UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. 1)
Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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Tier Technologies, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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PRELIMINARY COPY
TIER TECHNOLOGIES, INC.
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Keith S. Omsberg
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10780 Parkridge Boulevard
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Corporate Secretary
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Reston, Virginia 20191
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February XX, 2009
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Dear Stockholder:
You are invited to attend the Annual Meeting of Stockholders of Tier Technologies, Inc. on March
11, 2009 at 10:00 a.m. Eastern Time at Tiers headquarters located at 10780 Parkridge Boulevard,
Suite 400, Reston, Virginia 20191.
We consider the votes of all shareholders important, no matter how many or how few shares you may
own. Regardless of whether you plan to attend the annual meeting, we encourage you to submit your
proxy promptly, following the instructions on the enclosed
GOLD
proxy card. You may submit
your proxy by telephone, by Internet, or by mail.
Discovery Equity Partners (Discovery) has provided notice that it intends to nominate and solicit
proxies for an opposition slate of two nominees for election as directors at the Meeting.
THE
BOARD OF DIRECTORS URGES YOU NOT TO SIGN OR RETURN ANY PROXY CARD SENT TO YOU BY DISCOVERY.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF THE BOARD OF DIRECTORS
NOMINEES ON THE ENCLOSED
GOLD
PROXY CARD.
At the annual meeting, stockholders will elect directors, vote on the ratification of the selection
of Tiers independent registered public accounting firm, and consider a shareholder proposal
described in the enclosed proxy materials. We will also report on Tiers business. Stockholders
will have an opportunity to ask relevant questions.
Only stockholders of record at the close of business on January 16, 2009 are entitled to notice of,
to attend, and to vote at the annual meeting.
Your vote is extremely important. If you have questions or require any assistance with voting your
shares, please call our proxy solicitor, Laurel Hill Advisory Group, toll-free at (888) 742-1305.
By Order of the Board of Directors,
Keith S. Omsberg
Secretary
Reston, Virginia
February XX, 2009
TIER TECHNOLOGIES, INC.
10780 Parkridge Boulevard, Suite 400
Reston, Virginia 20191
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OF TIER TECHNOLOGIES, INC.
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TIME:
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10:00 a.m. Eastern Time on Wednesday, March 11, 2009.
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PLACE:
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Tier Technologies, Inc. corporate headquarters, 10780 Parkridge
Boulevard, Suite 400, Reston, Virginia 20191.
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ITEMS OF BUSINESS:
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(1) To elect nine directors;
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(2) To ratify the selection of McGladrey & Pullen, LLP as our
independent registered public accounting firm for the fiscal
year ending September 30, 2009;
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(3) To act on one shareholder proposal expected to come before
the meeting; and
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(4) To transact other business properly coming before the
meeting.
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WHO CAN VOTE:
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You can vote if you were a stockholder of record at the close of
business on January 16, 2009.
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Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be
Held on March 11, 2009.
The proxy statement and Tiers Annual Report on Form 10-K for fiscal year
2008, as amended on January XX, 2009, are available electronically at
http://materials.proxyvote.com/88650Q.
Our Board of Directors has nominated for election as directors the seven persons named in
Proposal One in the proxy statement accompanying this Notice, each of whom is currently serving as
a director of the Company. We believe that these individuals have the independence, knowledge, and
commitment to deliver value for Tier and its shareholders. Please note that Discovery Equity
Partners (Discovery) has provided notice that it intends to nominate two nominees for election as
directors at the annual meeting and solicit proxies for use at the annual meeting to vote in favor
of its own nominees. In addition, Giant Investment, LLC, an affiliate of Parthenon Capital
(collectively, Parthenon), has provided notice that it intends to nominate two nominees for
election as directors at the annual meeting (although it does not intend to solicit proxies from
any shareholder). We do not endorse the election of any of Discoverys or Parthenons nominees as
directors. You may receive proxy solicitation materials from Discovery or other persons or
entities affiliated with them, including an opposition proxy statement and proxy card.
YOUR BOARD
OF DIRECTORS URGES YOU NOT TO SIGN OR RETURN ANY PROXY CARD SENT TO YOU BY DISCOVERY OR ANY PERSON
OTHER THAN TIER.
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF THE BOARDS NOMINEES ON THE ENCLOSED
GOLD
PROXY CARD.
Even if you have previously signed a proxy card sent by another party, you have the right to change
your vote by using the enclosed
GOLD
proxy card to submit your proxy by telephone, by
Internet, or by signing, dating, and returning the enclosed
GOLD
proxy card in the
postage-paid envelope provided. Only the latest dated proxy you submit will be counted. We urge
you to disregard any proxy card sent to you by Discovery or any person other than Tier.
Keith S. Omsberg
Corporate Secretary
February XX, 2009
i
Table of Contents
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INFORMATION ABOUT THE PROXY MATERIALS AND OUR 2009 ANNUAL MEETING OF STOCKHOLDERS
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1
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GENERAL INFORMATION
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1
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1. WHO IS MAKING THIS SOLICITATION?
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1
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2. WHAT INFORMATION IS CONTAINED IN THESE MATERIALS?
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1
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3. WHEN AND WHERE IS THE ANNUAL MEETING?
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2
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4. WHAT PROPOSALS ARE BEING PRESENTED FOR STOCKHOLDER VOTE AT THE ANNUAL MEETING?
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2
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5. WHAT OTHER MATTERS MAY ARISE AT THE ANNUAL MEETING?
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3
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6. WHO WILL BEAR THE COST OF SOLICITING VOTES FOR THE ANNUAL MEETING?
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3
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7. WHAT DO I NEED FOR ADMISSION TO THE ANNUAL MEETING?
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3
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8. WHAT SHOULD I DO IF I RECEIVE A PROXY CARD FROM DISCOVERY?
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3
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9. HOW CAN I FIND TIERS PROXY MATERIALS AND ANNUAL REPORT ON THE INTERNET?
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3
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10. WHOM SHOULD I CALL IF I HAVE QUESTIONS OR NEED ADDITIONAL COPIES OF THE PROXY
MATERIALS?
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4
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VOTING MECHANICS
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4
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11. WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING?
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4
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12. WHAT IS THE RECORD DATE AND WHAT DOES IT MEAN?
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4
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13. HOW CAN I VOTE MY SHARES OF COMMON STOCK?
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4
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14. HOW CAN I REVOKE A PROXY OR CHANGE MY VOTING INSTRUCTIONS?
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5
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15. WILL MY SHARES BE VOTED IF I DO NOT PROVIDE INSTRUCTIONS TO MY BROKER?
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5
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16. WHO WILL COUNT THE VOTES?
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5
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VOTING INFORMATION
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6
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17. WHAT ARE THE VOTING CHOICES WHEN VOTING ON PROPOSAL ONE, THE ELECTION OF DIRECTORS?
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6
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18. WHAT VOTE IS NEEDED TO ELECT THE DIRECTORS?
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6
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19. WHAT ARE THE VOTING CHOICES WHEN VOTING ON PROPOSAL TWO, THE RATIFICATION OF THE
SELECTION OF MCGLADREY & PULLEN, LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM?
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6
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20. WHAT VOTE IS NEEDED TO RATIFY THE SELECTION OF MCGLADREY & PULLEN, LLP AS OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM?
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7
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21. WHAT ARE THE VOTING CHOICES WHEN VOTING ON PROPOSAL THREE, THE SHAREHOLDER
PROPOSAL?
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7
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22. WHAT VOTE IS NEEDED TO APPROVE THE SHAREHOLDER PROPOSAL?
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7
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23. HOW MANY VOTES MUST BE PRESENT TO HOLD THE ANNUAL MEETING?
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7
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24. WHAT IF A QUORUM IS NOT PRESENT AT THE MEETING?
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7
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25. WHAT IF I RETURN MY GOLD PROXY CARD BUT DO NOT GIVE VOTING INSTRUCTIONS?
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7
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26. WHAT IF OTHER MATTERS ARE VOTED ON AT THE MEETING?
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27. WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY OR VOTING INSTRUCTION CARD?
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8
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28. WHERE CAN I FIND THE VOTING RESULTS OF THE ANNUAL MEETING?
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8
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STOCK OWNERSHIP
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9
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CORPORATE GOVERNANCE MATTERS
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10
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MEETING AND COMMITTEES OF THE BOARD OF DIRECTORS
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13
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PROPOSAL ONE: ELECTION OF DIRECTORS
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15
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REMOVAL OF DIRECTORS
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18
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COMPENSATION COMMITTEE REPORT
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18
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ii
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
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19
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COMPENSATION DISCUSSION AND ANALYSIS
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19
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EXECUTIVE COMPENSATION
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29
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SUMMARY COMPENSATION TABLE
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29
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FISCAL 2008 GRANTS OF PLAN-BASED AWARDS
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32
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OUTSTANDING EQUITY AWARDS AT 2008 FISCAL YEAR-END
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33
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FISCAL 2008 OPTION EXERCISES AND STOCK VESTED
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35
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DIRECTOR COMPENSATION
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40
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REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
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42
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PRINCIPAL ACCOUNTING FEES AND SERVICES
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42
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PROPOSAL TWO: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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43
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PROPOSAL THREE: SHAREHOLDER PROPOSAL
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43
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OTHER MATTERS
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47
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ADDITIONAL INFORMATION
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47
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APPENDIX A
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48
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iii
PRELIMINARY COPY
TIER TECHNOLOGIES, INC.
10780 Parkridge Boulevard, Suite 400
Reston, Virginia 20191
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 11, 2009
This proxy statement is furnished in connection with the solicitation by the Board of Directors of
Tier Technologies, Inc., a Delaware corporation (Tier, the Company, we, us, or our), of
proxies for use in voting at the 2009 Annual Meeting of Stockholders to be held at Tiers
headquarters located at 10780 Parkridge Boulevard, Suite 400, Reston, Virginia 20191, on March 11,
2009, at 10:00 a.m., local time, and any adjournment or postponement thereof. On or about February
XX, 2009, we began mailing this proxy statement, the enclosed
GOLD
proxy card, and the
Companys Annual Report on Form 10-K for the fiscal year ended September 30, 2008, as amended on
January XX, 2009, to shareholders entitled to vote at the annual meeting.
We have received notice from Discovery Equity Partners (Discovery) of its intention to nominate
two nominees (collectively, the Discovery Nominees) for election to the Companys Board of
Directors at the annual meeting. The Discovery Nominees are not endorsed by our Board of
Directors. We urge shareholders NOT to vote any proxy card that you may receive from Discovery.
The Company has also received notice from Giant Investment, LLC, an affiliate of Parthenon Capital
(collectively, Parthenon), of its intention to nominate two nominees (collectively, the
Parthenon Nominees) for election to the Companys Board of Directors at the annual meeting. The
Parthenon Nominees are not endorsed by our Board of Directors. Parthenon has represented that it
does not intend to solicit proxies for its nominees, but in the event that Parthenon does solicit
proxies, we urge shareholders NOT to vote any proxy card that you may receive from Parthenon.
Our Board of Directors urges you to vote
FOR ALL
of our nominees for director.
We are not responsible for the accuracy of any information contained in any proxy solicitation
materials filed or disseminated by, or on behalf of, any other party or any other statements that
any other party may otherwise make.
INFORMATION ABOUT THE PROXY MATERIALS AND OUR 2009 ANNUAL MEETING OF STOCKHOLDERS
GENERAL INFORMATION
1.
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WHO IS MAKING THIS SOLICITATION?
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The Board of Directors, or Board, is soliciting your proxy for use at the Annual Meeting of
Stockholders of Tier Technologies, Inc. or at any adjournment or postponement of the annual
meeting. The Board is providing these proxy solicitation materials to give you information for
use in determining how to vote in connection with the annual meeting.
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2.
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WHAT INFORMATION IS CONTAINED IN THESE MATERIALS?
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The information included in this proxy statement relates to the proposals to be voted on at the
annual meeting, the voting process, the compensation of directors and our most highly paid
executive
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officers, and certain other required information. Our Annual Report on Form 10-K for the year
ended September 30, 2008, as amended, which includes the Companys audited consolidated
financial statements, is also enclosed.
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3.
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WHEN AND WHERE IS THE ANNUAL MEETING?
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The Annual Meeting of Stockholders of Tier Technologies, Inc. will be held on March 11, 2009 at
10:00 a.m. Eastern Time, at Tiers headquarters located at 10780 Parkridge Boulevard, Suite 400,
Reston, Virginia 20191.
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4.
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WHAT PROPOSALS ARE BEING PRESENTED FOR STOCKHOLDER VOTE AT THE ANNUAL MEETING?
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Three proposals are scheduled for voting at the annual meeting:
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PROPOSAL ONE. Election of Directors:
THE BOARD RECOMMENDS THAT YOU VOTE FOR ITS NOMINEES: CHARLES W. BERGER, SAMUEL CABOT
III, JOHN J. DELUCCA, MORGAN P. GUENTHER, PHILIP G. HEASLEY, DAVID A. POE, AND RONALD L.
ROSSETTI, FOR SERVICE IN THE ENSUING YEAR AND UNTIL SUCCESSORS ARE ELECTED.
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You can find information about the Boards nominees, as well as information about the Board, its
committees, and other related matters, beginning on page 13. Information regarding director
compensation can be found beginning on page 40.
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PROPOSAL TWO. Ratification of Selection of McGladrey & Pullen, LLP:
THE BOARD RECOMMENDS THAT YOU VOTE TO RATIFY THE SELECTION OF MCGLADREY & PULLEN, LLP AS
OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING
SEPTEMBER 30, 2009.
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You can find information about Tiers relationship with McGladrey & Pullen, LLP beginning on
page 42.
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PROPOSAL THREE. Shareholder Proposal:
THE BOARD RECOMMENDS THAT YOU VOTE AGAINST A SHAREHOLDER PROPOSAL, WHICH REQUESTS THAT
THE BOARD TAKE TWO SEPARATE ACTIONS: (1) ELIMINATE OUR SHAREHOLDER RIGHTS PLAN AND (2)
REVISE OUR BYLAWS TO PERMIT THE HOLDERS OF 10% OF OUR COMMON STOCK TO CALL SPECIAL
MEETINGS OF SHAREHOLDERS.
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You can find information about the shareholder proposal beginning on page 43. Because the
shareholder proposal presents a non-binding resolution, we will not be required to take the
requested action if the proposal is approved. However, if shareholders approve the proposal, we
will reevaluate our shareholder rights plan and the bylaw regarding special meetings in light of
the vote.
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For the shareholder proposal to be properly presented at the annual meeting, the shareholder
that submitted the proposal (or a qualified representative of that shareholder) must appear at
the annual meeting to present the proposal. For these purposes, to be considered a qualified
representative of a shareholder, a person must be a duly authorized officer, manager, or partner
of that shareholder or must be authorized by a writing executed by the shareholder or an
electronic transmission delivered by the shareholder to act for the shareholder as proxy at the
annual meeting, and such person must produce the writing or electronic transmission, or a
reliable reproduction of the writing or electronic transmission, at the annual meeting.
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We will also consider any other business that properly comes before the annual meeting.
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5.
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WHAT OTHER MATTERS MAY ARISE AT THE ANNUAL MEETING?
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We do not know of any other matters that will come before the shareholders at the annual
meeting. The Chairman of the annual meeting may refuse to allow presentation of a proposal or a
nomination for the Board if the proposal or nomination was not properly submitted. The
requirements for properly submitting proposals and nominations for this years annual meeting
were described in our proxy statement for the 2008 annual meeting and are similar to those
described on page 47 for next years meeting.
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6.
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WHO WILL BEAR THE COST OF SOLICITING VOTES FOR THE ANNUAL MEETING?
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Tier is making this solicitation of proxies and will bear all related costs. We will conduct
the solicitation by mail, personally, telephonically, through the Internet, or by facsimile
through our officers, directors, and employees identified on Appendix A, none of whom will
receive additional compensation for assisting with the solicitation. We may also solicit
shareholders through press releases issued by the Company, advertisements in periodicals, and
postings on the Companys website. We have also retained Laurel Hill Advisory Group to assist
in the solicitation of proxies, for a fee estimated to be approximately $8,500 plus
out-of-pocket expenses. In addition, we have agreed to indemnify Laurel Hill against certain
liabilities arising out of or in connection with the engagement. Laurel Hill has advised us
that approximately 20 of its employees will be involved in the proxy solicitation by Laurel Hill
on behalf of Tier.
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7.
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WHAT DO I NEED FOR ADMISSION TO THE ANNUAL MEETING?
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You are entitled to attend the annual meeting only if you are a shareholder of record or a
beneficial owner of Tier stock as of the close of business on January 16, 2009, or you hold a
valid proxy for the annual meeting. If you are the shareholder of record, your name will be
verified against the list of shareholders of record prior to your admittance to the annual
meeting. You should be prepared to present photo identification for admission. If you hold
your shares in street name, you should provide proof of beneficial ownership on the record date,
such as a brokerage account statement showing that you owned Tier common stock as of the record
date, a copy of the
GOLD
voting instruction card provided by your broker, bank, or other
nominee, or other similar evidence of ownership as of the record date, as well as your photo
identification, for admission. If you do not provide photo identification or comply with the
other procedures outlined above upon request, you will not be admitted to the annual meeting.
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8.
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WHAT SHOULD I DO IF I RECEIVE A PROXY CARD FROM DISCOVERY?
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Discovery has provided notice that it intends to nominate two nominees for election as directors
at the annual meeting and solicit proxies for use at the annual meeting to vote in favor of its
nominees. You may receive proxy solicitation materials from Discovery, including an opposition
proxy statement and proxy card.
OUR BOARD OF DIRECTORS URGES YOU NOT TO SIGN OR RETURN ANY
PROXY CARD SENT TO YOU BY DISCOVERY.
Even if you have previously signed a proxy card sent by
Discovery, you have the right to change your vote by following the instructions on the
GOLD
proxy card to submit your proxy by telephone or by Internet or by signing, dating,
and mailing the enclosed
GOLD
proxy card in the postage-paid envelope provided. Only
the latest dated proxy you submit will be counted. We urge you to disregard any proxy card sent
to you by Discovery or any person other than Tier.
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9.
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HOW CAN I FIND TIERS PROXY MATERIALS AND ANNUAL REPORT ON THE INTERNET?
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Our proxy statement and Annual Report on Form 10-K for fiscal year 2008, as amended on January
XX, 2009, are available electronically at
http://materials.proxyvote.com/88650Q
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3
10.
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WHOM SHOULD I CALL IF I HAVE QUESTIONS OR NEED ADDITIONAL COPIES OF THE PROXY MATERIALS?
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If you have questions, require any assistance with voting your shares, or need additional copies
of this proxy statement, please call our proxy solicitor, Laurel Hill Advisory Group, toll-free
at (888) 742-1305.
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VOTING MECHANICS
11.
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WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING?
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Only holders of record of shares of our common stock at the close of business on January 16,
2009, or the record date, are entitled to vote at the annual meeting, or at adjournments or
postponements of the annual meeting. As of the record date there were 19,734,863 shares of our
common stock outstanding and entitled to vote.
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Except in connection with Proposal One (the election of directors), each share of common stock
is entitled to one vote for each matter to be voted on at the annual meeting. In connection
with the election of directors, each share is entitled to nine votes, one vote for each board
seat that is being elected. The holders of a majority of the shares of common stock outstanding
and entitled to vote at the annual meeting will constitute a quorum for the transaction of
business at the annual meeting. Abstentions and broker non-votes will be counted towards a
quorum, but will not be counted in determining whether a proposal is approved.
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12.
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WHAT IS THE RECORD DATE AND WHAT DOES IT MEAN?
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The record date is January 16, 2009. Holders of common stock at the close of business on the
record date are entitled to receive notice of the meeting and to vote at the meeting and any
adjournments or postponements of the meeting.
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13.
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HOW CAN I VOTE MY SHARES OF COMMON STOCK?
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There are four ways to vote for the Boards nominees and on the other matters as set forth in
this proxy statement:
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Telephone:
If your proxy card or voting instruction card provides
instructions for proxy authorization by telephone, follow the instructions on your
proxy card or voting instruction card;
OR
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Mail:
Mark, sign, and date your proxy card and return it to: Tier
Technologies, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717;
OR
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|
|
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|
In-Person:
If you are a record holder or have obtained a valid proxy from
the record holder, mark, sign and submit a ballot during the 2009 Annual Meeting of
Stockholders on March 11, 2009 at 10:00 a.m. Eastern Time;
OR
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|
Internet
:
Follow the instructions for Internet proxy authorization on your
proxy card or voting instruction card.
|
|
|
If you deliver a properly executed written proxy, or submit a properly completed proxy by
telephone or by Internet, that proxy will be voted at the annual meeting in accordance with the
directions given in the proxy, unless you revoke the proxy before the annual meeting. The
proxies also may be voted at any adjournments or postponements of the annual meeting.
|
4
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|
If you want to specify how your votes are cumulated you must do so in writing with a proxy card
or, if you are a record holder of Tier stock or have obtained a valid proxy from the record
holder, in person at the annual meeting.
|
14.
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HOW CAN I REVOKE A PROXY OR CHANGE MY VOTING INSTRUCTIONS?
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|
You can revoke a proxy before the close of voting at the annual meeting by:
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|
Giving written notice to Tiers Corporate Secretary located at 10780 Parkridge
Boulevard, Suite 400, Reston, Virginia 20191;
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Submitting a new proxy card bearing a date later than your last proxy card;
|
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|
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|
Following the instructions for Internet proxy authorization that appear on the
proxy card;
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|
Following the instructions that appear on the proxy card for proxy authorization by
telephone; or
|
|
|
|
|
If you are a record holder of Tier stock or have obtained a valid proxy from the
record holder, attending the annual meeting and voting in person. Attendance at the
annual meeting will not, by itself, revoke a proxy.
|
15.
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|
WILL MY SHARES BE VOTED IF I DO NOT PROVIDE INSTRUCTIONS TO MY BROKER?
|
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|
If you are the beneficial owner of shares held in street name by a broker, the broker, as the
record holder of the shares, is required to vote those shares in accordance with your
instructions. If you do not give instructions to the broker, the broker will be entitled to
vote the shares with respect to discretionary proposals but will not be permitted to vote the
shares with respect to non-discretionary proposals (those shares are treated as broker
non-votes). The shareholder proposal is a non-discretionary proposal.
|
|
|
|
If Discovery solicits proxies to elect Discoverys nominees to the Board at the annual meeting,
then the election of directors will also be a non-discretionary proposal for any brokerage
accounts solicited by Discovery. As a result, if your shares are held in street name and
Discovery provides you with proxy solicitation materials through your broker and you do not
provide instructions as to how your shares are to be voted in the election of directors, your
broker or other nominee will not be able to vote your shares in the election of directors, and
your shares will not be voted for any of Tiers nominees. We urge you to provide instructions
to your broker or nominee so that your votes may be counted on this important matter. We urge
you to vote your shares by following the instructions provided on the enclosed
GOLD
proxy card and returning the
GOLD
proxy card to your bank, broker, or other nominee to
ensure that your shares will be voted on your behalf.
|
16.
|
|
WHO WILL COUNT THE VOTES?
|
|
|
A representative of IVS Associates, Inc., an independent voting services company, will tabulate
the votes and act as Inspector of Elections.
|
5
VOTING INFORMATION
17.
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|
WHAT ARE THE VOTING CHOICES WHEN VOTING ON PROPOSAL ONE, THE ELECTION OF DIRECTORS?
|
|
|
Shareholders may use the enclosed
GOLD
proxy card to:
|
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|
Vote FOR (in favor of) all of the Boards nominees;
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|
WITHHOLD votes from all nominees; or
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WITHHOLD votes from specific Board nominees; or
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|
Provide instructions for cumulating votes for one or more specific
Board nominees.
|
18.
|
|
WHAT VOTE IS NEEDED TO ELECT THE DIRECTORS?
|
|
|
Directors will be elected by the affirmative vote of a plurality of votes cast by shareholders
entitled to vote on the matter, which means that the nine director nominees with the highest
number of affirmative votes will be elected.
|
|
|
|
Tiers certificate of incorporation gives shareholders the right to cumulate their votes. This
means that a shareholder has the right to give any one nominee a number of votes equal to the
number of directors to be elected multiplied by the number of shares the shareholder would
otherwise be entitled to vote, or to distribute such votes among as many nominees (up to the
number of persons to be elected) as the shareholder may wish. There are no conditions
precedent to cumulative voting by Tier shareholders. Pursuant to Delaware law, the proxies are
agents for the shareholders; if you specify how your votes are to be cumulated among the
Boards nominees, the proxies named on the proxy card will cast your votes as you specify.
Shareholders may specify how their votes are to be cumulated with respect to the Boards
nominees by giving instructions on the enclosed form of proxy as to how the votes are to be
cumulated or, if the shareholder is a record holder or has obtained a valid proxy from the
record holder, by voting in person at the annual meeting.
|
|
|
|
Unless you specify how your votes are to be cumulated among the Boards nominees, the proxy
solicited by the Board authorizes the proxies named on the proxy card to cumulate votes that
you are entitled to cast at the annual meeting in connection with the election of directors;
provided that the proxies will not cumulate votes for any nominee from whom you have withheld
authority to vote. To specify different directions with regard to cumulative voting, including
to direct that the proxy holders cumulate votes with respect to a specific Board nominee or
nominees, you must mark the appropriate box on the front of the proxy card and write your
instructions on the reverse side.
|
19.
|
|
WHAT ARE THE VOTING CHOICES WHEN VOTING ON PROPOSAL TWO, THE RATIFICATION OF THE SELECTION OF
MCGLADREY & PULLEN, LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM?
|
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|
Vote FOR (in favor of) the ratification;
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|
Vote AGAINST the ratification; or
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|
ABSTAIN from voting on the ratification.
|
6
20.
|
|
WHAT VOTE IS NEEDED TO RATIFY THE SELECTION OF MCGLADREY & PULLEN, LLP AS OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM?
|
|
|
The selection of the independent registered public accounting firm will be ratified if it
receives the affirmative vote of a majority of the shares voting on the matter.
|
21.
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|
WHAT ARE THE VOTING CHOICES WHEN VOTING ON PROPOSAL THREE, THE SHAREHOLDER PROPOSAL?
|
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|
Vote FOR (in favor of) the proposal;
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|
Vote AGAINST the proposal; or
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|
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|
ABSTAIN from voting on the proposal.
|
22.
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|
WHAT VOTE IS NEEDED TO APPROVE THE SHAREHOLDER PROPOSAL?
|
|
|
The shareholder proposal will be approved if it receives the affirmative vote of a majority of
the shares voting on the matter.
|
23.
|
|
HOW MANY VOTES MUST BE PRESENT TO HOLD THE ANNUAL MEETING?
|
|
|
A majority of the shares of common stock outstanding and entitled to vote at the annual meeting
that are either present in person or represented by proxy will constitute a quorum for the
annual meeting. Abstentions and broker non-votes are included in determining the number of
votes present, but will not be counted in determining whether a proposal is approved.
|
24.
|
|
WHAT IF A QUORUM IS NOT PRESENT AT THE MEETING?
|
|
|
If a quorum is not present at the scheduled time of the annual meeting, we may adjourn the
meeting, either with or without the vote of the shareholders. If we propose to have the
shareholders vote whether to adjourn the meeting, the proxyholders will exercise their
discretion to vote all shares for which they have authority in favor of the adjournment.
|
25.
|
|
WHAT IF I RETURN MY
GOLD
PROXY CARD BUT DO NOT GIVE VOTING INSTRUCTIONS?
|
|
|
If you sign your
GOLD
proxy card but do not give voting instructions, the shares
represented by that proxy will be voted as recommended by the Board. The Board recommends a
vote
FOR
the election of the seven director nominees named in this Proxy Statement,
FOR
Proposal Two, the ratification of McGladrey & Pullen, LLP as our independent registered public
accounting firm for 2009, and
AGAINST
the shareholder proposal under Proposal Three. Unless you
specify how your votes are to be cumulated among the Boards nominees, the
GOLD
proxy
card authorizes the proxies named on the card to cumulate votes that you are entitled to cast at
the annual meeting at their discretion among the Boards nominees in connection with the
election of directors.
|
26.
|
|
WHAT IF OTHER MATTERS ARE VOTED ON AT THE MEETING?
|
|
|
If any other matters are properly presented at the Meeting for consideration, the persons named
as proxies in the enclosed
GOLD
proxy card will have discretion to vote on those matters
for you. On the date we filed this Proxy Statement with the Securities and Exchange Commission,
the Board did not know of any other matter to be raised at the Meeting.
|
7
27.
|
|
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY OR VOTING INSTRUCTION CARD?
|
|
|
If your shares are registered differently or are held in more than one account, you will receive
a
GOLD
proxy card or
GOLD
voting instruction card for each account. To ensure
that all of your shares are voted, please use all the
GOLD
proxy cards and
GOLD
voting instruction cards you receive to submit your proxy for your shares by telephone or by
Internet or complete, sign, date, and return a
GOLD
proxy card or
GOLD
voting
instruction card for each account.
|
|
|
|
As previously noted, Discovery has provided notice that it intends to nominate two nominees for
election as directors at the annual meeting and solicit proxies for use at the annual meeting to
vote in favor of its nominees. As a result, you may receive proxy cards from both Discovery and
the Company. To ensure shareholders have the Companys latest proxy information and materials
to vote, the Board of Directors expects to conduct multiple mailings prior to the date of the
annual meeting, each of which will include a
GOLD
proxy card regardless of whether or
not you have previously submitted your proxy. Only the latest dated proxy you submit will be
counted.
|
|
|
|
OUR BOARD OF DIRECTORS URGES YOU NOT TO SIGN OR RETURN ANY PROXY CARD SENT TO YOU BY DISCOVERY.
Even if you have previously signed a proxy card sent by Discovery, you have the right to change
your vote by re-submitting your proxy by telephone or by Internet or by signing, dating, and
returning the enclosed
GOLD
proxy card in the postage-paid envelope provided. Only the
latest dated proxy you submit will be counted. We urge you to disregard any proxy card sent to
you by Discovery.
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28.
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|
WHERE CAN I FIND THE VOTING RESULTS OF THE ANNUAL MEETING?
|
|
|
Tier will publish final results of the voting in our quarterly report on Form 10-Q for the
second quarter of fiscal 2009, if we have not published a current report on Form 8-K containing
such information at an earlier date. You will be able to read and print a copy of the Form 10-Q
or Form 8-K on our website,
http://www.tier.com
, by choosing Investor Relations,
Financial Information, and SEC Filings. You will also be able find the report by searching the
SEC EDGAR filings at
http://www.sec.gov
.
|
8
STOCK OWNERSHIP
Directors and Executive Officers
The following table sets forth certain information regarding the ownership of our common stock as
of January 16, 2009 by: (i) each director and director nominee; (ii) each of the named executive
officers (as set forth in the Summary Compensation Table); and (iii) all executive officers and
directors of Tier as a group. Unless otherwise indicated, beneficial ownership is direct and the
person indicated has sole voting and investment power.
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|
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Common stock beneficially owned
|
Name of beneficial owner
(1)
|
|
Total number of shares
|
|
Percent of class
(2)
|
|
Charles W. Berger
|
|
|
140,000
|
(3)
|
|
|
*
|
|
Samuel Cabot III
|
|
|
214,810
|
(4)
|
|
|
1.1
|
%
|
John J. Delucca
|
|
|
40,000
|
(5)
|
|
|
*
|
|
Morgan P. Guenther
|
|
|
151,000
|
(6)
|
|
|
*
|
|
Philip G. Heasley
|
|
|
10,002
|
(7)
|
|
|
*
|
|
David A. Poe
|
|
|
6,668
|
(8)
|
|
|
*
|
|
James R. Stone
|
|
|
38,337
|
(9)
|
|
|
*
|
|
Steven M. Beckerman
|
|
|
|
|
|
|
*
|
|
Kevin C. Connell
|
|
|
77,400
|
(10)
|
|
|
*
|
|
David E. Fountain
|
|
|
|
|
|
|
*
|
|
Ronald W. Johnston
|
|
|
|
|
|
|
*
|
|
Michael A. Lawler
|
|
|
131,704
|
|
|
|
*
|
|
Keith S. Omsberg
|
|
|
21,900
|
(11)
|
|
|
*
|
|
Ronald L. Rossetti
|
|
|
442,365
|
(12)
|
|
|
2.2
|
%
|
Deanne M. Tully
|
|
|
|
|
|
|
*
|
|
All directors and executive officers as a group (13 persons)
|
|
|
1,142,482
|
(13)
|
|
|
5.5
|
%
|
|
|
|
*
|
|
Less than 1%
|
|
(1)
|
|
Address: 10780 Parkridge Blvd, Suite 400, Reston, Virginia 20191.
|
|
(2)
|
|
The percentages shown are based on 19,734,863 shares of common stock outstanding as of January 16, 2009.
|
|
(3)
|
|
Consists entirely of shares issuable upon the exercise of options exercisable on or before March 17, 2009.
|
|
(4)
|
|
Includes 195,000 shares issuable upon the exercise of options exercisable on or before March 17, 2009.
|
|
(5)
|
|
Consists entirely of shares issuable upon the exercise of options exercisable on or before March 17, 2009.
|
|
(6)
|
|
Includes 150,000 shares issuable upon the exercise of options exercisable on or before March 17, 2009.
|
|
(7)
|
|
Consists entirely of shares issuable upon the exercise of options exercisable on or before March 17, 2009.
|
|
(8)
|
|
Consists entirely of shares issuable upon the exercise of options exercisable on or before March 17, 2009.
|
|
(9)
|
|
Consists entirely of shares issuable upon the exercise of options exercisable on or before March 17, 2009.
|
|
(10)
|
|
Consists entirely of shares issuable upon the exercise of options exercisable on or before March 17, 2009.
|
|
(11)
|
|
Consists entirely of shares issuable upon the exercise of options exercisable on or before March 17, 2009.
|
|
(12)
|
|
Includes 415,000 shares issuable upon the exercise of options exercisable on or before March 17, 2009.
|
|
(13)
|
|
Includes 1,094,307 shares issuable upon the exercise of options exercisable on or before March 17, 2009.
|
Equity Compensation Plan Information
The following table provides information about the securities authorized for issuance under our
equity compensation plan as of September 30, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of securities
|
|
|
|
|
|
|
to be issued upon
|
|
Weighted-average
|
|
Number of securities
|
|
|
exercise of
|
|
exercise price of
|
|
remaining available for
|
|
|
outstanding options,
|
|
outstanding
|
|
future issuance under
|
|
|
warrant and rights (in
|
|
options, warrants
|
|
equity compensation
|
Plan category
|
|
thousands)
|
|
and rights ($)
|
|
plans (in thousands)
|
|
Equity compensation plans
|
|
|
|
|
|
|
|
|
|
|
|
|
Approved by security holders
|
|
|
2,702
|
|
|
$
|
9.07
|
|
|
|
1,038
|
|
Not approved by security holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2,702
|
|
|
$
|
9.07
|
|
|
|
1,038
|
|
|
9
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, or the Exchange Act, requires our directors
and executive officers, and persons who beneficially own more than ten percent of our common
stock, to file with the Securities and Exchange Commission, or the SEC, initial reports of
beneficial ownership and reports of changes in beneficial ownership of our common stock.
Officers, directors and holders of greater than ten percent of our common stock are required
by SEC regulations to furnish us with copies of all Section 16(a) forms they file. To our
knowledge, based solely on a review of copies of such reports furnished to us and written
representations that no other reports were required, during the fiscal year ended
September 30, 2008, our officers, directors and greater than ten percent beneficial owners
complied with all Section 16(a) filing requirements, with the exception of Ronald L. Rossetti
and Philip G. Heasley. Mr. Rossetti filed one late Form 4, which related to one transaction.
Mr. Heasley filed one late Form 3 and one late Form 4, which related to one transaction.
Significant Stockholders
The following table lists certain persons known by Tier to own beneficially more than five
percent of Tiers outstanding shares of common stock as of January 16, 2009.
|
|
|
|
|
|
|
|
|
|
|
Amount and nature of
|
|
|
Name of beneficial owner
|
|
beneficial ownership
|
|
Percent of class
|
Wells Fargo & Company
(1)
|
|
|
2,689,293
|
|
|
|
13.6
|
%
|
Discovery Group I, LLC
(2)
|
|
|
1,957,563
|
|
|
|
9.9
|
%
|
Heartland Advisors, Inc.
(3)
|
|
|
1,891,430
|
|
|
|
9.6
|
%
|
Giant Investment, LLC
(4)
|
|
|
1,799,322
|
|
|
|
9.1
|
%
|
Dimensional Fund Advisors
(5)
|
|
|
1,764,020
|
|
|
|
8.9
|
%
|
|
|
|
(1)
|
|
Based solely on information contained in a Schedule 13G filed with the SEC
on January 23, 2009 by Wells Fargo & Company and its subsidiary, Wells Capital
Management Incorporated. The address for Wells Fargo & Company is 420
Montgomery Street, San Francisco, California 94104. The address for Wells
Capital Management Incorporated is 525 Market Street, San Francisco, California
94105. This table reflects the shares of common stock owned by Wells Fargo &
Company and Wells Capital Management Incorporated as of December 31, 2008.
|
|
(2)
|
|
Address: 191 North Wacker Drive, Suite 1685, Chicago, Illinois 60606.
Based solely on information contained in a Schedule 13D/A filed with the SEC by
Discovery Group I, LLC on December 4, 2008. Discovery Group I, LLC is the
general partner of Discovery Equity Partners, L.P. Discovery Equity Partners,
L.P. beneficially owns 1,684,608 shares of common stock and Discovery Group I,
LLC beneficially owns 1,957,563 shares of common stock. In addition, Daniel J.
Donoghue and Michael R. Murphy are the managing members of Discovery Group I,
LLC and may be deemed to beneficially own 1,957,563 shares of common stock.
|
|
(3)
|
|
Address: 789 North Water Street, Milwaukee, Wisconsin 53202. Based
solely on information contained in a Schedule 13G/A filed with the SEC by
Heartland Advisors, Inc. on February 8, 2008. This table reflects the shares
of common stock that may be deemed beneficially owned by Heartland Advisors,
Inc. as of December 31, 2007.
|
|
(4)
|
|
Address: 265 Franklin Street, 18th Floor, Boston, Massachusetts 02110.
Based solely on information contained in a Schedule 13D/A filed with the SEC by
Giant Investments, LLC on December 30, 2008. Parthenon Investors II, LP, is a
managing member of Giant Investment, LLC, PCap Partners II, LLC is a general
partner of Parthenon Investors II, LP, and PCap II, LLC is a managing member of
PCap Partners II, LLC. As parents of Giant Investment, LLC, Parthenon Investors
II, LP, PCap Partners II, LLC, and PCap II, LLC may be deemed to beneficially
own their proportional interest in the shares of common stock directly and
beneficially owned by Giant Investment, LLC, comprising 1,748,401 shares of
common stock. In addition, John C. Rutherford and Ernest K. Jacquet are
control persons of various entities indirectly investing in Giant Investment,
LLC and may be deemed to beneficially own a proportional interest in the shares
of common stock owned by Giant Investment, LLC, comprising 1,799,322 shares of
common stock.
|
|
(5)
|
|
Address: 1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401.
Based solely on information contained in a Schedule 13G filed with the SEC by
Dimensional Fund Advisors Inc. on February 6, 2008. This table reflects the
shares of common stock owned by Dimensional Fund Advisors Inc. on December 31,
2007.
|
CORPORATE GOVERNANCE MATTERS
Corporate Governance Documents
In November 2003, the Board adopted a Code of Ethics for our Chief Executive Officer, Chief
Financial Officer, and persons performing similar functions. Effective May 3, 2004, we also
adopted a Business Code of Conduct for all employees. Our Code of Ethics and our Business Code of
Conduct are posted on our website at:
http://www.tier.com
.
10
Director Independence
Under NASDAQ rules, a director will only qualify as an independent director if, in the opinion of
our Board, the person does not have a relationship that would interfere with the exercise of
independent judgment in carrying out the responsibilities of a director. Our Board determined that
each of its current directors other than Mr. Rossetti that is, each of Charles W. Berger, Samuel
Cabot III, John J. Delucca, Morgan P. Guenther, Philip G. Heasley, David A. Poe, and James R. Stone
- does not have a relationship which would interfere with the exercise of independent judgment in
carrying the responsibilities of a director and that each of these directors is an independent
director as defined under Rule 4200(a)(15) of the NASDAQ Stock Market, Inc. Marketplace Rules. T.
Michael Scott and Bruce Spector served on our Board of Directors during the fiscal year ended
September 30, 2008 but did not stand for re-election at our 2008 annual meeting. Our board
previously determined that each of Messrs. Scott and Spector did not have a relationship which
would interfere with the exercise of independent judgment in carrying the responsibilities of a
director and that each of these directors was an independent director as defined under Rule
4200(a)(15) of the NASDAQ Stock Market, Inc. Marketplace Rules.
Audit Committee Financial Expert
The Board determined that at least one member of the Audit Committee, Charles W. Berger, is an
audit committee financial expert as defined in Item 407(d)(5) of Regulation S-K, promulgated by
the SEC.
Executive Sessions of Non-Management Directors
At each regularly scheduled meeting of the Board, time is set aside for the non-management
directors to meet in an executive session without management present.
Communication with Directors
Stockholders may communicate directly with the Board members by writing to: Tier Technologies,
Inc., Board of Directors, c/o Corporate Secretary, 10780 Parkridge Boulevard, Suite 400, Reston,
Virginia 20191. Each communication should specify the individual or group to be contacted. We
will receive and review the communications before distributing them to the specified individual or
group. Generally, we will not forward stockholder communications to directors that relate to an
improper or irrelevant topic, or which request general information about Tier. All other
stockholder communications will be forwarded to the director or directors to whom they are
addressed.
Nomination of Director Candidates
The Governance and Nominating Committee will consider director nominees proposed by stockholders by
following the same process, and applying the same criteria, as it follows for candidates submitted
by others. Stockholders can recommend an individual for directorship consideration by submitting
the name of the individual for consideration together with appropriate biographical information and
background materials and a statement as to whether the stockholder or group of stockholders making
the recommendation has beneficially owned more than 5% of our common stock for at least a year as
of the date such recommendation is made. The information should be submitted to the Governance and
Nominating Committee, c/o Corporate Secretary, Tier Technologies, Inc., 10780 Parkridge Boulevard,
Suite 400, Reston, Virginia 20191.
Pursuant to our bylaws, stockholders of record on the date of the notice described in this section
and on the record date for the determination of stockholders entitled to vote at the meeting have
the right to nominate director candidates, without any action or recommendation on the part of the
Governance and Nominating Committee or the Board, only if timely written notice in proper form of
the intent to make a nomination at a meeting of stockholders is received by our corporate secretary
at: Tier Technologies, Inc., c/o Corporate Secretary, 10780 Parkridge Boulevard, Suite 400,
Reston, Virginia 20191. To be
11
timely under our bylaws, the notice must be delivered not less than 60 nor more than 90 days prior
to the first anniversary of the preceding years annual meeting; provided, however, that in the
event that less than 70 days notice or prior public disclosure of the date of the annual meeting is
given or made to stockholders, notice by the stockholder in order to be timely must be so received
not later than the close of business on the 10
th
day following the day on which such
notice of the date of the annual meeting was mailed or such public disclosure of the date of the
annual meeting was made, whichever first occurs. To be in proper form, the notice must contain
prescribed information about the proponent and each nominee, including such information about each
nominee and proponent as would be required to be included in a proxy statement made in connection
with a solicitation of proxies for elections of directors pursuant to Section 14 of the Exchange
Act and the rules and regulations promulgated thereunder.
In evaluating director candidates, including current members of the Board eligible for re-election,
the Governance and Nominating Committee considers many factors, including the current size and
composition of the Board and its committees; a candidates understanding of marketing, finance,
sales, and technology, and of our business and technology; and such other factors as the Governance
and Nominating Committee may deem appropriate. The Governance and Nominating Committee requires
that any director candidate satisfy the following minimum qualifications:
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financial literacy, demonstrated reputation for integrity, and the ability to exercise
sound business judgment;
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high personal and professional ethics;
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understanding of the fiduciary responsibilities required as a member of the Board and
the commitment, time, and ability to meet these responsibilities; and
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an appropriate professional background providing an understanding of our technology,
technology development, finance, sales, and marketing.
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Certain Relationships and Related Transactions
Related Person Transaction Policy
The Board has adopted a written policy and procedures for review, approval, and ratification of
transactions involving Tier and related persons. Related persons include Tiers executive
officers, directors, 5% or more beneficial owners of our common stock, immediate family members of
these persons, and entities in which one of these persons has a direct or indirect material
interest. The policy covers any related person transaction exceeding $50,000 in which a related
person had or will have a direct or indirect material interest.
Policies and Procedures for Review, Approval, or Ratification of Related Person Transactions
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Any related person transaction proposed to be entered into by Tier must be reported to
our General Counsel.
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The Governance and Nominating Committee shall review and approve all related person
transactions, prior to effectiveness or consummation of the transaction, whenever
practicable.
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If the General Counsel determines that advance approval of a related person transaction
is not practicable under the circumstances, the Governance and Nominating Committee shall
review and, in its discretion, may ratify the related person transaction at the next
Governance and Nominating Committee meeting, or at the next meeting following the date
that the related person transaction comes to the attention of the General Counsel;
provided, however, that the General Counsel may present a related person transaction
arising in the time period between meetings of the Governance and Nominating Committee to
the Chair of the Governance and Nominating
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Committee, who shall review and may approve the related person transaction, subject to
ratification by the Governance and Nominating Committee at the next meeting.
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Previously approved transactions of an ongoing nature shall be reviewed by the
Governance and Nominating Committee annually to ensure that such transactions have been
conducted in accordance with the previous approval granted by the Governance and
Nominating Committee, if any, and that all required disclosures regarding the related
person transaction are made.
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Standards for Review, Approval, or Ratification of Related Person Transaction
The Committee reviews, approves, or ratifies a related party transaction primarily based on the
following standards:
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the related persons interest in the transaction, the dollar value of the amount
involved, and the dollar value of the amount of the related persons interest, without
regard to profit or loss;
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whether the transaction was undertaken in the ordinary course of business;
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whether the transaction with the related person is proposed to be, or was, entered into
on terms no less favorable to us than terms that could have been reached with an unrelated
third party; and
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the purpose of, and potential benefits to us of, the transaction.
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During fiscal year 2008, we purchased $627,000 of telecom services from ITC Deltacom, Inc., a
company for which our director John J. Delucca serves as a member of the board of directors. We
also paid $185,000 for consultancy services to Edgar, Dunn & Company, for which our director David
A. Poe serves as consultant and director.
MEETING AND COMMITTEES OF THE BOARD OF DIRECTORS
During fiscal year 2008, the Board held 14 meetings. Each director attended at least 75% of the
meetings of the Board and any committees on which he served, held during the period in which he was
a director or committee member. Directors may attend the annual meeting, but are not obligated to
do so. Mr. Rossetti was the only director who attended last years annual meeting. Committee
functions and members are as follows:
Audit Committee
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Number of Members:
3
Members:
Charles W. Berger
(Chair)
Samuel Cabot III (thru 9/30/08)
Morgan P. Guenther
James R. Stone (effective
10/01/08)
Number of Meetings in Fiscal 2008:
10
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Functions:
Selects the independent registered
public accounting firm to audit Tiers
books and records, subject to
stockholder ratification, and determines
the compensation of the independent
registered public accounting firm.
At least annually, reviews a report by
the independent registered public
accounting firm describing: internal
quality control procedures, any issues
raised by an internal or peer quality
control review and any investigations by
regulatory authorities.
Consults with the independent registered
public accounting firm, reviews and
approves the scope of their audit, and
reviews independence and performance.
Also reviews any proposed engagement
between Tier and the independent
registered public accounting firm and
approves in advance
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any such engagement,
if appropriate.
Reviews internal controls, accounting
practices and financial reporting,
including the results of the annual
audit and the review of the interim
financial statements, with management
and the independent registered public
accounting firm.
Discusses earnings releases and guidance
provided to the public.
As appropriate, obtains advice and
assistance from outside legal,
accounting or other advisors.
Prepares a report of the Audit Committee
to be included in our proxy statement.
Assesses annually the adequacy of the
Audit Committee Charter.
Reports to the Board about these matters.
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Compensation Committee
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Number of Members:
3
Members:
Samuel Cabot III
(Chair)
Charles W. Berger (thru 9/30/08)
Morgan P. Guenther
Philip G. Heasley (effective 10/01/08)
Number of Meetings in Fiscal 2008:
11
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Functions:
Reviews and approves the compensation of
our Chief Executive Officer and other
executive officers.
Reviews executive bonus plan allocations.
Oversees and advises the Board on the
adoption of policies that govern our
compensation programs.
Oversees the administration of our
equity-based compensation and other
benefit plans.
Approves grants of stock options and
stock awards to our officers and
employees.
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Governance and Nominating Committee
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Number of Members:
3
Members:
Morgan P. Guenther
(Chair)
John J. Delucca (effective 4/23/08)
Samuel Cabot (effective 10/1/08)
James R. Stone (7/22/08 9/30/08)
T. Michael Scott (thru 2/28/08)
Bruce R. Spector (thru 2/28/08)
Number of Meetings in Fiscal 2008:
5
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Functions:
Interviews, evaluates and recommends individuals for
membership on the Board and its committees.
Evaluates and recommends, where appropriate, whether a
member of the Board qualifies as independent within the
meaning of the applicable NASDAQ rules.
Recommends guidelines and responsibilities relating to
corporate governance for adoption by the Board.
Reviews, approves or ratifies related person transactions.
Evaluates and recommends director compensation.
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The charters for the Audit Committee, Compensation Committee, and Governance and Nominating
Committee are available for review on our website at
http://www.tier.com.
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PROPOSAL ONE: ELECTION OF DIRECTORS
The Board of Directors has nominated the seven individuals named below for election to the Board at
the annual meeting. Each of the Boards nominees is currently serving as a director; each was
recommended for election by the Governance and Nominating Committee; and each was approved by the
Board. Each nominee has consented to serve if elected and our Board has no reason to believe that
any nominee will be unable to serve, if elected. Subject to the discussion of cumulative voting
and discretionary voting above, shares represented by proxies will be voted, if authority to do so
is not withheld, for the election of the nominees named below. In the event that any nominee
should be unavailable for election as a result of an unexpected occurrence, such shares will be
voted for the election of such substitute nominee as the Governance and Nominating Committee may
propose. Proxies cannot be voted for a greater number of persons than the number of nominees
named.
Background
Shareholders have communicated with the Board about strategic matters on several occasions over the
past ten months. As described below, the Companys Board and management have endeavored to respond
appropriately and constructively in each instance.
Between April 17 and April 21, 2008, Discovery, Parthenon, and two other shareholders sent separate
letters to the Board. Among other things, Discovery and Parthenon recommended that the Board
engage an investment bank to explore all strategic alternatives available to the Company, including
the potential sale of the Company. On April 25, 2008, the Board responded to Discovery, Parthenon,
and the other shareholders, thanking them for sharing their perspective and stating that the Board
was carefully considering the strategic issues they had raised. In May 2008, Discovery requested a
meeting with independent members of the Board, and in June 2008 two independent directors met by
conference call with Discovery. At that meeting, Discovery urged, among other things, that the
Board engage an investment banking firm to explore strategic alternatives, including the sale of
the Company, and that the Board authorize the Company to repurchase outstanding shares of its
common stock. On September 4, 2008, Discovery notified Tier that it intended to propose the
shareholder proposal described in Proposal Three: Shareholder Proposal on page 43.
In October 2008, Discovery and the independent director who chairs our Boards Governance and
Nominating Committee exchanged e-mail messages about the potential sale of the Company and the
Companys management. On October 22, 2008, Parthenon sent a letter to the Board, urging the Board
to initiate a stock repurchase program and pursue the sale of the Company, and requesting a meeting
with the Board. In December 2008, two independent directors met by conference call with Parthenon.
On December 4, 2008, Discovery notified the Company that it intended to nominate two individuals
for election to the Board at the annual meeting and that it intended to solicit proxies in support
of its nominees. On December 30, 2008, Parthenon notified the Company that it intended to nominate
two individuals for election to the Board at the annual meeting and that it did not intend to
solicit proxies in support of its nominees. Parthenons notice also stated that Parthenon was not
part of any group that intended to solicit proxies. In January 2009, representatives of the
Company spoke with representatives of Discovery and Parthenon, but those conversations did not
result in any settlement of the proxy contest.
As part of its continuing oversight and management of the Company and its business, the Board
considered strategic matters both prior to and after receipt of the communications from
shareholders described above. For example, commencing in the fall of 2006, the Board oversaw a
strategic review of the Companys business. In December 2006, the Board received presentations
from management and an investment banking firm regarding a plan to focus the Companys business on
the electronic payment processing business, or EPP, and various strategic alternatives to that
plan, including the prospects for a sale of the Company. The Board directed management to focus on
EPP and sell or wind-down the Companys business units other than EPP, believing that strategy to
be the one most likely to enhance the Companys profitability and maximize long-term shareholder
value. Thereafter, the Board was
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updated by the investment banking firm on the restructuring and on the various strategic
alternatives, and the Board discussed those alternatives. By December 31, 2008, the Companys
restructuring was substantially complete, and on January 18, 2009, the Board adopted a stock
repurchase program, as reported in the Current Report on Form 8-K filed by the Company on January
21, 2009.
In addition, on January 18, 2009, the Board of Directors increased the size of the Board to nine
(with such increase effective at the 2009 annual meeting) and determined to nominate the seven
candidates named below. The Boards action followed our receipt of separate notices from both
Parthenon and Discovery that each intended to nominate two individuals for election to the Board.
The Board had several reasons for its decision. Among other things, the Board was aware that some
shareholders believed that the Board did not sufficiently appreciate these shareholders
perspective, and the Boards decision to increase the size of the Board to nine and nominate only
seven candidates ensures that two candidates proposed by the shareholders will be added to the
Board at the 2009 annual meeting (assuming these candidates are properly nominated, in compliance
with our bylaws, and votes are validly cast for these candidates).
The Board has determined that each of the following nominees for director is independent under the
rules of the NASDAQ Stock Market, Inc.: Charles W. Berger, Samuel Cabot III, John J. Delucca,
Morgan P. Guenther, Philip G. Heasley, and David A. Poe. Each director elected will serve until
the next annual meeting and until his successor is elected and qualified, or until his earlier
death, resignation, or removal.
Nominees
The names and certain biographical information of each director nominee are set forth below.
Charles W. Berger
Age:
56
Director since:
January 2002
Recent Business Experience:
In April 2006, Mr. Berger became Chief Executive Officer of DVDPlay,
Inc., a manufacturer and operator of DVD rental kiosks. He has been Chairman of the Board of
DVDPlay, Inc. since December 2001. From March 2003 through September 2005, Mr. Berger served as
President, Chief Executive Officer, and a director of Nuance Communications, Inc., a publicly
traded company that developed and marketed speech recognition software. In September 2005, Nuance
Communications merged with Scansoft, Inc. Mr. Berger is a director of the surviving company of
this merger, Nuance Communications, Inc., a publicly traded company that develops and markets
speech recognition and imaging software. Mr. Berger has also served as the managing director of
Volatilis, LLC, a private investment and aviation services firm, since its founding in June 2001.
Since December 2004, Mr. Berger has been a director of SonicWALL, Inc., a publicly traded company
that manufactures computer network security applications.
Samuel Cabot III
Age:
68
Director since:
January 1997
Recent Business Experience:
Mr. Cabot served as Chief Executive Officer of Samuel Cabot, Inc., a
manufacturing and marketer of premium quality exterior stains and architectural coatings, from 1969
until December 2005. He also served as Chairman of its board of directors from February 2000 until
January 2006. Mr. Cabot also serves on the board of BC/BS of Massachusetts, a non-profit health
insurance provider, Plasticolors, Inc., an employee-owned company providing custom color and
chemical dispersion, Fiduciary Trust Co., a financial services firm, and Reed & Barton, a flatware
manufacturer.
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John J. Delucca
Age:
65
Director since:
February 2007
Recent Business Experience:
Since April 2003 Mr. Delucca has served as President of Atlantic &
Gulf, Limited, LLC, an investment and consulting group. He was Executive Vice President and Chief
Financial Officer of REL Consultancy Group, a provider of financial consulting services to
businesses, from April 2003 until March 2004. From 1999 until February 2002, he was Executive Vice
President, Finance and Administration, and Chief Financial Officer of Coty, Inc., a manufacturer
and marketer of personal fragrances. Mr. Delucca is a director of British Energy, PLC, a publicly
traded electric utility company; Endo Pharmaceuticals Holding, Inc., a publicly traded developer
and reseller of prescription pharmaceuticals; and ITC Deltacom, Inc., a publicly traded provider of
integrated communication services.
Morgan P. Guenther
Age:
55
Director since:
August 1999
Recent Business Experience:
Mr. Guenther has been Chairman and Chief Executive Officer of Airplay
Network, Inc., a wireless entertainment services company, since May 2005. From February 2003 to
April 2005, he served as a private consultant to technology companies. From October 2001 through
January 2003, Mr. Guenther served as President of TiVo, Inc., a creator of digital video recording
services. From June 1999 through October 2001, Mr. Guenther served as Vice President of Business
Development and Senior Vice President of Business Development and Revenue Operations at TiVo. Mr.
Guenther also serves as a board member for Integral Development Corp., a provider of electronic
capital markets trading solutions.
Philip G. Heasley
Age:
59
Director since:
August 2008
Recent Business Experience:
Since March 2005, Mr. Heasley has served as President and Chief
Executive Officer of ACI Worldwide, Inc., a developer of electronic payment software products.
From October 2003 to March 2005, Mr. Heasley served as Chairman and Chief Executive Officer of
PayPower LLC, an acquisition and consulting firm specializing in financial services and payment
services. From October 2000 to November 2003, Mr. Heasley served as Chairman and Chief Executive
Officer of First USA Bank. From 1996 until November 2003, Mr. Heasley served as Chairman of the
Board of Visa and a member of the board of Visa International. Mr. Heasley also serves on the
boards of directors of ACI Worldwide, Inc., a publicly traded company that develops electronic
payment software products, Fidelity National Financial, Inc., a publicly traded company providing
property inspections, preservation services and title insurance services, and Public Radio
International, a media company.
David A. Poe
Age:
60
Director since:
October 2008
Recent Business Experience:
From March 1980, Mr. Poe has served as a consultant and director of
Edgar, Dunn & Company, or EDC, an independent global financial services and payments consultancy.
From March 1998 to May 2008, Mr. Poe served as Chief Executive Officer of EDC. Mr. Poe also serves
as a board member for Bank of San Francisco and the University of Idaho.
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Ronald L. Rossetti
Age:
65
Director since:
November 1995
Recent Business Experience:
Mr. Rossetti has served as our Chairman of the Board and Chief
Executive Officer since May 2006 and has served as a director of Tier since November 1995. Mr.
Rossetti has served as President of Riverside Capital Partners, Inc., a venture capital investment
firm, and as general partner in several real estate general partnerships, all commonly controlled
by Riverside Capital Holdings, since 1997.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
EACH NOMINEE NAMED ABOVE.
REMOVAL OF DIRECTORS
Under Delaware law, shareholders have the right to remove any director, or the entire board of
directors. Delaware law also provides that, where a corporation has cumulative voting, if less
than the entire board is to be removed, no director may be removed without cause if the votes cast
against such directors removal would be sufficient to elect such director if then cumulatively
voted at an election of the entire board of directors. Tier has cumulative voting, and in January
2009, Tier amended Section 2.7 of bylaws, which relates to the removal of directors, so that Tiers
bylaws are consistent with this provision of Delaware law.
The following are two examples of how the statute and bylaw would be applied, if shareholders
sought to remove one director from Tiers nine-member Board, if Tier had 20,000,000 shares of stock
outstanding and entitled to vote in the election of directors at the time of the vote on the
removal proposal, and if the holders of all 20,000,000 shares cast votes on the removal proposal:
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If the holders of 17,999,999 shares voted in favor of the directors removal, and the
holders of 2,000,001 shares voted against removal, then the director would not be removed.
The director would not be removed because the total number of possible votes that could be
cast in the election of a nine member Board would be 180,000,000, with the top nine vote
recipients being elected to the Board, meaning that 18,000,001 would be the threshold number
of votes necessary to secure a seat on the Board in a contested election (and, therefore, to
defeat a proposal to remove a director). Since the holders of 2,000,001 shares would be
entitled to cast 18,000,009 votes, the director would remain on the Board.
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If the holders of 18,000,001 shares voted in favor of the directors removal, and the
holders of 1,999,999 shares voted against removal, then the director would be removed. The
director would be removed because the holders of 1,999,999 shares would be entitled to cast
17,999,991 votes, falling 10 votes short of the number of votes that would be required to
secure a seat on the Board in a contested election (and, therefore, to defeat a proposal to
remove a director).
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COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the following Compensation Discussion and
Analysis with management. Based on its review and discussions with management, the Compensation
Committee recommended to the Board, and the Board approved, that the Compensation Discussion and
Analysis be included in this proxy statement.
The foregoing report is given by the members of the Compensation Committee: Samuel Cabot, III
(Chair), Morgan P. Guenther, and Philip G. Heasley.
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 2008, the members of the Compensation Committee were Messrs. Cabot, Berger, Guenther,
and Heasley, none of whom was a current or former officer or employee of Tier and none of whom had
any related person transaction involving Tier. No interlocking relationships exist between the
Board of Directors or the Compensation Committee and the board of directors or the compensation
committee of any other entity.
COMPENSATION DISCUSSION AND ANALYSIS
Compensation Philosophy, Objectives, and Design
Compensation Philosophy
Our compensation philosophy for all our employees is to create an overall compensation package that
provides fair and competitive cash compensation and aligns performance-based incentives with the
interests of our shareholders. This compensation philosophy is particularly true for our named
executive officers, as we rely on their leadership, management skills, and experience for Tiers
continued growth and development.
Compensation Objectives
Our Compensation Committee establishes and reviews our overall executive compensation philosophy
and objectives and oversees our executive compensation programs. The primary goals of our
compensation program are to:
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attract, retain, and motivate talented employees;
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support business strategies that promote sustained growth and development;
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reward the achievement of business results through the delivery of competitive
pay and performance-based incentive programs; and
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link executives goals with the interests of shareholders by tying a portion of
compensation to our stock.
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We design our compensation strategy and packages for our executive officers to further these goals.
Performance
Our goal is to encourage and sustain high-quality performance by our executives. To achieve this
goal, we compensate our executives for their individual skills, talents, leadership qualities, and
responsibilities, primarily through base salary. To encourage our executives to meet and exceed
current performance levels, enhance their skill levels, and maximize their contributions to our
company, we also provide performance-based cash incentive compensation, framed around both
consolidated company and individual targets for the executives area of responsibility. The
combination of guaranteed cash compensation in the form of base salary and the potential for
additional performance-based compensation through our incentive compensation programs allow us to
reward our executives for the value they add to our company.
Alignment
To align the interests of our executives with those of our company and our shareholders, we provide
performance-based cash incentive and long-term incentive compensation. As discussed above, cash
incentive compensation is based in part on Tier achieving specific goals or targets for the fiscal
year. By
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linking individual incentive compensation to Tiers goals, we align the interests of our executives
with those of our shareholders and our clients. In addition, we provide long-term incentives to
our executives through stock options and restricted stock units (RSUs). This further aligns the
interests of our executives with our shareholders as contributors to Tiers growth and value based
upon stock performance. Through our long-term incentive program, executives only receive a benefit
through a sustained increase in our stock price.
Retention
We operate in a competitive work environment in which executives are presented with many
opportunities outside of Tier. It is important to retain and grow our current leadership to
provide stability within our organization and allow for sustained focus and effort to grow and
develop the company for continued success. We believe that a combination of market-based
competitive salaries and cash bonuses combined with performance-based short-and long-term
incentives awarded to our executives through cash incentives and stock options promotes long-term
tenure within our organization and sustainable shareholder value.
Implementing Our Objectives
Determining Compensation
The Compensation Committee relies heavily on its professional judgment and prior experience and on
recommendations by our Chief Executive Officer when making compensation decisions. The
Compensation Committee does not have a formulaic approach to determining executive compensation.
The Compensation Committee uses broad compensation bands (i.e., salary bands that have a minimum,
mid-point, and maximum salary level by function and career level), which are reviewed and updated
regularly, as a tool for determining competitive compensation. In determining the appropriate
compensation level and structure, the Compensation Committee focuses on Tiers goals, as well as
each executives roles and responsibilities; level and type of skills, training, experience and
leadership qualities; current compensation; and contributions to the achievement of Tiers goals.
To establish fair and equitable compensation packages for our executives, the Compensation
Committee also considers current market employment conditions and trends.
Role of the Compensation Committee and Chief Executive Officer
The Compensation Committees primary responsibility is to discharge the Boards responsibilities
relating to compensation of our executives. It carries out these responsibilities by:
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reviewing and approving the compensation for our Chief Executive Officer and other
executive officers;
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reviewing executive bonus plan allocations;
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overseeing and advising the Board on the adoption of policies that govern our
compensation programs; and
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approving grants of stock options and stock awards to our executive officers.
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Our Chief Executive Officer assists the Compensation Committee by recommending and reviewing
compensation packages for all other executive officers. The Chief Executive Officer discusses
company and individual performance objectives and results with the Compensation Committee in
connection with establishing cash incentive and long-term incentive compensation metrics and
determining amounts to be awarded. The Chief Executive Officer is also involved in recommending
and negotiating the terms of his own compensation package.
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The other named executive officers do not have a role in determining their own compensation or the
compensation of other executives, other than discussing with the Chief Executive Officer their
annual individual performance objectives and results, which are utilized in establishing
performance metrics used in cash incentive compensation calculations and determining amounts to be
awarded.
Peer Groups
To align our executives compensation with the market, our Compensation Committee typically uses
outside consulting services when hiring a new executive, entering into an employment agreement with
a key executive, and reviewing and determining compensation levels and practices in accordance with
market best practices. The consultant primarily provides market data from comparable companies.
The Compensation Committee uses this data to determine whether the compensation packages for our
executives are reasonable and competitive with those of similar companies in the marketplace. We
do not target specific medians or measurements from the peer groups to determine compensation
packages for our executives.
During fiscal 2008, the Compensation Committee used market peer group studies from John F. Reda &
Associates to provide market-based compensation information for the position of Chief Executive
Officer; Chief Financial Officer; Chief Operating Officer; Senior Vice President, Strategic
Marketing; Senior Vice President Sales and Marketing; Senior Vice President EPP Operations; Chief
Technical Officer; General Counsel; Controller; and Vice President Human Resources. Peer groups
were selected based upon industries of similar nature, capital investment, revenues, and headcount
(full time employees). Studies of peer group companies included a review of base salary, cash
incentive compensation, and long-term equity incentive compensation.
For fiscal 2008, the Compensation Committee used the following peer group for determining our
executive level compensation packages:
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ACI Worldwide Inc.
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Intersections Inc.
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S1 Corp
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Alliance Data Systems Corp
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Inx Inc.
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Techteam Global Inc.
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ASTA Funding Inc.
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Metvante Technologies Inc.
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TNS Inc.
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Bottomline Technologies Inc.
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NIC Inc.
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Total System Services Inc.
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CSG Systems International Inc.
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Online Resources Inc.
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TRX
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CyberSource Corp.
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Quality Systems Inc.
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Tyler Technologies Inc.
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Fiserv Inc.
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Radiant Systems Inc.
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Wright Express Corp
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Global Payments Inc.
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Elements Used to Achieve Compensation Objectives
Our compensation packages are composed of five main elements: base salary; cash incentive
compensation; long-term incentives; perquisites and benefits; and change of control provisions. We
do not have a specific method of allocating these elements when determining overall compensation.
Base Salary
The purpose of the base salary is to attract and retain talented employees, as well as compensate
individuals for services rendered. Base salary is a material component of an executives
compensation package.
Base salary is intended to reflect each executives role and responsibility within the company, as
well as the skills, experience, and leadership qualities the individual brings to the respective
position. The Compensation Committee compares our executives base salaries with the results of
the peer group study to ensure competitiveness; however, the Compensation Committee does not target
specific quartiles or medians in the comparison. The Compensation Committee does not assign
relative weights or rankings to the factors used to determine base salary; rather, a qualitative
determination is made based upon all the factors under consideration.
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Each year we conduct salary reviews for all employees, including our named executive officers, in
November and apply base compensation increases in December. At that time, base salary increases,
if applicable, for our executive officers are determined and approved by the Compensation Committee
and put into effect for the upcoming year. Base salary increases for our named executive officers
are determined by evaluating base salary currently in place; the achievements of the individual for
the review period; individual specific and overall contributions to Tier; and the current market
environment. The Compensation Committee considers the following factors when evaluating base
salary increases for executives: their individual performance and achievements throughout the year;
the performance of their strategic business area, if applicable; and cost of living adjustments.
On April 30, 2008, the Compensation Committee of the Board of Directors approved a new employment
agreement with Mr. Ronald L. Rossetti as Chief Executive Officer. Under the new agreement Mr.
Rossettis base salary was set at $400,000 per annum. Mr. Rossetti was also awarded 550,000 RSUs
pursuant to his employment agreement. As such, the Compensation Committee reduced Mr. Rossettis
salary from $600,000 to $400,000 to provide Mr. Rossetti with a total compensation package that was
in line with our compensation strategy.
Pursuant to an employment agreement executed on January 9, 2008, Mr. Omsbergs base salary was
increased to $190,000 per annum.
On July 1, 2008 we entered into an employment agreement with Mr. Johnston pursuant to which he
receives a base salary of $275,000 per annum.
The following table sets forth the rates of base salaries of our named executive officers active as
of October 1, 2008 and included in this proxy statement, for the fiscal years 2007, 2008, and 2009:
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Base salary rate by fiscal year
|
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% change
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|
% change
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|
|
2007
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|
2008
|
|
2009
|
|
2007 to 2008
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|
2008 to 2009
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Ronald L. Rossetti
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|
Chief Executive Officer and Chairman of the
Board
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|
$
|
600,000
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|
|
|
(1
|
)
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$
|
400,000
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(1
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)
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(1
|
)
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Ronald W. Johnston
(2)
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Senior Vice President, Chief Financial Officer
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N/A
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|
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275,000
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|
|
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272,000
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|
|
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N/A
|
|
|
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-1
|
%
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Kevin C. Connell
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|
Senior Vice President, Sales & Marketing
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|
|
250,000
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|
|
|
250,000
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|
|
|
250,000
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|
|
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0
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%
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|
|
0
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%
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Keith Omsberg
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|
Vice President, General Counsel and Corporate
Secretary
|
|
|
N/A
|
|
|
|
190,000
|
|
|
|
190,000
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|
|
|
N/A
|
|
|
|
0
|
%
|
|
|
|
(1)
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|
Pursuant to Mr. Rossettis employment agreement signed April 30, 2008, Mr. Rossettis base salary was reduced from $600,000 to $400,000 per annum, a reduction of 33%,
effective May 1, 2008.
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|
(2)
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|
Mr. Johnston voluntarily reduced his base salary from $275,000 to $272,000 for fiscal 2009 effective January 2009.
|
Fiscal year 2008 base salary rates for Messrs. Fountain, Lawler, and Beckerman and Ms. Tully
remained consistent with fiscal year 2007 base rates.
Cash Incentive Compensation
Our cash incentive compensation plans are designed to:
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align the management teams financial interests with those of our shareholders;
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support a performance-oriented environment that rewards business unit and Tiers
overall results;
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attract, motivate, and retain key management critical to Tiers long-term success;
and
|
22
|
|
|
align compensation with Tiers business strategy, values, and management
initiatives.
|
A combination of base salary, cash incentive compensation, and long-term incentives are used to
attract, motivate, and retain our executive officers and other key contributors. Cash incentives
are used in particular to drive performance against defined financial and other performance metrics
established as part of Tiers annual budgeting and strategic planning process, such that our
executive officers and other key contributors are recognized for the achievement of specific and
measurable company, business unit, and individual performance metrics on an annualized basis.
Our cash incentive compensation plans and individual performance goals under these plans are linked
to Tiers financial performance goals established annually within our business plan, which is
reviewed and approved by our Board. This link allows us to combine payment for individual
performance with at-risk payment for achieving threshold, target, and maximum company and business
unit performance targets. Throughout the year, the Compensation Committee reviews the cash
incentive plans for executives for reasonableness and potential for meeting company or business
unit defined performance metrics. If performance targets for the fiscal year are not met, the
Compensation Committee may still elect to pay bonus incentive compensation on a discretionary
basis. The Compensation Committee may also cancel or amend a cash incentive plan based on the
outcome of its periodic reviews.
In addition to our formal incentive plans, we may, at the discretion of the Chief Executive Officer
or at the discretion of the Compensation Committee, award a cash payment to our executive officers,
in recognition of achievements outside of performance metrics established under formal cash
incentive plans or award cash incentives under other agreements we enter into with an executive.
Bonus Incentive
On May 26, 2006, we entered into a one-year employment agreement with Mr. Rossetti, our Chief
Executive Officer. Under the terms of this agreement, Mr. Rossetti received a guaranteed bonus of
$50,000 per month, as negotiated and agreed upon by the Compensation Committee and Mr. Rossetti.
This contract expired on May 25, 2007. On December 21, 2007, the Compensation Committee passed a
resolution, which provided Mr. Rossetti with a bonus equal to that which he would have received had
his original employment agreement been extended through December 14, 2007. On April 30, 2008, the
Compensation Committee entered into a new three year agreement with Mr. Rossetti that provides for
a bonus incentive payment of up to 100% of base compensation. In May 2008, the Compensation
Committee approved and provided Mr. Rossetti with a bonus of $223,846, which is equal to that which
he would have received, had his original employment agreement been extended through April 29, 2008.
In addition, in December 2008, the Compensation Committee approved and paid a bonus to Mr.
Rossetti in the amount of $166,667, which is 100% of his pro-rated base salary for the fiscal year
ending September 30, 2008. The Compensation Committee believes these bonuses to Mr. Rossetti will
help provide stability to the critical position of Chief Executive Officer.
Consistent with the employment agreement entered into July 1, 2008, Mr. Johnston, our Chief
Financial Officer, received a guaranteed bonus of 50% of base compensation for the service period
from April 1, 2008 through September 30, 2008 which was paid in the amount of $68,750 in December
2008. The Compensation Committee believes these bonuses to Mr. Johnston will help provide
stability to the critical position of Chief Financial Officer.
Management Incentive Plan
On December 10, 2007, our Compensation Committee adopted the Fiscal Year 2008 Management Incentive
Plan, or MIP. Participants in the MIP included David E. Fountain, who was then our Senior Vice
President and Chief Financial Officer, as well as Michael A. Lawler, Senior Vice President,
Electronic Payment Processing; Kevin C. Connell, Senior Vice President, Sales & Marketing; and
Keith S. Omsberg, Vice President, General Counsel & Secretary. Steven M. Beckerman, Senior Vice
President, Government Business Process Outsourcing, and Deanne S. Tully, who served for a portion
of fiscal year
23
2008 as our Vice President, General Counsel and Corporate Secretary, did not participate in the
MIP. The MIP was designed to reward eligible employees for the achievement of electronic payment
processing (EPP) business unit performance targets on a fiscal year basis. The EPP targets,
including threshold, target, and stretch performance targets with associated levels of payout, were
determined by executive management at the beginning of the plan year based upon Tiers strategic
plan and budget process and the formulation of specific EPP performance targets.
The following tables illustrate the performance metrics and related potential threshold,
target, and maximum payouts for fiscal 2008 under the MIP for Messrs. Fountain, Lawler, Connell,
and Omsberg. For each officer, the performance metric was Company earnings before interest, tax,
depreciation and amortization (EBITDA) of $11.8 million. On July 22, 2008, the Compensation
Committee determined that the Company would not achieve the performance targets, and no awards were
made under the MIP. Any bonuses awarded to the officers listed (as disclosed in other tables) were
awarded from a pool of $0.2 million at the discretion of the Chief Executive Officer and the
Compensation Committee, based on individual performance and contributions throughout the year.
Estimated Payout Levels
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Threshold:
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Target:
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Maximum:
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92% of Performance
|
|
100% of Performance
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|
107% of Performance
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Name
|
|
metric
|
|
metric
|
|
metric
|
David E. Fountain
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|
$
|
47,923
|
|
|
$
|
79,872
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|
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$
|
159,744
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|
Michael A. Lawler
|
|
|
32,451
|
|
|
|
54,085
|
|
|
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108,170
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|
Kevin C. Connell
|
|
|
34,321
|
|
|
|
57,051
|
|
|
|
114,103
|
|
Keith S. Omsberg
|
|
|
9,870
|
|
|
|
16,450
|
|
|
|
32,900
|
|
The following table provides a summary of the actual cash incentive or bonus payments made to our
named executive officers for fiscal year 2008:
|
|
|
|
|
Named executive officer
|
|
2008 payment
|
|
Ronald L. Rossetti
|
|
$
|
390,513
|
|
Ronald W. Johnston
|
|
|
68,750
|
|
Kevin Connell
|
|
|
50,000
|
|
Keith Kendrick
|
|
|
|
|
Keith S. Omsberg
|
|
|
7,500
|
|
David E. Fountain
|
|
|
|
|
Michael A. Lawler
|
|
|
|
|
Deanne M. Tully
|
|
|
|
|
Steven M. Beckerman
|
|
|
|
|
|
Total incentive payout
|
|
$
|
516,763
|
|
|
Long-term Incentives
To further align our executives financial interests with those of our shareholders, we provide
long-term incentives through our
Amended and Restated 2004 Stock Incentive Plan
, or the Plan.
These incentives are designed to motivate employees through equity ownership and provide a
pay-at-risk element to our compensation package. Under the Plan, the Compensation Committee has
the authority to issue stock options, stock appreciation rights, restricted stock, or other
stock-based awards to all employees, officers, directors, consultants, and advisors at its
discretion. Currently, stock options and RSUs are our preferred method for providing long-term
equity incentives to our executives. Since the options are granted with an exercise price equal to
the close price of our common stock on the day preceding the grant date, and RSUs are earned based
upon share value performance over a defined measurement period, executives receive a benefit only
if the stock price appreciates over the term of the option or RSU. We believe these long-term
incentives motivate all eligible employees to meet and/or exceed performance goals and contribute
to the overall growth and value of Tier. We do not have agreements with any of our executive
officers that entitle them to stock option grants or restricted stock awards.
24
The Compensation Committee meets at least four times per year. At these meetings the Compensation
Committee reviews, among other things, new hire status, promotions, and achievements of current
executives, in determining whether to make stock option or RSU grants. Options and RSUs are
considered granted on the date the Compensation Committee approves the granting of the options
and/or the RSUs, with the closing price on the business day preceding the option grant date as the
exercise price of the award. RSUs, while awarded at the time of grant by the Compensation
Committee, are earned upon the achievement of defined and sustained share value performance
targets. The Compensation Committee awards options and RSUs at its discretion and in accordance
with the Plan requirements as to the amount of options that may be awarded to executives throughout
a fiscal year, taking into account an executives performance, level of responsibility and future
contributions to Tier. The maximum amount of options that may be awarded to an executive is
300,000 shares per fiscal year under the terms of the Plan. The maximum number of RSUs that could
be awarded under the terms of the Plan is 500,000 units. We reached this maximum number during
fiscal 2008. As such, all future RSU awards will be made outside of the Plan and settled in cash.
Typically options vest as to 20% of the underlying shares on the anniversary of the grant date and
have a maximum ten year term, while restricted stock units vest upon a three year cliff schedule
Options and RSUs that are unvested upon an executives termination are generally forfeited, unless
otherwise provided in an option agreement or employment agreement. We believe this encourages
executive performance, tenure and the promotion of sustained growth with Tier. However, our named
executive officers may be entitled to accelerated vesting of their options and RSUs under certain
circumstances, including a change of control. See
Potential Payments Upon Termination or Change in
Control
section on page 35 for additional information.
In fiscal year 2008, Mr. Rossetti was granted 550,000 RSUs on April 30, 2008 in connection with the
enterprise value award under his employment agreement as approved by the Compensation Committee.
Pursuant to the Plan, 500,000 units can be payable in shares of our common stock. The remaining
50,000 units may be payable in cash.
The Compensation Committee granted Mr. Omsberg options to purchase 30,000 shares of our common
stock on October 1, 2007 and options to purchase 20,000 shares of our common stock on December 10,
2007.
The Compensation Committee granted Mr. Johnston options to purchase 200,000 shares of our common
stock on July 1, 2008.
The Compensation Committee did not award any options to Messrs. Fountain, Lawler, Connell, or
Beckerman or Ms. Tully in fiscal year 2008.
Executive Performance Stock Unit Plan
In an effort to further align our executives financial interests with those of our shareholders
and promote stability in key executive positions, the Compensation Committee adopted the Executive
Performance Stock Unit Plan, or PSU Plan, on December 4, 2008, or the effective date. Under the
PSU Plan a maximum of 800,000 units may be issued for award to eligible executives. The units will
be awarded only upon the achievement and maintenance for a period of 60 days of specific share
performance targets, or Share Price Performance Targets, of $8.00, $9.50, $11.00, and $13.00 per
share for approved participants as the effective date. For participants hired after the effective
date, the Committee will establish Share Price Performance Targets based on 25%, 50%, 75%, and 100%
increases in the share price. The PSUs will be awarded in four equal tranches at those Share Price
Performance Targets; any PSUs awarded will vest on December 4, 2011, the third anniversary of the
effective date, unless they vest earlier upon a change in control event as described below.
We intend to pay PSUs in cash in the pay period in which the grant becomes fully vested. However,
if we have shares available for such issuance under, if required, a shareholder approved plan, we
may instead issue shares of our common or restricted stock in an amount equivalent to the value of
the PSUs. An executive will be entitled to receive a payment equal to (x) the price of a share of
our common stock as of
25
the close of market on the date of vesting, but not more than $15.00, multiplied by (y) the number
of PSUs that have been awarded to the executive.
Under the Plans change in control provision, if we experience a change in control event, the units
that have been awarded or would be awarded based upon the per share value realized by our
stockholders in the change in control event will be immediately awarded, and the payment due to the
executive will be based on such per share value realized by our stockholders in the change in
control event, not to exceed a $15.00 per share. If the executive continues to be employed by the
surviving entity following the change in control event, the award will be paid at the earlier of
two years after the change in control event or three years after the effective date of the Plan.
Payment of the award may be accelerated following a change in control event for termination without
cause; death or disability, or resignation for good reason. The Plan defines a change of control
event as:
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|
|
any person, entity, or affiliated group becoming the beneficial owner or owners of
more than 50% of the outstanding equity securities of Tier, or otherwise becoming
entitled to vote shares representing more than 50% of the undiluted total voting power
of our then-outstanding securities eligible to vote to elect members of the Board;
|
|
|
|
|
a consolidation or merger (in one transaction or a series of related transactions)
of Tier pursuant to which the holders of our equity securities immediately prior to
such transaction or series of transactions would not be the holders immediately after
such transaction or series of related transactions of more than 50% of the securities
eligible to vote to elect members of the Board of the entity surviving such
transaction or series of related transactions; or
|
|
|
|
|
the sale, lease, exchange, or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of Tier.
|
Perquisites and Benefits
All of our full-time employees, including our named executive officers, are eligible to participate
in our benefits programs. Our benefits programs include: paid time off; medical, dental, and
vision insurance; 401(k) safe harbor contribution; group term life insurance; short term
disability; long term disability; and a range of voluntary or elective benefits. Other than our
401(k) program, in which all eligible employees may participate, we do not have any retirement,
pension, or deferred compensation plans in effect for our named executive officers.
We do not have an established executive benefits program or an executive perquisite program.
Typically, we do not provide perquisites to our named executive officers at the senior vice
president level.
We provide limited perquisites to our Chief Executive Officer as discussed below. We believe these
perquisites benefit us and our shareholders by ensuring that our Chief Executive Officer is able to
maintain a regular presence at our headquarters to meet his duties and responsibilities in full.
Chief Executive Officer Perquisites
Pursuant to his April 30, 2008 employment agreement, we provide Mr. Rossetti with a fully-furnished
corporate apartment located near our corporate headquarters in Reston, Virginia. We also provide
Mr. Rossetti with local transportation for travel while he is located in Reston, Virginia. In
addition, we reimburse Mr. Rossetti for travel to and from his current residence to our corporate
headquarters. Travel reimbursement includes airfare, ground transportation, parking, and meals.
Mr. Rossetti is provided home office equipment and a cellular phone to assist him in executing his
responsibilities, while he is absent from our headquarters.
26
In addition, if Mr. Rossetti recognizes income for income tax purposes as a result of our payment
of certain expenses, we are obligated to make a tax gross-up payment to Mr. Rossetti based upon the
additional tax liability.
Change of Control
Messrs. Rossetti, Johnston, Connell, and Omsberg have change of control arrangements through their
employment agreements. Messrs. Fountain, Lawler, and Beckerman and Ms. Tully had change of control
arrangements through their employment agreements or a separate change of control agreement. We
provide change of control arrangements to our executives to promote stability and continuity at a
time when the departure of executive officers would be detrimental to our growth and development
and shareholder value. Executives are entitled to change of control payments upon termination
within one year of a change of control event. Payments are due to the executive within thirty days
of such termination. For a change of control provision to be triggered, the change of control
event, as defined below, must occur and the executives employment must terminate.
A change of control is defined in our employment agreements as:
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|
|
any person, entity or affiliated group becoming the beneficial owner or owners of
more than 50% of the outstanding equity securities of Tier, or otherwise becoming
entitled to vote shares representing more than 50% of the undiluted total voting power
of our then-outstanding securities eligible to vote to elect members of the Board;
|
|
|
|
|
a consolidation or merger (in one transaction or a series of related transactions)
of Tier pursuant to which the holders of our equity securities immediately prior to
such transaction or series of transactions would not be the holders immediately after
such transaction or series of related transactions of more than 50% of the securities
eligible to vote to elect members of the Board of the entity surviving such
transaction or series of related transactions;
|
|
|
|
|
the sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of Tier;
|
|
|
|
|
the dissolution or liquidation of Tier; or
|
|
|
|
|
the date on which (i) we consummate a going private transaction pursuant to
Section 13 and Rule 13e-3 of the Exchange Act, or (ii) no longer have a class of
equity securities registered under the Exchange Act .
|
Under Mr. Beckermans change of control agreement, the following also constituted a change of
control:
|
|
|
any person, entity or affiliated group becoming the beneficial owner or owners of
more than 50% of the outstanding equity securities of Tier, or of a subsidiary that
holds substantial assets or is the primary location of the strategic business unit or
practice unit in which Mr. Beckerman was engaged or otherwise becoming entitled to
vote shares representing more than 50% of the undiluted total voting power of the
then-outstanding securities eligible to vote to elect members of the board of
directors or of the business unit or practice units board of directors.
|
Under Mr. Rossettis change of control agreement, each of the following would constitute a change
of control:
|
|
|
any person, entity or affiliated group becoming the beneficial owner or owners of
more than 35% of the outstanding equity securities of Tier, or otherwise becoming
entitled to vote
|
27
|
|
|
shares representing more than 35% of the undiluted total voting power of our
then-outstanding securities eligible to vote to elect members of the Board;
|
|
|
|
|
a consolidation or merger (in one transaction or a series of related transactions)
of Tier pursuant to which the holders of our equity securities immediately prior to
such transaction or series of related transactions would not be the holders
immediately after such transaction or series of related transactions of at least 65%
of the securities eligible to elect members of the board of directors of the entity
surviving such transaction or series of related transactions; or
|
|
|
|
|
the sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of Tier.
|
In fiscal year 2008, specific pay-outs under change of control provisions were determined through
negotiations of each individuals employment agreement. For actual and potential payments upon a
change of control arrangements for our named executive officers, see
Potential Payments Upon
Termination or Change in Control
section of Executive Compensation on page 35.
Payouts to Named Executive Officers in Connection with Termination of Employment
On December 12, 2007, we entered into a transition agreement with Ms. Tully for employment
separation effective March 31, 2008 for the payment of one years base salary in a single lump sum
payment at $220,000, the provision of COBRA benefit reimbursement for a period of 12 months, and
the reimbursement of out-placement services not to exceed $7,500. In addition, we entered into a
consulting agreement with Ms. Tully for a period of April 2008 through September 2008, pursuant to
which we compensated her $18,333 per month.
Mr. Lawlers employment with Tier terminated on September 26, 2008. Pursuant to his employment
agreement dated October 29, 2007, Mr. Lawler was entitled to a lump sum payment equal to one times
his annual base salary of $237,000 and the reimbursement of COBRA benefits for a period of up to 12
months.
Mr. Beckermans employment with Tier terminated on September 30, 2008. Pursuant to his employment
agreement dated October 29, 2007, Mr. Beckerman was entitled to a lump sum payment of two times his
annual base compensation of $220,000, and reimbursement of COBRA benefits for a period of 18
months. In addition, we entered into a consulting agreement with Mr. Beckerman for a period of
October and November 2008, pursuant to which we compensated him $19,866 per month.
Tax and Accounting Implications
Deductibility of Compensation
Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code, generally disallows
federal tax deductions for compensation in excess of $1.0 million paid to the Chief Executive
Officer and the next four highly paid officers. Compensation that is performance-based within
the meaning of the Code does not count toward the $1.0 million limit. We believe it is in our best
interest, to the extent practicable, to have executive compensation be fully deductible under the
Code. However, the Compensation Committee has full discretion to provide compensation that
potentially may not be fully deductible.
Accounting for Share-Based Compensation
Effective October 1, 2005, we began accounting for share-based payments in accordance with the
requirements of Statement of Financial Accounting Standard No. 123(R)
Share-Based Payment
. As
such, we value the options granted based on the grant date fair value using the Black-Scholes
model.
28
We value RSUs using a Monte Carlo simulation option pricing model. We recognize compensation
expense over the vesting period of the option or RSU grants, which ranges from three to five years.
Additional information about the valuation of our options and RSUs can be found in Note
13Share-Based Payment of our Annual Report on Form 10-K for fiscal year ended September 30, 2008.
EXECUTIVE COMPENSATION
This section provides certain tabular and narrative information regarding the compensation of our
principal executive and financial officers and our other most highly compensated executive officers
for the fiscal year ended September 30, 2008. Messrs. Johnston and Omsberg became named executive
officers during fiscal 2008; therefore only fiscal 2008 information is reported for these
individuals. For additional information regarding compensation of the named executive officers,
see
Compensation Discussion and Analysis
beginning on page 19.
Summary Compensation Table
The following table sets forth information regarding compensation of our named executive officers
during the fiscal years ended September 30, 2008 and 2007:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
incentive plan
|
|
All other
|
|
|
Name and principal
|
|
|
|
|
|
Salary
|
|
Bonus
|
|
awards
|
|
awards
|
|
compensation
|
|
compensation
|
|
Total
|
position
|
|
Year
|
|
($)
|
|
($)
(1)
|
|
($)
(2)
|
|
($)
(2)
|
|
($)
(3)
|
|
($)
(4)
|
|
($)
|
|
Ronald L. Rossetti
|
|
|
2008
|
|
|
$
|
589,231
|
|
|
$
|
390,513
|
|
|
$
|
264,583
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
278,363
|
|
|
$
|
1,522,690
|
|
Chief Executive Officer,
Chairman of the Board
|
|
|
2007
|
|
|
|
600,000
|
|
|
|
600,000
|
|
|
|
|
|
|
|
119,375
|
|
|
|
|
|
|
|
230,710
|
|
|
|
1,550,085
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ronald W. Johnston
(5)
|
|
|
2008
|
|
|
|
172,158
|
|
|
|
68,750
|
|
|
|
|
|
|
|
58,326
|
|
|
|
|
|
|
|
4,943
|
|
|
|
304,177
|
|
Senior Vice President,
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin C. Connell
|
|
|
2008
|
|
|
|
251,923
|
|
|
|
50,000
|
|
|
|
|
|
|
|
62,270
|
|
|
|
|
|
|
|
6,685
|
|
|
|
370,878
|
|
Senior Vice President
Sales and Marketing
|
|
|
2007
|
|
|
|
245,796
|
|
|
|
|
|
|
|
|
|
|
|
121,177
|
|
|
|
167,808
|
|
|
|
19,482
|
|
|
|
554,263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Keith S. Omsberg
|
|
|
2008
|
|
|
|
188,000
|
|
|
|
92,500
|
|
|
|
|
|
|
|
50,706
|
|
|
|
|
|
|
|
5,585
|
|
|
|
336,791
|
|
Vice President,
General Counsel
and Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David E. Fountain
(6)
|
|
|
2008
|
|
|
|
181,731
|
|
|
|
|
|
|
|
|
|
|
|
52,969
|
|
|
|
|
|
|
|
147,987
|
|
|
|
382,687
|
|
Senior Vice President,
Chief Financial Officer and
Treasurer
|
|
|
2007
|
|
|
|
338,942
|
|
|
|
50,000
|
|
|
|
|
|
|
|
67,313
|
|
|
|
175,000
|
|
|
|
137,174
|
|
|
|
768,429
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael A. Lawler
(7)
|
|
|
2008
|
|
|
|
232,442
|
|
|
|
|
|
|
|
|
|
|
|
71,313
|
|
|
|
|
|
|
|
272,008
|
|
|
|
575,763
|
|
Senior Vice President
Electronic Payment
Processing
|
|
|
2007
|
|
|
|
234,402
|
|
|
|
|
|
|
|
|
|
|
|
67,845
|
|
|
|
21,000
|
|
|
|
5,606
|
|
|
|
328,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deanne M. Tully
(8)
|
|
|
2008
|
|
|
|
110,846
|
|
|
|
|
|
|
|
|
|
|
|
21,507
|
|
|
|
|
|
|
|
255,696
|
|
|
|
388,049
|
|
Vice President,
General Counsel and
Corporate Secretary
|
|
|
2007
|
|
|
|
219,117
|
|
|
|
|
|
|
|
|
|
|
|
48,805
|
|
|
|
|
|
|
|
5,204
|
|
|
|
273,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven M. Beckerman
(9)
|
|
|
2008
|
|
|
|
221,692
|
|
|
|
|
|
|
|
|
|
|
|
106,356
|
|
|
|
|
|
|
|
464,947
|
|
|
|
792,995
|
|
Senior Vice President,
Government Business
Process Outsourcing
|
|
|
2007
|
|
|
|
220,000
|
|
|
|
|
|
|
|
|
|
|
|
61,071
|
|
|
|
|
|
|
|
5,204
|
|
|
|
286,275
|
|
[Footnotes begin on next page]
29
|
|
|
(1)
|
|
Reflects bonus payouts for fiscal years 2008 and 2007:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employment
|
|
|
|
|
Name
|
|
Year
|
|
agreement
|
|
Discretionary
|
|
Total bonus payout
|
|
Ronald L. Rossetti
|
|
|
2008
|
|
|
$
|
166,667
|
|
|
$
|
223,846
|
|
|
$
|
390,513
|
|
|
|
|
2007
|
|
|
|
600,000
|
|
|
|
|
|
|
|
600,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ronald W. Johnston
|
|
|
2008
|
|
|
|
68,750
|
|
|
|
|
|
|
|
68,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin C. Connell
|
|
|
2008
|
|
|
|
|
|
|
|
50,000
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Keith S. Omsberg
|
|
|
2008
|
|
|
|
|
|
|
|
92,500
|
|
|
|
92,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David E. Fountain
|
|
|
2007
|
|
|
|
|
|
|
|
50,000
|
|
|
|
50,000
|
|
|
|
|
See
|
|
page 23 for additional information on bonus payments.
|
|
(2)
|
|
The amounts included in these columns reflect the value of stock awards and stock option
awards that were recognized as an expense for financial statement reporting purposes in
fiscal 2008 and 2007, calculated pursuant to Statement of Financial Accounting Standards
123R
Share-Based Payment
, excluding any estimate of forfeitures. Accordingly, the columns
include amounts relating to awards granted during and prior to the year indicated. The
following table summarizes the amounts shown in the Stock Awards and Option Awards
columns and the amount included for each such award for fiscal 2008. Assumptions used in
the calculation of these amounts and the amounts for fiscal 2007 are included in footnote 13
to the audited consolidated financial statements included in our annual report on Form 10-K
for the fiscal year ended September 30, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
Option Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total number of
|
|
|
|
|
|
|
|
|
|
|
Total number of
|
|
|
|
|
|
|
|
|
|
|
shares
|
|
|
|
|
|
|
|
|
|
|
shares
|
|
|
|
|
|
|
|
|
|
|
underlying
|
|
|
|
|
|
|
Date of
|
|
|
underlying
|
|
|
Amount included
|
|
|
Date of
|
|
|
options awarded
|
|
|
Amount included
|
|
Name
|
|
award
|
|
|
shares awarded (#)
|
|
|
in fiscal 2008 ($)
|
|
|
award
|
|
|
(#)
|
|
|
in fiscal 2008 ($)
|
|
|
|
|
Ronald L. Rossetti
|
|
|
4/30/08
|
|
|
|
550,000
|
|
|
$
|
264,583
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ronald W. Johnston
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/1/08
|
|
|
|
200,000
|
|
|
|
58,326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin C. Connell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/4/02
|
|
|
|
25,000
|
|
|
|
608
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/3/03
|
|
|
|
25,000
|
|
|
|
19,265
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/1/03
|
|
|
|
5,000
|
|
|
|
5,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/1/04
|
|
|
|
3,000
|
|
|
|
2,891
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/13/06
|
|
|
|
10,000
|
|
|
|
6,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/28/06
|
|
|
|
40,000
|
|
|
|
27,533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
62,270
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Keith S. Omsberg
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/1/03
|
|
|
|
3,000
|
|
|
|
3,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/1/04
|
|
|
|
3,000
|
|
|
|
2,891
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/13/06
|
|
|
|
10,000
|
|
|
|
6,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/1/07
|
|
|
|
30,000
|
|
|
|
25,453
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/10/07
|
|
|
|
20,000
|
|
|
|
12,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David E. Fountain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/12/05
|
|
|
|
75,000
|
|
|
|
35,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/24/06
|
|
|
|
40,000
|
|
|
|
17,314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael A. Lawler
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/1/04
|
|
|
|
50,000
|
|
|
|
48,179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/24/06
|
|
|
|
40,000
|
|
|
|
23,134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
71,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deanne M. Tully
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/1/03
|
|
|
|
10,000
|
|
|
|
5,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/1/04
|
|
|
|
10,000
|
|
|
|
4,819
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/24/06
|
|
|
|
40,000
|
|
|
|
11,564
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,507
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven M. Beckerman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/7/06
|
|
|
|
50,000
|
|
|
|
62,439
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/24/06
|
|
|
|
40,000
|
|
|
|
43,917
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
106,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30
|
|
|
(3)
|
|
Reflects cash incentive payouts for fiscal year 2007 under various non-equity incentive
plans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-equity incentive
|
Name
|
|
Year
|
|
Incentive plan
|
|
payout
|
|
Kevin C. Connell
|
|
|
2007
|
|
|
|
167,808
|
|
|
|
167,808
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael A. Lawler
|
|
|
2007
|
|
|
|
21,000
|
|
|
|
21,000
|
|
See page 23 for additional information on 2008 performance metrics and payouts.
|
|
|
the aggregate incremental cost to Tier of providing perquisites and other personal
benefits;
|
|
|
|
|
company matching contributions under 401(k) plans;
|
|
|
|
|
tax reimbursement payments relating to certain business and non-business travel; and
|
|
|
|
|
severance expenses.
|
The following table summarizes the amounts shown in the All Other Compensation column:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
|
|
|
|
|
|
Total all other
|
Name
|
|
Year
|
|
Perquisites
(a)
|
|
401(k)
|
|
reimbursement
|
|
Severance
(b)
|
|
compensation
|
|
Ronald L. Rossetti
|
|
|
2008
|
|
|
$
|
183,338
|
|
|
$
|
6,900
|
|
|
$
|
88,125
|
|
|
$
|
|
|
|
$
|
278,363
|
|
Ronald L. Rossetti
|
|
|
2007
|
|
|
|
191,435
|
|
|
|
6,750
|
|
|
|
32,525
|
|
|
|
|
|
|
|
230,710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ronald W. Johnston
|
|
|
2008
|
|
|
|
|
|
|
|
4,943
|
|
|
|
|
|
|
|
|
|
|
|
4,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin C. Connell
|
|
|
2008
|
|
|
|
|
|
|
|
6,685
|
|
|
|
|
|
|
|
|
|
|
|
6,685
|
|
Kevin C. Connell
|
|
|
2007
|
|
|
|
13,648
|
|
|
|
5,834
|
|
|
|
|
|
|
|
|
|
|
|
19,482
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Keith S. Omsberg
|
|
|
2008
|
|
|
|
|
|
|
|
5,585
|
|
|
|
|
|
|
|
|
|
|
|
5,585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David E. Fountain
|
|
|
2008
|
|
|
|
40,371
|
|
|
|
5,574
|
|
|
|
23,921
|
|
|
|
78,121
|
|
|
|
147,987
|
|
David E. Fountain
|
|
|
2007
|
|
|
|
88,310
|
|
|
|
6,750
|
|
|
|
42,114
|
|
|
|
|
|
|
|
137,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael A. Lawler
|
|
|
2008
|
|
|
|
|
|
|
|
6,750
|
|
|
|
|
|
|
|
265,258
|
|
|
|
272,008
|
|
Michael A. Lawler
|
|
|
2007
|
|
|
|
|
|
|
|
5,606
|
|
|
|
|
|
|
|
|
|
|
|
5,606
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deanne M. Tully
|
|
|
2008
|
|
|
|
|
|
|
|
4,173
|
|
|
|
|
|
|
|
251,523
|
|
|
|
255,696
|
|
Deanne M. Tully
|
|
|
2007
|
|
|
|
|
|
|
|
5,204
|
|
|
|
|
|
|
|
|
|
|
|
5,204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven M. Beckerman
|
|
|
2008
|
|
|
|
|
|
|
|
6,600
|
|
|
|
|
|
|
|
458,347
|
|
|
|
464,947
|
|
Steven M. Beckerman
|
|
|
2007
|
|
|
|
|
|
|
|
5,204
|
|
|
|
|
|
|
|
|
|
|
|
5,204
|
|
(a)
|
|
See
Perquisites and Benefits
in the Compensation Discussion and Analysis on page 26 for a discussion on perquisites provided to executives.
Perquisites include:
|
|
|
|
expenses for corporate apartments, including utilities;
|
|
|
|
|
air and ground transportation, meals and lodging for personal travel; and
|
|
|
|
|
legal consultation fees relating to negotiation and review of employment agreement.
The following table summarizes the amounts shown in the Perquisites column:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal
|
|
|
Name
|
|
Year
|
|
Corporate apartment
|
|
Travel
|
|
consultation
|
|
Other
|
|
Ronald L. Rossetti
|
|
|
2008
|
|
|
$
|
39,096
|
|
|
$
|
113,431
|
|
|
$
|
30,811
|
|
|
$
|
|
|
Ronald L. Rossetti *
|
|
|
2007
|
|
|
|
41,232
|
|
|
|
130,375
|
|
|
|
19,828
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin C. Connell *
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
13,648
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David E. Fountain
|
|
|
2008
|
|
|
|
20,420
|
|
|
|
19,951
|
|
|
|
|
|
|
|
|
|
David E. Fountain
|
|
|
2007
|
|
|
|
34,166
|
|
|
|
32,144
|
|
|
|
22,000
|
|
|
|
|
|
|
|
|
*
|
|
Includes travel by chartered private jet for business meeting which Mr. Connell and Mr. Rossetti attended. Total cost was $27,295 and is split
equally between Mr. Connell and Mr. Rossetti.
|
|
(b)
|
|
The amount in the severance column consists of severance payments and reimbursement for personal time off accrued but not used as of termination date.
|
|
(5)
|
|
Mr. Johnston served as interim Chief Financial Officer from April 2008 to June 2008.
|
|
|
(6)
|
|
Mr. Fountains employment with us terminated April 4, 2008.
|
|
|
(7)
|
|
Mr. Lawlers employment with us terminated September 26, 2008.
|
|
|
(8)
|
|
Ms. Tullys employment with us terminated March 31, 2008. From April 2008 to September
2008, Ms. Tully served as an independent consultant to Tier and was compensated $18,333 per
month.
|
|
|
(9)
|
|
Mr. Beckermans employment with us terminated September 30, 2008.
|
31
Fiscal 2008 Grants of Plan-Based Awards
The following table sets forth information regarding grants of plan-based awards made to the named
executive officers during the fiscal year ended September 30, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All other
|
|
All other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
stock
|
|
option awards:
|
|
|
|
|
|
|
|
|
|
|
Estimated future payouts under
|
|
awards:
|
|
Number of
|
|
Exercise or
|
|
Grant date fair
|
|
|
|
|
|
|
Non-Equity Incentive Plan Awards
(1)
|
|
Number of
|
|
Securities
|
|
base price of
|
|
value of stock
|
|
|
|
|
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
shares of
|
|
Underlying
|
|
option
|
|
and option
|
Name
|
|
Grant date
|
|
($)
(2)
|
|
($)
(3)
|
|
($)
(4)
|
|
stock(#)
(5)
|
|
Options(#)
|
|
awards ($)
(6)
|
|
awards ($)
(7)
|
|
Ronald L. Rossetti
|
|
|
04/30/08
|
(8)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
550,000
|
|
|
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ronald W. Johnston
|
|
|
07/01/08
|
(9)
|
|
|
|
|
|
|
68,750
|
|
|
|
103,125
|
|
|
|
|
|
|
|
200,000
|
(15)
|
|
|
8.01
|
|
|
|
701,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin C. Connell
|
|
|
12/10/07
|
(10)
|
|
|
34,321
|
|
|
|
57,051
|
|
|
|
114,103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Keith S. Omsberg
|
|
|
12/10/07
|
(11)
|
|
|
9,870
|
|
|
|
16,450
|
|
|
|
32,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/01/07
|
(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(16)
|
|
|
10.20
|
|
|
|
127,614
|
|
|
|
|
12/10/07
|
(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(16)
|
|
|
9.25
|
|
|
|
77,152
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David E. Fountain
|
|
|
12/10/07
|
(13)
|
|
|
47,923
|
|
|
|
79,872
|
|
|
|
159,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael A. Lawler
|
|
|
12/10/07
|
(14)
|
|
|
32,451
|
|
|
|
54,085
|
|
|
|
108,170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deanne M. Tully
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven M. Beckerman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
For additional information concerning performance metrics and payouts of non-equity incentive plan awards see page 22.
|
|
(2)
|
|
The threshold amount represents the amounts payable to the executive if we met a specific percentage of our
corporate performance goal and practice unit performance goal, if applicable, for fiscal 2008 under the applicable plans.
|
|
(3)
|
|
The target amount represents the amounts payable to the executive if we met our corporate performance goal and, if
applicable, practice unit performance goal for fiscal 2008 under the applicable plans.
|
|
(4)
|
|
The maximum estimated future payout for Mr. Johnston was 75% of his base salary from April 2008 September 2008.
The maximum estimated future payout for Messrs. Connell, Fountain and Lawler represent the amounts payable to the
executive if we met 107% of our corporate performance goal, and , if applicable, practice unit performance goal.
|
|
(5)
|
|
The shares vest April 30, 2011 provided the following share price performance targets are met and maintained for 60
consecutive days: 180,000 shares at share target price of $11, 185,000 shares at share target price of $13, and 185,000
shares at target price of $15. Of the 185,000 shares at target price of $15, 50,000 shares are intended to be settled in
cash.
|
|
(6)
|
|
The exercise price of the options granted to the individuals shown above was the closing price of Tiers common stock
on the day prior to the grant date.
|
|
(7)
|
|
Represents the full grant date fair value of each equity-based award, computed in accordance with SFAS 123R.
|
|
(8)
|
|
Awarded under the terms of Mr. Rossettis employment agreement.
|
|
(9)
|
|
Awarded under the terms of Mr. Johnstons employment agreement.
|
|
(10)
|
|
Awarded under the MIP, adopted by the Compensation Committee on December 10, 2007. On July 22, 2008, the Committee
determined the performance metrics would not be met, and no awards were made under the MIP.
|
|
(11)
|
|
Awarded under the MIP, adopted by the Compensation Committee on December 10, 2007. On July 22, 2008, the Committee
determined the performance metrics would not be met, and no awards were made under the MIP.
|
|
(12)
|
|
Award under the Companys Amended and Restated 2004 Stock Incentive Plan.
|
|
(13)
|
|
Awarded under the MIP, adopted by the Compensation Committee on December 10, 2007. On July 22, 2008, the Committee
determined the performance metrics would not be met, and no awards were made under the MIP.
|
|
(14)
|
|
Awarded under the MIP, adopted by the Compensation Committee on December 10, 2007. On July 22, 2008, the Committee
determined the performance metrics would not be met, and no awards were made under the MIP.
|
|
(15)
|
|
These options were awarded to Mr. Johnston upon his hire. These options vest as to 34% of the underlying shares the
first year and 33% each subsequent year on the anniversary of the date granted and expire in ten years.
|
|
(16)
|
|
Of the 50,000 total options awarded to Mr. Omsberg, 20,000 were merit based and 30,000 were awarded in connection
with his promotion to Corporate Secretary. These options vest as to 20% on the anniversary of the date granted and
expire in ten years.
|
32
Outstanding Equity Awards at 2008 Fiscal Year-End
The following table sets forth for each named executive officer certain information about stock
options and unvested and unearned equity incentive plan awards held at the end of the fiscal year
ended September 30, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
incentive
|
|
awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
plan
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
awards:
|
|
payout
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
value of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
unearned
|
|
unearned
|
|
|
securities
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Number of
|
|
value of
|
|
shares,
|
|
shares,
|
|
|
underlying
|
|
securities
|
|
|
|
|
|
|
|
|
|
shares or
|
|
shares or
|
|
units, or
|
|
units or
|
|
|
unexercised
|
|
underlying
|
|
Option
|
|
|
|
|
|
units of
|
|
units of
|
|
other rights
|
|
other rights
|
|
|
options
|
|
unexercised options
|
|
exercise
|
|
Option
|
|
stock that
|
|
stock that
|
|
that have
|
|
that have
|
|
|
(#)
|
|
(#)
|
|
price
|
|
expiration
|
|
have not
|
|
have not
|
|
not vested
|
|
not vested
|
Name
|
|
Exercisable
|
|
Unexercisable
(a)
|
|
($)
|
|
date
|
|
vested (#)
|
|
vested ($)
|
|
(#)
(b)
|
|
($)
(c)
|
|
Ronald L. Rossetti
|
|
|
10,000
|
|
|
|
|
|
|
$
|
17.75
|
|
|
|
01/27/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
|
|
|
6.81
|
|
|
|
07/25/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
6.94
|
|
|
|
01/21/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
19.56
|
|
|
|
01/22/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
13.75
|
|
|
|
01/30/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
8.62
|
|
|
|
01/27/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
|
|
|
|
9.77
|
|
|
|
10/07/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
|
|
|
8.30
|
|
|
|
06/29/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000
|
|
|
|
|
|
|
|
5.50
|
|
|
|
07/25/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
180,000
|
|
|
$
|
1,324,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
185,000
|
|
|
|
1,361,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
(d)
|
|
$
|
368,000
|
|
|
|
135,000
|
(d)
|
|
|
993,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
415,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ronald W. Johnston
|
|
|
|
|
|
|
200,000
|
(1)
|
|
|
8.01
|
|
|
|
06/30/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin C. Connell
|
|
|
25,000
|
|
|
|
|
|
|
|
16.90
|
|
|
|
10/03/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
7.86
|
|
|
|
07/02/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
1,000
|
(2)
|
|
|
7.81
|
|
|
|
11/30/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,800
|
|
|
|
1,200
|
(3)
|
|
|
8.60
|
|
|
|
10/31/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
6,000
|
(4)
|
|
|
7.05
|
|
|
|
09/12/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
|
32,000
|
(5)
|
|
|
7.10
|
|
|
|
11/27/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
67,800
|
|
|
|
40,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Keith Omsberg
|
|
|
2,500
|
|
|
|
|
|
|
|
16.04
|
|
|
|
07/04/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,400
|
|
|
|
600
|
(6)
|
|
|
7.81
|
|
|
|
11/30/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,800
|
|
|
|
1,200
|
(7)
|
|
|
8.60
|
|
|
|
10/31/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
6,000
|
(8)
|
|
|
7.05
|
|
|
|
09/12/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(9)
|
|
|
10.20
|
|
|
|
09/30/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(10)
|
|
|
9.25
|
|
|
|
12/09/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,700
|
|
|
|
57,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David E. Fountain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael A. Lawler
(e)
|
|
|
30,000
|
|
|
|
|
|
|
|
8.60
|
|
|
|
10/31/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,000
|
|
|
|
|
|
|
|
5.95
|
|
|
|
08/23/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deanne M. Tully
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven M. Beckerman
(f)
|
|
|
30,000
|
|
|
|
|
|
|
|
8.70
|
|
|
|
04/06/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,000
|
|
|
|
|
|
|
|
5.95
|
|
|
|
08/23/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33
|
|
|
(a)
|
|
Vesting of the unexercisable option awards are set forth below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Footnote reference
|
|
Vesting date
|
|
Number
|
|
Ronald W. Johnston
|
|
|
(1
|
)
|
|
|
07/01/09
|
|
|
|
66,666
|
|
|
|
|
|
|
|
|
07/01/10
|
|
|
|
66,667
|
|
|
|
|
|
|
|
|
07/01/11
|
|
|
|
66,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin C. Connell
|
|
|
(2
|
)
|
|
|
12/01/08
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3
|
)
|
|
|
11/01/08
|
|
|
|
600
|
|
|
|
|
|
|
|
|
11/01/09
|
|
|
|
600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4
|
)
|
|
|
09/13/09
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
09/13/10
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
09/13/11
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5
|
)
|
|
|
11/28/08
|
|
|
|
8,000
|
|
|
|
|
|
|
|
|
11/28/09
|
|
|
|
8,000
|
|
|
|
|
|
|
|
|
11/28/10
|
|
|
|
8,000
|
|
|
|
|
|
|
|
|
11/28/11
|
|
|
|
8,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Keith S. Omsberg
|
|
|
(6
|
)
|
|
|
12/01/08
|
|
|
|
600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7
|
)
|
|
|
11/01/08
|
|
|
|
600
|
|
|
|
|
|
|
|
|
11/01/09
|
|
|
|
600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8
|
)
|
|
|
09/13/09
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
09/13/10
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
09/13/11
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9
|
)
|
|
|
10/01/08
|
|
|
|
6,000
|
|
|
|
|
|
|
|
|
10/01/09
|
|
|
|
6,000
|
|
|
|
|
|
|
|
|
10/01/10
|
|
|
|
6,000
|
|
|
|
|
|
|
|
|
10/01/11
|
|
|
|
6,000
|
|
|
|
|
|
|
|
|
10/01/12
|
|
|
|
6,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10
|
)
|
|
|
12/10/08
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
12/10/09
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
12/10/10
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
12/10/11
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
12/10/12
|
|
|
|
4,000
|
|
|
|
|
(b)
|
|
The shares vest April 30, 2011 provided the following share price performance targets are met
and maintained for 60 consecutive days.
|
|
|
|
|
|
|
|
|
|
Share price
|
|
|
|
|
performance target
|
|
|
|
Number of units
|
|
$
|
11
|
|
|
|
|
|
180,000
|
|
|
13
|
|
|
|
|
|
185,000
|
|
|
15
|
|
|
|
|
|
185,000
|
(c)
|
|
|
|
(c)
|
|
The market value was determined by multiplying $7.36 (the closing price of Tiers stock at
September 30, 2008) by the number of shares.
|
|
(d)
|
|
Of the 185,000 shares at the $15 share price performance target, 50,000 shares are payable in
cash.
|
|
(e)
|
|
Mr. Lawlers employment with us terminated September 26, 2008; as such, all options ceased
vesting on that date.
|
|
(f)
|
|
Mr. Beckermans employment with us terminated September 30, 2008; as such, all options ceased
vesting on that date.
|
34
Fiscal 2008 Option Exercises and Stock Vested
The following table sets forth for each named executive officer certain information about stock
options that were exercised during the fiscal year ended September 30, 2008:
|
|
|
|
|
|
|
|
|
|
|
Option awards
|
|
|
|
Number of shares
|
|
|
|
|
|
|
acquired on exercise
|
|
|
Value realized on
|
|
Name
|
|
(#)
|
|
|
exercise ($)
|
|
|
Ronald L. Rossetti
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
Ronald W. Johnston
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin C. Connell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Keith S. Omsberg
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David E. Fountain
|
|
|
150
|
|
|
|
323
|
|
|
|
|
200
|
|
|
|
462
|
|
|
|
|
1,349
|
|
|
|
2,765
|
|
|
|
|
4,900
|
|
|
|
10,633
|
|
|
|
|
1,400
|
|
|
|
3,220
|
|
|
|
|
|
|
|
|
|
|
|
7,999
|
|
|
|
17,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael A. Lawler
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deanne M. Tully
|
|
|
8,000
|
|
|
|
15,600
|
|
|
|
|
|
|
|
|
|
|
Steven M. Beckerman
|
|
|
|
|
|
|
|
|
Potential Payments Upon Termination or Change of Control
This section provides information regarding payments and benefits to the named executive officers
that were or would be triggered by termination of the officers employment (including resignation,
voluntary termination, or involuntary termination) or a change of control of Tier. A change of
control has been defined in the
Change of Control
section of the Compensation Discussion and
Analysis on page 27.
Other key terms within our employment agreements with our named executive officers are cause and
good reason. They are defined as follows:
Cause shall mean a finding by Tier of:
|
|
|
a conviction of the named executive officer of, or a plea of guilty or
nolo contendere
by the named executive officer to, any felony;
|
|
|
|
|
an intentional violation by the named executive officer of federal or state securities
laws;
|
|
|
|
|
willful misconduct or gross negligence by the named executive officer that has or is
reasonably likely to have a material adverse effect on Tier;
|
|
|
|
|
a failure of the named executive officer to perform his or her reasonably assigned
duties for Tier that has or is reasonably likely to have a material adverse effect on
Tier;
|
|
|
|
|
a material violation by the named executive officer of any material provision of our
Business Code of Conduct (or successor policies on similar topics) or any other applicable
policies in place;
|
35
|
|
|
a violation by the named executive officer of any provision of our Proprietary and
Confidential Information, Developments, Noncompetition and Nonsolicitation Agreement with
the named executive officers; or
|
|
|
|
|
fraud, embezzlement, theft or dishonesty by the named executive officer against Tier.
|
Good reason shall mean, without the named executive officers prior written consent, the occurrence
of any of the following:
|
|
|
any reduction in the named executive officers base salary;
|
|
|
|
|
any material diminution of the named executive officers duties, responsibilities,
powers or authorities;
|
|
|
|
|
any relocation of his or her principal place of employment by more than 50 miles or
requirement that the executive relocate his or her principal place of residence by more
than 50 miles; or
|
|
|
|
|
a material breach by Tier of any material provision of the employment agreement.
|
Under our corporate policy, all employees, including our named executive officers, are entitled to
payments for base salary and payout of any accrued personal time off, or PTO, accrued through the
termination date, but not yet paid.
Employment AgreementChief Executive Officer
On April 30, 2008, we entered into an employment agreement with our Chief Executive Officer, Ronald
L. Rossetti. Pursuant to the terms of this agreement, Mr. Rossetti is entitled to certain
compensation and benefits, payable in a lump sum (with the exception of health benefits, which
would be reimbursed monthly) within 30 days of the applicable event and provided Mr. Rossetti signs
a separation release. The following table describes the maximum potential payments that would have
been due to Mr. Rossetti as of September 30, 2008, upon designated situations outlined in his
employment agreement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
Involuntary for
|
|
Involuntary
|
|
termination
|
|
|
|
|
Benefits and payments
|
|
Voluntary
|
|
cause
|
|
not for cause
|
|
with good
|
|
Death or
|
|
Change of
|
upon termination
|
|
termination
(1)
|
|
termination
(1)
|
|
termination
(2)
|
|
reason
(2)
|
|
disability
(3)
|
|
control
(4)
|
|
Salary
|
|
$
|
10,769
|
|
|
$
|
10,769
|
|
|
$
|
410,769
|
|
|
$
|
410,769
|
|
|
$
|
410,769
|
|
|
$
|
810,769
|
|
Bonus
|
|
|
166,667
|
|
|
|
166,667
|
|
|
|
949,743
|
|
|
|
949,743
|
|
|
|
558,205
|
|
|
|
783,076
|
|
Stock options
(5)
|
|
|
579,500
|
|
|
|
579,500
|
|
|
|
579,500
|
|
|
|
579,500
|
|
|
|
579,500
|
|
|
|
579,500
|
|
Restricted stock
units
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health benefits
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
12,000
|
|
|
|
|
|
|
|
12,000
|
|
Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued PTO
|
|
|
(13,729
|
)
|
|
|
(13,729
|
)
|
|
|
(13,729
|
)
|
|
|
(13,729
|
)
|
|
|
(13,729
|
)
|
|
|
(13,729
|
)
|
|
Total
|
|
$
|
743,207
|
|
|
$
|
743,207
|
|
|
$
|
1,938,283
|
|
|
$
|
1,938,283
|
|
|
$
|
1,534,745
|
|
|
$
|
2,171,616
|
|
|
|
|
|
(1)
|
|
Amounts reflect maximum salary earned and prior year bonus accrued but not paid prior to date of termination and personal time off accrued through date of occurrence.
|
|
(2)
|
|
Amounts reflect maximum salary earned and prior year bonus accrued but not yet paid prior to date of termination, one year base salary, bonus equal to average historic bonus prorated for number of months
worked prior to occurrence, bonus equal to average historic bonus, immediate vesting of all stock options, restricted stock grants and restricted stock units already issued under Mr. Rossettis Enterprise
Value Award, or the EVA plan, twelve months continuation of health benefits and personal time off accrued through September 30, 2008.
|
|
(3)
|
|
Amounts reflect maximum salary earned and prior year bonus accrued but not paid prior to date of termination, one year base salary and bonus equal to average annual bonus paid for the previous three years,
or average historic bonus and immediate vesting of all stock options, restricted stock grants, restricted stock units already issued under the EVA plan and personal time off accrued through September 30, 2008.
|
|
(4)
|
|
Amounts reflect two times (a) the base salary plus (b) bonus equal to average historic bonus, immediate vesting of any stock options, restricted stock grants and restricted stock units already issued under
the EVA plan, twelve months continuation of health benefits and personal time off accrued through September 30, 2008.
|
|
(5)
|
|
The amount represents the value of vested options as of September 30, 2008 at a closing price of $7.36.
|
|
(6)
|
|
As of September 30, 2008, the target price for the vesting of the restricted stock units had not been met, therefore all units were considered unvested.
|
36
Employment AgreementChief Financial Officer
On July 1, 2008, we entered into an employment agreement with our Chief Financial Officer, Ronald
W. Johnston. Pursuant to the terms of this agreement, Mr. Johnston is entitled to certain
compensation and benefits, payable in a lump sum (with the exception of health benefits, which
would be reimbursed monthly) within 30 days of the applicable event and provided Mr. Johnston signs
a separation release. The following table describes the maximum potential payments that would have
been due to Mr. Johnston as of September 30, 2008, upon designated situations outlined in his
employment agreement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
Involuntary for
|
|
Involuntary not
|
|
termination
|
|
|
|
|
Benefits and payments upon
|
|
Voluntary
|
|
cause
|
|
for cause
|
|
with good
|
|
Death or
|
|
Change of
|
termination
|
|
termination
(1)
|
|
termination
(1)
|
|
termination
(2)
|
|
reason
(2)
|
|
disability
(2)
|
|
control
(3)
|
|
Salary
|
|
$
|
7,404
|
|
|
$
|
7,404
|
|
|
$
|
282,404
|
|
|
$
|
282,404
|
|
|
$
|
282,404
|
|
|
$
|
557,404
|
|
Bonus
|
|
|
68,750
|
|
|
|
68,750
|
|
|
|
68,750
|
|
|
|
68,750
|
|
|
|
68,750
|
|
|
|
68,750
|
|
Stock options
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health benefits
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
12,000
|
|
|
|
12,000
|
|
|
|
18,000
|
|
Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued PTO
|
|
|
12,684
|
|
|
|
12,684
|
|
|
|
12,684
|
|
|
|
12,684
|
|
|
|
12,684
|
|
|
|
12,684
|
|
|
Total
|
|
$
|
88,838
|
|
|
$
|
88,838
|
|
|
$
|
375,838
|
|
|
$
|
375,838
|
|
|
$
|
375,838
|
|
|
$
|
656,838
|
|
|
|
|
|
(1)
|
|
Amounts reflect maximum salary earned but not paid prior to date of termination, accrued prior year bonus not paid prior to date of termination date and personal time off accrued through date of occurrence.
|
|
(2)
|
|
Amounts reflect maximum salary earned but not paid prior to date of termination, accrued prior year bonus not paid prior to date of termination, one year base salary, twelve months continuation of health
benefits and personal time off accrued through September 30, 2008.
|
|
(3)
|
|
Amounts reflect maximum salary earned but not paid prior to date of termination, accrued prior year bonus not paid prior to date of termination, two times (a) base salary and (b) bonus equal to average
historic bonus, bonus equal to average historic bonus prorated for the number of months worked, immediate vesting of any stock options, eighteen months continuation of health benefits and personal time off
accrued through September 30, 2008.
|
|
(4)
|
|
The amount represents the value of vested options as of September 30, 2008 at a closing price of $7.36.
|
Employment AgreementSenior Vice President, Sales and Marketing
We have an employment agreement with Mr. Connell. Pursuant to the terms of this agreement, if his
employment is terminated for reasons other than for cause, Mr. Connell is entitled to certain
compensation and benefits, payable in a lump sum (with the exception of health benefits, which
would be reimbursed monthly) within 30 days of the applicable event provided he signs a separation
release. The following table describes the maximum potential payments that would have been due to
Mr. Connell as of September 30, 2008, upon designated situations outlined in his employment
agreement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
Involuntary for
|
|
Involuntary not
|
|
termination
|
|
|
|
|
Benefits and payments upon
|
|
Voluntary
|
|
cause
|
|
for cause
|
|
with good
|
|
Death or
|
|
Change of
|
termination
|
|
termination
(1)
|
|
termination
(1)
|
|
termination
(2)
|
|
reason
(2)
|
|
disability
(2)
|
|
control
(3)
|
|
Salary
|
|
$
|
6,731
|
|
|
$
|
6,731
|
|
|
$
|
256,731
|
|
|
$
|
256,731
|
|
|
$
|
256,731
|
|
|
$
|
506,731
|
|
Bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
335,616
|
|
Stock options
(4)
|
|
|
3,320
|
|
|
|
3,320
|
|
|
|
3,320
|
|
|
|
3,320
|
|
|
|
3,320
|
|
|
|
8,100
|
|
Health benefits
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
12,000
|
|
|
|
12,000
|
|
|
|
18,000
|
|
Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued PTO
|
|
|
42,067
|
|
|
|
42,067
|
|
|
|
42,067
|
|
|
|
42,067
|
|
|
|
42,067
|
|
|
|
42,067
|
|
|
Total
|
|
$
|
52,118
|
|
|
$
|
52,118
|
|
|
$
|
314,118
|
|
|
$
|
314,118
|
|
|
$
|
314,118
|
|
|
$
|
910,514
|
|
|
37
|
|
|
(1)
|
|
Amounts reflect maximum salary earned but not yet paid prior to date of termination, accrued prior
year bonus not yet paid prior to date of termination and personal time off accrued through September 30,
2008.
|
|
(2)
|
|
Amounts reflect maximum salary earned but not yet paid prior to date of termination, accrued prior
year bonus not yet paid prior to date of termination, one year base salary, twelve months continued health
benefits and personal time off accrued through September 30, 2008.
|
|
(3)
|
|
Mr. Connells change of control amounts reflect maximum salary earned but not yet paid prior to date
of termination, accrued prior year bonus not yet paid prior to date of termination, two times (a) base
salary and (b) bonus equal to the average bonus paid over the last three years, immediate vesting of
options that would have vested within eighteen months of September 30, 2008, eighteen months continued
health benefits and personal time off accrued through September 30, 2008.
|
|
(4)
|
|
The amount represents the value of vested options as of September 30, 2008 at a closing price of $7.36.
|
Vice President, General Counsel and Corporate Secretary
We have an employment agreement with Mr. Omsberg, whereby, if his employment is terminated for
reasons other than for cause, he is entitled to certain compensation and benefits, payable in a
lump sum (with the exception of health benefits, which would be reimbursed monthly) within 30 days
of the applicable event provided he signs a separation release. The following table describes the
maximum potential payments that would have been due to Mr. Omsberg as of September 30, 2008, upon
designated situations outlined in his employment agreement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
Involuntary for
|
|
Involuntary not
|
|
termination
|
|
|
|
|
Benefits and payments upon
|
|
Voluntary
|
|
cause
|
|
for cause
|
|
with good
|
|
Death or
|
|
Change of
|
termination
|
|
termination
(1)
|
|
termination
(1)
|
|
termination
(2)
|
|
reason
(2)
|
|
disability
(2)
|
|
control
(3)
|
|
Salary
|
|
$
|
5,115
|
|
|
$
|
5,115
|
|
|
$
|
195,115
|
|
|
$
|
195,115
|
|
|
$
|
195,115
|
|
|
$
|
385,115
|
|
Bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
67,466
|
|
Stock options
(4)
|
|
|
1,240
|
|
|
|
1,240
|
|
|
|
1,240
|
|
|
|
1,240
|
|
|
|
1,240
|
|
|
|
1,860
|
|
Health benefits
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
12,000
|
|
|
|
12,000
|
|
|
|
18,000
|
|
Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued PTO
|
|
|
17,717
|
|
|
|
17,717
|
|
|
|
17,717
|
|
|
|
17,717
|
|
|
|
17,717
|
|
|
|
17,717
|
|
|
Total
|
|
$
|
24,072
|
|
|
$
|
24,072
|
|
|
$
|
226,072
|
|
|
$
|
226,072
|
|
|
$
|
226,072
|
|
|
$
|
490,158
|
|
|
|
|
|
(1)
|
|
Amounts reflect maximum salary earned but not yet paid prior to date of termination, accrued prior
year bonus not yet paid prior to date of termination and personal time off accrued through September 30,
2008.
|
|
(2)
|
|
Amounts reflect maximum salary earned but not yet paid prior to date of termination, accrued prior
year bonus not yet paid prior to date of termination, one year base salary, twelve months continued health
benefits and personal time off accrued through September 30, 2008.
|
|
(3)
|
|
Amounts reflect maximum salary earned but not yet paid prior to date of termination, accrued prior
year bonus not yet paid prior to date of termination, two times (a) base salary and (b) bonus equal to the
average bonus paid over the preceding three years, immediate vesting of options that would have vested
within eighteen months of September 30, 2008, eighteen months continued health benefits and personal time
off accrued through September 30, 2008.
|
|
(4)
|
|
The amount represents the value of vested options as of September 30, 2008 at a closing price of $7.36.
|
Payouts to Named Executive Officers in Connection with Termination of Employment
On December 12, 2007, we entered into a transition agreement with Ms. Tully for employment
separation effective March 31, 2008 for the payment of one years base salary in a single lump sum
payment at $220,000, COBRA benefit reimbursement for a period of 12 months, and the reimbursement
of out-placement services not to exceed $7,500. In addition, we entered into a consulting
agreement with Ms. Tully for a period of April 2008 through September 2008, pursuant to which we
compensated her $18,333 per month.
Mr. Lawlers employment with Tier terminated on September 26, 2008. Pursuant to his employment
agreement dated October 29, 2007, Mr. Lawler was entitled to a lump sum payment equal to one times
his annual base salary of $237,000 and the reimbursement of COBRA benefits for a period of up to 12
months.
38
Mr. Beckermans employment with Tier terminated on September 30, 2008. Pursuant to his employment
agreement dated October 29, 2007, Mr. Beckerman was entitled to a lump sum payment of two times his
annual base compensation of $220,000, and reimbursement of COBRA benefits for the period of 18
months. In addition, we entered into a consulting agreement with Mr. Beckerman for a period of
October and November 2008, pursuant to which we compensated him $19,866 per month.
39
DIRECTOR COMPENSATION
The Governance and Nominating Committee of the Board determines the compensation of our
non-employee Board members. Compensation is reviewed annually and when the Governance and
Nominating Committee deems necessary, and is compared with companies of similar nature, capital
investment, revenues, and headcount. In addition to the results of a peer study, prior annual
retainers and per-meeting fees are taken into account to determine overall compensation.
The following table describes the compensation program for our non-employee directors:
|
|
|
|
|
|
|
|
|
|
|
Fiscal
|
|
Effective
|
Pay component
|
|
2008
|
|
October 1, 2008
|
Board retainer (payable quarterly in arrears)
|
|
$
|
15,000
|
|
|
$
|
20,000
|
|
|
|
|
|
|
|
|
|
|
Board member fee (per meeting)
|
|
|
|
|
|
|
|
|
In-person meeting
|
|
|
1,000
|
|
|
|
1,000
|
|
Telephonic meeting
|
|
|
1,000
|
|
|
|
500
|
|
|
|
|
|
|
|
|
|
|
Committee chair retainer (payable quarterly in arrears)
|
|
|
|
|
|
|
|
|
Audit committee
|
|
|
5,000
|
|
|
|
5,000
|
|
All other committees
|
|
|
|
|
|
|
2,500
|
|
|
|
|
|
|
|
|
|
|
Committee meeting fee (per meeting)
|
|
|
|
|
|
|
|
|
In-person meeting
|
|
|
1,000
|
|
|
|
1,000
|
|
Telephonic meeting
|
|
|
1,000
|
|
|
|
500
|
|
|
|
|
|
|
|
|
|
|
Lead director retainer (payable quarterly in arrears)
|
|
|
5,000
|
|
|
|
5,000
|
|
Effective as of March 6, 2007, a Special Committee for Divestments was created. The Special
Committee for Divestments advised management in the divestment process and assisted in evaluating
offers for certain business units. The Special Committee for Divestments consisted of Morgan P.
Guenther (Chair), Bruce R. Spector, John J. Delucca, and Ronald L. Rossetti. The chair of the
Special Committee for Divestments was paid an annual retainer of $20,000, payable quarterly in
arrears. The Board dissolved the Special Committee for Divestments effective October 1, 2008,
because we had substantially completed our divestment program.
In addition, we reimburse our Board members for reasonable expenses, including travel related
expenses, incurred to attend Board and/or committee meetings.
Effective October 1, 2008, the Governance and Nominating Committee has authorized an annual equity
award, granted on the date of the annual stockholder meeting, of 9,000 restricted stock units
payable in cash and vesting in full three years from the date of grant. The vesting and payout
provisions of the restricted stock units are as follows:
|
|
|
Death and disabilityPro rata vesting; immediate payout
|
|
|
|
|
Voluntary resignationPro rata vesting; payable at end of 3-year vesting period
|
|
|
|
|
Termination for causeForfeit entire award
|
|
|
|
|
Change-in-control100% vesting, payable on date of change-in-control
|
Prior to October 1, 2008, each non-employee director was granted options to purchase 20,000 shares
of common stock upon the election to the Board by the stockholders at each Annual Meeting of
Stockholders, which options were fully vested upon grant. Prior to October 1, 2008, each
non-employee director elected by the Board, and not by the stockholders in conjunction with an
annual meeting, was
40
granted an option on the date of his or her election to purchase a number of shares of common stock
calculated by multiplying 1,677 by the number of full calendar months remaining from the date of
his or her initial election to the Board until the first anniversary of the prior years annual
meeting. The closing sale price of a share of our common stock on the date of the option grant was
the exercise price of the option, consistent with the way we determine exercise prices on other
option grants.
Mr. Rossetti, the only director who is also a Tier employee, receives no compensation for serving
as a director.
Fiscal 2008 Director Compensation
For our fiscal year ended September 30, 2008, our directors were compensated in the manner
described above. The following table sets forth information regarding the compensation of our
non-employee directors for the fiscal year ended September 30, 2008. David A. Poe joined our Board
of Directors on October 1, 2008, and therefore is not included in the following table.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees earned or
|
|
Option awards
|
|
|
Name
|
|
paid in cash ($)
|
|
($)
(1) (2)
|
|
Total ($)
|
|
Charles W. Berger
(Chair Audit Committee)
|
|
$
|
54,000
|
|
|
$
|
153,497
|
|
|
$
|
207,497
|
|
Samuel Cabot III
(Chair Compensation
Committee and Lead Director)
|
|
|
56,000
|
|
|
|
153,497
|
|
|
|
209,497
|
|
John J. Delucca
|
|
|
35,750
|
|
|
|
63,326
|
|
|
|
99,076
|
|
Morgan P. Guenther
(Chair Special
Committee for Divestitures and Chair
Governance and Nominating Committee)
|
|
|
67,000
|
|
|
|
153,497
|
|
|
|
220,497
|
|
Philip G. Heasley
|
|
|
3,750
|
|
|
|
35,422
|
|
|
|
39,172
|
|
T. Michael Scott
(3)
|
|
|
21,250
|
|
|
|
90,171
|
|
|
|
111,421
|
|
Bruce R. Spector
(3)
|
|
|
21,250
|
|
|
|
90,171
|
|
|
|
111,421
|
|
James R. Stone
(4)
|
|
|
31,750
|
|
|
|
63,326
|
|
|
|
95,076
|
|
|
|
|
(1)
|
|
The amounts included in this column reflect the value of option awards that were recognized
as an expense for financial statement reporting purposes in fiscal 2008, calculated pursuant
to SFAS 123R. Assumptions used in the calculation of these amounts are included in footnote
13 to the audited consolidated financial statements included in our annual report on Form 10-K
for the fiscal year ended September 30, 2008. The following table sets forth each option
award represented in the column and the amount included for each such award:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of shares
|
|
Amount included in
|
Name
|
|
Date of award
|
|
underlying options (#)
|
|
fiscal 2008 ($)
|
|
Charles W. Berger
|
|
08/24/06
02/28/08
|
|
|
40,000
20,000
|
*
|
|
$
|
90,171
63,326
|
|
|
|
|
|
|
|
|
|
|
|
|
Samuel Cabot III
|
|
08/24/06
02/28/08
|
|
|
40,000
20,000
|
*
|
|
|
90,171
63,326
|
|
|
|
|
|
|
|
|
|
|
|
|
John J. Delucca
|
|
02/28/08
|
|
|
20,000
|
|
|
|
63,326
|
|
|
|
|
|
|
|
|
|
|
|
|
Morgan P. Guenther
|
|
08/24/06
02/28/08
|
|
|
40,000
20,000
|
*
|
|
|
90,171
63,326
|
|
|
|
|
|
|
|
|
|
|
|
|
Philip G. Heasley
|
|
08/01/08
|
|
|
10,002
|
|
|
|
35,422
|
|
|
|
|
|
|
|
|
|
|
|
|
T. Michael Scott
|
|
08/24/06
|
|
|
40,000
|
*
|
|
|
90,171
|
|
|
|
|
|
|
|
|
|
|
|
|
Bruce R. Spector
|
|
08/24/06
|
|
|
40,000
|
*
|
|
|
90,171
|
|
|
|
|
|
|
|
|
|
|
|
|
James R. Stone
|
|
02/28/08
|
|
|
20,000
|
|
|
|
63,326
|
|
|
|
|
*
|
|
On August 24, 2006, our non-employee Board members were granted options to purchase
40,000 shares of common stock, which vest as to 20% of the underlying shares granted on
the anniversary of the grant date. On December 10, 2007, the Compensation Committee
passed a resolution to accelerate the vesting of these options effective December 7,
2007.
|
41
|
|
|
(2)
|
|
The following table sets forth the outstanding options held by each of our non-employee
directors as of September 30, 2008:
|
|
|
|
|
|
Name
|
|
Options outstanding (#)
|
|
Charles W. Berger
|
|
|
140,000
|
|
Samuel Cabot III
|
|
|
200,000
|
|
John J. Delucca
|
|
|
40,000
|
|
Morgan P. Guenther
|
|
|
150,000
|
|
Philip G. Heasley
|
|
|
10,002
|
|
James R. Stone
|
|
|
38,337
|
|
(3)
|
|
Mr. Scott and Mr. Spector did not stand for re-election at our 2008 Annual Meeting.
|
|
(4)
|
|
Mr. Stone was a director during fiscal year 2008 but has not been nominated for re-election at
our 2009 Annual Meeting.
|
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee has reviewed and discussed the consolidated financial statements for the fiscal
year ended September 30, 2008 with management and McGladrey & Pullen, LLP, Tier Technologies,
Inc.s registered public accounting firm for fiscal year 2008. The Audit Committee also reviewed
and discussed with the registered public accounting firm the matters required to be discussed by
Statement of Auditing Standards No. 61, as amended.
The Audit Committee discussed with the registered public accounting firm its independence from
Tier. The Audit Committee also received from and discussed with the registered public accounting
firm its written disclosures and the letter required by Independence Standards Board Standard No.
1.
Based upon the reviews and discussions noted above, the Audit Committee recommended to the Board
that the audited financial statements be included in Tiers Annual Report on Form 10-K for the
fiscal year ended September 30, 2008.
The foregoing report is given by the members of the Audit Committee: Charles W. Berger (Chair),
and Morgan P. Guenther, and James R. Stone.
PRINCIPAL ACCOUNTING FEES AND SERVICES
The aggregate fees billed by McGladrey & Pullen, LLP, or McGladrey, to us for the fiscal years
ended September 30, 2008 and 2007 are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
2007
|
|
Audit Fees
(1)
|
|
$
|
251
|
|
|
$
|
346
|
|
Audit Related Fees
(2)
|
|
|
272
|
|
|
|
230
|
|
Tax Fees
|
|
|
|
|
|
|
|
|
All Other Fees
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
523
|
|
|
$
|
576
|
|
|
|
|
|
(1)
|
|
Represents fees for the audit of our financial
statements, review of our quarterly financial statements,
and advice on accounting matters directly related to the
audit and audit services provided in connection with
other statutory and regulatory filings.
|
|
(2)
|
|
Represents fees associated with the audit of our
internal controls over financial reporting to comply with
Section 404 of the Sarbanes-Oxley Act of 2002.
|
The Audit Committee has a policy requiring that it approve the scope, extent, and associated fees
of any audit services provided by our independent registered public accounting firm and that it
pre-approve all non-audit related services performed by the independent registered public
accounting firm. For the fiscal year ended September 30, 2008, the Audit Committee pre-approved
100% of the services performed by McGladrey and did not rely on the
de minimis
exception under Rule
2-01(c)(7)(i)(C) of Regulation S-X under the Exchange Act.
42
PROPOSAL TWO: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our Audit Committee selected McGladrey as our independent registered public accounting firm for
fiscal year 2009, subject to ratification by our stockholders at the annual meeting.
Representatives of McGladrey are expected to be present at the annual meeting, will have an
opportunity to make a statement if they so desire, and will be available to respond to appropriate
questions.
Shareholder ratification of the selection of McGladrey as our independent registered public
accounting firm is not required by our Bylaws or otherwise. However, the Audit Committee is
submitting the selection of McGladrey to the shareholders for ratification as a matter of good
corporate practice. If the shareholders fail to ratify the selection of McGladrey, the Audit
Committee will reconsider whether to retain that firm. Even if the selection of McGladrey is
ratified, the Audit Committee in its discretion may select a different independent registered
public accounting firm at any time during the year if it determines that such a change would be in
the best interests of Tier and our shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
PROPOSAL TWO.
PROPOSAL THREE: SHAREHOLDER PROPOSAL
We have been advised that the following non-binding shareholder proposal will be presented at the
Annual Meeting. The proposal will be voted on at the Annual Meeting if the proponent, or a
qualified representative, is present at the meeting and submits the proposal for a vote. The text
of the shareholder proposal and supporting statement appear below as received by us, and we assume
no responsibility for its content or accuracy. Following the shareholder proposal is our statement
in opposition.
FOR THE REASONS SET FORTH BELOW IN THE BOARDS STATEMENT IN OPPOSITION TO THE SHAREHOLDER PROPOSAL,
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST
PROPOSAL THREE.
Beginning of Shareholder Proposal
Stockholder Proposal
RESOLVED, that the stockholders of Tier Technologies, Inc. (Tier) request that Tiers Board of
Directors restore to stockholders their rights to directly influence the strategic direction and
possible sale of Tier by (i) terminating Tiers poison pill rights plan and (ii) reinstating the
ability of stockholders owning at least 10% of the voting power to call special meetings of
stockholders.
Supporting Statement
In January 2006, the Board of Tier stripped its stockholders, without their consent, of their
ability to directly receive offers for Tier by implementing a poison pill that effectively prevents
any person from acquiring 15% or more of the outstanding common stock without the Boards consent.
Further, the Board eliminated the ability of stockholders to pursue value-creation proposals
between annual meetings by denying stockholders the right to call special meetings. These actions
appear to have been taken in response to Tiers widely reported operating and accounting problems.
Nearly three years have passed since these events and Tier is no longer the poorly integrated
collection of weak performing businesses with inadequate financial controls that it then was. The
Board should now have the confidence to reverse the defensive mechanisms then adopted, since they
no longer serve the
43
best interests of Tier and its stockholders and represent a de facto transfer of voting rights away
from stockholders to management.
Poison pills reduce accountability and entrench management, prevent investors from making
financially meaningful investments in small capitalization companies like Tier, and allow a Board
unilaterally to block offers for a company that are in the best interests of stockholders. If a
companys Board and management have no meaningful equity stake (as is the case with Tier), this
creates a significant conflict of interest between the Board and stockholders. Recently, in
response to stockholder complaints, numerous companies have terminated or not renewed their poison
pills. Tiers Board should remove its obsolete poison pill that currently acts as an impediment to
realizing shareholder value.
The elimination of the right of stockholders to call special meetings limits the direct voice of
stockholders in Tiers strategic direction by allowing management to unilaterally decide if a
proposal may be presented to stockholders between annual meetings. Tier is rapidly changing its
Board composition, its management team, its operations, and its overall strategic direction.
Annual meetings do not provide the access necessary for shareholders to bring forward and vote on
critical and timely matters while the company is undergoing such transformations.
By supporting this proposal, stockholders can advise the Board of their concerns regarding Tiers
continued maintenance of defenses against offers and proposals that may maximize shareholder value,
and express their desire that the Board be open to all strategic alternatives for Tier, including
its sale. While the adoption of this proposal will not legally bind the Board, we trust that given
its fiduciary responsibilities, the Board will honor the stockholders wishes as reflected in the
vote on the proposal.
Discovery, one of Tiers largest shareholders, strongly urges you to vote FOR this proposal.
End of Shareholder Proposal
Boards Statement in Opposition
This shareholder proposal requests that your Board of Directors take two separate actions. First,
it requests that we eliminate our shareholder rights plan, and second, it requests that we amend
our bylaws to permit any holder (or group of holders) of ten percent or more of our common stock to
call a special meeting of shareholders for any reason, at any time, and as frequently as it (or
they) desire. Your Board recommends that you vote against the proposal, because neither part of
the proposal is advisable or in the best interest of the company or its shareholders. Among other
things:
|
|
|
The rights plan is intended to enhance shareholder value and protect all the companys
shareholders from an unfair or coercive offer to acquire the company.
|
|
|
|
|
The bylaw amendment that has been requested would permit the holders of a small minority
of Tier stock to impose their own agenda, and the costs and disruptions of a special
meeting, on all shareholders.
|
Shareholder Rights Plan
Your Board of Directors adopted Tiers shareholder rights plan in January 2006. (A rights plan is
sometimes called a poison pill.) We amended the plan in July 2007 to increase the number of
shares that could be acquired without triggering the plan. Your directors are fiduciaries for all
shareholders and must consider the interests of all shareholders when acting. Tiers rights plan
was designed to strengthen the Boards ability to maximize value for all shareholders and to
protect shareholders from abusive or opportunistic takeover tactics by encouraging negotiations
with the Board.
Tiers shareholder rights plan allows the Board to protect Tier and all shareholders from unfair
and coercive takeover tactics, such as a partial offer, a creeping acquisition, or other tactics
that the Board
44
believes would be unfair to the companys shareholders. For example, in a partial offer or
creeping acquisition, a bidder seeks to acquire a majority or controlling stake in a target company
but does not seek ownership of 100% of the target companys shares. In this type of a transaction,
the bidder would pay a control premium only to the holders of the shares it purchased; the premium
would not be available to all shareholders. Tiers Board believes that Tiers shareholder rights
plan may deter offers of this type. Under Tiers shareholder rights plan, each share of Tiers
common stock has associated with it one preferred share purchase right, and if a person acquires
more than 15% of Tiers common stock before Tiers Board redeems the rights, the rights permit each
Tier shareholder (other than the acquiring person and its affiliates and associates) to acquire
additional shares of Tiers common stock at a substantial discount. The result would be
substantial dilution of the acquiring persons stake in the Company. The Board believes that the
prospect of this dilution, coupled with the Boards authority to redeem the rights and therefore
prevent this dilution, will encourage prospective bidders for the Company to negotiate with the
Board. The Board intends to use its power under the plan consistent with its fiduciary duties.
The Board believes that Tiers shareholder rights plan should not affect any prospective offeror
willing to make an offer at a fair price and otherwise in the best interests of the company and its
shareholders, as determined by the Board. Similar plans are in effect at approximately 1,200
public companies.
The objective of the Board in adopting the shareholder rights plan was, and continues to be, the
preservation and maximization of Tiers value for all shareholders. The rights plan is not
designed or intended to prevent an unsolicited, non-abusive offer to acquire the company at a fair
price. Rather, it is designed to enable the Board to protect shareholders against inadequate
offers and abusive or opportunistic takeover tactics. Such plans have been used to increase the
bargaining power of targeted companies and their shareholders by encouraging negotiations between
the potential acquirer and the board of directors of the targeted company, resulting in higher
value for shareholders. While we believe rights plans generally provide such benefits, there can
be no assurance that the Companys rights plan will produce similar results in connection with any
particular transaction.
The following studies of merger and acquisition activity over the last 15 years support the Boards
belief that plans similar to Tiers shareholder rights plan neither prevent unsolicited offers from
occurring nor prevent companies from being acquired at prices that are fair and adequate to
shareholders:
|
|
|
An August 2005 study, based upon data from transactions in the period from
January 1, 2002 to June 30, 2005, concluded that companies with rights plans on
average commanded higher takeover premiums than companies without such plans.
|
|
|
|
|
A 2004 report by the Investor Responsibility Research Center (IRRC) concluded
that evidence is increasingly strong that, in general, companies with poison pills
receive higher premiums in takeover situations than do those that do not.
|
|
|
|
|
A 1997 study published by Georgeson & Company of takeover premiums during the
period from 1992 to 1996 also concluded that premiums paid to acquire target
companies with rights plans were higher than premiums paid for target companies
that did not have such plans.
|
Thus, we believe that rights plans serve their principal objectives: protection against inadequate
offers and abusive tactics and increased bargaining power.
Special Shareholder Meetings
Tiers shareholders currently have significant rights under our charter and bylaws:
|
|
|
Each of your directors is elected annually.
|
|
|
|
|
Shareholders may propose business to be conducted at the annual meeting.
|
45
|
|
|
Shareholders may act by written consent at any time.
|
We also communicate regularly with all shareholders:
|
|
|
We hold conference calls, which are open to all shareholders, after we file our
quarterly and annual reports with the SEC.
|
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We receive letters from shareholders, and letters raising issues of general
concern are promptly forwarded to all of the directors.
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Where appropriate, we take other actions to ensure that shareholders are able to
communicate directly with the Board.
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There is no shortage of opportunities for communication between shareholders and Tier. Because
shareholders may act by written consent at any time, there is no shortage of opportunities for
shareholders to act.
By contrast, special meetings can be costly and disruptive. Proxy materials must be prepared and
sent to each shareholder for each special meeting called. This imposes legal, printing, and
distribution costs on your company. We have never held a special meeting, but the printing and
distribution cost for our annual meetings is approximately $20,000. Legal costs vary from meeting
to meeting depending on the matters to be voted on at the meeting. Preparing for special meetings
also requires the attention of your Board and senior management, potentially diverting them from
managing our operations and executing on our business strategy. If holders of ten percent of our
stock had an unlimited ability to call special meetings at any time and for any purpose, they could
use the mechanism of a special meeting to serve their narrow interests and impose their own agenda
on the majority. Frequent shareholder solicitation would require us to incur significant expense
without a corresponding benefit to Tier and our shareholders as a whole.
Our current bylaws permit the Board, the Chairman of the Board, the Chief Executive Officer, or the
President to call a special meeting. The current bylaw provision is appropriate because it
requires the directors and senior management, rather than a single minority shareholder, to
determine, after thoughtful and complete analysis and evaluation of the issue consistent with their
fiduciary duties, when it is in the best interests of our shareholders to convene a special
meeting. For example, Delaware law provides that matters such as entering into merger agreements
or charter amendments (the primary means of effecting acquisitions and restructurings) must first
be approved by the Board and then submitted to shareholders for approval. NASDAQ rules require the
companys shareholders to approve certain issuances of stock equaling 20 percent or more of the
number of outstanding shares of stock, a change of control of the company, and certain equity
compensation plans or material amendments to existing plans. In addition to these specific actions
that require shareholder approval, the Board has a fiduciary duty to the shareholders. Pursuant to
this duty, the Board manages the affairs of the company in accordance with its sound business
judgment, a responsibility that includes determining when a matter is appropriate for shareholder
consideration.
Our Board believes our current system minimizes the costs associated with holding special meetings
and ensures that such meetings are called only when they are in the best interests of Tier and our
shareholders as a whole.
Conclusion
For the reasons stated above, your Board opposes both elements of the shareholder proposal.
ACCORDINGLY, YOUR BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE
AGAINST
PROPOSAL THREE.
46
OTHER MATTERS
The Board knows of no other matters that will be presented for consideration at the annual meeting.
If any other matters are properly brought before the annual meeting, it is the intention of the
persons named in the accompanying proxy to vote on such matters in accordance with their best
judgment.
ADDITIONAL INFORMATION
Stockholder Proposals for our next Annual Meeting
If a stockholder intends to present a proposal for inclusion in the proxy statement for our next
annual meeting, the stockholder must follow the procedures outlined in Rule 14a-8 under the
Exchange Act. Such proposals must be addressed to Tier Technologies, Inc., Attention: Corporate
Secretary, 10780 Parkridge Boulevard, Suite 400, Reston, Virginia, 20191, and received no later
than October 5, 2009.
Proposals not intended to be included in next years proxy statement, but that are instead sought
to be presented directly at the 2010 annual meeting, including nominations of director candidates,
must be received by us at the above-mentioned address no later than 60 days nor more than 90 days
prior to the first anniversary of the date of this years meeting (but if we give less than 70 days
advance notice or prior public disclosure of the date of such meeting, we must receive such
proposals and director nominations by the close of business on the tenth day following the mailing
of notice of the date of such annual meeting or public disclosure of the date of such annual
meeting, whichever comes first) and must otherwise comply with the requirements of our bylaws.
If you and other residents at your mailing address own shares of our common stock in street name,
your broker, bank or other nominee record holder may have notified you that your household will
receive only one notice of Internet availability of proxy materials, annual report and proxy
statement for each company in which you hold stock through that broker or bank. Each stockholder
will continue to receive a separate proxy card or voting instruction card. If you would like to
receive additional copies of the notice of Internet availability of proxy materials, annual report,
and proxy statement, or if you are receiving multiple copies and would like to receive only one
copy for your household, you should contact your broker, bank, or other nominee holder, or you may
contact us by mail or phone at Tier Technologies, Inc., 10780 Parkridge Boulevard, Suite 400,
Reston, Virginia 20191, attention Corporate Secretary, (571) 382-1000.
A copy of the our Annual Report on
Form 10-K
for the fiscal year ended September 30, 2008 is
available without charge upon written request to Corporate Secretary, Tier Technologies, Inc.,
10780 Parkridge Boulevard, Suite 400, Reston, Virginia 20191.
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By Order of the Board of Directors
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Keith S. Omsberg
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Secretary
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February XX, 2009
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47
APPENDIX A
INFORMATION CONCERNING PARTICIPANTS IN THE COMPANYS SOLICITATION OF PROXIES
The following tables (Directors and Nominees and Officers and Employees) set forth the name,
principal business address, and the present principal occupation or employment, and the name,
principal business, and address of any corporation or other organization in which their employment
is carried on, of our directors, nominees, officers, and employees who, under the rules of the
Securities and Exchange Commission, are considered to be participants in our solicitation of
proxies from our stockholders in connection with our 2008 Annual Meeting of Stockholders.
Directors and Nominees
The principal occupations of our directors and nominees who are considered participants in our
solicitation are set forth under the section above titled Proposal One: Election of Directors of
this proxy statement. The name and business addresses of the organization of employment of our
directors and nominees are as follows:
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Name
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Business Address
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Charles W. Berger
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c/o Tier Technologies, Inc., 10780 Parkridge Blvd., Suite 400, Reston, VA 20191
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Samuel Cabot III
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c/o Tier Technologies, Inc., 10780 Parkridge Blvd., Suite 400, Reston, VA 20191
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John J. Delucca
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c/o Tier Technologies, Inc., 10780 Parkridge Blvd., Suite 400, Reston, VA 20191
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Morgan P. Guenther
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c/o Tier Technologies, Inc., 10780 Parkridge Blvd., Suite 400, Reston, VA 20191
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Philip G. Heasley
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c/o Tier Technologies, Inc., 10780 Parkridge Blvd., Suite 400, Reston, VA 20191
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David A. Poe
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c/o Tier Technologies, Inc., 10780 Parkridge Blvd., Suite 400, Reston, VA 20191
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Ronald L. Rossetti
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c/o Tier Technologies, Inc., 10780 Parkridge Blvd., Suite 400, Reston, VA 20191
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James R. Stone
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c/o Tier Technologies, Inc., 10780 Parkridge Blvd., Suite 400, Reston, VA 20191
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Officers and Employees
The principal occupations of our executive officers and employees who are considered participants
in our solicitation of proxies are set forth below. The principal occupation refers to such
persons position with our company, and the business address for each person is Tier Technologies,
Inc., 10780 Parkridge Blvd., Suite 400, Reston, VA 20191.
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Name
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Principal Occupation
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Ronald L. Rossetti
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Chairman and Chief Executive Officer
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Ronald W. Johnston
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Chief Financial Officer
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Nina K. Vellayan
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Chief Operating Officer
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Kevin C. Connell
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Senior Vice President, Sales and Marketing
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Keith S. Kendrick
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Senior Vice President, Strategic Marketing
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Keith S. Omsberg
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Vice President, General Counsel, and Secretary
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Information Regarding Ownership of the Companys Securities by Participants
The shares of our common stock beneficially owned or held as of January 16, 2009 by the persons
listed above under Directors and Nominees and Officers and Employees, other than Nina K.
Vellayan and Keith S. Kendrick, are set forth in the section entitled Stock Ownership Directors
and Executive Officers of this proxy statement. As of January 16, 2009, neither Nina K. Vellayan
nor Keith Kendrick is a beneficial owner of our common stock.
48
Information Regarding Transactions in the Companys Securities by Participants
The following table sets forth all transactions that may be deemed purchases and sales of shares of
our common stock by the individuals who are considered participants between January 16, 2007 and
January 16, 2009. Except as described in this proxy statement, shares of our common stock owned of
record by each participant are also beneficially owned by such participant. Unless otherwise
indicated, all transactions were in the public market or pursuant to our equity compensation plans,
and none of the purchase price or market value of those shares is represented by funds borrowed or
otherwise obtained for the purpose of acquiring or holding such securities.
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Name
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Date
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Number of Shares
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Transaction Type
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Charles W. Berger
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Samuel Cabot III
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02/27/07
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5,000
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(1
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)
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07/31/07
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10,000
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(1
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)
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John J. Delucca
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Morgan P. Guenther
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Philip G. Heasley
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David A. Poe
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Ronald L. Rossetti
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02/27/07
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5,000
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(1
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07/31/07
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10,000
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(1
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09/05/08
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2,900
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(2
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09/08/08
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50
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(2
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09/09/08
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1,115
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(2
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09/10/08
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3,000
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(2
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09/11/08
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2,600
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(2
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09/12/08
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2,200
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(2
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)
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09/15/08
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500
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(2
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)
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James R. Stone
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Ronald W. Johnston
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Nina K. Vellayan
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Kevin C. Connell
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Keith S. Kendrick
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Keith S. Omsberg
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(1)
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Acquired Option exercise
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(2)
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Acquired Open market purchase
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49
Termination or Change of Control Arrangements with Participants
In addition to the termination or change of control arrangements described in the proxy statement,
the following participants are party to termination or change of control arrangements with us:
Nina K. Vellayan and Keith S. Kendrick. A brief description of the principal terms of the
arrangements is as follows:
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upon termination of employment by Tier for disability or termination of employment by
death, each of Ms. Vellayan and Mr. Kendrick will be entitled to one times the base salary
in effect on the date of termination, payment of any accrued prior year bonus and twelve
months continuation of health benefits;
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upon termination of employment by Tier without cause or by the individual with good
reason, each of Ms. Vellayan and Mr. Kendrick will be entitled to one times the base salary
in effect on the date of termination, payment of any accrued prior year bonus and twelve
months continuation of health benefits; and
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upon termination of employment by Tier after a change in control, each of Ms. Vellayan
and Mr. Kendrick will be entitled to two times the base salary in effect on the date of
termination, two times the average annual bonus paid to the individual, payment of any
accrued prior year bonus, immediate vesting of all options or stock awards and eighteen
months continuation of health benefits.
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Change of control is defined as set forth in the
Change of Control
section of the Compensation
Discussion and Analysis section of the proxy statement.
Miscellaneous Information Regarding Participants
In addition to the employment arrangements described in the proxy statement, the following
participants are party to employment agreements with us:
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Nina K. Vellayan, our Chief Operating Officer, is employed pursuant to an employment
agreement, which was filed as Exhibit 10.34 to our Annual Report on Form 10-K filed on
December 10, 2008; and
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Keith S. Kendrick, our Senior Vice President Strategic Marketing, is employed pursuant
to an employment agreement, which was filed as Exhibit 10.2 to a Current Report on Form 8-K
filed on July 7, 2008.
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Except as described in this Appendix A or the proxy statement, none of the participants
(i) beneficially owns (within the meaning of Rule 13d-3 under the Exchange Act), directly or
indirectly, any shares or other securities of our company or any of our subsidiaries, (ii) has
purchased or sold any of such securities within the past two years, or (iii) is, or within the past
year was, a party to any contract, arrangement or understanding with any person with respect to any
such securities. Except as disclosed in this Appendix A or the proxy statement, none of the
participants associates beneficially owns, directly or indirectly, any of our securities. Other
than as disclosed in this Appendix A or the proxy statement, neither we nor any of the participants
has any substantial interests, direct or indirect, by security holding or otherwise, in any matter
to be acted upon at the annual meeting or is or has been within the past year a party to any
contract, arrangement, or understanding with any person with respect to any of our securities,
including, but not limited to, joint ventures, loan or option agreements, puts or calls, guarantees
against loss or guarantees of profit, division of losses or profits, or the giving or withholding
of proxies. Except as disclosed in this Appendix A or the proxy statement, none of us, the
participants, or any of their associates has had or will have a direct or indirect material
interest in any transaction or series of similar transactions since the beginning of our last
fiscal year or any currently proposed transactions, or series of
50
similar transactions, to which we or any of our subsidiaries was or is to be a party in which the
amount involved exceeds $120,000.
Other than as set forth in this Appendix A or the proxy statement, none of the Company, any of the
participants or any of their associates has any arrangements or understandings with any person with
respect to any future employment by us or our affiliates or with respect to any future transactions
to which we or any of our affiliates will or may be a party.
51
TO SUBMIT YOUR PROXY BY MAIL, PLEASE DETACH PROXY CARD HERE
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ANNUAL MEETING OF STOCKHOLDERS
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TO BE HELD ON MARCH 11, 2009
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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The undersigned stockholder of Tier Technologies, Inc. hereby constitutes and appoints Ronald W.
Johnston and Keith S. Omsberg and each of them, with full power of substitution, as proxy or
proxies of the undersigned to vote the number of shares of common stock which the undersigned would
be entitled to vote if personally present at Tiers Annual Meeting of Stockholders, to be held at
Tiers headquarters located at 10780 Parkridge Boulevard, Suite 400, Reston, Virginia, at 10:00
a.m. local time on March 11, 2009, and at any adjournments or postponements thereof, with respect
to the proposals described in the Notice of Annual Meeting of Stockholders and proxy statement, in
the manner specified on the reverse side. The proxies are further authorized to vote, in their
discretion, upon such other business as may properly come before the meeting or any postponements
or adjournments thereof.
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THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AMONG THE BOARDS NOMINEES AS DIRECTED BY THE
STOCKHOLDER. WHERE NO CONTRARY DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY IS RETURNED, SUCH
SHARES WILL BE VOTED CUMULATIVELY IN THE DISCRETION OF THE PROXY HOLDERS AMONG THE BOARDS NOMINEES
NAMED IN PROPOSAL NO. 1 (EXCEPT FOR ANY NOMINEES FOR WHOM THE UNDERSIGNED HAS WITHHELD AUTHORITY TO
VOTE), FOR PROPOSAL NO. 2, AND AGAINST PROPOSAL NO. 3.
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Cumulative Voting Instructions (Mark the corresponding box on the reverse side)
|
Annual Meeting of Stockholders
|
March 11, 2009 10:00
a.m. Local Time
|
Tier Technologies, Inc.
Headquarters 10780 Parkridge
Blvd., Suite 400 Reston, VA 20191
|
· Use any touch-tone telephone.
|
·
Have your proxy card ready.
|
· Follow the simple recorded instructions.
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Go To
www.proxypush.com/tier
|
· Submit your proxy online.
|
· Mark, sign and date your proxy card.
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· Detach your proxy card.
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· Return your proxy card in the postage-paid envelope provided.
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All proxies submitted by mail, internet, or telephone must be received by 11:59 p.m., local time on
March 10, 2009.
|
TO SUBMIT YOUR PROXY BY MAIL, PLEASE DETACH PROXY CARD HERE
X
Please mark
votes as in
this example.
Unless otherwise specified on the reverse side, this proxy
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
authorizes the proxies named on the reverse side to cumulate
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1 . PROPOSAL NO. 1:
votes that the undersigned is entitled to cast at the annual
meeting in connection with the election of directors; provided
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Nominees for Directors for election by the holders of common
FOR all nominees listed WITHHOLD
that the proxies will not cumulate votes for any nominee from
|
stock: (except as indicated to authority to vote
the contrary) for all nominees
whom the undersigned has withheld authority to vote. To
01 . Charles W. Berger 04 . Morgan P. Guenther
specify different directions with regard to cumulative voting,
02 . Samuel Cabot III 05 . Philip G. Heasley
including to direct that the proxy holders cumulate votes with
ellx760
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03 . John J. Delucca 06 . David A. Poe
explained in the proxy statement, mark the box below and
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07 . Ronald L. Rossetti
write your instructions on the reverse side. (If you wish to
direct that the proxy holders cumulate votes with respect to a
|
INSTRUCTIONS: To withhold authority to vote for any individual
n
specific Board nominee or nominees, please indicate the
nominee(s), write the name(s) of each nominee(s) in the space
name(s) and the number of votes to be given to such Board
|
provided below:
nominee(s).)
FOR AGAINST ABSTAIN
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· PROPOSAL NO. 2: To ratify the selection of McGladrey & Pullen, LLP as the Companys
independent registered public accounting firm for the fiscal year ending September 30,
2009.
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If the undersigned hold(s) any of the
shares of common stock in a fiduciary,
custodial, or joint capacity or
capacities, this proxy is signed by the
undersigned in every such capacity as
well as individually.
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Please sign as name appears on this
proxy. Joint owners should each sign.
When signing as attorney, as executor,
administrator, trustee, or guardian,
please give full title as such. If a
corporation, please sign in full
corporate name by President or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSAL 3.
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· PROPOSAL NO. 3: To approve a shareholder proposal regarding our shareholder rights
plan and special meetings.
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Signature [PLEASE SIGN WITHIN BOX]
|
Signature [PLEASE SIGN WITHIN BOX]
|
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