Exhibit
10.4


 


AMENDED AND RESTATED MANAGEMENT EMPLOYMENT AGREEMENT


 


THIS
AMENDED AND RESTATED MANAGEMENT EMPLOYMENT AGREEMENT (this “Employment
Agreement” or “Agreement”) is dated as of September 20, 2010 (the
“Effective Date”), by and among NETSPEND CORPORATION, a Delaware corporation
(the “Company”),  NETSPEND
HOLDINGS, INC., a Delaware corporation (“Holdings”), and Daniel Henry, an
individual residing at                           
(the “Executive”).  Certain terms used
herein are defined in Section 10.13 hereof.


 


W I T N E S S E T H:


 


WHEREAS,
the Executive has been employed by the Company pursuant to the terms of that
certain Management Employment Agreement, dated as of February 5, 2008 (the
“Prior Agreement”);


 


WHEREAS,
the Company wishes to continue to secure the services of the Executive as Chief
Executive Officer of the Company upon the terms and conditions hereinafter set
forth, and the Executive wishes to continue 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 continue 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.


 


1.1                                 The Company agrees to continue to employ the Executive in the position
of Chief Executive Officer, and the Executive accepts such employment and
agrees to continue to perform such duties as the Company’s Board of Directors
(the “Board’) may assign from time to time. 
During the Term (as hereinafter defined), the Executive shall report to
the Board.


 


1.2                                 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 competently.  The
Executive, if so requested by the Company, also shall serve, without additional
compensation, as an officer, director or manager of any of the Company’s
Subsidiaries and/or Holdings.  During the
Term, the Executive shall not engage in any business activity which, in the
reasonable judgment of 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 the first
(1st) anniversary of the Effective Date. 
This Employment Agreement shall automatically renew for 


 

















 


additional
one (1) year terms beginning on the first (1st) anniversary of the
Effective Date and in each subsequent anniversary thereof (each, an “Expiration
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) 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) 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:


 


3.1                                 Salary.  The Executive shall receive a
base semi-monthly salary of $16,666.67 (the “Base Salary), payable 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.  Notwithstanding the foregoing, the Company
shall not be obligated to increase the Base Salary during the Term, and the
determination of whether to increase the Base Salary shall be in the sole
discretion of the Compensation Committee. 
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.


 


3.2                                 Bonus.  The Executive shall be eligible to
participate in any bonus program of the Company now or hereafter maintained by
the Company (the “Bonus Program”), subject to the terms and conditions of any
such Bonus Program; provided that the Executive shall be eligible to earn a
bonus of up to 100% of the Base Salary at 100% target, with a maximum bonus of
150% of the Base Salary.  The Board shall
establish the financial targets within 60 days following the beginning of each
fiscal year during the Term.  The annual
bonus (if any) shall be paid no later than the fifteenth (15th) day of the third month of the year following the applicable bonus
measurement year (e.g., the bonus with respect to calendar 2010 will be paid no
later than March 15, 2011).


 


3.3                                 Participation in Executive Benefit Plans; Other Benefits.  The Executive 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 (including any stock option plan) and generally provided to the
Company’s and/or Holdings’ executives, subject to the terms and conditions of
such plans.  Nothing in this Employment
Agreement shall preclude the Company and/or Holdings, as the case may be, from
terminating or amending any such plans or coverage so as to eliminate, reduce
or otherwise change any benefit thereunder, so long as such change similarly
affects all Company and/or Holdings executives and such change does not adversely
affect the Executive’s rights with respect to any options then outstanding
under the Holdings stock option plan or any other equity plan of the Company
and/or Holdings (without the Executive’s prior written consent).


 


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3.4                                 Expenses.


 


(i)                                     Subject to the limitations set forth in Section 3.4 (ii), 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.


 


(ii)                                  (A)  The Company shall also pay or reimburse the Executive up to a
total of $400,000.00 annually for expenses incurred in connection with the use
of a private or chartered plane (“Jet Expenses”) used by the Executive for
travel associated with the Executive’s duties under this Employment Agreement
and/or in connection with travel between multiple offices of the Company.  Except as provided below, to the extent the
Jet Expenses exceed $400,000 annually, the Executive shall be solely
responsible for such expenses.  (B) 
To the extent the Executive submits Jet Expenses which exceed $400,000 annually
and the Executive submits the applicable invoice evidencing such expenses
within 30 days of his receipt of such invoice (“Excess Expenses”), the
Executive’s Base Salary payment(s) that would otherwise be received following
the Executive’s submission of the applicable invoice shall be reduced by the
amount of such Excess Expenses in exchange for reimbursements by the Company
(within thirty (30) days) of an equivalent amount of such Excess Expenses. 
For clarification with respect to timing, the Executive typically receives
invoices for Jet Expenses on a monthly basis, and the Base Salary reduction(s) shall
be applied to the installments of Base Salary that would otherwise be paid
immediately following the Company’s receipt of the  Excess Expenses
invoice.  If the Excess Expenses exceed
the amount of the next Base Salary installment, the subsequent Base Salary
installment (or installments, if applicable) will be reduced by the amount of
such unrecovered Excess Expenses.  In no
event will the Company reimburse an Excess Expense prior to the date that the
corresponding Base Salary installment has been reduced.  In the event that the Executive does not
submit an invoice for excess Jet Expenses within thirty (30) days of his
receipt, such amounts will not be deemed “Excess Expenses” and the provisions
of this clause (B) shall not apply.  (C) 
In addition, the Company shall reimburse the Executive up to a total of $3,000
per month for housing in Austin, Texas (“Housing Expenses”).  To the
extent Executive’s Housing Expenses exceed $3,000 per month, Executive shall be
solely responsible for such expenses.


 


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


 


3.6                                 Withholding of
Taxes.  The
Company may withhold from any compensation or benefits payable under this
Employment Agreement 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.


 


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4.                                       Termination.


 


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


 


4.2                                 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, the Company (a “Disability”), by written notice to the
Executive, may terminate the Executive’s employment, in which event the Term
shall terminate ten (10) 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 4.2 shall be
deemed to extend the Term.


 


4.3                                 Termination 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
twenty (20) days after the Executive’s receipt of written notice of such
alleged violation and the corrective action reasonably sought by the Company,
(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
failed to perform his duties hereunder, in the good faith opinion of the Board
which failure continues for twenty (20) days after the Executive’s receipt of
written notice of such alleged failure and the corrective action reasonably
sought by the Company, (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 5.2
hereof, the Executive shall have no right to receive any compensation or
benefit hereunder on and after the date of such notice.


 


4.4                                 Termination
without Cause.  The Company may terminate the Term at any
time, without Cause, upon thirty (30) days’ written notice by the Company to
the Executive and, except as provided in Section 5.1 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.


 


4.5                                 Termination for Good Reason.  The Executive may terminate the Term at any
time with Good Reason (as hereinafter defined), upon thirty (30) days’ written
notice by the Executive to the Company (which notice shall be received by the
Company no later than thirty 


 


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(30) 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 5.1
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 expense reimbursements set forth in Section 3.4, any reduction in the
Base Salary or any downward change in the target bonus percentages; (ii) the
Company makes a material reduction in the Executive’s duties as Chief Executive
Officer 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 4.1,
4.2, 4.3, 4.4, 4.5, or 4.6 hereof; (iii) if the Executive is not elected
to the Board, or (iv) 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 twenty (20) 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.


 


4.6                                 Termination without Good Reason.  The Executive may terminate the Term at any
time, without Good Reason, upon thirty (30) days written notice by the
Executive to the Company and, except as provided in Section 5.2 hereof,
the Executive shall have no right to receive any compensation or benefit after
such termination.


 


5.                                       Severance
Payments.


 


5.1                                 Severance
Payments for Termination by the Company Without Cause; Termination due to Disability
or Death of Executive; or Termination by Executive With Good Reason.  If during the Term the Company
terminates the Term pursuant to Sections 4.1, 4.2 or 4.4 hereof or the
Executive terminates the Term pursuant to Section 4.5 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, or as of the date of the Executive’s death, as the case may
be (the “Termination Date”), and, subject to the last sentence of this Section 5.1
and the requirements of Section 5.3, the Company shall provide to the
Executive, subject to Section 7 hereof, the following sums: (i) an
amount equal to 24 months of Base Salary, as in effect on the Termination Date,
which amount will be payable in a lump-sum within forty (40) business days
following the Termination Date; (ii) all accrued and unpaid Base Salary
through the Termination Date; (iii) any accrued but unpaid bonus for the
fiscal year ending prior to the fiscal year in which the Termination Date falls
(which shall be paid as set forth in Section 3.2 and notwithstanding any
requirement that the Executive otherwise be employed by the Company on the date
of the payment of such bonus); (iv) any unpaid or unreimbursed expenses
incurred by the Executive through the Termination Date in accordance with
Section 3.4 hereof; (v) to the extent permitted under the applicable
plans, programs or policies, if any, all previously earned, accrued, and unpaid
benefits from the Company and its employee benefit plans, including any such
benefits under pension, disability, and life insurance plans, policies, and
programs applicable to the Company which benefits, if any, shall be payable as
provided therein; and (vi) if the Executive elects to continue his
participation and/or that of his eligible dependents 


 


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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 eighteen-month period beginning on the Termination
Date or, if earlier, until 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 shorter of both 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
commences participation 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 the Executive violates Section 7
hereof, then the Company shall have no obligation to make any of the payments
that remain payable by the Company under clauses (i), (iii) and/or (vi) of
this Section 5.1 on or after the date of such violation.


 


5.2                                 Payments upon
Termination for Cause or Termination without Good Reason.  If the Term is terminated by
the Company pursuant to Sections 4.3, or if the Executive terminates the Term
pursuant to Section 4.6 hereof, the Executive shall receive only the
amounts specified in clauses (ii), (iii), (iv) and (v) of Section 5.1
hereof.


 


5.3                                 Eligibility.  In order for the Executive (or his estate) to
be eligible to receive the severance payments and benefits provided for in Section 5.1(i) or
(vi), 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
“Release”) within twenty-five (25) days following the Termination Date; 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 three (3) calendar
days following the Termination Date.


 


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


 


6.                                       Performance of
Duties.  The Executive shall devote his best efforts to the performance of
his duties and the performance of any other work that may be assigned to him by
the Company and its officers, all under and subject to the Company’s
instructions and control.


 


6.1                                 Duty of Loyalty During Employment and Exclusivity of Service.  The Executive understands and
acknowledges that employment with the Company requires the Executive’s full
attention and effort.  The Executive
agrees that, during the period of 


 


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employment by the Company, the Executive shall
devote all of his working time, best efforts, attention, knowledge, and skill
to the business and interest of the Company and the Company shall be entitled
to the Executive’s services and the benefits of the Executive’s skills and
efforts as a full-time Executive. 
Further, the Executive shall not, directly or indirectly, render any
service of a business, commercial or professional nature to any other person or
organization, whether for compensation or otherwise without the prior written
consent of the Board.


 


6.2                                 Absence of Restrictions.  The
Executive represents and warrants that he knows of no reason that he cannot
legally enter into this Employment Agreement and perform the personal services
contemplated by this Employment Agreement. 
Specifically, the Executive represents and warrants that he has
disclosed to the Company, or he is not a party to, any agreement with a former
employer containing any post-employment restrictions, non-competition
provisions or any other restrictive covenants with respect to (i) the rendition
of any personal services which he is expected to perform or conduct,
(ii) the disclosure or use of any information which, directly or
indirectly, relates to the business of the Company or the services to be
rendered by the Executive, or (iii) any other obligation which would impact or
restrict his employment by the Company or the performance of his duties.  The Executive further represents and warrants
that he is not in violation of any such agreement as described in this Section 6.2
and disclosed to the Company.


 


6.3                                 Former Employer’s Confidential Information.  The Company prohibits the
Executive from engaging in any unfair competition or otherwise misusing
confidential information of any prior employer. 
Accordingly, the Executive represents and warrants that the Executive
(i) will hold and safeguard the confidential information and trade secrets
of any prior employer and will not misappropriate, use, disclose or make
available to anyone at the Company any such information; (ii) will comply
with any lawful non-solicitation agreement applicable to any former employer of
the Executive, clients or customers; and (iii) has not wrongfully retained
or removed any files, books, correspondence, reports, proposals, records or
other documents concerning a former employer’s business, whether prepared by
the Executive or not.


 


7.                                       Certain
Covenants of the Executive.  To induce the Company and Holdings to enter
into this Employment Agreement, the Executive covenants and agrees that (the
“Restrictive Covenants”):


 


7.1                                 Receipt and Non-Disclosure of Confidential Information.  The Company promises to
provide the Executive, immediately upon execution of this Employment Agreement,
with confidential and proprietary information unique to the Company and to
Holdings that is not generally available to the public and that, if disclosed,
could put the Company and Holdings at an unfair competitive disadvantage.  By signing this Employment Agreement, the
Executive acknowledges delivery and receipt of same.  The Company’s and Holdings’ confidential
information includes, without limitation, information not in the public domain
relating to the Company’s and Holdings’ issuing banks, distribution partners,
customers, pricing structure, budgets, vendor pricing, financial performance
and strategies, financial projections, accounting information, business plans,
internal audit methods and plans, sales methods and strategies, products,
pricing strategies, customer lists, contacts and information, all records
developed with respect to prospective customers or purchasers, vendor lists and
information, employee compensation, information about the skills, performance
and qualifications of personnel, trade 


 


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secrets, inventions, computer programs, research,
developments, methods and processes, licenses, permits, and other information
relating to the actual or anticipated business of the Company and Holdings
(collectively, the “Confidential Information”). 
The Executive shall treat the Company’s and Holdings’ Confidential
Information with the utmost confidentiality and shall not, during his
employment or at any time following the termination of the Executive’s
employment with the Company, take away, copy, divulge, or use such Confidential
Information that has been obtained by, or disclosed to, the Executive as a
result of the Executive’s employment by the Company, whether for the
Executive’s benefit or for the benefit of any third parties, without the prior
written consent of an authorized representative of the Company.  Notwithstanding the above, nothing contained
in this Section 7 shall prohibit the Executive from disclosing
Confidential Information (i) in the ordinary course of performing his
duties for the Company, or (ii) when disclosure is required by law or by any
court, arbitrator or administrative or legislative body; provided that, if the
Executive is required by law or by any court, arbitrator or administrative or
legislative body to disclose all or any portion of the Confidential
Information, the Executive will provide the Company with prompt notice thereof,
so that the Company may seek a protective order or other appropriate remedy.  In the event that such protective order or
other remedy is not obtained, the Executive will furnish only that portion of
the Confidential Information which is legally required and the Executive will
exercise the Executive’s reasonable best efforts to obtain reliable assurance
that confidential treatment will be afforded such portion of the Confidential
Information.  In addition, Executive may
disclose the terms of this Agreement to his legal, financial and tax advisors
and immediate family members and to any prospective employers (but only to the
extent necessary to inform such employer of any restrictions on Executive’s
ability to perform services for such employer).


 


7.2                                 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 of the Company.  Upon termination
of employment the Executive must return Confidential Information to the Company
in accordance with the provisions of Section 10.2 of this Agreement.  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.


 


7.3                                 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 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 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 


 


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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
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.


 


7.4                                 Noncompetition and Nonsolicitation Agreement.  The Executive acknowledges and
agrees that information, including the Confidential Information, he acquires at
the time of signing this Employment Agreement and continues to acquire during
the course of his employment will enable the Executive to irreparably injure
the Company if the Executive should engage in unfair competition.  The Executive also acknowledges that his
position is one which requires public involvement with the Company, thus the
position requires loyalty to preserve a positive public image of the Company
and to prevent injury to the Company by soliciting employees or customers for
the direct benefit of a competitor. 
Moreover, the Executive acknowledges that the services he provides are
of a special, peculiar and extraordinary character that gives such services a
unique value, the loss of which cannot be reasonably or adequately compensated
for in damages by way of a lawsuit.


 


Therefore,
in consideration of the Company’s agreement to provide, and provision of,
Confidential Information to the Executive, as well as the compensation,
benefits and other agreements made by the Company in this Agreement and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Executive hereby agrees as follows:


 


7.4.1                                        Non-Competition.  During the Term of this Employment Agreement
and for a period of one (1) year following the termination of this Employment
Agreement or of the Executive’s employment with the Company for any reason, the
Executive shall not, directly or indirectly, be employed by, or provide
services to, any other issuer or marketer of pre-paid debit cards to perform
any executive-level functions (i) in any state or territory in which the
Executive worked during the last twelve months of his employment with the
Company; or (ii) if the Executive’s employment terminates prior to his
working a full twelve months, in any state or territory in which the Executive
worked during his employment with the Company.


 


7.4.2                                        Non-Solicitation of Employees.  During the Term of this Employment Agreement
and for a period of one (1) year following the termination of this
Employment Agreement or of the Executive’s employment with the Company for any
reason, the Executive shall not, on the Executive’s own behalf or on behalf of
any other person or entity, solicit, divert or recruit any person who is,
during such time frame, an employee of the Company 


 


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or any subsidiary or
affiliate, to leave such employment or in any other manner attempt, directly or
indirectly, to influence, induce, or encourage any employee of the Company to
leave the employment of the Company.


 


7.4.3                                        Non-Solicitation of the Company’s Customers.  During the Term of this
Employment Agreement and for a period of one (1) year following the
termination of this Employment Agreement or of the Executive’s employment with
the Company for any reason, the Executive shall not, on the Executive’s own
behalf or on behalf of any other person or entity, solicit, divert or recruit
any person who is, during such time frame, a customer, issuing bank or
distribution partner of the Company or of Holdings or any subsidiary or
affiliate, to discontinue its relationship with the Company or with Holdings or
in any other manner attempt, directly or indirectly, to influence, induce, or
encourage any customer, issuing bank or distribution partner of the Company to
discontinue its relationship with the Company or with Holdings.


 


7.4.4                                        Reasonableness of Restrictions.  The Executive has carefully read
and considered the provisions contained in this Section 7, 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 affiliated entities,
officers, directors, shareholders and other employees.  The Executive acknowledges that these
restrictions will not prevent him from obtaining gainful employment in the
Executive’s occupation or field of expertise or cause him undue hardship; that
there are numerous other employment and business opportunities available to him
that are not affected by these restrictions; and that the Executive’s ability
to earn a livelihood without violating such restrictions is a material
condition to employment with the Company.


 


7.4.5                                        Notification.  Executive
agrees that the Company may notify any person or entity employing Executive or
evidencing an intention of employing the Executive of the existence and
provisions of this Employment Agreement.


 


7.5                                 Rights and Remedies Upon Breach.  If the Executive breaches, or threatens to
commit a breach of, any of the Restrictive Covenants, Holdings and the Company
shall have the right to seek monetary damages for any past breach in addition to
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 Holdings and the Company under law or in equity:


 


7.5.1                                        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 Holdings 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 


 


10






 










 


specific performance or
injunctive relief under this Section 7.5, the parties further agree to
submit to jurisdiction and venue in Travis County, Texas.


 


7.5.2             Accounting.  The right and remedy to require the Executive
to account for and pay over to Holdings and the Company and Affiliates thereof
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.


 


7.6           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
Holdings and the Company and Affiliates thereof, to the fullest extent
permitted by applicable law, the benefits intended by such provisions.


 


8.             Enforceability
in Jurisdictions.  Holdings,
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 Holdings, the Company and
the Executive that such determination not bar or in any way affect the right of
Holdings and the Company, or any of their Affiliates, to the relief provided
above in the courts of any other jurisdiction within the 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.


 


9.             Tax Provisions.


 


9.1           Internal Revenue Code Sections 280G and 4999.


 


9.1.1             Private Company Provision.  To the extent that any of the payments and
benefits provided for under this Agreement or any other agreement or
arrangement between the Executive and the Company (collectively, the “Payments”)
constitute a “parachute payment” within the meaning of Section 280G of the
Code and, but for this Section 9.1, would be subject to the excise tax
imposed by Section 4999 of the Code, then, in the event that Code
Section 280G(b)(5)(A) or any successor provision applies, the
Executive shall receive the greater of (i) the After-Tax Capped Amount or
(ii) the Payments with application of the Applicable Taxes; provided that,
the Executive may, at his option, waive his right to retain such payments
and/or other benefits unless such payments and other benefits are approved by
the stockholders of the Company (or Holdings, if applicable) in a manner that
satisfies the stockholder approval requirements of
Section 280G(b)(5)(B) of the Code and the Treasury Regulations
promulgated thereunder (a “280G Vote”), and (ii) the Company (or
Holdings, if applicable) shall submit the Executive’s right to retain such
payments and other benefits to a 280G Vote. 
The Executive 


 


11

















 


acknowledges and agrees
that the stockholders of the Company (or Holdings, if applicable) are not
obligated to approve such payments following any waiver by the Executive of his
right to receive such payments.


 


9.1.2             Public Company Provision.  In the event that Code
Section 280G(b)(5)(A) or any successor provision does not apply, the
Executive will receive either (i) the Grossed-Up Amount, if the After-Tax
Grossed-Up Amount is at least 125% of the After-Tax Capped Amount, or
(ii) the Capped Amount, if the After-Tax Grossed-Up Amount is not at least
125% of the After-Tax Capped Amount.  For
purposes of this Section 9.1.2:


 


“After-Tax Capped Amount” means the Capped Amount after deducting
Applicable Taxes.


 


“After-Tax Grossed-Up Amount” equals the Grossed-Up Amount after
deducting Applicable Taxes.


 


“Applicable Taxes” means the federal, state and local income taxes and,
if relevant, the Excise Tax applicable to the Executive’s receipt of the
Grossed-Up Amount or the Capped Amount, as the case may be.


 


“Capped Amount” means the greatest amount of Payments that can be
provided under this Agreement and all other agreements providing for Payments
without any portion of the Payments being subject to the Excise Tax.


 


“Excise Tax” means the excise tax imposed by Section 4999 of the
Code.


 


“Grossed-Up Amount” means an amount equal to the full amount of
Payments provided for by this Section 9.2.1, increased by the lesser of
(i) such additional amount as is necessary such that, after taking into
account Applicable Taxes, the Executive will receive such full amount of
Payments (less federal, state and local income taxes on the Payments) and
(ii) $1,500,000.


 


9.1.3             Determinations.  Subject to the provisions of
Section 9.1.2 hereof, all determinations required to be made under this
Section 9.1, including whether an Excise Tax is payable by the Executive
and the amount of such Excise Tax, shall be made by the nationally recognized
firm of certified public accountants (the “Accounting Firm”) as the Company may
designate provided, however, the determination by Accounting Firm shall be
subject to agreement by the Executive and his advisors (which agreement shall
not unreasonably be withheld).  If the
Accounting Firm determines that any Excise Tax is payable by the Executive, the
Company shall be required to either (x) make payment of the Payment (and,
if applicable the Gross-Up Payment), less all amounts withheld in respect of
the Payment (and, if applicable the Gross-Up Payment), as required by
applicable law or (y) reduce the Payment by the amount which, based on the
Accounting Firm’s determination and calculations, would provide the Executive
with the Capped Payment, and pay to the Executive such reduced amount.  All fees and expenses of the Accounting Firm
shall be paid by the Company in connection with the calculations required by
this Section 9.1.


 


12

















 


9.1.4             Timing of Gross-Up Payments.  A Gross-Up Payment shall be made no later
than the end of the calendar year following the calendar year in which the
Executive remits the related taxes to the applicable governmental authority. In
the event of any underpayment or overpayment under this Section 9.1 as
determined by the Company’s independent auditors (or such other firm as may
have been designated in accordance with the preceding paragraph), the amount of
such underpayment or overpayment shall forthwith be paid to the Executive or
refunded to the Company, as the case may be, with interest at the applicable
federal rate provided for in Section 7872(f)(2) of the Code; provided,
however, in no event shall any reimbursement of the Executive for an
underpayment be made later than the end of the calendar year following the
calendar year in which the Executive remits the related taxes to the applicable
governmental authority.


 


9.2           Section 409A of the Internal Revenue Code. 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:


 


9.2.1             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) 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.


 


9.2.2             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 


 


13

















 


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.


 


9.2.3             To the extent applicable, this Employment Agreement shall be interpreted,
construed and operated in accordance with Section 409A of the Code, and
the Treasury Regulations and other guidance issued thereunder.


 


9.2.4             Notwithstanding anything to the contrary contained in this Agreement, the
Company shall not make any deductions for money or property that the Executive
owes to the Company, or offset or otherwise reduce any sums that may be due or
become payable to or for the account of the Executive, from amounts that
constitute deferred compensation for purposes of Code Section 409A.


 


9.2.5             The Executive’s right to any deferred compensation, as defined under Code
Section 409A, shall not be subject to borrowing, anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, attachment, garnishment by
creditors, to the extent necessary to avoid tax, penalties and/or interest
under Code Section 409A.


 


10.           Other Provisions.


 


10.1         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
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:


 


14

















 


	
  (i)

  	
  if to the Company or Holdings, to:

  
	
   

  	
   

  
	
   

  	
  NetSpend
  Corporation

  
	
   

  	
  Austin
  Centre

  
	
   

  	
  701
  Brazos Street, 12th Floor

  
	
   

  	
  Austin,
  TX 78701

  
	
   

  	
  Telephone: 

  	
  (512)
  532-8280

  
	
   

  	
  Fax:

  	
  (512)
  469-9951

  
	
   

  	
  Attn:
  Christopher Brown, General Counsel and

  
	
   

  	
   

  
	
   

  	
  NetSpend
  Holdings, Inc.

  
	
   

  	
  Austin
  Centre

  
	
   

  	
  701
  Brazos Street, 12th Floor

  
	
   

  	
  Austin,
  TX 78701

  
	
   

  	
  Telephone: 

  	
  (512)
  532-8662

  
	
   

  	
  Fax:

  	
  (512)
  469-9951

  
	
   

  	
  Attn:
  Christopher Brown, General Counsel

  
	
   

  	
   

  
	
   

  	
  with
  a copy to:

  
	
   

  	
   

  
	
   

  	
  Baker
  Botts L.L.P.

  
	
   

  	
  1500
  San Jacinto Center

  
	
   

  	
  98
  San Jacinto Boulevard

  
	
   

  	
  Austin,
  TX 78701

  
	
   

  	
  Telephone: 

  	
  (512)
  322-2500

  
	
   

  	
  Fax:

  	
  (512)
  322-2501

  
	
   

  	
  Attn:

  
	
   

  	
   

  
	
   

  	
  Finn
  Dixon & Herling, LLP

  
	
   

  	
  177
  Broad Street, 15t Floor

  
	
   

  	
  Stamford,
  CT 06901

  
	
   

  	
  Telephone: 

  	
  (203)
  325-5015

  
	
   

  	
  Fax:

  	
  (203)
  325-5001

  
	
   

  	
  Attn:  Michael J. Herling, Esq.

  



 


(ii)           if to the Executive, to him (A) at the address listed on the first
page of this Agreement, and (B) by facsimile at
                                    .


 


	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Law Office of Adam E. Faber LLC

  
	
   

  	
  80 Cutter Mill Road, Suite 308

  
	
   

  	
  Great Neck, New York, 11021

  
	
   

  	
  Telephone: 

  	
  (516) 570-0685

  
	
   

  	
  Fax:

  	
  (516) 908-4170

  
	
   

  	
  Attn:  Adam
  E. Faber

  



 


15

















 


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 10.1.


 


10.2         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.


 


10.3         Entire Agreement.  This Employment Agreement (which includes
references to option agreements for the grant of options to the Executive)
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 Prior
Agreement.  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 7 hereof.


 


10.4         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.


 


10.5         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.


 


10.6         Payment of Severance.  In addition to the provisions of
Section 7.5 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 7, 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 


 


16

















 


each case without limiting or affecting the
Executive’s obligations under Section 7 hereof, or the Company’s other
rights and remedies available at law or equity.


 


10.7         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 rights to the Executive’s estate under Section 5.3 of this
Agreement.


 


10.8         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.


 


10.9         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.


 


10.10       Arbitration.


 


10.10.1         As
a part of, and in consideration for this Employment Agreement and the
compensation and other benefits paid herein and in consideration for the
Company’s mutual agreement to arbitrate certain claims, the Executive agrees
that any dispute he may have against the Company, its subsidiaries, affiliates,
directors, officers, agents, representatives, attorneys, employees, successors
or assigns, under either state or federal law, arising out of this Employment Agreement,
the Executive’s employment or the Company’s termination of employment, will be
submitted to final and binding arbitration in Austin, Texas in accordance with
the Company’s then current arbitration procedures.


 


10.10.2         However,
nothing in this Section 10.10 shall be construed to prevent the Company
from asking a court of competent jurisdiction to enter appropriate equitable
relief to enjoin a violation of the covenants and agreements contained in
Section 7 of this 


 


17

















 


Employment Agreement.  The Company shall have the right to seek such
relief in connection with or apart from the parties’ rights under this clause
to arbitrate all disputes.


 


10.10.3         The
Executive expressly acknowledges that the Company’s arbitration procedures
requires the Executive to initiate the arbitration procedure within one hundred
and eighty days (180) days after the Executive’s termination or resignation or
after the Executive knows or should have known of the adverse employment
action.  By agreeing to arbitrate, the
Executive understands that the Executive and the Company are mutually agreeing
to submit all disputes to an arbitral rather than judicial forum.


 


10.10.4         The
Executive and the Company agree that, based on the Company’s current
arbitration procedures, which procedures may be changed by the Company with
thirty (30) days written notice to the Executive, an arbitrator will be
selected from AAA and that AAA shall schedule any arbitration and appoint the
arbitrator, if the parties cannot agree on the selection of the
arbitrator.  The Executive understands
that the cost of the arbitrator will be borne equally by the Executive and the
Company, although upon demonstration of financial burden by the Executive, the
arbitrator may shift the arbitration fees to be borne by the Company with the
Executive paying a minimum of $250.  The
Executive also understands that the decision of the arbitrator shall be final
and binding.  In the event that either
party to this Employment Agreement brings or pursues a dispute in a court of
law, which dispute is subject to final and binding arbitration in accordance
with this Employment Agreement and should have been brought or submitted to
arbitration, that party shall pay all reasonable attorneys’ fees and court
costs incurred by the other party in filing any motion to compel arbitration,
motion to dismiss or other pleading with said court to enforce arbitration
under those procedures.


 


10.11       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.  Facsimile and electronic transmission of the
executed Agreement shall be acceptable.


 


10.12       Headings.  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.


 


10.13       Certain Definitions.


 


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


 


“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.


 


18

















 


“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.


 


[Remainder of page intentionally
left blank]


 


19














 


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


 


 


	
   

  	
  NETSPEND
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Christopher T. Brown

  
	
   

  	
   

  	
  Christopher
  T. Brown

  General Counsel and Secretary

  
	
   

  	
   

  
	
   

  	
  NETSPEND
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Christopher T. Brown

  
	
   

  	
   

  	
  Christopher
  T. Brown

  General Counsel and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  Daniel Henry

  
	
   

  	
  Daniel
  Henry

  



 

















 


Exhibit A


 


Form of Release


 


This
Release Agreement is by and among NetSpend Corporation, a Delaware corporation
(the “Company”), NetSpend Holdings, Inc., a Delaware corporation (“Holdings”),
and Daniel Henry (“Henry”).


 


1.             The parties hereby acknowledge and
agree to the severance terms set forth in Section 5 of the Employment
Agreement, dated as of
                                    
(the “Employment Agreement”), between the Company, Holdings and Henry.  Henry 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 5.3 of the Employment Agreement.


 


2.             For and in consideration of the
severance payments and benefits the Company will pay to Henry pursuant to
Section 5 of the Employment Agreement, Henry, 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 Holdings and their
respective predecessors, successors, corporate affiliates, 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 Henry’s employment with the Company or Holdings 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 or Holdings, 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.


 


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 Releasee as an
officer of the Company pursuant to the Company’s certificate of incorporation
or bylaws, in accordance with applicable law; (iii) rights under stock
option plans or agreements, or (iv) claims for group health 


 

















 


and/or
life insurance benefits to which Releasor is entitled under
Section 5.1(v) of the Employment Agreement.


 


4.             Henry 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 Henry may choose to
voluntarily execute this Release earlier). Henry 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.             Henry 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 or
Holdings.


 


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


 


7.             Henry 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 or
Holdings shall Disparage Henry.  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, Holdings and Henry. 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]


 


2

















 


	
   

  	
   

  
	
  Daniel
  Henry

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
  This
                
  day of
                                                    ,
  200  .

  
	
   

  	
   

  
	
   

  	
   

  
	
  WITNESSES:

  	
   

  
	
   

  	
   

  
			



 


	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name

  



 


ACKNOWLEDGEMENT


 


	
  STATE
  OF TEXAS

  	
  )

  	
   

  
	
   

  	
  )

  	
  SS:

  
	
  COUNTY
  OF 

  	
  )

  	
   

  



 


On
this               day
of
                                  ,
200  , before me, the undersigned officer, personally appeared Daniel
Henry, 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:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NETSPEND
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NETSPEND
  HOLDINGS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
					



 


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