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| 8-K - FORM 8-K - OFFICIAL PAYMENTS HOLDINGS, INC. | form8k.htm |
AGREEMENT
This
Agreement dated this 8th day of January, 2010 (this “Agreement”), is made by and
among Giant Investment, LLC, a Delaware limited liability company (“Giant”), Parthenon Investors
II, L.P., a Delaware limited partnership (“Parthenon”), PCap Partners
II, LLC, a Delaware limited liability company (“PCap Partners”), PCap II,
LLC, a Delaware limited liability company (“PCap II”), and John C.
Rutherford (the foregoing individuals and entities being collectively referred
to herein as the “Parthenon
Group”), and Tier Technologies, Inc., a Delaware corporation (the “Company”).
WHEREAS,
the Parthenon Group nominated two individuals for election to the Company’s
Board of Directors (the “Board”) at the 2009 annual
meeting of stockholders of the Company, and one of the Parthenon Group’s
nominees, Zachary F. Sadek (“Mr. Sadek”), was elected to
the Board at that meeting; and
WHEREAS,
the Company and the members of the Parthenon Group have determined that the
interests of the Company and its stockholders would be best served by entering
into this Agreement;
NOW,
THEREFORE, in consideration of the foregoing premises and the respective
representations, warranties, and agreements hereinafter set forth, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, hereby
agree as follows:
Section
1. Board
Composition. The Board shall (i) nominate Mr. Sadek (the
“Parthenon Nominee”)
for re-election as a director of the Company at the 2010 Annual Meeting, (ii)
recommend that the stockholders of the Company at the 2010 Annual Meeting vote
to elect the Parthenon Nominee as a director, and (iii) use its reasonable best
efforts (which shall include the solicitation of proxies and the voting of shares for which the Board’s designees
hold proxies) to ensure that the Parthenon Nominee is elected at the 2010
Annual Meeting; provided, however, that the Board and
the holders of proxies granted to the Board’s designees shall not be required to
cast, or cause to be cast, in the aggregate more votes for the election of the
Parthenon Nominee than may be validly cast
pursuant to the Proxy (which term is defined below), plus, if and only if the votes entitled to be cast
pursuant to the Proxy are insufficient to ensure the election of the
Parthenon Nominee to the Board at the 2010 Annual Meeting, and if and only if
the Proxy validly permits the Proxyholders (which term is defined below) to vote
an aggregate of at least 1,799,321 shares of Common Stock at the 2010 Annual
Meeting, then up to such additional number of votes as shall be necessary to
ensure the election of the Parthenon Nominee to the Board at the 2010 Annual
Meeting.
Section
2. Voting; Proxy; Nominee
Information.
(a) The
Parthenon Group and their affiliates (as defined in Rule 12b-2 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) (“Affiliates”) shall (i) cause
all shares of the Voting Securities (as defined below) that they beneficially
own (as determined by Rule 13d-3 of the Exchange Act) as of the record date for
the 2010 Annual Meeting to be present for quorum purposes at the 2010 Annual
Meeting, (ii) not support or participate in any “withhold the vote” or similar
campaign with respect to any meeting to elect directors of the Company, and, in
the event of any such campaign, will vote their shares in accordance with this
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(b) To
facilitate the voting of any Voting Securities beneficially owned by the
Parthenon Group, or the granting of any consent with respect thereto, in any
matter other than a matter subject to Sections 2(a) and 3(a), the members of the
Parthenon Group shall provide written instructions to the Proxyholders no less
than five Business Days prior to the 2010 Annual Meeting, and the Proxyholders
shall vote such Voting Securities in accordance with such written instructions
on any matter other than a matter subject to Section 2(a) or Section
3(a).
(c) The
Parthenon Group shall promptly provide to the Company any information reasonably
requested by the Company for inclusion in any filings or submissions required to
be made by the Company with or to the U.S. Securities and Exchange Commission
(the “SEC”).
Section
3. Additional
Agreements.
(a) For
the period commencing on the date hereof and ending on the Business Day
immediately following the conclusion of the 2010 Annual Meeting, including any
adjournments or postponements thereof (the “Termination Date”), each
member of the Parthenon Group will not, and will cause each of its respective
Affiliates, directors, officers, employees, agents, consultants, advisors, and
other representatives, including legal counsel, accountants, and financial
advisors (collectively, “Representatives”) not to, do
any of the following, directly or indirectly, unless they have obtained the
prior written consent of the Board:
(i) (A)
engage, or in any way participate, directly or indirectly, in any “solicitation”
(as such term is defined in Rule 14a-1(l) promulgated by the SEC under the
Exchange Act) of proxies or consents in any “election contest” with respect to
the Company’s
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(ii) in
connection with any “election contest” with respect to the Company’s directors
(regardless of whether it involves the election or removal of or withholding
votes for directors of the Company), form, join, or in any way participate in a
partnership, syndicate, or other group, including any “group” as defined under
Section 13(d)(3) of the Exchange Act, with respect to any voting securities of
the Company, other than a “group” that only includes members who are currently
identified as Reporting Persons in the Parthenon Group’s Schedule 13D filings
(or Affiliates thereof);
(iii) seek,
alone or in concert with others, (A) to call a meeting of stockholders or
solicit consents from stockholders, or conduct a nonbinding referendum of
stockholders, related to the composition of the Board, (B) to obtain
representation on the Board except as otherwise expressly permitted in this
Agreement, or (C) to effect the removal of any member of the Board;
(iv) sell,
offer to sell, or agree to sell, all or substantially all, directly or
indirectly, through swap or hedging transactions or otherwise, any voting rights
decoupled from the underlying Voting Securities held by the Parthenon Group to
any Third Party (as defined below);
(v) enter
into any discussions, negotiations, agreements, or understandings with any Third
Party with respect to the foregoing, or advise, assist, encourage, or seek to
persuade any Third Party to take any action with respect to any of the
foregoing, or otherwise take or cause any action inconsistent with any of the
foregoing; or
(vi) request,
directly or indirectly, any amendment or waiver of any provision of this
Section 3(a) (including this clause (vi)) by the Company or any of its
Representatives.
(b) For
the period commencing on the date hereof and ending on the Termination Date, no
member of the Parthenon Group shall sell, transfer, or otherwise dispose of
(including by merger or otherwise by operation of law) beneficial ownership of
any Voting Securities, unless the transferee thereof executes an irrevocable
proxy in form and substance satisfactory to the Company, and takes such other
actions as the Company may reasonably request, to permit the Proxyholders to
exercise all voting and consent rights with respect to such Voting Securities
through the Termination Date.
(c) The
Company shall not increase the number of directors constituting the entire Board
to a number greater than nine.
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Section
4. Representations and
Warranties.
(a) The
members of the Parthenon Group represent and warrant, jointly and severally, as
follows:
(i) Each
member of the Parthenon Group has the power and authority to execute, deliver,
and carry out the terms and provisions of this Agreement and the Proxy and to
consummate the transactions contemplated hereby and thereby.
(ii) Each
of this Agreement and the Proxy has been duly and validly authorized, executed,
and delivered by each member of the Parthenon Group, constitutes a valid and
binding obligation and agreement of each such member, and is enforceable against
each such member in accordance with its terms.
(iii) The
members of the Parthenon Group, together with their Affiliates, beneficially
own, directly or indirectly, an aggregate of 1,799,321 shares of Common Stock,
and such shares of Common Stock constitute all of the Voting Securities of the
Company beneficially owned by the members of the Parthenon Group and their
Affiliates.
(iv) Mr.
Sadek is “independent” under the NASDAQ Stock Market, Inc. listing standards
(other than with respect to any opinion of the Company’s board of directors
referenced therein, as to which the Parthenon Group makes no representation) and
Rule 10A-3 of the Exchange Act.
(v) The
information provided by the Parthenon Group with respect to Mr. Sadek for
inclusion in any filings or submissions by the Company with or to the SEC (A)
shall not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, (B) shall not contain any statement which, at the time
and in the light of the circumstances under which such statement is made, will
be false or misleading with respect to any material fact, and (C) shall not omit
to state any material fact necessary in order to make the statements therein not
false or misleading or necessary to correct any statement in any earlier filing
with or submission to the SEC.
(b) The
Company hereby represents and warrants as follows:
(i) The
Company has the power and authority to execute, deliver, and carry out the terms
and provisions of this Agreement and to consummate the transactions contemplated
hereby.
(ii) This
Agreement has been duly and validly authorized, executed, and delivered by the
Company, constitutes a valid and binding obligation and agreement of the
Company, and is enforceable against the Company in accordance with its
terms.
Section
5. Specific
Performance. Each of the members of the Parthenon Group, on
the one hand, and the Company, on the other hand, acknowledges and agrees that
irreparable injury to the other party hereto would occur in the event any of the
provisions of this Agreement were not performed in accordance with its specific
terms or were otherwise breached, and that such injury would not be adequately
compensable in damages. It is accordingly agreed that the
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Section
6. Certain
Definitions. As used in this Agreement, (a) the term
“Common Stock” shall
mean the common stock of the Company, par value $0.01 per share; (b) the term
“Person” shall mean any
individual, partnership (whether general or limited), corporation, limited
liability company, joint venture, or other entity, group, syndicate, trust,
government or agency thereof, or any other association or entity whatsoever; (c)
the term “Third Party”
shall mean any person or entity that is not a party to this Agreement, a member
of the Board, a director or officer of the Company, or legal counsel to any
party to this Agreement; (d) the term “Voting Securities” shall mean
the Common Stock and any other securities of the Company entitled to vote in the
election of directors, or securities convertible into, or exercisable or
exchangeable for Common Stock or other securities entitled to vote in the
election of directors, whether or not subject to the passage of time,
contingencies, contractual restrictions, or any combination thereof (including
any derivative securities representing interests in Common Stock); (e) the term
“Business Day” shall
mean each Monday, Tuesday, Wednesday, Thursday, and Friday that is not a day on
which banking institutions in New York City are generally authorized or
obligated by law or executive order to close; and (f) “beneficial ownership” is
determined pursuant to Rule 13d-3 of the Exchange Act, and the terms
“beneficially own,” “beneficial owner,” “beneficial ownership,” and variations
thereof have the meanings determined in accordance with Rule 13d-3 of the
Exchange Act.
Section
7. Termination. The
obligations in Sections 1, 2, and 3 shall terminate on the Termination
Date.
Section
8. No
Waiver. Any waiver by any party of a breach of any provision
of this Agreement shall not operate as or be construed to be a waiver of any
other breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to
any term of this Agreement on one or more occasion shall not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
Section
9. Successors and Assigns;
Assignment. All the terms and provisions of this Agreement
shall inure to the benefit of, and shall be enforceable by, the successors and
assigns of each of the parties hereto. No party may assign either
this Agreement or any of its rights, interests, or obligations hereunder without
the prior written approval of the other parties.
Section
10. Entire Agreement;
Amendments; Interpretation and Construction.
(a) This
Agreement contains the entire understanding of the parties with respect to its
subject matter. There are no restrictions, agreements, promises,
representations, warranties, covenants, or other undertakings other than those
expressly set forth in this Agreement.
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(b) This
Agreement may be amended only by a written instrument duly executed by the
Company and the Parthenon Group or their respective successors or
assigns.
(c) Each
of the parties hereto acknowledges that it has been represented by counsel of
its choice throughout all negotiations that have preceded the execution of this
Agreement, and that it has executed the same with the advice of said
counsel. Each party and its counsel cooperated and participated in
the drafting and preparation of this Agreement and the documents referred to
herein, and any and all drafts relating thereto exchanged among the parties
shall be deemed the work product of all of the parties and may not be construed
against any party by reason of its drafting or
preparation. Accordingly, any rule of law or any legal decision that
would require interpretation of any ambiguities in this Agreement against any
party that drafted or prepared it is of no application and is hereby expressly
waived by each of the parties hereto, and any controversy over interpretations
of this Agreement shall be decided without regard to events of drafting or
preparation.
(d) When
reference is made in this Agreement to a Section or subsection, such reference
shall be to a Section or subsection of this Agreement unless otherwise
indicated. Whenever the words “include”, “includes,” or “including”
are used in this Agreement, they shall be deemed to be followed by the words
“without limitation.” The words “hereof,” “herein,” “hereby,” and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement.
Section
11. Headings. The
section headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement.
Section
12. Notices. All
notices, demands and other communications to be given or delivered under, or by
reason of, the provisions of this Agreement shall be in writing and shall be
deemed to have been given (a) when delivered by hand (with written confirmation
of receipt), (b) upon sending (on the date sent if a Business Day, or if not
sent on a Business Day, the first Business Day thereafter) if sent by facsimile
to the facsimile number below, with electronic confirmation of sending, provided, however, that in each case
notice by facsimile shall be deemed to have been given only if a copy is sent
within one Business Day thereafter by registered mail, return receipt requested,
in each case to the appropriate mailing addresses set forth below, (c) one (1)
Business Day after being sent by a nationally recognized overnight carrier to
the addresses set forth below, or (d) when actually delivered if sent by any
other method that results in delivery (with written confirmation of
receipt):
If to the Parthenon Group
(or any member thereof), to:
Giant
Investment LLC
c/o
Parthenon Capital LLC
265
Franklin Street, 18th Floor
Boston,
MA 02110
Attention:
Brian Golson
Facsimile:
617-960-4010
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If to the Company,
to:
Tier
Technologies, Inc.
10780
Parkridge Blvd., 4th floor
Reston,
VA 20191
Attention:
Chief Executive Officer
Facsimile:
571-382-1030
in
each case, or to such other address as the Person to whom notice is given may
have previously furnished to the others in writing in the manner set forth
above.
Section
13. Governing
Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without reference
to the conflict of laws principles thereof.
Section
14. Consent to
Jurisdiction. The parties hereby irrevocably and
unconditionally consent to the exclusive jurisdiction of the courts of the State
of Delaware located in Wilmington, Delaware for any action, suit, or proceeding
arising out of or relating to this Agreement. The parties further
hereby irrevocably and unconditionally waive any objection to the laying of
venue of any action, suit, or proceeding arising out of or relating to this
Agreement in such courts and hereby further irrevocably and unconditionally
waive and agree not to plead or claim in any such court that any such action,
suit, or proceeding brought in any such court has been brought in an
inconvenient forum.
Section
15. Counterparts. This
Agreement may be executed in counterparts and may be exchanged by PDF or
facsimile, each of which shall be an original, but all of which together shall
constitute one and the same Agreement.
Section
16. Severability. If
any provision of this Agreement or the application thereof to any Person or
circumstance is determined by a court of competent jurisdiction to be invalid,
void, or unenforceable, the remaining provisions hereof, or the application of
such provision to Persons or circumstances other than those as to which it has
been held invalid or unenforceable, will remain in full force and effect and
shall in no way be affected, impaired, or invalidated thereby, so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such an
occurrence, the parties shall negotiate in an effort to agree upon a suitable
and equitable substitute provision to effect the original intent of the
parties.
Section
17. No Third Party
Beneficiaries. This Agreement is solely for the benefit of the
parties hereto and is not enforceable by any other Person.
[Remainder
of page intentionally left blank.]
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as
of the day and year first above written.
GIANT
INVESTMENT, LLC
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By:
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Parthenon
Investors II, L.P.,
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as
managing member
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By:
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PCap
Partners II, LLC,
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as
general partner
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By:
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PCap
II, LLC,
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as
general partner
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By:
/s/ John C.
Rutherford
Name: John
C. Rutherford
Title: Managing
Member
PARTHENON
INVESTORS II, L.P.
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By:
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PCap
Partners II, LLC,
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as
general partner
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By:
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PCap
II, LLC,
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as
general partner
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By:
/s/ John C.
Rutherford
Name: John
C. Rutherford
Title: Managing
Member
PCAP
PARTNERS II, LLC
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By:
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PCap
II, LLC,
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as
general partner
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By:
/s/ John C.
Rutherford
Name: John
C. Rutherford
Title: Managing
Member
PCAP
II, LLC
By:
/s/ John C.
Rutherford
Name: John
C. Rutherford
Title: Managing
Member
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By:
/s/ John C.
Rutherford
Name: John
C. Rutherford
TIER
TECHNOLOGIES, INC.
By:
/s/ Ronald L.
Rossetti
Name: Ronald
L. Rossetti
Title: Chief
Executive Officer and
Chairman of the Board
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Exhibit
A
IRREVOCABLE
PROXY
Each
of the undersigned holders of shares of capital stock of Tier Technologies,
Inc., a Delaware corporation (the “Company”), hereby constitutes
and appoints Ronald W. Johnston and Keith S. Omsberg and each of them, with full
powers of substitution, as the undersigned’s proxy for and on the undersigned’s
behalf, to act, vote, execute written consents, and/or waive any and all notice
requirements which may be applicable under the Company’s Certificate of
Incorporation (as the same is now in effect or may hereafter be amended, the
“Certificate of
Incorporation”) or otherwise, in each case with respect to all of the
shares of capital stock of the Company now or hereafter beneficially owned by
the undersigned during the Term (as defined below) (all such securities
collectively, the “Proxy
Shares”), as fully and to the same extent and effect as the undersigned
itself might do, in accordance with the terms and conditions of the Agreement of
even date herewith among the undersigned and the Company (the “Agreement”). Each
of the undersigned agrees that any shares of capital stock or voting securities
of the Company that the undersigned may purchase or with respect to which the
undersigned otherwise acquires beneficial ownership during the Term shall be
subject to the terms and conditions of this Irrevocable Proxy and shall
constitute Proxy Shares.
Upon
execution of this Irrevocable Proxy, each of the undersigned hereby revokes any
and all prior proxies or powers of attorney given by the undersigned with
respect to the matters as to which this Irrevocable Proxy relates and agrees not
to grant any subsequent proxies or powers of attorney with respect to such
matters during the Term and not to provide voting instructions with respect to
the Proxy Shares in any manner inconsistent with this Irrevocable Proxy or the
Agreement during the Term. This Irrevocable Proxy is irrevocable (to
the extent provided in the General Corporation Law of the State of Delaware, 8
Del. Laws ch.1, § 101, et seq., as it may be
amended from time to time) for the duration of the Term, is coupled with an
interest, and is granted in consideration of the benefits to the undersigned
arising from the Agreement. All authority herein conferred shall
survive the death or incapacity of the undersigned and any obligation of the
undersigned hereunder shall be binding upon the heirs, personal representatives,
successors, and assigns of the undersigned.
This
Irrevocable Proxy is effective as of the date written below and will continue in
force until the business day immediately following the conclusion of the 2010
annual meeting of stockholders of the Company, including any adjournments or
postponements thereof (the “Term”).
IN
WITNESS WHEREOF, the undersigned have executed this Irrevocable Proxy, effective
as of the 8th day of January, 2010.
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PCAP
PARTNERS II, LLC
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PCAP
II, LLC
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By: PCap
II, LLC,
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as
general partner
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By:
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Name:
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Title:
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By:
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Name:
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Title:
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A-1
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GIANT
INVESTMENT, LLC
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PARTEHNON
INVESTORS II, L.P.
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By: Parthenon
Investors II, L.P.,
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By: PCap
Partners II, LLC,
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as
managing member
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as general partner
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By: PCap
Partners II, LLC,
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By: PCap
II, LLC,
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as
general member
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as general partner
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By: PCap
II, LLC
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as
general partner
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By:
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Name:
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By:
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Title:
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Name:
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Title:
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By:
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Name: John
C. Rutherford
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A-2