Use these links to rapidly review the documentTABLE OF CONTENTS

Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



Form 10-K/A

Amendment No. 1

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2012

Commission file number: 001-34915



NetSpend Holdings, Inc.(Exact name of registrant as specified in its charter)

Delaware(State or other jurisdiction of
incorporation or organization)

20-2306550(I.R.S. Employer
Identification No.)701 Brazos Street
Suite 1300
Austin, Texas(Address of principal executive offices)

78701-2582(Zip Code)


Registrant's
telephone number, including area code: (512) 532-8200

Securities
registered pursuant to Section 12(b) of the Act:

Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $.001 par value

The NASDAQ Stock Market LLC
(NASDAQ Global Select Market)


Securities
registered pursuant to Section 12(g) of the Act:None

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes o    No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 of the Act.
Yes o    No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes ý    No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such
files). Yes ý    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.:

Large accelerated filer ý

Accelerated filer o

Non-accelerated filer o (Do not check if a
smaller reporting company)

Smaller reporting company o


Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes o    No ý

The aggregate market value of the registrant's common equity held by non-affiliates based upon the last sale price of the common equity reported on
the NASDAQ Global Select Market on June 30, 2012, was $756.8 million.

The
number of shares of the registrant's common stock outstanding on April 3, 2013 was 70,243,989.

DOCUMENTS INCORPORATED BY REFERENCE

None





---





Table of Contents



TABLE OF CONTENTS



PagePART IIIItem 10.

Directors, Executive Officers and Corporate Governance


1Item 11.

Executive Compensation


9Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters


38Item 13.

Certain Relationships and Related Transactions, and Director Independence


40Item 14.

Principal Accounting Fees and Services


42PART IVItem 15.

Exhibits, Financial Statement Schedules


42


EXPLANATORY NOTE

This Amendment No. 1 on Form 10-K/A (Amendment No. 1) amends the Annual Report on
Form 10-K of NetSpend Holdings, Inc. (the "Company") for the fiscal year ended December 31, 2012, as filed with the Securities and Exchange Commission on
February 22, 2013 (the "Original Filing"). The Company is filing this Amendment No. 1 to provide the information required pursuant to instruction G(3) to
Form 10-K for Part III, Items 10, 11, 12, 13 and 14 of the Original Filing. Part IV of the Original Filing has been amended to contain currently dated
certifications as required by Rules 12b-15 and 15d-14(a) under the Securities Exchange Act of 1934 with respect to this Amendment No. 1.

This
Amendment No. 1 speaks as of the original filing date of the Original Filing and reflects only the changes to the cover page, Items 10, 11, 12, 13 and 14 of
Part III, Item 15 of Part IV, the signature page and Exhibits 31.1 and 31.2. No other information included in the Original Filing, including the information set forth in
Part I and Part II, has been modified or updated in any way. The Company has made no attempt in this Amendment No. 1 to modify or update the disclosures presented in the Original
Filing other than as noted above. Also, this Amendment No. 1 does not reflect events occurring after the filing of the Original Filing. Accordingly, this Amendment No. 1 should be read
in conjunction with the Original Filing.

---





Table of Contents

PART III

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table sets forth information regarding the members of the Company's Board of Directors, and the Company's executive
officers.

Name

Age

PositionAndrew W. Adams


38

Class I DirectorDaniel R. Henry


47

Chief Executive Officer and Class I DirectorStephen A. Vogel


64

Class I DirectorThomas A. McCullough


70

Class II DirectorDaniel M. Schley


58

Class II DirectorAlexander R. Castaldi


62

Class II DirectorFrancisco J. Rodriguez


41

Class III DirectorAnn Huntress Lamont


56

Class III DirectorCharles J. Harris


50

PresidentGeorge W. Gresham


46

Chief Financial OfficerSteven F. Coleman


54

General Counsel and SecretaryAnh Hatzopoulos


41

Executive Vice President of Online Business DevelopmentJames DeVoglaer


52

Executive Vice President of Information TechnologyJames Jerome


53

Executive Vice President of Card Operations


Set
forth below are descriptions of the principal occupations during at least the past five years of the Company's directors and executive officers.

Andrew W. Adamshas served as a member of our Board of Directors since January 2010. Mr. Adams joined Oak Investment Partners in
October 2003 as a Senior Associate and has served as a General Partner since 2010. Prior to joining Oak, Mr. Adams was a Senior Associate with Capital Resource Partners. Mr. Adams was
also a Financial Analyst in the media and communications group of Deutsche Bank. Mr. Adams holds a Bachelor of Arts degree in history from Princeton University.

Daniel R. Henryhas served as our Chief Executive Officer since February 2008 and has also served as a member of our Board of Directors
since June 2007. Prior to being appointed as Chief Executive Officer, Mr. Henry briefly served as our President beginning in January 2008. Prior to joining us, Mr. Henry
co-founded Euronet Worldwide, Inc., a NASDAQ-listed global provider of
electronic payment and transaction processing solutions for financial institutions, retailers, service providers and individual consumers, and, from May 1994 to December 2006, served as its President
and Chief Operating Officer. In addition, Mr. Henry served as a director of Euronet Worldwide, Inc. from 1996 to 2006. Mr. Henry earned a B.S. in business administration with majors in
finance, economics and real estate from the University of Missouri-Columbia.

Stephen A. Vogelhas served as a member of our Board of Directors since February 2011. Mr. Vogel has served as Chief Executive
Officer of Grameen America, Inc., a not-for-profit company focused on providing micro-loans that financially empower low-income entrepreneurs, since November 2008.
Prior to that, Mr. Vogel was Chief Executive Officer of Synergy Gas Corp., a propane distribution company. Mr Vogel holds a B.S. degree from Syracuse University.

Thomas A. McCulloughhas served as a member of our Board of Directors since October 2008. From April 1987 to December 2009,
Mr. McCullough served as Executive Vice President and Chief Operating Officer of DST Systems, Inc., a major provider of processing services to the financial services and health care industries.
Prior to joining DST, Mr. McCullough was President and Chief Executive Officer of Garnac Grain Company, an international grain trading and exporting company. Prior to that, he was a partner
with the consulting firm of Arthur Young & Co. Mr. McCullough also serves on the

1

---



Table of Contents

board
of directors of Boston Financial Data Services, DST, BlueCross BlueShield of Kansas City, Country Club Bank, PBI Gordon, Inc. and Balance Innovations LLC. Mr. McCullough holds an A.B. in
mathematics from Rockhurst University and a Master's degree in economics from the University of Missouri at Kansas City.

Daniel M. Schleyhas served as a member of our Board of Directors since June 2004. Since 2003, Mr. Schley has served as Chairman of
Foundation Source, Inc., a provider of back-office technology and services for private foundations, and served as CEO of Foundation Source from 2003 through 2009. Mr. Schley also
serves as a Co-Founder and Managing Director of Dolphin Capital Group, a private equity firm, where he has served since 2000. Mr. Schley also serves on the board of directors of
Winder Farms, Inc., Dynamic Confections, Inc., and the Fairfield, Connecticut chapter of the World Presidents Organization. Mr. Schley holds a Bachelor of Arts degree in economics and political
science from Stanford University and a Master of Business Administration degree from Harvard University.

Alexander R. Castaldihas served as a member of our Board of Directors since January 2009. Since January 2005, Mr. Castaldi has
served as a Managing Director of JLL Partners, a private equity investment company. Prior to joining JLL, Mr. Castaldi served as Chief Financial & Administration
Officer of Remington Products Company, LLC. Mr. Castaldi also serves on the board of directors of PGT Industries, Inc., Education Affiliates, Inc., J.G. Wentworth, LLC, C.H.I. Overhead
Doors, Inc., Medical Card System, Inc., FC Holdings, Inc. and Ross Education, LLC. Mr. Castaldi holds a B.S. from Central Connecticut State University.

Francisco J. Rodriguezhas served as a member of our Board of Directors since July 2008. Mr. Rodriguez is a Managing Director of
JLL Partners, which he joined in 1995. Prior to joining JLL, Mr. Rodriguez was a member of the merchant banking group at Donaldson, Lufkin & Jenrette Securities Corporation.
Mr. Rodriguez also serves as a director of several companies, including J.G. Wentworth, LLC, Education Affiliates, Inc., FC Holdings, Inc., Ross Education, LLC and The Learning
Annex GP, LLC. Mr. Rodriguez holds a B.S. degree from the University of Pennsylvania Wharton School.

Ann Huntress Lamonthas served as a member of our Board of Directors since June 2004. Ms. Lamont has been with Oak Investment
Partners, a multi-stage venture capital firm, since 1982, serving as a General Partner from 1986 to 2006 and as a Managing Partner since 2006. Prior to joining Oak, Ms. Lamont served as a
research associate with Hambrecht & Quist. Ms. Lamont currently serves on the Stanford University Board of Trustees and on the board of directors of various private companies.
Ms. Lamont holds a Bachelor of Arts degree in political science from Stanford University.

Charles J. Harrishas served as our President since July 2010. Prior to joining us, from April 2009 to June 2010, Mr. Harris served
as the general manager of the payment solutions division of Intuit, Inc., a NASDAQ-listed company that is a leading provider of financial management, tax and online banking solutions for consumers,
small and mid-sized businesses, accountants and financial institutions. From September 2005 until April 2009, Mr. Harris served in multiple positions for Electronic Clearing House,
Inc., including as President and Chief Executive Officer, President and Chief Operating Officer and as a director. Prior to that, Mr. Harris held a number of leadership roles with Chase
Paymentech, including President and Chief Executive Officer of Merchant Link, a wholly owned subsidiary of Chase Paymentech. Mr. Harris holds a B.B.A. in finance from the University of Texas at
Austin.

George W. Greshamhas served as our Chief Financial Officer since May 2010. Prior to joining us, from February 2008 to May 2010,
Mr. Gresham served as Chief Financial Officer of Global Cash Access, Inc., a NYSE-listed provider of payment processing services to the gaming industry. From May 2002 until October
2007, Mr. Gresham served as Chief Financial Officer, Chief Administrative Officer and Executive Vice President of eFunds Corporation ("eFunds"), a NYSE-listed company that
specialized in the development and deployment of payment and payments-related technology.

2

---



Table of Contents

Mr. Gresham
holds a B.S. in accountancy from Northern Arizona University and an MBA from the Thunderbird School of Global Management.

Steven F. Colemanhas served as our Executive Vice President, General Counsel and Secretary since June 2011. From November 2009 to May
2011, Mr. Coleman served as General Counsel for Syncada LLC., a provider of business-to-business payment solutions. From 2000 to 2007, Mr. Coleman served as
Executive Vice President, General Counsel and Secretary for eFunds. Mr. Coleman holds a Bachelor of Science, Electrical Engineering degree from the University of Wisconsin-Madison and a J.D.
from the University of Minnesota-Twin Cities.

Anh Hatzopouloshas served as our Executive Vice President of Online Business Development since February 2008. Prior to joining us, from
July 2005 to February 2008, Ms. Hatzopoulos served as founder and Chief Executive Officer of Little Grad, Inc., an online rebate-based college savings program. From July 2000 to July 2005,
Ms. Hatzopoulos was a senior executive on the core team responsible for building the online business of Wal-Mart Stores, Inc. Ms. Hatzopoulos holds a degree in computer
science and business administration from Stanford University and Carnegie Mellon University.

James DeVoglaerhas served as our Executive Vice President of Information Technology since November 2009. From September 2006 to November
2009, Mr. DeVoglaer served as our Vice President of Information Technology. Prior to joining us, from January 2004 to September 2006, Mr. DeVoglaer served as co-founder of
KAIAN Business Solutions, an IT infrastructure integrator and operational process solutions provider. Prior to that, Mr. DeVoglaer served as Vice President, Information Technology for Accent
Health, a health education television network, and as General Manager and Director of Technology for Convergent Communications Services, Inc., a leading provider of Enterprise Network Carrier (ENC)
services. Mr. DeVoglaer holds a B.S. in computer studies from University of Maryland, University College.

James Jeromehas served as our Executive Vice President of Card Operations since November 2009. Prior to being appointed as Executive Vice
President, Mr. Jerome served as a Senior Vice President from August 2008 to November 2009 and a Vice President from April 2008 to August 2008. Prior to joining us, from October 1999 to March
2008, Mr. Jerome served in various capacities with Euronet Worldwide, Inc., including as an Executive Vice President and Managing Director of its software division. Also, Mr. Jerome
served in various capacities with the Electronic Banking Services division of BISYS, Inc. Mr. Jerome holds a degree in business administration from the State University of New York.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our directors and officers, and persons who own more than 10% of our outstanding
Common Stock, to file with the SEC initial reports of ownership and reports of changes in ownership of Common Stock held by such persons. These persons are also required to furnish us with copies of
all forms they file under this regulation.

To
our knowledge, based solely on a review of the copies of such reports furnished to us and without further inquiry, during the fiscal year ended December 31, 2012, our
directors, officers and beneficial owners of more than 10% of our Common Stock complied with all applicable Section 16(a) filing requirements.

CORPORATE GOVERNANCE

Code of Business Conduct and Ethics

We have adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including those
officers responsible for financial reporting. Our code of business

3

---



Table of Contents

conduct
and ethics is available on our website at http://www.netspend.com, under the "Investor Relations" section. We intend to disclose any amendments to the code, or any waivers of its requirements,
on our website.

We
will, upon request, provide any person with a copy of our Code of Conduct and Ethics without charge. Requests for a copy of this policy should be addressed to NetSpend Holdings, Inc.,
Attn: Corporate Secretary, 701 Brazos, Suite 1300, Austin, Texas, 78701.

Board Composition

We currently have eight directors, each of whom will hold office until his or her successor has been elected and qualified or, if
earlier, his or her death, resignation or removal.

Our
Board of Directors is divided into three classes, with members of each class serving for staggered three-year terms. Our Board of Directors consists of the
following:



Upon
the expiration of the term of a class of directors, directors for that class will be elected for three-year terms at the Annual Meeting of Stockholders in the year in
which such term expires. In addition, the authorized number of directors may be changed by resolution duly adopted by at least a majority of our entire Board of Directors. Any increase or decrease in
the number of directors will be distributed among the three classes so that, to the extent possible, each class will consist of one-third of the directors. Our classified Board of
Directors could have the effect of making it more difficult for a third party to acquire control of us. We do not currently have a Chairman of the Board of Directors.

Nomination Process, Director Candidate Selection and Qualifications

The Nominating and Corporate Governance Committee (the "Nominating Committee") is responsible for identifying, screening and
recommending director candidates to the Board of Directors for nomination by the Board of Directors. The Nominating Committee may consider director candidates from numerous sources, including
stockholders, directors and officers. The Board of Directors is responsible for nominating directors for election by the stockholders and filling any vacancies on the Board of Directors that may
occur.

Qualifications and Diversity

The Board of Directors does not have a formal policy with respect to diversity on the Board of Directors and does not narrowly define
diversity to gender and race. We look at the breadth of experience, background and viewpoints of each candidate. In its assessment of each candidate, the Nominating Committee considers, among other
things, the business judgment of the nominee as demonstrated by operational business experience, the nominee's familiarity with the perspectives of underbanked U.S. consumers of diverse race,
religion, national origin and economic status, the number of boards of directors on which that the nominee has served or currently serves and the nominee's availability to devote the time and other
requirements of attentive participation in the Board of Directors' deliberations and applicable committee assignments, whether such person would be independent, and the integrity, honesty and
reputation of each candidate.

4

---



Table of Contents

Nomination Process

If a candidate is recommended by the Nominating Committee, he or she may then be interviewed by other members of the Board of
Directors. If appropriate, a candidate may also be interviewed by other members of the Company's executive management. The full Board of Directors will approve all final nominations after considering
the recommendations of the Nominating Committee.

With
regard to the incumbent directors whose terms are set to expire, the Nominating Committee reviews each director's expertise, qualifications, attributes and skills, his or her
overall service during the director's term, including the number of meetings attended, his or her level of participation, the quality of his or her performance and whether he or she meets the
independence standards set forth under applicable laws, regulations and the Nasdaq Stock Market LLC ("NASDAQ") listing standards. Each nominee for re-election as a director must consent to
stand for re-election.

Stockholder Nomination Procedures

In accordance with Section 3.5 of our Bylaws, stockholders who wish to have their nominees considered by the Nominating
Committee for election to the Board of Directors must submit such nomination to our Secretary for receipt not less than 90 days and not more than 120 days prior to the anniversary date
of the immediately preceding Annual Meeting of Stockholders; provided, however, that (i) if the scheduled annual meeting is called for a date that is not within 30 days before or after
such anniversary date (as will likely be the case in 2013), notice by such stockholder, to be timely, must be so delivered or received not earlier than the close of business on the 120th day and not
later than the close of business on the later of the 90th day prior to the date of such annual meeting or, if less than 100 days' prior notice or public disclosure of the scheduled meeting date
is given or made, the 10th day following the earlier of the day on which the notice of such meeting was mailed to stockholders of the Company or the day on which such public disclosure was made.
Pursuant to our Bylaws, the notice of nomination is required to contain certain information about both the nominee and the stockholder making the nomination, including information sufficient to allow
the independent directors to determine if the candidate meets the criteria for Board of Directors membership. We may also require that the proposed nominee furnish additional information in order to
determine that person's eligibility to serve as a director. Candidates recommended by stockholders will be evaluated on the same basis as candidates recommended by our directors, executive officers,
third-party search firms or other sources. A nomination that does not comply with the above procedure will be disregarded. Stockholders should submit their nominations in writing to the Chairman,
Nominating and Corporate Governance Committee, in care of the Secretary, NetSpend Holdings, Inc., 701 Brazos Street, Suite 1300, Austin, Texas 78701.

Our
Board of Directors has established an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee, each of which operates pursuant to a charter
adopted by our Board of Directors.

Audit Committee

The Audit Committee is a standing committee of the Board of Directors and currently consists of Messrs. McCullough, Adams and
Vogel. Messrs. McCullough, Adams and Vogel are non-employee directors and "independent." Mr. McCullough serves as a financial expert on our Audit Committee and as the
chairman of the Audit Committee. The functions of the Audit Committee include: appointing, approving the compensation of and assessing the independence of our independent registered public accounting
firm; pre-approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm; reviewing
the overall audit plan with the independent registered public accounting firm and the members of management responsible for preparing our financial statements; reviewing and discussing with management
and the

5

---



Table of Contents

independent
registered public accounting firm our annual and quarterly financial statements and related disclosures, as well as the critical accounting policies and practices used by us; coordinating
the oversight and reviewing the adequacy of our internal control over financial reporting; establishing policies and procedures for the receipt and retention of accounting-related complaints and
concerns; recommending, based upon the Audit Committee's review and discussions with management and the independent registered public accounting firm, whether our audited financial statements shall be
included in our Annual Report on Form 10-K; preparing the Audit Committee report required by SEC rules to be included in our annual proxy statement; and reviewing all related person
transactions for potential conflict of interest situations and approving all such transactions. The Audit Committee operates under a written charter adopted by the Board of Directors that is annually
reviewed and approved by the Audit Committee. The charter is posted on our website at http://www.netspend.com in the "Corporate Governance" area of the "Investor Relations" section.

Compensation Committee Interlocks and Insider Participation

Ms. Lamont and Messrs. McCullough and Schley (chair) serve on the Compensation Committee of our Board of Directors. The
Company has no compensation committee interlocksthat is, no executive officer of the Company serves as a director or a compensation committee member of a company that has an executive
officer serving on our Board or the Compensation Committee. No member of our Compensation Committee has ever been an officer or employee of the Company. There are no family relationships among any of
our directors or executive officers.

Director Qualifications

Each member of the Board of Directors of the Company brings a wide variety of expertise, qualifications, attributes and skills to the
Board of Directors. Set forth below are the specific expertise, qualifications, attributes and skills that each member of our Board of Directors brings to our Board of Directors which have led the
Board of Directors to conclude that such member should serve on our Board of Directors.

Andrew W. Adamshas served on our Board of Directors since January 2010. Mr. Adams is a representative of one of our largest
shareholders, Oak Investment Partners. Mr. Adams brings considerable expertise, qualifications, attributes and skills in the private equity, finance, technology, and corporate governance areas.
He represents the unique perspective of one of our largest stockholders on matters considered by the Board of Directors. His work with Oak Investment Partners has given Mr. Adams experience in
providing financial and strategic advice to other portfolio companies and a significant network of contacts that are valuable to the Company.

Daniel R. Henryhas served as our Chief Executive Officer since February 2008 and a member of the Board of Directors since June 2007. As
our Chief Executive Officer, Mr. Henry brings a unique familiarity with the Company's day-to-day operations to his role as a member of the Board of Directors.
Mr. Henry also has significant experience in the payments industry, having co-founded Euronet Worldwide, Inc., a NASDAQ-listed global provider of electronic payment and transaction
processing solutions for financial institutions, retailers, service providers and individual consumers. Through his prior work with Euronet and his service as our Chief Executive Officer,
Mr. Henry has developed an extensive network of contacts throughout the payments industry.

6

---





Table of Contents

Stephen A. Vogelhas served on our Board of Directors since February 2011. Mr. Vogel was added to the Board
of Directors primarily for his experience with the underbanked segment of the financial services market. Mr. Vogel currently serves as Chief Executive Officer of Grameen America, Inc., a
not-for-profit company focused on providing micro-loans that financially empower lower-income entrepreneurs. His role with Grameen has given him unique insight into the traits,
characteristics and desires of underbanked consumers. He also brings to the Company a strong background in finance and operating matters developed throughout his career, including at Grameen.

Thomas A. McCulloughhas served on our Board of Directors since October 2008. Mr. McCullough has significant experience in the
financial services industry, most recently as Executive Vice President and Chief Operating Officer of DST Systems, Inc., a major provider of processing services to the financial services and
health care industries, and extensive experience as an executive responsible for the active supervision of principal financial officers and other senior executive roles, as both a Chief Executive
Officer and Chief Operating Officer. Mr. McCullough also brings a strong background in corporate governance to our Board of Directors. Mr. McCullough's corporate governance experience
has been developed over many years of service on a number of corporate boards of directors, including Boston Financial Data Services, DST Systems, BlueCross BlueShield of Kansas City, Country Club
Bank, PBI Gordon, Inc. and Balance Innovations LLC.

Daniel M. Schleyhas served on our Board of Directors since June 2004. Mr. Schley has a strong operational and finance background,
which includes a six-year term as Chief Executive
Officer of Foundation Source, Inc., a provider of back-office technology and services for private foundations, a decade as a private investor at Dolphin Capital, and a variety of
successful entrepreneurial endeavors prior to that. Mr. Schley brings a unique independent perspective and strong belief in financial discipline to our Board of Directors.

Alexander R. Castaldihas served as a member of our Board of Directors since January 2009. Mr. Castaldi, who is a Managing Director
of JLL Partners, joined our Board of Directors following our acquisition of Skylight Holdings. Mr. Castaldi has significant experience with financial and operational matters, from his service
as a Chief Financial Officer and his oversight of investments by JLL Partners in financial services and other businesses. Mr. Castaldi represents the unique perspective of our largest
stockholder, JLL Partners. Mr. Castaldi brings a strong background in corporate governance through his membership on a diverse set of boards of directors, including PGT Industries, Inc.,
Education Affiliates, Inc., J.G. Wentworth, LLC, C.H.I. Overhead Doors, Inc., Medical Card System, Inc., FC Holdings, Inc and Ross Education, LLC.

Francisco J. Rodriguezhas served as a member of our Board of Directors since July 2008. Mr. Rodriguez also joined our Board of
Directors following our acquisition of Skylight Holdings. Mr. Rodriguez has managed multiple investments in portfolio companies by JLL Partners, which he joined in 1995. Mr. Rodriguez
brings a depth of experience, insight and analytical skills to our Board of Directors from his years of experience as an institutional investor in a variety of industries, including banking, financial
services and payments. Mr. Rodriguez also has strong relationships with financing sources and many of our largest institutional stockholders and provides valuable strategic guidance to the
Company.

Ann Huntress Lamonthas served as a member of our Board of Directors since June 2004. Along with Mr. Schley, Ms. Lamont is
the longest tenured director on our Board of Directors and she brings a unique historical perspective on the Company and its growth over the years. Ms. Lamont has overseen numerous investments
by one of our largest stockholders, Oak Investment Partners, over the course of her almost three decades of service to Oak. Ms. Lamont brings a depth of experience and judgment to our Board of
Directors, stemming from her work in venture capital since 1984 in a wide array of high-growth businesses, including many in the financial services, payments and technology

7

---



Table of Contents

industries.
She is widely respected in the investment community and provides valuable strategic guidance to the Company.

Independent Directors

Ms. Lamont and Messrs. McCullough, Schley, Adams and Vogel have been determined by the Board of Directors to qualify as
"independent" in accordance with the published listing requirements of NASDAQ. The NASDAQ independence definition includes a series of objective tests, such as a requirement that the director not be
an employee of the Company and not have engaged in various types of business dealings with the Company. In addition, as further required by the relevant NASDAQ rules, our Board of Directors has made a
subjective determination as to each independent director that no relationships exist that, in the opinion of the Board of Directors, would interfere with their ability to effectively exercise
independent judgment in carrying out their responsibilities as a director.

In
addition, each member of the Audit Committee of our Board of Directors (Messrs. Andrews, McCullough and Vogel) qualifies as "independent" under special standards established by
the Securities and Exchange Commission ("SEC") and NASDAQ for members of audit committees. The Audit Committee includes at least one member (Mr. McCullough) that our Board of Directors has
determined meets the qualifications of an "audit committee financial expert" in accordance with the applicable SEC rules. Mr. McCullough was determined to be an audit committee financial expert
based on the Board of Directors' qualitative assessment of Mr. McCullough's level of knowledge, experience (as described above in his biographical statement) and formal education. The
designation does not impose on Mr. McCullough any duties, obligations or liabilities that are greater than those generally imposed on him as a member of the Audit Committee and the Board of
Directors and McCullough's designation as an audit committee financial expert pursuant to this SEC requirement does not affect the duties, obligations or liabilities of any other member of the Audit
Committee or the Board of Directors.

Compensation Committee

The Compensation Committee is a standing committee of the Board of Directors and currently consists of Ms. Lamont and
Messrs. McCullough and Schley. Ms. Lamont and Messrs. McCullough and Schley are non-employee directors and "independent." Mr. Schley serves as the chairman of
the Compensation Committee. The Compensation Committee's responsibilities include: annually reviewing and approving corporate goals and objectives relevant to the compensation of our Chief Executive
Officer; evaluating the performance of our Chief Executive Officer in light of such corporate goals and objectives and determining the compensation of our Chief Executive Officer; reviewing and
approving the compensation of our other executive officers; reviewing and establishing our overall management compensation, philosophy and policy; overseeing and administering our compensation,
welfare, benefit and pension and similar plans; reviewing and approving our policies and procedures for the grant of equity-based awards; reviewing and making recommendations to the Board of Directors
with respect to non-employee director compensation; and reviewing and discussing with management the compensation discussion and analysis to be included in our annual proxy statement or
Annual Report on Form 10-K.

The
Compensation Committee currently operates under a written charter adopted and approved by the Board of Directors that is annually reviewed and approved by the Compensation Committee.
The charter is posted on our website at http://www.netspend.com in the "Corporate Governance" area of the "Investor Relations" section. The Report of the Compensation Committee for fiscal year 2012 is
included in this Annual Report on Form 10-K/A on page 37.

8

---



Table of Contents

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee is a standing committee of the Board of Directors and currently consists of
Messrs. McCullough, Vogel and Schley, all of whom are non-employee directors and "independent." Mr. Vogel serves as the chairman of the Nominating Committee. The Nominating
Committee's responsibilities include searching for, identifying, evaluating the qualifications of and recommending to the Board of Directors qualified director candidates, including nominees
recommended by stockholders; recommending committee assignments in accordance with the membership requirements specified in the charter of each committee; developing and recommending to the Board of
Directors standards and processes for determining the independence of directors that meet the rules and requirements of NASDAQ and applicable laws and regulations; developing and recommending to the
Board of Directors a code of business conduct and ethics and a set of corporate governance guidelines; developing a mechanism by which violations of the code of business conduct and ethics can be
reported in a confidential manner; and overseeing the evaluation of the Board of Directors and management.

The
Nominating Committee currently operates under a written charter adopted and approved by the Board of Directors that is annually reviewed and approved by the Nominating Committee. The
charter is posted on our website at http://www.netspend.com in the "Corporate Governance" area of the "Investor Relations" section.

Accounting and Auditing Concerns

The Audit Committee has established procedures to receive, retain and treat complaints regarding accounting, internal accounting
controls or auditing matters and to allow for the confidential and anonymous submission by employees of concerns regarding questionable
accounting or auditing matters. We also maintain a confidential hotline by which employees can communicate concerns or complaints regarding these matters.

Stockholder Communication with the Board of Directors

Stockholders may communicate with the Board of Directors by submitting their communications in writing, addressed to the entire Board
of Directors or, at the election of the stockholder, to one or more specific directors, in care of the Secretary, NetSpend Holdings, Inc., 701 Brazos Street, Suite 1300, Austin, Texas
78701.

ITEM 11.    EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

We provide what we believe is a competitive total compensation package to our executive management team through a combination of base
salary, annual cash bonus awards, a long-term equity incentive compensation plan and broad-based benefits programs.

We
place significant emphasis on pay for performance-based incentive compensation programs, which make payments only when certain Company goals are achieved. This Compensation Discussion
and Analysis explains our compensation philosophy, policies and practices, with respect to our Chief Executive Officer, Chief Financial Officer and our other three most highly-compensated executive
officers, collectively referred to as the "named executive officers".

The Objectives of our Executive Compensation Program

Our Compensation Committee is responsible for establishing and administering our policies governing the compensation of our executive
officers. Our executive officers are elected by our Board

9

---



Table of Contents

of
Directors. The Compensation Committee is composed entirely of non-employee directors. Our executive compensation programs are designed to achieve the following
objectives:



Our Compensation Practices

The Compensation Committee meets outside the presence of all of our executive officers, including the named executive officers, to
consider appropriate compensation for our Chief Executive Officer, or CEO. For all other named executive officers, the Compensation Committee typically meets outside the presence of all executive
officers except our CEO and our corporate secretary. Mr. Henry, our CEO, annually reviews each other named executive officer's performance with the Compensation Committee and makes
recommendations to the Compensation Committee with respect to the appropriate base salary, annual cash bonus and the grants of long-term equity incentive awards for all executive officers,
excluding himself. Based in part on these recommendations from our CEO and other considerations discussed below, the Compensation Committee approves the annual compensation package of our executive
officers other than our CEO. The Compensation Committee also annually analyzes our CEO's performance and determines his base salary, annual cash bonus and long-term equity incentive awards
based on its assessment of his performance. The views of our CEO regarding the performance of our executive officers are considered by the Compensation Committee when making decisions on setting base
salary, cash bonus award and grants of long-term equity incentive awards. When making decisions on setting base salary, cash bonus award and grants of long-term equity
incentive awards for executive officers, the Compensation Committee considers the importance of the position to us, the past salary history of the executive officer and the future contributions
expected to be made by the executive officer to us.

We
use the following principles to guide our decisions regarding executive compensation:

Provide compensation opportunities that are competitive in the marketplace.

To attract and retain executives with the ability and the experience necessary to lead us and deliver strong performance to our
stockholders, we strive to provide a total compensation package that is competitive with or superior to total compensation provided by other private and public companies in our industry.

10

---



Table of Contents

Although
we do not specifically benchmark our compensation levels against a defined peer group, we do consider competitive market pay data important to our compensation decisions. We
gather competitive market compensation information from a number of sources:



We
utilize this data to assess the competitiveness of our compensation packages. Our goal is to ensure that our executives are compensated at levels commensurate with or, for our
higher-performing executives, superior to what they could achieve at other similarly situated companies in our industry. For each executive officer, we consider competitive compensation data in
concert with:



Require performance goals to be achieved in order for the majority of the target pay levels to be earned.

Our
executive compensation program emphasizes pay for performance. Performance is measured based on achievement of the Company goals established by our Board of Directors. These goals
are typically related to the annual business plan approved by our Board each year. The goals for our Company and individual measures are established so that target attainment is not assured. The
attainment of payment for performance at target or above requires strong Company performance and significant effort on the part of our executives.

Offer the same comprehensive benefits package to all full-time employees.

We provide a competitive benefits package to all full-time employees that includes health and welfare benefits, such as
medical, dental, vision care, disability insurance, life insurance benefits, and a 401(k) savings plan. We have also implemented an employee stock purchase plan. Other than an allowance for the use of
private aircraft when travelling on Company business that is given to our CEO, we do not have any structured executive perquisite benefits (e.g., club memberships or company vehicles) for any
executive officer, including the named executive officers.

Provide fair and equitable compensation.

We provide a total compensation program that we believe will be perceived by both our executive officers and our stockholders as fair
and equitable. In addition to conducting analyses of market pay levels and considering individual circumstances related to each executive officer, we also consider the pay of each executive officer
relative to each other executive officer and relative to other members of our management team. We have designed the total compensation programs to be consistent for our executive management team.

11

---



Table of Contents

Compensation Consultant

In late 2010, the Compensation Committee retained Deloitte Consulting LLP ("Deloitte") as its independent compensation
consultant to conduct a supplemental compensation review, to benchmark officer compensation against a peer group and to provide guidance to the Compensation Committee on its compensation practices,
particularly with respect to long-term incentive compensation, for the named executive officers and other employees. Deloitte billed the Company for an aggregate of $139,541 in consulting
fees during the fiscal year ended December 31, 2012.



Overall, our executive compensation programs are designed to be consistent with the objectives and principles set forth above. The
basic elements of our executive compensation programs are summarized in the table below, followed by a more detailed discussion of each compensation program.

Element

Characteristics

PurposeBase salary

Fixed annual cash compensation; all executives are eligible for periodic increases in base salary based on performance.

Keep our annual compensation competitive with the market for the skills and experience necessary to meet the requirements of the executive's role with us.Annual cash bonus awards

Performance-based annual cash incentive earned based on Company performance against target performance levels.

Motivate and reward for the achievement and over-performance of our critical financial and strategic goals. Amounts earned for
achievement of target performance levels (which are based on our annual budget) are designed to provide a market-competitive pay package; potential for greater amounts is intended to motivate participants to achieve or exceed our financial
performance goals and not to reward participants if our performance goals are not met.


12

---



Table of Contents

Element

Characteristics

PurposeLong-term equity incentive plan
awards (stock options and
restricted stock)

Equity-based awards which increase in value to the extent the price of our Common Stock increases over time.

Align interests of management with stockholders; motivate management to increase the stockholder value of the Company over the long term. Vesting
based on continued employment will facilitate retention; vesting based on performance metrics further aligns interest of management with stockholders; provides change in control protection for management.Employee Stock Purchase Plan

Enables employees to use payroll deductions to purchase shares of our Common Stock at a discounted level.

Align interests of employees and managers with stockholders; motivate employees and management to increase stockholder
value.Retirement savings
opportunities

Tax-deferred plan in which all employees can choose to defer compensation for retirement and a plan in which certain executives
can choose to defer compensation on a basis that is not tax-qualified.

Provide employees the opportunity to save for their retirement. Account balances are affected by contributions and investment
decisions made by the employee.Health & welfare benefits

Comparable health & welfare benefits (medical, dental, vision, disability insurance and life insurance) are available
for all full-time employees.

Provides benefits to meet the health and welfare needs of employees and their families.


All
pay elements are cash-based except for the long-term equity incentive program and the Employee Stock Purchase Plan, which are equity-based. We
consider market pay practices and practices of peer companies in determining the amounts to be paid, what components should be paid in cash versus equity and how much of a named executive officer's
compensation should be short-term versus long-term.

In
general, compensation or amounts realized by executives from prior compensation from us, such as gains from previously awarded stock options or options awards, are not taken into
account in setting other elements of compensation, such as base pay, annual cash bonus awards or awards of stock options or restricted shares under our long-term equity incentive program.
With respect to our CEO, we do take into account the significant option grants he received in 2008 when he became our CEO and we have not increased his base salary or made material equity grants to
him prior to 2012. With respect to new executive officers, we take into account their prior base salary and annual cash incentive, as well as the contribution expected to be made by the new executive
officer, the needs of our business and the role of the executive officer with us. We believe that our executive officers should be fairly compensated each year relative to market pay levels and
internal equity among executive officers. Moreover, we believe that our long-term incentive compensation program furthers our significant emphasis on pay for performance compensation.

13

---



Table of Contents

To attract and retain executives with the ability and the experience necessary to lead us and deliver strong performance to our stockholders, we provide a
competitive total compensation package. Total compensation is broken into three main categories:



Base Salary

We review on an annual basis salary ranges and individual salaries for our executive officers. We establish the base salary for each
executive officer based on a review of market pay levels as well as internal factors, such as the individual's performance and experience, and the pay of others on the executive team. We believe a
competitive base salary is necessary to attract and retain an executive management team with the appropriate abilities and experience required to lead us. Generally, we seek to target the base
salaries of our officers at the 50th percentile of the amounts indicated by the competitive market data for similarly situated persons, although the base salaries for some of our
named executive officers trend somewhat higher as a result of negotiations undertaken when they joined the Company, in the case of exceptional performance and competitive market dynamics. In 2012,
base salaries accounted for approximately 8.9 - 17.8% of the total compensation of our named executive officers.

The
base salaries paid to our named executive officers are set forth below in the Summary Compensation Table. We believe that the base salaries paid to our executive officers during 2012
achieved our executive compensation objectives, compare favorably to the base salaries paid by other financial services companies and are consistent with our emphasis on pay for performance.

Cash Incentive Awards

On an annual basis, the Compensation Committee adopts an employee bonus program in which our executives participate. The bonus program
provides a financial incentive to our executive officers and other employees to drive long-term growth and recurring profitability for the Company. In order to be eligible for a bonus
award under the plan, each eligible employee must have received a minimum individual performance rating by his or her direct supervisor (or, in the case of the Chief Executive Officer, by the Board of
Directors) and must be employed by the Company at the time the annual bonuses are paid. If the executive's employment began after January 1 of the current plan year his or her potential bonus
will generally be prorated over a 12-month period of time.

Under
our annual executive bonus program, each executive is assigned a target bonus level expressed as a percentage of his or her base salary. For 2012, the target bonus levels for our
employees ranged from 100% for our CEO to 15% for our director-level executives. The target bonus levels established in 2012 for our named executive officers were as follows:

Officer

Target BonusChief Executive Officer

100% of Base SalaryChief Financial Officer

70% of Base SalaryPresident

70% of Base SalaryExecutive Vice President of Online Business Development

70% of Base SalaryExecutive Vice President, General Counsel and Secretary

50% of Base Salary


Generally,
our goal is to establish bonus opportunities for the executives that direct their total cash compensation to between the median and 75th percentile of
cash compensation seen in the competitive

14

---



Table of Contents

market
data, although this level can be exceeded in the case of executive officers who negotiated higher levels of compensation when they joined the Company and due to competitive factors.

Payout
of the target level bonus is conditioned upon the Company achieving the corporate performance objectives set for each annual period. During 2012, we used only one financial
performance metric, earnings per fully-diluted share before interest, taxes, depreciation and amortization, adjusted for stock-based compensation and non-recurring gains and losses, or
Adjusted EPS, to
determine whether our executives are entitled to their target bonus (we reconcile "adjusted net income" to the net income we calculate in accordance with generally accepted accounting principles in
the Selected Financial Data that appears in the Annual Report on Form 10-K that we file with the Securities and Exchange Commission). We chose Adjusted EPS as the single performance
metric because we believe it appropriately emphasizes creating long-term stockholder value through both top line revenue growth as well as profitability. We believe that basing payment of
the bonuses on Adjusted EPS targets creates incentives for the executive officers to grow the Company's customers and revenue while at the same time ensuring that the Company maintains strict cost
control and the Company's growth is profitable. Under the bonus program, the Compensation Committee has the power to determine Adjusted EPS in its sole discretion and make adjustments up or down to
reflect restructurings, extraordinary or non-recurring items, discontinued operations, the cumulative effects of accounting changes and such other factors as the Committee may deem
relevant. Adjusted EPS is calculated after giving effect to the earnings expense associated with the annual bonus payments.

In
addition to setting a target Adjusted EPS at which employees will receive their target bonus payouts, the Compensation Committee also sets a minimum Adjusted EPS threshold, below
which employees will receive no payout, and a maximum Adjusted EPS target, at or above which employees may receive more than their target bonuses. Depending upon whether the Company falls short of,
meets or exceeds the target Adjusted EPS under the bonus program, employees can earn more or less than their target bonus amounts. For 2012, target Adjusted EPS was $0.57 and the potential bonus
payouts under various scenarios were as follows:

Adjusted EPS Performance

Adjusted EPS
Target

Cash Bonus PayoutBelow Threshold

Less than $0.51

No payoutBetween Threshold and Target

$0.51 - $0.56

Pro-rated starting at 50% of TargetAt Target

$0.57

100% of target bonusAt or above Target

$0.58 - $0.65

Pro-rated starting at 100% of Target, capped at 150% of Target


Annual
cash incentive awards are determined at year-end based upon our performance against the annual Adjusted EPS target. Our Compensation Committee reviews and recommends
the final bonus payout amounts. Our Compensation Committee and our Board of Directors may make bonus payouts at levels higher or lower than the amounts derived through the application of the formula
described above and may modify or terminate the annual bonus program at any time.

For
2012, our Adjusted EPS was $0.58, resulting in a suggested payout percentage of 108.5% of target. The Compensation Committee did not make any upward or downward adjustment to this
amount. The cash bonuses paid to our named executive officers are set forth below in the Summary Compensation Table. See "Summary of Compensation." We believe that the cash bonuses paid
to our executive officers in respect of 2012 achieved our basic executive compensation objectives and were consistent with our emphasis on pay for performance.

The
payment of bonuses in 2012 was also conditioned upon the Company managing at least 1,000,000 ninety-day active cards using direct deposit as the end of 2012 in order to
emphasize the

15

---



Table of Contents

importance
of growing this portion of our customer base. We closed the year with 1,082,000 cards qualifying under this metric.

Long-term Equity Incentive Compensation

We award long-term equity incentive grants to executive officers, including the named executive officers, as part of our
total compensation package. These awards are consistent with our pay for performance principles and are intended to align the interests of the executive officers with the interests of our
stockholders. The Compensation Committee reviews the amount of each award to be granted to each named executive officer. Long-term equity incentive awards are made pursuant to our 2004
Plan. Generally, we make annual grants of equity-based awards to our executives at the first meeting of the Compensation Committee held in a given year.

Our
long-term equity incentive compensation has historically been primarily in the form of options to acquire our Common Stock (with awards of restricted stock also being
used in some instances). The value of the stock options awarded is dependent upon the performance of our Common Stock. The Compensation Committee and management believe that stock options are an
appropriate vehicle to provide long-term incentive compensation to our executive officers.

Our
long-term equity incentive grants to executive officers generally fall into three categories: standard time-based awards, performance-based awards and
event-based awards.



See
"Employment Agreements, Severance Benefits and Change in Control Provisions" for a discussion of the change in control provisions related to stock options and restricted stock awards.

Stock
option awards provide our executive officers with the right to purchase shares of our Common Stock at a fixed exercise price for a period of up to ten years. The exercise price of
each stock option granted prior to the Company's initial public offering, with the exception of a July 2010

16

---



Table of Contents

grant
to our President with an exercise price based upon a negotiated employment agreement, was based on the fair market value of our Common Stock on the grant date as determined by our Board of
Directors. Options granted after our initial public offering were granted with an exercise price equal to the fair market value of our Common Stock on the date of grant, with fair market value being
defined as the closing price of our Common Stock on that date. All of the options granted in 2012 were time-based and priced at the closing price of our Common Stock on their date of
grant.

Restricted
stock awards are shares of Common Stock that are issued to our executive officers and employees that cannot be sold or otherwise transferred prior to their vesting date.
Generally, any portion of the award that is not vested prior to the termination of an employee's termination of employment is subject to forfeiture. The vesting of the time-based
restricted stock awards made in 2012 is subject to acceleration in the event of the death or disability of the holder thereof. If we declared a dividend on our Common Stock, the holder of a restricted
stock award would also receive that dividend, although dividends received on an unvested restricted award would be held in a suspense account until the shares vest and would be forfeited if the
underlying award was forfeited.

Individual
determinations are made with respect to the number of stock options or restricted stock awards to be granted to our executive officers and other senior employees. In making
these determinations, we consider our performance relative to the financial and strategic objectives set forth in the annual business plan, the individual performance of each executive officer, each
executive officer's base salary and target bonus amount and the market pay levels for the executive officer. Generally, our equity-based awards are intended to bring the total compensation of our
officers to the 75th percentile of the total compensation levels seen in our market surveys, although the total compensation paid to some of our named executive officers tends to
exceed this benchmark given their importance to the success of the Company.

Generally,
we do not (other than in the case of our CEO) consider an executive officer's stock holdings or previous stock option grants in determining the number of stock options or
restricted stock awards to be granted. We believe that our executive officers should be fairly compensated each year relative to market pay levels of our peer group and relative to our other executive
officers. Moreover, we believe that our long-term incentive compensation program furthers our significant emphasis on pay for performance compensation. We do not have any requirement that
executive officers hold a specific amount of our Common Stock or stock options.

The
Compensation Committee is the plan administrator for our 2004 Plan.

For
accounting purposes, we apply the guidance in Accounting Standards Board Accounting Standards Codification Topic 718, or ASC Topic 718, to record compensation expense for our stock
option grants. ASC Topic 718 is used to develop the assumptions necessary and the model appropriate to value the awards as well as the timing of the expense recognition over the requisite service
period, generally the vesting period, of the award.

Equity Grants in 2012

In early 2012, the Compensation Committee determined that the 2012 annual equity incentive grants would be made in the form of
time-based options and
time-based restricted stock awards, with the estimated intrinsic value of each executive's awards being split evenly between the two award types. The Compensation Committee chose this
approach to increase the retention value of the Company's annual incentive grants because restricted stock awards generally always have some level of value whereas options can lose their entire value
if our share price declines.

In
April 2012, the Compensation Committee reviewed the performance-based stock option granted to our CEO in 2008 and determined that the time-based portion of this award
(608,646 shares; vesting February 7, 2014) should be amended to provide that this portion of the award would vest if his

17

---



Table of Contents

employment
was terminated by the Company without cause or by him for good reason following, in each case, a change in control of the Company (each, a "Qualifying Termination") in order to conform this
award to the time-based option awards held by the other executive officers of the Company.

In
October 2012, the Compensation Committee noted that with the equity grants made in connection with the Company's initial public offering and certain performance options granted in
2008 due to vest in the relatively short term, many of the Company's key executives would have the majority of their equity awards vested by March 2013. To address the retention issue that would
otherwise result, the Committee determined to grant performance-based awards of restricted stock that would only vest if the Company achieved certain adjusted net income targets in 2015, with the
targets being set so as to require significant growth over the amount of adjusted net income expected for 2012. The grant date value of the awards was determined by reference to the participating
executive's base salary with the awards made to senior employees having an implied value between 100 - 375% of the employee's base salary. The Compensation Committee retains
the discretion to reduce, but not increase, the amount of any performance-based award that would otherwise vest pursuant to the application of the formula used to calculate the Company's 2015 adjusted
net income.

Also
in October 2012, the Committee authorized the granting of a time-based restricted stock award to the Company's Executive Vice President, Online Business Development in
order to incent her not to accept an offer from an alternative employer.

Revision to CEO Severance

In April 2012, the Compensation Committee decided to amend the CEO's employment contract to provide that the amount payable to him
would increase from one to two times his base salary plus target annual bonus in the event of any Qualifying Termination in order to more closely conform this arrangement to prevailing industry
practices.

Other Benefits

Retirement savings opportunities

All of our employees, subject to certain age and length of service requirements, may participate in the NetSpend Corporation 401(k)
Plan (the "401(k) Plan"). Generally, each employee may make pre-tax contributions of up to 100% of their eligible earnings up to the current Internal Revenue Service annual
pre-tax contribution limits. We provide this plan to help employees save some of their cash compensation for retirement in a tax efficient manner. We also make matching contributions equal
to 100% of the first 3% of the eligible earnings that an employee contributes to the 401(k) Plan and 50% of the next 2% of the eligible earnings that an employee contributes. We also have the ability
to make certain discretionary contributions under the 401(k) Plan, although we have not done so in the past. See "Employee Benefit Plans401(k) Plan" below for a complete
description of the 401(k) Plan.

In
2009, we adopted the NetSpend Holdings, Inc. Deferred Compensation Plan (the "Deferred Compensation Plan"). The purpose of this plan is to attract and retain key employees by
providing them with an opportunity to defer receipt of a portion of their salary, bonus and other specified compensation. We do not match any contributions made by eligible employees to the Deferred
Compensation Plan, but we do have the ability to make discretionary contributions to the Deferred Compensation Plan which may be credited to any participant. We have not made any discretionary
contributions to this plan in the past. Mr. Henry was the only one of our named executive officers to participate in the Deferred Compensation Plan in 2012. See "Employee Benefit
PlansDeferred Compensation Plan" below for a complete description of the Deferred Compensation Plan.

18

---



Table of Contents

Employee Stock Purchase Plan

In April 2012, the stockholders of the Company approved the NetSpend Holdings, Inc. 2012 Employee Stock Purchase Plan (the "ESPP"). The
purpose of this plan is to align interests of employees and managers with stockholders and motivate employees and management to increase stockholder value. Subject to certain limitations, the ESPP
enables eligible employees to utilize after-tax payroll deductions to purchase shares of Company's common stock at the lesser of 85% of its fair market value on the first or last business
day of each quarterly purchase period. This plan was suspended after the first quarter of 2013. A total of 2,000,000 of the Company's treasury shares have been reserved for issuance under the ESPP.

Health and welfare benefits

All full-time employees, including our named executive officers, may participate in our health and welfare benefit
programs, including medical, dental and vision care coverage, disability insurance and life insurance.

Stock Ownership Guidelines

Stock ownership guidelines have not been implemented by the Compensation Committee for our executive officers. We will continue to
periodically review best practices and re-evaluate our position with respect to stock ownership guidelines.

Tax Deductibility of Executive Compensation

Limitations on deductibility of compensation may occur under Section 162(m) of the Internal Revenue Code of 1986 (the "Code"),
which generally limits the tax deductibility of compensation paid by a public company to its Chief Executive Officer and certain other highly compensated executive officers to $1 million in the
year the compensation becomes taxable to the executive officer. There is an exception to the limit on deductibility for performance-based compensation that meets certain requirements. Generally, the
limitations imposed by Section 162(m) have not materially limited the deductibility of the compensation paid to our executives in the past.

Summary of Compensation

The following table sets forth certain information with respect to compensation for the years ended December 31, 2010, 2011 and
2012 earned by or paid to our Chief Executive Officer, our principal

19

---



Table of Contents

financial
officer, and our three other most highly compensated executive officers, which are referred to as the "named executive officers".

Name and principal position

Year

Salary

Bonus(1)

Stock
Awards(2)

Option
Awards(3)

Non-equity
incentive plan
compensation(4)

Nonqualified
deferred
compensation
earnings(5)

All other
compensation(6)

TotalDaniel R. Henry


2012


401,500





1,599,000





435,628


139,075


9,110


2,584,313Chief Executive Officer


2011


401,500











281,050





362,708


1,045,2582010


401,500











595,147





186,340


1,182,987George W. Gresham(7)


2012


360,500





2,603,682


742,478


272,471





9,110


3,988,241Chief Financial Officer


2011


350,000








1,568,000


171,500





9,911


2,099,4112010


226,827


201,357





2,087,000


211,847





4,404


2,731,435Charles J. Harris(8)


2012


360,500





2,048,467


742,478


272,471





110


3,424,026President


2011


350,000








1,568,000


171,500





111


2,089,6112010


175,000


121,792


2,868,125


1,781,500


151,319





59


5,097,795Steven F. Coleman(9)


2012


309,000





1,010,778


200,069


166,819





54,007


1,740,673Executive Vice President,


2011


160,192








902,000


75,000





27,068


1,164,260General Counsel and Secretary


2010























Anh Hatzopoulos


2012


362,045


25,000


3,266,236


133,379


273,638





10,110


4,070,408Executive Vice President of


2011


351,500


25,000





235,200


172,235





9,911


793,846Online Business Development


2010


351,500


50,000





1,084,500


364,722





1,312


1,852,034


(1)For
2010, 2011 and 2012, the amounts shown represent discretionary bonuses paid to Ms. Hatzopoulos based on her performance in the prior year, as
provided by her offer letter. For 2010, these amounts represent a signing bonus paid to Mr. Gresham and relocation bonuses paid to Messrs. Gresham and Harris.(2)The
amounts in this column represent the grant date fair value of restricted stock awards granted in July 2010 (Mr. Harris) and February 2012 based
on the executive's performance in the prior year. The amounts shown for 2012 also reflect the granting of performance-based and retention awards in October 2012. All of the awards were valued in
accordance with the Financial Accounting Standards Board Accounting Standards Codification ("ASC") Topic 718. Under SEC rules, the amounts shown exclude the impact of estimated forfeitures
related to service and performance-based vesting conditions. The grant date fair value of restricted stock awards is calculated using the fair market value of the Company's Common Stock on the date of
grant. For awards granted prior to our initial public offering, fair market value was determined by our Board of Directors. For additional information, see Note 12 to our consolidated financial
statements for the year ended December 31, 2012. These amounts do not correspond to the actual value that will be recognized by the executive.(3)The
amounts in this column represent the grant date fair value of stock option awards, calculated in accordance with ASC Topic 718. Under the
applicable SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. The grant date fair value of stock option awards is calculated using
the Binomial Lattice model. For additional information, see Note 12 to our consolidated financial statements for the year ended December 31, 2012. These amounts do not correspond to the
actual value that will be recognized by the executive.(4)The
amounts in this column represent the amounts received under our annual Bonus Plan. For additional information, please see "Compensation
Discussion and AnalysisComponents of our Executive Compensation ProgramsCash Incentive Awards."(5)Represents
earnings on contributions made to the Company's Deferred Compensation Plan in excess of the applicable federal long-term rate, with
compounding (as prescribed under section 1274(d) of the Internal Revenue Code).(6)Includes
matching contributions under our 401(k) Plan, premiums for group term life insurance policies maintained for the benefit of the named executives,
dividend equivalent payments, rental reimbursements and tax-gross ups. For 2012, the Company made 401(k) matching contributions for each of Messrs. Henry ($9,800), Gresham ($9,800)
and Coleman ($7,057) and Ms. Hatzopoulos ($10,000). The Company paid $110 for life insurance premiums for each of the named executive. For Mr. Henry, the amounts shown also include
dividend equivalents of $352,797 paid in 2011. We also reimbursed Mr. Henry for $448,726 of expenses related to his use of private aircraft when travelling on company business, $276,117 of
which was paid to companies owned by him for the use of their aircraft. For Mr. Coleman, the amount shown represents the reimbursement of $32,460 related to the rental of an apartment in
Austin, Texas and $14,380 of associated tax gross-ups.(7)Mr. Gresham
became our Chief Financial Officer in May 2010.(8)Mr. Harris
became our President in July 2010.(9)Mr. Coleman
became our General Counsel in June 2011.


20

---



Table of Contents

Grants of Plan-Based Awards

The following tables set forth certain information with respect to grants of plan-based awards for the year ended
December 31, 2012 to the named executive officers.

All Other
Stock
Awards:
Number of
Shares of
Stock or
Units (#)(2)

All Other
Option
Awards:
Number of
Securities
Underlying
Options (#)(3)Estimated Future Payouts Under
Non-Equity
Incentive Plan Awards

Estimated Future Payouts
Under Equity
Incentive Plan Awards(1)

Exercise or
Base Price of
Option
Awards
($/Share)Grant Date Fair
Value of Stock
and Option
Awards(4)Grant
DateName

Threshold

Target

Maximum

Threshold

Target

MaximumDaniel R. Henry


02/09/12

$
200,750

$
401,500

$
602,250




















10/29/12











60,000


120,000


150,000







$
10.66

$
1,599,000George W. Gresham


02/09/12

$
126,175

$
252,350

$
378,525











75,480


154,041

$
8.75

$
1,402,92810/29/12











72,917


145,834


182,292







$
10.66

$
1,943,232Charles J. Harris


02/09/12

$
126,175

$
252,350

$
378,525











75,480


154,041

$
8.75

$
1,402,92810/29/12











52,083


104,166


130,208







$
10.66

$
1,388,017Steven F. Coleman


02/09/12

$
77,250

$
154,500

$
231,750











20,339


41,508

$
8.75

$
378,03510/29/12











31,250


62,500


78,125







$
10.66

$
832,812Anh Hatzopoulos


02/09/12

$
126,716

$
253,432

$
380,147




















02/10/12




















13,559


27,672

$
8.80

$
252,69810/29/12











52,083


104,166


130,208


165,000




$
10.66

$
1,388,017


(1)Represents
performance-based restricted stock awards. The shares shown may not be sold or otherwise transferred until they vest. The vesting of the shares
shown is conditioned upon the Company's 2015 adjusted net income equaling or exceeding certain specified targets and the holder remaining in the employ of the Company through the applicable vesting
date.(2)Represents
time-based restricted stock awards. The shares shown may not be sold or otherwise transferred until they vest. The shares will vest
in four equal installments on the four succeeding anniversaries of their date of grant, subject to the holder's continued employment with the Company or an affiliate of the Company through the
applicable vesting date. The vesting of the award is subject to acceleration in the event of the death or disability of the holder.(3)The
stock options shown vest and may be exercised, in whole or in part, in four equal installments on each of the four succeeding anniversaries of their
date of grant, subject to the holder's continued employment with the Company or an affiliate of the Company through the applicable vesting date. Additionally, in the event of a change in control of
the Company, 25% of the awards will vest immediately, subject to the holder's continued employment with the Company or an affiliate of the Company through the date of the change in control.(4)The
amounts in this column represent the grant date fair value of equity awards granted in 2012, calculated in accordance with ASC Topic 718. Under
the applicable SEC rules, the amounts shown exclude the impact of estimated forfeitures related to performance or service-based vesting conditions. The grant date fair value of these awards is
calculated using the Binomial Lattice model. For additional information, see Note 12 to our consolidated financial statements for the year ended December 31, 2012. These amounts do not
correspond to the actual value that will be recognized by the executive.


Our 2004 Plan generally provides that 25% of each unvested stock option, excluding performance based options, will automatically vest upon the
occurrence of a change in control. Our options have this feature to enhance their retentive effect in the event a strategic transaction involving the Company were to be announced. In addition, the
options held by our named executive offices provide that if, in connection with a change in control of the Company, any unvested portion of their time-based equity awards is not assumed
by, or substituted for, a new award covering the stock of the successor or purchasing company, or a parent or subsidiary thereof, 100% of such unvested portion will vest upon the consummation of the
change in control. Further, if, in connection with or during the 12-month period immediately following the consummation of a change in control of the Company, the further employment of the
holder is terminated by the Company or an affiliate of the Company, for any reason other than for (a) cause or (b) disability, or if, during the same 12-month period, the
holder terminates his or her employment with the Company or an affiliate of the Company for good reason, 100% of the existing award or any new award, as applicable, will vest immediately. In
connection with the negotiation of his employment agreement, Mr. Harris received a time-based restricted stock award (401,500 shares) that provides that 50% of the award will
vest upon a change of control of the Company.

21

---



Table of Contents

Employment Agreements, Severance Benefits and Change in Control Provisions

We have entered into management employment agreements with each of our named executive officers. Each of these agreements provides for
certain severance payments and some provide for change in control payments. These arrangements were designed to ensure retention of our senior executive team. Details of each named executive officer's
employment agreement and severance arrangement, including estimates of amounts payable under certain circumstances if the executive's employment is terminated or we experience a change in control, are
described below. Although we believe these arrangements are an important feature to ensure the focus and retention of our executives, our Board of Directors and Compensation Committee do not consider
them to be material factors in the determination of the executives' overall compensation.

Employment Agreements

Named Executive Officers

Daniel R. Henry.Mr. Henry's current annual base salary is $401,500, and his maximum bonus under our executive bonus program is
150% of his
annual base salary. Mr. Henry's employment is at will and may be terminated at any time, with or without formal cause. As discussed in "Severance Benefits and Change in Control
Provisions" below, if the employment of Mr. Henry is terminated under certain circumstances, we have agreed to make certain severance payments and provide him with certain benefits.

George W. Gresham.Mr. Gresham was appointed as our Chief Financial Officer in May 2010. Mr. Gresham's employment agreement
provides
that his annual base salary will be at least $350,000 (his base salary for 2012 was $360,500), and his maximum bonus under our executive bonus program is 105% of his annual base salary.
Mr. Gresham's employment is at will and may be terminated at any
time, with or without formal cause. As discussed in "Severance Benefits and Change in Control Provisions" below, if the employment of Mr. Gresham is terminated under certain
circumstances, we have agreed to make certain severance payments and provide him with certain benefits.

Charles J. Harris.Mr. Harris was appointed as our President in July 2010. Mr. Harris's annual base salary in 2012 was
$360,500, and
his maximum bonus under our executive bonus program is 105% of his annual base salary. Mr. Harris' employment is at will and may be terminated at any time, with or without formal cause. As
discussed in "Severance Benefits and Change in Control Provisions" below, if the employment of Mr. Harris is terminated under certain circumstances, we have agreed to make certain
severance payments and provide him with certain benefits.

Steven F. Coleman.Mr. Coleman became our General Counsel in June 2011 and his annual base salary was $309,000 for 2012. Pursuant
to his
employment agreement, his maximum annual bonus is 75% of his annual base salary. Mr. Coleman's employment is at will and may be terminated at any time, with or without formal cause. As
discussed in "Severance Benefits and Change in Control Provisions" below, if the employment of Mr. Coleman is terminated under certain circumstances, we have agreed to make certain
severance payments and provide him with certain benefits.

Anh Hatzopoulos.Ms. Hatzopoulos' annual base salary for 2012 was $362,045, and her maximum bonus under our executive bonus
program is 105% of
her annual base salary. In addition, Ms. Hatzopoulos was eligible to receive a special bonus of up to $75,000 upon the achievement of certain sales goals during 2011 and the Company paid her
$25,000 in March 2012 pursuant to this arrangements. Ms. Hatzopoulos' employment is at will and may be terminated at any time, with or without formal cause. As discussed in
"Severance Benefits and Change in Control Provisions" below, if the employment of Ms. Hatzopoulos is terminated under certain circumstances, we have agreed to make certain
severance payments and provide her with certain benefits.

22

---



Table of Contents

Severance Benefits and Change in Control Provisions

The following description of the severance benefits and change in control provisions applicable to our named executive officers is only
a general description of their existing arrangements. For a description of the specific arrangements negotiated in connection with the proposed merger (the "Merger") between the Company and General
Merger Sub, Inc., a wholly-owned subsidiary of Total System Services, Inc., see the Preliminary Proxy Statement on Schedule 14A filed by the Company with the Securities Exchange Commission on
March 8, 2013, as amended by Amendment No. 1 filed with the Commission on March 26, 2013 and as amended by Amendment No. 2 filed with the Commission on April 18,
2013.

Termination by us without cause, or termination by named executive officer for good reason

Our management employment agreements typically provide that if we terminate a named executive officer's employment other than for
cause, or if a named executive officer terminates his or her employment for good reason, the named executive officer is entitled to severance payments (less applicable withholding taxes) equal
to:



In
addition, upon any such termination, all our named executive officers would receive payments related to their accrued and unpaid expenses, salary and benefits. The named executive
officers are also entitled to contributory payments towards their health coverage under COBRA for up to 18 (12 months for Messrs. Gresham, Harris and Coleman and Ms. Hatzopoulos)
months following the termination of their employment. Mr. Henry's employment agreement also provides that, in the event any payment or benefit received by Mr. Henry in connection with a
termination of his employment would constitute a "parachute payment" within the meaning of Internal Revenue Code Section 280G or any similar or successor provision to 280G, then we will
reimburse Mr. Henry on a "grossed-up" basis for any income taxes attributable to Mr. Henry by reason of such payment or reimbursements, subject to a cap of
$1.5 million.

The
foregoing payments and benefits are subject to perpetual confidentiality obligations and the execution of a general release by the named executive officers. The payments and benefits
are also subject to covenants not to compete with us, covenants not to solicit our employees and covenants not to solicit our customers or suppliers, in each case for a period of one year following
termination and, in the case of Ms. Hatzopoulos, subject to certain exceptions based on applicable California law. In

23

---



Table of Contents

addition,
in the case of all of our named executive officers other than Mr. Henry, their severance payments are subject to a post-termination one-year covenant not to
furnish any services similar to those furnished to us during such named executive officer's tenure with us to any of our customers or accounts. Each management employment agreement contains customary
provisions which allow for the waiver of the terms and conditions thereof only by a written instrument signed by the party waiving compliance.

"Cause"
is generally defined under the management employment agreements to include:



"Good
reason" is generally defined under the management employment agreements to include a violation of such employment agreement by us in a material respect (including in the case of
Mr. Gresham, a requirement that he report to a person other than a chief executive officer who reports directly to the Company's Board of Directors), a material reduction in the executive's
responsibilities (including in the case of Mr. Henry a failure to elect him to our Board of Directors) and a sale or transfer of all or substantially all of our assets to another entity that
does not assume our obligations under such employment agreement, in each case subject to a 30-day cure period.

24

---



Table of Contents

The following table summarizes the potential maximum payments that the named executive officers would have been entitled to receive if their employment had been
terminated by us without cause, or by the named executive officers for good reason (or, in the case of Mr. Henry, by reason of his death or disability), on December 31, 2012 prior to any
change in control. The amounts reflected in the table assume (i) that there were no accrued and unpaid expenses, salary, bonus or benefits for any named executive officer (ii) that
bonuses for 2012 were accrued at 100% of target, and (iii) compliance with all conditions relating to the receipt and/or continued receipt of such payments and benefits.

Name

Base Salary

Bonus

Equity
Acceleration

Benefits(1)

TotalDaniel R. Henry

$
803,000







$
15,120

$
818,120George W. Gresham

$
360,500

$
252,350




$
10,080

$
622,930Charles J. Harris

$
360,500

$
252,350




$
10,080

$
622,930Steven F. Coleman(2)

$
309,000

$
154,500




$
10,080

$
473,580Anh Hatzopoulos(2)

$
362,045

$
253,432




$
10,080

$
625,557


(1)Amount
shown represents the Company's contribution to the premium cost for the employee's COBRA coverage for 12 months following the assumed
termination date (18 months with respect to Mr. Henry).(2)Mr. Coleman's
and Ms. Hatzopoulos' employment agreements provides that they are entitled to a pro-rated portion of their actual
bonus, such amount to be paid when the Company pays annual bonuses to its executives generally. The amount shown does not reflect the actual bonuses paid to Mr. Coleman and
Ms. Hatzopoulos in respect of 2012.


Termination by us for cause or by named executive officer for other than good reason, death or disability

We are not obligated to make any cash payment or provide any benefit to our named executive officers if their employment is terminated
by us for cause or by the named executive officer without good reason, other than the payment of accrued and unpaid expenses, salary and benefits and, in the case of Mr. Henry, any accrued and
unpaid bonus for the fiscal year preceding the year of his termination.

Other
than with respect to Mr. Henry, we are not obligated to make any cash payment or provide any benefit to our named executive officers if their employment is terminated due to
their death or disability, other than the payment of accrued and unpaid expenses, salary and benefits.

Each
of our named executive officers (other than Mr. Henry) received a time-based restricted stock award in 2012 (two awards with respect to Ms. Hatzopoulos).
Generally, these awards vest in equal annual installments on the four succeeding anniversaries of their date of grant. The vesting of these awards is subject to acceleration in the event of the death
or disability of the holder. The following table summarizes the value (based on the closing price of our Common Stock on December 31, 2012 ($11.82)) of the restricted stock awards that would
have vested on December 31, 2012 in the event of the death or disability of the executives shown on that date:

Name

Number of
Time-Based
Restricted
Shares Held

Equity
AccelerationDaniel R. Henry





George W. Gresham


75,480

$
892,174Charles J. Harris


75,480

$
892,174Steven F. Coleman


20,339

$
240,407Anh Hatzopoulos


178,559

$
2,110,567


25

---



Table of Contents

Change in Control Payments

Employment Agreements.Upon a change in control, the employment agreements of the named executive officers generally do not provide for
termination
or severance benefits or payments in addition to those described above. However, in the event of termination without cause or termination for good reason in connection with, or within 12 months
following, a change in control, Ms. Hatzopoulos is entitled to receive an amount equal to 70% of her annual base salary, payable in one lump sum, in lieu of the pro-rata bonus that
would be payable for the then-current fiscal year if such termination had not been in connection with a change in control. The severance payments and benefits payable to
Ms. Hatzopoulos upon such a termination are subject to the same covenants described above regarding the severance payments and benefits payable in connection with a termination prior to a
change in control.

Equity Award Agreements.In addition to the foregoing payments pursuant to the named executive officers' employment agreements, certain
of the stock
options held by them as of December 31, 2012 provided for accelerated vesting in connection with a change in control. In addition, Mr. Henry and Ms. Hatzopoulos held
performance-based options that provided that the vesting of the options was subject to acceleration in connection with a change of control that met or exceeded certain valuation hurdles. The equity
incentive awards held by our named executive officers as of December 31, 2012 provide for a number of variations with regard to the acceleration of vesting, all as set forth
below:



Time-based stock option awardsprovide for two variations of acceleration upon a change in
control:



26

---



Table of Contents

Performance-based option awardsprovide for two variations of acceleration upon a change in control:



Time-based restricted stock awardsprovide for accelerated vesting upon a change in control if (A) the award is not
assumed by the acquiring entity or the holder does not receive new options from such entity in connection with the change in control or (B) the award is assumed or substituted by the acquiring
entity and the named executive officer is terminated other than for cause or resigns for good reason within 12 months following the change in control. The vesting of time-based
restricted stock awards is subject to acceleration in the event of the death or disability of the holder of the award. Each of Messrs. Gresham (75,480 shares), Harris (75,480 shares) and
Coleman (20,339 shares) and Ms. Hatzopoulos (178,559 shares) held time-based restricted stock awards at the end of 2012. Absent any acceleration of vesting associated with a change
of control or the holder's death or disability, time-based restricted stock awards generally vest 25% per year on the four succeeding anniversaries of their date of grant.

Performance-based restricted stock awards.Each of the named executive officers (Mr. Henry (150,000 shares); Mr. Gresham
(182,292 shares); Mr. Harris (130,208 shares); Mr. Coleman (78,125 shares); and Ms. Hatzopolous (130,208 shares)) received a performance-based restricted stock award
in 2012. Generally, the vesting of these awards is conditioned upon the Company's 2015 net income equaling or exceeding certain specified targets and the holder continuing to provide services through
the applicable vesting date. The vesting of the awards is subject to acceleration if there is a change of control and (A) the award is not assumed by the acquiring entity or the holder does not
receive new options from such entity in connection with the change in control or (B) the award is assumed or substituted by the acquiring entity and the named executive officer is terminated
other than for cause, disability or death or resigns for good reason within 12 months following the change in control. When evaluating the Company's performance against the adjusted net income
targets applicable to these awards, the Compensation Committee has the discretion to reduce, but not increase, the amount of the award that would otherwise vest pursuant to the application of the
formula.

The
change in control vesting conditions and acceleration provided above are subject, in each case, to the continued service of the named executive officer holding the award through the
applicable vesting date. In addition, the awards are subject to the same covenants described above applicable to

27

---



Table of Contents

severance
payments and benefits upon termination by us other than for cause or termination for good reason. The change in control and market valuation vesting conditions associated with our
performance-based options that are tied to our equity value as of a certain date are subject to adjustment if we undertake certain strategic transactions.

A
"change in control" occurs, under the management employment agreements and, unless otherwise noted below, under the stock option and restricted stock agreements, on the earlier
of:



The
following table summarizes the potential maximum payments that the named executive officers would have been entitled to receive if their employment had been terminated by us without
cause, or by the named executive officers for good reason, on December 31, 2012, following the consummation of a change in control. The amounts reflected in the table assume (i) that
there were no accrued and unpaid expenses, salary, bonus or benefits for any named executive officer, (ii) that each named executive officer was terminated without cause following a change in
control which valued our equity at $901 million (using an assumed value of $11.82 per share, the closing price of our common stock as of December 31, 2012), (iii) that bonuses for
2012 were to be paid at 100% of target and (iv) compliance with all conditions relating to the receipt and/or continued receipt of such payments and benefits. Acceleration values are based upon
the per assumed value of the shares of our Common Stock underlying outstanding options and restricted stock awards as of December 31, 2012, minus, in the case of options, the exercise price.

Name

Base Salary

Bonus

Equity
Acceleration

Benefits(1)

TotalDaniel R. Henry

$
1,606,000




$
6,818,675

$
15,120

$
8,439,795George W. Gresham

$
360,500

$
252,350

$
4,927,971

$
10,080

$
5,550,901Charles J. Harris

$
360,500

$
252,350

$
5,305,064

$
10,080

$
5,927,994Steven F. Coleman(2)

$
309,000

$
154,500

$
1,769,775

$
10,080

$
2,243,355Anh Hatzopoulos

$
362,045

$
253,432

$
5,759,990

$
10,080

$
6,385,547


(1)Amount
shown represents the Company's contribution to the premium cost for the employee's COBRA coverage for 12 months following the assumed
termination date (18 months with respect to Mr. Henry).(2)Mr. Coleman's
employment agreement provides that he is entitled to a pro-rated portion of his actual bonus, such amount to be paid when
the Company pays annual bonuses to its executives generally. Amount shown does not reflect the actual bonus paid to Mr. Coleman in respect of 2012.


Employee Benefit Plans

Amended and Restated NetSpend Holdings, Inc. 2004 Equity Incentive Plan

Our Amended and Restated NetSpend Holdings, Inc. 2004 Equity Incentive Plan (the "2004 Plan"), was adopted by our Board of
Directors in October 2010.

28

---



Table of Contents

Administration.Our 2004 Plan is administered by the Compensation Committee. As plan administrator, the Compensation Committee has full
authority to
interpret the 2004 Plan and all awards thereunder and adopt, amend and rescind such rules as it deems appropriate for the administration of the 2004 Plan. The Compensation Committee has full authority
under the 2004 Plan to grant awards in its discretion and dictate the terms and conditions of such awards.

Eligibility.All of our employees, consultants and non-employee directors are eligible to be recieve awards under our 2004 Plan. An
employee, consultant or non-employee director who recieves an award is considered a participant under our 2004 Plan.

Number of Shares Available for Issuance.The maximum number of shares of our Common Stock that are authorized for issuance under the
2004 Plan
currently is 29,724,997. The number of shares reserved for issuance under our 2004 Plan is increased at the beginning of each fiscal year, beginning January 1, 2011, by an amount equal to the
lower of: (1) 3% of the total number of issued and outstanding shares of Common Stock immediately prior to such increase, (2) 3,000,000 shares and (3) such lesser amount as
is determined by our Board of Directors. Shares issued under the 2004 Plan may be treasury shares or authorized but unissued shares. As of December 31, 2012, options to purchase an aggregate of
10,945,235 shares of Common Stock and 2,415,604 shares of restricted Common Stock were outstanding under our 2004 Plan. As of December 31, 2012, an aggregate of 5,254,537 shares of our Common
Stock remained available for future awards under the 2004 Plan.

In
the event any award granted under the 2004 Plan is forfeited, any restricted stock is repurchased by the Company or any stock option or stock appreciation right is terminated, expires
or is cancelled without having been fully exercised, the number of shares no longer subject to such award are released and are thereafter available for future awards under the 2004 Plan. In addition,
if a participant uses shares of Common Stock to pay the exercise price of an award or satisfy any tax withholding obligation with respect to an award, only the net number of shares of Common Stock
issued to the participant will be deemed delivered for purposes of determining the maximum number of shares of Common Stock available for delivery under the 2004 Plan.

Upon
the occurrence of a merger, consolidation, recapitalization, reclassification, stock split, stock dividend, combination of shares or the like, the administrator of the 2004 Plan may
ratably adjust the aggregate number and affected class of securities available under the 2004 Plan.

Award Limits.For purposes of awards that are intended to qualify as performance-based compensation under Section 162(m) of the
Code, as
amended (that is, to make the awards fully deductible without regard to the $1,000,000 deduction limit imposed by Section 162(m)), the following limits apply: (1) no participant may be
granted (A) options or stock appreciation rights during any three-year period with respect to more than 5,000,000 shares of Common Stock or (B) restricted stock or
performance units that are denominated in shares of Common Stock in any three-year period with respect to more than 3,000,000 shares of Common Stock; and (2) the maximum dollar
value payable with respect to performance units and/or other stock-based awards that are valued with reference to property other than shares of Common Stock and granted to any participant in any
performance period is $3,000,000 times the number of years in such performance period.

Types of Awards.Currently, the Compensation Committee may grant awards of nonqualified stock options, incentive stock options under
Section 422 of the Code or shares of restricted stock. The Compensation Committee is also permitted to grant stock appreciation rights, or SARs, performance units and other stock-based awards.
With the exception of incentive stock options, the Compensation Committee may grant, from time to time, any of the types of awards under the 2004 Plan to our employees, consultants and
non-employee directors. Incentive stock options may only be granted to our employees.

29

---



Table of Contents

Stock Options.Stock option awards under the 2004 Plan consist of the right to acquire shares of our Common Stock at a fixed price for
a fixed period
of time and generally are subject to a vesting requirement set by the Compensation Committee. A stock option may be in the form of a nonqualified stock option or an incentive stock option under the
2004 Plan. The exercise price of a stock option is set by the Compensation Committee but, with respect to incentive stock options, cannot be less than 100% of the fair market value of the underlying
stock on the date of grant, or, in the case of incentive stock options granted to an employee who owns 10% or more of the total combined voting power of all classes of our stock (a "10% owner"), the
exercise price cannot be less than 110% of the fair market value of the underlying stock on the date of grant. The term of a stock option may not exceed ten years, or, in the case of incentive stock
options granted to a 10% owner, five years. Except in the case of a termination of service in connection with a participant's death or disability or a termination of service for cause, a participant's
vested and exercisable stock options will generally be exercisable for 90 days following a termination of service. Unvested stock options will terminate on a participant's termination of
service, unless otherwise provided for by the Compensation Committee.

Exercise of Stock Options.Stock options may be exercised upon the satisfaction of the applicable vesting requirements or, in the
discretion of the
Compensation Committee, at any time prior to the complete termination of such stock option. The exercise price is due upon the exercise of the option. At the time of any stock option grant, the
Compensation Committee must specify that the exercise price may be paid in one or more of the following forms (i) in cash or by check, (ii) in shares of our Common Stock previously
acquired by the participant based on the fair market value as of the exercise date or (iii) by a cashless exercise program authorized by the Compensation Committee, which may include a
broker-assisted cashless exercise program.

Stock Appreciation Rights.Stock appreciation rights (SARs) under the 2004 Plan entitle the participant to receive an amount equal to
the excess of
the fair market value of our Common Stock over a fixed price during a fixed period of time. This amount may paid in cash, Common Stock or a combination thereof as determined by the Compensation
Committee. The SAR may be in the form of a freestanding right or a tandem right. A freestanding SAR can be granted at any time, and exercised in any form determined by the Compensation Committee, but
the right is non-transferable except by will or the laws of descent and the period of exercise must expire ten years after the grant date. A tandem SAR must be issued along with stock
options and exercised at the same time, for an amount equal to the excess of the fair market value of Common Stock at the time of exercise over the exercise price of the related stock option. The
right is transferable only to the extent the related stock option is transferable. To date, we have not issued any SARs.

Restricted Stock.Restricted stock awards under the 2004 Plan are awards of shares of our Common Stock that are subject to vesting,
transferability
and repurchase conditions, all as determined by the Compensation Committee. The conditions for vesting may include, among other things, continued service or achievement of applicable performance
goals. Restricted stock granted under the 2004 Plan may not be sold, pledged or otherwise transferred until the applicable vesting conditions have been satisfied. We have the perpetual right, but not
the obligation, to repurchase any unvested restricted stock awarded under the 2004 Plan after the termination of a participant's service to us. The repurchase price for unvested restricted stock will
be the price paid by the participant for such shares of restricted stock.

Performance Units.Performance Units under the 2004 Plan entitle the participant to receive an amount in cash or Common Stock following
the
satisfaction of any conditions established by the Compensation Committee. The Compensation Committee has complete discretion to determine the eligibility of participants, time and conditions of the
award, the number of participation units to be awarded, the duration of any award cycle, the conversion rate between performance units and Common Stock and the cash value of each performance unit.
Performance units may be in the form of qualified

30

---



Table of Contents

performance-based
awards in which the conditions to the award consist of meeting performance goals. Continued employment may also serve as a condition to the award. Forfeiture occurs if employment
ends within an award cycle, subject to waiver by the Compensation Committee. A participant may elect at the time of an award and in certain other circumstances to defer receipt of cash or Common
Stock, subject to Compensation Committee approval. Each award of a performance unit must be confirmed by, and be subject to, the terms of an award agreement. To date, we have not made any awards of
performance units.

Other Stock-Based Awards.Other stock-based awards are awards of Common Stock and other awards that are valued in whole or in part by
reference to,
or are otherwise based upon, the value of our Common Stock. Other stock-based awards may include dividend equivalents and convertible debentures, and may be granted either alone or in conjunction with
other awards granted under the 2004 Plan. Other stock-based awards must be confirmed by, and be subject to, the terms of an award agreement.

Performance Conditions.Our Compensation Committee may condition the vesting or payment of awards that are intended to qualify for the
performance-based exemption under Code Section 162(m) on the attainment of specified levels of one or more of any of the following measures: (1) revenue, (2) gross margin,
(3) operating expense excluding depreciation and amortization and equity expense as a percentage of revenue, (4) earnings before interest and taxes, (5) earnings before interest,
taxes, depreciation and amortization, (6) pre-tax income, (7) net income from continuing operations, (8) earnings per share from continuing operations, (9) cash
earnings per share from continuing operations, (10) return on assets, (11) return on equity, (12) return on invested capital, (13) leverage ratio, (14) fixed charge
ratio, (15) new product introduction milestones, (16) trading price per share, (17) operating margin, (18) gross margin, (19) cash flow, (20) operating
expense, excluding depreciation and amortization and equity expense and (21) market share.

Change in Control.The Compensation Committee has the authority under the 2004 Plan to modify the acceleration of any award or make
such adjustments
and/or settlements it deems appropriate and consistent with such plan's purposes. A change in control occurs under the 2004 Plan upon the first to occur of: (i) the consummation of a merger,
reorganization, consolidation or sale or other transfer of all or substantially all of our assets or of all or substantially all of the combined voting power of our then-outstanding voting
securities, excluding, however, transactions where a majority of the owners of us or any new entity following such transaction consist of all or substantially all of our owners prior to such
transaction and (ii) the approval by the holders of a majority of our outstanding voting securities of our liquidation or dissolution.

Unless
otherwise provided in a participant's stock option agreement, upon a change in control, 25% of a participant's option award is accelerated and vested, subject to the continued
employment or service of the participant through the date of the change in control. If not terminated in connection with the change in control, the remainder of the participant's stock option award
continues to vest in accordance with its original vesting schedule. The stock option acceleration provisions of the 2004 Plan are only applicable to stock options which vest based solely on a
participant's continued employment or service with us (i.e., excludes performance-based options). Unless otherwise provided in a participant's stock option agreement, all unvested and/or
unexercised stock options not assumed or substituted in connection with a change in control terminate and are no longer exercisable. Some of our senior employees have option agreements that provide
that the vesting of their options is accelerated if those options are not assumed or replaced in connection with a change in control. The vesting of these options or any replacement options is also
subject to acceleration if the employment of the holder is terminated without cause or by the holder for good reason within one year of the change in control. For a discussion of the change in control
provisions under our named executive officer's stock option

31

---



Table of Contents

and
restricted stock agreements, please see "Employment Agreements, Severance Benefits and Change in Control Provisions" above.

Amendment and Discontinuance; Term.Subject to certain exceptions, our Board of Directors may amend, modify or terminate our 2004 Plan
at any time,
with or without prior notice to or consent of any person. Our stockholders must approve any amendment that would require the approval of stockholders under applicable law or in order to comply with
the regulations promulgated by the SEC under Section 16(b) of the Exchange Act, Section 422 of the Code or the regulations promulgated thereunder and the rules of NASDAQ. Further,
subject to certain exceptions, any amendment that would adversely affect a participant's rights to an outstanding award cannot be made without such participant's consent. Unless terminated earlier by
our Board of Directors in its sole discretion, our 2004 Plan will expire on September 22, 2020.

401(k) Plan

Our 401(k) Plan is a deferred savings retirement plan intended to qualify for favorable tax treatment under Section 401(a) of
the Code. All of our employees are generally eligible to participate in the 401(k) Plan subject to certain eligibility requirements, including requirements relating to age and length of service. Under
the 401(k) Plan, each employee may make pre-tax contributions of up to 100% of their eligible earnings up to the current statutorily prescribed annual limit on pre-tax
contributions under the Code. Employees who are 50 years of age or older may contribute additional amounts based on the statutory limits for catch-up contributions. We also make
safe-harbor matching contributions equal to 100% of the first 3% of the eligible earnings that an employee contributes to the 401(k) Plan and 50% of the next 2% of the eligible earnings
that an employee contributes. In addition, we have the ability to make certain other discretionary contributions to certain eligible employees under the 401(k) Plan, subject to established
limits and a vesting schedule. Pre-tax contributions by employees and any employer contributions that we make to the 401(k) Plan and the income earned on those contributions are generally
not taxable to employees until withdrawn. Employer contributions that we make to the 401(k) Plan are generally deductible when made. Employee contributions are held in trust as required by law. An
employee's interest in his or her pre-tax deferrals, including, with the exception of certain discretionary contributions, any matching contributions made by us, is 100% vested when
contributed. An employee's interest in discretionary contributions generally vests over a three-year period. For the years ended December 31, 2010, 2011 and 2012, the Company
matched employee contributions under the 401(k) Plan in the amounts of approximately $0.8 million, $0.9 million and $0.9 million, respectively. No discretionary contributions were
made during 2010, 2011 or 2012.

Deferred Compensation Plan

We adopted our Deferred Compensation Plan in 2009 to attract and retain key employees by providing eligible participants with an
opportunity to defer the receipt of a portion of their compensation. The Deferred Compensation Plan is administered under the supervision of the Compensation Committee. Eligible participants may defer
portions of their base salary, bonus, commissions and other cash and equity-based compensation approved by the Compensation Committee. All amounts deferred by a participant are 100% vested at all
times. We do not match any contributions made by participants to the Deferred Compensation Plan, but we do have the ability to make discretionary contributions to the Deferred Compensation Plan which
may be credited to any participant and which vest in accordance with a vesting schedule established by the Compensation Committee. Participants are entitled to receive the vested portions of their
deferred compensation and any earnings thereon, if any, upon certain events set forth in the plan. Management determines which investment options will be available under the plan, one of which may be
an investment in our stock, and the participant has the ability to allocate portions of their deferrals in accordance with the procedures outlined in the plan and subject to the plan's limitations.
The Deferred Compensation Plan

32

---



Table of Contents

is
not intended to meet the qualification requirements of Code Section 401(a), but is intended to meet the requirements of Code Section 409A. The plan is unfunded for federal tax
purposes and is intended to be an unfunded arrangement for eligible employees who are part of a select group of management or highly compensated employees within the meaning of Sections 201(2),
301(a)(3) and 401(a)(1) of ERISA. Although we did not make any discretionary contributions, Mr. Henry participated in the Company's Deferred Compensation Plan in 2012.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth certain information with respect to outstanding equity awards at December 31, 2012 with respect
to the named executive officers. The vesting of the awards shown in conditioned upon the holder continuing to provide services to the Company or one of its affiliates through the applicable vesting
date. The vesting of the awards is subject to acceleration in the event of a change in control of the Company as described in "Severance Benefits and Change in Control Provisions" above (the
acceleration of the vesting of the performance awards held by Mr. Henry and Ms. Hatzopoulos requires that certain equity valuation hurdles be achieved in connection with the change in
control transaction).

Name

Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable

Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable

Equity
Incentive
Plan
Awards;
Number of
Securities
Underlying
Unexercised
Unearned
Options(#)

Option
Exercise
Price($)

Option
Expiration
Date

Number of
Shares or
Units of
Stock That
Have Not
Vested (#)

Market
Value of
Shares of
Units of
Stock That
Have Not
Vested ($)

Equity
Incentive Plan
Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested (#)(1)

Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units of
Other
Rights That
Have Not
Vested ($)Daniel R. Henry(2)


1,002,293







$
3.53


03/10/2018








150,000

$
1,773,0001,217,292


608,646


1,217,293

$
3.53


03/10/2018George W. Gresham


167,500


167,500
(3)



$
3.78


05/07/2020


75,480
(4)
$
892,174


182,292

$
2,154,691165,000







$
3.78


05/07/202075,000


75,000
(5)



$
11.00


10/18/202050,000


150,000
(6)



$
14.80


02/16/2021


154,041
(7)



$
8.75


02/09/2022Charles J. Harris


350,000







$
3.78


07/01/2020


278,605
(8)
$
3,293,111


130,208

$
1,539,05950,000


150,000
(6)



$
14.80


02/16/2021


154,041
(7)



$
8.75


02/09/2022Steven F. Coleman


50,000


150,000
(9)



$
8.63


06/20/2021


20,339
(10)
$
240,407


78,125

$
923,438


41,508
(11)



$
8.75


02/09/2022Anh Hatzopoulos








200,000
(12)
$
3.45


05/08/2018


178,559
(13)
$
2,110,567


130,208

$
1,539,059


25,000
(14)



$
3.47


02/05/2019


150,750
(15)



$
3.78


04/20/20207,500


22,500
(16)



$
14.80


02/16/2021


27,672
(17)



$
8.80


02/10/2022


(1)The
vesting of the shares shown is conditioned on the Company's adjusted net income in 2015 equaling or exceeding certain specified targets and the holder
remaining in the employ of the Company through the applicable vesting date.(2)The
unvested options are earned on the basis of a performance-based vesting condition. 40% of these conditions have been achieved (resulting in the vesting
of 1,217,292 of the options) and the conditions related to an additional 40% of the option will be achieved in 10% increments if our equity is valued, in a change of control transaction or otherwise,
at (1) $1.395 billion, (2) $1.534 billion, (3) $1.674 billion or (4) $1.813 billion and the final 20% (and thus 100% in the aggregate) of the
performance conditions will be achieved if our equity is valued at $2.441 billion. In the event that these valuation levels have not been achieved on or before February 5, 2014, the 20%
of the option associated with the $2.441 billion valuation hurdle will vest on that date.(3)These
options vest in installments of 83,750 shares on May 7 in each of 2013 and 2014.(4)These
shares will vest in installments of 18,870 shares on February 9 in each of 2013, 2014, 2015 and 2016.(5)These
options will vest in installments of 37,500 shares on October 19 in each of 2013 and 2014.(6)These
options will vest in installments of 50,000 shares on February 16 in each of 2013, 2014 and 2015.(7)These
options will vest in installments of 38,513 (38,512 with respect to one tranche) shares on February 9 in each of 2013, 2014, 2015 and 2016.


33

---



Table of Contents

(8)203,125
of these shares will vest in approximately equal installments on July 1 in each of 2013 and 2014. The remaining 75,480 shares will vest in
installments of 18,870 shares on February 9 in each of 2013, 2014, 2015 and 2016.(9)These
options will vest in installments of 50,000 shares on June 20 in each of 2013, 2014 and 2015.(10)These
shares will vest in installments of 5,085 shares (5,084 shares with respect to one tranche) on February 9 in each of 2013, 2014, 2015 and
2016.(11)These
options will vest in installments of 10,377 shares on February 9 in each of 2013, 2014, 2015 and 2016.(12)The
time-based vesting requirement associated with these options has been completed. In addition to the time-based vesting
requirements, the vesting of these options requires that our equity be valued, in a change of control transaction or otherwise, at $1.38 billion or that an adjusted EBITDA hurdle be achieved
($93.5 million for 2012).(13)13,559
of these shares will vest in approximately equal installments on February 10 in each of 2013, 2014, 2015 and 2016. The remaining 165,000
shares will vest on October 29, 2014.(14)These
options will vest on February 5, 2013.(15)These
options will vest in installments of 75,375 shares on March 25 in each of 2013 and 2014.(16)These
options will vest in installments of 7,500 shares on February 16 in each of 2013, 2014 and 2015.(17)These
options will vest in installments of 6,918 shares on February 10 in each of 2013, 2014, 2015 and 2016.


Option Exercises and Stock Vested

The following named executive officers exercised stock options or had restricted stock awards vest during the fiscal year ended
December 31, 2012:

Option Awards

Stock VestedName

Number of
shares of
acquired on
exercise

Value realized
on exercise

Number of
shares
acquired on
vesting

Value
realized on
vesting(1)Charles J. Harris(2)








101,563

$
964,849Anh Hatzopoulos


385,250

$
2,264,606








(1)Value
shown is based on the closing price of our Common Stock ($9.50 per share) on July 1, 2012, the date the awards shown vested.(2)37,020
of the shares that vested were withheld as payment of income taxes payable with respect to the vesting of the shares.


Pension Benefits

We do not have any plan that provides for payments or other benefits at, following, or in connection with, retirement.

34

---





Table of Contents

Non-qualified Deferred Compensation

None of the named executive officers, other than Mr. Henry, participated in a plan that provides for the deferral of
compensation on a basis that is not tax-qualified during 2012. Our Deferred Compensation Plan is described under the heading "Employee Benefit Plans-Deferred Compensation Plan."
Mr. Henry's contributions to our deferred compensation plan during 2012 are summarized below:

Name

Executive
Contributions
in Last FY ($)

Registrant
Contributions
In Last FY ($)

Aggregate
Earnings
in Last
FY ($)

Aggregate
Withdrawals/
Distributions
($)

Aggregate
Balance
at Last
FYE ($)Daniel R. Henry(1)

$
275,115




$
164,211




$
1,353,446


(1)All
of the amounts deferred in 2012 were reported as compensation in the Summary Compensation Table appearing earlier in this proxy statement and amounts
reported in the aggregate balance of Mr. Henry's deferred compensation account were reported in the summary compensation tables prepared for previous years.


Compensation of Directors

During 2012, members of our Board of Directors who are not our employees and are not affiliated with any Oak Investment
Partners-affiliated entity (collectively, "Oak") or any JLL Partners-affiliated entity (collectively, "JLL") received an annual cash retainer of $61,800 and a restricted stock grant
having an implied value of $121,015 (assuming a value of $8.85 per share). Our lead director received a supplemental $15,450 retainer. Additionally, the chairman of the Audit Committee received an
annual retainer of $15,450, the chairman of the Compensation Committee received an annual retainer of $10,300 and the chairman of the Nominating and Corporate Governance Committee received an annual
retainer of $5,150. All cash retainers are paid quarterly on a pro-rata basis. Directors may elect to receive the value of any cash compensation payable in accordance with the foregoing
policy in equity securities. Equity grants are generally made the first meeting of our Board of Directors and are made in the form of shares of restricted stock with a one-year vesting
period (with fees paid in the form of stock using an assumed value of $8.85 per share). Our directors are also reimbursed for their out-of-pocket expenses related to their
service on our Board of Directors.

The
following table sets forth certain information with respect to our non-employee director compensation during the year ended December 31, 2012.

Name

Fees earned
or paid in cash
($)

Stock awards
($)(1)

Total
($)(1)Andrew W. Adams








Ann H. Lamont








Daniel M. Schley(2)




$
209,919

$
209,919Thomas A. McCullough(3)

$
77,250

$
123,356

$
200,606Francisco J. Rodriguez








Alexander R. Castaldi








Stephen A. Vogel(4)




$
189,549

$
189,549


(1)Represents
the aggregate grant date fair value of the awards shown, computed in accordance with FASB ASC Topic 718.


35

---



Table of Contents

(2)Mr. Schley
received a grant of 9,893 shares of restricted stock on February 9, 2012 in lieu of his annual cash retainer and the director fees
receivable for acting as the Company's Lead Director and as chair of the Compensation Committee.(3)Mr. McCullough
serves as the chair of our Audit Committee.(4)Mr. Vogel
received a grant of 7,565 restricted shares on February 9, 2012 in lieu of his annual cash retainer and his fees for serving as the
chair of our Nominating and Corporate Governance Committee.


The
shares of restricted stock granted to our non-affiliated directors generally vest on the first anniversary of their grant date, subject to the recipients continued service on our board
through the vesting date.

Compensation Policies and Practices and Risk Mitigation

The Compensation Committee periodically reviews the Company's compensation policies and practices to ensure that they do not encourage
excessive risk-taking. The Company believes that its compensation policies and practices for all employees, including executive officers, do not create risks that are reasonably likely to
have a material adverse effect on the Company.



We conducted an advisory vote on the compensation paid to our named executive officers at the 2011annual meeting of our stockholders
and 88% of the stockholders voting approved the compensation paid to the named executive officers in 2010. The compensation paid in 2012 varied somewhat in amount and form from that paid in 2010 for
the reasons in this Compensation Discussion and Analysis.

36

---



Table of Contents

REPORT OF THE COMPENSATION COMMITTEE

To the Stockholders of NetSpend Holdings, Inc.:

The
Compensation Committee of the Board of Directors has reviewed and discussed theCompensation Discussion and Analysis, above, with
management. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Annual Report on
Form 10-K/A for the fiscal year ended December 31, 2012.

Submitted
by the Compensation Committee of the Board of Directors

Daniel
M. Schley (Chairman)
Ann H. Lamont
Thomas A. McCullough

37

---





Table of Contents

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth the beneficial ownership of Company common stock as of April 3, 2013 by (i) each of our
directors, (ii) our principal executive officer, principal financial officer, and three other most highly compensated executive officers who were serving as executive officers at
December 31, 2012, (iii) each stockholder known by the Company to be the beneficial owner of more than 5% of Company common stock, and (iv) all of our directors and executive
officers as a group.

The
information in the following table has been presented in accordance with the rules of the SEC. Under SEC rules, beneficial ownership of a class of capital stock includes any shares
of such class as to which a person, directly or indirectly, has or shares voting power or investment power and also any shares as to which a person has the right to acquire such voting or investment
power within 60 days through the exercise of any stock option, warrant or other right. If two or more persons share voting power or investment power with respect to specific securities, each
such person is deemed to be the beneficial owner of such securities. Except as otherwise indicated, the persons named in this table have
sole voting and investment power with respect to all shares of Company common stock shown as beneficially owned by them, subject to community property laws where applicable and to the information
contained in the footnotes to this table. Unless otherwise indicated, the principal address of each of the stockholders below is c/o Corporate Secretary, NetSpend Holdings, Inc., 701 Brazos Street,
Suite 1300, Austin, Texas 78701. The amounts shown assume that the 700,000 shares of Series A Convertible Preferred Stock held by the JLL Funds have been converted into
7,000,000 shares of Company common stock.

Name and Address of Beneficial Owner(1)

Shares
Beneficially
Owned(1)

Percentage
of Class(2)Directors and executive officersDaniel R. Henry(3)


2,601,394


*George W. Gresham(4)


853,964


*Charles J. Harris(5)


1,041,131


*Anh Hatzopoulos(6)


345,377


*Steven F. Coleman(7)


161,383


*Andrew W. Adams(8)


11,219,355


16.0
%Alexander R. Castaldi(9)


21,839,225


31.1
%Ann H. Lamont(10)


11,255,431


16.0
%Thomas A. McCullough


182,174


*Francisco J. Rodriquez(9)


21,839,225


31.1
%Daniel M. Schley


343,110


*Stephen A. Vogel


56,169


*All directors and executive officers as a group (14 persons)(11)


39,065,937


52.7
%Five percent stockholdersJLL Partners(12)


21,839,225


31.1
%Oak Investment Partners(13)


11,219,335


16.0
%12 West Capital Management L.P.(14)


5,177,925


7.4
%


*Less
than 1%.(1)For
the following directors and named executive officers, the shares beneficially owned include the following numbers of shares with respect to which such
persons have the right to acquire beneficial


38

---



Table of Contents

ownership
within 60 days of April 3, 2013 (amounts shown assume that the Merger is not consummated within such 60 day period):


Name

Shares

PercentageDaniel R. Henry


2,219,585


*George W. Gresham


546,010


*Charles J. Harris


488,510


*Anh Hatzopoulos


40,000


*Steven F. Coleman


60,377


*Andrew W. Adams


0


*Alexander R. Castaldi


0


*Ann H. Lamont


0


*Thomas A. McCullough


133,500


*Francisco J. Rodriquez


0


*Daniel M. Schley


133,500


*Stephen A. Vogel


0


*All directors and executive officers as a group (14 persons)


3,898,715


5.3
%


*Less
than 1%.


(2)The
percentage of beneficial ownership as to any person as of a particular date is calculated by dividing the number of shares beneficially owned by such
person, which includes the number of shares as to which such person has the right to acquire voting or investment power within 60 days after such date, by the sum of the number of shares
outstanding as of such date plus the number of shares as to which such person has the right to acquire voting or investment power within 60 days after such date. Consequently, the denominator
for calculating beneficial ownership percentages may be different for each beneficial owner.(3)Includes
an aggregate of 40,500 shares held by minor sons of Mr. Henry who share his home. Mr. Henry disclaims beneficial ownership of
these shares. Also includes 150,000 shares of Restricted Shares that are subject to forfeiture if the holder leaves the employ of the Company prior to the vesting of such shares.(4)Includes
238,902 shares of Restricted Shares that are subject to forfeiture if the holder leaves the employ of the Company prior to the vesting of
such shares.(5)Includes
389,942 shares of Restricted Shares that are subject to forfeiture if the holder leaves the employ of the Company prior to the vesting of
such shares.(6)Includes
305,377 shares of Restricted Shares that are subject to forfeiture if the holder leaves the employ of the Company prior to the vesting of
such shares.(7)Includes
93,379 shares of Restricted Shares that are subject to forfeiture if the holder leaves the employ of the Company prior to the vesting of
such shares.(8)Includes
11,042,089 shares owned by Oak Investment Partners X, L.P. and 177,266 shares owned by Oak X Affiliates Fund, L.P.
Mr. Adams is an officer of Oak Management Corporation, which acts as the investment advisor to each of the Oak Funds and may be deemed to be the beneficial owner of the shares held by these
funds. Mr. Andrews disclaims ownership of the shares held by the Oak Funds.(9)Includes
14,839,225 shares of Common Stock held by JLL Partners Fund IV, L.P. (4,239,677 shares), a Delaware limited partnership, and
JLL Partners Fund V, L.P. (10,599,548 shares), a Delaware limited partnership. Also includes (on an "as-if converted" basis) 199,995 shares of Series A
Convertible Preferred Stock held by JLL Fund IV, L.P. and 500,005 shares of Series A Convertible


39

---



Table of Contents

Preferred
Stock held by JLL Fund V, L.P. Each of Mr. Rodriguez and Mr. Castaldi is an affiliate of the JLL Funds and may be deemed to be the beneficial owner of the shares held by
them. Mr. Rodriguez and Mr. Castaldi disclaim beneficial ownership of the shares held by the JLL Funds. (10)Includes
an aggregate of 11,219,355 shares held by the Oak Funds. Ms. Lamont is a managing member of the Oak Funds and may be deemed to be
the beneficial owner of the shares held by them. Ms. Lamont disclaims beneficial ownership of the shares held by the Oak Funds.(11)Includes
(i) 1,281,272 shares of Restricted Shares that are subject to forfeiture if the holders cease to provide services to the Company
prior to the vesting of such shares, (ii) the shares held by the JLL Funds and Oak Funds, the beneficial ownership of which is disclaimed by their representatives on the Company's Board and
(iii) 40,500 shares held by children of Mr. Henry. Mr. Henry disclaims beneficial ownership of these shares.(12)The
principal address of Oak Investment Partners is 901 Main Avenue, Suite 600, Norwalk, CT 06851. Includes 11,219,355 shares of Common Stock
held by the Oak Funds.(13)The
principal address of the JLL Funds is 450 Lexington Avenue, 31st Floor, New York, NY 10017. Includes 4,239,677 shares of common stock
held by JLL Fund IV, L.P. and 10,599,548 shares of common stock held by JLL Fund V, L.P. Also includes (on an "as-if converted" basis) 199,995 shares of
Series A Convertible Preferred Stock held by JLL Fund IV, L.P. and 500,005 shares of Series A Convertible Preferred Stock held by JLL Fund V, L.P.(14)Based
on a report, dated February 14, 2013, filed by 12 West Capital Management L.P. ("12 West"). 12 West serves as the investment manager to 12
West Capital Fund LP ("12 West Onshore Fund"), and 12 West Capital Offshore LP ("12 West Offshore Fund"), and possesses the sole power to vote and the sole power to direct the disposition of all
securities of the Company held by 12 West Onshore Fund and 12 West Offshore Fund. Joel Ramin, as the sole member of 12 West Capital Management, LLC, the general partner of 12 West, possesses the
voting and dispositive power with respect to all securities beneficially owned by 12 West. The principal address of 12 West is 90 Park Avenue, 41st Floor, New York, NY 10016.


ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

TRANSACTIONS WITH RELATED PERSONS

Transactions with related persons are reviewed, approved or ratified by our Audit Committee, in accordance with our Audit Committee
charter.

Our
code of business conduct and ethics provides that directors, officers, and employees must avoid situations that involve, or could appear to involve, "conflicts of interest" with
regard to the Company's interests. Exceptions may only be made after review of fully disclosed information and approval of specific or general categories by senior management (in the case of
employees) or the Board of Directors (in the case of officers or directors). Any employee, officer or director who becomes aware of a conflict or potential conflict of interest should bring the matter
to the attention of a supervisor or other appropriate personnel.

Each
year we require all our directors, nominees for director and executive officers to complete and sign a questionnaire in connection with the solicitation of proxies for use at our
annual meeting of stockholders. The purpose of the questionnaire is to obtain information, including information regarding transactions with related persons, for inclusion in our Proxy Statement or
Annual Report on Form 10-K to be filed with the SEC.

In
addition, we annually review SEC filings made by beneficial owners of more than five percent of any class of our voting securities to determine whether information relating to
transactions with such

40

---



Table of Contents

persons
needs to be included in our Proxy Statement or Annual Report on Form 10-K to be filed with the SEC.

Based
on these reviews, our Board of Directors has determined that the transactions described below are the only transactions during the fiscal year ended December 31, 2012 with
related persons which would require disclosure under Item 404 of Regulation S-K. All of the transactions set forth below were approved or ratified by a majority of our Board
of Directors or by our Audit Committee.

ACE

The JLL Funds (as hereinafter defined) own approximately 97% of ACE Cash Express, Inc. ("ACE"), the Company's largest distributor.
Pursuant to an existing services agreement with ACE, the Company derives revenues from the cardholders it acquires through ACE and pays a portion of these revenues to ACE as commissions. In addition,
the Company provides ACE with a marketing allowance that it can apply against the expenses it incurs in connection with its efforts to advertise and promote the cards managed by the Company. The
Company paid ACE $47.0 million, $40.5 million and $31.0 million for the years ended December 31, 2012, 2011 and 2010, respectively. Revenues derived from cardholders
acquired through ACE represented more than one-third of the Company's revenues in 2012. As of December 31, 2012 and December 31, 2011, $3.5 million and
$3.2 million, respectively, was payable to ACE.

Pursuant
to the services agreement, ACE pays fees to the Company when cardholders withdraw cash from their cards at ACE stores. Under this arrangement, ACE paid the Company
$5.5 million, $4.8 million and $4.4 million for the years ended December 31, 2012, 2011 and 2010, respectively.

Sutherland

Oak Investment Partners X, LP and Oak X Affiliates Fund LP (collectively "Oak") own in excess of 10% of Sutherland Global
Services, Inc. ("Sutherland"), one of the Company's external customer service providers. Oak beneficially owned more than five percent of the Company's outstanding Common Stock as of
December 31 2012. The Company incurred expenses from transactions with Sutherland of $6.2 million, $8.6 million and $7.4 million, for the years ended December 31,
2012, 2011 and 2010, respectively. As of December 31, 2012 and 2011, $1.0 million and $0.6 million, respectively, was payable to Sutherland.

Vesta

Oak owns in excess of 10% of Vesta Corporation ("Vesta"), which provides reload services to the Company's cardholders. The Company
earned revenues from transactions with Vesta of $0.4 million, $0.6 million and $0.2 million during the years ended December 31, 2012, 2011 and 2010, respectively.
Additionally, the Company incurred expenses from transactions with Vesta of $0.4 million, $0.6 million and $0.2 million during the years ended December 31, 2012, 2011 and
2010, respectively.

Birardi Investments, LLC; Henry CJ1, LLC

Pursuant to his employment agreement, the Company reimburses its CEO for up to $0.5 million of expenses per year related to the
use of private aircraft while traveling on Company business. Birardi ("Birardi") Investments, LLC and Henry CJ1, LLC ("Henry CJ1"), airplane leasing companies owned by the CEO, supply aircraft that is
used for this travel. Birardi was paid less than $0.1 million, $0.1 million and $0.2 million during the years ended December 31, 2012, 2011 and 2010, respectively. Henry
CJ1 was paid $0.3 million and $0.1 million during the years ended December 31, 2012 and 2011, respectively. The Company incurred no such expenses with Henry CJ1 during the year
ended December 31, 2010.

41

---



Table of Contents

ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES

FEES BILLED BY INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Audit Fees.The aggregate Audit Fees billed for the fiscal years 2012 and 2011 for professional services rendered by KPMG LLP,
were $535,000
and $450,000, respectively. Audit Fees consist of the aggregate fees billed for professional services rendered for the audit of the our annual financial statements and review of financial statements
included in our quarterly reports and for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.

Audit-Related Fees.The aggregate Audit-Related Fees billed for each of the fiscal years 2012 and 2011 by KPMG LLP were $87,000.
Audit-Related
Fees consist of the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported
under "Audit Fees".

Tax Fees.There were no fees billed in each of the last two fiscal years for tax services provided by KPMG LLP.

All Other Fees.The aggregate of All Other Fees billed in fiscal years 2012 and 2011 by KPMG LLP were $3,000 and $2,000,
respectively. All
Other Fees consist of the aggregate fees billed for products and services, other than the services reported above.

Pursuant
to the Audit Committee's policy on pre-approval of fees and other compensation paid to the principal independent registered public accounting firm, the Audit
Committee holds an annual committee meeting during which the committee determines the principal matters for which the principal independent registered public accounting firm will be engaged for the
upcoming fiscal year. If any matters should arise during such fiscal year beyond those matters discussed at the annual committee meeting, the Audit Committee holds additional meetings, as necessary,
specifically for the purpose of determining whether to engage the principal independent registered public accounting firm for such matters. Once the Audit Committee has determined to engage the
principal independent registered public accounting firm with respect to any matter, whether such determination is made at an annual meeting of the Audit Committee or at a meeting held specifically for
the purpose of making such determination, our Chief Financial Officer or other authorized financial officer executes the engagement letters of the principal independent registered public accounting
firm prior to the commencement of any services. All fees paid in 2012 were approved in accordance with these procedures. All of the work performed in auditing our financial statements for the last two
fiscal years by the principal independent registered public accounting firm, KPMG LLP, has been performed by their full-time, permanent employees.

PART IV

ITEM 15.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Exhibit
Number

Description of Exhibits24.1

Powers of Attorney (filed as Exhibit 24.1 to NetSpend Holdings, Inc.'s Annual Report on Form 10-K filed on February 22, 2013 and incorporated herein by reference)31.1

Certification by principal executive officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2

Certification by principal financial officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002


42

---





Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Austin, State of Texas on the 19th day of April, 2013.

NETSPEND HOLDINGS, INC.By:

/s/ DANIEL R. HENRY Daniel R. Henry Chief Executive Officer


Pursuant to the requirements of the Securities Act of 1934, as amended, this report has been signed by the following persons in the listed capacities on
April 19, 2013:

Name

Title/s/ DANIEL R. HENRY Daniel R. Henry

Chief Executive Officer and Director (Principal Executive Officer)/s/ GEORGE W. GRESHAM George W. Gresham

Chief Financial Officer (Principal Accounting and Financial Officer)* Andrew Adams

Director* Alexander R. Castaldi

Director* Ann H. Lamont

Director* Thomas McCullough

Director* Francisco Rodriguez

Director* Daniel M. Schley

Director* Stephen A. Vogel

Director*By

/s/ DANIEL R. HENRY Daniel R. Henry Attorney-in-Fact


43

---