ex10-4.htm


EXHIBIT 10.4

 

HYPERCOM CORPORATION

8888 E. Raintree Drive, Suite 300

Scottsdale, Arizona 85260





August 6, 2009





Shawn Rathje

Chief Accounting Officer

Hypercom Corporation 

8888 E. Raintree Drive, Suite 300

Scottsdale, Arizona 85260





Re: Change of Control  

 

Dear Shawn:

 

In consideration of your execution and return of the attached Confidentiality, Non-Solicitation & Non-Compete Agreement and other good and valuable consideration, the sufficiency of which hereby is acknowledged, you and Hypercom Corporation (the “Company”) hereby agree that this letter modifies the terms of your employment
by the Company effective upon the date of your signature below.  

 

In the event of a Change of Control (as defined below) within eighteen (18) months after the date of your signature on this letter, and if, within a period of twelve (12) months following such a Change of Control, you are involuntarily terminated by the Company without Cause (as defined below), and provided that the Company’s customary
form of release for terminated employees is executed by you and becomes effective in accordance with its terms on or before the thirtieth (30th) day following the date of your termination of employment, you will be entitled to:

 

(a) an amount equal to six (6) months of your Base Salary at the rate then in effect, which amount will be paid in the form of salary continuation in accordance with the Company’s usual bi-weekly payroll cycle; and

 

(b) immediate vesting of all of your shares of restricted stock and all of your options to purchase common stock of the Company (or its successor), and such options shall remain exercisable until the expiration date of their original terms.

 

“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 of Directors (“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.

 

“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.

 

All other terms and conditions of your employment remain unchanged.

 

If you agree to the addition of the foregoing to your terms of employment, please indicate your acceptance below.

 

 

Sincerely,

 

/s/ Thomas B. Sabol         

 

Thomas B. Sabol    

Chief Financial Officer   









ACCEPTED AND AGREED









/s/ Shawn Rathje           

Shawn Rathje





Date:  August 6, 2009         

 



  



  







  





CONFIDENTIALITY, NON-SOLICITATION

& NON-COMPETE AGREEMENT





This Confidentiality, Non-Solicitation & Non-Compete Agreement (“Agreement”) is entered into by and between Hypercom Corporation, its subsidiaries, affiliates, successors and assigns (the “Company”),
and Shawn Rathje (“Employee”).





Section One

Background to the Agreement

 

1.1           The Company is in the business of  providing electronic payment solutions, including card payment terminals and peripherals, networking equipment and software applications for e-commerce, smart cards and traditional payment applications (“Company
Business”).  What distinguishes the Company from its competitors is the knowledge and expertise which the Company has developed over time to determine, evaluate, and service its customers’ needs





1.2           Employee performs essential services for the Company.  As part of these essential services, Employee will meet and develop close working relationships with the Company’s Business Associates (as defined below).  In addition, Employee will work
with and have access to the Company’s Confidential Information (as defined below).





1.3           This Agreement is important to protecting the Company’s business interests.  If Employee  violates any of the terms of this Agreement, it would harm the goodwill and diminish the value of the Company.





1.4           The compensation and professional growth opportunities made available to Employee through employment with the Company is fair and adequate consideration for entry into this Agreement.  Employee need not accept or continue employment with the Company.  Employee’s
compliance with this Agreement is a condition of Employee’s employment or continued employment with the Company.





1.5           For these and other reasons, and because there are many other employment opportunities available to Employee if his/her employment with the Company should end, Employee agrees that the terms of this Agreement are fair, reasonable and voluntarily entered into.





Section Two

The Covenants

 

2.1.           Exclusivity of Services; Conflict of Interest.  While employed by the Company, Employee will devote his/her full business time and best efforts to the Company and not engage in any activity that
creates an actual or potential conflict of interest with the Company.  A conflict of interest includes Employee directly or indirectly, competing with the Company in any way, or acting as an officer, director, executive, consultant, stockholder, volunteer, lender, or agent of any business engaged in Company Business.  Should any matter of dealing in which Employee is or becomes involved appear to present a conflict of interest, Employee will promptly disclose the facts to the Company’s
General Counsel so that a determination can be made as to whether a conflict of interest does exist.

 

2.2.           Company Property.  Employee will not remove any equipment, materials,  property, records, documents, notes, diskettes, manuals, lists, data files, or any other tangible items (whether
in duplicate or original form) (collectively “Company Property”) from the Company’s premises, except as is needed in the ordinary course of conducting Company business.  At the time of Employee’s separation, or at any other time upon the Company’s request, Employee will immediately deliver to the Company any Company Property in Employee’s possession or control.  To the maximum extent permitted by law,
the Company reserves the right to deduct the cost of unreturned or damaged Company Property from any compensation owed to Employee.

 

2.3.           Inventions.

 

a.           While employed by the Company, and for twelve (12) months thereafter, Employee will disclose promptly, completely and in writing to the Company, and hereby assigns and agrees to assign and bind Employee's heirs, executors, or administrators to assign to the Company, any
and all inventions, concepts, processes, diagrams, methods, apparatus, improvements, or any other technological “know how” (collectively “Company Inventions”), whether patentable, copyrightable, or otherwise subject to exclusive rights, which are discovered, conceived, and/or developed, either individually or jointly with others, (i) in connection with the performance of Employee's
duties for the Company, (ii) using or influenced by the Company’s time, data, facilities, materials, and/or proprietary information or technology, or (iii) that relate to Company Business.  All such Company Inventions will be deemed "works for hire" commissioned by the Company to the fullest extent permitted by the copyright laws of the United States.  Employee's obligations under this paragraph apply without regard to whether an idea for an Invention or a solution to a problem occurs
to Employee on the job, at home, or elsewhere. All such Company Inventions are the Company’s exclusive property, whether or not patent, trademark or copyright applications are filed thereon.  This paragraph 2.3 does not apply to any patents, copyrights, trademarks, inventions, concepts, processes, diagrams, methods, apparatus, improvements, or any other technological “know how” filed, discovered, conceived, and/or developed by Employee, alone or jointly with others,  prior
to Employee's employment with the Company (collectively “Prior Inventions”).

 

b.           Employee represents that there are no currently existing Prior Inventions belonging to Employee or any third party, except that which he/she discloses in Schedule 1 to this Agreement.  The absence
of anything set forth on Schedule 1, or the absence of Schedule 1 entirely, constitutes Employee’s representation that there are no such Prior Inventions.





c.           While employed by the Company, and at all times thereafter, Employee will assist the Company, at the Company’s expense, in the preparation, execution, and delivery of any disclosures, patent, trademark or copyright applications or papers within the scope and intent
of this Agreement required to obtain patents in this or in other countries and in connection with such other proceedings as may be necessary to enforce the Company’s rights in such Inventions against others or to vest title thereto in the Company.  If such assistance takes place after Employee's employment ends, Employee shall be paid by the Company at a reasonable rate for any time that Employee actually spends in such work at the Company’s request.

 

2.4.           Confidentiality.

 

a.           While employed by the Company, and at all times thereafter, Employee will not, directly or indirectly, disclose, utilize, or authorize any disclosure of Confidential Information (as defined below) to any third person, except as expressly permitted in writing by the Company’s
General Counsel.

 

b.           For purposes of this Agreement, “Confidential Information” includes, but is not limited to, the following information relating to the Company or entrusted to the Company by its Business Associates (as
defined below):

 

(i)  customer lists, consultant lists, vendor information, and customer information as compiled by the Company, including customer orders, product usage, product volumes, pricing, customer technology, sale and contract terms, contract expiration dates, and other compiled customer and vendor information;

 

(ii) internal practices and procedures, compensation and payroll information, and personnel data;

 

(iii) financial condition and financial results of operations;

 

(iv) supply of materials information, including sources and costs;

 

(v) information relating to designs, formula, developmental or experimental work, know-how, products, processes, computer programs, source codes, data bases, designs, schematics, inventions, creations, original works of authorship, or other subject matter relating to research and development, strategic planning, manufacturing, engineering,
purchasing, finance, marketing, promotion, distribution, licensing, and selling activities; and

 

(vi) any and all information, whether in oral or written form, having independent economic value to the Company that is not generally known to, and not readily ascertainable by proper means by a person who can obtain economic value from its disclosure or use.

 

Excluded from this definition is information that (i) is in or enters the public domain without breach of this Agreement; (ii) is received from a third party without restriction on disclosure and without breach of a nondisclosure obligation; or (iii) is required to be disclosed by order of
a court or other governmental agency; provided that the Company shall first be given reasonable notice and opportunity to obtain a protective order against disclosure of such information.

 

2.5.           Nonsolicitation.

 

a.           During Employee’s employment and during the Time Period (as defined below), Employee, whether personally or on behalf of any person or entity, will not:

 

(i) directly or indirectly solicit, accept business from, call upon, handle, deliver products or render services to any customer of the Company with whom Employee, alone or in conjunction with others, has corresponded, talked, solicited, or otherwise entered into or pursued a business relationship
within the twelve (12) month period immediately preceding Employee’s separation for the purpose of selling such customer the same, similar, or related services or products that Employee provided on behalf of the Company; or

 

(ii) directly or indirectly solicit, encourage, induce, or convince any Business Associate to end, reduce, or change his/her/its relationship with the Company.

 

b.           For the purpose of this Agreement:

 

(i) “Time Period” means the period beginning from Employee’s separation date and ending twelve (12) months thereafter; and

 

(ii) “Business Associate” means any individual or entity doing business with or rendering services to the Company within the twelve (12) month period immediately preceding Employee’s separation, including customers, employees, investors, independent contractors,
vendors, suppliers, or joint venture partners.

 

2.6.           Non-Competition.





a.           While employed by the Company and during the Time Period (as defined above), Employee, whether personally or on behalf of any person or entity, will not engage in a Competitive Activity (as defined below) within the Territory (as defined below).





b.           For purposes of this paragraph:





(i)   “Time Period” means the period beginning from Employee’s separation date and ending twelve (12) months thereafter;





(ii) “Competitive Activity” means engaging in or planning to engage in any business activity which is in competition with the products or services being developed, manufactured or sold by the Company at the time of Employee’s separation, including without limitation,
working as a officer, director, partner, consultant, advisor, or independent contractor with VeriFone, Ingenico, CAM Commerce Solutions, Cybernet, ExaDigm, Gemalto, Micros Systems, PAR Technology, Radiant Systems, Retalix, RDM Corp., Symbol, or Way Systems; and





(iii) “Territory” means any country in which the Company does business on the Employee’s separation date.





2.7.           Authority to Contract; Warranties and Representations.  Employee has no power to, and will not, obligate the Company in any manner whatsoever to any contract, agreement, undertaking or commitment,
unless specifically authorized and directed to do so by an executive officer of the Company.  Employee will not, without specific approval of an executive officer of the Company, borrow on behalf of the Company, purchase capital equipment, or sell any capital assets of the Company.  Employee is prohibited from communicating with or responding to any inquiries from the media, investors, or potential investors regarding the Company or any of its Business Associates (as defined above).  Any
such inquiries or communications should be directed to the executive officer or manager in charge of Employee’s business unit

 

2.8           Non-Disparagement.  Employee will not at any time disparage the Company or any of its employees, products, services, operations, policies, decisions,
or programs, if the effect of such disparagement reasonably could be anticipated to cause material harm to the Company’s reputation, business, interests or to the morale among its work force, or the reputation of any Company employee.





2.9.           Lack of Prior Conflict.  You represent 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.

 

2.10.           Notification.  During the Time Period, Employee will inform any new employer or Business Associate (as defined above), prior to entering into an employment or business relationship, of the existence
of this Agreement and will provide such new employer or Business Associate with a copy of this Agreement.  Employee authorizes the Company to notify others, including Business Associates and Employee’s future employers, of Employee’s obligations under this Agreement.

 

2.11.           Continuing Cooperation.  Provided the Company reimburses Employee for any reasonable and necessary out-of-pocket expenses, Employee will fully cooperate with the Company and its legal counsel
in connection with any action, proceeding, or dispute arising out of matters with which Employee was directly or indirectly involved while serving as an Employee of the Company.  This cooperation  includes meeting with, and providing information to, the Company and its legal counsel, maintaining the confidentiality of any past or future privileged communications with the Company’s legal counsel, and being  available to testify truthfully by affidavit, in depositions, or in
any other forum on behalf of the Company.

 

Section Three

 

Miscellaneous Provisions





3.1           Survival.  The covenants contained in Section Two of this Agreement shall survive the end of  Employee’s employment, regardless of the manner of or reason for such separation.





3.2.           Extension of Time.  If Employee has breached or threatened to breach any of the covenants in this Agreement, and if the Company brings legal action for injunctive or other relief, such relief
shall have the duration specified in Section Two, commencing from the date such relief is granted, but reduced by the period of time elapsed between Employee’s separation and Employee’s first breach of this Agreement.





3.3.           Injunctive Relief; Attorney Fees.  If Employee breaches the covenants in this Agreement, irreparable injury will result to the Company and its remedy at law for damages will be inadequate.  As
a result, the Company shall be entitled to an injunction to restrain the continuing breach by Employee, or any other persons or entities acting for or with Employee, without the necessity of proving actual damages or posting any bond or other security, in addition to any other rights and remedies which the Company may have at law or in equity.  The prevailing party in any legal action relating or touching upon this Agreement is entitled to recover reasonable attorneys’ fees and costs.

 

3.4.           At-Will Employment.  Nothing in this Agreement affects Employee’s status as an employee at will.  Employment of Employee by the Company may be terminated by either Employee or
the Company for any lawful reason at any time with or without cause.  Any representation to the contrary is unauthorized and not valid unless obtained in writing and signed by the Company’s Chief Executive Officer.

 

3.5.           Binding Affect/Assignment.  This Agreement shall inure to the benefit of and be enforceable by the successors and assigns of the Company without the consent of Employee.  None of the
rights or obligations under this Agreement shall be assigned or transferred by Employee.

 

3.6.           Governing Law; Forum.  This Agreement shall be governed and construed in accordance with the laws of the State of Arizona.  Employee consents to venue and jurisdiction in the Superior
Court of Maricopa County, State of Arizona, and in the United States District Court for the District of Arizona, and to service of process under Arizona law, in any action commenced to enforce this Agreement.

 

3.7.           Entire Agreement.  This Agreement constitutes the entire agreement of the parties and supersedes any prior agreements and understandings regarding the subject matter covered herein.  This
Agreement may not be modified or amended except by a written document signed by the parties.

 

3.8.           Severability.  If any provisions of this Agreement shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a Court
finds that any provision of this Agreement is overbroad with regard to its subject matter, geographic scope or duration, it may  modify that provision to the extent necessary to make the provision enforceable.

 

3.9.           Waiver.  The Company’s failure to enforce any provisions of this Agreement shall not constitute a waiver of the Company’s right to pursue any prior or subsequent breach, violation
or default of the Agreement.

 

The parties have had a reasonable opportunity to review and consider this Agreement with counsel of their choosing and, by their signatures below, enter into the Agreement willingly.

 

SHAWN RATHJE                                                                            HYPERCOM
CORPORATION





/s/ Shawn Rathje                                                        By: /s/ Thomas
B. Sabol      

 

Date: August 6, 2009                                                             Its: CFO             



          Date: August 6, 2009       

 













  



  







  





SCHEDULE 1

TO

CONFIDENTIALITY, NON-SOLICITATION & NON-COMPETE AGREEMENT





This Schedule 1 to the Employee Confidentiality, Non-Solicitation & Non-Compete Agreement entered into between Hypercom Corporation and Shawn Rathje ertain exclusions and prior assignments or grants as referenced in paragraph 2.3 of the Agreement.






	
I.  
	
EXCLUSIONS








Please describe below any Prior Inventions (as defined in paragraph 2.3 of the Agreement) that currently exist and which you wish to exclude from operation of this Agreement.  Any such exclusion must be stated with sufficient specificity to distinguish Prior Inventions from Company Inventions (as defined in paragraph 2.3) which
will be covered by operation of the Agreement (attach additional pages if necessary).





________________________None.__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________





II. PRIOR ASSIGNMENTS OR GRANTS





Please describe below any contracts to assign or grant any rights in Prior Inventions now in existence between Employee and any other person or entity (attach additional pages if necessary).





________________________None.__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________





ACCEPTED AND AGREED TO:

 


"Employee"                                                                         HYPERCOM
CORPORATION





/s/ Shawn Rathje                                                        By: /s/ Thomas
B. Sabol      

 

Date: August 6, 2009                                                             Its: CFO            

 

          Date: August 6, 2009