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. )
Filed by the Registrant
þ
Filed by a Party other than the Registrant
o
Check the appropriate box:
o
|
|
Preliminary Proxy Statement
|
|
o
|
|
Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
|
|
þ
|
|
Definitive Proxy Statement
|
|
o
|
|
Definitive Additional Materials
|
|
o
|
|
Soliciting Material Pursuant to §240.14a-12
|
Tier Technologies, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
þ
|
|
No fee required.
|
|
o
|
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
|
|
(1)
|
|
Title of each class of securities to which transaction applies:
|
|
|
|
|
|
|
|
(2)
|
|
Aggregate number of securities to which transaction applies:
|
|
|
|
|
|
|
|
(3)
|
|
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):
|
|
|
|
|
|
|
|
(4)
|
|
Proposed maximum aggregate value of transaction:
|
|
|
|
|
|
|
|
(5)
|
|
Total fee paid:
|
|
|
|
|
|
o
|
|
Fee paid previously with preliminary materials.
|
|
o
|
|
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.
|
|
(1)
|
|
Amount Previously Paid:
|
|
|
|
|
|
|
|
(2)
|
|
Form, Schedule or Registration Statement No.:
|
|
|
|
|
|
|
|
(3)
|
|
Filing Party:
|
|
|
|
|
|
|
|
(4)
|
|
Date Filed:
|
|
|
|
|
|
TIER TECHNOLOGIES,
INC.
|
|
|
Keith S. Omsberg
Corporate Secretary
|
|
10780 Parkridge Boulevard
Reston, Virginia 20191
March 18, 2010
|
Dear Stockholder:
You are invited to attend the Annual Meeting of Stockholders of
Tier Technologies, Inc. on April 8, 2010 at
10:00 a.m. Eastern Time at the Sheraton Reston Hotel,
located at 11810 Sunrise Valley Drive, Reston, VA 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 proxy card. You may submit your proxy by telephone, by
Internet, or by mail.
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 proposal to
amend Tiers Restated Certificate of Incorporation in order
to change Tiers name to Official Payments Holdings, Inc.,
in each case as 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
February 9, 2010 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
March 18, 2010
TIER TECHNOLOGIES,
INC.
10780 Parkridge Boulevard, Suite 400
Reston, Virginia 20191
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OF TIER TECHNOLOGIES, INC.
|
|
|
TIME:
|
|
10:00 a.m. Eastern Time on Thursday, April 8, 2010.
|
PLACE:
|
|
Sheraton Reston Hotel, located at 11810 Sunrise Valley Drive,
Reston, Virginia 20191.
|
ITEMS OF BUSINESS:
|
|
(1) To elect seven directors;
|
|
|
(2) To ratify the selection of McGladrey &
Pullen, LLP as our independent registered public accounting firm
for the fiscal year ending September 30, 2010;
|
|
|
(3) To act on a proposal to amend Tiers
Restated Certificate of Incorporation in order to change
Tiers name to Official Payments Holdings, Inc.; and
|
|
|
(4) To transact other business properly coming before
the meeting.
|
WHO CAN VOTE:
|
|
You can vote if you were a stockholder of record at the close of
business on February 9, 2010.
|
Important Notice Regarding the Availability of Proxy
Materials for the Stockholder Meeting to Be Held on
April 8, 2010.
The proxy statement and Tiers
Annual Report on
Form 10-K
for fiscal year 2009, as amended, are available electronically
at www.proxyvote.com. Directions to the meeting are provided on
page B-1
of this proxy statement.
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 Tier. We believe that these individuals
have the independence, knowledge, and commitment to deliver
value for Tier and its shareholders.
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF THE
BOARDS NOMINEES ON THE ENCLOSED PROXY CARD.
Keith S. Omsberg
Corporate Secretary
March 18, 2010
Table of
Contents
|
|
|
|
|
INFORMATION ABOUT THE PROXY MATERIALS AND OUR 2010 ANNUAL
MEETING OF STOCKHOLDERS
|
|
|
1
|
|
GENERAL INFORMATION
|
|
|
1
|
|
1. WHO IS MAKING THIS SOLICITATION?
|
|
|
1
|
|
2. WHAT INFORMATION IS CONTAINED IN THESE MATERIALS?
|
|
|
1
|
|
3. WHEN AND WHERE IS THE ANNUAL MEETING?
|
|
|
1
|
|
4. WHAT PROPOSALS ARE BEING PRESENTED FOR
STOCKHOLDER VOTE AT THE ANNUAL MEETING?
|
|
|
1
|
|
5. WHAT OTHER MATTERS MAY ARISE AT THE ANNUAL MEETING?
|
|
|
2
|
|
6. WHO WILL BEAR THE COST OF SOLICITING VOTES FOR THE
ANNUAL MEETING?
|
|
|
2
|
|
7. WHAT DO I NEED FOR ADMISSION TO THE ANNUAL MEETING?
|
|
|
2
|
|
8. HOW CAN I FIND TIERS PROXY MATERIALS AND
ANNUAL REPORT ON THE INTERNET?
|
|
|
2
|
|
9. WHOM SHOULD I CALL IF I HAVE QUESTIONS OR NEED
ADDITIONAL COPIES OF THE PROXY MATERIALS?
|
|
|
3
|
|
VOTING MECHANICS
|
|
|
3
|
|
10. WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING?
|
|
|
3
|
|
11. WHAT IS THE RECORD DATE AND WHAT DOES IT MEAN?
|
|
|
3
|
|
12. HOW CAN I VOTE MY SHARES OF COMMON STOCK?
|
|
|
3
|
|
13. HOW CAN I REVOKE A PROXY OR CHANGE MY VOTING
INSTRUCTIONS?
|
|
|
4
|
|
14. WILL MY SHARES BE VOTED IF I DO NOT PROVIDE
INSTRUCTIONS TO MY BROKER?
|
|
|
4
|
|
15. WHO WILL COUNT THE VOTES?
|
|
|
4
|
|
VOTING INFORMATION
|
|
|
4
|
|
16. WHAT ARE THE VOTING CHOICES WHEN VOTING ON
PROPOSAL ONE, THE ELECTION OF DIRECTORS?
|
|
|
4
|
|
17. WHAT VOTE IS NEEDED TO ELECT THE DIRECTORS?
|
|
|
4
|
|
18. 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?
|
|
|
5
|
|
19. WHAT VOTE IS NEEDED TO RATIFY THE SELECTION OF
MCGLADREY & PULLEN, LLP AS OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM?
|
|
|
5
|
|
20. WHAT ARE THE VOTING CHOICES WHEN VOTING ON
PROPOSAL THREE, THE NAME CHANGE PROPOSAL?
|
|
|
5
|
|
21. WHAT VOTE IS NEEDED TO APPROVE THE NAME CHANGE
PROPOSAL?
|
|
|
5
|
|
22. HOW MANY VOTES MUST BE PRESENT TO HOLD THE ANNUAL
MEETING?
|
|
|
6
|
|
23. WHAT IF A QUORUM IS NOT PRESENT AT THE MEETING?
|
|
|
6
|
|
24. WHAT IF I RETURN MY PROXY CARD BUT DO NOT GIVE
VOTING INSTRUCTIONS?
|
|
|
6
|
|
25. WHAT IF OTHER MATTERS ARE VOTED ON AT THE MEETING?
|
|
|
6
|
|
26. WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE
PROXY OR VOTING INSTRUCTION CARD?
|
|
|
6
|
|
27. WHERE CAN I FIND THE VOTING RESULTS OF THE ANNUAL
MEETING?
|
|
|
6
|
|
STOCK OWNERSHIP
|
|
|
7
|
|
CORPORATE GOVERNANCE MATTERS
|
|
|
10
|
|
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
|
|
|
13
|
|
PROPOSAL ONE: ELECTION OF DIRECTORS
|
|
|
15
|
|
REMOVAL OF DIRECTORS
|
|
|
17
|
|
COMPENSATION COMMITTEE REPORT
|
|
|
18
|
|
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
|
|
|
18
|
|
i
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
18
|
|
EXECUTIVE COMPENSATION
|
|
|
28
|
|
SUMMARY COMPENSATION TABLE
|
|
|
29
|
|
FISCAL 2009 GRANTS OF PLAN-BASED AWARDS
|
|
|
32
|
|
OUTSTANDING EQUITY AWARDS AT 2009 FISCAL YEAR END
|
|
|
34
|
|
FISCAL 2009 OPTION EXERCISES AND STOCK VESTED
|
|
|
36
|
|
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
|
|
|
36
|
|
DIRECTOR COMPENSATION
|
|
|
44
|
|
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
|
|
|
46
|
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
|
|
46
|
|
PROPOSAL TWO: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
|
|
|
46
|
|
PROPOSAL THREE: AMENDMENT OF RESTATED CERTIFICATE OF
INCORPORATION TO CHANGE THE NAME OF THE COMPANY
|
|
|
47
|
|
OTHER MATTERS
|
|
|
47
|
|
ADDITIONAL INFORMATION
|
|
|
47
|
|
ANNEX A
|
|
|
A-1
|
|
DIRECTIONS TO THE ANNUAL MEETING
|
|
|
B-1
|
|
ii
TIER TECHNOLOGIES,
INC.
10780 Parkridge Boulevard, Suite 400
Reston, Virginia 20191
PROXY
STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 8, 2010
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 2010 Annual Meeting of Stockholders to be held at
the Sheraton Reston Hotel, located at 11810 Sunrise Valley
Drive, Reston, Virginia 20191, on April 8, 2010, at
10:00 a.m., local time, and any adjournment or postponement
thereof. On or about March 18, 2010, we began mailing this
proxy statement, the enclosed proxy card, and the Companys
Annual Report on
Form 10-K
for the fiscal year ended September 30, 2009, as amended,
to shareholders entitled to vote at the annual meeting.
INFORMATION
ABOUT THE PROXY MATERIALS AND OUR 2010 ANNUAL MEETING OF
STOCKHOLDERS
GENERAL
INFORMATION
|
|
1.
|
WHO
IS MAKING THIS SOLICITATION?
|
Tiers Board of Directors, or the Board, is soliciting your
proxy for use at Tiers Annual Meeting of Stockholders 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.
|
|
2.
|
WHAT
INFORMATION IS CONTAINED IN THESE MATERIALS?
|
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 officers, and certain other required information. Our
Annual Report on
Form 10-K
for the year ended September 30, 2009, as amended, which
includes the Companys audited consolidated financial
statements, is also enclosed.
|
|
3.
|
WHEN
AND WHERE IS THE ANNUAL MEETING?
|
Our Annual Meeting of Stockholders will be held on April 8,
2010 at 10:00 a.m. Eastern Time, at the Sheraton
Reston Hotel, located at 11810 Sunrise Valley
Drive, Reston, VA 20191.
|
|
4.
|
WHAT
PROPOSALS ARE BEING PRESENTED FOR STOCKHOLDER VOTE AT THE
ANNUAL MEETING?
|
Three proposals are scheduled for voting at the annual meeting:
PROPOSAL ONE. Election of Directors:
THE BOARD RECOMMENDS THAT YOU VOTE FOR ITS NOMINEES, CHARLES
W. BERGER, JOHN J. DELUCCA, MORGAN P. GUENTHER, PHILIP G.
HEASLEY, DAVID A. POE, RONALD L. ROSSETTI, AND ZACHARY F. SADEK,
FOR SERVICE UNTIL TIERS NEXT ANNUAL MEETING AND UNTIL
THEIR RESPECTIVE SUCCESSORS ARE ELECTED.
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 44.
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,
2010.
You can find information about Tiers relationship with
McGladrey & Pullen, LLP beginning on page 46.
PROPOSAL THREE. Company Name Change:
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE AMENDMENT TO
TIERS RESTATED CERTIFICATE OF INCORPORATION IN ORDER TO
CHANGE THE NAME OF THE COMPANY TO OFFICIAL PAYMENTS
HOLDINGS, INC.
You can find information about the proposed change to
Tiers name beginning on page 47.
We will also consider any other business that properly comes
before the annual meeting.
|
|
5.
|
WHAT
OTHER MATTERS MAY ARISE AT THE ANNUAL MEETING?
|
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 2009 annual
meeting and are similar to those described on page 47 for
next years meeting.
|
|
6.
|
WHO
WILL BEAR THE COST OF SOLICITING VOTES FOR THE ANNUAL
MEETING?
|
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, 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
$5,000 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.
|
|
7.
|
WHAT
DO I NEED FOR ADMISSION TO THE ANNUAL MEETING?
|
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 February 9, 2010, 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 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.
|
|
8.
|
HOW
CAN I FIND TIERS PROXY MATERIALS AND ANNUAL REPORT ON THE
INTERNET?
|
Our proxy statement and Annual Report on
Form 10-K
for fiscal year 2009, as amended, are available electronically
at www.proxyvote.com.
2
|
|
9.
|
WHOM
SHOULD I CALL IF I HAVE QUESTIONS OR NEED ADDITIONAL COPIES OF
THE PROXY MATERIALS?
|
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.
VOTING
MECHANICS
|
|
10.
|
WHO
IS ENTITLED TO VOTE AT THE ANNUAL MEETING?
|
Only holders of record of shares of our common stock at the
close of business on February 9, 2010, 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 18,150,965 shares of our common stock
outstanding and entitled to vote.
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 seven 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.
|
|
11.
|
WHAT
IS THE RECORD DATE AND WHAT DOES IT MEAN?
|
The record date is February 9, 2010. 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.
|
|
12.
|
HOW
CAN I VOTE MY SHARES OF COMMON STOCK?
|
There are four ways to vote for the Boards nominees and on
the other matters as set forth in this proxy statement:
|
|
|
|
|
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
|
|
|
|
|
|
Mail:
Mark, sign, and date your proxy
card and return it to: Tier Technologies, Inc.,
c/o Broadridge
Financial Solutions, Inc., 51 Mercedes Way, Edgewood, NY 11717;
OR
|
|
|
|
|
|
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 2010 Annual Meeting of
Stockholders on April 8, 2010, at 10:00 a.m. Eastern
Time;
OR
|
|
|
|
|
|
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.
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. Please see question 17
below for additional information on cumulative voting.
3
|
|
13.
|
HOW
CAN I REVOKE A PROXY OR CHANGE MY VOTING INSTRUCTIONS?
|
If you are the stockholder of record, you can revoke a proxy
before the close of voting at the annual meeting by:
|
|
|
|
|
Giving written notice to Tiers Corporate Secretary at (for
notices mailed before March 26, 2010) 10780 Parkridge
Boulevard, Suite 400, Reston, Virginia 20191 or 11130
Sunrise Valley Drive, Suite 300, Reston, VA 20191 (for
notices mailed on or after March 26, 2010);
|
|
|
|
|
|
Submitting a new proxy card bearing a date later than your last
proxy card;
|
|
|
|
|
|
Following the instructions for Internet proxy authorization that
appear on the proxy card;
|
|
|
|
|
|
Following the instructions that appear on the proxy card for
proxy authorization by telephone; or
|
|
|
|
|
|
Attending the annual meeting and voting in
person. Attendance at the annual meeting will not, by
itself, revoke a proxy.
|
If your shares are held in street name by a bank or
broker, your bank or broker should provide you with appropriate
instructions for revoking your proxy.
|
|
14.
|
WILL
MY SHARES BE VOTED IF I DO NOT PROVIDE INSTRUCTIONS TO
MY BROKER?
|
If you are the beneficial owner of shares held in street
name by a bank or broker, the bank or 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 your bank or broker, it 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
referred to as broker non-votes). Proposal One
(the election of directors) and Proposal Three (the Company name
change proposal) are both non-discretionary proposals.
Proposal Two (ratification of auditors) is a discretionary
proposal. As a result, if your shares are held in street
name and you do not provide instructions as to how your
shares are to be voted in the election of directors or with
respect to the name change proposal, your bank or broker will
not be able to vote your shares in the election of directors or
with respect to the name change proposal, and your shares will
not be voted for any of Tiers nominees or for the name
change proposal. We urge you to provide instructions to your
bank or broker so that your votes may be counted on these
important matters. We urge you to vote your shares by following
the instructions provided on the enclosed proxy card and
returning the proxy card to your bank or broker to ensure that
your shares will be voted on your behalf.
|
|
15.
|
WHO
WILL COUNT THE VOTES?
|
A representative of American Election Services, LLC will
tabulate the votes and act as Inspector of Elections.
VOTING
INFORMATION
|
|
16.
|
WHAT
ARE THE VOTING CHOICES WHEN VOTING ON PROPOSAL ONE, THE
ELECTION OF DIRECTORS?
|
Shareholders may use the enclosed proxy card to:
|
|
|
|
|
Vote FOR (in favor of) all of the Boards nominees;
|
|
|
|
|
|
WITHHOLD votes from all nominees; or
|
|
|
|
|
|
WITHHOLD votes from specific Board nominees; or
|
|
|
|
|
|
Provide instructions for cumulating votes for one or more
specific Board nominees.
|
|
|
17.
|
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 seven director nominees with the highest
number of affirmative votes will be elected.
4
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.
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
proxyholders 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.
Abstentions and broker non-votes will not be counted as votes
for or against a nominee, and therefore, will have no effect on
the outcome of the election.
|
|
18.
|
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?
|
Shareholders may:
|
|
|
|
|
Vote FOR (in favor of) the ratification;
|
|
|
|
|
|
Vote AGAINST the ratification; or
|
|
|
|
|
|
ABSTAIN from voting on the ratification.
|
|
|
19.
|
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. Abstentions and
shares not voted by brokers will not be counted as votes cast on
Proposal Two and will have no effect on the outcome of this
proposal.
|
|
20.
|
WHAT
ARE THE VOTING CHOICES WHEN VOTING ON PROPOSAL THREE, THE
NAME CHANGE PROPOSAL?
|
Shareholders may:
|
|
|
|
|
Vote FOR (in favor of) the proposal;
|
|
|
|
Vote AGAINST the proposal; or
|
|
|
|
ABSTAIN from voting on the proposal.
|
|
|
21.
|
WHAT
VOTE IS NEEDED TO APPROVE THE NAME CHANGE PROPOSAL?
|
The name change proposal will be approved if a majority of the
outstanding stock entitled to vote thereon has been voted in
favor of the proposal. Because Proposal Three will be approved
only if it receives the affirmative vote of a majority of the
outstanding stock entitled to vote on the matter, abstentions
and broker non-votes have the effect of votes against this
proposal.
5
|
|
22.
|
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 whether a quorum is present.
|
|
23.
|
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.
|
|
24.
|
WHAT
IF I RETURN MY PROXY CARD BUT DO NOT GIVE VOTING
INSTRUCTIONS?
|
If you sign your 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 2010, and FOR Proposal Three,
the name change proposal. Unless you specify how your votes are
to be cumulated among the Boards nominees, the 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.
|
|
25.
|
WHAT
IF OTHER MATTERS ARE VOTED ON AT THE MEETING?
|
If any other matters are properly presented at the annual
meeting for consideration, the persons named as proxies in the
enclosed 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 annual meeting.
|
|
26.
|
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 proxy card or voting
instruction card for each account. To ensure that all of your
shares are voted, please use all the proxy cards and voting
instruction cards you receive to submit your proxy for your
shares by telephone or by Internet or complete, sign, date, and
return a proxy card or voting instruction card for each account.
|
|
27.
|
WHERE
CAN I FIND THE VOTING RESULTS OF THE ANNUAL MEETING?
|
Tier will publish preliminary results of the voting, or final
results of the voting (if such final results are known), in a
current report on
Form 8-K
within four business days of the annual meeting. If we report
preliminary results, we will file an amended report on
Form 8-K
to disclose the final voting results within four business days
after the final voting results are known. You will be able to
read and print a copy of the
Form 8-K
and, if applicable, the amended
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
.
6
STOCK
OWNERSHIP
Directors
and Executive Officers
The following table sets forth certain information regarding the
ownership of our common stock as of February 23, 2010 by:
(i) each director and director nominee; (ii) each of
our CEO, CFO and our three most highly compensated executive
officers, other than our CEO and CFO, who were serving as
executive officers at the end of fiscal year 2009, whom we refer
to collectively as our named executive officers; 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.
|
|
|
|
|
|
|
|
|
|
|
Common Stock Beneficially Owned
|
Name of Beneficial Owner(1)
|
|
Total Number of Shares
|
|
Percent of Class(2)
|
|
Charles W. Berger
|
|
|
140,000
|
(3)
|
|
|
*
|
|
John J. Delucca
|
|
|
50,000
|
(4)
|
|
|
*
|
|
Daniel Donohue
|
|
|
2,459,404
|
(5)
|
|
|
13.5
|
%
|
Morgan P. Guenther
|
|
|
140,000
|
(3)
|
|
|
*
|
|
Philip Heasley
|
|
|
20,002
|
(6)
|
|
|
*
|
|
Michael Murphy
|
|
|
2,459,404
|
(5)
|
|
|
13.5
|
%
|
David A. Poe
|
|
|
6,668
|
(3)
|
|
|
*
|
|
Zachary Sadek
|
|
|
1,799,321
|
(7)
|
|
|
9.9
|
%
|
Ronald W. Johnston
|
|
|
81,666
|
(8)
|
|
|
*
|
|
Keith Kendrick
|
|
|
30,000
|
(9)
|
|
|
*
|
|
Keith S. Omsberg
|
|
|
37,500
|
(10)
|
|
|
*
|
|
Ronald L. Rossetti
|
|
|
434,500
|
(11)
|
|
|
2.3
|
%
|
Nina K. Vellayan
|
|
|
53,564
|
(12)
|
|
|
*
|
|
All directors and executive officers as a group (13 persons)
|
|
|
5,252,625
|
(13)
|
|
|
27.6
|
%
|
|
|
|
*
|
|
Less than 1%
|
|
(1)
|
|
Address: 10780 Parkridge Blvd, Suite 400, Reston, Virginia
20191, unless otherwise specified.
|
|
(2)
|
|
The percentages shown are based on 18,150,965 shares of
common stock outstanding as of February 23, 2010.
|
|
(3)
|
|
Consists entirely of shares issuable upon the exercise of
options exercisable on or before April 24, 2010.
|
|
(4)
|
|
Includes 40,000 shares issuable upon the exercise of
options exercisable on or before April 24, 2010.
|
|
(5)
|
|
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 March 2, 2010. Discovery Group I,
LLC is the sole general partner of Discovery Equity Partners,
L.P. Discovery Equity Partners, L.P. beneficially owns
2,109,667 shares of common stock and Discovery
Group I, LLC beneficially owns 2,459,404 shares of
common stock. Daniel J. Donoghue and Michael R. Murphy are the
sole managing members of Discovery Group I, LLC and may be
deemed to beneficially own 2,459,404 shares of common stock.
|
|
(6)
|
|
Includes 10,002 shares issuable upon the exercise of
options exercisable on or before April 24, 2010.
|
|
(7)
|
|
Address: 265 Franklin Street, 18th Floor, Boston, Massachusetts
02110. Based solely on information contained in a
Schedule 13D/A filed with the SEC on January 15, 2010
by Giant Investment, LLC, (Giant); Parthenon
Investors II, L.P. (Parthenon); PCap Partners II,
LLC (PCap Partners); PCap II, LLC (PCap
II); John C. Rutherford; and Ernest K. Jacquet
(collectively, the Parthenon Group). Parthenon is a
managing member of Giant, PCap Partners is a general partner of
Parthenon, and PCap II is a managing member of PCap
Partners. Giant directly beneficially owns 1,799,321 shares
of common stock. As parents of Giant, Parthenon, PCap Partners
and PCap II may be deemed to beneficially own their
proportional interest in the shares of common stock directly and
beneficially owned by Giant, comprising 1,748,401 shares of
|
7
|
|
|
|
|
common stock. John C. Rutherford and Ernest K. Jacquet are
control persons of various entities indirectly investing in
Giant and may be deemed to beneficially own a proportional
interest in the shares of common stock owned by Giant,
comprising 1,799,321 shares of common stock. In addition,
Exhibit 99.2 to a Schedule 13D/A filed by the
Parthenon Group on January 6, 2009 indicated that
Mr. Sadek, as a Vice President of PCap Managers LLC, an
affiliate of Giant, may be deemed to indirectly beneficially own
all of the shares directly beneficially owned by Giant, but that
Mr. Sadek disclaims any such beneficial ownership.
|
|
(8)
|
|
Consists entirely of shares issuable upon the exercise of
options exercisable on or before April 24, 2010.
|
|
(9)
|
|
Consists entirely of shares issuable upon the exercise of
options exercisable on or before April 24, 2010.
|
|
(10)
|
|
Consists entirely of shares issuable upon the exercise of
options exercisable on or before April 24, 2010.
|
|
(11)
|
|
Includes 385,000 shares issuable upon the exercise of
options exercisable on or before April 24, 2010.
|
|
(12)
|
|
Includes 40,000 shares issuable upon the exercise of
options exercisable on or before April 24, 2010.
|
|
(13)
|
|
Includes 910,836 shares issuable upon the exercise of
options exercisable on or before April 24, 2010.
|
Equity
Compensation Plan Information
The following table provides information about the securities
authorized for issuance under our equity compensation plan as of
September 30, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-
|
|
|
|
|
|
|
Average Exercise
|
|
Number of
|
|
|
Number of Securities
|
|
Price of
|
|
Securities
|
|
|
to be Issued Upon
|
|
Outstanding
|
|
Remaining Available
|
|
|
Exercise of
|
|
Options,
|
|
for Future Issuance
|
|
|
Outstanding Options,
|
|
Warrants and
|
|
Under Equity
|
Plan Category
|
|
Warrant and Rights
|
|
Rights ($)
|
|
Compensation Plans
|
|
Equity compensation plans
|
|
|
|
|
|
|
|
|
|
|
|
|
Approved by security holders
|
|
|
2,359
|
|
|
$
|
7.86
|
|
|
|
1,353
|
|
Not approved by security holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2,359
|
|
|
$
|
7.86
|
|
|
|
1,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2009, our officers, directors, and greater
than ten percent beneficial owners complied with all
Section 16(a) filing requirements, except that
Messrs. Rossetti, Johnston, Kendrick and Omsberg, and
Ms. Vellayan each filed two late Forms 4 related to
two transactions and Mr. Heasley filed one late
Form 4, which related to one transaction.
8
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 February 23, 2010.
|
|
|
|
|
|
|
|
|
|
|
Common Stock Beneficially Owned
|
|
|
Total Number of
|
|
Percent of
|
Name of Beneficial Owner
|
|
Shares
|
|
Class(1)
|
|
Discovery Group I, LLC(2)
|
|
|
2,459,404
|
|
|
|
13.5
|
%
|
Wells Fargo & Company(3)
|
|
|
2,109,746
|
|
|
|
11.6
|
%
|
Giant Investment, LLC(4)
|
|
|
1,799,321
|
|
|
|
9.9
|
%
|
Heartland Advisors, Inc.(5)
|
|
|
1,717,474
|
|
|
|
9.5
|
%
|
Dimensional Fund Advisors(6)
|
|
|
1,450,931
|
|
|
|
8.0
|
%
|
|
|
|
(1)
|
|
The percentages shown are based on 18,150,965 shares of
common stock outstanding as of February 23, 2010.
|
|
(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 March 2, 2010. Discovery Group I,
LLC is the sole general partner of Discovery Equity Partners,
L.P. Discovery Equity Partners, L.P. beneficially owns
2,109,667 shares of common stock and Discovery
Group I, LLC beneficially owns 2,459,404 shares of
common stock. Daniel J. Donoghue and Michael R. Murphy, each of
whom is a member of our Board of Directors, are the sole
managing members of Discovery Group I, LLC and may be
deemed to beneficially own 2,459,404 shares of common stock.
|
|
(3)
|
|
Address: For Wells Fargo & Company, 420 Montgomery
Street, San Francisco, California 94104; for Wells Capital
Management Incorporated, 525 Market Street, 10th Floor,
San Francisco, California 94105. Based solely on
information contained in a Schedule 13G/A filed with the
SEC on January 26, 2009 by Wells Fargo & Company
and its subsidiary, Wells Capital Management Incorporated. This
table reflects the shares of common stock owned by Wells
Fargo & Company and Wells Capital Management
Incorporated as of December 31, 2009.
|
|
(4)
|
|
Address: 265 Franklin Street, 18th Floor, Boston, Massachusetts
02110. Based solely on information contained in a
Schedule 13D/A filed with the SEC on January 15, 2010
by Giant Investment, LLC, (Giant); Parthenon
Investors II, L.P. (Parthenon); PCap Partners II,
LLC (PCap Partners); PCap II, LLC (PCap
II); John C. Rutherford; and Ernest K. Jacquet
(collectively, the Parthenon Group). Parthenon is a
managing member of Giant, PCap Partners is a general partner of
Parthenon, and PCap II is a managing member of PCap
Partners. Giant directly beneficially owns 1,799,321 shares
of common stock. As parents of Giant, Parthenon, PCap Partners
and PCap II may be deemed to beneficially own their
proportional interest in the shares of common stock directly and
beneficially owned by Giant, comprising 1,748,401 shares of
common stock. John C. Rutherford and Ernest K. Jacquet
are control persons of various entities indirectly investing in
Giant and may be deemed to beneficially own a proportional
interest in the shares of common stock owned by Giant,
comprising 1,799,321 shares of common stock. In addition,
Exhibit 99.2 to a Schedule 13D/A filed by the
Parthenon Group on January 6, 2009 indicated that
Mr. Sadek, who is a member of our Board of directors, may
be deemed to indirectly beneficially own all of the shares
directly beneficially owned by Giant due to his position as a
Vice President of PCap Managers LLC, an affiliate of Giant, but
that Mr. Sadek disclaims any such beneficial ownership.
|
|
(5)
|
|
Address: 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 10, 2010. This table reflects the shares of common
stock that may be deemed beneficially owned by
(1) Heartland Advisors, Inc., by virtue of its investment
discretion and voting authority granted by certain clients, and
(2) William J. Nasgovitz, by virtue of his control of
Heartland Advisors, Inc., in each case as of December 31,
2009. Mr. Nasgovitz disclaims beneficial ownership of these
shares.
|
|
(6)
|
|
Address: Palisades West, Building One, 6300 Bee Cave Road,
Austin, Texas 78746. Based on information contained in a
Schedule 13G/A filed with the SEC by Dimensional
Fund Advisors LP on February 8, 2010. In its role as
an investment advisor, sub-adviser and/or manager to certain
investment companies, trusts and
|
9
|
|
|
|
|
accounts (the Funds), Dimensional and/or its
subsidiaries (collectively, Dimensional) possesses
investment and/or voting power over the shares shown in the
table above, and may be deemed to be the beneficial owner of
such shares. However, all shares reported above are owned by the
Funds, and Dimensional disclaims beneficial ownership of such
shares. This table reflects the shares of common stock deemed
beneficially owned by Dimensional as of December 31, 2009.
|
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 Chief
Accounting Officer. Effective May 3, 2004, we also adopted
a Business Code of Conduct for all employees. On March 31,
2009, we adopted Corporate Governance Guidelines. Our Code of
Ethics, Business Code of Conduct, and Corporate Governance
Guidelines, as well as the charters for our Audit Committee,
Compensation Committee, and Governance and Nominating Committee,
which are discussed in greater detail below under the heading
Meetings and Committees of our Board of Directors
, are
posted on our website at:
http://www.tier.com
.
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, John J. Delucca, Daniel J. Donoghue, Morgan P. Guenther,
Philip G. Heasley, Michael R. Murphy, David A. Poe, and Zachary
F. Sadek does not have a relationship which would
interfere with the exercise of independent judgment in carrying
out the responsibilities of a director and that each of these
directors is an independent director as defined
under Rule 5605(a)(2) of the NASDAQ Stock Market, Inc.
Listing Rules. Samuel Cabot III and James R. Stone served
on our Board of Directors during the fiscal year ended
September 30, 2009; their terms of office expired when
their successors were elected at the 2009 annual meeting. Our
board previously determined that Messrs. Cabot and Stone
did not have a relationship which would interfere with the
exercise of independent judgment in carrying out the
responsibilities of a director and that each of these directors
was an independent director as defined under
Rule 5605(a)(2) of the NASDAQ Stock Market, Inc. Listing
Rules.
Lead
Director
Consistent with our Corporate Governance Guidelines, our Board
has elected Philip G. Heasley as a Lead Director in
order to facilitate communication between management and the
independent directors. The principal responsibilities of the
Lead Director are to consult with the CEO and Chairman of the
Board regarding the agenda for meetings of the Board, schedule
and prepare agendas for meetings of independent directors,
communicate with the CEO and Chairman, act as principal liaison
between the independent directors and the CEO and Chairman on
sensitive issues, and raise issues with management on behalf of
the independent directors when appropriate.
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. The Board has determined that
Mr. Berger is independent under applicable SEC and NASDAQ
rules.
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. The Lead Director or, in his
absence, the Chair of the Governance and Nominating or Audit
Committee, preside at these meetings.
10
Service
on Other Boards
Our Corporate Governance Guidelines provide that no director may
serve on the board of directors of more than three public
companies, in addition to our Board of Directors.
Board
Evaluation
Our Corporate Governance Guidelines require our Board to conduct
a self-evaluation at least annually to determine whether it and
its members are functioning effectively. The Governance and
Nominating Committee oversees these evaluations.
Communication
with Directors
Stockholders may communicate directly with the Board members by
writing to: Tier Technologies, Inc., Board of Directors,
c/o Corporate
Secretary, at (for letters mailed before March 26,
2010) 10780 Parkridge Boulevard, Suite 400, Reston,
Virginia 20191 or 11130 Sunrise Valley Drive, Suite 300,
Reston, VA 20191 (for letters mailed on or after March 26,
2010). 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., at (for letters mailed
before March 26, 2010) 10780 Parkridge Boulevard,
Suite 400, Reston, Virginia 20191 or 11130 Sunrise Valley
Drive, Suite 300, Reston, VA 20191 (for letters mailed on
or after March 26, 2010).
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, at (for notices mailed before March 26,
2010) 10780 Parkridge Boulevard, Suite 400, Reston,
Virginia 20191 or 11130 Sunrise Valley Drive, Suite 300,
Reston, VA 20191 (for notices mailed on or after March 26,
2010). To be timely under our bylaws, the notice must be
received by us at our principal executive offices 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 10th 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;
the need for a particular expertise; a candidates
understanding of marketing, finance, sales, and technology, and
of our business and technology; a prospective nominees
experience, judgment, diversity,
11
independence, and skills; 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:
|
|
|
|
|
financial literacy, demonstrated reputation for integrity, and
the ability to exercise sound business judgment;
|
|
|
|
high personal and professional ethics;
|
|
|
|
understanding of the fiduciary responsibilities required as a
member of the Board and the commitment, time, and ability to
meet these responsibilities; and
|
|
|
|
an appropriate professional background providing an
understanding of our technology, technology development,
finance, sales, and marketing.
|
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
We use the following policies and procedures in connection with
the review, approval, or ratification of related person
transactions:
|
|
|
|
|
Any related person transaction proposed to be entered into by
Tier must be reported to our General Counsel.
|
|
|
|
The Governance and Nominating Committee shall review and approve
all related person transactions, prior to effectiveness or
consummation of the transaction, whenever practicable.
|
|
|
|
If the General Counsel determines that advance approval of a
related person transaction is not practicable under the
circumstances, the Governance and Nominating Committee shall
review and, in its discretion, may ratify the related person
transaction at the next Governance and Nominating Committee
meeting, or at the next meeting following the date that the
related person transaction comes to the attention of the General
Counsel; provided, however, that the General Counsel may present
a related person transaction arising in the time period between
meetings of the Governance and Nominating Committee to the Chair
of the Governance and Nominating Committee, who shall review and
may approve the related person transaction, subject to
ratification by the Governance and Nominating Committee at the
next meeting.
|
|
|
|
Previously approved transactions of an ongoing nature shall be
reviewed by the Governance and Nominating Committee annually to
ensure that such transactions have been conducted in accordance
with the previous approval granted by the Governance and
Nominating Committee, if any, and that all required disclosures
regarding the related person transaction are made.
|
Standards
for Review, Approval, or Ratification of Related Person
Transactions
The Committee reviews, approves, or ratifies a related party
transaction primarily based on the following standards:
|
|
|
|
|
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;
|
|
|
|
whether the transaction was undertaken in the ordinary course of
business;
|
|
|
|
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;
|
12
|
|
|
|
|
the purpose of, and potential benefits to us of, the
transaction; and
|
|
|
|
any other information regarding the related person transaction
or the related person in the context of the proposed transaction
that would be material to investors in light of the
circumstances of the particular transaction.
|
The Committee may approve or ratify the transaction only if the
Committee determines that, under all of the circumstances, the
transaction is in Tiers best interests. The Committee may
impose any conditions on the related person transaction that it
deems appropriate.
Transactions
not covered by Related Person Transaction Policy
Our Board has determined that specific types of interests and
transactions identified in the policy do not create a material
direct or indirect interest on behalf of related persons and,
therefore, are not related person transactions for purposes of
the policy, including:
|
|
|
|
1.
|
interests arising solely from the related persons position
as an executive officer of another entity (whether or not the
person is also a director of such entity) that is a participant
in the transaction, where (a) the related person and all
other related persons own in the aggregate less than a 10%
equity interest in such entity, (b) the related person and
his or her immediate family members are not involved in the
negotiation of the terms of the transaction with the Company and
do not receive any special benefits as a result of the
transaction and (c) the amount involved in the transaction
equals less than the greater of $200,000 or 5% of the annual
gross revenues of the company receiving payment under the
transaction;
|
|
|
2.
|
a transaction that is specifically contemplated by provisions of
our charter or bylaws; and
|
|
|
3.
|
transactions that do not constitute related person transactions
pursuant to the instructions to the SECs related person
transaction disclosure rule.
|
Tier paid Edgar, Dunn & Company, or EDC, approximately
$158,000 for consulting services in fiscal year 2009. David Poe,
a director of the Company, is a director and officer of EDC and
a holder of less than 10% of EDCs outstanding shares.
Mr. Poe was not involved in the negotiation of the terms of
the transaction with the Company and did not receive any special
benefits as a result of the transaction. The transaction with
EDC during fiscal year 2009 was not reviewed under the related
person transaction policy because it met the criteria set forth
in item 1 above, and accordingly was not a related person
transaction for purposes of the policy.
MEETINGS
AND COMMITTEES OF THE BOARD OF DIRECTORS
During fiscal year 2009, the Board held 15 meetings. Each of our
incumbent directors attended at least 75% of the aggregate of
the total number of meetings of the board of directors (held
during the period for which he has been a director) and the
total number of meetings held by all committees of the board on
which he served (during the periods that he served). Directors
may attend the annual meeting of stockholders, but are not
obligated to do so. Mr. Guenther and Mr. Rossetti were
the only directors who attended last years annual meeting.
Committee members and a summary of key committee functions are
as follows:
Audit
Committee
|
|
|
Number of Members:
4
|
|
Functions:
|
|
|
|
Members:
Charles W. Berger
(Chair)
John J. Delucca
(Vice Chair)
Daniel J. Donoghue
Zachary F. Sadek (from March 2009)
Samuel Cabot III (through March 2009)
|
|
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,
|
13
|
|
|
|
|
any issues raised by an internal or peer quality control review,
and any investigations by regulatory authorities.
|
|
Number of Meetings in Fiscal 2009: 7
|
|
Consults with the independent registered public accounting firm,
reviews and approves the scope of their audit, and reviews
independence and performance. Also reviews any proposed
engagement between Tier and the independent registered public
accounting firm and approves in advance any such engagement, if
appropriate.
|
|
|
|
Reviews internal controls, accounting practices, and financial
reporting, including the results of the annual audit and the
review of the interim financial statements, with management and
the independent registered public accounting firm.
|
|
|
|
Discusses earnings releases and guidance provided to the public.
|
|
|
|
As appropriate, obtains advice and assistance from outside
legal, accounting, or other advisors.
|
|
|
|
Prepares a report of the Audit Committee to be included in our
proxy statement.
|
|
|
|
Assesses annually the adequacy of the Audit Committee Charter.
|
|
|
|
Reports to the Board about these matters.
|
Compensation
Committee
|
|
|
Number of Members:
3
|
|
Functions:
|
|
Members:
Philip G. Heasley
(Chair)
Morgan P. Guenther
Michael R. Murphy (from March 2009)
Samuel Cabot III (through March 2009)
|
|
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.
|
|
Number of Meetings in Fiscal 2009:
8
|
|
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.
|
Governance
and Nominating Committee
|
|
|
Number of Members:
4
|
|
Functions:
|
|
Members:
Morgan P. Guenther
(Chair)
John J. Delucca
Philip G. Heasley
Michael R. Murphy (from March 2009)
|
|
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.
|
|
Number of Meetings in Fiscal 2009:
9
|
|
Reviews, approves, or ratifies related person transactions.
|
14
|
|
|
|
|
Evaluates and recommends director compensation.
|
Data
Security Committee
|
|
|
Number of Members:
3
|
|
Functions:
|
|
Members:
David A. Poe
(Chair)
Philip G. Heasley
Zachary F. Sadek (from March 2009)
|
|
Identifies and evaluates security risks.
Implements safeguards and programs on data security integrity
and migration of security risks.
Works with management to enhance current, and develop new,
technical policies and procedures.
|
|
Number of Meetings in Fiscal 2009:
3
|
|
|
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
.
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.
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, John J. Delucca, Morgan P.
Guenther, Philip G. Heasley, David A. Poe, and Zachary
Sadek. 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:
57
Director since:
January 2002
Recent Business Experience:
Mr. Berger
was Chief Executive Officer of DVDPlay, Inc., a manufacturer and
operator of DVD rental kiosks, from April 2006 through February
2009, and was Chairman of the Board of DVDPlay from December
2001 through December 2009. 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. Since December 2004, Mr. Berger
has been a director of SonicWALL, Inc., a publicly traded
company that manufactures computer network security
applications. Mr. Berger also serves on the Board of
Directors for the United States Naval Memorial and is a Trustee
and member of the Investment Committee for Bucknell University.
15
John J.
Delucca
Age:
66
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 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:
56
Director since:
August 1999
Recent Business Experience:
Since April 2009,
Mr. Guenther has served as a private consultant to
technology companies. Mr. Guenther served as Chairman and
Chief Executive Officer of Airplay Network, Inc., a wireless
entertainment services company, from May 2005 through April
2009. 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:
60
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:
61
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 an advisory council member for the
Bank of San Francisco and the University of Idaho College
of Letters, Arts and Social Sciences.
Ronald L.
Rossetti
Age:
66
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.
16
Zachary
F. Sadek
Age:
30
Director since:
March 2009
Recent Business Experience:
Mr. Sadek
serves as Vice President of PCap Managers LLC, an affiliate of
Parthenon Capital, LLC, a private equity fund, and since June
2004 has been employed as an investment professional by
affiliates of Parthenon Capital. From June 2002 to June 2004,
Mr. Sadek was an investment banker with Dresdner Kleinwort
Wasserstein, an investment banking firm.
THE BOARD
OF DIRECTORS RECOMMENDS A VOTE
FOR
EACH NOMINEE NAMED ABOVE.
Arrangements
or understandings related to the selection of
directors
Parthenon Capital nominated Mr. Sadek for election to the
Companys Board of Directors at our 2009 annual meeting of
stockholders in March 2009, and Mr. Sadek was elected at
that meeting. In January 2010, we and Parthenon Capital agreed
that the Company would nominate Mr. Sadek for reelection as
a director of the Company at the 2010 annual meeting and would
use its reasonable best efforts to ensure that Mr. Sadek is
elected at that annual meeting, and Parthenon Capital gave the
Company a proxy for the shares of the Companys capital
stock owned by Parthenon Capital and authorized the proxyholders
designated by the Board to cast the votes entitled to be cast
pursuant to the proxy and to cumulate such votes in the
proxyholders discretion in favor of the election of any
person (i) nominated by the Board and serving on the Board
as of the date of the agreement
and/or
(ii) nominated by the Board in accordance with the
Boards nomination procedures in effect on the date of the
agreement and for whom the members of the Parthenon Group have
specifically authorized the proxyholders to vote. The agreement
between the Company and Parthenon Capital was described in and
filed as an exhibit to a current report on
Form 8-K
filed January 11, 2010, and the preceding sentence is a
summary of the agreement, does not purport to be complete, and
is qualified in its entirety by reference to the agreement. We
have agreed to pay Parthenon Capital $48,072 to reimburse it for
expenses incurred in connection with our 2009 annual meeting.
Discovery Equity Partners, L.P. and Discovery Group I, LLC,
which we refer to as Discovery Group, nominated
Mr. Donoghue and Mr. Murphy for election to the
Companys Board of Directors at our 2009 annual meeting of
stockholders in March 2009, and Mr. Donoghue and
Mr. Murphy were elected at that meeting. In February 2010,
the Company and Discovery Group reached an agreement with
respect to the Companys 2010 annual meeting and other
matters. Discovery Group agreed, among other things, that
(i) it would not nominate any person for election to the
Board at the 2010 annual meeting, (ii) it would not conduct
any solicitation of proxies in connection with the 2010 annual
meeting, and (iii) it would vote all shares of the
Companys common stock it beneficially owned for the
election of each of the Boards nominees at the 2010 annual
meeting. The Company agreed, among other things, to
(i) reduce the size of the Board from nine to seven
members, effective as of the date of the 2010 annual meeting,
(ii) separate the roles of Chairman and Chief Executive
Officer of the Company following the 2010 annual meeting,
(iii) pay Discovery Group $175,000 to reimburse Discovery
Group for fees and expenses incurred in connection with the
Companys 2009 annual meeting of stockholders, and
(iv) accelerate the vesting of unvested restricted stock
units issued to Mr. Donoghue and Mr. Murphy. The
Company and Discovery Group also agreed that
Messrs. Berger, Delucca, Guenther, Heasley, Poe, Rossetti,
and Sadek would be the Boards nominees for election at the
2010 annual meeting. The agreement between the Company and
Discovery Group was described in and filed as an exhibit to a
current report on
Form 8-K
filed March 1, 2010. The foregoing is a summary of that
agreement, does not purport to be complete, and is qualified in
its entirety by reference to the agreement.
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 Tiers
bylaws are consistent with this provision of Delaware law.
17
The following are two examples of how the statute and bylaw
would be applied, if shareholders sought to remove one director
from Tiers seven-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:
|
|
|
|
|
If the holders of 17,499,999 shares voted in favor of the
directors removal, and the holders of
2,500,001 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 seven member Board would be 140,000,000, with the
top seven vote recipients being elected to the Board, meaning
that 17,500,001 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 2,500,001 shares would be entitled to cast
17,500,007 votes, the director would remain on the Board.
|
|
|
|
If the holders of 17,500,001 shares voted in favor of the
directors removal, and the holders of
2,499,999 shares voted against removal, then the director
would be removed. The director would be removed because the
holders of 2,499,999 shares would be entitled to cast
17,499,993 votes, falling 8 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).
|
COMPENSATION
COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the
Compensation Discussion and Analysis that appears below 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 our annual report on
Form 10-K,
as amended, and in this proxy statement.
The foregoing report is given by the members of the Compensation
Committee: Philip G. Heasley (Chair), Morgan P. Guenther, and
Michael R. Murphy.
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 2009, the members of the Compensation Committee
were Messrs. Cabot (through March 2009), Guenther, Heasley,
and Murphy (from March 2009), 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 Chief
Executive Officer, Chief Financial Officer and our other three
most highly compensated executive officers who were serving as
executive officers at the end of fiscal year 2009, as we rely on
their leadership, management skills, and experience for
Tiers continued growth and development. We refer to these
executive officers as our named executive officers.
18
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:
|
|
|
|
|
attract, retain, and motivate talented employees;
|
|
|
|
support business strategies that promote sustained growth and
development;
|
|
|
|
reward the achievement of business results through the delivery
of competitive pay and performance-based incentive
programs; and
|
|
|
|
link executives goals with the interests of shareholders
by tying a portion of compensation to our stock.
|
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
consolidated Company and business unit 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. Cash incentive
compensation is based in part on Tiers achieving specific
goals or targets for the fiscal year. By linking individual
incentive compensation to Tiers goals, we align the
interests of our executives with those of our shareholders. In
addition, we provide long-term incentives to our executives
through stock options, restricted stock units (RSUs) and
performance stock units (PSUs). 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 and other
equity-based awards 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
19
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.
The Company uses the same policies and process to determine the
compensation of our highest-paid executive officer,
Mr. Rossetti, our Chief Executive Officer, as we use to
determine the compensation of our other named executive
officers. The Company believes that, as Chief Executive Officer
and Chairman of the Board of Directors, Mr. Rossetti has
the most significant impact on the value, potential growth, and
success of the Company. Among other things, Mr. Rossetti
provides the Companys strategic vision, manages client and
stockholder relationships, supervises the Companys
executive team, and provides executive leadership to the Company
as a whole. In addition, the Compensation Committee believes
that Mr. Rossettis compensation reflects his
30 years CEO experience in private and public companies,
8 years of experience in the payment processing industry,
15 years as a member of the Companys Board of
Directors, and his financial and accounting experience.
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:
|
|
|
|
|
reviewing and approving the compensation for our Chief Executive
Officer and other executive officers;
|
|
|
|
reviewing executive bonus plan allocations;
|
|
|
|
overseeing and advising the Board on the adoption of policies
that govern our compensation programs; and
|
|
|
|
approving grants of stock options and other stock awards to our
executive officers.
|
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
also provides input and makes recommendations concerning the
terms of his own compensation package.
The other named executive officers do not determine their own
compensation or the compensation of other executives, although
they may discuss with the Chief Executive Officer the
performance objectives and results that are utilized in
establishing performance metrics used in cash incentive
compensation calculations and determining amounts to be awarded.
Use of
Compensation Consultants and 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 from time to time
in accordance with market best practices. These consultants,
which are engaged directly by the Compensation Committee,
provide 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, which we refer to
as peer groups. We typically conduct peer group studies when we
are filling a new or vacant position within the Company or when
the Compensation Committee requests such a study in order to
determine whether our executive compensation levels are
appropriately aligned with the peer group. We did not conduct a
peer group study for fiscal year 2009.
In prior fiscal years, the Compensation Committee has used peer
group studies from John F. Reda & Associates to
provide market-based compensation information for the positions
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. Studies of peer
group companies included a review of base salary, cash incentive
compensation, and long-term equity incentive compensation.
20
During the peer group review for fiscal year 2008, the
Compensation Committee used the following peer group for
determining our executive level compensation packages:
ACI Worldwide Inc.
ASTA Funding Inc.
Bottomline Technologies Inc.
CSG Systems International Inc.
CyberSource Corp.
Intersections Inc.
Inx Inc.
NIC Inc.
Online Resources Inc.
Quality Systems Inc.
Radiant Systems Inc.
S1 Corp
Techteam Global Inc.
TNS Inc.
TRX Inc.
Tyler Technologies Inc.
Wright Express Corp
Companies in this peer group were selected because they operated
in an industry similar to Tier and were generally comparable to
Tier in terms of annual sales, net income, market capitalization
and number of employees.
We do not target specific medians, quartiles or measurements
from the peer group to determine compensation packages for our
executives; instead, we make a qualitative assessment of the
competitiveness of our packages based on the totality of the
available peer group information.
In fiscal year 2009, we also used John F. Reda &
Associates to advise us on the adoption of our Executive
Performance Stock Unit Plan, or the PSU Plan, which is further
discussed below under
Long-term Incentives
, and on grants
of RSUs to Mr. Rossetti. Reda & Associates was
asked to prepare a summary of the accounting and expense impact
of the PSU Plan and to make recommendations concerning the
number of PSUs to be granted pursuant to the PSU Plan and the
number of RSUs to be granted to Mr. Rossetti.
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 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.
We typically conduct salary reviews for all employees, including
our named executive officers, in November of each fiscal year.
At that time, the Compensation Committee considers base salaries
of our executive officers and determines whether to approve base
salary increases. Any base salary increases that are approved in
November typically become effective in December. Base salary
increases for our named executive officers are determined by
evaluating base salary currently in place; the performance and
achievements of the individual for the review period;
individual-specific and overall contributions to Tier; and the
current hiring market for executive talent. The
21
Compensation Committee also considers the performance of the
applicable executives strategic business area, if
applicable, and cost of living adjustments.
The following table sets forth the base salaries of our named
executive officers for fiscal years 2008 and 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary Rate by
|
|
|
|
|
fiscal year
|
|
% Change
|
|
|
2008
|
|
2009
|
|
2008 to 2009
|
|
Ronald L. Rossetti
|
|
$
|
(1
|
)
|
|
$
|
400,000
|
|
|
|
(1
|
)
|
Chief Executive Officer and Chairman of the Board
|
|
|
|
|
|
|
|
|
|
|
|
|
Nina K. Vellayan(2)
|
|
|
|
|
|
|
275,000
|
|
|
|
N/A
|
|
Executive Vice President, Chief Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
Ronald W. Johnston
|
|
|
275,000
|
|
|
|
272,000
|
(3)
|
|
|
(1
|
)%
|
Senior Vice President, Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
Keith S. Kendrick
|
|
|
265,000
|
|
|
|
265,000
|
|
|
|
0
|
%
|
Senior Vice President, Strategic Marketing
|
|
|
|
|
|
|
|
|
|
|
|
|
Keith S. Omsberg
|
|
|
190,000
|
|
|
|
190,000
|
|
|
|
0
|
%
|
Vice President, General Counsel and Corporate Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
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.
|
|
(2)
|
|
Ms. Vellayan joined Tier in October 2008.
|
|
(3)
|
|
Mr. Johnston voluntarily reduced his base salary from
$275,000 to $272,000 for fiscal year 2009, effective January
2009.
|
Cash
Incentive Compensation
Our cash incentive compensation plans are designed to:
|
|
|
|
|
align the management teams financial interests with those
of our shareholders;
|
|
|
|
support a performance-oriented environment that rewards business
unit and Tiers overall results;
|
|
|
|
attract, motivate, and retain key management critical to
Tiers long-term success; and
|
|
|
|
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 reward performance against
defined financial 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
and/or
business unit performance metrics on an annualized basis.
Our cash incentive compensation 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 a component of our executive compensation to be an
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. There is no limit on the
Compensation Committees discretion; however, in fiscal
year 2009, the Compensation Committee did not exercise
discretion to increase the bonus compensation payable to any
executive officer. The Compensation Committee expects that it
would exercise its discretion to pay bonus compensation where it
determined that such a payment would increase stockholder
welfare over the medium- and long-term. In determining whether
and how to exercise their discretion to pay incentive
compensation, the members of the Compensation Committee are
subject to the same standards of fiduciary duty, good faith, and
business judgment that govern the exercise of their other
responsibilities as directors of the Company. The Compensation
Committee may also cancel or amend a cash incentive plan based
on the outcome of its periodic reviews.
22
For fiscal year 2010, Tier plans to use individual performance
goals in addition to Company performance goals in determining
cash incentive compensation for our executives.
For fiscal year 2009, we had one formal cash incentive
compensation plan, our management incentive plan, or MIP. We use
the term Executive Incentive Plan, or EIP, to refer to the
portion of the MIP that applied to our named executive officers
in fiscal year 2009. The EIP is discussed in more detail below.
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.
Sign-on
and Retention Incentives
Consistent with the employment agreement effective
October 1, 2008, Ms. Vellayan, our Chief Operating
Officer, received a sign-on bonus of $75,000. This bonus was
paid in October 2008. Ms. Vellayan would have been
obligated to repay this bonus on a pro-rata basis had she
completed fewer than twelve consecutive months of service with
Tier due to her termination for cause by Tier or her voluntary
resignation. The Compensation Committee believes this bonus to
Ms. Vellayan incentivized Ms. Vellayan to accept
employment with Tier and helped provide stability to the
critical position of Chief Operating Officer.
Consistent with the employment agreement entered into
June 30, 2008, Mr. Kendrick, our Senior Vice
President, Strategic Marketing, received a guaranteed bonus of
50% of his base salary, or a bonus of $132,500, following the
one year anniversary of his employment. This bonus was paid in
August 2009. The Compensation Committee believes this bonus to
Mr. Kendrick incentivized Mr. Kendrick to accept
employment with Tier and helped provide stability to the
critical position of Senior Vice President, Strategic Marketing.
Executive
Incentive Plan
In the first quarter of fiscal year 2009, our Board approved
performance targets under the EIP. All of our named executive
officers participate in the EIP. The EIP was designed to reward
eligible employees for the achievement of performance targets by
our Continuing Operations business segment on a fiscal year
basis. Our Continuing Operations business segment consists of
our electronic payments solutions operations and our wind-down
operations, which consist of certain operations we intend to
wind down over the next three years. The Continuing Operations
targets, including threshold, target, and stretch performance
targets with associated levels of payout, were approved by the
Compensation Committee based upon Tiers strategic plan and
budget process and the formulation of specific Continuing
Operations performance targets.
The following tables illustrate the performance metric and
related potential threshold, target, and maximum payouts for
fiscal 2009 under the EIP for Messrs. Rossetti, Johnston,
Kendrick, and Omsberg and Ms. Vellayan. For each officer,
the performance metric was net income from continuing operations
before interest, tax, depreciation and amortization and stock
based equity compensation (EBITDA) as outlined below.
Estimated
Payout Levels(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Threshold:
|
|
Target:
|
|
Maximum:
|
|
|
EBITDA of
|
|
EBITDA of
|
|
EBITDA of
|
Name
|
|
$0.75 Million
|
|
$1.0 Million
|
|
$1.25 Million
|
|
Ronald L. Rossetti
|
|
$
|
300,000
|
|
|
$
|
400,000
|
|
|
$
|
500,000
|
|
Nina K. Vellayan
|
|
|
137,500
|
|
|
|
206,250
|
|
|
|
275,000
|
|
Ronald W. Johnston
|
|
|
137,500
|
|
|
|
165,000
|
|
|
|
206,250
|
|
Keith S. Kendrick
|
|
|
132,500
|
|
|
|
159,000
|
|
|
|
198,750
|
|
Keith S. Omsberg
|
|
|
19,000
|
|
|
|
28,500
|
|
|
|
38,000
|
|
|
|
|
(1)
|
|
The following table provides detail on the basis of the
estimated payout levels:
|
23
Percentage
of base salary
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Ronald L. Rossetti
|
|
|
75
|
%
|
|
|
100
|
%
|
|
|
125
|
%
|
Nina K. Vellayan
|
|
|
50
|
%
|
|
|
75
|
%
|
|
|
100
|
%
|
Ronald W. Johnston(a)
|
|
|
50
|
%
|
|
|
60
|
%
|
|
|
75
|
%
|
Keith S. Kendrick
|
|
|
50
|
%
|
|
|
60
|
%
|
|
|
75
|
%
|
Keith S. Omsberg
|
|
|
10
|
%
|
|
|
15
|
%
|
|
|
20
|
%
|
|
|
|
(a)
|
|
Mr. Johnstons estimated payout amounts were
calculated on a base salary of $275,000, which represented his
base salary per his employment agreement.
|
During fiscal year 2009, Tier exceeded the maximum EBITDA goal
of $1.25 million. However, the Compensation Committee, on
managements recommendation, determined that EIP payouts
for fiscal year 2009 would be determined as if the target
EBITDA, rather than the maximum EBITDA, had been achieved, in
order to make additional funds available for bonuses payable to
individuals other than our executive officers. The following
table provides a summary of the actual cash incentive
and/or
bonus
payments made to our named executive officers for fiscal year
2009:
|
|
|
|
|
|
|
|
|
|
|
2009 Payout
|
|
Named Executive Officer
|
|
EIP
|
|
|
Bonus
|
|
|
Ronald L. Rossetti
|
|
$
|
400,000
|
|
|
$
|
|
|
Nina K. Vellayan
|
|
|
206,250
|
|
|
|
75,000
|
|
Ronald W. Johnston
|
|
|
165,000
|
|
|
|
|
|
Keith S. Kendrick(1)
|
|
|
59,625
|
|
|
|
132,500
|
|
Keith S. Omsberg
|
|
|
28,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total incentive payout
|
|
$
|
859,375
|
|
|
$
|
207,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
In accordance with the terms of his employment agreement,
Mr. Kendricks EIP award was reduced by $99,375, the
amount of his guaranteed bonus that was attributed to fiscal
year 2009, from his target level of $159,000.
|
Long-term
Incentives
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 2004 Plan and the PSU Plan. These incentives are designed to
motivate employees through equity ownership or compensation tied
to stock appreciation and provide a
pay-at-risk
element to our compensation package. Under the 2004 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. We issue stock
options and RSUs under the 2004 Plan as a method for providing
long-term equity incentives to our executives. Since the options
are granted with an exercise price equal to the closing 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 have granted RSUs to Mr. Rossetti
pursuant to his Enterprise Value Award Plan, or EVA Plan.
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. 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
24
with 2004 Plan requirements as to the number of awards that may
be awarded to executives throughout a fiscal year, taking into
account an executives performance, level of responsibility
and future contributions to Tier. Under the terms of the 2004
Plan, the maximum number of shares with respect to which awards
may be granted to any individual is 300,000 shares per
fiscal year. The maximum number of RSUs that may be awarded
under the terms of the 2004 Plan is 500,000 units. We
reached this maximum number of RSUs during fiscal year 2008. As
such, all future RSU awards will be made outside of the 2004
Plan and settled in cash. Subject to provisions relating to
vesting acceleration that apply under certain circumstances,
options typically vest over five years, with 20% of the
underlying shares vesting on each of the first five
anniversaries of the grant date, and have a maximum ten year
term, and RSUs typically vest three years after they are earned.
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
on page 36 for additional information.
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 PSU Plan on December 4, 2008, or the effective date.
Under the PSU Plan, a maximum of 800,000 units may be
issued for awards 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, that, for the initial participants in
the PSU Plan, are $8.00, $9.50, $11.00, and $13.00 per share.
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 of 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 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 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 PSU Plans change of control provision, if we
experience a change of 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 of 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 of control event, not to exceed
$15.00 per share. If the executive continues to be employed by
the surviving entity following the change of control event, the
award will vest and be paid at the earlier of two years after
the change of control event or three years after the effective
date of the PSU Plan. Payment of the award may be accelerated
following a change of control event for a termination without
cause, death or disability, or resignation for good reason that
occurs within 24 months of the change of control event. The
PSU Plan defines a change of control event as:
|
|
|
|
|
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
|
25
|
|
|
|
|
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 following table provides information on long-term incentives
issued to our named executive officers during fiscal 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted
|
|
Performance
|
|
Stock
|
Named Executive Officer
|
|
Stock Units(1)
|
|
Stock Units(2)
|
|
Options(3)
|
|
Ronald L. Rossetti
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
Nina K. Vellayan
|
|
|
|
|
|
|
180,000
|
|
|
|
200,000
|
|
Ronald W. Johnston
|
|
|
|
|
|
|
150,000
|
|
|
|
75,000
|
|
Keith S. Kendrick
|
|
|
|
|
|
|
100,000
|
|
|
|
50,000
|
|
Keith S. Omsberg
|
|
|
|
|
|
|
50,000
|
|
|
|
15,000
|
|
|
|
|
(1)
|
|
Granted to Mr. Rossetti under his EVA Plan. These RSUs will
be earned upon Tiers achievement and maintenance for a
period of 60 days of a Share Price Performance Target of
$8.00 per share. Unless vesting is accelerated under the
circumstances discussed under
Potential Payments Upon
Termination or Change in Control
, any RSUs that are
earned due to the achievement and maintenance of Share Price
Performance Targets will vest on April 30, 2011. RSUs are
payable in shares unless no shares are available under a
shareholder approved plan, in which case they are payable in
cash.
|
|
(2)
|
|
Unless vesting is accelerated under the circumstances discussed
under
Potential Payments Upon Termination or Change in
Control
, any PSUs that are awarded due to the
achievement and maintenance of Share Price Performance Targets
will vest on December 4, 2011. PSUs are payable in cash
unless shares are available under a shareholder approved plan,
in which case they may be payable in the form of shares at the
option of the Company.
|
|
(3)
|
|
Unless vesting is accelerated under the circumstances discussed
under
Potential Payments Upon Termination or Change in
Control
, options vest over five years, with 20% of the
underlying shares vesting on each of the first five
anniversaries of the grant date.
|
Equity
Ownership Guidelines
Members of Tiers Board of Directors are required to hold
shares of Tier common stock with a value equal to three times
the amount of the annual retainer paid to directors, calculated
using the annual retainer in effect as of the later of
March 31, 2009 and the date the director is elected to the
Board. Directors are required to achieve the guideline within
three years of joining the Board, or, in the case of directors
serving at March 31, 2009, within three years of that date.
These guidelines may be waived, at the discretion of Tiers
Corporate Governance and Nominating Committee, if compliance
would create severe hardship or prevent a director from
complying with a court order. Please see
Director
Compensation
for additional information concerning director
retainers.
Tier currently does not have equity ownership guidelines for its
executive officers.
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
and Senior Vice President, Strategic Marketing, as discussed
below. We believe these perquisites benefit us and our
shareholders by ensuring that these individuals are able to
maintain a regular presence at our headquarters to meet their
duties and responsibilities in full.
26
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 also provided home
office equipment and a cellular phone to assist him in executing
his responsibilities while he is absent from our headquarters.
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.
Tiers Compensation Committee has expressed the intent not
to include a tax
gross-up
provision in any new employment contract.
Senior
Vice President, Strategic Marketing Perquisites
Pursuant to his June 30, 2008 employment agreement, we
provide Mr. Kendrick with a fully-furnished corporate
apartment located near our corporate headquarters in Reston,
Virginia. We also provide Mr. Kendrick with local
transportation for travel while he is located in Reston,
Virginia. In addition, we reimburse Mr. Kendrick for travel
to and from his current residence to our corporate headquarters.
Travel reimbursement includes airfare, ground transportation,
parking, and meals. Mr. Kendrick is provided home office
equipment and a cellular phone to assist him in executing his
responsibilities while he is absent from our headquarters.
In addition, if Mr. Kendrick 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. Kendrick based upon the additional tax
liability.
Tiers Compensation Committee has expressed the intent not
to include a tax
gross-up
provision in any new employment contract.
Change
of Control
Our named executive officers have change of control arrangements
through their employment agreements. 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. In
addition, under the terms of his employment agreement,
Mr. Rossetti is also entitled to full vesting of certain
equity awards effective immediately prior to a change of control
during the term of his employment agreement, regardless of
whether his employment is terminated. Payments are generally due
to the executive within thirty days of his or her termination
(or such later date as is required for compliance with tax laws
governing deferred compensation). For a change of control
provision to be triggered (other than, in the case of
Mr. Rossetti, the vesting acceleration discussed above),
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,
other than Mr. Rossettis, as:
|
|
|
|
|
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;
|
27
|
|
|
|
|
the sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all or substantially all
of the assets of Tier;
|
|
|
|
the dissolution or liquidation of Tier; or
|
|
|
|
the date on which we (i) consummate a going
private transaction pursuant to Section 13 and
Rule 13e-3
of the Exchange Act, or (ii) no longer have a class of
equity securities registered under the Exchange Act .
|
Under Mr. Rossettis employment 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
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.
|
For potential payments upon a change of control arrangements for
our named executive officers, see
Potential Payments Upon
Termination or Change in Control
on page 36.
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, generally,
to the Chief Executive Officer and the next three highly paid
officers, other than the Chief Financial Officer. 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
We value share-based compensation based on the grant date fair
value using the Black-Scholes model for options and the Monte
Carlo simulation option pricing model for RSUs and PSUs. We
recognize compensation expense over the vesting period of the
option, RSU or PSU grants, which ranges from three to five
years. Additional information about the valuation of our options
and RSUs can be found in Note 14 Share-Based
Payment of our Annual Report on
Form 10-K
for fiscal year ended September 30, 2009.
EXECUTIVE
COMPENSATION
This section provides certain tabular and narrative information
regarding the compensation of our named executive officers.
Johnston, Kendrick and Omsberg became executive officers during
the fiscal year ended September 30, 2008 and
Ms. Vellayan became an executive officer during fiscal year
2009; therefore, only fiscal year 2008 and 2009 information is
reported for Messrs. Johnston, Kendrick and Omsberg, and
only fiscal year 2009 information is reported for
Ms. Vellayan. For additional information regarding
compensation of the named executive officers, see
Compensation Discussion and Analysis
beginning on
page 18.
28
Summary
Compensation Table
The following table sets forth information regarding
compensation of our named executive officers during the fiscal
years ended September 30, 2009, 2008 and 2007. References
to years in the tables in this section are to our
fiscal years ended September 30, 2009, September 30,
2008 and September 30, 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan
|
|
All Other
|
|
|
Name and Principal
|
|
|
|
Salary
|
|
Bonus
|
|
Stock Awards
|
|
Option Awards
|
|
Compensation
|
|
Compensation
|
|
Total
|
Position
|
|
Year
|
|
($)
|
|
($)(1)
|
|
($)(2)
|
|
($)(2)
|
|
($)(3)
|
|
($)(4)
|
|
($)
|
|
Ronald L. Rossetti
|
|
|
2009
|
|
|
$
|
400,000
|
|
|
$
|
|
|
|
$
|
513,497
|
|
|
$
|
|
|
|
$
|
400,000
|
|
|
$
|
228,061
|
|
|
$
|
1,541,558
|
|
Chief Executive Officer,
|
|
|
2008
|
|
|
|
589,231
|
|
|
|
390,513
|
|
|
|
264,583
|
|
|
|
|
|
|
|
|
|
|
|
278,363
|
|
|
|
1,522,690
|
|
Chairman of the Board
|
|
|
2007
|
|
|
|
600,000
|
|
|
|
600,000
|
|
|
|
|
|
|
|
119,375
|
|
|
|
|
|
|
|
230,710
|
|
|
|
1,550,085
|
|
Nina K. Vellayan
|
|
|
2009
|
|
|
|
267,596
|
|
|
|
75,000
|
|
|
|
219,180
|
|
|
|
47,215
|
|
|
|
206,250
|
|
|
|
8,028
|
|
|
|
823,269
|
|
Executive Vice President,
Chief Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ronald W. Johnston(5)
|
|
|
2009
|
|
|
|
272,692
|
|
|
|
|
|
|
|
182,650
|
|
|
|
232,971
|
|
|
|
165,000
|
|
|
|
8,180
|
|
|
|
861,493
|
|
Senior Vice President,
|
|
|
2008
|
|
|
|
172,158
|
|
|
|
68,750
|
|
|
|
|
|
|
|
58,326
|
|
|
|
|
|
|
|
4,943
|
|
|
|
304,177
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Keith S. Kendrick
|
|
|
2009
|
|
|
|
265,000
|
|
|
|
132,500
|
|
|
|
121,767
|
|
|
|
72,783
|
|
|
|
59,625
|
|
|
|
95,405
|
|
|
|
747,080
|
|
Senior Vice President,
|
|
|
2008
|
|
|
|
68,288
|
|
|
|
|
|
|
|
|
|
|
|
18,018
|
|
|
|
|
|
|
|
42,953
|
|
|
|
129,259
|
|
Strategic Marketing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Keith S. Omsberg
|
|
|
2009
|
|
|
|
190,000
|
|
|
|
|
|
|
|
60,883
|
|
|
|
47,845
|
|
|
|
28,500
|
|
|
|
4,385
|
|
|
|
331,613
|
|
Vice President, General
|
|
|
2008
|
|
|
|
188,000
|
|
|
|
92,500
|
|
|
|
|
|
|
|
50,706
|
|
|
|
|
|
|
|
5,585
|
|
|
|
336,791
|
|
Counsel and Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Reflects the following bonus payouts for fiscal years 2009, 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
|
|
Nina K. Vellayan
|
|
|
2009
|
|
|
|
75,000
|
|
|
|
|
|
|
|
75,000
|
|
Ronald W. Johnston
|
|
|
2008
|
|
|
|
68,750
|
|
|
|
|
|
|
|
68,750
|
|
Keith S. Kendrick
|
|
|
2009
|
|
|
|
132,500
|
|
|
|
|
|
|
|
132,500
|
|
Keith S. Omsberg
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
|
|
|
|
92,500
|
|
|
|
92,500
|
|
See pages 22 through 24 for additional information on bonus
payments.
|
|
|
(2)
|
|
The amounts included in these columns reflect the dollar amount
recognized as an expense for financial statement reporting
purposes in fiscal years 2009, 2008 and 2007 for stock awards
(consisting of RSUs in the case of Mr. Rossetti and PSUs in
the case of the other named executives) and stock option awards,
calculated in accordance with U.S. GAAP, excluding any estimate
of forfeitures. Accordingly, the columns include amounts
relating to awards granted during and prior to the year
indicated. The following table summarizes the amounts shown in
the Stock Awards and Option Awards
columns and the amount included for each such award for fiscal
year 2009. Assumptions used in the calculation of these amounts
and the amounts for fiscal year 2009 are included in footnote 14
to the audited consolidated financial statements included in our
annual report on
Form 10-K
for fiscal year 2009, as amended.
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
Option Awards
|
|
|
|
|
|
|
Total Number of
|
|
|
|
|
|
|
|
|
Total Number of
|
|
|
|
|
|
|
|
|
|
Shares Underlying
|
|
|
Amount Included in
|
|
|
|
|
|
Shares Underlying
|
|
|
Amount Included in
|
|
Name
|
|
Date of Award
|
|
|
Stock Awards (#)
|
|
|
Fiscal 2009 ($)
|
|
|
Date of Award
|
|
|
Options Awarded (#)
|
|
|
Fiscal 2009 ($)
|
|
|
Ronald L. Rossetti
|
|
|
12/4/08
|
|
|
|
150,000
|
|
|
$
|
102,222
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
4/30/08
|
|
|
|
550,000
|
|
|
|
411,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
513,497
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nina K. Vellayan
|
|
|
12/4/08
|
|
|
|
180,000
|
|
|
|
219,180
|
|
|
|
12/4/08
|
|
|
|
200,000
|
|
|
|
47,215
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ronald W. Johnston
|
|
|
12/4/08
|
|
|
|
150,000
|
|
|
|
182,650
|
|
|
|
12/4/08
|
|
|
|
75,000
|
|
|
|
17,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/1/08
|
|
|
|
200,000
|
|
|
|
215,265
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
232,971
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Keith S. Kendrick
|
|
|
12/4/08
|
|
|
|
100,000
|
|
|
|
121,767
|
|
|
|
12/30/08
|
|
|
|
50,000
|
|
|
|
11,409
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/30/08
|
|
|
|
100,000
|
|
|
|
61,374
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72,783
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Keith S. Omsberg
|
|
|
12/4/08
|
|
|
|
50,000
|
|
|
|
60,883
|
|
|
|
12/4/08
|
|
|
|
15,000
|
|
|
|
3,541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/10/07
|
|
|
|
20,000
|
|
|
|
13,457
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/1/07
|
|
|
|
30,000
|
|
|
|
21,912
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/13/06
|
|
|
|
10,000
|
|
|
|
5,882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/1/04
|
|
|
|
3,000
|
|
|
|
2,481
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/1/03
|
|
|
|
3,000
|
|
|
|
572
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47,845
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
|
Reflects cash payouts for fiscal year 2009 under the Executive
Incentive Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-Equity Incentive
|
Name
|
|
Year
|
|
Incentive Plan
|
|
Payout
|
|
Ronald L. Rossetti
|
|
|
2009
|
|
|
|
EIP
|
|
|
$
|
400,000
|
|
Nina K. Vellayan
|
|
|
2009
|
|
|
|
EIP
|
|
|
|
206,250
|
|
Ronald W. Johnston
|
|
|
2009
|
|
|
|
EIP
|
|
|
|
165,000
|
|
Keith S. Kendrick
|
|
|
2009
|
|
|
|
EIP
|
|
|
|
59,625
|
|
Keith S. Omsberg
|
|
|
2009
|
|
|
|
EIP
|
|
|
|
28,500
|
|
See page 23 for additional information on the Executive
Incentive Plan.
|
|
|
|
|
the aggregate incremental cost to Tier of providing perquisites
and other personal benefits;
|
|
|
|
Company matching contributions under 401(k) plans; and
|
|
|
|
tax reimbursement payments relating to income tax liability
incurred by the applicable executive as a result of the
Companys payment for the perquisites described below.
|
30
The following table summarizes the amounts shown in the
All Other Compensation column:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
|
|
Total all Other
|
Name
|
|
Year
|
|
Perquisites(a)
|
|
401(k)
|
|
Reimbursement
|
|
Compensation
|
|
Ronald L. Rossetti
|
|
|
2009
|
|
|
$
|
116,802
|
|
|
$
|
7,350
|
|
|
$
|
103,909
|
|
|
$
|
228,061
|
|
|
|
|
2008
|
|
|
|
183,338
|
|
|
|
6,900
|
|
|
|
88,125
|
|
|
|
278,363
|
|
|
|
|
2007
|
|
|
|
191,435
|
|
|
|
6,750
|
|
|
|
32,525
|
|
|
|
230,710
|
|
Nina K. Vellayan
|
|
|
2009
|
|
|
|
|
|
|
|
8,028
|
|
|
|
|
|
|
|
8,028
|
|
Ronald W. Johnston
|
|
|
2009
|
|
|
|
|
|
|
|
8,180
|
|
|
|
|
|
|
|
8,180
|
|
|
|
|
2008
|
|
|
|
|
|
|
|
4,943
|
|
|
|
|
|
|
|
4,943
|
|
Keith S. Kendrick
|
|
|
2009
|
|
|
|
87,455
|
|
|
|
7,950
|
|
|
|
|
|
|
|
95,405
|
|
|
|
|
2008
|
|
|
|
35,986
|
|
|
|
1,835
|
|
|
|
5,132
|
|
|
|
42,953
|
|
Keith S. Omsberg
|
|
|
2009
|
|
|
|
|
|
|
|
4,385
|
|
|
|
|
|
|
|
4,385
|
|
|
|
|
2008
|
|
|
|
|
|
|
|
5,585
|
|
|
|
|
|
|
|
5,585
|
|
|
|
|
(a)
|
|
See
Perquisites and Benefits
in
Compensation
Discussion and Analysis
beginning on page 26 for a
discussion of perquisites provided to executives.
|
Perquisites include:
|
|
|
|
|
expenses for corporate apartments located near our corporate
headquarters in Reston, Virginia, including utilities;
|
|
|
|
expenses for local transportation while the executive is located
in Reston and air and ground transportation, meals and lodging
for travel by the executive to and from his home to our
corporate headquarters in Reston; and
|
|
|
|
legal consultation fees relating to negotiation and review of
the executives employment agreement.
|
The following table summarizes the amounts shown in the
Perquisites column:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
Legal
|
|
|
Name
|
|
Year
|
|
Apartment*
|
|
Travel*
|
|
Consultation*
|
|
Total
|
|
Ronald L. Rossetti
|
|
|
2009
|
|
|
$
|
52,459
|
|
|
$
|
64,343
|
|
|
$
|
|
|
|
$
|
116,802
|
|
|
|
|
2008
|
|
|
|
39,096
|
|
|
|
113,431
|
|
|
|
30,811
|
|
|
|
183,338
|
|
|
|
|
2007
|
|
|
|
41,232
|
|
|
|
130,375
|
**
|
|
|
19,828
|
|
|
|
191,435
|
|
Keith S. Kendrick
|
|
|
2009
|
|
|
|
28,221
|
|
|
|
59,234
|
|
|
|
|
|
|
|
87,455
|
|
|
|
|
2008
|
|
|
|
8,310
|
|
|
|
19,371
|
|
|
|
8,305
|
|
|
|
35,986
|
|
|
|
|
*
|
|
Amounts reflect aggregate incremental cost to the Company, which
is equal to the Companys out-of-pocket costs for these
perquisites.
|
|
|
|
**
|
|
Includes travel by chartered private jet for business meeting
which Mr. Rossetti attended. Total cost was $27,295 and is
split equally between Mr. Rossetti and a former executive
who attended the meeting.
|
|
|
|
(5)
|
|
Mr. Johnston served as interim Chief Financial Officer from
April 2008 to June 2008.
|
31
Fiscal
2009 Grants of Plan-Based Awards
The following table sets forth information regarding grants of
plan-based awards made to the named executive officers during
the fiscal year ended September 30, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
Market
|
|
Fair
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
|
|
Exercise or
|
|
Price
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Base Price
|
|
of Common
|
|
Stock
|
|
|
|
|
Estimated Possible Payouts
|
|
Estimated Future Payouts
|
|
Number of
|
|
of
|
|
Stock
|
|
and
|
|
|
|
|
Under Non-Equity Incentive Plan Awards(1)
|
|
under Equity Incentive Plan Awards(1)
|
|
Securities
|
|
Option
|
|
on Date of
|
|
Option
|
|
|
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Underlying
|
|
Awards
|
|
Grant
|
|
Awards
|
Name
|
|
Grant Date
|
|
($)(2)
|
|
($)(3)
|
|
($)(4)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
Options (#)
|
|
($/sh)(5)
|
|
($/sh)(5)
|
|
($)(6)
|
|
Ronald L. Rossetti
|
|
|
|
|
|
$
|
300,000
|
|
|
$
|
400,000
|
|
|
$
|
500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
12/4/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000
|
(7)
|
|
|
(9
|
)
|
|
|
700,000
|
(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nina K. Vellayan
|
|
|
|
|
|
|
137,500
|
|
|
|
206,250
|
|
|
|
275,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/4/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,000
|
(8)
|
|
|
(9
|
)
|
|
|
180,000
|
(11)
|
|
|
200,000
|
(12)
|
|
|
4.25
|
|
|
|
4.34
|
|
|
|
850,000
|
|
Ronald W. Johnston
|
|
|
|
|
|
|
137,500
|
|
|
|
165,000
|
|
|
|
206,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/4/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,500
|
(8)
|
|
|
(9
|
)
|
|
|
150,000
|
(11)
|
|
|
75,000
|
(13)
|
|
|
4.25
|
|
|
|
4.34
|
|
|
|
318,750
|
|
Keith S. Kendrick
|
|
|
|
|
|
|
132,500
|
|
|
|
159,000
|
|
|
|
198,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/4/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
(8)
|
|
|
(9
|
)
|
|
|
100,000
|
(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/30/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
(13)
|
|
|
4.73
|
|
|
|
4.93
|
|
|
|
236,500
|
|
Keith S. Omsberg
|
|
|
|
|
|
|
19,000
|
|
|
|
28,500
|
|
|
|
38,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/4/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
(8)
|
|
|
(9
|
)
|
|
|
50,000
|
(11)
|
|
|
15,000
|
(13)
|
|
|
4.25
|
|
|
|
4.34
|
|
|
|
63,750
|
|
|
|
|
(1)
|
|
For additional information concerning performance metrics and
payouts under non-equity and equity incentive plan awards, see
pages 23 through 26.
|
|
|
|
(2)
|
|
The threshold amount represents the amounts payable to the
executive if we met our corporate performance threshold goal of
EBITDA of $750,000 for fiscal 2009 under the Executive Incentive
Plan.
|
|
(3)
|
|
The target amount represents the amounts payable to the
executive if we met our corporate performance target goal of
EBITDA of $1.0 million for fiscal 2009 under the Executive
Incentive Plan.
|
|
(4)
|
|
The maximum amount represents the amounts payable to the
executive if we met our corporate performance stretch goal of
EBITDA of $1.25 million for fiscal 2009 under the Executive
Incentive Plan. During fiscal year 2009, we exceeded this
stretch goal. However, the Compensation Committee, on
managements recommendation, determined that EIP payouts
for fiscal year 2009 would be determined as if the target
EBITDA, rather than the maximum EBITDA, had been achieved, in
order to make additional funds available for bonuses payable to
individuals other than our executive officers.
|
|
(5)
|
|
The exercise price of the options granted to the individuals
shown above was the closing price of Tiers common stock on
the day prior to the grant date.
|
|
(6)
|
|
Represents the full grant date fair value of each equity-based
award, computed in accordance with U.S. GAAP.
|
|
(7)
|
|
The threshold amount represents the number of RSUs that would be
issuable to Mr. Rossetti under his EVA Plan if we achieved
and maintained a Share Price Performance Target of $8.00 per
share, which is the lowest Share Price Performance Target under
the EVA Plan, for a period of 60 days, subject to vesting
requirements. RSUs that are earned vest on April 30, 2011.
Vesting may be accelerated under certain circumstances described
in
Potential Payments upon Termination or Change of
Control
. RSUs are payable in shares unless no shares are
available under a shareholder approved plan, in which case they
are payable in cash.
|
|
(8)
|
|
The threshold amount represents the number of PSUs that would be
issuable to the applicable executive under the PSU Plan if we
achieved and maintained a Share Price Performance Target of
$8.00 per share, which is the lowest Share Price Performance
Target under the PSU Plan, for a period of 60 days, subject
to vesting requirements. If the applicable Share Price
Performance Targets are met, PSUs vest on December 4, 2011.
Vesting may be accelerated under certain circumstances described
in
Potential Payments upon Termination or Change of
Control
. PSUs are payable in cash unless shares are
available under a shareholder approved plan, in which case they
may be payable in the form of shares at the option of Tier.
|
|
(9)
|
|
As discussed on page 35, each of Mr. Rossettis
EVA Plan and the PSU Plan has four payout levels, each of which
is associated with a Share Price Performance Target. The
threshold payout level, which is associated with the lowest
Share Price Performance Target, is discussed in notes
(7) and (8) above. The maximum payout
|
32
|
|
|
|
|
level, which is associated with the highest Share Price
Performance Target, is discussed in notes (10) and
(11) below. The middle two payout levels are the target
payout levels. If Tier achieves either of the two middle Share
Price Performance Targets, Mr. Rossetti will earn the number of
RSUs associated with that Share Price Performance Target, and
the other named executive officers will earn the number of PSUs
associated with that Share Price Performance Target, in each
case subject to the vesting requirements noted in footnotes (7)
and (8) above.
|
|
|
|
(10)
|
|
The maximum amount represents the number of RSUs that would be
issuable to Mr. Rossetti under his EVA Plan if Tier
achieved and maintained a Share Price Performance Target of
$15.00 per share, which is the highest Share Price Performance
Target under the EVA Plan, for a period of 60 days, subject
to the vesting requirements noted in footnote (7) above.
|
|
(11)
|
|
The maximum amount represents the number of PSUs that would be
issuable to the applicable executive under the PSU Plan if Tier
achieved and maintained a Share Price Performance Target of
$13.00 per share, which is the highest Share Price Performance
Target under the PSU Plan, for a period of 60 days, subject
to the vesting requirements noted in footnote (8) above.
|
|
(12)
|
|
Ms. Vellayan was awarded an option to purchase
200,000 shares of Tier stock pursuant to her employment
agreement. These options, which were granted under the 2004
Plan, vest as to 20% of the underlying shares on each of the
first five anniversaries of the date granted and expire in ten
years. Vesting may be accelerated under certain circumstances
described in Potential Payments upon Termination or Change of
Control.
|
|
(13)
|
|
These options were granted under the 2004 Plan, vest as to 20%
of the underlying shares on each of the first five anniversaries
of the date granted and expire in ten years. Vesting may be
accelerated under certain circumstances described in Potential
Payments upon Termination or Change of Control.
|
33
Outstanding
Equity Awards at 2009 Fiscal Year-End
The following table sets forth for each named executive officer
certain information about stock options and unvested and
unearned equity incentive plan awards held at the end of the
fiscal year ended September 30, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
|
|
Stock Awards
|
|
|
|
|
Number of
|
|
|
|
|
|
Equity Incentive
|
|
Equity Incentive
|
|
|
Number of
|
|
Securities
|
|
|
|
|
|
Plan Awards:
|
|
Plan Awards:
|
|
|
Securities
|
|
Underlying
|
|
|
|
|
|
Number of
|
|
Market or Payout
|
|
|
Underlying
|
|
Unexercised
|
|
|
|
|
|
Unearned
|
|
Value of Unearned
|
|
|
Unexercised
|
|
Options
|
|
Option
|
|
|
|
Shares, Units, or
|
|
Shares, Units or
|
|
|
Options
|
|
(#)
|
|
Exercise
|
|
Option
|
|
Other Rights that
|
|
Other Rights that
|
|
|
(#)
|
|
Unexercisable
|
|
Price
|
|
Expiration
|
|
have not Vested
|
|
have not Vested
|
Name
|
|
Exercisable
|
|
(a)
|
|
($)
|
|
Date
|
|
(#)
|
|
($)(d)
|
|
Ronald L. Rossetti
|
|
|
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
|
|
|
|
150,000
|
(b)
|
|
$
|
1,272,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
385,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nina K. Vellayan
|
|
|
|
|
|
|
200,000
|
(1)
|
|
|
4.25
|
|
|
|
12/03/18
|
|
|
|
45,000
|
(c)
|
|
|
381,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200,000
|
|
|
|
|
|
|
|
|
|
|
|
45,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ronald W. Johnston
|
|
|
66,666
|
|
|
|
133,334
|
(2)
|
|
|
8.01
|
|
|
|
06/30/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
(3)
|
|
|
4.25
|
|
|
|
12/04/18
|
|
|
|
37,500
|
(c)
|
|
|
318,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66,666
|
|
|
|
208,334
|
|
|
|
|
|
|
|
|
|
|
|
37,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Keith S. Kendrick
|
|
|
20,000
|
|
|
|
80,000
|
(4)
|
|
|
7.80
|
|
|
|
06/29/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
(5)
|
|
|
4.73
|
|
|
|
12/29/18
|
|
|
|
25,000
|
(c)
|
|
|
212,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
130,000
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Keith Omsberg
|
|
|
2,500
|
|
|
|
|
|
|
|
16.04
|
|
|
|
07/04/12
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000
|
|
|
|
|
|
|
|
7.81
|
|
|
|
11/30/13
|
|
|
|
|
|
|
|
|
|
|
|
|
2,400
|
|
|
|
600
|
(6)
|
|
|
8.60
|
|
|
|
10/31/14
|
|
|
|
|
|
|
|
|
|
|
|
|
6,000
|
|
|
|
4,000
|
(7)
|
|
|
7.05
|
|
|
|
09/12/16
|
|
|
|
|
|
|
|
|
|
|
|
|
6,000
|
|
|
|
24,000
|
(8)
|
|
|
10.20
|
|
|
|
09/30/17
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
16,000
|
(9)
|
|
|
9.25
|
|
|
|
12/09/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
(10)
|
|
|
4.25
|
|
|
|
12/03/18
|
|
|
|
12,500
|
(c)
|
|
|
106,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,900
|
|
|
|
59,600
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Vesting schedules of the unexercisable option awards are set
forth below. Vesting may be accelerated under certain
circumstances described in
Potential Payments upon
Termination or Change of Control
.
|
34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnote
|
|
|
|
|
Name
|
|
Reference
|
|
Vesting Date
|
|
Number Vesting
|
|
Nina K. Vellayan
|
|
|
(1
|
)
|
|
|
12/04/09
|
|
|
|
40,000
|
|
|
|
|
|
|
|
|
12/04/10
|
|
|
|
40,000
|
|
|
|
|
|
|
|
|
12/04/11
|
|
|
|
40,000
|
|
|
|
|
|
|
|
|
12/04/12
|
|
|
|
40,000
|
|
|
|
|
|
|
|
|
12/04/13
|
|
|
|
40,000
|
|
Ronald W. Johnston
|
|
|
(2
|
)
|
|
|
07/01/10
|
|
|
|
66,667
|
|
|
|
|
|
|
|
|
07/01/11
|
|
|
|
66,667
|
|
|
|
|
(3
|
)
|
|
|
12/04/09
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
12/04/10
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
12/04/11
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
12/04/12
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
12/04/13
|
|
|
|
15,000
|
|
Keith S. Kendrick
|
|
|
(4
|
)
|
|
|
06/29/10
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
06/29/11
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
06/29/12
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
06/29/13
|
|
|
|
20,000
|
|
|
|
|
(5
|
)
|
|
|
12/30/09
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
12/30/10
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
12/30/11
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
12/30/12
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
12/30/13
|
|
|
|
10,000
|
|
Keith S. Omsberg
|
|
|
(6
|
)
|
|
|
11/01/09
|
|
|
|
600
|
|
|
|
|
(7
|
)
|
|
|
09/13/10
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
09/13/11
|
|
|
|
2,000
|
|
|
|
|
(8
|
)
|
|
|
10/01/09
|
|
|
|
6,000
|
|
|
|
|
|
|
|
|
10/01/10
|
|
|
|
6,000
|
|
|
|
|
|
|
|
|
10/01/11
|
|
|
|
6,000
|
|
|
|
|
|
|
|
|
10/01/12
|
|
|
|
6,000
|
|
|
|
|
(9
|
)
|
|
|
12/10/09
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
12/10/10
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
12/10/11
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
12/10/12
|
|
|
|
4,000
|
|
|
|
|
(10
|
)
|
|
|
12/04/09
|
|
|
|
3,000
|
|
|
|
|
|
|
|
|
12/04/10
|
|
|
|
3,000
|
|
|
|
|
|
|
|
|
12/04/11
|
|
|
|
3,000
|
|
|
|
|
|
|
|
|
12/04/12
|
|
|
|
3,000
|
|
|
|
|
|
|
|
|
12/04/13
|
|
|
|
3,000
|
|
|
|
|
|
|
|
|
(b)
|
|
The table above shows the number of RSUs that would be earned by
Mr. Rossetti upon achievement and maintenance of the
threshold Share Price Performance Target, or $8.00 per share,
for the required 60 day period. Mr. Rossetti has been
granted a total of 700,000 RSUs (including the 150,000 RSUs show
in the table above) under his EVA Plan. These RSUs are earned
when the Share Price Performance Targets shown below are met and
maintained for 60 consecutive days, and RSUs that are earned
vest on April 30, 2011. Vesting may be accelerated under
certain circumstances described in
Potential Payments upon
Termination or Change of Control
.
|
|
|
|
|
|
Share Price Performance Target
|
|
Number of RSUs
|
|
$8.00
|
|
|
150,000
|
|
11.00
|
|
|
180,000
|
|
13.00
|
|
|
185,000
|
|
15.00
|
|
|
185,000
|
|
|
|
|
|
|
|
|
|
700,000
|
|
|
|
|
|
|
|
|
|
(c)
|
|
The table above shows the number of PSUs that would be earned by
the named executive officers upon achievement and maintenance of
the threshold Share Price Performance Target, or $8.00 per
share, for the
|
35
|
|
|
|
|
required 60 day period. The named executive officers have
been granted the total number of PSUs shown in the table below
(which includes the PSUs shown in the table above) under the PSU
Plan. These PSUs are earned when the Share Price Performance
Targets shown below are met and maintained for 60 consecutive
days. PSUs that have been earned vest December 4, 2011.
Please see
Compensation Discussion and Analysis
Long-term Incentives
for additional detail. Vesting may be
accelerated under certain circumstances described in
Potential Payments upon Termination or Change of Control
.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Units at Share Price Performance Target
|
|
Total Units that
|
|
|
$8.00
|
|
$9.50
|
|
$11.00
|
|
$13.00
|
|
could be Awarded
|
|
Nina K. Vellayan
|
|
|
45,000
|
|
|
|
45,000
|
|
|
|
45,000
|
|
|
|
45,000
|
|
|
|
180,000
|
|
Ronald W. Johnston
|
|
|
37,500
|
|
|
|
37,500
|
|
|
|
37,500
|
|
|
|
37,500
|
|
|
|
150,000
|
|
Keith S. Kendrick
|
|
|
25,000
|
|
|
|
25,000
|
|
|
|
25,000
|
|
|
|
25,000
|
|
|
|
100,000
|
|
Keith S. Omsberg
|
|
|
12,500
|
|
|
|
12,500
|
|
|
|
12,500
|
|
|
|
12,500
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
480,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(d)
|
|
Represents the market value of RSUs or PSUs, as applicable,
issuable to the applicable executive upon achievement and
maintenance of the $8.00 threshold Share Price Performance
Target for the required 60 day period, subject to the
vesting requirements noted in footnotes (b) and
(c) above. The market value was determined by multiplying
$8.48 (the closing price of Tiers stock at
September 30, 2009) by the number of RSUs or PSUs, as
applicable.
|
Fiscal
2009 Option Exercises and Stock Vested
The following table sets forth for each named executive officer
certain information about stock options that were exercised
during the fiscal year ended September 30, 2009:
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Number of Shares
|
|
|
|
|
Acquired on Exercise
|
|
Value Realized on
|
Name
|
|
(#)
|
|
Exercise ($)(1)
|
|
Ronald L. Rossetti
|
|
|
20,000
|
|
|
$
|
12,350
|
|
Nina K. Vellayan
|
|
|
|
|
|
|
|
|
Ronald W. Johnston
|
|
|
|
|
|
|
|
|
Keith S. Kendrick
|
|
|
|
|
|
|
|
|
Keith S. Omsberg
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Amount realized on exercise was determined by multiplying $7.43
(the closing price of Tiers common stock at July 14,
2009, the date of exercise) by the number of shares exercised
and subtracting the aggregate exercise price paid for such
shares.
|
Potential
Payments Upon Termination or Change of Control
This section provides information regarding payments and
benefits to the named executive officers that would be triggered
by termination of the officers employment (including
voluntary termination, involuntary termination, resignation for
good reason and termination due to death or disability) or a
change of control of Tier. The term change of
control is defined in the
Change of Control
section
of the Compensation Discussion and Analysis on page 27.
Other key terms in our employment agreements with our named
executive officers are cause and good
reason. Summaries of these definitions, which are
qualified by reference to the full definitions and related
provisions in the employment agreements, are 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;
|
36
|
|
|
|
|
an intentional violation by the named executive officer of
federal or state securities laws;
|
|
|
|
willful misconduct or gross negligence by the named executive
officer that has or is reasonably likely to have a material
adverse effect on Tier;
|
|
|
|
a failure of the named executive officer to perform his or her
reasonably assigned duties for Tier that has or is reasonably
likely to have a material adverse effect on Tier;
|
|
|
|
a material violation by the named executive officer of any
material provision of our Business Code of Conduct or, in the
case of Mr. Rossetti and Mr. Johnston, our Code of
Ethics for Chief Executive, Chief Financial and Chief Accounting
Officers (or successor policies on similar topics) or any other
applicable policies in place;
|
|
|
|
a violation by the named executive officer of any provision of
his or her Proprietary and Confidential Information,
Developments, Noncompetition and Nonsolicitation Agreement with
us; or
|
|
|
|
fraud, embezzlement, theft or dishonesty by the named executive
officer against Tier.
|
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,
or in the case of Mr. Rossetti, a reduction in his maximum
bonus opportunity below 100% of base salary, and in the case of
each of Mr. Kendrick and Ms. Vellayan, a reduction in
the minimum bonus opportunity below 50% of base salary;
|
|
|
|
in the case of Mr. Rossetti, a material change in the
applicable performance goals used to determine his bonus that
makes it materially less likely for the goals to be achieved and
which change is not reasonable in light of the Companys
business, is designed to make it materially less likely for
Mr. Rossetti to obtain the bonus opportunity or is applied
solely to Mr. Rossetti (except to the extent relating only
to the functions of a Chief Executive Officer);
|
|
|
|
in the case of Mr. Rossetti, any reduction in his title,
position or reporting status, unless he is provided with a
comparable title, position or reporting status, or any material
diminution of his duties, responsibilities, powers or
authorities;
|
|
|
|
in the case of Mr. Kendrick and Ms. Vellayan, any
material reduction in position and reporting status (defined as
reporting directly to the Chief Executive Officer of Tier or an
equivalent position), or any material diminution in the nature
and scope of duties, responsibilities, powers or authorities
consistent with those immediately following commencement of
employment by Mr. Kendrick or Ms. Vellayan, as
applicable, with Tier, or the assignment of duties and
responsibilities materially inconsistent with
Mr. Kendricks position of Senior Vice President,
Strategic Marketing or Ms. Vellayans position as
Executive Vice President, Chief Operating Officer;
|
|
|
|
in the case of Mr. Johnston and Mr. Omsberg, any
material diminution of the named executive officers
duties, responsibilities, powers, or authorities;
|
|
|
|
in the case of Mr. Kendrick, any requirement imposed upon
Mr. Kendrick to relocate his principal residence to any
other location than Reston, Virginia or Atlanta, Georgia or a
similar metropolitan area;
|
|
|
|
in the case of Mr. Omsberg, any relocation of his principal
place of employment by more than 50 miles or a requirement
that Mr. Omsberg relocate his principal place of residence
by more than 50 miles; or
|
|
|
|
a material breach by Tier of any material provision of the
employment agreement.
|
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.
37
Potential
Payments Due under our Employment Agreement with our Chief
Executive Officer
On April 30, 2008, we entered into an employment agreement
with our Chief Executive Officer, Ronald L. Rossetti,
which provides that Mr. Rossetti will continue to serve as
Tiers Chief Executive Officer for a three year term ending
on April 30, 2011. Pursuant to the terms of this agreement,
Mr. Rossetti is entitled to certain compensation and
benefits upon termination of his employment
and/or
a
change of control of Tier, payable in a lump sum (with the
exception of health benefits, which would be reimbursed monthly)
within 30 days of the applicable event (or such later date
as is required for compliance with tax laws governing deferred
compensation) and provided, in the case of a termination other
than for death, disability, or cause or a voluntary termination
by Mr. Rossetti, that Mr. Rossetti signs a separation
agreement and release. The following table describes the maximum
potential payments that would have been due to Mr. Rossetti
as of September 30, 2009, upon designated situations
outlined in his employment agreement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary for
|
|
|
Involuntary
|
|
|
Termination
|
|
|
|
|
|
|
|
Benefits and Payments
|
|
Voluntary
|
|
|
Cause
|
|
|
not for Cause
|
|
|
with Good
|
|
|
|
|
|
Change of
|
|
Upon Termination
|
|
Termination(1)
|
|
|
Termination(1)
|
|
|
Termination(2)
|
|
|
Reason(2)
|
|
|
Death(3)
|
|
|
Control(4)
|
|
|
Salary
|
|
$
|
12,308
|
|
|
$
|
12,308
|
|
|
$
|
412,308
|
|
|
$
|
412,308
|
|
|
$
|
412,308
|
|
|
$
|
812,308
|
|
Bonus
|
|
|
400,000
|
|
|
|
400,000
|
|
|
|
1,161,881
|
|
|
|
1,161,881
|
|
|
|
780,940
|
|
|
|
1,161,881
|
|
Restricted stock units(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health benefits
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
12,000
|
|
|
|
|
|
|
|
12,000
|
|
Tax
gross-up
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,038,234
|
|
Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued PTO(6)
|
|
|
(10,025
|
)
|
|
|
(10,025
|
)
|
|
|
(10,025
|
)
|
|
|
(10,025
|
)
|
|
|
(10,025
|
)
|
|
|
(10,025
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total company obligation
|
|
|
402,283
|
|
|
|
402,283
|
|
|
|
1,576,164
|
|
|
|
1,576,164
|
|
|
|
1,183,223
|
|
|
|
3,014,398
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options(7)
|
|
|
936,150
|
|
|
|
936,150
|
|
|
|
936,150
|
|
|
|
936,150
|
|
|
|
936,150
|
|
|
|
936,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total benefit to employee
|
|
$
|
1,338,433
|
|
|
$
|
1,338,433
|
|
|
$
|
2,512,314
|
|
|
$
|
2,512,314
|
|
|
$
|
2,119,373
|
|
|
$
|
3,950,548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Amounts reflect maximum salary earned but not paid prior to date
of termination, accrued prior year bonus not paid prior to date
of termination and personal time off accrued through
September 30, 2009.
|
|
(2)
|
|
Amounts reflect maximum salary earned and prior year bonus
accrued but not paid prior to date of termination, one
years base salary, bonus equal to the average annual bonus
paid to Mr. Rossetti (or for the most recent year, accrued
for Mr. Rossetti) for the previous three years, or the
Average Historic Bonus, prorated for number of months worked
prior to occurrence, bonus equal to the Average Historic Bonus,
immediate vesting of all stock options, restricted stock grants
and restricted stock units already issued under the EVA Plan
(and an extension of the measurement period under the EVA Plan
to nine months after the date of termination, with full vesting
of awards that become earned because of performance during that
nine month period), twelve months continuation of health
benefits and personal time off accrued through
September 30, 2009. In addition, in this scenario, all
stock options will be exercisable for a period of one year after
the date of Mr. Rossettis termination, other than a
stock option for 300,000 shares granted to
Mr. Rossetti on July 26, 2006, which will be
exercisable until the later of five years after the date of his
termination or three months following the date he is no longer
serving in a capacity that would enable him to be eligible to
receive option grants under the 2004 Plan, but in no event later
than July 25, 2016.
|
|
(3)
|
|
Amounts reflect maximum salary earned and prior year bonus
accrued but not paid prior to date of termination, one
years base salary and bonus equal to the Average Historic
Bonus, immediate vesting of all stock options, restricted stock
grants and restricted stock units already issued under the EVA
plan (and an extension of the measurement period under the EVA
Plan to nine months after the date of termination, with full
vesting of awards that become earned because of performance
during that nine month period) and personal time off accrued
through September 30, 2009. In addition, in this scenario,
all stock options will be exercisable for a
|
38
|
|
|
|
|
period of one year after the date of Mr. Rossettis
termination due to death, other than a stock option for
300,000 shares granted to Mr. Rossetti on
July 26, 2006, which will be exercisable until the date
that is five years after the date of his death, but in no event
later than July 25, 2016. Amounts payable in the event of a
termination due to disability are the same as the foregoing,
except that Mr. Rossetti would not be entitled to one
years base salary and bonus equal to the Average Historic
Bonus in the event of a termination for disability.
|
|
(4)
|
|
The amounts payable to Mr. Rossetti upon a change of
control vary depending on the relevant facts. The amounts shown
in this column assume that Mr. Rossetti remains employed by
Tier for the shorter of (i) 180 days after a change in
control (the CIC Transition Period) and
(ii) the period required by the Board in connection with
the change of control, and assists in the transition during such
period of employment. In this scenario, Mr. Rossetti is
entitled to a payment of two times (a) his base salary in
effect on the date of his termination plus (b) a bonus
equal to the Average Historic Bonus, immediate vesting of all
stock options, restricted stock grants and restricted stock
units already issued under the EVA Plan (and an extension of the
measurement period under the EVA Plan to nine months after the
date of termination, with full vesting of awards that become
earned because of performance during that nine month period),
gross-ups
on
payments that are subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as
amended, twelve months continuation of health benefits and
personal time off accrued through September 30, 2009. In
another potential scenario, if Tier terminates
Mr. Rossettis employment without cause during the CIC
Transition Period (or within the 60 days preceding a change
of control) or he resigns because Tier does not treat him during
that period as a senior executive or senior adviser, he will
receive the benefits described in the previous sentence, and
will also receive the benefits he would have been entitled to
had he been terminated without cause by Tier in the absence of a
change of control, other than one years base salary and a
bonus equal to the Average Historic Bonus. In a third scenario,
if Mr. Rossetti is terminated or resigns for good reason
after the CIC Transition Period (or a shorter period under
certain circumstances), such termination would be governed by
the applicable provisions of Mr. Rossettis employment
agreement, depending on the circumstances of the cessation,
provided that he would not be entitled to any further cash
severance in the form of one years base salary or a bonus
equal to the Average Historic Bonus. Mr. Rossetti is
entitled to immediate vesting of his equity awards and a
nine-month extension of the EVA Plan measurement period if he is
employed by Tier immediately prior to a change of control,
regardless of whether or when his employment is subsequently
terminated.
|
|
(5)
|
|
As of September 30, 2009, the stock price performance
targets that trigger the award of RSUs had not been met;
therefore, no units were considered awarded or vested for
purposes of the table above.
|
|
(6)
|
|
As of September 30, 2009, Mr. Rossettis PTO days
taken were in excess of his accrued amount.
|
|
(7)
|
|
The amount represents the value of vested options as of
September 30, 2009 at a closing price of $8.48 less the
cost to the employee to exercise the options at their exercise
price.
|
39
Potential
Payments Due under our Employment Agreement with our Chief
Operating Officer
Effective October 1, 2008, we entered into an employment
agreement with our Chief Operating Officer,
Nina K. Vellayan. Pursuant to the terms of this
agreement, Ms. Vellayan 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 (or such later date as is
required for compliance with tax laws governing deferred
compensation) and provided, in the case of a termination other
than for death, disability, or cause or a voluntary termination
by Ms. Vellayan, that Ms. Vellayan signs a separation
agreement and release. The following table describes the maximum
potential payments that would have been due to Ms. Vellayan
as of September 30, 2009, upon designated situations
outlined in her employment agreement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary for
|
|
|
Involuntary not for
|
|
|
Termination
|
|
|
|
|
|
|
|
Benefits and Payments
|
|
Voluntary
|
|
|
Cause
|
|
|
Cause
|
|
|
with Good
|
|
|
Death or
|
|
|
Change of
|
|
Upon Termination
|
|
Termination(1)
|
|
|
Termination(1)
|
|
|
Termination(2)
|
|
|
Reason(2)
|
|
|
Disability(2)
|
|
|
Control(3)
|
|
|
Salary
|
|
$
|
8,462
|
|
|
$
|
8,462
|
|
|
$
|
283,462
|
|
|
$
|
283,462
|
|
|
$
|
283,462
|
|
|
$
|
558,462
|
|
Bonus
|
|
|
206,250
|
|
|
|
206,250
|
|
|
|
206,250
|
|
|
|
206,250
|
|
|
|
206,250
|
|
|
|
431,250
|
|
Performance stock units(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health benefits
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
12,000
|
|
|
|
12,000
|
|
|
|
18,000
|
|
Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued PTO
|
|
|
12,594
|
|
|
|
12,594
|
|
|
|
12,594
|
|
|
|
12,594
|
|
|
|
12,594
|
|
|
|
12,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total company obligation
|
|
|
227,306
|
|
|
|
227,306
|
|
|
|
514,306
|
|
|
|
514,306
|
|
|
|
514,306
|
|
|
|
1,020,306
|
|
Stock options(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total benefit to employee
|
|
$
|
227,306
|
|
|
$
|
227,306
|
|
|
$
|
514,306
|
|
|
$
|
514,306
|
|
|
$
|
514,306
|
|
|
$
|
1,020,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Amounts reflect maximum salary earned but not paid prior to date
of termination, accrued prior year bonus not paid prior to date
of termination and personal time off accrued through
September 30, 2009.
|
|
(2)
|
|
Amounts reflect maximum salary earned but not paid prior to date
of termination, accrued prior year bonus not paid prior to date
of termination, one years base salary, twelve months
continuation of health benefits and personal time off accrued
through September 30, 2009.
|
|
(3)
|
|
Amounts shown are payable in the event of a termination of
Ms. Vellayans employment by Tier without cause, or a
resignation by Ms. Vellayan for good reason, within one
year after a change of control, and reflect maximum salary
earned but not paid prior to date of termination, accrued prior
year bonus not paid prior to date of termination, two times
(a) base salary and (b) bonus equal to the average
annual bonus paid to Ms. Vellayan (or for the most recent
year, accrued for Ms. Vellayan) for the previous three
years (or such shorter period during which Ms. Vellayan was
employed), immediate vesting of any stock options, eighteen
months continuation of health benefits and personal time
off accrued through September 30, 2009.
|
|
(4)
|
|
As of September 30, 2009, the stock price performance
targets that trigger the award of performance stock units had
not been met; therefore, no units were considered awarded or
vested for purposes of the table above. In the event
Ms. Vellayans employment terminates within
24 months of a change of control due to her death,
disability, termination by Tier without cause, or resignation by
Ms. Vellayan for good reason, all PSUs previously awarded
(if any) will vest in full.
|
|
(5)
|
|
The amount represents the value of vested options as of
September 30, 2009 at a closing price of $8.48 less the
cost to the employee to exercise the options at their exercise
price.
|
Potential
Payments Due under our Employment Agreement with our Chief
Financial Officer
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
40
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 (or such later date as is
required for compliance with tax laws governing deferred
compensation) and provided in the case of a termination other
than for death, disability, or cause or a voluntary termination
by Mr. Johnston, Mr. Johnston signs a separation
agreement and release. The following table describes the maximum
potential payments that would have been due to Mr. Johnston
as of September 30, 2009, upon designated situations
outlined in his employment agreement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary for
|
|
|
Involuntary not
|
|
|
Termination
|
|
|
|
|
|
|
|
Benefits and Payments
|
|
Voluntary
|
|
|
Cause
|
|
|
for Cause
|
|
|
with Good
|
|
|
Death or
|
|
|
Change of
|
|
Upon Termination
|
|
Termination(1)
|
|
|
Termination(1)
|
|
|
termination(2)
|
|
|
Reason(2)
|
|
|
Disability(2)
|
|
|
Control(3)
|
|
|
Salary
|
|
$
|
8,369
|
|
|
$
|
8,369
|
|
|
$
|
280,369
|
|
|
$
|
280,369
|
|
|
$
|
280,369
|
|
|
$
|
552,369
|
|
Bonus
|
|
|
165,000
|
|
|
|
165,000
|
|
|
|
165,000
|
|
|
|
165,000
|
|
|
|
165,000
|
|
|
|
371,250
|
|
Performance stock units(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health benefits
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
12,000
|
|
|
|
12,000
|
|
|
|
18,000
|
|
Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued PTO
|
|
|
26,049
|
|
|
|
26,049
|
|
|
|
26,049
|
|
|
|
26,049
|
|
|
|
26,049
|
|
|
|
26,049
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total company obligation
|
|
|
199,418
|
|
|
|
199,418
|
|
|
|
483,418
|
|
|
|
483,418
|
|
|
|
483,418
|
|
|
|
967,668
|
|
Stock options(5)
|
|
|
31,333
|
|
|
|
31,333
|
|
|
|
31,333
|
|
|
|
31,333
|
|
|
|
31,333
|
|
|
|
31,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total benefit to employee
|
|
$
|
230,751
|
|
|
$
|
230,751
|
|
|
$
|
514,751
|
|
|
$
|
514,751
|
|
|
$
|
514,751
|
|
|
$
|
999,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Amounts reflect maximum salary earned but not paid prior to date
of termination, accrued prior year bonus not paid prior to date
of termination and personal time off accrued through
September 30, 2009.
|
|
(2)
|
|
Amounts reflect maximum salary earned but not paid prior to date
of termination, accrued prior year bonus not paid prior to date
of termination, one years base salary, twelve months
continuation of health benefits and personal time off accrued
through September 30, 2009.
|
|
(3)
|
|
Amounts shown are payable in the event of a termination of
Mr. Johnstons employment by Tier without cause, or a
resignation by Mr. Johnston for good reason, within one
year after a change of control, and reflect maximum salary
earned but not paid prior to date of termination, accrued prior
year bonus not paid prior to date of termination, two times
(a) base salary and (b) bonus equal to the average
annual bonus paid to Mr. Johnston (or for the most recent
year, accrued for Mr. Johnston) for the previous three
years (or such shorter period during which Mr. Johnston was
employed), immediate vesting of any stock options, eighteen
months continuation of health benefits and personal time
off accrued through September 30, 2009.
|
|
(4)
|
|
As of September 30, 2009, the stock price performance
targets that trigger the award of performance stock units had
not been met, therefore no units were considered awarded or
vested for purposes of the table above. In the event
Mr. Johnstons employment terminates within
24 months of a change of control due to his death,
disability, termination by Tier without cause, or resignation by
Mr. Johnston for good reason, all PSUs previously awarded
(if any) will vest in full.
|
|
(5)
|
|
The amount represents the value of vested options as of
September 30, 2009 at a closing price of $8.48 less the
cost to the employee to exercise the options at their exercise
price.
|
Potential
Payments Due under our Employment Agreement with our Senior Vice
President, Strategic Marketing
On June 30, 2008, we entered into an employment agreement
with our Senior Vice President, Strategic Marketing, Keith S.
Kendrick. Pursuant to the terms of this agreement,
Mr. Kendrick 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 (or such later date as is required for
compliance with tax laws governing deferred compensation) and
provided in the case of a termination other than for death,
disability, or cause or a voluntary termination by
Mr. Kendrick, Mr. Kendrick signs a separation
agreement and release. The
41
following table describes the maximum potential payments that
would have been due to Mr. Kendrick as of
September 30, 2009, upon designated situations outlined in
his employment agreement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary for
|
|
|
Involuntary not
|
|
|
Termination
|
|
|
|
|
|
|
|
Benefits and Payments
|
|
Voluntary
|
|
|
Cause
|
|
|
for Cause
|
|
|
with Good
|
|
|
Death or
|
|
|
Change of
|
|
Upon Termination
|
|
Termination(1)
|
|
|
Termination(1)
|
|
|
Termination(2)
|
|
|
Reason(2)
|
|
|
Disability(2)
|
|
|
Control(3)
|
|
|
Salary
|
|
$
|
8,154
|
|
|
$
|
8,154
|
|
|
$
|
273,154
|
|
|
$
|
273,154
|
|
|
$
|
273,154
|
|
|
$
|
538,154
|
|
Bonus
|
|
|
21,500
|
|
|
|
21,500
|
|
|
|
21,500
|
|
|
|
21,500
|
|
|
|
21,500
|
|
|
|
419,000
|
|
Performance stock units(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health benefits
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
12,000
|
|
|
|
12,000
|
|
|
|
18,000
|
|
Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued PTO
|
|
|
14,593
|
|
|
|
14,593
|
|
|
|
14,593
|
|
|
|
14,593
|
|
|
|
14,593
|
|
|
|
14,593
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total company obligation
|
|
|
44,247
|
|
|
|
44,247
|
|
|
|
321,247
|
|
|
|
321,247
|
|
|
|
321,247
|
|
|
|
989,747
|
|
Stock options(5)
|
|
|
13,600
|
|
|
|
13,600
|
|
|
|
13,600
|
|
|
|
13,600
|
|
|
|
13,600
|
|
|
|
13,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total benefit to employee
|
|
$
|
57,847
|
|
|
$
|
57,847
|
|
|
$
|
334,847
|
|
|
$
|
334,847
|
|
|
$
|
334,847
|
|
|
$
|
1,003,347
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Amounts reflect maximum salary earned but not paid prior to date
of termination, accrued prior year bonus not paid prior to date
of termination and personal time off accrued through
September 30, 2009.
|
|
(2)
|
|
Amounts reflect maximum salary earned but not paid prior to date
of termination, accrued prior year bonus not paid prior to date
of termination, one years base salary, twelve months
continuation of health benefits and personal time off accrued
through September 30, 2009.
|
|
(3)
|
|
Amounts shown are payable in the event of a termination of
Mr. Kendricks employment by Tier without cause, or a
resignation by Mr. Kendrick for good reason, within one
year after a change of control, and reflect maximum salary
earned but not paid prior to date of termination, accrued prior
year bonus not paid prior to date of termination, two times
(a) base salary and (b) bonus equal to the average
annual bonus paid to Mr. Kendrick (or for the most recent
year, accrued for Mr. Kendrick) for the previous three
years (or such shorter period during which Mr. Kendrick was
employed), immediate vesting of options, eighteen months
continuation of health benefits and personal time off accrued
through September 30, 2009.
|
|
(4)
|
|
As of September 30, 2009, the stock price performance
targets that trigger the award of performance stock units had
not been met, therefore no units were considered awarded or
vested for purposes of the table above. In the event
Mr. Kendricks employment terminates within
24 months of a change of control due to his death,
disability, termination by Tier without cause, or resignation by
Mr. Kendrick for good reason, all PSUs previously awarded
(if any) will vest in full.
|
|
(5)
|
|
The amount represents the value of vested options as of
September 30, 2009 at a closing price of $8.48 less the
cost to the employee to exercise the options at their exercise
price.
|
Potential
Payments Due under our Employment Agreement with our Vice
President, General Counsel and Corporate Secretary
On May 6, 2009, we entered into an employment agreement
with our Vice President, General Counsel and Corporate
Secretary, Keith S. Omsberg. Pursuant to the terms of this
agreement, Mr. Omsberg 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 (or such later date as is
required for compliance with tax laws governing deferred
compensation) and provided in the case of a termination other
than for death, disability, or cause or a voluntary termination
by Mr. Omsberg, Mr. Omsberg signs a separation
agreement and release.
42
The following table describes the maximum potential
payments that would have been due to Mr. Omsberg as of
September 30, 2009, upon designated situations outlined in
his employment agreement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary for
|
|
|
Involuntary not
|
|
|
Termination
|
|
|
|
|
|
|
|
Benefits and Payments
|
|
Voluntary
|
|
|
Cause
|
|
|
for Cause
|
|
|
with Good
|
|
|
Death or
|
|
|
Change of
|
|
Upon Termination
|
|
Termination(1)
|
|
|
Termination(1)
|
|
|
Termination(2)
|
|
|
Reason(2)
|
|
|
Disability(2)
|
|
|
Control(3)
|
|
|
Salary
|
|
$
|
5,846
|
|
|
$
|
5,846
|
|
|
$
|
195,846
|
|
|
$
|
195,846
|
|
|
$
|
195,846
|
|
|
$
|
385,846
|
|
Bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
96,833
|
|
Performance stock units(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health benefits
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
12,000
|
|
|
|
12,000
|
|
|
|
18,000
|
|
Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued PTO
|
|
|
19,026
|
|
|
|
19,026
|
|
|
|
19,026
|
|
|
|
19,026
|
|
|
|
19,026
|
|
|
|
19,026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total company obligation
|
|
|
24,872
|
|
|
|
24,872
|
|
|
|
226,872
|
|
|
|
226,872
|
|
|
|
226,872
|
|
|
|
519,705
|
|
Stock options(5)
|
|
|
10,590
|
|
|
|
10,590
|
|
|
|
10,590
|
|
|
|
10,590
|
|
|
|
10,590
|
|
|
|
10,590
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total employee benefit
|
|
$
|
35,462
|
|
|
$
|
35,462
|
|
|
$
|
237,462
|
|
|
$
|
237,462
|
|
|
$
|
237,462
|
|
|
$
|
530,295
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Amounts reflect maximum salary earned but not paid prior to date
of termination, accrued prior year bonus not paid prior to date
of termination and personal time off accrued through
September 30, 2009.
|
|
(2)
|
|
Amounts reflect maximum salary earned but not paid prior to date
of termination, accrued prior year bonus not paid prior to date
of termination, one years base salary, twelve months
continuation of health benefits and personal time off accrued
through September 30, 2009.
|
|
(3)
|
|
Amounts shown are payable in the event of a termination of
Mr. Omsbergs employment by Tier without cause, or a
resignation by Mr. Omsberg for good reason, within one year
after a change of control, and reflect maximum salary earned but
not paid prior to date of termination, accrued prior year bonus
not paid prior to date of termination, two times (a) base
salary and (b) bonus equal to the average bonus paid over
the preceding three years (which average would include the
retention payment in the amount of $85,000 pursuant to the
February 5, 2007 retention agreement between
Mr. Omsberg and Tier), immediate vesting of options that
would have vested within eighteen months of the termination of
Mr. Omsbergs employment, full vesting of all
performance stock units awarded in accordance with the PSU Plan
(if any), eighteen months continuation of health benefits
and personal time off accrued through September 30, 2009.
|
|
(4)
|
|
As of September 30, 2009, the stock price performance
targets that trigger the award of performance stock units had
not been met, therefore no units were considered awarded or
vested for purposes of the table above. In the event
Mr. Omsbergs employment terminates within
24 months of a change of control due to his death,
disability, termination by Tier without cause, or resignation by
Mr. Omsberg for good reason, all PSUs previously awarded
(if any) will vest in full.
|
|
(5)
|
|
The amount represents the value of vested options as of
September 30, 2009 at a closing price of $8.48 less the
cost to the employee to exercise the options at their exercise
price.
|
43
DIRECTOR
COMPENSATION
The Governance and Nominating Committee of the Board determines
the compensation of our non-employee Board members. Compensation
is generally reviewed annually, and more frequently when the
Governance and Nominating Committee deems necessary, and is
compared with companies in the same peer group that is used for
evaluating executive compensation. In addition to the results of
peer group studies, 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
|
|
Pay Component
|
|
2009
|
|
|
Board retainer (payable quarterly in arrears)
|
|
$
|
20,000
|
|
Board member fee (per meeting)
|
|
|
|
|
In-person meeting
|
|
|
1,000
|
|
Telephonic meeting
|
|
|
500
|
|
Committee chair retainer (payable quarterly in arrears)
|
|
|
|
|
Audit committee
|
|
|
5,000
|
|
All other committees
|
|
|
2,500
|
|
Committee meeting fee (per meeting)
|
|
|
|
|
In-person meeting
|
|
|
1,000
|
|
Telephonic meeting
|
|
|
500
|
|
Lead director retainer (payable quarterly in arrears)
|
|
|
5,000
|
|
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 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, subject to full vesting acceleration in the event
of a change of control. The vesting and payout provisions of the
restricted stock units under the circumstances described below
are as follows:
|
|
|
|
|
Death and disability Pro rata vesting through the
date of death or disability; immediate payout
|
|
|
|
Voluntary resignation Pro rata vesting through the
date of resignation; payable at end of
3-year
vesting period
|
|
|
|
Termination for cause Forfeit entire award
|
|
|
|
Change of control 100% vesting, payable on date of
change of control
|
As described under
Arrangements or understandings related to
the selection of directors
on page 17 above, in
February 2010, Tier and Discovery Group reached an agreement
with respect to the Companys 2010 annual meeting and other
matters. As part of that agreement, we accelerated the vesting
of unvested restricted stock units issued to Mr. Donoghue
and Mr. Murphy, such acceleration to be effective upon the
expiration of the term of Mr. Murphy and Mr. Donoghue
as a director.
Mr. Rossetti, the only director who is also a Tier
employee, receives no compensation for serving as a director.
44
Fiscal
2009 Director Compensation
For our fiscal year ended September 30, 2009, 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, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned or Paid
|
|
|
|
|
Name
|
|
in Cash ($)
|
|
Stock Awards ($)(1)
|
|
Total ($)
|
|
Charles W. Berger
(Chair Audit Committee)
|
|
$
|
41,000
|
|
|
$
|
12,720
|
|
|
$
|
53,720
|
|
Samuel Cabot III(2)
|
|
|
25,750
|
|
|
|
|
|
|
|
25,750
|
|
John J. Delucca
(Vice Chair Audit Committee)
|
|
|
37,500
|
|
|
|
12,720
|
|
|
|
50,220
|
|
Daniel J. Donoghue(3)
|
|
|
17,000
|
|
|
|
12,720
|
|
|
|
29,720
|
|
Morgan P. Guenther
(Chair Governance and Nominating
Committee)
|
|
|
52,500
|
|
|
|
12,720
|
|
|
|
65,220
|
|
Philip G. Heasley
(Chair Compensation Committee and Lead
Director)
|
|
|
46,500
|
|
|
|
12,720
|
|
|
|
59,220
|
|
Michael R. Murphy(3)
|
|
|
19,500
|
|
|
|
12,720
|
|
|
|
32,220
|
|
David A. Poe
(Chair Data Security Committee)
|
|
|
31,875
|
|
|
|
12,720
|
|
|
|
44,595
|
|
Zachary F. Sadek(3)
|
|
|
16,500
|
|
|
|
12,720
|
|
|
|
29,220
|
|
James R. Stone(4)
|
|
|
18,500
|
|
|
|
|
|
|
|
18,500
|
|
|
|
|
(1)
|
|
The amounts included in this column reflect the dollar amount
recognized as an expense for financial statement reporting
purposes in fiscal 2009 for restricted stock unit awards,
calculated in accordance with US GAAP. Assumptions used in the
calculation of these amounts are included in footnote 14 to the
audited consolidated financial statements included in our annual
report on
Form 10-K
for the fiscal year ended September 30, 2009, as amended.
The expense per member has been calculated as total expense to
be recognized on the date of valuation per month multiplied by
the number of months in measurement period, based on the
following:
|
|
|
|
|
|
Number of RSUs awarded
|
|
|
9,000
|
|
Fair value of award (closing price on day of valuation)
|
|
$
|
8.48
|
|
Total fair value
|
|
$
|
76,320
|
|
Total months to recognize expense
|
|
|
36
|
|
Number of months in measurement period
|
|
|
6
|
|
The following table shows the aggregate number of stock awards
and option awards outstanding at the end of fiscal year 2009 for
each director:
|
|
|
|
|
|
|
|
|
Name
|
|
Stock Awards Outstanding
|
|
Options Outstanding
|
|
Charles W. Berger
|
|
|
9,000
|
|
|
|
140,000
|
|
John J. Delucca
|
|
|
9,000
|
|
|
|
40,000
|
|
Daniel J. Donoghue
|
|
|
9,000
|
|
|
|
|
|
Morgan P. Guenther
|
|
|
9,000
|
|
|
|
150,000
|
|
Philip G. Heasley
|
|
|
9,000
|
|
|
|
10,002
|
|
Michael R. Murphy
|
|
|
9,000
|
|
|
|
|
|
David A. Poe
|
|
|
9,000
|
|
|
|
6,668
|
|
Zachary F. Sadek
|
|
|
9,000
|
|
|
|
|
|
|
|
|
(2)
|
|
Mr. Cabots term of office expired when his successor
was elected at our 2009 annual meeting.
|
|
(3)
|
|
Messrs. Donoghue, Murphy and Sadek joined our Board in
March 2009.
|
|
(4)
|
|
Mr. Stone did not stand for re-election at our 2009 annual
meeting.
|
45
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, 2009 with management and
McGladrey & Pullen, LLP, or McGladrey,
Tier Technologies, Inc.s registered public accounting
firm for fiscal year 2009. The Audit Committee also reviewed and
discussed with McGladrey the matters required to be discussed by
Statement of Auditing Standards No. 61, as amended.
The Audit Committee received the written disclosures and letter
from McGladrey required by applicable requirements of the Public
Company Accounting Oversight Board regarding McGladreys
communications with the Audit Committee concerning independence,
and has discussed with McGladrey its independence from Tier.
Based upon the review 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, 2009.
The foregoing report is given by the members of the Audit
Committee: Charles W. Berger (Chair), John J. Delucca (Vice
Chair), Daniel J. Donoghue, and Zachary F. Sadek.
PRINCIPAL
ACCOUNTING FEES AND SERVICES
The aggregate fees billed by McGladrey to us for the fiscal
years ended September 30, 2009 and 2008 are as follows (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
Audit Fees(1)
|
|
$
|
539
|
|
|
$
|
540
|
|
Audit Related Fees(2)
|
|
|
52
|
|
|
|
|
|
Tax Fees
|
|
|
|
|
|
|
|
|
All Other Fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
591
|
|
|
$
|
540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Represents fees for the audit of our financial statements,
review of our quarterly financial statements, audit of our
internal controls, and advice on accounting matters directly
related to the audit and audit services provided in connection
with other statutory and regulatory filings.
|
|
(2)
|
|
Represents fees associated with the review of ChoicePay
financial statements, as a result of the acquisition of
ChoicePay in January 2009.
|
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, 2009, 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.
PROPOSAL TWO:
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
Our Audit Committee selected McGladrey as our independent
registered public accounting firm for fiscal year 2010, 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
46
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:
AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION TO
CHANGE
THE NAME OF THE COMPANY
The Board of Directors has approved, subject to stockholder
approval, an amendment to our restated certificate of
incorporation that changes the name of the Company from
Tier Technologies, Inc. to Official
Payments Holdings, Inc.. The form of amendment to our
restated certificate of incorporation to effect the name change
is attached as
Annex A
to this Proxy Statement.
We are proposing to change our name in order to more closely
align our formal corporate name with our brand and our focus on
electronic payments. We conduct substantially all of our
business activities through our wholly owned subsidiary,
Official Payments Corporation. We believe that changing our
corporate name to Official Payments Holdings, Inc.
would clarify our corporate identity and more closely associate
our Company with our brand and business focus.
If our stockholders approve the name change amendment at the
annual meeting, we intend to apply to change our NASDAQ Global
Select Market trading symbol from TIER to
OPAY. Stockholders will not be required to submit
their stock certificates for exchange if the proposed name
change is approved. Following the effective date of the name
change, all new stock certificates issued by us will reflect our
new name.
If the proposal to amend our restated certificate of
incorporation to change our name to Official Payments
Holdings, Inc. is approved by our stockholders at the
annual meeting, an amendment to our restated certificate of
incorporation in the form attached as
Annex A
will
be filed with the Secretary of State of the State of Delaware to
effect the name change as soon as practicable after the annual
meeting.
THE BOARD
OF DIRECTORS RECOMMENDS A VOTE
FOR
PROPOSAL THREE.
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,
11130 Sunrise Valley Drive, Suite 300, Reston, VA 20191
(for proposals mailed on or after March 26, 2010), and
received no later than November 18, 2010.
Proposals not intended to be included in next years proxy
statement, but that are instead sought to be presented directly
at the 2011 annual meeting, including nominations of director
candidates, must be received by us at the above-mentioned
address not less 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 the 2011 annual 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
47
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 at
Tier Technologies, Inc., attention Corporate Secretary, at
(for letters mailed before March 26, 2010) 10780
Parkridge Boulevard, Suite 400, Reston, Virginia 20191 or
11130 Sunrise Valley Drive, Suite 300, Reston, VA 20191
(for letters mailed on or after March 26, 2010), or by
phone at
(571) 382-1000.
A copy of our Annual Report on
Form 10-K
for the fiscal year ended September 30, 2009, as amended,
is available without charge upon written request to Corporate
Secretary, Tier Technologies, Inc., at (for requests mailed
before March 26, 2010) 10780 Parkridge Boulevard,
Suite 400, Reston, Virginia 20191 or 11130 Sunrise Valley
Drive, Suite 300, Reston, VA 20191 (for requests mailed on
or after March 26, 2010).
By Order of the Board of Directors,
Keith S.
Omsberg
Secretary
March 18, 2010
48
Annex A
CERTIFICATE
OF AMENDMENT OF
RESTATED
CERTIFICATE OF INCORPORATION
OF
TIER TECHNOLOGIES, INC.
Pursuant to
Section 242 of the
General Corporation Law of the State of Delaware
Tier Technologies, Inc. (hereinafter called the
Corporation), a corporation organized and existing
under the General Corporation Law of the State of Delaware, does
hereby certify as follows:
At a meeting of the Board of Directors of the Corporation, a
resolution was duly adopted pursuant to Section 242 of the
General Corporation Law of the State of Delaware setting forth
an amendment to the Restated Certificate of Incorporation of the
Corporation and declaring said amendment to be advisable. The
stockholders of the Corporation duly approved said amendment in
accordance with Section 242 of the General Corporation Law
of the State of Delaware. The resolution setting forth the
amendment is as follows:
|
|
|
RESOLVED:
|
|
That, subject to the approval of the stockholders of the
Corporation, Article FIRST of the Restated Certificate of
Incorporation of the Corporation be and hereby is amended and
restated in its entirety so that the same shall read in full as
follows:
|
|
|
FIRST: The name of the Corporation is: Official Payments
Holdings, Inc.
|
IN WITNESS WHEREOF, this Certificate of Amendment of Restated
Certificate of Incorporation has been executed by a duly
authorized officer of the Corporation
this day
of ,
2010.
TIER TECHNOLOGIES, INC.
A-1
Directions
to the Annual Meeting
Sheraton
Reston Hotel
11810 Sunrise Valley Drive, Reston, Virginia 20191
Phone:
(703) 620-9000
From Reston Town Center
|
|
|
|
|
Take Reston Parkway west to Sunrise Valley Drive.
|
|
|
|
Continue for one-quarter mile; the hotel will be on your left.
|
From Washington D.C.
|
|
|
|
|
Take Interstate 66 West and follow the exit signs for
Washington/Dulles Airport 267 Toll Road.
|
|
|
|
Proceed on 267 West to Reston Parkway, Exit 12.
|
|
|
|
Turn left on Reston Parkway. At the second light turn left again
onto Sunrise Valley Drive.
|
|
|
|
Continue for a quarter mile; the hotel will be on your left.
|
From Washington Reagan International Airport (DCA)
|
|
|
|
|
Take Washington Parkway to Capital Beltway Interstate 495 into
Virginia.
|
|
|
|
Merge onto the Dulles access Toll Road 267 East.
|
|
|
|
Take Exit 12 to Reston Parkway and turn left.
|
|
|
|
Proceed to the first light and turn left on Sunrise Valley Drive.
|
|
|
|
Continue for a quarter mile; the hotel will be on the left.
|
From South (Virginia)
|
|
|
|
|
Follow Capitol Beltway Interstate 495 North.
|
|
|
|
Take the exit for Washington/Dulles Airport 267 Toll Road West.
|
|
|
|
Proceed on 267 West to Reston Parkway, Exit 12.
|
|
|
|
Turn left on Reston Parkway to the second light, then turn left
again on Sunrise Valley Drive.
|
|
|
|
Continue for a quarter mile; the hotel will be on your left.
|
From North (Maryland)
|
|
|
|
|
Follow Capitol Beltway Interstate 495 to Virginia.
|
|
|
|
Take the exit for Washington/Dulles Airport 267 Toll Road West.
|
|
|
|
Follow 267 West to Reston Parkway, Exit 12.
|
|
|
|
Turn left on Reston Parkway. At the second light turn left again
onto Sunrise Valley Drive.
|
|
|
|
Continue for a quarter mile; the hotel will be on your left.
|
From Washington Dulles International Airport (IAD)
|
|
|
|
|
Follow Dulles access Toll Road 267 East.
|
|
|
|
Take Exit 12 to Reston Parkway and turn right.
|
|
|
|
Go to the first light and turn left on Sunrise Valley Drive.
|
|
|
|
Continue for a quarter mile; the hotel will be on the left.
|
B-1
VOTE BY INTERNET www.proxyvote.com
Use the Internet to transmit your voting instructions
and for electronic delivery of information up until
11:59 P.M. Eastern Time on April 7, 2010. Have your
proxy card in hand when you access the web site and
follow the instructions to obtain your records and to
create an electronic voting instruction form.
VOTE BY PHONE 1-800-690-6903
Use any touch-tone telephone to transmit your voting
instructions up until 11:59 P.M. Eastern Time on
April 7, 2010. Have your proxy card in hand when you
call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in
the postage-paid envelope we have provided or return
it to Vote Processing, Tier Technologies, Inc, c/o
Broadridge Financial Solutions, Inc., 51 Mercedes
Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
M20789-P88628 KEEP THIS PORTION FOR YOUR RECORDS
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
DETACH AND RETURN THIS PORTION ONLY
To withhold authority
to vote for any
TIER TECHNOLOGIES, INC. For Withhold For All
individual
nominee(s), mark For
All Except and write
All All Except
the
number(s) of the
nominee(s) on the line
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
below.
PROPOSALS 1, 2 AND 3.
1. PROPOSAL NO. 1:
Nominees for Directors for election by the holders of
common stock:
01) Charles W. Berger 05) David A. Poe
02) John J. Delucca 06) Ronald L. Rossetti
03) Morgan P. Guenther 07) Zachary F. Sadek
04) Philip G. Heasley
For Against Abstain
2. 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, 2010.
3. PROPOSAL NO. 3: To amend the Companys Restated Certificate of Incorporation to change the Companys name to Official Payments Holdings, Inc.
Unless otherwise specified on the reverse side, this proxy authorizes the
proxies named on the reverse side to cumulate votes that the undersigned
is entitled to cast at the annual meeting in connection with the election of
directors; provided that the proxies will not cumulate votes for any
nominees from whom the undersigned has 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 as explained in the proxy statement, mark the
box below and write your instructions on the reverse side. (If you wish to
direct that the proxy holders cumulate votes with respect to a specific
Board nominee or nominees, please indicate the name(s) and the number of
votes to be given to such Board nominee(s)).
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.
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full
title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full
corporate
or partnership name by authorized officer.
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
|
TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
M20790-P88628
TIER TECHNOLOGIES, INC.
PROXY
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 8, 2010
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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 the
Sheraton Reston Hotel located at 11810 Sunrise Valley Drive, Reston, Virginia at 10:00 a.m. local
P
time on April 8, 2010, 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
R
to vote, in their discretion, upon such
other business as may properly come before the meeting or any postponements or adjournments thereof.
O THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AMONG THE BOARDS NOMINEES AS DIRECTED BY THE
X
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
Y
NAMED
IN PROPOSAL NO. 1 (EXCEPT FOR ANY NOMINEES FOR WHOM THE UNDERSIGNED HAS WITHHELD AUTHORITY
TO VOTE), FOR PROPOSAL NO. 2, AND FOR PROPOSAL NO. 3.
Cumulative Voting Instructions (Mark the Corresponding box on the reverse side)
(If you noted cumulative voting instructions above, please check the corresponding box on the reverse side.)
|
Tier Reit Inc. (NYSE:TIER)
Historical Stock Chart
From Jun 2024 to Jul 2024
Tier Reit Inc. (NYSE:TIER)
Historical Stock Chart
From Jul 2023 to Jul 2024