EXHIBIT A CACHET FINANCIAL SOLUTIONS INC. 2010 EQUITY INCENTIVE PLAN

 

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

 

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

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

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

 

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

 

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

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

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

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

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

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

 

(B)

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

 

(C)

in cash or its equivalent; or

 

(D)

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

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

 

(A)

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

 

(B)

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

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

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

 

(A)

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

 

(B)

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

 

(C)

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

 

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

 

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

 

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

 

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

 

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

 

Other Terms and Conditions. Restricted Shares issued under the Plan shall be registered in the name of the Participant on the books and records of Cachet or its designee (or by one or more physical certificates if physical certificates are issued with respect to such Restricted Shares) subject to the applicable restrictions imposed by the Plan. The Participant may not sell, transfer, pledge, exchange, hypothecate or dispose of such Restricted Shares during the Restriction Period. A breach of a restriction or a breach of terms and conditions established by the Committee pursuant to Restricted Shares or Restricted Stock Units shall cause forfeiture of any such Award. If a Restricted Share is forfeited in accordance with the restrictions that apply to such Restricted Shares, such interest or certificate, as the case may be, shall be cancelled. At the end of the Restriction Period that applies to Restricted Shares, the number of shares to which the Participant is then entitled shall be delivered to the Participant free and clear of such restrictions, either in certificated or uncertificated form. No shares of Common Stock shall be registered in the name of the Participant with respect to a Restricted Stock Unit unless and until such unit is paid in shares of Common Stock.

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

(i)

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

 

(ii)

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

 

Impact of Event. Notwithstanding any other provision of the Plan to the contrary, in the event of a Change in Control: (i) outstanding Options and SARs shall immediately vest and become exercisable; (ii) the restrictions and other conditions applicable to outstanding Restricted Shares, Restricted Stock Units and Stock Awards, including vesting requirements, shall immediately lapse; such Awards shall be free of all restrictions and fully vested; and, with respect to Restricted Stock Units, shall be payable immediately in accordance with their terms or, if later, as of the earliest permissible date under Code Section 409A; and (iii) outstanding Performance Shares or Performance Units granted under the Plan shall immediately vest and shall become immediately payable in accordance with their terms as if 100% of the Performance Goals have been achieved.

 

 

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

 

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