Exhibit 10.66
 
TRANSITION AGREEMENT
 
This Transition Agreement (the “Agreement”) is made and entered into as of
December 12, 2007, by and between Tier Technologies, Inc., a Delaware
corporation (together with its successors and assigns, the “Company”), and
Deanne M. Tully (the “Executive”).
 
WHEREAS, the Company and the Executive are parties to an Executive Severance and
Change in Control Benefits Agreement entered into July 30, 2003 (the “Severance
Agreement”);
 
WHEREAS, the Company wants the Executive to continue in her current officer
positions reporting to the Company’s Chief Executive Officer, and, as
applicable, to the Company’s Board of Directors, until March 31, 2008 (the
“Separation Date”);
 
NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which is mutually acknowledged, the Company and the Executive,
intending to be legally bound, agree as follows:
 
1.    Separation.  The Company hereby provides notice that it will end the
Executive’s employment in an Involuntary Termination without Cause (as defined
in the Severance Agreement), effective as of the Separation Date, provided that
she does not resign and is not terminated for Cause (as defined the Severance
Agreement) before such date, in either of which case Executive will not receive
the compensation hereunder.
 
2.    Compensation.  Assuming the Executive satisfies the conditions of the
Severance Agreement, including executing a release of all claims in the form
attached to the Severance Agreement and not thereafter revoking such release,
and her employment ends on an Involuntary Termination without Cause, the Company
will provide the following benefits:
 
          (a)  12 months’ base salary in the amount of $220,000 in a single lump
sum payment, on the next paydate occurring at least 10 days following the
Separation Date, provided that the release has become effective;
 
          (b)  Payment by the Company of any post-employment health insurance
premiums ­ in accordance with the Company’s customary treatment of senior
executives for the shorter of (i) the 12 months following the Separation Date or
(ii) the period during which she is eligible for COBRA (without regard to any
early termination of the COBRA period that might apply if she ceases to be
within the coverage area of the Company’s plan); and
 
          (c)  Payment upon presentation of receipts for expenses related to
outplacement and incurred in 2008, to a maximum of $7,500.

 
The Executive agrees that the foregoing payments satisfy all Company obligations
under the Severance Agreement and all other compensation and benefits owed to
the Executive (other than  

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compensation and benefits already accrued as of the date of this Agreement and
accruing  between the date of this Agreement and the Separation Date).  The
Executive agrees that, to receive the compensation above, she must execute the
release after the close of business on the date her employment ends or within
two business days thereafter.
 
3.    Further Services. Commencing after the Separation Date and for the six
months thereafter, the Executive shall make herself reasonably available for
consultation under a consulting arrangement to be executed on or before the
Separation Date (with a monthly retainer, paid in arrears each month, of
$18,333.33) for the six months following the Separation Date.
 
4.    Employment Status.  This Agreement does not constitute a contract of
employment or impose upon the Executive any obligation to remain as an employee,
or impose on the Company any obligation (i) to retain Executive as an employee
or (ii) to change the status of Executive as an at-will employee.  The Company
agrees not to terminate Executive’s employment before March 31, 2008 without
Cause.
 
5.    Assignability; Binding Nature.  This Agreement shall be binding upon and
inure to the benefit of both parties and their respective successors and
assigns, including any corporation or entity with which or into which the
Company may be merged or that may succeed to its assets or business; provided,
however, that the obligations of the Executive are personal and shall not be
assigned by her.
 
6.    Entire Agreement.  This Agreement contains the entire understanding and
agreement between the parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, with respect thereto, including, without
limitation, the Severance Agreement, except as provided herein.  The parties
agree that nothing herein supersedes any eligibility for general benefits
programs before the Separation Date or the Executive’s agreement under the
Nondisclosure and Proprietary/Confidential Information/NonSolicitation
Agreement, dated May 4, 2004, which she agrees remains in effect.
 
7.    Amendment or Waiver.  No provision in this Agreement may be amended unless
such amendment is agreed to in writing and signed by the Executive and an
authorized officer of the Company.  No waiver by either party of any breach by
the other party of any condition or provision contained in this Agreement to be
performed by such other party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent
time.  Any waiver must be in writing and signed by the Executive or an
authorized officer of the Company, as the case may be.
 
8.    Taxation.  The Company may withhold from any amounts payable under this
Agreement such federal, state and local taxes as may be required to be withheld
pursuant to any applicable law or regulation.  To the extent that, at the
Executive’s request, the Company does not withhold taxes with respect to
payments during the consultation period, the Executive shall indemnify the
Company if it incurs any taxes, penalties, or interest in connection with such
request.  The application of Section 409A of the Internal Revenue Code (“Section
409A”) is fact specific and uncertain, and the Executive has requested payment
as provided herein.  The Company makes no representations or warranty and shall
have no liability to the Executive or any other person if any provisions of or
payments under this Agreementare determined to constitute
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deferred compensation subject to Code Section 409A but not to satisfy the
conditions of that section.
 
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first written above.

TIER TECHNOLOGIES, INC

                                                                
 By:
       Name:      Title:  

THE EXECUTIVE

         Deanne M. Tully  

 

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