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EXHIBIT 10.14
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made by and between Xxxx Xxxxxxx
("Xxxxxxx"), JMAR Industries, Inc. ("JMAR") and Pacific Precision Laboratories,
Inc. ("PPL") (collectively, PPL and JMAR shall be referred to as the
"Companies").
1. Titles. Ricardi shall be employed as Senior Vice President for Sales
and Marketing of PPL and shall report directly to the President of PPL. Xxxxxxx
shall also be employed as Vice President for Corporate Development for JMAR,
reporting directly to the Chief Executive Officer of JMAR.
2. Salary. As compensation for employment with the Companies, Xxxxxxx
will be paid $5,557.00 bi-weekly, which is equivalent to $145,002 per year.
3. Incentive Bonus Program.
3.1 Xxxxxxx will receive a cash bonus payable at the end of 1997 equal to
1/2 of one percent of the amount of the increase of PPL's 1997 firm
shippable sales bookings in excess of PPL's 1996 actual shipped sales
bookings. Said bonus shall be payable in installments. The initial
installment shall be payable within fifteen (15) days after receipt, by
JMAR, of its 1997 audit report from Xxxxxx Xxxxxxxx & Co. Subsequent
quarterly installments shall be paid to Xxxxxxx based on 1997 bookings
which are shipped in subsequent years.
3.2 Xxxxxxx will receive a cash bonus equal to 1 percent of the sales
revenue generated in 1997 from the introduction of new JTC products into
the commercial marketplace (excluding sales from R&D and product
development contracts).
3.3 If Ricardi's starting date at JMAR and PPL is on or before February 3,
1997, Xxxxxxx will also be allocated a 10 percent share of the PPL
Management Incentive Pool, the total size of which is based on PPL's 1997
profitability.
4. Auto Allowance. Xxxxxxx will receive $500 per month as an automobile
allowance.
5. Equity Participation. On Ricardi's employment start date, Xxxxxxx will
be granted 60,000 Employee Stock Options, subject to the conditions of JMAR's
Employee Stock Option Plan ("Plan"), a copy of which is attached hereto. The
principal elements of that Plan include:
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5.1 An option Exercise Price equal to the Closing price of JMAR stock
as quoted on the NASDAQ National Market System for the five trading day
average prior to the day that Xxxxxxx starts work.
5.2 One third of Ricardi's Options will vest (i.e., become
exercisable) at the end of each successive twelve month period after
Ricardi's start date.
5.3 If there is any contradiction between the summary of the elements
of the Plan in Paragraph 7.1 and 7.2, and the Plan itself, the terms of
the Plan shall govern and control.
5.4 In addition, starting in 1998 (if the majority of Ricardi's
efforts and responsibilities will have transitioned from PPL to the
Corporate Office) Xxxxxxx will become eligible to participate in the
JMAR Corporate Incentive Bonus plan which pays out cash bonuses based
on JMAR's consolidated profitability plus stock option awards based on
improvements in JMAR's stock price.
6. Relocation Expense. The Companies will reimburse Xxxxxxx for
reasonable, actual expenses involved in moving his primary residence from its
present location to the San Diego area pursuant to its standard Relocation
Policy.
7. Company Credit Card. Xxxxxxx will be issued a credit card for use in
charging company expenses incurred by Xxxxxxx.
8. Employee Benefits. Xxxxxxx will be enrolled in JMAR's employee
medical, dental and life insurance programs and will be eligible for all of the
benefits described in the employee benefit section of the enclosed "Personnel
Handbook". JMAR reserves the right to modify, supplement or rescind any of its
insurance programs and benefits at any time, in its sole discretion. The
standard vacation accrual plan will be modified for Xxxxxxx such that the
initial yearly earning rate for vacation will be four weeks, instead of the
standard three weeks. Ricardi will also be eligible to participate in JMAR's
401(k) Plan (see the copy of the attached Plan Description).
9. First Year Of Employment. The following provisions shall govern the
term, duration, and termination of employment for the first year (365
consecutive days regardless of any leave of absence, vacation or sick days) of
Ricardi's employment:
9.1 During the first year of employment, this Agreement shall
terminate upon the occurrence of any of the following events: (a) the
death of Xxxxxxx; (b) the incapacity or disability of Ricardi, which
renders him unable to perform substantially all of the services
contemplated by this Agreement for a continuous period of sixty (60)
days; or (c) the mutual agreement of Ricardi and either of the
Companies.
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9.2 This Agreement may be terminated by either of the Companies prior
to completion of the first year of employment on the happening of one
or more of the following events: (a) the commission of an act of fraud,
dishonesty, or embezzlement by Xxxxxxx; (b) the willful neglect by
Ricardi in the performance of the services contemplated by this
Agreement in such manner as to provide reasonable cause for terminating
his services; or (c) the breach by Ricardi of any of the covenants or
obligations under this Agreement and such breach provides reasonable
cause for either of the Companies to terminate this Agreement; provided
that, in order to terminate this Agreement pursuant to clauses (b) and
(c) of this Paragraph 2.2, JMAR or PPL shall have given thirty (30)
days written notice of termination to Xxxxxxx, and Xxxxxxx shall have
failed to fully cure or correct such willful neglect or breach within
the thirty days immediately following such notice.
9.3 This Agreement may be terminated by Ricardi prior to the first
year on thirty (30) days written notice of termination to JMAR or PPL
if either JMAR or PPL breaches any of its covenants or obligations
under the Agreement and such breach provides reasonable cause for
Xxxxxxx to terminate this Agreement.
9.4 In addition to the circumstances under which this Agreement may be
terminated by the Companies pursuant to Paragraph 2.2, the Companies
may terminate this Agreement at any time, without cause, upon thirty
(30) days written notice of termination to Xxxxxxx; provided, however,
should the Companies terminate this Agreement pursuant to this
Paragraph 2.4 prior to the end of the first year of employment (other
than a termination pursuant to the provisions of Paragraph 2.2), then
Ricardi shall become entitled to receive as severance pay an amount
equal to the balance of the compensation that would have been payable
to Ricardi through the end of the first year of employment (subject to
earlier termination on the happening of the event specified in
Paragraph 2.2), payable at the rate and times as such compensation
would have been payable to Xxxxxxx had this Agreement not been
terminated pursuant to this Paragraph 2.4. In addition to the payment
of such severance pay, all insurance policies in which Ricardi
participates shall continue through the end of what otherwise would
have been the first year of employment.
9.5 If employment is terminated under this Agreement for any reason by
any party hereto, then Ricardi's employment with both JMAR and PPL
shall terminate.
10. Employment After The First Year. If employment continues for more than
one year, the following provisions shall govern the term, duration, and
termination of employment:
10.1 If employment continues beyond the first year, employment will be
at-will and may be terminated at any time, for any reason, by either of
the Companies
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or Xxxxxxx. If either of the Companies decide to terminate Xxxxxxx, it
or they will provide thirty (30) days notice and Ricardi will receive
an additional sixty (60) days severance pay, unless the termination is
on the ground set forth in Paragraph 3.3(b) below, in which case
Xxxxxxx will receive neither notice nor severance.
10.2 Xxxxxxx and the Companies understand and agree that
Xxxxxxx and the Companies have the right to terminate Ricardi's
employment at any time for any reason, with or without cause. Xxxxxxx
and the Companies understand and agree that nothing in the Companies'
employee handbooks or the Companies' 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.
10.3 Notwithstanding the notice provision in Paragraph 3.1 above, this
Agreement shall terminate immediately (without advance notice) on the
happening of one or more of the following events: (a) the death of Xxxx
Xxxxxxx; or (b) the commission of an act of fraud, dishonesty, or
embezzlement by Xxxx Xxxxxxx.
10.4 If employment is terminated under this Agreement for any reason
by any party hereto, then Ricardi's employment with both JMAR and PPL
shall terminate.
10.5 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 Ricardi'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. This Agreement may not be modified or
amended by oral agreement, or course of conduct, but only by an
agreement in writing signed by Xxxx X. Xxxxxxxx and Xxxxxxx.
11. Confidential Information.
11.1 Concurrently herewith, Xxxxxxx shall enter into an Invention and
Secrecy Agreement substantially similar to the agreement executed by
the other key employees of JMAR. This Agreement is intended to
supplement and not limit or restrict the provisions of such Invention
and Secrecy Agreement. Xxxxxxx will acknowledge that, in the course of
the performance of Ricardi's services hereunder, Xxxxxxx may become
acquainted with confidential information regarding JMAR (and companies
affiliated with or owned, operated, or supervised by JMAR) and their
business, operations, finances, personnel,
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accounts, customers, and suppliers. This information may include
information relating to persons, firms, corporations, and other
entities which are or become suppliers or customers of JMAR (or a
company affiliated with or owned, operated, or supervised by JMAR).
Xxxxxxx agrees he will not, either during the term of this Agreement or
thereafter, without the prior express written consent of JMAR and PPL,
disclose or make any use of such confidential information except as may
be required in the course of the performance of Ricardi's services
hereunder.
11.2 The undertakings and obligations of the parties under this
Agreement shall not apply to any proprietary information which:
(a) Is disclosed in a printed publication available to the public,
is described in a patent anywhere in the world, or is otherwise in
the public domain at the time of disclosure;
(b) Is generally disclosed to third parties by the disclosing
party without restriction on such third parties; or
(c) Is approved for release by written authorization of the
disclosing party.
12. Protection Of Property. All records, files, manuals, list of
customers, blanks, forms, materials, furnished to Xxxxxxx by the Companies (or
any company affiliated with or owned, operated, or supervised by the Companies),
used on their behalf or generated or obtained during the course of the
performance of Ricardi's services hereunder, shall be and remain the property of
the Companies (or any company affiliated with or owned, operated, or supervised
by the Companies, as the case may be). Xxxxxxx shall be a holder thereof for the
sole use and benefit of the Companies (or any companies affiliated with or
owned, operated, or supervised by the Companies, as the case may be) and shall
safely keep and preserve such property, except as consumed in the normal
business operations of the Companies (or any company affiliated with or owned,
operated, or supervised by the Companies, as the case may be). Xxxxxxx
acknowledges that this property is confidential and is not readily accessible to
the competitors of the Companies. Upon termination of this Agreement hereunder,
Xxxxxxx shall immediately deliver to the Companies, or their authorized
representatives, all such property, including all copies, remaining in Ricardi's
possession or control.
13. Severability. If any provision in this Agreement is held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force without being impaired or
invalidated in any way.
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14. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California.
15. Waiver. The failure of any party to insist on strict compliance
with any of the terms, covenants, or conditions of this Agreement by the other
party shall not be deemed a waiver of that term, covenant, or condition, nor
shall any waiver or relinquishment of any right or power at any one time or
times be deemed a waiver or relinquishment of that right or power for all or any
other times.
16. Arbitration. Except as otherwise required by law, any controversy
or claim arising out of or relating to this Agreement or the breach or
termination thereof, shall be settled by arbitration in San Diego County,
California in accordance with the rules of the American Arbitration Association,
and judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof. The arbitrator(s) shall have no authority
whatsoever to make an award of punitive damages to either side. By agreeing to
arbitration under this paragraph, JMAR, PPL and Ricardi understand they are
agreeing to have any dispute relating to Ricardi's employment decided by a
neutral arbitrator and as to those disputes decided by the neutral arbitrator,
JMAR, PPL and Xxxxxxx are giving up their right to a jury or court trial and
giving up their right, if any, to seek punitive damages against each other.
17. Effective Date. This Agreement shall become effective on the date
Xxxxxxx begins employment with JMAR and PPL.
Date: 12/13/96 /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
Chairman of the Board
JMAR
Date: 12/12/96 /s/ Xxxxxx X. Xxxx
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Xxxxxx Xxxx
President
Pacific Precision Laboratories
Date: 12/22/96 /s/ Xxxx X. Xxxxxxx
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Xxxx Xxxxxxx
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