Employment Agreement - iPayment Holdings Inc. and Carl Grimstad
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement"), effective as of February 26,
2001, is entered into between iPayment Holdings, Inc. (hereinafter the
"Company"), a Tennessee corporation, and Carl Grimstad (hereinafter "Employee").
WHEREAS, the Company desires to employ the Employee and to be assured of
its rights to his services in the position of President on the terms and
conditions hereinafter set forth. The Employee is willing to accept such
employment on such terms and conditions; and
WHEREAS, Employee entered into that certain Employment Agreement on
October 12, 2000 with iPayment Technologies, Inc., a California corporation and
subsidiary of the Company ("Subsidiary"), which each of the Company, Subsidiary
and Employee desires to terminate hereby and replace with this Agreement.
NOW, THEREFORE, in consideration of the premises and other mutual
agreements hereinafter set forth, the parties hereto, each intending to be
legally bound hereby, agree as follows:
1. Employment. (a) The Company agrees to, and hereby does, employ Employee
to perform the services and to discharge the duties of President. During the
term of this Agreement, the Employee shall perform such duties as are consistent
with an employee in the position of President.
(b) The duties Employee is to perform hereunder shall be conducted
from Nashville, Tennessee, where the principal offices of the Company are
located. No change in the location of the principal offices of the Company shall
require Employee to perform his duties hereunder from any location other than in
the Nashville, Tennessee area.
2. Term. The term of this Agreement and of the employment of Employee
hereunder shall be for a term of one year commencing on the date hereof, and
thereafter renewing for successive one year terms, each such term to commence on
the successive anniversaries of the commencement date hereof, unless either
party shall give ninety days' notice of intention to terminate prior to the
expiration of any such term, and subject to earlier termination as hereinafter
provided.
3. Acceptance of Employment. (a) Employee hereby accepts such employment
for the compensation and upon the other terms and conditions provided for in
this Agreement and agrees to use his or her best efforts to serve the Company
faithfully and competently and to devote such business time as necessary to
fulfill such employment so long as it shall continue hereunder. Notwithstanding
the foregoing, Employee may engage in investing and related activities providing
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such activities do not detract from his ability to perform the duties set out
hereunder.
(b) Employee acknowledges that the services to be rendered by him
under this Agreement require special training, skill, information and experience
and that this Agreement is entered into for the purpose of obtaining such
skilled services for the Company. Employee warrants and represents that he is
under no contractual arrangement or agreement or provision under law or equity
which prohibits or limits the rendering to the Company of the services
contemplated by this Agreement.
4. Compensation. (a) As compensation for the services contemplated by this
Agreement, beginning April 1, 2001, the Company shall pay to Employee a base
salary of ONE HUNDRED EIGHTY THOUSAND AND NO/100 Dollars ($180,000) per year,
less all applicable taxes and payroll deductions, payable in accordance with
customary Company procedures (the "Base Salary").
(b) In addition, Employee may also be paid, on an annual or other
basis, such bonus or other compensation as the Board of Directors in its sole
discretion may determine to be reasonable compensation for Employee, considering
the performance of Employee, the business and financial condition of the Company
and the operating results achieved.
(c) Employee shall be entitled to four weeks vacation and shall also
be entitled to such other employee benefits as the Board of Directors of the
Company, from time to time, shall determine to be reasonable and feasible for
the Company to provide for a President and no less favorable than the benefits
provided to other executive officers of the Company or any subsidiary of the
Company.
(d) The Company shall reimburse the Employee for all expenses
reasonably incurred by him on behalf of the Company in accordance with Company
policy regarding expenses and reimbursement thereof at the time the expenses are
incurred.
5. Nonassignment. No party hereto may assign any rights or obligations
hereunder without the prior written consent of the other parties.
6. Earlier Termination. (a) Notwithstanding any term of employment
provided for in paragraph 2 hereof, the Company shall have the right to
terminate this Agreement immediately, and without further obligation hereunder,
for any of the following causes:
(i) conviction of, or a plea of guilty or nolo contendere by
Employee to (A) any felony, or (B) any misdemeanor reflecting upon Employee's
honesty or truthfulness;
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(ii) Employee's breach or negligent performance of his or her
duties and obligations arising under this Agreement with the Company;
(iii) fraudulent conduct by Employee, either in connection with
his or her duties as an employee of the Company or otherwise;
(iv) material breach of any policy, rule, or regulation of the
Company;
(v) the Employee dies or becomes mentally or physically
incapacitated or disabled so as to be unable to perform his or her duties; or
(vi) the good faith determination of the Board of Directors that
Employee has failed to perform his or her duties to the Company in a
satisfactory manner.
(b) Notwithstanding the foregoing provisions of paragraph 6(a), the
Company shall retain the right to terminate Employee's employment at any time
without Cause. If Employee's employment hereunder shall be terminated by the
Company for any reason other than for Cause (as defined in paragraph (a) above),
then Employee shall be entitled to receive an amount equal to his or her then
Base Salary for the remaining time period under the Agreement, payable in
accordance with the Company's normal payroll policies.
7. Non-Competition and Confidentiality. (a) In consideration for the
benefits Employee is receiving hereunder, and for other good and valuable
consideration, Employee agrees that during the period beginning on the date
hereof and ending two (2) years following the termination of Employee's
employment with the Company for any reason whatsoever, Employee directly or
indirectly, whether as a shareholder, director, employee, officer or otherwise,
shall not (i) operate, develop or own any interest (other than ownership of less
than 5% of the equity securities of a publicly traded company) in any entity
which engages in the business of providing credit card authorization and related
services anywhere in the world; (ii) solicit or hire any employee of the Company
who was an employee of the Company at any time within the thirty (30) day period
prior to the date of the termination of Employee's employment; or (iii)
interfere with, disrupt or attempt to disrupt any past, present or prospective
material business relationship, contractual or otherwise existing as of the date
of the termination of Employee's employment.
(b) Employee further agrees that during the period beginning on the
date hereof and ending two (2) years following the termination of his or her
employment, he will not voluntarily at any time, directly or indirectly,
communicate, furnish, divulge or disclose to any individual, firm, association,
partnership or corporation any knowledge or information (collectively, the
"Information") with respect to any matters concerning or relating to the
business of
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the Company, including but not limited to, copies or originals of any
information supplied to the Company. The foregoing restrictions with respect to
the Information shall not apply to any Information which (i) on the date hereof
or thereafter becomes generally available to the public other than as a result
of a disclosure, directly or indirectly, in violation of the terms hereof, (ii)
was available to such party on a non-confidential basis prior to its disclosure,
(iii) becomes available to such party on a non-confidential basis from a source
other than the other party or its representatives, which source was not itself
bound by a confidentiality agreement, or (iv) is disclosed pursuant to any legal
requirement or in connection with any legal process.
(c) Employee agrees and acknowledges that the violation of the
covenants in this paragraph 7 would cause irreparable injury to the Company and
that the remedy at law for any violation or threatened violation would be
inadequate and that the Company shall be entitled to temporary and permanent
injunctive relief or other equitable relief without the necessity of proving
actual damages. Employee represents that enforcement of a remedy by way of
injunction will not prevent him from earning a livelihood. Employee further
represents and admits that time periods contained in paragraph 7(a) are
reasonably necessary to protect the interests of the Company and would not
unfairly or unreasonably restrict Employee.
(d) For purposes of this Section 7 only, references to the Company
shall include any and all subsidiary companies of the Company existing now and
as of the date of termination of this Agreement.
8. Notices. Any notice or other communication under this Agreement shall
be in writing and shall be sent by certified or registered mail addressed to the
respective parties as follows:
If to the Company: iPayment Holdings, Inc.
30 Burton Hills, Suite 520
Nashville, TN 37215
Attn: General Counsel
with a copy to: Waller Lansden Dortch & Davis
A Professional Limited Liability Company
Nashville City Center
511 Union Street, Suite 2100
Post Office Box 198966
Nashville, Tennessee 37219-8966
Attn: Howard W. Herndon, Esq.
If to Employee: Carl Grimstad
311 Jackson Boulevard
Nashville, Tennessee 37205
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Any such notice or other communication shall be deemed to have been given when
deposited, postage paid, in the United States mail. Either of the above
addresses may be changed at any time on 10 days' prior notice given as above
provided.
9. Governing Law. This Agreement shall be governed in all respects by the
laws of the State of Tennessee
10. Headings. The headings herein are for convenience of reference only
and shall not be deemed to be part of the substance of this Agreement.
11. Entire Agreement. This Agreement sets forth the entire agreement
between the parties with respect to the subject matter hereof and may be changed
or supplemented only by a written agreement signed by the Employee and the
Company.
12. Modification. This Agreement may not be modified or amended in any way
except in writing by the parties hereto.
13. Enforceability; Severability. It is the intention of the Company and
Employee that the provisions of this Agreement shall be enforced to the fullest
extent permissible under the laws and public policies of the laws of the State
of Tennessee, but that the unenforceability (or the modification to conform with
such laws or public policies) of any provisions hereof shall not render
unenforceable or impair the remainder of this Agreement. Accordingly, if any
provision of this Agreement shall be determined to be invalid or unenforceable,
either in whole or in part, this Agreement shall be deemed amended to delete or
modify, as necessary, the offending provisions and to alter the balance of this
Agreement in order to render the same valid and enforceable to the fullest
extent permissible as aforesaid. The provisions of this Agreement shall be
deemed severable, and the invalidity or unenforceability of any one or more of
the provisions hereof shall not affect the validity and enforceability of the
other provisions hereof. In the event that any provision of paragraph 7 relating
to the time period and/or geographical areas of restriction shall be declared by
a court of competent jurisdiction to exceed the maximum time period and/or
geographical areas of restriction such court deems reasonable and enforceable,
said time period and/or geographical areas of restriction shall be deemed to
become and thereafter be the maximum time period and/or geographical area of
restriction that such court deems reasonable and enforceable.
14. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same agreement.
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IN WITNESS WHEREOF, the Company and Employee have executed this Agreement
as of the date first above written.
iPayment Holdings, Inc.
By: /s/ Gregory S. Daily
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Title: Chief Executive Officer
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/s/ Carl Grimstad
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Carl Grimstad
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