Exhibit 10.61**EMPLOYMENT AGREEMENT**     This Employment Agreement (the “Agreement”) is made and entered into as of the 11th day ofDecember, 2006, by and between Tier Technologies, Inc., a Delaware corporation (together with itssuccessors and assigns, the “Company”), and David E. Fountain (the “Executive”).**W I T N E S S E T H**     WHEREAS, the Company desires to continue to employ the Executive as its Chief FinancialOfficer and to enter into an employment agreement embodying the terms of such employment; and     WHEREAS, the Executive desires to enter into this Agreement and to accept such continuedemployment, subject to the terms and provisions of this Agreement;     NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and forother good and valuable consideration, the receipt and sufficiency of which is mutuallyacknowledged, the Company and the Executive, intending to be legally bound, agree as follows:     1. Definitions.          (a) “Base Salary” shall mean the Executive’s base salary as determined in accordance withSection 4 below, including any applicable increases.          (b) “Board” shall mean the Board of Directors of the Company.          (c) “Cause” shall mean a finding by the Company of: (i) a conviction of the Executive of, or a plea of guilty or *nolocontendere*by the Executive to, any felony;  (ii) an intentional violation by the Executive of federal or statesecurities laws;  (iii) willful misconduct or gross negligence by the Executive thathas or is reasonably likely to have a material adverse effect on the Company;  (iv) a failure of the Executive to perform his reasonably assignedduties for the Company that has or is reasonably likely to have a materialadverse effect on the Company;  (v) a material violation by the Executive of any materialprovision of (i) the Company’s Code of Ethics for Chief Executive, ChiefFinancial, and Chief Accounting Officers or its Business Code of Conduct (orsuccessor
 

 
   policies on similar topics) or (ii) the Executive’s Proprietary andConfidential Information, Developments, Noncompetition and NonsolicitationAgreement (the “Noncompetition/NDA”); or  (vi) fraud, embezzlement, theft or dishonesty by the Executiveagainst the Company,providedthat no finding of Cause shall be made pursuant to subsections (ii),(iii), (iv), (v) or (vi) hereof unless the Company has provided the Executive with written noticein accordance with Section 21 below stating with specificity the facts and circumstances underlyingthe allegations of Cause and the Executive has failed to cure such violation, if curable, withinthirty (30) calendar days of receipt thereof. The Board shall determine whether a violation iscurable and/or cured in its reasonable discretion.          (d) “Change in Control” shall occur upon: (i) any person, entity or affiliated group becoming thebeneficial owner or owners of more than fifty percent (50%) of the outstandingequity securities of the Company, or otherwise becoming entitled tovote shares representing more than fifty percent (50%) of the undiluted totalvoting power of the Company’s then-outstanding securities eligible to vote toelect members of the Board (the “Voting Securities”);  (ii) a consolidation or merger (in one transaction or a series ofrelated transactions) of the Company pursuant to which the holders of theCompany’s equity securities immediately prior to such transaction or series ofrelated transactions would not be the holders immediately after suchtransaction or series of related transactions of more than fifty percent (50%)of the Voting Securities of the entity surviving such transaction or series ofrelated transactions;  (iii) the sale, lease, exchange or other transfer (in onetransaction or a series of related transactions) of all or substantially allof the assets of the Company;  (iv) the dissolution or liquidation of the Company; or  (v) the date on which (i) the Company consummates a “goingprivate” transaction pursuant to Section 13 and Rule 13e-3 of the SecuritiesExchange Act of 1934, as amended (the “Exchange Act”), or (ii) no longer has aclass of equity security registered under the Exchange Act.          (e) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.          (f) “Compensation Committee” shall mean the Compensation Committee of the Board or anothercommittee of the Board that performs the functions typically associated with a compensationcommittee.
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          (g) “Date of Termination” shall mean (i) if the Executive’s employment is terminated by reasonof his death, the date of his death, or (ii) if the Executive’s employment is terminated pursuantto any other section, the date specified in the written notice provided in accordance with Section21 below.          (h) “Disability” shall mean, for purposes of this Agreement, the Executive’s inability tosubstantially perform his duties and responsibilities under this Agreement for a period of six (6)consecutive months due to a physical or mental disability, as the term “physical or mentaldisability” is defined in the Company’s long-term disability insurance plan then in effect (orwould be so found if the Executive applied for coverage or benefits under such plan).          (i) “Effective Date” shall mean December 11, 2006.          (j) “Good Reason” shall mean, without the Executive’s prior written consent, the occurrence ofany of the following events or actions, providedthat no finding of Good Reasonshall be made pursuant to subsections (ii), (iii), (iv), (v), or (vi) hereof unless the Executivehas provided the Company with written notice in accordance with Section 21 below stating withspecificity the facts and circumstances underlying the allegations of Good Reason and the Companyhas failed to cure such violation within thirty (30) calendar days of receipt thereof: (i) any reduction in the Executive’s Base Salary or a reductionin minimum Bonus Opportunity below fifty percent (50%) of Base Salary,  (ii) a material change in the applicable performance goals used todetermine the Executive’s bonus that makes it materially less likely for thegoals to be achieved and which change (I) is not reasonable in light of theCompany’s business, (II) is designed to make it materially less likely toobtain the Bonus Opportunity, or (III) is applied solely to the Executive(except to the extent relating only to the functions of a Chief FinancialOfficer);  (iii) any reduction in the Executive’s title, position orreporting status, unless the Executive is provided with a comparable title,position or reporting status, or any material diminution of the Executive’sduties, responsibilities, powers or authorities; *provided*, *however*, that theExecutive agrees that the change in his duties, responsibilities, powers orauthorities that result solely from the Company’s ceasing to be a publiccompany by virtue of a Change in Control under Section 1(d)(v) hereof shallnot constitute Good Reason, unless he resigns on the basis of such a Change inControl no later than thirty (30) calendar days after the occurrence of theChange in Control;  (iv) any material reduction in the scope or value of the medicalor health programs in which the Executive is entitled to participate or anymaterial reduction in other employee benefit plans and programs that does notapply to other similarly situated executives;
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 (v) any requirement imposed on the Executive to (I) relocate hisprincipal residence, (II) materially increase his travel time between hisprincipal residence and a relocated corporate headquarters beyond hiscustomary travel time from his date of hire to the Effective Date, or (III)travel away from his office in the course of discharging his responsibilitiesor duties hereunder at least 20% more (in terms of aggregate days in anycalendar year or in any calendar quarter when annualized for purposes ofcomparison to any prior year) than was required of Executive in the yearimmediately prior to the Change in Control; or  (vi) a material breach by the Company of any material provision ofthis Agreement.          (k) “Term of Employment” shall mean the period specified in Section 2 below, as such periodmay be extended.     2. Term of Employment.          The Company hereby continues to employ the Executive, and the Executive hereby accepts suchcontinued employment, for the period commencing on the Effective Date and ending on the secondanniversary of the Effective Date, subject to earlier termination of the Term of Employment inaccordance with the terms of this Agreement. This Agreement shall be automatically renewed foradditional one (1) year periods on each anniversary of the Effective Date thereafter, unless eitherparty notifies the other party in writing of his or its intention not to renew this Agreement notless than thirty (30) calendar days prior to such expiration date or anniversary, as the case maybe.     3. Position, Duties and Responsibilities.          As of the Effective Date, the Executive shall be employed as the Chief Financial Officer ofthe Company or in such other reasonably comparable position as the Chief Executive Officer of theCompany (the “Chief Executive Officer”) or the Board may determine from time to time. In thiscapacity, the Executive shall be assigned such duties and responsibilities inherent in suchposition and such other duties and responsibilities as the Chief Executive Officer or the Boardshall from time to time reasonably assign to him. The Executive shall serve the Companyfaithfully, conscientiously, and to the best of the Executive’s ability and shall promote theinterests and reputation of the Company. The Executive shall devote all of the Executive’s time,attention, knowledge, energy and skills during normal working hours, and at such other times as theExecutive’s duties may reasonably require, to the duties of the Executive’s employment;provided, however, that the Executive may (a) serve on civic or charitable boardsor committees; or (b) with the approval of the Chief Executive Officer or the Board, serve oncorporate boards or committees. The Executive shall report to the Chief Executive Officer incarrying out his duties and responsibilities under this Agreement. The Executive agrees to abideby the rules, regulations, instructions, personnel practices and policies of the Company and anychanges therein that may be adopted from time to time.
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     4. Base Salary.          As of the Effective Date, the Executive shall be paid an annualized Base Salary of ThreeHundred Twenty-Five Thousand Dollars ($325,000) for the one-year period commencing on the EffectiveDate, payable in accordance with the regular payroll practices of the Company. The Base Salaryshall be subject to increase but not decrease thereafter, as determined by the Board in its solediscretion.     5. Incentive Compensation Arrangements.          During the Term of Employment, the Executive shall be entitled to participate in any Companyincentive compensation plans, programs and/or arrangements applicable to senior-level executives asestablished and modified from time to time by the Compensation Committee in its sole discretionincluding, without limitation, the Executive Incentive Compensation Plan (the “Incentive Plan”).In no event shall the minimum annual incentive opportunity (the “Bonus Opportunity”) for theExecutive be less than fifty percent (50%) of that year’s Base Salary, assuming satisfaction ofapplicable performance goals. (For the avoidance of doubt, the Company may choose to pay no bonusif applicable performance goals are not met.)     6. Equity Compensation Programs.          During the Term of Employment, the Executive shall be entitled to participate in anyequity-based plans, programs or arrangements applicable to senior-level executives as establishedand modified from time to time by the Board or the Compensation Committee in its sole discretion,to the extent that the Executive is eligible under (and subject to the provisions of) the plandocuments governing those programs.     7. Employee Benefit Programs.          During the Term of Employment, the Executive shall be entitled to participate in all employeewelfare and pension benefit plans, programs and/or arrangements applicable to senior-levelexecutives, to the extent that the Executive is eligible under (and subject to the provisions of)the plan documents governing those programs.     8. Reimbursement of Business Expenses.          The Company shall reimburse the Executive for all reasonable travel, entertainment and otherexpenses incurred or paid by the Executive in connection with, or related to, the performance ofhis duties, responsibilities or services under this Agreement, upon presentation by the Executiveof documentation, expense statements, vouchers and/or such other supporting information as theCompany may request; provided, however, that the amount available for such travel,entertainment and other expenses may be fixed in advance by the Board.          The Company will provide the Executive with a corporate apartment located within a reasonabledaily commuting distance from the Company’s corporate headquarters and reimburse the Executive forairfare for the Executive or his spouse between the city of Executive’s current residence and theCompany’s corporate headquarters and out of pocket expenses (including but not limited to parking,taxicabs and meals) subject to the Company’s normal business travel
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policies. From time to time the Executive may choose to fly directly to another city insteadof to his city of residence. The airfare and out of pocket expenses (but not his lodging or meals)for such travel shall also be reimbursed by the Company, subject to the limitation that the airfarefor any such travel shall not be reimbursed to the extent that it exceeds 100% of the airfare toExecutive’s city of residence.          If the Executive recognizes income for income tax purposes as a result of the Company’spayment of certain expenses pursuant to this Section 8 or Section 9(b) below, regardless of whetherhe recognizes such income before or after his employment terminates, the Company shall make a taxgross-up payment to the Executive based on the additional tax liability that he incurs by reason ofhis recognition of such income.     9. Perquisites.          (a) During the Term of Employment, the Executive shall be entitled to participate in theCompany’s executive fringe benefit programs applicable to the Company’s senior-level executives (ifany) in accordance with the terms and conditions of such programs as in effect from time to time,to the extent that the Executive is eligible under (and subject to the provisions of) the plandocuments governing those programs.          (b) If Executive is required to relocate, the Company shall reimburse the Executive forreasonable moving and travel expenses incurred by the Executive in moving himself and his immediatefamily to the Company’s corporate headquarters in accordance with its relocation policy. Inaccordance with Company policy, the Executive will be required to repay a pro-rata portion of thereimbursed amount if he resigns (other than under Section 11(e) below) or is terminated for Causewithin twelve (12) months of the date of relocation.     10. Vacation.          The Executive shall be entitled to twenty-four (24) days of paid time off per calendar year,prorated during the calendar year in which the Executive is initially hired and the calendar yearin which the Executive’s employment terminates, to be taken at such times as may be approved by theChief Executive Officer. Executive may carry over up to forty-eight (48) days of unused paid timeoff.     11. Termination of Employment.          (a) Termination of Employment by the Company for Disability or Termination of Employmentby Death. Upon a termination of the Executive’s employment by the Company for Disability or atermination of the Executive’s employment by reason of the Executive’s death, the Executive or hisestate and/or beneficiaries, as the case may be, shall be entitled to the following amounts,payable within thirty (30) calendar days following such termination: (i) Base Salary earned but not paid prior to the Date ofTermination and any accrued prior year bonus not paid prior to such date;  (ii) any amounts earned, accrued or owing to the Executive but notyet paid under Sections 7, 8, 9 or 10 above prior to the Date of Termination;
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 (iii) in the event of termination of employment by reason of deathor, in the event the Executive is not covered by the Company’s short- andlong-term disability policies, disability: (I) one year’s Base Salary, plus a bonus equal tothe average annual bonus paid to the Executive (or for the most recentyear, accrued for the Executive) for the previous three years (or suchshorter period during which the Executive was employed) (the “AverageHistoric Bonus”), prorated for the number of months worked in thefiscal year in which the date of death occurs;  (II) a bonus equal to the Average Historic Bonus;and  (III) payment by the Company of the premiums forany covered beneficiary of the Executive’s coverage under COBRA healthcontinuation benefits over the twelve (12) month period immediatelyfollowing the date of death, assuming such individual elects andremains eligible for such coverage; (iv) immediate vesting of one additional year on all stockoptions; and  (v) such other or additional benefits, if any, as may be providedunder applicable plans, programs and/or arrangements of the Company.The Company must provide written notice to the Executive in accordance with Section 21 below upon atermination of the Executive’s employment for Disability.Notwithstanding the provisions of clause (iii) above, the Company may provide life insurancecoverage for the Executive payable in an amount that exceeds the amount payable under such clause(the “Minimum Death Benefit”) and shall have no obligation to the Executive under such clause if anamount at least equal to the Minimum Death Benefit is paid in a lump sum to the Executive’s estatewithin (30) calendar days of his death. In the event that the insurance policy is paid out aftersuch thirty (30) calendar day period, the Executive’s estate shall reimburse the Company for anyamounts paid to it by the Company up to the amount of the Minimum Death Benefit. This provisionrefers to life insurance coverage that supplements any group term life coverage for which theExecutive is or may become eligible under terms generally applicable to executives.          (b) Termination of Employment by the Company for Cause, by the Executive or by Notice ofNonrenewal by the Executive. Upon a termination of the Executive’s employment by the Companyfor Cause, a termination of the Executive’s employment by the Executive (except as provided inSection 11(e)), or a termination of the Executive’s employment by virtue of non-renewal by theExecutive pursuant to Section 2, the Executive shall be entitled to the following: (i) Base Salary earned but not paid prior to the Date ofTermination and any accrued prior year bonus not paid prior to such date;
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 (ii) any amounts earned, accrued or owing to the Executive but notyet paid under Sections 7, 8, 9 or 10 above prior to the Date of Termination;and  (iii) such other or additional benefits, if any, as may beprovided under applicable plans, programs and/or arrangements of the Company.The Executive must provide written notice to the Company in accordance with Section 21 below atleast fifteen (15) calendar days prior to the actual Date of Termination upon a termination of theExecutive’s employment. A termination by the Company for Cause and by notice of nonrenewal by theExecutive must be made as set forth herein.          (c) Termination of Employment by the Company Without Cause. Upon a termination of theExecutive’s employment by the Company without Cause (including through notice of nonrenewal by theCompany pursuant to Section 2), other than under the circumstances described in Section 11(d), theExecutive shall be entitled to the following amounts, payable within thirty (30) calendar daysfollowing such termination, subject to the provisions of Section 23 below: (i) Base Salary earned but not paid prior to the Date ofTermination and any accrued prior year bonus not paid prior to such date;  (ii) any amounts earned, accrued or owing to the Executive but notyet paid under Sections 7, 8, 9 or 10 above prior to the Date of Termination;  (iii) such other or additional benefits, if any, as may beprovided under applicable plans, programs and/or arrangements of the Company;  (iv) a prorated portion of the Average Historic Bonus (proratedfor the number of months worked in the fiscal year in which the Date ofTermination falls);  (v) one (1) times the Base Salary in effect on the Date ofTermination, plus a bonus equal to the Average Historic Bonus;  (vi) immediate vesting of any stock options that would have vestedbefore the end of the term of this Agreement (taking into account any renewalsthat have occurred under Section 2) or, if greater, one additional year ofvesting on all stock options; and  (vii) payment by the Company of the premiums for the Executive’sand any covered beneficiary’s coverage under COBRA health continuationbenefits over the twelve (12) month period immediately following the Date ofTermination, assuming such individuals elect and remain eligible for suchcoverage;providedthat the Executive must execute and not revoke a severance agreement andrelease of claims drafted by and reasonably satisfactory to the Company (the “Severance Agreement”)to be eligible for the payments in Sections 11(c)(iv) through (vii) herein, which will contain afull
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release of the Company (other than for exceptions specified therein), and will be in substantiallythe form attached hereto as Exhibit A (with such additional reasonable grounds for release of theCompany as changes in law or circumstances may require). The Company must provide written noticeto the Executive in accordance with Section 21 below upon a termination of the Executive’semployment without Cause.          (d) Termination of Employment by the Company after a Change in Control. Upon atermination of the Executive’s employment by the Company without Cause within one (1) year after aChange in Control, the Executive shall be entitled to the following amounts, payable within thirty(30) calendar days following such termination, subject to the provisions of Section 23 below: (i) Base Salary earned but not paid prior to the Date ofTermination and any accrued prior year bonus not paid prior to such date;  (ii) any amounts earned, accrued or owing to the Executive but notyet paid under Sections 7, 8, 9 or 10 above prior to the Date of Termination;  (iii) such other or additional benefits, if any, as may beprovided under applicable plans, programs and/or arrangements of the Company;  (iv) a prorated portion of the Average Historic Bonus (proratedfor the number of months worked in the fiscal year in which the Date ofTermination falls);  (v) three (3) times the sum of (A) the Base Salary in effect onthe Date of Termination plus (B) a bonus equal to the Average Historic Bonus,but in no event shall the Average Historic Bonus used to calculate the amountpayable under this clause (v) be in an amount less than fifty percent (50%) ofthe then current Base Salary;  (vi) immediate vesting of any stock options; and  (vii) payment by the Company of the premiums for the Executive’sand any covered beneficiary’s health insurance over the thirty-six (36) monthperiod immediately following the Date of Termination;providedthat the Executive must execute and not revoke the Severance Agreement(with the conditions contained in the proviso to Section 11(c)) to be eligible for the payments inSections 11(d)(iv) through (vii) herein. The Company must provide written notice to the Executivein accordance with Section 21 below upon a termination of the Executive’s employment without Cause.          (e) Resignation for Good Reason by the Executive due to a Change in Control. TheExecutive may terminate his employment for Good Reason within one (1) year after a Change inControl (extended to two (2) years after a Change in Control defined in Section 1(d)(v)), in whichevent the Executive shall be entitled to the payments in and subject to
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the conditions of Section 11(d). The Executive must provide written notice to the Company of aproposed resignation for Good Reason in accordance with Section 21 below.     12. Nondisclosure, Inventions, Noncompetition and Nonsolicitation.          The Executive shall execute, simultaneously with the execution of this Agreement or otherwiseupon the Company’s request, the Noncompetition/NDA attached hereto as Exhibit B.     13. Assignability; Binding Nature.          This Agreement shall be binding upon and inure to the benefit of both parties and theirrespective successors and assigns, including any corporation or entity with which or into which theCompany 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 byhim.     14. Representation.          The Company represents and warrants that it is fully authorized and empowered to enter intothis Agreement. The Executive states and represents that he has had an opportunity to fullydiscuss and review the terms of this Agreement with an attorney. The Executive further states andrepresents that he has carefully read this Agreement, understands the contents herein, freely andvoluntarily assents to all of the terms and conditions hereof, and signs his name of his own freeact.          The Company will pay or reimburse the Executive’s reasonable attorneys’ fees and expenses inconnection with the drafting and negotiation of this Agreement, to an amount not to exceed $22,000.In addition, the Company agrees that, if a dispute arises that concerns this Agreement, theNDA/Noncompete, or the Separation Agreement and the Executive is the prevailing party in thedispute, he shall be entitled to recover all of his reasonable attorney’s fees and expensesincurred in connection with the dispute. For this purpose, the Executive will be the “prevailingparty” if he is successful on any significant substantive issue in the action and achieves either ajudgment in his favor or some other affirmative recovery.          Upon the occurrence of a Change in Control, the following additional provisions shall be ineffect and shall remain in effect until the first anniversary of the effective date of such Changein Control (or such longer period as is needed to resolve disputes relating to the first year aftera Change in Control (or, to the extent a two (2) year period applies under Section 11(e), two (2)years): It is the intent of the Company that the Executive not be required to incur legal fees andthe related expenses associated with the negotiation, execution, interpretation, enforcement ordefense of Executive’s rights under this Agreement by litigation or otherwise because the cost andexpense thereof would substantially detract from the benefits intended to be extended to theExecutive hereunder. Accordingly, if it should appear in good faith to the Executive that theCompany has failed to comply with any of its obligations under this Agreement or in the event thatthe Company or any other person takes or threatens to take any action to declare this Agreementvoid or unenforceable, or institutes any litigation or other action or proceeding designed to deny,or to recover from the Executive, the benefits provided or intended to be provided to the Executivehereunder, the Company irrevocably authorizes the Executive from time to time to retain counsel ofExecutive’s choice , at the expense of the
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Company ashereafter provided, to advise and represent the Executive in connection with any such interpretation,enforcement or defense, including without limitation the initiation or defense of any litigation orother legal action, whether by or against the Company or any Director, officer, stockholder orother person affiliated with the Company. Notwithstanding any existing or prior attorney-clientrelationship between the Company and any such counsel, the Company irrevocably consents to theExecutive’s entering into an attorney client relationship with such counsel, and in that connectionthe Company and the Executive agree that a confidential relationship shall exist between theExecutive and such counsel. Without respect to whether the Executive prevails, in whole or inpart, in connection with any of the foregoing, the Company will pay and be solely financiallyresponsible for any and all attorneys’ and related fees and expenses incurred by the Executive ingood faith in connection with any of the foregoing. The Company will pay the Executive’s legalfees as invoices are presented by the Executive’s legal counsel. The special provisions of thisparagraph do not apply to the Noncompete/NDA, disputes with respect to which are covered by thepreceding paragraph.          In the event that Employee’s employment is terminated during the applicable one or two yearperiod, as the case may be, pursuant to Sections 11(d) or 11(e) hereof, the additional provisionsshall also apply to any payments owed him as specified in the Severance Agreement and shall remainin effect with respect to such payments as long as necessary to receive (or be found not entitledto) such payments.     15. Entire Agreement.          This Agreement contains the entire understanding and agreement between the parties concerningthe subject matter hereof and supersedes all prior agreements, understandings, discussions,negotiations and undertakings, whether written or oral, with respect thereto**,**including, withoutlimitation, the Offer Letter dated as of May 2, 2005.     16. Amendment or Waiver.          No provision in this Agreement may be amended unless such amendment is agreed to in writingand signed by the Executive and an authorized officer of the Company. No waiver by either party ofany breach by the other party of any condition or provision contained in this Agreement to beperformed by such other party shall be deemed a waiver of a similar or dissimilar condition orprovision at the same or any prior or subsequent time. Any waiver must be in writing and signed bythe Executive or an authorized officer of the Company, as the case may be.     17. Withholding.          The Company may withhold from any amounts payable under this Agreement such federal, state andlocal taxes as may be required to be withheld pursuant to any applicable law or regulation.     18. Severability.          In the event that any provision of this Agreement shall be determined by a court of competentjurisdiction to be invalid or unenforceable for any reason, in whole or in part, the
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remaining parts, terms or provisions of this Agreement shall be unaffected thereby and shallremain in full force and effect to the fullest extent permitted by law.     19. Survivorship.          The respective rights and obligations of the parties hereunder shall survive any terminationof the Executive’s employment to the extent necessary to preserve such rights and obligations.     20. Governing Law; Jurisdiction; Dispute Resolution.          This Agreement shall be governed by and construed in accordance with the laws of theCommonwealth of Virginia (without reference to the conflict of laws provisions thereof). In caseof any controversy or claim arising out of or related to this Agreement or relating to theExecutive’s employment (including but not limited to claims relating to employment discrimination),except as expressly excluded herein, each party to this Agreement agrees to give the other partynotice of non-compliance with this Agreement and ten (10) days to cure. Should resolution of anycontroversy or claim not be reached following provision of notice and a reasonable opportunity tocure, then the dispute shall be settled by arbitration, under the American ArbitrationAssociation’s National Rules for the Resolution of Employment Disputes (the “National Rules”). Asingle arbitrator shall be selected in accordance with the National Rules, and the costs of sucharbitration shall be shared equally between the parties, except to the extent expressly set forthin Section 14 above. Any claim or controversy not submitted to arbitration in accordance with thisSection 20 (other than as provided under the Noncompetition/NDA) shall be waived, and thereafter noarbitrator, arbitration panel, tribunal, or court shall have the power to rule or make any award onany such claim or controversy. In determining a claim or controversy under this Agreement and inmaking an award, the arbitrator must consider the terms and provisions of this Agreement, as wellas all applicable federal, state, or local laws. The award rendered in any arbitration proceedingheld under this Section 20 shall be final and binding and judgment upon the award may be entered inany court having jurisdiction thereof. Claims for workers’ compensation or unemploymentcompensation benefits are not covered by this Section 20. Without limiting the provisions of thisSection 20, the Company and the Executive agree that the decision as to whether a party is theprevailing party in an arbitration, or a legal proceeding that is commenced in connection therewithwill be made in the sole discretion of the arbitrator or, if applicable, the court and thearbitrator or court may award reasonable attorneys’ fees, costs and expenses, except to the extentexpressly to the contrary in Section 14 above. **The Company and the Executive each herebyirrevocably waive any right to a trial by jury in any action, suit or other legal proceedingarising under or relating to any provision of this Agreement.**
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     21. Notices.          All notices shall be in writing, shall be sent to the following addresses listed below using areputable overnight express delivery service and shall be deemed to be received one (1) calendarday after mailing.     If to the Company: 10780 Parkridge Blvd.4th FloorReston, Virginia 20191Attention: General Counsel with a copy to: The Chief Executive Officer     If to the Executive: At his current or last known residential addressAny notice of termination must include a Date of Termination in accordance with the relevantprovisions of this Agreement.     22. Headings.          The headings of the sections contained in this Agreement are for convenience only and shallnot be deemed to control or affect the meaning or construction of any provision of this Agreement.     23. Compliance with Code Section 409A.          To the extent any payment, compensation or other benefit provided to the Executive inconnection with his employment termination is determined to constitute “nonqualified deferredcompensation” within the meaning of Section 409A of the Code and the Executive is a specifiedemployee as defined in Section 409A(2)(B)(i), such payment, compensation or other benefit shall notbe paid before the day that is six (6) months plus one (1) day after the Date of Termination (the“New Payment Date”). The aggregate of any payments that otherwise would have been paid to theExecutive during the period between the Date of Termination and the New Payment Date shall be paidto the Executive in a lump sum on such New Payment Date. Thereafter, any payments that remainoutstanding as of the day immediately following the New Payment Date shall be paid without delayover the time period originally scheduled, in accordance with the terms of this Agreement.     24. Excise Tax Gross-Up.          Under certain circumstances the Executive may become entitled to a gross-up payment withrespect to the excise tax imposed by Section 4999 of the Code. The terms governing the gross-uppayment are set forth in Exhibit C, which is incorporated herein by reference.
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     25. Counterparts.          This Agreement may be executed in two or more counterparts, and such counterparts shallconstitute one and the same instrument. Signatures delivered by facsimile shall be deemedeffective for all purposes to the extent permitted under applicable law.**REMAINDER OF PAGE INTENTIONALLY LEFT BLANK**
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          IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first writtenabove.         TIER TECHNOLOGIES, INC.         By:             Name:      Title:           THE EXECUTIVE              David E. Fountain
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**Exhibit A****FORM OF SEPARATION AGREEMENT AND RELEASE**     This Separation Agreement and Release (the “***Agreement***”) is made by and between TierTechnologies, Inc., a Delaware corporation (the “***Company***”), and ___(the “***Employee***”)(collectively, the “***Parties***”), as of the Separation Date (as defined below).     WHEREAS, the Employee entered into an employment agreement dated as of December ___, 2006(the “***Employment Agreement***”) and [RECITE AGREEMENTS] (together, the “***Prior Agreements***”);WHEREAS, the Employee has been [TITLES];     WHEREAS, the Parties desire to set forth the terms of their joint agreements regarding theEmployee’s separation from the Company and establish the terms of the Employee’s severancearrangement; and     WHEREAS, the Company advises the Employee to consult with an attorney of his own choosingprior to executing this Agreement;     NOW, THEREFORE, in consideration of the promises and conditions set forth herein, the receiptand sufficiency of which is hereby acknowledged, the Company and the Employee agree as follows:     Separation Date and Termination of Prior Agreements. The Employee’s effective date ofseparation from the Company [was] [shall be] [date] (the “***Separation Date***”). Provided that theEmployee does not revoke this Agreement pursuant to Section 18 below, the Employee acknowledgesthat the Prior Agreements terminated effective as of the Separation Date, except as providedherein, and that the Company no longer has any obligations thereunder, including any obligations toprovide benefits or perquisites to the Employee and/or his family pursuant to the
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Prior Agreements.     Consideration. In return for the timely execution and non-revocation of thisAgreement and provided that the Employee has complied with all conditions set forth in thisAgreement, the Company agrees to provide the Employee with the following consideration (the“***Consideration***”):     [Reflect payments from Employment Agreement or other compensatory agreement.]