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EXHIBIT 10.29
TIER TECHNOLOGIES, INC.
EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED
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AMENDED BY THE BOARD OF DIRECTORS ON NOVEMBER 23, 1999 AND
APPROVED BY THE SHAREHOLDERS ON JANUARY 11, 2000
I. PURPOSE OF THE PLAN
This Employee Stock Purchase Plan is intended to promote the interests
of Tier Technologies, Inc. by providing eligible employees with the opportunity
to acquire a proprietary interest in the Corporation through participation in a
payroll-deduction based employee stock purchase plan.
Capitalized terms herein shall have the meanings assigned to such
terms in the attached Appendix.
II. ADMINISTRATION OF THE PLAN
The Plan Administrator shall have full authority to interpret and
construe any provision of the Plan and to adopt such rules and regulations for
administering the Plan as it may deem necessary in order to comply with the
requirements of Code Section 423. Decisions of the Plan Administrator shall be
final and binding on all parties having an interest in the Plan.
III. STOCK SUBJECT TO PLAN
A. The stock purchasable under the Plan shall be shares of
authorized but unissued or reacquired Class B Common Stock, including shares of
Class B Common Stock purchased on the open market. The maximum number of shares
of Class B Common Stock which may be issued over the term of the Plan shall not
exceed 300,000 shares.
B. Should any change be made to the Class B Common Stock by reason
of any stock split, stock dividend, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding Class B Common
Stock as a class without the Corporation's receipt of consideration, appropriate
adjustments shall be made to (i) the maximum number and class of securities
issuable under the Plan, (ii) the maximum number and class of securities
purchasable per Participant on any one Purchase Date and (iii) the number and
class of securities and the price per share in effect under each outstanding
purchase right in order to prevent the dilution or enlargement of benefits
thereunder.
IV. PURCHASE PERIODS
A. Shares of Class B Common Stock shall be offered for purchase
under the Plan through a series of successive Purchase Periods until such time
as (i) the maximum number
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of shares of Class B Common Stock available for issuance under the Plan shall
have been purchased or (ii) the Plan shall have been sooner terminated.
B. Each Purchase Period shall be six (6) months in duration, unless
otherwise determined by the Plan Administrator prior to the start date of the
Purchase Period, and provided that the initial Purchase Period shall commence at
the Effective Time and shall terminate on the last business day in May 1998.
The next Purchase Period shall commence on the first business day in June 1998
and shall terminate on the last business day in November 1998; subsequent
Purchase Periods shall commence every six (6) months thereafter on the first
business day in December and June each year, unless otherwise designated by the
Plan Administrator. The Plan Administrator shall have complete discretion to
change the start date and the duration of a Purchase Period, provided Eligible
Employees are notified prior to the start date of any Purchase Period for which
such change is to be effective and provided, further, that no Purchase Period
shall have a duration exceeding twenty-seven (27) months.
V. ELIGIBILITY
A. Each Eligible Employee of a Participating Corporation shall be
eligible to participate in the Plan in accordance with the following provisions:
(i) An individual who is an Eligible Employee on the start
date of any Purchase Period under the Plan shall be eligible to commence
participation in that Purchase Period on such start date.
(ii) An individual who first becomes an Eligible Employee after
the start date of any Purchase Period will not be eligible to commence
participation under the Plan until the start date of the next Purchase Period on
which he/she remains an Eligible Employee.
B. To participate in the Plan for a particular Purchase Period, the
Eligible Employee must complete the enrollment forms prescribed by the Plan
Administrator (which may include a stock purchase agreement and a payroll
deduction authorization form) and file such forms with the Plan Administrator
(or its designate) on or before the start date for the Purchase Period.
VI. PAYROLL DEDUCTIONS
A. The payroll deduction authorized by the Participant for purposes
of acquiring shares of Class B Common Stock under the Plan may be any multiple
of one percent (1%) of the Cash Compensation paid to the Participant during that
Purchase Period, up to a maximum of ten percent (10%). The deduction rate so
authorized shall continue in effect for the remainder of the Purchase Period,
except to the extent such rate is changed in accordance with the following
guidelines:
(i) The Participant may, at any time during the Purchase Period,
reduce his or her rate of payroll deduction to become effective as soon as
possible after filing the
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appropriate form with the Plan Administrator. The Participant may not, however,
effect more than one (1) such reduction per Purchase Period.
(ii) The Participant may, prior to the commencement of any new
Purchase Period, increase the rate of his or her payroll deduction by filing the
appropriate form with the Plan Administrator. The new rate (which may not exceed
the ten percent (10%) maximum) shall become effective as of the start date of
the Purchase Period following the filing of such form.
B. Payroll deductions shall begin on the first pay day following the
start date for the Purchase Period and shall (unless sooner terminated by the
Participant) continue through the pay day ending with or immediately prior to
the last day of that Purchase Period. The amounts so collected shall be credited
to the Participant's book account under the Plan, but no interest shall be paid
on the balance from time to time outstanding in such account. The amounts
collected from the Participant shall not be held in any segregated account or
trust fund and may be commingled with the general assets of the Corporation and
used for general corporate purposes.
C. Payroll deductions shall automatically cease upon the termination
of the Participant's purchase right in accordance with the provisions of the
Plan.
D. The Participant's acquisition of Class B Common Stock under the
Plan on any Purchase Date shall neither limit nor require the Participant's
acquisition of Class B Common Stock on any subsequent Purchase Date.
VII. PURCHASE RIGHTS
A. GRANT OF PURCHASE RIGHT. A Participant shall be granted a
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separate purchase right for each Purchase Period in which he or she
participates. The purchase right shall be granted on the start date of the
Purchase Period and shall provide the Participant with the right to purchase
shares of Class B Common Stock, upon the terms set forth below. The purchase
right shall continue until the end of the Purchase Period, and shall be
automatically exercised on the last business day of the respective Purchase
Period each year (the last business day of May and the last business day of
November) or such other date as may be selected by the Plan Administrator as the
ending date for the Purchase Period). The Participant shall execute a stock
purchase agreement embodying such terms and such other provisions (not
inconsistent with the Plan) as the Plan Administrator may deem advisable.
Under no circumstances shall purchase rights be granted under the Plan
to any Eligible Employee if such individual would, immediately after the grant,
own (within the meaning of Code Section 424(d)), or hold outstanding options or
other rights to purchase, stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Corporation
or any Corporate Affiliate.
B. EXERCISE OF THE PURCHASE RIGHT. Each purchase right shall be
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automatically exercised on the respective Purchase Date , and shares of Class B
Common Stock shall accordingly be purchased on behalf of each Participant (other
than any Participant whose
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payroll deductions have previously been refunded in accordance with the
Termination of Purchase Right provisions below) on each such Purchase Date. The
purchase shall be effected by applying the Participant's payroll deductions for
the Purchase Period ending on such Purchase Date (together with any carryover
deductions from the preceding Purchase Period) to the purchase of whole shares
of Class B Common Stock (subject to the limitation on the maximum number of
shares purchasable per Participant on any one Purchase Date) at the purchase
price in effect for the Participant for that Purchase Date.
C. PURCHASE PRICE. The purchase price per share at which Class B
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Common Stock will be purchased on the Participant's behalf on each Purchase Date
shall be equal to eighty-five percent (85%) of the lower of (i) the Fair Market
Value per share of Class B Common Stock on the start date for that Purchase
Period or (ii) the Fair Market Value per share of Class B Common Stock on that
Purchase Date.
D. NUMBER OF PURCHASABLE SHARES. The number of shares of Class B
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Common Stock purchasable by a Participant on each Purchase Date shall be the
number of whole shares obtained by dividing the amount collected from the
Participant through payroll deductions during the Purchase Period ending with
that Purchase Date (together with any carryover deductions from the preceding
Purchase Period) by the purchase price in effect for the Participant for that
Purchase Date. However, the maximum number of shares of Class B Common Stock
purchasable per Participant on any Purchase Date shall not exceed five hundred
(500) shares, subject to periodic adjustments in the event of certain changes in
the Corporation's capitalization.
E. EXCESS PAYROLL DEDUCTIONS. Any payroll deductions not applied to
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the purchase of shares of Class B Common Stock on any Purchase Date because they
are not sufficient to purchase a whole share of Class B Common Stock shall be
held for the purchase of Class B Common Stock on the next Purchase Date, or at
the option of the Plan Administrator, may be used to buy fractional shares.
However, any payroll deductions not applied to the purchase of Class B Common
Stock by reason of the limitation on the maximum number of shares purchasable by
the Participant on the Purchase Date shall be promptly refunded, without
interest.
F. TERMINATION OF PURCHASE RIGHT. The following provisions shall
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govern the termination of outstanding purchase rights:
(i) A Participant may, at any time prior to the next Purchase
Date, terminate his or her outstanding purchase right by filing the appropriate
form with the Plan Administrator (or its designate), and no further payroll
deductions shall be collected from the Participant with respect to the
terminated purchase right. Any payroll deductions collected during the Purchase
Period in which such termination occurs shall, at the Participant's election, be
immediately refunded, without interest, or held for the purchase of shares on
the next Purchase Date. If no such election is made at the time such purchase
right is terminated, then the payroll deductions collected with respect to the
terminated right shall be refunded as soon as possible, without interest.
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(ii) The termination of such purchase right shall be irrevocable,
and the Participant may not subsequently rejoin the Purchase Period for which
the terminated purchase right was granted. In order to resume participation in
any subsequent Purchase Period, such individual must re-enroll in the Plan (by
making a timely filing of the prescribed enrollment forms) on or before the
start date for that Purchase Period.
(iii) Should the Participant cease to remain an Eligible Employee
for any reason (including death, disability or change in status) while his or
her purchase right remains outstanding, then that purchase right shall
immediately terminate, and all of the Participant's payroll deductions for the
Purchase Period in which the purchase right so terminates shall be immediately
refunded. However, should the Participant cease to remain in active service by
reason of an approved unpaid leave of absence, then the Participant shall have
the election, exercisable up until the last business day of the Purchase Period
in which such leave commences, to (a) withdraw all the funds in the
Participant's payroll account at the time of the commencement of such leave or
(b) have such funds held for the purchase of shares at the end of such Purchase
Period. In no event, however, shall any further payroll deductions be added to
the Participant's account during such leave. Upon the Participant's return to
active service, his or her payroll deductions under the Plan shall automatically
resume at the rate in effect at the time the leave began, provided the
Participant returns to service prior to the expiration date of the Purchase
Period in which such leave began.
G. CORPORATE TRANSACTION. Each outstanding purchase right shall
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automatically be exercised, immediately prior to the effective date of any
Corporate Transaction, by applying the payroll deductions of each Participant
for the Purchase Period in which such Corporate Transaction occurs to the
purchase of whole shares of Class B Common Stock at a purchase price per share
equal to eighty-five percent (85%) of the lower of (i) the Fair Market Value per
share of Class B Common Stock on the start date for the Purchase Period in which
such Corporate Transaction occurs or (ii) the Fair Market Value per share of
Class B Common Stock immediately prior to the effective date of such Corporate
Transaction. However, the applicable limitation on the number of shares of
Class B Common Stock purchasable per Participant shall continue to apply to any
such purchase.
The Corporation shall use its best efforts to provide at least ten
(10) days prior written notice of the occurrence of any Corporate Transaction,
and Participants shall, following the receipt of such notice, have the right to
terminate their outstanding purchase rights prior to the effective date of the
Corporate Transaction.
H. PRORATION OF PURCHASE RIGHTS. Should the total number of shares
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of Class B Common Stock which are to be purchased pursuant to outstanding
purchase rights on any particular date exceed the number of shares then
available for issuance under the Plan, the Plan Administrator shall either (i)
make a pro-rata allocation of the available shares on a uniform and
nondiscriminatory basis, in which case the payroll deductions of each
Participant, to the extent in excess of the aggregate purchase price payable for
the Class B Common Stock pro-rated to such individual, shall be refunded,
without interest, or (ii) increase the number of shares then available for
issuance under the Plan, subject to shareholder approval, by an amount
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at least sufficient to permit the purchase of all shares which are to be
purchased pursuant to outstanding purchase rights on such date
I. ASSIGNABILITY. During the Participant's lifetime, the purchase
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right shall be exercisable only by the Participant and shall not be assignable
or transferable by the Participant.
J. SHAREHOLDER RIGHTS. A Participant shall have no shareholder
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rights with respect to the shares subject to his or her outstanding purchase
right until the shares are purchased on the Participant's behalf in accordance
with the provisions of the Plan and the Participant has become a holder of
record of the purchased shares.
VIII. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to acquire
Class B Common Stock pursuant to any purchase right outstanding under this Plan
if and to the extent such accrual, when aggregated with (i) rights to purchase
Class B Common Stock accrued under any other purchase right granted under this
Plan and (ii) similar rights accrued under other employee stock purchase plans
(within the meaning of Code Section 423) of the Corporation or any Corporate
Affiliate, would otherwise permit such Participant to purchase more than twenty-
five thousand dollars ($25,000) worth of stock of the Corporation or any
Corporate Affiliate (determined on the basis of the Fair Market Value of such
stock on the date or dates such rights are granted) for each calendar year such
rights are at any time outstanding.
B. For purposes of applying such accrual limitations, the following
provisions shall be in effect:
(i) The right to acquire Class B Common Stock under each
outstanding purchase right shall accrue on each successive Purchase Date.
(ii) No right to acquire Class B Common Stock under any
outstanding purchase right shall accrue to the extent the Participant has
already accrued in the same calendar year the right to acquire Class B Common
Stock under one or more other purchase rights in an amount equal to twenty-five
thousand dollars ($25,000) worth of Class B Common Stock (determined on the
basis of the Fair Market Value of such stock on the date or dates of grant) for
each calendar year such rights were at any time outstanding.
C. If by reason of such accrual limitations, any purchase right of a
Participant does not accrue for a particular Purchase Period, then the payroll
deductions which the Participant made during that Purchase Period with respect
to such purchase right shall be promptly refunded, without interest.
D. In the event there is any conflict between the provisions of this
Article and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article shall be controlling.
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IX. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan was adopted by the Board as of October 1, 1997, and
approved by the shareholders as of December 3, 1997. It shall become effective
at the Effective Time, provided no purchase rights granted under the Plan shall
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be exercised, and no shares of Class B Common Stock shall be issued hereunder,
until the Corporation shall have complied with all applicable requirements of
the 1933 Act (including the registration of the shares of Class B Common Stock
issuable under the Plan on a Form S-8 registration statement filed with the
Securities and Exchange Commission), all applicable listing requirements of any
stock exchange (or the Nasdaq National Market, if applicable) on which the Class
B Common Stock is listed for trading and all other applicable requirements
established by law or regulation. In the event such shareholder approval is not
obtained, or such compliance is not effected, within twelve (12) months after
the date on which the Plan is adopted by the Board, the Plan shall terminate and
have no further force or effect and all sums collected from Participants during
the initial offering period hereunder shall be refunded.
B. Unless sooner terminated by the Board, the Plan shall terminate
upon the earliest of (i) the last business day in September 2007, (ii) the date
on which all shares available for issuance under the Plan shall have been sold
pursuant to purchase rights exercised under the Plan or (iii) the date on which
all purchase rights are exercised in connection with a Corporate Transaction. No
further purchase rights shall be granted or exercised, and no further payroll
deductions shall be collected, under the Plan following its termination.
X. AMENDMENT OF THE PLAN
The Board may alter, amend, suspend or discontinue the Plan at any
time, to become effective immediately following the close of any Purchase
Period. However, the Board may not, without the approval of the Corporation's
shareholders, (i) materially increase the number of shares of Class B Common
Stock issuable under the Plan or the maximum number of shares purchasable per
Participant on any one Purchase Date, except for permissible adjustments in the
event of certain changes in the Corporation's capitalization as provided in
Section III.B hereof, (ii) alter the purchase price formula so as to reduce the
purchase price payable for the shares of Class B Common Stock purchasable under
the Plan, or (iii) materially modify the requirements for eligibility to
participate in the Plan.
XI. GENERAL PROVISIONS
A. All costs and expenses incurred in the administration of the Plan
shall be paid by the Corporation.
B. Nothing in the Plan shall confer upon the Participant any right
to continue in the employ of the Corporation or any Corporate Affiliate for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Corporation (or any Corporate Affiliate employing such person)
or of the Participant, which rights are hereby expressly reserved by each, to
terminate such person's employment at any time for any reason, with or without
cause.
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C. The provisions of the Plan shall be governed by the laws of the
State of California without resort to that State's conflict-of-laws rules.
D. The Plan is designed to qualify under Section 423 of the Code.
Payroll deductions will be made on an after-tax basis.
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SCHEDULE A
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CORPORATIONS PARTICIPATING IN
EMPLOYEE STOCK PURCHASE PLAN
AS OF THE EFFECTIVE TIME
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Tier Technologies, Inc.
Tier Technologies (UK), Inc.
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APPENDIX
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The following definitions shall be in effect under the Plan:
A. BOARD shall mean the Corporation's Board of Directors.
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B. CASH COMPENSATION shall mean the (i) regular base salary paid to
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a Participant by one or more Participating Companies during such individual's
period of participation in the Plan, plus (ii) all of the following amounts to
the extent paid in cash: overtime payments, bonuses, commissions, profit-sharing
distributions and other incentive-type payments (including, in the case of any
amounts referred to in clause (i) or (ii), any pre-tax contributions made by the
Participant to any Code Section 401(k) salary deferral plan or any Code Section
125 cafeteria benefit program now or hereafter established by the Corporation or
any Corporate Affiliate). However, Eligible Earnings shall not include any
contributions (other than Code Section 401(k) or Code Section 125 contributions)
made on the Participant's behalf by the Corporation or any Corporate Affiliate
to any deferred compensation plan or welfare benefit program now or hereafter
established.
C. CLASS B COMMON STOCK shall mean the Corporation's Class B Common
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Stock.
D. CODE shall mean the Internal Revenue Code of 1986, as amended.
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E. CORPORATE AFFILIATE shall mean any parent or subsidiary
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corporation of the Corporation (as determined in accordance with Code Section
424), whether now existing or subsequently established.
F. CORPORATE TRANSACTION shall mean either of the following
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shareholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to such
transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete liquidation or
dissolution of the Corporation.
G. CORPORATION shall mean Tier Technologies, Inc., a California
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corporation, and any corporate successor to all or substantially all of the
assets or voting stock of Tier Technologies, Inc. which shall by appropriate
action adopt the Plan.
H. EFFECTIVE TIME shall mean the time at which the Underwriting
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Agreement is executed and finally priced. Any Corporate Affiliate which becomes
a
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Participating Corporation after such Effective Time shall designate a subsequent
Effective Time with respect to its employee-Participants.
I. ELIGIBLE EMPLOYEE shall mean any employee, except any person who
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is engaged, on a regularly-scheduled basis for fewer than twenty (20) hours per
week or for fewer than five (5) months per calendar year, in the rendition of
personal services to any Participating Corporation as an employee for earnings
considered wages under Code Section 3401(a).
J. FAIR MARKET VALUE per share of Class B Common Stock on any
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relevant date shall be determined in accordance with the following provisions:
(i) If the Class B Common Stock is at the time traded on the
Nasdaq National Market, then the Fair Market Value shall be the closing selling
price per share of Class B Common Stock on the date in question, as such price
is reported by the National Association of Securities Dealers on the Nasdaq
National Market or any successor system. If there is no closing selling price
for the Class B Common Stock on the date in question, then the Fair Market Value
shall be the closing selling price on the last preceding date for which such
quotation exists.
(ii) If the Class B Common Stock is at the time listed on any
Stock Exchange, then the Fair Market Value shall be the closing selling price
per share of Class B Common Stock on the date in question on the Stock Exchange
determined by the Plan Administrator to be the primary market for the Class B
Common Stock, as such price is officially quoted in the composite tape of
transactions on such exchange. If there is no closing selling price for the
Class B Common Stock on the date in question, then the Fair Market Value shall
be the closing selling price on the last preceding date for which such quotation
exists.
(iii) For purposes of the initial offering period which begins at
the Effective Time, the Fair Market Value shall be deemed to be equal to the
price per share at which the Class B Common Stock is sold in the initial public
offering pursuant to the Underwriting Agreement.
K. 1933 ACT shall mean the Securities Act of 1933, as amended.
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L. PARTICIPANT shall mean any Eligible Employee of a Participating
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Corporation who is actively participating in the Plan.
M. PARTICIPATING CORPORATION shall mean the Corporation and such
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Corporate Affiliate or Affiliates as may be authorized from time to time by the
Board to extend the benefits of the Plan to their Eligible Employees. The
Participating Corporations in the Plan as of the Effective Time are listed in
attached Schedule A.
N. PLAN shall mean the Corporation's Employee Stock Purchase Plan,
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as set forth in this document.
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O. PLAN ADMINISTRATOR shall mean the committee of two (2) or more
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Board members appointed by the Board to administer the Plan.
P. PURCHASE DATE shall mean the last business day of each Purchase
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Period. The initial Purchase Date shall be May 29, 1998.
Q. PURCHASE PERIOD shall mean each successive period at the end of
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which there shall be purchased shares of Class B Common Stock on behalf of each
Participant.
R. STOCK EXCHANGE shall mean either the American Stock Exchange or
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the New York Stock Exchange.
S. UNDERWRITING AGREEMENT shall mean the agreement among the
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Corporation, the selling shareholders and the underwriters managing the initial
public offering of the Class B Common Stock.
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