exhibit4-1.htm


    Exhibit
      4.1

     

    FIRST
      AMENDMENT TO

     

    RIGHTS
      AGREEMENT

     

    


     

    This
      FIRST AMENDMENT TO RIGHTS AGREEMENT (the “Amendment”) is entered into as of July
      ___, 2007 between Tier Technologies, Inc., a Delaware corporation (the
“Company”), and American Stock Transfer & Trust Company, a New York
      corporation, as Rights Agent (the “Rights Agent”).

     

    WITNESSETH

     

    WHEREAS,
      the Company and the Rights Agent entered into a Rights Agreement dated January
      10, 2006 (the “Original Agreement”);

     

    WHEREAS,
      the Company and the Rights Agent wish to amend the Original Agreement to modify
      the definition of “Acquiring Person” set forth therein and to make a
      corresponding modification to Section 3(a), in each case so as to increase
      the
      10% threshold described in those provisions to a 15% threshold;

     

    NOW,
      THEREFORE, in consideration of the premises and the mutual agreements herein
      set
      forth, the parties hereby agree as follows:

     

                 
      1.           Section 1(a)
      of the Original Agreement shall be deleted in its entirety and the following
      Section 1(a) shall be substituted therefor:

     

    (a)           “Acquiring
      Person” shall mean any Person who or which, together with all Affiliates and
      Associates of such Person, shall be the Beneficial Owner of 15% or more of
      the
      shares of Common Stock then outstanding, but shall not include (i) the Company,
      (ii) any Subsidiary of the Company, (iii) any employee benefit plan of the
      Company or of any Subsidiary of the Company, or (iv) any Person organized,
      appointed or established by the Company for or pursuant to the terms of any
      such
      plan.  Notwithstanding the foregoing, (x) no Person shall become an
“Acquiring Person” as the result of an acquisition of Common Stock by the
      Company which, by reducing the number of shares outstanding, increases the
      proportionate number of shares beneficially owned by such Person to 15% or
      more
      of the shares of Common Stock of the Company then outstanding; provided, however
      that if a Person shall become the Beneficial Owner of 15% or more of the shares
      of Common Stock of the Company then outstanding as the result of an acquisition
      of Common Stock by the Company and shall, following written notice from, or
      public disclosure by the Company of such share purchases by the Company become
      the Beneficial Owner of any additional Common Stock of the Company and shall
      then beneficially own 15% or more of the shares of Common Stock then
      outstanding, then such Person shall be deemed to be an “Acquiring Person” and
      (y) if the Board determines 

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    in
      good
      faith that a Person who would otherwise be an “Acquiring Person,” as defined
      pursuant to the foregoing provisions of this paragraph (a), has become such
      inadvertently, and such Person divests as promptly as practicable (as determined
      in good faith by the Board of Directors), but in any event within 15 Business
      Days, following receipt of written notice from the Company of such event, of
      Beneficial Ownership of a sufficient number of shares of Common Stock so that
      such Person would no longer be an “Acquiring Person,” as defined pursuant to the
      foregoing provisions of this paragraph (a), then such Person shall not be deemed
      to be an “Acquiring Person” for any purposes of this Agreement unless and until
      such Person shall again become an “Acquiring Person.”

     

    2.           Section
      3(a) of the Original Agreement shall be deleted in its entirety and the
      following Section 3(a) shall be substituted therefor:

     

    (a)           Until
      the earlier of (i) the close of business on the tenth Business Day (or such
      later date as may be determined by the Board) after the Stock Acquisition Date
      (or, if the tenth Business Day after the Stock Acquisition Date occurs before
      the Record Date, the close of business on the Record Date), or (ii) the
      close of business on the tenth Business Day (or such later date as may be
      determined by action of the Board) after the date that a tender or exchange
      offer by any Person (other than the Company, any Subsidiary of the Company,
      any
      employee benefit plan of the Company or of any Subsidiary of the Company, or
      any
      Person organized, appointed or established by the Company for or pursuant to
      the
      terms of any such plan) is first published or sent or given within the meaning
      of Rule 14d-2 of the General Rules and Regulations under the Exchange Act,
      if upon consummation thereof, such Person would be the Beneficial Owner of
      15%
      or more of the shares of Common Stock then outstanding (the earlier of (i)
      and
      (ii) being herein referred to as the “Distribution Date”), (x) the Rights will
      be evidenced by the certificates for the Common Stock registered in the names
      of
      the holders of the Common Stock (which certificates for Common Stock shall
      be
      deemed also to be certificates for Rights) and not by separate certificates,
      and
      (y) the Rights will be transferable only in connection with the transfer of
      the underlying shares of Common Stock (including a transfer to the
      Company).  As soon as practicable after the Distribution Date, the
      Rights Agent will send by first-class, insured, postage prepaid mail, to each
      record holder of the Common Stock as of the close of business on the
      Distribution Date, at the address of such holder shown on the records of the
      Company, one or more rights certificates, in substantially the form of
Exhibit B hereto (the “Rights Certificates”), evidencing one Right
      for each share of Common Stock so held, subject to adjustment as provided
      herein.  With respect to certificates for the Common Stock outstanding
      as of the close of business on the Record Date, until the Distribution Date,
      the
      Rights will be evidenced by such certificates for the Common Stock and the
      registered holders of the Common Stock shall also be the registered holders
      of
      the associated Rights.  In addition, in connection with the issuance
      or sale of shares of Common Stock following the Distribution Date and prior
      to
      the redemption or expiration of the Rights, the Company (i) shall, with respect
      to shares of Common Stock so issued or sold pursuant to the exercise of stock
      options or under any employee benefit plan or arrangement, or upon the exercise,
      conversion or exchange of securities granted or issued by the Company prior
      to
      the Distribution Date, and (ii) may, in any other case, if deemed necessary
      or
      appropriate by the Board, issue Rights Certificates representing the appropriate
      number of Rights in connection with such issuance or sale; provided, however,
      that (x) no such Rights

    
      
         

      

      
         

        
        

      

      
         

      

    

     

    Certificate
      shall be issued if, and to the extent that, the Company shall be advised by
      counsel that such issuance would create a significant risk of material adverse
      tax consequences to the Company or the Person to whom such Rights Certificate
      would be issued, and (y) no such Rights Certificate shall be issued if, and
      to
      the extent that, appropriate adjustment shall otherwise have been made in lieu
      of the issuance thereof.  In the event that an adjustment in the
      number of Rights per share of Common Stock has been made pursuant to Sections
      11(i) or 11(p) hereof, at the time of distribution of the Rights Certificates,
      the Company shall make the necessary and appropriate rounding adjustments (in
      accordance with Section 14(a) hereof) so that Rights Certificates
      representing only whole numbers of Rights are distributed and cash is paid
      in
      lieu of any fractional Rights.  As of and after the Distribution Date,
      the Rights will be evidenced solely by such Rights Certificates.

    
       

                   
        3.           This Amendment
        may be executed in any number of counterparts and each of such counterparts
        shall for all purposes be deemed to be an original, and all such counterparts
        shall together constitute but one and the same instrument.

    

     

    4.           This
      Amendment shall for all purposes be governed by and construed in accordance
      with
      the laws of Delaware applicable to contracts made and to be performed entirely
      within Delaware.

     

    IN
      WITNESS WHEREOF, the parties hereto
      have caused this First Amendment to Rights Agreement to be duly executed and
      their respective corporate seals to be hereunto affixed and attested, all as
      of
      the day and year first above written.

     

    
      	
              ATTEST:

            	
              TIER
                TECHNOLOGIES, INC.

            
	
              By:___________________________                                                                

              Name:  Deanne
                M. Tully

              Title:    Vice
                President, General Counsel and Secretary

            	
              By:_________________________                                                              

              Name:  Ronald
                L. Rossetti

              Title:    Chief
                Executive Officer and Chairman

                             of
                the Board of Directors

            
	
               

               

               

               

              ATTEST:

            	
               

               

               

              AMERICAN
                STOCK TRANSFER & TRUST

              COMPANY

            
	
              By:___________________________                                                                

              Name:

              Title:

            	
              By:__________________________                                                                

              Name:

              Title: