FIRST AMENDMENT TO EMPLOYMENT AND NON-COMPETITION AGREEMENT
FIRST
AMENDMENT TO EMPLOYMENT AND
NON-COMPETITION
AGREEMENT
This
First Amendment is made on the 11th
day of
May 2006, by and between XXXXX X. XxXXXXX ("XxXxxxx"), and USA TECHNOLOGIES,
INC., a Pennsylvania corporation ("USA").
Background
USA
and
XxXxxxx entered into an Employment And Non-Competition Agreement dated April
12,
2005 (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.
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A.
The
date
“April 30, 2006” appearing in the first and second sentences of subparagraph (a)
of Section 1. Employment
of the
Agreement is hereby deleted and the date “June 30, 2008” is hereby substituted
in its place.
B.
The
following new subparagraph (c) shall be added to Section 1. Employment
of the
Agreement:
(c)
If
during the Employment Period a USA Transaction (as such term is defined in
the
Employment Agreement of Xxxxxx X. Xxxxxx, Xx.) shall occur, then XxXxxxx may
upon thirty days prior notice to USA, terminate the Employment Period. Upon
such
termination by XxXxxxx, neither party shall have any further duties or
obligations hereunder, provided, however, that XxXxxxx’x obligations under
Sections 5 and 6 hereof shall survive any such termination.
C.
Subparagraph
(a) of Section 2. Compensation
and Benefits
of the
Agreement is hereby deleted and the following new subparagraph (a) is hereby
substituted in its place:
(a)
In
consideration of his services rendered, commencing on the date hereof, USA
shall
pay to XxXxxxx a base salary of $165,000 per year during the Employment Period,
subject to any withholding required by law. XxXxxxx'x
base
salary may be increased from time to time in the discretion of the Board of
Directors.
For
each
of the fiscal years ending June 30, 2007, and June 30, 2008, XxXxxxx shall
have
the option to elect to have fifty percent (50%) of his base salary paid in
Common Stock of USA (“Common Stock”) rather than cash. Any such election must be
made not later than 60-days following the commencement of each such fiscal
year
by appropriate notice by XxXxxxx to USA. For the purposes of calculating the
number of shares to be issued to XxXxxxx, the shares shall be valued at the
average closing bid price for the Common Stock during the 30 trading days
immediately preceding the date of any such election by XxXxxxx. If any such
election is made, the shares issuable to XxXxxxx for the fiscal year would
vest
ratably on a quarterly basis. XxXxxxx acknowledges that the issuance of the
shares to him represents taxable income to him and that he (and not USA) shall
be responsible for the payment of any and all income taxes attributable to
the
issuance of the shares to him. XxXxxxx shall make appropriate cash payments
to
USA to pay for any withholding tax liability of USA in connection with the
shares. XxXxxxx acknowledges that the Common Stock has not been registered
under
the Securities Act of 1933, as amended (the “Act”), or under any state
securities law, and the Common Stock can not be sold or transferred unless
such
Common Stock has been registered under the Act or such state securities laws,
or
unless USA has received an opinion of its counsel that such registration is
not
required.
XxXxxxx
understands that USA has not agreed to register the Common Stock under the
Act
or any state securities laws. In
addition, the certificates representing the Common Stock shall contain such
legends, or restrictive legends, or stop transfer instructions, as shall be
required by applicable Federal or state securities laws, or as shall be
reasonably required by USA or its transfer agent.
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D. The
following new subsection (e) shall be added to Section 2. Compensation
and Benefits
of the
Agreement:
(e)
At
the time of the signing of this First Amendment by each of USA and XxXxxxx,
USA
shall issue to XxXxxxx options to acquire up to 7,000 shares of USA Common
Stock
for an exercise price of $7.50 per share (which is equal to the average
closing bid price for the Common Stock during the 30 trading days immediately
preceding the execution and delivery by USA and XxXxxxx of this First
Amendment).
The
options shall vest as
follows: 2,334 on the date hereof; 2,333 on June 30, 2007; and 2,333 on June
30,
2008.
The
options shall be exercisable at any time within five years of vesting. All
of
the terms and conditions of the options are set forth in the Option Certificate
attached hereto as Exhibit "A".
XxXxxxx
acknowledges that such options are not incentive stock options as such term
is
defined in Section 422 of the Internal Revenue Code of 1986, as amended, or
part
of an employee stock purchase plan as defined in Section 423 thereunder. As
a
result, among other things, taxable income will be realized by XxXxxxx at the
time of the exercise of any such options.
XxXxxxx
also acknowledges that neither the options nor the Common Stock underlying
the
options have been registered under the Act or under any state securities laws,
and neither the options nor the Common Stock underlying the options can be
sold
or transferred unless such options or Common Stock have been registered under
the Act or such state securities laws, or unless USA has received an opinion
of
counsel that such registration is not required. XxXxxxx understands that USA
has
not agreed to register the options or the underlying Common Stock under the
Act
or any state securities laws.
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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.
4.
Effective
Time.
The
amendments to the Agreement made in Paragraph 1 hereof shall be effective from
and after the date hereof.
IN
WITNESS WHEREOF, the parties hereto have executed this First Amendment on the
day and year first above written.
XXXXX X. XxXXXXX |
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USA TECHNOLOGIES, INC. | ||
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By: | ||
Xxxxxxx X. Xxxxxxx, |
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President |
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