Exhibit 10.1
JMAR Balanced Scorecard Performance Based Compensation Plan
     The following resolutions were approved by the Board’s CompensationCommittee at its August 13, 2004 meeting and represent the material terms andconditions of the JMAR Balanced Scorecard Performance Based Compensation Plan:
     WHEREAS, at several prior Board meetings, management has discussed theterms and conditions of an annual performance based compensation bonus plan forexempt employees; and
     WHEREAS**,**current Nasdaq Rules and the Charter of this Committee requirethat all elements of compensation of executive officers be approved by theCompensation Committee; and
     WHEREAS, management has recommended the adoption of an annual “BalancedScorecard” (“BSC”) Plan that establishes Corporate, Division and individualgoals and objective criteria pursuant to which bonuses of up to ten percent(10%) of the participant’s base salary may be earned; and
     WHEREAS, the 2004 base salaries of the executive officers were previouslyapproved based upon several salary surveys and an analysis by an outside HRconsultant and the Company intends to continue to set base salaries withreference to market salaries; and
     WHEREAS, because (i) the BSC Plan has objective criteria that are directlytied to the achievement of Company objectives and incentivizes performance toachieve those objectives, (ii) the BSC Plan limits total bonus compensationunder the participant’s scorecard to 10% of the participants’ respectivesalaries, and (iii) the total of all compensation (base salaries and maximumBSC bonus) are within the range of compensation levels contained in the salarysurveys, the Committee has concluded that the BSC Plan will not result in thepayment of unreasonable compensation to the Company’s executive officers; and
     NOW, THEREFORE, BE IT RESOLVED, that the Balanced Scorecard Plan aspresented to this Committee, the material terms of which are set forth onAttachment A hereto, be, and it hereby is, approved and authorized by thisCompany; and
     RESOLVED FURTHER, that the Company’s CEO is hereby authorized to makeadjustments to the individual officers’ scorecards to ensure that theirobjectives continue to be relevant to the Company’s overall objectives andbusiness plan and to take such further actions and execute such furtherdocuments and instruments to carry out the actions authorized herein.
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Attachment A
The material terms of the JMAR Balanced Scorecard Performance BasedCompensation Plan (the “BSC Plan”) are:
 • All exempt JMAR employees shall participate in the BSC Plan;  • The maximum annual bonus that may be awarded to each participantunder the BSC Plan is 10% of the employee’s base salary;  • Following the initial approval of the BSC Plan by the CompensationCommittee, each manager shall approve and communicate a specific“scorecard” of objectives for each of his or her direct reports for2004. For succeeding plan years, management intends to approve andcommunicate the individual “scorecards” for the plan year within 60days after the beginning of the calendar year. The potential bonus ofup to 10% of base salary will be based upon Corporate, Division andindividual objectives which are derived from the Board-approvedBusiness Plan for that year. Individual scorecards shall allocate thepotential 10% bonus among several performance areas, with the specificpercentage allocation based upon the employee’s relative responsibilityand ability to influence the achievement of the specific objectives.Initially, these performance areas will include the following, with theCompensation Committee approving significant changes to the specificareas of emphasis on an annual basis:
 • Financial performance and shareholder value;  • Customer development;  • Internal operational effectiveness; and  • Organizational learning and growth.
 • The actual bonus awarded to each participant will be determinedwithin 60 days after the end of plan year based upon the achievement ofthe pre-established Corporate, Division and individual objectives.  • Any deviations to the material terms of the BSC Plan must beapproved by the Compensation Committee of the Board of Directors.
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