##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K/A
 Amendment No. 2
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE TRANSITION PERIOD FROM  TO
 COMMISSION FILE NUMBER 000-23195
 TIER TECHNOLOGIES, INC.
  DELAWARE
    
    94-3145844(State or other jurisdiction of Incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 10780 PARKRIDGE BOULEVARD4th FLOOR, RESTON, VA 20191
 (571) 382-1000
  Title of each class
    
    Name of each exchange on which registeredCOMMON STOCK, $0.01 PAR VALUE
    
    The NASDAQ STOCK MARKET, LLC
 NONE
 o þ
 o þ
 þ o
 o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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TABLE OF CONTENTS  PART IIIITEM 10DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEITEM 11EXECUTIVE COMPENSATIONITEM 12SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSITEM 13CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCEITEM 14PRINCIPAL ACCOUNTING FEES AND SERVICESPART IVITEM 15EXHIBITS AND FINANCIAL STATEMENT SCHEDULESSIGNATURESEX-31.5EX-31.6    Table of Contents  EXPLANATORY NOTE
    2




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##### Table of Contents



PART III
 
 ITEM 10DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 Executives
 Executive Officers of the Registrant
 Directors
  Charles W. Berger
 Age: Director since:
 Recent Business Experience:
 John J. Delucca
 Age: Director since:
 Recent Business Experience:
 Daniel J. Donoghue
 Age: Director since:
 Recent Business Experience:
 3




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##### Table of Contents



Morgan P. Guenther
 Age: Director since:
 Recent Business Experience:
 Philip G. Heasley
 Age: Director since:
 Recent Business Experience:
 Michael R. Murphy
  Recent Business Experience:
 David A. Poe
 Age: Director since:
 Recent Business Experience:
 4




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##### Table of Contents



Ronald L. Rossetti
 Age: Director since:
 Recent Business Experience:
 Zachary F. Sadek
 Age Director since:
 Recent Business Experience:
 Arrangements or understandings related to the selection of directors
   Audit Committee Financial Expert
  5




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##### Table of Contents



Audit Committee
  Number of Members: 4
    
    Functions:Members:
     Charles W. Berger (Chair)
     John J. Delucca (Vice Chair)
     Daniel J. Donoghue
     Zachary F. Sadek (from March 2009)
     Samuel Cabot III (through March 2009)
Number of Meetings in Fiscal 2009: 7
    
    Selects the independent registered
public accounting firm to audit Tiers
books and records, subject to
stockholder ratification, and determines
the compensation of the independent
registered public accounting firm.
At least annually, reviews a report by
the independent registered public
accounting firm describing: internal
quality control procedures, any issues
raised by an internal or peer quality
control review, and any investigations
by regulatory authorities.
Consults with the independent registered
public accounting firm, reviews and
approves the scope of their audit, and
reviews independence and performance.
Also reviews any proposed engagement
between Tier and the independent
registered public accounting firm and
approves in advance any such engagement,
if appropriate.
Reviews internal controls, accounting
practices, and financial reporting,
including the results of the annual
audit and the review of the interim
financial statements, with management
and the independent registered public
accounting firm.
Discusses earnings releases and guidance
provided to the public.
As appropriate, obtains advice and
assistance from outside legal,
accounting, or other advisors.
Prepares a report of the Audit Committee
to be included in our proxy statement.
Assesses annually the adequacy of the
Audit Committee Charter.
Reports to the Board about these matters.
 Section 16(a) Beneficial Ownership Reporting Compliance
  6




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##### Table of Contents



Corporate Governance Documents
 http://www.tier.com
 7




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##### Table of Contents



ITEM 11EXECUTIVE COMPENSATION
 COMPENSATION DISCUSSION AND ANALYSIS
 Compensation Philosophy, Objectives, and Design
 Compensation Philosophy
  Compensation Objectives
  
    
    attract, retain, and motivate talented employees;
    
    support business strategies that promote sustained growth and development;
    
    reward the achievement of business results through the delivery of competitive
pay and performance-based incentive programs; and
    
    link executives goals with the interests of shareholders by tying a portion of
compensation to our stock.
  Performance
  Alignment
  8




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Retention
  Implementing Our Objectives
 Determining Compensation
   Role of the Compensation Committee and Chief Executive Officer
  
    
    reviewing and approving the compensation for our Chief Executive Officer and other
executive officers;
    
    reviewing executive bonus plan allocations;
    
    overseeing and advising the Board on the adoption of policies that govern our
compensation programs; and
    
    approving grants of stock options and other stock awards to our executive
officers.
   9




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##### Table of Contents



Use of Compensation Consultants and Peer Groups
    ACI Worldwide Inc.
    
    Intersections Inc.
    
    S1 CorpASTA Funding Inc.
    
    Inx Inc.
    
    Techteam Global Inc.Bottomline Technologies Inc.
    
    NIC Inc.
    
    TNS Inc.CSG Systems International Inc.
    
    Online Resources Inc.
    
    TRX Inc.CyberSource Corp.
    
    Quality Systems Inc.
    
    Tyler Technologies Inc.Radiant Systems Inc.
    
    Wright Express Corp
   Long-term Incentives
 10




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##### Table of Contents



Elements Used to Achieve Compensation Objectives
  Base Salary
     Base salary rate by fiscal year
    
    
    % change2008
    
    
    2009
    
    
    2008 to 2009Ronald L. RossettiChief Executive Officer and Chairman of the
Board
    
    $
    (1
    )
    
    $
    400,000
    
    
    
    (1
    )Nina K. Vellayan (2)Executive Vice President, Chief Operating
Officer
    
    
    
    
    
    
    275,000
    
    
    
    N/ARonald W. JohnstonSenior Vice President, Chief Financial Officer
    
    
    275,000
    
    
    
    272,000
    (3)
    
    
    -1
    %Keith S. KendrickSenior Vice President, Strategic Marketing
    
    
    265,000
    
    
    
    265,000
    
    
    
    0
    %Keith S. OmsbergVice President, General Counsel and Corporate
Secretary
    
    
    190,000
    
    
    
    190,000
    
    
    
    0
    %
 
 (1)
    
    Pursuant to Mr. Rossettis employment agreement signed April 30, 2008, Mr. Rossettis base salary was reduced from $600,000 to $400,000 per annum, a
reduction of 33%, effective May 1, 2008.(2)
    
    Ms. Vellayan joined Tier in October 2008.(3)
    
    Mr. Johnston voluntarily reduced his base salary from $275,000 to $272,000 for fiscal year 2009, effective January 2009. 11




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Cash Incentive Compensation
  
    
    align the management teams financial interests with those of our shareholders;
    
    support a performance-oriented environment that rewards business unit and Tiers
overall results;
    
    attract, motivate, and retain key management critical to Tiers long-term success;
and
    
    align compensation with Tiers business strategy, values, and management
initiatives.
      Sign-on and Retention Incentives
  12




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Executive Incentive Plan
   Estimated Payout Levels (1)
 Threshold:
    
    
    Target:
    
    
    Maximum:Name
    
    EBITDA of $0.75 million
    
    
    EBITDA of $1.0 million
    
    
    EBITDA of $1.25 millionRonald L. Rossetti
    
    $
    300,000
    
    
    $
    400,000
    
    
    $
    500,000Nina K. Vellayan
    
    
    137,500
    
    
    
    206,250
    
    
    
    275,000Ronald W. Johnston
    
    
    137,500
    
    
    
    165,000
    
    
    
    206,250Keith S. Kendrick
    
    
    132,500
    
    
    
    159,000
    
    
    
    198,750Keith S. Omsberg
    
    
    19,000
    
    
    
    28,500
    
    
    
    38,000
 
 (1)
    
    The following table provides detail on the basis of the estimated payout levels: Percentage of base salary
 Name
    
    Threshold
    
    
    Target
    
    
    MaximumRonald L. Rossetti
    
    
    75
    %
    
    
    100
    %
    
    
    125
    %Nina K. Vellayan
    
    
    50
    %
    
    
    75
    %
    
    
    100
    %Ronald W. Johnston (a)
    
    
    50
    %
    
    
    60
    %
    
    
    75
    %Keith S. Kendrick
    
    
    50
    %
    
    
    60
    %
    
    
    75
    %Keith S. Omsberg
    
    
    10
    %
    
    
    15
    %
    
    
    20
    %
 
 (a)
    
    Mr. Johnstons estimated payout amounts were calculated on a base salary of $275,000,
which represented his base salary per his employment agreement.  13




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2009 PayoutNamed executive officer
    
    EIP
    
    
    BonusRonald L. Rossetti
    
    $
    400,000
    
    
    $
    Nina K. Vellayan
    
    
    206,250
    
    
    
    75,000Ronald W. Johnston
    
    
    165,000
    
    
    
    Keith S. Kendrick (1)
    
    
    59,625
    
    
    
    132,500Keith S. Omsberg
    
    
    28,500
    
    
    
    Total incentive payout
    
    $
    859,375
    
    
    $
    207,500
 
 (1)
    
    In accordance with the terms of his employment agreement, Mr. Kendricks EIP award was reduced by
$99,375, the amount of his guaranteed bonus that was attributed to fiscal year 2009, from his target level
of $159,000. Long-term Incentives
   14




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Potential Payments Upon Termination or Change in
Control
 Executive Performance Stock Unit Plan
     
    
    any person, entity, or affiliated group becoming the beneficial owner or owners of
more than 50% of the outstanding equity securities of Tier, or otherwise becoming
entitled to vote shares representing more than 50% of the undiluted total voting
power of our then-outstanding securities eligible to vote to elect members of the
Board;
    
    a consolidation or merger (in one transaction or a series of related transactions)
of Tier pursuant to which the holders of our equity securities immediately prior to
such transaction or series of transactions would not be the holders immediately after
such transaction or series of related transactions of more than 50% of the securities
eligible to vote to elect members of the Board of the entity surviving such
transaction or series of related transactions; or
    
    the sale, lease, exchange, or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of Tier.
  15




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Restricted
    
    
    Performance
    
    
    StockNamed executive officer
    
    stock units (1)
    
    
    stock units (2)
    
    
    options (3)Ronald L. Rossetti
    
    
    150,000
    
    
    
    
    
    
    
    Nina K. Vellayan
    
    
    
    
    
    
    180,000
    
    
    
    200,000Ronald W. Johnston
    
    
    
    
    
    
    150,000
    
    
    
    75,000Keith S. Kendrick
    
    
    
    
    
    
    100,000
    
    
    
    50,000Keith S. Omsberg
    
    
    
    
    
    
    50,000
    
    
    
    15,000
 
 (1)
    
    Granted to Mr. Rossetti under his EVA Plan. These RSUs will be earned upon Tiers achievement
and maintenance for a period of 60 days of a Share Price Performance Target of $8.00 per share.
Unless vesting is accelerated under the circumstances discussed under Potential Payments Upon
Termination or Change in Control, any RSUs that are earned due to the achievement and maintenance of
Share Price Performance Targets will vest on April 30, 2011. RSUs are payable in shares unless no
shares are available under a shareholder approved plan, in which case they are payable in cash.(2)
    
    Unless vesting is accelerated under the circumstances discussed under Potential Payments Upon
Termination or Change in Control, any PSUs that are awarded due to the achievement and maintenance
of Share Price Performance Targets will vest on December 4, 2011. PSUs are payable in cash unless
shares are available under a shareholder approved plan, in which case they may be payable in the form
of shares at the option of the Company.(3)
    
    Unless vesting is accelerated under the circumstances discussed under Potential Payments Upon
Termination or Change in Control, options vest over five years, with 20% of the underlying shares
vesting on each of the first five anniversaries of the grant date. Equity Ownership Guidelines
 Director Compensation
  Perquisites and Benefits
    Chief Executive Officer Perquisites
  16




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##### Table of Contents



Senior Vice President, Strategic Marketing Perquisites
    Change of Control
   
    
    any person, entity or affiliated group becoming the beneficial owner or owners of
more than 50% of the outstanding equity securities of Tier, or otherwise becoming
entitled to vote shares representing more than 50% of the undiluted total voting
power of our then-outstanding securities eligible to vote to elect members of the
Board;
    
    a consolidation or merger (in one transaction or a series of related transactions)
of Tier pursuant to which the holders of our equity securities immediately prior to
such
 17




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##### Table of Contents



transaction or series of transactions would not be the holders immediately after such
transaction or series of related transactions of more than 50% of the securities
eligible to vote to elect members of the Board of the entity surviving such
transaction or series of related transactions;
    
    the sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of Tier;
    
    the dissolution or liquidation of Tier; or
    
    the date on which we (i) consummate a going private transaction pursuant to
Section 13 and Rule 13e-3 of the Exchange Act, or (ii) no longer have a class of
equity securities registered under the Exchange Act .
  
    
    any person, entity or affiliated group becoming the beneficial owner or owners of
more than 35% of the outstanding equity securities of Tier, or otherwise becoming
entitled to vote shares representing more than 35% of the undiluted total voting
power of our then-outstanding securities eligible to vote to elect members of the
Board;
    
    a consolidation or merger (in one transaction or a series of related transactions)
of Tier pursuant to which the holders of our equity securities immediately prior to
such transaction or series of related transactions would not be the holders
immediately after such transaction or series of related transactions of at least 65%
of the securities eligible to elect members of the board of directors of the entity
surviving such transaction or series of related transactions; or
    
    the sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of Tier.
 Potential Payments Upon Termination or Change in Control
 Tax and Accounting Implications
 Deductibility of Compensation
  Accounting for Share-Based Compensation
  18




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EXECUTIVE COMPENSATION
 Compensation
Discussion and Analysis
 Summary Compensation Table
  Non-equityincentive plan
    
    
    All otherName and principal
    
    
    
    
    
    Salary
    
    
    Bonus
    
    
    Stock awards
    
    
    Option awards
    
    
    compensation
    
    
    compensation
    
    
    Totalposition
    
    Year
    
    
    ($)
    
    
    ($) (1)
    
    
    ($) (2)
    
    
    ($) (2)
    
    
    ($) (3)
    
    
    ($) (4)
    
    
    ($)Ronald L. Rossetti
    
    
    2009
    
    
    $
    400,000
    
    
    $
    
    
    
    $
    513,497
    
    
    $
    
    
    
    $
    400,000
    
    
    $
    228,061
    
    
    $
    1,541,558Chief Executive Officer,
Chairman of the Board
    
    
    2008
    
    
    
    589,231
    
    
    
    390,513
    
    
    
    264,583
    
    
    
    
    
    
    
    
    
    
    
    278,363
    
    
    
    1,522,6902007
    
    
    
    600,000
    
    
    
    600,000
    
    
    
    
    
    
    
    119,375
    
    
    
    
    
    
    
    230,710
    
    
    
    1,550,085Nina K. Vellayan
Executive Vice President,
Chief Operating Officer
    
    
    2009
    
    
    
    267,596
    
    
    
    75,000
    
    
    
    219,180
    
    
    
    47,215
    
    
    
    206,250
    
    
    
    8,028
    
    
    
    823,269Ronald W. Johnston (5)
Senior Vice President,
Chief Financial Officer
    
    
    2009
    
    
    
    272,692
    
    
    
    
    
    
    
    182,650
    
    
    
    232,971
    
    
    
    165,000
    
    
    
    8,180
    
    
    
    861,4932008
    
    
    
    172,158
    
    
    
    68,750
    
    
    
    
    
    
    
    58,326
    
    
    
    
    
    
    
    4,943
    
    
    
    304,177Keith S. Kendrick
    
    
    2009
    
    
    
    265,000
    
    
    
    132,500
    
    
    
    121,767
    
    
    
    72,783
    
    
    
    59,625
    
    
    
    95,405
    
    
    
    747,080Senior Vice President,
Strategic Marketing
    
    
    2008
    
    
    
    68,288
    
    
    
    
    
    
    
    
    
    
    
    18,018
    
    
    
    
    
    
    
    42,953
    
    
    
    129,259Keith S. Omsberg
Vice President,
General Counsel
and Secretary
    
    
    2009
    
    
    
    190,000
    
    
    
    
    
    
    
    60,883
    
    
    
    47,845
    
    
    
    28,500
    
    
    
    4,385
    
    
    
    331,6132008
    
    
    
    188,000
    
    
    
    92,500
    
    
    
    
    
    
    
    50,706
    
    
    
    
    
    
    
    5,585
    
    
    
    336,791
 
 19




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##### Table of Contents



(1)
    
    Reflects the following bonus payouts for fiscal years 2009, 2008 and 2007: EmploymentName
    
    Year
    
    
    agreement
    
    
    Discretionary
    
    
    Total bonus payoutRonald L. Rossetti
    
    
    2008
    
    
    $
    166,667
    
    
    $
    223,846
    
    
    $
    390,5132007
    
    
    
    600,000
    
    
    
    
    
    
    
    600,000Nina K. Vellayan
    
    
    2009
    
    
    
    75,000
    
    
    
    
    
    
    
    75,000Ronald W. Johnston
    
    
    2008
    
    
    
    68,750
    
    
    
    
    
    
    
    68,750Keith S. Kendrick
    
    
    2009
    
    
    
    132,500
    
    
    
    
    
    
    
    132,500Keith S. Omsberg
    
    
    2009
    
    
    
    
    
    
    
    
    
    
    
    2008
    
    
    
    
    
    
    
    92,500
    
    
    
    92,500
  
 (2)
    
    The amounts included in these columns reflect the dollar amount recognized as an expense
for financial statement reporting purposes in fiscal years 2009, 2008 and 2007 for stock
awards (consisting of RSUs in the case of Mr. Rossetti and PSUs in the case of the other
named executives) and stock option awards, calculated in accordance with U.S. GAAP,
excluding any estimate of forfeitures. Accordingly, the columns include amounts relating to
awards granted during and prior to the year indicated. The following table summarizes the
amounts shown in the Stock Awards and Option Awards columns and the amount included for
each such award for fiscal year 2009. Assumptions used in the calculation of these amounts
and the amounts for fiscal year 2009 are included in footnote 14 to the audited consolidated
financial statements included in our annual report on Form 10-K for fiscal year 2009, as
amended. Stock Awards
    
    
    Option AwardsTotal number of
    
    
    
    
    
    
    
    
    
    
    Total number ofshares underlying
    
    
    Amount included in
    
    
    
    
    
    
    shares underlying
    
    
    Amount included inName
    
    Date of award
    
    
    stock awards (#)
    
    
    fiscal 2009 ($)
    
    
    Date of award
    
    
    options awarded (#)
    
    
    fiscal 2009 ($)Ronald L. Rossetti
    
    
    12/4/08
    
    
    
    150,000
    
    
    $
    102,222
    
    
    
    
    
    
    
    
    
    
    $
    4/30/08
    
    
    
    550,000
    
    
    
    411,275513,497Nina K. Vellayan
    
    
    12/4/08
    
    
    
    180,000
    
    
    
    219,180
    
    
    
    12/4/08
    
    
    
    200,000
    
    
    
    47,215Ronald W. Johnston
    
    
    12/4/08
    
    
    
    150,000
    
    
    
    182,650
    
    
    
    12/4/08
    
    
    
    75,000
    
    
    
    17,7067/1/08
    
    
    
    200,000
    
    
    
    215,265232,971Keith S. Kendrick
    
    
    12/4/08
    
    
    
    100,000
    
    
    
    121,767
    
    
    
    12/30/08
    
    
    
    50,000
    
    
    
    11,4096/30/08
    
    
    
    100,000
    
    
    
    61,37472,783Keith S. Omsberg
    
    
    12/4/08
    
    
    
    50,000
    
    
    
    60,883
    
    
    
    12/4/08
    
    
    
    15,000
    
    
    
    3,54112/10/07
    
    
    
    20,000
    
    
    
    13,45710/1/07
    
    
    
    30,000
    
    
    
    21,9129/13/06
    
    
    
    10,000
    
    
    
    5,88211/1/04
    
    
    
    3,000
    
    
    
    2,48112/1/03
    
    
    
    3,000
    
    
    
    57247,845
 20




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##### Table of Contents



(3)
    
    Reflects cash payouts for fiscal year 2009 under the Executive Incentive Plan.
 Total non-equity incentiveName
    
    Year
    
    
    Incentive plan
    
    
    payoutRonald L. Rossetti
    
    
    2009
    
    
    EIP
    
    
    $  400,000Nina K. Vellayan
    
    
    2009
    
    
    EIP
    
    
    206,250Ronald W. Johnston
    
    
    2009
    
    
    EIP
    
    
    165,000Keith S. Kendrick
    
    
    2009
    
    
    EIP
    
    
    59,625Keith S. Omsberg
    
    
    2009
    
    
    EIP
    
    
    28,500
  (4)
    
    Consists of:
 
    
    the aggregate incremental cost to Tier of providing perquisites and other personal
benefits;
    
    company matching contributions under 401(k) plans; and
    
    tax reimbursement payments relating to income tax liability incurred by the applicable
executive as a result of the Companys payment for the perquisites described below.
  Tax
    
    
    Total all otherName
    
    Year
    
    
    Perquisites(a)
    
    
    401(k)
    
    
    reimbursement
    
    
    compensationRonald L. Rossetti
    
    
    2009
    
    
    $
    116,802
    
    
    $
    7,350
    
    
    $
    103,909
    
    
    $
    228,0612008
    
    
    
    183,338
    
    
    
    6,900
    
    
    
    88,125
    
    
    
    278,3632007
    
    
    
    191,435
    
    
    
    6,750
    
    
    
    32,525
    
    
    
    230,710Nina K. Vellayan
    
    
    2009
    
    
    
    
    
    
    
    8,028
    
    
    
    
    
    
    
    8,028Ronald W. Johnston
    
    
    2009
    
    
    
    
    
    
    
    8,180
    
    
    
    
    
    
    
    8,1802008
    
    
    
    
    
    
    
    4,943
    
    
    
    
    
    
    
    4,943Keith S. Kendrick
    
    
    2009
    
    
    
    87,455
    
    
    
    7,950
    
    
    
    
    
    
    
    95,4052008
    
    
    
    35,986
    
    
    
    1,835
    
    
    
    5,132
    
    
    
    42,953Keith S. Omsberg
    
    
    2009
    
    
    
    
    
    
    
    4,385
    
    
    
    
    
    
    
    4,3852008
    
    
    
    
    
    
    
    5,585
    
    
    
    
    
    
    
    5,585
 
 (a)
    
    See Perquisites and Benefitsin Compensation
Discussion and Analysisbeginning on page 8 for a discussion of perquisites provided to executives. Perquisites
include: 
    
    expenses for corporate apartments located near our corporate headquarters in Reston, Virginia, including utilities;
    
    expenses for local transportation while the executive is located in Reston and air and ground transportation, meals and lodging for travel by the executive
to and from his home to our corporate headquarters in Reston; and
    
    legal consultation fees relating to negotiation and review of the executives employment agreement.
  Name
    
    Year
    
    
    Corporate apartment*
    
    
    Travel*
    
    
    Legal consultation*
    
    
    TotalRonald L. Rossetti
    
    
    2009
    
    
    
    $  52,459
    
    
    
    $    64,343
    
    
    
    $        
    
    
    $
    116,8022008
    
    
    
    39,096
    
    
    
    113,431
    
    
    
    30,811
    
    
    
    183,3382007
    
    
    
    41,232
    
    
    
    130,375
    **
    
    
    19,828
    
    
    
    191,435Keith S. Kendrick
    
    
    2009
    
    
    
    28,221
    
    
    
    59,234
    
    
    
    
    
    
    
    87,4552008
    
    
    
    8,310
    
    
    
    19,371
    
    
    
    8,305
    
    
    
    35,986
  *
    
    Amounts reflect aggregate incremental cost to the Company, which is equal to the Companys out-of-pocket costs for these perquisites.**
    
    Includes travel by chartered private jet for business meeting which Mr. Rossetti attended. Total cost was $27,295 and is split equally between Mr. Rossetti and a former
executive who attended the meeting. 21




---



##### Table of Contents



(5)
    
    Mr. Johnston served as interim Chief Financial Officer from April 2008 to June
2008.
 Fiscal 2009 Grants of Plan-Based Awards
  ClosingAll other
    
    
    
    
    
    market
    
    Grant dateoption
    
    Exercise or
    
    price
    
    fairawards:
    
    base price
    
    of common
    
    value ofEstimated possible payouts under
    

Estimated
future payouts under
    
    number of
    
    of
    
    stock
    
    stockNon-Equity Incentive Plan Awards (1)
    
    Equity Incentive Plan Awards (1)
    
    securities
    
    option
    
    on date of
    
    and optionThreshold
    
    Target
    
    Maximum
    
    Threshold
    
    Target
    
    Maximum
    
    underlying
    
    awards
    
    grant
    
    awards ($)Name
    
    Grant date
    
    ($) (2)
    
    ($) (3)
    
    ($) (4)
    
    (#)
    
    (#)
    
    (#)
    
    options (#)
    
    ($/s h) (5)
    
    ($/s h) (5)
    
    (6)Ronald L. Rossetti
    
    
    
    
    
    $
    300,000
    
    
    $
    400,000
    
    
    $
    500,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    12/4/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150,000
    (7)
    
    
    (9
    )
    
    
    700,000
    (10)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Nina K. Vellayan
    
    
    
    
    
    
    137,500
    
    
    
    206,250
    
    
    
    275,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12/4/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,000
    (8)
    
    
    (9
    )
    
    
    180,000
    (11)
    
    
    200,000
    (12)
    
    
    4.25
    
    
    
    4.34
    
    
    
    850,000Ronald W. Johnston
    
    
    
    
    
    
    137,500
    
    
    
    165,000
    
    
    
    206,250
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12/4/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,500
    (8)
    
    
    (9
    )
    
    
    150,000
    (11)
    
    
    75,000
    (13)
    
    
    4.25
    
    
    
    4.34
    
    
    
    318,750Keith S. Kendrick
    
    
    
    
    
    
    132,500
    
    
    
    159,000
    
    
    
    198,750
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12/4/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,000
    (8)
    
    
    (9
    )
    
    
    100,000
    (11)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12/30/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,000
    (13)
    
    
    4.73
    
    
    
    4.93
    
    
    
    236,500Keith S. Omsberg
    
    
    
    
    
    
    19,000
    
    
    
    28,500
    
    
    
    38,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12/4/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,500
    (8)
    
    
    (9
    )
    
    
    50,000
    (11)
    
    
    15,000
    (13)
    
    
    4.25
    
    
    
    4.34
    
    
    
    63,750
  (1)
    
    For additional information concerning performance metrics and
payouts under non-equity and equity incentive plan awards, see pages
13 through 16.(2)
    
    The threshold amount represents the amounts payable to the executive if we met our corporate performance threshold goal of EBITDA of $750,000 for fiscal 2009 under the Executive Incentive Plan.(3)
    
    The target amount represents the amounts payable to the executive if we met our corporate performance target goal of EBITDA of $1.0 million for fiscal 2009 under the Executive Incentive Plan.(4)
    
    The maximum amount represents the amounts payable to the executive if we met our corporate performance stretch goal of EBITDA of $1.25 million for fiscal 2009 under the Executive Incentive Plan. During fiscal year 2009, we exceeded this
stretch goal. However,
the Compensation Committee, on managements recommendation, determined that EIP payouts for fiscal year 2009 would be determined as if the target EBITDA, rather than the maximum EBITDA, had been achieved, in order to make additional funds
available for bonuses
payable to individuals other than our executive officers.(5)
    
    The exercise price of the options granted to the individuals shown above was the closing price of Tiers common stock on the day prior to the grant date.(6)
    
    Represents the full grant date fair value of each equity-based award, computed in accordance with U.S. GAAP.(7)
    
    The threshold amount represents the number of RSUs that would be issuable to Mr. Rossetti under his EVA Plan if we achieved and maintained a Share Price Performance Target of $8.00 per share, which is the lowest Share Price Performance
Target under the EVA
Plan, for a period of 60 days, subject to vesting requirements. RSUs that are earned vest on April 30, 2011. Vesting may be accelerated under certain circumstances described in Potential Payments upon Termination or Change of
Control. RSUs are payable in shares
unless no shares are available under a shareholder approved plan, in which case they are payable in cash.(8)
    
    The threshold amount represents the number of PSUs that would be issuable to the applicable executive under the PSU Plan if we achieved and maintained a Share Price Performance Target of $8.00 per share, which is the lowest Share Price
Performance Target
under the PSU Plan, for a period of 60 days, subject to vesting requirements. If the applicable Share Price Performance Targets are met, PSUs vest on December 4, 2011. Vesting may be accelerated under certain circumstances described in
Potential Payments upon
Termination or Change of Control. PSUs are payable in cash unless shares are available under a shareholder approved plan, in which case they may be payable in the form of shares at the option of Tier. 22




---



##### Table of Contents



(9)
    
    As discussed on pages 24 and 25, each of Mr. Rossettis EVA Plan and the PSU Plan has four payout levels, each of which is associated with a Share Price Performance Target. The threshold payout level, which is associated with the lowest
Share Price Performance
Target, is discussed in notes (7) and (8) above. The maximum payout level, which is associated with the highest Share Price Performance Target, is discussed in notes (10) and (11) below. The middle two payout levels are the
target payout levels. If Tier
achieves either of the two middle Share Price Performance Targets, Mr. Rossetti will earn the number of RSUs associated with that Share Price Performance Target, and the other named executive officers will earn the number of PSUs associated
with that Share Price
Performance Target, in each case subject to the vesting requirements noted in footnotes (7) and (8) above.(10)
    
    The maximum amount represents the number of RSUs that would be issuable to Mr. Rossetti under his EVA Plan if Tier achieved and maintained a Share Price Performance Target of $15.00 per share, which is the highest Share Price
Performance Target under the EVA
Plan, for a period of 60 days, subject to the vesting requirements noted in footnote (7) above.(11)
    
    The maximum amount represents the number of PSUs that would be issuable to the applicable executive under the PSU Plan if Tier achieved and maintained a Share Price Performance Target of $13.00 per share, which is the highest Share Price
Performance Target
under the PSU Plan, for a period of 60 days, subject to the vesting requirements noted in footnote (8) above.(12)
    
    Ms. Vellayan was awarded an option to purchase 200,000 shares of Tier stock pursuant to her employment agreement. These options, which were granted under the 2004 Plan, vest as to 20% of the underlying shares on each of the first five
anniversaries of the
date granted and expire in ten years. Vesting may be accelerated under certain circumstances described in Potential Payments upon Termination or Change of Control.(13)
    
    These options were granted under the 2004 Plan, vest as to 20% of the underlying shares on each of the first five anniversaries of the date granted and expire in ten years. Vesting may be accelerated under certain circumstances described in
Potential
Payments upon Termination or Change of Control. Outstanding Equity Awards at 2009 Fiscal Year-End
  Option Awards
    
    
    
    
    
    
    
    
    
    Stock AwardsNumber of
    
    
    
    
    
    
    
    
    
    Equity incentive
    
    Equity incentiveNumber of
    
    securities
    
    
    
    
    
    
    
    
    
    plan awards:
    
    plan awards:securities
    
    underlying
    
    
    
    
    
    
    
    
    
    Number of
    
    Market or payoutunderlying
    
    unexercised
    
    
    
    
    
    
    
    
    
    unearned
    
    value of unearnedunexercised
    
    options
    
    Option
    
    
    
    
    
    shares, units, or
    
    shares, units oroptions
    
    (#)
    
    exercise
    
    Option
    
    other rights that
    
    other rights that(#)
    
    Unexercisable
    
    price
    
    expiration
    
    have not vested
    
    have not vestedName
    
    Exercisable
    
    (a)
    
    ($)
    
    date
    
    (#)
    
    ($) (d)Ronald L. Rossetti
    
    
    25,000
    
    
    
    
    
    
    $
    6.94
    
    
    
    01/21/1110,000
    
    
    
    
    
    
    
    19.56
    
    
    
    01/22/1210,000
    
    
    
    
    
    
    
    13.75
    
    
    
    01/30/1315,000
    
    
    
    
    
    
    
    8.62
    
    
    
    01/27/145,000
    
    
    
    
    
    
    
    9.77
    
    
    
    10/07/1420,000
    
    
    
    
    
    
    
    8.30
    
    
    
    06/29/15300,000
    
    
    
    
    
    
    
    5.50
    
    
    
    07/25/16150,000
    (b)
    
    
    1,272,000385,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150,000Nina K. Vellayan
    
    
    
    
    
    
    200,000
    (1)
    
    
    4.25
    
    
    
    12/03/1845,000
    (c)
    
    
    381,600
    
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    45,000Ronald W. Johnston
    
    
    66,666
    
    
    
    133,334
    (2)
    
    
    8.01
    
    
    
    06/30/18
    
    
    
    75,000
    (3)
    
    
    4.25
    
    
    
    12/04/1837,500
    (c)
    
    
    318,00066,666
    
    
    
    208,334
    
    
    
    
    
    
    
    
    
    
    
    37,500Keith S. Kendrick
    
    
    20,000
    
    
    
    80,000
    (4)
    
    
    7.80
    
    
    
    06/29/18
    
    
    
    50,000
    (5)
    
    
    4.73
    
    
    
    12/29/1825,000
    (c)
    
    
    212,00020,000
    
    
    
    130,000
    
    
    
    
    
    
    
    
    
    
    
    25,000Keith Omsberg
    
    
    2,500
    
    
    
    
    
    
    
    16.04
    
    
    
    07/04/123,000
    
    
    
    
    
    
    
    7.81
    
    
    
    11/30/132,400
    
    
    
    600
    (6)
    
    
    8.60
    
    
    
    10/31/146,000
    
    
    
    4,000
    (7)
    
    
    7.05
    
    
    
    09/12/166,000
    
    
    
    24,000
    (8)
    
    
    10.20
    
    
    
    09/30/174,000
    
    
    
    16,000
    (9)
    
    
    9.25
    
    
    
    12/09/17
    
    
    
    15,000
    (10)
    
    
    4.25
    
    
    
    12/03/1812,500
    (c)
    
    
    106,00023,900
    
    
    
    59,600
    
    
    
    
    
    
    
    
    
    
    
    12,500
 
 (a)
    
    Vesting schedules of the unexercisable option awards are set forth below.
Vesting may be accelerated under certain circumstances described in Potential Payments upon Termination or Change of Control. 23




---



##### Table of Contents



FootnoteName
    
    reference
    
    
    Vesting date
    
    
    Number vestingNina K. Vellayan
    
    
    (1
    )
    
    
    12/04/09
    
    
    
    40,00012/04/10
    
    
    
    40,00012/04/11
    
    
    
    40,00012/04/12
    
    
    
    40,00012/04/13
    
    
    
    40,000Ronald W. Johnston
    
    
    (2
    )
    
    
    07/01/10
    
    
    
    66,66707/01/11
    
    
    
    66,667(3
    )
    
    
    12/04/09
    
    
    
    15,00012/04/10
    
    
    
    15,00012/04/11
    
    
    
    15,00012/04/12
    
    
    
    15,00012/04/13
    
    
    
    15,000Keith S. Kendrick
    
    
    (4
    )
    
    
    06/29/10
    
    
    
    20,00006/29/11
    
    
    
    20,00006/29/12
    
    
    
    20,00006/29/13
    
    
    
    20,000(5
    )
    
    
    12/30/09
    
    
    
    10,00012/30/10
    
    
    
    10,00012/30/11
    
    
    
    10,00012/30/12
    
    
    
    10,00012/30/13
    
    
    
    10,000Keith S. Omsberg
    
    
    (6
    )
    
    
    11/01/09
    
    
    
    600(7
    )
    
    
    09/13/10
    
    
    
    2,00009/13/11
    
    
    
    2,000(8
    )
    
    
    10/01/09
    
    
    
    6,00010/01/10
    
    
    
    6,00010/01/11
    
    
    
    6,00010/01/12
    
    
    
    6,000(9
    )
    
    
    12/10/09
    
    
    
    4,00012/10/10
    
    
    
    4,00012/10/11
    
    
    
    4,00012/10/12
    
    
    
    4,000(10
    )
    
    
    12/04/09
    
    
    
    3,00012/04/10
    
    
    
    3,00012/04/11
    
    
    
    3,00012/04/12
    
    
    
    3,00012/04/13
    
    
    
    3,000
 
 (b)
    
    The table above shows the number of RSUs that would be earned by Mr. Rossetti upon achievement
and maintenance of the threshold Share Price Performance Target, or $8.00 per share, for the
required 60 day period. Mr. Rossetti has been granted a total of 700,000 RSUs (including the
150,000 RSUs show in the table above) under his EVA Plan. These RSUs are earned when the Share
Price Performance Targets shown below are met and maintained for 60 24




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##### Table of Contents



Potential Payments upon Termination or Change of Control
 Share Price Performance Target
    
    Number of RSUs$

8.00
    
    
    150,00011.00
    
    
    180,00013.00
    
    
    185,00015.00
    
    
    185,000700,000
 
 (c)
    
    The table above shows the number of PSUs that would be earned by the named executive officers
upon achievement and maintenance of the threshold Share Price Performance Target, or $8.00 per
share, for the required 60 day period. The named executive officers have been granted the total
number of PSUs shown in the table below (which includes the PSUs shown in the table above) under
the PSU Plan. These PSUs are earned when the Share Price Performance Targets shown below are met
and maintained for 60 consecutive days. PSUs that have been earned vest December 4, 2011. Please
see Compensation Discussion and Analysis  Long-term Incentivesfor additional detail. Vesting may
be accelerated under certain circumstances described in Potential Payments upon Termination or
Change of Control. Number of Units at Share Price Performance TargetTotal units thatcould be$
    8.00
    
    
    $
    9.50
    
    
    $
    11.00
    
    
    $
    13.00
    
    
    awardedNina K. Vellayan
    
    
    45,000
    
    
    
    45,000
    
    
    
    45,000
    
    
    
    45,000
    
    
    
    180,000Ronald W. Johnston
    
    
    37,500
    
    
    
    37,500
    
    
    
    37,500
    
    
    
    37,500
    
    
    
    150,000Keith S. Kendrick
    
    
    25,000
    
    
    
    25,000
    
    
    
    25,000
    
    
    
    25,000
    
    
    
    100,000Keith S. Omsberg
    
    
    12,500
    
    
    
    12,500
    
    
    
    12,500
    
    
    
    12,500
    
    
    
    50,000Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    480,000
 
 (d)
    
    Represents the market value of RSUs or PSUs, as applicable, issuable to the applicable
executive upon achievement and maintenance of the $8.00 threshold Share Price Performance Target
for the required 60 day period, subject to the vesting requirements noted in footnotes (b) and (c)
above. The market value was determined by multiplying $8.48 (the closing price of Tiers stock at
September 30, 2009) by the number of RSUs or PSUs, as applicable. Fiscal 2009 Option Exercises and Stock Vested
  Option awardsNumber of sharesacquired on exercise
    
    
    Value realized onName
    
    (#)
    
    
    exercise ($) (1)Ronald L. Rossetti
    
    
    20,000
    
    
    $
    12,350Nina K. Vellayan
    
    
    
    
    
    
    Ronald W. Johnston
    
    
    
    
    
    
    Keith S. Kendrick
    
    
    
    
    
    
    Keith S. Omsberg
    
    
    
    
    
    
    
 
 (1)
    
    Amount realized on exercise was determined by multiplying
$7.43 (the closing price of Tiers common
stock at July 14, 2009, the date of exercise) by the number of shares exercised and subtracting
the aggregate exercise price paid for such shares. Potential Payments Upon Termination or Change of Control
 Change
of Control
 25




---



##### Table of Contents




    
    a conviction of the named executive officer of, or a plea of guilty or nolo contendere
by the named executive officer to, any felony;
    
    an intentional violation by the named executive officer of federal or state securities
laws;
    
    willful misconduct or gross negligence by the named executive officer that has or is
reasonably likely to have a material adverse effect on Tier;
    
    a failure of the named executive officer to perform his or her reasonably assigned
duties for Tier that has or is reasonably likely to have a material adverse effect on
Tier;
    
    a material violation by the named executive officer of any material provision of our
Business Code of Conduct or, in the case of Mr. Rossetti and Mr. Johnston, our Code of
Ethics for Chief Executive, Chief Financial and Chief Accounting Officers (or successor
policies on similar topics) or any other applicable policies in place;
    
    a violation by the named executive officer of any provision of his or her Proprietary
and Confidential Information, Developments, Noncompetition and Nonsolicitation Agreement
with us; or
    
    fraud, embezzlement, theft or dishonesty by the named executive officer against Tier.
  
    
    any reduction in the named executive officers base salary, or in the case of Mr.
Rossetti, a reduction in his maximum bonus opportunity below 100% of base salary, and in
the case of each of Mr. Kendrick and Ms. Vellayan, a reduction in the minimum bonus
opportunity below 50% of base salary;
    
    in the case of Mr. Rossetti, a material change in the applicable performance goals
used to determine his bonus that makes it materially less likely for the goals to be
achieved and which change is not reasonable in light of the Companys business, is
designed to make it materially less likely for Mr. Rossetti to obtain the bonus
opportunity or is applied solely to Mr. Rossetti (except to the extent relating only to
the functions of a Chief Executive Officer);
    
    in the case of Mr. Rossetti, any reduction in his title, position or reporting status,
unless he is provided with a comparable title, position or reporting status, or any
material diminution of his duties, responsibilities, powers or authorities;
    
    in the case of Mr. Kendrick and Ms. Vellayan, any material reduction in position and
reporting status (defined as reporting directly to the Chief Executive Officer of Tier or
an equivalent position), or any material diminution in the nature and scope of duties,
responsibilities, powers or authorities consistent with those immediately following
commencement of employment by Mr. Kendrick or Ms. Vellayan, as applicable, with Tier, or
the assignment of duties and responsibilities materially inconsistent with Mr. Kendricks
position of Senior Vice President, Strategic Marketing or Ms. Vellayans position as
Executive Vice President, Chief Operating Officer;
    
    in the case of Mr. Johnston and Mr. Omsberg, any material diminution of the named
executive officers duties, responsibilities, powers, or authorities;
 26




---



##### Table of Contents




    
    in the case of Mr. Kendrick, any requirement imposed upon Mr. Kendrick to relocate his
principal residence to any other location than Reston, Virginia or Atlanta, Georgia or a
similar metropolitan area;
    
    in the case of Mr. Omsberg, any relocation of his principal place of employment by
more than 50 miles or a requirement that Mr. Omsberg relocate his principal place of
residence by more than 50 miles; or
    
    a material breach by Tier of any material provision of the employment agreement.
  Potential Payments Due under our Employment Agreement with our Chief Executive Officer
  VoluntaryInvoluntary for
    
    
    Involuntary
    
    
    terminationBenefits and payments
    
    Voluntary
    
    
    cause
    
    
    not for cause
    
    
    with good
    
    
    
    
    
    
    Change ofupon termination
    
    termination(1)
    
    
    termination(1)
    
    
    termination(2)
    
    
    reason(2)
    
    
    Death (3)
    
    
    control(4)Salary
    
    $
    12,308
    
    
    $
    12,308
    
    
    $
    412,308
    
    
    $
    412,308
    
    
    $
    412,308
    
    
    $
    812,308Bonus
    
    
    400,000
    
    
    
    400,000
    
    
    
    1,161,881
    
    
    
    1,161,881
    
    
    
    780,940
    
    
    
    1,161,881Restricted stock units(5)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Health benefits
    
    
    
    
    
    
    
    
    
    
    12,000
    
    
    
    12,000
    
    
    
    
    
    
    
    12,000Tax gross-up
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,038,234Perquisites
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accrued PTO (6)
    
    
    (10,025
    )
    
    
    (10,025
    )
    
    
    (10,025
    )
    
    
    (10,025
    )
    
    
    (10,025
    )
    
    
    (10,025
    )Total company obligation
    
    
    402,283
    
    
    
    402,283
    
    
    
    1,576,164
    
    
    
    1,576,164
    
    
    
    1,183,223
    
    
    
    3,014,398Stock options (7)
    
    
    936,150
    
    
    
    936,150
    
    
    
    936,150
    
    
    
    936,150
    
    
    
    936,150
    
    
    
    936,150Total benefit to employee
    
    $
    1,338,433
    
    
    $
    1,338,433
    
    
    $
    2,512,314
    
    
    $
    2,512,314
    
    
    $
    2,119,373
    
    
    $
    3,950,548
 27




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##### Table of Contents



(1)
    
    Amounts reflect maximum salary earned but not paid prior to date of termination, accrued
prior year bonus not paid prior to date of termination and personal time off accrued through
September 30, 2009.(2)
    
    Amounts reflect maximum salary earned and prior year bonus accrued but not paid prior to date
of termination, one years base salary, bonus equal to the average annual bonus paid to Mr.
Rossetti (or for the most recent year, accrued for Mr. Rossetti) for the previous three years, or
the Average Historic Bonus, prorated for number of months worked prior to occurrence, bonus equal
to the Average Historic Bonus, immediate vesting of all stock options, restricted stock grants
and restricted stock units already issued under the EVA Plan (and an extension of the measurement
period under the EVA Plan to nine months after the date of termination, with full vesting of
awards that become earned because of performance during that nine month period), twelve months
continuation of health benefits and personal time off accrued through September 30, 2009. In
addition, in this scenario, all stock options will be exercisable for a period of one year after
the date of Mr. Rossettis termination, other than a stock option for 300,000 shares granted to
Mr. Rossetti on July 26, 2006, which will be exercisable until the later of five years after the
date of his termination or three months following the date he is no longer serving in a capacity
that would enable him to be eligible to receive option grants under the 2004 Plan, but in no
event later than July 25, 2016.(3)
    
    Amounts reflect maximum salary earned and prior year bonus accrued but not paid prior to date
of termination, one years base salary and bonus equal to the Average Historic Bonus, immediate
vesting of all stock options, restricted stock grants and restricted stock units already issued
under the EVA plan (and an extension of the measurement period under the EVA Plan to nine months
after the date of termination, with full vesting of awards that become earned because of
performance during that nine month period) and personal time off accrued through September 30,
2009. In addition, in this scenario, all stock options will be exercisable for a period of one
year after the date of Mr. Rossettis termination due to death, other than a stock option for
300,000 shares granted to Mr. Rossetti on July 26, 2006, which will be exercisable until the date
that is five years after the date of his death, but in no event later than July 25, 2016.
Amounts payable in the event of a termination due to disability are the same as the foregoing,
except that Mr. Rossetti would not be entitled to one years base salary and bonus equal to the
Average Historic Bonus in the event of a termination for disability.(4)
    
    The amounts payable to Mr. Rossetti upon a change of control vary depending on the relevant
facts. The amounts shown in this column assume that Mr. Rossetti remains employed by Tier for
the shorter of (i) 180 days after a change in control (the CIC Transition Period) and (ii) the
period required by the Board in connection with the change of control, and assists in the
transition during such period of employment. In this scenario, Mr. Rossetti is entitled to a
payment of two times (a) his base salary in effect on the date of his termination plus (b) a
bonus equal to the Average Historic Bonus, immediate vesting of all stock options, restricted
stock grants and restricted stock units already issued under the EVA Plan (and an extension of
the measurement period under the EVA Plan to nine months after the date of termination, with full
vesting of awards that become earned because of performance during that nine month period),
gross-ups on payments that are subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended, twelve months continuation of health benefits and personal
time off accrued through September 30, 2009. In another potential scenario, if Tier terminates
Mr. Rossettis employment without cause during the CIC Transition Period (or within the 60 days
preceding a change of control) or he resigns because Tier does not treat him during that period
as a senior executive or senior adviser, he will receive the benefits described in the previous
sentence, and will also receive the benefits he would have been entitled to had he been
terminated without cause by Tier in the absence of a change of control, other than one years
base salary and a bonus equal to the Average Historic Bonus. In a third scenario, if Mr. Rossetti
is terminated or resigns for good reason after the CIC Transition Period (or a shorter period
under certain circumstances), such termination would be governed by the applicable provisions of
Mr. Rossettis employment agreement, depending on the circumstances of the cessation, provided
that he would not be entitled to any further cash severance in the form of one years base salary
or a bonus equal to the Average Historic Bonus. Mr. Rossetti is entitled to immediate vesting of
his equity awards and a nine-month extension of the EVA Plan measurement period if he is employed
by Tier immediately prior to a change of control, regardless of whether or when his employment is
subsequently terminated.(5)
    
    As of September 30, 2009, the stock price performance targets that trigger the award of RSUs
had not been met; therefore, no units were considered awarded or vested for purposes of the table
above.(6)
    
    As of September 30, 2009, Mr. Rossettis PTO days taken were in excess of his accrued amount.(7)
    
    The amount represents the value of vested options as of September 30, 2009 at a closing price
of $8.48 less the cost to the employee to exercise the options at their exercise price. Potential Payments Due under our Employment Agreement with our Chief Operating Officer
  28




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##### Table of Contents



VoluntaryInvoluntary for
    
    
    Involuntary not for
    
    
    TerminationBenefits and payments
    
    Voluntary
    
    
    cause
    
    
    Cause
    
    
    with good
    
    
    Death or
    
    
    Change ofupon termination
    
    termination(1)
    
    
    termination(1)
    
    
    termination(2)
    
    
    reason (2)
    
    
    disability(2)
    
    
    control(3)Salary
    
    $
    8,462
    
    
    $
    8,462
    
    
    $
    283,462
    
    
    $
    283,462
    
    
    $
    283,462
    
    
    $
    558,462Bonus
    
    
    206,250
    
    
    
    206,250
    
    
    
    206,250
    
    
    
    206,250
    
    
    
    206,250
    
    
    
    431,250Performance stock
units (4)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Health benefits
    
    
    
    
    
    
    
    
    
    
    12,000
    
    
    
    12,000
    
    
    
    12,000
    
    
    
    18,000Perquisites
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accrued PTO
    
    
    12,594
    
    
    
    12,594
    
    
    
    12,594
    
    
    
    12,594
    
    
    
    12,594
    
    
    
    12,594Total company obligation
    
    
    227,306
    
    
    
    227,306
    
    
    
    514,306
    
    
    
    514,306
    
    
    
    514,306
    
    
    
    1,020,306Stock options (5)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total benefit to employee
    
    $
    227,306
    
    
    $
    227,306
    
    
    $
    514,306
    
    
    $
    514,306
    
    
    $
    514,306
    
    
    $
    1,020,306
 
 (1)
    
    Amounts reflect maximum salary earned but not paid prior to date of termination, accrued prior year bonus not paid prior to
date of termination and personal time off accrued through September 30, 2009.(2)
    
    Amounts reflect maximum salary earned but not paid prior to date of termination, accrued prior year bonus not paid prior to date of
termination, one years base salary, twelve months continuation of health benefits and personal time off accrued through September 30, 2009.(3)
    
    Amounts shown are payable in the event of a termination of Ms. Vellayans employment by Tier without cause, or a resignation by Ms.
Vellayan for good reason, within one year after a change of control, and reflect maximum salary earned but not paid prior to date of
termination, accrued prior year bonus not paid prior to date of termination, two times (a) base salary and (b) bonus equal to the average
annual bonus paid to Ms. Vellayan (or for the most recent year, accrued for Ms. Vellayan) for the previous three years (or such shorter period
during which Ms. Vellayan was employed), immediate vesting of any stock options, eighteen months continuation of health benefits and personal
time off accrued through September 30, 2009.(4)
    
    As of September 30, 2009, the stock price performance targets that trigger the award of performance stock units had not been met;
therefore, no units were considered awarded or vested for purposes of the table above. In the event Ms. Vellayans employment terminates
within 24 months of a change of control due to her death, disability, termination by Tier without cause, or resignation by Ms. Vellayan for
good reason, all PSUs previously awarded (if any) will vest in full.(5)
    
    The amount represents the value of vested options as of September 30, 2009 at a closing price of $8.48 less the cost to the employee to
exercise the options at their exercise price. Potential Payments Due under our Employment Agreement with our Chief Financial Officer
  29




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##### Table of Contents



VoluntaryInvoluntary for
    
    
    Involuntary not
    
    
    terminationBenefits and payments
    
    Voluntary
    
    
    cause
    
    
    for cause
    
    
    with good
    
    
    Death or
    
    
    Change ofupon termination
    
    termination(1)
    
    
    termination(1)
    
    
    termination(2)
    
    
    reason (2)
    
    
    disability(2)
    
    
    control(3)Salary
    
    $
    8,369
    
    
    $
    8,369
    
    
    $
    280,369
    
    
    $
    280,369
    
    
    $
    280,369
    
    
    $
    552,369Bonus
    
    
    165,000
    
    
    
    165,000
    
    
    
    165,000
    
    
    
    165,000
    
    
    
    165,000
    
    
    
    371,250Performance stock
units (4)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Health benefits
    
    
    
    
    
    
    
    
    
    
    12,000
    
    
    
    12,000
    
    
    
    12,000
    
    
    
    18,000Perquisites
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accrued PTO
    
    
    26,049
    
    
    
    26,049
    
    
    
    26,049
    
    
    
    26,049
    
    
    
    26,049
    
    
    
    26,049Total company obligation
    
    
    199,418
    
    
    
    199,418
    
    
    
    483,418
    
    
    
    483,418
    
    
    
    483,418
    
    
    
    967,668Stock options (5)
    
    
    31,333
    
    
    
    31,333
    
    
    
    31,333
    
    
    
    31,333
    
    
    
    31,333
    
    
    
    31,333Total benefit to employee
    
    $
    230,751
    
    
    $
    230,751
    
    
    $
    514,751
    
    
    $
    514,751
    
    
    $
    514,751
    
    
    $
    999,001
 
 (1)
    
    Amounts reflect maximum salary earned but not paid prior to date of termination, accrued prior year bonus not paid prior
to date of termination and personal time off accrued through September 30, 2009.(2)
    
    Amounts reflect maximum salary earned but not paid prior to date of termination, accrued prior year bonus not paid prior to date of
termination, one years base salary, twelve months continuation of health benefits and personal time off accrued through September 30,
2009.(3)
    
    Amounts shown are payable in the event of a termination of Mr. Johnstons employment by Tier without cause, or a resignation by Mr.
Johnston for good reason, within one year after a change of control, and reflect maximum salary earned but not paid prior to date of
termination, accrued prior year bonus not paid prior to date of termination, two times (a) base salary and (b) bonus equal to the average
annual bonus paid to Mr. Johnston (or for the most recent year, accrued for Mr. Johnston) for the previous three years (or such shorter
period during which Mr. Johnston was employed), immediate vesting of any stock options, eighteen months continuation of health benefits
and personal time off accrued through September 30, 2009.(4)
    
    As of September 30, 2009, the stock price performance targets that trigger the award of performance stock units had not been met,
therefore no units were considered awarded or vested for purposes of the table above. In the event Mr. Johnstons employment terminates
within 24 months of a change of control due to his death, disability, termination by Tier without cause, or resignation by Mr. Johnston
for good reason, all PSUs previously awarded (if any) will vest in full.(5)
    
    The amount represents the value of vested options as of September 30, 2009 at a closing price of $8.48 less the cost to the employee
to exercise the options at their exercise price. Potential Payments Due under our Employment Agreement with our Senior Vice President,
Strategic Marketing
  30




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##### Table of Contents



VoluntaryInvoluntary for
    
    
    Involuntary not
    
    
    terminationBenefits and payments
    
    Voluntary
    
    
    cause
    
    
    for cause
    
    
    with good
    
    
    Death or
    
    
    Change ofupon termination
    
    termination (1)
    
    
    termination (1)
    
    
    termination (2)
    
    
    reason (2)
    
    
    disability (2)
    
    
    control (3)Salary
    
    $
    8,154
    
    
    $
    8,154
    
    
    $
    273,154
    
    
    $
    273,154
    
    
    $
    273,154
    
    
    $
    538,154Bonus
    
    
    21,500
    
    
    
    21,500
    
    
    
    21,500
    
    
    
    21,500
    
    
    
    21,500
    
    
    
    419,000Performance stock
units (4)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Health benefits
    
    
    
    
    
    
    
    
    
    
    12,000
    
    
    
    12,000
    
    
    
    12,000
    
    
    
    18,000Perquisites
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accrued PTO
    
    
    14,593
    
    
    
    14,593
    
    
    
    14,593
    
    
    
    14,593
    
    
    
    14,593
    
    
    
    14,593Total company
obligation
    
    
    44,247
    
    
    
    44,247
    
    
    
    321,247
    
    
    
    321,247
    
    
    
    321,247
    
    
    
    989,747Stock options (5)
    
    
    13,600
    
    
    
    13,600
    
    
    
    13,600
    
    
    
    13,600
    
    
    
    13,600
    
    
    
    13,600Total benefit to
employee
    
    $
    57,847
    
    
    $
    57,847
    
    
    $
    334,847
    
    
    $
    334,847
    
    
    $
    334,847
    
    
    $
    1,003,347
 
 (1)
    
    Amounts reflect maximum salary earned but not paid prior to date of
termination, accrued prior year bonus not paid prior to date of termination
and personal time off accrued through September 30, 2009.(2)
    
    Amounts reflect maximum salary earned but not paid prior to date of
termination, accrued prior year bonus not paid prior to date of termination,
one years base salary, twelve months continuation of health benefits and
personal time off accrued through September 30, 2009.(3)
    
    Amounts shown are payable in the event of a termination of Mr. Kendricks
employment by Tier without cause, or a resignation by Mr. Kendrick for good
reason, within one year after a change of control, and reflect maximum salary
earned but not paid prior to date of termination, accrued prior year bonus not
paid prior to date of termination, two times (a) base salary and (b) bonus
equal to the average annual bonus paid to Mr. Kendrick (or for the most recent
year, accrued for Mr. Kendrick) for the previous three years (or such shorter
period during which Mr. Kendrick was employed), immediate vesting of options,
eighteen months continuation of health benefits and personal time off accrued
through September 30, 2009.(4)
    
    As of September 30, 2009, the stock price performance targets that trigger
the award of performance stock units had not been met, therefore no units were
considered awarded or vested for purposes of the table above. In the event Mr.
Kendricks employment terminates within 24 months of a change of control due to
his death, disability, termination by Tier without cause, or resignation by Mr.
Kendrick for good reason, all PSUs previously awarded (if any) will vest in
full.(5)
    
    The amount represents the value of vested options as of September 30, 2009
at a closing price of $8.48 less the cost to the employee to exercise the
options at their exercise price. Potential Payments Due under our Employment Agreement with our Vice President, General Counsel
and Corporate Secretary
  31




---



##### Table of Contents



VoluntaryInvoluntary for
    
    
    Involuntary not
    
    
    terminationBenefits and payments upon
    
    Voluntary
    
    
    cause
    
    
    for cause
    
    
    with good
    
    
    Death or
    
    
    Change oftermination
    
    termination(1)
    
    
    termination(1)
    
    
    termination(2)
    
    
    reason(2)
    
    
    disability(2)
    
    
    control(3)Salary
    
    $
    5,846
    
    
    $
    5,846
    
    
    $
    195,846
    
    
    $
    195,846
    
    
    $
    195,846
    
    
    $
    385,846Bonus
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    96,833Performance stock units (4)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Health benefits
    
    
    
    
    
    
    
    
    
    
    12,000
    
    
    
    12,000
    
    
    
    12,000
    
    
    
    18,000Perquisites
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accrued PTO
    
    
    19,026
    
    
    
    19,026
    
    
    
    19,026
    
    
    
    19,026
    
    
    
    19,026
    
    
    
    19,026Total company obligation
    
    
    24,872
    
    
    
    24,872
    
    
    
    226,872
    
    
    
    226,872
    
    
    
    226,872
    
    
    
    519,705Stock options (5)
    
    
    10,590
    
    
    
    10,590
    
    
    
    10,590
    
    
    
    10,590
    
    
    
    10,590
    
    
    
    10,590Total employee benefit
    
    $
    35,462
    
    
    $
    35,462
    
    
    $
    237,462
    
    
    $
    237,462
    
    
    $
    237,462
    
    
    $
    530,295
 
 (1)
    
    Amounts reflect maximum salary earned but not paid prior to date of
termination, accrued prior year bonus not paid prior to date of termination
and personal time off accrued through September 30, 2009.(2)
    
    Amounts reflect maximum salary earned but not paid prior to date of
termination, accrued prior year bonus not paid prior to date of termination,
one years base salary, twelve months continuation of health benefits and
personal time off accrued through September 30, 2009.(3)
    
    Amounts shown are payable in the event of a termination of Mr. Omsbergs
employment by Tier without cause, or a resignation by Mr. Omsberg for good
reason, within one year after a change of control, and reflect maximum salary
earned but not paid prior to date of termination, accrued prior year bonus not
paid prior to date of termination, two times (a) base salary and (b) bonus
equal to the average bonus paid over the preceding three years (which average
would include the retention payment in the amount of $85,000 pursuant to the
February 5, 2007 retention agreement between Mr. Omsberg and Tier), immediate
vesting of options that would have vested within eighteen months of the
termination of Mr. Omsbergs employment, full vesting of all performance stock
units awarded in accordance with the PSU Plan (if any), eighteen months
continuation of health benefits and personal time off accrued through September
30, 2009.(4)
    
    As of September 30, 2009, the stock price performance targets that trigger
the award of performance stock units had not been met, therefore no units were
considered awarded or vested for purposes of the table above. In the event Mr.
Omsbergs employment terminates within 24 months of a change of control due to
his death, disability, termination by Tier without cause, or resignation by Mr.
Omsberg for good reason, all PSUs previously awarded (if any) will vest in
full.(5)
    
    The amount represents the value of vested options as of September 30, 2009
at a closing price of $8.48 less the cost to the employee to exercise the
options at their exercise price. 32




---



##### Table of Contents



DIRECTOR COMPENSATION
   FiscalPay component
    
    2009Board retainer (payable quarterly in arrears)
    
    $
    20,000Board member fee (per meeting)In-person meeting
    
    
    1,000Telephonic meeting
    
    
    500Committee chair retainer (payable quarterly in arrears)Audit committee
    
    
    5,000All other committees
    
    
    2,500Committee meeting fee (per meeting)In-person meeting
    
    
    1,000Telephonic meeting
    
    
    500Lead director retainer (payable quarterly in arrears)
    
    
    5,000
   
    
    Death and disabilityPro rata vesting through the date of death or disability;
immediate payout
    
    Voluntary resignationPro rata vesting through the date of resignation; payable
at end of 3-year vesting period
    
    Termination for causeForfeit entire award
    
    Change of control100% vesting, payable on date of change of control
  33




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##### Table of Contents



Fiscal 2009 Director Compensation
  Fees earned or paidName
    
    in cash ($)
    
    Stock awards ($) (1)
    
    Total ($)Charles W. Berger (Chair Audit Committee)
    
    $
    41,000
    
    
    $
    12,720
    
    
    $
    53,720Samuel Cabot III (2)
    
    
    25,750
    
    
    
    
    
    
    
    25,750John J. Delucca (Vice Chair Audit Committee)
    
    
    37,500
    
    
    
    12,720
    
    
    
    50,220Daniel J. Donoghue (3)
    
    
    17,000
    
    
    
    12,720
    
    
    
    29,720Morgan P. Guenther (Chair Governance and
Nominating Committee)
    
    
    52,500
    
    
    
    12,720
    
    
    
    65,220Philip G. Heasley (Chair Compensation
Committee and Lead Director)
    
    
    46,500
    
    
    
    12,720
    
    
    
    59,220Michael R. Murphy (3)
    
    
    19,500
    
    
    
    12,720
    
    
    
    32,220David A. Poe (Chair Data Security Committee)
    
    
    31,875
    
    
    
    12,720
    
    
    
    44,595Zachary F. Sadek (3)
    
    
    16,500
    
    
    
    12,720
    
    
    
    29,220James R. Stone (4)
    
    
    18,500
    
    
    
    
    
    
    
    18,500
 
 (1)
    
    The amounts included in this column reflect the dollar amount recognized as an expense
for financial statement reporting purposes in fiscal 2009 for restricted stock unit awards,
calculated in accordance with U.S. GAAP. Assumptions used in the calculation of these amounts are
included in footnote 14 to the audited consolidated financial statements included in our annual
report on Form 10-K for the fiscal year ended September 30, 2009, as amended. The expense per
member has been calculated as total expense to be recognized on the date of valuation per
month multiplied by the number of months in measurement period, based on the following: Number of RSUs awarded
    
    
    9,000Fair value of award (closing price on day of valuation)
    
    $
    8.48Total fair value
    
    $
    76,320Total months to recognize expense
    
    
    36Number of months in measurement period
    
    
    6
  Name
    
    Stock awards outstanding
    
    Options outstandingCharles W. Berger
    
    
    9,000
    
    
    
    140,000John J. Delucca
    
    
    9,000
    
    
    
    40,000Daniel J. Donoghue
    
    
    9,000
    
    
    
    Morgan P. Guenther
    
    
    9,000
    
    
    
    150,000Philip G. Heasley
    
    
    9,000
    
    
    
    10,002Michael R. Murphy
    
    
    9,000
    
    
    
    David A. Poe
    
    
    9,000
    
    
    
    6,668Zachary F. Sadek
    
    
    9,000
    
    
    
    
 
 (2)
    
    Mr. Cabots term of office expired when his successor was elected at our 2009 annual meeting.(3)
    
    Messrs. Donoghue, Murphy and Sadek joined our Board in March 2009.(4)
    
    Mr. Stone did not stand for re-election at our 2009 annual meeting. 34




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##### Table of Contents



COMPENSATION COMMITTEE REPORT
   COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
  
 ITEM 12SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
 STOCK OWNERSHIP
 Directors and Executive Officers
  Common stock beneficially ownedPercent ofName of beneficial owner(1)
    
    Total number of shares
    
    class(2)Charles W. Berger
    
    
    140,000
    (3)
    
    
    
    
    
    
    *John J. Delucca
    
    
    50,000
    (4)
    
    
    
    
    
    
    *Daniel Donoghue
    
    
    2,459,404
    (5)
    
    
    
    
    
    
    13.5
    %Morgan P. Guenther
    
    
    140,000
    (3)
    
    
    
    
    
    
    *Philip Heasley
    
    
    20,002
    (6)
    
    
    
    
    
    
    *Michael Murphy
    
    
    2,459,404
    (5)
    
    
    
    
    
    
    13.5
    %David A. Poe
    
    
    6,668
    (3)
    
    
    
    
    
    
    *Zachary Sadek
    
    
    1,799,321
    (7)
    
    
    
    
    
    
    9.9
    %Ronald W. Johnston
    
    
    81,666
    (8)
    
    
    
    
    
    
    *Keith Kendrick
    
    
    30,000
    (9)
    
    
    
    
    
    
    *Keith S. Omsberg
    
    
    37,500
    (10)
    
    
    
    
    
    
    *Ronald L. Rossetti
    
    
    434,500
    (11)
    
    
    
    
    
    
    2.3
    %Nina K. Vellayan
    
    
    53,564
    (12)
    
    
    
    
    
    
    *All directors and executive officers
as a group (13 persons)
    
    
    5,252,625
    (13)
    
    
    
    
    
    
    27.6
    %
 35




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##### Table of Contents



Significant Stockholders
  Common stock beneficially ownedTotal number of
    
    Percent ofName of beneficial owner
    
    shares
    
    class(1)Discovery Group I, LLC (2)
    
    
    2,459,404
    
    
    
    13.50
    %Wells Fargo & Company (3)
    
    
    2,109,746
    
    
    
    11.60
    %Giant Investment, LLC (4)
    
    
    1,799,321
    
    
    
    9.90
    %Dimensional Fund Advisors LP (5)
    
    
    1,761,302
    
    
    
    9.70
    %Heartland Advisors, Inc. (6)
    
    
    1,738,574
    
    
    
    9.60
    %Signia Capital Management, LLC (7)
    
    
    1,432,650
    
    
    
    7.90
    %
 
 (1)
    
    The percentages shown are based on 18,150,965 shares of common stock outstanding as of
January 15, 2010. 36




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##### Table of Contents



(2)
    
    Address: 191 North Wacker Drive, Suite 1685, Chicago, Illinois 60606. Based solely on
information contained in a Schedule 13D/A filed with the SEC by Discovery Group I, LLC on January
7, 2010. Discovery Group I, LLC is the sole general partner of Discovery Equity Partners, L.P.
Discovery Equity Partners, L.P. beneficially owns 2,109,667 shares of common stock and Discovery
Group I, LLC beneficially owns 2,459,404 shares of common stock. Daniel J. Donoghue and Michael R.
Murphy, each of whom is a member of our Board of Directors, are the sole managing members of
Discovery Group I, LLC and may be deemed to beneficially own 2,459,404 shares of common stock.(3)
    
    Address: For Wells Fargo & Company, 420 Montgomery Street, San Francisco, California 94104; for
Wells Capital Management Incorporated, 525 Market Street, 10th Floor, San Francisco,
California 94105. Based solely on information contained in a Schedule 13G/A filed with the SEC on
January 26, 2009 by Wells Fargo & Company and its subsidiary, Wells Capital Management
Incorporated. This table reflects the shares of common stock owned by Wells Fargo & Company and
Wells Capital Management Incorporated as of December 31, 2009.(4)
    
    Address: 265 Franklin Street, 18th Floor, Boston, Massachusetts 02110. Based solely on
information contained in a Schedule 13D/A filed with the SEC on January 15, 2010 by Giant
Investment, LLC, (Giant); Parthenon Investors II, L.P. (Parthenon); PCap Partners II, LLC
(PCap Partners); PCap II, LLC (PCap II); John C. Rutherford; and Ernest K. Jacquet
(collectively, the Parthenon Group). Parthenon is a managing member of Giant, PCap Partners is a
general partner of Parthenon, and PCap II is a managing member of PCap Partners. Giant directly
beneficially owns 1,799,321 shares of common stock. As parents of Giant, Parthenon, PCap Partners
and PCap II may be deemed to beneficially own their proportional interest in the shares of common
stock directly and beneficially owned by Giant, comprising 1,748,401 shares of common stock. John
C. Rutherford and Ernest K. Jacquet are control persons of various entities indirectly investing in
Giant and may be deemed to beneficially own a proportional interest in the shares of common stock
owned by Giant, comprising 1,799,321 shares of common stock. In addition, Exhibit 99.2 to a
Schedule 13D/A filed by the Parthenon Group on January 6, 2009 indicated that Mr. Sadek, who is a
member of our Board of directors, may be deemed to indirectly beneficially own all of the shares
directly beneficially owned by Giant due to his position as a Vice President of PCap Managers LLC,
an affiliate of Giant, but that Mr. Sadek disclaims any such beneficial ownership.(5)
    
    Address: Palisades West, Building One, 6300 Bee Cave Road, Austin, Texas 78746. Based solely on
information contained in a Schedule 13G/A filed with the SEC by Dimensional Fund Advisors LP
(Dimensional) on February 9, 2009. In its role as an investment advisor or manager to certain
investment companies, trusts and accounts (the Funds), Dimensional possesses investment and/or
voting power over the shares shown in the table above, and may be deemed to be the beneficial owner
of such shares. However, all shares reported above are owned by the Funds, and Dimensional
disclaims beneficial ownership of such shares. This table reflects the shares of common stock
deemed beneficially owned by Dimensional as of December 31, 2008.(6)
    
    Address: 789 North Water Street, Milwaukee, Wisconsin 53202. Based solely on information
contained in a Schedule 13G/A filed with the SEC by Heartland Advisors, Inc. on February 11, 2009.
This table reflects the shares of common stock that may be deemed beneficially owned by (1)
Heartland Advisors, Inc., by virtue of its investment discretion and voting authority granted by
certain clients, and (2) William J. Nasgovitz, as a result of his ownership interest in Heartland
Advisors, Inc, in each case as of December 31, 2008. Heartland Advisors, Inc. and Mr. Nasgovitz
specifically disclaim beneficial ownership of these shares.(7)
    
    Address: 108 N. Washington St. Ste 305, Spokane, WA 99201. Based solely on information
contained in a Schedule 13G filed with the SEC by Signia Capital Management, LLC on February 13,
2009. This table reflects shares of common stock beneficially owned by Signia Capital Management,
LLC as of December 31, 2008. Equity Compensation Plan Information
  Number of securities to
    
    
    Weighted-average
    
    
    Number of securitiesbe issued upon exercise
    
    
    exercise price of
    
    
    remaining available forof outstanding options,
    
    
    outstanding
    
    
    future issuance underwarrant and rights
    
    
    options, warrants
    
    
    equity compensation plansPlan category
    
    (in thousands)
    
    
    and rights ($)
    
    
    (in thousands)Equity compensation plansApproved by security holders
    
    
    2,359
    
    
    $
    7.86
    
    
    
    1,353Not approved by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    2,359
    
    
    $
    7.86
    
    
    
    1,353
 37




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##### Table of Contents



ITEM 13CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
AND DIRECTOR INDEPENDENCE
 Certain Relationships and Related Transactions
 Related Person Transaction Policy
  Policies and Procedures for Review, Approval, or Ratification of Related Person Transactions
  
    
    Any related person transaction proposed to be entered into by Tier must be reported to
our General Counsel.
 
    
    The Governance and Nominating Committee shall review and approve all related person
transactions, prior to effectiveness or consummation of the transaction, whenever
practicable.
 
    
    If the General Counsel determines that advance approval of a related person transaction
is not practicable under the circumstances, the Governance and Nominating Committee shall
review and, in its discretion, may ratify the related person transaction at the next
Governance and Nominating Committee meeting, or at the next meeting following the date that
the related person transaction comes to the attention of the General Counsel; provided,
however, that the General Counsel may present a related person transaction arising in the
time period between meetings of the Governance and Nominating Committee to the Chair of the
Governance and Nominating Committee, who shall review and may approve the related person
transaction, subject to ratification by the Governance and Nominating Committee at the next
meeting.
 
    
    Previously approved transactions of an ongoing nature shall be reviewed by the
Governance and Nominating Committee annually to ensure that such transactions have been
conducted in accordance with the previous approval granted by the Governance and Nominating
Committee, if any, and that all required disclosures regarding the related person
transaction are made.
 Standards for Review, Approval, or Ratification of Related Person Transactions
  
    
    the related persons interest in the transaction, the dollar value of the amount
involved, and the dollar value of the amount of the related persons interest, without
regard to profit or loss;
 
    
    whether the transaction was undertaken in the ordinary course of business;
 38




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##### Table of Contents




    
    whether the transaction with the related person is proposed to be, or was, entered into
on terms no less favorable to us than terms that could have been reached with an unrelated
third party;
 
    
    the purpose of, and potential benefits to us of, the transaction; and
 
    
    any other information regarding the related person transaction or the related person in
the context of the proposed transaction that would be material to investors in light of the
circumstances of the particular transaction.
  Transactions not covered by Related Person Transaction Policy
  1.
    
    interests arising solely from the related persons position as an executive officer of
another entity (whether or not the person is also a director of such entity) that is a
participant in the transaction, where (a) the related person and all other related persons
own in the aggregate less than a 10% equity interest in such entity, (b) the related person
and his or her immediate family members are not involved in the negotiation of the terms of
the transaction with the Company and do not receive any special benefits as a result of the
transaction and (c) the amount involved in the transaction equals less than the greater of
$200,000 or 5% of the annual gross revenues of the company receiving payment under the
transaction;
 2.
    
    a transaction that is specifically contemplated by provisions of our charter or bylaws;
and
 3.
    
    transactions that do not constitute related person transactions pursuant to the
instructions to the SECs related person transaction disclosure rule.
  Director Independence
  Lead Director
  39




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##### Table of Contents



ITEM 14PRINCIPAL ACCOUNTING FEES AND SERVICES
 PRINCIPAL ACCOUNTING FEES AND SERVICES
  (in thousands)
    
    2009
    
    2008Audit Fees(1)
    
    $
    539
    
    
    $
    540Audit Related Fees(2)
    
    
    52
    
    
    
    Tax Fees
    
    
    
    
    
    
    All Other Fees
    
    
    
    
    
    
    Total
    
    $
    591
    
    
    $
    540
 
 (1)
    
    Represents fees for the audit of our financial statements, review of our quarterly financial statements, audit of our internal controls, and advice on
accounting matters directly related to the audit and audit services provided in
connection with other statutory and regulatory filings.(2)
    
    Represents fees associated with the review of ChoicePay financial statements, as a result of the acquisition of ChoicePay in January 2009. de minimis
 40




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##### Table of Contents



PART IV
 
 ITEM 15EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
    Exhibitnumber
    
    Exhibit description2.1
    
    Purchase and Sale Agreement between Tier Technologies, Inc. and Informatix, Inc., dated
June 30, 2008 (1)2.2
    
    Asset Purchase Agreement between Tier Technologies, Inc., Cowboy Acquisition Company and
ChoicePay, Inc., dated as of January 13, 2009 (2)3.1
    
    Restated Certificate of Incorporation (3)3.2
    
    Amended and Restated Bylaws of Tier Technologies, Inc., as amended (4)4.1
    
    Form of common stock certificate (3)4.2
    
    See Exhibits 3.1 and 3.2, for provisions of the Restated Certificate of Incorporation and
Amended and Restated Bylaws, as amended of the Registrant defining rights of the holders of common
stock of the Registrant10.1
    
    Amended and Restated 1996 Equity Incentive Plan, dated January 28, 1999
(6)*10.2
    
    Form of Incentive Stock Option Agreement under the Registrants Amended and Restated 1996
Equity Incentive Plan (7)*10.3
    
    Form of Nonstatutory Stock Option Agreement under the Registrants Amended and Restated
1996 Equity Incentive Plan (7)*10.4
    
    Amended and Restated 2004 Stock Incentive Plan (8)*10.5
    
    Form of Incentive Stock Option Agreement under the Registrants Amended and Restated 2004
Stock Incentive Plan (8)*10.6
    
    Form of Nonstatutory Stock Option Agreement under the Registrants Amended and Restated
2004 Stock Incentive Plan (8)*10.7
    
    Form of Restricted Stock Agreement under the Registrants Amended and Restated 2004 Stock
Incentive Plan (8)*10.8
    
    Form of California Indemnification Agreement (9)10.9
    
    Form of Delaware Indemnification Agreement for officers (29)10.10
    
    Form of Delaware Indemnification Agreement for directors (29)10.11
    
    Tier Corporation 401(k) Plan, Summary Plan Description (9)*10.12
    
    Supplemental Indemnity Agreement by and between Registrant and Bruce R. Spector, dated
September 2, 2004 (11)*10.13
    
    Employment Agreement dated July 1, 2004 between Tier Technologies, Inc. and Ms. Deanne M.
Tully (10)*10.14
    
    Executive Severance and Change in Control Benefits Agreement (10)*10.15
    
    Amended and Restated Credit and Security Agreement between the Registrant, Official
Payments Corporation, EPOS Corporation and City National Bank dated March 6, 2006
(12)10.16
    
    Form of Employment Security Agreements between Tier Technologies, Inc., and each of
Steven Beckerman, Todd Vucovich, and Michael Lawler, dated March 28, 2006 (13) *10.17
    
    Employment Agreement between Tier Technologies, Inc., and Ronald L. Rossetti, dated July
26, 2006 (14)*10.18
    
    Non-Statutory Stock Option Agreement between Tier and Ronald L. Rossetti, dated July 26,
2006 (14)*10.19
    
    Description of Option Grants awarded to David E. Fountain, Steven M. Beckerman, Michael
Lawler, Deanne Tully, Stephen Wade, Charles Berger, Samuel Cabot, Morgan Guenther, T. Michael
Scott, Bruce Spector, and fifteen other employees on August 24, 2006 (15)*
 41




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##### Table of Contents



Exhibitnumber
    
    Exhibit description10.20
    
    Employment Agreement between Tier Technologies, Inc. and David E. Fountain, dated
December 11, 2006(16)*10.21
    
    First Amendment to Amended and Restated Credit and Security Agreement dated March 20,
2007 between the Registrant, Official Payments Corporation, EPOS Corporation and City National
Bank (17)10.22
    
    Second Amendment to Amended and Restated Credit and Security Agreement dated September
26, 2007 between the Registrant, Official Payments Corporation, EPOS Corporation and City National
Bank (18)10.23
    
    Share Repurchase Agreement between CPAS Systems, Inc., Tier Ventures Corporation and Tier
Technologies, Inc. dated June 29, 2007 (19)10.24
    
    Employment Agreement between Tier Technologies, Inc., and Kevin Connell, dated August 9,
2007 (20)*10.25
    
    Transition Agreement between Tier Technologies, Inc., and Deanne M. Tully dated December
12, 2007 (29)*10.26
    
    Separation Agreement and Release between Tier Technologies, Inc., and Todd F. Vucovich, dated
February 12, 2007 (29)*10.27
    
    Amendment to the Separation Agreement and Release between Tier Technologies, Inc., and Todd
F. Vucovich, dated November 15, 2007 (29)*10.28
    
    Employment Agreement between Tier Technologies, Inc. and Ronald L. Rossetti, dated April 30,
2008 (21)*10.29
    
    Employment Agreement between Tier Technologies, Inc. and Keith Kendrick, dated June 30,
2008 (22)*10.30
    
    Employment Agreement between Tier Technologies, Inc. and Ronald W. Johnston, dated July
1, 2008 (22)*10.31
    
    Independent Contractor Agreement between Tier Technologies, Inc. and Steven M. Beckerman,
dated August 6, 2008 (23) *10.32
    
    Third Amendment to Amended and Restated Credit and Security Agreement between Tier
Technologies, Inc., Official Payments Corporation, EPOS Corporation and City National Bank dated
September 29, 2008 (24)10.33
    
    Employment Agreement between Tier Technologies, Inc. and Nina K. Vellayan, dated
September 22, 2008 (25)*10.34
    
    UBS Offering Letter dated October 8, 2008, together with Acceptance Form of Tier
Technologies, Inc., dated November 11, 2008 (26)10.35
    
    UBS Offering Letter dated October 8, 2008, together with Acceptance Form of Official
Payments Corporation, dated November 11, 2008 (26)10.36
    
    Enterprise Value Award Plan Amendment to Reflect Supplemental Award dated December 4,
2008 between Tier Technologies, Inc. and Ronald L. Rossetti (27)*10.37
    
    Tier Technologies, Inc. Executive Performance Stock Unit Plan (30)*10.38
    
    Employment Agreement between Tier Technologies, Inc. and Keith Omsberg, effective as of
May 6, 2009 (28)*10.39
    
    Renewal Letter: Short Clear Extension of Termination Date between Tier Technologies,
Inc., Official Payments Corporation, EPOS Corporation and City National Bank (31)21.1
    
    Subsidiaries of the Registrant(31)23.1
    
    Consent of McGladrey & Pullen, LLP, Independent Registered Public Accounting
Firm(31)
 42




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##### Table of Contents



Exhibitnumber
    
    Exhibit description31.1
    
    Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a)
promulgated under the Securities Exchange Act of 1934(31)31.2
    
    Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a)
promulgated under the Securities Exchange Act of 1934(31)31.3
    
    Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a)
promulgated under the Securities Exchange Act of 1934(32)31.4
    
    Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a)
promulgated under the Securities Exchange Act of 1934(32)31.5
    
    Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act
of 193431.6
    
    Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a)
promulgated under the Securities Exchange Act of 193432.1
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(31)32.2
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(31)
 
 *
    
    Management contract or compensatory plan required to be filed as an exhibit
to this report
    
    Filed as an exhibit to this report(1)
    
    Filed as an exhibit to Form 8-K, filed July 7, 2008, and incorporated
herein by reference(2)
    
    Filed as an exhibit to Form 8-K, filed on January 20, 2009, and
incorporated herein by reference(3)
    
    Filed as an exhibit to Form 8-K, filed on July 19, 2005, and incorporated
herein by reference(4)
    
    Filed as an exhibit to Form 8-K, filed on February 24, 2009, and
incorporated herein by reference(5)
    
    Filed as an exhibit to Form 10-Q/A, filed November 3, 2008, and
incorporated herein by reference(6)
    
    Filed as an exhibit to Form 10-Q, filed May 11, 2001, and incorporated
herein by reference(7)
    
    Filed as an exhibit to Form 8-K, filed November 12, 2004, and incorporated
herein by reference(8)
    
    Filed as an exhibit to Form 8-K, filed July 5, 2005 and incorporated
herein by reference(9)
    
    Filed as an exhibit to Form S-1 (No. 333-37661), filed on October 10,
1997, and incorporated herein by reference(10)
    
    Filed as an exhibit to Form 10-K, filed October 27, 2006, and
incorporated herein by reference(11).
    
    Filed as an exhibit to Form 10-K, filed December 28, 2004, and
incorporated herein by reference(12)
    
    Filed as an exhibit to Form 8-K, filed March 9, 2006, and incorporated
herein by reference(13)
    
    Filed as an exhibit to Form 8-K, filed April 3, 2006, and incorporated
herein by reference(14)
    
    Filed as an exhibit to Form 8-K, filed August 1, 2006, and incorporated
herein by reference(15)
    
    Filed as an exhibit to Form 8-K, filed August 29, 2006, and incorporated
herein by reference(16)
    
    Filed as an exhibit to Form 10-K, filed December 13, 2006, and
incorporated herein by reference(17)
    
    Filed as an exhibit to Form 8-K, filed March 28, 2007, and incorporated
herein by reference(18)
    
    Filed as an exhibit to Form 8-K, filed September 27, 2007, and
incorporated herein by reference(19)
    
    Filed as an exhibit to Form 8-K, filed July 3, 2007, and incorporated
herein by reference(20)
    
    Filed as an exhibit to Form 10-Q, filed August 9, 2007, and incorporated
herein by reference(21)
    
    Filed as an exhibit to Form 10-Q, filed May 6, 2008, and incorporated
herein by reference(22)
    
    Filed as an exhibit to Form 8-K, filed July 7, 2008, and incorporated
herein by reference(23)
    
    Filed as an exhibit to Form 8-K, filed August 7, 2008, and incorporated
herein by reference(24)
    
    Filed as an exhibit to Form 8-K, filed October 3, 2008, and incorporated
herein by reference(25)
    
    Filed as an exhibit to Form 10-K, filed December 8, 2008, and
incorporated herein by reference(26)
    
    Filed as an exhibit to Form 10-Q, filed February 9, 2009, and
incorporated herein by reference(27)
    
    Filed as an exhibit to Form 10-Q, filed May 11, 2009, and incorporated
herein by reference(28)
    
    Filed as an exhibit to Form 8-K, filed May 19, 2009, and incorporated
herein by reference(29)
    
    Filed as an exhibit to Form 10-K, filed December 14, 2007, and
incorporated herein by reference(30)
    
    Filed as an exhibit to Form 8-K, filed January 22, 2009, and incorporated
herein by reference(31)
    
    Previously filed as an exhibit to Form 10-K filed November 10, 2009(32)
    
    Previously filed as an exhibit to Form 10-K/A filed January 28, 2010 43




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##### Table of Contents



SIGNATURES
  Tier Technologies, Inc.Dated: March 15, 2010
    By:
    /s/ Ronald L. RossettiRonald L. RossettiChief Executive Officer 44