Exhibit 10.1
**AMENDED AND RESTATED HYPERCOM CORPORATION**
**1997 EMPLOYEE STOCK PURCHASE PLAN**
(As amended, effective as of April 1, 2004)
          1. PURPOSE. The purpose of this 1997 Employee Stock Purchase Plan (the“Plan”) is to encourage stock ownership by employees of Hypercom Corporation(the “Company”) and its Subsidiaries and thereby provide employees with anincentive to contribute to the profitability and success of the Company. ThePlan is intended to qualify as an “employee stock purchase plan” under Section423 of the Code and will be maintained for the exclusive benefit of eligibleemployees of the Company and its Subsidiaries.
          2. DEFINITIONS. For purposes of the Plan, in addition to the termsdefined in Section 1, terms are defined as set forth below:
     (a) “Board” means the Board of Directors of the Company.
     (b) “Cash Account” means the account maintained on behalf of the Participantby either by the Company or the Custodian for the purpose of holding cashcontributions pending investment in Stock.
     (c) “Code” means the Internal Revenue Code of 1986, as amended.
     (d) “Custodian” means Fidelity Investments or the successor thereto as may beappointed by the Board.
     (e) “Earnings” means a Participant’s salary or wages for services performedfor the Company and its Subsidiaries and received by a Participant forservices rendered during a specified pay period.
     (f) “Enrollment Period” means the first 15 calendar days of the last month ofeach Offering Period.
     (g) “Fair Market Value” means the fair market value of the Stock determinedby such methods or procedures as may be established from time to time bythe Board in good faith, or if the Company’s Stock is publicly traded, theclosing price of the Stock on the relevant date as reported on the NewYork Stock Exchange (or any national securities exchange or quotationsystem on which the Stock is then listed), or if there were sales on thatdate the closing price on the next preceding date for which a closingprice was reported.
     (h) “Offering Period” means the period beginning January 1, 2000, and everythree months thereafter.
     (i) “Participant” means an employee of the Company or a Subsidiary who isparticipating in the Plan.
 

 

     (j) “Purchase Date” means the last day of each Offering Period or the nextpreceding day on which a trading price for the Company’s Stock is reportedif the last day of any Offering Period is a day on which the Company’sStock is not traded.
     (k) “Purchase Right” means a Participant’s option to purchase shares which isdeemed to be outstanding during a Offering Period. A Purchase Rightrepresents an “option” as such term is used under Section 423 of the Code.
     (l) “Stock” means the common stock of the Company.
     (m) “Stock Account” means the account maintained on behalf of the Participantby the Custodian for the purpose of holding Stock acquired upon investmentunder the Plan.
     (n) “Subsidiary” means any corporation (other than the Company) in anunbroken chain of corporations beginning with the Company if each of thecorporations (other than the last corporation in the unbroken chain) ownsstock possessing 50% or more of the total combined voting power of allclasses of stock in one of the other corporations in the chain as setforth in Code Section 424(f).
          3. ADMINISTRATION.
     (a) Board Administration. The Plan will be administered by the Board. TheBoard may delegate its administrative duties and authority (other thanauthority to amend the Plan) to any Board committee or to any officers oremployees or committee thereof as the Board may designate (in which casereferences to the Board will be deemed to mean the administrator to whichsuch duties and authority have been delegated). The Board will have fullauthority to adopt, amend, suspend, waive, and rescind such rules andregulations and appoint such agents as it may deem necessary or advisableto administer the Plan, to correct any defect or supply any omission orreconcile any inconsistency in the Plan and to construe and interpret thePlan and rules and regulations thereunder, to furnish to the Custodiansuch information as the Custodian may require, and to make all otherdecisions and determinations under the Plan (including determinationsrelating to eligibility). No person acting in connection with theadministration of the Plan will, in that capacity, participate in decidingany matter relating to his or her participation in the Plan.
     (b) The Custodian. The Custodian will act as custodian under the Plan, andwill perform such duties as are set forth in the Plan and in any agreementbetween the Company and the Custodian. The Custodian will establish andmaintain, as agent for Participants, Cash and Stock Accounts and any othersubaccounts as may be necessary or desirable for administration of thePlan.
     (c) Waivers. The Board may waive or modify any requirement that a notice orelection be made or filed under the Plan a specified period in advance inan individual case or by adopting a rule or regulation under the Plan,without amending the Plan.
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     (d) Other Administrative Provisions. The Company will furnish informationfrom its records as directed by the Board, and such records, including aParticipant’s Earnings, will be conclusive on all persons unlessdetermined by the Board to be incorrect. Each Participant and other personclaiming benefits under the Plan must furnish to the Company in writing anup-to-date mailing address and any other information as the Board orCustodian may reasonably request. Any communication, statement, or noticemailed or delivered (by electronic means or otherwise) to any suchParticipant or other person at the last mailing or electronic addressfiled with the Company will be deemed sufficiently given when mailed ordelivered and will be binding upon the named recipient. The Plan will beadministered on a reasonable and nondiscriminatory basis and uniform ruleswill apply to all persons similarly situated. All Participants will haveequal rights and privileges (subject to the terms of the Plan) withrespect to Purchase Right outstanding during any given Offering Period.
     4. STOCK SUBJECT TO PLAN. Subject to adjustment as provided below, thetotal number of shares of Stock reserved and available for issuance or whichmay be otherwise acquired upon exerciseof Purchase Rights under the Plan will be 625,000. Any shares of Stockdelivered by the Company under the Plan may consist, in whole or in part, ofauthorized and unissued shares or treasury shares. The number and kind of suchshares of Stock subject to the Plan will be proportionately adjusted, asdetermined by the Board, in the event of any extraordinary dividend or otherdistribution, recapitalization, forward or reverse split, reorganization,merger, consolidation, spin-off, combination, repurchase, share exchange, orother similar corporate transaction or event affecting the Stock.
     5. ENROLLMENT AND CONTRIBUTIONS.
     (a) Eligibility. An employee of the Company, or a Subsidiary that haselected with the Company’s consent to participate in the Plan, may beenrolled in the Plan for any Offering Period if such employee is employedby the Company or a Subsidiary on or before the first day of theEnrollment Period, unless one of the following applies to the employee:
     (i) Such person is customarily employed by the Company or a Subsidiary for 20hours or less a week or for not more than five months in any calendaryear; or
     (ii) Such person would, immediately upon enrollment, be deemed to own, forpurposes of Section 423(b)(3) of the Code, an aggregate of five percent ormore of the total combined voting power or value of all outstanding sharesof all classes of the Company or any Subsidiary.
The Company will notify an employee of the date as of which he or she iseligible to enroll in the Plan, and will make available to each eligibleemployee the necessary enrollment forms or means with which to enroll in thePlan. Notwithstanding the above, any individual who is employed by the Companyor a Subsidiary and who is not a U.S. citizen and does not reside in the U.S.(“Nonresident Alien”) is not eligible to participate in the Plan if the laws ofthe country in which the Nonresident Alien resides make the offer to purchaseStock or the delivery of Stock under the
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Plan impractical. Additionally, theoffer to purchase Stock and the delivery of Stock under the Plan is effectivefor any employee of the Company or a Subsidiary who is a Nonresident Alien onlyafter the Company has complied with the applicable laws of the country in whichthe Nonresident Alien resides.
     (b) Initial Enrollment. An employee who is eligible under Section 5(a) (orwho will become eligible on or before a given Enrollment Period) may,after receiving current information about the Plan, initially enroll inthe Plan pursuant to such procedures as established by the Board or itsdesignee. To be effective for any Offering Period, an eligible employeemust enroll during the Enrollment Period immediately preceding suchOffering Period.
     (c) Automatic Re-enrollment for Subsequent Offering Periods. A Participantwhose enrollment in, and payroll contributions under, the Plan continuesthroughout a Offering Period will automatically be re-enrolled in the Planfor the next Offering Period unless (i) the Participant terminatesenrollment before the next Offering Period in accordance with Section7(a), or (ii) on the last day of the relevant Enrollment Period he or sheis ineligible to participate under Section 5(a). The initial rate ofpayroll contributions for a Participant who is automatically re-enrolledfor a Offering Period will be the same as the rate of payroll contributionin effect at the end of the preceding Offering Period, unless theParticipant properly changes such payroll contribution rate during theEnrollment Period immediately preceding such Offering Period.
     (d) Payroll Contributions. A Participant will make contributions under thePlan by means of payroll deductions from each payroll period which endsduring the Offering Period, at the rate elected by the Participant duringthe Enrollment Period immediately preceding such Offering Period (exceptthat such rate may be changed during the Offering Period to the extentpermitted below). The rate of payroll contributions elected by aParticipant may not be less than two percent (2%) nor more than tenpercent (10%) of the Participant’s Earnings for each payroll period, andonly whole percentages may be elected; provided, however, that the Boardmay specify a lower minimum rate and higher maximum rate, subject toSection 8(c). Notwithstanding the above, a Participant’s payrollcontributions will be adjusted downward by the Company as necessary toensure that the limit on the amount of Stock purchased with respect to aOffering Period set forth in Section 6(a)(iii) is not exceeded. AParticipant may elect to increase, decrease, or discontinue payrollcontributions for a future Offering Period pursuant to such procedures asestablished by the Board or its designee during the Enrollment Periodimmediately preceding such Offering Period. In addition, a Participant mayelect to decrease or discontinue payroll contributions during a OfferingPeriod pursuant to such procedures as established by the Board or itsdesignee, such change to be effective for the next payroll period afterthe Participant’s makes his or her election.
     (e) Crediting Payroll Contributions to Cash Accounts. All payrollcontributions by a Participant under the Plan will be credited to a CashAccount maintained either by the Company or by the Custodian on behalf ofthe Participant. The Company or the Custodian will credit payrollcontributions to each Participant’s Cash Account upon receipt by theCompany or the Custodian based upon information provided
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by the Companyidentifying the amount of payroll contribution. The Company will depositinto a separate account, or deposit with the Custodian an amount equal tothe aggregate payroll contributions for the Offering Period (not otherwiserepaid to Participant under Section 7(b)) on or before the Purchase Datefor such Offering Period.
     (f) No Interest on Cash Accounts. No interest will be credited or payable bythe Company on payroll contributions or by The Company or the Custodian oncash balances in Participant’s Cash Accounts pending investment in Stock.
          6. PURCHASES OF STOCK.
     (a) Purchase Rights. Enrollment in the Plan for any Offering Period by aParticipant will constitute a grant by the Company of a Purchase Right tosuch Participant for such Offering Period. Each Purchase Right will besubject to the following terms:
     (i) The Purchase prices at which Stock will be purchased under a PurchaseRight will be as specified in Section 6(c).
     (ii) Except as limited in (iii) below, the number of shares of Stock that maybe purchased upon exercise of the Purchase Right for a Offering Periodwill equal the number of shares (including fractional shares) that can bepurchased at the purchase price specified in Section 6(c) with theaggregate amount credited to the Participant’s Cash Account as of thePurchase Date.
     (iii) The number of shares of Stock subject to a Participant’s Purchase Rightfor any Offering Period will not exceed the number derived by dividing$6,250 by 100% of the Fair Market Value of one share of Stock on the firstday of the Offering Period for the Offering Period.
     (iv) The Purchase Right will be automatically exercised on the Purchase Datefor the Offering Period.
     (v) Payments by a Participant for Stock purchased under a Purchase Right willbe made only through payroll deduction in accordance with Section 5(d) and(e).
     (vi) The Purchase Right will expire on the earlier of the Purchase Date forthe Offering Period or the date on which the Participant’s enrollment inthe Plan terminates.
     (b) Purchase of Stock. At or as promptly as practicable after the PurchaseDate for a Offering Period, amounts credited to each Participant’s CashAccount as of such Purchase Date will be applied by the Custodian to thepurchase of shares of Stock, in accordance with the terms of the Plan.Shares of Stock will be purchased by the Custodian from the Company.Shares sold by the Company may be authorized but unissued shares ortreasury shares, as permitted under Section 4. The Custodian willaggregate the amounts in all Cash Accounts when purchasing Stock, and shares purchased will be allocated to each Participant’s Stock Account inproportion to the cash
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amounts withdrawn from such Participant’s CashAccount. Upon completion of purchases in respect of a Purchase Date (whichwill be completed in not more than 30 days after the Purchase Date), all shares of Stock so purchased for a Participant will be credited to theParticipant’s Stock Account.
     (c) Purchase Price. The purchase price of each share of Stock purchased inrespect of a Purchase Date will equal 85% of the lesser of (i) the FairMarket Value of a share of Stock on the first day of the Offering Periodor (ii) the Fair Market Value of a share of Stock on the Purchase Date.
     (d) Dividend Reinvestment; Other Distributions. Cash dividends on any Stockcredited to a Participant’s Stock Account will be automatically reinvestedin additional shares of Stock; such amounts will not be available in theform of cash to Participants. All cash dividends paid on Stock credited toParticipant’s Stock Accounts will be paid over by the Company to theCustodian at the dividend payment date. The Custodian will aggregate allpurchase of Stock in connection with dividend reinvestment for a givendividend payment date. Purchases of Stock for purposes of dividendreinvestment will be made as promptly as practicable (but not more than 30days) after a dividend payment date. The Custodian will make suchpurchases, as directed by the Board directly from the Company at 100% ofthe Fair Market Value of a share of Stock on the dividend payment date.Any shares of Stock distributed as a dividend or distribution in respectof shares of Stock or in connection with a split of the Stock credited toa Participant’s Stock Account will be credited to such Account.
     (e) Withdrawals and Transfers. Shares of Stock may be withdrawn from aParticipant’s Stock Account, in which case one or more certificates forwhole shares may be issued in the name of, and delivered to, theParticipant, with such Participant receiving cash in lieu of fractional shares based on the Fair Market Value of a share of Stock on the date ofwithdrawal. Alternatively, whole shares of Stock may be withdrawn from aParticipant’s Stock Account by means of a transfer to a broker-dealer orfinancial institution that maintains an account for the Participant,together with the transfer of cash in lieu of fractional shares based onthe Fair Market Value of a share of Stock on the date of withdrawal.Participants may not designate any other person to receive shares of Stockwithdrawn or transferred under the Plan. A Participant seeking to withdrawor transfer shares of Stock must give instructions to the Custodian insuch manner and form as may be prescribed by the Custodian, whichinstructions will be acted upon as promptly as practicable. Withdrawalsand transfers will be subject to any fees imposed in accordance withSection 8(a).
     (f) Excess Account Balances. If any amounts remain in a Cash Accountfollowing a Purchase Date as a result of the limitation set forth inSection 6(a)(iii), such amounts will be returned to the Participant by theCustodian as promptly as practicable.
          7. TERMINATION AND DISTRIBUTIONS.
     (a) Termination of Enrollment. A Participant’s enrollment in the Plan willterminate upon (i) the beginning of any payroll period or Offering Periodthat begins after
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he or she terminates enrollment in the Plan pursuant tosuch procedures as established by the Board or its designee, provided thatsuch Participant will continue to be deemed to be enrolled with respect toany completed Offering Period for which purchases have not been completed,(ii) such time as the Participant becomes ineligible to participate underSection 5(a) of the Plan, or (iii) the termination of the Participant’semployment by the Company and its Subsidiaries. An employee whoseenrollment in the Plan terminates may again enroll in the Plan as of anysubsequent Offering Period that is at least 90 days after such terminationof enrollment if he or she satisfies the eligibility requirements ofSection 5(a) as of such Offering Period. A Participant’s election todiscontinue payroll contributions will not constitute a termination ofenrollment.
     (b) Distribution. As soon as practicable after a Participant’s enrollment inthe Plan terminates, amounts in the Participant’s Cash Account whichresulted from payroll contributions will be repaid to the Participant if aParticipant enrollment terminates five or more business days before theend of the last payroll period in an Offering Period. If amounts creditedto the Participant’s Cash Account have not yet been deposited by theCompany with the Custodian, the Company rather than the Custodian willmake the repayment to the Participant. The Custodian will continue tomaintain the Participant’s Stock Account for the Participant until theearlier of such time as the Participant directs the sale of all Stock inthe Account, withdraws, or transfers all Stock in the Account. If theParticipant’s enrollment in the Plan ceases because of the termination ofthe Participant’s employment by the Company and its Subsidiaries, theParticipant is responsible for the administrative costs associated withmaintaining their Stock Account after such termination of employment. If aParticipant’s termination of enrollment results from his or her death, allamounts payable will be paid to his or her estate.
          8. GENERAL.
     (a) Costs. Except as otherwise provided in Section 7(b), costs and expensesincurred in the administration of the Plan and maintenance of Accountswill be paid by the Company, to the extent provided in this Section 8(a).Any brokerage fees and commissions for the purchase of Stock under thePlan (including Stock purchased upon reinvestment of dividends anddistributions) will be paid by the Company, but any brokerage fees andcommissions for the sale of Stock under the Plan by a Participant will beborne by such Participant. The rate at which such fees and commissionswill be charged to Participants will be determined by the Custodian or anybroker-dealer used by the Custodian (including an affiliate of theCustodian), and communicated from time to time to Participants. Inaddition, the Custodian may impose or pass through a reasonable fee forthe withdrawal of Stock in the form of stock certificates (as permittedunder Section 6(e)), and reasonable fees for other services unrelated tothe purchase of Stock under the Plan, to the extent approved in writing bythe Company and communicated to Participants.
     (b) Statements to Participants. The Custodian will reflect payrollcontributions, purchases, sales, and withdrawals and transfers of sharesof Stock and other Plan transactions by appropriate adjustments tothe Participant’s Accounts. The Custodian will, not less frequently thansemi-annually, provide or cause to be provided a
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written statement to theParticipant showing the transactions in his or her Accounts and the datethereof, the number of shares of Stock purchased or sold, the aggregatepurchase price paid or sales price received, the purchase or sales price pershare, the brokerage fees and commissions paid (if any), the total sharesheld for the Participant’s Stock Account (computed to at least three decimalplaces), and other information.
     (c) Compliance with Section 423. It is the intent of the Company that thisPlan comply in all respects with applicable requirements of Section 423 ofthe Code and regulations thereunder. Accordingly, if any provision of thisPlan does not comply with such requirements, such provision will beconstrued or deemed amended to the extent necessary to conform to suchrequirements.
          9. GENERAL PROVISIONS.
     (a) Compliance With Legal and Other Requirements. The Plan, the granting andexercising of Purchase Rights hereunder, and the other obligations of theCompany and the Custodian under the Plan will be subject to all applicablefederal and state laws, rules, and regulations, and to such approvals byany regulatory or governmental agency as may be required. Additionally,the granting and exercising of Purchase Rights hereunder shall be subjectto all applicable laws of the country in which employees of the Companyand a Subsidiary who are nonresident aliens and who are eligible toparticipate in the Plan reside. The Company may, in its discretion,postpone the issuance or delivery of Stock upon exercise of PurchaseRights until completion of such registration or qualification of suchStock or other required action under any federal or state law, rule, orregulation, or the laws of any country in which employees of the Companyand a Subsidiary who are nonresident aliens and who are eligible toparticipate in the Plan reside, or other required action with respect toany automated quotation system or stock exchange upon which the Stock orother Company securities are designated or listed, or compliance with anyother contractual obligation of the Company, as the Company may considerappropriate, and may require any Participant to make such representationsand furnish such information as it may consider appropriate in connectionwith the issuance or delivery of Stock in compliance with applicable laws,rules, and regulations, designation or listing requirements, or othercontractual obligations.
     (b) Limits on Encumbering Rights. No right or interest of a Participantunder the Plan, including any Purchase Right, may be pledged, encumbered,or hypothecated to or in favor of any party, subject to any lien,obligation, or liability of such Participant, or otherwise assigned,transferred, or disposed of except pursuant to the laws of descent ordistribution, and any right of a Participant under the Plan will beexercisable during the Participant’s lifetime only by the Participant.
     (c) No Right to Continued Employment. Neither the Plan nor any action takenhereunder, including the grant of a Purchase Right, will be construed asgiving any employee the right to be retained in the employ of the Companyor any of its Subsidiaries, nor will it interfere in any way with theright of the Company or any of its Subsidiaries to terminate anyemployee’s employment at any time.
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     (d) Taxes. The Company or any Subsidiary is authorized to withhold from anypayment to be made to a Participant, including any payroll and otherpayments not related to the Plan, amounts of withholding and other taxesdue in connection with any transaction under the Plan, and a Participant’senrollment in the Plan will be deemed to constitute his or her consent tosuch withholding. In addition, Participants may be required to advise theCompany of sales and other dispositions of Stock acquiredunder the plan in order to permit the Company to comply with tax laws and toclaim any tax deductions to which the Company may be entitled with respect tothe Plan. (This provision and other Plan provisions do not set forth anexplanation of the tax consequences to Participants under the Plan. A briefsummary of the tax consequences will be included in disclosure documents tobe separately furnished to Participants.)
     (e) Changes to the Plan. The Board may amend, alter, suspend, discontinue,or terminate the Plan without the consent of shareholders or Participants,except that any such action will be subject to the approval of theCompany’s shareholders within one year after such Board action if suchshareholder approval is required by any federal or state law or regulationor the rules of any automated quotation system or stock exchange on whichthe Stock may then be quoted or listed, or if such shareholder approval isnecessary in order for the Plan to continue to meet the requirements ofSection 423 of the Code, and the Board may otherwise, in its discretion,determine to submit other such actions to shareholders for approval;provided, however, that, without the consent of an affected Participant,no amendment, alteration, suspension, discontinuation, or termination ofthe Plan may materially and adversely affect the rights of suchParticipant with respect to outstanding Purchase Rights relating to anyOffering Period that has been completed prior to such Board action. Theforegoing notwithstanding, upon termination of the Plan the Board mayelect to terminate all outstanding Purchase Rights at such time as theBoard may designate; in the event of such termination of any PurchaseRight prior to its exercise, all amounts contributed to the Plan whichremain in a Participant’s Cash Account will be returned to the Participant(without interest) as promptly as practicable.
     (f) No Rights to Participate; No Shareholder Rights. No Participant oremployee will have any claim to participate in the Plan with respect toOffering Periods that have not commenced, and the Company will have noobligation to continue the Plan. No Purchase Right will confer on anyParticipant any of the rights of a shareholder of the Company unless anduntil Stock is duly issued or transferred and delivered to the Participant(or credited to the Participant’s Stock Account).
     (g) Fractional Shares. Unless otherwise determined by the Board, purchasesof Stock under the Plan executed by the Custodian may result in thecrediting of fractional shares of Stock to the Participant’s StockAccount. Such fractional shares will be computed to at least three decimalplaces. Fractional shares will not, however, be issued by the Company, andcertificates representing fractional shares will not be delivered toParticipants under any circumstances.
     (h) Nonexclusivity of the Plan. Neither the adoption of the Plan by theBoard nor its submission to the shareholders of the Company for approvalwill be construed as creating any limitations on the power of the Board toadopt such other compensatory
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arrangements as it may deem desirable,including, without limitation, the granting of stock options otherwisethan under the Plan, and such arrangements may be either applicablegenerally or only in specific cases.
     (i) Plan Year. The Plan will operate on a plan year that ends December 31 ineach year.
     (j) Governing Law. The validity, construction, and effect of the Plan andany rules and regulations relating to the Plan will be determined inaccordance with the laws of the State of Arizona, without giving effect toprinciples of conflicts of laws, and applicable federal law.
     (k) Effective Date. The Plan will become effective at such time as the Planhas been approved by shareholders of the Company, at a meeting thereof, bya vote sufficient to meet the requirements of Section 423(b)(2) of theCode.
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