Exhibit 10.1
PENSON WORLDWIDE, INC.
August 17, 2010
Mr. Daniel P. Son
President
Penson Worldwide, Inc.
1700 Pacific Avenue, Suite 1400
Dallas, Texas 75201
Via Personal Delivery
Dear Dan:
In recognition of your many contributions in creating one of the most successful
global financial services firms, Penson and its employees wish to thank you for
your many years of leadership. As you transition into retirement, we have set
forth in this letter agreement (“Agreement”) between you and Penson Worldwide,
Inc. (“Company”) the terms of your retirement from employment with the Company.
Your last day of employment with the Company shall be August 31, 2010
(“Retirement Date”). Accordingly on the Retirement Date, you will incur a
separation from service for purposes of Section 409A of the Internal Revenue
Code (the “Code”).
You and the Company agree as follows:

1.   Regardless of whether you sign this Agreement, you will receive payment for
all base salary and all accrued but unused vacation earned by you in the normal
course of business through the Retirement Date, less all required deductions for
federal and state withholdings, other applicable taxes, and any lawfully
authorized or required payroll deductions. We will also promptly reimburse you
for all reasonable expenses incurred in connection with your recent ordinary
course employment in accordance with the Company’s existing policies relating to
same with all such properly documented expenses to be reimbursed no later than
September 30, 2010. Subject to the provisions of this Agreement, your group
medical insurance benefits, if any, will end on February 28, 2012. Regardless of
signing this Agreement, you may elect to continue receiving group medical
insurance under the Company’s plan, should you currently have it, pursuant to
the federal “COBRA” law. All premium costs shall be paid by you on a monthly
basis for as long as, and to the extent that, you remain eligible for COBRA
continuation coverage. You should consult the COBRA materials to be provided by
the Company for details regarding COBRA continuation benefits. All other
benefits will end on the Retirement Date.

Provided you sign this Agreement and return it to me within 21 days from the
date of this letter and do not thereafter revoke it within the applicable seven
day

 

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revocation period measured from the date you return this signed Agreement, the
Company is willing to provide you with certain benefits. If you do not accept
this Agreement within that time or you revoke it within the applicable
revocation period, you will not be entitled to receive the benefits described
below. By signing and returning this Agreement and not revoking it within the
applicable revocation period, you will be entering into a binding agreement with
the Company and will be agreeing to the terms and conditions set forth herein
including in the paragraphs below.
Accordingly, if you execute and return this Agreement within 21 days following
the date of your receipt of this letter, subject to the other provisions of this
Agreement, and your general release under this Agreement becomes irrevocable and
enforceable after the applicable seven day revocation period, you will receive
the following severance benefits:
(a) You will be entitled to cash in the form of salary continuation payments, in
an aggregate amount of $900,000 (less applicable withholding taxes at the rate
currently in effect for payment of your salary), equal to (i) 12 months of base
salary at the prorated annualized rate currently in effect for you of $550,000
and, thereafter, (ii) 16 months of the prorated amount of $350,000 with the last
such payment to be made with respect to the period ending on December 31, 2012.
Such payments will be made in a series of successive equal (relative,
respectively, to the compensation amount identified in each of clauses (i) and
(ii) above) installments on the Company’s regularly scheduled pay dates for
salaried employees for the periods noted in clauses (i) and (ii) above, except
that, notwithstanding the forgoing to the contrary, the first such salary
continuation payment shall be in the amount of $45,833.33 and each subsequent
semi-monthly payment thereafter through August 31, 2011 shall be in the amount
of $22,916.66 (in each case less applicable withholding taxes at the rate
currently in effect for payment of your salary). Subject to the other provisions
of this Agreement, the first such payment will be made on the first such
regularly scheduled payday for the Company’s salaried employees following the
expiration of the maximum 21day review and seven day revocation period in effect
for your general release under this Agreement. Each such payment shall be
subject to the Company’s collection of all applicable withholding taxes. For
purposes of Section 409A of the Code, including the short-term deferral
exception under Treasury Regulations Section 1.409A-1(b)(4)(i)(F) and the
involuntary separation pay plan exemption under Treasury Regulations Section
1.409A-1(b)(9)(iii), each such cash severance payment shall be deemed to be a
separate payment and not part of an entitlement to a single payment. Each such
separate payment made during the period commencing with your Retirement Date and
ending on March 15 of the succeeding year is hereby designated a “Short-Term
Deferral Payment” and shall be paid during such period.
(b) Provided you and your spouse and eligible dependents make a timely election
to continue your health care coverage under the Company’s group health care
plans pursuant to your COBRA rights, the Company will reimburse you for

 

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the costs you incur to obtain such continued coverage for yourself, your spouse
and your eligible dependents (collectively, the “COBRA Coverage Costs”) until
the earlier of (x) the end of the 18 month period measured from your Retirement
Date or (y) the first date on which you are covered under another employer’s
health benefit program without exclusion for any pre-existing medical condition.
In order to obtain reimbursement for your COBRA Coverage Costs, you must submit
appropriate evidence to the Company of each periodic payment of your COBRA
Coverage Costs within 45 days after the required payment date for those COBRA
Coverage Costs, and the Company will within 30 days after such submission
reimburse you for that payment. In no event will any COBRA Coverage Costs be
reimbursed after the close of the calendar year following the calendar year in
which those COBRA Coverage Costs were incurred; and the amount of COBRA Coverage
Costs reimbursed to you in any one calendar year shall not affect the amount of
COBRA Coverage Costs reimbursable in any other calendar year during which you
are entitled to such reimbursement hereunder. In addition, your right to
reimbursement of such COBRA Coverage Costs cannot be liquidated or exchanged for
any other benefit. Each reimbursement shall be subject to the Company’s
collection of applicable withholding taxes, and you shall only be paid the net
amount remaining after such withholding taxes have been collected.
Notwithstanding any provision in this Agreement to the contrary, no payment or
benefit under this Agreement that constitutes an item of deferred compensation
under Code Section 409A will be made to you prior to the earlier of (i) the
first day of the seventh month following the Retirement Date or (ii) the date of
your death, if you are deemed to be on the Retirement Date a specified employee
under Section 1.409A-1(i) of the Treasury Regulations issued under Code
Section 409A and such delayed commencement is otherwise required in order to
avoid a prohibited distribution under Code Section 409A(a)(2). Upon the
expiration of the applicable deferral period, all payments and benefits deferred
in accordance herewith (whether they would have otherwise been payable in a
single sum or in installments in the absence of such deferral) shall be paid or
provided to you in a lump sum on the first day of the seventh month after the
Retirement Date or, if earlier, the first day of the month immediately following
the date the Company receives proof of your death. Such delayed commencement
date shall not apply to any salary continuation payments hereunder that
constitute a Short-Term Deferral Payment.

  2.   Contemporaneously with the execution hereof, Holland Consulting, LLC and
the Company shall enter into that certain Consulting Agreement dated the same
date as this Agreement.     3.   Subject to the terms of the Company’s Bylaws,
you shall continue to serve on the Company’s Board of Directors in the capacity
of Non-Executive Vice Chairman of the Board until your current term expires in
May, 2011 and attend all meetings of the Board of Directors without additional
compensation until the expiry of your current term. Effective as of August 31,
2010, except as noted in the immediately

 

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      preceding sentence, you agree to resign your other positions as an
employee and director of the Company and its subsidiaries.     4.   In
consideration of the promises contained in this Agreement you agree as follows:

  (a)   On behalf of yourself and anyone claiming through you, irrevocably and
unconditionally to release, acquit and forever discharge the Company and its
affiliates and subsidiaries, their successors and assigns, as well as their
officers, directors, shareholders, agents and employees (collectively,
“Releasees”), in the individual and/or corporate capacities of each, from any
and all claims, liabilities, promises, actions, damages and the like, known and
unknown, which you may ever have had against any of the Releasees arising out of
or relating to your employment with the Company and/or the end of your
employment with the Company. Said claims include, but are not limited to, Title
VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1966;
the Age Discrimination in Employment Act (ADEA); the Older Workers’ Benefit
Protection Act; the Americans with Disabilities Act; the Family and Medical
Leave Act of 1993; the Fair Labor Standards Act; the Equal Pay Act; the Employee
Retirement Income Security Act of 1974; the Civil Rights Act of 1991; 42 U.S.C.
§ 1981; any state law equivalents of the forgoing statutes and laws, defamation;
intentional infliction of emotional distress; injury to reputation; pain and
suffering; or any other federal, state, or local law or regulation; or any right
under any Company pension, welfare, or stock plans, with the exception of any
breach of the terms of this Agreement. In case of any doubt, the terms of your
release shall be broadly construed in favor of Releasees and any references to
statutes and laws shall refer to such as they may be amended from time to time.
        The only exceptions to this release are any claim(s) you may have for:

(i) unemployment benefits pursuant to the terms of applicable law (to the extent
available to you under applicable law);
(ii) workers’ compensation insurance benefits pursuant to applicable State law
under the terms of any workers’ compensation insurance policy or fund of the
Company;
(iii) continued participation in certain of the Company’s group health benefit
plans pursuant to the terms and conditions of the federal law known as “COBRA”,
if applicable, and/or any applicable State law counterpart to COBRA;
(iv) any benefit entitlements vested as of the Retirement Date pursuant to
written terms of any applicable employee benefit plan sponsored by the Company;
and

 

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(v) any claims that, as a matter of applicable law, are not waivable and any
claims you may have for breach of this Agreement by the Company.

  (b)   That you shall not bring any legal action against any of the Releasees
for any claim waived and released under this Agreement and that you represent
and warrant that no such claim has been filed to date. You further agree that
should you bring any type of administrative or legal action arising out of
claims waived under this Agreement, you will bear all legal fees and costs, on
an as incurred basis (i.e., you must immediately pay all invoices for same that
we submit to you), including those of Releasees.     (c)   That the Amended and
Restated Executive Employment Agreement dated as of December 31, 2008 between
you and the Company (“Employment Agreement”) is hereby terminated and of no
further force and effect except that you shall remain bound by
Sections VII.B.2.b and VII.B.2 .c of such agreement through the Applicable End
Date (defined below) and all references in such Sections to periods of time
(including, without limitation, to “Severance Period”) shall be deemed modified
such that your obligations shall extend through the Applicable End Date in lieu
of any shorter period reference therein (you shall, however, benefit from the
exceptions to confidentiality obligations set forth in Section 6(b)(ii) of the
Consulting Agreement between the Company and Holland Consulting, LLC dated the
date hereof).     (d)   The Company’s obligations to you hereunder are dependent
upon compliance by (i) Holland Consulting, LLC with the terms of the Consulting
Agreement dated the date hereof and (ii) your compliance with the terms of the
Prior Agreements (the term of such Prior Agreements to be hereby deemed extended
through the later of December 31, 2012 or the date the Consulting Agreement
terminates, such date being referred to herein as the “Applicable End Date”).  
  (e)   The parties acknowledge that you will be entitled to all restricted
stock units that have vested through the Retirement Date (pro rated for the last
quarterly vesting period) and no others.

  5.   The Company acknowledges that the provisions of (i) that certain
Indemnification Agreement (herein so called) entered into as of August 1, 2005,
between you and Company and (ii) the Company’s Bylaws shall continue in full
force and effect and be applicable to you subject to the terms set forth
therein.     6.   The Company shall reimburse you for your actual legal expenses
incurred in connection with the negotiation and preparation of this Agreement
and the Consulting Agreement in an amount not to exceed $12,000.

 

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  7.   This Agreement shall be binding upon the parties and upon their heirs,
administrators, representatives, executors, successors and assigns.     8.   The
provisions of this Agreement are severable. If any provision is held to be
unenforceable, it shall not affect the validity of any other provision. This
Agreement sets forth the entire agreement between you and the Company relating
to your employment with the Company; provided that, notwithstanding the
forgoing, you shall continue to be bound by any prior obligations you may have
under any prior agreements (“Prior Agreements”) you entered into in favor of the
Company with respect to confidentiality, intellectual property, equity and
health related plans, employment matters (in the case of employment matters to
the extent agreements related thereto remain applicable after implementing this
Agreement), and related matters set forth in such agreements in accordance with
the terms and conditions of those agreements. This Agreement may not be amended
or waived without a written document executed by all of the parties hereto. You
represent and warrant that you fully understand that you have a right to consult
with an attorney of your choice prior to executing this Agreement and that you
have carefully read the provisions of this Agreement and are executing it freely
and knowingly. This Agreement will be governed by the laws of the State of
Texas. VENUE FOR ANY DISPUTE RELATING TO THE PROVISIONS OF THIS AGREEMENT SHALL
BE EXCLUSIVELY IN A COURT LOCATED IN DALLAS COUNTY, TEXAS EXCEPT TO THE EXTENT
THE COMPANY OTHERWISE DETERMINES.         You agree that in executing this
Agreement it shall be effective as a bar to each and every claim, demand and
cause of action released in this Agreement that you may have against the Company
or its affiliates.         You agree that you understand and that you
acknowledge the significance and the consequences of such release. This means
that, should you discover any facts different from what you understood at the
time you signed this Agreement; you will still be barred from making any claims
against any of the foregoing people or entities.         Nothing in this release
shall limit your right to testify, assist or participate in any investigation,
hearing or proceeding conducted by the Equal Employment Opportunity Commission
(“EEOC”) or preclude you from filing a charge of discrimination with the EEOC.
In addition, nothing in this release is intended to prevent, impede or otherwise
interfere with your ability and/or right to: (a) provide truthful testimony if
under subpoena to do so or (b) file a claim with any state or federal agency or
to participate or cooperate in such a matter; provided, however, that you hereby
acknowledge and agree that you cannot recover any monetary benefits in
connection with any such claim.         PLEASE READ CAREFULLY. YOU ARE GIVING UP
LEGAL CLAIMS THAT YOU HAVE AGAINST THE COMPANY BY SIGNING THIS

 

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      AGREEMENT. THIS OFFER OF COMPENSATION TO YOU WILL EXPIRE AND NO LONGER BE
VALID IF NOT ACCEPTED BY YOU AS SET FORTH ABOVE PRIOR TO AUGUST 20, 2010.

     Thank you for your many years of service to the Company.

            Very truly yours,

PENSON WORLDWIDE, INC.
      By:   /s/ David Johnson         David Johnson        Chair, Board of
Directors
Compensation Committee     

 

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ACCEPTANCE OF AGREEMENT AND RELEASE
     I acknowledge that I have carefully read this Agreement and understand all
of its terms, including the full and final release of claims set forth above. I
further acknowledge that I have voluntarily entered into this Agreement, that I
have not relied upon any representation or statement, whether written or oral,
not set forth in this Agreement and that I have been encouraged and given the
opportunity to consult with an attorney regarding this Agreement.
     By executing this Agreement, I agree to be bound by and comply with each
and every term of this Agreement. Pursuant to the terms of this Agreement,
therefore, and in consideration of the benefits described in this Agreement and
for other good and valuable consideration, I hereby release and forever
discharge the Company from all potential claims as more fully described above.

         
By:
Name:
  /s/ Daniel P. Son
 
Daniel P. Son    

Date: August 17, 2010