EXHIBIT
10.45


 


EXECUTIVE


SEVERANCE
AND CHANGE IN CONTROL BENEFITS
AGREEMENT


This  Executive Severance and
Change in Control Benefits Agreement (the “Agreement”)
is entered into this 22nd  day of August, 2002 (the
“Effective Date”), between Laura B. DePole (“Executive”)
and Tier Technologies, Inc. (the “Company”).
This Agreement is intended to provide Executive with the compensation and
benefits described herein upon the occurrence of specific events.  Certain capitalized terms used in this
Agreement are defined in Article 4.


The Company and Executive hereby agree as follows:


ARTICLE 1



Scope of and Consideration for this Agreement


1.1          Executive is currently employed by the Company.


1.2          The Company and Executive wish to set forth the
payments and benefits which Executive shall be entitled to receive in the event
Executive’s employment with the Company is terminated pursuant to an
Involuntary Termination Without Cause and/or in the event there is a Change in
Control (as defined in Section 4.4) of the Company.


1.3          The duties and obligations of the Company to Executive
under this Agreement shall be in consideration for Executive’s past services to
the Company, Executive’s continued employment with the Company, and Executive’s
execution of a release in accordance with Sections 2.2 and 0 herein.


1.4          This Agreement shall supersede any other agreement
relating to cash severance benefits and health benefits in the event of
Executive’s termination of employment with the Company and benefits to be paid
in the event of a Change in Control. 
Nothing herein is intended to or does alter the Change in Control
provisions in Executive’s stock option agreements with the Company.


ARTICLE 2



Benefits


2.1          Benefits. 
A Covered Event (as defined in Section 4.7) entitles Executive to receive
the following benefits set forth in Sections 2.2 and 2.3.


2.2          Payment. 
Upon the occurrence of a Covered Event and subject to Section 3.1
herein, Executive shall be entitled to a lump sum payment equivalent to her
Base Salary, less standard deductions and withholdings (the “Payment”) for a
period of eighteen (18) months.


2.3          Health Benefits. 
In the event that Executive’s employment is terminated as a result of an
Involuntary Termination without Cause prior to a Change in Control or within
twelve 


 


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(12) months
following a Change in Control, and Executive elects continued coverage under
federal COBRA law, the Company shall pay the premiums of Executive’s group
health insurance coverage, including coverage for Executive’s eligible
dependents, for a maximum period of eighteen (18) months following such
termination; provided, however, that: 
(i) the Company shall pay premiums for Executive’s eligible dependents
only for coverage for which those eligible dependents were enrolled immediately
prior to the termination; and (ii) the Company’s obligation to pay such
premiums shall cease immediately upon the date Executive becomes covered under
any other group health plan (as an employee or otherwise).


2.4          Mitigation. 
Except as otherwise specifically provided herein, Executive shall not be
required to mitigate damages or the amount of any payment provided under this
Agreement by seeking other employment or otherwise, nor shall the amount of any
payment provided for under this Agreement be reduced by any compensation earned
by Executive as a result of employment by another employer or by any retirement
benefits received by Executive after the date of the Covered Event.


ARTICLE 3



Limitations And Conditions On Benefits


3.1          Release Prior To Payment Of Benefits. 
Upon the occurrence of a Covered Event, and prior to the payment of any
benefits under this Agreement on account of such Covered Event, Executive shall
deliver to the Company an effective release (the “Release”) in the form
attached hereto and incorporated herein as Exhibit A.  Such Release shall specifically relate to
all of Executive’s rights and claims in existence at the time of such execution
and shall confirm Executive’s obligations under the Company’s standard form of
proprietary information and inventions agreement.


3.2          Termination of Company’s Obligations. 
Notwithstanding any provisions in this Agreement to the contrary, the
Company’s obligations, and Executive’s rights pursuant to Sections 2.2  and  2.3
herein, shall cease and be rendered a nullity immediately should Executive: i)
fail to comply with the provisions of her Proprietary Information &
Inventions Agreement attached hereto as Exhibit B; ii) directly compete with
the business of the Company so as to cause the Company to lose material revenue
from any client account which is in existence on the date of termination of
Executive’s employment; and/or iii) directly or indirectly employ or solicit
for employment any person whom she knows to be an employee of the Company or
any subsidiary of the Company.


3.3          Non-Duplication of Benefits. 
Executive is not eligible to receive benefits under this Agreement more
than one time.


 


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ARTICLE
4



Definitions


                For
purposes of the Agreement, the following terms are defined as follows:


4.1          “Base Salary” means Executive’s annual base salary as
in effect during the last regularly scheduled payroll period immediately
preceding the Covered Event.


4.2          “Board” means the Board of Directors of the Company.


4.3          “Cause” means that, in the reasonable determination of the
Company or, in the case of the Chief Executive Officer, the Board, Executive:


(a)           repeatedly fails to satisfactorily perform the
Executive’s job duties after thirty (30) days notice and an opportunity to cure
such deficiency.


(b)           has committed an act that materially injures the
business of the Company;


(c)           has refused or failed to follow lawful and reasonable
directions of the Board or the appropriate individual to whom Executive
reports;


(d)           has been convicted of a felony involving moral
turpitude that is likely to inflict or has inflicted material injury on the
business of the Company;


(e)           has engaged or in any manner participated in any
activity which is directly competitive with or intentionally injurious to the
Company  or any
of its affiliates or which violates any material provisions of her Proprietary
Information & Inventions Agreement, attached hereto as Exhibit B; or


(f)            has committed any fraud against the Company, its
affiliates, employees, agents or customers or use or intentional appropriation
for his personal use or benefit of any funds or properties of the Company not
authorized by the Board to be so used or appropriated.


4.4          “Change
in Control” means


(a)           a sale or other disposition of
all or substantially all of the assets of the Company;


(b)           a merger or consolidation in
which the Company is not the surviving entity and in which the shareholders of
the Company immediately prior to such consolidation or merger own less than
fifty percent (50%) of the surviving entity’s voting power immediately after
the transaction;


(c)           a reverse merger in which the
Company is the surviving entity but the shares of the Company’s Common Stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or 


 


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otherwise, and in which the shareholders of the Company immediately prior
to such merger own less than fifty percent (50%) of the Company’s voting power
immediately after the transaction;


(d)           any other capital reorganization
in which more than fifty percent (50%) of the shares of the Company entitled to
vote are exchanged.


4.5           “Company” means Tier
Technologies, Inc. or, following a Change in Control, the surviving
entity resulting from such transaction.


4.6          “Covered Event” means an Involuntary Termination Without
Cause or a Change in Control, provided that if the Company or its successor requests
Executive to provide transition services (“Transition Services”) to the Company
for a period of up to six (6) months following a Change in Control (the
“Transition Period”), the Covered Event will not be deemed to have occurred
until after Executive provides such requested Transition Services during the
Transition Period.  Executive will be
paid one twelfth of her Base Salary, less standard deductions and withholdings,
for each month during which she provides Transition Services during the
Transition Period.  The Payment to which
Executive is entitled under Section 2.2 will not be reduced by any compensation
received by Executive for the provision of Transition Services during the
Transition Period.


4.7          “Involuntary Termination Without
Cause” means Executive’s
dismissal or discharge other than for Cause. 
The termination of Executive’s employment as a result of Executive’s
death or disability will not be deemed to be an Involuntary Termination Without
Cause.


ARTICLE 5



General Provisions


5.1          Employment Status; Employment
Agreement Superceded.  This Agreement does not
constitute a contract of employment or impose upon Executive any obligation to
remain as an employee, or impose on the Company any obligation (i) to
retain Executive as an employee, (ii) to change the status of Executive as
an at-will employee, or (iii) to change the Company’s policies regarding
termination of employment.  In the event
of any conflict between the provisions of this Agreement and the provisions of
any other previously existing employment, severance or other similar agreement,
then the provisions of this Agreement shall govern.


5.2          Notices. 
Any notices provided hereunder must be in writing, and such notices or
any other written communication shall be deemed effective upon the earlier of
personal delivery (including personal delivery by facsimile) or the third day
after mailing by first class mail, to the Company at its primary office
location and to Executive at Executive’s address as listed in the Company’s
payroll records.  Any payments made by
the Company to Executive under the terms of this Agreement shall be delivered
to Executive either in person or at the address as listed in the Company’s
payroll records.


5.3          Severability. 
Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision 


 


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of this Agreement
is held to be invalid, illegal or unenforceable in any respect under any applicable
law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any other jurisdiction,
but this Agreement will be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provisions had never
been contained herein.


5.4          Waiver.  If either
party should waive any breach of any provisions of this Agreement, he or it
shall not thereby be deemed to have waived any preceding or succeeding breach
of the same or any other provision of this Agreement.


5.5          Arbitration. 
Unless otherwise prohibited by law or specified below, all disputes,
claims and causes of action, in law or equity, arising from or relating to this
Agreement or its enforcement, performance, breach, or interpretation shall be
resolved solely and exclusively by final and binding arbitration held in San
Francisco, California through Judicial Arbitration & Mediation
Services/Endispute (“JAMS”) under the then existing JAMS arbitration rules.  In addition to and notwithstanding these
rules, Executive and Company agree that the arbitrator shall have the authority
to compel adequate discovery for resolution of the dispute.  Further, the arbitrator shall issue a written
decision that includes the arbitrator’s findings, conclusions and award.  However, nothing in this section is intended
to prevent either party from obtaining injunctive relief in court to prevent
irreparable harm pending the conclusion of any such arbitration.  The Company shall pay for all the
arbitrator’s fees and costs.  In
addition to any other relief, the arbitrator may award to the prevailing party
in the arbitration the recovery of its attorneys’ fees and costs.  During the arbitration, each party shall be
responsible for its own attorneys’ fees and costs; provided, however, that in
the event one party refuses to arbitrate and the other party seeks to compel
arbitration by court order, if such other party prevails, it shall be entitled
to recover reasonable attorneys’ fees, costs and necessary disbursements.  Pursuant to California Civil Code Section
1717, each party warrants that it was represented by counsel in the negotiation
and execution of this Agreement, including the attorneys’ fees provisions
herein.


5.6          Complete Agreement. 
This Agreement, including Exhibits A and B, constitutes the entire
agreement between Executive and the Company and is the complete, final, and
exclusive embodiment of their agreement with regard to this subject matter,
wholly superseding all written and oral agreements with respect to cash
benefits and health benefits to Executive in the event of employment
termination and/or a Change in Control, other than any outstanding loans by the
Company to Executive.  It is entered
into without reliance on any promise or representation other than those
expressly contained herein.


5.7          Amendment Or Termination Of Agreement. 
This Agreement may be changed or terminated only upon the mutual written
consent of the Company and Executive. 
The written consent of the Company to a change or termination of this
Agreement must be signed by an executive officer of the Company after such
change or termination has been approved by the Board.


5.8          Counterparts. 
This Agreement may be executed in separate counterparts, any one of
which need not contain signatures of more than one party, but all of which
taken together will constitute one and the same Agreement.


 


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5.9          Headings. 
The headings of the Articles and Sections hereof are inserted for
convenience only and shall not be deemed to constitute a part hereof or to
affect the meaning thereof.


5.10        Successors And Assigns. 
This Agreement is intended to bind and inure to the benefit of and be
enforceable by Executive, and the Company, and any surviving entity resulting
from a Change in Control and upon any other person who is a successor by
merger, acquisition, consolidation or otherwise to the business formerly
carried on by the Company, and their respective successors, assigns, heirs, executors
and administrators, without regard to whether or not such person actively
assumes any rights or duties hereunder; provided, however, that Executive may not
assign any duties hereunder and may not assign any rights hereunder without the
written consent of the Company, which consent shall not be withheld
unreasonably.


5.11        Choice Of Law. 
All questions concerning the construction, validity and interpretation
of this Agreement will be governed by the law of the State of California,
without regard to such state’s conflict of laws rules.


5.12        Non-Publication. 
The parties mutually agree not to disclose publicly the terms of this
Agreement except to the extent that disclosure is mandated by applicable law or
to respective advisors (e.g., attorneys, accountants).


5.13        Construction Of Agreement. 
In the event of a conflict between the text of the Agreement and any
summary, description or other information regarding the Agreement, the text of
the Agreement shall control.


                In Witness Whereof, the parties have executed this Agreement on the
Effective Date written above.


 


	
  Tier
  Technologies, Inc.

  	
   

  	
  Laura B.
  DePole

  
	
   

  	
   

  	
   

  	
   

  
	
  By:  

  	
  /s/James L.
  Bildner

  	
   

  	
  /s/ Laura B.
  DePole

  
	
  Name: 

  	
  James L. Bildner

  	
   

  	
   

  
	
  Title: 

  	
  CEO

  	
   

  	
   

  



 


 


Exhibit A:  Release (Individual
Termination)


Exhibit B:  Proprietary
Information and Inventions Agreement


 


 


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Exhibit A


 


RELEASE


 


 


 


                Certain
capitalized terms used in this Release are defined in the Executive Severance
Benefits Agreement (the “Agreement”) which I have executed and of which this
Release is a part.


 


                I
hereby confirm my obligations under the Company’s proprietary information and
inventions agreement.


                I
acknowledge that I have read and understand Section 1542 of the California
Civil Code which reads as follows: “A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected his
settlement with the debtor.” 
I hereby expressly waive and relinquish all rights and benefits under
that section and any law of any jurisdiction of similar effect with respect to
my release of any claims I may have against the Company.


                Except
as otherwise set forth in this Release, I hereby release, acquit and forever
discharge the Company, its parents and subsidiaries, and their officers,
directors, agents, servants, employees, shareholders, successors, assigns and
affiliates, of and from any and all claims, liabilities, demands, causes of action,
costs, expenses, attorneys fees, damages, indemnities and obligations of every
kind and nature, in law, equity, or otherwise, known and unknown, suspected and
unsuspected, disclosed and undisclosed (other than any claim for
indemnification I may have as a result of any third party action against me
based on my employment with the Company), arising out of or in any way related
to agreements, events, acts or conduct at any time prior to the date I execute
this Release, including, but not limited to: 
all such claims and demands directly or indirectly arising out of or in
any way connected with my employment with the Company or the termination of
that employment, including but not limited to, claims of intentional and
negligent infliction of emotional distress, any and all tort claims for
personal injury, claims or demands related to salary, bonuses, commissions,
stock, stock options, or any other ownership interests in the Company, vacation
pay, fringe benefits, expense reimbursements, severance pay, or any other form
of disputed compensation; claims pursuant to any federal, state or local law or
cause of action including, but not limited to, the federal Civil Rights Act of
1964, as amended; the federal Age Discrimination in Employment Act of 1967, as
amended (“ADEA”); the federal Employee Retirement Income Security Act of 1974,
as amended; the federal Americans with Disabilities Act of 1990; the California
Fair Employment and Housing Act, as amended; tort law; contract law; statutory
law; common law; wrongful discharge; discrimination; fraud; defamation;
emotional distress; and breach of the implied covenant of good faith and fair
dealing; provided,
however, that nothing in this paragraph shall be construed in any
way to release the Company from its obligation to indemnify me pursuant to the
Company’s indemnification obligation pursuant to agreement or applicable law.


                I acknowledge that
I am knowingly and voluntarily waiving and releasing any rights I may have
under ADEA.  I also acknowledge that the
consideration given under the Agreement 


 


 

















 


for the waiver and release in the preceding paragraph hereof is in
addition to anything of value to which I was already entitled.  I further acknowledge that I have been
advised by this writing, as required by the ADEA:  (A) my waiver and release do not
apply to any rights or claims that may arise on or after the date I execute
this Release; (B) I have the right to consult
with an attorney prior to executing this Release; and that if I am 40 or older
on the date I execute this Release,  (C) I have twenty-one (21) days
to consider this Release (although I may choose to voluntarily execute this
Release earlier); (D) I have seven (7) days
following the execution of this Release by the parties to revoke the Release;
and (E) this Release shall not be effective
until the date upon which the revocation period has expired, which shall be the
eighth day after this Release is executed by me.


 


	
   

  	
   

  	
  Laura B.
  DePole

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


 


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Exhibit B


 


Proprietary Information & Inventions Agreement