Document:

Exhibit 10.31

OPTION AGREEMENT

          AGREEMENT, dated as of July 31, 2003 among Robert O. Carr, an individual resident of the State of New Jersey (“Carr”), the holders (collectively, the “Grantors”) of the shares of capital stock of Heartland Payment Systems, Inc., a Delaware corporation (the “Company”), listed on Schedule 1 hereto, and the Company.

          WHEREAS, the Grantors have agreed to grant to Carr an option to purchase certain shares of capital stock of the Company, upon the terms and subject to the conditions set forth herein; and

          WHEREAS, the parties hereto are parties to the Amended and Restated Shareholders’ Agreement dated as of October 11, 2001 (as amended by the First Amendment thereto dated as of December 31, 2002 and the Second Amendment thereto dated as of March 21, 2003, and as may be further amended, modified and supplemented from time to time, the “Shareholders’ Agreement”) and have agreed to amend the Shareholders’ Agreement in certain respects in connection herewith. Capitalized terms used but not otherwise defined herein shall have the meanings provided to such terms in the Shareholders’ Agreement.

          NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE 1 
 STOCK OPTION

          Section 1.01. Grant of Stock Option. Each of the Grantors, severally but not jointly, hereby grants Carr an irrevocable option (collectively, the “Option”) to purchase up to the aggregate number of shares of Series A Senior Convertible Participating Preferred Stock, par value $0.001 per share, of the Company set forth opposite its name on Schedule 1 hereto (collectively, and as the same may be adjusted pursuant to Section
1.05, the “Optioned Shares”) at a purchase price of $12.50 per Optioned Share (the “Purchase Price”), subject to the terms and conditions provided herein.

          Section
1.02. Exercise of Option, (a) Subject to the conditions below and as set forth in Section 1.04 hereof, Carr may exercise the Option, in whole or in part, at any time or from time to time on any Business Day after the date hereof and prior to 5:00 p.m., New York City time, on July 31, 2006 (the “Expiration Date”). If Carr wishes to exercise the Option for all or some of the Optioned Shares, Carr shall send a written notice (the “Exercise Notice”) to the Grantors specifying the total number of Optioned Shares that Carr wishes to purchase pursuant to such exercise (which, in the event of an exercise for less than all of the Optioned Shares, shall be allocated among the Grantors on a pro rata basis in accordance with the percentages set forth on Schedule 1 hereto) and the place, the date of purchase (which shall be not less than one nor more than 20
Business

Days after the date of the Exercise Notice, and no later than the Expiration Date), and the time for the closing of such purchase. Each closing of a purchase of Optioned Shares (a “Closing”) shall take place at the place, on the date (the “Closing Date”) and at the time designated by Carr in the Exercise Notice; provided that if, at any Closing Date, the conditions set forth in Section 1.04 shall not have been satisfied (or waived by the Grantors), Carr may postpone the Closing until a date within five Business Days after such conditions are satisfied (but no later than the Expiration
Date).

          (b)          Subject to Article 2 hereof, Carr shall not be under any obligation to deliver any Exercise Notice and may allow the Option to terminate without purchasing any Optioned Shares hereunder, provided, however that once Carr has delivered to the Grantors an Exercise Notice, subject to the terms and conditions of this Agreement, Carr shall be bound to effect the purchase as described in such Exercise Notice.

          (c)          The parties agree that, for tax purposes, the Optioned Shares delivered to Carr pursuant to Section 1.03 shall be treated as having been delivered by the Company to Carr in accordance with Treasury Regulation  Section 1.83-6(d)(l). The parties further agree to treat the transactions described herein for all tax purposes in a manner consistent with the preceding sentence.

          (d)          (i)  The Purchase Price for the Optioned Shares to be purchased upon any exercise of the Option shall be payable, at Carr’s option, in cash or by acceptance of a reduced number of Optioned Shares in accordance with the further provisions of this Section 1.02(d) (by “cashless exchange”); provided, however, that, only with respect to those Optioned Shares held by Grantors who are “Greenhill Funds” (as set forth on Schedule 1 hereto), the Purchase Price shall not be payable in cash if, in the opinion of such Grantors’ counsel, doing so would give rise to the imposition of a withholding tax on any such Grantor (or the beneficial owners thereof) or the Company that is greater than the withholding tax that would otherwise be imposed on such Grantor (or the beneficial owners thereof) or the Company if
the Purchase Price had been paid by cashless exchange. Should the foregoing
proviso apply, the Grantors who are “Greenhill Funds” shall, at
Carr’s request, confer with Carr to determine if the Option may be
exercised in such other reasonable manner as (A) would permit Carr to purchase
all of the Optioned Shares other than by cashless exchange and (B) would not
cause the Grantors (or the beneficial owners thereof) or the Company to be
subject to such adverse withholding tax.

                       (ii) If by cashless exchange, Carr shall receive from each Grantor upon exercise of the Option of such Grantor the number of Optioned Shares determined by multiplying (A) the number of Optioned Shares of such Grantor with respect to which the Option is being exercised at such time by (B) a fraction, (1) the numerator of which shall be the amount by which (x) the Value Per Optioned Share at such time exceeds (y) the Purchase Price at such time, and (2) the denominator of which shall be the Value Per Optioned Share at such time. For purposes of this Section 1.02(d):

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          “Value   Per Optioned Share” shall   mean, on any date, the value of one Optioned Share as of such date, which   value shall be determined as follows:
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (A)          if   exercise of the Option is in connection with the closing of a Qualified   Public Offering, then Value Per Optioned Share shall be equal to the public   offering price per Optioned Share in the Qualified Public Offering (before   deduction of any underwriters’ fees, discounts or commissions);
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (B)          if
exercise of the Option is in connection with the closing of any Transfer of
Optioned Shares by the Grantor thereof, then Value Per Optioned Share shall be
equal to the value of one Optioned Share implied by such transaction as of such
date, determined (to the extent not comprised of cash) by an independent
investment bank or other valuation firm of national reputation selected by such
Grantor and reasonably acceptable to Carr; and
 
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (C)          otherwise   Value Per Optioned Share shall be the Current Market Price Per Optioned   Share.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
In each case, Value Per   Optioned Share shall be determined assuming that all Optioned Shares are   converted into shares of Common Stock on or prior to the relevant date of   determination but without giving effect to any discount for any minority or   controlling interest or for any lack of liquidity of the shares of Common   Stock.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
“Current   Market Price Per Optioned
Share” shall mean, on any date, for each Optioned Share, (1) if such   security is of a class or series of securities then listed or admitted to   trading on any national securities exchange or traded on any national market   system, the average of the daily closing prices for the ten trading days   before such date, excluding any trades which are not bona fide, arms’ length   transactions (and the closing price for each such day shall be the last sale   price on such date or, if no such sale takes place on such date, the average   of the closing bid and ask prices on such date, in each case as officially   reported on the principal national securities exchange or national market   system on which securities are then listed, admitted to trading or traded),   (2) if such security is not of a class or series of securities then listed or   admitted to trading on any national securities exchange or traded on
any   national market system, the average of the daily reported closing bid and ask   prices in the over-the-counter market for the ten trading days before such   date, as shown by the National Association of Securities Dealers, Inc.   automated quotation
  

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system, or if such securities are not then quoted on   such system, as published by the National Quotation Bureau, Incorporated or   any similar successor organization, and in either case as reported by any   member firm of the New York Stock Exchange selected by the Grantor, and (3)   if such security is not of a class or series of securities then listed or   admitted to trading on any national securities exchange or traded on any   national market system, and if no closing bid and asked prices thereof are   then so quoted or published in the over-the-counter market, the “Current   Market Price” of such security shall be the fair value thereof on such date,   which shall be determined in good faith by the Board (provided, that, if   either the Grantor or Carr notifies the Board and the other parties hereto in   writing disputing any such determination of the Board within 20 days after   such determination, the Grantor and Carr shall select an investment
bank of   national recognition reasonably acceptable to both the Grantor and Carr to   determine the fair value of such security, the investment bank’s   determination to be conclusive, absent manifest error, and the cost of such   determination to be borne by the Company, except that the party requesting   such determination shall bear such costs if the investment bank’s   determination is equal to or less than the Board’s determination).
  

          Section 1.03. Closing. At each Closing, (a) each Grantor shall deliver to Carr a certificate or certificates representing the Optioned Shares to be purchased from such Grantor at such Closing (in the amount specified in Section 1.02(d) hereof), in each case duly endorsed or accompanied by stock powers duly executed in blank; and (b) Carr shall deliver to the Company an amount sufficient to enable the Company to comply with its tax withholding obligations (in accordance with Section 1.02(c) hereof) associated with the purchase of such Optioned Shares. Amounts described in clause (b) of the preceding sentence shall be paid by wire transfer of immediately available funds to an account designated by the Company prior to the Closing or, if no such account is designated by the Company, by certified or bank cashier’s check or checks payable to or upon the order of the Company.

          Section 1.04. Conditions to Grantor’s Obligations. The obligation of Grantors to sell Optioned Shares at any Closing is subject to the following conditions:

          (a)          The representations and warranties of Carr contained in Article 4 shall be true and correct at and as of the Closing Date as if made at and as of such date, and the Grantors shall have received a certificate signed by Carr to the foregoing effect; and

          (b)          There shall be no preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, nor any
statute, rule, regulation or order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining the purchase and sale of such
Optioned Shares at the Closing.

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          Section 1.05. Adjustment Upon Change in Capital Stock; Conversion of Optioned Shares. In the event of any change in the Company’s capital stock by reason of any stock dividend, stock split, reverse stock split, stock combination, recapitalization, reclassification, exchange of securities, extraordinary or liquidating dividend or distribution, or in the event of any conversion of Optioned Shares into shares of common stock, par value $0.001 per share, of the Company or other securities in accordance with the terms of the Optioned Shares, then the number and kind of shares or securities subject to the Option and the Purchase Price (but not the total purchase price for all Optioned Shares) shall be appropriately and equitably adjusted so that Carr shall receive, upon exercise of the Option, and payment of the same total purchase price, the number and class of shares or other securities or
property that Carr would have received in respect of the Optioned Shares purchasable upon exercise of the Option if the Option had been exercised immediately prior to such event.

ARTICLE 2

MANDATORY EXERCISE

          Section 2.01. Mandatory Exercise. In the event of any Mandatory Exercise Event (as hereinafter defined), each Grantor shall have the right to require that Carr exercise all, but not less than all, of the Option granted by such Grantor and remaining outstanding hereunder (a “Mandatory Exercise”) at the time of (or immediately prior to) such Mandatory Exercise Event. In order to exercise this right, the Grantor shall deliver irrevocable notice (a “Mandatory Exercise Notice”) of such Mandatory Exercise to Carr not less than 10 Business Days prior to the date of proposed consummation of such Mandatory Exercise Event, stating the date of such consummation (which shall be a Closing Date hereunder), the applicable Purchase Price and the applicable Value Per Optioned Share at which the Grantor proposes to Transfer Company Securities in such Mandatory Exercise Event;
provided that if the Purchase Price is greater than such Value Per Optioned Share, Carr may, in lieu of exercising the Option, submit to the irrevocable cancellation thereof without any liability for payment of the Purchase Price with respect thereto. In any event, this Option with respect to any Grantor shall terminate upon consummation of any Mandatory Exercise Event.

          The Closing of any Mandatory Exercise shall be governed by the provisions of Article 1, and the Mandatory Exercise Notice delivered pursuant to this Section 2.01 shall be deemed to be an “Exercise Notice” delivered in accordance with Section 1.02 (unless Carr shall have submitted to the irrevocable cancellation of the Option).

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          Section
2.02 Definitions. For purposes of this Article 2, the term
“Mandatory Exercise Event” means (i) any sale, conveyance,
exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of the
Company and its Subsidiaries (whether in a single transaction or in a series of
related or substantially contemporaneous transactions), (ii) any merger,
reorganization, consolidation or other transaction involving the Company in
which the holders of the capital stock of the Company immediately prior to such
transaction do not retain a majority of the voting power in the continuing
entity (whether in a single transaction or in a series of related or
substantially contemporaneous transactions), (iii) any Drag-Along Sale, (iv)
from and after July 31, 2005, any Transfer by a Grantor to a Third Party of all
Company Securities owned by such Grantor or (v) if any Grantor shall at any time
from and after July 31, 2005 Transfer any Preferred Shares as a result of which
such Grantor shall own an amount of Preferred Shares that is less than or equal
to the amount of Optioned Shares subject to the Option granted by such
Grantor.

ARTICLE 3

REPRESENTATIONS  AND WARRANTIES OF GRANTORS 

          Each Grantor severally represents and warrants to Carr that:

          Section
3.01. Power And Authority; Binding Effect. Such Grantor has all requisite power and authority to enter into this Agreement and to perform its obligations hereunder. The execution, delivery and performance by such Grantor of this Agreement and the consummation by such Grantor of the transactions contemplated hereby (i) have been duly authorized by such Grantor and no other action on the part of such Grantor is necessary to authorize the execution, delivery or performance by such Grantor of this Agreement and the consummation by such Grantor of the transactions contemplated hereby and (ii) require no action by or in respect of, or filing with, any governmental body, agency or official. This Agreement has been duly executed and delivered by such Grantor and is a valid and binding Agreement of such Grantor, enforceable against it in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, moratorium or other similar laws relating to creditors’ rights generally.

          Section
3.02. Valid Title. Such Grantor is the beneficial owner of the Optioned Shares with no restrictions on the Grantor’s rights of disposition pertaining thereto (except for those set forth in the Shareholders’ Agreement). At each Closing, such Grantor will convey good title to the Optioned Shares being purchased free and clear of any and all claims, liens, charges, encumbrances and security interests.

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ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF CARR

          Carr represents and warrants to each of the Grantors:

          Section
4.01. Power and Authority. Carr has all requisite power and authority to
enter into this Agreement and to perform his obligations hereunder. The
execution, delivery and performance by Carr of this Agreement, including the
exercise of the Option and purchase of the Optioned Shares hereunder, (i) have
been duly authorized by Carr and no other action on the part of Carr is
necessary to authorize the execution, delivery or performance by Carr of this
Agreement and the consummation by Carr of the transactions contemplated hereby,
(ii) require no action by or in respect of, or filing with, any governmental
body, agency or official and (iii) do not and will not (A) violate the
organizational documents of Carr, (B) violate any applicable law, rule,
regulation, judgment, injunction, order or decree, (C) require any consent or
other action by any Person under, constitute a default under, or give rise to
any right of termination, cancellation or acceleration of any right or
obligation of Carr or the Company or to a loss of any benefit to which Carr or
the Company is entitled under any provision of any agreement or other instrument
being upon Carr or the Company or (D) result in the creation or imposition of
any lien on any asset of Carr or the Company. This Agreement has been duly
executed and delivered by Carr and is a valid and binding agreement of Carr,
enforceable against him in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, moratorium or other similar laws relating
to creditors’ rights generally.

          Section
4.02. Purchase for Investment. Carr is acquiring this Option for his own account for investment and not with a view to the resale or distribution thereof or any interest therein and will not Transfer this Option except in compliance with the Securities Act of 1933. Can is an “accredited investor” as such term is defined in Regulation D under the Securities Act of 1933.

          Section 4.03.
Acquisition for Carr’s Account. Any Optioned Shares acquired upon
exercise of the Option will be acquired by Carr for his own account for
investment and not with a view to the resale or distribution thereof or any
interest therein and will not be Transferred except in compliance with the
Securities Act of 1933.

          Section 4.04.
Acknowledgment. Carr hereby acknowledges and agrees that the Optioned
Shares are not subject to the “upside sharing” arrangement set forth
in paragraph l(a) of the purchase agreement dated as of March 21, 2003 by and
among Carr Holdings, L.L.C., the Grantors and the Company.

          Section 4.05.
No Restriction on Grantors’ Rights Prior to Exercise. Carr hereby
acknowledges and agrees that the Grantors shall be free to exercise all powers
of ownership of the Optioned Shares (including, without limitation, disposition
and voting rights) at all times prior to the Closing (if any) with respect to
such Optioned Shares, subject to the terms and conditions set forth in Article 5
hereof and in the Shareholders’ Agreement.

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ARTICLE 5

TAG-A LONG RIGHTS 

          Section 5.01.
Tag-Along Right. (a) If, at any time prior to the Expiration Date, any
Grantor (the “Option Tag-Along Seller”) proposes to Transfer,
in a transaction otherwise permitted by Article 3 of the Shareholders’
Agreement, any number of Preferred Shares (an “Option Tag-Along
Sale”), then the Option Tag-Along Seller shall provide Carr written
notice of the terms and conditions of such proposed Transfer (an “Option
Tag-Along Notice”) and offer Carr the opportunity to participate in
such Transfer in accordance with this Section 5.01, and (ii) Carr may elect, at
his option, to participate in the proposed Transfer in accordance with this
Section 5.01.

          The Option Tag-Along Notice shall identify the number of Preferred Shares subject to the offer (the “Option Tag-Along Offer”), the consideration for which the Transfer is proposed to be made, and all other material terms and conditions of the Option Tag-Along Offer, including the form of the proposed agreement, if any, and a firm offer by the proposed transferee to purchase Optioned Shares from Carr in accordance with this Section 5.01.

          From the date of his receipt of the Option Tag-Along Notice, Carr shall have the right (the “Option Tag-Along Right”), exercisable by notice (the “Option Tag-Along Response Notice”) given to the Option Tag-Along Seller within 15 Business Days after its receipt of the Option Tag-Along Notice (the “Option Tag-Along Notice Period”), to request that the Option Tag-Along Seller include in the proposed Transfer the number of Optioned Shares as is specified in the Option Tag-Along Response Notice; provided that Carr shall be entitled to include in the Option Tag-Along Sale only his Option Tag-Along Portion (as hereinafter defined) of the Optioned Shares and the Option Tag-Along Seller shall be entitled to include the number of Company Securities proposed to be Transferred by the Option Tag-Along Seller as set forth in the Option Tag-Along Notice
(reduced, to the extent necessary, so that Carr shall be able to include his Option Tag-Along Portion). In connection with any exercise of an Option Tag-Along Right, Carr shall exercise (in accordance with the provisions of Article 1) the Option with respect to the Optioned Shares to be Transferred pursuant thereto, with the Closing of such Option exercise to occur either prior to, or simultaneous with, the consummation of such Option Tag-Along Sale; provided that Carr may condition the exercise of such Option upon the consummation of such Option Tag-Along Sale. Each Option Tag-Along Notice shall include wire transfer instructions for payment of the cash portion of the consideration. Carr shall deliver to the Option Tag-Along Seller or a representative of the Option Tag-Along Seller designated in the Option Tag-Along Notice, when he delivers his

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Option Tag-Along Response Notice, the certificate or certificates, if any, representing the Optioned Shares to be included in the proposed Transfer, together with a limited power-of-attorney authorizing the Option Tag-Along Seller to Transfer such Optioned Shares on the terms set forth in the Option Tag-Along Notice. Delivery of the Option Tag-Along Response Notice with such certificate or certificates and limited power-of-attomey shall constitute an irrevocable acceptance of the Option Tag-Along Offer by Carr. As used in this paragraph, “Option Tag-Along Portion” means, for any Option Tag-Along Sale by any Option Tag-Along Seller, the number of Optioned Shares that such Option Tag-Along Seller has granted to Carr a right to purchase pursuant to the Option, as in effect immediately prior to such Transfer (to the extent not previously exercised), multiplied by a fraction the numerator of which is the aggregate number of Preferred Shares proposed to
be Transferred to the purchaser by such Option Tag-Along Seller in such Option Tag-Along Sale and the denominator of which is the aggregate number of Preferred Shares owned by such Option Tag-Along Seller, including, in both the numerator and the denominator, the Optioned Shares.

          If, at the end of a
120-day period after such delivery of such Option Tag-Along Notice (which
120-day period shall be extended if any of the transactions contemplated by the
Option Tag-Along Offer are subject to regulatory approval until the expiration
of five Business Days after all such approvals have been received, but in no
event later than 180 days following receipt of such Option Tag-Along Notice),
the Option Tag-Along Seller has not completed the Transfer of all such Company
Securities on substantially the same terms and conditions set forth in the
Option Tag-Along Notice, the Option Tag-Along Seller shall (i) return to Carr
the limited power-of-attorney (and all copies thereof) together with all
certificates representing Optioned Shares that Carr delivered for Transfer
pursuant to this Section 5.01(a) and any other documents in the possession of
the Option Tag-Along Seller executed by Carr in connection with the proposed
Option Tag-Along Sale, and (ii) not conduct any Transfer of Preferred Shares
without again complying with this Section.

          (b)          Concurrently with the consummation of the Option Tag-Along Sale, the Option Tag-Along Seller shall (i) notify Carr thereof, (ii) remit to Carr the total consideration for the Optioned Shares Transferred pursuant thereto, with the cash portion thereof to be paid by wire transfer of immediately available funds to the bank account designated by Carr in his Option Tag-Along Response Notice and (iii) promptly after the consummation of such Option Tag-Along Sale, furnish such other evidence of the completion and the date of completion of such Transfer and the terms thereof as may be reasonably requested by Carr.

          (c)          If at the termination of the Option Tag-Along Notice Period Carr shall not have elected to participate in the Option Tag-Along Sale, Carr shall be deemed to have waived his rights under Section 5.01 (a) with respect to the Transfer of any Optioned Shares pursuant to such Option Tag-Along Sale.

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          (d)          The Option Tag-Along Seller shall Transfer, on behalf of itself and Carr, the Company Securities subject to the Option Tag-Along Offer and elected to be Transferred on the terms and conditions set forth in the Option Tag-Along Notice within 120 days (or such longer period as extended under Section 5.01 (a)) of the date on which all Option Tag-Along Rights shall have been waived, exercised or expired; provided that the price payable in any such Transfer may exceed the price specified in the Option Tag-Along Notice by up to 10%.

          (e)          Notwithstanding anything contained in this Section 5.01, there shall be no liability on the part of the Option Tag-Along Seller to Carr (other than the obligation to return any certificates evidencing Optioned Shares and limited powers-of-attorney received by the Option Tag-Along Seller) if the Transfer of Company Securities pursuant to Section
5.01 is not consummated for whatever reason. Whether to effect a Transfer of Company Securities pursuant to this Section 5.01 by the Option Tag-Along Seller is in the sole and absolute discretion of the Option Tag-Along Seller.

          (f)          The provisions of this Section 5.01 shall not apply to any proposed Transfer of Company Securities by a Grantor to any Permitted Transferee of such Grantor in accordance with Section 3.03 of the Shareholders’ Agreement. This Section 5.01 shall terminate upon the earlier of the Expiration Date or the date on which the Option shall have been exercised or cancelled in full.

ARTICLE 6

MISCELLANEOUS

          Section 6.01. Expenses. Except as otherwise set forth herein, the Company agrees to pay all reasonable out-of-pocket expenses incurred by Grantors in connection with the transactions contemplated hereby and by the Third Amendment to the Shareholders’ Agreement dated as of the date hereof.

          Section 6.02. Further Assurances. Carr and the Grantors will each execute and deliver or cause to be executed and delivered all further documents and instruments and take all such further action as may be reasonably necessary in order to consummate the transactions contemplated hereby.

          Section 6.03. Notices. All notices, requests, claims, demands and other communications provided for by this Agreement (unless otherwise specified herein) shall be in writing and delivered in accordance with the notice provisions set forth in the Shareholders’ Agreement.

          Section 6.04. Amendments and Waivers. This Agreement may not be
modified, amended, altered or supplemented, except upon the execution and
delivery of a written agreement executed by each of the parties hereto. Any
provision of this Agreement may be waived if, but only if, such waiver is in
writing and is signed by the party against whom the waiver is to be
effective.

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          Section 6.05. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of the other parties hereto (other than (i) to a Permitted Transferee of such party in accordance with Section 3.03 of the Shareholders’ Agreement, so long as such Permitted Transferee assumes all rights and obligations of such party hereunder and shall become a party to this Agreement, or (ii) in the case of Carr, by Carr to Carr Holdings, L.L.C., so long as Carr Holdings, L.L.C. assumes all rights and obligations of such party hereunder and shall become a party hereto).

          Section 6.06.
Governing Law. This Agreement shall construed in accordance with and
governed by the law of New York without giving effect to the principles of
conflicts of laws thereof.

          Section 6.07.
Jurisdiction. The parties hereto agree that any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby shall be brought in the United States District Court for the Southern
District of New York or any New York State court sitting in New York City, so
long as one of such courts shall have subject matter jurisdiction over such
suit, action or proceeding, and that any cause of action arising out of this
Agreement shall be deemed to have arisen from a transaction of business in the
State of New York, and each of the parties hereby irrevocably consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. Process in any such suit, action or proceeding
may be served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 6.03 shall
be deemed effective service of process on such party.

          Section 6.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

          Section
6.09. Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective as of the date hereof when each party hereto shall have received counterparts hereof signed by all of the other parties hereto.

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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
/s/ ROBERT O. CARR
  
	
  
 
  	
  

  
	
  
 
  	
  
ROBERT O. CARR
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
GREENHILL CAPITAL   PARTNERS, L.P.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By
  	
  
its geaeral partner, GCP,   L.P.
  
	
  
 
  	
  
By
  	
  
its general partner,   Greenhill Capital Partners, LLC
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
 
  
	
   
  	
  
Title:
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
GREENHILL CAPITAL PARTNERS   (CAYMAN), L.P.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By
  	
  
its general partner, GCP,   L.P.
  
	
  
 
  	
  
By
  	
  
its general partner,   Greenhill Capital Partners, LLC
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
By:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
 
  
	
  
 
  	
  
Title:
  	
  
 
  

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
/s/ ROBERT O, CARR
  
	
   
  	
  

  
	
  
 
  	
  
ROBERT O. CARR
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
GREENHILL CAPITAL   PARTNERS, L.P.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By
  	
  
its general partner, GCP,   L.P.
  
	
  
 
  	
  
By
  	
  
its general partner,   Greenhill Capital Partners, LLC
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/ Scott L.Bok
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
Scott L.Bok
  
	
  
 
  	
  
Title:
  	
  
Managing Member
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
GREENHILL CAPITAL PARTNERS   (CAYMAN), L.P.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
By
  	
  
its general partner, GCP,   L.P.
  
	
  
 
  	
  
By
  	
  
its general partner,   Greenhill Capital Partners, LLC
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/ Scott L.Bok
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
Scott L.Bok
  
	
   
  	
  
Title:
  	
  
Managing Member
  

	
  
 
  	
  
GREENHILL   CAPITAL PARTNERS (EXECUTIVES), L.P.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By
  	
  
its general partner, GCP,   L.P.
  
	
  
 
  	
  
By
  	
  
its general partner,   Greenhill Capital Partners, LLC
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
By.
  	
  
/s/ Scott L. Bok
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
s/ Scott L. Bok
  
	
  
 
  	
  
Title:
  	
  
Managing Member
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
GREENHILL CAPITAL, L.P.
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
By
  	
  
its general partner, GCP,   L.P.
  
	
  
 
  	
  
By
  	
  
its general  partner,   Greenhill
Capital Partners, LLC
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/ Scott L.Bok
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
s/ Scott L.Bok
  
	
  
 
  	
  
Title:
  	
  
Managing Member
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
LLR EQUITY PARTNERS, L.P,
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
LLR Capital, L.P.
  
	
  
 
  	
  
 
  	
  
Its General Partner
  
	
  
 
  	
  
By:
  	
  
LLR Capital, LLC
  
	
  
 
  	
  
 
  	
  
Its General Partner
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
By:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
 
  
	
  
 
  	
  
Title:
  	
  
 
  

	
  
 
  	
  
GREENHILL CAPITAL PARTNERS   (EXECUTIVES), L.P.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By
  	
  
its general partner, GCP,   L.P.
  
	
   
  	
  
By
  	
  
its general partner,   Greenhill Capital Partners, LLC
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
 
  
	
  
 
  	
  
Title:
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
GREENHILL CAPITAL, L.P.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By
  	
  
its general partner, GCP,   L.P.
  
	
  
 
  	
  
By
  	
  
its general partner, Greenhill   Capita! Partners, LLC
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
 
  
	
   
  	
  
Title:
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
LLR EQUITY PARTNERS, L.P.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
LLR Capital, L.P.
  
	
  
 
  	
  
 
  	
  
Its General Partner
  
	
  
 
  	
  
By.
  	
  
LLR Capital, LLC
  
	
   
  	
  
 
  	
  
Its General Partner
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/ Mitchell Hollin
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
Mitchell Hollin
  
	
  
 
  	
  
Title:
  	
  
Member
  

	
   
  	
  
LLR EQUITY PARTNERS   PARALLEL, L.P.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
LLR Capital, L.P,
  
	
  
 
  	
  
 
  	
  
Its General Partner
  
	
  
 
  	
  
By:
  	
  
LLR Capital, LLC
  
	
  
 
  	
  
 
  	
  
Its Genera] Partner
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
By;
  	
  
Mitchell Hollin
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
Mitchell Hollin
  
	
  
 
  	
  
Title:
  	
  
Member
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
HEARTLAND PAYMENT SYSTEMS,   INC.
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
 
  
	
  
 
  	
  
Title:
  	
  
 
  

	
  
 
  	
  
LLR EQUITY PARTNERS   PARALLEL, L.P.
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
By:
  	
  
LLR Capital, L.P,
  
	
  
 
  	
  
 
  	
  
Its General Partner
  
	
  
 
  	
  
By:
  	
  
LLR Capital, LLC
  
	
  
 
  	
  
 
  	
  
Its General Partner
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
 
  
	
   
  	
  
Title:
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
HEARTLAND PAYMENT SYSTEMS,   INC.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/ Robert H.B. Baldwind. Jr.
  
	
  
 
  	
  
 
  	
  

  
	
   
  	
  
Name:
  	
  
Robert H.B. Baldwind. Jr.
  
	
  
 
  	
  
Title:
  	
  
CFO & Secretary
  

SCHEDULE 1

GREENHILL FUNDS:

	
  
Grantor
  	
   
 	
  
Aggregate Number of 
   Optioned Shares
  	
   
 	
  
Aggregate 
   Purchase Price
  	
   
 	
  
ProRata 
   Percentage
  	
   
 
	
  

  	
   
  	
  

  	
  

  	
  
 
  	
  

  	
  

  	
  
 
  	
  

  	
  

  	
  
 
  
	
  
Greenhill Capital Partners,   L.P.
  	
  
 
  	
  
 
  	
  
382,656
  	
  
 
  	
  
$
  	
  
4,783,200.00
  	
  
 
  	
  
 
  	
  
38.26
  	
  
%
  
	
  Greenhill Capital Partners   (Cayman), L.P.
  	
  
 
  	
  
 
  	
  
63,877
  	
  
 
  	
  
$
  	
  
798,462.50
  	
  
 
  	
  
 
  	
  
6.39
  	
  
%
  
	
  
Greenhill Capital Partners   (Executives), L.P.
  	
  
 
  	
  
 
  	
  
61,792
  	
  
 
  	
  
$
  	
  
772,400.00
  	
  
 
  	
  
 
  	
  
6.18
  	
  
%
  
	
  Greenhill Capital,
  L.P.
  	
  
 
  	
  
 
  	
  
116,675
  	
  
 
  	
  
$
  	
  
1,458,437.50
  	
  
 
  	
  
 
  	
  
11.67
  	
  
%
  
	
  
 
  	
  
 
  	
  

  	
  

  	
  
 
  	
  

  	
  

  	
  
 
  	
  

  	
  

  	
  
 
  
	
  TOTAL
  	
  
 
  	
  
 
  	
  
625,000
  	
  
 
  	
  
$
  	
  
7,812,500.00
  	
  
 
  	
  
 
  	
  
62.50
  	
  
%
  

LLR FUNDS.

	
  Grantor
  	
   
 	
  
Aggregate Number of 
   Optioned Shares
  	
   
 	
  
Aggregate 
   Purchase Price
  	
   
 	
  
ProRata 
   Percentage
  	
   
 
	
  

  	
  
 
  	
  

  	
  

  	
  
 
  	
  

  	
  

  	
  
 
  	
  

  	
  

  	
  
 
  
	
  
LLR Equity Partners, L.P.
  	
  
 
  	
  
 
  	
  
340,449
  	
  
 
  	
  
$
  	
  
4,255,612.50
  	
  
 
  	
  
 
  	
  
34.04
  	
  
%
  
	
  LLR Equity Partners
  Parallel, L.P.
  	
  
 
  	
  
 
  	
  
34,551
  	
  
 
  	
  
$
  	
  
431,887.50
  	
  
 
  	
  
 
  	
  
3.46
  	
  
%
  
	
  
 
  	
  
 
  	
  

  	
  

  	
  
 
  	
  

  	
  

  	
  
 
  	
  

  	
  

  	
  
 
  
	
  Total
  	
  
 
  	
  
 
  	
  
375,000
  	
  
 
  	
  
$
  	
  
4,687,500.00
  	
  
 
  	
  
 
  	
  
37.50
  	
  
%
  
	
  
 
  	
  
 
  	
  

  	
  

  	
  
 
  	
  

  	
  

  	
  
 
  	
  

  	
  

  	
  
 
  
	
  TOTAL FOR ALL GRANTORS
  	
   
  	
   
  	
  1,000,000
  	
   
  	
  $
  	
  12,500,000.00
  	
   
  	
   
  	
  100
  	
  %Exhibit 10(m)

 

 

 

 

 

January 12, 2005

 

 

Mr. Perry Beadon

640 Patriot Road

Southbury, CT 06488

 

Dear Perry:

 

I am pleased to offer you the position of Senior Vice President, Global Sales.  The terms of the offer are as follows:

 

Base Salary:  You will be entitled to an annualized base salary of $245,000.

 

Annual Cash Bonus:  You will be eligible for an annual cash bonus based on Company performance at a target of 60% of base salary. 

 

Equity Awards:  Upon hire, the Company will grant you options to purchase 190,000 shares of Company common stock pursuant to the Company’s 2003 Stock Option Plan and 60,000 shares of restricted stock.  The restricted stock award is contingent on shareholder approval of a new equity plan.  The terms of the option and restricted stock awards are described as follows and will be outlined in a non-qualified stock option agreement and a restricted stock award agreement which will be given to you upon hire.

 

Stock Options

The options consist of a time vesting option to purchase 63,333 shares of stock, and a performance vesting option to purchase 126,667 shares of stock.  The options will be granted on your hire date at “fair market value”. 

 

The time option vests and becomes exercisable over three years in three equal installments on your 1st, 2nd and 3rd  employment anniversary. 

 

The performance option vests and becomes exercisable with respect to one-third of the shares covered by the performance option on the last day of each of the Company’s fiscal years 2005, 2006, and 2007, but only if the average daily closing share price of the Company common stock during the last quarter of such fiscal year equals or exceeds the “share price target” for such fiscal year.  The share price targets for fiscal years 2005, 2006, and 2007 are $9.50, $12.00, and $14.50, respectively.  The performance option includes a cumulative catch-up feature, so that, to the extent any shares do not vest with respect to a fiscal year because the share price target for such fiscal year is not met, such shares may vest and become exercisable in a subsequent fiscal year if the share price target for such subsequent fiscal year is met.  However, any shares that are not vested and exercisable as of the
end of fiscal year 2007 shall be immediately terminated and canceled.

 

 

 

 

Mr. Perry Beadon

January 10, 2005

Page 2 of 3

 

 

 

 

 

Restricted Stock:  One-third of the shares of the restricted stock vest on the last day of each of the Company’s fiscal years 2005, 2006, and 2007, subject to the Company’s attainment of 100% of the performance target for such fiscal year (this target will be identical to the target for such year under the Company’s executive bonus plan), provided that, if the Company attains or exceeds 90% of the performance target for a fiscal year, but less than 100% of such target, then 50% of the restricted stock vesting portion will vest in respect of such fiscal year on the applicable vesting date.  To the extent that any shares do not vest on the applicable vesting date, those shares are forfeited.

 

Benefit Programs and Coverages: At employment you will be eligible for medical, including an executive physical, dental, vision, life insurance, disability coverage, child and health care reimbursement accounts, travel accident insurance and tuition reimbursement under the Playtex Products, Inc. benefit program.  Information is enclosed outlining the benefit options.

 

Effective July 1, 2005, you will become eligible to participate in the Playtex Products, Inc. Profit Sharing Plan, in which the Company provides a profit-sharing contribution equal to 10% of an employee’s eligible compensation at the end of each calendar year.  

 

Upon hire, you will become eligible to contribute to the 401(k) Plan on a pre-tax basis.   Playtex will match 50% of your pre-tax contribution, up to a maximum deferral rate of 4%.  Since you will be considered a highly compensated employee, your eligible deferral percentage will be determined at the time you enroll.

 

Vehicle:  You will be eligible for a vehicle per company policy.

 

Vacation:  You will be eligible for four weeks (20 days) of vacation.  Vacation is accrued on the 1st of each month at a rate of 2.0 days per month up to a maximum of 20 days per year.

 

Severance Payments and Benefits:  If your employment is terminated by the Company without cause you will be entitled to receive on regular scheduled pay periods (bi-weekly) 12 months of base salary, plus your average bonus as described below; continued medical and dental coverage for 12 months after termination or, if earlier, until you become eligible for comparable benefits from any other source.  The average bonus means for a termination in fiscal year 2005, the target bonus for such year; for a termination in fiscal year 2006, the bonus actually paid to you for fiscal year 2005; and for termination during a fiscal year subsequent to fiscal year 2005, the average of the bonuses paid to you in the two fiscal years preceding termination.  You agree to contact the Company when you obtain new employment, at which time your base salary payments will be reduced by base salary
received from your new employer.

 

The payments and benefits described above are conditioned on your continued compliance with the non-disclosure, non-competition, and non-solicitation covenants described as follows.  During your employment and for one year thereafter, you are restricted from engaging in activities that are competitive with Company business, soliciting or hiring employees, soliciting Company customers, suppliers, licensees, or other business relations to cease doing business with the Company, and interfering in Company relationships with its customers, suppliers, licensees, or other business relations.  Additionally, you are bound by standard obligations not to disclose Company confidential information.  

 

 

 

 

Mr. Perry Beadon

January 10, 2005

Page 3 of 3

 

 

 

 

Employment Eligibility (I-9) Documentation:  The Immigration Reform and Control Act of 1986 requires employers to verify the employment eligibility and identity of all new hires.  In order to facilitate the process, please review the attached I-9 Draft along with the list of acceptable documents and bring the documents with you on your first day of work.  An original I-9 form will be provided for your completion on your first day of employment.  (See the enclosed I-9 form).

 

Drug Screening:  This offer of employment is contingent upon a negative result from the drug screening urinalysis.  You may refuse the drug test, however, this refusal will be considered withdrawal of your application of employment.

 

You will be advised of the results of your drug screening evaluation so that you can provide notice of resignation to your current employer, if appropriate.

 

Employment Verification:  All information provided regarding prior employment, salary, education, etc. will be subject to verification as specified on the application for employment that you have been requested to complete.  You acknowledge that by signing this letter, you will authorize Playtex to ask and request your current employer to answer all questions that may be asked and to give all information and release any records that may be sought in connection with your employment, once your notice of resignation has been given. 

 

Perry, we look forward to you joining Playtex Products, Inc.  Please indicate your acceptance of this offer by signing below and returning the letter to me.  Please keep a copy of the offer letter for your records and feel free to contact me at 203-341-4002, if you have any questions regarding this letter or any other aspects of your pending employment with Playtex Products, Inc.

 

	
            Sincerely,
 

 

/S/ Neil P. DeFeo

 

Neil P. DeFeo

Chief Executive Officer 

 

I accept this offer with the terms and conditions as outlined in this letter:

 

 

	
            /S/ Perry R. Beadon  _________________________________
 	
            1/17/05_____________________
 
	
            Perry Beadon
 	
            Start Date

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