exv10w1






Exhibit 10.1




PENSON WORLDWIDE, INC.

2010 EXECUTIVE BONUS PLAN




I. PURPOSE AND ADMINISTRATION OF THE PLAN




     The Penson Worldwide, Inc. 2010 Executive Bonus Plan (the “Plan”) is hereby established to
promote the interests of the Corporation by creating an incentive program to (i) attract and retain
employees, (ii) provide a link between compensation and performance and (iii) provide the
opportunity for long-term financial gain through share ownership. The Plan shall be in effect for
the Corporation’s fiscal year ending on December 31, 2010 (the “2010 Year”). The Plan shall be
administered by the Compensation Committee, which shall have full authority to establish such rules
as it deems appropriate for administration of the Plan, to make all determinations and to interpret
the provisions of the Plan. Decisions of the Committee shall be final and binding on all parties
who have an interest in the Plan.



II. ELIGIBILITY




     The Compensation Committee shall determine, in its sole discretion, the persons eligible to
become Participants. A Participant shall be eligible to receive an award (whether in the form of
cash or RSUs) under the Plan, provided the Participant remains in Service through the payment date
of the award.



III. BONUS COMPENSATION




     A. 2010 Bonus Potential



     The target bonus for the 2010 Year for each Participant shall be determined by the
Compensation Committee. Generally, no more than 25% of the 2010 target bonus will be payable in
cash, with the balance payable in the form of a grant of RSUs. The actual amount of the cash bonus
and the number of RSUs awarded will be calculated pursuant to the criteria below. In addition, the
RSUs will be subject to the vesting schedule specified below.



     B. Cash Payments



          1. The cash bonus opportunity will be based on the Corporation’s attainment of its
pre-established revenue and pre-tax profit targets for the 2010 Year. One-half of each
Participant’s cash bonus opportunity will be based upon the Corporation’s achievement of its
pre-established revenue target and the other half will be based upon the Corporation’s achievement
of its pre-established pre-tax profit goal. At least 70% of each goal must be attained in order to
receive any cash bonus. Cash bonus payments will generally be earned on a pro-rata basis for
achievement of between 70% and 100% of each goal. The actual level at which each goal is achieved
will determine the cash bonus amount payable to the Participant. For example, for most
Participants, if the Participant’s target bonus is $40,000, then the cash portion of the targeted
bonus would be $10,000. If the Corporation achieves 100% of its revenue goal and 90% of its
pre-tax earnings goal, actual cash bonus payments would be as follows:




	 	•	 	Revenues — 100% of the financial goal achieved equates to a 50%
payment of the total cash bonus target.
	 
	 	•	 	Earnings — 90% of the financial goal achieved equates to a 33%
payment of the total cash bonus target.
	 
	 	•	 	Total — 83% of targeted cash bonus (i.e., $8,300) would be
paid.





          2. Following the close of the 2010 Year, the Compensation Committee shall determine the actual
level at which each performance target for the 2010 Year has been attained and the amount of the
cash bonus payable to each Participant. The actual cash bonus payments to which a Participant
becomes entitled will be made after such determination but no later than February 15, 2011,
provided the Participant has continued in Service through such date. No Participant shall earn or
accrue any right to any portion of the cash bonus prior to such payment date. Any bonus payments
shall be subject to the Corporation’s collection of all applicable taxes.



 









 





     C. RSU Awards



          1. The number of target RSUs (the “Target RSUs”) allocated to each Participant shall be
determined by dividing the RSU portion of the Participant’s target bonus by the Fair Market Value
per share of Common Stock on the last trading day in the 2010 Year (rounded down to the nearest
whole number of RSUs). Each RSU grant will be subject to the vesting schedule set forth in
subparagraph 3 below. The number of actual RSUs granted will be based upon the following criteria:




	 	•	 	25% of the Target RSUs will be granted without regard to
attainment of any performance goals.
	 
	 	•	 	Up to 25% of the Target RSUs will be granted based upon the
level of the Corporation’s achievement of its established financial goals, and
determined in the same manner as set forth for receiving the cash bonus
described above.
	 
	 	•	 	Up to 25% of the Target RSUs will be granted based upon
attainment of a pre-established specific client or balance growth target
applicable to the Participant’s employer entity for the 2010 Year.
	 
	 	•	 	Up to 25% of the Target RSUs will be granted based upon a
subjective evaluation of the Participant’s attainment of pre-established
individual objectives.





          2. Following the close of the 2010 Year, the Compensation Committee shall determine the actual
level at which each of the performance goals for the 2010 year has been attained and the number of
RSUs to be granted to each Participant; provided, that under no circumstances shall any such award
include units representing fractional shares of Common Stock, and in lieu of any such fractional
shares the Participant shall receive the cash value thereof (based on the Fair Market Value on the
grant date of the award). The RSUs will be granted effective February 15, 2011, provided the
Participant has continued in Service through such date. Any cash payable in connection with a
fractional RSU shall be paid at the same time as any cash bonus payable to the Participant.



          3. Each RSU will represent the right to receive one share of Common Stock following vesting of
the RSU. The RSU award will vest in three (3) equal annual installments upon the Participant’s
completion of each year of Service measured from the grant date of the award. All unvested RSUs
held by a Participant shall immediately vest in full upon the termination of such Participant’s
Service (i) by the Corporation (or any Subsidiary employing such person) for any reason other than
Cause, or (ii) by the Participant for Good Reason. The shares subject to vested RSUs shall be
issued upon such vesting or as soon as practicable thereafter but in no event later than March 15
of the year following the year in which the vesting occurs. Any such issuance shall be subject to
the Corporation’s collection of all applicable taxes. The remaining terms of each RSU award shall
be subject to the Stock Incentive Plan and the form RSU agreement thereunder.



          4. Nothing herein shall be deemed an amendment to any term or provision of the Stock Incentive
Plan.



III. MISCELLANEOUS




          1. The Compensation Committee or the Board shall have complete and exclusive power to amend or
modify the Plan in any and all respects; provided, that in no event may the Board or the
Compensation Committee amend or modify the Plan in a manner requiring approval by the stockholders
of the Corporation without obtaining stockholders’ approval.



          2. Nothing in the Plan shall confer upon any Participant any right to continue in employment
for any period or restrict in any way the rights of the Corporation (or any Subsidiary employing
such person) or of the Participant, which rights are hereby expressly reserved by each, to
terminate such person’s employment at any time for any reason, with or without cause.



2









 





          3. No amounts awarded or accrued under this Plan shall actually be funded, set aside or
otherwise segregated prior to payment. The obligation to pay the bonuses awarded hereunder shall
at all
times be an unfunded and unsecured obligation of the Corporation. Participants shall have the
status of general creditors and shall look solely to the general assets of the Corporation for the
payment of their bonus awards.



          4. No Participant shall have the right to alienate, pledge or encumber his/her interests in
this Plan, and such interest shall not (to the extent permitted by law) be subject in any way to
the claims of the employees creditors or to attachment, execution or other process of law.



3









 





APPENDIX I

DEFINITIONS




     The following definitions shall be in effect under the Plan:



     A. Board means the board of directors of the Corporation, as such shall be constituted from
time to time.



     B. Cause means (in addition to any definition given such term in any employment agreement
between the Corporation or a Subsidiary, on the one hand, and the Participant, on the other hand,
which definition is incorporated herein by reference with respect to such Participant): (i) a
conviction or plea of nolo contendre by the Participant to a felony offense or any crime that could
have an adverse effect on the Corporation or a Subsidiary or on the Participant’s job performance;
or (ii) the Corporation’s good faith determination that (a) the Participant has engaged in theft,
fraud, embezzlement or dishonest conduct with respect to any property or funds of the Corporation
or a Subsidiary, or of any vendor, partner, employee or customer of the Corporation or a
Subsidiary, or (b) the Participant has engaged in a significant act of misconduct which has had an
adverse effect on the business, operations, reputation or business prospects of the Corporation or
any Subsidiary.



     C. Common Stock means the common stock, par value $0.01 per share, of the Corporation.



     D. Compensation Committee means the compensation committee of the Board, as such shall be
constituted from time to time.



     E. Corporation means Penson Worldwide, Inc., a Delaware corporation.



     F. Fair Market Value per share of Common Stock on any relevant date means the closing selling
price per share of Common Stock on the date in question, as such price is reported on the Nasdaq
National Market or any successor system and in The Wall Street Journal. If there is no closing
selling price for the Common Stock on the date in question, then the Fair Market Value shall be the
closing selling price on the last preceding date for which such quotation exists.



     G. Good Reason means, solely for the purpose of the Plan (and specifically shall not apply to
any employment agreement between the Corporation or a Subsidiary, on the one hand, and the
Participant, on the other hand, which definition shall remain unchanged with respect to such
employment agreement), without the Participant’s express written consent; the occurrence of one or
both of the following: (i) a material change in the location of the Participant’s regular place of
employment (for this purpose a relocation of such Participant’s regular place of employment by more
than fifty (50) miles shall be deemed to be material) or (ii) a material diminution in the
Participant’s authority, duties or responsibilities provided that the Participant must (a) provide
written notice to the Company of the existence of the condition constituting Good Reason within
sixty (60) days of the initial existence of such condition and (b) provide the Company with thirty
(30) days after receipt of such notice to cure such condition. If the Company fails to remedy such
condition, the Participant’s termination for Good Reason will occur on the expiration of the cure
period; if the Company cures such condition within the applicable cure period, a termination for
Good Reason will not be deemed to have occurred.



     H. Participant means any person in Service of the Corporation or any Subsidiary that the
Compensation Committee determines, in its sole and absolute discretion, is permitted to participate
in the Plan.



     I. Plan means the Corporation’s 2010 Executive Bonus Plan.



     J. RSU means restricted stock units awarded pursuant to the Corporation’s Stock Incentive
Plan.



     K. Service means serving as an employee, consultant or director with the Corporation or a
Subsidiary.



     L. Stock Incentive Plan means the Corporation’s Amended and Restated 2000 Stock Incentive
Plan, as amended.



 









 





     M. Subsidiary means, except to the extent otherwise determined by the Plan administrator, any
corporation (other than the Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last in such chain) in the unbroken chain
owns, at the time of the determination, stock possessing fifty (50) percent or more of the total
combined voting power of all classes of equity interests in one of the other entities in such
chain.




2