Exhibit
10.6


 






***  Where this marking appears throughout this Exhibit 10.6,
information has been omitted pursuant to a request for confidential treatment;
a complete copy of this agreement has been filed separately with the Securities
and Exchange Commission.


 


AMENDED AND RESTATED


MANAGEMENT EMPLOYMENT AGREEMENT


 


THIS
AMENDED AND RESTATED MANAGEMENT EMPLOYMENT AGREEMENT (this “Employment
Agreement”) is dated as of June 1, 2010 (the “Effective Date”)
by and between NETSPEND CORPORATION, a Delaware corporation (the “Company”)
and Tom Cregan, an individual residing at the address set forth on the
signature page hereto (the “Executive”).  Certain terms used herein are defined in Section 8(k) hereof.


 


WITNESSETH:


 


WHEREAS,
the Company wishes to secure the services of the Executive as Executive Vice
President, Partner Channel of the Company upon the terms and conditions
hereinafter set forth, and the Executive wishes to render such services to the
Company upon the terms and conditions hereinafter set forth; and


 


WHEREAS,
in consideration of the employment to be provided hereby and the amounts to be
paid as provided herein, the Executive desires to be employed by the Company
and to agree with the Company as further provided herein.


 


NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants herein
contained and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows:


 


1.             Employment by the Company.


 


(a)           The Company agrees to employ the
Executive in the position of Executive Vice President, Partner Channel, and the
Executive accepts such employment and agrees to perform such duties as the
Company’s Chief Executive Officer or his or her designee may assign from time
to time. During the Term (as hereinafter defined), the Executive shall report
to the Company’s Chief Executive Officer or his or her designee.


 


(b)           The Executive agrees to devote his
business time and energies to the business of the Company and to perform his
duties hereunder faithfully, diligently and to the best of his ability.  The Executive, if so requested by the
Company, also shall serve, without additional compensation, as an officer, director
or manager of any of NetSpend Holdings, Inc. (“Holdings”) and/or
any other subsidiary of Holdings or other Affiliate.  During the Term, the Executive shall not
engage in any business activity which, in the reasonable judgment of the Board
of Directors of the Company (the “Board”), conflicts with the duties of
the Executive hereunder, whether or not such activity is pursued for gain,
profit or other pecuniary advantage.


 


2.             Term of Employment.  Unless otherwise mutually agreed upon by the
parties hereto, the term of the Executive’s employment pursuant to this
Employment Agreement (the “Term”) shall be for the period commencing on
the Effective Date and ending on April 30, 2011.  This Employment Agreement shall automatically
renew for additional one (1) year terms beginning on May 1, 2011 and
on each subsequent anniversary thereof (each, an “Expiration 


 

















 






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Confidential Treatment Requested


 


Date”) unless (i) the
Executive notifies the Company in writing of his intention to terminate his
employment pursuant to this Employment Agreement at least thirty (30) calendar
days prior to the applicable Expiration Date or (ii) the Company notifies
the Executive in writing of its intention to terminate his employment pursuant
to this Employment Agreement at least thirty (30) calendar days prior to the
applicable Expiration Date. 
Notwithstanding the foregoing, the Executive’s employment may be earlier
terminated as provided in Section 4 hereof.


 


3.             Compensation, Benefits and Expenses.  As full compensation for all services to be
rendered by the Executive to the Company and its Affiliates in all capacities,
the Executive shall receive the following compensation, benefits, and
reimbursement of expenses during the Term:


 


(a)           Salary.  During the Term, the Executive shall be
entitled to receive an annual salary of $300,000.00 (the “Base Salary”),
payable not less frequently than semimonthly in accordance with the
then-customary payroll practices of the Company.  Executive’s Base Salary shall be reviewed for
adjustment by the Compensation Committee of the Board (the “Compensation
Committee”) at least once annually during the Term, and the determination
of whether to increase the Base Salary shall be in the sole discretion of the
Company.  For the avoidance of doubt, the
Company shall not be obligated to increase the Base Salary during the
Term.  For the purposes of this
Agreement, “Base Salary” shall refer to the Executive’s Base Salary on an
annualized basis and as adjusted pursuant to the terms of this Agreement.


 


(b)           Bonus.


 


(i)            The Executive shall be eligible to
participate in the bonus program of the Company now or hereafter maintained by
the Company (the “Bonus Program”), subject to the terms and conditions of such
Bonus Program; provided that the Executive shall be eligible to earn a bonus of
up to 70% of the Base Salary at 100% target, with a maximum bonus of 105% of
the Base Salary.  For purposes of
clarification, the Board may elect to eliminate or modify any Bonus Program at
any time during the Term.


 


(ii)           For the 2010 fiscal year only, the
Executive shall also be eligible to receive an additional bonus (up to an
aggregate amount of $100,000) pursuant to the terms set forth in Exhibit B.


 


(c)           Participation in Executive Benefit
Plans.  The Executive additionally
shall be permitted during the Term, if and to the extent eligible, to
participate in employee benefit plans now or hereafter maintained by the
Company and/or Holdings and generally provided to the Company’s executives,
subject to the terms and conditions of such plans.  Nothing in this Employment Agreement shall
preclude the Company from terminating or amending any such plans or coverage so
as to eliminate, reduce or otherwise change any benefit payable thereunder.


 


(d)           Expenses.  Subject to the limitations set forth in Section 9(b),
the Company shall pay or reimburse the Executive for all reasonable and
necessary expenses actually incurred or paid by the Executive during the Term
in the performance of the Executive’s duties under this Employment Agreement,
upon submission and approval of expense statements, vouchers or other
supporting information in accordance with the then-customary practices of the
Company.


 


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Confidential Treatment Requested


 


(e)           Vacation.  The Executive shall be entitled to up to four
(4) weeks of personal time off (“PTO”), which shall include,
without limitation, vacation and sick leave.


 


(f)            Withholding of Taxes.  The Company may withhold from any
compensation or benefits payable under this Employment Agreement or otherwise
all federal, state, city and other taxes as shall be required pursuant to any
law or governmental regulation or ruling and, where applicable, in accordance
with any lawful election made by the Executive.


 


4.             Termination.


 


(a)           Termination upon Death.  If the Executive dies during the Term, the
Term shall terminate as of the date of his death.


 


(b)           Termination upon Disability.  If during the Term the Executive becomes
physically or mentally disabled, whether totally or partially, so that the
Executive is unable to perform his essential job functions hereunder, with or
without reasonable accommodation in accordance with the Americans With
Disabilities Act, as determined by the Board in its good faith judgment, for: (i) a
period of one hundred twenty (120) consecutive days; or (ii) for shorter
periods aggregating one hundred fifty (150) days during any twelve-month period
(a “Disability”), the Company, by written notice to the Executive, may
terminate the Executive’s employment, in which event the Term shall terminate
ten (10) calendar days after the date upon which the Company shall have
given notice to the Executive of its intention to terminate the Executive’s
employment because of the Disability. 
Nothing in this Section 4(b) shall be deemed to extend
the Term.


 


(c)           Termination by Company for Cause.  If the Company determines, in its sole
discretion, that (i) the Executive has committed any felony or other
offense involving moral turpitude or any crime relating to his employment, (ii) the
Executive has violated this Employment Agreement or any other written agreement
with the Company or any Affiliate, in any material respect, and fails to cure
such violation within fourteen (14) calendar days after notice of such conduct,
(iii) the Executive has committed any act of fraud, theft or personal
dishonesty with respect to the Company or any Subsidiary or otherwise
detrimental to the Company or any Subsidiary, (iv) the Executive has, in
the good faith opinion of the Board, failed to perform his duties hereunder or
has performed such duties in a grossly negligent manner or with willful
malfeasance, (v) the Executive has failed to observe material Company
policies applicable to executives of the Company, or (vi) the Executive
has violated any state or federal law relating to sexual harassment or age, sex
or other prohibited discrimination, (the foregoing clauses (i) through (vi) being
referred to herein collectively as “Cause”), then the Company, at any
time by written notice to the Executive, may terminate the employment of the
Executive for Cause, which notice shall set forth the reasons for the Company’s
terminating the Executive’s employment for Cause, and terminate the Term and
Executive’s employment pursuant to this Employment Agreement effective as of
the date of such notice and, except as provided in Section 5(b) hereof,
the Executive shall have no right to receive any compensation or benefit
hereunder on and after the date of such notice.


 


(d)           Termination by Company Without
Cause.  The Company may terminate the
Term at any time, without Cause, upon thirty (30) calendar days’ written notice
by the 


 


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Confidential Treatment Requested


 


Company to the Executive
and, except as provided in Section 5(a) hereof, the Executive
shall have no right to receive any compensation or benefit hereunder after such
termination.  The Executive’s termination
of employment on any Expiration Date following notice by the Company to the
Executive of the Company’s intention to terminate this Employment Agreement on
such Expiration Date, as provided in Section 2 hereof, shall
constitute a termination without Cause hereunder.


 


(e)           Termination by Executive for Good
Reason.  The Executive may terminate
the Term at any time with Good Reason (as hereinafter defined), upon thirty
(30) calendar days’ written notice by the Executive to the Company (which
notice shall be received by the Company no later than thirty (30) calendar days
following the Executive’s knowledge of the occurrence of any of the events set
forth in clauses (i) or (ii) below) and, except as provided in Section 5(a) hereof,
the Executive shall have no right to receive any compensation or benefit
hereunder after such termination.  For
purposes of this Employment Agreement, “Good Reason” shall mean, without
the Executive’s written consent: (i) the Company violates this Employment
Agreement in any material respect, including, without limitation, the failure
of the Company to pay or provide to the Executive the Base Salary or any reduction
in the Base Salary or any downward change in the target bonus percentage (it
being understood by the Executive that the Board may elect not to maintain a
Bonus Program at any time during the Term and that the Company is not obligated
to pay the Executive any bonus hereunder); (ii) the Company makes a
material reduction in the Executive’s duties as Executive Vice President,
Partner Channel, as provided in Section 1(a) hereof, other
than by reason of the expiration of the Term or a termination of the Term
pursuant to Sections 4(a), 4(b), 4(c) or 4(d) hereof;
or (iii) the sale or other transfer of all or substantially all of the
assets of the Company to a corporation or other entity in a transaction in
which such corporation or other entity does not assume all of the obligations
of the Company hereunder.  Good Reason
shall not be deemed to exist unless the Company fails to cure the event giving
rise to Good Reason within thirty (30) calendar days after receipt of written
notice thereof given by the Executive to the Company, which notice shall
specifically set forth the nature of such event and the corrective action
reasonably sought by the Executive.


 


(f)            Termination by Executive Without
Good Reason.  The Executive may
terminate the Term at any time, without Good Reason, upon thirty (30) calendar
days’ written notice by the Executive to the Company and, except as provided in
Section 5(b) hereof, the Executive shall have no right to
receive any compensation or benefit after such termination.


 


5.             Severance Payments.


 


(a)           Severance Payments for Termination
by the Company Without Cause or Termination by Executive With Good Reason.  If during the Term the Company terminates the
Term pursuant to Section 4(d) hereof or the Executive
terminates the Term pursuant to Section 4(e) hereof, all
compensation payable to the Executive under Section 3 hereof shall
cease as of the date of termination of the Term specified in the Company’s or
Executive’s notice, as the case may be (the “Termination Date”), and:


 


(i)            the Company shall pay to the
Executive the following sums:  (A): all
accrued and unpaid Base Salary through the Termination Date, (B) any
unpaid or 


 


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Confidential Treatment Requested


 


unreimbursed expenses incurred
by the Executive through the Termination Date in accordance with Section 3(d) hereof,
and (C) to the extent permitted under the applicable plans, programs or
policies, if any, all previously earned, accrued, and unpaid benefits from the
Company, Holdings and their respective employee benefit plans, including any
such benefits which have become vested prior to the Termination Date under the
retirement plans, and any other such benefits under disability, and life
insurance plans, policies, and programs applicable to the Company which
benefits, if any, shall be payable as provided therein (collectively, the “Accrued
Obligations”); and


 


(ii)           the Company shall pay to the
Executive the following sums, subject to the final sentence of this Section 5(a)(ii) and
Sections 5(c), 6 and 9 hereof, (A) an amount equal to
the Base Salary, as in effect on the Termination Date, payable over the twelve
(12) month period following the Termination Date (the “Severance Period”),
(B) the pro  rata portion of any bonus that would have been
received by the Executive for the then-current fiscal year (based upon the
number of months elapsed in such fiscal year prior to the Termination Date
(including the month of the termination), calculated by the Board in its sole
discretion), payable when bonuses generally are paid to executives of the
Company pursuant to the terms of the Bonus Program (that is, no later than 75
days following the applicable year-end), (C) any accrued but unpaid bonus
in respect of any fiscal year ending prior to the fiscal year in which the
Termination Date falls (which shall be paid notwithstanding any requirement
that the Executive otherwise be employed by the Company on the date of the
payment of such bonus), payable when bonuses generally are paid to executives
of the Company pursuant to the terms of the Bonus Program, and (D) if the
Executive elects to continue his participation and/or that of his eligible
dependents in the Company’s group health and/or dental plans for a period of
time under the Consolidated Omnibus Reconciliation Act of 1985 “COBRA”)
then, through the earliest of (1) the expiration of the Severance Period, (2) the
period during which the Executive is entitled to continuation coverage under
COBRA and (3) the date the Executive becomes eligible to receive
comparable medical coverage under a group health plan (within the meaning of Section 5001(b)(1) of
the Internal Revenue Code of 1986, as amended (the “Code”), under new
employment (the earliest of such periods, the “COBRA Continuation Period”),
the Company will contribute to the premium cost of the Executive’s coverage and
that of his eligible dependents under those plans at the rate it contributed to
the Executive’s premium cost of coverage on the Termination Date.  To be eligible for these Company premium
contributions, however, the Executive must pay the same portion of the premium
cost during the COBRA Continuation Period as is paid by the Company’s active
employees.  The Executive is required to
notify the Company immediately if he begins new employment during the COBRA
Continuation Period and to repay promptly the cost of any benefit contributions
made by the Company for coverage after Executive becomes eligible to
participate in the group policy of such new employer.  After the Company’s contributions end, the
Executive may continue benefits coverage for the remainder of the COBRA period,
if any, by paying the full premium cost of such benefits.  If, prior to the end of the Severance Period,
the Executive violates Section 6 hereof, then the Company shall
have no obligation to make any of the payments that remain payable by the
Company under this Section 5(a)(ii) on or after the date of
such violation.


 


(iii)          If during the Term and in connection
with or during the twelve-month period following a Change in Control (as
defined in the Amended and Restated NetSpend Holdings, Inc. 2004 Stock
Option Plan), the Company terminates the Term pursuant to Section


 


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Confidential Treatment Requested


 


4(d) hereof or the Executive terminates the Term pursuant to Section 4(e) hereof,
then, in lieu of the payment set forth in Section 5(a)(ii)(B) above
(pro-rated bonus), the Company shall pay to the Executive an amount equal to
70% of the Base Salary, as in effect on the Termination Date, payable in a lump
sum within sixty (60) Business Days following the Termination Date.  If the Executive violates Section 6
hereof, then the Company shall have no obligation to make the payment set forth
under this Section 5(a)(iii).


 


(b)           Payments upon Termination by
Company for Cause, Termination by Executive Without Good Reason, Death or
Disability.  If the Term is
terminated by the Company pursuant to Sections 4(a), 4(b) or
4(c) hereof or if the Executive terminates the Term pursuant to Section 4(f) hereof,
the Executive shall receive only the Accrued Obligations.


 


(c)           Eligibility.  For the Executive (or his estate) to be
eligible to receive the severance payments and benefits provided for in Section 5(a)(ii) and,
if applicable, (iii), the Executive (or his estate or, in the event of the
Executive’s legal incapacity, his legal representative) will be obligated to
execute and deliver to the Company (and not revoke) a release (to be provided
by the Company) substantially in the form attached hereto as Exhibit A
(the “Form of Release”); provided, however, that the
Company shall have the right to modify the form of Release as necessary to
comply with applicable law and/or the particular circumstances of
termination.  The Company shall deliver
the Release to the Executive within five (5) Business Days following the
Termination Date.


 


(d)           No Mitigation.  The Executive shall not be required to
mitigate the amount of any severance payments or benefits provided for in Section 5(a)(ii) and
(iii) by seeking other employment or otherwise and the amount of any
such severance payments and benefits shall not be reduced by any compensation
earned as a result of the Executive’s other employment or otherwise.


 


6.             Certain Covenants of the Executive.  To induce the Company to enter into this
Employment Agreement, the Executive covenants and agrees that:


 


(a)           Confidential Information.  During the Restricted Period (as hereinafter
defined) and thereafter, the Executive shall not, directly or indirectly,
disclose to any Person who is not authorized by the Company to receive such
information, or use or appropriate for his own benefit or for the benefit of
any Person other than the Company, (i) any documents or other papers
relating to the Company, including, without limitation, any such information,
documents or papers relating to the Company’s Current Lines of Business (as
hereinafter defined) or the customers of the Company (whether such customers
were customers of the Company prior to or after the date hereof) including,
without limitation, files, business relationships and accounts, royalty
relationships, licensing relationships, pricing policies, customer lists,
computer software and hardware or (ii) any other materials relating to the
Company or any trade secrets or confidential information, including, without
limitation, any business or operational methods, know-how, marketing plans or
strategies, product development techniques or plans, product concepts and
designs, business acquisition plans, financial or other performance data,
personnel and other policies of the Company, whether generated by the Executive
or by any other Person and/or whether developed prior to the date hereof
(collectively, “Confidential Information”); provided, however,
that Confidential Information shall not include any information readily 


 


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Confidential Treatment Requested


 


ascertainable from public
or published information, or trade sources (other than as a direct or indirect
result of unauthorized disclosure by the Executive).


 


(b)           Receipt of Confidential
Information.  The Executive
acknowledges that: (i) the Company is presently engaged in the marketing,
processing and distributing of prepaid debit cards, stored value cards and
other similar products from which the Company derives substantial revenues
(collectively, the “Company’s Current Lines of Business”); (ii) contemporaneously
with the Executive’s execution of this Employment Agreement, the Company is
providing the Executive with Confidential Information, including, without
limitation, information relating to the Company’s information technology
systems, and related technologies, and information previously or hereafter
provided relating to the Company’s legal affairs and business relationships,
and the Company will continue to provide the Executive with Confidential
Information in the future while the Executive is employed with the Company; (iii) the
Executive has received the Confidential Information; (iv) in the Executive’s
position as Executive Vice President, Partner Channel, the Executive will need
the Confidential Information to properly carry out the Executive’s duties
hereunder; (v) the Company’s provision of Confidential Information to the
Executive, in exchange for the Executive’s agreement and covenant to maintain
the confidentiality of the Confidential Information, as set forth in Section 6(a) hereof
gives rise to the Company’s interest in restraining the Executive from
competing against the Company as set forth in Sections 6(c), 6(e),
6(f) and 6(g) hereof; (vi) the Executive’s
agreement and covenant not to compete with the Company as set forth in Sections
6(c), 6(e), 6(f), and 6(g) hereof is designed to
enforce the Executive’s agreement and covenant to maintain the confidentiality
of the Confidential Information as set forth in Section 6(a) hereof;
(vii) the agreements and covenants contained in Sections 6(a) through
6(g) hereof (the “Restrictive Covenants”) are essential to
protect the goodwill and profitability of the Company’s Current Lines of
Business; and (viii) the agreements and covenants contained in Sections
6(a) through 6(g) hereof will not involve a substantial
hardship upon the Executive’s future livelihood.  Accordingly, the Executive covenants and
agrees for the benefit of the Company, with respect to himself, to comply with
the Restrictive Covenants.


 


(c)           Non-Compete.  At all times during the Term and for a period
of one (1) year thereafter (the entirety of such period being the “Restricted
Period”), the Executive shall not, in the United States of America or any
other country in which the Company then engages in business, directly or
indirectly, accept employment with, provide services to or have any interest
(as an owner, sole proprietor, shareholder, partner, director, officer,
employee, consultant, agent or otherwise) in any financial institution, third
party processor, member service provider, card association or independent sales
organization or other similar business that directly competes with the Company’s
Current Lines of Business; provided, however, that the Executive may hold,
directly or indirectly, solely as an investment, not more than one percent (1%)
of the outstanding securities of any Person which is listed on any national
securities exchange or regularly traded in the over-the-counter market.


 


(d)           Property of the Company.  At no time shall the Executive remove or
cause to be removed from the premises of the Company any memorandum, note,
list, record, file, document or other paper, equipment or any like item
relating to the Company, or its customers, distribution partners or issuing
banks (including copies, extracts and summaries thereof) except as specifically
permitted hereunder or in furtherance of the performance of his duties on
behalf 


 


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of the Company.  Upon termination of employment the Executive
must return Confidential Information to the Company in accordance with the
provisions of Section 8(b) hereof.  All memoranda, notes, lists, records, files,
documents and other papers and other like items (and all copies, extracts and
summaries thereof) made or compiled by the Executive or made available to the
Executive concerning the Company (whether or not prior to the date hereof), are
and shall be the property of the Company (or its customers, distribution
partners, or issuing banks) and shall be delivered by the Executive to the
Company, and all electronic copies thereof shall be deleted by the Executive
from any personal computer or other similar device belonging to the Executive
promptly upon the termination of the Executive’s employment with the Company.


 


(e)           Employees of the Company.  During the Restricted Period, the Executive
shall not hire or, directly or indirectly, initiate communications with,
solicit, persuade, entice, induce or encourage any individual who is then or
who has been within the preceding 12-month period, an employee or consultant of
the Company to terminate employment with the Company or to become employed by,
or enter into a contract or any other arrangement with, any other Person, and
the Executive shall not approach any such employee or provider for any such
purpose or authorize or knowingly approve the taking of any such actions by any
other Person.


 


(f)            Solicitation of Customers and/or
Suppliers.  During the Restricted
Period, the Executive shall not, directly or indirectly, initiate
communications with, solicit, persuade, entice, induce, or encourage (or assist
any other Person to do any of the foregoing), for the Executive’s benefit or
for the benefit of any Person other than the Company, any Person who is then or
has been within the preceding 12-month period a customer, supplier or account
of the Company, or any potential customer, supplier or account whose identity
the Executive learned during the course of his relationship with the Company
(whether or not prior to the date hereof), to terminate its contractual or
other relationship with the Company.


 


(g)           Servicing of Customers.  During the Restricted Period, the Executive
shall not furnish any services similar to those furnished while he was employed
by the Company (whether prior to or after the date hereof) to any customer or
account of the Company.


 


(h)           Future Employer.  The Executive shall inform any future
employer of the Restrictive Covenants and provide such employer with a copy
thereof, prior to the commencement of that employment.


 


(i)            Corporate Opportunities.  During the Term, the Executive promptly shall
disclose to the Company any business idea or opportunity which falls within the
scope of the Company’s Current Lines of Business, which business idea or
opportunity shall become the sole property of the Company if the Company elects
to pursue such idea or opportunity as part of the Company’s Current Lines of
Business or as a business project. All programs, product concepts, materials,
results or ideas (“Inventions”) conceived, made, developed, reduced to
practice, or worked on, in whole or in part, solely by the Executive or jointly
with others prior to the date of this Employment Agreement, during the Term,
relating to the business of the Company are and shall be deemed to be “work for
hire” and, at the election of the Company, shall be the sole property of the
Company, without any further consideration paid to the Executive.  The Executive shall disclose promptly in
writing to any duly appointed officer of the Company, any Invention, whether or
not patentable or copyrightable or entitled to legal protection as a trade


 


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secret or otherwise.  Upon the request of the Company, the
Executive agrees to disclaim promptly in writing all such rights and give all
reasonable assistance and execute such documents to enable the Company to prepare
and prosecute any application for patent or copyright registration.  The Company shall have the sole right as it
may deem appropriate to determine the treatment of information related to any
Inventions, including but not limited to the right to keep the same as a trade
secret, to use, disclose, and publish same without prior patent application or
copyright registration and to file the same in its own name or to follow any
other procedure which the Company may deem appropriate.


 


(j)            Rights and Remedies Upon Breach.  If the Executive breaches, or threatens to
commit a breach of, any of the Restrictive Covenants, the Company shall have
the following rights and remedies, each of which rights and remedies shall be
independent of the other and severally enforceable, and all of which rights and
remedies shall be in addition to, and not in lieu of, any other rights and
remedies available to the Company under law or in equity:


 


(i)            Specific Performance.  The right and remedy to seek from any court
of competent jurisdiction in Travis County, Texas specific performance of the
Restrictive Covenants or injunctive relief against any act which would violate
any of the Restrictive Covenants, it being acknowledged and agreed that any
such breach or threatened breach will cause irreparable injury to the Company
and its Affiliates and that money damages will not provide an adequate
remedy.  Any action or proceeding arising
out of this Employment Agreement shall be maintained in Travis County,
Texas.  In the event an action is filed
for specific performance or injunctive relief under this Section 6(j)(i),
the parties further agree to submit to jurisdiction and venue in Travis County,
Texas.


 


(ii)           Accounting.  The right and remedy to require the Executive
to account for and pay over to the Company and its Affiliates all compensation,
profits, monies, accruals, increments or other benefits derived or received by
the Executive as the result of any transactions constituting a breach of any of
the Restrictive Covenants.


 


(k)           Severability of Covenants.  If any of the Restrictive Covenants, or any
part thereof, is held by a court of competent jurisdiction or any Governmental
Authority to be invalid, void, unenforceable or against public policy for any
reason, the remainder of the Restrictive Covenants shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and such
court, government, agency or authority shall be empowered to substitute, to the
extent enforceable, provisions similar to the provisions governing the term,
breadth or geographic scope of the Restrictive Covenants so as to provide to
the Company and Affiliates thereof, to the fullest extent permitted by
applicable law, the benefits intended by such provisions.


 


(l)            Enforceability in Jurisdictions.  The Company and the Executive intend to and
hereby confer jurisdiction to enforce the Restrictive Covenants upon the courts
of any jurisdiction within the geographical scope of such Restrictive
Covenants. If the courts of any one or more of such jurisdictions hold the
Restrictive Covenants wholly invalid or unenforceable by reason of the breadth
of such scope or otherwise, it is the intention of the Company and the
Executive that such determination not bar or in any way affect the right of the
Company, or any of their Affiliates, to the relief provided above in the courts
of any other jurisdiction within the 


 


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geographical scope of
such Restrictive Covenants, as to breaches of such Restrictive Covenants in
such other respective jurisdictions, such Restrictive Covenants as they relate
to each jurisdiction being, for this purpose, severable into diverse and
independent covenants.


 


(m)          Reasonableness of Restrictions.  The Executive has carefully read and
considered the provisions of this Section 6, and having done so,
agrees that the restrictions set forth herein, including, but not limited to,
the time period of restriction, the geographic areas of restriction, and the
scope of the restriction are fair and reasonable, are supported by sufficient
and valid consideration, and these restrictions do not impose any greater
restraint than is necessary to protect the goodwill and other legitimate
business interests of the Company and its Affiliates, officers, directors,
stockholders and other employees.


 


7.             Arbitration. 
Any and all claims or controversies between the Company and the
Executive relating to the Executive’s employment with the Company, or the
termination thereof, including claims for breach of contract, personal injury,
tort, employment discrimination (including unlawful harassment), and any
violation of any state or federal ,law shall be resolved by final binding
arbitration in accordance with the rules of the American Arbitration
Association.  Judgment upon the award
rendered by the arbitrator or arbitrators may be entered in any court having
jurisdiction thereof.  The Executive
understands that this agreement to arbitrate covers any and all claims that the
Executive might bring under Title VII, the Americans With Disabilities Act or
the Age Discrimination in Employment Act. 
The arbitrators shall be selected from a panel provided by the American
Arbitration Association. Any such arbitration shall be conducted in Austin,
Texas or such other place as may be mutually agreed upon by the parties.  Each party shall select one (1) individual
to act as arbitrator, and the two (2) arbitrators so selected shall select
a third arbitrator.  Each party shall
bear its own costs, expenses and attorneys’ fees.  The Executive shall pay a portion of the
arbitrators’ expenses and administrative fees of arbitration equal to the
standard filing fee in the U.S. Federal District Court, Western District in
Austin, Texas.  The Company shall pay the
remainder of the arbitrators’ expenses and administrative fees of arbitration.
If any party prevails on a statutory claim that affords the prevailing party
attorneys’ fees, then the arbitrator may award reasonable attorneys’ fees and
costs to the prevailing party. Notwithstanding anything to the contrary
contained in this Section 7, if the Executive breaches, or
threatens to commit a breach of, any of the Restrictive Covenants, the Company
shall have the right and remedy to seek from any court of competent
jurisdiction specific performance of the Restrictive Covenants or injunctive
relief against any act which would violate any of the Restrictive Covenants, it
being acknowledged and agreed that any such breach or threatened breach will cause
irreparable injury to the Company and its Affiliates.


 


8.             Other Provisions.


 


(a)           Notices.  Except as may be otherwise provided herein,
all notices, requests, waivers and other communications under this Employment
Agreement shall be in writing and shall be conclusively deemed delivered and
effective (i) when hand delivered to the other party, (ii) five (5) Business
Days after being sent by registered or certified mail, return receipt
requested, postage prepaid, (iii) one (1) business day after being
sent via a reputable nationwide overnight courier service guaranteeing next
business day delivery, or (iv) in the case of a facsimile transmission,
upon transmission thereof by the sender and the issuance by the 


 


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Confidential Treatment Requested


 


transmitting machine of a
confirmation slip confirming that the number of pages constituting the
notice have been transmitted without error; provided, however, that the sender
shall contemporaneously mail a copy of the notice to the addressee by the
method provided for in (i) or (ii) above, but such mailing shall in
no way alter the time at which the notice sent by facsimile transmission is
deemed received, in each case to the intended recipient as set forth below:


 


(i)            if to the Company,
to:


 


	
  NetSpend Corporation

  
	
  Austin Centre

  
	
  701 Brazos Street, 12th Floor

  
	
  Austin, TX 78701

  
	
  Telephone:

  	
    (512)
  532-8280

  
	
  Fax:

  	
    (512)
  469-9951

  
	
  Attn: General Counsel

  



 


and


 


(ii)           if to the
Executive, to him at the address set forth on the signature page hereto.


 


Any
party may change the address to which notices, requests, consents or other
communications hereunder are to be delivered by giving the other parties notice
in the manner set forth in this Section 8.


 


(b)           Return of Confidential Information
and the Company’s Property. The Executive
agrees that all documents, records, electronic data, and tangible items and
materials containing or embodying any Confidential Information (whether
prepared by the Executive or by others), including all copies thereof, that are
in the Executive’s possession, custody, or control are the property of the
Company and shall as soon as is practicable be returned to the Company and that
any electronic copies thereof shall be deleted by the Executive from any
personal computer or other similar device belonging to the Executive upon
termination of the Executive’s employment with the Company, whether voluntary
or otherwise, or at any time upon the Company’s request.  In addition, upon termination of employment
for any reason, the Executive shall return all property of the Company for
which the Executive is responsible including but not limited to pagers,
security access keys, and laptop computers, or that is in the Executive’s
possession, custody, or control.


 


(c)           Entire Agreement.  This Employment Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior contracts and other agreements, written or oral, with
respect thereto, including, without limitation, the Employment Agreement by and
between the Company and the Executive, dated as of December 8, 2009, the
letter from Dan Henry to the Executive dated April 1, 2010, the offer
letter by and between the Company and the Executive dated as of March 7,
2008.  Neither the termination of the
Executive’s employment hereunder nor the expiration or termination of the Term
or of this Employment Agreement shall affect the enforceability of Section 6
hereof.


 


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(d)           Waivers and Amendments.  This Employment Agreement may be amended,
modified, superseded, canceled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by the
parties or, in the case of a waiver, by the party waiving compliance.  No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any right, power or
privilege hereunder, nor any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.


 


(e)           Governing Law.  This Employment Agreement shall be governed
by, and construed in accordance with and subject to, the laws of the State of
Texas applicable to agreements made and to be performed entirely within such
State.  Venue for enforcement of this
Employment Agreement shall be in Travis County, Texas.


 


(f)            Payment of Severance.  In addition to the provisions of Section 6(c) hereof,
and not in any way in limitation thereof, or in limitation of any right or
remedy otherwise available to the Company, if the Executive violates any provision
of Section 6 hereof, any severance payments and/or benefit then or
thereafter due from the Company to the Executive shall be terminated forthwith
and the Company’s obligation to pay and the Executive’s right to receive such
severance payments and/or benefit shall terminate and be of no further force or
effect, in each case without limiting or affecting the Executive’s obligations
under Section 6 hereof or the Company’s other rights and remedies
available at law or equity.


 


(g)           Binding Effect; Benefit.  This Employment Agreement shall inure to the
benefit of and be binding upon the parties hereto and any successors and
assigns. Nothing in this Employment Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto or such
successors and assigns, any rights, remedies, obligations or liabilities under
or by reason of this Employment Agreement other than the right to the Executive’s
estate under Section 5(c) hereof.


 


(h)           Assignment.  This Employment Agreement, and the Executive’s
rights and obligations hereunder, may not be assigned by the Executive;
provided, however, that it shall be enforceable by the Executive’s legal
representatives and other successors in interest. The Company may assign this
Employment Agreement and its rights, together with its obligations, hereunder
in connection with any sale, transfer or other disposition of all or
substantially all of its assets or business, whether by merger, consolidation
or otherwise.


 


(i)            Counterparts.  This Employment Agreement may be executed in
two or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.


 


(j)            Construction.  The headings in this Employment Agreement are
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Employment Agreement. 
Whenever required by the context any gender shall include any other
gender, the singular shall include the plural, and the plural shall include the
singular.


 


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(k)           Certain Definitions.


 


“Affiliate”
means any entity from time to time owned or controlled by the Company.


 


“Business
Day” means a day other than Saturday, Sunday or a day on which banks in
Austin, Texas are not required to be open or are authorized to remain closed.


 


“Governmental
Authority” means any United States federal, state or local or foreign
government or governmental, regulatory or administrative authority, department,
agency, commission, entity or other political subdivision thereof or any court,
tribunal, or judicial or arbitral body.


 


“Person”
means any natural person, partnership, corporation, limited liability company,
association, joint stock company, trust, joint venture, unincorporated
organization or Governmental Authority.


 


“Subsidiary”
means any corporation or other entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time
directly or indirectly owned by the Company.


 


9.             Compliance With Code Section 409A.  Notwithstanding anything herein to the
contrary, this Employment Agreement 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 Executive for or with respect to any
taxes, penalties or interest which may be imposed upon the Executive pursuant
to Section 409A.  The Executive
hereby acknowledges and agrees that no representations have been made to the
Executive 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. 
Specifically, the parties agree as follows:


 


(a)           Each severance payment shall be
treated as a right to a series of separate payments as set forth in Treasury
Regulation 1.409A-2(b)(2)(iii) and no severance payment shall be paid
later than the last day of the second taxable year of the Executive following
the taxable year of the Executive’s “separation from service” as defined in
Treasury Regulation 1.409A-1(h) (“Separation From Service”).  To the extent that any severance payment
constitutes a “deferral of compensation” subject to Code Section 409A (a “409A
Payment”), then, (A) in the event that a termination of Executive’s
employment does not constitute a Separation From Service, such 409A Payment
shall begin at such time as the Executive has otherwise experienced such a
Separation from Service, and the date of such Separation from Service shall be
deemed to be his Termination Date for purposes of Section 5 hereof,
and (B) if on the date of the Executive’s Separation from Service, the
Executive is a “specified employee,” as such term is defined in Treas. Reg. Section 1.409A-1(i),
as determined from time to time by the Company, then such 409A Payment shall
not be made to the Executive earlier than the earlier of (i) six (6) months
after the Executive’s Separation from Service; or (ii) the date of his
death.  The 409A Payments under this
Agreement that would otherwise be made during such period shall be aggregated
and paid in one lump sum, without interest, on the first business day following
the end of the six (6)


 


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Confidential Treatment Requested


 


month period or following
the date of the Executive’s death, whichever is earlier, and the balance of the
409A Payments, if any, shall be paid in accordance with the applicable payment
schedule provided in Section 5.


 


(b)           With respect to reimbursements (whether
such reimbursements are for business expenses or, to the extent permitted under
the Company’s policies, other expenses) and/or in-kind benefits, in each case,
that constitute deferred compensation subject to Code Section 409A (as
determined by the Company in its sole discretion), each of the following shall
apply: (1) no reimbursement of expenses incurred by Executive during any
taxable year shall be made after the last day of the following taxable year of
Executive, (2) the amount of expenses eligible for reimbursement, or
in-kind benefits provided, during a taxable year of Executive shall not affect
the expenses eligible for reimbursement, or in-kind benefits to be provided, to
Executive in any other taxable year, and (3) the right to reimbursement of
such expenses or in-kind benefits shall not be subject to liquidation or
exchange for another benefit.


 


[Remainder of page intentionally left blank]


 


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10.          WAIVER OF JURY TRIAL.  NO PARTY TO THIS EMPLOYMENT 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 EMPLOYMENT AGREEMENT OR ANY OF THE
OTHER AGREEMENTS OR THE DEALINGS OR THE RELATIONSHIP BETWEEN THE PARTIES. 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 have executed this Employment Agreement as of the
date first above written.


 


	
   

  	
  NETSPEND
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Paige K. Ellis

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Tom Cregan

  
	
   

  	
  Tom
  Cregan

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
				



 


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Exhibit A


 


Form of Release


 


This
Release Agreement is by and between NetSpend Corporation, a Delaware
corporation (the “Company”), and Tom Cregan (“Cregan”).


 


1.     The parties hereby acknowledge and agree to the severance terms
set forth in Section 5(a)(ii) and, if applicable, (iii) of the
Employment Agreement, dated as of December 8, 2009 (the “Employment
Agreement”), between the Company and Cregan. 
Cregan further acknowledges and agrees that he is not entitled to any
severance payment or benefits, pursuant to the Employment Agreement or
otherwise, unless he signs this Release and returns it to the Company, as
required by Section 5(c) of the Employment Agreement.


 


2.     For and in consideration of the severance payments and benefits
the Company will pay to Cregan pursuant to clauses (ii) and, if
applicable, (iii) of Section 5(a) of the Employment Agreement,
Cregan, on his own behalf and on behalf of his successors and assigns
(collectively referred to as “Releasor”), hereby releases and forever
discharges the Company and NetSpend Holdings, Inc., and their respective
predecessors, successors, corporate affiliates, stockholders, officers,
directors, agents, representatives, employees, consultants and advisors
(collectively referred to as “Releasee”), from any and all claims,
counterclaims, demands, debts, actions, causes of action, suits, expenses,
costs, attorneys’ fees, damages, indemnities, obligations and/or liabilities of
any nature whatsoever, whether known or unknown, which Releasor ever had, now
has or hereafter can, shall or may have against Releasee, for, upon or by
reason of any matter, cause or thing whatsoever from the beginning of the world
to the day of the date of this Release, including, but not limited to, the
following: (i) all such claims and demands directly or indirectly arising
out of or in any way connected with Cregan’s employment with the Company or the
termination of that employment; (ii) all such claims and demands related
to salary, bonuses, commissions, stock, stock options, or any other ownership
interests in the Company, vacation pay, fringe benefits, expense
reimbursements, severance pay and/or any other form of compensation; (iii) any
claims arising under any federal, state or local law, statute or ordinance,
including, without limitation, Title VII of the Civil Rights Act of 1964, the
Age Discrimination in Employment Act, the Older Workers Benefit Protection Act,
the Americans With Disabilities Act, the Civil Rights Act of 1991, the Fair
Labor Standards Act, the Equal Pay Act, the Employee Retirement Income Security
Act of 1974, the Family and Medical Leave Act of 1993, the Consolidated Omnibus
Budget Reconciliation Act of 1985, the Texas Commission on Human Rights Act and
section 8307c of the Texas Workers Compensation Act; and (iv) any claims
for breach of contract, express or implied, including any claim for breach of
any implied covenant of good faith and fair dealing, wrongful discharge,
discrimination, harassment, fraud, defamation, intentional tort, emotional
distress and negligence.


 

















 






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3.     Notwithstanding anything to the contrary contained in this
Release, Releasor does not release Releasee from any (i) claims against
Releasee that may arise after this Release has become effective; (ii) rights
to indemnification conferred upon Releasor as an officer, director or employee
of the Company or any Affiliates pursuant to the certificate or articles of
incorporation or bylaws of such entity, in accordance with applicable law; (iii) rights
under [list stock option agreements], or (iv) rights
of Releasor under Section 5(a) of the Employment Agreement.


 


4.     Cregan acknowledges that he has been advised to consult
independent legal counsel before signing this Release, and hereby represents
that he has executed this Release after having the opportunity to consult
independent counsel and after considering the terms of this Release for at
least twenty one (21) days (although Cregan may choose to voluntarily execute
this Release earlier). Cregan further represents and warrants that he has read
this Release carefully, that he has discussed it or has had reasonable
opportunity to discuss it with his counsel, that he fully understands its
terms, and that he is signing it voluntarily and of his own free will.


 


5.     Cregan acknowledges that the consideration for this Release is
consideration to which he would not otherwise be entitled and is in lieu of any
rights or claims that he may have with respect to any severance benefits or
other remuneration from the Company.


 


6.     This Release shall not become effective until the eighth day
following the date on which Cregan has executed it, provided that he has not
revoked it.  At any time prior to that
effective date, Cregan may revoke this Release by providing notice of
revocation to the Board of Directors of the Company.  If Cregan exercises his right to revoke this
Release, any obligation of the Company to pay him severance under the
Employment Agreement shall terminate.


 


7.     Cregan agrees that he will not, either directly or indirectly
through any agent or surrogate, and whether orally or in writing, “Disparage”
(as defined herein) the Company or its affiliates, or the members, directors,
managers, officers, or employees of the Company or its affiliates.  In addition, the Company agrees that no Board
member or executive officer of the Company shall Disparage Cregan.  As used in this Agreement, to “Disparage”
includes, but is not limited to, impugning the character, honesty, integrity,
morality, business acumen, abilities, qualities, or reliability of any person
or entity.


 


8.     This Release may not be amended or modified except by a writing
signed by the Company and Cregan. This Release shall be governed by and
construed in accordance with the laws of the State of Texas without regard to
principles of conflicts of laws thereunder.


 


[Signature Page Follows]


 


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  Tom
  Cregan

  	
   

  	
   

  



 


Dated:                 This
              
day of
                                                  ,
200  .


 


WITNESSES:


 


	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name

  



 


ACKNOWLEDGEMENT


 


	
  STATE
  OF

  	
  )

  	
   

  
	
   

  	
  )

  	
  SS:

  
	
  COUNTY
  OF

  	
  )

  	
   

  



 


On
this               day
of
                                  ,
200  , before me, the undersigned officer, personally appeared Tom
Cregan, known to me (or satisfactorily proven) to be the person whose name is
subscribed to the within instrument and acknowledged that he has executed the
same for the purposes therein contained and acknowledged the same to be his
free act and deed.


 


In
witness whereof, I have hereunto set my hand.


 


	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
   

  	
  My
  Commission Expires:

  



 


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EXHIBIT B


 


Special 2010 Bonus Opportunity:


 


In
addition to the Bonus Program, you have the opportunity to earn additional cash
bonuses as described below:


 


1.   
$25,000 for signing *** on or before December 31, 2010.


2.   
$25,000 for signing *** on or before December 31, 2010.


3.   
$25,000 for 4,000 NSAI locations live by EOY 2010.


4.   
$25,000 for 20,000 locations with a NS reload chit by EOY 2010.


 


These
bonuses will be paid upon your achievement of the above goals.