EXHIBIT 10.1
AGREEMENT
THIS AGREEMENT ("Agreement") is entered into this 16th day of September
2002, between JMAR TECHNOLOGIES, INC. (the "Company") and XXXX X. XXXXXXXX,
Ph.D. ("Xxxxxxxx"), with reference to the following facts:
X. Xxxxxxxx and the Company are parties to that certain Amended and
Restated Employment Agreement dated May 1, 1996, as amended September 7, 2001
(the "Employment Agreement");
X. Xxxxxxxx and the Company seek to novate and replace the Employment
Agreement;
C. The parties have agreed that Xxxxxxxx will retire from his positions as
President and Chief Executive Officer and accept certain deferred compensation
and continued insurance coverage from the Company.
NOW, THEREFORE, in consideration for the mutual promises contained herein
and the premises set forth above, the parties agree as follows:
1. Employment Agreement. Except as provided in Section 7, the terms and
conditions of the Employment Agreement terminated as of August 15, 2002 (the
"Retirement Date").
2. Payments to Xxxxxxxx. Xxxxxxxx will receive the aggregate sum of One
Million Two Hundred Seventy-Four Thousand Eight Hundred and Fifty Three Dollars
($1,274,853.00) ("Aggregate Payment"), less any tax or other legally required or
mutually agreeable withholding, to be paid over a seventy-two (72) month period
following the Retirement Date (the "Agreement Term"). The Aggregate Payment
includes any and all accrued but unpaid vacation to which Xxxxxxxx is entitled.
As of the date this Agreement was executed, Xxxxxxxx had received Fifteen
Thousand Eight Hundred Fifty Two Dollars and Thirty Two Cents ($15,852.32) of
the Aggregate Payment. The first payment after execution of this Agreement shall
be due within fifteen days of the date this Agreement is executed, and
thereafter payments will be made in equal installments according to the
Company's regular payroll schedule. The Company will report the payments on an
IRS form W-2 each year. In the event of Xxxxxxxx' death between the date of this
Agreement and the end of the Agreement Term, the Company shall continue to make
the above-described payments to such person as Xxxxxxxx shall designate in
writing to the Company, or if no such designation is made, to the person
determined to be entitled to receive such payment under Xxxxxxxx'x estate
planning arrangements or, in the absence of such arrangements, to his estate.
The Company shall also pay Xxxxxxxx'x reasonable attorneys' fees and costs
incurred in the negotiations for and preparation of this Agreement.
3. Employee Benefits. In addition to the above, in the event Xxxxxxxx is
eligible to continue the medical, dental and vision insurance coverage he
enjoyed pursuant to the Employment Agreement, for the Agreement Term the Company
will continue to pay the Company's portion of the premium for such coverage. In
the event Xxxxxxxx is not eligible for
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or elects not to continue the medical, dental or vision insurance coverage he
enjoyed under the Employment Agreement but Xxxxxxxx secures alternative or
substitute comparable benefits such as Medicare and supplemental benefits
insurance, the Company will reimburse Xxxxxxxx the full cost of that comparable
insurance coverage during the Agreement Term, even if the cost of such benefits
increases during the Agreement Term. In the event Xxxxxxxx elects an alternative
or substitute benefit, Xxxxxxxx shall not be required to contribute to these
substitute benefits in an amount greater than the amount he pays for such
benefits as of the Retirement Date.
During the Agreement Term, the Company agrees to self-insure Xxxxxxxx for
accidental death and life insurance benefits such that in the event of Xxxxxxxx'
accidental or other death during the Agreement Term, the Company will pay to
such person as Xxxxxxxx shall designate in writing to the Company, or if no such
designation is made, to the person determined to be entitled to receive such
payment under Xxxxxxxx'x estate planning arrangements or, in the absence of such
arrangements, to his estate, the benefits Xxxxxxxx would have enjoyed under the
Company's insurance policies had he remained employed by the Company during the
Agreement Term. Specifically, in the event Xxxxxxxx dies before he reaches the
age of Seventy Five (75), Xxxxxxxx' designee or estate is entitled to death
benefits equal to Seventy Seven Thousand Two Hundred Dollars, and twice that
amount in the event of "accidental death" as defined by the Company's insurance
policies. If Xxxxxxxx dies during the Agreement Term after he reaches the age of
Seventy Five (75), his designee or his estate is entitled to death benefits of
Forty Eight Thousand Two Hundred and Fifty Dollars, and twice that in the event
of accidental death. The Company may at any time during the Agreement Term, in
lieu of self-insuring and at its sole discretion, purchase life or accidental
death insurance that will provide this same benefit to Xxxxxxxx.
The Company shall provide Xxxxxxxx'x spouse with notice of the maximum
COBRA insurance benefits available under federal and state laws. In the event
Xxxxxxxx' spouse elects to continue coverage under COBRA or secures substitute
benefits such as Medicare and supplemental benefits insurance, the cost for such
continued coverage will be borne by Xxxxxxxx' spouse.
In the event Xxxxxxxx elects alternative or substitute comparable benefits
and the cost of such benefits is less than the amount paid by the Company for
such benefits during the Agreement Term, the amount saved by the Company shall
be applied by the Company toward the premiums incurred by Xxxxxxxx' spouse
during the Agreement Term in the event she elects to continue coverage pursuant
to COBRA or secures substitute benefits such as Blue Cross, Medicare and
supplemental benefits insurance.
4. Ongoing Relationship. The Company shall nominate Xxxxxxxx for the
position of director at the first annual shareholders' meeting following the
execution of this Agreement and shall take all action to fully support his
election at such meeting. Xxxxxxxx shall receive the same compensation and
benefits for his service as a director as "outside" directors receive during any
period he serves as a director. If an election of directors occurs at a special
meeting of shareholders during that period, the Company is obligated to support
Xxxxxxxx' election at such meeting. If for any reason he is not elected by the
shareholders as a director, such event shall not affect Xxxxxxxx' right to all
non-director benefits described in this Agreement.
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5. Stock Options and Warrants. Attached to this Agreement as Schedule A is
a schedule of all qualified and non-qualified stock options and warrants held by
Xxxxxxxx as of the Retirement Date. Effective on the Retirement Date, all
unvested stock options and warrants shall become fully vested. All stock options
and warrants listed in Part 1 of Schedule A shall be amended to provide for
expiration dates as detailed in Schedule A.
With regard to the warrants listed in Part 2 of Schedule A (the "Loan
Warrants"), in the event Xxxxxxxx ceases to be a director of the Company prior
to August 15, 2008, the Company agrees to take appropriate action in the future
to continue the exercisability of the Loan Warrants to August 15, 2008.
6. Remedies For Breach Of Agreement By Company. If a breach of this
Agreement by the Company occurs, whether a failure to pay sums due hereunder in
a timely manner or a failure to observe other terms and conditions of the
Agreement, Xxxxxxxx shall have the right to demand acceleration of the payment
of the sums due hereunder as follows: In the event that the Company is
delinquent by more than ten (10) days in making the payments when due or for any
other breach, then it shall be obligated, at Xxxxxxxx' option, to double the
regular payments to Xxxxxxxx until the total sum of One Million Two Hundred
Seventy-Four Thousand Eight Hundred and Fifty Three Dollars ($1,274,853.00) has
been paid, including payments made before the breach. At such times as the full
One Million Two Hundred Seventy-Four Thousand Eight Hundred and Fifty Three
Dollars ($1,274,853.00) has been paid to Xxxxxxxx, the Agreement Term shall be
deemed terminated.
7. Confidential Information. Xxxxxxxx shall continue to be bound during
the Agreement Term to the provisions of the Employment Agreement regarding
maintaining the confidentiality of information and the protection of Company
property.
8. Releases.
a. Release of the Company. Except for claims under the Workers'
Compensation Act and the Unemployment Insurance Code and rights as a vested
shareholder, in consideration for the payment set out in paragraph 2 and other
agreements set forth above, Xxxxxxxx releases and forever discharges the
Company, its present and former agents, employees, officers, directors,
shareholders, principals, predecessors, alter egos, partners, parents,
subsidiaries, affiliates, attorneys, insurers, successors and assigns, from any
and all claims, demands, grievances, causes of action or suit of any kind
arising out of, or in any way connected with, the dealings between the parties
to date, including the termination of his employment relationship. Xxxxxxxx also
releases and waives any and all legal or administrative claims arising under any
express or implied contract, law (federal, state or administrative), rule,
regulation, or ordinance, including, but not limited to, Title VII of the Civil
Rights Act of 1964, the Americans with Disabilities Act, the California Fair
Employment and Housing Act, or the Age Discrimination in Employment Act of 1967,
as amended ("ADEA"), and the Older Workers Benefit Protection Act, as amended
("OWBPA") (except a claim relating to whether this release or waiver is valid
under the ADEA and except for any claims under the ADEA that may arise after the
date this agreement is executed by Xxxxxxxx).
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x. Xxxxxxxx' Waiver of ADEA claims. Xxxxxxxx acknowledges that with
this document he has been advised in writing to consult with an attorney prior
to executing this waiver of ADEA claims and that Xxxxxxxx has been given
twenty-one (21) days from the date he received this Agreement in which to
consider entering into the waiver of the ADEA claims, if any. If Xxxxxxxx
decides to sign before the expiration of 21 days, he acknowledges that he is
doing so knowingly and voluntarily. In addition, Xxxxxxxx acknowledges that he
has been informed that he may revoke a signed waiver of the ADEA claims for up
to 7 days after executing this Agreement. To be effective, any revocation must
be in writing, signed, dated and delivered to Xxxxxx Xxxxxxxxx at the Company no
later than 7 days from the date on which Xxxxxxxx signs this Agreement. If the
7th day falls on a weekend or holiday, the revocation must be delivered the next
business day.
c. Release of Xxxxxxxx. The Company on behalf of itself, its
officers, directors, stockholders, agents, servants, representatives, employees,
affiliates, predecessors and successors in interest, and their heirs, executors,
administrators and assigns hereby releases and forever discharges Xxxxxxxx and
his agents, servants, representatives, heirs, executors, administrators and
assigns of and from any and all past, present or future claims, demands,
obligations, actions, rights, damages, expenses and compensation of any nature
whatsoever, whether based on a tort, contract or other theory of recovery, which
the Company now has arising from events occurring up to the date hereof.
d. Waiver of Section 1542. By executing this Agreement, the parties
acknowledge that they have read the document and have had the opportunity to
receive independent legal advice with respect to executing this Agreement and
have expressly waived the rights and benefits they otherwise might have under
California Civil Code Section 1542, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
[EMPLOYEE] DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST
HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE [COMPANY].
9. Indemnification. The Company will protect, defend, indemnify and hold
Xxxxxxxx harmless from and against any and all demands, claims, recoveries,
obligations, losses, damages and liabilities and all related costs, expenses
(including reasonable attorneys' fees), interest and penalties which Xxxxxxxx
may incur or suffer which arise from, result from or relate to (i) the
performance of his services under the Employment Agreement, (ii) his position as
a director during the Agreement Term.
10. 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 the Company, whether by merger, purchase or otherwise, and the
Company may assign this Agreement to any subsidiary or affiliate of the Company
and Xxxxxxxx may assign his right to receive the payments described in Paragraph
2 of this Agreement.
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11. Representations. All parties represent and warrant as follows:
a. They have read this Agreement, understand its contents, and
understand its legal effect and binding nature. Each party further acknowledges
that he or it is acting voluntarily and of his or its free will in executing
this Agreement.
b. They have received independent legal advice from their respective
attorneys with respect to the advisability of executing this Agreement, and with
respect to its meaning.
c. The Parties affirm their present competence to enter into this
Agreement, with respect to the advisability of executing this Agreement, and
with respect to its meaning.
d. Each signatory is mentally competent as of the date he signs this
Agreement, and this Agreement has been freely executed and entered into without
duress.
e. No party and no officer, director, agent, partner, employee,
consultant, representative or attorney of or for any party has made any
statement or representation to any other party regarding any fact relied upon in
entering into this Agreement. No party is relying upon any statement,
representation or promise of the other party or any party's officer, director,
agent, partner, employee, consultant, representative or attorney in executing
this Agreement, except as expressly stated in this Agreement.
f. The parties have made such independent investigation of the facts
and law pertaining to this Agreement, and of all the matters related to it, as
they deem necessary.
g. Each party or its responsible signatory has read this Agreement
and understands its contents. The representatives executing this Agreement on
behalf of the Company are empowered to do so and thereby bind the Company.
h. Each term of this Agreement is contractual and not merely a
recital.
12. 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 to:
If to the Company: JMAR Technologies, Inc.
0000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Chief Executive Officer
If to the Employee: Xxxx X. Xxxxxxxx
X.X. Xxx 0000
Xxx Xxx, XX 00000
Any party may change the address to which notices are to be sent to it or him by
giving ten (10) 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.
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13. 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.
14. Severability. If any one or more covenants, agreements or
provisions herein contained shall be held or determined for any reason
whatsoever to be invalid or unenforceable, either in whole or in part, then such
covenants, agreements or provisions, or portion thereof, shall be null and void
and shall be deemed separable from the remaining covenants, agreements or
provisions hereof and shall in no way affect the validity of any of the other
provisions hereof.
15. Attorneys' Fees. The prevailing party in any litigation concerning
the enforcement or interpretation of this Agreement shall be entitled to recover
reasonable costs and attorneys' fees.
16. Arbitration. All claims or disputes between or among the parties
arising hereunder, which claims or disputes cannot be mutually resolved between
or among the parties, shall be decided by the American Arbitration Association
in accordance with the arbitration rules then in force with reference to the
claim or dispute. Said arbitration will be held in San Diego County, California.
Written notice of the demand for arbitration shall be filed by the party seeking
arbitration with the other party and with the American Arbitration Association
within a reasonable period of time after the dispute has arisen. The award
rendered by the arbitrator(s) shall be final, and judgment may be entered upon
it in accordance with applicable law in any court having jurisdiction thereof.
17. Choice of Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
18. Entire Agreement. This Agreement contains the entire agreement of
the parties with respect to the transactions contemplated hereby, and no party
shall be liable or bound except as expressly provided herein.
19. Headings. The subject headings of 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.
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20. Counterparts. This Agreement may be executed in counterparts, and
when each party has signed and delivered at least one such counterpart, each
counterpart shall be deemed an original, and, when taken together with the other
executed counterparts, shall constitute one Agreement, which shall be binding
upon and effective as to all Parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
JMAR TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxxx /s/ Xxxx X. Xxxxxxxx
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XXXXXX X. XXXXXXXX, XXXX X. XXXXXXXX, Ph.D.
Interim Chief Executive Officer
By: /s/ Xxxxxx X. Xxxxxxxxx
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XXXXXX X. XXXXXXXXX,
Chief Financial Officer
Approved by the Board of Directors effective September 16, 2002
By: /s/ Xxxxxx X. Xxxxxxxx
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XX. XXXXXX X. XXXXXXXX
Chairman, Board of Directors
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