SEPARATION AGREEMENT AND RELEASE OF CLAIMS
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 Xxxxx X. Black (“Employee”) on the dates written
below.
WITNESSETH:
WHEREAS, pursuant to an Employment Agreement between the Company and Employee dated February
5, 2001 (the “Employment Agreement”), Employee has been employed by the Company, most recently as
its Chief Operating Officer and Assistant Secretary; and
WHEREAS, by action of the Company’s Board of Directors effective as of May 15, 2008 and
communicated to Employee on or about May 10, 2008, the Company has eliminated the position of Chief
Operating Officer, and as a result of that decision, Employee will be separated from the employment
of the Company effective June 20, 2008; 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 June 20, 2008 (the “Date of Separation”).
The parties acknowledge and agree that Employee’s separation will be treated as a Termination Other
Than For Cause, Death, of Disability under the provisions of Section 8.7 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 twelve (12) months, thereby extending Employee’s pay
through and including June 19, 2009 (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 pay Employee for all earned but unused paid time off, less
applicable payroll taxes and withholdings.
Section 1.3. Benefit Continuation. The Company will provide Employee with the medical
benefits he was receiving as of the Date of Separation, on the same basis as such
benefits were provided as of the Date of Separation, through and including June 20, 2008.
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 July 1, 2008 through June 30, 2009 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 June 30, 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 twelve (12) month period
through and including June 19, 2009, 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 as may be reasonably requested from time-to-time by the Company’s Chief
Executive Officer or other executives as directed by the Chief Executive Officer;
provided, however, that such services shall not exceed one hundred (100) hours per
calendar quarter. In determining reasonable availability, due consideration shall
be given to Employee’s other business, employment and personal commitments.
(c) Consulting Fees and Expenses. The Company will compensate Employee for
his consulting services provided under this Section 1.4 at the hourly rate of
$120.00 per hour. Within thirty days of the end of each month in which Employee
performs services or incurs expenses in his capacity as Consultant, Employee shall
submit to the Company an invoice detailing such services and 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,” and shall not participate in any employee benefit program of the Company
by reason of the consulting relationship between the parties created by this
Agreement. Except as otherwise required by law, the Company shall not withhold any
sums from the payments to be made to Employee for Social Security or other federal,
state, or local tax liabilities or contributions, and all withholdings, liabilities,
and contributions are hereby acknowledged and agreed as solely the responsibility of
Employee. The Company will deliver to Employee Internal Revenue Service Form 1099
indicating the payments made to Consultant
during the Consulting Period under this Agreement. 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 (“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. Upon the Effective Date of this Agreement, and for the
duration of the Consulting Period, Employee shall continue to have the rights to vest and exercise
stock options under each of the Stock Option Agreements between the Company and Employee dated on
December 9, 1999, June 4, 2002, December 23, 2003, and December 28, 2004 (collectively, the “Stock
Option Agreements”). The vesting and exercise of Employee’s stock options, and all other terms and
conditions of the options, shall be governed by the Stock Option Agreements.
Section 1.6. Outplacement Services. During the twelve month period following the Date
of Separation, the Company will provide to Employee, at Company expense, outplacement services
through a provider of outplacement services to be mutually selected by the Company and Employee, in
an amount not to exceed Ten Thousand Dollars ($10,000.00). If Employee commences employment or
consulting services during the twelve month period following the Date of Separation, other than the
consulting services described in Section 1.4 of this Agreement, the Company’s obligation to provide
outplacement services as described in this Section 1.6 shall terminate as of the date the Employee
commences such employment or consulting services. To that end, Employee agrees to notify the
Company of any employment or consulting services commenced by Employee during the twelve month
period following the Date of Separation.
Section 1.7. Adequacy of Consideration. Employee hereby agrees and acknowledges that
the items described in §§ 1.3, 1.4, 1.5, 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.
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 Xxxxxxx Xxxxxxxxx, DATATRAK
International, Inc., 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxx 00000, 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.
ARTICLE III
OTHER OBLIGATIONS OF EMPLOYEE
Section 3.1. Company Property. On or before June 20, 2008, 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. To the extent applicable, 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/or director of the Company and each of its related/affiliated business entities,
including but not limited to 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.
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 | SIGNATURE OF EMPLOYEE | |||||||
| ACKNOWLEDGING DATE OF RECEIPT: | ||||||||
| July 7, 2008 | /s/Xxxxx X. Black | |||||||
| RECEIPT WITNESSED BY: | ||||||||
| /s/ Xxxxxxx Xxxxxxxxx | ||||||||
| DATE OF EXECUTION BY EMPLOYEE: | AGREED TO AND ACCEPTED BY: | |||||||
| July 7, 2008 | /s/Xxxxx X. Black | |||||||
| XXXXX X. BLACK | ||||||||
| EXECUTION WITNESSED BY: | ||||||||
| /s/ Xxxxxxx Xxxxxxxxx | ||||||||
| DATE OF EXECUTION BY COMPANY: | AGREED TO AND ACCEPTED BY | |||||||
| DATATRAK INTERNATIONAL, INC. | ||||||||
July 7, 2008
|
BY: | /s/Xx. Xxxxxxx X. Xxxxx | ||||||
| TITLE: | Chief Executive Officer | |||||||
| EXECUTION WITNESSED BY: | ||||||||
| /s/ Xxxxxxx Xxxxxxxxx | ||||||||
