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 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 4, 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.
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 Xxxxxxx as President and Chief Operating
Officer commencing on June 17, 1999 and continuing through June 30,
2002 (the "Employment Period") and Xxxxxxx 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. Subparagraph (c) of the Section 1. Employment is hereby deleted and
the following new subparagraph (c) is hereby substituted in its place:
(c) Nothing contained in subparagraph 1.(b) hereof shall
prohibit Xxxxxxx 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 Xxxxxxx 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 Xxxxxxx a base salary of $125,000 per year
during the Employment Period, subject to any withholding required by
law. Herbert's base salary may be increased from time to time in the
discretion of the Board of Directors.
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:
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(b) (i) In addition to the base salary provided for in subparagraph
(a), Xxxxxxx 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 Xxxxxxx 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
Xxxxxxx 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) Xxxxxxx shall also be eligible to receive an additional bonus
of up to 20,000 shares of Common Stock on account of the 2000
calendar year. The determination of the number of shares to be
awarded to Xxxxxxx 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/or the performance of Xxxxxxx during
the 2000 calendar year. USA shall issue to Xxxxxxx 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 Xxxxxxx is an employee of USA at the end of the
original Employment Period hereunder (i.e., on June 30, 2002), and
further provided that Xxxxxxx has not materially breached any
provision of this Agreement if he is so employed, then USA shall
issue to Xxxxxxx 40,000 fully vested shares of Common Stock. USA
shall issue to Xxxxxxx 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. Xxxxxxx shall not be
entitled to any such shares of Common Stock if for any reason
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whatsoever he is not an employee of USA on June 30, 2002. The number
of shares of Common Stock issuable to Xxxxxxx 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
Xxxxxxx on behalf of USA or at its direction or for USA's use, or
otherwise devised, developed, created, or invented in connection
with Herbert's employment with USA or Herbert's 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 Xxxxxxx has
and shall have no right or interest whatsoever thereto. Xxxxxxx
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 Xxxxxxx. 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.
Xxxxxxx hereby assigns, transfers, and conveys to USA all of
Herbert's 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
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assignment, transfer and conveyance. At USA's direction and request,
Xxxxxxx 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.
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/ Xxxxxx X. Xxxxxx, Xx.
-------------------------
Xxxxxx X. Xxxxxx, Xx.,
Chief Executive Officer
/s/ Xxxxxxx X. Xxxxxxx
-------------------------
XXXXXXX X. XXXXXXX
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