EX-10.1






HYPERCOM CORPORATION


2851 West Kathleen Road


Phoenix, Arizona 85053


Phone: 602.504.5000


Fax: 602.504.4655



January 16, 2007



Mr. Philippe Tartavull


3550 Surfwood Road


Malibu, California 90265




Re: Offer of Employment



Dear Philippe:



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




	1.	 	Position with the Company. Hypercom is pleased to offer you the position of
President of the Company, based at the Company’s headquarters in Phoenix, Arizona. You may be
called upon to serve in additional or other capacities from time-to-time during your tenure
with the Company. You will faithfully and diligently perform all lawful duties commensurate
with these positions, including those duties directed by the Company’s Chief Executive Officer
or his designees, or the Board of Directors of the Company (the “Board”).






	2.	 	Term. Your employment by the Company will be effective as of 12:01 a.m. on
February 6, 2007 and will terminate on February 5, 2010 (the “Term”), unless you and the
Company agree to renew your employment relationship.






	3.	 	Compensation. You will receive the following compensation for your services:






	 	(a)	 	You will receive a base salary of $350,000.00 per year, which may be adjusted
upward from time-to-time (the “Base Salary”) at the discretion of the Board or downward
in the event of a Company-wide downward compensation adjustment. The first potential
adjustment in salary will be February 6, 2008, subject to the discretion of the Board.
The Base Salary will be paid in equal installments in accordance with the Company’s
salary payment policies in effect from time-to-time, and such salary payments will be
subject to the usual withholding for income tax and other customary deductions.






	 	(b)	 	Your target annual bonus compensation shall be one hundred percent (100%) of your
then-current Base Salary for each year during the term of this Agreement, if the Company
achieves the annual Performance Goals, as defined below, and as determined by the Board;
provided that you may be entitled to receive annual bonus compensation in an aggregate
amount up to one hundred and fifty percent (150%) of your then-current base salary for
each year during the term of this Agreement if the Board deems it consistent with the
achievement of the Performance Goals for such year. The Performance Goals, and the
percentage of bonus compensation tied to each, will be specifically defined by the Board
in its discretion, but will likely include some or all of the following: revenue
growth, gross margin, earnings per share, market share growth and development of the
organization (the “Performance Goals”). The determination as to whether the
Company has achieved the Performance Goals will be made by the Board in its discretion,
and the bonus will be paid to you within five (5) business days following such
determination.






	 	(c)	 	Effective upon your first day of employment (or the first day thereafter that the
Company’s common stock is traded on the New York Stock Exchange), the Board will grant
to you thirty-five thousand (35,000) shares of restricted common stock pursuant to the
Company’s Long-Term Incentive Plan and subject to the terms set forth in the Company’s
form restricted stock agreement. Such shares will be owned by you effective immediately
upon the date of the grant, provided, however, that if you are no longer employed by the
Company on February 6, 2008 for any reason other than your death, disability, or
termination of employment by the Company without Cause, or your resignation for Good
Reason, this grant may be forfeited upon the Board’s discretion and any taxes paid by
the Company on your behalf shall be repaid. You will agree to timely file an election
under Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”) to be
taxed on the entire value of the shares on the date of grant. Consequently, the Company
shall make an additional payment (the “Gross-up Payment”) to you equal to the
highest marginal applicable federal state and local taxes calculated on the total income
you are required to include on your federal and state income tax returns as a result of
filing this 83(b) election (but excluding the amount of income you will be required to
include as a result of the Gross-up Payment itself). Any Gross-up Payment to be paid
pursuant to this Agreement shall be timely withheld by the Company and paid over to the
applicable taxing authorities. The Company acknowledges that you currently are a
resident of California for state income tax purposes for purposes of this subsection
3(c) and any other appropriate provision of this Agreement.






	 	(d)	 	Effective upon your first day of employment (or the first day thereafter that the
Company’s common stock is traded on the New York Stock Exchange), the Board will grant
to you fifty thousand (50,000) shares of restricted common stock of the Company pursuant
to the Long-Term Incentive Plan (and the Company’s form restricted stock agreement)
restricted by achievement of the Performance Goals to be established by the Board for
fiscal years 2007 and 2008, as follows: (i) fifty percent (50%) of the restricted
common stock, or twenty-five thousand (25,000) shares of restricted common stock, will
vest based upon substantial achievement of 2007 Performance Goals as determined by the
Board; and (ii) the remaining fifty percent (50%) of the restricted common stock or
twenty-five thousand (25,000) shares of restricted common stock will vest based upon
substantial achievement of 2008 Performance Goals as determined by the Board. If either
or both of the 2007 or 2008 Performance Goals are not fully and completely achieved, the
proportion of the restricted common stock which shall vest pursuant to this subsection
3(d) shall be determined in the Board’s sole discretion taking into account the
Performance Goals achieved for such year, in both quantitative and qualitative degree.
The Company will also provide to you a Gross-up Payment in connection with the
restricted common stock grant (but not on the cash so paid) pursuant to this subsection
3(d).






	 	(e)	 	Effective upon your first day of employment (or the first day thereafter that the
Company’s common stock is traded on the New York Stock Exchange), the Board will grant
to you an option to purchase one-hundred thousand (100,000) shares of common stock of
the Company (the “Option”) pursuant to the Company’s Long-Term Incentive Plan
(and the Company’s form option agreement) with a per share exercise price equal to the
fair market value of the per share price of the common stock on the date of grant. The
Option shall vest and be fully exercisable on the first anniversary of your first day of
employment (or the first day thereafter that the Company’s common stock is traded on the
New York Stock Exchange), with respect to thirty-three and one-third percent (33.33%) of
the total number of shares subject to the Option. The remaining sixty-six and
two-thirds percent (66.67%) of the Option shall vest in equal monthly installments over
a period of twenty-four (24) months thereafter. The Option is intended to be treated as
an “incentive stock option” to the maximum extent permitted under the Internal Revenue
Code of 1986, as amended.






	 	(f)	 	You will be eligible, but not entitled, to receive additional grants of stock
options and restricted capital stock of the Company in such quantities and subject to
such conditions as the Board may determine in its sole and absolute discretion.






	 	(g)	 	The Company will provide you with housing reimbursement in connection with your
business travel to the Company’s headquarters in Phoenix in a reasonable amount to be
determined by the Board, provided, however, that such reimbursement will be in an amount
comparable to the cost of a standard room at the Sheraton Crescent Hotel located in
Phoenix, Arizona and shall only apply to housing costs incurred while residing in
Phoenix, Arizona on business.






	 	(h)	 	For each week during the term of this Agreement, the Company will provide you
with a reasonable allowance for one round-trip airline ticket from Los Angeles,
California to Phoenix, Arizona (or comparable destinations), and back, consistent with
the terms of the Company’s travel policies then in effect for executive officers. Upon
presentation of receipts, the Company also will reimburse you for all reasonable
expenses incurred by you in connection with your transportation to and from the airport
in Phoenix and to and from the airport in Los Angeles (consistent with the terms of the
Company’s travel policies then in effect for executive officers).






	 	(i)	 	In the event that you determine to move to Phoenix, Arizona from your current
residence, the Company will provide you with a moving package as set forth in a separate
letter provided to you. If you resign for any reason, except as a result of a Change of
Control as defined in the Definitions section, attached hereto, within twelve (12)
months of the date of reimbursement for the move, you must reimburse the Company the
full amount of the moving package granted pursuant to this section.






	 	(j)	 	You may participate in any pension or profit sharing plan, stock purchase plan,
group benefit plan, medical plan, and/or other benefit plans, either currently in effect
or as may be established from time to time by the Board, for which you as an officer of
the Company are, and remain, eligible to participate. (You acknowledge that you will
not be entitled to any benefits under any discretionary plan unless actually provided to
you in accordance with such plan.)






	 	(k)	 	You covenant and agree that, as soon as practicable but in no event more than
three (3) years from the date of this Agreement, you will beneficially own, hold and
retain shares of common stock of the Company equal in value to your Base Salary for such
given year (the “Minimum Ownership”); provided, however, that this covenant
shall not be construed to require or encourage you to purchase shares of the Company’s
common stock on the open market for the sole purpose of achieving the Minimum Ownership,
as such purposes are governed by the Company’s insider trader policy. You also covenant
and agree that you will not sell or dispose of, or cause anyone else to sell or dispose
of, any common stock of the Company that you have received (i) as a result of this
Agreement or (ii) pursuant to any other Company compensation, until and unless you have
achieved (and will continue to maintain following such sale or disposition) the Minimum
Ownership.






	 	(l)	 	You will be eligible for, but not entitled to, receive such other compensation as
may from time to time be granted to you by the Board in its sole and absolute
discretion, including additional bonuses approved by the Board or the Board’s
Compensation Committee.






	 	(m)	 	You will be permitted to take vacations and sick leave, in accordance with the
Company’s policies and procedures as in effect for officers of the Company.






	4.	 	Benefits and Employment Matters. The Company offers a comprehensive array of
employee benefit programs. Currently, those programs include paid time off (“PTO”), medical,
dental and vision care, paid holidays, disability insurance, life insurance, travel accident
insurance, 401(k) Plan, Hypercom Employee Stock Purchase Plan, and tuition reimbursement.
Details of these programs will be provided to you. Eligibility for Company benefit programs
may vary by employee status, length of service, and by the specific benefit program. Hypercom
reserves the right to modify, suspend or terminate its benefit programs in its sole
discretion.






	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.	 	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, (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 by any governmental
entity with any felony (excluding traffic violations) that is reasonably determined by
the Board to be true and to adversely reflect upon the Company’s standing in the
community, or (v) have engaged in gross misconduct or other material omissions that are
significantly detrimental to the well-being of the Company.






	7.	 	Death or Disability.






	 	(a)	 	Except as provided in this subsection 7(a), no salary or benefits shall be
payable under this Agreement following the date of your death. In the event of your
death, any Base Salary earned by you up to the date of your death, as well as any
unreimbursed expenses or Gross-up Payment, shall be paid to your estate or named
beneficiary within a reasonable time following your death. In addition, the title to
(i) such restricted common stock granted pursuant to subsection 3(c) hereof, and (ii)
any other restricted common stock not governed by a conflicting agreement or performance
requirements (including the restricted stock granted pursuant to subsection 3(d)
hereof), the vesting of which is contingent upon continued employment with the Company,
shall immediately pass to your estate or named beneficiary.






	 	(b)	 	If during the term of your employment, you become so disabled or incapacitated by
reason of any physical or mental illness or any substance or chemical dependency which
renders you unable to perform the services required of you pursuant to your employment
for a continuous period of three (3) months, then, at the option of the Board, your
employment will terminate at the end of such three (3) month period, provided that (i)
the Board exercises reasonable efforts to accommodate such disability in accordance with
the American with Disabilities Act, and (ii) during such period of disability,
incapacity or incapacity, you will be paid your Base Salary and expenses otherwise
payable to you.






	 	(c)	 	In the event of your death, for a period of twelve (12) months from the date of
death the Company will pay for COBRA benefits (or the equivalent) for your surviving
spouse and dependents covered by the Company’s group health plan at the time of your
death. In the event of your termination on account of disability, for a period of
twelve (12) months from the date of termination the Company will pay for COBRA benefits
or the equivalent for you, your spouse, and your dependents covered by the Company’s
group health plan at the time of termination.






	8.	 	Termination by the Company Other than for Cause or by You for Good Reason.






	 	(a)	 	In the event that you are terminated without Cause or you terminate your
employment for Good Reason within twelve (12) months from the effective date of this
Agreement, you will be entitled to an amount equal to one and one-half (1.5) years of
Base Salary, to be paid in the form of salary continuation at the normal payroll
intervals of the Company. In the event that you are terminated without Cause or you
terminate your employment for Good Reason after twelve (12) months from the effective
date of this Agreement, you will be entitled to an amount equal to one (1) year of Base
Salary, to be paid in the form of salary continuation at the normal payroll intervals of
the Company. Upon any termination without Cause or termination for Good Reason, all your
options to purchase common stock of the Company, the exercise price of which is less
than the then fair market value of such common stock upon the date of termination, shall
immediately vest (the “Vested Options”). You shall have the later of (i) ninety
(90) days from the date of your termination or (ii) the expiration date of such options
to exercise the Vested Options; provided, however, that if your termination without
Cause or termination for Good Reason and subsequent acceleration of all of a portion of
your Vested Options under this subsection 8(a) were to occur pursuant to, or immediately
prior to, a Change in Control and, would cause a charge to the Company’s earnings, then
the Board shall have discretion to offer you a consulting position in lieu of
accelerating your Vested Options during which consulting period your options would
continue to vest as if you had not been terminated, as deemed appropriate by the Board.






	 	(b)	 	For a period of twelve (12) months from the date of your termination without
Cause or your resignation for Good Reason, the Company will pay for the COBRA benefits
available to you, your spouse and your dependents covered by the Company’s group health
plan at the time of termination. For purposes of this Agreement, the date of
termination of employment without Cause shall be the date specified in a written notice
of termination or resignation.






The payments pursuant to this provision shall be subject to the provisions set forth in
Section 19.




	9.	 	Resignation Following Change of Control.






If, after a Change of Control, as defined in the Definition section, attached hereto, you
resign for Good Reason within the 60-day period following the last event that constitutes
Good Reason, and the Change of Control occurs within thirty-six (36) months from the
effective date of this Agreement, you will receive:




	 	(a)	 	Payment equal to one and one-half (1.5) years Base Salary in a lump sum upon
effectiveness of the release contemplated by Paragraph 18 below; and






	 	(b)	 	For a period of eighteen (18) months from the date of your termination, the
Company will pay for the COBRA benefits due you.






In the event that you resign for Good Reason, following a Change of Control, and the Change
of Control occurs after thirty six (36) months from the effective date of this Agreement, you
will receive:




	 	(a)	 	Payment equal to one (1) year Base Salary in a lump sum upon effectiveness of the
release contemplated by Paragraph 18 below; and






	 	(b)	 	For a period of eighteen (18) months from the date of your termination, the
Company will pay for the COBRA benefits due you.






The payments pursuant to this provision shall be subject to the provisions set forth in
Section 19.




	10.	 	Post-Employment Obligations. Your employment is expressly contingent on you
executing and delivering to the Company the Hypercom Confidentiality, Non-Solicitation, &
Non-Compete Agreement, attached hereto as Exhibit A






	11.	 	Representations. You acknowledge that this offer of employment is based on, and the
Company is relying upon, your representation that: (i) you are not prohibited from contacting
the Company or entering into any employment arrangement with the Company; (ii) you rightfully
possess any and all information that has been discussed or may be discussed with the Company
in the future; (iii) no other person or entity has any interest in such information, arising
out of any current or previous employment relationship or otherwise; and (iv) you have the
lawful right to disclose such information to the Company, that such disclosure or any
employment arrangement with the Company, will not violate the terms of any employment,
non-compete, non-solicitation, confidentiality or non-disclosure agreement, or any other
similar agreement, contract, law, code, regulation, or other rights, obligations or
prohibitions applicable to such information, and that such information could not be considered
in any way a trade secret in any jurisdiction.






	12.	 	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 12, and any purported assignment in violation thereof will be null
and void. Subject to the provisions of Section 9, 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 the terms of this Agreement with such business substituted for
the Company as the employer.






	13.	 	Board Service. Your acceptance of this offer of employment will be received as your
resignation from the Board of Directors of the Company. In addition, you agree to not
participate as a member of any Board of Directors for the first twelve (12) months of your
employment by the Company. Thereafter, your service as a member of any Board of Directors
other than that of the Company will require the prior written consent of a majority of the
members of the Board of the Company. The Board shall not unreasonably withhold its consent.






	14.	 	Notices. Any notice, election or communication to be given hereunder 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:



Philippe Tartavull



3550 Surfwood Road



Malibu, California 90265




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.




	15.	 	Entire Agreement. Except for the Hypercom Employee Confidentiality, Non-Solicitation
& Non-Compete Agreement attached hereto as Exhibit A and the Company’s policies and procedures
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.






	16.	 	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.






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






	18.	 	Withholding and Release. You hereby acknowledge that you have carefully reviewed the
provisions of this Agreement and agree that the provisions are fair and equitable, and that
they are necessary and reasonable in order to protect the Company and its affiliates in the
conduct of their business. 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 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) any continuing obligations required by law or provided herein,
and (ii) for any continuing obligations of indemnification due you as an officer (or a former
officer).






	19.	 	Code Section 409A. If any payments under this Agreement are subject to the
provisions of Code Section 409A, it is intended that the Agreement will comply fully with and
meet all the requirements of Code Section 409A. Consequently, any payment under this
Agreement shall be subject to the provisions of this Section 19. If you are a “Specified
Employee” of the Company for purposes of Code Section 409A at the time of a payment event set
forth in Sections 8 or 9 then no payments pursuant to those Sections shall be made to you by
the Company until the amount of time has passed that is necessary to avoid incurring excise
taxes under Code Section 409A. Should this Section 19 result in a delay of payments to you,
on the first day any such payments may be made without incurring a penalty pursuant to Section
409A (the “409A Payment Date”), the Company shall begin to make such payments as described in
Sections 8 or 9, provided that any amounts that would have been payable earlier but for the
application of this Section 19, shall be paid in lump-sum on the 409A Payment Date along with
accrued interest at the rate of interest announced by Bank of America, Arizona from time to
time as its prime rate from the date that payments to you should have been made under this
Agreement. The balance of such payments shall be payable in accordance with regular payroll
timing and the COBRA premiums shall be reimbursed monthly. For purposes of this provision,
the term Specified Employee shall have the meaning set forth in Code Section 409A(2)(B)(i) or
any successor provision and the treasury regulations and rulings issued hereunder.





We look forward to working with you to fully enable your and our shareholders’ mutual success.



Sincerely,



/s/ William Keiper


William Keiper

Chief Executive Officer



Accepted by:



/s/ Philippe Tartavull


Philippe Tartavull



Date of Acceptance:


January 16, 2007



1




Definitions




“Change of Control” means and includes each of the following:



(1) the acquisition of beneficial ownership, directly or indirectly, of securities having 50%
or more of the combined voting power of the Company’s then outstanding securities by any “Unrelated
Person” or “Unrelated Persons” acting in concert with one another either at one time or over a
series of purchases. For purposes of this definition, the term “Person” shall mean and include any
individual, partnership, joint venture, association, trust, corporation, or other entity (including
a “group” as referred to in Section 13(d)(3) of the Securities Exchange Act of 1934. For purposes
of this Section, the term “Unrelated Person” shall mean and include any Person other than the
Company, or an employee benefit plan of the Company, or any officer, director, or 10% or more
shareholder of the Company as of the date of this Agreement



(2) the consummation of any consolidation or merger of the Company in which the Company is not
the continuing or surviving entity, or pursuant to which common stock would be converted into cash,
securities or other property, other than a merger of the Company in which the holders of the
Company’s common stock immediately prior to the merger have at least 50% ownership of beneficial
interest of common stock or other voting securities of the surviving entity immediately after the
merger;



(3) the consummation of any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of assets or earning power aggregating more than 50% of the assets
or earning power of the Company and its subsidiaries (taken as a whole), other than pursuant to a
sale-leaseback, structured finance or other form of financing transaction;



(4) the stockholders of the Company shall approve any plan or proposal for liquidation or
dissolution of the Company; or



(5) during any period of two consecutive years, individuals who at the beginning of such
period constituted a majority of the Board shall fail to constitute a majority thereof, unless the
election, or the nomination for election by the Company’s stockholders, of each new director was
approved by a vote of at least two-thirds of the directors then still in office who were directors
at the beginning of the period.



“Good Reason” means, without your consent:



(1) you suffer a reduction in position or a material change in your functions, duties or
responsibilities;



(2) your Base Salary is reduced by the Company or there is a material reduction in your
current benefits (other than a reduction in the benefits as part of overall reduction applicable to
all or substantially all other officers); or



(3) you are required by the Company to reside other than in Maricopa County, Arizona, or in
Malibu, California.




2