Exhibit 10.10

EXHIBIT A
 
CACHET FINANCIAL SOLUTIONS INC.
 
2010 EQUITY INCENTIVE PLAN
 
1.          Purposes,
 
The purposes of the Plan are to provide long-term incentives to those persons
with significant responsibility for the success and growth of Cachet and its
subsidiaries, divisions and affiliated businesses, to associate the interests of
such persons with those of Cachet shareholders, to assist Cachet in recruiting,
retaining and motivating a diverse group of employees and outside directors on a
competitive basis, and to provide a pay-for-performance linkage for such
employees and outside directors. It is a further purpose of the Plan to provide
such persons with additional incentives and reward opportunities designed to
enhance the profitable growth of Cachet.
 
2.          Definitions.
 
For purposes of the Plan:
 

 
(a)
"2010 Equity Incentive Plan" or the "Plan" means the Cachet Financial Solutions
Inc. 2010 Equity Incentive Plan, as amended and restated from time to time.

 
 

 
(b)
"Award" means a grant of Options, Stock Appreciation Rights, Restricted Shares,
Restricted Stock Units, Performance Shares, Performance Units, Stock Awards, or
any or all of them (but a Stock Award may not be granted to employees or
officers).

 
 

 
(c)
"Board" means the Board of Directors of Cachet.

 
 

 
(d)
"Cachet" means Cachet Financial Solutions Inc., a Minnesota corporation, and its
successors and assigns,

 
 

 
(e)
"Cause" means unless otherwise provided in an applicable Award agreement, fraud;
commission of a felony or gross misdemeanor (or its equivalent), regardless of
whether there is a conviction or plea of nolo contendere to such a crime;
embezzlement or misappropriation of funds or property; consistent refusal to
perform, or willful misconduct in or disregard of the performance of Company
duties and obligations; gross negligence in the performance of Company duties;
disclosure of confidential information regarding the Company or its operations;
or breach of an employment agreement and/or restrictive covenants, if
applicable.

 
 

 
(f)
"Change in Control" has the meaning set forth in Section 10(b).

 
 
 

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(g)
"Code" means the Internal Revenue Code of 1986, as amended. Any reference to a
section of the Code shall also be a reference to any successor section of the
Code (or a successor code).

 
 

 
(h)
"Committee" means, with respect to any matter relating to Section 8 of the Plan,
the Board, and with respect to all other matters under the Plan, the
Compensation Committee of the Board. The Compensation Committee of the Board
shall be appointed by the Board and shall consist of two or more outside,
disinterested members of the Board. In the judgment of the Board, the
Compensation Committee shall be qualified to administer the Plan as contemplated
by (i) Rule 16b-3 of the Exchange Act, (ii) Code Section 162(m) and the
regulations thereunder, and (iii) any rules and regulations of a stock exchange
on which the Common Stock is traded. Any member of the Compensation Committee of
the Board who does not satisfy the qualifications set out in the preceding
sentence may recuse himself or herself from any vote or other action taken by
the Compensation Committee of the Board. The Board may, at any time and in its
complete discretion, remove any member of the Compensation Committee of the
Board and may fill any vacancy in the Compensation Committee of the Board.

 
 

 
(i)
"Common Stock" means the common stock, par value $0.01 per share, of Cachet.

 
 

 
(j)
"Company" means Cachet, its subsidiaries, divisions and affiliated businesses,

 

 
(k)
"Covered Employee" means any employee of the Company for whom Cachet is subject
to the deductibility limitation imposed by Code Section 162(m).

 
 

 
(1)
"Eligible Person" means any of the following individuals who is designated by
the Committee as eligible to receive Awards, subject to the conditions set forth
in the Plan: (i) any employee of the Company (including any officer of the
Company and any Employee Director); (ii) any person expected to become an
employee of the Company (including any officer of the Company and any Employee
Director); (iii) any person expected to become a Non-Employee Director; (iv) any
consultant or advisor of the Company; and (v) any Non-Employee Director who is
eligible to receive an Award in accordance with Section 8 hereof.

 
 

 
(m)
"Employee Director" means a member of the Board who is also an employee of the
Company.

 
 

 
(n)
"Exchange Act" means the Securities Exchange Act of 1934, as amended from time
to time, and any successor thereto.

 
 

 
(o)
"Fair Market Value" on any date means the fair market value of a share of Common
Stock as determined by the Compensation Committee or, if the Common Stock is
listed on an exchange, the average of the high and low market prices at which a
share of Common Stock shall have been sold on such date, or the immediately
preceding trading day if such date was not a trading day, as reported by the
principal securities exchange on which shares of Common Stock are then traded.

 
 
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(p)
"ISO" means an Option satisfying the requirements of Code Section 422
anddesignated as an ISO by the Committee.

 
 

 
(q)
"Non-Employee Director" means a member of the Board who is not an employee of
the Company.

 
 

 
(r)
"NQSO" or "Non-Qualified Stock Option" means an Option that does not satisfy the
requirements of Code Section 422 or that is not designated as an ISO by the
Committee.

 
 

 
(s)
"Option Exercise Price" means the purchase price per share of Common Stock
covered by an Option granted pursuant to the Plan.

 
 

 
(t)
"Options" means the right to purchase shares of Common Stock at a specified
price for a specified period of time.

 
 

 
(u)
"Participant" means an Eligible Person who has received an Award under the Plan.

 
 

 
(v)
"Performance Awards" means an Award of Options, Performance Shares, Performance
Units, Restricted Shares, Restricted Stock Units or SARs conditioned on the
achievement of Performance Goals during a Performance Period.

 
 

 
(w)
"Performance Goals" means the goals established by the Committee under Section
7(d).

 
 

 
(x)
"Performance Measures" means the criteria set out in Section 7(d) that may be
used by the Committee as the basis for Performance Goals.

 
 

 
(y)
"Performance Period" means the period established by the Committee during which
the achievement of Performance Goals is assessed in order to determine whether
and to what extent an Award that is conditioned on attaining Performance Goals
has been earned.

 
 

 
(z)
"Performance Shares" means an Award of shares of Common Stock awarded to a
Participant based on the achievement of Performance Goals during a Performance
Period.

 
 

 
(aa)
"Performance Units" means an Award denominated in shares of Common Stock, cash
or a combination thereof, as determined by the Committee, awarded to a
Participant based on the achievement of Performance Goals during a Performance
Period.

 
 

 
(bb)
"Performance-Based Exception" means the performance-based exception to the
deductibility limitations of Code Section 162(m), as set forth in Code Section
162(m)(4)(C).

 
 
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(cc)
"Plan" means this Cachet Financial Solutions Inc. 2010 Equity Term Incentive
Plan, as it may be amended and restated from time to time.

 
 

 
(dd)
"Restricted Shares" means shares of Common Stock that are subject to such
restrictions and such other terms and conditions as the Committee may establish.

 
 

 
(ee)
"Restricted Stock Units" means the right, as described in Section 7(c), to
receivean amount, payable in either cash, shares of Common Stock or a
combination thereof, equal to the value of a specified number of shares of
Common Stock, subject to such terms and conditions as the Committee may
establish.

 
 

 
(ff)
"Restriction Period" means, with respect to Performance Shares, Performance
Units, Restricted Shares or Restricted Stock Units, the period during which any
risk of forfeiture or other restrictions set by the Committee remain in effect.
Such restrictions remain in effect until such time as they have lapsed under the
terms and conditions of the Performance Shares, Performance Units, Restricted
Shares or Restricted Stock Units or as otherwise determined by the Committee.

 
 

 
(gg)
"Retirement" shall mean cessation of active employment or service with the
Company.

 
 

 
(hh)
"Stock Appreciation Rights" or "SARs" means the right to receive a payment equal
to the excess of the Fair Market Value of a share of Common Stock on the date
the Stock Appreciation Rights are exercised over the exercise price per share of
Common Stock established for those Stock Appreciation Rights at the time of
grant, multiplied by the number of shares of Common Stock with respect to which
the Stock Appreciation Rights are exercised.

 
 

 
(ii)
"Stock Award" means an Award of shares of Common Stock that is subject to such
terms, conditions and restrictions (if any) as determined by the Committee in
accordance with Section 7(e).

 
3.          Administration of the Plan.
 
 
(a)
Authority of Committee. The Plan shall be administered by the Committee, which
shall have all the powers vested in it by the terms of the Plan, such powers to 
include the authority (within the limitations described in the Plan):

 
 
·
to select the persons to be granted Awards under the Plan;

 
 
·
to determine the type, size and terms of Awards to be made to each Participant;

 
 
·
to determine the time when Awards are to be granted and any conditions that must
be satisfied before an Award is granted;

 
 
·
to establish objectives and conditions for earning Awards;

 
 
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·
to determine whether an Award shall be evidenced by an agreement and, if so, to
determine the terms and conditions of such agreement (which shall not be
inconsistent with the Plan) and who must sign such agreement;

 
 
·
to determine whether the conditions for earning an Award have been met and
whether an Award will be paid at the end of an applicable Performance Period;

 
 
·
to determine if the Performance Measures have been satisfied;

 
 
·
except as otherwise provided in Section 7(d), to modify the terms of Awards made
under the Plan;

 
 
·
to determine if all or some of the restrictions applicable to an outstanding
Award should lapse;

 
 
·
to determine whether the amount or payment of an Award should be reduced or
eliminated;

 
 
·
to determine the guidelines and/or procedures for the payment or exercise of
Awards; and

 
 
·
to determine whether an Award should qualify, regardless of its amount, as
deductible in its entirety for federal income tax purposes, including whether
any Awards granted to Covered Employees should comply with the Performance-Based
Exception.

 
 
(b)
Interpretation of Plan. The Committee shall have full power and authority to
administer and interpret the Plan and to adopt or establish such rules,
regulations, agreements, guidelines, procedures and instruments, which are not
contrary to the terms of the Plan and which, in its opinion, may be necessary or
advisable for the administration and operation of the Plan. The Committee's
interpretations of the Plan, and all actions taken and determinations made by
the Committee pursuant to the powers vested in it hereunder, shall be conclusive
and binding on all parties concerned, including the Company, Cachet shareholders
and all Eligible Persons and Participants.

 
 
(c)
Facilitation ofAdministration. To the extent not prohibited by law, the
Committee may grant authority to employees or designate employees of the Company
to execute documents on behalf of the Committee or to otherwise assist the
Committee in the administration and operation of the Plan.

 
4.           Eligibility.
 

 
(a)
General. Subject to the terms and conditions of the Plan, the Committee may,
from time to time, select from all Eligible Persons those to whom Awards shall
be granted under Section 7 and shall determine the nature and amount of
eachAward; provided, however, that Non-Employee Directors shall be eligible to
receive Awards only pursuant to Section 8.

 
 
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(b)
International Participants. Notwithstanding any provision of the Plan to the
contrary, in order to foster and promote achievement of the purposes of the Plan
or to comply with provisions of the laws in countries outside the United States
in which the Company operates or has employees, the Committee, in its sole
discretion, shall have the power and authority (and may delegate such authority
in accordance with Section 3(c)) to (i) determine which Eligible Persons (if
any) employed or retained by the Company outside the United States should
participate in the Plan, (ii) modify the terms and conditions of any Awards made
to such Eligible Persons, and (iii) establish sub-plans, modified Option
exercise procedures and other Award terms, conditions and procedures to the
extent such actions may be necessary or advisable to comply with provisions of
the laws in such countries outside the United States in order to assure the
lawfulness, validity and effectiveness of Awards granted under the Plan and to
the extent such actions are consistent with the Committee's authority to amend
the Plan absent shareholder approval pursuant to Section 12(b).

 
5.           Shares of Common Stock Subject to the Plan.
 
 
(a)
Authorized Number of Shares. Unless otherwise authorized by Cachet shareholders
and subject to the provisions of this Section 5 and Section 9, the maximum
aggregate number of shares of Common Stock available for issuance under the Plan
shall be 675,000. Any of the authorized shares may be used for any of the types
of Awards described in the Plan, except that no more than 675,000 of the
authorized shares of Common Stock may be issued in the form of IS Os.

 
 
(b)
Share Counting. The following rules shall apply in determining the number of
shares of Common Stock remaining available for grant under the Plan:

 
In connection with the granting of an Option or other Award, the number of
shares of Common Stock available for issuance under the Plan shall be reduced by
the number of shares of Common Stock in respect of which the Option or Award is
granted or denominated. For example, upon the grant of stock-settled SARs, the
number of shares of Common Stock available for issuance under the Plan shall be
reduced by the full number of SARs granted, and the number of shares of Common
Stock available for issuance under the Plan shall not thereafter be increased
upon the exercise of the SARs and settlement in shares of Common Stock, even if
the actual number of shares of Common Stock delivered in settlement of the SARs
is less than the full number of SARs exercised. However, Awards that by their
terms do not permit settlement in shares of Common Stock shall not reduce the
number of shares of Common Stock available for issuance under the Plan.
 
 
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(ii)
Any shares of Common Stock that are tendered by a Participant or withheld as
full or partial payment of withholding or other taxes or as payment for the
exercise or conversion price of an Award under the Plan shall not be added back
to the number of shares of Common Stock available for issuance under the Plan.

 

 
(iii)
Whenever any outstanding Option or other Award (or portion thereof) expires, is
cancelled, is settled in cash rather than in shares of Common Stock (pursuant to
the terms of an Award that permits but does not require cash settlement) or is
otherwise terminated for any reason without having been exercised or payment
having been made in the form of shares of Common Stock, the number of shares of
Common Stock available for issuance under the Plan shall be increased by the
number of shares of Common Stock allocable to the expired, cancelled, settled or
otherwise terminated Option or other Award (or portion thereof).

 

 
(iv)
Any shares of Common Stock underlying Awards granted through the assumption of,
or in substitution for, outstanding awards previously granted to individuals who
become employees of the Company as a result of a merger, consolidation,
acquisition or other corporate transaction involving the Company shall not,
unless required by law or regulation, count against the reserve of available
shares of Common Stock under the Plan.

 

 
(c) 
Shares to be Delivered. The source of shares of Common Stock to be delivered by
Cachet under the Plan shall be determined by Cachet and may consist in whole or
in part of authorized but unissued shares or repurchased shares.

 
6.           Award Limitations.
 
To the extent necessary for an Award hereunder to satisfy the Performance-Based
Exception, the maximum number of shares of Common Stock with respect to which
Awards may be granted during any calendar year to any person shall be 500,000,
subject to adjustment as provided in Section 9, and the maximum amount that may
be paid under the Performance-Based Exception to any one person during any
period of three calendar years shall be $3,000,000.
 
7.           Awards to Eligible Persons.
 
(a)          Options.
 

 
(i)
Grants. Subject to the terms and conditions of the Plan, Options may be granted
to Eligible Persons. Options may consist of ISOs or NQSOs, as the Committee
shall determine. Options may be granted alone or in tandem with SARs. With
respect to Options granted in tandem with SARs, the exercise of either such
Options or such SARs will result in the simultaneous cancellation of the same
number of tandem SARs or Options, as the case may be.

 
 
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(ii)
Option Exercise Price. The Option Exercise Price shall be equal to or, at the
Committee's discretion, greater than the Fair Market Value on the date the
Option is granted, unless the Option was granted through the assumption of, or
in substitution for, outstanding awards previously granted to individuals who
became employees of the Company as a result of a merger, consolidation,
acquisition or other corporate transaction involving the Company (in which case
the assumption or substitution shall be accomplished in a manner that permits
the Option to be exempt from Code Section 409A).

 

 
(iii)
Term. The term of Options shall be determined by the Committee in its sole
discretion, but in no event shall the term exceed ten (10) years from the date
of grant.

 

 
(iv)
ISO Limits. ISOs may be granted only to Eligible Persons who are employees of
Cachet or of any parent or subsidiary corporation (within the meaning of Code
Section 424) on the date of grant, and may only be granted to an employee who,
at the time the Option is granted, does not own stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of
Cachet or of any parent or subsidiary corporation (within the meaning of Code
Section 424). The aggregate Fair Market Value of all shares of Common Stock with
respect to which ISOs are exercisable by a Participant for the first time during
any calendar year (under all plans of the Company and its parent) shall not
exceed $100,000 or such other amount as may subsequently be specified by the
Code and/or applicable regulations. The aggregate Fair Market Value of such
shares shall be determined at the time the Option is granted. ISOs shall contain
such other provisions as the Committee shall deem advisable but shall in all
events be consistent with and contain or be deemed to contain all provisions
required in order to qualify as incentive stock options under Code Section 422.

 

 
(v)
No Repricing. Except for adjustments made pursuant to Section 10, the Option
Exercise Price for any outstanding Option granted under the Plan may not be
decreased after the date of grant nor may any outstanding Option granted under
the Plan be surrendered to Cachet as consideration for the grant of a new Option
with a lower Option Exercise Price without the approval of Cachet shareholders.

 

 
(vi)
Form of Payment. The Option Exercise Price shall be paid to Cachet at the time
of such exercise, subject to any applicable rules or regulations adopted by the
Committee:

 

 
(A)
to the extent permitted by applicable law, pursuant to cashlessexercise
procedures that are, from time to time, approved by the Committee; proceeds from
any such exercise shall be used to pay the exercise costs, which include the
Option Exercise Price, statutory minimum applicable taxes, withholdings,
brokerage commissions and fees; any remaining proceeds from the sale shall be
delivered to the Participant in cash or stock as specified by the Participant;

 
 
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(B)
through the tender of shares of Common Stock owned by the Participant (or by
delivering a certification or attestation of ownership of such shares) valued at
their Fair Market Value on the date of exercise;

 
 
(C)
in cash or its equivalent; or

 
 
(D)
by any combination of (A), (B), and (C) above.

 

 
(vii)
No Dividend Equivalents. No dividends or dividend equivalents may be paid on
Options. Except as otherwise provided herein, a Participant shall have no rights
as a holder of Common Stock with respect to shares of Common Stock covered by an
Option unless and until such shares of Common Stock have been registered to the
Participant as the owner.

 

 
(viii)
Termination of Employment or Service or Death of Participant.

 
 
(A)
In the event of any termination of the employment or service of a Participant,
other than by reason of death or, in the case of a Participant holding a NQSO,
Retirement, the Participant may (unless otherwise provided in the Option
agreement) exercise each Option held by such Participant at any time within
three months (or one year if the Participant is permanently and totally disabled
within the meaning of Section 22(e)(3) of the Code) after such termination of
employment or service, but only if and to the extent such Option is exercisable
at the date of such termination of employment or service, and in no event after
the date on which such Option would_otherwise terminate; provided, however, that
if such termination of employment or service is for Cause or voluntarily on the
part of the Participant without the written consent of the Company, any Option
held by such Participant under the Plan shall terminate unless otherwise
provided in the Option agreement.

 
 
(B)
In the event of the termination of employment or service of a Participant
holding a NQSO by reason of Retirement, then each NQSO held by the Participant
shall be fully exercisable, and, subject to the following paragraph, such NQSO
shall be exercisable by the Participant at any time up to and including (but not
after) the date on which the NQSO would otherwise terminate (unless otherwise
provided in the Option agreement).

 
 
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(C)
Unless otherwise provided in the Option agreement, in the event of the death of
a Participant (i) while employed by or providing service to the Company or after
Retirement, (ii) within three months after termination of the Participant's
employment, other than a termination by reason of death, Retirement or permanent
and total disability within the meaning of Section 22(e)(3) of the Code, or
(iii) within one year after termination of the Participant's employment by
reason of such disability, then each Option held by such Participant may be
exercised by the legatees of the Participant under his or her last will, or by
his or her personal representatives or distributees, at any time within a period
of nine months after the Participant's death, but only if and to the extent such
Option is exercisable at the date of death (unless death occurs while the
Participant is employed by or providing service to the Company, in which case
each Option held by the Participant shall be fully exercisable), and in no event
after the date on which such Option would otherwise terminate.

 
(b)         Stock Appreciation Rights.
 

 
(i)
Grants. Subject to the terms and provisions of the Plan, SARs may be granted to
Eligible Persons. SARs may be granted alone or in tandem with Options. With
respect to SARs granted in tandem with Options, the exercise of either such
Options or such SARs will result in the simultaneous cancellation of the same
number of tandem SARs or Options, as the case may be.

 

 
(ii)
Exercise Price. The exercise price per share of Common Stock covered by a SAR
granted pursuant to the Plan shall be equal to or, at the Committee's
discretion, greater than Fair Market Value on the date the SAR is granted,
unless the SAR was granted through the assumption of, or in substitution for,
outstanding awards previously granted to individuals who became employees of the
Company as a result of a merger, consolidation, acquisition or other corporate
transaction involving the Company (in which case the assumption or substitution
shall be accomplished in a manner that permits the SAR to be exempt from Code
Section 409A).

 

 
(iii)
Term. The term of a SAR shall be determined by the Committee in its sole
discretion, but, in no event shall the term exceed ten (10) years from the date
of grant.

 

 
(iv)
No Repricing. Except for adjustments made pursuant to Section 9, the exercise
price for any outstanding SAR granted under the Plan may not be decreased after
the date of grant nor may any outstanding SAR granted under the Plan be
surrendered to Cachet as consideration for the grant of a new SAR with a lower
exercise price without the approval of Cachet shareholders.

 
 
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(v)
Form of Payment. The Committee may authorize payment of a SAR in the form of
cash, Common Stock valued at its Fair Market Value on the date of the exercise,
a combination thereof, or by any other method as the Committee may determine.

 

 
(vi)
No Dividend Equivalents. No dividends or dividend equivalents may be paid on
SARs.

 

 
(vii)
Termination of Employment or Service or Death of Participant.

 
 
(A)
In the event of any termination of the employment or service of a Participant,
other than by reason of death or Retirement, the Participant may (unless
otherwise provided in the SAR agreement) exercise each SAR held by such
Participant at any time within three months (or one year if the Participant is
permanently and totally disabled within the meaning of Section 22(e)(3) of the
Code) after such termination of employment or service, but only if and to the
extent such SAR is exercisable at the date of such termination of employment or
service, and in no event after the date on which such SAR would otherwise
terminate; provided, however, that if such termination of employment or service
is for Cause or voluntarily on the part of the Participant without the written
consent of the Company, any SAR held by such Participant under the Plan shall
terminate unless otherwise provided in the SAR agreement.

 
 
(B)
In the event of the termination of employment or service of a Participant by
reason of Retirement, then each SAR held by the Participant shall be fully
exercisable, and, subject to the following paragraph, such SAR shall be
exercisable by the Participant at any time up to and including (but not after)
the date on which the SAR would otherwise terminate (unless otherwise provided
in the SAR agreement).

 
 
(C)
Unless otherwise provided in the SAR agreement, in the event of the death of a
Participant (i) while employed by or providing service to the Company or after
Retirement, (ii) within three months after termination of the Participant's
employment, other than a termination by reason of death, Retirement or permanent
and total disability within the meaning of Section 22(e)(3) of the Code, or
(iii) within one year after termination of the Participant's employment by
reason of such disability, then each SAR held by such Participant may be
exercised by the legatees of the Participant under his or her last will, or by
his or her personal representatives or distributees, at any time within a period
of nine months after the Participant's death, but only if and to the extent such
SAR is exercisable at the date of death (unless death occurs while the
Participant is employed by or providing service to the Company, in which case
each SAR held by the Participant shall be fully exercisable), and in no event
after the date on which such SAR would otherwise terminate.

 
 
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(c)           Restricted Shares / Restricted Stock Units.
 
 
(i)
Grants. Subject to the terms and provisions of the Plan, Restricted Shares or
Restricted Stock Units may be granted to Eligible Persons.

 
 
(ii)
Restrictions. The Committee shall impose such terms, conditions and/or
restrictions on any Restricted Shares or Restricted Stock Units granted pursuant
to the Plan as it may deem advisable including, without limitation: a
requirement that Participants pay a stipulated purchase price for each
Restricted Share or each Restricted Stock Unit; forfeiture conditions; transfer
restrictions; restrictions based upon the achievement of specific performance
goals (company-wide, related to a subsidiary, division, department, region,
function, policy initiative or business unit of Cachet, and/or individual);
time-based restrictions on vesting; and/or restrictions under applicable federal
or state securities laws. The Committee may establish different Restriction
Periods from time to time and each Award may have a different Restriction
Period, in the discretion of the Committee. Any time-based Restriction Period
shall be for a minimum of one year (subject to acceleration as specified in the
applicable Award agreement or as determined by the Committee). To the extent the
Restricted Shares or Restricted Stock Units are intended to be deductible under
Code Section 162(m), the applicable restrictions shall be based on the
achievement of Performance Goals over a Performance Period, as described in
Section 7(d) below.

 
 
(iii)
Payment of Restricted Stock Units. Restricted Stock Units that become payable in
accordance with their terms and conditions shall be settled in cash, shares of
Common Stock, or a combination of cash and shares, as determined by the
Committee. Any person who holds Restricted Stock Units shall have no ownership
interest in the shares of Common Stock to which the Restricted Stock Units
relate unless and until payment with respect to such Restricted Stock Units is
actually made in shares of Common Stock. The payment date shall be as soon as
practicable after the earlier of (A) any vesting date that can be pre-determined
at grant under the terms of an Award agreement, and (B) the occurrence date of
an applicable vesting event (e.g., death, total disability, approved transfer or
retirement) specified in the applicable Award agreement.

 
 
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(iv)
Transfer Restrictions. During the Restriction Period, Restricted Shares may not
be sold, assigned, transferred or otherwise disposed of, or mortgaged, pledged
or otherwise encumbered. In order to enforce the limitations imposed upon the
Restricted Shares, the Committee may (A) cause a legend or legends to be placed
on any certificates evidencing such Restricted Shares, and/or (B) cause "stop
transfer" instructions to be issued, as it deems necessary or appropriate.
Restricted Stock Units may not be sold, assigned, transferred or otherwise
disposed of, or mortgaged, pledged, or otherwise encumbered at any time.

 
 
(v)
Shareholder Rights. Unless otherwise determined by the Committee, during the
Restriction Period, Participants who hold Restricted Shares shall have the right
to receive dividends in cash or other property or other distributions or rights
in respect of such shares and shall have the right to vote such shares and shall
have all other shareholder rights as the record owners thereof. Unless otherwise
determined by the Committee, during the Restriction Period, Participants who
hold Restricted Stock Units shall be credited with dividend equivalents in
respect of such Restricted Stock Units.

 
 
(vi)
Other Terms and Conditions. Restricted Shares issued under the Plan shall be
registered in the name of the Participant on the books and records of Cachet or
its designee (or by one or more physical certificates if physical certificates
are issued with respect to such Restricted Shares) subject to the applicable
restrictions imposed by the Plan. The Participant may not sell, transfer,
pledge, exchange, hypothecate or dispose of such Restricted Shares during the
Restriction Period. A breach of a restriction or a breach of terms and
conditions established by the Committee pursuant to Restricted Shares or
Restricted Stock Units shall cause forfeiture of any such Award. If a Restricted
Share is forfeited in accordance with the restrictions that apply to such
Restricted Shares, such interest or certificate, as the case may be, shall be
cancelled. At the end of the Restriction Period that applies to Restricted
Shares, the number of shares to which the Participant is then entitled shall be
delivered to the Participant free and clear of such restrictions, either in
certificated or uncertificated form. No shares of Common Stock shall be
registered in the name of the Participant with respect to a Restricted Stock
Unit unless and until such unit is paid in shares of Common Stock.
 
If requested by Cachet, a Holder of Restricted Shares or Restricted Stock Units
shall deposit with Cachet stock powers or other instruments of assignment
(including a power of attorney), each endorsed in blank with a guarantee of
signature if deemed necessary or appropriate by Cachet, which would permit
transfer to Cachet of all or a portion of the shares of Common Stock subject to
the Restricted Shares or Restricted Stock Units, if any, in the event such Award
is forfeited in whole or in part. The Committee may prescribe additional
restrictions, terms or conditions upon or to the Restricted Shares or Restricted
Stock Units.

 
 
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(vii)
Termination of Employment or Service or Death. An Award under this subsection
(c) shall terminate for all purposes if the Participant does not remain
continuously in the employ or service of the Company at all times during the
applicable Restriction Period, except as provided in the applicable Award
agreement or as determined by the Committee.

 

(d)          Performance Awards.
 
 
(i)
Grants. Subject to the provisions of the Plan, Performance Awards may be granted
to Eligible Persons. Performance Awards may be granted either alone or in
addition to other Awards made under the Plan,

 
 
(ii)
Performance Goals. Unless otherwise determined by the Committee, Performance
Awards shall be conditioned on the achievement of Performance Goals (which shall
be based on one or more Performance Measures, as determined by the Committee)
over a Performance Period. The Performance Period shall be one year, unless
otherwise determined by the Committee.

 
 
(iii)
Restriction Period. The Restriction Period shall be for a minimum of one year
unless otherwise determined by the Committee.

 
 
(iv)
Termination of Employment or Service or Death. A Performance Award under this
subsection (d) shall terminate for all purposes if the Participant does not
remain continuously in the employ or service of the Company at all times during
the applicable Restriction Period except as provided in the applicable Award
agreement or as determined by the Committee.

 
 
(v)
Performance Measures. The Performance Measure(s) to be used for purposes of
Performance Awards may be described in terms of objectives that are related to
the individual Participant (including salary range, tenure in the current
position and performance during the prior year) or objectives that are
company-wide or related to a subsidiary, division, department, region, function,
policy initiative or business unit of Cachet, and may consist of one or more or
any combination of the following criteria: stock price, the attainment by a
share of Common Stock of a specified fair market value for a specified period of
time, capitalization, earnings per share, growth in stock price, growth in
market value, return to shareholders (including or excluding dividends), return
on equity, earnings, economic value added, revenues, net income, operating
income, return on assets, return on capital, adjusted return on invested
capital, return on sales, market share, cash flow measures or cost reduction
goals, sales volume, net earnings, total shareholder return, gross margin, or
achieving goals, objectives, and policy initiatives. The Performance Goals based
on these Performance Measures may be expressed in absolute terms, relative to
prior performance or relative to the performance of other entities.

 
 
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(vi)
Negative Discretion. Notwithstanding the achievement of any Performance Goal
established under the Plan, the Committee has the discretion to reduce, but does
not have the discretion to increase, some or all of a Performance Award that
would otherwise be paid to a Participant.

 
 
(vii)
Extraordinary Events. At, or at any time after, the time an Award is granted,
and to the extent permitted under Code Section 162(m) and the regulations
thereunder without adversely affecting the treatment of the Award under the
Performance-Based Exception, the Committee, in its sole discretion, may provide
for the manner in which performance will be measured against the Performance
Goals (or may adjust the Performance Goals) to reflect the impact of specific
corporate transactions, accounting or tax law changes and other extraordinary
and nonrecurring events.

 
 
(viii)
Performance-Based Exception. With respect to any Award that is intended to
satisfy the conditions for the Performance-Based Exception under Code Section
162(m): (A) the Committee shall interpret the Plan and this Section 7(d) in
light of Code Section 162(m) and the regulations thereunder; (B) the Committee
shall have no discretion to amend the Award in any way that would adversely
affect the treatment of the Award under Code Section 162(m) and the regulations
thereunder; and (C) such Award shall not be paid until the Committee shall first
have certified that the Performance Goals have been achieved.

 
(e)          Stock Awards.
 
 
(i)
Grants. Subject to the provisions of the Plan, Stock Awards consisting of shares
of Common Stock may be granted pursuant to this Section 7(e) only to Eligible
Persons who are consultants or advisors to the Company and may not be granted to
employees of the Company (including Employee Directors). Non-Employee Directors
are eligible to receive Stock Awards only pursuant to Section 8. Stock Awards
may be granted either alone or in addition to other Awards made under the Plan.

 
 
(ii)
Terms and Conditions. The shares of Common Stock subject to a Stock Award shall
be immediately vested at the time of grant and nonforfeitable at all times but
shall be subject to such other terms and conditions, including restrictions on
transferability, as determined by the Committee in its discretion, subject to
the provisions of the Plan. The shares of Common Stock subject to a Stock Award
shall be registered in the name of the Participant.

 
 
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8.           Awards to Non-Employee Directors.
 
 
(a)
Sole Awards. Notwithstanding anything in the other sections of the Plan to the
contrary, Non-Employee Directors are eligible to receive only Awards authorized
by this Section 8. The terms applicable under Section 7 for each such category
of Award shall apply under this Section 8 to the extent not inconsistent with
the provisions of this Section 8. The Committee retains the discretion to change
the amount, terms and types of Awards to Non-Employee Directors notwithstanding
paragraphs (a) and (b) of this Section 8.

 
 
(b)
Grants. Each Non-Employee Director shall receive Stock Awards in the amount
provided in the Cachet Non-Employee Directors Compensation Program, as amended
and restated from time to time, with such shares subject to the transfer
restrictions in Section 8(c)(i).

 
 
(c)
Terms of Grants to Non-Employee Directors.

 
 
(i)
Shares of Common Stock subject to a Stock Award granted to a Non-Employee
Director shall be immediately vested at the time of grant and nonforfeitable at
all times. However, such shares of Common Stock may not be sold, assigned,
transferred or otherwise disposed of, or mortgaged, pledged or otherwise
encumbered, until the date the Non-Employee Director's membership on the Board
ceases (except that this transfer restriction (1)'shall not apply to shares of
Common Stock in excess of the minimum stock ownership requirement established
from time to time under the Non-Employee Directors Stock Retention Requirements
set forth in the Cachet Corporate Governance Guidelines and (2) shall not
prohibit: (A) Cachet retaining shares to satisfy required tax withholding under
Section 11(e) and (B) intra-family transfers permitted by the Committee). In
order to enforce the limitations imposed upon such shares of Common Stock, the
Committee may (a) cause a legend or legends to be placed on any certificates
evidencing such shares, and/or (b) cause "stop transfer" instructions to
be-issued, as it deems necessary or appropriate.

 
 
(ii)
Non-Employee Directors who hold shares of Common Stock pursuant to a Stock Award
granted under this Section 8 shall have the right to receive dividends in cash
or other property and shall have the right to vote such shares as the record
owners thereof; provided that any securities of Cachet that are distributed to a
Non-Employee Director in connection with a Stock Award shall be subject to the
same transfer restrictions that apply to such shares of Common Stock.

 
9.           Dilution and Other Adjustments.
 
In the event of any merger, reorganization, consolidation, recapitalization,
stock dividend, stock split, combination or exchange of shares or other change
in corporate structure affecting any class of Common Stock, the Committee shall
make such adjustments in the class and aggregate number of shares which may be
delivered under the Plan as described in Section 5, the individual award
maximums under Section 6, the class, number, and Option Exercise Price of
outstanding Options, the class, number and exercise price of outstanding SARs
and the class, number of shares and exercise price, if any, subject to any other
Awards granted under the Plan (provided the number of shares of any class
subject to any Award shall always be a whole number), as may be, and to such
extent (if any), determined to be appropriate and equitable by the Committee,
and any such adjustment may, in the sole discretion of the Committee, take the
form of Awards covering more than one class of Common Stock. Such adjustment
shall be conclusive and binding for all purposes of the Plan. Any adjustment of
an Option or SAR under this Section 9 shall be accomplished in a manner that
permits the Option or SAR to be exempt from Code Section 409A.
 
 
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10.          Change in Control.
 
 
(a)
Impact of Event. Notwithstanding any other provision of the Plan to the
contrary, in the event of a Change in Control: (i) outstanding Options and SARs
shall immediately vest and become exercisable; (ii) the restrictions and other
conditions applicable to outstanding Restricted Shares, Restricted Stock Units
and Stock Awards, including vesting requirements, shall immediately lapse; such
Awards shall be free of all restrictions and fully vested; and, with respect to
Restricted Stock Units, shall be payable immediately in accordance with their
terms or, if later, as of the earliest permissible date under Code Section 409A;
and (iii) outstanding Performance Shares or Performance Units granted under the
Plan shall immediately vest and shall become immediately payable in accordance
with their terms as if 100% of the Performance Goals have been achieved.
 
In the event of a Change in Control in connection with which the holders of
Common Stock receive shares of common stock that are publicly traded, there
shall be substituted for each share of Common Stock remaining available under
the Plan, whether or not then subject to an outstanding Option, SAR, Restricted
Stock Award or Performance Award, the number and class of shares into which each
outstanding share of Common Stock shall be converted pursuant to such Change in
Control. In the event ofany such substitution, the purchase price per share in
the case of an Option or Restricted Stock Award shall be appropriately adjusted
by the Committee (whose determination shall be conclusive), such adjustments to
be made without any increase in the aggregate purchase price.

 
 
(b)
Definitions. For purposes of this Section 10, a "Change in Control" shall be
deemed to have occurred if: (i) any one person or more than one person acting as
a group acquires ownership of stock of Cachet that, together with the stock held
by such person or group, constitutes more than fifty percent (50%) of the total
fair market value or total voting power of the stock of Cachet, other than a
merger in which the holders of Common Stock immediately prior to the merger have
substantially the same proportionate ownership of common stock of the surviving
corporation immediately after the merger; provided, however, if any one person
or more than one person acting as a group, is considered to own more than fifty
percent (50%) of the total fair market value or total voting power of the stock
of Cachet, the acquisition of additional stock by the same person or persons is
not considered to cause a change in the ownership of Cachet or to cause a change
in the effective control of Cachet; (ii) any one person, or more than one person
acting as a group acquires (or has acquired during the twelve (12) month period
ending on the date of the most recent acquisition by such person or persons)
ownership of stock of Cachet possessing thirty percent (30%) percent or more of
the total voting power of the stock of Cachet; (iii) any one person, or more
than one person acting as a group acquires (or has acquired during the twelve
(12) month period ending on the date of the most recent acquisition by such
person or persons) assets from Cachet that have a total gross fair market value
equal to or more than forty percent (40%) of the total gross fair market value
of all of the assets of Cachet taken as a whole, immediately prior to such
acquisition or acquisitions; or (iv) a majority of the members of the Board is
replaced during any twelve (12) month period by directors whose appointment or
election is not endorsed by a majority of the members of the Board prior to the
date of the appointment or election. Notwithstanding the Compensation Committee
may determine that (i), (ii) or (iii) above shall not, for purposes of this
Section 10, constitute a Change in Control.

 
 
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11.         Miscellaneous Provisions.
 
 
(a)
Misconduct. Except as otherwise provided in agreements covering Awards
hereunder, a Participant shall forfeit all rights in his or her outstanding
Awards under the Plan, and all such outstanding Awards shall automatically
terminate and lapse, if the Committee determines that such Participant has (i)
used for profit or disclosed to unauthorized persons, confidential information
or trade secrets of the Company, (ii) breached any contract with or violated any
fiduciary obligation to the Company, including without limitation, a violation
of any Company code of conduct, (iii) engaged in unlawful trading in the
securities of Cachet or of another company based on information gained as a
result of that Participant's employment or other relationship with the Company,
(iv) committed a felony or other serious crime, or (v) has violated any Cachet
Clawback Policy, as amended and restated from time to time. If Cachet is
required to prepare an accounting restatement due to the material noncompliance
of Cachet, as a result of misconduct, with any financial reporting requirement
under the securities laws, the chief executive officer and the chief financial
officer of Cachet shall reimburse Cachet for the amount of any payment in
settlement of an Award received by that person from Cachet during the 12-month
period following the first public issuance or filing with the Securities and
Exchange Commission (whichever occurs first) of the financial document embodying
such financial reporting requirement; and any profits realized from the sale of
securities underlying an Award during that 12-month period. The provisions of
the foregoing sentence shall also apply to Participants other than the chief
executive officer and the chief financial officer of Cachet to the extent such
Participant violates any Cachet Clawback Policy, as amended and restated from
time to time.

 
 
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(b)
Rights as Shareholder. Except as otherwise provided herein, a Participant shall
have no rights as a holder of Common Stock with respect to Awards hereunder,
unless and until the shares of Common Stock have been registered to the
Participant as the owner.

 

 
(c)
No Loans. No loans from the Company to Participants shall be permitted in
connection with the Plan.

 

 
(d)
Assignment or Transfer. Except as otherwise provided under the Plan, no Award
under the Plan or any rights or interests therein shall be transferable other
than by will or the laws of descent and distribution. The Committee may, in its
discretion, provide that an Award (other than an ISO) is transferable without
the payment of any consideration to a Participant's family member, whether
directly or by means of a trust or otherwise, subject to such terms and
conditions as the Committee may impose. For this purpose, "family member" has
the meaning given to such term in the General Instructions to the Form S-8
registration statement under the Securities Act of 1933. All Awards under the
Plan shall be exercisable, during the Participant's lifetime, only by the
Participant or a person who is a permitted transferee pursuant to this Section
11(d). Once awarded, the shares of Common Stock (other than Restricted Shares)
received by Participants may be freely transferred, assigned, pledged or
otherwise subjected to lien, subject to the following if applicable: (i) the
transfer restrictions in Sections 7(c)(iv) and 8(c)(i) above; and (ii) the
restrictions imposed by the Securities Act of 1933, Section 16 of the Exchange
Act and the Cachet Insider Trading Policy, each as amended from time to time.
Cachet reserves the right to restrict, in whole or in part, the exercise of any
Options or SARs or the delivery of Common Stock pursuant to any Restricted
Shares or Performance Shares granted under the Plan until such time as, (A) any
legal requirements or regulations have been met relating to the issuance of the
shares covered thereby or to their registration under the Securities Act of 1933
or to any applicable state laws; and (B) satisfactory assurances are received
that the shares, when issued, will be duly listed on the principal securities
exchange on which shares of Common Stock are then traded.

 

 
(e)
Withholding Taxes. Cachet shall have the right to deduct from all Awards paid in
cash to a Participant any taxes required by law to be withheld with respect to
such Awards. All statutory minimum applicable withholding taxes arising with
respect to Awards paid in shares of Common Stock to a Participant shall be
satisfied by Cachet retaining shares of Common Stock having a Fair Market Value
on the date the tax is to be determined that is equal to the amount of such
statutory minimum applicable withholding tax (rounded, if necessary, to the next
highest whole number of shares of Common Stock); provided, however, that,
subject to any restrictions or limitations that the Committee deems appropriate,
a Participant may elect to satisfy such statutory minimum applicable withholding
tax through cash, or by delivering previously owned shares of Common Stock.

 
 
(f)
Currency and Other Restrictions. The obligations of Cachet to make delivery of
Awards in cash or Common Stock shall be subject to currency or other
restrictions imposed by any governmental authority or regulatory body having
jurisdiction over such Awards.

 
 
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(g)
No Rights to Awards. Neither the Plan nor any action taken hereunder shall be
construed as giving any person any right to be retained in the employ or service
of the Company, and the Plan shall not interfere with or limit in any way the
right of the Company to terminate any person's employment or service at any
time. Except as set forth herein, no employee or other person shall have any
claim or right to be granted an Award under the Plan. By accepting an Award, the
Participant acknowledges and agrees that (i) the Award will be exclusively
governed by the terms of the Plan, including the right reserved by Cachet to
amend or cancel the Plan at any time without Cachet incurring liability to the
Participant (except, to the extent the terms of the Award so provide, for Awards
already granted under the Plan), (ii) Awards are not a constituent part of
salary and the Participant is not entitled, under the terms and conditions of
employment, or by accepting or being granted Awards under the Plan to require
Awards to be granted to him or her in the future under the Plan or any other
plan, (iii) the value of Awards received under the Plan shall be excluded from
the calculation of termination indemnities or other severance payments or
benefits, and (iv) the Participant shall seek all necessary approval under, make
all required notifications under, and comply with all laws, rules and
regulations applicable to the ownership of Options and shares of Common Stock
and the exercise of Options, including, without limitation, currency and
exchange laws, rules and regulations.

 
 
(h)
Beneficiaty Designation. To the extent allowed by the Committee, each
Participant under the Plan may, from time to time, name any beneficiary or
beneficiaries (who may be named on a contingent or successive basis) to whom any
benefit under the Plan is to be paid in case of his or her death before he or
she receives any or all of such benefit. Unless the Committee determines
otherwise, each such designation shall revoke all prior designations by the same
Participant, shall be in a form prescribed by the Committee, and shall be
effective only when filed by the Participant in writing with the Company during
the Participant's lifetime, In the absence of any such designation, benefits
remaining unpaid at the Participants death shall be paid to the Participant's
estate.

 
 
(i)
Costs and Expenses. The cost and expenses of administering the Plan shall be
borne by Cachet and not charged to any Award or to any Participant.

 
 
(j)
Fractional Shares. Fractional shares of Common Stock shall not be issued or
transferred under an Award, but the Committee may direct that cash be paid in
lieu of fractional shares or may round off fractional shares, in its discretion.

 
 
(k)
Funding of Plan. The Plan shall be unfunded and any benefits under the Plan
shall represent an unsecured promise to pay Cachet. Cachet shall not be required
to establish or fund any special or separate account or to make any other
segregation of assets to assure the payment of any Award under the Plan and the
existence of any such account or other segregation of assets shall be consistent
with the "unfunded" status of the Plan.

 
 
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(l)
Indemnification. Provisions for the indemnification of officers and directors of
Cachet in connection with the administration of the Plan shall be as set forth
in the Certificate of Incorporation and By-Laws of Cachet as in effect from time
to time.

 
 
(m)
Successors. All obligations of Cachet under the Plan with respect to Awards
granted hereunder shall be binding on any successor to Cachet, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of Cachet.

 
 
(n)
Compliance with Code Section 409A. The Plan is intended to satisfy the
requirements of Code Section 409A and any regulations or guidance that may be
adopted thereunder from time to time, including any transition relief available
under applicable guidance related to Code Section 409A. Accordingly, to ensure
the exemption from Code Section 409A of potentially exempt Awards and the
compliance with Code Section 409A of other Awards, any payment that under the
terms of the Plan or an Award agreement is to be made as soon as practicable
relative to a date shall be made not later than 60 days after such date, and the
Participant may not determine the time of payment. Pursuant to Section 12(b),
the Plan may be amended or interpreted by the Committee as it determines
necessary or appropriate in accordance with Code Section 409A and to avoid a
plan failure under Code Section 409A(a)(l).

 

12.          Effective Date, Amendments, Governing Law and Termination.
 
 
(a)
Effective Date. The Plan was approved by the Board on February 9, 2010 and shall
become effective on the date it is approved by Cachet shareholders.

 
 
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(b)
Amendments. The Committee or the Board may at any time terminate or from time to
time amend the Plan in whole or in part, but no such action shall adversely
affect any rights or obligations with respect to any Awards granted prior to the
date of such termination or amendment without the consent of the affected
Participant except to the_extent that the Committee reasonably determines that
such termination or amendment is necessary or appropriate to comply with
applicable law (including the provisions of Code Section 409A and the
regulations thereunder pertaining to the deferral of compensation) or the rules
and regulations of any stock exchange on which Common Stock is listed or quoted.
Notwithstanding the foregoing, unless Cachet shareholders shall have first
approved the amendment, no amendment of the Plan shall be effective if the
amendment would (i) increase the maximum number of shares of Common Stock that
may be delivered under the Plan or to any one individual (except to the extent
such amendment is made pursuant to Section 9 hereof), (ii) extend the maximum
period during which Awards may be granted under the Plan, (iii) add to the types
of Awards that can be made under the Plan, (iv) change the Performance Measures
pursuant to which Performance Awards are earned, (v) modify the requirements as
to eligibility for participation in the Plan, (vi) decrease the grant or
exercise price of any Option or SAR to less than the Fair Market Value on the
date of grant; (vii) require shareholder approval pursuant to the Plan or
applicable law or the rules of the principal securities exchange on which shares
of Common Stock are then traded in order to be effective; or (viii) effect any
change inconsistent with Section 422 of the Code.

 

 
(c)
Governing Law. All questions pertaining to the construction, interpretation,
regulation, validity and effect of the provisions of the Plan shall be
determined in accordance with the laws of the State of Minnesota without giving
effect to conflict of laws principles.

 

 
(d)
Termination. No Awards shall be made under the Plan after the tenth anniversary
of the date on which Cachet shareholders approve the Plan.

 
 
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