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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made by and between Xxxxxx X.
Xxxxxxxx ("Xxxxxxxx") and JMAR Industries, Inc. ("JMAR").
1. Title. Xxxxxxxx shall be employed as Vice President/General Counsel
of JMAR and shall report directly to the Chief Executive Officer of JMAR.
2. Salary. As compensation for employment with the Company, Xxxxxxxx
will be paid $5,192.31 bi-weekly, which is equivalent to $135,000 per year.
3. Management Incentive Bonus Program. As a corporate officer, Xxxxxxxx
will participate in JMAR's Management Incentive Bonus Program which pays cash
bonuses based on the Company's consolidated annual profitability. For 1998,
Xxxxxxxx will be allocated a 15% participation share in the Corporate Office
pool (the "Pool"), pro-rated based on the percentage of the year that he is
employed by JMAR. (For example, if Xxxxxxxx starts work at JMAR on May 1st, his
pro-rated share of the Pool would be 2/3 x 15% or 10%).
4. Auto Allowance. Xxxxxxxx will receive $400 per month as an automobile
expense allowance.
5. Equity Participation. On his employment start date, Xxxxxxxx will be
granted 50,000 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:
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 Xxxxxxxx starts work.
5.2 One third of Xxxxxxxx' Options will vest (i.e., become exercisable)
at the end of each successive twelve month period after Xxxxxxxx' start
date.
5.3 If there is any contradiction between the summary of the elements of
the Plan as described in this Agreement, and the Plan itself, the terms
of the Plan shall govern and control.
6. Office Location. The Company believes that the greater the amount of
time that Xxxxxxxx is able to spend in close proximity to the corporate staff,
the greater will be his impact on JMAR's operations. Nevertheless, to
accommodate Xxxxxxxx' current and future living arrangements, the Company will
make available to Xxxxxxxx temporary office space at its Orange County facility
(which currently houses the Company's California ASIC operations).
Administrative staff support will be supplied by corporate office personnel
located in San Diego.
7. Expense Reimbursements.
7.1 The Company will reimburse Xxxxxxxx for all of the reasonable
out-of-pocket expenses that he incurs in the performance of his
employment with JMAR, excluding any costs associated with travel between
his Orange County office and San Diego.
7.2 The Company will reimburse Xxxxxxxx for his professional expenses to
support his continuing status as a fully licensed attorney-at-law,
including Annual California State Bar dues, continuing education classes
and other educational seminars and events that are deemed to be in the
Company's best interests.
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7.3 The Company will also provide Xxxxxxxx with an annual budget to
purchase necessary legal periodicals and other reference material and
computer software and hardware to enable him to access standard
professional information sources.
8. Relocation Expense. The Company will reimburse Xxxxxxxx for
reasonable, actual expenses involved in moving his primary residence from its
present location to a location within a reasonable daily commute from JMAR's
corporate office pursuant to its standard Relocation Policy.
9. Home Sale Realtor Fee Reimbursement.
9.1 The Company will reimburse Xxxxxxxx for 50% of any Realtors fees
incurred in connection with the sale of his current residence located in
Torrance, California providing the escrow on such sale is closed and the
fee is paid no later than August 31, 1998.
9.2 If Martinez sells his current home in Torrance and re-locates his
permanent residence to San Diego County prior to August 31, 1998, the
Company will reimburse him for 100% of the Realtor fees incurred in
connection with the sale of his Torrance home.
10. Employee Benefits. Xxxxxxxx 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. He will
accrue three weeks paid vacation per year and will also be eligible to
participate in JMAR's 401(k) Plan (see the copy of the attached Plan
Description).
11. 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
Xxxxxxxx employment:
11.1 During the first year of employment, this Agreement shall terminate
upon the occurrence of any of the following events: (a) the death of
Xxxxxxxx; (b) the incapacity or disability of Xxxxxxxx, 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 Xxxxxxxx and the Company.
11.2 This Agreement may be terminated by the Company 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 Xxxxxxxx; (b) the willful neglect by Xxxxxxxx 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 Xxxxxxxx of any of the covenants or obligations under
this Agreement and such breach provides reasonable cause for the Company
to terminate this Agreement; provided that, in order to terminate this
Agreement pursuant to clauses (b) and (c) of this Paragraph 11.2, JMAR
shall have given thirty (30) days written notice of termination to
Xxxxxxxx, and Xxxxxxxx shall have failed to fully cure or correct such
willful neglect or breach within the thirty days immediately following
such notice.
11.3 This Agreement may be terminated by Xxxxxxxx prior to the first
year on thirty (30) days written notice of termination to JMAR if JMAR
breaches any of its covenants or obligations under the Agreement and
such breach provides reasonable cause for Xxxxxxxx to terminate this
Agreement.
11.4 In addition to the circumstances under which this Agreement may be
terminated by the Company pursuant to Paragraph 11.2, the Company may
terminate this Agreement at any time, without cause, upon thirty (30)
days written notice of termination to Xxxxxxxx; provided, however,
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should the Company terminate this Agreement pursuant to this Paragraph
11.4 prior to the end of the first year of employment (other than a
termination pursuant to the provisions of Paragraph 11.2), then Xxxxxxxx
shall become entitled to receive as severance pay an amount equal to the
balance of the compensation that would have been payable to him through
the end of the first year of employment (subject to earlier termination
on the happening of the event specified in Paragraph 11.2), payable at
the rate and times as such compensation would have been payable to
Xxxxxxxx had this Agreement not been terminated pursuant to this
Paragraph. In addition to the payment of such severance pay, all
insurance policies in which Xxxxxxxx participates shall continue through
the end of what otherwise would have been the first year of employment.
11.5 If employment is terminated under this Agreement for any reason by
any party hereto, then Xxxxxxxx' employment with JMAR shall terminate.
12. 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:
12.1 If employment continues beyond the first year, employment will be
at-will and may be terminated at any time, for any reason, by either
JMAR or Xxxxxxxx. If the Company decides to terminate Xxxxxxxx, it or
they will provide thirty (30) days notice and Xxxxxxxx will receive an
additional sixty (60) days severance pay, unless the termination is on
the ground set forth in Paragraph 12.3(b) below, in which case Xxxxxxxx
will receive neither notice nor severance.
12.2 Xxxxxxxx and the Company understand and agree that Xxxxxxxx and the
Company have the right to terminate Xxxxxxxx' employment at any time for
any reason, with or without cause. Xxxxxxxx and the Company understand
and agree that nothing in the Company's employee handbooks or its 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.
12.3 Notwithstanding the notice provision in Paragraph 12.1 above, this
Agreement shall terminate immediately (without advance notice) on the
happening of one or more of the following events: (a) the death of
Xxxxxxxx; or (b) the commission of an act of fraud, dishonesty, or
embezzlement by Xxxxxxxx.
12.4 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 Xxxxxxxx' 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 both the Chairman or the CEO of JMAR and by Xxxxxxxx.
13. Confidential Information.
13.1 Concurrently herewith, Xxxxxxxx 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. Xxxxxxxx will acknowledge that, in the course of the
performance of Xxxxxxxx' services hereunder, he 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, accounts, customers, and suppliers.
This information may include information relating to persons, firms,
corporations, and other entities which are or become
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suppliers or customers of JMAR (or a company affiliated with or owned,
operated, or supervised by JMAR). Xxxxxxxx agrees he will not, either
during the term of this Agreement or thereafter, without the prior
express written consent of JMAR, disclose or make any use of such
confidential information except as may be required in the course of the
performance of Xxxxxxxx' services hereunder.
13.2 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.
14. Protection Of Property. All records, files, manuals, list of
customers, blanks, forms, materials, furnished to Xxxxxxxx by the Company (or
any company affiliated with or owned, operated, or supervised by the Company),
used on its behalf or generated or obtained during the course of the performance
of Xxxxxxxx' services hereunder, shall be and remain the property of the Company
(or any company affiliated with or owned, operated, or supervised by the
Company, as the case may be). Xxxxxxxx shall be a holder thereof for the sole
use and benefit of the Company (or any companies affiliated with or owned,
operated, or supervised by the Company, as the case may be) and shall safely
keep and preserve such property, except as consumed in the normal business
operations of the Company (or any company affiliated with or owned, operated, or
supervised by the Company, as the case may be). Xxxxxxxx acknowledges that this
property is confidential and is not readily accessible to the competitors of the
Company. Upon termination of this Agreement hereunder, Xxxxxxxx shall
immediately deliver to the Company, or its authorized representatives, all such
property, including all copies, remaining in Xxxxxxxx' possession or control.
15. 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.
16. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
17. 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.
18. 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 and Xxxxxxxx understand they are agreeing to have any
dispute relating to Xxxxxxxx' employment decided by a neutral arbitrator and as
to those disputes decided by the neutral arbitrator, JMAR and Xxxxxxxx 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.
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19. Effective Date. This Agreement shall become effective on the date
Xxxxxxxx begins employment with JMAR.
Date: 4/15/98 /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
Chairman of the Board
JMAR
Date: 4/13/98 /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
Date: 4/13/98 /s/ C. Neil Beer
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Xx. X. Xxxx Beer
Date: 4/15/98 /s/ Xxxxxx X. Xxxxxxxx
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Xx. Xxxxxx X. Xxxxxxxx
Date: 4/15/98 /s/ Xxxxx X. Xxxxxxxx, Xx.
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Xxxxx X. Xxxxxxxx, Xx.
Date: April 16, 1998 Agreed To: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
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