EXHIBIT 10.3
(HYPERCOM LOGO) [p74081p7408100.gif]
HYPERCOM CORPORATION
2851 West Kathleen Road
Phoenix, Arizona 85053
Phone: 602.504.5000
Fax: 602.504.4655
July 11, 2007
Mr. Philippe Tartavull
3550 Surfwood Road
Malibu, California 90265
Re: Amendment to Your Employment Agreement with Hypercom Corporation dated
January 16, 2007
Dear Philippe:
     If Hypercom Corporation (“Company”) does not select you for the Chief
Executive Officer (“CEO”) position to succeed William Keiper, and you separate
from service with the Company during the “trial period” for any reason other
than termination by the Company for Cause1, the Company will provide to you the
separation payment and benefits described below. In addition, should the Company
terminate your employment without Cause, or you terminate your employment for
Good Reason, prior to commencement of the trial period, the Company will
likewise provide you with the separation payment and benefits described below.
For the purpose of this letter, the “trial period” begins on the first day on
which the new CEO succeeds Mr. Keiper as the CEO of the Company (or on
January 1, 2008, if no CEO has succeeded Mr. Keiper as of that date) and ends on
a date six months from the date the CEO succeeding Mr. Keiper commences
employment with the Company as CEO. To receive the payment and benefits
described below, you must not be terminated for Cause, or voluntarily terminate
your employment without Good Reason, prior to the beginning of the trial period
and execute the release required by Section 18 of your Employment Agreement. You
will not be entitled to the separation payment or benefits described below if
the Company terminates your employment for Cause prior to or during the trial
period.
     If you separate from service with the Company during the trial period for
any reason (excluding death or disability), the Company will provide to you the
payment and benefits you would have received under Section 9 of your Employment
Agreement if you had separated your service for Good Reason after a Change in
Control. You also will be entitled to the following benefits, as approved by the
Compensation Committee of the Company’s Board of Directors at its February 27,
2007 meeting and reflected in the Minutes of the meeting:
Stock Option Vesting. All outstanding stock options granted to you pursuant to
Section 3(e) of your Employment Agreement, or otherwise, under all of the
Company’s stock plans, to the extent not already vested, will vest upon the
effective date of your separation from service.
Restricted Stock Awards. All restricted stock awards granted to you pursuant to
Section 3(c) of your Employment Agreement, or otherwise, under all of the
Company’s stock plans, to the extent not already unrestricted, will vest and
become unrestricted upon the effective date of your
 

1   The terms “Cause” and “Good Reason” in this Amendment mean “Cause” and “Good
Reason” as defined in your Employment Agreement.

 

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separation from service. The Company will make an additional “tax gross up”
payment to you, consistent with Section 3(c) of your Employment Agreement.
Performance Based Restricted Stock Awards. All performance based restricted
stock awards granted to you pursuant to Section 3(d) of your Employment
Agreement, or otherwise, under all of the Company’s stock plans, to the extent
not already unrestricted will vest and become unrestricted upon the effective
date of your separation from service. The Company will make an additional “tax
gross up” payment to you, consistent with Section 3(d) of your Employment
Agreement.
     The lump sum separation payment described in Section 9(a) of your
Employment Agreement, which becomes payable if you meet the requirements
described above, is considered “non-qualified deferred compensation” that is
subject to Section 409A of the Internal Revenue Code of 1986 (“Section 409A”).
The Company has determined that there is no applicable exception to
Section 409A. As a result, because you are a “specified employee” under
Section 409A, if such payment cannot be considered a “short-term deferral” under
Section 409A or qualifies in whole or in part for the “severance pay exception”
under Section 409A and the lump sum separation payment is payable upon your
separation from service with the Company, Section 409A imposes an additional 20%
tax (plus interest) on the lump sum payment unless it is paid at least six
months following your separation from service. To avoid this added tax burden,
to the extent this six-month hold is mandated at the time of the separation from
service, the Company will pay to you the amount of your lump sum separation
payment, should you become entitled to it, plus simple interest at 6% per annum,
on the first day of the seventh month following the effective date of your
separation from service with the Company.
     If you become entitled to the separation payment and benefits described in
this letter, the payment and benefits will be made to you in lieu of, and not in
addition to, any of the other payments or benefits to which you may be entitled
on your separation from service under the terms of your Employment Agreement.
     The Company intends that the terms of this letter serve as an amendment to
your Employment Agreement, but only to the extent described in this letter. Your
signature below signifies that you agree to this amendment.
Sincerely,

     
/s/ Daniel Diethelm
 
Daniel Diethelm, Chairman of the Board
   
 
   
Accepted by:
   
 
   
/s/ Philippe Tartavull
 
Philippe Tartavull
     
July 11, 2007
 
Date of Acceptance
   

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