Document:

10.2 - Engel Retention Incentive Letter 2012

Exhibit 10.2
MEMORANDUM
	
					
	TO:
	Bryce B. Engel
	 

	FROM:
	Bart McCain
	 

	DATE:
	July 24, 2012
	 
	 
	 

	SUBJECT:
	Special Retention Incentive Program
	 

	 

As you know, Penson Financial Services, Inc. (the “Company”) entered into various agreements with Apex Clearing Holdings LLC (“Apex Holdings”) on May 31, 2012, pursuant to which PFSI agreed to sell and transfer the customer and correspondent accounts and related contractual rights under its securities clearing contracts.  
We are pleased to inform you that the board of directors of the Company has approved a special retention program (the “Incentive Payment”) for you as an incentive to continue to remain employed with the Company following the closing date of the transaction.  This Incentive Payment is conditioned on your execution of the amendment (the “Amendment”) to the Executive Employment Agreement between you and Penson Worldwide, Inc. dated as of February 2, 2012, (the “Employment Agreement”) prior to July 27, 2012.
Incentive Payment:
The specific terms and conditions governing your Incentive Payment entitlement may be summarized as follows:
1.The aggregate amount of your Incentive Payment will be Three Hundred and Fifty Thousand Dollars ($350,000.00).  
2.The Incentive Payment will be payable in seven (7) equal successive installments with the first such installment to be paid on or prior to July 31, 2012 and the remaining installments to be paid on the last day of each month over the 6-month period commencing July 2012 and ending December 2012.  Each installment will be paid only if you continue to remain employed with the Company through the scheduled payment date for that installment.  Except as provided in Section 3 and Section 4 below, should your employment terminate for any reason prior to the payment date of an installment, you will not be eligible to receive that installment or any subsequent installment of your Incentive Payment.
3.Notwithstanding the foregoing, in the event the Company terminates your employment other than for Cause (as such term is defined in the Employment Agreement) prior to December 31, 2012, you will be paid all remaining unpaid installments of your Incentive Payment in a lump sum on the date of such termination.  In addition, in the event of a voluntary or involuntary bankruptcy filing with respect to the Company (or any subsidiary), all remaining unpaid installments of your Incentive Payment will be automatically accelerated (without any further action required) and paid to you in a lump sum unless the Company’s board of directors determines that an acceleration is not necessary to protect your rights, and subject to the court’s discretion to permit the payment.  

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4.Notwithstanding the foregoing, in the event you commence employment with an Apex Entity prior to December 31, 2012, you will be paid all remaining unpaid installments of your Incentive Payment in a lump sum on the date of termination of your employment with the Company by reason of such commencement of employment.  For purposes of this award letter, an “Apex Entity” means Apex Holdings, Apex Clearing Corporation or any entity affiliated with Apex Holdings.
5.Each installment payment under Section 2 (and any payment under Section 3 or Section 4) will be subject to the Company’s collection of all applicable withholding, including federal, state and local income and employment withholding taxes.
Nothing in this award letter shall confer upon you any right to continue in the Company’s employ for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company or your rights to terminate your employee status at any time for any reason, with or without cause.  This award letter will be governed by and construed in accordance with the laws of the State of Texas without resort to that State’s conflict-of-laws rules.  Nothing in this letter shall affect your rights under the Employment Agreement as amended by the Amendment.   
We hope that you find the Incentive Payment a significant addition to your total compensation package which will encourage you to continue in the Company’s service and facilitate the provision of transitional services to Apex Clearing Corporation.  

Please acknowledge your agreement with the terms of the Incentive Payment by executing this award letter below and returning it to me by July 27, 2012.

PENSON FINANCIAL SERVICES, INC.

/s/ Bart McCain                 
By: Bart McCain

ACKNOWLEDGMENT

I hereby acknowledge the terms and conditions of the Incentive Payment including that in order to receive any Incentive Payment I must execute and return to the Company the Amendment to the Employment Agreement prior to July 27, 2012.

/s/ Bryce B. Engel                    
Bryce B. Engel

Date: July 24, 2012

210.3 - 23426181_1_PEN_MYV McCain Offer Letter

Exhibit 10.3
June 12, 2006
Mr. Bart McCain 
3459 Henrietta Hartford Rd. 
Mt. Pleasant, SC 29466
Dear Bart,
We are pleased to offer you employment with Penson Financial Services, Inc., under the following terms:
		
	1.
	You will become Senior Vice President of Penson Financial Services, Inc. (“PFSI”) located in Dallas, Texas. Your title will be Chief Administrative Officer, reporting to the President and CEO, Bill Yancey.

		
	2.
	As a senior executive of a Penson company, your responsibilities will include cash management, the business planning process and developing metrics for measuring corporate performance, while being actively engaged in all aspects of the business and leading designated strategic initiatives designed to achieve organizational excellence.

		
	3.
	Your base compensation will be $200,000 per year, plus a discretionary bonus to be determined by the Executive Committee of Penson. With respect to the period ending on the first year following the date you commence your employment with Penson, you will receive a bonus of no less than $75,000.

		
	4.
	You will receive a restricted stock grant of 8,300 shares of common stock of Penson Worldwide, Inc., to vest equally over quarterly periods of service during the first four years of your employment.

		
	5.
	You will receive an option grant for 8,300 shares of common stock of Penson Worldwide at a price to be determined by the Compensation Committee of Penson Worldwide, to vest equally during quarterly periods of service over the first four years following the date you commence your employment with Penson. The equity grants described above and in this paragraph are subject to approval of the Compensation Committee of Penson Worldwide and the standard documentation of Penson Worldwide relating to such grants.

		
	6.
	You will be entitled to the standard benefits coverage and vacation policy offered to all PFSI employees holding similar positions, except that you will be entitled to four weeks vacation annually for each year of employment (to be taken in accordance with company policies).

1

		
	7.
	We will pay reasonable relocation and temporary housing expenses related to the travel and transition from South Carolina to Texas provided that I pre-approve such expenses in advance.

		
	8.
	While your employment is at will, the terms of this compensation agreement will apply to the first year of your employment, unless modified in writing upon mutual agreement.

We are excited at the prospect of having you join us. If the terms of this agreement are acceptable, please evidence your acceptance by signing below by no later than July 3, 2006. Your offer is contingent upon satisfactory completion of our background check and your signing of standard documentation prepared by our company. Please feel free to contact me with any questions or comments.
Sincerely, 
 
/s/ Bill Yancey
Bill Yancey 
President and CEO 
Penson Financial Services, Inc.
Accepted:
/s/ Bart McCain     
Mr. Bart McCain

210.4 - McCain Amendment Exhibit

Exhibit 10.4
July 31, 2012                                        
Mr. Bart McCain
6981 Kenwood Avenue
Dallas, Texas 75214

Re: Amendment to Employment Letter
Dear Bart
This letter agreement (the “Amendment Agreement”) amends that certain employment letter between you and Penson Financial Services, Inc. (the “Company”) dated as of June 12, 2006 (the “Employment Letter”).  
You and the Company have agreed to amend the terms and conditions of the Employment Letter in order to update certain terms and conditions of your employment.  Accordingly, you and the Company hereby agree that, effective June 5, 2012, the Employment Letter shall be amended as follows:
		
	1.
	Job Title.  Your job title is Execute Vice President and Chief Financial Officer of the Company.  In addition, you shall serve as interim Chief Financial Officer of Penson Worldwide, Inc. (“PWI”).  You shall report to the Chief Executive Officer of the Company and, so long as you serve as Chief Financial Officer of PWI, to the Chief Executive Officer of PWI.

		
	2.
	Compensation.  Your annual base salary will be $275,000.  

		
	3.
	Severance.  If your employment with the Company is terminated by the Company for a reason, other than cause, you will be entitled to severance compensation equal to six months’ of your current base salary.  If you are terminated for cause, you will not be entitled to any severance compensation.

		
	4.
	Right to Advice of Counsel.  You acknowledge that you have had the right to consult with counsel and you are fully aware of your rights and obligations under the Employment Letter and this Amendment Agreement.

		
	5.
	Remaining Terms.  Except for the amendment set forth in this Amendment Agreement, all of the other terms of the Employment Letter shall remain in full force and effect.  This Amendment Agreement does not modify or affect your at-will employment status, which means that you or the Company may terminate your employment relationship at any time for any reason, with or without cause.

PENSON FINANCIAL SERVICES, INC.

By:/s/ Bryce Engel        
Name: Bryce Engel
Title:   Chief Executive Officer

AGREED AND ACKNOWLEDGED:
By:/s/ Bart McCain             
Name: Bart McCain

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