FIRST AMENDMENT TO EMPLOYMENT AND
NON-COMPETITION AGREEMENT
This First Amendment is made as of the 22nd day of February 2000, by
and between XXXXXXX XXXXXX ("Xxxxxx"), and USA TECHNOLOGIES, INC., a
Pennsylvania corporation ("USA").
Background
USA and Xxxxxx entered into an Employment And Non-Competition Agreement
dated June 7, 1996 (the "Agreement"). As more fully set forth herein, the
parties desire to amend the Agreement in certain respects.
Agreement
NOW, THEREFORE, in consideration of the covenants set forth herein, and
intending to be legally bound hereby, the parties agree as follows:
1. Amendments To Agreement.
A. Paragraph A. of Section 1. Employment of the Agreement is hereby
deleted and the following new Paragraph A. is hereby substituted in its place:
A. USA shall employ Xxxxxx as Vice President of Marketing and Sales
commencing on the date hereof and continuing through June 30, 2001
(the "Employment Period") and Xxxxxx hereby accepts such employment.
Unless terminated by either party hereto upon at least 60-days
notice prior to the end of the Employment Period ending June 30,
2001, or prior to the end of any one year extension of the
Employment Period, the Employment Period shall not be terminated and
shall automatically continue in full force and effect for
consecutive one year periods.
B. Paragraph A. of Section 2. Compensation and Benefits of the
Agreement is hereby deleted and the following new Paragraph A. is hereby
substituted in its place:
A. In consideration of his services rendered, commencing on March 1,
2000, USA shall pay to Xxxxxx a base salary of $100,000 per year
during the Employment Period, subject to any withholding required by
law. Xxxxxx'x base salary may be increased from time to time in the
discretion of the Board of Directors.
C. Paragraph B. of Section 2. Compensation and Benefits of the
Agreement is hereby deleted and the following new Paragraph B. is hereby
substituted in its place:
B. (i) In addition to the base salary provided for in Paragraph A.,
Xxxxxx shall be eligible to receive such bonus or bonuses as the
Compensation Committee of the Board of Directors may, in their sole
discretion, pay to Xxxxxx from time to time based upon his
performance and/or the performance of USA. All awards in this regard
may be made in cash or in Common Stock of USA ("Common Stock").
(ii) As of the date of this First Amendment, USA shall issue to
Xxxxxx 10,000 shares of fully vested Common Stock as a bonus on
account of calendar year 2000. Such shares of Common Stock shall be
registered under the Securities Act of 1933, as amended ("Act"),
pursuant to a Form S-8, at USA's cost and expense.
(iii) Xxxxxx shall also be eligible to receive, at the discretion of
the Compensation Committee of the Board of Directors, an additional
bonus for calendar year 2000 in an amount of up to 65% of his base
salary. Such additional bonus shall be payable in either cash or
Common Stock in the discretion of the Compensation Committee. The
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amount of the bonus to be awarded to Xx. Xxxxxx shall be based upon
the performance of the Company and/or Xx. Xxxxxx during calendar
year 2000. The Company shall deliver to Xx. Xxxxxx any such bonus
during January 2001. Any shares of Common Stock payable as part of
any such bonus shall be registered under the Act pursuant to a Form
S-8, at the Company's cost and expense.
D. The following new Section 2.X. Xxxxxx Relocation is hereby added to
the Agreement:
2.X. Xxxxxx Relocation.
X. Xxxxxx agrees that he and his family shall relocate to the
Philadelphia, Pennsylvania area on or before March 15, 2000. All of
the reasonable and customary costs and expenses of such relocation
to the Philadelphia, Pennsylvania area, including moving expenses,
shall be paid for by USA. Such costs and expenses shall be payable
in either cash or Common Stock in the discretion of USA. Any such
shares of Common Stock shall be registered under the Act pursuant to
a Form S-8, at the Company's cost and expense.
B. In addition to the payment by USA of Xxxxxx'x relocation costs
and expenses, and in order to assist Xxxxxx to purchase a residence
in the Philadelphia, Pennsylvania area prior to the closing of the
sale of his current residence in Texas, USA shall make available to
Xxxxxx a bridge loan in an amount of up to $70,000. The bridge loan
shall be repaid by Xxxxxx upon the earlier to occur of the closing
of the sale of his Texas residence or August 1, 2000. The bridge
loan shall not bear any interest. The bridge loan shall be evidenced
by a promissory note signed by Xxxxxx and his spouse and upon
request of USA shall be secured by a mortgage on Xxxxxx'x Texas
residence. Xxxxxx and his spouse shall execute any other instruments
or documents reasonably required by USA or its counsel.
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C. Commencing on the first month in which Xxxxxx is required to make
a mortgage payment in connection with his new residence located in
the Philadelphia, Pennsylvania area, and provided that he has not
yet sold his Texas residence, USA shall, until his Texas residence
has been sold, advance to Xxxxxx the monthly mortgage payment due in
connection with his Texas residence. Such monthly payment is in the
approximate amount of $950. Xxxxxx shall not be required to repay
USA for any such advances.
E. The following new sentence shall be added to the end of Paragraph B.
of Section 0.Xxxxxxxx Secrets of the Agreement:
Notwithstanding this Section 5.B. or Section 6 hereof, during the
one year period following the termination of the Employment Period,
or during the one year period following the termination of Xxxxxx'x
employment hereunder if earlier, Xxxxxx may nevertheless solicit,
serve, or sell to any customer or account of USA, provided that any
such solicitation, sale or serving shall not be in connection with
any product, service or business that is in competition, in whole or
in part, with the products, services or business of USA as presently
or as hereinafter existing or conducted.
F. The following new Paragraph D. is hereby added to Section 5.
Business Secrets of the Agreement:
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D. All documents, data, know-how, designs, products, ideas,
equipment, inventions, names, devices, marketing information, method
or means, materials, software programs, hardware, configurations,
information, or any other materials or data of any kind developed by
Xxxxxx on behalf of USA or at its direction or for USA's use, or
otherwise devised, developed, created, or invented in connection
with Xxxxxx'x employment with USA or Xxxxxx'x affiliation with USA,
and whether before or after the date of this Agreement, are and
shall remain the sole and exclusive property of USA, and Xxxxxx has
and shall have no right or interest whatsoever thereto. Xxxxxx
hereby renounces and disclaims the work-for-hire doctrine and
acknowledges that all such rights to intellectual property shall
belong exclusively to USA and not to Xxxxxx. Any and all rights of
ownership in connection with any of the foregoing shall belong
solely to USA, and all copyright, patent, trademark, or similar
rights or interests shall be the sole and exclusive property of USA.
Xxxxxx hereby assigns, transfers, and conveys to USA all of Xxxxxx'x
right, title and interest in and to any and all such inventions,
discoveries, improvements, modifications and other intellectual
property rights and agrees to take all such actions as may be
required by USA at any time and with respect to any such invention,
discovery, improvement, modification or other intellectual property
rights to confirm or evidence such assignment, transfer and
conveyance. At USA's direction and request, Xxxxxx shall execute and
deliver any and all forms, documents, or applications required under
any applicable copyright, patent, trademark, or other law, rule or
regulation.
2. Modification. Except as otherwise specifically set forth in
Paragraph 1, the Agreement shall not be amended or modified in any respect
whatsoever and shall continue in full force and effect.
3. Capitalized Terms. Except as specifically provided otherwise herein,
all capitalized terms used herein shall have the meanings ascribed to them in
the Agreement.
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4. Original Part. The amendments to the Agreement made in Paragraph 1
hereof shall be deemed to have been an original part of the Agreement and to
have been effective from and after the date of the Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment as of the day and year first above written.
USA TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx,
President
/s/ Xxxxxxx Xxxxxx
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XXXXXXX XXXXXX
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