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EXHIBIT 10.4




                                  May 17, 2002


Mr. Christopher S. Alexander
President and Chief Executive Officer
HYPERCOM CORPORATION
2851 W. Kathleen Road
Phoenix, Arizona 85053

                  Re:      Employment Agreement

Dear Chris:

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

1.       Term. This Agreement will become effective as of March 1, 2002 and will
         terminate on February 28, 2005, unless mutually extended by the parties
         in writing.

2.       Positions with the Company. During the term of this Agreement, you will
         serve as Chief Executive 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. You will report directly to the Board. In the
         event that you cease to be employed as Chief Executive Officer of the
         Company, you agree that you will resign as a director of the Company at
         the request of the Chairman of the Board, following a determination of
         a majority of the Board (except you).

3.       Compensation. You will receive the following compensation for your
         services during your term of employment:

         (a)      You will receive a minimum base salary of $310,000 per year,
                  which shall be subject to increase but not decrease at the
                  discretion of the Board. Your salary will be paid in equal
                  installments in accordance with the Company's salary payment
                  policies as in effect from time to time subject to any
                  deferred compensation arrangement that may be in effect;

         (b)      You will participate in any deferred compensation plan,
                  incentive compensation plan, pension or profit sharing plan,
                  stock purchase plan, group benefit plan, medical plan, bonus
                  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 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);

         (c)      You will receive such other compensation as may from time to
                  time be granted to you by the Board at its sole discretion,
                  including any bonuses approved by the Board or the
                  Compensation Committee thereof; and
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Mr. Christopher S. Alexander
March 1, 2002
Page 2


         (d)      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.       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.

5.       Termination for Cause. The Company may terminate you for Cause as
         defined in the Amended and Restated Hypercom Corporation Long-Term
         Incentive Plan (the "Option Plan"). A copy of this definition is
         attached. Upon any termination for Cause, you will be entitled to
         receive only that compensation due you, including any deferred
         compensation, through the date of termination, together with any COBRA
         (at your cost) or other benefits required by law.

6.       Termination by Voluntary Resignation. In the event that you voluntarily
         resign from the Company without Good Reason as defined in the
         attachment, you will be entitled to receive only that compensation due
         you through the date of your resignation, including, if any, deferred
         compensation, together with any COBRA (at your cost) or other benefits
         required by law.

7.       Death or Disability.

         (a)      If during the term of this Agreement you die, then this
                  Agreement will terminate and your estate shall be paid the
                  compensation due you through the date of your death.

         (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 three months, then, at the option of the
                  Company, this Agreement shall terminate at the end of such
                  three month period, provided that during such period of
                  disability or incapacity, you shall be paid the full salary,
                  benefits and expenses otherwise payable to you, less the
                  amount you receive from any Company-provided disability
                  insurance for the period of such illness or incapacity.

         (c)      In addition, in the case of termination by death or disability
                  under this Paragraph 7, for a period of eighteen months from
                  the date of your termination, the Company will pay for the
                  COBRA benefits due you or your estate.

8.       Termination Other than for Cause.

         In the event that (i) you are terminated without Cause, (ii) you resign
         for Good Reason, or (iii) you and the Company fail to agree to an
         extension of this Agreement at the end of its term, you will receive:
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Mr. Christopher S. Alexander
March 1, 2002
Page 3


         (a)      Payment equal to two times the greater of (i) your minimum
                  base salary as provided in Paragraph 3 (a) or (ii) your then
                  current salary, in a lump sum upon effectiveness of the
                  release contemplated by Paragraph 15 below;

         (b)      Acceleration of all your options, and a minimum period of 90
                  days after your termination within which to exercise your
                  options (or, if longer, the period permitted by your option
                  grants), provided, however, that if the acceleration of your
                  options under this provision were to occur before a Change in
                  Control as defined in the attachment and, would cause a charge
                  to the Company's earnings, then at the Company's option it may
                  offer you a consulting position during which your options
                  would continue to vest; and

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

9.       Covenant Not to Compete.

         For a period of one year from any termination of your employment
         hereunder other than your termination without Cause, including any
         completion of the term of this Agreement (or, if later, upon conclusion
         of your service as a consultant), you shall not, directly or
         indirectly, for your own benefit or for, with or through any other
         individual, firm, corporation, partnership or other entity, whether
         acting in an individual, fiduciary or other capacity, own, manage,
         operate, control, advise, invest in (except as a 1% or less shareholder
         of a public company), loan money to, or participate or assist in the
         ownership, management, operation or control of or be associated as a
         director, officer, employee, partner, consultant, advisor, creditor,
         agent, independent contractor or otherwise with, or acquiesce in the
         use of your name by, any business enterprise that is in direct
         competition with the Company or any subsidiary, within the United
         States of America or any other country that the Company conducts
         business at the time of your termination.

         In addition to the foregoing, at all times during the period of your
         employment and for one year after any termination thereof (or, if
         later, upon conclusion of your services as a consultant), you will not,
         directly or indirectly (as described above), for your benefit or for,
         with or through any business enterprise, hire, employ, solicit, or
         otherwise encourage or entice any of the Company's (or subsidiary's)
         employees or consultants to leave or terminate their employment with
         the Company.

         You and the Company consider the restrictions contained in this
         Paragraph 9 above to be reasonable for the purpose of preserving the
         Company's rights and interests. If a court makes a final judicial
         determination that any such restrictions are unreasonable or otherwise
         unenforceable against you, you and the Company agree to modify the
         provisions held to be unenforceable to preserve each party's
         anticipated benefits thereunder to the maximum extent legal.
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Mr. Christopher S. Alexander
March 1, 2002
Page 4


         You acknowledge and agree that the Company's remedies at law for breach
         or threatened breach of any of the provisions of this Paragraph 9 would
         be inadequate. Therefore, you agree that in the event of a breach or
         threatened breach by you of the provisions in this Paragraph 9, the
         Company shall be entitled to, in addition to its remedies at law and
         without posting any bond, equitable relief in the form of specific
         performance, a temporary restraining order, a temporary or permanent
         injunction, or any other equitable remedy that may then be available.
         You further agree that you shall not oppose the Company's request for
         such equitable relief.

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

11.      Notices. Any notice, election or communication to be given under this
         Agreement shall 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:
         Mr. Christopher S. Alexander
         2851 West Kathleen Road
         Phoenix, Arizona  85053

         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.

12.      Entire Agreement. Except for any confidentiality agreement or option
         grants 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.
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Mr. Christopher S. Alexander
March 1, 2002
Page 5


13.      Arbitration. Any controversy relating to this Agreement or relating to
         the breach hereof shall 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) shall 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) shall possess the powers to
         issue mandatory orders and restraining orders in connection with such
         arbitration. The expenses of the arbitration shall be borne by the
         losing party unless otherwise allocated by the arbitrator(s). This
         agreement to arbitrate shall be specifically enforceable under the
         prevailing arbitration law. During the continuance of any arbitration
         proceedings, the parties shall continue to perform their respective
         obligations under this Agreement. Nothing in this Agreement shall
         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 the non-compete
         provisions herein and any obligations of confidentiality.

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

15.      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 of the benefits 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 director (or a former officer
         or director).

                                                     Very truly yours,

                                                     /s/George Wallner
                                                     George Wallner
                                                     Chairman of the Board

ACCEPTED:

/s/ Christopher S. Alexander
--------------------------------------------
Christopher S. Alexander


Date:    5/17/02
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Mr. Christopher S. Alexander
March 1, 2002
Page 6


                                   Definitions

         "Cause" means if the Board, in its reasonable and good faith
discretion, determines that the employee, consultant or advisor:


         (1) has developed or pursued interests substantially adverse to the
Company,


         (2) has materially breached any employment, engagement or
confidentiality agreement,


         (3) has not devoted all or substantially all of his or her 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),


         (4) is charged with or convicted of a felony, or


         (5) has engaged in activities or omissions that are detrimental to the
well-being of the Company.


         "Change of Control" means and includes each of the following:


         (1) there shall be consummated 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 80%
ownership of beneficial interest of common stock or other voting securities of
the surviving entity immediately after the merger;


         (2) there shall be consummated any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of assets or
earning power aggregating more than 40% 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;


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


         (4) any person (as such term is used in Section 13(d) and 14(d)(2) of
the Exchange Act) or group of purchasers in the same transaction, other than any
current stockholders of the Company or affiliates thereof or any employee
benefit plans of the Company or any subsidiary of the Company or any entity
holding shares of capital stock of the Company for or pursuant to the terms of
any such employee benefit plan in its role as an agent or trustee for such plan,
shall become the beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act) of 25% or more of the Company's outstanding common stock; 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
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Mr. Christopher S. Alexander
March 1, 2002
Page 7

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 or your authority is undermined or
interfered with so as to materially impair your ability to perform your
responsibilities;


         (2) your annual 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 to reside other than in Maricopa County, Arizona,
Dade County, Florida or Georgia.