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EXHIBIT 10.31

 
AMENDMENT TO EMPLOYMENT AGREEMENT
BETWEEN RALPH E. FAISON AND PULSE ELECTRONICS CORPORATION
 
WHEREAS, Pulse Electronics Corporation (the “Company”) and Ralph E. Faison (the
“Executive”) entered into an employment agreement dated January 4, 2011, as
amended as of September 16, 2011 (as amended, the “Agreement”) pursuant to which
the Company employed the Executive as the Company’s President and Chief
Executive Officer; and
 
WHEREAS, Section 4.2(a) of the Agreement provides that the Executive is entitled
to receive a guaranteed bonus for the 2011 performance period in an amount equal
to at least $325,000 payable no later than March 15, 2012 (“2011 Bonus
Payment”); and
 
WHEREAS, Section 4.2(d) of the Agreement required the Company to reimburse the
Executive for certain moving and other relocation expenses incurred by the
Executive as a result of the relocation of his residence to San Diego,
California to assume his responsibilities as the Company’s President and Chief
Executive Officer, including real estate sales commissions incurred upon sale of
his prior home; provided, however, that if he did not sell his prior home prior
to December 31, 2011, he would receive $575,000 (or, if less, the maximum amount
that would cause all of his reimbursements pursuant to Section 4.2(d) of his
Agreement to equal $750,000); and
 
WHEREAS, the Executive has previously received reimbursement for $105,373.52 in
expenses pursuant to Section 4.2(d) of the Agreement and would thus be entitled
to receive an additional payment of $575,000 pursuant to Section 4.2(d) of the
Agreement if he does not sell his prior home by December 31, 2011 (the
“Relocation Payment”); and
 
WHEREAS, due to the decline in real estate market conditions in the Chicago
metropolitan area the Executive and the Company desire to reduce the Relocation
Payment from $575,000 to $330,000 (as amended, the “Amended Relocation
Payment”); and
 
WHEREAS, the Compensation Committee of the Board of Directors of the Company has
recently amended the minimum stock ownership guidelines for its senior
executives and directors generally requiring them to retain 50% of the shares of
Common Stock issued to them by the Company until they achieve the specified
ownership guidelines, which in the case of the Executive is 600% of his base
salary; and
 
WHEREAS, the Company and the Executive desire to amend the Agreement to provide
that the Company will pay the Amended Relocation Payment to the Executive on
December 16, 2011 and the 2011 Bonus Payment on March 9, 2012 and that these
payments will, to the extent permitted by applicable law and the regulations of
the New York Stock Exchange, Inc., (“NYSE”) be made in the form of shares of
common stock, par value $0.125 per share, of the Company (“Common Stock”) rather
than cash; and
 
WHEREAS, on the date hereof the Executive has executed into a written Trading
Plan pursuant to Rule 10b5-1 of the Securities Act of 1934, as amended (the
“Exchange Act”), with an independent securities brokerage firm for the purpose
of selling a portion of the shares of Common Stock issuable hereunder to finance
the payment of applicable withholding taxes on the issuance of such shares.
 
 
 

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NOW, THEREFORE, in consideration of the promises and mutual agreements contained
herein and intending to be legally bound hereby, the parties hereto agree as
follows:
 
 
1.
Subject to paragraph 3 and paragraph 5 below, the Company shall issue and
transfer to the Executive the number of whole shares of Common Stock on December
16, 2011 equal to $330,000 (or, if Executive sells his prior home prior to
December 15, 2011, the maximum reimbursement amount to which the Executive would
be entitled pursuant to the provisions of Section 4.2(d) of the Agreement)
divided by the closing price per share of the Common Stock on the NYSE on
December 15, 2011, rounded down to the next whole share of Common Stock.

 
 
2.
Subject to paragraph 3 and paragraph 6 below, the Company shall issue and
transfer to the Executive the number of whole shares of Common Stock on March 9,
2012 equal to the 2011 Bonus Payment to which the Executive is entitled pursuant
to Section 4.2(a) of the Agreement divided by the closing price per share of the
Common Stock on the NYSE on March 8, 2012, rounded down to the next whole share
of Common Stock.

 
 
3.
Notwithstanding anything to the contrary contained herein, in accordance with
Rule 312.03(b)(3) of the NYSE, the Company shall not issue to the Executive
shares of Common Stock pursuant to paragraph 1 and 2 above, that in the
aggregate, exceeds (1%) of the amount of issued and outstanding shares of Common
Stock of the Company on the date hereof.  If and to the extent that any payment
to the Executive pursuant to paragraph 1 or paragraph 2 above is not payable in
shares of Common Stock by virtue of the preceding sentence or otherwise, such
payment shall, to such extent, be made in cash.

 
 
4.
The issuance and transfer of shares of Common Stock pursuant to paragraph 1
above (and payment of any cash pursuant to paragraph 3, if applicable) shall be
in full and final satisfaction of the Company’s obligations to the Executive for
the Amended Relocation Payment pursuant to Section 4.2(d) of the Agreement and
the issuance and transfer of shares of Common Stock pursuant to paragraph 2 (and
payment of any cash pursuant to paragraph 3, if applicable) shall be in full and
final satisfaction of the Company’s obligations to the Executive for the 2011
Bonus Payment pursuant to Section 4.2(a) of the Agreement.

 
 
5.
On or prior to the December 16, 2011 the Company shall file with the Securities
and Exchange Commission (the “Commission”) a registration statement on Form S-8
for the purposes of registering under the Securities Act of 1933, as amended
(the “Securities Act”) the shares of Common Stock that may be issued to the
Executive pursuant to paragraph 1.

 
 
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6.
On or prior to the March 9, 2012 the Company shall file with the Commission a
registration statement on Form S-8 for the purposes of registering under the
Securities Act the shares of Common Stock that may be issued to the Executive
pursuant to paragraph 2.

 
 
7.
The Company shall cause the Company’s transfer agent (the “Transfer Agent”) to
credit the Shares to which the Executive is entitled to his brokerage account at
JP Morgan Securities with Depositary Trust Corporation (“DTC”) through its
Deposit/Withdrawal At Custodian (“DWAC”) system; provided that the Executive
shall provide the requisite DTC Participant Number and applicable account number
to the Company for the purposes of effecting such DWAC transaction. If any
physical certificates relating to the Shares are ever issued, they shall be
imprinted with a legend in form and substance satisfactory to counsel to the
Company.

 
 
8.
The Executive represents and warrants that he has the requisite capacity to
purchase the Shares and to enter into this amendment to his Agreement.  The
Executive understands and accepts that the purchase of the Shares involves
various risks, including the risks disclosed in the Company’s filings and
reports with the Commission.

 
 
9.
The Executive confirms that he is not relying on any communication (written or
oral) of the Company or any of its affiliates, as investment advice or as a
recommendation to purchase the Shares.  As Chairman, President and Chief
Executive Officer of the Company, the Executive is familiar with the business
and financial condition and operations of the Company, and has had access to
such information concerning the Company and the Shares as he deems necessary to
enable him to make an informed investment decision concerning the purchase of
the Shares.

 
 
10.
The Executive represents and warrants that (a) he has such knowledge, skill and
experience in business, financial and investment matters that the Executive is
capable of evaluating the merits and risks of an investment in the Shares; (b)
with the assistance of the Executive’s own professional advisors, to the extent
that the Executive has deemed appropriate, the Executive has made his own legal,
tax, accounting and financial evaluation of the merits and risks of an
investment in the Shares and the consequences of this amendment to the
Agreement; and (c) he has considered the suitability of the Shares as an
investment in light of his own circumstances and financial condition and is able
to bear the risks associated with an investment in the Shares.

 

 
11.
With a view to making available to the Executive the benefits of Rule 144 under
the Securities Act and any other rule or regulation of the Commission that may
at any time permit a holder to sell securities of the Company to the public
without registration, the Company shall:

 

 
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(i)
make and keep public information available, as those terms are understood and
defined in Rule 144 under the Securities Act;

 
 
(ii)
use reasonable efforts to file with the Commission in a timely manner all
reports and other documents required of the Company under the Securities Act and
the Exchange Act; and

 
 
(iii)
furnish to the Executive so long as he owns the Shares, a written statement by
the Company as to its compliance with the reporting requirements of the
Securities Act (including Rule 144 thereunder) and the Exchange Act.

 
 
12.
The Executive understands that the Shares are "control securities" under
applicable federal securities laws, and the Executive agrees that he will not
sell, assign, pledge, give, transfer or otherwise dispose of the Shares or any
interest therein, or make any offer or attempt to do any of the foregoing,
except pursuant to a registration of the Shares under the Securities Act and all
applicable state securities laws, or in a transaction which is exempt from the
registration provisions of the Securities Act and all applicable state
securities laws.

 

 
13.
Except as amended herein, the Agreement shall remain in full force and effect.

 

IN WITNESS WHEREOF, the parties hereto have executed, or caused their duly
authorized representative to execute, this amendment to the Agreement on this
11th day of November, 2011.
 

 
PULSE ELECTRONICS CORPORATION
                By: /s/  Drew A. Moyer      Name: Drew A. Moyer           Title:
Senior Vice President and Chief Financial Officer                 EXECUTIVE    
            By: /s/ Ralph E. Faison     RALPH E. FAISON  

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