Document:

EXHIBIT
10.45

 

EXECUTIVE

SEVERANCE
AND CHANGE IN CONTROL BENEFITS
AGREEMENT

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

The Company and Executive hereby agree as follows:

ARTICLE 1

Scope of and Consideration for this Agreement

1.1          Executive is currently employed by the Company.

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

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

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

ARTICLE 2

Benefits

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

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

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

 

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

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

ARTICLE 3

Limitations And Conditions On Benefits

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

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

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

 

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ARTICLE
4

Definitions

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

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

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

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

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

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

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

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

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

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

4.4          “Change
in Control” means

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

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

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

 

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

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

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

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

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

ARTICLE 5

General Provisions

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

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

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

 

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

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

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

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

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

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

 

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

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

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

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

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

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

 

	
  Tier
  Technologies, Inc.

  	
   

  	
  Laura B.
  DePole

  
	
   

  	
   

  	
   

  	
   

  
	
  By:  

  	
  /s/James L.
  Bildner

  	
   

  	
  /s/ Laura B.
  DePole

  
	
  Name: 

  	
  James L. Bildner

  	
   

  	
   

  
	
  Title: 

  	
  CEO

  	
   

  	
   

  

 

 

Exhibit A:  Release (Individual
Termination)

Exhibit B:  Proprietary
Information and Inventions Agreement

 

 

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Exhibit A

 

RELEASE

 

 

 

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

 

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

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

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

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

 

 

 

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

 

	
   

  	
   

  	
  Laura B.
  DePole

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

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Exhibit B

 

Proprietary Information & Inventions AgreementEXHIBIT 10.46

AMENDED EMPLOYMENT AGREEMENT

                This agreement (the “Agreement”) between Tier technologies inc., a California corporation
(the “Company”) and Mr.
Harry Wiggins (the “Employee”),
is entered into as of the Effective Date. 
Those capitalized terms used in this Agreement and not otherwise defined
herein shall have the meanings given to such terms in the Agreement.

RECITAL

WHEREAS, the
Company and the Employee entered into an employment agreement on September 10,
2001 as memorialized on October 29, 2002, and

WHEREAS the
Company and the Employee desire to amend said employment agreement.

NOW, THEREFORE, In
consideration of the mutual benefits derived from this Agreement and of the
agreements, covenants and provisions hereof, the parties hereto agree as
follows:

 

Agreement

 

	
   

  	
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1.              EMPLOYMENT. 
The Company employs Employee as of the Effective Date in the capacity of
Senior Vice President and General Manager, Government Services Strategic
Business Unit (SBU), reporting to Mr. James R. Weaver, President or his
designee.  Employee will be expected to
travel frequently from Employee’s home office in Virginia to the Company’s
offices in Boston, Massachusetts and employee will be reimbursed for business
travel in accordance with Tier’s business travel & expense reimbursement
policy. In addition, Employee agrees to undertake such other business travel as
is customary to such position, and as shall from time to time be requested of
him by the Company.

2.              TERM.  This Agreement shall be effective as of
September 29, 2002 (the “Effective Date”). 
The term of this Agreement shall be for two (2) years, commencing with
the effective date and ending September 28, 2004 unless extended by the parties
or terminated as provided in Article 4 hereof. 
This employment agreement replaces all other agreements either verbal or
written heretofore.

3.              COMPENSATION AND BENEFITS

                3.1          Base Salary. 
In consideration of and as compensation for the services to be performed
by the Employee hereunder, the Company shall pay the Employee a base salary
(the “Base Salary”) of not
less than $305,000, effective September 29, 2002.  Employee’s Base Salary is payable semi-monthly in arrears in
accordance with the Company’s regular payroll practices.

 

                3.2          Retention Bonus. 
Provided that the Employee is still employed by the Company on April 1,
2003, Employee shall be entitled to receive and shall be fully vested in a
retention bonus of Eighty-four Thousand Four Hundred and forty-four Dollars
($84,444) (the “Retention Bonus”).  The Retention Bonus shall be paid to the
Employee on or before April 20, 2003. 
All payments shall be reduced by applicable tax and withholding
requirements for compensation. Notwithstanding the foregoing payment schedule,
if the Employee ceases to be employed by the Company after April 1, 2003 for
any reason, including termination for cause by the Company or without cause by
the Employee, all unpaid Retention Bonus payments shall be paid to him within
five days after termination.

 

	
   

  	
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                3.3          Incentive
Compensation.  Employee shall
be eligible to receive targeted incentive compensation (the “Incentive Compensation”)
of One Hundred Fifty-two Thousand Five Hundred Dollars ($152,500) per fiscal
year based upon performance targets for both the SBU (exclusive of Government
Solutions Center (“GSC”) division results and any future Government SBU
acquisitions as and from the Effective Date unless specifically included in the
annual SBU Performance Target) and the Company.  To the extent a Government SBU acquisition is added to the SBU
for which Employee has management responsibility, the annual SBU Performance
Target shall be adjusted to reflect the acquisition.  Actual annual Incentive Compensation eligibility will be
determined based upon the performance of the SBU and the Company for each
fiscal year.  The amount of Incentive
Compensation to which the Employee is entitled shall be allocated seventy-five
percent (75%) ($114,375) based on the SBU performance, and twenty-five percent
(25%) ($38,125) based on Company performance. 
Eligibility to participate in the SBU performance component is
contingent upon the achievement of both the budgeted revenue and budgeted gross
profit targets set by Tier’s President. 
Eligibility for participation in the Company performance component is
contingent upon the achievement of 100% of agreed SBU performance targets.
Fiscal year targets are established by the Company’s President for the
Government SBU and Company’s Compensation Committee for the Company on an
annual basis. Corporate performance will be based upon Company revenue, Company
earnings per share (EPS), and average share price as set forth annually for
other senior executives of the Company and defined by the Compensation
Committee. All three Company targets must be met for the Company performance
target to be considered achieved. If the SBU achieves at least ninety-five
percent (95%) of its budgeted gross revenues and budgeted gross profit, the
Employee shall be entitled to eighty percent (80%) of the Incentive
Compensation allocated to SBU performance. 
Additionally, in the event that in excess of one hundred five percent
(105%) of the gross revenues and gross profits of the SBU are achieved, the
Company shall review in good faith whether or not the Employee should receive
additional discretionary Incentive Bonuses based on such performance.

 

Payment of Incentive
Compensation will be made in accordance with Company standard payment schedule
for fiscal year bonuses and will be fully vested as of the last day of the
fiscal period on which the Incentive Compensation is based.  Employee must be employed by Company at the
end of the fiscal year to be eligible to receive the full Incentive Bonus but
need 

 

	
   

  	
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not remain employed by
the Company at the time of payment in order to receive the Incentive Bonus
earned in the previous year.  For
avoidance of doubt, Incentive Bonuses will not be earned where Employee is
terminated for Cause or resigns without Cause on or prior to the end of the
fiscal year. If Employee is terminated without Cause or resigns with Cause,
Incentive Bonuses related to SBU Performance only shall be determined based on
the portion of the fiscal year elapsed with budgeted amounts and targeted
Incentive Bonuses amounts pro rated. For avoidance of doubt, there will be no
prorated Company Performance bonus as these targets cannot be prorated during a
fiscal year.

 

3.4          Options. 
In addition to the original stock option grant the Employee received
upon his original employment start date and subject to the approval of the
Compensation Committee of the Tier Board of Directors, and at their sole
discretion, Employee will be eligible for an additional annual discretionary
option grant of up to 25,000 shares. Consideration for additional option grant
will be based upon the achievement of SBU performance targets for the fiscal
year and overall Company performance in line with Section 3.3 of this
agreement.

3.5          Participation
in Benefit Plans.  The Employee shall be entitled to
participate in any pension plans, profit-sharing plans and group insurance,
medical, hospitalization, disability and other benefit plans maintained by the
Company from time to time, as such are generally applicable to employees of the
Company and to the extent Employee is eligible under the general provisions
thereof.

3.6          Reimbursement
of Expenses.  The Company shall reimburse the Employee for
all business expenses, including, without limitation, travel, entertainment and
similar expenses, incurred by the Employee on behalf of the Company if such
expenses are ordinary and necessary business expenses incurred on behalf of the
Company pursuant to standard expense reimbursement policy.  The Employee shall timely provide the
Company with such itemized accounts, receipts or documentation for such
expenses as are required under the Company’s policy regarding the reimbursement
of such expenses.

3.7          Vacation
and Personal Leave.  The Employee shall be entitled to three (3)
weeks of vacation per annum, pro-rated in the year of hire and terminated and
accrued on a semi-

 

	
   

  	
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monthly basis. The
Employee shall also be entitled to other paid personal leave in accordance with
The Company’s policy.

4.              TERMINATION

                4.1          Termination.

 

                                (a)           Termination  for Cause by the Company.  The Company may terminate Employee’s
employment under this Agreement, in its sole discretion, “for cause” by written
notice to the Employee.  Grounds for the
Company to terminate this Agreement “for cause” shall be limited to the
occurrence of any of the following events:

 

                                                (i)            the Employee’s willful commission of any act which
materially and adversely affects the Company, including, without limitation, an
act of dishonesty, fraud, willful and repeated disobedience to reasonable
direction from the Company, gross misconduct or breach of duty;

 

                                                (ii)           the Employee’s commission of any act in contravention of
Employee’s undertakings contained in Section 5 hereof; or

 

                                                (iii)         the Employee’s conviction of a felony or a misdemeanor
involving dishonesty or moral turpitude.

 

                                (b)           Termination
for Cause by the Employee. The Employee may terminate this Agreement
“for cause” by written notice to the Company. 
Grounds for Employee to terminate this Agreement for cause shall be
limited to:

 

                                                (i)            the
failure by the Company to cure within three (3) business days the failure to
make any timely payment to Employee called for hereunder; or

 

                                                (ii)           the requirement by the Company that the employee relocate
his home or be required to stay in temporary housing during the work week
at  administrative offices other than
greater Boston or Washington D.C. Metropolitan areas.

 

	
   

  	
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                                (c)           Right to Contest.  In the event that either the Company or the Employee,
as the case may be, purports to terminate this Agreement “for cause,” the other
party may contest the existence of “cause” (as defined herein).  In such event, the existence of cause shall
be determined by arbitration conducted in accordance with the rules of the
American Arbitration Association.  If
“cause” is found not to exist, the termination shall be deemed to have been a
termination without cause.  The losing
party shall pay the costs of the arbitration.

 

                                (d)           Termination Without Cause. 
Either the Company or the Employer may terminate Employee’s employment
under this Agreement without cause by written notice to the other party.

 

                                (e)           Termination
by Death or Disability.  This
Agreement shall terminate on the death of Employee and, at the election of the
Company, on the complete disability of the Employee.  For purposes hereof, “complete disability” shall be deemed to
have occurred if Employee is unable to perform his duties hereunder for a
period of ninety days and is unable, prior to the end of such ninety day
period, to provide a medical opinion that he will be able to return to work
within thirty days after the expiration of such period or if he does not so
return.

 

                                (f)            Notice of Termination. 
Any purported termination of employment by the Company or by the
Employee shall be communicated by written notice of termination to the other
party stating the nature of the termination and the facts upon which any
alleged cause is based.

 

                                (g)           Effect of Termination.

 

                                                (i)            If termination is by the Company for cause (as defined in
Section 4.1(a)) or by the Employee without cause, the termination shall be
effective upon notice or such later date as stated in the notice of
termination.  Following a termination for
cause by the Company or without cause by the Employee, the Employee shall only
be entitled to receive his accrued compensation for service performed prior to
the date of termination and shall remain bound by the provisions of Article 5
hereof.

 

	
   

  	
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                                                (ii)           If termination is by the Employee for Cause (as defined in
Section 4.1(b) the termination shall be effective upon notice or at such later
date as specified in the termination Notice. 
Following a termination for cause by the Employee, the Employee shall be
entitled to receive all accrued compensation for services rendered prior to the
date of termination, any Incentive Bonuses earned, including current year
Incentive Bonuses determined under Section 3.3 hereof to the date of
termination and a severance payment equal to six months of Base Compensation
then in effect. Severance payments attributable to Base Compensation will be
payable over six months in accordance with normal payroll cycle and all
severance will be subject to normal payroll withholding. The provisions of
Article 5 shall remain in effect for the six-month severance period  beginning with the effective date of
termination.

 

                                                (iii)         If the termination is by the Company without cause (as cause
is defined in Section 4.1(a)), the Company shall pay Employee all accrued but
unpaid compensation through the date up to termination, any Incentive Bonuses
earned, including current year Incentive Bonuses determined under Section 3.3
hereof to the date of termination and shall continue to pay the Employee Base
Compensation for six months following the date of termination and the
provisions of Article 5 shall apply for six months.

 

                                                (iv)          Upon the termination of the Employee’s employment as a
result of Employee’s complete disability (as defined in Section 3.1(d)), the
Employee shall be entitled to receive for an additional sixty (60) days after
the date of such termination, Employee’s Base Salary in effect at the time of
termination and any and all benefits to which Employee is entitled on the date
of such termination under the Company’s pension, life, disability, accident and
health and other benefit plans in accordance with the provisions of such plans
and Incentive Bonuses earned to the date of termination.

 

                                                (v)            Upon termination of the Employee’s employment as a result
of Employee’s death, the Employee’s heirs, devisees, executors or other legal
representatives shall receive all compensation, including Incentive Bonuses
earned through the date of death.

 

	
   

  	
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5.              NON-COMPETITION, NON-SOLICITATION AND CONFIDENTIALITY

                5.1          Non-Competition. 
For the period of one year (1) from the expiration of this Agreement or
in the case of a termination other than by the expiration of this Agreement, as
specified in Section 3.1(d) from the date of termination of Employee’s
employment, the Employee shall not, directly or indirectly:

 

                                (a)           carry
on or engage in with any Person engaged in, in any territory in which the
Company carried on business during the twelve months preceding termination, any
activity that is in competition with the business engaged in by the Company at
the time of termination (the “Company Business”); or

 

                                (b)           do
or say anything which is harmful to the reputation of the Company or which may
lead any person to cease to deal with the Company on substantially equivalent
terms to those previously offered or at all; or

 

                                (c)           seek
to contract with or engage any person who has been contracted with or engaged
to manufacture, assemble, supply or deliver products, goods, materials or
services which will be competitive with the Company Business.

 

                5.2          Non-solicitation.  For as long as the provisions of Section 5.1 are in
effect, the Employee shall not, directly or indirectly:

 

                                (a)           employ
or solicit for employment any person whom Employee knows to be an employee of
the Company or any subsidiary of the Company or induce or attempt to induce any
such person to terminate his or her employment with the Company or such
subsidiary; or

 

                                (b)           seek
in competition with the Company to procure orders from or do business with or
procure directly or indirectly any other person to procure orders from or do
business with any person who has been an active customer of the Company within
the twelve months preceding termination.

 

	
   

  	
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                5.3          Confidential Information.

 

                                (a)           The
Employee acknowledges that the Confidential Information (as hereinafter
defined) of the Company is valuable, special and unique to the Company
Business, and that such Company Business depends on such Confidential
Information; and that the Company wishes to protect such Confidential
Information by keeping it confidential for the use and benefit of the
Company.  Based on the foregoing, the
Employee undertakes:

 

                                                (i)            to keep any and all Confidential Information in trust for
the use and benefit of the Company;

 

                                                (ii)           except as required by the Employee’s duties hereunder or
as may be authorized in writing by the Company, not at any time during and for
a period of one (1) year after termination of Employee’s employment with the
Company, to disclose or use, directly or indirectly, any Confidential
Information of the Company;

 

                                                (iii)         to take all reasonable steps necessary, or reasonably
requested by the Company, to ensure that all Confidential Information of the
Company is kept confidential for the use and benefit of the Company; and

 

                                                (iv)          on termination of Employee’s employment with the Company or
at any other time the Company may in writing so request, to promptly deliver to
the Company all materials constituting Confidential Information (including all
copies thereof) that are in Employee’s possession or under Employee’s
control.  Further, the Employee
undertakes that, if requested by the Company, Employee shall return any
Confidential Information pursuant to this subsection and shall not make or
retain any copy of or extract from such materials.

 

                                (b)           For
purposes of this Section, “Confidential Information” means any and all information
developed by or for the Company of which the Employee gained knowledge by
reason of Employee’s employment with the Company under this Agreement that is
not generally known in the industry in which the Company is or may become
engaged.  Confidential 

 

	
   

  	
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Information includes, but
is not limited to, any and all information developed by or for the Company or
customers of the Company, concerning plans, marketing and sales methods,
materials, processes, business forms, procedures, devices used by the Company,
plans for development of new products, services and expansion into new areas or
markets, internal operations and any trade secrets and proprietary information
of any type owned by the Company together with all written, graphic and other
materials relating to all or any part of the same.  Confidential Information does not include any information which
becomes public through some other means not controlled by the Employee.

 

                                (c)           Employee
agrees that as a condition of employment Employee will execute and abide by the
Employee Proprietary Information and Inventions Agreement (the “Proprietary Information Agreement”),
attached hereto as Appendix B. To the extent the Proprietary
Information Agreement conflicts with or is inconsistent with this Agreement,
this Agreement shall control.

 

                5.4          Remedies.

 

                                (a)           Injunctive Relief. 
Employee acknowledges and agrees that the covenants and obligations
contained in Sections 5.1, 5.2 and 5.3 hereof relate to special, unique and
extraordinary matters and that a violation of any of the terms of said Sections
will cause the Company irreparable injury for which adequate remedy at law is
not available.  Therefore, Employee
agrees that the Company shall be entitled to an injunction, restraining order,
or other equitable relief from any court of competent jurisdiction, restraining
the Employee from committing any violation of such covenants and obligations.

                                (b)           Remedies Cumulative.  The Company’s rights and remedies in respect of this
Section are cumulative and are in addition to any other rights and remedies the
Company may have at law or in equity.

 

6.              MISCELLANEOUS

                6.1          Notices. 
Any written notice, required or permitted under this Agreement, shall be
deemed sufficiently given if either hand delivered or by fax (with written
confirmation of 

 

	
   

  	
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receipt) or nationally
recognized overnight courier.  Written
notices must be delivered to the receiving party at its address or facsimile
number on the signature page of this Agreement.  The parties may change the address or facsimile number at which
written notices are to be received in accordance with this Section.

 

                6.2          Prevailing Party. 
If any litigation is commenced between the parties hereto concerning
this Agreement or their respective rights, duties and obligations hereunder,
the party prevailing in that litigation shall be entitled to reasonable
attorney’s fees, to be fixed by the court as part of the costs of the
litigation or established in a separate action brought to recover those fees,
in addition to any other relief that may be granted.

 

                6.3          Assignment. The Employee may not assign, transfer or
delegate his rights or obligations hereunder, and any attempt to do so shall be
void.  This Agreement shall be binding
upon and shall inure to the benefit of the Company and its successors and
assigns.

 

                6.4          Entire Agreement. 
This Agreement contains the entire agreement of the parties hereto with
respect to the subject matter hereof, and all other prior agreements, written
or oral, are hereby merged herein and are of no further force or effect.  This Agreement may be modified or amended
only by a written agreement that is signed by the Company and the
Employee.  No waiver of any section or
provision of this Agreement shall be valid unless such waiver is in writing and
signed by the party against whom enforcement of the waiver is sought.  The waiver by the Company of any section or
provision of this Agreement shall not apply to any subsequent breach of this
Agreement.  Captions to the various
Sections of this Agreement are for the convenience of the parties only and
shall not affect the meaning or interpretation of this agreement.  This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but together they
shall constitute one and the same instrument.

 

                6.5          Severability. 
The provisions of this Agreement shall be deemed severable, and if any
part of any provision is held illegal, void or invalid under applicable law,
such provision may be changed to the extent reasonably necessary to make the
provision, as so changed, legal valid and binding.  If any provision of this Agreement is held illegal, void or
invalid in its entirety, the 

 

	
   

  	
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remaining provisions of
this Agreement shall not in any way be affected or impaired but shall remain
binding in accordance with their terms.

 

                6.6          Continuing Obligations. 
The provisions contained in Sections 4.1(g), 5, 6.2, 6.6 and 6.7 of this
Agreement shall continue and survive the termination of this Agreement.

 

                6.7          Applicable Law. 
This Agreement and the rights and obligations of the Company and the
Employee hereunder shall be governed by and construed and enforced under the
laws of the Commonwealth of Virginia, without reference to any principles of
conflict of laws.

 

IN
WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the date first above
written.

 

	
   

  	
  Tier Technologies, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  James R. Weaver

  
	
   

  	
   

  	
  Print Name:

  	
  James R. Weaver

  
	
   

  	
   

  	
  Title: 

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Harry W. Wiggins

  
	
   

  	
   

  	
  [Employee]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
					

 

	
   

  	
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12

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