Document:

exhibit_10-1.htm

    
      Intermec,
Inc.

      2004
Long-Term Performance Share Program

      

       

      Agreement
for the Performance Period

       

      January 1, [YEAR] through
December 31, [YEAR]

       

       

      This
Performance Share Unit Agreement (the “Agreement”) is made as of
[DATE] between Intermec, Inc., a Delaware corporation (the “Company”) and [FIRST MIDDLE
LAST_NAME] (the “Participant”).

       

      WHEREAS, the Intermec, Inc.
2004 Omnibus Incentive Compensation Plan (the “Plan”) was adopted by the
Board of Directors of the Company on March 11, 2004, and was approved by the
stockholders of the Company on May 6, 2004; and

       

      WHEREAS, the Committee has
adopted the 2004 Long-Term Performance Share Program (the “Program”) as a sub-plan of
the Plan and authorized the Award represented by this Agreement;

       

      NOW, THEREFORE, in
consideration of the premises, the mutual covenants hereinafter set forth, and
other good and valuable consideration, the Company and the Participant hereby
agree as follows:

       

      Article
1.  Award

       

      The
Participant is hereby awarded, as a matter of separate inducement and agreement,
and not in lieu of salary or other compensation for services, [NUMBER]
Performance Share Units (the “Target Award”), on the terms
and conditions hereinafter set forth.  The number of Performance Share
Units (“PSUs”) that the
Participant may earn under this Agreement shall range from 0% to 200% of the
Target Award (the “Awarded
Shares”), as determined by the achievement of the performance measures
set forth in Article 3 of this Agreement.  The Awarded Shares shall be
paid in shares of the common stock, par value $.01 per share, of the Company
(the “Common Stock”) as
set forth in Article 6 of this Agreement.  The Participant shall have
no obligation to pay the Company additional consideration for the Awarded
Shares.

       

      The Plan
and the Program, copies of which have been made available to the Participant,
are incorporated herein by reference and made part of this Agreement as if fully
set forth herein. Capitalized terms used in this Agreement that are not defined
herein shall have the meanings assigned to such terms in the Plan and the
Program. This Agreement is subject to, and the Company and the Participant agree
to be bound by, all of the terms and conditions of the Plan and the Program as
the same exist at the time this Agreement became effective. The Plan and the
Program shall control in the event there is any express conflict between the
terms hereof and the Plan or the Program and with respect to such matters as are
not expressly covered in this Agreement. The Company hereby reserves the right
to alter, amend, modify, restate, suspend or terminate the Plan, the Program and
this Agreement in accordance with Section 12 of the Plan, but no such subsequent
amendment, modification, restatement, or termination of the Plan, the Program or
this Agreement shall adversely affect in any material way the Participant’s
rights under this Agreement without the Participant’s written
consent.  This Agreement shall be subject, without further action by
the Company or the Participant, to such amendment, modification, or
restatement.

       

      Article
2.  Performance Period

      

      For all
purposes of this Agreement, “Performance Period” means
January 1, [YEAR 1] through December 31, [YEAR 3].

       

      Article
3.  Achievement of Performance Measures

       

             
The number of Awarded Shares to be earned under this Agreement shall be based
upon the achievement of the following Performance Measures set by the Committee:
The weighted percentage of achievement of (a) the average percentage of
attainment of Revenue (calculated as net Revenue as reported under GAAP) (“Revenue”) over the
Performance Period and (b) the average percentage of achievement of Diluted
Earnings Per Share from continuing operations (calculated on a GAAP basis) (“Diluted EPS”) over the
Performance Period. The achievement shall be determined in accordance with the
following schedules, with ultimate payout of Awarded Shares to be weighted 70%
as to the Revenue Performance Measure and 30% as to the Diluted EPS Performance
Measure:

       

      Revenue
(30% Weight)

      

      
        	
                Fiscal

                Year

              	 
      	
                Target

                Revenue
      ($M)

              
	
                [YEAR
      1]

              	 
      	
                $

              
	
                [YEAR
      2]

              	 
      	 
      
	
                [YEAR
      3]

              	 
      	 
      

      

      

      

      
        	
                Performance

                Level

              	 
      	
                3-Year
      Average

                Revenue
      as %

                of
      Target

              	 
      	
                Payout
      as %

                of
      Target

              
	
                Maximum

              	 
      	
                ≥[1__]%

              	 
      	
                200%

              
	 
      	 
      	
                [1__]%

              	 
      	
                180%

              
	 
      	 
      	
                [1__]%

              	 
      	
                160%

              
	 
      	 
      	
                [1__]%

              	 
      	
                140%

              
	 
      	 
      	
                [1__]%

              	 
      	
                120%

              
	
                Target

              	 
      	
                100%

              	 
      	
                100%

              
	 
      	 
      	
                [__]%

              	 
      	
                82%

              
	 
      	 
      	
                [__]%

              	 
      	
                64%

              
	 
      	 
      	
                [__]%

              	 
      	
                46%

              
	 
      	 
      	
                [__]%

              	 
      	
                28%

              
	
                Threshold

              	 
      	
                [__]%

              	 
      	
                10%

              
	 
      	 
      	
                <[__]%

              	 
      	
                0%

              

      

      

      

      Diluted
EPS (70% Weight)

      

      
        	
                Fiscal

                Year

              	 
      	
                Target

                Diluted
      EPS

              
	
                [YEAR
      1]

              	 
      	
                $

              
	
                [YEAR
      2]

              	 
      	 
      
	
                [YEAR
      3]

              	 
      	 
      

      

       

      

       

      
        	
                Performance

                Level

              	 
      	
                3-Year
      Average

                Diluted
      EPS as a %

                of
      Target

              	 
      	
                Payout

                as
      a %

                  of
      Target

              
	
                Maximum

              	 
      	
                [1__]%
      or >

              	 
      	
                200%

              
	 
      	 
      	
                [1__]%

              	 
      	
                180%

              
	 
      	 
      	
                [1__]%

              	 
      	
                160%

              
	 
      	 
      	
                [1__]%

              	 
      	
                140%

              
	 
      	 
      	
                [1__]%

              	 
      	
                120%

              
	
                Target

              	 
      	
                100%

              	 
      	
                100%

              
	 
      	 
      	
                [__]%

              	 
      	
                82%

              
	 
      	 
      	
                [__]%

              	 
      	
                64%

              
	 
      	 
      	
                [__]%

              	 
      	
                46%

              
	 
      	 
      	
                [__]%

              	 
      	
                28%

              
	
                Threshold

              	 
      	
                [__]%

              	 
      	
                10%

              
	 
      	 
      	
                <[__]%

              	 
      	
                0%

              

      

      

      The
number of Awarded Shares earned for achievement above threshold levels but
between the levels shown above will be calculated using
interpolation.

      

      In
evaluating the achievement of each measure as of the end of each fiscal year in
the performance period, the Committee will adjust the calculation of the
Attainment Level to exclude restructuring or reorganization costs (as
defined in accordance with U.S. GAAP) incurred in any fiscal year in the
performance period to the extent that related savings from the program will
occur in a future fiscal year, and will include these costs in the period in
which, and to the extent that, cost savings are anticipated during the
performance period.

      

      Article
4. Termination Provisions

      

      Except as
provided below, a Participant shall be eligible for payment of Awarded Shares,
as determined in Section 3, only if the Participant’s employment with the
Company, a Subsidiary or Affiliate continues through the end of the Performance
Period.

       

      In the
event of a Participant’s Disability or Retirement at age 65 or later during the
Performance Period, a pro rata payment will be made for the number of full
months worked during the Performance Period, based on achievement of the
Performance Measures over the entire Performance Period.  In the case
of death, payment shall be calculated and paid as provided in the
Program.

       

      In the
event of a Change of Control (as defined in the Plan), all outstanding Awards
will automatically vest and be paid out in cash at the Target Award level or the
actual performance level as of the Change of Control, whichever is
higher.  Notwithstanding any provision of this Agreement or the Plan
to the contrary, in the event such Change of Control does not constitute a
"change in control event" within the meaning of Section 409A of the Internal
Revenue Code and the regulations thereunder, the cash payment of Awards
described in the preceding sentence shall be made within 74 days following the
close of the Performance Period.

       

      Article
5. Rights as a Stockholder

      

      During
the Performance Period, the Participant shall have no rights of a stockholder
with respect to the PSUs or the Awarded Shares.  Notwithstanding the
foregoing, the Participant shall be entitled to receive any dividend equivalents
declared by the Board, as provided in the Program.

       

      Article
6. Form and Timing of Payment

      

      Except as
set forth in Article 4, payment of Awarded Shares shall be made in the form of
shares of Common Stock within seventy-four (74) calendar days following the
close of the Performance Period.

       

      Article
7. Nontransferability

       

      PSUs may
not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution.  The Participant’s rights under this Agreement shall be
exercisable during the Participant’s lifetime only by the Participant or the
Participant’s legal representative.

      

      Article
8. Administration

       

      It is
expressly understood that the Committee is authorized to administer, construe,
and make all determinations necessary or appropriate to the administration of
the Plan, the Program and this Agreement, all of which shall be binding upon the
Participant.

       

      Article
9.  Withholding Taxes

       

      No later
than the date as of which an amount first becomes includable in the gross income
of the Participant for federal income tax purposes with respect to any Awarded
Shares, the Participant shall pay to the Company, or make arrangements
satisfactory to the Company regarding the payment of, any federal, state, local,
or foreign taxes of any kind required by law to be withheld by the Company with
respect to such amount. Unless otherwise determined by the Committee,
withholding obligations (up to the minimum statutory amount required to be
withheld by the Company) may be settled with shares of Common Stock, including
the Awarded Shares that give rise to the withholding requirement or shares of
Common Stock already owned by the Participant. The obligations of the Company
under the Plan shall be conditional on such payment or arrangements, and the
Company and its Subsidiaries and its Affiliates shall, to the extent permitted
by law, have the right to deduct any such taxes from any payment otherwise due
to the Participant. Participant, therefore, hereby unconditionally and
irrevocably elects, notwithstanding anything to the contrary in this Article 9
or elsewhere in this Agreement, to satisfy any and all federal, state, local,
and foreign taxes of any kind that may be withheld by the Company in connection
with Participant’s Awarded Shares (the “Withholding Taxes”) by
electing one of the following options; provided that in all cases,
the Company shall have the right to receive not less than the minimum amount of
the Withholding Taxes that the Company is required by law to withhold (the “Mandatory Withholding
Taxes”); and further
provided that an amount equal to the Mandatory Withholding Taxes in
respect of any cash payment to Participant shall be withheld from any such cash
payment:

       

      OPTION
1:

       

      
        	
                 
      

              	
                 ̈

              	
                Authorizing
      and directing the Company to deduct from the total number of shares of
      Common Stock issued and deliverable to Participant pursuant to this
      Agreement the number of shares having a value equal to the Mandatory
      Withholding Taxes.

              

      

       

      OPTION
2:

       

      
        	
                 
      

              	
                 ̈

              	
                Paying
      to the Company in cash an amount up to the Withholding Taxes but not less
      than the Mandatory Withholding
Taxes.

              

      

       

      OPTION
3:

       

      
        	
                 
      

              	
                 ̈

              	
                Tendering
      to the Company the number of unrestricted shares of Common Stock owned by
      the Participant prior to the date on which Withholding Taxes are due and
      having a value equal to the Mandatory Withholding
  Taxes.

              

      

       

      In the event that none of the payment
options set forth above is specified, the Participant’s election shall be deemed
to be Option 1, and the Company shall proceed accordingly.  The
Company may refuse to deliver the shares of Common Stock if the Participant
fails to comply with his or her obligations in connection with the Withholding
Taxes as described in this Article 9.

       

      Regardless
of any action the Company takes with respect to any or all Withholding Taxes,
the Participant acknowledges that the ultimate liability for all Withholding
Taxes legally due by the Participant is and remains the Participant’s
responsibility and that the Company (i) make no representations or
undertakings regarding the treatment of any Withholding Taxes in connection with
any aspects of the PSUs, including the grant or vesting of the PSUs, the
subsequent sale of shares of Common Stock received upon vesting of the PSUs, if
any, and the receipt of any dividends or dividend equivalents; and (ii) do not
commit to structure the terms of the Award of any aspect of the Award to reduce
or eliminate the Participant’s liability for Withholding Taxes.

      

      Article
10. Miscellaneous

       

      A.         The
Participant understands and acknowledges that the Participant is one of a
limited number of employees of the Company and its Subsidiaries and Affiliates
who have been selected to receive grants of PSUs and that the Participant’s
Award is considered Company confidential information. The Participant hereby
covenants and agrees not to disclose the Award of PSUs pursuant to this
Agreement to any other person except (i) the Participant’s immediate family and
legal or financial advisors who agree to maintain the confidentiality of this
Agreement, (ii) as required in connection with the administration of this
Agreement and the Plan as it relates to this Award or under applicable law, and
(iii) to the extent the terms of this Award have been publicly
disclosed.

       

      B.         The
grant of PSUs to the Participant in any year shall give the Participant neither
any right to similar grants in future years nor any right to be retained in the
employ of the Company or its Subsidiaries or Affiliates, such employment being
terminable to the same extent as if the Program and this Agreement were not in
effect. The right and power of the Company and its Subsidiaries and Affiliates
to dismiss or discharge the Participant is specifically and unqualifiedly
unimpaired by this Agreement.

       

      C.         Each
notice relating to this Agreement shall be in writing and delivered in person or
by mail to the Company at its office, 6001 36th Avenue West, Everett, WA
98203-1264, to the attention of the Company’s Secretary or at such other address
as the Company may specify in writing to the Participant by a notice delivered
in accordance with this paragraph. All notices to the Participant shall be
delivered to the Participant at the Participant’s address specified below or at
such other address as the Participant may specify in writing to the Secretary of
the Company by a notice delivered in accordance with this
paragraph.

       

      D.         This
Agreement, including the provisions of the Plan and the Program incorporated by
reference herein, comprises the whole Agreement between the parties hereto with
respect to the subject matter hereof, and shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to
principles of conflicts of law.  This Agreement shall become effective
when it has been executed or accepted electronically by the Company and the
Participant.  For purposes of litigating any dispute that arises
directly or indirectly from the relationship of the parties evidenced by this
grant of the Agreement, the parties hereby submit to and consent to the
exclusive jurisdiction of the State of Washington, U.S.A., and agree that such
litigation shall be conducted only in the courts of Washington, U.S.A., or the
federal courts for the United States for the Western District of Washington, and
no other courts where this grant is made and/or to be performed.

       

      E.         This
Agreement shall inure to the benefit of and be binding upon each successor of
the Company and, to the extent specifically provided herein and in the Plan and
the Program, shall inure to the benefit of and shall be binding upon the
Participant’s heirs, legal representatives, and successors.

       

      F.         If
any provision of this Agreement shall be invalid or unenforceable, such
invalidity or unenforceability shall not affect the validity and enforceability
of the remaining provisions of this Agreement.

       

      G.         This
Agreement may be executed in separate counterparts, each of which when so
executed and delivered will be an original, but all of which together will
constitute one and the same instrument. In pleading or proving this Agreement,
it will not be necessary to produce or account for more than one such
counterpart.

       

      H.         The
Company may, in its sole discretion, decide to deliver any documents related to
the PSUs granted under, and participation in, the Program or future PSUs that
may be granted under the Program by electronic means or to request the
Participant’s consent to participate in the Program by electronic
means.  The Participant hereby consents to receive such documents by
electronic delivery and, if requested, to agree to participate in the Program
through an on-line or electronic system established and maintained by the
Company or another third party designated by the Company.

       

      IN WITNESS WHEREOF, this
Agreement is executed by the Participant and by the Company through its duly
authorized officer as of the day and year first above written.

       

       

      
        
          	
                   

                	INTERMEC,
      INC.  
	 
      	 
      
	
                   

                	
                  /s/
      Patrick J. Byrne

                
	
                   

                	
                  Patrick
      J. Byrne

                

        

      
        	
                 

              	PARTICIPANT:
	 
      	(One
      of the boxes under Article 9 must be
checked)

      

       

      
        	IMPORTANT	 
	PLEASE
      ACCEPT ELECTRONICALLY OR	 
	SIGN
      AND RETURN PROMPTLY	 

        	
                 

              	 
	 
      	
                [FIRST
      MIDDLE LAST_NAME]exhibit10-1.htm

                    Exhibit
10.1

     

    EMPLOYMENT
AGREEMENT

     

    This
Employment Agreement (the “Agreement”)
is made and entered into as of April 30, 2008, by and between Tier Technologies,
Inc., a Delaware corporation (together with its successors and assigns, the
“Company”),
and Ronald L. Rossetti, Sr., (the “Executive”).

     

     

    WITNESSETH

     

    WHEREAS,
the Company desires to continue to employ the Executive as its Chief Executive
Officer and to enter into an employment agreement embodying the terms of such
employment and to provide incentives to the Executive to remain employed until
the third anniversary of the Effective Date; and

     

    WHEREAS,
the Executive desires to enter into this Agreement and to accept such continued
employment, subject to the terms and provisions of this Agreement;

     

    NOW,
THEREFORE, in consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which is mutually acknowledged, the Company and the Executive,
intending to be legally bound, agree as follows:

     

    1.     Definitions.

     

    (a)    “Base
Salary” shall mean the Executive’s base salary as determined in
accordance with Section 4 below, including any applicable
increases.

     

    (b)    “Board”
shall mean the Board of Directors of the Company.

     

    (c)    “Cause”
shall mean a finding by the Company of:

     

    
      	
              (i)  

            	
              a
      conviction of the Executive of, or a plea of guilty or nolo contendere by
      the Executive to, any felony;

            

    

     

    
      	
              (ii)  

            	
              an
      intentional violation by the Executive of federal or state securities
      laws;

            

    

     

    
      	
              (iii)  

            	
              willful
      misconduct or gross negligence by the Executive that has or is reasonably
      likely to have a material adverse effect on the
  Company;

            

    

     

    
      	
              (iv)  

            	
              a
      failure of the Executive to perform his reasonably assigned duties for the
      Company that has or is reasonably likely to have a material adverse effect
      on the Company;

            

    

     

    
      	
              (v)  

            	
              a
      material violation by the Executive of any material provision of (i) the
      Company’s Code of Ethics for Chief Executive, Chief Financial, and Chief
      

            

    

    
                    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

                    Accounting Officers or its
Business Code of Conduct (or successor policies on similar topics) or (ii) the
“Covenants,” as defined in Section 13 below; or

    

     

    
      	
              (vi)  

            	
              fraud,
      embezzlement, theft or dishonesty by the Executive against the
      Company,

            

    

     

    provided that no
finding of Cause shall be made pursuant to subsections (ii), (iii), (iv), (v) or
(vi) hereof unless the Company has provided the Executive with written notice in
accordance with Section 22 below stating with specificity the facts and
circumstances underlying the allegations of Cause and the Executive has failed
to cure such violation, if curable, within thirty (30) calendar days of receipt
thereof.  The Board shall determine whether a violation is curable
and/or cured in its reasonable discretion.

     

    (d)    “Change in
Control” shall occur upon:

     

    
      	
              (i)  

            	
              any
      person, entity or affiliated group becoming the beneficial owner or owners
      of more than thirty-five percent (35%) of the outstanding equity
      securities of the Company, or otherwise becoming entitled to vote shares
      representing more than thirty-five percent (35%) of the undiluted total
      voting power of the Company’s then-outstanding securities eligible to vote
      to elect members of the Board (the “Voting
      Securities”);

            

    

     

    
      	
              (ii)  

            	
              a
      consolidation or merger (in one transaction or a series of related
      transactions) of the Company pursuant to which the holders of the
      Company’s 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 sixty-five
      percent (65%) of the Voting Securities of the entity surviving such
      transaction or series of related transactions;
  or

            

    

     

    
      	
              (iii)  

            	
              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 the
      Company.

            

    

     

    (e)    “Code”
shall mean the Internal Revenue Code of 1986, as amended from time to
time.

     

    (f)      “Compensation
Committee” shall mean the Compensation Committee of the Board or another
committee of the Board that performs the functions typically associated with a
compensation committee.

     

    (g)    “Date of
Termination” shall mean the earliest to occur of (i) the date of his
death, (ii) the last day of the Term of Employment, or (iii) if the
Executive’s employment is terminated 

    
      
        
        

      

      
        - 2 -

        
          

        

      

      
        
        
pursuant
to any section, the prospective date specified in the written notice provided in
accordance with Section 22 below.

    

     

    (h)     “Disability”
shall mean, for purposes of this Agreement, the Executive’s inability to
substantially perform his duties and responsibilities under this Agreement for a
period of six (6) consecutive months due to a physical or mental disability, as
the term “physical or mental disability” is defined in the Company’s long-term
disability insurance plan then in effect (or would be so found if the Executive
applied for coverage or benefits under such plan).

     

    (i)    “Director
Transition Period” shall mean the period specified in Section 3
below.

     

    (j)      “Effective
Date” shall mean April 30, 2008.

     

    (k)    “Good
Reason” shall mean, without the Executive’s prior written consent, the
occurrence of any of the following events or actions, provided that no finding of
Good Reason shall be made pursuant to subsections (ii) or (iii) hereof unless
the Executive has provided the Company with written notice in accordance with
Section 22 below within ninety (90) days after the occurrence of such event or
action stating with specificity the facts and circumstances underlying the
allegations of Good Reason and the Company has failed to cure such violation
within thirty (30) calendar days of receipt thereof:

     

    
      	
              (i)  

            	
              any
      reduction in the Executive’s Base Salary or a reduction in the maximum
      Bonus Opportunity below one hundred percent (100%) of Base
      Salary,

            

    

     

    
      	
              (ii)  

            	
              a
      material change in the applicable performance goals used to determine the
      Executive's Bonus that makes it materially less likely for the goals to be
      achieved and which change (I) is not reasonable in light of the Company's
      business, (II) is designed to make it materially less likely to obtain the
      Bonus Opportunity, or (III) is applied solely to the Executive (except to
      the extent relating only to the functions of a Chief Executive
      Officer);

            

    

     

    
      	
              (iii)  

            	
              any
      reduction in the Executive’s title, position or reporting status, unless
      the Executive is provided with a comparable title, position or reporting
      status, or any material diminution of the Executive’s duties,
      responsibilities, powers or authorities;
or

            

    

     

    
      	
              (iv)  

            	
              a
      material breach by the Company of any material provision of this
      Agreement.

            

    

     

    (l)     “Term of CEO
Employment” shall mean the Term of Employment other than any portion
within the Director Transition Period.

    
      
        
        

      

      
        - 3 -

        
          

        

      

      
        
        

      

    

        

    (m)    “Term of
Employment” shall mean the period specified in Section 2
below.

     

    2.     Term of
Employment.

     

    The
Company hereby continues to employ the Executive, and the Executive hereby
accepts such continued employment, for the period commencing on the Effective
Date and ending on the third anniversary of the Effective Date, subject to
earlier termination of the Term of Employment in accordance with the terms of
this Agreement.

     

    3.     Position, Duties and
Responsibilities.

     

    As
of the Effective Date, the Executive shall be employed as the Chief Executive
Officer of the Company or in such other reasonably comparable position as the
Board may determine from time to time.  In this capacity, the
Executive shall be assigned such duties and responsibilities inherent in such
position and such other duties and responsibilities as the Board shall from time
to time reasonably assign to him.  The Executive shall serve the
Company faithfully, conscientiously, and to the best of the Executive’s ability
and shall promote the interests and reputation of the Company.  The
Executive shall devote all of the Executive’s time, attention, knowledge, energy
and skills during normal working hours, and at such other times as the
Executive’s duties may reasonably require, to the duties of the Executive’s
employment; provided, however, that the
Executive may (a) serve on civic or charitable boards or committees, or (b) with
the approval of the Board, serve on corporate boards or
committees.  The Executive shall report to the Board in carrying out
his duties and responsibilities under this Agreement.  The Executive
agrees to abide by the rules, regulations, instructions, personnel practices and
policies of the Company and any changes therein that may be adopted from time to
time.  The Executive shall also continue to serve as a member and
Chairman of the Board of Directors.

     

    Notwithstanding
the foregoing, at any time (i) prior to April 30, 2010, with the mutual
agreement of the Compensation Committee, or (ii) on or after April 30,
2010, in the Executive’s sole discretion, the Executive may relinquish his role
as Chief Executive Officer of the Company and serve only as non-executive
Chairman of the Board and Lead Director for the remainder of the Term of
Employment (the “Director
Transition Period”).  If the Executive relinquishes the Chief
Executive Officer position in his sole discretion, he shall provide written
notice to the Company in accordance with Section 22 below at least fifteen (15)
calendar days prior to the date on which he shall relinquish such
position.

     

    4.     Base
Salary.

     

    As
of the Effective Date, the Executive shall be paid an annualized Base Salary of
Four Hundred Thousand Dollars ($400,000) for the one-year period commencing on
the Effective Date, payable in accordance with the regular payroll practices of
the Company.  The Base Salary shall be subject to increase but not
decrease thereafter, as determined by the Board in its sole
discretion.  

    
      
        
        

      

      
        - 4 -

        
          

        

      

      
        
        
During
the Director Transition Period, the Base Salary shall replace any director fees
to which the Executive might otherwise be entitled.  Except as
specifically provided below or in the EVA Plan or as provided in equity
compensation awards, this Base Salary shall be the Executive’s sole compensation
during the Director Transition Period.

    

     

    5.     Incentive Compensation
Arrangements.

     

    During
the Term of CEO Employment, the Executive shall be entitled to participate in
any Company incentive compensation plans, programs and/or arrangements
applicable to senior-level executives as established and modified from time to
time by the Compensation Committee in its sole discretion including, without
limitation, the Executive Incentive Compensation Plan (the “Incentive
Plan”).  In no event shall the maximum annual incentive
opportunity (the “Bonus
Opportunity”) for the Executive be less than one hundred percent (100%)
of that fiscal year’s Base Salary, assuming satisfaction of applicable
performance goals to be established by the Compensation Committee after
consultation with the Executive.  The bonus paid with respect to the
Bonus Opportunity (the “Bonus”)
shall be paid no later than 75 days after the end of the fiscal year in which
the Bonus is earned, and shall be pro-rated to take into account any bonus
already provided for the period that includes the Effective
Date.  (For the avoidance of doubt, the Company may choose to pay no
Bonus if applicable performance goals are not met.)

     

    6.     Equity Compensation
Programs.

     

    (a)     During
the Term of CEO Employment, the Executive shall be entitled to participate in
any equity-based plans, programs or arrangements applicable to senior-level
executives as established and modified from time to time by the Board or the
Compensation Committee in its sole discretion, to the extent that the Executive
is eligible under (and subject to the provisions of) the plan documents
governing those programs.

     

    (b)     Subject
to approval by the Compensation Committee, the Executive shall also be entitled
to receive the Enterprise Value Award (“EVA”) Plan
set forth in Exhibit A attached hereto.

     

    7.     Employee Benefit
Programs.

     

    During
the Term of Employment, the Executive shall be entitled to participate in all
employee welfare and pension benefit plans, programs and/or arrangements
applicable to senior-level executives, to the extent that the Executive is
eligible under (and subject to the provisions of) the plan documents governing
those programs.  The Executive acknowledges that any participation
during the Director Transition Period will be limited to plans open to
non-employee directors or former employees.

    
      
        
        

      

      
        - 5 -

        
          

        

      

      
        
        

      

    

     

    8.     Reimbursement of Business
Expenses.

     

    The
Company shall reimburse the Executive for all reasonable travel, entertainment
and other expenses incurred or paid by the Executive in connection with, or
related to, the performance of his duties, responsibilities or services under
this Agreement, upon presentation by the Executive of documentation, expense
statements, vouchers and/or such other supporting information as the Company may
request; provided, however, that the amount available for such travel,
entertainment and other expenses may be fixed in advance by the
Board.

     

    During
the Term of CEO Employment, the Company will provide the Executive with a
corporate apartment located within a reasonable daily commuting distance from
the Company’s corporate headquarters and reimburse the Executive for airfare for
the Executive or his spouse between the city of Executive’s current residence
and the Company’s corporate headquarters and out of pocket expenses (including
but not limited to parking, taxicabs and meals) subject to the Company’s normal
business travel policies.  From time to time the Executive may choose
to fly directly to another city instead of to his city of
residence.  The airfare and out of pocket expenses (but not his
lodging or meals) for such travel shall also be reimbursed by the Company,
subject to the limitation that the airfare for any such travel shall not be
reimbursed to the extent that it exceeds 100% of the airfare to Executive’s city
of residence.

     

    If
the Executive recognizes income for income tax purposes as a result of the
Company’s payment of certain expenses pursuant to this Section 8 or Section
9(b) below, regardless
of whether he recognizes such income before or after his employment terminates,
the Company shall make a tax gross-up payment to the Executive based on the
additional tax liability that he incurs by reason of his recognition of such
income; provided that all taxable reimbursements and tax gross-up payments shall
be made in accordance with the requirements of Section 409A of the Code,
including the requirement that any taxable reimbursements be paid before the end
of the year following the year in which the Executive incurs the expense and any
tax gross-up payment be made before the end of the Executive’s taxable year
following the year in which the Executive pays the applicable
taxes.

    
      
        
        

      

      
        - 6 -

        
          

        

      

      
        
        

      

    

     

    9.     Perquisites.

     

    (a)     During
the Term of CEO Employment, the Executive shall be entitled to participate in
the Company’s executive fringe benefit programs (if any) applicable to the
Company’s senior-level executives in accordance with the terms and conditions of
such programs as in effect from time to time, to the extent that the Executive
is eligible under (and subject to the provisions of) the plan documents
governing those programs.

     

    (b)     In
addition, during the Term of CEO Employment, Executive shall receive the
following perquisites:

     

    
      	
              (i)  

            	
              Automobile:  At
      his election, Executive shall be (I) eligible to use a Company automobile
      for business or personal use or (II) provided with an allowance for the
      use, maintenance and operation of an
automobile.

            

    

     

    
      	
              (ii)  

            	
              Home
      Office Equipment:  Executive shall be provided with home office
      equipment (e.g.,
      computer, fax machine, business line with long distance, and internet
      access), which must be returned to the Company or purchased at fair market
      value, at Executive’s option, at the termination of Executive’s employment
      (or, if later, the end of the Director Transition Period).  All
      files, discs, etc. containing proprietary information of the Company will
      be returned, by the Executive to the Company if the purchase option is
      exercised

            

    

     

    
      	
              (iii)  

            	
              Cellular
      Telephone:  Executive shall be provided with cellular telephone
      equipment and service for business use, which must be returned to the
      Company at the termination of Executive’s
  employment.

            

    

     

    The
specifics of the above arrangements shall be subject to approval by the
Compensation Committee.

     

    10.     Vacation.

     

    During
the Term of CEO Employment, the Executive shall be entitled to twenty-four (24)
days of paid time off per calendar year, prorated for the calendar year in which
the Executive’s employment terminates, to be taken at such times as may be
approved by the Board or its designee.  Executive may carry over up to
thirty (30) days of unused paid time off.

     

    11.     Termination of Employment.

     

    (a)     Termination of Employment by
the Company for Disability or Termination of Employment by
Death.  Upon a termination of the Executive’s employment by the
Company for 

    
      
        
        

      

      
        - 7 -

        
          

        

      

      
        
        
Disability
or a termination of the Executive’s employment by reason of the Executive’s
death, the Executive or his estate and/or beneficiaries, as the case may be,
shall be entitled to the following amounts, payable on the business day
coinciding with or next following the thirtieth (30th)
calendar day following such termination, subject to the provisions of Section 24
below, or such earlier date as payment is legally required:

    

     

    
      	
              (i)  

            	
              Base
      Salary earned but not paid prior to the Date of Termination and any
      accrued prior year Bonus not paid prior to such
  date;

            

    

     

    
      	
              (ii)  

            	
              any
      amounts earned, accrued or owing to the Executive but not yet paid under
      Sections 7, 8, 9 or 10 above prior to the Date of
    Termination;

            

    

     

    
      	
              (iii)  

            	
              in
      the event of death, one (1) times the Base Salary in effect on the Date of
      Termination, plus a Bonus equal to the average annual Bonus paid to the
      Executive (or for the most recent year, accrued for the Executive) for the
      previous three years (or such shorter period during which the Executive
      was employed) (the “Average
      Historic Bonus”), provided, however, that the
      Company may instead and in substitution choose to obtain life insurance
      coverage for the benefit of the Executive in a face amount of not less
      than twice the Base Salary as of the Effective Date (in addition to any
      group term life insurance during the Term of CEO Employment) and the
      Executive will cooperate in obtaining such
  coverage;

            

    

     

    
      	
              (iv)  

            	
              immediate
      vesting in full of all stock options (which shall be exercisable for a
      period of one year after the Date of Termination), 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 the performance during that nine month period);
      and

            

    

     

    
      	
              (v)  

            	
              such
      other or additional benefits, if any, as may be provided under applicable
      plans, programs and/or arrangements of the
  Company.

            

    

     

    The
Company must provide written notice to the Executive in accordance with Section
22 below upon a termination of the Executive’s employment for
Disability.

     

    (b)     Termination of Employment by
the Company for Cause or by the Executive.  Upon a termination
of the Executive’s employment by the Company for Cause or a termination of the
Executive’s employment by the Executive (except as provided in Section 11(d) or
(e)), the Executive shall be entitled to the following:

    
      
        
        

      

      
        - 8 -

        
          

        

      

      
        
        

      

    

     

    
      	
              (i)  

            	
              Base
      Salary earned but not paid prior to the Date of Termination and any
      accrued prior year Bonus not paid prior to such
  date;

            

    

     

    
      	
              (ii)  

            	
              any
      amounts earned, accrued or owing to the Executive but not yet paid under
      Sections 7, 8, 9 or 10 above prior to the Date of Termination;
      and

            

    

     

    
      	
              (iii)  

            	
              such
      other or additional benefits, if any, as may be provided under applicable
      plans, programs and/or arrangements of the
  Company.

            

    

     

    The
Executive must provide written notice to the Company in accordance with Section
22 below at least fifteen (15) calendar days prior to the actual Date of
Termination upon a termination of the Executive’s employment.  A
termination by the Company for Cause must be made as set forth
herein.

     

    (c)     Termination of Employment by
the Company Without Cause.  Upon a termination of the
Executive’s employment by the Company without Cause during the Term of
Employment, the Executive shall be entitled to the following amounts, payable on
the business day coinciding with or next following the thirtieth (30th)
calendar day following such termination, subject to the provisions of Section 24
below and excluding the payments under clause (vii) below (which will be paid as
premiums are due):

     

    
      	
              (i)  

            	
              Base
      Salary earned but not paid prior to the Date of Termination and any
      accrued prior year Bonus not paid prior to such
  date;

            

    

     

    
      	
              (ii)  

            	
              any
      amounts earned, accrued or owing to the Executive but not yet paid under
      Sections 7, 8, 9 or 10 above prior to the Date of
    Termination;

            

    

     

    
      	
              (iii)  

            	
              such
      other or additional benefits, if any, as may be provided under applicable
      plans, programs and/or arrangements of the
  Company;

            

    

     

    
      	
              (iv)  

            	
              if
      during the Term of CEO Employment, a prorated portion of the Average
      Historic Bonus (prorated for the number of months worked in the fiscal
      year in which the Date of Termination
falls);

            

    

     

    
      	
              (v)  

            	
              one
      (1) times the Base Salary in effect on the Date of Termination, plus a
      Bonus equal to the Average Historic
Bonus;

            

    

     

    
      	
              (vi)  

            	
              the
      equity treatment provided in Section 11(a)(iv)
  above;

            

    

     

    
      	
              (vii)  

            	
              payment
      by the Company of the premiums for the Executive’s and any covered
      beneficiary’s coverage under COBRA health continuation benefits over the
      twelve (12) month period immediately following the Date of
  

            

    

     

    
      
        
        

      

      
        - 9 -

        
          

        

      

      
        
        

      

    

                  Termination, assuming such
individuals elect and remain eligible for such 

    coverage;

     

    provided that the Executive
must execute and not revoke a severance agreement and release of claims drafted
by and reasonably satisfactory to the Company (the “Severance
Agreement”) to be eligible for the payments in Sections 11(c)(iv) through
(vii) herein, which will contain a full release of the Company (other than for
exceptions specified therein), and will be in substantially the form attached
hereto as Exhibit B (with such additional grounds for release of the Company as
changes in law or circumstances may require).  The Executive will not
be paid under Section 11(c)(v) if he has previously received or become
entitled to payment under Section 12(b) or 12(c).  The Company must
provide written notice to the Executive in accordance with Section 22 below
upon a termination of the Executive’s employment without Cause.  An
expiration of the Term of Employment shall be treated as provided in
Section 11(e) and not as a termination without Cause.

     

        (d)     Resignation for Good Reason
by the Executive.  The Executive may terminate his employment
for Good Reason at any time during the Term of Employment in a manner consistent
with the definition of Good Reason, in which event the Executive shall be
entitled to the payments in and subject to the conditions and provisos of
Section 11(c) and the provisions of Section 24 below.  The Executive
will not be paid under Section 11(c)(v) if he has previously received or become
entitled to payment under Section 12(b) or 12(c).  The Executive must
provide written notice to the Company of a proposed resignation for Good Reason
in accordance with Section 22 below and must actually resign under this
provision no later than the six month anniversary of the date he specifies as
that of the adverse event or action.

     

    (e)     Expiration of this
Agreement.  If not ended sooner as provided above in this
section, the Executive’s employment will end with the end of the Term of
Employment, and he shall be treated as resigning under Section 11(b) on such
date.  When his employment ends at the end of the Term of Employment,
he shall only be entitled to any previously accrued but unpaid benefits
described in Sections 11(c)(i)-(iii) and to the immediate vesting of any
restricted stock units already issued under the EVA
Plan.  Notwithstanding the foregoing, in the event of a Change in
Control in which the CIC Transition Period extends beyond the Term of
Employment, the provisions of Section 12 shall supersede the provisions of this
Section 11(e).

     

    12.    Change in Control.

     

         
(a)           If
the Executive remains employed immediately prior to the consummation of the
first Change in Control after the Effective Date (but during the Term of
Employment), he will receive the equity treatment provided in Section 11(a)(iv)
above immediately prior to the consummation of the Change in Control, subject to
the consummation thereof.

    
      
        
        

      

      
        - 10
-

        
          

        

      

      
        
        

      

    

     

          (b)           In
addition, if he then (x) remains employed for the shorter of (i) one hundred
eighty (180) days after such consummation (the “CIC Transition
Period”) and (ii) the period required by the Board in connection
with the Change in Control and (y) assists in the transition during such period
of employment, the Executive shall be entitled to the following
amount:  two (2) times the sum of (A) the Base Salary in effect on the
Date of Termination (or, if higher, the Base Salary in effect sixty (60) days
preceding the Change in Control) plus (B) a Bonus equal to the Average Historic
Bonus.

     

     
   (c)           If
the Company terminates the Executive’s employment without Cause during the CIC
Transition Period (or, in connection with a Change in Control, within the sixty
(60) days preceding the consummation of the Change in Control, and such Change
in Control is consummated) or he resigns because the Company does not treat
him during the period required in Section 12(b) as a senior executive or senior
adviser, Section 12(d) will not apply and the Executive shall be treated as
though he remained employed through the end of the period required under Section
12(b) and shall also receive the payments and benefits under Section 11(c)
(other than Section 11(c)(v)).

     

      (d)           If
the Executive remains employed to the end of the period under Section 12(b),
Section 12(c) will not apply and any cessation of employment at or after such
date and during the Term of Employment shall provide the payments and benefits
under Section 11(a), (b), (c), or (d) as applicable and depending upon the
circumstances of such later cessation, provided that he will not then receive
any further equity treatment under Section 11(a)(iv) or any further cash
severance under Section 11(a)(iii) or 11(c)(v) (either directly or through
Section 11(d)).

     

      (e)           All
payments and benefits under this Section 12 are conditioned on the Executive’s
executing and not revoking a release of claims substantially in the form of the
release contained within the Severance Agreement, with respect to any prior or
then existing employment claims, provided that if he receives payment under
Section 12(b) and not Section 12(c), he is not required to release a claim to
future benefits under Sections 11(c) or (d).  Payment under this
Section 12 (other than equity treatment) shall be made on the business day
coinciding with or next following the thirtieth (30th)
calendar day following the end of the CIC Transition Period, subject to the
provisions of Section 24 below.

     

    13.    Covenants.

     

    In
consideration for the benefits and agreements described above, Executive agrees
to comply with the covenants set forth in the Proprietary and Confidential
Information, Developments, Noncompetition and Nonsolicitation Agreement attached
as Exhibit C hereto, which is incorporated herein by reference (the “Covenants”).

    
      
        
        

      

      
        - 11 -

        
          

        

      

      
        
        

      

    

     

    14.     Assignability; Binding
Nature.

     

    This
Agreement shall be binding upon and inure to the benefit of both parties and
their respective successors and assigns, including any corporation or entity
with which or into which the Company may be merged or that may succeed to its
assets or business; provided, however, that the obligations of the Executive are
personal and shall not be assigned by him.

     

    15.    Representation.

     

    The
Company represents and warrants that it is fully authorized and empowered to
enter into this Agreement.  The Executive states and represents that
he has had an opportunity to fully discuss and review the terms of this
Agreement with an attorney.  The Executive further states and
represents that he has carefully read this Agreement, understands the contents
herein, freely and voluntarily assents to all of the terms and conditions
hereof, and signs his name of his own free act.

     

    The
Company will pay or reimburse the Executive’s reasonable attorneys’ fees and
expenses in connection with the drafting and negotiation of this
Agreement.  In addition, the Company agrees that, if a dispute arises
that concerns this Agreement, the Covenants, Section 27 below or the Separation
Agreement and the Executive is the prevailing party in the dispute, he shall be
entitled to recover all of his reasonable attorney’s fees and expenses incurred
in connection with the dispute.  For this purpose, the Executive will
be the “prevailing party” if he is successful on any significant substantive
issue in the action and achieves either a judgment in his favor or some other
affirmative recovery.

     

    16.    Entire
Agreement.

     

    This
Agreement contains the entire understanding and agreement between the parties
concerning the subject matter hereof and supersedes all prior agreements,
understandings, discussions, negotiations and undertakings, whether written or
oral, with respect thereto, including, without limitation, the Employment
Agreement dated as of July 26, 2006 (the “2006
Agreement”), provided, that any
obligation under the 2006 Agreement to provide benefits that have vested under
the terms of the 2006 Agreement, the obligation in the second paragraph of
Section 7 thereof, and to the extent set forth in the stock option agreement in
Exhibit A thereto, the “Stock
Option” (as defined therein), shall survive in accordance with the terms
of the 2006 Agreement.

     

    17.     Amendment or
Waiver.

     

    No
provision in this Agreement may be amended unless such amendment is agreed to in
writing and signed by the Executive and an authorized officer of the
Company.  No waiver by either party of any breach by the other party
of any condition or provision contained in this 

    
      
        
        

      

      
        - 12
-

        
          

        

      

      
        
        
Agreement
to be performed by such other party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent
time.  Any waiver must be in writing and signed by the Executive or an
authorized officer of the Company, as the case may be.

    

     

    18.    Withholding.

     

    The
Company may withhold from any amounts payable under this Agreement such federal,
state and local taxes as may be required to be withheld pursuant to any
applicable law or regulation.

     

    19.    Severability.

     

    In
the event that any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable for any reason, in whole
or in part, the remaining parts, terms or provisions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law.

     

    20.    Survivorship.

     

    The
respective rights and obligations of the parties hereunder shall survive any
termination of the Executive’s employment to the extent necessary to preserve
such rights and obligations.

     

    21.    Governing Law; Jurisdiction;
Dispute Resolution.

     

    This
Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Virginia (without reference to the conflict of laws provisions
thereof).  In case of any controversy or claim arising out of or
related to this Agreement or relating to the Executive’s employment (including
but not limited to claims relating to employment discrimination), except as
expressly excluded herein, each party to this Agreement agrees to give the other
party notice of non-compliance with this Agreement and ten (10) days to
cure.  Should resolution of any controversy or claim not be reached
following provision of notice and a reasonable opportunity to cure, then the
dispute shall be settled by arbitration, under the American Arbitration
Association’s National Rules for the Resolution of Employment Disputes (the
“National
Rules”).  A single arbitrator shall be selected in accordance
with the National Rules, and the costs of such arbitration shall be paid by the
Company, provided that the fees and expenses of the Executive’s attorneys shall
only be paid by the Company to the extent expressly set forth in Section 15
above.  Any claim or controversy not submitted to arbitration in
accordance with this Section 21 (other than as provided under the Covenants and
Section 27 below) shall be waived, and thereafter no arbitrator, arbitration
panel, tribunal, or court shall have the power to rule or make any award on any
such claim or controversy.  In determining a claim or controversy
under this Agreement and in making an award, the arbitrator must consider the
terms and provisions of this Agreement, as well as all applicable federal,
state, or local laws.  The award 

    
      
        
        

      

      
        - 13
-

        
          

        

      

      
        
        
rendered
in any arbitration proceeding held under this Section 21 shall be final and
binding and judgment upon the award may be entered in any court having
jurisdiction thereof.  Claims for workers’ compensation or
unemployment compensation benefits are not covered by this
Section 21.  The
Company and the Executive each hereby irrevocably waive any right to a trial by
jury in any action, suit or other legal proceeding arising under or relating to
any provision of this Agreement.

    

     

    22.     Notices.

     

    All
notices shall be in writing, shall be sent to the following addresses listed
below using a reputable overnight express delivery service and shall be deemed
to be received one (1) calendar day after mailing.

     

    If
to the Company:      10780 Parkridge
Blvd.

    4th Floor

    Reston, Virginia 20191

    Attention: General
Counsel

    

    If
to the Executive: At his current or last known residential address

     

    Any
notice of termination must include a Date of Termination in accordance with the
relevant provisions of this Agreement.

     

    23.     Headings.

     

    The
headings of the sections contained in this Agreement are for convenience only
and shall not be deemed to control or affect the meaning or construction of any
provision of this Agreement.

     

    24.     Compliance with Code Section
409A.

     

    If
and to the extent any portion of any payment, compensation or other benefit
provided to the Executive in connection with his employment termination is
determined to constitute “nonqualified deferred compensation” within the meaning
of Section 409A and the Executive is a specified employee as defined in Section
409A(a)(2)(B)(i) of the Code, as determined by the Company in accordance with
its procedures, by which determination the Executive hereby agrees that he is bound, such
portion of the payment, compensation or other benefit shall not be paid before
the day that is six months plus one day after the date of “separation from
service” (as determined under Section 409A) (the “New Payment
Date”), except as Section 409A may then permit.  The aggregate
of any payments that otherwise would have been paid to the Executive during the
period between the date of separation from service and the New Payment Date
shall be paid to the Executive in a lump sum on such New Payment Date, and any
remaining payments 

    
      
        
        

      

      
        - 14
-

        
          

        

      

      
        
        
will
be paid on their original schedule.  For purposes of this Agreement,
each amount to be paid or benefit to be provided shall be construed as a
separate identified payment for purposes of Section 409A, and any payments
described in Section 11 or 12 that are due within the “short term deferral
period” as defined in Section 409A shall not be treated as deferred
compensation unless applicable law requires otherwise.  Neither the
Company nor the Executive shall have the right to accelerate or defer the
delivery of any such payments or benefits except to the extent specifically
permitted or required by Section 409A.  This Agreement is intended to
comply with the provisions of Section 409A and the Agreement shall, to the
extent practicable, be construed in accordance therewith.  Terms
defined in the Agreement shall have the meanings given such terms under Section
409A if and to the extent required to comply with Section 409A.  In
any event, the Company makes no representations or warranty and shall have no
liability to the Executive or any other person, other than with respect to
payments made by Tier in violation of the provisions of this Agreement, if any
provisions of or payments under this Agreement are determined to constitute
deferred compensation subject to Code Section 409A but not to satisfy the
conditions of that section.

    

     

    25.     Parachute Tax
Provision.

     

    The
Board will direct the Company to make the payments under this Agreement and
other arrangements without regard to whether the deductibility of such payments
(or any other payments or benefits) would be limited or precluded by Code
Section 280G and without regard to whether such payments would subject the
Executive to the tax under Code Section 4999.  The Executive shall be
entitled to additional payments under Exhibit D hereto.

     

    26.     Counterparts.

     

    This
Agreement may be executed in two or more counterparts, and such counterparts
shall constitute one and the same instrument.  Signatures delivered by
facsimile shall be deemed effective for all purposes to the extent permitted
under applicable law.

     

    27.      Additional
Remedies.

     

    In
addition to any other rights or remedies, whether legal, equitable, or
otherwise, that each of the parties to this Agreement may have, the Executive
acknowledges that

     

    (a)     The
Covenants incorporated in Section 13 are essential to the continued good will
and profitability of the Company;

     

    (b)     Irreparable
damage to the Company shall result in the event that the Covenants incorporated
in Section 13 are not specifically enforced and that monetary damages will not
adequately protect the Company from a breach of these paragraphs of the
Agreement;

    
      
        
        

      

      
        - 15
-

        
          

        

      

      
        
        

      

    

     

    (c)     If
any dispute arises concerning the violation by the Executive of the Covenants
incorporated in Section 13, an injunction may be issued restraining such
violation pending the determination of such controversy, and no bond or other
security shall be required in connection therewith; and

     

    (d)     Such
Covenants shall continue to apply after any expiration, termination, or
cancellation of this Agreement.

     

    REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

    
      
         

      

      
        - 16 -
  

        
          

        

      

      
         

      

    

    

    

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

    

    
       

      
        	 	 TIER
      TECHNOLOGIES, INC
	 	 	 	 
	 	
                 By:

              	 /s/ Samuel
      Cabott III	 
	 	 	 Name: Samuel
      Cabot III	 
	 	 	 Title:
      Chairman of Compensation Committee	 
	 	 	 	 
	 	 THE
      EXECUTIVE	 
	 	 	 	 
	 	 	 /s/ Ronald L.
      Rossetti, Sr.	 
	 	 	 	 
	 	 	 Ronald L.
      Rossetti, Sr.	 
	 	 	 	 

      

       

    

    

    

    

    
      
         

      

      
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      EXHIBIT
A

      

      ENTERPRISE
VALUE AWARD PLAN

      
        
           

        

        
           

          
            

          

        

        
           

        

      

Exhibit A

    Enterprise
Value Award Plan

    

    

    1.           Eligibility

    

    Executive
is entitled to participate in the Enterprise Value Award (“EVA”) Plan (the
“Plan”)
consistent with his or her position of Chief Executive Officer or any
other position as mutually agreed to between the Board and the
Executive consistent with the terms and conditions of the Executive’s
Employment Agreement, including service solely as Chairman of the Board if the
Executive relinquishes his role of Chief Executive Officer in accordance with
the terms of Section 3 of the Employment Agreement.

     

    2.           Incentive
Opportunity

    

    Executive
will be entitled to receive restricted share units (“RSUs”)
payable in stock (or, as provided in Item 8 below, in cash) under the Plan
subject to the following terms and conditions over the effective term of the
Employment Agreement (and as extended pursuant to Item 2.5 below):

    

    
      	
               
      

            	
              2.1.

            	
              The
      RSUs will be awarded as Tier’s share price achieves a “Share Price
      Performance Target” of $11, $13 and $15 per share. The RSUs will be
      paid in stock (or, as provided in Item 8 below, in cash) on the vesting
      date;

            

    

    

    
      	
               
      

            	
              2.2

            	
              If
      the closing price of Company stock equals or exceeds a Share Price
      Performance Target for each trading day within any 60 consecutive calendar
      day period (a “Performance
      Period”), the Company will grant the applicable number of RSUs
      described in item 3 below as of the last day of the calendar quarter
      during which the Performance Period for which the target or targets were
      met ends, provided, that
      if more than one Share Price Performance Target is achieved in a
      Performance Period or in multiple Performance Periods ending during the
      same calendar quarter, the Executive shall be entitled to receive the
      awards for achieving all such targets on the last day of the applicable
      calendar quarter.  If the Company has a Change in Control during
      a calendar quarter and the value per share realized by the Company or its
      shareholders, as reasonably determined by the Board based on the
      transaction documents, equals or exceeds a Share Price Performance Target,
      that Change in Control value will determine the RSUs issued with respect
      to that quarter and, to the extent practicable, the Board shall issue
      the RSUs no later than immediately in advance of the effective time of the
      Change in Control, after taking into account the Change in Control), and
      any tranches that have not already been granted and that have lower
      targets will also be granted in connection with the Change in
      Control;

            

    

    

    
      	
               
      

            	
              2.3

            	
              For
      the Executive to be eligible for an award under Item 2.2, Tier shares must
      be actively traded on NASDAQ or another established securities exchange
      throughout the Performance Period;

            

    

    

    
      	
               
      

            	
              2.4

            	
              The
      measurement for the Performance Period will commence on the effective date
      of this Plan;

            

    

    

    
      	
               
      

            	
              2.5

            	
              If
      the Executive’s employment ends for any reason other than Cause or
      resignation without Good Reason (as provided under Section 11(b) of the
      Employment Agreement), and RSUs remain ungranted under Item 3 below, the
      achievement of the Share Price Performance Target or a Change in Control
      for 

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

                any ungranted RSUs may still
occur during any Performance Period falling within the nine (9) months after
employment ends, in which case the RSUs shall be immediately
vested;

     

    
      	
               
      

            	
              2.6

            	
              All
      awards are subject to three (3) year cliff vesting from the effective date
      of the completion of the applicable Performance Period for which they were
      earned, except as provided in Item 7
below.

            

    

    

    3.           Share
Price Targets

    

    RSUs
shall be awarded in the tranches below in accordance with the following Share
Price Performance Targets: 

    

    
      	
              Share
      Price Performance Target for 60 Consecutive Days or Change in
      Control

            	
              #
      of Units

            
	
              $11

            	
              180,000

            
	
              $13

            	
              185,000

            
	
              $15

            	
              185,000

            

    

     

    The
number of RSUs that will be earned in any tranche that is not yet issued or the
number of shares underlying any RSUs that have been issued, as the case may be,
shall be subject to adjustment in the event of any stock split, reverse stock
split, stock dividend, recapitalization, combination or reclassification of
shares or any other change in capitalization.  In no event shall the
Executive be eligible for more than one tranche of the RSUs at any Share Price
Performance Target as determined by the trading price or Change in Control value
or combination of either.  (In other words, if the Share Price
Performance Target were met at $13, he or she would receive RSUs equivalent to
185,000 shares plus RSUs equivalent to 180,000 (the $11 target) but only if the
$11 target had not previously been paid.)  In addition, the maximum
number of shares or cash equivalents that can be issued with respect to this
Plan is 550,000 shares.

    

    4.           Grant
Date

    

    RSUs
will be granted under an appropriate grant agreement as of the date determined
under Item 2.2 above.

    

    5.           Dividend
Entitlement

    

    The
Executive will be entitled to dividend equivalent rights with respect to any
RSUs that have been granted, with payment to be made under a Section 409A
compliant plan, subject to vesting as provided with respect to the
RSUs.

    

    
      	
              6.

            	
              Withholding

            

    

    

    All
payments hereunder are subject to withholding for taxes and other required
deductions in such manner as Tier determines appropriate.

    

    
      	
              7.

            	
              Acceleration
      of Vesting of RSUs Awarded

            

    

    

    The
three (3) year vesting period will be accelerated and all RSUs that have
previously been awarded shall immediately and fully vest in the event of
Executive’s termination of employment associated with death and Disability;
termination without Cause or resignation for Good Reason (without regard to
whether the termination or resignation is in connection with a Change in
Control), on expiration of the Term of Employment or in the Event of a Change in
Control while 

    
      
        
        

      

      
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    Executive
is employed by the Company, each as defined under the Executive’s Employment
Agreement.

    

    8.           Manner
of Payment

    

    The
Company intends to pay the RSUs, to the maximum extent possible, in shares of
Company stock under the Company’s Amended and Restated 2004 Stock Incentive Plan
(or any successor plan), with any amount that cannot be paid thereunder to be
paid in cash.

    

    9.           Compliance
with Section 409A

    

    If and
to the extent any portion of any payment, compensation or other benefit provided
to the Executive in connection with his or her employment termination is
determined to constitute “nonqualified deferred compensation” within the meaning
of Section 409A of the Internal Revenue Code of 1986 (the “Code”) and
the Executive is a specified employee as defined in Section 409A(a)(2)(B)(i), as
determined by the Company in accordance with its procedures, by which
determination the Executive has agreed, by participating in this Plan, that he
or she is bound, such portion of the payment, compensation or other benefit
shall not be paid before the day that is six months plus one day after the date
of “separation from service” (as determined under Section 409A) (the “New Payment
Date”), except as Section 409A may then permit.  The aggregate
of any payments that otherwise would have been paid to the Executive during the
period between the date of separation from service and the New Payment Date
shall be paid to the Executive in a lump sum on such New Payment Date, and any
remaining payments will be paid on their original schedule.  For
purposes of this Agreement, each amount to be paid or benefit to be provided
shall be construed as a separate identified payment for purposes of Section
409A, and any payments that are due within the “short term deferral period” as
defined in Section 409A shall not be treated as deferred compensation unless
applicable law requires otherwise.  Neither the Company nor the
Executive shall have the right to accelerate or defer the delivery of any such
payments or benefits except to the extent specifically permitted or required by
Section 409A.  This Plan is intended to comply with the provisions of
Section 409A and the Agreement shall, to the extent practicable, be construed in
accordance therewith.  Terms defined in the Plan shall have the
meanings given such terms under Section 409A if and to the extent required to
comply with Section 409A.  In any event, the Company makes no
representations or warranty and shall have no liability to the Executive or any
other person, other than with respect to payments made by Tier in violation of
the provisions of this Plan, if any provisions of or payments under this Plan
are determined to constitute deferred compensation subject to Code Section 409A
but not to satisfy the conditions of that section.

    
      
         

      

      
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    EXHIBIT
B

    

     

    SEVERANCE
AGREEMENT

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Exhibit
B

     

    FORM OF SEPARATION AGREEMENT
AND RELEASE

     

    This Separation Agreement and Release
(the “Agreement”)
is made by and between Tier Technologies, Inc., a Delaware corporation (the
“Company”),
and Ronald L. Rossetti, Sr. (the “Employee”)
(collectively, the “Parties”),
as of the Separation Date (as defined below).

    WHEREAS, the Employee entered into an
employment agreement dated as of April 30, 2008 (the “Employment
Agreement”) and July 26, 2006 (together, the “Prior
Agreements”);

    WHEREAS, the Employee has been Chief
Executive Officer;

    WHEREAS, the Parties desire to set
forth the terms of their joint agreements regarding the Employee’s separation
from the Company and establish the terms of the Employee’s severance
arrangement; and

    WHEREAS, the Company advises the
Employee to consult with an attorney of his own choosing prior to executing this
Agreement;

    NOW, THEREFORE, in consideration of the
promises and conditions set forth herein, the receipt and sufficiency of which
is hereby acknowledged, the Company and the Employee agree as
follows:

    1.     Separation Date and
Termination of Prior Agreements.  The Employee’s effective date
of separation from the Company [was] [shall be] [date] (the “Separation
Date”).  Provided that the Employee does not revoke this
Agreement pursuant to Section 18 below, the Employee acknowledges that the Prior
Agreements terminated effective as of the Separation Date, except as provided
herein, and that the Company no longer has any obligations thereunder, including
any obligations to provide benefits or perquisites to the Employee and/or his
family pursuant to the 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Prior
Agreements.

    2.     Consideration.  In
return for the timely execution and non-revocation of this Agreement and
provided that the Employee has complied with all conditions set forth in this
Agreement, the Company agrees to provide the Employee with the following
consideration (the “Consideration”):

       (a)     [Reflect
payments from Employment Agreement or other compensatory
agreement.]

       (b)     [Any
other applicable consideration]

    3.     Release.

    (a)     In
exchange for the Consideration, which the Employee acknowledges he would not
otherwise be entitled to receive if he failed to execute this Agreement or if he
revokes it, and except as otherwise provided in this Agreement, the Employee
hereby fully, forever, irrevocably and unconditionally releases, remises and
discharges the Company, its officers, directors, affiliates, subsidiaries,
parent companies, agents and employees (each in their individual and corporate
capacities) (hereinafter, the “Released
Parties”) from any and all claims, charges, complaints, demands, actions,
causes of action, suits, rights, debts, sums of money, costs, accounts,
reckonings, covenants, contracts, agreements, promises, doings, omissions,
damages, executions, obligations, liabilities and expenses (including attorneys’
fees and costs), of every kind and nature that the Employee ever had or now has
against any or all of the Released Parties, including, but not limited to, all
claims arising out of his employment with and/or separation from the Company
including, but not limited to, all employment discrimination claims under Title
VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Americans With
Disabilities Act of 1990, 42 U.S.C. § 12101 et seq., the Age
Discrimination in Employment Act, 

    
      
        
        

      

      
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      29
U.S.C., § 621 et
seq.,
the Virginia Human Rights Act, Va. Code § 2.2-3900 et seq., Va. Code
Ann. § 51.5-40 et seq. (Virginia rights
of persons with disabilities law) and Va. Code § 40.1-28.6 (Virginia equal
pay law), all as amended, all claims arising out of the Fair Credit Reporting
Act, 15 U.S.C. § 1681 et seq. and the Employee
Retirement Income Security Act of 1974 (“ERISA”),
29 U.S.C. § 1001 et seq., all as amended,
any claims to have been or to be considered as a “whistleblower” or other
protected person under Federal or state law, including Section 806 of the
Corporate and Criminal Fraud Accountability Act; all common law claims
including, but not limited to, actions in tort, defamation and breach of
contract (including, without limitation, claims arising out of or related to the
Prior Agreements), all claims to any non-vested ownership interest in the
Company, contractual or otherwise, including, but not limited to, claims to
stock or stock options, and any claim or damage arising out of the Employee’s
employment with and/or separation from the Company (including a claim for
retaliation) under any common law theory or any federal, state or local statute
or ordinance not expressly referenced above.  The Employee understands
and agrees that by entering into this Agreement, he is waiving any and all
rights or claims he might have under the Age Discrimination in Employment Act,
as amended by the Older Workers Benefits Protection Act, and that he has
received consideration beyond that to which he was previously
entitled.  It is understood that this release does not affect any
rights the Employee has under this Agreement, any vested rights that Employee
may have under any pension or retirement plans sponsored by the Company for its
employees or under any previously issued equity compensation awards (or any
potentially issuable awards for the post-employment period under Item 2.5 of the
Enterprise Value Award Plan), or any rights the Employee and his beneficiaries
may have to continued medical coverage under the continuation coverage
provisions of the Internal Revenue Code, ERISA, or applicable state law, nor
does it prevent the 

    

    
      
        
        

      

      
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      Employee
from (a) filing, cooperating with, or participating in any proceeding before the
EEOC or a state fair employment practices agency (except that the Employee
acknowledges and understands that he may not be able to recover any monetary
benefits in connection with any such claim, charge or proceeding); or (b) making
claims for indemnification and/or advancement of fees pursuant to Section 6
hereof.

    

    (b)     Known and Unknown
Claims.  The Employee understands and agrees that the claims
released in Section 3(a) above include not only claims presently known to him,
but also include all unknown or unanticipated claims, rights, demands, actions,
obligations, liabilities and causes of action of every kind and character that
would otherwise come within the scope of the released claims as described in
Section 3.  The Employee understands that he may hereafter discover
facts different from what he now believes to be true, which if known, could have
materially affected this Agreement, but he nevertheless waives and releases any
claims or rights based on different or additional facts.

    4.     Proprietary and Confidential
Information, Developments, Noncompetition and Nonsolicitation
Agreement.  The Employee represents and agrees that, as a
condition of the payment of the Consideration herein described, he has complied
with and will continue to comply with the Proprietary and Confidential
Information, Developments, Noncompetition and Nonsolicitation Agreement he
executed previously and any successor agreements thereto.

    5.     Cooperation.  The
Employee agrees to fully cooperate with the Company in the investigation,
defense or prosecution of any government investigation, claims or actions now in
existence or which may be brought in the future against or on behalf of the
Company or any of its owners, shareholders, predecessors, successors, assigns,
agents, directors, officers, employees, representatives, attorneys,
subsidiaries, affiliates or parents (and agents, directors,
officers,

    
      
        
        

      

      
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      employees,
representatives and attorneys of such subsidiary, affiliate or parent) and all
persons acting by, through, under or in concert with any of
them.  Such cooperation shall include, but not be limited to, meeting
with representatives of the Company upon reasonable notice at reasonable times
and locations to prepare for discovery or any mediation, arbitration, trial,
administrative hearing or other proceeding or to act as a witness.  In
furtherance of the cooperation to be provided under this Section 5, the Employee
agrees that he will provide accurate and complete information and
testimony.  Moreover, unless otherwise prohibited by law, the Employee
shall notify the General Counsel of the Company if the Employee is asked by any
person, entity or agency to assist, testify or provide information in any such
proceeding or investigation.  Such notice shall be in writing and sent
by overnight mail within two (2) business days of the time the request for
assistance, testimony, or information is received by the Employee.  If
the Employee is not legally permitted to provide such notice, he agrees that he
shall request that the person, entity, or agency seeking assistance or
information provide notice consistent with this Section 5.  If and to
the extent that the cooperation is required after the period for which the
Employee is receiving payments, if any, under Section 11 of the Employment
Agreement (i.e., after one year in connection with the payment of one year’s
base salary and after two years in connection with a Change in Control payment
(where “Change in Control” is defined in Section 1(d) of the Employment
Agreement)), the Corporation shall pay the Employee reasonable per diem
compensation for time spent by Employee for which he is not otherwise
compensated by the Corporation or any third party while providing such
cooperation.  The Board must approve the rate of compensation and
estimated time involved and may not unreasonably withhold
approval.  In addition, the Company shall reimburse the Employee for
all expenses (including attorney’s 

      
        
          
          

        

        
          - 5
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      fees)
actually and reasonably incurred by the Employee in providing such cooperation
under this Section 5.

    

    6.     Indemnification.  The
Company agrees that the Employee is not releasing any claims he may have for
indemnification under state or other law or the charter, articles, or by-laws of
the Company and its affiliated companies, or under any indemnification agreement
with the Company or under any insurance policy providing directors’ and
officers’ coverage for any lawsuit or claim relating to the period when he was a
director or officer of the Company or any affiliated company; provided, however, that (i) the
Company’s execution of this Agreement is not a concession or guaranty that the
Employee has any such rights to indemnification, (ii) that this Agreement does
not create any additional rights to indemnification, and (iii) that the Company
retains any defenses it may have to such indemnification or
coverage.

    7.     Resignation from Officer and
Board Positions. The Employee agrees that
he [will cease] [has ceased], effective as of the Separation Date, to be Chief
Executive Officer, as well as to hold any and all other positions as an officer
or director of any of the Company’s subsidiaries or affiliates.

    8.     Business Expenses and Final
Compensation.  The Company shall promptly reimburse the
Employee for all business expenses incurred in conjunction with the performance
of his employment duties and consistent with the Company
policies.  The Company shall promptly pay, to the extent not already
paid, the Employee’s salary through the Separation Date and any accrued, unused
paid time off days that the Employee has as of the Separation
Date.  Upon such payments, the Employee acknowledges and agrees that
he will have received payment in full for all services rendered in conjunction
with his employment by the Company and that no other compensation, including
salary, bonuses, or severance payments or benefits 

    
      
        
        

      

      
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      pursuant
to any plan, policy or practice, will be or are owed to him (other than payments
specified herein).

    

    9.     Return of Company
Property.  The Employee confirms he has returned to the Company
all keys, files, records (and copies thereof), equipment (including, but not
limited to, computer hardware, software and printers, wireless handheld devices,
cellular phones and pagers), Company identification, Company vehicles, Company
confidential and proprietary information and any other Company-owned property in
his possession or control and has left intact all electronic Company documents,
including, but not limited to, those that he developed or helped to develop
during his employment. The Employee further confirms that he has cancelled all
accounts for his benefit, if any, in the Company’s name, including, but not
limited to, credit cards, telephone charge cards, cellular phone and/or pager
accounts and computer accounts.

    10.     Nondisparagement.  The
Employee understands and agrees that as a condition for payment to him of the
Consideration described herein, he will not make any false, disparaging or
derogatory statements to any media outlet, industry group, financial institution
or current or former employee, consultant, client or customer of the Company or
to any other entity or person regarding the Company or any of its officers,
directors, agents, consultants, employees, customers or suppliers or about the
Company’s business affairs or financial condition; provided, however, that this
shall not apply to truthful communications the Employee is required by law to
make to the Board or any governmental entity or in any litigation or
arbitration.  The Company understands and agrees that (i) as a
condition for the release provided under this Agreement, it will instruct its
directors and officers not to make and (ii) that its directors and officers
shall not make any false, disparaging or derogatory statements to any media
outlet, industry group, 

    
      
        
        

      

      
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      financial
institution or current or former employee, consultant, client or customer of the
Company or to any other entity or person regarding the Employee or any members
of his family; provided, however, that this
shall not apply to truthful communications the Company or its directors or
officers are required by law to make to the Board or any governmental entity or
in any litigation or arbitration or as part of any required public
disclosures.

    

    11.     [Confidentiality.  The
Parties understand and agree that the contents of the negotiations and
discussions resulting in this Agreement shall be maintained as confidential and
shall not be disclosed, provided that the Employee may make disclosure
hereunder: (i) to the extent that such disclosure is specifically required by
law or legal process or as authorized in writing by the Company; (ii) to the
extent that such disclosure is necessary to enforce or implement the provisions
of this Agreement; (iii) to his tax advisors, accountants, attorneys,
representatives and members of his immediate family; and (iv) to the extent the
Company has publicly disclosed a provision of this Agreement; and provided
further that the Company may make disclosure hereunder: (i) to the extent that
such disclosure is specifically required by law or legal process or as
authorized in writing by the Employee; (ii) to the extent that such disclosure
is necessary to enforce or implement the provisions of this Agreement; and (iii)
to its tax advisors, accountants, and attorneys.  Notwithstanding the
foregoing, the Employee acknowledges that the Company must promptly describe the
materials terms of this Agreement on a Form 8-K and will satisfy its obligation
of filing this Agreement by providing this Agreement as an exhibit to that Form
8-K.]

    12.     Nature of
Agreement.  The Parties understand and agree that this
Agreement is a severance and settlement agreement and does not constitute an
admission of liability or wrongdoing on the part of the Company.

    
      
        
        

      

      
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    13.     Amendment.  This
Agreement shall be binding upon the Parties and may not be modified in any
manner except by an instrument in writing of concurrent or subsequent date
signed by a duly authorized representative of the Parties
hereto.  This Agreement is binding upon and shall inure to the benefit
of the Parties and their respective agents, assigns, heirs, executors,
successors and administrators.

    14.     Waiver of
Rights.  No delay or omission by the Company or the Employee in
exercising any rights under this Agreement shall operate as a waiver of that or
any other right.  A waiver or consent given by the Company or the
Employee on any one occasion shall be effective only in that instance and shall
not be construed as a bar to or waiver of any right on any other
occasion.

    15.     Validity.  Should
any provision of this Agreement be declared or be determined by any court of
competent jurisdiction to be illegal or invalid, the validity of the remaining
parts, terms or provisions shall not be affected thereby and said illegal or
invalid part, term or provision shall be deemed not to be a part of this
Agreement.

    16.     Governing Law; Jurisdiction;
Dispute Resolution.  This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia (without
reference to the conflict of laws provisions thereof).  The dispute
resolution provisions of Section 22 of the Employment Agreement apply to
this Agreement.

    17.     Acknowledgments.  The
Employee acknowledges that he has been given at least twenty-one (21) calendar
days to consider this Agreement and that the Company advised the Employee in
writing to consult with an attorney of his own choosing prior to executing
it.  The Employee further acknowledges that any change made to this
Agreement, whether material or immaterial, does not restart the running of the
twenty-one (21) day period.  The Employee 

    
      
        
        

      

      
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      further
understands that he may revoke this Agreement for a period of seven (7) calendar
days after he executes it, and that it shall not be effective or enforceable
until the expiration of this seven (7) day revocation period.

    

    18. Voluntary
Assent.  The Employee affirms that no other promises or
agreements of any kind have been made to or with him by any person or entity
whatsoever to cause him to sign this Agreement, and that he fully understands
the meaning and intent of this Agreement.  The Employee states and
represents that he has had an opportunity to discuss fully and review the terms
of this Agreement with an attorney.  The Employee further states and
represents that he has carefully read this Agreement, understands the contents
herein, freely and voluntarily assents to all of the terms and conditions
hereof, and signs his name of his own free act.

    19. Entire
Agreement.  Except as provided in Sections 4, 6, or 16 herein
or as specified below, this Agreement contains and constitutes the entire
understanding and agreement between the Parties hereto with respect to severance
and settlement and terminates and supersedes all previous oral and written
negotiations, agreements, commitments and writings in connection therewith,
including, but not limited to, the Prior Agreements.

    20. Recital
Paragraphs.  The recital paragraphs at the beginning of this
Agreement are incorporated by reference as if fully set forth
herein.

    21. Counterparts.  This
Agreement may be executed in two (2) signature counterparts, each of which shall
constitute an original, but all of which taken together shall constitute one and
the same instrument.

    
      
        
        

      

      
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    IN
WITNESS WHEREOF, the Parties have set their hand and seal to this Agreement as
of the date set forth below.

     

    Signatures
on Page Following

     

    
      
         

      

      
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      	 	 TIER
      TECHNOLOGIES, INC.
	 	 
	                     By:	 
	 	 Name:
	 	 Title:
	 	 
	                      Dated:	 
	 	 
	 	 
	 	 Ronald L.
      Rossetti, Sr.
	 	 
	                     Dated:	 

    

     

     

     

    
      
        
        

      

      
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      EXHIBIT
C

      

       

      PROPRIETARY
AND CONFIDENTIAL INFORMATION, DEVELOPMENTS, NONCOMPETITION AND NONSOLICITATION
AGREEMENT

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      

      EXHIBIT
C

      

      PROPRIETARY AND CONFIDENTIAL
INFORMATION, DEVELOPMENTS, NONCOMPETITION AND NONSOLICITATION
AGREEMENT

       

       

      This
Proprietary and Confidential Information, Developments, Noncompetition and
Nonsolicitation Agreement (the “Agreement”)
is made by and between Tier Technologies, Inc. (the “Company”)
and Ronald L. Rossetti, Sr. (the “Employee”).

      IN
CONSIDERATION of the Employee’s employment and/or continued employment with the
Company and for other valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Employee agrees as follows:

      1.   Condition of
Employment.

      The
Employee acknowledges that the Employee’s employment and/or the continuance of
that employment with the Company is contingent upon the Employee’s agreement to
sign and adhere to the provisions of this Agreement.  Employee is
receiving enhanced severance protection and additional benefits in connection
with executing an employment agreement and this Agreement. The Employee further
acknowledges that the nature of the Company’s business is such that protection
of its proprietary and confidential information is critical to its business’s
survival and success.  For purposes of Sections 2, 3 and 4, the “Company”
shall include Tier Technologies, Inc. and any of its subsidiaries, corporate
affiliates, and/or associated companies.

      2.   Proprietary and Confidential
Information.

          (a)     The
Employee agrees that all information and know-how, whether or not in writing, of
a private, secret, or confidential nature concerning the Company’s business
or

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

        financial
affairs (collectively, “Proprietary
Information”) is and shall be the exclusive property of the
Company.  By way of illustration, but not limitation, Proprietary
Information may include systems, software and codes, whether existing, in the
course of development, or being planned or proposed; customer and prospect
lists; contacts at or knowledge of customers or prospective customers, customer
accounts and other customer financial information; price lists and all other
pricing, marketing and sales information relating to the Company or any customer
or supplier of the Company; databases, modules, products, product improvements,
product enhancements, processes, methods, and techniques; patent and patent
applications; negotiation strategies and positions; operations, projects,
developments, and plans; research data and techniques; financial data; and
personnel data.  The Employee will not disclose any Proprietary
Information to others outside the Company or use the same for any unauthorized
purposes without written approval by an officer of the Company, either during or
at any time after the Employee’s employment with the Company, unless and until
such Proprietary Information has become public knowledge without fault by the
Employee.  While employed by the Company, the Employee will use the
Employee’s best efforts to prevent publication or disclosure of any confidential
or Proprietary Information concerning the business, products, processes, or
affairs of the Company.

      

      (b)     The
Employee agrees that all disks, files, documents, letters, memoranda, reports,
records, data, drawings, notebooks, program listings, or any other written,
photographic or other record containing Proprietary Information, whether created
by the Employee or others, that come into the Employee’s custody or possession,
shall be and are the exclusive property of the Company to be used only in the
performance of the Employee’s duties for the Company.  Upon
termination or cessation of the Employee’s employment with the Company for any
reason or at the Company’s request, the Employee agrees to return to the Company
any and all materials and 

      
        
          
          

        

        
          - 2
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        copies
thereof in the Employee’s custody, possession or control containing Proprietary
Information.

      

      (c)     The
Employee acknowledges that the Employee’s obligations with regard to Proprietary
Information set out in subsections 2(a) and 2(b) above extend to all
information, know-how, records and tangible property of customers of the Company
or suppliers to the Company or of any third party who may have disclosed or
entrusted the same to the Company or to the Employee in the course of the
Company’s business.

      3.   Developments.

      (a)     The
Employee will make full and prompt disclosure to the Company of all inventions,
creations, improvements, discoveries, methods, developments, software and works
of authorship, whether patentable or not, that are created, made, conceived or
reduced to practice by the Employee or under the Employee’s direction or jointly
with others during the Employee’s employment by the Company, whether or not
during normal working hours or on the premises of the Company (all of which are
collectively referred to in this Agreement as “Developments”).

      (b)     The
Employee agrees to assign and does hereby assign to the Company (or any person
or entity designated by the Company) all of the Employee’s right, title and
interest in and to all Developments and all related patents, patent
applications, copyrights and copyright applications.   However,
this subsection 3(b) shall not apply to Developments that do not relate to the
present or planned business or research and development of the Company and that
are made and conceived by the Employee not during normal working hours, not on
the Company’s premises and not using the Company’s tools, devices, equipment or
Proprietary Information.  The Employee understands that, to the extent
this Agreement shall be construed in accordance with the laws of any state that
precludes a requirement in an employee agreement to assign 

      
        
          
          

        

        
          - 3
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        certain
classes of inventions made by an employee, this subsection 3(b) shall be
interpreted not to apply to any invention that a court rules and/or the Company
agrees falls within such classes.  The Employee hereby also waives all
claims to moral rights in any Developments.

      

      (c)     The
Employee agrees to cooperate fully with the Company, both during and after the
Employee’s employment with the Company, with respect to the procurement,
maintenance and enforcement of copyrights, patents and other intellectual
property rights (both in the United States and foreign countries) relating to
Developments.  The Employee shall sign all papers, including, but not
limited to, copyright applications, patent applications, declarations, oaths,
formal assignments, assignments of priority rights and powers of attorney, that
the Company may deem necessary or desirable to protect its rights and interests
in any Development.  The Employee further agrees that if the Company
is unable, after reasonable effort, to secure the Employee’s signature on any
such papers, any executive officer of the Company shall be entitled to execute
any such papers as the Employee’s agent and attorney-in-fact, and the Employee
hereby irrevocably designates and appoints each executive officer of the Company
as the Employee’s agent and attorney-in-fact to execute any such papers on the
Employee’s behalf, and to take any and all actions as the Company may deem
necessary or desirable to protect its rights and interests in any Development
under the conditions described in this sentence.

      4.   Noncompetition and
Nonsolicitation.

      (a)     While
the Employee is employed by the Company and for a period of eighteen (18) months
following the termination or cessation of such employment for any reason (the
“Restricted Period”), the Employee will not directly or indirectly:

      
        	
                (1)  

              	
                In
      the geographical area where the Company does business or has done business
      at the time of the termination or cessation of the Employee’s
    

              

      

       

      
        
          
          

        

        
          - 4
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                    employment, engage in any
business or enterprise (whether as an owner, partner, officer, employee,
director, investor, lender, consultant, independent contractor or otherwise,
except as the holder of not more than one percent (1%) of the combined voting
power of the outstanding stock of a publicly-held company) that is competitive
with the Company’s business, including, but not limited to, any business or
enterprise that develops, designs, produces, markets, sells or renders any
product or service competitive with any product or service developed, designed,
produced, marketed, sold or rendered by the Company while the Employee was
employed by the Company;

       

      
        	
                (2)  

              	
                Either
      alone or in association with others, (i) solicit, recruit, or induce, or
      attempt to solicit, recruit, or induce, any employee of the Company to
      leave the employ of the Company, or (ii) recruit,
      solicit or hire as an employee or engage as an independent contractor, or
      attempt to recruit, solicit or hire as an employee or engage as an
      independent contractor, any person who was employed by the Company at any
      time during the period of the Employee’s employment with the Company,
      except for an individual whose employment with the Company ceased at least
      six (6) months earlier; or

              

      

       

      
        	
                (3)  

              	
                Either
      alone or in association with others, solicit, divert or take away, or
      attempt to solicit, divert or take away, the business or patronage of any
      of the clients, customers or accounts, or prospective clients, customers
      or 

              

      

       

      
        
          
          

        

        
          - 5
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                    accounts, of the Company that the
Employee contacted, solicited or served while the Company employed the
Employee.  The terms “client” and “customer” include any person, firm,
corporation, governmental department or agency, or other entity or any parent,
subsidiary, or affiliate thereof but excludes clients and customers who have had
no business relationship with the Company within the twelve (12) months
preceding the Employee’s proposed activity with respect to such client or
customer.

          
(b)     If
any court of competent jurisdiction finds any restriction set forth in this
Section 4 to be unenforceable because the restriction extends for too long
a period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.

      (c)     The
Employee agrees to provide a copy of this Agreement to all persons and entities
with whom the Employee seeks to be hired or do business before accepting
employment or engagement with any of them.

      (d)     If
the Employee violates the provisions of this Section 4, the Employee shall
continue to be held by the restrictions set forth in this Section 4 until a
period equal to the period of restriction has expired without any
violation.

      5.   Other
Agreements.

      The
Employee hereby represents that, except as the Employee has disclosed in writing
to the Company, the Employee is not bound by the terms of any agreement with any
previous employer or other party to refrain from using or disclosing any trade
secret or confidential or proprietary information in the course of the
Employee’s employment with the Company, to 

      
        
          
          

        

        
          - 6
-

          
            

          

        

        
          
          

        

        refrain
from competing, directly or indirectly, with the business of such previous
employer or other party, or to refrain from soliciting employees, customers or
suppliers of such previous employer or other party.  The Employee
further represents that the Employee’s performance of all of the terms of this
Agreement and the performance of the Employee’s duties as an employee of the
Company do not and will not breach any agreement to keep in confidence
proprietary information, knowledge or data acquired by the Employee in
confidence or in trust prior to the Employee’s employment with the
Company.  The Employee also represents that the Employee will not
disclose to the Company or induce the Company to use any confidential or
proprietary information or material belonging to any previous employer or
others.

      

      6.   United States Government
Obligations.

      The
Employee acknowledges that the Company from time to time may have agreements
with other persons or with the United States Government, or agencies thereof,
that impose obligations or restrictions on the Company regarding inventions made
during the course of work under such agreements or regarding the confidential
nature of such work.  The Employee agrees to be bound by all such
obligations and restrictions that are made known to the Employee and to take all
action necessary to discharge the obligations of the Company under such
agreements.

      7.   Not An Employment
Contract.

      The
Employee acknowledges that this Agreement does not constitute a contract of
employment and does not imply that the Company will continue the Employee’s
employment for any period of time.

      
        
          
          

        

        
          - 7
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      8.   General
Provisions.

      (a)     No
Conflict.  The Employee represents that the execution and
performance by him/her of this Agreement does not and will not conflict with or
breach the terms of any other agreement by which the Employee is
bound.

      (b)     Acknowledgements and
Equitable Remedies.  The Employee acknowledges that the
restrictions contained in this Agreement are necessary for the protection of the
business and goodwill of the Company and considers the restrictions to be
reasonable for such purpose.  The Employee agrees that any breach or
threatened breach of this Agreement will cause the Company substantial and
irrevocable damage that is difficult to measure.  Therefore, in the
event of any such breach or threatened breach, the Employee agrees that the
Company, in addition to such other remedies that may be available, shall have
the right to seek specific performance and injunctive relief without posting a
bond.  The Employee hereby waives the adequacy of a remedy at law as a
defense to such relief.

      (c)     Entire
Agreement.  This Agreement supersedes all prior agreements,
written or oral, between the Company and the Employee relating to the subject
matter of this Agreement.  This Agreement may not be modified, changed
or discharged in whole or in part, except by an agreement in writing signed by
an executive officer of the Company and the Employee.  The Employee
agrees that any change or changes in the Employee’s employment duties or
compensation after the signing of this Agreement shall not affect the validity
or scope of this Agreement.

      (d)     Severability.  The
invalidity or unenforceability of any provision of this Agreement shall not
affect or impair the validity or enforceability of any other provision of this
Agreement.

      
        
          
          

        

        
          - 8
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      (e)     Waiver.  No
delay or omission by the Company in exercising any right under this Agreement
will operate as a waiver of that or any other right.  A waiver or
consent given by the Company on any one occasion is effective only in that
instance and will not be construed as a bar to or waiver of any right on any
other occasion.

      (f)     Successor and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of both parties and their respective successors and assigns, including
any corporation or entity with which or into which the Company may be merged or
that may succeed to all or substantially all of its assets or business; provided, however, that the
obligations of the Employee are personal and shall not be assigned by the
Employee.

      (g)     Governing Law, Forum and
Jurisdiction.  This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia without
regard to conflicts of law provisions.  The dispute resolution
provisions of Section 22 of the Employee’s employment agreement with the
Company dated as of April 30, 2008 (the “Employment Agreement”) apply to this
Agreement, except to the extent that either party seeks injunctive relief to
enforce any provision of this Agreement, in which case that party may bring an
action, suit, or other legal proceeding in a court of competent jurisdiction.
Any such action, suit or other legal proceeding that is commenced to resolve any
matter arising under or relating to such injunctive relief shall be commenced
only in a court of the Commonwealth of Virginia (or, if appropriate, a federal
court located within the Commonwealth of Virginia), and the Company and the
Employee each consents to the jurisdiction of such a court.  The Company and the Employee each
hereby irrevocably waive any right to a trial by jury in any action, suit or
other legal proceeding arising under or relating to any provision of this
Agreement.

      
        
          
          

        

        
          - 9
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      (h)     Captions.  The
captions of the sections of this Agreement are for convenience of reference only
and in no way define, limit or affect the scope or substance of any section of
this Agreement.

      THE
EMPLOYEE ACKNOWLEDGES THAT HE/SHE HAS CAREFULLY READ THIS AGREEMENT AND
UNDERSTANDS AND AGREES TO ALL OF THE PROVISIONS IN THIS AGREEMENT.

       

      

       

      
        	 	 	 	 	
                TIER
      TECHNOLOGIES, INC.

              
	 Date:	 April
      30, 2008	 	
                 By:

              	
                 /s/Samuel
      Cabott                                                       

              
	 	 	 	 	 Samuel
      Cabot, III
	 	 	 	 	
                (print
      name and title)

              
	 	 	 	 	
                RONALD
      L. ROSSETTI, SR.

              
	 Date:	 April
      30, 2008	 	 	 /s/Ronald
      L. Rossetti, Sr.
	 	 	 	 	
                (Signature)

              

      

      

       

      

      

      
        
           

        

        
          - 10
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      EXHIBIT
D

      EXCISE TAX
GROSS-UP

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
D

      EXCISE TAX
GROSS-UP

       

       

      
        	
                1)  

              	
                Gross-Up Payment - If
      any payment or benefit received or to be received by the Executive from
      the Company pursuant to the terms of the Agreement to which this Exhibit D
      is attached or otherwise (the “Payments”)
      would be subject to the excise tax (the “Excise
      Tax”) imposed by Code Section 4999 as determined in accordance with
      this Exhibit D, the Company shall pay the Executive, at the time specified
      below, an additional amount (the “Gross-Up
      Payment”) such that the net amount that the Executive retains,
      after deduction of the Excise Tax on the Payments and any federal, state,
      and local income tax upon the Gross-Up Payment (but not upon the Payments)
      and the Excise Tax upon the Gross-Up Payment, and any interest, penalties,
      or additions to tax payable by the Executive with respect thereto, shall
      be equal to the total present value (using the applicable federal rate (as
      defined in section 1274(d) of the Code) in such calculation) of the
      Payments at the time such Payments are to be made. 

              

      

       

      
        	
                2)  

              	
                Calculations - For
      purposes of determining whether any of the Payments shall be subject to
      the Excise Tax and the amount of such excise
  tax,

              

      

       

      
        	
                a)  

              	
                The
      total amount of the Payments shall be treated as “parachute payments”
      within the meaning of section 280G(b)(2) of the Code, and all “excess
      parachute payments” within the meaning of section 280G(b))(1) of the Code
      shall be treated as subject to the excise tax, except to the extent that,
      in the written opinion of independent counsel selected by the Company and
      reasonably acceptable to the Executive (“Independent
      Counsel”), a Payment (in whole or in part) does not constitute a
      “parachute payment” within the meaning of section 280G(b)(2) of the Code,
      or such “excess parachute payments” (in whole or in part) are not subject
      to the Excise Tax;

              

      

       

      
        	
                b)  

              	
                The
      amount of the Payments that shall be subject to the Excise Tax shall be
      equal to the lesser of (i) the total amount of the Payments or (ii) the
      amount of “excess parachute payments” within the meaning of section
      280G(b)(l) of the Code (after applying clause (a), above);
    and

              

      

       

      
        	
                c)  

              	
                The
      value of any noncash benefits or any deferred payment or benefit shall be
      determined by Independent Counsel in accordance with the principles of
      section 280G(d)(3) and (4) of the
Code.

              

      

       

      
        	
                3)  

              	
                Tax Rates - For purposes
      of determining the amount of the Gross-Up Payment, the Executive shall be
      deemed to pay federal income taxes at the highest marginal rates of
      federal income taxation applicable to individuals in the calendar year in
      which the Gross-Up Payment is to be made and state and local income taxes
      at the highest marginal rates of taxation applicable to individuals as are
      in effect in the state and locality of the Executive's residence in the
      calendar year in which the Gross-Up Payment is to be made, net of the
      maximum reduction in federal income taxes that can be obtained from
      deduction of such state and local taxes, taking into
  

              

      

       

      
        
        

        
          

        

      

      
        
        

      

      account any limitations
applicable to individuals subject to federal income tax at the highest marginal
rates.

       

      
        	
                4)  

              	
                Time of Gross-Up
      Payments - The Gross-Up Payments provided for in this Exhibit D
      shall be made upon the earlier of (a) the payment to the Executive of any
      Payment or (b) the imposition upon the Executive, or any payment by the
      Executive, of any Excise Tax; provided that all such Gross-Up Payments
      shall be made prior to the end of the Executive's taxable year next
      following the taxable year in which the taxes are remitted to the taxing
      authority.

              

      

       

      
        	
                5)  

              	
                Adjustments to Gross-Up
      Payments - If it is established pursuant to a final determination
      of a court or an Internal Revenue Service proceeding or the written
      opinion of Independent Counsel that the Excise Tax is less than the amount
      previously taken into account hereunder, the Executive shall repay the
      Company, within 30 days of his receipt of notice of such final
      determination or opinion, the portion of the Gross-Up Payment attributable
      to such reduction (plus the portion of the Gross-Up Payment attributable
      to the Excise Tax and federal, state, and local income tax imposed on the
      Gross-Up Payment being repaid by the Executive if such repayment results
      in a reduction in Excise Tax or a federal, state, and local income tax
      deduction) plus any interest received by the Executive on the amount of
      such repayment, provided that if any such amount has been paid by the
      Executive as an Excise Tax or other tax, the Executive shall cooperate
      with the Company in seeking a refund of any tax overpayments, and the
      Executive shall not be required to make repayments to the Company until
      the overpaid taxes and interest thereon are refunded to the
      Executive.

              

      

       

      
        	
                6)  

              	
                Additional Gross-Up
      Payment - If it is established pursuant to a final determination of
      a court or an Internal Revenue Service proceeding or the written opinion
      of Independent Counsel that the Excise Tax exceeds the amount taken into
      account hereunder (including by reason of any payment the existence or
      amount of which cannot be determined at the time of the Gross-Up Payment),
      the Company shall make an additional Gross-Up Payment in respect of such
      excess within 30 days of the Company's receipt of notice of such final
      determination or opinion.

              

      

       

      
        	
                7)  

              	
                Change In Law or
      Interpretation - In the event of any change in or further
      interpretation of Section 280G or 4999 of the Code and the regulations
      promulgated thereunder, the Executive shall be entitled, by written notice
      to the Company, to request a written opinion of Independent Counsel
      regarding the application of such change or further interpretation to any
      of the foregoing, and the Company shall use its best efforts to cause such
      opinion to be rendered as promptly as
  practicable.

              

      

       

      
        	
                8)  

              	
                Fees And Expenses - All
      fees and expenses of Independent Counsel incurred in connection with this
      Exhibit D shall be borne by the
Company.

              

      

       

      
        	
                9)  

              	
                Survival - The Company's
      obligation to make a Gross-Up Payment with respect to Payments made or
      accrued before the end of the Term of Employment shall survive the Term of
      Employment.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	 
      

      

      
        	
                10)  

              	
                Defined Terms - Except
      where clearly provided to the contrary, all capitalized terms used in this
      Exhibit D shall have the definitions given to those terms in the Agreement
      to which this Exhibit D is
attached.

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