exv10w3



 





EXHIBIT
10.3








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.




 









 











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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