March 21, 2005

Mr. Grant Lyon

Re: Employment Agreement

Dear Grant:

Upon execution by you, this letter will constitute your employment agreement
(this “Agreement”) with Hypercom Corporation (the “Company”).

  1.   Term. This Agreement will be effective as of March 22, 2005 and will
terminate on September 22, 2005, unless mutually extended by the parties in
writing.

  2.   Position with the Company. During the term of this Agreement, you will
serve as interim Chief Financial Officer of the Company. You will faithfully and
diligently perform all duties commensurate with this position, including those
duties directed by the Company’s Board of Directors (the “Board”), as well as
those set forth in the Company’s Bylaws that relate to such position. It is
expected that you will devote a majority of your weekly working hours to this
position, with you and the Company having estimated that you will spend
approximately 30 hours per week on the Company’s business. You will report
directly to the Chief Executive Officer of the Company.

  3.   Compensation. You will receive a salary of $35,000 per month. Your salary
will be paid in equal installments in accordance with the Company’s salary
payment policies as in effect from time to time, and such salary payments will
be subject to the usual withholding for federal and state income taxes and FICA.
You will not participate in any bonus plan of the Company.

  4.   Vacation. With the concurrence of the Chief Executive Officer, you will
be permitted to take vacations and sick leave.

  5.   Business Expenses. The Company will pay or reimburse you for all ordinary
and necessary business expenses incurred or paid by you in furtherance of the
Company’s business, in accordance with the Company’s policies and procedures.

  6.   No Employee Benefits. Notwithstanding anything to the contrary in this
Agreement, the Company will not provide, and you will not be entitled to
receive, any employee benefits, including, without limitation, medical benefits,
retirement benefits or other fringe benefits (except as provided in Paragraphs 4
and 5 above) or any options to purchase the Company’s stock or other equity
grants. Without limiting the generality of the preceding sentence, the Company
will not be obligated to provide any employee benefits to you despite your
eligibility to participate in any of the Company’s employee benefit programs,
whether such participation would be of little or no additional cost to the
Company. Except as provided in Paragraphs 4 and 5 above, you hereby acknowledge
and agree to not participate in any of the Company’s employee benefit programs
and agree to execute any and all documents and take such further action
necessary to effectuate the intent of the parties under this Paragraph 6.
However, as a Company executive officer, you will be covered by the Company’s
director and officer liability insurance policies.

7. Termination for Cause or by Voluntary Resignation.

  (a)   The Company may terminate you for Cause, as defined below. Upon any
termination for Cause, or in the event that you voluntarily resign from the
Company, you will be entitled to receive only that compensation due you through
the date of termination or resignation, as the case may be.

  (b)   For purposes of this Agreement, “Cause” means if the Board, in its
reasonable and good faith discretion, determines that you (i) have developed or
pursued interests substantially adverse to the Company, (ii) have materially
breached any employment or confidentiality agreement or otherwise failed to
satisfactorily discharge your duties, (iii) have not devoted a majority of your
business time, effort and attention to the affairs of the Company (or such
lesser amount as has been agreed to in writing by the Company), (iv) are charged
with or convicted of a felony, or (v) have engaged in activities or omissions
that are detrimental to the well-being of the Company.

8. Death or Disability.

  (a)   If during the term of this Agreement you die, then this Agreement will
terminate and your estate will be entitled to receive the compensation due you
through September 22, 2005 (or the date of your death if this Agreement is
mutually extended by the parties past September 22, 2005).

  (b)   If during the term of this Agreement you become so disabled or
incapacitated by reason of any physical or mental illness or any drug or alcohol
addiction so as to be unable to perform the services required of you pursuant to
this Agreement for a continuous period of one month, then, at the option of the
Company, this Agreement will terminate at the end of such one month period,
provided that during such period of disability or incapacity, you will be paid
the full salary and expenses otherwise payable to you.

  9.   Termination by the Company Other than for Cause. In the event that you
are terminated without Cause, or in the event a new Chief Financial Officer is
hired by the Company, you will be entitled to receive the compensation due you
through September 22, 2005 (or the date of termination if this Agreement is
mutually extended by the parties past September 22, 2005) upon effectiveness of
the release contemplated by Paragraph 16 below.

  10.   Confidential Information and Non-Disclosure. You hereby agree to execute
and deliver to the Company the Hypercom Employee Non-Disclosure Agreement
attached hereto as Exhibit A.

  11.   Personal Rights and Obligations. This Agreement and all rights and
obligations hereunder are personal and will not be assignable by either you or
the Company except as provided in this Paragraph 11, and any purported
assignment in violation thereof will be null and void. Any person, firm or
corporation succeeding to the business of the Company by merger, consolidation,
purchase of assets or otherwise will assume by contract or operation of law the
obligations of the Company hereunder and in such a case you will continue to
honor this Agreement with such business substituted for the Company as the
employer.

  12.   Notices. Any notice, election or communication to be given under this
Agreement will be in writing and delivered in person or deposited, certified or
registered, in the United States mail, postage prepaid, addressed as follows:

If to the Company:

Hypercom Corporation
2851 West Kathleen Road
Phoenix, Arizona 85053
Attn: General Counsel

If to you:
Grant Lyon

or to such other addresses as the Company or you may from time to time designate
by notice hereunder. Notices will be effective upon delivery in person or upon
receipt of any facsimile or e-mail, or at midnight on the fourth business day
after the date of mailing, if mailed.

  13.   Entire Agreement. Except for the Hypercom Employee Non-Disclosure
Agreement attached hereto as Exhibit A to which you are subject, this Agreement
constitutes and embodies the full and complete understanding and agreement of
the Company and you with respect to your employment by the Company and
supersedes all prior understandings or agreements whether oral or in writing.
This Agreement may be amended only by a writing signed by you and the Company.
This Agreement may be executed in any number of counterparts, each of which will
be considered a duplicate original.

  14.   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 the 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.

  15.   Governing Law. This Agreement will be governed by and interpreted in
accordance with the laws of the State of Arizona.

  16.   Withholding and Release. You acknowledge and agree that payments made to
you hereunder may be subject to withholding. You further acknowledge and agree
that payment of any compensation to be provided to you under this Agreement
following any termination of your employment is subject to your compliance with
any reasonable and lawful policies or procedures of the Company relating to
employee severances, including the execution and delivery by you of a release
reasonably satisfactory to the Company of any and all claims that you may have
against the Company or related persons, except for (i) the continuing
obligations provided herein, and (ii) for any continuing obligations of
indemnification due you as an officer (or a former officer).

Very truly yours,

/s/ C. S. Alexander

      Christopher S. Alexander
Chief Executive Officer

ACCEPTED:

/s/ Grant Lyon
Grant Lyon

Date: March 21, 2005