SECOND AMENDMENT TO EMPLOYMENT AND
NON-COMPETITION AGREEMENT
This Second Amendment is made as of the 22nd day of February 2000, by
and between XXXXXX X. XXXXXX, XX. ("Xxxxxx"), and USA TECHNOLOGIES, INC., a
Pennsylvania corporation ("USA").
Background
USA and Xxxxxx entered into an Employment And Non-Competition Agreement
dated November 20, 1997, and a First Amendment thereto dated June 17, 1999
(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 Xxxxxx as Chairman and Chief Executive Officer
commencing on June 17, 1999, and continuing through June 30, 2002
(the "Employment Period") and Xxxxxx 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 Section 1. Employment of the Agreement 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
Xxxxxx 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 Xxxxxx 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 Xxxxxx a base salary of $135,000 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.
2
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:
(b) (i) In addition to the base salary provided for in subparagraph
(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 Second Amendment, USA shall issue to
Xxxxxx 25,000 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 an additional bonus
of up to 25,000 shares of Common Stock on account of the 2000
calendar year. The determination of the number of shares to be
awarded to Xxxxxx 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 Xxxxxx during
the 2000 calendar year. USA shall issue to Xxxxxx 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 Xxxxxx is an employee of USA at the end of the
original Employment Period hereunder (i.e., on June 30, 2002), and
further provided that Xxxxxx has not materially breached any
provision of this Agreement if he is so employed, then USA shall
issue to Xxxxxx 40,000 fully vested shares of Common Stock. USA
shall issue to Xxxxxx 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.
3
Xxxxxx 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 Common Stock
issuable to Xxxxxx 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 7.
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
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
4
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.
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 Second
Amendment as of the day and year first above written.
USA TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxx,
President
/s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------
XXXXXX X. XXXXXX, XX.
5
