Exhibit 10.9
INDEMNIFICATION AGREEMENT
This Agreement is made as of the _____ day of _______ 2005, by and
between Tier Technologies, Inc., a Delaware corporation (the
“Corporation”), and _______________ (the
“Indemnitee”), an officer or key employee of the
Corporation.
WHEREAS, it is essential to the Corporation to retain and attract
as officers and key employees the most capable persons available,
and
WHEREAS, the Corporation succeeded to all of the business,
properties, assets and liabilities of its sole stockholder, Tier
Technologies, Inc., a California corporation (“Tier
California”), by means of a merger (the
“Re-incorporation Merger”) of Tier California with and
into the Corporation, and
WHEREAS, Tier California and the Indemnitee previously entered into
an indemnification agreement governed by California law (the
“California Agreement”), and
WHEREAS, as of the effective date of the Re-incorporation Merger,
the Corporation and the Indemnitee desire that this Agreement shall
govern events occurring on or after the effective date of the
Re-incorporation Merger and the California Agreement shall remain
in full force and effect only with respect to events occurring
prior to the effective date of the Re-incorporation Merger,
and
WHEREAS, the Corporation desires the Indemnitee to serve, or
continue to serve, as a director or officer of the
Corporation.
NOW THEREFORE, the Corporation and the Indemnitee do hereby agree
as follows:
1.
Agreement to Serve . The Indemnitee agrees to
serve or continue to serve as a director or officer of the
Corporation for so long as the Indemnitee is duly elected or
appointed or until such time as the Indemnitee tenders a
resignation in writing.
2.
Definitions . As used in this
Agreement:
(a)
The term “Proceeding” shall include any threatened,
pending or completed action, suit, arbitration, alternative dispute
resolution proceeding, administrative hearing or other proceeding,
whether brought by or in the right of the Corporation or otherwise
and whether of a civil, criminal, administrative or investigative
nature, and any appeal therefrom.
(b)
The term “Corporate Status” shall mean the status of a
person who is or was a director or officer of the Corporation, or
is or was serving, or has agreed to serve, at the request of the
Corporation, as a director, officer, partner, trustee, member,
employee or agent of another corporation, partnership, joint
venture, trust, limited liability company or other
enterprise.
(c)
The term “Expenses” shall include, without limitation,
attorneys’ fees, retainers, court costs, transcript costs,
fees and expenses of experts, travel expenses,
duplicating
costs, printing and binding costs, telephone charges, postage,
delivery service fees and other disbursements or expenses of the
types customarily incurred in connection with investigations,
judicial or administrative proceedings or appeals, but shall not
include the amount of judgments, fines or penalties against
Indemnitee or amounts paid in settlement in connection with such
matters.
(d)
References to “other enterprise” shall include employee
benefit plans; references to “fines” shall include any
excise tax assessed with respect to any employee benefit plan;
references to “serving at the request of the
Corporation” shall include any service as a director,
officer, employee or agent of the Corporation which imposes duties
on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants,
or beneficiaries; and a person who acted in good faith and in a
manner such person reasonably believed to be in the interests of
the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner “not opposed to the
best interests of the Corporation” as referred to in this
Agreement.
3.
Indemnification in Third-Party Proceedings
. Subject to Paragraph 26 of this Agreement, the
Corporation shall indemnify the Indemnitee in accordance with the
provisions of this Paragraph 3 if the Indemnitee was or is a
party to or threatened to be made a party to or otherwise involved
in any Proceeding (other than a Proceeding by or in the right of
the Corporation to procure a judgment in its favor) by reason of
the Indemnitee’s Corporate Status or by reason of any action
alleged to have been taken or omitted in connection therewith,
against all Expenses, judgments, fines, penalties and amounts paid
in settlement actually and reasonably incurred by or on behalf of
the Indemnitee in connection with such Proceeding, if the
Indemnitee acted in good faith and in a manner which the Indemnitee
reasonably believed to be in, or not opposed to, the best interests
of the Corporation and, with respect to any criminal Proceeding,
had no reasonable cause to believe that his or her conduct was
unlawful. The termination of any Proceeding by judgment,
order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the Indemnitee did not act in good faith and in a
manner which the Indemnitee reasonably believed to be in, or not
opposed to, the best interests of the Corporation, and, with
respect to any criminal Proceeding, had reasonable cause to believe
that his or her conduct was unlawful.
4.
Indemnification in Proceedings by or in the Right of the
Corporation . Subject to Paragraph 26 of this
Agreement, the Corporation shall indemnify the Indemnitee in
accordance with the provisions of this Paragraph 4 if the
Indemnitee was or is a party to or threatened to be made a party to
or otherwise involved in any Proceeding by or in the right of the
Corporation to procure a judgment in its favor by reason of the
Indemnitee’s Corporate Status or by reason of any action
alleged to have been taken or omitted in connection therewith,
against all Expenses actually and reasonably incurred and, to the
extent permitted by law, amounts paid in settlement by or on behalf
of the Indemnitee in connection with such Proceeding, if the
Indemnitee acted in good faith and in a manner which the Indemnitee
reasonably believed to be in, or not opposed to, the best interests
of the Corporation, except that no indemnification shall be made
under this Paragraph 4 in respect of any claim, issue, or
matter as to which the Indemnitee shall have been adjudged to be
liable to the Corporation, unless, and only to the extent, that the
Court of Chancery of Delaware or the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication of such liability but in view of all the circumstances
of
the case, the Indemnitee is fairly and reasonably entitled to
indemnity for such Expenses as the Court of Chancery or such other
court shall deem proper.
5.
Exceptions to Right of Indemnification
. Notwithstanding anything to the contrary in this
Agreement, except as set forth in Paragraph 10, the
Corporation shall not indemnify the Indemnitee in connection with a
Proceeding (or part thereof) initiated by the Indemnitee unless the
initiation thereof was approved by the Board of Directors of the
Corporation. Notwithstanding anything to the contrary in
this Agreement, the Corporation shall not indemnify the Indemnitee
to the extent the Indemnitee is reimbursed from the proceeds of
insurance or otherwise receives payment of any amounts
indemnifiable hereunder under any contract, agreement or otherwise,
and in the event the Corporation makes any indemnification payments
to the Indemnitee and the Indemnitee is subsequently reimbursed
from the proceeds of insurance or otherwise receives payment of any
amounts indemnifiable hereunder under any contract, agreement or
otherwise, the Indemnitee shall promptly refund such
indemnification payments to the Corporation to the extent of such
insurance reimbursement or other payments.
6.
Indemnification of Expenses of Successful Party
. Subject to Paragraph 26 of this Agreement, but
notwithstanding any other provision of this Agreement, to the
extent that the Indemnitee has been successful, on the merits or
otherwise, in defense of any Proceeding or in defense of any claim,
issue or matter therein, the Indemnitee shall be indemnified
against all Expenses incurred by or on behalf of the Indemnitee in
connection therewith. Without limiting the foregoing, if
any Proceeding or any claim, issue or matter therein is disposed
of, on the merits or otherwise (including a disposition without
prejudice), without (i) the disposition being adverse to the
Indemnitee, (ii) an adjudication that the Indemnitee was
liable to the Corporation, (iii) a plea of guilty or nolo
contendere by the Indemnitee, (iv) an adjudication that
the Indemnitee did not act in good faith and in a manner the
Indemnitee reasonably believed to be in or not
opposed to the best interests of the Corporation, and (v) with
respect to any criminal proceeding, an adjudication that the
Indemnitee had reasonable cause to believe his or her conduct was
unlawful, the Indemnitee shall be considered for the purposes
hereof to have been wholly successful with respect
thereto.
7.
Notification and Defense of Claim .
(a) Indemnitee shall notify the Corporation promptly upon
being served with or receiving any summons, citation, subpoena,
complaint, indictment, information, notice, request or other
document relating to any Proceeding which may result in the right
to indemnification or the advance of Expenses hereunder; provided,
however, that the failure to give any such notice shall not
disqualify Indemnitee from the right, or otherwise affect in any
manner any right of Indemnitee, to indemnification or the advance
of Expenses under this Agreement unless the Corporation’s
ability to defend in such Proceeding or to obtain proceeds under
any insurance policy is materially and adversely prejudiced
thereby, and then only to the extent the Corporation is thereby
actually so prejudiced.
(b) Subject to the provisions of the last sentence of this
Section 7(b) and of Section 7(c) below, the Corporation shall have
the right to defend Indemnitee in any Proceeding which may give
rise to indemnification hereunder; provided, however, that the
Corporation shall notify Indemnitee of any such decision to defend
within 15 calendar days following receipt of notice of any such
Proceeding under Section 7(a) above. After notice from
the Corporation to
the Indemnitee of its election so to defend the Indemnitee, the
Corporation shall not be liable to the Indemnitee for any legal or
other expenses subsequently incurred by the Indemnitee in
connection with such Proceeding, other than as
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