Exhibit
10.24


Second Amended and Restated NetSpend Holdings, Inc.


2004 Stock Option and Restricted Stock Plan


 


Notice of Grant


 


	
  Name: 

  	
  Charles Harris

  	
     Address:

  	
   

  



 


You have been granted an
option to purchase Common Stock
of the Company, subject to the terms and conditions of the Stock Option
Agreement attached hereto (the “Stock Option Agreement”) and the Second Amended
and Restated NetSpend Holdings, Inc. 2004 Stock Option and Restricted
Stock Plan (the “Plan”), as follows:


 




	
  Date
  of Grant

  	
  July 1, 2010

  
	
   

  	
   

  
	
  Vesting
  Measurement Date:

  	
  July 1, 2010

  
	
   

  	
   

  
	
  Option
  Price per Share:

  	
  $3.78

  
	
   

  	
   

  
	
  Total
  Number of Shares Granted:

  	
  350,000

  
	
   

  	
   

  
	
  Total
  Option Price:

  	
  $1,323,000

  
	
   

  	
   

  
	
  Type
  of Option:

  	
  o   Incentive
  Stock Option  x   Nonqualified
  Stock Option

  
	
   

  	
   

  
	
  Expiration
  Date:

  	
  July 1, 2020

  






 


Capitalized terms not
defined herein shall have the meanings ascribed to such terms in the Plan or
the Stock Option Agreement.


 


Vesting and Exercise
Schedule:


 


This Option shall become
vested and shall be exercised, upon the earlier to occur of the following dates
only:  (A) a Change in Control of
the Company, subject to your continued employment with the Company or an
Affiliate through the closing date of the Change in Control, or (B) the
second anniversary of the closing of an Initial Public Offering, subject to
your continued employment with the Company or an Affiliate through the second
anniversary of the closing of the Initial Public Offering.  Such earlier date is referred to herein as
the “Vesting Date;” provided that no Vesting Date will occur unless you remain
employed through the earlier of a Change in Control or the second anniversary
of an IPO.  This Option, to the extent
not vested as of the date of your Termination of Service or the Expiration Date
listed above shall be forfeited immediately without any payment therefor.


 


Termination Period:


 


This Option shall be
exercised on the Vesting Date and shall not be exercisable on any other
date.  For clarification, if you do not
remain employed with the Company or an Affiliate through the earlier of the
closing date of a Change in Control or the second anniversary of an IPO, no
Vesting Date will occur and this Option will not be exercised.  For purpose of Section 409A of the Code,
the “payment date” 


 

















 


(assuming this Option vests)
is earlier to occur of (A) a Change in Control of the Company, and (B) the
second anniversary of the closing of an Initial Public Offering.


 


Employee Covenants;
Repurchase Right; Forfeiture


 


In the event you are no
longer employed with the Company or an Affiliate, the Company has the right to
repurchase any shares of stock you acquire pursuant to this Option.  This repurchase right is described Section 5
of the attached Exercise Notice.  In
addition, in the event that you breach the provisions of Section 6 of the
Employment Agreement (regarding your confidentiality, non-competition,
non-solicitation obligations), you will be required to return, or (if not
received) to forfeit, to the Company the economic value of the Option which is
realized or obtained by you.  Please see
Sections 4(d) of the Stock Option Agreement and 6 of the Employment
Agreement for additional details.


 


2

















 


Second Amended and Restated


NetSpend Holdings, Inc.


2004 Stock Option and Restricted Stock Plan


 


Stock Option Agreement


 


This Stock Option Agreement
(this “Agreement”) is made as of the 1st day of July, 2010, between NetSpend
Holdings, Inc., a Delaware corporation (the “Company”), and Charles Harris
(the “Participant”, which term as used herein shall be deemed to include any
successor to the Participant by will or by the laws of descent and
distribution, unless the context shall otherwise require).


 


Pursuant to the Company’s
Second Amended and Restated 2004 Stock Option and Restricted Stock Plan (the “Plan”),
the Company, acting through the Committee, approved the issuance to the
Participant, effective as of the date set forth above, of a stock option to
purchase the number of shares (the “Shares”) of Common Stock, $0.001 par value per share, of the Company (the “Option  Stock”), at the price (the “Option Price”),
each as set forth in the Notice of Grant attached hereto (the “Notice of Grant”),
upon the terms and conditions hereinafter set forth.  Capitalized terms not defined herein shall
have the meanings ascribed to such terms in the Plan or in the Notice of Grant.


 


NOW,
THEREFORE, in consideration of the mutual premises and
undertakings hereinafter set forth, the parties hereto agree as follows:


 


1.              Option; Option Price.


 


On behalf of the Company,
the Committee hereby grants to the Participant an option (the “Option”) to
purchase the number of shares of Option Stock of the Company set forth in the
Notice of Grant, at an exercise price per share equal to the Option Price set
forth in the Notice of Grant, subject to the terms and conditions of this
Agreement and the Plan (which is incorporated by reference herein and which in
all cases shall control in the event of any conflict with the terms,
definitions and provisions of this Agreement). 
A copy of the Plan as in effect on the date hereof has been supplied to
the Participant, and the Participant hereby acknowledges receipt thereof.


 


2.              Term.


 


The term (the “Option Term”)
of the Option shall commence on the Date of Grant and shall expire on the
Expiration Date set forth in the Notice of Grant, unless such Option shall
theretofore have been terminated in accordance with the terms hereof or of the
Plan.


 


3.              Time of Exercise.


 


The Option shall be
exercised on the Vesting Date.


 

















 


4.              Termination of Option; Potential Forfeiture and Clawback.


 


(a)          The unvested
portion of the Option shall automatically terminate and shall become null and
void and be of no further force or effect upon the first to occur of the
following:


 


(i)                                     the expiration
of the Option Term;


 


(ii)                                  the date of the
Participant’s Termination of Service;


 


(iii)                               except to the
extent permitted by Section 7(c) of the Plan or Section 11 of
this Agreement, the date on which the Option or any part thereof or right or
privilege relating thereto is transferred (otherwise than by will or by the
laws of descent and distribution), assigned, pledged, hypothecated, attached or
otherwise disposed of by the Participant; and


 


(iv)                              the date on
which the Participant breaches Section 6 of the Employment Agreement.


 


(b)         Anything
contained herein to the contrary notwithstanding, the Option shall not be
affected by any change of duties or position of the Participant (including a
transfer to or from the Company or any of its Affiliates), so long as the
Participant continues to be an Employee or a Consultant.


 


(c)          In the event of
the Participant’s Termination of Service, the Company shall have the right, but
not the obligation, to repurchase any and all Optioned Shares as set forth in
the Notice (defined in Section 5(a)) or in any stockholders, stock
restriction or similar agreement to which the Participant is a party, as
applicable.


 


(d)         Option/Stock
Forfeiture (Clawback).  In
the event the Participant fails to comply with the provisions of Section 6
of the Employment Agreement prior to, or during the one-year period after the
Participant’s Termination of Service, the exercise, payment or delivery
pursuant to the Option may be rescinded within two years thereafter. In the
event of any such rescission, the Participant shall pay to the Company the
amount of any gain realized or payment received as a result of the rescinded
exercise, payment or delivery, in such manner and on such terms and conditions
as may be required, and the Company shall be entitled to set-off against the amount
of any such gain any amount owed to the Participant by the Company.


 


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5.              Procedure for Exercise.


 


(a)          The Option
shall be automatically exercised on the Vesting Date pursuant to the terms of
this Agreement, and the attached Exercise Notice and Investment Representation
Statement which are being executed concurrently herewith.  Notwithstanding the foregoing, the payment
terms set forth in Section 14 of the Exercise Notice may be modified by
the Participant or the Company by providing at least thirty (30) days’ advance
written notice; provided, that the Company may only modify such payment and
withholding terms as permitted under Section 6 hereof.  For clarification, unless otherwise elected
by the Participant or the Company in accordance with this Agreement, Option
Stock shall be used to satisfy both the exercise price and withholding
requirements (i.e., a cashless exercise).


 


(b)         The Company
shall issue (or cause to be issued) a stock certificate in the name of the
Participant (or such other person exercising the Option in accordance with the
provisions of Section 11) for the Optioned Shares as soon as reasonably
practicable after the exercise date. 
Such stock certificate shall contain the legend set forth in Section 7
of the Exercise Notice attached hereto as Exhibit A.


 


6.              Withholding.


 


The
Committee shall be entitled to require as a condition of delivery of shares of
Option Stock in connection with the exercise of an Option that the Participant
remit or, in appropriate cases, agree to remit when due, an amount sufficient
to satisfy all current or estimated future federal, state and local withholding
tax and employment tax requirements relating thereto.  Certificates shall not be delivered to the
Participant, and the Option shall be forfeited, unless the Participant has made
arrangements satisfactory to the Committee to satisfy tax-withholding
obligations.  Unless otherwise determined
by the Board (which determination shall only be made for purposes of complying
with applicable law or stock exchange requirements, or as necessary to preserve
the intended accounting treatment of this Option), the minimum statutorily
required withholding obligations shall be settled with shares of Common Stock
owned by the Participant and/or Option Stock that gives rise to the withholding
requirement.  In the event the Committee
determines that the Participant will not be permitted to use Optioned Stock to
settle his withholding obligations, the Company shall use its commercially
reasonable best efforts to assist the Participant in structuring another manner
in which the Participant can satisfy his withholding obligations without being
required to submit a substantial lump-sum cash payment from his personal
savings.


 


7.              No Rights as a Stockholder.


 


The Participant shall not
have any privileges of a stockholder of the Company with respect to any
Optioned Shares until the date of issuance of a stock certificate pursuant to Section 5(c).


 


8.              Adjustments.


 


(a)          Changes in
Capital Structure.  Subject to Section 8(b),
if the Option Stock is changed by reason of a change in corporate
capitalization, such as a stock split, reverse stock split, stock dividend or
recapitalization, or converted into or exchanged for other securities as a 


 


3

















 


result
of a merger, consolidation or reorganization, the Committee shall make such
adjustments as shall be equitable and appropriate in order to make any
outstanding Option, as nearly as may be practicable, equivalent to the portion
of the Option outstanding as of the effective date of such transaction.  Anything contained in the Plan or in this
Agreement to the contrary notwithstanding, in the case of ISOs, no adjustment
under this Section 8(a) shall be appropriate if such adjustment (i) would
constitute a modification, extension or renewal of such ISOs within the meaning
of Sections 422 and 424 of the Code, and the regulations promulgated by the
Treasury Department thereunder, or (ii) would, under Section 422 of
the Code and the regulations promulgated by the Treasury Department thereunder,
be considered the adoption of a new plan requiring stockholder approval.


 


(b)         Change in
Control.  Notwithstanding any provision
of the Plan to the contrary, in the event of a Change in Control, the Committee
may make such adjustments and/or settlements of the outstanding portion of the
Option as it deems appropriate and consistent with the Plan’s purposes,
including, without limitation, canceling the Option if the Option Price exceeds
the price paid for a share of Option Stock in connection with a Change in
Control; provided, however, that in the event of any
inconsistency between the provisions of this subsection (b) and any
provision in the Notice of Grant regarding vesting upon a Change in Control,
the provisions in the Notice of Grant shall govern.


 


(c)          Any adjustments
referred to in Section 8(a) or (b) shall be made by the
Committee in its sole discretion and shall be conclusive and binding on the
Participant.


 


9.              Additional Provisions Related to Exercise.


 


(a)          The Option
shall be exercisable only on such date and for such number of shares of Option
Stock as are set forth in this Agreement.


 


(b)         Upon the
exercise of the Option at a time when there is not in effect a registration
statement under the Securities Act of 1933, as amended (the “Securities Act”),
relating to the shares of Option Stock issuable upon exercise of the Option,
the Committee in its discretion may, as a condition to the exercise of the
Option, require the Participant (i) to make the representations set forth
in Exhibit B hereto and (ii) to make such other representations and
warranties as are deemed appropriate by counsel to the Company.  No shares of Option Stock shall be issued and
delivered upon the exercise of the Option unless and until the Company and/or
the Participant shall have complied with all applicable Federal or state
registration, listing and/or qualification requirements and all other
requirements of law or of any regulatory agencies having jurisdiction.


 


10.       No Evidence
of Employment or Consulting Relationship.


 


Nothing
contained in the Plan or in this Agreement shall confer upon the Participant
any right with respect to the continuation of his or her employment by, or
service relationship with, the Company or any Affiliate or interfere in any way
with the right of the Company or any Affiliate (subject to the terms of any
separate agreement to the contrary), at any time to terminate such employment
or service relationship or to increase or decrease the compensation of the
Participant from the rate in existence at the time of the grant of the
Option.  For the avoidance of 


 


4

















 


doubt, this Option shall not
guarantee employment for the length of all, or any portion of, the vesting
schedule set forth in the Notice of Grant.


 


11.       Restriction
on Transfer.


 


The
Option may not be transferred, pledged, assigned, hypothecated or otherwise
disposed of in any way by the Participant, except by will or by the laws of
descent and distribution, and may be exercised during the lifetime of the
Participant only by the Participant.  The
Option shall not be subject to execution, attachment or similar process.  Any attempted assignment, transfer, pledge,
hypothecation or other disposition of the Option contrary to the provisions
hereof, and the levy of any execution, attachment or similar process upon the
Option, shall be null and void and without effect.


 


12.       Lock-Up
Period.


 


(a)          In the event that the Company files a registration statement under the Securities Act with respect to an
underwritten public offering of any Option Stock, the Participant shall be
prohibited from effecting any public sale or distribution of any Option Stock
(other than as part of such underwritten public offering), including, but not
limited to, pursuant to Rule 144 or Rule 144A under the Securities
Act, during the “lock-up” period established by the Committee, which lock-up
period shall be no shorter than that required by the underwriters of such
public offering.


 


(b)         Without limiting the foregoing clause (a), if (1) during
the last 17 days of the “lock up” period the Company issues an earnings release
or material news or a material event relating to the Company occurs; or (2) prior
to the expiration of the “lock up” period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of
the “lock up” period, the restrictions imposed by this Section 12 shall
continue to apply until no earlier than the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of the
material news or material event (or no earlier than the 16th day, if the Company does not issue the
earnings release).


 


13.       Code Section 409A.  Notwithstanding anything herein
to the contrary, this Option is intended to be interpreted and operated so that
the payments and benefits set forth herein either shall either be exempt from
the requirements of Code Section 409A or shall comply with the
requirements of such provision; provided, however, that in no event shall the
Company be liable to the Participant for or with respect to any taxes,
penalties or interest which may be imposed upon the Participant pursuant to
Code Section 409A.  Without limiting
the foregoing, because all payments (whether in the form of shares of Common
Stock or otherwise) under this Option shall be made on the first date on which
a “substantial risk of forfeiture” (within the meaning of Treasury Regulation Section 1.409A-1(d))
no longer exists, this Option is intended to qualify as a “short-term deferral”
within the meaning of Treasury Regulation Section 1.409A-1(b)(4).  The Participant hereby acknowledges and
agrees that no representations have been made to the Participant relating to
the tax treatment of any payment pursuant to this Agreement under Code Section 409A
and the corresponding provisions of any applicable state income tax laws.


 


5

















 


14.       Notices.


 


All
notices or other communications which are required or permitted hereunder shall
be in writing and sufficient if (i) personally delivered, (ii) sent
by nationally-recognized overnight courier or (iii) sent by registered or
certified mail, postage prepaid, addressed as follows:


 


if to the Participant, to
the address set forth on the Notice of Grant; and


 


if to the Company, to:


 


NetSpend Holdings, Inc.


c/o Netspend Corporation


Austin Centre


701 Brazos Street, 12th Floor


Austin, TX  78701


Attention:  Chief Financial Officer


 


or to such other address as
the party to whom notice is to be given may have furnished to each other party
in writing in accordance herewith.  Any
such communication shall be deemed to have been given (x) when delivered,
if personally delivered, (y) on the first Business Day (as hereinafter
defined) after dispatch, if sent by nationally-recognized overnight courier and
(z) on the third Business Day following the date on which the piece of
mail containing such communication is posted, if sent by mail.  As used herein, “Business Day” means a day
that is not a Saturday, Sunday or a day on which banking institutions in the
city to which the notice or communication is to be sent are not required to be
open.


 


15.       Transfer
Restrictions; Mandatory Participation in Sale of the Company.


 


(a)          Prior to an
Initial Public Offering, the Participant agrees that he or she will not
Transfer all or any portion of the Optioned Shares, except in connection with,
and strictly in compliance with applicable securities laws and with this Section 15.


 


(b)         Sale of the
Company and/or Its Subsidiaries.


 


(i)                                     Conditions.  So long as Oak continues to hold at least a
majority of the Common Stock (on an as converted basis) held by it on the
effective date of the Plan, if Oak determines to pursue the sale of the
business of the Company and/or its Subsidiaries to a third party that is not (i) an
Affiliate of Oak or (ii) a Person in which Oak or an Affiliate of Oak
holds a direct or indirect equity interest (other than a ownership interest of
less than 5% of the outstanding capital stock of a public company) or any other
material interest (as a creditor or otherwise) (a “Third Party Purchaser”)
in a bona fide arms’ length transaction (whether by way of a merger,
consolidation, sale of all or substantially all of its assets, sale of
outstanding capital stock or otherwise) (an “Approved Sale”), then,
subject to the provisions of subsection (c) of this Section 15:


 


(A)  the Participant shall, subject to the conditions set forth in
subsection (c), consent to, vote for, and raise no objections against, and
waive dissenters and appraisal rights (if any) with respect to, the Approved 


 


6

















 


Sale,
and


 


(B)  if the Approved Sale is structured as a sale of stock, the
Participant will agree to sell and will be permitted to sell all of the
Optioned Shares on the terms and conditions approved by Oak.


 


(C)  if the Approved Sale includes the sale, contribution,
exchange, redemption, cancellation or other disposition of options, the
Participant will sell, contribute, exchange, redeem, cancel or otherwise
dispose of the Option on the terms and conditions approved by the Oak.


 


The
Participant will take all reasonably necessary and desirable actions to
consummate such Approved Sale, including, without limitation, the execution of
all agreements and other instruments and such other actions reasonably
necessary to effectuate the allocation and distribution of the aggregate
consideration upon the Approved Sale as set forth in subsection (c) below.


 


(c)          Approved Sale
Obligations.  The
obligations of the Participant with respect to an Approved Sale are subject to
the satisfaction of the conditions that:


 


(i)                                     the proceeds of
the Approved Sale are applied in accordance with the Company’s Certificate of
Incorporation as in effect immediately prior to such Approved Sale;


 


(ii)                                  each holder of
shares of capital stock of the Company shall receive the same proportion of the
aggregate consideration from such Approved Sale that such holder would have
received if such aggregate consideration had been distributed by the Company in
complete liquidation pursuant to the rights and preferences set forth in the
Company’s Certificate of Incorporation as in effect immediately prior to such
Approved Sale and no holder of any shares of capital stock of the Company shall
receive any consideration of any kind from the purchaser or any of its
Affiliates other than such proportionate consideration (except in respect of
such holder’s employment with the Company and other matters personal to such
holder);


 


(iii)                               upon the
consummation of the Approved Sale, all of the holders of each class of Option
Stock will receive the same form and amount of consideration per share of each
such class of Option Stock;


 


(iv)                              if any holder
of a particular class of Option Stock is given an option as to the form and
amount of consideration to be received, all holders of the same class or series
of stock will be given the same option;


 


(v)                                 the Participant
shall not be required to make any representations or warranties other than
representations and warranties about the Company and its business, operations,
liabilities and the like that are required by all Stockholders, in which case,
the indemnification obligations of the Participant with respect to any such
representations and warranties provided for in this clause (v) shall be
limited to the Participant’s pro rata portion thereof (based upon the share
ownership of all Stockholders).


 


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(d)         Prohibited
Transfers.  If any
purported Transfer is made or attempted contrary to the provisions of this
Agreement, such purported Transfer shall be void ab  initio; the
Company, and the Stockholders shall have, in addition to any other legal or
equitable remedies which they may have, the right to enforce the provisions of
this Agreement by actions for specific performance (to the extent permitted by
law); and the Company shall have the right to refuse to recognize any
Transferee as one of its stockholders for any purpose.  Without limitation to the foregoing, the
Participant (and any Permitted Transferees) further agree that the provisions
of Section 20 shall apply in the event of any violation or threatened violation
of this Agreement.


 


(e)          Definitions.


 


(i)                                     “Initial
Public Offering” or “IPO” means the first firm commitment
underwritten public offering for shares of Option Stock pursuant to an
effective registration statement under the Securities Act with aggregate gross
proceeds of at least $25,000,000.


 


(ii)                                  “Oak”
means Oak Investment Partners X, Limited Partnership and/or Oak X Affiliates
Fund, L.P.


 


(iii)                               “Permitted
Transfer” shall mean any Transfer permitted under this Agreement or the
Plan.


 


(iv)                              “Permitted
Transferee” shall mean any Transferee of a Participant permitted under this
Agreement or the Plan.


 


(v)                                 “Stockholder”
and “Stockholders” shall have the meaning set forth in the Preamble.


 


(vi)                              “Transfer”
means any direct or indirect transfer, donation, sale, assignment, pledge,
hypothecation, grant of a security interest in or other disposal of all or any
portion of a Security or of any rights thereunder.  “Transferred” means the accomplishment
of a Transfer, and “Transferee” means the recipient of a Transfer.


 


16.       No Waiver.


 


No
waiver of any breach or condition of this Agreement shall be deemed to be a
waiver of any other or subsequent breach or condition, whether of like or
different nature.


 


17.       Participant
Undertaking.


 


The
Participant hereby agrees to take whatever additional actions and execute
whatever additional documents the Company may in its reasonable judgment deem
necessary or advisable in order to carry out or effect one or more of the
obligations or restrictions imposed on the Participant pursuant to the express
provisions of this Agreement.


 


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18.       Successors
and Assigns.


 


Except
as otherwise provided herein, this Agreement shall bind and inure to the
benefit of and be enforceable by the Participant and the Company and their
respective successors, assigns, heirs, representatives and estates, as the case
may be (including subsequent holders of Optioned Shares); provided, however,
that the rights and obligations of the Participant under this Agreement shall
not be assignable except in connection with a Permitted Transfer of Optioned
Shares hereunder (so long as the transferee agrees in writing in advance to
become bound by the terms and conditions hereof).


 


19.       Modification
of Rights.


 


The
rights of the Participant are subject to modification and termination in
certain events as provided in this Agreement and the Plan.


 


20.       Governing
Law.


 


(a)          This Agreement
shall be deemed to be a contract made under, and shall be construed in
accordance with, the laws of the State of Delaware, without giving effect to
conflict of laws principles thereof.


 


(b)         Each of the
parties hereto hereby irrevocably and unconditionally submits, for himself or
herself and his or her property, to the nonexclusive jurisdiction of any
Delaware State court or any federal court of the United States of America
sitting in the State of Delaware, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Agreement or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such Delaware
State court or, to the extent permitted by law, in any such federal court.  Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.


 


(c)          Each of the
parties hereto irrevocably and unconditionally waives, to the fullest extent
that he or she may legally and effectively do so, any objection that he or she
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to the Agreement in any Delaware state or
federal court sitting in the State of Delaware. 
Each of the parties hereto irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.


 


21.       Counterparts.


 


This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and
the same instrument.


 


22.       Entire
Agreement.


 


This
Agreement (including the Notice of Grant), the Plan, the Exercise Notice and
the Investment Representation Statement, constitute the entire agreement
between the parties with respect to the subject matter hereof, and supersede
all previously written or oral negotiations, commitments, representations and
agreements with respect thereto.


 


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23.       WAIVER OF
JURY TRIAL. 
NO PARTY TO THIS AGREEMENT OR ANY ASSIGNEE, SUCCESSOR, HEIR OR PERSONAL
REPRESENTATIVE OF A PARTY SHALL SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING,
COUNTERCLAIM OR ANY OTHER LITIGATION PROCEDURE BASED UPON OR ARISING OUT OF
THIS AGREEMENT.  NO PARTY WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION, IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH
ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT OR HAS NOT BEEN WAIVED.  THE PROVISIONS OF THIS SECTION HAVE BEEN
FULLY DISCUSSED BY THE PARTIES HERETO, AND THESE PROVISIONS SHALL BE SUBJECT TO
NO EXCEPTIONS.  NEITHER PARTY HAS IN ANY
WAY AGREED WITH OR REPRESENTED TO THE OTHER PARTY THAT THE PROVISIONS OF THIS SECTION WILL
NOT BE FULLY ENFORCED IN ALL INSTANCES.


 


IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the date first written above.


 


	
   

  	
  NetSpend
  Holdings, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel R. Henry

  
	
   

  	
   

  	
  Name:
  Daniel R. Henry

  
	
   

  	
   

  	
  Title:
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Participant

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Charles Harris

  
	
   

  	
   

  	
  Name:   Charles
  Harris

  



 


Acknowledgment
and Agreement of Spouse


 


The undersigned spouse of
the Participant acknowledges that he/she has read this agreement and agrees to be
bound thereby to the extent that the Participant has executed such document.


 


 


	
   

  	
   

  
	
  Name:

  	
   

  



 


Declaration
of Unmarried Status


 


I,
                                        ,
the undersigned hereby declare that I am not married as of the date hereof.


 


 


	
   

  	
   

  
	
  Name:

  	
   

  



 


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EXHIBIT A


 


Second Amended and Restated NetSpend Holdings, Inc.


2004 Stock Option and Restricted Stock Plan


 


Exercise Notice


 


NetSpend Holdings, Inc.


c/o Netspend Corporation


Austin Centre


701 Brazos Street, 12th Floor


Austin, TX  78701


Attention:  Chief Financial Officer


 


	
  Date of
  Notice:  

  	
   

  	
   

  



 


1.               Exercise
of Option.  Effective
as of the Vesting Date (which may or may not occur), the undersigned (the “Participant”)
hereby elects to exercise the Participant’s option to purchase 350,000 shares
of the Common Stock (the “Shares”)
of NetSpend Holdings, Inc. (the “Company”) under and pursuant to the
Company’s Second Amended and Restated 2004 Stock Option and Restricted Stock
Plan (the “Plan”) and the Stock Option Agreement, dated July 1, 2010 (the “Stock
Option Agreement”).


 


2.               Representations of the Participant.  The Participant acknowledges that the
Participant has received, read and understood the Plan and the Stock Option
Agreement and the Investment Representation Statement and agrees to abide by
and be bound by their terms and conditions.


 


3.               Rights as Stockholder.  Until the stock certificate evidencing such
Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder shall exist with
respect to the Shares, notwithstanding the exercise of the Option.  The Company shall issue (or cause to be
issued) such stock certificate as soon as practicable after the Option is
exercised.  No adjustment will be made
for a dividend or other right for which the record date is prior to the date
the stock certificate is issued, except as provided in Section 10 of the
Plan.


 


The Participant shall enjoy
rights as a stockholder until such time as the Participant disposes of the
Shares.  Upon such disposition, the
Participant shall have no further rights as a holder of the Shares so purchased
except the right to receive payment for the Shares so purchased in accordance
with the provisions of the Option Agreement, and the Participant shall
forthwith cause the certificate(s) evidencing the Shares so purchased to
be surrendered to the Company and/or its assignee(s) for transfer or
cancellation.


 


4.               Plan; Transfer Restrictions; Drag-Along.  Unless otherwise determined by the Committee,
any shares of Stock acquired pursuant to this Option (including any Shares
acquired 


 


A-1

















 


by
way of stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization) shall
be subject to the Option Agreement and the Plan including, without limitation,
transfer restrictions and the Company’s right to require the Participant to
sell the Optioned Shares and otherwise cooperate in the event of an Approved
Sale as set forth in Section 15 of the Option Agreement.


 


5.               Repurchase
Right; Forfeiture Provision.


 


(a)          In the event of
the Participant’s Termination of Service, the Company shall have the right, but
not the obligation, for the two-year period following the Participant’s
Termination of Service to repurchase any and all Optioned Shares acquired by
the Participant (for cash or cancellation of purchase money indebtedness for
the Optioned Shares).


 


(i)                                     Except as
provided in clause (ii) below (i.e., the Participant’s Termination of
Service by the Company for Cause or the Participant’s breach of Section 6
(regarding confidentiality, non-solicitation or non-competition) of the
Employment Agreement by and between the Participant and NetSpend Corporation,
dated June 1, 2010 (the “Employment Agreement”), the per share purchase
price for each Optioned Share shall be the Fair Market Value of a share of Common Stock on the date of such
Termination of Service.


 


(ii)                                  In the event of
a Participant’s Termination of Service for Cause or in the event the
Participant breaches Section 6 of the Employment Agreement, the purchase
price shall be the lower of the exercise price for such Optioned Share and the
Fair Market Value of such Optioned Share on the date of such Termination of
Service.  The Company’s repurchase right
set forth in this Section 5(a) shall lapse upon an Initial Public
Offering.


 


(b)         In the event of
the Company’s exercise of its repurchase right, the Participant and his, her or
its successors or assigns shall (i) take all steps necessary and desirable
to obtain all required third-party, governmental and regulatory consents and
approvals with respect to the surrender and cancellation of the Optioned
Shares, (ii) deliver for cancellation the certificate(s) representing
the Option Shares for cancellation in person or by first class mail, registered
mail, certified first class mail or by reputable overnight courier service to
the address set forth in the Company’s notice to the Participant within 10 days
of receipt of such notice and (iii) take all other actions necessary and
desirable to facilitate consummation of the repurchase and the cancellation of
the Option Shares in a timely manner.  If
the Participant fails or refuses to take any action required by this Section 5,
the Company may note in its stock ledger and books and records the cancellation
of the Participant’s Optioned Shares which are subject to cancellation after
application of this Section 5.


 


6.               Tax Consultation.  The Participant understands that the
Participant may suffer adverse tax consequences as a result of the Participant’s
purchase or disposition of the Shares. 
The Participant represents that the Participant has consulted with any tax
consultants the Participant deems advisable in connection with the purchase or
disposition of the Shares and that the Participant is not relying on the
Company for any tax advice.


 


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7.               Restrictive Legends and Stop-Transfer Orders.


 


(a)          Legends.  The Participant understands and agrees that
the Company shall cause the legends set forth below or legends substantially
equivalent thereto, to be placed upon any certificate(s) evidencing
ownership of the Shares together with any other legends that may be required by
state or federal securities laws at the time of the issuance of the Shares:


 


THE SALE AND ISSUANCE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAW OF
ANY STATE OR OTHER JURISDICTION.  THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE DISTRIBUTION THEREOF. 
THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED, OR TRANSFERRED
UNLESS (I) A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO THESE
SECURITIES AND SUCH OFFER, SALE, PLEDGE, OR TRANSFER IS IN COMPLIANCE WITH
APPLICABLE SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION OR (II) THERE
IS AN OPINION OF COUNSEL OR OTHER EVIDENCE, IN EITHER CASE, SATISFACTORY
TO THE CORPORATION, THAT AN EXEMPTION THEREFROM IS AVAILABLE AND THAT SUCH
OFFER, SALE, PLEDGE, OR TRANSFER IS IN COMPLIANCE WITH APPLICABLE SECURITIES
LAW OF ANY STATE OR OTHER JURISDICTION.


 


TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN AN
AWARD AGREEMENT BETWEEN THE ISSUER AND A PARTICIPANT IN THE ISSUER’S SECOND
AMENDED AND RESTATED 2004 STOCK OPTION AND RESTRICTED STOCK PLAN.  NO TRANSFER OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE SHALL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN
FULFILLED.  SUCH AGREEMENTS MAY BE
INSPECTED AT THE PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER.


 


(b)         Stop-Transfer
Notices.  The Participant agrees that,
in order to ensure compliance with the restrictions referred to herein, the
Company may issue appropriate “stop transfer” instructions to its transfer
agent, if any, and that, if the Company transfers its own securities, it may
make appropriate notations to the same effect in its own records.


 


(c)          Refusal to
Transfer.  The Company
shall not be required (i) to transfer on its books any Shares that have
been sold or otherwise transferred in violation of any of the provisions of
this Agreement or (ii) to treat as owner of such Shares or to accord the
right to vote or pay dividends to any purchaser or other transferee to whom
such Shares shall have been so transferred.


 


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8.               Successors and Assigns.  The Company may assign any of its rights
under this Agreement to single or multiple assignees (who may be stockholders,
officers, directors, employees or consultants of the Company), and this
Agreement shall inure to the benefit of the successors and assigns of the
Company.  Subject to the restrictions on
transfer herein set forth, this Agreement shall be binding upon the Participant
and his or her heirs, executors, administrators, successors and assigns.


 


9.               Interpretation.  Any
dispute regarding the interpretations of this Agreement shall be submitted by
the Participant or by the Company forthwith to the Committee, which shall
review such dispute at its next regular meeting.  The resolution of such a dispute by the
Committee shall be final and binding on the Company and on the Participant.


 


10.         Governing Laws; Severability.


 


(a)          This Agreement
shall be deemed to be a contract made under, and shall be construed in
accordance with, the laws of the State of Delaware, without giving effect to
conflict of laws principles thereof.


 


(b)         Each of the
parties hereto hereby irrevocably and unconditionally submits, for himself or
herself and his or her property, to the nonexclusive jurisdiction of any
Delaware State court or any federal court of the United States of America
sitting in the State of Delaware, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Agreement or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such Delaware
State court or, to the extent permitted by law, in any such federal court.  Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.


 


(c)          Each of the
parties hereto irrevocably and unconditionally waives, to the fullest extent
that he or she may legally and effectively do so, any objection that he or she
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to the Agreement in any Delaware state or
federal court sitting in the State of Delaware. 
Each of the parties hereto irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.


 


11.         Specific Performance.  The right and remedy to seek from any court
of competent jurisdiction specific performance of the transfer restrictions set
forth or referenced herein or injunctive relief against any act which would
violate Section 4 hereof, it being acknowledged and agreed that any such
breach or threatened breach will cause irreparable injury to the Company and
that money damages will not provide an adequate remedy to the Company.


 


12.         Notices.  Any notice
required or permitted hereunder shall be given in writing and shall be deemed
effectively given if given in the manner specified in the Stock Option
Agreement.


 


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13.         Further Instruments.  The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.


 


14.         Delivery of Payment and Withholding Taxes.  The Participant hereby authorizes the Company
to withhold Option Stock with an aggregate Fair Market Value (measured as of
the date of exercise) equal to the Total Option Price (as set forth in the
Notice of Grant) plus the Participant’s minimum statutorily required tax
withholding obligations with respect to the exercise of the Option.


 


15.         Definitions.  Capitalized
terms not defined herein shall have the meaning set forth in the Plan.


 


16.         Entire Agreement.  The Plan, the Notice of Grant, the Stock
Option Agreement and the Investment Representation Statement (if applicable)
are incorporated herein by reference. 
This Agreement, the Plan, the Notice of Grant, the Stock Option
Agreement and the Investment Representation Statement (if applicable)
constitute the entire agreement of the parties and supersede in their entirety
all prior undertakings and agreements of the Company and the Participant with
respect to the subject matter hereof.


 


17.         WAIVER OF JURY TRIAL.  NO PARTY TO THIS AGREEMENT OR ANY ASSIGNEE,
SUCCESSOR, HEIR OR PERSONAL REPRESENTATIVE OF A PARTY SHALL SEEK A JURY TRIAL
IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER LITIGATION PROCEDURE
BASED UPON OR ARISING OUT OF THIS AGREEMENT. 
NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION, IN WHICH A JURY
TRIAL HAS BEEN WAIVED, WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT OR
HAS NOT BEEN WAIVED.  THE PROVISIONS OF
THIS SECTION HAVE BEEN FULLY DISCUSSED BY THE PARTIES HERETO, AND THESE
PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. 
NEITHER PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO THE OTHER
PARTY THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN
ALL INSTANCES.


 


[Signature
Page Follows]


 


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  Submitted by:

  
	
   

  	
   

  
	
   

  	
  PARTICIPANT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  



 


Acknowledgment
and Agreement of Spouse


 


The undersigned spouse of
the Participant acknowledges that he/she has read this agreement and agrees to
be bound thereby to the extent that the Participant has executed such document.


 


 


	
   

  	
   

  
	
  Name:

  	
   

  



 


 


Declaration
of Unmarried Status


 


I,
                                        ,
the undersigned hereby declare that I am not married as of the date hereof.


 


 


	
   

  	
   

  
	
  Name:

  	
   

  



 


 


	
  Accepted by:

  
	
   

  
	
  NetSpend Holdings, Inc.

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


A-6

















 


EXHIBIT B


 


INVESTMENT REPRESENTATION STATEMENT


(APPLICABLE PRIOR TO AN IPO)


 




	
  PARTICIPANT

  	
    :

  	
   

  
	
   

  	
   

  	
   

  
	
  COMPANY

  	
    :

  	
  NetSpend Holdings, Inc.

  
	
   

  	
   

  	
   

  
	
  SECURITY

  	
    :

  	
   

  
	
   

  	
   

  	
   

  
	
  AMOUNT

  	
    :

  	
   

  
	
   

  	
   

  	
   

  
	
  DATE

  	
    :

  	
   

  






 


In connection with the
purchase of the above-listed Securities, the undersigned Participant represents
to the Company the following:


 


The
Participant is aware of the Company’s business affairs and financial condition
and has acquired sufficient information about the Company to reach an informed
and knowledgeable decision to acquire the Securities.  The Participant is acquiring these Securities
for investment for the Participant’s own account only and not with a view to,
or for resale in connection with, a “distribution” thereof within the meaning
of the Securities Act.


 


The
Participant acknowledges and understands that the Securities constitute “restricted
securities” under the Securities Act and have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of the Participant’s
investment intent as expressed herein. 
In this connection, the Participant understands that, in the view of the
Securities and Exchange Commission, the statutory basis for such exemption may
be unavailable if the Participant’s representation was predicated solely upon a
present intention to hold these Securities for the minimum capital gains period
specified under tax statutes, for a deferred sale, for or until an increase or
decrease in the market price of the Securities, or for a period of one year or
any other fixed period in the future. 
The Participant further understands that the Securities must be held
indefinitely unless they are subsequently registered under the Securities Act
or an exemption from such registration is available.  The Participant further acknowledges and
understands that the Company is under no obligation to register the
Securities.  The Participant understands
that the certificate evidencing the Securities will be imprinted with a legend
which prohibits the transfer of the Securities unless they are registered or
such registration is not required in the opinion of counsel satisfactory to the
Company and other legends required under the applicable state or federal
securities laws.


 


The
Participant is familiar with the provisions of Rule 701 and Rule 144,
each promulgated under the Securities Act, which, in substance, permit limited
public resale of “restricted securities” acquired, directly or indirectly from
the issuer thereof, in a non-public offering subject to the satisfaction of
certain conditions.  Rule 701
provides that if the issuer qualifies under Rule 701 at the time of the
grant of the Option to the Participant, the exercise will be exempt from
registration under the Securities Act.


 


B-1

















 


In the event that the
Company does not become subject to the requirements of Section 13 or 15(d) of
the Exchange Act, then the Securities may be resold in certain limited
circumstances subject to the provisions of Rule 144, which requires the
resale to occur not less than one year after the later of the date the
Securities were sold by the Company or the date the Securities were sold by an
affiliate of the Company, within the meaning of Rule 144; and, in the case
of acquisition of the Securities by an affiliate only, the satisfaction of the
following conditions: (1) the resale being made through a broker in an
unsolicited “broker’s transaction,” in transactions directly with a market
maker (as said term is defined under the Exchange Act) or in “riskless
principal transactions” (as said term is defined in the Note to Rule 144(f)(1));
(2) the amount of Securities being sold during any three month period not
exceeding the limitations specified in Rule 144(e); (3) the availability
of certain public information about the Company; and (4) the timely filing
of a Form 144, if applicable.


 


In
the event the Company becomes subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, then ninety (90) days thereafter (or such
longer period as any market stand-off agreement may require), Securities exempt
under Rule 701 may be resold by non-affiliates in reliance on Rule 144,
without compliance with any of the conditions set forth in Rule 144, and
Securities exempt under Rule 701 may be resold by affiliates in reliance
on Rule 144, subject to the satisfaction of the conditions set forth in
the clauses (1) through (4) immediately above and without compliance
with any specified holding period requirement.


 


The
Participant further understands that in the event all of the applicable
requirements of Rule 701 or Rule 144 are not satisfied, registration
under the Securities Act, compliance with Regulation A under the Securities
Act, or some other registration exemption will be required; and that,
notwithstanding the fact that Rules 144 and 701 are not exclusive, the
Staff of the Securities and Exchange Commission has expressed its opinion that
a person proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rules 144 or 701 will
have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and
their respective brokers who participate in such transactions do so at their
own risk.  The Participant understand
that no assurances can be given that any such other registration exemption will
be available in such event.


 


The Participant further
represents and warrants that it comes within the category or categories marked
below, and that for any category marked, it can truthfully set forth the
factual basis or reason the investor comes within that category.  The undersigned agrees to furnish any
additional information which the Company deems necessary in order to verify the
answers set forth below.


 


o                                    (a)                                  The Participant
is an individual (not a partnership, corporation, etc.) whose individual
net worth, or joint net worth with his or her spouse, presently exceeds
US$1,000,000.


 


Explanation:  In calculating net worth you may include
equity in personal property and real estate, including your principal
residence, cash, short-term investments, stock and securities.  Equity in personal property and real estate 


 


B-2

















 


should be based on the
appraised fair market value of such property less debt secured by such
property.


 


o                                    (b)                                 The Participant
is an individual (not a partnership, corporation, etc.) who had an income
in excess of US$200,000 in each of the two most recent years, or joint income
with his or her spouse in excess of US$300,000 in each of those years (in each
case including foreign income, tax exempt income and full amount of capital
gains and losses but excluding any income of other family members and any
unrealized capital appreciation) and has a reasonable expectation of reaching
the same income level in the current year.


 


o                                    (c)                                  The Participant
is a director or executive officer of the Company.


 


o                                    (d)                                 The Participant
is a non-profit organization within the meaning of Section 501(c)(3) of
the Internal Revenue Code, corporation, business trust, partnership or limited
liability company, in each case not formed for the specific purpose of
acquiring the Securities and with total assets in excess of US$5,000,000.  If so, please describe entity:


 


o                                    (e)                                  The Participant
is a trust with total assets in excess of US$5,000,000, not formed for the
specific purpose of acquiring the Securities, where the purchase is directed by
a “sophisticated person” as defined in Rule 506(b)(2)(ii) of
Regulation D under the Securities Act.


 


o                                    (f)                                    The Participant
is a revocable grantor trust in which each of the grantors is an individual who
(i) has a net worth, either alone or with his or her spouse, of more than
$1,000,000 or (ii) had income in excess of $200,000 during each of the
previous two years and reasonably expects to have income in excess of $200,000
during the current year, or joint income with his or her spouse in excess of
$300,000 during each of the previous two years and reasonably expects to have
joint income in excess of $300,000 during the current year.


 


o                                    (g)                                 The Participant
is an entity (other than a trust) all the equity owners of which are “accredited
investors” within one or more of the above categories.  If so, please describe entity:  (If relying upon this
category alone, each equity owner must complete a separate copy of this
questionnaire.)


 


o                                    (h)                                 The Participant
is not within any of the categories above and is therefore a non-accredited
investor.


 


 


	
   

  	
  Signature of Participant:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
                                                 

  	
  ,   

  	
   

  
					



 


B-3