Exhibit 10.9

INDEMNIFICATION AGREEMENT
 
This Agreement is made as of the _____ day of _______ 2005, by and between Tier
Technologies, Inc., a Delaware corporation (the “Corporation”), and
_______________ (the “Indemnitee”), an officer or key employee of the
Corporation.
 
WHEREAS, it is essential to the Corporation to retain and attract as officers
and key employees the most capable persons available, and
 
WHEREAS, the Corporation succeeded to all of the business, properties, assets
and liabilities of its sole stockholder, Tier Technologies, Inc., a California
corporation (“Tier California”), by means of a merger (the “Re-incorporation
Merger”) of Tier California with and into the Corporation, and
 
WHEREAS, Tier California and the Indemnitee previously entered into an
indemnification agreement governed by California law (the “California
Agreement”), and
 
WHEREAS, as of the effective date of the Re-incorporation Merger, the
Corporation and the Indemnitee desire that this Agreement shall govern events
occurring on or after the effective date of the Re-incorporation Merger and the
California Agreement shall remain in full force and effect only with respect to
events occurring prior to the effective date of the Re-incorporation Merger, and
 
WHEREAS, the Corporation desires the Indemnitee to serve, or continue to serve,
as a director or officer of the Corporation.
 
NOW THEREFORE, the Corporation and the Indemnitee do hereby agree as follows:
 
1.    Agreement to Serve.  The Indemnitee agrees to serve or continue to serve
as a director or officer of the Corporation for so long as the Indemnitee is
duly elected or appointed or until such time as the Indemnitee tenders a
resignation in writing.
 
2.    Definitions.  As used in this Agreement:
 
 (a)  The term “Proceeding” shall include any threatened, pending or completed
action, suit, arbitration, alternative dispute resolution proceeding,
administrative hearing or other proceeding, whether brought by or in the right
of the Corporation or otherwise and whether of a civil, criminal, administrative
or investigative nature, and any appeal therefrom.
 
 (b)  The term “Corporate Status” shall mean the status of a person who is or
was a director or officer of the Corporation, or is or was serving, or has
agreed to serve, at the request of the Corporation, as a director, officer,
partner, trustee, member, employee or agent of another corporation, partnership,
joint venture, trust, limited liability company or other enterprise.
 
 (c)  The term “Expenses” shall include, without limitation, attorneys’ fees,
retainers, court costs, transcript costs, fees and expenses of experts, travel
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costs, printing and binding costs, telephone charges, postage, delivery service
fees and other disbursements or expenses of the types customarily incurred in
connection with investigations, judicial or administrative proceedings or
appeals, but shall not include the amount of judgments, fines or penalties
against Indemnitee or amounts paid in settlement in connection with such
matters.
 
 (d)  References to “other enterprise” shall include employee benefit plans;
references to “fines” shall include any excise tax assessed with respect to any
employee benefit plan; references to “serving at the request of the Corporation”
shall include any service as a director, officer, employee or agent of the
Corporation which imposes duties on, or involves services by, such director,
officer, employee, or agent with respect to an employee benefit plan, its
participants, or beneficiaries; and a person who acted in good faith and in a
manner such person reasonably believed to be in the interests of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner “not opposed to the best interests of the Corporation” as
referred to in this Agreement.
 
3.    Indemnification in Third-Party Proceedings.  Subject to Paragraph 26 of
this Agreement, the Corporation shall indemnify the Indemnitee in accordance
with the provisions of this Paragraph 3 if the Indemnitee was or is a party to
or threatened to be made a party to or otherwise involved in any Proceeding
(other than a Proceeding by or in the right of the Corporation to procure a
judgment in its favor) by reason of the Indemnitee’s Corporate Status or by
reason of any action alleged to have been taken or omitted in connection
therewith, against all Expenses, judgments, fines, penalties and amounts paid in
settlement actually and reasonably incurred by or on behalf of the Indemnitee in
connection with such Proceeding, if the Indemnitee acted in good faith and in a
manner which the Indemnitee reasonably believed to be in, or not opposed to, the
best interests of the Corporation and, with respect to any criminal Proceeding,
had no reasonable cause to believe that his or her conduct was unlawful.  The
termination of any Proceeding by judgment, order, settlement, conviction or upon
a plea of nolocontendere or its equivalent, shall not, of itself, create a
presumption that the Indemnitee did not act in good faith and in a manner which
the Indemnitee reasonably believed to be in, or not opposed to, the best
interests of the Corporation, and, with respect to any criminal Proceeding, had
reasonable cause to believe that his or her conduct was unlawful.
 
4.    Indemnification in Proceedings by or in the Right of the
Corporation.  Subject to Paragraph 26 of this Agreement, the Corporation shall
indemnify the Indemnitee in accordance with the provisions of this Paragraph 4
if the Indemnitee was or is a party to or threatened to be made a party to or
otherwise involved in any Proceeding by or in the right of the Corporation to
procure a judgment in its favor by reason of the Indemnitee’s Corporate Status
or by reason of any action alleged to have been taken or omitted in connection
therewith, against all Expenses actually and reasonably incurred and, to the
extent permitted by law, amounts paid in settlement by or on behalf of the
Indemnitee in connection with such Proceeding, if the Indemnitee acted in good
faith and in a manner which the Indemnitee reasonably believed to be in, or not
opposed to, the best interests of the Corporation, except that no
indemnification shall be made under this Paragraph 4 in respect of any claim,
issue, or matter as to which the Indemnitee shall have been adjudged to be
liable to the Corporation, unless, and only to the extent, that the Court of
Chancery of Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of such liability but
in view of all the circumstances of
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the case, the Indemnitee is fairly and reasonably entitled to indemnity for such
Expenses as the Court of Chancery or such other court shall deem proper.
 
5.    Exceptions to Right of Indemnification.  Notwithstanding anything to the
contrary in this Agreement, except as set forth in Paragraph 10, the Corporation
shall not indemnify the Indemnitee in connection with a Proceeding (or part
thereof) initiated by the Indemnitee unless the initiation thereof was approved
by the Board of Directors of the Corporation.  Notwithstanding anything to the
contrary in this Agreement, the Corporation shall not indemnify the Indemnitee
to the extent the Indemnitee is reimbursed from the proceeds of insurance or
otherwise receives payment of any amounts indemnifiable hereunder under any
contract, agreement or otherwise, and in the event the Corporation makes any
indemnification payments to the Indemnitee and the Indemnitee is subsequently
reimbursed from the proceeds of insurance or otherwise receives payment of any
amounts indemnifiable hereunder under any contract, agreement or otherwise, the
Indemnitee shall promptly refund such indemnification payments to the
Corporation to the extent of such insurance reimbursement or other payments.
 
6.    Indemnification of Expenses of Successful Party.  Subject to Paragraph 26
of this Agreement, but notwithstanding any other provision of this Agreement, to
the extent that the Indemnitee has been successful, on the merits or otherwise,
in defense of any Proceeding or in defense of any claim, issue or matter
therein, the Indemnitee shall be indemnified against all Expenses incurred by or
on behalf of the Indemnitee in connection therewith.  Without limiting the
foregoing, if any Proceeding or any claim, issue or matter therein is disposed
of, on the merits or otherwise (including a disposition without prejudice),
without (i) the disposition being adverse to the Indemnitee, (ii) an
adjudication that the Indemnitee was liable to the Corporation, (iii) a plea of
guilty or nolo contendere by the Indemnitee, (iv) an adjudication that the
Indemnitee did not act in good faith and in a manner the Indemnitee reasonably
believed to be in or not opposed to the best interests of the Corporation, and
(v) with respect to any criminal proceeding, an adjudication that the Indemnitee
had reasonable cause to believe his or her conduct was unlawful, the Indemnitee
shall be considered for the purposes hereof to have been wholly successful with
respect thereto.
 
7.    Notification and Defense of Claim.
 
            (a) Indemnitee shall notify the Corporation promptly upon being
served with or receiving any summons, citation, subpoena, complaint, indictment,
information, notice, request or other document relating to any Proceeding which
may result in the right to indemnification or the advance of Expenses hereunder;
provided, however, that the failure to give any such notice shall not disqualify
Indemnitee from the right, or otherwise affect in any manner any right of
Indemnitee, to indemnification or the advance of Expenses under this Agreement
unless the Corporation’s ability to defend in such Proceeding or to obtain
proceeds under any insurance policy is materially and adversely prejudiced
thereby, and then only to the extent the Corporation is thereby actually so
prejudiced.
 
         (b) Subject to the provisions of the last sentence of this Section 7(b)
and of Section 7(c) below, the Corporation shall have the right to defend
Indemnitee in any Proceeding which may give rise to indemnification hereunder;
provided, however, that the Corporation shall notify Indemnitee of any such
decision to defend within 15 calendar days following receipt of notice of any
such Proceeding under Section 7(a) above.  After notice from the Corporation to
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the Indemnitee of its election so to defend the Indemnitee, the Corporation
shall not be liable to the Indemnitee for any legal or other expenses
subsequently incurred by the Indemnitee in connection with such Proceeding,
other than as provided in the last sentence of this Section 7(b) and in Section
7(c) below.  The Corporation shall not, without the prior written consent of
Indemnitee, which shall not be unreasonably withheld or delayed, consent to the
entry of any judgment against Indemnitee or enter into any settlement or
compromise which (i) includes an admission of fault of Indemnitee or (ii) does
not include, as an unconditional term thereof, the full release of Indemnitee
from all liability in respect of such Proceeding, which release shall be in form
and substance reasonably satisfactory to Indemnitee.
 
            (c) Notwithstanding the provisions of Section 7(b) above, if in a
Proceeding to which Indemnitee is a party by reason of Indemnitee’s Corporate
Status, (i) Indemnitee reasonably concludes, based upon advice of counsel
approved by the Corporation, which approval shall not be unreasonably withheld,
that he may have separate defenses or counterclaims to assert with respect to
any issue which may not be consistent with the Corporation in such Proceeding,
(ii) Indemnitee reasonably concludes, based upon advice of counsel approved by
the Corporation, which approval shall not be unreasonably withheld, that an
actual or apparent conflict of interest or potential conflict of interest exists
between Indemnitee and the Corporation, or (iii) if the Corporation fails to
assume the defense of such Proceeding in a timely manner, Indemnitee shall be
entitled to be represented by separate legal counsel of Indemnitee’s choice,
subject to the prior approval of the Corporation, which shall not be
unreasonably withheld, at the expense of the Corporation.
 
8.    Advancement of Expenses.  Subject to the provisions of Paragraphs 9 and 26
of this Agreement, in the event that the Corporation does not assume the defense
pursuant to Paragraph 7 of this Agreement of any Proceeding of which the
Corporation receives notice under this Agreement, any Expenses incurred by or on
behalf of the Indemnitee in defending such Proceeding shall be paid by the
Corporation in advance of the final disposition of such Proceeding; provided,
however, that notwithstanding anything herein to the contrary the payment of
such Expenses incurred by or on behalf of the Indemnitee in advance of the final
disposition of such Proceeding shall be made only upon receipt of an
undertaking, in substantially the form set forth on Exhibit A hereto, by or on
behalf of the Indemnitee to repay all amounts so advanced in the event that it
shall ultimately be determined that the Indemnitee is not entitled to be
indemnified by the Corporation as authorized in this Agreement.  Such
undertaking shall be accepted without reference to the financial ability of the
Indemnitee to make repayment.
 
9.    Procedure for Indemnification.  In order to obtain indemnification or
advancement of Expenses pursuant to Paragraphs 3, 4, 6 or 8 of this Agreement,
the Indemnitee shall submit to the Corporation a written request.  Any such
indemnification or advancement of Expenses shall be made promptly, and in any
event within 30 days after receipt by the Corporation of the written request of
Indemnitee, unless the Corporation, pursuant to the last sentence of this
Section 9, determines within such 30-day period that Indemnitee did not meet the
applicable standard of conduct set forth in Paragraph 3 or 4, as the case may
be.  Such determinations as to indemnification, the advancement of Expenses and
any determination that advanced Expenses must be repaid to the Corporation,
shall be made in each instance (a) by a majority vote of the directors of the
Corporation consisting of persons who are not at that time parties to the
Proceeding (“disinterested directors”), whether or not a quorum, (b) by a
committee of disinterested directors designated by a majority vote of
disinterested directors, whether or not
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a quorum, (c) if there are no disinterested directors, or if the disinterested
directors so direct, by independent legal counsel (who may, to the extent
permitted by applicable law, be regular legal counsel to the Corporation) in a
written opinion, or (d) by the stockholders of the Corporation.
 
10.    Remedies.  The right to indemnification or advancement of Expenses as
provided by this Agreement shall be enforceable by the Indemnitee in any court
of competent jurisdiction.  Unless otherwise required by law, the burden of
proving that indemnification or the advancement of Expenses is not appropriate
shall be on the Corporation.  Neither the failure of the Corporation to have
made a determination prior to the commencement of such action that
indemnification is proper in the circumstances because the Indemnitee has met
the applicable standard of conduct, nor an actual determination by the
Corporation pursuant to Paragraph 9 that the Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that the Indemnitee has not met the applicable standard of
conduct.  The Indemnitee’s expenses (of the type described in the definition of
“Expenses” in Paragraph 2(c)) reasonably incurred in connection with
successfully establishing the Indemnitee’s right to indemnification, in whole or
in part, in any such Proceeding shall also be indemnified by the Corporation.
 
11.    Partial Indemnification.  If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Corporation for some or a
portion of the Expenses, judgments, fines, penalties or amounts paid in
settlement actually and reasonably incurred by or on behalf of the Indemnitee in
connection with any Proceeding but not, however, for the total amount thereof,
the Corporation shall nevertheless indemnify the Indemnitee for the portion of
such Expenses, judgments, fines, penalties or amounts paid in settlement to
which the Indemnitee is entitled.
 
12.    Subrogation.  In the event of any payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of the Indemnitee, who shall execute all papers required and
take all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Corporation to bring suit to enforce
such rights.
 
13.    Term of Agreement.  This Agreement shall commence upon the effective date
of the Re-incorporation Merger, and shall continue until and terminate upon the
later of (a) six years after the date that the Indemnitee shall have ceased to
serve as a director or officer of the Corporation or, at the request of the
Corporation, as a director, officer, partner, trustee, member, employee or agent
of another corporation, partnership, joint venture, trust, limited liability
company or other enterprise or (b) the final termination of all Proceedings
pending on the date set forth in clause (a) in respect of which the Indemnitee
is granted rights of indemnification or advancement of Expenses hereunder and of
any proceeding commenced by the Indemnitee pursuant to Paragraph 10 of this
Agreement relating thereto.
 
14.    Indemnification Hereunder Not Exclusive.  The indemnification and
advancement of Expenses provided by this Agreement shall not be deemed exclusive
of any other rights to which the Indemnitee may be entitled under the
Certification of Incorporation, the By-Laws, any other agreement, any vote of
stockholders or disinterested directors, the General Corporation Law of
Delaware, any other law (common or statutory), or otherwise, both as to action
in the Indemnitee’s Corporate Status and as to action in another capacity while
holding office for the
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Corporation.  Nothing contained in this Agreement shall be deemed to prohibit
the Corporation from purchasing and maintaining insurance, at its expense, to
protect itself or the Indemnitee against any expense, liability or loss incurred
by it or the Indemnitee in any such capacity, or arising out of the Indemnitee’s
status as such, whether or not the Indemnitee would be indemnified against such
expense, liability or loss under this Agreement.
 
15.    No Special Rights.  Nothing herein shall confer upon the Indemnitee any
right to continue to serve as an officer or director of the Corporation for any
period of time or at any particular rate of compensation.
 
16.    Savings Clause.  If this Agreement or any portion thereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify the Indemnitee as to Expenses,
judgments, fines, penalties and amounts paid in settlement with respect to any
Proceeding to the full extent permitted by any applicable portion of this
Agreement that shall not have been invalidated and to the fullest extent
permitted by applicable law.
 
17.    Counterparts.  This Agreement may be executed in any number of
counterparts, each of which shall constitute the original.
 
18.    Successors and Assigns.  This Agreement shall be binding upon the
Corporation and its successors and assigns, and shall inure to the benefit of
the estate, heirs, executors, administrators and personal representatives of the
Indemnitee.
 
19.    Headings.  The headings of the paragraphs of this Agreement are inserted
for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
 
20.    Modification and Waiver.  This Agreement may be amended from time to time
to reflect changes in Delaware law or for other reasons.  No supplement,
modification or amendment of this Agreement shall be binding unless executed in
writing by both of the parties hereto.  No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof nor shall any such waiver constitute a continuing waiver.
 
21.    Notices.  All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been given (i) when
delivered by hand or (ii) if mailed by certified or registered mail with postage
prepaid, on the third day after the date on which it is so mailed:
 
   (a)  if to the Indemnitee, to:[  ]
 
   (b)  if to the Corporation, to:
 
Tier Technologies, Inc
10780 Parkridge Boulevard, 4th Floor
Reston, Virginia 20191
Attention:  General Counsel
 
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Telephone: 571-382-1090
Fax: 571-382-1385

or to such other address as may have been furnished to the Indemnitee by the
Corporation or to the Corporation by the Indemnitee, as the case may be.
 
22.     Applicable Law.  This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware.  The Indemnitee
may elect to have the right to indemnification or reimbursement or advancement
of Expenses interpreted on the basis of the applicable law in effect on the date
hereof, at the time of the occurrence of the event or events giving rise to the
applicable Proceeding, to the extent permitted by law, or in effect at the time
such indemnification or reimbursement or advancement of Expenses is
sought.  Such election shall be made, by a notice in writing to the Corporation,
at the time indemnification or reimbursement or advancement of Expenses is
sought; provided, however, that if no such notice is given, and if the General
Corporation Law of Delaware is amended, or other Delaware law is enacted, to
permit further indemnification of the directors and officers, then the
Indemnitee shall be indemnified to the fullest extent permitted under the
General Corporation Law, as so amended, or by such other Delaware law, as so
enacted.
 
23.     Enforcement.  The Corporation expressly confirms and agrees that it has
entered into this Agreement in order to induce the Indemnitee to continue to
serve as an officer or director of the Corporation, and acknowledges that the
Indemnitee is relying upon this Agreement in continuing in such capacity.
 
24.     Entire Agreement.  This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and supercedes
all prior agreements, whether oral or written, by any officer, employee or
representative of any party hereto in respect of the subject matter contained
herein; and any prior agreement of the parties hereto in respect of the subject
matter contained herein is hereby terminated and cancelled.  For avoidance of
doubt, the parties confirm that the foregoing does not apply to or limit the
Indemnitee’s rights under Delaware law or the Corporation’s Certificate of
Incorporation or By-Laws.
 
25.     Consent to Suit.  In the case of any dispute under or in connection with
this Agreement, the Indemnitee may only bring suit against the Corporation in
the Court of Chancery of the State of Delaware.  The Indemnitee hereby consents
to the exclusive jurisdiction and venue of the courts of the State of Delaware,
and the Indemnitee hereby waives any claim the Indemnitee may have at any time
as to forum non conveniens with respect to such venue.  The Corporation shall
have the right to institute any legal action arising out of or relating to this
Agreement in any court of competent jurisdiction.  Any judgment entered against
either of the parties in any proceeding hereunder may be entered and enforced by
any court of competent jurisdiction.
 
26.     Application of the California Agreement.  Upon the effective date of the
Re-incorporation Merger, the California Agreement shall cease to govern with
respect to the Indemnitee’s Corporate Status or any action alleged to have been
taken or omitted in connection therewith (collectively, the “Indemnifiable
Events”) on or after the effective date of the Re-incorporation Merger and shall
remain in full force and effect only with respect to Indemnifiable Events that
occurred prior to the effective date of the Re-incorporation Merger.  Upon the
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effective date of the Re-incorporation Merger, this Agreement shall govern all
Indemnifiable Events occurring on or after such effective date.
 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
 
Attest:
TIER TECHNOLOGIES, INC.
By:      __________________________
By:  ________________________
Name: __________________________
Name:  ________________________
 
Title:    ________________________
 
INDEMNITEE:
 
______________________________
Name:  ________________________

 

 

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EXHIBIT A
 
FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED
 
The Board of Directors of Tier Technologies, Inc.

Re:  Undertaking to Repay Expenses Advanced

Ladies and Gentlemen:

This undertaking is being provided pursuant to that certain Indemnification
Agreement dated the ___ day of ______________, 200__, by and between Tier
Technologies, Inc. (the "Company") and the undersigned Indemnitee (the
"Indemnification Agreement"), pursuant to which I am entitled to advance of
expenses in connection with [Description of Proceeding] (the "Proceeding").
 
Terms used herein and not otherwise defined shall have the meanings specified in
the Indemnification Agreement.
 
I am subject to the Proceeding by reason of my Corporate Status or by reason of
alleged actions or omissions by me in such capacity.  In consideration of the
advance of Expenses by the Company in connection with the Proceeding (the
"Advanced Expenses"), I hereby agree that if, in connection with the Proceeding,
it is ultimately determined that I am not entitled to be indemnified, then I
shall promptly reimburse the portion of the Advanced Expenses relating to the
claims, issues or matters in the Proceeding as to which the foregoing findings
have been established and which have not been successfully resolved as described
in Section 11 of the Indemnification Agreement.  To the extent that Advanced
Expenses do not relate to a specific claim, issue or matter in the Proceeding, I
agree that such Expenses shall be allocated on a reasonable basis.
 
IN WITNESS WHEREOF, I have executed this Undertaking on this ___ day of
____________________, 200__.

 
WITNESS:
 
____________________________                                                                                                                     _____________________________(SEAL)

 

 

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