Re: Offer of Employment

1.

Position with the Company . Hypercom is pleased to offer you the position of President of the Company, based at the Company’s headquarters in Phoenix, Arizona. You may be called upon to serve in additional or other capacities from time-to-time during your tenure with the Company. You will faithfully and diligently perform all lawful duties commensurate with these positions, including those duties directed by the Company’s Chief Executive Officer or his designees, or the Board of Directors of the Company (the “Board”).

2.

Term . Your employment by the Company will be effective as of 12:01 a.m. on February 6, 2007 and will terminate on February 5, 2010 (the “Term”), unless you and the Company agree to renew your employment relationship.

3.

Compensation . You will receive the following compensation for your services:

(a)

You will receive a base salary of $350,000.00 per year, which may be adjusted upward from time-to-time (the “Base Salary”) at the discretion of the Board or downward in the event of a Company-wide downward compensation adjustment. The first potential adjustment in salary will be February 6, 2008, subject to the discretion of the Board. The Base Salary will be paid in equal installments in accordance with the Company’s salary payment policies in effect from time-to-time, and such salary payments will be subject to the usual withholding for income tax and other customary deductions.

(b)

Your target annual bonus compensation shall be one hundred percent (100%) of your then-current Base Salary for each year during the term of this Agreement, if the Company achieves the annual Performance Goals, as defined below, and as determined by the Board; provided that you may be entitled to receive annual bonus compensation in an aggregate amount up to one hundred and fifty percent (150%) of your then-current base salary for each year during the term of this Agreement if the Board deems it consistent with the achievement of the Performance Goals for such year. The Performance Goals, and the percentage of bonus compensation tied to each, will be specifically defined by the Board in its discretion, but will likely include some or all of the following: revenue growth, gross margin, earnings per share, market share growth and development of the organization (the “ Performance Goals ”). The determination as to whether the Company has achieved the Performance Goals will be made by the Board in its discretion, and the bonus will be paid to you within five (5) business days following such determination.

(c)

Effective upon your first day of employment (or the first day thereafter that the Company’s common stock is traded on the New York Stock Exchange), the Board will grant to you thirty-five thousand (35,000) shares of restricted common stock pursuant to the Company’s Long-Term Incentive Plan and subject to the terms set forth in the Company’s form restricted stock agreement. Such shares will be owned by you effective immediately upon the date of the grant, provided, however , that if you are no longer employed by the Company on February 6, 2008 for any reason other than your death, disability, or termination of employment by the Company without Cause, or your resignation for Good Reason, this grant may be forfeited upon the Board’s discretion and any taxes paid by the Company on your behalf shall be repaid. You will agree to timely file an election under Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”) to be taxed on the entire value of the shares on the date of grant. Consequently, the Company shall make an additional payment (the “ Gross-up Payment ”) to you equal to the highest marginal applicable federal state and local taxes calculated on the total income you are required to include on your federal and state income tax returns as a result of filing this 83(b) election (but excluding the amount of income you will be required to include as a result of the Gross-up Payment itself). Any Gross-up Payment to be paid pursuant to this Agreement shall be timely withheld by the Company and paid over to the applicable taxing authorities. The Company acknowledges that you currently are a resident of California for state income tax purposes for purposes of this subsection 3(c) and any other appropriate provision of this Agreement.

(d)

Effective upon your first day of employment (or the first day thereafter that the Company’s common stock is traded on the New York Stock Exchange), the Board will grant to you fifty thousand (50,000) shares of restricted common stock of the Company pursuant to the Long-Term Incentive Plan (and the Company’s form restricted stock agreement) restricted by achievement of the Performance Goals to be established by the Board for fiscal years 2007 and 2008, as follows: (i) fifty percent (50%) of the restricted common stock, or twenty-five thousand (25,000) shares of restricted common stock, will vest based upon substantial achievement of 2007 Performance Goals as determined by the Board; and (ii) the remaining fifty percent (50%) of the restricted common stock or twenty-five thousand (25,000) shares of restricted common stock will vest based upon substantial achievement of 2008 Performance Goals as determined by the Board. If either or both of the 2007 or 2008 Performance Goals are not fully and completely achieved, the proportion of the restricted common stock which shall vest pursuant to this subsection 3(d) shall be determined in the Board’s sole discretion taking into account the Performance Goals achieved for such year, in both quantitative and qualitative degree. The Company will also provide to you a Gross-up Payment in connection with the restricted common stock grant (but not on the cash so paid) pursuant to this subsection 3(d).

(e)

Effective upon your first day of employment (or the first day thereafter that the Company’s common stock is traded on the New York Stock Exchange), the Board will grant to you an option to purchase one-hundred thousand (100,000) shares of common stock of the Company (the “ Option ”) pursuant to the Company’s Long-Term Incentive Plan (and the Company’s form option agreement) with a per share exercise price equal to the fair market value of the per share price of the common stock on the date of grant. The Option shall vest and be fully exercisable on the first anniversary of your first day of employment (or the first day thereafter that the Company’s common stock is traded on the New York Stock Exchange), with respect to thirty-three and one-third percent (33.33%) of the total number of shares subject to the Option. The remaining sixty-six and two-thirds percent (66.67%) of the Option shall vest in equal monthly installments over a period of twenty-four (24) months thereafter. The Option is intended to be treated as an “incentive stock option” to the maximum extent permitted under the Internal Revenue Code of 1986, as amended.

(f)

You will be eligible, but not entitled, to receive additional grants of stock options and restricted capital stock of the Company in such quantities and subject to such conditions as the Board may determine in its sole and absolute discretion.

(g)

The Company will provide you with housing reimbursement in connection with your business travel to the Company’s headquarters in Phoenix in a reasonable amount to be determined by the Board, provided , however , that such reimbursement will be in an amount comparable to the cost of a standard room at the Sheraton Crescent Hotel located in Phoenix, Arizona and shall only apply to housing costs incurred while residing in Phoenix, Arizona on business.

(h)

For each week during the term of this Agreement, the Company will provide you with a reasonable allowance for one round-trip airline ticket from Los Angeles, California to Phoenix, Arizona (or comparable destinations), and back, consistent with the terms of the Company’s travel policies then in effect for executive officers. Upon presentation of receipts, the Company also will reimburse you for all reasonable expenses incurred by you in connection with your transportation to and from the airport in Phoenix and to and from the airport in Los Angeles (consistent with the terms of the Company’s travel policies then in effect for executive officers).

(i)

In the event that you determine to move to Phoenix, Arizona from your current residence, the Company will provide you with a moving package as set forth in a separate letter provided to you. If you resign for any reason, except as a result of a Change of Control as defined in the Definitions section, attached hereto, within twelve (12) months of the date of reimbursement for the move, you must reimburse the Company the full amount of the moving package granted pursuant to this section.

(j)

You may participate in any pension or profit sharing plan, stock purchase plan, group benefit plan, medical 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, and remain, 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.)

(k)

You covenant and agree that, as soon as practicable but in no event more than three (3) years from the date of this Agreement, you will beneficially own, hold and retain shares of common stock of the Company equal in value to your Base Salary for such given year (the “ Minimum Ownership ”); provided, however, that this covenant shall not be construed to require or encourage you to purchase shares of the Company’s common stock on the open market for the sole purpose of achieving the Minimum Ownership, as such purposes are governed by the Company’s insider trader policy. You also covenant and agree that you will not sell or dispose of, or cause anyone else to sell or dispose of, any common stock of the Company that you have received (i) as a result of this Agreement or (ii) pursuant to any other Company compensation, until and unless you have achieved (and will continue to maintain following such sale or disposition) the Minimum Ownership.

(l)

You will be eligible for, but not entitled to, receive such other compensation as may from time to time be granted to you by the Board in its sole and absolute discretion, including additional bonuses approved by the Board or the Board’s Compensation Committee.

(m)

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.

Benefits and Employment Matters . The Company offers a comprehensive array of employee benefit programs. Currently, those programs include paid time off (“PTO”), medical, dental and vision care, paid holidays, disability insurance, life insurance, travel accident insurance, 401(k) Plan, Hypercom Employee Stock Purchase Plan, and tuition reimbursement. Details of these programs will be provided to you. Eligibility for Company benefit programs may vary by employee status, length of service, and by the specific benefit program. Hypercom reserves the right to modify, suspend or terminate its benefit programs in its sole discretion.

5.

Business Expenses . The C