<PAGE> 1
EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (herein "Agreement") is entered into as of April 20,
2000, by and between JMAR Technologies, Inc. ("JMAR") of 3956 Sorrento Valley
Blvd., San Diego, CA 92121 and John H. Carosella ("Carosella"), 876 Spartan
Drive, Rochester Hills, MI 48309.
Recitals
WHEREAS, JMAR is a leading developer and producer of microtechnology equipment
and integrated circuits for the semiconductor, biomedical and telecommunications
industries with strong emphasis on advanced X-ray source and system technology;
WHEREAS, JMAR desires to retain the services of Carosella; and
WHEREAS, Carosella desires to be employed by JMAR.
NOW, THEREFORE, JMAR and Carosella agree as follows:
1. Employment/Title/Responsibilities. Carosella shall be employed as Senior
Vice President, Corporate Development and Director of the Advanced Light
Business Area, reporting directly to the CEO of JMAR. Carosella's
primary responsibilities shall be to assist JMAR's CEO in establishing
and implementing a program to create a viable commercial business based
on JMAR's "light technology". It is expected that Carosella's efforts
will lead to the formation of a new subsidiary division of JMAR that
could provide the basis for a separately capitalized, profitable,
publicly-owned corporation. Carosella will be a leading candidate to
manage such an organization, subject to future events and Carosella's
desire to accept such an assignment. During the period of Carosella's
indoctrination into JMAR he may also be assigned additional corporate
level business development responsibilities commensurate with those
assigned to JMAR's most senior executives. Such assignments could
include: Preparation of business plans for new ventures; identification
and negotiation of new joint ventures, alliances, acquisitions, etc.;
advising or managing elements of JMAR's existing advanced light business
activities; and such other services and duties as may be assigned to him
from time-to-time. Although his position may require a reasonable amount
of travel, Carosella will be provided with an office in JMAR's corporate
headquarters currently located in the San Diego, CA area.
2. Compensation/Benefits/Review. As compensation for the services provided
by Carosella under this Agreement, JMAR will pay him an annual salary of
$140,000 (base pay), payable in accordance with JMAR's usual payroll
procedures. Carosella will receive all standard JMAR benefits as
described in the enclosed summary of benefits, except that his vacation
accrual plan will be modified such
<PAGE> 2
that his benefits will be equivalent to those attained by JMAR employees
upon completion of five years of employment at JMAR.
3. Initial Stock Options/Future Stock Options. Upon the commencement of
Carosella's employment, JMAR shall grant him Incentive Stock Options
(ISO's) to purchase 25,000 shares of JMAR common stock pursuant to the
terms of JMAR's 1999 Employee Stock Option Plan, a copy of which is
delivered herewith. The ISO's will vest in equal amounts at the end of
each of the first three years after the start date of Carosella's
employment and the exercise price of the ISO'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, which shall also
contain a provision that immediately vests all options granted to
Carosella in the event that a third party should acquire a controlling
interest in JMAR.
4. Signing Bonus. JMAR shall pay Carosella a $30,000 signing bonus (the
"Signing Bonus") in consideration for Carosella starting employment no
later than June 5, 2000. The Signing Bonus is payable in cash or JMAR
shares of common stock, at Carosella's election. In the event this
Agreement is terminated prior to June 5, 2001 by JMAR pursuant to
paragraph 7.2 or by Carosella for any reason other than pursuant to
paragraph 7.3, then Carosella shall refund to JMAR that portion of the
Signing Bonus which is equal to the product of $2500.00 multiplied by
the number of calendar months remaining after said termination until
June 5, 2001.
As set forth in paragraph 1, above, Carosella's primary goal will be to
create a viable advanced light commercial business with the intent of
establishing a profitable, publicly-owned corporation. To help motivate
employees who will be key to the success of that venture, JMAR plans to
establish an additional incentive plan based on equity in that new
entity. It is expected that Carosella in his capacity as Director of the
Advanced Light Business Area, will have an opportunity to acquire a
significant equity interest in the new venture, consistent with his
contributions to its creation.
5. Performance Bonus Plan. JMAR shall provide to Carosella an annual
executive bonus plan that, based upon JMAR's consolidated performance,
has the potential of paying him up to an additional 50% of his annual
salary. Carosella's incentive goals for the remainder of year 2000 will
be agreed upon during his first month of employment. Two-thirds of
Carosella's signing bonus ($20,000) shall be credited toward any bonus
payment for his year 2000 performance.
6. Relocation Benefits/House-hunting/Temporary Living Expenses. JMAR will
reimburse Carosella for reasonable, actual expenses involved in moving
his residence from the present location in Michigan to the San Diego
area pursuant to JMAR's standard Relocation Policy, including the cost
of such house-hunting trips for Carosella and his family, as are
necessary; provided, however, that the
2
<PAGE> 3
total costs reimbursable under this Section 6 shall not exceed a total
of $35K. JMAR will also reimburse Carosella for up to three months
temporary living expense during the relocation process. These expenses
may include but are not limited to airfare, car rental and hotel/motel.
7. Employment at Will; Salary Continuation Payments.
7.1 Carosella's employment will be "at-will" and may be terminated at
any time, for any reason, by either Carosella or JMAR. If JMAR
terminates Carosella for any reason other than pursuant to
Paragraph 7.2 below within Carosella's first six months of
employment, Carosella shall be entitled to receive an amount
("Salary Continuation Payments") equal to twelve (12) months
salary (subject to earlier termination upon the occurrence of an
event specified in Paragraph 7.2), payable commencing on the date
of such termination at the rate and times as such compensation
would have been payable to Carosella had this Agreement not been
terminated pursuant to this Paragraph 7.1. If such termination
occurs any time after six months, Carosella will be entitled to
receive an amount equal to six (6) months salary, payable in the
same manner as described above. In addition to the payment of
such Salary Continuation Payments, JMAR shall, at its expense,
continue coverage under those insurance policies in which
Carosella participates for which COBRA coverage is available for
the period during which the Salary Continuation Payments are made
(the "Continued Insurance Coverage").
7.2 Notwithstanding the provisions of Paragraph 7.1 above, this
Agreement shall terminate (without any right to Salary
Continuation Payments or Continued Insurance Coverage) upon the
occurrence of any of the following events: (a) the death of
Carosella; (b) the incapacity or disability of Carosella, which
renders him unable to perform substantially all of the services
contemplated by this Agreement for a continuous period of sixty
(60) days; (c) the commission of an act of fraud, dishonesty in a
matter which is material to his employment, or embezzlement by
Carosella; (d) the willful neglect by Carosella in the
performance of the services contemplated by this Agreement in
such manner as to provide reasonable cause for terminating his
services; or (e) the substantial breach by Carosella of any of
the covenants or obligations under this Agreement and such breach
provides reasonable cause for JMAR to terminate this Agreement;
provided that, in order to terminate this Agreement pursuant to
clauses (d) and (e) of this Paragraph 7.2, JMAR shall have given
thirty (30) days written notice of termination to Carosella and
Carosella shall have failed to fully cure or correct such willful
neglect or breach within the thirty days immediately following
such notice.
7.3 This Agreement may be terminated by Carosella on thirty (30) days
written notice of termination to JMAR if JMAR breaches any of its
covenants or
3
<PAGE> 4
obligations under the Agreement and such breach provides
reasonable cause for Carosella to terminate this Agreement. In
such event, Carosella shall also be entitled to the Salary
Continuation Payments and Continued Insurance Coverage in the
manner provided in Paragraph 7.1 above; provided that, in order
to terminate this Agreement pursuant to this provision, JMAR
shall have failed to fully cure or correct such breach within the
thirty days immediately following such notice.
8. Reimbursement for Expenses/Use of Employer Property. JMAR will reimburse
Carosella for all reasonable expenses incurred by him on the business of
JMAR in accordance with JMAR policies in effect from time-to-time. JMAR
will provide to Carosella the necessary equipment and materials to
accomplish his employment responsibilities, and will also provide him
with a monthly auto allowance of $400.00 to reimburse him for use of his
personal auto for business travel.
9. Travel/Requirements. Carosella will be required to travel from time to
time not averaging more than 50% of his time for JMAR in the normal
course of business. On domestic USA trips Carosella will travel coach
class. On all international trips Carosella may travel business class.
For all auto rentals Carosella will rent appropriate size vehicles.
10. Retirement Plan. Carosella shall be able to participate in JMAR's 401(k)
retirement plan in accordance with the plan's terms and the requirement
of law.
11. Confidential Information. Concurrently herewith, Carosella shall enter
into an Employee Confidentiality and Inventions Agreement with JMAR in
the form provided to Carosella.
12. No Violation of Other Contracts. Carosella represents and warrants that
the execution, delivery and performance of this Agreement by Carosella
does not and will not result in a breach of or violation of, or
constitute a default under, any agreement to which Carosella is a party
or by which Carosella is bound.
13. No Conflicts of Interest. Except as set forth on Schedule 1, hereto,
Carosella does not have any financial interest, whether by stock
ownership or otherwise, in any entity which is a supplier, customer or
competitor of JMAR.
14. Compliance with JMAR's Rules. Carosella agrees to comply with all of the
rules, regulations and standard practices of JMAR as in effect from time
to time. JMAR will provide Carosella with all such current rules,
regulations and standard practices and all future updates.
15. General Provisions.
4
<PAGE> 5
15.1 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.
15.2 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:
if to JMAR:
JMAR Technologies, Inc.
3956 Sorrento Valley Blvd.
San Diego, CA 92121
Attn: Joseph G. Martinez, Esq., General Counsel
If to the Employee:
John H. Carosella
876 Spartan Drive
Rochester Hills, MI 48309
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.
15.3 Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by arbitration
at San Diego, 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.
15.4 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.
5
<PAGE> 6
15.5 Entire Agreement. This Agreement constitutes the entire agreement
and understanding between Carosella and JMAR with respect to the
employment of Carosella, 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.
15.6 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 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.
15.7 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.
15.8 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.
15.9 California Law. This Agreement shall be governed by and considered
in accordance with the laws of the State of California.
15.10 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.
15.11 Disclosure. Subject to JMAR's disclosure obligations under
applicable laws, JMAR and Carosella agree not to publicly disclose the
terms of this Agreement without each other's prior consent which will
not be unreasonably withheld.
AGREED TO AND ACCEPTED BY:
Employer: Employee:
JMAR TECHNOLOGIES, INC.
By: /s/ JOHN S. MARTINEZ /s/ JOHN H. CAROSELLA
-------------------------- ----------------------------
John S. Martinez, CEO John H. Carosella
6
