THIRD AMENDMENT TO EMPLOYMENT AND
NON-COMPETITION AGREEMENT
This Third Amendment is made as of the 22nd day of February 2000, by
and between HAVEN XXXXX XXXXX, XX. ("Xxxxx"), and USA TECHNOLOGIES, INC., a
Pennsylvania corporation ("USA").
Background
USA and Xxxxx entered into an Employment And Non-Competition Agreement
dated May 1, 1994, and a First Amendment thereto dated May 1, 1995, and a Second
Amendment thereto dated March 30, 1996 (collectively, 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.
A. Subparagraph A. of Section 1. Employment of the Agreement is hereby
deleted and the following new subparagraph A. is hereby substituted in its
place:
A. USA shall employ Xxxxx as Senior Vice President - Research and
Development commencing on December 12, 1997 and continuing through
June 30, 2002 (the "Employment Period") and Xxxxx hereby accepts
such employment. Unless terminated by either party hereto upon at
least 60-days notice prior to end of the original Employment Period
ending June 30, 2002, 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. The following new subparagraph C. is hereby added to Section 1.
Employment of the Agreement:
C. Nothing contained in subparagraph 1.B. hereof shall prohibit
Xxxxx from investing his personal assets in businesses which do not
compete with USA, where the form or manner of such investments will
not require more than minimal services on the part of Xxxxx in the
operation of the affairs of the business in which such investments
are made, or in which his participation is solely that of a passive
investor; or from serving as a member of boards of directors, boards
of trustees, or other governing bodies of any organization, provided
that USA approves such activities in advance; or from participating
in trade associations, charitable, civic and any similar activities
of a not-for- profit, philanthropic or eleemosynary nature; or from
attending educational events or classes. It is understood and agreed
that any such permitted activities which shall occur during business
hours shall be limited to no greater than forty hours per year.
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 March 1,
2000, USA shall pay to Xxxxx a base salary of $120,000 per year
during the Employment Period, subject to any withholding required by
law.
D. Subparagraph B. of Section 2. Compensation and Benefits of the
Agreement is hereby deleted and the following new subparagraph B. is hereby
substituted in its place:
2
B. (i) In addition to the base salary provided for in subparagraph
A., Xxxxx shall be entitled to receive such bonus or bonuses as the
Compensation Committee of the Board of Directors may, in their sole
discretion, pay to Xxxxx from time to time based upon his
performance 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 Third Amendment, the Company shall issue
to Xxxxx 20,000 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) Xxxxx shall also be entitled to receive an additional bonus of
up to 25,000 shares of Common Stock on account of the 2000 calendar
year. The determination of the amount of shares to be awarded to
Xxxxx shall be made by the Compensation Committee of the Board of
Directors, in their sole discretion, and shall be based upon the
performance of USA and the performance of Xxxxx during the 2000
calendar year. USA shall issue to Xxxxx any such shares of Common
Stock during January 2001. Such shares of Common Stock shall be
registered under the Act pursuant to a Form S-8, at USA's cost and
expense.
(iv) Provided that Xxxxx is an employee of USA at the end of the
original Employment Period hereunder (i.e., on June 30, 2002), and
further provided that Xxxxx has not materially breached any
provision of this Agreement if he is so employed, then USA shall
issue to Xxxxx 40,000 fully vested shares of Common Stock. USA shall
issue to Xxxxx such shares of Common Stock during July 2002. All of
such shares shall be registered under the Act pursuant to a Form
S-8, at the cost and expense of USA. Xxxxx shall not be entitled to
any such shares of Common Stock if for any reason whatsoever he is
not an employee of USA on June 30, 2002. The number of shares of
3
Common Stock issuable to Xxxxx shall be equitably adjusted from time
to time to reflect any stock splits, stock combinations, stock
subdivisions, stock recapitilizations, reverse stock splits, stock
dividends paid on, and other similar events involving the Company's
Common Stock occurring prior to and as of June 30, 2002.
E. The following new subparagraph D. is hereby added to Section 5
Business Secrets of the Agreement:
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
you on behalf of USA or at its direction or for USA's use, or
otherwise devised, developed, created, or invented in connection
with your employment with USA or your 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 you have and
shall have no right or interest whatsoever thereto. You hereby
renounce and disclaim the work-for-hire doctrine and acknowledge
that all such rights to intellectual property shall belong
exclusively to USA and not to you. 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. You hereby assign,
transfer, and convey to USA all of your right, title and interest in
and to any and all such inventions, discoveries, improvements,
modifications and other intellectual property rights and agree 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,
you shall execute and deliver any and all forms, documents, or
applications required under any applicable copyright, patent,
trademark, or other law, rule or regulation.
4
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. 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 Third
Amendment as of the day and year first above written.
USA TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------
Xxxxxx X. Xxxxxx, Xx.
Chief Executive Officer
/s/ Haven Xxxxx Xxxxx, Xx.
--------------------------
HAVEN XXXXX XXXXX, XX.
5
