Document:

ex10_31.htm

 

EXHIBIT 10.3(1)

PULSE ELECTRONICS CORPORATION

2001 STOCK OPTION PLAN

STOCK OPTION AGREEMENT

THIS STOCK OPTION AGREEMENT (this “Agreement”) is made and entered into as of this ___ day of _______, 201__ by and between PULSE ELECTRONICS CORPORATION, a Pennsylvania corporation (the “Company”) and ____________ (“Optionee”).

 

Background

 

The Company adopted the 2001 Stock Option Plan, as amended and restated effective November 8, 2010 (the “Plan”) to attract, retain and motivate the best available personnel and to provide additional incentive to key employees of the Company and its subsidiaries to promote the success of the business.  Pursuant to and in accordance with the Plan, the Company desires to grant to Optionee a stock option to purchase shares of the Company’s Common Stock as more fully set forth below.  The Plan is administered by the Board’s Compensation Committee (the “Committee”).  Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Plan.

 

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, and intending to be legally bound, it is agreed as follows:

 

1.           Option to Purchase Shares.  The Company hereby grants to Optionee an Option (the “Option”) to purchase up to the number of shares listed below of the Company’s Common Stock (the “Stock”) at the Exercise Price listed below, pursuant to and subject to the terms and provisions of the Plan which are incorporated by reference herein.  The Exercise Price is 100% of the Market Value of each share of Stock on the Date of Grant listed below.  The Option will be exercisable according to Section 2 below except as otherwise limited by the terms of this Agreement or the Plan.  The Option is not an “incentive stock option” within the meaning of Section 422 of the U.S. Internal Revenue Code of 1986, as amended and is not qualified under the laws of any non-U.S. country for preferential tax treatment or any other reason.

 

	Number of Shares	 
	 	 
	Exercise Price Per Share 	$ 	 
	 	 
	Date of Grant  	 

                                                    

  

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2.           Vesting of Option.  The Option will become exercisable upon Optionee’s completion of each Year of Service after the Date of Grant  (“Exercise Period(s)”) as set forth in the following vesting schedule:

 

	
Years of Continuous Service

after Date of Grant

	 	
Percentage of Shares Subject to

Option Which May Be

Exercised

	  	 	  
	
Upon Grant

	 	
0%

	
1 year but less than 2 years

	 	
25%

	
2 years but less than 3 years

	 	
50%

	
3 years but less than 4 years

	 	
75%

	
4 years or more

	 	
100%

Notwithstanding the vesting schedule above, an Option shall become 100% vested upon a Change in Control or termination of Optionee’s service due to Disability, death or retirement at or after age 65.  If Optionee elects to retire before age 65 but on or after his or her “early retirement date” (as defined in the Technitrol, Inc. Retirement Plan) or has his or her employment terminated by the Company, other than for Cause, prior to the completion of four Years of Service after the Date of Grant, Optionee shall be entitled to pro-rata vesting, based upon the number of months elapsed since the Date of Grant to the date of Optionee’s retirement or termination by the Company, divided by 48.

 

  (b)      Period of Exercise.  The Option may be exercised, to the extent vested, (i) only while Optionee is an Employee and has maintained Continuous Service from the Date of Grant, or (ii) within 60 days after termination of such Continuous Service (but not later than the date on which the Option would otherwise expire).  However, in the event Optionee’s Continuous Service terminates by reason of Cause, death, Disability or retirement on or after Optionee’s “early retirement date,” the provisions of Section 8(c) of the Plan will control the ability, if any, of Optionee to exercise the Option.

 

3.           Manner of Exercise and Terms of Payment.  The Option may be exercised in whole or in part, subject to the limitations set forth in the Plan and this Agreement, upon delivery to the Company of timely written or electronic notice of exercise, accompanied by full payment of the Exercise Price for the shares of Stock with respect to which the Option is exercised and all applicable withholding taxes.  Notice of exercise must be accomplished in a form and manner prescribed by the Committee.  Optionee’s payment must be forwarded to the payroll office from which Optionee is paid.  The Option may not be exercised for fractions of a Share.  Full payment of the Exercise Price and all applicable withholding taxes shall be in cash (or by certified check, bank draft, or postal express money order) or, if and as permitted by the Committee in its sole discretion, by delivery of any property (including Common Stock of the Company) other than cash, as long as such property constitutes valid consideration for the Stock under applicable law.

 

4.           Term of Option.  The Option shall have a term of seven (7) years from the Date of Grant (“Expiration Date”) and shall terminate at the expiration of that period, unless it is terminated at an earlier date pursuant to the provisions of this Agreement or the Plan.

 

  

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  (b)      Termination.  The Option will automatically terminate upon the first to occur of (i) an event of default or breach by Optionee of the terms and conditions of this Agreement, or (ii) 60 days after Optionee ceases to be an Employee or maintain Continuous Service from the Date of Grant, except if the termination of Continuous Service was for Cause or by reason of death, Disability, or retirement on or after Optionee’s “early retirement date.”  If Optionee’s employment is terminated for Cause, death, Disability, or retirement on or after the “early retirement date,” then the provisions of Section 8(c) of the Plan shall apply with regard to termination of the Option and Optionee’s ability to exercise the Option.

 

5.           Rights as Shareholder.  Neither Optionee nor any permitted transferee of the Option shall have any rights or privileges of a shareholder of the Company with respect to any shares of Stock subject to the Option until such shares of Stock have been issued upon the exercise of the Option.

 

6.           No Employment or Other Rights.  The grant of the Option shall not confer upon Optionee any right to be retained by or in the employ or service of the Company or any subsidiary of the Company and shall not interfere in any way with the right of the Company to terminate Optionee’s employment or service at any time.  The right of the Company or any of its subsidiaries to terminate at will Optionee’s employment or service at any time for any reason is specifically reserved.

 

7.           Delivery of Stock Certificates.  The Company shall not be required to issue or deliver any certificate, or cause uncertificated shares to be registered on the books of the Company, for shares of Stock purchased upon the exercise of all or any portion of an Option granted under the Plan prior to the fulfillment of any of the following conditions which may, from time to time, be applicable to the issuance of the Stock:

 

  (a)           Listing of Shares.  The admission of such shares of Stock to listing on all stock exchanges on which the Common Stock of the Company is then listed.

 

  (b)           Registration and/or Qualification of Shares.  The completion of any registration or other qualification of such shares of Stock under any federal, state or foreign securities laws or under the regulations promulgated by the Securities and Exchange Commission or any other federal, state or foreign governmental regulatory body which the Board or Committee, as the case may be, deems necessary or advisable.  The Company shall in no event be obligated to register any securities pursuant to the Securities Act of 1933 (as now in effect or as hereafter amended) or to take any other action in order to cause the issuance and delivery of such certificates to comply with any such law, regulations or requirement.  As a condition to Optionee’s exercise of this Option, the Company may require the person exercising the Option to make any representation and warranty to the Company as may be required by any applicable law, regulation or requirement.

 

  (c)           Approval or Clearance.  The receipt of any approval or clearance from any federal, state or foreign governmental agency which the Board or the Committee, as the case may be, shall determine to be necessary or advisable.

 

  

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  (d)           Reasonable Lapse of Time.  The lapse of such reasonable period of time following the exercise of the Option as the Committee may establish from time to time for reasons of administrative convenience.

 

  (e)           Tax Withholding.  Optionee’s satisfaction of all applicable federal, state, local or foreign income and employment tax withholding obligations.

 

8.           Change in Control.  The Plan sets forth the effect that a Change in Control of the Company has on the Option granted hereunder.

 

9.           Options Subject to Plan Provisions.

 

  (a)           The grant and exercise of the Option are subject to the provisions of the Plan and to interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (i) changes in capitalization of the Company, (ii) transactions in which the Company is not the surviving entity, and (iii) other changes resulting from a merger, reorganization, stock dividend or similar transactions, all of which may require the number or kind of Shares underlying the Option to be adjusted in accordance with Section 10 of the Plan.

 

  (b)           The Committee shall have the authority to interpret and construe the Option pursuant to the terms of the Plan, and its decisions shall be conclusive as to any questions arising hereunder.  A copy of the Plan has previously been delivered to Optionee (an additional copy may be obtained from the Secretary of the Company by request in writing to the address set forth in Section 11(a) below).

 

10.         Restrictions on Transfers.  The Option may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner by Optionee other than by will or by the laws of descent and distribution (and in the case of transfer or assignment by will, descent or distribution, solely to give effect to the provisions of Section 8(c)(2) of the Plan). Notwithstanding the foregoing, or any other provision of the Plan or this Agreement, the Committee, in its sole discretion, may permit Optionee to transfer the Option by gift to his or her spouse, lineal ascendants, lineal descendants, or to a duly established trust for the benefit of one or more of these individuals.  Following such transfer, the Option may thereafter be transferred by gift, subject to the approval of the Committee, only to Optionee or to an individual or trust to whom Optionee could have initially transferred the Option pursuant to this Section.  If the Option is transferred pursuant to this Section, it shall be exercisable by the transferee according to the same terms and conditions as applied to Optionee.

 

  

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11.         Miscellaneous.

 

  (a)           Except for notices to exercise the Option which shall be made in accordance with the provisions of Section 3 above, all notices provided for or contemplated herein shall be in writing and addressed as follows:

 

	 If to the Company: 	 	Pulse Electronics Corporation
	 	 	Attn.:  Corporate Secretary
	 	 	[Address]
	 	 	 
	 	 	 
	 	 	 
	
If to Optionee:

	 	
At the address listed on the Company’s payroll records.

 

or to such other addresses as the parties may specify in writing.

 

  (b)           This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania (without reference to the principles of the conflict of laws), except to the extent that federal law shall be deemed to apply.  Any dispute or claim arising out of or relating to this Agreement shall be brought exclusively in the federal court for the Eastern District of Pennsylvania or in the Court of Common Pleas of Bucks County, Pennsylvania.  By execution of this Agreement, Optionee and the Company each hereby consent to the exclusive jurisdiction of such courts, and waive any right to challenge jurisdiction or venue in such courts with regard to any suit, action, or proceeding under or in connection with this Agreement.

 

IN WITNESS WHEREOF, the undersigned have executed, or have caused this Agreement to be executed, as of the day and year first above written.                                                                     

 

	PULSE ELECTRONICS 	 	OPTIONEE	 
	CORPORATION	 	 	 
	 	 	 	 
	 	 	 	 
	By: 	 	 	 	 
	 	[Name]	 	[Name of Optionee]	 
	 	[Title]	 	 	 

                                                           

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EXHIBIT 10.11

PULSE ELECTRONICS CORPORATION

INDEMNIFICATION AGREEMENT

This Indemnification Agreement is made this ___ day of ______________ between _________________ (“Indemnitee”) and PULSE ELECTRONICS CORPORATION, a Pennsylvania corporation (“Pulse”).

In consideration of the mutual covenants and conditions set forth below, the parties hereto, intending to be legally bound, hereby agree as follows

1.  Pulse shall indemnify the Indemnitee in any instance whereby the Indemnitee was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of Pulse) by reason of the fact that he is or was a director or officer of Pulse, or is or was serving at the request of Pulse as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of Pulse, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.  The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of Pulse, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

2.  Pulse shall indemnify the Indemnitee in any instance whereby the Indemnitee was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of Pulse to procure a judgment in its favor by reason of the fact that he is or was a director or officer of Pulse, or is or was serving at the request of Pulse as a director or officer of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interest of Pulse.  No such indemnification against expenses shall be made, however, in respect of any claim, issue or matter as to which the Indemnitee shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to Pulse unless and only to the extent that the Court of Common Pleas of the county in which the registered office of Pulse is located or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, the Indemnitee is fairly and reasonably entitled to indemnity for such expenses which the Court of Common Pleas or such other court shall deem proper.

 

  

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3.  Indemnification under paragraphs 1 and 2 of this Agreement shall be made by Pulse when ordered by a court or upon a determination that indemnification of the Indemnitee is proper in the circumstances because he has met the applicable standard of conduct set forth in those paragraphs.  Such determination shall be made (1) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion or (3) by the stockholders.

4.  In addition to and notwithstanding the limited indemnification provided in paragraphs 1, 2 and 3 of this Agreement, Pulse shall indemnify and hold harmless the Indemnitee of, from and against any and all liability, expenses (including attorneys' fees), claims, judgments, fines and amounts paid in settlement, actually incurred by the Indemnitee in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (including but not limited to any action by or in the right of Pulse), to which the Indemnitee is, was or at any time becomes, a party, or is threatened to be made a party, by reason of the fact that the Indemnitee is, was or at any time becomes, a director or officer of Pulse, or is or was serving or at any time serves at the request of Pulse, as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other person of any nature whatsoever.  Nothing contained in this paragraph 4 shall authorize Pulse to provide, or entitle the Indemnitee to receive, indemnification for any action taken, or failure to act, which action or failure to act is determined by a court to have constituted willful misconduct or recklessness.

5.  Expenses incurred in defending a civil or criminal action, suit or proceeding of the kind described in paragraphs 1, 2 and 4 of this Agreement shall be paid by Pulse in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking, by or on behalf of the Indemnitee, to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by Pulse.

6.  The indemnification, advancement of expenses and limitation of liability provided in this Agreement shall continue after the Indemnitee has ceased to be a director or officer of the corporation and shall inure to the benefit of the heirs, executors and administrators of the Indemnitee.

7.  Nothing herein contained shall be construed as limiting the power or obligation of Pulse to indemnify the Indemnitee in accordance with the Pennsylvania Business Corporation Law as amended from time to time or in accordance with any similar law adopted in lieu thereof.  The indemnification and advancement of expenses provided under this Agreement shall not be deemed exclusive of any other rights to which the Indemnitee seeking indemnification or advancement of expenses may be entitled under any agreement, vote of shareholders or directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding that office.

8.  Pulse shall also indemnify the Indemnitee against expenses, including attorneys' fees, actually and reasonably incurred by him in enforcing any right to indemnification under this Agreement, under the Pennsylvania Business Corporation Law as amended from time to time or under any similar law adopted in lieu thereof.

 

  

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9.  The Indemnitee, having been asked to serve as director, officer, employee or agent of Pulse or serving, at the request of Pulse, as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, is deemed to do so with knowledge of and in reliance upon the rights of indemnification provided in this Agreement, in the Pennsylvania Business Corporation Law as amended from time to time and in any similar law adopted in lieu thereof.

10.  If the Indemnitee is entitled under any provision of this Agreement to indemnification by Pulse for any portion of any action, but not, however, for the total amount thereof, Pulse shall nevertheless indemnify Indemnitee for the portion of the action to which the Indemnitee is entitled.

11.  If a claim for indemnification under this Agreement is not paid in full by Pulse within thirty (30) days written notice of the claim from the Indemnitee, the Indemnitee may any time thereafter bring suit against Pulse to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall also be entitled to be paid the expense of prosecuting such claim.  In any such suit, the burden of proof shall be on Pulse to prove the claimant is not entitled to such payment.

12.  This Agreement shall be subject to and construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania, without giving effect to principles of conflicts of laws.  Pulse and Indemnitee each hereby irrevocably consent to the jurisdiction of the courts of the Commonwealth of Pennsylvania for all purposes in connection with any action or proceeding which arises out of or relates to this Agreement and agree that any action instituted under this Agreement shall be commenced, prosecuted and continued only in the courts of the Commonwealth of Pennsylvania in and for Bucks County, which shall be the exclusive and only proper forum for adjudicating such action.

13.  The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law.  Furthermore, to the fullest extent possible, the provisions of this Agreement (including each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

14.  This Agreement may be executed in one or more counterparts, all of which together shall constitute a single instrument.

15.  This Agreement contains the entire understanding between Pulse and the Indemnitee relating to the subject matter hereof and supercedes any prior understanding, arrangement or agreement relating to the subject matter hereof.  This Agreement may not be modified in any manner, except by written amendment duly executed by each of the parties hereto.  This Agreement may not be assigned by either party without the prior written consent of the other party.

 

  

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IN WITNESS WHEREOF, the parties hereto, with the intent to be legally bound hereby, have duly executed this Agreement on the date indicated above.

 

 

 

	 	 	PULSE ELECTRONICS CORPORATION
	 	 	 
	 	 	 
	 	 	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	 	 
	 	 	 
	 	 	[Name of Indemnitee]

 

 

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