As filed with the Securities and Exchange Commission
on March 26, 1996
Registration No. _______________
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
____________
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
____________
FRANKLIN ELECTRIC CO., INC.
(Exact Name of Registrant as Specified in Its Charter)
____________
Indiana 35-0827455
(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation)
____________
400 East Spring Street
Bluffton, Indiana 46714
(Address of Principal Executive Offices) (Zip Code)
____________
Franklin Electric Co., Inc.
1996 Employee Stock Option Plan
(Full Title of the Plan)
____________
Jess B. Ford
Vice President, Chief Financial Officer
Franklin Electric Co., Inc.
400 East Spring Street
Bluffton, Indiana 46714
(219)824-2900
(Name, Address, and Telephone Number, Including Area Code,
of Agent for Service)
____________
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Proposed Proposed
Amount Maximum Maximum
Amount of
Title of Securities to be Offering Price Aggregate
Registration
to be Registered Registered Per Share<F1> Offering
Price<F1> Fee
- ---------------- ---------- ------------ -----------------
- ---
<S> <C> <C> <C>
<C>
Common Stock, par 600,000 $36.375 $21,825,000
$7,525.86
value $.10 per share
(the "Common Stock")<F2>
<FN>
<F1> Computed on the basis of the average of the high and low sales
price for the Common
Stock reported on the National Association of Securities Dealers
Automated Quotation
System on March 20, 1996, pursuant to Rule 457(h) of the
Securities Act of 1933, as
amended, solely for the purpose of calculating the amount of the
registration fee.
<F2> Each share of Common Stock includes one related Common Stock
Purchase Right. The
Common Stock Purchase Rights are currently not evidenced by
separate certificates and
may not be transferred except upon transfer of the related shares
of Common Stock.
The value attributed to the Common Stock Purchase Rights is
reflected in the market
price of the Common Stock of the Registrant.
</FN>
</TABLE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
- -------------------------------------------------
The following documents which have been filed by Franklin
Electric Co., Inc. (the "Registrant") are incorporated herein by
reference:
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended December 30, 1995;
(b) The description of the Registrant's Common Stock, and related
Common Stock Purchase Rights, contained in the Registrant's
Registration Statement filed on Form 8-A filed with the
Commission on February 26, 1991 under Section 12 of the
Securities Exchange Act of 1934 (the "Exchange Act"), and the
Registration Statement filed on Form S-4 (the Plan of
Recapitalization) filed with the Securities and Exchange
Commission ("Commission") on July 6, 1989.
All documents filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date
of this Registration Statement and prior to the filing of a post-
effective amendment to this Registration Statement which indicates
that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated
herein by reference and to be a part hereof from the date of filing
of such documents.
Any statement contained in any document incorporated, or deemed
to be incorporated, by reference herein shall be deemed to be
modified or superseded for purposes of this Registration Statement to
the extent that a statement contained herein or in any subsequently
filed document which also is, or is deemed to be, incorporated by
reference herein modifies or supersedes such statement. Except as so
modified or superseded, such statement shall not be deemed to
constitute a part of this Registration Statement.
Item 4. Description of Securities
- ----------------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel
- -----------------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers.
- ---------------------------------------------------
The Indiana Business Corporation Law permits indemnification of
directors, employees and agents of corporations under certain
conditions and subject to certain limitations. Article VII of the
By-laws of the Registrant ("Article VII") provides that each person
who was or is a part to, or has threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the
fact that he or she is or was a director or officer of the
corporation, or that he or she was serving at the request of the
corporation as a director or officer of another corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise, will be indemnified by the Registrant, to the fullest
extent authorized by the Indiana Business Corporation Law, as
currently in effect, against all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action,
suit or proceeding provided that the individual's conduct was in good
faith, and the individual reasonably believed that in the case of
conduct in the individual's official capacity with the Registrant,
that such conduct was in its best interest and in all other cases,
that the individual's conduct was at least not opposed to its best
interest, and in the case of any criminal proceeding, the individual
either had reasonable cause to believe the individual's conduct was
lawful or had no reasonable cause to believe the individual's conduct
was unlawful. Article VII provides that the rights conferred thereby
are contract rights between the Registrant and each Director or
Officer serving in each such capacity, and any repeal or modification
of Article VII shall not affect any rights or obligations thereunder
with respect to any state of facts then or theretofore existing or
any claim, action, suit or proceeding theretofore or thereafter
brought or threatened based in whole or in part upon any such state
of facts. Article VII provides that the Registrant may, by action of
the Board of Directors, provide indemnification to its employees or
agents of the Registrant, to the same extent as the indemnification
provided to a director or officer of the Registrant.
The registrant has insurance which, subject to certain policy
limits, deductible amounts and exclusions, insures directors and
officers of the Registrant for liabilities incurred as a result of
acts committed in their capacity as directors and officers or claims
made against them by reason of their status as directors or officers.
Item 7. Exemption From Registration Claimed
- --------------------------------------------
Not applicable.
Item 8. Exhibits
- -----------------
The exhibits filed herewith or incorporated by reference herein
are set forth in the Exhibit Index filed as part of the Registration
Statement.
Item 9. Undertakings.
- ----------------------
(a) Rule 415 offerings.
------------------
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most
recent posteffective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in this Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3 or Form S-8,
and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) Filings Incorporating Subsequent Exchange Act Documents By
- ---------------------------------------------------------------
Reference.
- ----------
The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of
the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of
the Exchange Act) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) Filing of Registration Statement on Form S-8.
- -------------------------------------------------
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities
Act of 1933, the Registrant certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City
of Chicago, State of Illinois, on December 8, 1995.
FRANKLIN ELECTRIC CO., INC.
(Registrant)
By: WILLIAM H. LAWSON
------------------------
William H. Lawson
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below appoints each of
William H. Lawson and Jess B. Ford as such person's true and lawful
attorney to execute in the name of each such person, and to file, any
amendments to this registration statement that such attorney deems
necessary or desirable to enable the Registrant to comply with the
Securities Act of 1933, and any rules, regulations, and requirements
of the Securities and Exchange Commission with respect thereto, in
connection with the registration of the shares of Common Stock (and
the related Preference Stock Purchase Rights attached thereto) that
are subject to this registration statement, which amendments may make
such changes in such registration statement as the above-named
attorneys deem appropriate, and to comply with the undertakings of
the Registrant made in connection with this registration statement;
and each of the undersigned hereby ratifies all that said attorneys
will do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in
the capacities and on the date indicated.
Signature Title Date
--------- ----- ----
WILLIAM H. LAWSON Chairman of the Board and December 8, 1995
- ------------------- Chief Executive Officer
William H. Lawson (Principal Executive Officer
JOHN B. LINDSAY President December 8, 1995
- -------------------
John B. Lindsay
JESS B. FORD Vice President and Chief December 8, 1995
- ------------------- Financial Officer
(Principal Financial and
Accounting Officer)
WILLIAM W. KEEFER Director December 8, 1995
- -------------------
William W. Keefer
ROBERT H. LITTLE Director December 8, 1995
- -------------------
Robert H. Little
PATRICIA SCHAEFER Director December 8, 1995
- -------------------
Patricia Schaefer
DONALD J. SCHNEIDER Director December 8, 1995
- -------------------
Donald J. Schneider
GERARD E. VENEMAN Director December 8, 1995
- -------------------
Gerard E. Veneman
JURIS VIKMANIS Director December 8, 1995
- -------------------
Juris Vikmanis
HOWARD B. WITT Director December 8, 1995
- -------------------
Howard B. Witt
EXHIBIT INDEX
Sequentially
Exhibit Number Exhibit Numbered Page
- -------------- ------- -------------
4.1 Restated Articles of Incorporation of
Franklin Electric Co., Inc. (incorporated
herein by reference to Exhibit 3 of the
Company's Form 10-K for the fiscal year
ended December 30, 1989)
Articles of Amendment of the Restated
Articles of Incorporation of Franklin
Electric Co., Inc. effective February 26,
1991 (incorporated herein by reference to
the Company's current report on Form 8-K
dated February 26, 1991)
4.2 By-laws of Franklin Electric Co., Inc.
as amended, effective July 15, 1994
(incorporated herein by reference to the
Company's Form 10-K for the fiscal year
ended December 31, 1994)
4.3 Rights Agreement dated as of February 11,
1991 between Franklin Electric Co., Inc.
and Lincoln National Bank & Trust Co. of
Fort Wayne (incorporated herein by reference
to the Company's registration statement on
Form 8-A dated February 26, 1991)
4.4 Franklin Electric Co., Inc. 1996
Employee Stock Option Plan
5 Opinion of Schiff Hardin & Waite
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Schiff Hardin & Waite
(contained in their opinion filed as
Exhibit 5)
24 Powers of Attorney (contained on the
signature pages hereto)
1996 EMPLOYEE STOCK OPTION PLAN
Franklin Electric Co., Inc.
November 1995
CONTENTS
Article 1. Establishment, Objectives, and Duration
Article 2. Definitions
Article 3. Administration
Article 4. Shares Subject to the Plan and Maximum Awards
Article 5. Eligibility and Participation
Article 6. Stock Options
Article 7. Tandem Stock Appreciation Rights
Article 8. Beneficiary Designation
Article 9. Rights of Employees
Article 10. Change in Control
Article 11. Amendment, Modification, and Termination
Article 12. Withholding
Article 13. Indemnification
Article 14. Successors
Article 15. Legal Construction
FRANKLIN ELECTRIC CO., INC.
1996 EMPLOYEE STOCK OPTION PLAN
ARTICLE 1. ESTABLISHMENT, OBJECTIVES, AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. Franklin Electric Co., Inc., an
Indiana corporation (hereinafter referred to as the "Company"), hereby
establishes an incentive compensation plan to be known as the "1996
Franklin Electric Co., Inc. Employee Stock Option Plan" (hereinafter
referred to as the "Plan"), as set forth in this document. The Plan
permits the grant of Nonqualified Stock Options and Tandem Stock
Appreciation Rights (SARs).
Subject to approval by the Company's stockholders, the Plan shall
become effective as of July 1, 1995 (the "Effective Date") and shall
remain in effect as provided in Section 1.3 herein.
1.2 OBJECTIVES OF THE PLAN. The objectives of the Plan are to
optimize the profitability and growth of the Company through incentives
which are consistent with the Company's goals and which link and align
the personal interests of Participants to those of the Company's
stockholders; to provide Participants with an incentive for excellence in
individual performance; to promote teamwork among Participants; and to
aid the Company in attracting and retaining Participants who make
significant contributions to the Company's success.
1.3 DURATION OF THE PLAN. The Plan shall commence on the Effective
Date, as described in Section 1.1 herein, and shall remain in effect,
subject to the right of the Board of Directors to amend or terminate the
Plan at any time pursuant to Article 11 herein, until all Shares subject
to it shall have been purchased or acquired according to the Plan's
provisions. However, in no event may an Award be granted under the Plan
on or after June 30, 2005.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the
meanings set forth below, and when the meaning is intended, the initial
letter of the word shall be capitalized:
2.1 "AWARD" means a grant of Nonqualified Stock Options or Tandem
SARs under this Plan.
2.2 "AWARD AGREEMENT" means an agreement entered into by
the Company and each Participant setting forth the terms and provisions
applicable to Awards granted under this Plan.
2.3 "BENEFICIAL OWNER" or "Beneficial Ownership" shall have the
meaning ascribed to such term in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act.
2.4 "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of
the Company.
2.5 "CHANGE IN CONTROL" of the Company shall be deemed to have
occurred if the conditions set forth in any one or more of the following
paragraphs shall have been satisfied:
(i) Any Person (other than the Person in control of the Company on
the Effective Date, or other than a trustee or other fiduciary
holding securities under an employee benefit plan of the
Company, or a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same
proportions as their ownership of Shares of the Company), is or
becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding
securities; or
(ii) The election to the Board of Directors of the Company, without
the recommendation or approval of a majority of the incumbent
Board of Directors, of the lesser of (a) three directors, or
(b) directors constituting a majority of the numbers of
directors then in office; or
(iii) The stockholders of the Company approve (a) a plan of
complete liquidation of the Company; or (b) an agreement for
the sale or disposition of all or substantially all the
Company's assets; or (c) a merger or consolidation of the
Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at
least 50% of the combined voting securities of the Company
(or such surviving entity) outstanding immediately after such
merger or consolidation.
However, in no event shall a Change in Control be deemed to have
occurred, with respect to a Participant, if that Participant is part
of a purchasing group which consummates the Change-in-Control
transaction. A Participant shall be deemed "part of a purchasing
group" for purposes of the preceding sentence if the Participant is
an equity participant or has agreed to become an equity participant
in the purchasing company or group (except for (i) passive ownership
of less than 3% of the Shares of the purchasing company; or (ii)
ownership of equity participation in the purchasing company or group
which is otherwise not deemed to be significant, as determined prior
to the Change in Control by a majority of the disinterested
Directors).
2.6 "CODE" means the Internal Revenue Code of 1986, as amended from
time to time.
2.7 "COMMITTEE" means the Stock Option Committee of the Board, as
specified in Article 3 herein, or such other Committee appointed by the
Board to administer the Plan with respect to grants of Awards.
2.8 "COMPANY" means Franklin Electric Co., Inc., an Indiana
corporation, and the Company's subsidiaries, as well as any successor to
any of such entities as provided in Article 14 herein.
2.9 "DIRECTOR" means any individual who is a member of the Board of
Directors of the Company.
2.10 "DISABILITY" means a permanent and total disability, within
the meaning of Code Section 22(e)(3), as determined by the Board in good
faith.
2.11 "EFFECTIVE DATE" shall have the meaning ascribed to such term
in Section 1.1 hereof.
2.12 "EMPLOYEE" means any employee of the Company. Nonemployee
Directors shall not be considered Employees under this Plan unless
specifically designated otherwise.
2.13 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor act thereto.
2.14 "FAIR MARKET VALUE" means the closing sale price of a Share on
the principal securities exchange on which the Shares are publicly
traded, or if there is no such sale on the relevant date, then on the
last previous day on which a sale was reported.
2.15 "INSIDER" shall mean an individual who is, on the relevant
date, an officer, director or ten percent (10%) beneficial owner of any
class of the Company's equity securities that is registered pursuant to
Section 12 of the Exchange Act, all as defined under Section 16 of the
Exchange Act.
2.16 "NAMED EXECUTIVE OFFICER" means a Participant who, as of the
date of vesting and/or payout of an Award, as applicable, is one of the
group of "covered employees," as defined in the regulations promulgated
under Code Section 162(m), or any successor statute.
2.17 "NONEMPLOYEE DIRECTOR" means an individual who is a member of
the Board of Directors of the Company, but who has never otherwise been
an Employee of the Company.
2.18 "NONQUALIFIED STOCK OPTION" or "NQSO" means an option to
purchase Shares granted under Article 6 herein and which is not intended
to meet the requirements of Code Section 422.
2.19 "OPTION" means a Nonqualified Stock Option granted under this
Plan.
2.20 "OPTION PRICE" means the price at which a Share may be
purchased by a Participant pursuant to an Option.
2.21 "PARTICIPANT" means an Employee who has outstanding an Award
granted under the Plan.
2.22 "PERFORMANCE-BASED EXCEPTION" means the performance-based
exception from the tax deductibility limitations of Code Section 162(m).
2.23 "PERSON" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, including a "group" as defined in Section 13(d) thereof.
2.24 "SHARES" means the $.10 par value common stock of the Company.
2.25 "SUBSIDIARY" means any corporation, partnership, joint
venture, affiliate, or other entity in which the Company has a majority
voting interest, and which the Committee designates as a participating
entity in the Plan.
2.26 "TANDEM SAR" or "SAR" means an Award that is granted in
connection with a related Option pursuant to Article 7 herein, the
exercise of which shall require forfeiture of the right to purchase a
Share under the related Option (and when a Share is purchased under the
Option, the Tandem SAR shall similarly be canceled).
ARTICLE 3. ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by the Stock
Option Committee of the Board, or by any other Committee appointed by the
Board consisting of not less than two (2) Nonemployee Directors who
fulfill the requirements for an exempt grant transaction under Rule 16b-3
of the Exchange Act. The members of the Committee shall be appointed from
time to time by, and shall serve at the discretion of, the Board of
Directors.
The Committee shall be comprised solely of Nonemployee Directors who
are eligible to administer the Plan pursuant to Rule 16b-3 of the
Exchange Act. However, if for any reason the Committee does not qualify
to administer the Plan as contemplated by Rule 16b-3 of the Exchange Act,
the Board of Directors may appoint a new Committee so as to comply with
Rule 16b-3.
3.2 AUTHORITY OF THE COMMITTEE. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to select
Employees who shall participate in the Plan; determine the terms and
conditions of Awards in a manner consistent with the Plan; construe and
interpret the Plan and any agreement or instrument entered into under the
Plan; establish, amend, or waive rules and regulations for the Plan's
administration; and (subject to the provisions of Article 11 herein)
amend the terms and conditions of any outstanding Award to the extent
such terms and conditions are within the discretion of the Committee as
provided in the Plan. Further, the Committee shall make all other
determinations which may be necessary or advisable for the administration
of the Plan. As permitted by law, the Committee may delegate its
authority as identified herein.
The Committee shall keep minutes of its meetings. A majority of the
Committee shall constitute a quorum, and only the acts of a majority of
the members present at any meeting at which a quorum is present, or acts
approved in writing by a majority of the Committee, shall be valid acts
of the Committee.
3.3 DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders
and resolutions of the Board shall be final, conclusive and binding on
all persons, including the Company, its stockholders, Employees,
Participants, and their estates and beneficiaries.
ARTICLE 4. SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
4.1 NUMBER OF SHARES AVAILABLE FOR GRANTS. Subject to adjustment as
provided in Section 4.2, the number of Shares hereby reserved for
issuance upon the exercise of Options granted under the Plan shall be six
hundred thousand (600,000). If any Option granted hereunder shall expire
or terminate for any reason without having been exercised in full, the
unpurchased Shares subject thereto shall again be available for issuance
under this Plan.
Unless and until the Committee determines that an Award to a Named
Executive Officer shall not be designed to comply with the Performance-
Based Exception, the maximum aggregate number of Options and Tandem SARs
that may be granted or that may vest, as applicable, pursuant to any
Award held by any Named Executive Officer shall be three hundred thousand
(300,000) during the term of the Plan.
4.2 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any change
in corporate capitalization, such as a stock split, or a corporate
transaction, such as any merger, consolidation, separation, including a
spin-off, or other distribution of stock or property of the Company, any
reorganization (whether or not such reorganization comes within the
definition of such term in Code Section 368) or any partial or complete
liquidation of the Company, such adjustment shall be made in the number
and class of Shares available for issuance and in the number and class of
and/or price of Shares subject to outstanding Awards granted under the
Plan, as may be determined to be appropriate and equitable by the
Committee, in its sole discretion, to prevent dilution or enlargement of
rights; provided, however, that the number of Shares subject to any Award
shall always be a whole number.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Persons eligible to participate in this Plan
include all officers and key employees of the Company who, in the opinion
of the Committee, are materially responsible for the management, growth,
and protection of all or a material part of the business or major product
lines or major functions of the Company or its Subsidiaries.
5.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan,
the Committee may, from time to time, select from all eligible Employees,
those to whom Awards shall be granted and shall determine the nature and
amount of each Award.
ARTICLE 6. STOCK OPTIONS
6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the
Plan, Options may be granted to one or more Participants in such number,
and upon such terms, and at any time and from time to time as shall be
determined by the Committee.
6.2 AWARD AGREEMENT. Each Option grant shall be evidenced by an
Award Agreement that shall specify the Option Price, the duration of the
Option, the number of Shares to which the Option pertains, and such other
provisions as the Committee shall determine.
6.3 OPTION PRICE. Unless otherwise designated by the Committee at
the time of grant, the Option Price for each grant of an Option under
this Plan shall be equal to one hundred percent (100%) of the Fair Market
Value of a Share on the date the Option is granted; provided, however,
that the Option Price designated by the Committee shall be at least equal
to fifty percent (50%) of the Fair Market Value of a Share on the date
the Option is granted.
6.4 DURATION OF OPTIONS. Each Option granted to an Employee shall
expire at such time as the Committee shall determine at the time of
grant; provided, however, that unless otherwise designated by the
Committee at the time of grant, no Option shall be exercisable later than
the tenth (10th) anniversary date of its grant.
6.5 EXERCISE OF OPTIONS. Options granted under this Article 6 shall
be exercisable at such times and be subject to such restrictions and
conditions as are set forth in the applicable Award Agreement, which need
not be the same for each grant or for each Participant.
6.6 PAYMENT. OPTIONS GRANTED under this Article 6 shall be
exercised by the delivery of a written notice of exercise to the Company,
setting forth the number of Shares with respect to which the Option is to
be exercised, accompanied by full payment for the Shares.
The Option Price upon exercise of any Option shall be payable to the
Company in full either: (a) in cash or its equivalent, or (b) by
tendering previously acquired Shares having an aggregate Fair Market
Value at the time of exercise equal to the total Option Price (provided
that the Shares which are tendered must have been held by the Participant
for at least six (6) months prior to their tender to satisfy the Option
Price).
As soon as practicable after receipt of a written notification of
exercise and full payment, the Company shall deliver to the Participant,
in the Participant's name, Share certificates in an appropriate amount
based upon the number of Shares purchased under the Option(s).
In the event that a Tandem SAR is granted with an Option, the
exercise of such related Option shall cause the surrender of the right to
exercise the equivalent portion of the related Tandem SAR.
6.7 RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose
such restrictions on any Shares acquired pursuant to the exercise of an
Option granted under this Article 6 as it may deem advisable, including,
without limitation, restrictions under applicable Federal securities
laws, under the requirements of any stock exchange or market upon which
such Shares are then listed and/or traded, and under any blue sky or
state securities laws applicable to such Shares.
6.8 TERMINATION OF EMPLOYMENT. Unless otherwise determined by the
Committee, in the event a Participant's employment with the Company
and/or its Subsidiaries is terminated due to death or Disability, all
Options shall immediately become fully vested on the date of termination
and shall be exercisable for the lesser of two (2) years following the
date of termination or the expiration date of the Option.
Unless otherwise determined by the Committee, in the event a
Participant's employment with the Company and/or its Subsidiaries is
terminated for any reason other than death or Disability, all Options
which are unvested at the date of termination shall be forfeited to the
Company; Options which are vested at the date of termination shall be
exercisable for the lesser of six (6) months following the date of
termination or the expiration date of the Option.
6.9 NONTRANSFERABILITY OF OPTIONS. Except as otherwise provided in
a Participant's Award Agreement, no Option granted under this Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution. Further, except as otherwise provided in a Participant's
Award Agreement, all NQSOs granted to a Participant under this Article 6
shall be exercisable during his or her lifetime only by such Participant.
ARTICLE 7. TANDEM STOCK APPRECIATION RIGHTS
7.1 GRANT OF TANDEM SARs. Subject to the terms and conditions of
the Plan, Tandem SARs may be granted to Participants at any time and from
time to time as shall be determined by the Committee. Subject to the
terms and conditions of the Plan, the Committee shall have complete
discretion in determining the number of Tandem SARs granted to each
Participant (provided, however, that in no event shall the number of
Tandem SARs granted exceed the number of related Options) and, in
determining the terms and conditions pertaining to such Tandem SARs. The
grant price of Tandem SARs shall equal the Option Price of the related
Option.
7.2 EXERCISE OF TANDEM SARs. Tandem SARs may be exercised for all
or part of the Shares subject to the related Option upon the surrender of
the right to exercise the equivalent portion of the related Option. A
Tandem SAR may be exercised only with respect to the Shares for which its
related Option is then exercisable.
7.3 TANDEM SAR AGREEMENT. Each Tandem SAR grant shall be evidenced
by an Award Agreement that shall specify the grant price, the term of the
Tandem SAR, and such other provisions as the Committee shall determine.
7.5 TERM OF TANDEM SARs. The term of Tandem SARs granted under the
Plan shall be determined by the Committee, in its sole discretion;
provided, however, that unless otherwise designated by the Committee,
such term shall not exceed the term of the related Option.
7.6 PAYMENT OF TANDEM SAR AMOUNT. Upon exercise of a Tandem SAR, a
Participant shall be entitled to receive payment from the Company in an
amount determined by multiplying:
(a) The difference between the Fair Market Value of a Share on the
date of exercise over the grant price; by
(b) The number of Shares with respect to which the Tandem SAR is
exercised.
At the election of Participant and upon approval by the Committee,
the payment upon Tandem SAR exercise may be in cash, in Shares of
equivalent value, or in any combination thereof.
7.7 RULE 16B-3 REQUIREMENTS. Notwithstanding any other provision of
the Plan, the Committee may impose such conditions on exercise of a
Tandem SAR (including, without limitation, the right of the Committee to
limit the time of exercise to specified periods) as may be required to
satisfy the requirements of Section 16 of the Exchange Act (or any
successor rule).
7.8 TERMINATION OF EMPLOYMENT. Unless otherwise determined by the
Committee, in the event a Participant's employment with the Company
and/or its Subsidiaries is terminated due to death or Disability, all
Tandem SARs shall immediately become fully vested on the date of
termination and shall be exercisable for the lesser of two (2) years
following the date of termination or the expiration date of the Tandem
SAR.
Unless otherwise determined by the Committee, in the event a
Participant's employment with the Company and/or its Subsidiaries is
terminated for any reason other than death or Disability, all Tandem SARs
which are unvested at the date of termination shall be forfeited to the
Company; Tandem SARs which are vested at the date of termination shall be
exercisable for the lesser of six (6) months following the date of
termination or the expiration date of the Tandem SAR.
7.9 NONTRANSFERABILITY OF TANDEM SARs. Except as otherwise provided
in a Participant's Award Agreement, no Tandem SAR granted under the Plan
may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution. Further, except as otherwise provided in a Participant's
Award Agreement, all Tandem SARs granted to a Participant under the Plan
shall be exercisable during his or her lifetime only by such Participant.
ARTICLE 8. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or
successively) to whom any benefit under the Plan is to be paid in case of
his or her death before he or she receives any or all of such benefit.
Each such designation shall revoke all prior designations by the same
Participant, shall be in a form prescribed by the Company, and will be
effective only when filed by the Participant in writing with the Company
during the Participant's lifetime. In the absence of any such designation
or if all beneficiaries predecease the Participant, benefits remaining
unpaid at the Participant's death shall be paid to the Participant's
estate.
ARTICLE 9. RIGHTS OF EMPLOYEES
9.1 EMPLOYMENT. Nothing in the Plan shall interfere with or limit
in any way the right of the Company to terminate any Participant's
employment at any time, nor confer upon any Participant any right to
continue in the employ of the Company.
For purposes of this Plan, a transfer of a Participant's employment
betweenthe Company and a Subsidiary, or between Subsidiaries, shall not
be deemed to be a termination of employment. Upon such a transfer, the
Committee may make such adjustments to outstanding Awards as it deems
appropriate to reflect the changed reporting relationships.
9.2 PARTICIPATION. No Employee shall have the right to be selected
to receive an Award under this Plan, or, having been so selected, to be
selected to receive a future Award.
ARTICLE 10. CHANGE IN CONTROL
10.1 TREATMENT OF OUTSTANDING AWARDS. Upon the occurrence of a
Change in Control, unless otherwise specifically prohibited under
applicable laws, or by the rules and regulations of any governing
governmental agencies or national securities exchanges, any and all
Options and Tandem SARs granted hereunder shall become immediately
exercisable, and shall remain exercisable throughout their entire term.
10.2 TERMINATION, AMENDMENT, AND MODIFICATIONS OF CHANGE-IN-CONTROL
Provisions. Notwithstanding any other provision of this Plan or any Award
Agreement provision, the provisions of this Article 10 may not be
terminated, amended, or modified to affect adversely any Award
theretofore granted under the Plan without the prior written consent of
the Participant with respect to said Participant's outstanding Awards.
ARTICLE 11. AMENDMENT, MODIFICATION, AND TERMINATION
11.1 AMENDMENT, MODIFICATION, AND TERMINATION. The Board may at
any time and from time to time, alter, amend, suspend or terminate the
Plan in whole or in part; provided, however, that no amendment which
fails to comply with the exemptions available under Rule 16b-3 of the
Exchange Act, including any successor to such Rule, shall be effective.
The Committee shall not have the authority to cancel outstanding
Awards and issue substitute Awards in replacement thereof.
11.2 AWARDS PREVIOUSLY GRANTED. Unless required by law, no
termination, amendment, or modification of the Plan shall adversely
affect in any material way any Award previously granted under the Plan,
without the written consent of the Participant holding such Award.
11.3 COMPLIANCE WITH CODE SECTION 162(m). At all times when Code
Section 162(m) is applicable, all Awards granted under this Plan shall
comply with the Performance-Based Exception requirements of Code
Section 162(m); provided, however, that in the event the Committee
determines that such compliance is not desired with respect to any Award
or Awards available for grant under the Plan, then compliance with Code
Section 162(m) will not be required. In addition, in the event that
changes are made to Code Section 162(m) to permit greater flexibility
with respect to any Award or Awards available under the Plan, the
Committee may, subject to this Article 11, make any adjustments it deems
appropriate.
ARTICLE 12. WITHHOLDING
12.1 TAX WITHHOLDING. The Company shall have the power and the
right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy federal, state, and local taxes,
domestic or foreign, required by law or regulation to be withheld with
respect to any taxable event arising as a result of this Plan.
12.2 SHARE WITHHOLDING. With respect to withholding required upon
the exercise of Options or Tandem SARs, Participants may elect, subject
to the approval of the Committee, to satisfy the withholding requirement,
in whole or in part, by having the Company withhold Shares having a Fair
Market Value on the date the tax is to be determined equal to the minimum
statutory total tax which could be imposed on the transaction. All such
elections shall be irrevocable, made in writing, signed by the
Participant, and shall be subject to any restrictions or limitations that
the Committee, in its sole discretion, deems appropriate.
ARTICLE 13. INDEMNIFICATION
Each person who is or shall have been a member of the Committee, or
of the Board, shall be indemnified by the Company against and from any
loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim,
action, suit, or proceeding to which he or she may be a party or in which
he or she may be involved by reason of any action taken or failure to act
under the Plan. Such person shall be indemnified by the Company for all
amounts paid by him or her in settlement thereof, with the Company's
approval, or paid by him or her in satisfaction of any judgement in any
such action, suit, or proceeding against him or her, provided he or she
shall give the Company an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on
his or her own behalf. The foregoing right of indemnification shall not
be exclusive of any other rights of indemnification to which such persons
may be entitled under the Company's Articles of Incorporation or Bylaws,
as a matter of law, or otherwise, or any power that the Company may have
to indemnify them or hold them harmless.
ARTICLE 14. SUCCESSORS
All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company,
whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company.
ARTICLE 15. LEGAL CONSTRUCTION
15.1 GENDER AND NUMBER. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine;
the plural shall include the singular and the singular shall include the
plural.
15.2 SEVERABILITY. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining parts of the Plan, and the Plan shall be
construed and enforced as if the illegal or invalid provision had not
been included.
15.3 REQUIREMENTS OF LAW. The granting of Awards and the issuance
of Shares under the Plan shall be subject to all applicable laws, rules,
and regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required.
15.4 GOVERNING LAW. To the extent not preempted by Federal law, the
Plan, and all agreements hereunder, shall be construed in accordance with
and governed by the laws of the State of Indiana.
March 26, 1996
Franklin Electric Co., Inc.
400 E. Spring Street
Bluffton, IN 46714
RE: REGISTRATION ON FORM S-8 OF 600,000 SHARES OF COMMON STOCK,
$0.10 PAR VALUE PER SHARE, AND THE RELATED COMMON STOCK
PURCHASE RIGHTS ("COMMON STOCK")
Ladies and Gentlemen:
We have acted as counsel to Franklin Electric Co., Inc. an
Indiana corporation (the "Company"), in connection with the Company's
filing of a Registration Statement on Form S-8 (the "Registration
Statement") covering 600,000 shares of Common Stock to be offered and
sold pursuant to the terms of the Franklin Electric Co., Inc. 1996
Employee Stock Option Plan (the "Plan").
In this connection, we have considered such questions of
law and have examined such documents as we have deemed necessary to
enable us to render the opinions contained herein. We have also
assumed that the Plan will have been approved by the shareholders of
the Company, as required under the terms and conditions of the Plan,
prior to the exercise of any options granted under the Plan. Based
upon the foregoing, it is our opinion that those shares of the Common
Stock that are originally issued shares, when issued upon the
exercise of an option granted under the Plan and subject to the terms
and conditions thereof, will be legally issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement.
Very truly yours,
SCHIFF HARDIN & WAITE
By: ROBERT J. REGAN
---------------------------
Robert J. Regan
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Franklin Electric Co., Inc. on Form S-8 of our report
dated January 31, 1996 appearing in the Annual Report on Form 10-K of
Franklin Electric Co., Inc. for the year ended December 30, 1995.
DELOITTE & TOUCHE LLP
Chicago, Illinois
March 26, 1996
