EX-99.1 2 dex991.htm FORM OF EMPLOYMENT SECURITY AGREEMENT EMPLOYMENT SECURITY AGREEMENT
Exhibit 99.1
This Employment Security Agreement (“Agreement”) between TIER TECHNOLOGIES, INC., (“Tier”) and (“Employee”) is entered into as of , 2006 (the “Effective Date”). The signatories hereto will be collectively referred to as the “Parties.”
WHEREAS, Tier wishes to provide retention incentives to certain of its executives; and
(a) “Change in Control” shall mean:
(i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than a trustee or other fiduciary holding securities of Tier under an employee benefit plan of Tier, becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of Tier representing 50% or more of (A) the outstanding shares of common stock of Tier or (B) the combined voting power of Tier’s then-outstanding securities;
(ii) Tier is party to a merger or consolidation, or series of related transactions, which results in the voting securities of Tier outstanding immediately prior thereto failing to continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving or another entity) at least fifty (50%) percent of the combined voting power of the voting securities of Tier or such surviving or other entity outstanding immediately after such merger or consolidation;
(iii) the sale or disposition of all or substantially all of Tier’s assets (or consummation of any transaction, or series of related transactions, having similar effect); or
(iv) the dissolution or liquidation of Tier.
(b) “Position Change” shall mean:
(i) a significant diminution of Employee’s assigned duties and responsibilities and/or any material diminution of the powers and authority associated with the position Employee holds with Tier immediately prior to a Change in Control. In order for such diminution of duties and responsibilities and/or powers and authority to constitute a Position Change within the meaning of this Agreement, Employee must deliver written notice to Tier specifying the diminution in assigned duties/responsibilities and/or powers/authority that
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Employee believes constitutes a Position Change, and Tier must fail to reverse the same within 30 days of receiving such notice;
(ii) Tier reduces Employee’s salary more than 5% below that in effect as of the date of the Change in Control; or
(iii) Tier requires Employee to relocate Employee’s principal business office or his principal place of residence outside the Washington D.C. Metropolitan Area, or assigns to Employee duties that would require such relocation;
(c) “Termination For Cause” shall mean Termination of Employee’s employment by Tier if, and only if, such termination is a result of one or more of the following:
(i) Employee’s fraud, embezzlement, or misappropriation of Tier’s property, or is the result of Employee’s criminal conduct that is materially injurious to the financial condition or business reputation of Tier or any of its subsidiaries or affiliates; or
(ii) Employee has materially and willfully breached his or her responsibilities or willfully failed to comply with Tier’s policies or the reasonable directives of his or her supervisor or Tier’s Board of Directors; but, in each case, only if Tier has given Employee written notice specifying the breach or failure to comply complained of, demanding that Employee remedy such breach or failure to comply and affording Employee an opportunity to be heard in connection therewith, and Employee either fails to remedy such alleged breach or fails to comply within 30 days from receipt of such written notice.
(iii) Employee has violated Tier’s policy prohibiting harassment in the workplace;
(iv) Employee has violated his or her Nondisclosure and Proprietary/Confidential Information and Non-Solicitation Agreement with Tier; or
(v) Employee has violated Tier’s Business Code of Conduct.
(d) “Termination Without Cause” shall mean any termination of Employee by Tier that is for any reason other than a Termination For Cause.
(e) “Resignation for Good Reason” shall mean a resignation by Employee as a result of and within sixty days after Employee receives notice of a Position Change.
(f) “Security Period” shall mean the period beginning with the effective date of any Change in Control and ending twelve (12) months after that effective date, except that for those Changes in Control described in paragraphs 1(a)(ii) and (1)(a)(iii) above, the Security Period shall begin on the date of shareholder approval of the Change in Control, and end twelve (12) months after the effective date of that Change in Control.
(g) “Term” shall mean the period of time commencing on the Effective Date and expiring on the date that is three (3) years after the Effective Date.
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Period; or (2) a Resignation for Good Reason that is based on a Position Change occurring during the Security Period, Employee shall be entitled to the continuation of his or her annual base salary, less standard deductions and withholdings, for a period of twelve (12) months. Annual base salary is defined as the salary in effect during the last regularly scheduled payroll period immediately preceding the Termination Without Cause or Resignation for Good Reason.
8. Governing Law. This Agreement shall be governed and interpreted in accordance with the laws of the State of Virginia, without regard to its conflicts of law principles.
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[employee name] |
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TIER TECHNOLOGIES, INC. |
By: |
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