exv10w1






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



 









 






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



 









 






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




 









 






	 	 	 	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



 









 






(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.




 









 






	 	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




 









 






	 	 	 	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 	 
	 




 









 





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