<PAGE>   1

                                                                    EXHIBIT 10.1


                   AMENDED AND RESTATED EMPLOYMENT AGREEMENT

         This Amended and Restated Employment Agreement ("the Agreement")
between James J. Condon ("you" or "Employee") and CyberCash, Inc., a Delaware
corporation with offices at 2100 Reston Parkway, Reston, Virginia ("CyberCash"
or the "Company") is entered into as of the 20th day of August, 1999 and sets
forth the new terms and conditions of your employment by CyberCash.

         You and the Company are currently parties to an employment contract
dated as of March 17, 1999. In order to induce you to continue in your position
with the Company, it has agreed to amend that agreement. As a further
inducement, the Company has represented to you that its Board of Directors will
give consideration to elevating you to the position of Chief Executive Officer
should William Melton, the current Chief Executive Officer, resign from that
position.

1.       SCOPE

         a)      You will act as President and Chief Operating Officer of
                 CyberCash, and in that capacity you will report directly to
                 the Chief Executive Officer.  You will be responsible for the
                 day-to-day oversight and management of the business of
                 CyberCash, including:

                 i)       Assisting in the development of strategies to make
                          CyberCash the leading global provider of software and
                          services to enable payments.

                 ii)      Providing general management of the Company's
                          marketing, sales, development, operations, human
                          resources, and finance and administration activities.

                 iii)     Representing the interests of CyberCash and its
                          affiliated companies in accordance with the Company's
                          strategies.

         b)      If you are appointed Chief Executive Officer, you will assume
                 the duties normally inherent in that office, and you will
                 report directly to the Board of Directors.

         c)      You agree not to engage in any other employment or activity at
                 any time during your employment with CyberCash which
                 materially interferes with the performance of your duties for
                 CyberCash.






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2.       TERM OF EMPLOYMENT

         The term of this Agreement will be from March 17, 1998 through
         December 31, 2002.

3.       COMPENSATION AND BENEFITS

         a)      Your compensation will consist of the following:

                 i)       Salary: Effective July 1, 1999, you will begin
                          receiving an annual base salary of $290,000, to be
                          paid monthly in arrears into a bank account
                          designated by you.  You will be responsible for the
                          payment of any taxes due.  Your base salary will be
                          increased to $320,000 on September 1, 2000, and
                          increased to $350,000 on January 1, 2002.

                 ii)      Stock Options: Stock Options to purchase 100,00
                          shares of the Company's common stock at a price per
                          share equal to the closing price of the common stock
                          on the day prior to the date the options are approved
                          by the Board of Directors or its Compensation
                          Committee.  Of these, options to purchase 50,000
                          shares will start vesting immediately and will vest
                          over 40 months in accordance with the Company's
                          standard policy. An additional 50,000 will commence
                          vesting on the last day of the first fiscal quarter
                          in which the Company reports an operating profit.
                          These options will be issued under, and will be
                          subject to, the terms and conditions of CyberCash's
                          1995 Employee Stock Option Plan ("ESOP") and will be
                          evidenced by CyberCash's standard form option
                          agreement reflecting the terms of this paragraph.

                          Additional Stock Options: CyberCash will grant you
                          additional stock options in the following amounts
                          under the terms set forth below:

                          (1)     Options to purchase 200,000 shares of the
                          Company's Common Stock at the price of $10.20 per
                          share. Those options will start vesting immediately
                          and will vest over 40 months in accordance with the
                          Company's standard policy.

                          (2)     Options to purchase 200,000 shares of the
                          Company's Common Stock at the price of $10.20 per
                          share. Those options will vest on December 31, 2002 .

                          These options will be issued under, and will be
                          subject to, the terms and conditions of CyberCash's
                          1995 ESOP and will be





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<PAGE>   3
                          evidenced by CyberCash's standard form of option
                          agreement reflecting the terms of this paragraph; all
                          options will vest immediately in the event of a
                          Change in Control following which you are not
                          retained or appointed as the CEO under the new
                          ownership structure.

                 iii)     Bonuses: CyberCash will pay you the following
                          bonuses:

                          September 01, 1999:      $100,000

                          February 01, 2000:       $150,000

                          February 01, 2001:       $200,000

                          February 01, 2002:       $250,000

                          February 01, 2003:       $300,000

         b)      Severance Pay: You will be entitled to severance pay equal to
                 your then current base salary (without benefits, but not less
                 than $290,000 per annum) for eighteen months, paid in equal
                 monthly installments, plus a bonus equal to 1.5 times the
                 amount of any annual bonus you were paid for the calendar year
                 immediately preceding the termination of your employment if
                 (i) your employment with CyberCash is terminated by CyberCash
                 other than for Cause, (ii) there is a Change of Control or
                 Change of Responsibilities.

                 For the purposes of this Agreement:

                 i)       Cause for termination shall exist if: (a) you fail or
                          refuse to perform your duties (not including a
                          failure to perform due to a disability entitling you
                          to disability benefits) and your failure or refusal
                          continues after written notice; (b) you are convicted
                          for a crime constituting a felony involving moral
                          turpitude; or (c) you commit a material act of fraud
                          or dishonesty resulting in substantial harm to the
                          Company.

                 ii)      Change of Control shall mean (i) a transaction or
                          series of related transactions resulting in a change
                          in beneficial ownership of more than 50% of the
                          outstanding equity securities of the Company; (ii) or
                          a sale of all or substantially all of the assets of
                          the Company; provided that such a transaction shall
                          not be considered a change in Change in Control if
                          after the transaction a majority of the members of
                          the board of directors are persons who were members
                          of the board of directors prior to the transaction
                          and you remain the Chief Operating Officer (or, if
                          you have been promoted, the Chief Executive Officer)
                          of the Company.





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                 iii)     There would be a Change of Responsibilities if because
                          of actions of the Board of Directors of the Company
                          you no longer are performing the functions normally
                          performed by the Chief Operating Officer (or, if you
                          have been promoted, the Chief Executive Officer) of a
                          corporation similar to the Company.

         c)      The Company shall provide you the following additional
                 benefits:

                 i)       Health insurance benefits for you and your family, in
                          accordance with the standard CyberCash health
                          insurance plan for CyberCash executives.

                 ii)      Twenty-three days per year of paid vacation.

                 iii)     An allowance of  up to $600 per month to lease an
                          automobile.

                 iv)      A life insurance policy on your life in the amount of
                          $1,000,000 for the benefit of your named beneficiary.

                 v)       Reimbursement of pre-approved business expenses.

4.   CONFIDENTIAL INFORMATION.

         a)      In the course of your employment, CyberCash will disclose to
                 you confidential information concerning, among other things,
                 CyberCash's existing and prospective clients, existing and
                 contemplated products and services, inventions, software, and
                 other matters and information received from CyberCash clients,
                 any CyberCash affiliated entities, and other third parties,
                 which information constitutes valuable assets of CyberCash
                 ("Confidential Information").  The term "Confidential
                 Information" shall include all information that is not known
                 by, or generally available to the public at large and that
                 concerns the business or affairs of CyberCash and CyberCash's
                 affiliated entities, including, but not limited to,
                 technology, methods of operation, and information regarding
                 clients of a party hereto.  CyberCash shall have no obligation
                 to specifically identify any information as constituting
                 Confidential Information in order for it to be entitled to
                 protection as such.

         b)      You will not, at any time during or after your employment,
                 without the prior written consent of CyberCash, use any
                 portion of the Confidential Information for any purpose other
                 than as contemplated herein, and you agree that:

                 i)       You will hold all Confidential Information in the
                          strictest confidence, and will exercise at least the
                          same care with respect thereto as you exercise with
                          respect to your own proprietary and confidential
                          information, and will not, without CyberCash's prior
                          written consent,





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<PAGE>   5
                          copy or disclose any portion thereof to any third
                          party except as contemplated herein; and

                 ii)      You will not remove or permit to be removed from any
                          Confidential Information any notice placed thereon by
                          CyberCash indicating the confidential nature of, or
                          the proprietary right of CyberCash in such items.

         c)      The foregoing shall not prohibit or limit your use of
                 information (including, but not limited to, ideas, concepts,
                 know-how, techniques, and methodologies) which:  (i) are
                 already known to you; (ii) are independently developed by you;
                 (iii) were received by you on a non-confidential basis, prior
                 to receipt from CyberCash, from a third party lawfully
                 possessing and lawfully entitled to disclose such information;
                 or (iv) becomes part of the public domain through
                 circumstances unrelated to any breach by you of this
                 Agreement.

         d)      In the event you become aware that any person or entity is
                 taking or threatens to take any action which would violate any
                 of the foregoing provisions were that person or entity a party
                 to this Agreement, you shall promptly and fully advise
                 CyberCash (with written confirmation as soon as practicable
                 thereafter) of all facts known to you concerning such action
                 or threatened action.  You shall not in any way aid, abet or
                 encourage any such action or threatened action.  You agree to
                 cooperate in all reasonable ways to prevent such action or
                 threatened action, and you agree to do all reasonable things
                 and cooperate in all reasonable ways as may be requested by
                 CyberCash to protect the trade secrets, and proprietary rights
                 of CyberCash in and to the Confidential Information.

5.       OWNERSHIP OF WORK.

         a)      CyberCash shall own and you hereby assign to CyberCash all
                 right, title and interest in any invention, technique,
                 process, device, discovery, improvement or know-how,
                 patentable or not, including all trade secrets and copyrights,
                 in and to the following works created by you on CyberCash
                 premises or at any other location:  (i) works that relate to
                 or are derived from the actual or anticipated business of
                 CyberCash, and (ii) works that result from or are derived from
                 any services performed by you or, if not actually performed,
                 services requested by CyberCash to be so performed
                 (collectively the "Contract Work").  CyberCash shall own such
                 Contract Work even if you create such Contract Work outside
                 normal working hours and regardless of the ownership of the
                 equipment used to create such Contract Work.  Such Contract
                 Work shall include program codes and documentation.

         b)      To the extent that any such Contract Work does not qualify as
                 works made for hire under U.S. copyright law, you hereby
                 assign to CyberCash and agree to assign to CyberCash,
                 irrevocably and in perpetuity, any and all right, title and





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<PAGE>   6
                 interest that you may have in and to the Contract Work.
                 Promptly upon CyberCash's request, you agree that you will
                 execute any appropriate assignment document.

         c)      If you alone or jointly with others make or conceive of any
                 invention, technique, process, or other know-how, whether
                 patentable or not, in the course of your employment, which
                 relates in any manner to the actual or anticipated business of
                 CyberCash (collectively, "Inventions"), you hereby assign to
                 CyberCash your entire right, title and interest in such
                 Inventions.  You will disclose any such Inventions to an
                 officer of CyberCash and will, upon request, promptly sign a
                 specific assignment of title to CyberCash, and do anything
                 else reasonably necessary to enable CyberCash to secure
                 patent, trade secret or any other proprietary rights in the
                 United States or foreign countries.

         d)      You hereby agree, at CyberCash's request, to assist CyberCash
                 and its nominees to secure, maintain, and defend for
                 CyberCash's own benefit all copyrights and patents, and other
                 proprietary rights in the Contract Work in any and all
                 countries.  Your obligations to assist CyberCash in obtaining
                 and enforcing its proprietary rights in the Contract Work
                 shall continue beyond the termination or expiration of this
                 Agreement, but CyberCash shall compensate you for any
                 assistance rendered after such expiration or termination at a
                 reasonable rate for time actually spent by you at CyberCash's
                 request.

         e)      You understand that you may continue to work on, and retain
                 rights to, projects of your own interest outside of CyberCash
                 which do not in any way compete or conflict with the current
                 or planned business of CyberCash provided that (i) they do not
                 fall under the paragraphs titled "Ownership of Works" above;
                 and (ii) they do not interfere in any way with your time at
                 work or duties for CyberCash.  You understand that you are not
                 permitted to engage in any outside business activities while
                 employed by CyberCash which compete with or conflict with the
                 current or planned business of CyberCash.

6.       EQUITABLE RELIEF.

         a)      Because any breach by you of the promises set forth in
                 Sections 4 and 5 herein would cause irreparable harm and
                 significant injury which dollar amount would be difficult to
                 ascertain and which in fact would not be compensable by money
                 damages alone, you agree that CyberCash shall have the right
                 to enforce this Agreement and any of such provisions by
                 injunction, specific performance or other equitable relief
                 without prejudice to any other rights and remedies that
                 CyberCash may have for breach of this Agreement.

         b)      You hereby consent to the personal jurisdiction of the U.S.
                 federal courts in the Commonwealth of Virginia over you in
                 connection with all disputes regarding





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                 this Agreement and agree that all disputes regarding this
                 Agreement shall be exclusively settled in those courts.

7.       RESTRICTIVE COVENANTS.

         a)      You further agree that, unless CyberCash has materially failed
                 to meet its obligations under this Agreement, during your
                 employment by CyberCash and for a period of eighteen months
                 (or, if you were employed by CyberCash for less than eighteen
                 months and you are not receiving the above described severance
                 pay, for a shorter period equal to the duration of your
                 employment by CyberCash) commencing on the date of termination
                 of your employment with CyberCash (the "Termination Date"),
                 you shall not:

                 i)       solicit business or perform work for any of
                          CyberCash's past or present clients, or for any of
                          CyberCash's prospective clients to whom CyberCash has
                          made written proposals within six months prior to the
                          Termination Date, either directly or indirectly, for
                          the benefit of anyone other than CyberCash or
                          participate or assist in any way in the solicitation
                          of business from or performance of work for any such
                          clients as an independent contractor or consultant to
                          any other entity unless the business being solicited
                          or the work being performed is not directly
                          competitive with the services and products provided
                          by the CyberCash to such clients (the business of
                          CyberCash is international in scope, therefore, the
                          restrictions of this paragraph shall apply
                          worldwide);

                 ii)      hire any past or present CyberCash employee, or
                          knowingly attempt to induce any employee of CyberCash
                          to leave CyberCash's employ;

                 iii)     either directly or indirectly, alone or in
                          association with others, become an employee, officer,
                          director, partner or five percent or greater
                          stockholder of, or consultant to, any entity which
                          engages in the development, sale or marketing of
                          software or services to enable electronic payments,
                          or in any other business which is directly
                          competitive with any business conducted by CyberCash;
                          and

                 iv)      enter the employ of any person, firm or other entity
                          engaged in any business that directly competes with
                          the Company Business, as defined below, or render any
                          services to any person, firm or other entity for use
                          in directly competing with the Company Business.





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         b)      You acknowledge that (i) CyberCash is engaged and in the
                 future will be engaged in the business of providing technology
                 and services to enable electronic payments (the foregoing,
                 together with any other businesses that CyberCash engages from
                 the date hereof to the date of the termination of this
                 Agreement, being hereinafter referred to as the "Company
                 Business"); (ii) your services to CyberCash have been and will
                 continue to be special and unique and have immeasurable value
                 to CyberCash; (iii) your work for CyberCash allows you access
                 to trade secrets of and confidential information concerning
                 CyberCash; (iv) the Company Business is national and
                 international in scope; (v) CyberCash would not have entered
                 into this Agreement and employed you but for the agreements
                 and covenants contained in this Agreement; and (vi) the
                 agreements and covenants contained in this Agreement are
                 essential to protect the business and goodwill of CyberCash.

8.       GOVERNING LAW AND SEVERABILITY.

         This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Virginia.  If any provision of this Agreement
is for any reason found by a court of competent jurisdiction to be
unenforceable, that provision will be enforced to the maximum extent
permissible, and the remainder of this Agreement shall continue in full force
and effect.

9.       NOTICES.

         Any notices required or permitted hereunder shall be given to the
appropriate party at the address specified above or at such other address as
the party shall specify in writing.  Such notice shall be deemed given upon
personal delivery to the appropriate address or three days after being sent by
certified or registered mail or Federal Express.

10.      ENTIRE AGREEMENT AND MODIFICATION.

         Except as modified in this Amended and Restated Employment Agreement,
all other terms and conditions of the Agreement remain in full force and
effect.  This Agreement contains the entire agreement between you and CyberCash
concerning the subject matter hereof and supersedes all prior agreements and
understandings, including but not limited to the Employment Agreement dated
March 17, 1998.  This Agreement may be modified only by a writing signed by





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the parties hereto.  If the terms of this offer of employment are acceptable to
you, please sign and return the enclosed copy of this letter, confirming your
agreement with the foregoing.



<TABLE>
<S>                                    <C>
James J. Condon                        CyberCash, Inc.



/s/ JAMES J. CONDON                    By:    /s/ WILLIAM N. MELTON
------------------------------                --------------------------------

Date: August 20, 1999                  Name:  William N. Melton

                                       Title: Chief Executive Officer

                                       Date:  August 20, 1999
</TABLE>





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<PAGE>   10



                  COMPENSATION AGREEMENT AND PERSONAL GUARANTEE

         This Compensation Agreement and Personal Guarantee ("Compensation
Agreement") between James J. Condon ("Condon") and William Melton ("Melton") is
entered into this 20th day of August, 1999 .

         WHEREAS pursuant to that certain Employment Agreement dated March 17,
1998, Condon is employed as the President and Chief Operating Officer of
CyberCash, Inc. a Delaware corporation with offices at 2100 Reston Parkway,
Reston, Virginia ("CyberCash" or "Company"); and

         WHEREAS CyberCash and Condon are considering entering into an Amended
and Restated Employment Agreement which would supersede the March 17, 1998
Employment Agreement; and

         WHEREAS pursuant to the Amended and Restated Employment Agreement
CyberCash will agree to give Condon additional compensation in the form of
increased salary and stock and consider appointing him its Chief Executive
Officer upon Melton's resignation; and

         WHEREAS Melton himself, as the Chief Executive Officer of CyberCash and
a major stockholder, personally desires to secure Condon's services by removing
the risk that Condon may not realize the full benefit of the compensation
package set forth in the Amended and Restated Employment Agreement; and

         WHEREAS Condon has agreed to continue his employment at CyberCash in
reliance on Melton's promise to guarantee Condon the full benefit of his
compensation package, regardless of the obligations of CyberCash and
notwithstanding the possibility that Condon might not otherwise be entitled
under the Amended and Restated Employment Agreement to the financial benefits
guaranteed herein by Melton;

NOW THEREFORE, THE PARTIES AGREE AS FOLLOWS:

1.       In lieu of pursuing other opportunities currently available to him,
     Condon agrees to execute the Amended and Restated Employment Agreement and
     remain employed by CyberCash.

2.       On or about the dates indicated below, Melton will pay Condon the
     difference, if any, between the amount of any bonus paid to Condon by
     CyberCash and the following amounts:

                           September 01, 1999:       $100,000

                           February 01, 2000:        $150,000


<PAGE>   11

                           February 01, 2001:        $200,000

                           February 01, 2002:        $250,000

                           February 01, 2003:        $300,000

     Melton may fulfill his obligation in this paragraph 2 by paying Condon in
     cash or additional stock valued as of the date the bonus is due and
     payable.

3.        Melton hereby grants Condon the option to purchase 100,000 shares of
     CyberCash common stock currently held by Melton at a price of $10.20 per
     share. These options will vest on December 31, 2002 and Condon's right to
     exercise the options will expire on February 1, 2003. In recognition of his
     obligation to Condon hereunder, and regardless of his rights and
     obligations under any other Agreement to sell, transfer, or otherwise
     dispose of CyberCash common stock that he currently holds, Melton agrees to
     hold at least 100,000 shares of CyberCash common stock until February 1,
     2003.

4.        No later than February 1, 2003, Melton will pay Condon the difference,
     if any, between $6 million and the combined value of Condon's options
     (approximately 800,000) under the Amended and Restated Employment Agreement
     and this Compensation Agreement.

5.        In the event of a Change in Control and a Change of Responsibilities
     (as defined in the Amended and Restated Employment Agreement) prior to
     December 31, 2002 (hereinafter together referred to as the "Transition
     Event"), Melton's guarantee of Condon's compensation package will be
     prorated for each 6 month period that Condon was employed by CyberCash
     prior to the Transition Event. Thus, if the Transition Event occurs at any
     time within the applicable time periods set forth below, Melton will pay
     Condon the following amounts either in cash or equity, but only after first
     subtracting the sum of the total value of all bonuses already paid by
     Melton or the Company to Condon pursuant to this Compensation Agreement and
     the total value of Condon's vested options as of the date of the Transition
     Event.

                 July 15, 1999 - January 15, 2000:  $1,000,000
                 January 16, 2000 - July 15, 2000:  $2,000,000
                 July 16, 2000 - January 15, 2001:  $3,000,000
                 January 16, 2001 - July 15, 2001:  $4,000,000
                 July 16, 2001 - January 15, 2002:  $5,000,000
                 January 16, 2002 - July 15, 2002   $6,000,000
                 July 16, 2002 - December 31,2002:  $7,000,000

6.   In the event of Condon's death prior to December 31, 2002, Condon's estate
     shall have the right to either (1) immediately vest all 500,000 options and
     wait until


<PAGE>   12

     December 31, 2002 to calculate the value of the options in order to
     determine whether any additional amount is due by Melton pursuant to
     paragraph 4 of this Compensation Agreement; or (2) transfer to Melton these
     options with all their rights and privileges in exchange for immediate
     payment of $6 million in cash or equity.

7.   This Compensation Agreement shall inure to the benefit of each party's
     successors, heirs, assigns, and personal representatives. In the event of
     Condon's death, all benefits owed to Condon pursuant to this Agreement
     shall be paid to Condon's designated beneficiary. In the event Condon does
     not designate a beneficiary, all benefits shall be payable to Condon's
     estate.

8.   In the event of Melton's death, this Compensation Agreement will be binding
     on Melton's successors, heirs, assigns, and personal representatives.



/s/ WILLIAM MELTON                          /s/ JAMES J. CONDON
---------------------------------           ------------------------------
William Melton                                   James J. Condon


August 20, 1999                             August 20, 1999
---------------------------------           ------------------------------
Date                                             Date