SECOND AMENDMENT TO
AMENDED EMPLOYMENT AGREEMENT OF
GREGG G. SENGSTACK

This Second Amendment to the Amended Employment Agreement is made and entered
into on February 20, 2009, by and between Franklin Electric Co., Inc., an
Indiana corporation (“Franklin”), and Gregg C. Sengstack (“Executive”).
 
WHEREAS, Franklin and Executive are parties to an Amended Employment Agreement
dated as of December 20, 2002 and further amended as of July 25, 2005 (the
“Agreement”) and now desire to amend the Agreement to clarify certain provisions
and to comply with Internal Revenue Code Section 409A and the guidance and
regulations thereunder, to the extent applicable.
 
NOW, THEREFORE, in consideration of the mutual covenants and promises contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree to amend the Agreement as
follows, effective as of January 1, 2008:
 
1.  
By amending subparagraph  6(b) to read as follows:

 
(b) If at any time other than as specified in subparagraph (c) of this paragraph
6, (i) Franklin shall terminate Executive's employment without Good Cause, or
(ii) Executive shall voluntarily terminate such employment with Good Reason:
 
(A) Franklin shall pay Executive the following amounts:  (1) in accordance with
normal payroll practices, the Salary earned by Executive pursuant to
subparagraph 3(a) but not yet paid as of the date of Executive's termination of
employment, and any bonus earned by Executive pursuant to subparagraph 3(b) for
the year prior to the year in which Executive's termination occurs but not yet
paid as of such date, and (2) a lump sum cash payment, within 30 days of such
termination, equal to the sum of (a) not less than a prorata portion of the
bonus (based on the date on which such termination occurs) paid or payable to
Executive pursuant to subparagraph 3(b) for the year prior to the year in which
Executive's termination occurs, (b) one and one-half (1½) times the bonus paid
or payable to Executive pursuant to subparagraph 3(b) for the year prior to the
year of termination, and (c) one and one-half (1½) times Executive's then
current Salary.
 
(B) For the severance period, Executive shall continue to be provided with the
benefits under Benefit Plans that are health and welfare plans, and shall be
considered an active employee for such purposes.  The date of Executive’s
termination of employment shall be considered a “qualifying event” as such term
is defined in Title I, Part 6 of the Employee Retirement Income Security Act of
1974 (“COBRA”), and any continued coverage by Executive, his spouse or eligible
dependents under Franklin’s group health plan after Executive’s termination of
employment shall be considered COBRA coverage.
 
(C) Franklin shall pay Executive a lump sum payment within 30 days following his
termination of employment of an amount equal to the increase in benefits under
all tax-qualified and supplemental retirement plans maintained by Franklin in
which Executive participates at termination of employment that results from
crediting Executive with additional service for all purposes under such plans
equal to the severance period, and deeming Executive to be an employee of
Franklin during the severance period. The amounts attributable to additional
benefits under any such plan shall be based on Executive’s compensation level as
of his termination of employment.  The amounts attributable to additional
benefits under any retirement plan that is a defined contribution plan shall
include the additional Franklin contributions that would have been made or
credited on Executive’s behalf had he authorized the same elective contributions
he had elected for the year in which the termination of employment occurs, and
shall include earnings that would have accrued under the applicable plan during
the severance period based on the investment alternatives elected by Executive
as of his termination of employment.  Benefits accrued under such plans prior to
Executive’s termination of employment shall be paid in accordance with the terms
of such plans.
 
(D) Any stock options granted to Executive by Franklin shall be accelerated and
become immediately exercisable in full on the date of termination and shall
remain exercisable for such period after the date of termination as is provided
under the terms of the options and the plans pursuant to which they were issued.
 
The severance period for purposes of this subparagraph 3(b) shall be the period
beginning on the date of Executive's termination and ending on the earlier of
the date on which Executive would attain his Normal Retirement Age or eighteen
(18) months.
 
2.  
By amending subparagraph 6(c) to read as follows:

 
(c) If within two (2) years after a Change in Control, (i) Franklin shall
terminate Executive’s employment with Franklin without Good Cause, (ii)
Executive shall voluntarily terminate such employment with Good Reason, or (iii)
Executive shall voluntarily terminate such employment for any reason whatsoever
during the period beginning on the first anniversary of the Change in Control
and ending thirty (30) days thereafter:
 
(A) Franklin shall pay Executive the following amounts:  (1) in accordance with
normal payroll practices, the Salary earned by Executive pursuant to
subparagraph 3(a) but not yet paid as of the date of Executive's termination of
employment, and any bonus earned by Executive pursuant to subparagraph 3(b) for
the year prior to the year in which Executive's termination occurs but not yet
paid as of such date, and (2) a lump sum cash payment, within 30 days of such
termination, equal to the sum of (a) not less than a prorata portion of the
bonus (based on the date on which such termination occurs) paid or payable to
Executive pursuant to subparagraph 3(b) for the year prior to the year in which
Executive's termination occurs, (b) three (3) times the bonus paid or payable to
Executive pursuant to subparagraph 3(b) for the year prior to the year of
termination, and (c) three (3) times Executive's then current Salary.
 
(B) For the severance period, Executive shall continue to be provided with the
benefits under Benefit Plans that are health and welfare plans, and shall be
considered an active employee for such purposes.  The date of Executive’s
termination of employment shall be considered a “qualifying event” as such term
is defined in Title I, Part 6 of the Employee Retirement Income Security Act of
1974 (“COBRA”), and any continued coverage by Executive, his spouse or eligible
dependents under Franklin’s group health plan after Executive’s termination of
employment shall be considered COBRA coverage.
 
(C) Franklin shall pay Executive a lump sum payment within 30 days following his
termination of employment of an amount equal to the increase in benefits under
all tax-qualified and supplemental retirement plans maintained by Franklin in
which Executive participates at termination of employment that results from
crediting Executive with additional service for all purposes under such plans
equal to the severance period, and deeming Executive to be an employee of
Franklin during the severance period. The amounts attributable to additional
benefits under any such plan shall be based on Executive’s compensation level as
of his termination of employment.  The amounts attributable to additional
benefits under any retirement plan that is a defined contribution plan shall
include the additional Franklin contributions that would have been made or
credited on Executive’s behalf had he authorized the same elective contributions
he had elected for the year in which the termination of employment occurs, and
shall include earnings that would have accrued under the applicable plan during
the severance period based on the investment alternatives elected by Executive
as of his termination of employment.  Benefits accrued under such plans prior to
Executive’s termination of employment shall be paid in accordance with the terms
of such plans.
 
(D) In settlement of any stock options then outstanding (whether or not then
exercisable), Franklin shall pay Executive a lump sum cash payment, within 30
days of such termination, equal to the difference between the aggregate fair
market value of the shares subject to such options as of the date of such
termination and the aggregate exercise price thereof.
 
The severance period for purposes of this subparagraph 3(b) shall be the period
beginning on the date of Executive's termination and ending on the earlier of
the date on which Executive would attain his Normal Retirement Age or thirty-six
(36) months.
 
3.  
By amending subparagraph 6(e) to add a final sentence to read as follows:

 
The Gross-Up Payment shall be paid within 30 days after Executive remits the
related excise tax or other amounts to the appropriate taxing authority.
 
4.  
By adding a new Paragraph 20 to read as follows:

 
 
20.
Provisions Regarding Code §409A.

 
(a) If at the time of Executive’s termination of employment for reasons other
than death he is a “Key Employee” as determined in accordance with the
procedures set forth in Treas. Reg. §1.409A-1(i), any amounts payable to
Executive pursuant to this Agreement that are subject to Section 409A of the
Internal Revenue Code shall not be paid or commence to be paid until six months
following Executive’s termination of employment, or if earlier, Executive’s
subsequent death.
 
(b) Reimbursements or in-kind benefits provided under this Agreement that are
subject to Section 409A of the Internal Revenue Code are subject to the
following restrictions:  (i) the amount of expenses eligible for reimbursements,
or in-kind benefits provided, to Executive during a calendar year shall not
affect the expenses eligible for reimbursement or the in-kind benefits provided
in any other calendar year, and (ii) reimbursement of an eligible expense shall
be made as soon as practicable, but in no event later than the last day of the
calendar year following the calendar year in which the expense was incurred.
 
IN WITNESS WHEREOF, the parties have executed this Second Amendment to the
Agreement on the ____ day of _________, 2009.

FRANKLIN ELECTRIC CO., INC.

By:           
Its:           
 

/s/ GREGG C. SENGSTACK
CH2\2956910.1                                                                    Gregg
C. Sengstack

 
 

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