of the Company and all rights or interest of Employee therein are
hereby assigned by Employee to the Company, and Employee will cooperate with and assist the Company
from time to time, in any manner reasonably requested by the Company, in obtaining title or
ownership therein or evidence thereof;

     (c) Employee shall not divulge, disclose or communicate to any third party in any manner,
directly or indirectly, Proprietary Information or Work Product;

     (d) Employee will not use for his own benefit or purposes or for the benefit or purposes of
any third party or permit or assist, by acquiescence or otherwise, any third party to use in any
manner, directly or indirectly, Proprietary Information or Work Product; and

     (e) upon the termination of his employment, Employee will promptly deliver to the Company all
Proprietary Information and Work Product, including, without limitation, any reproductions, copies,
abstracts, summaries or other documents or records of Proprietary Information or Work Product.

      9.3 NO INTERFERENCE. During the Non-competition Period, Employee agrees that he shall
not:

     (a) interfere with the contractual relationship of the Company, any Company Affiliate,
customers, suppliers, employees or other which relate to the business of the Company or any Company
Affiliate; or

     (b) induce any employee or representative of the Company or any Company Affiliate not to
continue as an employee or representative of the Company or any Company Affiliate;

     (c) make remarks or take any other action which disparages or diminishes the reputation of the
Company or any Company Affiliate; and

     (d) without limiting the generality of the foregoing, without the prior written consent of the
Chief Executive Officer, directly or indirectly employ, whether as an employee, officer, director,
agent, consultant or independent contractor, any person who was an employee, representative,
officer or director of the Company or any Company Affiliate at any time during the six-month period
prior to the date of such proposed employment; provided, however, that the covenants contained in
this clause (d) shall not apply with respect to such person terminated by action of the Company or
any Company Affiliate.

      9.4 INJUNCTIVE RELIEF. Both parties hereto recognize that the services to be rendered
by Employee to the Company are special, unique and of extraordinary character; that the market for
the Company’s services and products is worldwide; that through the Internet, World Wide Web, and/or
other media of electronic commerce, the Company regularly transacts business worldwide; and that if
Employee hereafter fails to comply with the restrictions and obligations imposed upon him
hereunder, the Company may not have an adequate remedy at law. Accordingly, the Company, in
addition to any other rights which it may have, shall be entitled to seek injunctive relief to
enforce such restrictions and obligations without the necessity of posting any bond.

     10. REPRESENTATIONS OF EMPLOYEE. Employee represents and warrants to the Company that
he has the capacity to enter into this Agreement that he is not a party to any agreement,
arrangement or other understanding with any person or entity which might affect, restrain or
conflict with the provisions of this Agreement and/or the services to be provided to the Company by
Employee under this Agreement.

     11. REFORMATION OF AGREEMENT; SEVERABILITY. In the event that any provision or term of
this Agreement is found to be void or unenforceable to any extent for any reason, it is the
agreed-upon intent of the parties hereto that all remaining provisions or terms of the Agreement
shall remain in full force and effect to the maximum extent permitted and that the Agreement shall
be enforceable as if such void or unenforceable provision or term had never been a part hereof.

     12. ASSIGNMENT. This Agreement shall inure to the benefit of, and shall be binding
upon, the Company, its successors and assigns. Employee shall not assign this Agreement without the
prior written consent of the Company.

 

 

     13. NOTICE. Any notice required to be given under the terms of this Agreement shall be
in writing, and mailed to the recipient’s last known address or delivered in person. If sent by
registered or certified mail, such notice shall be effective when mailed; otherwise, it shall be
effective upon delivery.

     14. ENTIRE AGREEMENT; AMENDMENTS: WAIVERS. This Agreement contains the entire
agreement between the parties hereto with respect to the subject matter hereof and replaces or
supersedes any previous agreement on such subject matter. It may not be changed orally, but only
by agreement, in writing, signed by each of the parties hereto. The terms or covenants of this
Agreement may be waived only by a written instrument specifically referring to this Agreement,
executed by the party waiving compliance. The failure of the Company at any time, or from time to
time, to require performance of any of Employee’s obligations under this Agreement shall in no
manner affect the Company’s right to enforce any provisions of this Agreement at a subsequent time;
and the waiver by the Company of any right arising out of any breach shall not be construed as a
waiver of any right arising out of any subsequent breach.

     15. HEADINGS. The headings in this Agreement are intended solely for convenience of
reference and shall be given no effect in the construction or interpretation of this Agreement.

     16. COUNTERPARTS. This Agreement may be executed in multiple counterparts each of
which shall be deemed an original but all of which together shall constitute one and the same
document.

     17. GOVERNING LAW. This Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio without giving effect to the conflict of law provisions thereof.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of April 14,
2008.

	 	 	 	 	 	 	 
	 	 	/s/ Raymond J. Merk	 	 
	 	 	 	 	 
	 	 	Raymond J. Merk (Employee)	 	 
	 
	 	 	 	 	 	 
	 	 	DATATRAK International, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	BY:
	 	/s/ Jeffrey A. Green
 

	 	 
	 

	 	ITS:
	 	President & Chief Executive Officer

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