EXHIBIT 10.2
CONSULTING AGREEMENT
     This Consulting Agreement (the “Agreement”) is entered into on this 11th
day of July, 2007, by and between Hypercom Corporation, a Delaware corporation
(“Company”) and William Keiper (“Consultant”).
RECITALS:
     A. Simultaneous with the execution of this Agreement, Company and
Consultant have entered into a Separation Agreement and General Release
(“Separation Agreement”).
     B. As a result of his former position as the Company’s Chief Executive
Officer, Consultant has the knowledge of Company operations and goals and the
professional experience necessary to perform certain consulting services for
Company.
     C. Company desires to have Consultant perform such consulting services and
Consultant agrees to perform the services as set forth herein.
     NOW THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, Company and Consultant agree as follows:
AGREEMENTS:
     1. Consulting Services. Company engages Consultant, and Consultant accepts
such engagement, to consult with Company and provide to Company the assistance
necessary to further develop the Venture-Hypercom contract manufacturing
relationship (the “Services”), as requested by the Board of Directors of
Company.
     2. Confidentiality and Non-Disclosure. Consultant acknowledges and agrees
that information furnished to Consultant is subject to all of the terms and
provisions of the Hypercom Employee Non-Disclosure Agreement previously executed
by Consultant and which is attached as Exhibit A to the Separation Agreement to
the same extent as if Consultant continued in the employ of Company for purposes
of the Non-Disclosure Agreement.
     3. Term. This Agreement shall become effective on Consultant’s Resignation
Date as such term is defined in the Separation Agreement (the “Effective Date”)
and shall remain in full force and effect for a period of 90 days immediately
following the Effective Date (the “Term”) at which time this Agreement and
Consultant’s obligation to provide services hereunder will terminate
automatically, unless Company and Consultant agree to extend the term of this
Agreement. Consultant and Company agree that the covenants and obligations set
forth in Sections 2, 8 and 9 hereof shall survive the termination of this
Agreement.
     4. Compensation. In consideration for Consultant’s performance of the
Services hereunder, Company shall pay to Consultant the following:
          (a) A lump sum payment equal to $50,000 due and payable on
November 15, 2007.

 

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          (b) A monthly fee equal to $37,500 for each month during which this
Agreement is in effect, and for each month thereafter that Company and
Consultant agree to extend the term of this Agreement. Such fee will be paid in
accordance with Company’s regular bi-weekly payroll schedule.
          (c) $33,334 relating to the advancement of the Hypercom-Venture
Corporation Ltd. relationship, to be earned as follows:
               (1) $16,667 based upon completion and execution of a Management
Services Agreement with Venture for the management of the Hypercom Shenzhen
facility by Venture on or before November 15, 2007, as approved by the Hypercom
Chief Financial Officer and the Chairman of the Hypercom Board of Directors.
This amount will be paid to Consultant within 30 days following the approval of
the Management Services Agreement referenced herein.
               (2) $16,667 based upon completion of an agreement with Venture
relating to the top level assembly of Hypercom products on or before
November 15, 2007, as approved by the Hypercom Chief Financial Officer and the
Chairman of the Hypercom Board of Directors. If this agreement is not approved
on or before November 15, 2007, Company will specifically identify the reasons
for withholding its approval, and Consultant will have an additional 30 days
from receipt of the statement of such reasons within which to obtain the
approval. This amount will be paid to Consultant within 30 days following the
approval of the referenced agreement.
          (d) $33,333 if the Hypercom standard cost board-level bill of
materials at March 31, 2007 is reduced by 5% or more for the three highest
volume board configurations of the T2100, T7Plus and S9/P1300 combined, as
compared with the board-level bill of materials for the identical board
configurations as of March 31, 2008. The combined standard cost board-level bill
of materials for the three highest volume board configurations of the T2100,
T7Plus and S9/P1300 as of March 31, 2007, was $122.08. This sum represents the
total direct material, material overhead and outside processing for four boards,
two for the T2100 and one each for the T7Plus and S9/P1300, currently bearing
Hypercom part numbers 030013-005 ($47.99), 030034-003 ($8.66), 030473-119
($46.26) and 030516-012 ($19.17). The combined board-level bill of materials at
March 31, 2008 will be measured in an identical fashion to that of March 31,
2007. Tom Liguori or Bob Vreeland shall confirm that this is the case. This
amount will be paid to Consultant on or before May 1, 2008.
          (e) For each $1,000,000 that Company net inventory publicly reported
in its December 31, 2007 financial statements is lower than the net inventory
publicly reported in its June 30, 2007 financial statements, Consultant shall
receive $4,762, not to exceed a total payment of $33,333, provided that
(i) inventory that is agreed to be sold by Consultant below standard cost during
this period must have the authorization of Tom Liguori or Philippe Tartavull,
(ii) inventory that is agreed to be sold by Consultant direct to a customer must
have the authorization of Tom Liguori or Philippe Tartavull and (iii) to the
extent that inventory reserve charges during the six month period exceed
$1,000,000, the net inventory publicly reported as of December 31, 2007 will be
increased by the amount of the reserve charges that are in excess of $1,000,000
for the purpose of measuring performance to the target. For each

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fraction of a $1,000,000 dollars by which such net inventory is lower as
described in this Section 4(e), Consultant will receive a pro rata portion of
the $4,762 per million dollars. Any amounts earned will be paid to Consultant on
or before February 1, 2008.
          (f) In order to assure compliance with the short-term deferral
exception to Section 409A of the Internal Revenue Code of 1986 (“Section 409A”),
in no event will any payment called for by paragraphs (b), (c), (d) or (e) above
be made later than March 15 of the tax year following the tax year in which
Consultant becomes entitled to each payment as set forth in paragraphs (b), (c),
(d) and (e). If Company fails to make a payment, either intentionally or
unintentionally, within the period required by these paragraphs, but the payment
is made within the same calendar year, it will be treated as made within the
period required by this paragraph pursuant to Treas. Reg. § 1.409A-3(d). In
addition, if a payment is not made due to a dispute between Company and
Consultant, payments may be delayed in accordance with Treas. Reg. §
1.409A-3(g).
          (g) Except as provided in this Section 4 and in Section 5, Consultant
shall not be entitled to any additional compensation in connection with
performance of the Services hereunder.
     5. Reimbursement of Expenses; Access to Company Services. Consultant will
be reimbursed by Company for all expenses incurred by Consultant that are
directly related to the performance of the Services, including reasonable and
authorized travel, meals, and other incidental business expenses all in
accordance with established Company policies. Consultant must receive approval
from Daniel D. Diethelm, the Chairman of Company’s Board of Directors (“Company
Chairman”), prior to incurring any travel expenses under the terms of this
Agreement. Consultant must furnish to Company adequate records and other
documentary evidence required by Company policy in order to receive
reimbursement for any expenses incurred by Consultant. In addition, Company will
provide to Consultant access to a Company e-mail account and to any
administrative and travel assistance necessary for the performance of the
Services throughout the Term of this Agreement and any agreed upon extensions
thereto.
     6. Communication with Company Board of Directors. From and after
Consultant’s Resignation Date, Consultant agrees that Consultant will
communicate with the Board of Directors of Company principally through the
Company Chairman, but Consultant also will be reasonably available to
communicate with other members of the Board of Directors of Company.
     7. Independent Contractor. The relationship of Consultant to Company is
that of an independent contractor, and nothing in this Agreement will be
construed or deemed to create any other relationship. Without limiting the
foregoing, the relationship between the parties will not be considered to be
that of an employer-employee, joint venture, or partnership. As an independent
contractor, Consultant has the sole responsibility for paying taxes, workers
compensation, employee benefits (if any), and all similar obligations.
Consultant shall perform the Services in the way that Consultant deems the most
feasible or desirable in order to perform and complete the Services in the most
efficient manner possible. Consultant shall be entirely and solely responsible
for his acts while engaged in the performance of the Services, and Consultant
shall not hold himself out as an employee of Company. During the term of this
Agreement,

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Consultant is not entitled to any employee benefits from Company since
Consultant no longer is an employee of Company.
     8. Taxes. Consultant shall be liable for and shall pay, and shall
indemnify, defend and hold harmless the Company from, all taxes (including but
not limited to gross receipts, compensation, use and sales taxes) assessed or
payable on all compensation and other monies paid to Consultant pursuant to this
Agreement.
     9. Non-Competition Covenant.
          (a) Competition. Consultant agrees that, during the “Restriction
Period” and in the “Restricted Area,” Consultant will not, without the prior
written consent of the Company, which shall not be unreasonably withheld, engage
in, accept employment from, perform services for, or become affiliated with or
connected with, either directly or indirectly, any person, firm, corporation,
partnership or other business entity that engages in the design, manufacture,
marketing or sale of electronic payment solutions, including point of sale/point
of transaction terminals, peripheral devices, transaction networking devices,
transaction management systems and application software and related support and
services currently offered, sold or under development by Company. Consultant
agrees that if Consultant competes with Company, Company may suffer irreparable
harm and damage.
          (b) Restricted Area. For this purpose, the “Restricted Area” means the
United States. If a court of competent jurisdiction determines that this is a
larger area than necessary to protect the Company’s business interests, the
parties agree that the Restricted Area will be the largest of the following
areas that the court determines to be reasonable: the state of Arizona, the
100-mile radius of the office maintained by Company where Consultant spent most
of his time while employed by Company or during the Term of this Agreement and
any extensions thereto, the 50-mile radius of the office maintained by Company
where Consultant spent most of his time while employed by Company or during the
Term of this Agreement and any extensions thereto, the 25-mile radius of the
office maintained by Company where Consultant spent most of his time while
employed by Company or during the Term of this Agreement and any extensions
thereto, or the 10-mile radius of the office maintained by Company where
Consultant spent most of his time while employed by Company during the Term of
this Agreement and any extensions thereto.
          (c) Restriction Period. For this purpose, the “Restriction Period”
begins on the Effective Date and ends at the end of the 12th month following the
end of the Term and any extensions thereto, or if a court of competent
jurisdiction concludes that 12 months is longer than necessary to protect
Company’s business interests, then the parties agree that the restriction period
will end at the end of the longest of the following number of months that the
court determines to be reasonable: 9, 8, 7, 6, 5, 4, 3, 2 or 1.
          (d) Breach of Covenants. If Consultant breaches the covenant not to
compete contained in paragraph (a), Consultant agrees that in addition to (and
without limiting) any other remedy or right Company may have, Company will have
the right to an injunction against Consultant issued by a court of competent
jurisdiction enjoining such breach. Consultant and Company agree that the
foregoing remedy is reasonable and necessary for the protection of

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Company’s goodwill and recognize that in the event of a breach of the covenant
not to compete, it will be impossible to ascertain or estimate the entire or
exact cost, damage or injury Company may sustain by reason of such breach.
     10. Conflicts Of Interest. Consultant agrees that, during the term of this
Agreement, Consultant will not, without the prior written consent of Company,
engage in, accept employment from, perform services for, or become affiliated
with or connected with, either directly or indirectly, any person, firm,
corporation, partnership or other business entity which is doing business with
Company relative to any project worked on by Consultant under this Agreement,
and further agrees that Consultant will avoid all circumstances and actions
which would place Consultant in a position of divided loyalty with respect to
Consultant’s obligations in connection with this Agreement.
     11. Compliance with Laws. Consultant shall perform and expressly warrants
that he shall conduct perform the Services required by this Agreement in
accordance with currently approved or accepted methods or practices in the
industry for the nature of the services involved and in accordance with all
applicable federal, state and local laws, statutes, regulations, rules and
ordinances, as amended from time to time.
     12. Prohibition Against Assignment. It is understood and agreed that
Company has chosen Consultant based on Consultant’s qualifications to perform
the Services. Accordingly, Consultant shall not assign, transfer, subcontract or
otherwise dispose of any of his obligations pursuant to this Agreement. However,
in the event of Consultant’s death during the Term and any extensions thereto,
all amounts due hereunder including those amounts determined to be earned under
Sections 4(c), (d) or (e) shall be paid to Consultant’s spouse or to her estate
should she pre-decease Consultant. The parties agree that Consultant’s spouse is
a permitted assignee under Section 17 hereof, for the purpose of receiving such
payments as may be due Consultant under this Agreement.
     13. Notices. Except as expressly provided elsewhere in this Agreement, any
formal notice, demand, or request provided for in this Agreement shall be in
writing and shall be deemed properly made if personally delivered, or delivered
by courier, or sent by registered or certified mail, postage prepaid, or by
facsimile transmission and shall be deemed received, if personally delivered or
delivered by courier, upon delivery, and if mailed, on the third day following
deposit in the U.S. mails, and if sent by facsimile, upon transmission. All
communications made under this Section 13 shall be sent to Consultant at the
most recent address for Consultant on file with Company and to Company at
Company’s main office address and facsimile number. The parties may change their
addresses, contact persons, or facsimile numbers to which notices are to be sent
by providing the other party with notice of such changes in the manner provided
in this Section 13. Nothing contained herein shall preclude the transmission of
routine invoices or correspondence, messages and information between the parties
by a representative of a party in the ordinary course of performing their
respective obligations under this Agreement.
     14. No Waiver. No term, covenant or condition of this Agreement or any
breach thereof shall be deemed waived, unless such waiver shall be in writing
and executed by the party

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claimed to have waived the same. The waiver of any breach by a party, whether
express or implied, shall not constitute a waiver of any subsequent breach.
     15. Severability. Subject to Section 9 above, if a court or regulatory
agency having jurisdiction over the parties determines that a term of this
Agreement, or any part of it, is void, illegal or unenforceable, said term or
part shall be deemed to have been severed from this Agreement, and the remaining
terms, or parts thereof, shall be unaffected and shall be enforced to the
fullest extent allowed by law.
     16. Binding Effect. This Agreement and all its provisions shall inure to
the benefit of and be binding upon the parties, their successors, and permitted
assigns.
     17. Governing Law. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Arizona, without regard to its choice
of law provisions.
     18. Arbitration. Any controversy relating to this Agreement or relating to
the breach hereof will be settled by arbitration conducted in Phoenix, Arizona
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect. The award rendered by the arbitrator(s) will be
final and judgment upon the award rendered by the arbitrator(s) may be entered
upon it in any court having jurisdiction thereof. The arbitrator(s) will possess
the powers to issue mandatory orders and restraining orders in connection with
such arbitration. The expenses of the arbitration will be borne by the losing
party unless otherwise allocated by the arbitrator(s). This agreement to
arbitrate will be specifically enforceable under the prevailing arbitration law.
During the continuance of any arbitration proceedings, the parties will continue
to perform their respective obligations under this Agreement. Nothing in this
Agreement will preclude Company or any affiliate or successor from seeking
equitable relief, including injunction or specific performance, in any court
having jurisdiction, in connection with any obligations of confidentiality or
under a covenant not to compete.
     19. Entire Agreement. This Agreement, together with the Separation
Agreement executed concurrently herewith, represents the entire agreement and
understanding between Company and Consultant with respect to its subject matter
and supersedes any prior understandings, representations or agreements with
respect to the subject matter, whether verbal or written, prior to execution of
this Agreement.

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     In witness whereof, Consultant has signed this Agreement personally and
Company has caused this Agreement to be executed by its duly authorized
representative.

              HYPERCOM CORPORATION
 
       
 
  By   /s/ Daniel Diethelm
 
       
 
      Dan Diethelm, Chairman of the Board
 
            /s/ William Keiper           William Keiper

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