EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (herein "Agreement") is entered into
as of October 14, 2002, by and between JMAR Technologies, Inc. ("JMAR")
and Xxxxxx X. Xxxxxx ("Executive").
Recitals
WHEREAS, JMAR is a leading developer and producer of microtechnology
equipment, with strong emphasis on advanced X-ray source and system
technology;
WHEREAS, JMAR desires to retain the services of Executive; and
WHEREAS, Executive desires to be employed by JMAR.
NOW, THEREFORE, JMAR and Executive agree as follows:
1. Employment/Title/Responsibilities. The Company hereby employs Executive,
and Executive hereby accepts such employment as President and Chief
Executive Officer of the Company. Executive shall do and perform such
other services, acts or things as shall be required of him from time to
time by the Company, and shall comply with the directives, policies,
procedures and requirements issued or established from time to time by
the Company. Executive shall at all times during his employment by the
Company (unless otherwise agreed in writing by the Company) devote his
entire productive time, energies, ability and attention to the business
of the Company and perform faithfully and diligently such duties and
responsibilities to the best of his abilities; provided, however, that
Executive shall be entitled to vacation time and time off for sickness
and disability in accordance with the policies of the Company in effect
from time to time. Executive shall initially accrue vacation at the rate
of four weeks per annum. After reaching five years of service, Executive
shall accrue one additional day of vacation for each additional year of
service up to a maximum of five weeks per year.
2. Compensation/Benefits.
2.1 As compensation for the services provided by Executive under this
Agreement, JMAR will pay him an annual salary of $250,000 (base pay),
payable in accordance with JMAR's usual payroll procedures. Executive's
base pay shall be reviewed at least annually by the Board, and in the
Board's sole discretion, may be increased at any time.
2.2 Executive shall have the right to participate in such pension,
profit sharing, bonus, group insurance or similar employee benefit plans
established by the
Company for the benefit of senior management of the Company, for so long
as any such plan is maintained in effect for the benefit of such class,
with Executive's participation or share therein being determined by the
provisions and requirements of the respective plan. A summary of the
Company's benefits plans has been provided to Executive.
2.3 All payments from the Company to Executive pursuant to this
Agreement, including salary or other amounts paid pursuant to Sections
2.1 above or otherwise, shall be subject to such payroll tax,
withholding, social security and other deductions as may be required by
any Federal, state or local law, rule or regulation, which the Company
may reasonably deem to be applicable thereto.
2.4 The Company shall pay or reimburse Executive for all reasonable
expenses incurred by Executive on the business of the Company and for
the promotion of its business, provided such expenses are pre-approved
in writing by the Company or are consistent with the written policies
and guidelines approved by the Company and in effect from time to time.
2.5 Beginning January 1, 2003, Executive will be eligible for an annual
bonus based upon achievement of reasonable goals specified by the Board.
3. Initial Stock Option Grant. Upon the commencement of Executive's
employment, JMAR shall grant him Non-Qualified Stock Options (NQSO's) to
purchase 500,000 shares of JMAR common stock. The NQSO's will vest in
equal amounts at the end of each of the first three years after the
start date of Executive's employment and the exercise price of the
NQSO's will be equal to the average closing prices of JMAR Common Stock
for the five trading days prior to the date of the grant. The other
terms of the options shall be contained in JMAR's standard stock option
agreement, a copy of which has been provided to Executive.
The Board will review Executive's performance after a six month period
(commencing upon the date of this agreement) to consider further grant
of options.
4. Employment at Will; Salary Continuation Payments.
4.1 Executive and the Company understand and agree that Executive's
employment will be "at-will" and may be terminated at any time, for any
reason, with or without cause, by either Executive or JMAR. Executive
and the Company understand and agree that nothing in the Company's
Executive handbooks or the Company's other policies is intended to be,
and nothing in them should be construed to be, a limitation on the right
to terminate the employment relationship at any time for any reason.
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4.2 Section 4 of this Agreement contains the entire agreement between
the parties as to the term and duration of the employment. It supersedes
any and all other agreements, either oral or in writing between the
parties hereto with respect to Executive's term of employment and the
termination thereof. Each party to this Agreement acknowledges that no
representations, inducements, promises, or agreements, oral or
otherwise, have been made by any party, or anyone acting on behalf of
any party, which are not embodied herein, and acknowledges that no other
agreement, statement, or promise not contained in this Agreement shall
be valid or binding. Section 4 of this Agreement may not be modified or
amended by oral agreement, or course of conduct, but only by an
agreement in writing signed by an officer of the Company and Executive.
4.3 In the event Executive's employment terminates for any reason other
than death, disability, a termination upon a Change of Control, a
voluntary termination not for Good Reason, or a termination for Cause,
Executive shall receive six (6) monthly payments each equal in amount to
one-twelfth of the sum of the full amount of his then Base Salary, minus
standard withholdings and deductions.
4.4 In the event of Executive's termination upon a Change of Control,
Executive shall, within seven (7) days of such termination, receive one
lump sum payment equivalent to twelve (12) months of his then Base
Salary, minus standard withholdings and deductions.
5. Confidential Information. Concurrently herewith, Executive shall enter
into an Employee Confidentiality and Inventions Agreement with JMAR in
the form provided to Executive.
6. No Violation of Other Contracts. Executive represents and warrants that
the execution, delivery and performance of this Agreement by Executive
does not and will not result in a breach of or violation of, or
constitute a default under, any agreement to which Executive is a party
or by which Executive is bound.
7. No Conflicts of Interest. Executive does not now, and during the term of
his employment, will not have any financial interest, whether by stock
ownership or otherwise, in any entity which is a supplier, customer or
competitor of the Company; provided, however, that the foregoing shall
not prohibit the ownership of securities of corporations which are
listed on a national securities exchange or traded in the national
over-the-counter market in an amount which shall not exceed 1% of the
outstanding shares of any such corporation.
8. Compliance with JMAR's Rules. Executive agrees to comply with all of the
rules, regulations and standard practices of JMAR as in effect from time
to time. JMAR will provide Executive with all such current rules,
regulations and standard practices and all future updates.
9. Definitions
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9.1 Good Reason: For purposes of this Agreement, "Good Reason" means
that any of the following are undertaken without Executive's express
written consent: (a) the assignment to Executive of any duties or
responsibilities which result in any diminution or adverse change of
Executive's position, status or circumstances of employment; (b) a
reduction by the Company in Executive's Base Salary; (c) the taking of
any action by the Company which would adversely affect Executive's
participation in, or reduce Executive's benefits under, the Company's
benefit plans (including equity benefits) as of the time this Agreement
is executed, except to the extent the benefits of all other executive
officers of the Company are similarly reduced; (d) a relocation of
Executive's principal office to a location outside of San Diego County,
California; (e) any breach by the Company of any material provision of
this Agreement; or (f) any failure by the Company to obtain the
assumption of this Agreement by any successor or assign of the Company.
9.2 Cause: For the purposes of this Agreement, "Cause" means: (i) an
intentional action or intentional failure to act by Executive which was
performed in bad faith and to the material detriment of the Company;
(ii) Executive intentionally refuses or intentionally fails to act in
accordance with any lawful and proper direction or order of the Board;
(iii) Executive willfully and habitually neglects the duties of
employment; or (iv) Executive violates Sections 5, 7, 8 of this
Agreement; provided, however, that in the event that any of the
foregoing events under clauses (i), (ii), (iii), (iv) above is capable
of being cured, the Company shall provide written notice to Executive
describing the nature of such event and Executive shall thereafter have
ten (10) business days to cure such event.
9.3 Change of Control: For purposes of this Agreement, a Change of
Control means: (a) any sale, merger, consolidation, tender offer or
similar acquisition of shares, as a result of which at least a majority
of the voting power of the Company is not held, directly or indirectly,
by the persons or entities who held the Company's securities with voting
power before such transaction, or (b) a sale or other disposition of all
or a substantial part of the Company's assets.
10. General Provisions.
10.1 Assignment. Neither the rights nor obligations under this Agreement
may be assigned, transferred, pledged or hypothecated by any party
hereto, except that this Agreement shall be binding upon and inure to
the benefit of any successor of JMAR.
10.2 Notices. Any notice required or permitted to be given under this
Agreement shall be deemed to have been duly given if in writing and if
personally delivered or sent by registered or certified mail, return
receipt requested, with postage prepaid:
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if to JMAR:
JMAR Technologies, Inc.
0000 Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
If to the Employee:
Xxxxxx X. Xxxxxx
00000 Xxxxx Xxxxxx Xxxx
Xxxxx, Xxxxxxxxxx 00000
Any party may change the address to which notices are to be sent to it
or him by giving ten days' written notice of such change of address to
the other party in the manner above provided for giving notice. Notices
will be considered delivered on the date of personal delivery or on the
date of deposit in the United States mail in the manner above provided
for giving notice by mail.
10.3 Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by arbitration
in San Diego County, California, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, and judgment
upon the award of the arbitrator(s) shall be entered in any court with
appropriate jurisdiction as the final binding judgment. The provisions
of California Code of Civil Procedure Section 1283.05 (related to the
availability of certain discovery procedures) are hereby incorporated
into and made applicable to this Agreement. In addition to any other
relief as may be granted, the prevailing party shall be entitled to
reasonable attorneys' fees in such arbitration, with the amount thereof
to be determined by the arbitrator or the court.
10.4 Counterparts. This Agreement may be executed in several
counterparts, and all counterparts so executed shall constitute one
agreement binding on all of the parties hereto notwithstanding that all
parties are not signatory to the original or same counterpart.
10.5 Entire Agreement. This Agreement constitutes the entire agreement
and understanding between Executive and JMAR with respect to the
employment of Executive, and supersedes all other agreements, written or
oral, regarding such employment. This Agreement may be altered or
amended only by a written instrument executed by each of the parties
hereto.
10.6 Severability. If any provision of this Agreement or the application
thereof to any person or circumstance shall be invalid or unenforceable
to any extent, the
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remainder of this Agreement and the application of such provisions to
other persons or circumstances shall not be affected thereby and shall
be enforced to the greatest extent permitted by law.
10.7 Interpretation of Agreement. In the event of any arbitration or
other dispute, neither this Agreement nor any provision hereof shall be
interpreted for or against any party on the basis said party or its
attorney drafted the Agreement or provision in question.
10.8 Waiver. The waiver by any party hereto of a breach of any of the
provisions of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach hereof by such party.
10.9 California Law. This Agreement shall be governed by and considered
in accordance with the laws of the State of California.
10.10 Headings. The subject headings of the Sections of this Agreement
are included for the purposes of convenience only and shall not affect
the construction or interpretation of any term or provision hereof.
AGREED TO AND ACCEPTED BY:
Employer: Employee:
JMAR TECHNOLOGIES, INC.
By: /s/ XXXXXX X. XXXXXXXX /s/ XXXXXX X. XXXXXX
------------------------------- -----------------------------------
Xxxxxx X. Xxxxxxxx, Senior Vice Xxxxxx X. Xxxxxx
President and General Counsel
APPROVED:
By: /s/ XXXXXX X. XXXXXXXX
-------------------------------
Xxxxxx X. Xxxxxxxx, Chairman of
the Board
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