Senior Vice President For Sales And Marketing of PPL And Shall Report Directly Employment Agreement

EMPLOYMENT AGREEMENT


This Employment Agreement ("Agreement") is made by and between John Ricardi ("Ricardi"), 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. Ricardi 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, Ricardi will be paid $5,557.00 bi-weekly, which is equivalent to $145,002 per year.


3. Incentive Bonus Program.


3.1 Ricardi 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 Arthur Andersen & Co. Subsequent
quarterly installments shall be paid to Ricardi based on 1997 bookings
which are shipped in subsequent years.


3.2 Ricardi 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, Ricardi 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. Ricardi will receive $500 per month as an automobile allowance.


5. Equity Participation. On Ricardi's employment start date, Ricardi 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:


2


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 Ricardi 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) Ricardi 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 Ricardi 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. Ricardi will be issued a credit card for use in charging company expenses incurred by Ricardi.


8. Employee Benefits. Ricardi 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 Ricardi 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 Ricardi; (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.


2 3


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 Ricardi; (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; o ...