Exhibit 10.7
FIRST AMENDMENT TO
THE
HYPERCOM
CORPORATION
LONG-TERM INCENTIVE
PLAN
(EFFECTIVE JANUARY 1,
2009)
WHEREAS , Hypercom Corporation (the
“Company”) has adopted and currently maintains the
Hypercom Corporation Long-Term Incentive Plan (the
“Plan”) on behalf of its eligible employees, directors,
consultants and advisors;
WHEREAS , Section 15.1 of the Plan provides that the
Board of Directors of the Company may amend the Plan at any
time;
WHEREAS , Section 409A of the Internal Revenue Code (the
“Code”), which became effective as of January 1,
2005, applies to the Plan and certain awards granted pursuant to
the Plan;
WHEREAS , the Plan has been and shall continue to be
administered in good faith compliance with the requirements of
Section 409A of the Code from January 1, 2005 through December 31,
2008; and
WHEREAS , the purpose of this First Amendment is to
satisfy the documentation requirements of Section 409A of the Code
which are effective as of January 1, 2009.
NOW, THEREFORE , the Plan is hereby amended, effective as of
January 1, 2009, as set forth below:
1.
Section 3.1(e) of the Plan is hereby amended by adding the
following sentence to the end thereof:
The Award
Agreement for any Award subject to the requirements of Section 409A
of the Code may prescribe a different definition of Change of
Control that will apply for purposes of that Award Agreement and
that complies with the requirements of Section 409A of the
Code.
2.
Section 3.1(i) of the Plan is hereby
amended by adding the following sentence to the end
thereof:
The Award
Agreement for any Award subject to the requirements of Section 409A
of the Code may prescribe a different definition of the term
Disability that will apply for purposes of that Award Agreement and
that complies with the requirements of Section 409A of the
Code.
3.
Section 3.1(k)(ii) of the Plan is hereby amended and restated
in its entirety to read as follows
(ii) the price as determined by
such methods and procedures as may be established from time to time
by the Board in compliance with Section 409A of the Code and
regulations promulgated thereunder.
4.
Section 3.1 of the Plan is hereby amended by
adding the following new paragraphs to the end thereof:
(w)
“Specified Employee” means certain officers and
highly compensated employees of the Company as defined in Treas.
Reg. § 1.409A-1(i). The identification date for
determining whether any employee is a Specified Employee during any
calendar year shall be the September 1 preceding the commencement
of such calendar year.
(x)
“Termination of Employment” means a
“Separation from Service” solely for the purpose of any
Award that is subject to the requirements of Section 409A of the
Code. With respect to a Participant who is an employee
of the Company, the term “Separation from Service”
means either (i) the termination of a Participant’s
employment with the Company and all Affiliates due to death,
retirement or other reasons, or (ii) a permanent reduction in the
level of bona fide services the Participant provides to the Company
and all Affiliates to an amount that is 20% or less of the average
level of bona fide services the Participant provided to the Company
and all Affiliates in the immediately preceding 36 months, with the
level of bona fide service calculated in accordance with Treas.
Reg. § 1.409A-1(h)(1)(ii). For this purpose, the
term “Affiliate” has the meaning set forth in Treas.
Reg. § 1.409A-1(h)(3) (which generally requires at least
50% common ownership).
A Participant’s employment relationship is
treated as continuing while the Participant is on military leave,
sick leave, or other bona fide leave of absence (if the period of
such leave does not exceed six months, or if longer, so long as the
Participant’s right to reemployment with the Company or an
Affiliate is provided either by statute or contract). If
the Participant’s period of leave exceeds six months and the
Participant’s right to reemployment is not provided either by
statute or by contract, the employment relationship is deemed to
terminate on the first day immediately following the expiration of
such six-month period. Whether a Termination of
Employment has occurred will be determined based on all of the
facts and circumstances and in accordance with regulations issued
by the United States Treasury Department pursuant to Code Section
409A.
With respect to a Participant who is a
non-employee independent contractor or consultant providing
services to Company, the term “Separation from Service”
means a termination of the individual’s services to the
Company due to the expiration of the contract, and if there is more
than one contract, all contracts under which the individual
performs services, as long as the expiration is a good faith and
complete termination of the contractual
relationship. With respect to a Participant who is a
non-employee member of the Board, the term “Separation from
Service” means that he or she has ceased to be a member of
the Board.
For purposes of the Plan, if a Participant
performs services in more than one capacity, the Participant must
have a Separation from Service in all capacities as an employee,
member of the Board, independent contractor or consultant to have a
Separation from Service. Notwithstanding the foregoing,
if a Participant provides services both as an employee and a
non-employee, (1) the services provided as a non-employee are not
taken into account in determining whether the Participant has a
Separation from Service as an employee under a nonqualified
deferred compensation plan in which the Participant participates as
an employee and that is not aggregated under Section 409A of the
Code with any plan in which the Participant participates as a
non-employee, and (2) the services provided as an employee are not
taken into account in determining whether the Participant has a
Separation f
