UNITED STATES DISTRICT COURT
DISTRICT OF DELAWARE
CARD CONNECT, LLC,
Plaintiff,
v.
SHIFT4 PAYMENTS, LLC, and
SHIFT4 CORPORATION
Defendants.
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C.A. No. 20-1491-CFC-JLH
EXCERPTS OF VIDEOTAPED
DEPOSITION OF JARED ISAACMAN
VIA ZOOM VIDEOCONFERENCING
March 17, 2021
9:03 a.m.
Pages: 1 - 261
Reported By: Kristen M. Mucci, RPR, CRR, CRC
Job No.: 235540
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UNITED STATES DISTRICT COURT
DISTRICT OF DELAWARE
------------------------------x
CARD CONNECT, LLC,
:
Plaintiff,
:
-vs-
: C.A. No. 20-1491-CFC-JLH
SHIFT4 PAYMENTS, LLC, and :
SHIFT4 CORPORATION,
:
Defendants.
:
------------------------------x
Videotaped deposition of JARED ISAACMAN,
taken on behalf of the Plaintiff, and pursuant to
the applicable provisions of the Federal Rules of
Civil Procedure pertaining to the taking of
depositions, via Zoom videoconferencing, on
Wednesday, March 17, 2021, commencing at 9:03 a.m.,
before Kristen M. Mucci, a Registered Professional
Reporter, Certified Realtime Reporter, and Certified
Realtime Captioner within and for the Commonwealth of
Pennsylvania.
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APPEARANCES:
MORRIS, NICHOLS, ARSHT & TUNNELL LLP
1201 North Market Street
P.O. Box 1347
Wilmington, DE 19899-1347
Attorneys for Plaintiff
BY: JACK B. BLUMENFELD, ESQUIRE
-and-
STEPTOE & JOHNSON LLP
1330 Connecticut Avenue, NW
Washington, DC 20036
BY: JENNIFER D. BURNETT, ESQUIRE
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Rodney Square, 1000 North King Street
Wilmington, DE 19801
Attorneys for Defendants
BY: TIMOTHY R. LEYH, ESQUIRE
-and-
WILLIAMS & CONNOLLY LLP
725 Twelfth Street, N.W.
Washington, DC 20005
BY: STEPHEN D. RABER, ESQUIRE
BRYAN C. GOOT, ESQUIRE
ALSO PRESENT:
Jonathan Werner, Card Connect Representative
Jeffrey Peitzman, Shift4
Kristen M. Mucci, RPR, CRR, CRC, Notary Public
Joshua J. Schinder, Legal Videographer
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1 know, there was already going to be some level of
2 natural attrition right around that May/June
3 timeframe. COVID was certainly in full swing at at
4 that point, which would have contributed to some of
5 it.
6 But then a lot of it was just bad
7 circumstances. And I don't think they were all --
8 they're not attributable to any one particular
9 thing. You know, the -- the gateway migration was
10 certainly disruptive, and that contributed to some
11 of the attrition.
12 But, you know, we had -- we were going
13 through enormous growth everywhere else. So I
14 don't -- I don't think even in terms of the
15 attrition that was attributable to just pure
16 performance, that it was entirely at the feet of the
17 Card Connect organization. I'm sure there were some
18 on Shift4's side, too.
19 Q. Okay. And, again, still going back to
20 1696, you write, "We are seeing way too much
21 attrition inside of Card Connect. Total losses are
22 now way above norm."
23 Then you go on to write, "I recognize some
24 of this is due to COVID and you" -- and then you
25 have, in parentheses, "(how much?)," close
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1 parentheses, "but there is a lot of self-inflicted
2 wounds here from billing to tech issues."
3 Do you recall what you meant there by
4 "self-inflicted wounds from billing to tech
5 issues"?
6 A. Yeah. I mean, you know, any time we were
7 making changes or migrations, sunsetting legacy
8 technology, that was -- that was definitely -- you
9 know, that's our own doing.
10 And then on the billing side, I mean, we
11 did -- we were -- we were going through the billing
12 migration, and that would have been a little bit
13 disruptive. So there was a variety of factors
14 contributing to it. I think that one sentence you
15 probably captured it the best.
16 Q. Okay. And do you see the next paragraph,
17 you write, "This is a big problem. We need a plan
18 to correct ASAP or it is only going to get worse
19 every single month"?
20 A. I do.
21 MR. LEYH: Let the record reflect
22 that's the conclusion of that particular
23 email.
24 Q. (BY MS. BURNETT) Right above Taylor's
25 original.
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1 Q. Can you read that for me, please.
2 A. Sure.
3 "I'm concerned if we continue to not
4 communicate what our actual numbers are, it's going
5 to cause credibility problems on all fronts."
6 Q. And the "all fronts" referred to
7 which -- what did you mean by "all fronts"?
8 A. How much time we got? I don't know.
9 Like, I'm -- I'm a -- I'm a believer in a single
10 version of the truth for a lot of reasons,
11 internally, externally, publicly, non-publicly. So
12 it was probably just that.
13 Q. So did that include the board that you
14 mentioned earlier?
15 A. Yeah. I mean, I think, at the time,
16 you -- you have a responsibility to deliver accurate
17 information to a variety of different audiences.
18 So, yeah, absolutely.
19 Q. Including at that time the special
20 committee; right?
21 A. Again, you have a responsibility to
22 deliver accurate information to all of your various
23 audiences from employees to departments, to senior
24 teams, to boards.
25 Q. And various external audiences, not just
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1 internal; right?
2 A. Yeah. I have no idea what the external
3 audiences would be, but I -- I mean, sure. Like, if
4 you're signing a certification that, you know, goes
5 to the U.S. government as part of some, you know,
6 funding program, you should make sure that the
7 numbers that you're putting on that certification
8 is accurate, as an example.
9 If you're delivering information to a
10 board or in earnings calls or whatever, you -- you
11 should make sure that the information is accurate.
12 You should -- you should do all that.
13 Q. And in this email, you were referring to
14 historical data, weren't you, the actual numbers?
15 A. I mean, it says "actual numbers," so I
16 would assume it's historical data, yeah.
17 Q. Okay. Let's move on to Bates number 322,
18 please.
19 And this is an email from you to
20 Taylor Vaughan dated April 24, 2020 at 8:17 p.m.
21 Eastern time.
22 Do you see that?
23 A. I do.
24 Q. And you write, "We are having some
25 serious problems. We should talk at 6:30 a.m.
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1 tomorrow."
2 Do you see that?
3 A. I do.
4 Q. What serious problems were you referring
5 to here?
6 A. I have no idea.
7 (Laughter.)
8 Q. Can we look at the whole thread and see if
9 that helps you.
10 A. Sure.
11 Q. Okay. Do you see an email from earlier
12 that day from Taylor Vaughan to a number of
13 recipients, listing the subject "Daily COVID-19
14 update"?
15 A. I see it.
16 Q. Okay.
17 MR. LEYH: Can you give us the
18 Bates number, the beginning of the email you
19 were just talking about?
20 MS. BURNETT: 324.
21 Q. (BY MS. BURNETT) Do you recall what the
22 daily COVID-19 updates were about, what information
23 they were providing?
24 A. I don't know.
25 Q. All right.
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1 If you look at the paragraph numbered "2,"
2 the first sentence reads, "The total active and
3 processing merchant count has now declined for 5
4 straight weeks."
5 Do you see that?
6 A. I do.
7 Q. Do you recall receiving this information
8 from Taylor and reviewing this information from
9 Taylor back in April of 2020?
10 A. I don't, but that doesn't mean I didn't
11 look at it. It just means I don't remember it.
12 Q. Do you see --
13 A. Sorry. Can I just complete a thought.
14 Q. Sure.
15 A. I made a joke at the end of the last one.
16 You know, there have been periods of time in my life
17 where getting a 6:30 phone call would be, like,
18 par for the course. And that was -- that was a
19 response that -- that could have covered, you know,
20 a lot of different things.
21 Q. Okay. Looking above at your email at
22 8:17 p.m., have you -- did you find any materials
23 that suggest what you and Taylor spoke about at
24 6:30 a.m. on April 25th?
25 A. No.
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11/17/2020 1:03 PM GMT
S-44960392
FINAL TRANSCRIPT
Goldman Sachs TMT Conference Call - Shift4
Payments, LLC
EVENT DATE/TIME: NOVEMBER 17, 2020 / 2:20PM GMT
11/17/2020 1:03 PM GMT
S-44960392
FINAL TRANSCRIPT
Goldman Sachs TMT Conference Call - Shift4
Payments, LLC
EVENT DATE/TIME: NOVEMBER 17, 2020 / 2:20PM GMT
C O R P O R A T E P A R T I C I P A N T S
Jared Isaacman Shift4 Payments, LLC - Founder & CEO
Taylor Lauber Shift4 Payments, LLC - Chief Strategy Officer
C O N F E R E N C E C A L L P A R T I C I P A N T S
Will Nance Goldman Sachs - Analyst
P R E S E N T A T I O N
Operator
Good day and thank you for standing by, and welcome to the Shift4 TMT Conference Call. (Operator Instructions) Please be
advised that today's conference is being recorded. (Operator Instructions)
I would now like to hand the conference over to your speaker today, Will Nance. Please go ahead.
Will Nance
Hey. Good afternoon, everyone, and thanks for joining us. My name is Will Nance. I cover the payments processes and IT
services space at Goldman Sachs. And I'm very happy to have with us the management team of Shift4. We've got Jared
Isaacman, who is the Founder and CEO; and Taylor Lauber, the Chief Strategy Officer.
So Jared, Taylor, I really appreciate you guys making the time. I think it's a super exciting story. There's a lot of interest in
the payments industry from investors these days and I think it's really exciting together to tell the story.
Maybe we could start off with something that most of the folks in the audience may be able to relate to after the
last year, and it had seemed like everybody is moving out on to the suburbs. I was hoping maybe you could talk a
little bit about what you're seeing across your merchant base now. Maybe how that compares to the depths of the
downturn back in April?
Jared Isaacman
Sure. Hey, Will. And good afternoon, everyone. Pleasure to be here. As Will mentioned, I'm Jared Isaacman. I'm the Founder
and CEO of Shift4 Payments. And I'll just kick it off by saying that the recovery is certainly well underway, although just like
the pandemic itself, not evenly distributed at all. We're seeing a pretty meaningful acceleration towards normal really since
Labor Day across our various customer segments.
If you just carve up some of the big pieces of the portfolio, our restaurant merchants now are in total at about 90%
of 2019 levels, where we're indexed to quick service and fast casual. So that's been pretty stable throughout and
more of the table [crap] (sic) [tablecloth] restaurants are the ones that are driving that recovery.
Hotels, we're seeing a pretty big acceleration. It's around 70% of 2019 levels. And as a reminder, our hotel mix
is largely domestic, a little bit of Caribbean, not a lot of international travel. And it's less kind of business travel
and more leisure travel. So you're seeing those weekend occupancy rates really kind of get back to close to normal,
although the average daily rate is still down pretty considerably. So that's driving that number.
And then our other specialty vertical markets like entertainment and leisure are also recovering pretty nicely,
indexed almost entirely towards kind of regional type establishments. So theme parks, ski mountains, minor league
sports, that's contributing to the stabilization we're seeing in the recovery.
1
11/17/2020 1:03 PM GMT
S-44960392
FINAL TRANSCRIPT
Goldman Sachs TMT Conference Call - Shift4
Payments, LLC
EVENT DATE/TIME: NOVEMBER 17, 2020 / 2:20PM GMT
And at the low point, so to speak, in April, we really saw total payment volumes down about 55% across all of our major customer
segments. So a lot of pain shared throughout there. But we're definitely on the rise.

[Image of text message exchange]
Friday, March 13

Taylor Lauber
10:18 AM
Just listened to briefing
Should have plan by
Monday
For you, me, Nancy and
Brad to review
10:19 AM
Nancy saying "I hope its
more than thoughts and
prayers"
Lol

Jared Isaacman
10:36 AM
We have
- full remote plan for
IT, Dev, Risk,
Support and Vegas
Ops
- Partial remote for
install/repair
- Full remote for
boarding, billing,
HR, legal
Anywhere we don't
have full remote its
due to dependencies
like mail, fedex,
laser checks
-Full remote plan
available for
PA/Corp with sub
3 days notice as we
have to run through
drills
We have
- A plan to address
the expected 25%
reduction in
revenue from our
merchants and the

impact from the
inability to sign new
merchants. We can
cut 30% of payroll
without impacting
essential functions
We
- have liquidity plan
to fund merchants
with a 33% reserve
(greater severity
than 2008) for 60-90
days
We have
- suspended
corporate travel and
paused 401k
matching. Expect to
reinstate 401k match
in Q3
We need
- a better story to
rally around than just
saving money and cut
cost. I am going to
work on that
- To make decision
on commissions for
sales people since
we will not be able
to sign merchants
for 2-3 months

Taylor Lauber
10:38 AM
Perfect
Agree with your "We
Need" section

Jared Isaacman
10:38 AM
Did you go for a run
yet?
10:40 AM
Good
Yes. Need a better
story

Taylor Lauber
10:46 AM
Going to meet Colin at
gym in an hour
Then off to kill
w/e

Jared Isaacman
Okay