USA TECHNOLOGIES, INC.
000 XXXXX XXXXXX
XXXXX, XXXXXXXXXXXX 19087
(000)000-0000
November 18, 1999
Dear Xxxxxxx Xxxx:
As you know, the Company has offered its employees the option to receive
shares of Common Stock of the Company in lieu of cash salary payments otherwise
due for the period from November 26, 1999 through February 4, 2000.
1. Issuance. This is to acknowledge and confirm your agreement that 25%
of your net pay due to you from the Company during the fourth quarter of 1999
and first quarter of 2000 shall be paid to you by the issuance to you of 1,260
shares of Common Stock. If your total net pay over the six weeks is greater than
twice this number of shares, such shortfall will be paid to you in cash. All of
these shares of Common Stock have been valued at $2.00 per share, the market
value of the Common Stock on the date of the Board of Director's approval of
this plan.
Pursuant to the foregoing, the Company shall issue to you in your
individual name, a total of 1,260 shares of nonassessable, free trading Common
Stock of the Company. Upon the effective date of the Form S-8 registration
statement described below, the Company shall issue all of such stock to you. You
will receive your stock certificate within several weeks.
2. Form S-8. Promptly after the date of this agreement, the Company will
cause at its expense a registration statement on Form S-8 to be filed with the
Securities and Exchange Commission for the purpose of registering all of the
shares of Common Stock of the Company issuable to you pursuant hereto. The
shares of Common Stock are also exempt from registration pursuant to Section
202(g) of the Pennsylvania Securities Act of 1972. In this regard, you represent
to the Company that as of the date hereof you are a resident of Pennsylvania.
3. Rule 144 and Xxxxxxx Xxxxxxx. If you are currently an officer of the
Company, you hereby acknowledge your obligations under Rule 144 promulgated
under the Securities Act of 1933, as amended, in connection with any sale of the
shares. In addition, in order to avoid any violation of the xxxxxxx xxxxxxx
laws, or to avoid any appearance of any violation thereof, as long as you are an
officer of the Company, you agree to notify Xxxxxxx X. Xxxxxxx, President, or
the compliance officer of the Company, before you sell any of these shares.
If you have any questions at any time regarding the xxxxxxx xxxxxxx
laws, please contact Xxxxxxx X. Xxxxxxx, President, or the Company's chief
compliance officer.
4. Market Price Of Common Stock. For purposes of the valuation of the
Common Stock, you and the Company have valued the shares at $2.00 per share, the
market price thereof as of the date of the approval of the plan by the Board of
Directors. You understand that there is no assurance that you could sell the
Common Stock in the future for any guaranteed price, and you understand that the
future sales price of the Common Stock could be less than $2.00 per share. In
such event, you would receive less than $2.00 per share for the Common Stock. By
agreeing to accept the Common Stock, you are bearing the risk of the fluctuation
or reduction in the market value of the Common Stock. The Company has not made
any representations or warranties to you regarding the market price for the
Common Stock in the future or the continuation in the future of any public
trading market for the Common Stock.
5. Description of Common Stock. The Company is authorized to issue up to
62,000,000 shares of Common Stock. As of September 30, 1999, there were
6,191,097 shares of Common Stock issued and outstanding. The holder of each
share of Common Stock is entitled to one vote on all matters submitted to a vote
of the shareholders of the Company, including the election of directors. There
is no cumulative voting for directors. The holders of Common Stock are entitled
to receive such dividends as the Board of Directors may from time to time
declare out of funds legally available for payment of dividends. No dividend may
be paid on the Common Stock until all accumulated and unpaid dividends on the
Series A Convertible Preferred Stock have been paid. Upon any liquidation,
dissolution or winding up of the Company, holders of shares of Common Stock are
entitled to receive pro rata all of the assets of the Company available for
distribution, subject to the liquidation preference of the
Series A Convertible Preferred Stock of $10.00 per share and any unpaid and
accumulated dividends on the Series A Convertible Preferred Stock. The holders
of the Common Stock do not have any preemptive rights to subscribe for or
purchase shares, obligations, or other securities of the Company.
6. Tax Effects. The issuance of the Common Stock to you will constitute
taxable compensation income to you at a value of $2.00 per share. The Company
will receive a compensation deduction in the amount of such compensation.
7. Form 10-KSB. The Company has delivered to you, and you acknowledge
receipt of, the Form 10-KSB of the Company for the fiscal year ended June 30,
1999.
In addition, the Company will make available to you without charge, upon
written or oral request, any of the documents incorporated by reference in Item
3 of Part II of the Form S-8 registration statement referred to above, and these
documents are also incorporated by reference herein. Any such request should be
delivered to Xxxxxxx X. Xxxxxxx, President, at the address set forth above.
8. Return of Shares. Notwithstanding anything else set forth herein, if
your employment with the Company shall be terminated for any reason whatsoever,
whether with or without cause, prior to payment in full, you agree to
immediately return to the Company the pro rata portion of the Common Stock which
has been unearned as of the date of such termination of employment. If the
Common Stock has been sold by you, you agree to return a payment in the amount
equal to such unearned shares of Common stock to be valued at $2.00 per share.
Except as specifically set forth herein, all of the terms and conditions
of your presently existing employment arrangements with the Company shall remain
in full force and effect.
This will confirm that prior to your acceptance of this letter, you have
reviewed this letter and the Form 10-KSB referred to above, and except as set
forth herein or in the Form 10-KSB, you have not relied upon any representations
or warranties from or of the Company whatsoever.
Please indicate your acceptance of the terms of this letter by signing
below where indicated and returning it to me.
USA TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Chief Financial Officer
ACCEPTED AND AGREED TO:
Sign name: /s/ Xxxxx Xxxx
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Print name: Xxxxx Xxxx
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Dated: Nov. 18, 1999
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