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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 o
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