Exhibit 10.7.2
USA TECHNOLOGIES, INC.
000 Xxxxx Xxxxxx
Xxxxx, Xxxxxxxxxxxx 00000
May 13, 2003
Xx. Xxxxxxx X. Xxxxxx
000 Xxxx Xxxxx
Xxxxx, Xxxxxxxxxxxx 00000
Re: Separation Agreement
Dear Xxxx:
This will confirm that your employment with USA Technologies, Inc. (the
"Company") shall terminate at the close of business on June 30, 2003. We wish
you the best of luck in your future endeavors. This letter sets forth the
various agreements we have reached concerning your separation from the Company.
1. Employment Period.
C. Effective July 1, 2003, you shall no longer be an employee of
the Company and the Employment Period as defined under your
Employment And Non-Competition Agreement dated as of June 7,
1996, as amended by the First Amendment thereto dated as of
February 22, 2000 and by the Second Amendment thereto dated as
of April 15, 2002 ("Employment Agreement"), shall be
terminated. The Employment Period shall continue through June
30, 2003, and you shall continue to act as Senior Vice
President of Business Development of the Company and the
Company shall continue to pay to you your current base salary
and to provide to you your existing benefits. During this
time, you agree to work with the Company on an orderly
transition of the work in your area of responsibility,
including but not necessarily limited to the following:
working with the Company to formulate a suitable transition
plan, and working with whomever the Company might designate on
the transition.
D. After June 30, 2003, and except as provided in Section 2
hereof, you shall not be provided or covered by any
Company-paid benefits or receive any further payments from the
Company. Subject to Section 2, you may also elect to continue
your health insurance coverage pursuant to COBRA, at your own
cost and expense.
C. Notwithstanding subparagraph A. above, and the termination of
the Employment Period under your Employment Agreement, this
will confirm that Sections 5, 6, and 7 of the Employment
Agreement, relating to non-disclosure and non-competition
restrictions, shall not be terminated and shall survive and
remain in full force and effect in accordance with all of
their terms and conditions.
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2. Severance Payment. In consideration of the general release set forth
in Section 3 hereof, the Company shall pay to you a cash severance payment in
the amount of $77,273. This amount is intended to reimburse you for the income
taxes attributable to the stock bonuses paid to you during the 2002 calendar
year. The severance payment will be payable over a six month period (or sooner
in the discretion of the Company) commencing upon the effectiveness of this
letter (as discussed in Section 10), and shall be subject to applicable payroll
tax withholdings. The payment of the cash severance payment by the Company to
you shall be subject to you first canceling an aggregate of 186,200 shares of
Common Stock of the Company presently owned by you.
The Company shall also provide common stock based severance pay of two weeks per
year served in the employ of USA Technologies. This amount shall be calculated
based upon your current annual base salary of $120,000(14 weeks based upon 7
years of service - for a total amount of $33,307). The severance amount shall be
received by you in the form of Common Stock of the Company as part of the
current 2003-A Common Stock offering at $0.10 per share. Upon the effectiveness
of this letter (as described in Section 10), you and the Company shall enter
into the standard 2003-A Subscription Agreement for these shares (as provided
therein, the Common Stock is expected to be filed with the SEC within 30-45
days).
In addition to the above noted severance payments, the Company will provide 3
weeks of additional compensation for accumulated `paid time off' payable on or
before July 18, 2003.
The Company will continue benefits coverage for you and your family until
December 31, 2003 in accordance with current practice.
3. General Release. You agree, intending to be legally bound, to
voluntarily and forever release and discharge the Company, as well as all of its
past, present and future officers, directors, employees, shareholders and agents
and their respective successors and assigns (collectively "Releasees"), jointly
and severally, from any and all actions, charges, causes of action or claims of
any kind (collectively, "claims"), known or unknown, suspected or claimed, which
you, your heirs, agents, successors or assigns ever had, now have or hereafter
may have against Releasees arising heretofore out of any matter, occurrence or
event existing or occurring prior to the execution hereof, including, without
limitation:
(a) Any claims relating to or arising out of
your employment with and/or separation of employment
by the Company;
(b) Except as specifically provided
otherwise herein, any claims for unpaid or withheld
wages, severance, benefits, bonuses and/or other
compensation of any kind;
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(c) Any claims for attorneys' fees, costs or
expenses;
(d) Any claims of discrimination and/or
harassment based on age, sex, race, religion, color,
creed, disability, handicap, citizenship, national
origin, sexual preference or any other factor
prohibited by Federal, state or local law or
ordinance, common law or administrative regulations
(such as the Age Discrimination in Employment Act,
the Americans With Disabilities Act, Title VII of the
Civil Rights Act of 1964, the Employee Retirement
Income Security Act and the Pennsylvania Human
Relations Act), and/or any other statutory or common
law claims, now existing or hereinafter recognized,
including, but not limited to, breach of contract,
quasi-contract, breach of covenant of good faith and
fair dealing, detrimental reliance, libel, slander,
fraud, wrongful discharge, promissory estoppel,
equitable estoppel and intentional or negligent
misrepresentation, and/or any rights under any of the
foregoing laws or regulations.
In addition, you covenant and agree to never, individually or with any
other person or in any way, commence, aid in any fashion, prosecute or cause or
permit to be commenced against the Company or any Releasee any action,
obligation, damage, or liability that is the subject matter of this Section 3.
4. Return of Company Property. At the time of your termination of
employment, you agree to return to the Company any of its property either issued
to you or in your possession, including but not limited to, any Company credit
cards, American Express cards, computers, pagers and keys to the Company's
office. In addition, you shall immediately surrender to the Company any and all
company, customer and partner contact information, materials, documents,
software, manuals or other records, in your possession or control, which include
or contain any confidential information of or concerning the business or
policies of the Company, and you will not retain or use any copies or summaries
thereof.
5. Future Actions.
A. From and after the date hereof, you agree not to take any
actions which are specifically intended to damage the business
interests of the Company or which reflect negatively on the
Company or its employees, directors, shareholders or agents,
including but not limited to, contacting the Company's agents,
customers, suppliers, employees (past, present or future to
the extent you know them to be related to the Company), or
using documents or other data obtained while in the employ of
the Company, in a manner that interferes with or damages the
Company's reputation, purpose or employee relations.
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B. From and after the date hereof, you agree not to sell during
any single calendar month more than 20% of your aggregate
holdings of USTT common stock (measured as of the first day of
any such calendar month).
C. From and after the date hereof, the Company agrees not to take
any actions which are specifically intended to reflect
negatively on you. From and after the date hereof, the Company
shall give you a "favorable" recommendation in response to any
inquires from any of your potential employers and use its best
efforts to assist you in your search for employment.
6. Remedies. In the event that you should breach any term or condition
of this letter or the Employment Agreement, the Company shall cease paying to
you any payments otherwise due to you under Section 2 hereof. The foregoing
remedy shall be cumulative, and shall be in addition to any remedies otherwise
available to the Company at law or in equity or otherwise. In the event of any
breach hereof or your Employment Agreement, you shall pay all of the costs and
expenses incurred by the Company in enforcing the provisions hereof, including
its attorney's fees.
7. Severability. Should any provision of this letter be held invalid or
illegal, such illegality shall not invalidate the whole of this letter but
rather, the letter shall be construed as if it did not contain the invalid or
illegal part, and the rights and obligations of the parties shall be construed
and enforced accordingly.
8. Merger Clause. This letter contains the complete understanding and
agreement between the parties hereto and supersedes any and all prior and
contemporaneous agreements, understandings, negotiations and discussions between
the parties, oral or written, express or implied. Notwithstanding the prior
sentence, however, and as indicated in Section 1.B., the provisions of Sections
5, 6 and 7 of your Employment Agreement shall remain in full force and effect.
9. Choice of Law; Successors. This letter has been executed in the
Commonwealth of Pennsylvania and shall be construed in accordance with the laws
of the Commonwealth of Pennsylvania without regard to its conflict of law rules.
This letter shall be binding upon our respective, permitted successors, assigns,
heirs, and personal representatives.
10. Effective Date. You have twenty-one (21) days within which to
consider this letter. If you sign this letter, you will retain the right to
revoke it for seven (7) days. This letter shall not be effective until this
revocation period has expired. To revoke the letter, you must send a certified
letter to my attention. The letter must be postmarked within seven (7) days of
your execution of this letter. Finally, this will confirm that the Company has
advised you to consult with an attorney prior to your execution of this letter.
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Xxxx, please indicate your agreement with this letter by signing this
letter below where indicated and returning it to me.
Sincerely,
USA TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxx, President
UNDERSTOOD AND AGREED:
/s/ Xxxxxxx X. Xxxxxx
---------------------------------
XXXXXXX X. XXXXXX
Date: 5/14/03
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