Document:

Exhibit

Exhibit 10.1
EMPLOYMENT SECURITY AGREEMENT
This Employment Security Agreement (“Agreement”) is entered into as of the 12th day of September, 2016, by and between Franklin Electric Co., Inc., an Indiana corporation (“Franklin”), and Jonathan M. Grandon (“Executive”).
WITNESSETH:
WHEREAS, Executive is currently employed by Franklin as the Chief Administrative Officer and General Counsel;
WHEREAS, Franklin desires to provide certain security to Executive in connection with Executive’s employment with Franklin; and
WHEREAS, Executive and Franklin desire to enter into this Agreement pertaining to the terms of the security Franklin is providing to Executive with respect to his employment.
NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:
1.Definitions.  For purposes of this Agreement:
(a)    “Affiliate” has the meaning set forth in Rule 12b-2 under the Securities Exchange Act of 1934.
(b)    “Base Salary” means Executive’s annual base salary at the rate in effect on the date of a Change in Control, or if greater, the rate in effect immediately prior to Executive’s termination of employment with Franklin.
(c)    “Change in Control” means the occurrence of any of the following events:
(i)    any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity (other than Franklin or a trustee or other fiduciary holding securities under an employee benefit plan of Franklin), or any syndicate or group deemed to be a person under Section 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is or becomes the "beneficial owner" (as defined in Rule 13d-3 of the General Rules and Regulations under the Exchange Act), directly or indirectly, of securities of Franklin representing 20% or more of the combined voting power of Franklin’s then outstanding securities entitled to vote generally in the election of directors;
(ii)    Franklin is party to a merger, consolidation, reorganization or other similar transaction with another corporation or other legal person unless, following such transaction, more than 50% of the combined voting power of the outstanding securities of the surviving, resulting or acquiring corporation or person or its parent 

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entity entitled to vote generally in the election of directors (or persons performing similar functions) is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of Franklin’s outstanding securities entitled to vote generally in the election of directors immediately prior to such transaction, in substantially the same proportions as their ownership, immediately prior to such transaction, of Franklin’s outstanding securities entitled to vote generally in the election of directors;
(iii)    The stockholders of Franklin approve a plan of complete liquidation or dissolution of Franklin or Franklin sells all or substantially all of its business and/or assets to another corporation or other legal person unless, following such sale, more than 50% of the combined voting power of the outstanding securities of the acquiring corporation or person or its parent entity entitled to vote generally in the election of directors (or persons performing similar functions) is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of Franklin’s outstanding securities entitled to vote generally in the election of directors immediately prior to such sale, in substantially the same proportions as their ownership, immediately prior to such sale, of Franklin’s outstanding securities entitled to vote generally in the election of directors; or
(iv)    during any period of two consecutive years or less, individuals who at the beginning of such period constituted the Board of Directors of Franklin (and any new Directors, whose appointment or election by the Board of Directors or nomination for election by Franklin’s stockholders was approved by a vote of at least two-thirds of the Directors then still in office who either were Directors at the beginning of the period or whose appointment, election or nomination for election was so approved) cease for any reason to constitute a majority of the Board of Directors.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur by virtue of any transaction in which Executive is a participant in a group effecting an acquisition of Franklin if Executive holds an equity interest in the entity acquiring Franklin at the time of such acquisition.
(d)    “Good Cause” means:
(i)    Executive’s intentional and material misappropriation of, or damage to, the property or business of Franklin; 
(ii)    Executive’s conviction of a criminal violation involving fraud or dishonesty or of a felony that causes material harm or injury (whether financial or otherwise) to Franklin; or
(iii)    Executive’s willful and continuous failure to perform his obligations under the Agreement, provided that Franklin shall first give written notice to Executive describing such failure and, as long as it is capable of being cured and 

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does not involve acts of material dishonesty directed against Franklin, Executive does not substantially cure or correct such failure within 30 days thereafter, or if such failure can not reasonably be cured within such period, cure is not commenced within such period and diligently pursued and fully cured within 60 days of Franklin’s original notice to Executive.
Notwithstanding anything herein to the contrary, in the event Franklin terminates the employment of Executive for Good Cause hereunder, Franklin shall give Executive at least 30 days’ prior written notice specifying in detail the reason or reasons for Executive’s termination.
(e)    “Good Reason” means:
(i)    a material reduction in Executive’s salary or retirement benefits or a material reduction in Executive’s compensation and benefits in the aggregate, excluding, in the case of incentive benefits that are based upon the performance of Executive or Franklin, reductions in benefits resulting from diminished performance by Executive or Franklin; 
(ii)    any purchaser (or affiliate thereof) who purchases substantially all of the assets of Franklin shall decline to assume all of Franklin’s obligations under this Agreement; or
(iii)    the relocation of the Executive’s principal place of employment by more than 50 miles.
(f)    “Severance Period” means the period beginning on the date Executive’s employment with Franklin terminates under circumstances described in Section 2 and ending on the date 24 months thereafter.
(g)    “Target Bonus” means the amount that would be payable to Executive under the Executive Officer Annual Incentive Cash Bonus Program or any successor plan thereto for the year in which Executive’s employment with Franklin terminates, assuming attainment of the target performance goals at 100% level and employment of Executive at the end of such year (such amount to be determined regardless of whether Executive would otherwise be eligible for a bonus under the terms of any such plan or the extent to which the performance goals are actually met).
2.    Termination of Employment.  If within two years after a Change in Control, (a) Franklin terminates Executive’s employment for any reason other than Good Cause, or (b) Executive terminates his employment with Franklin for Good Reason, Franklin shall make the payments and provide the benefits described in Section 3 below.
3.    Benefits Upon Termination of Employment.  Upon termination of Executive’s employment with Franklin under circumstances described in Section 2 above:

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(a)    Within 30 days following the date of such termination, Franklin shall pay Executive a lump sum cash payment equal to the sum of (i), (ii) and (iii) below:
(i)    unpaid Base Salary earned by Executive through the date of termination (which shall include payment for all accrued but unused vacation pay);
(ii)    two times Executive’s Base Salary; and
(iii)    an amount equal to the sum of (A) a  pro rata portion of Executive’s Target Bonus (based on the date on which such termination of employment occurs), and (B) two times Executive’s Target Bonus.
(b)    Franklin shall pay Executive a lump sum payment (calculated based on his age as of his termination of employment) 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 an additional 24 months of service for all purposes (including determining service and age for early retirement factors, if applicable) under such plans, 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 (the earnings will be determined by multiplying the aggregate contributions to each such plan by the weighted average of the rate of return of the actual investment alternatives elected by Executive as of the beginning of the 12-month period ending on the employment termination date).  Benefits accrued under such plans prior to Executive’s termination of employment shall be paid in accordance with the terms of such plans.  Notwithstanding the foregoing, the payment under this Section 3(b) shall be offset by the lump sum value of the amounts of additional benefits paid or payable in accordance with the terms of such plans as a result of the occurrence of a Change in Control but not below zero.
(c)    If Executive holds any stock-based awards as of the date of his termination of employment, (i) all such awards that are stock options shall immediately become exercisable on such date and shall be exercisable for 12 months following such termination of employment, or if earlier, until the expiration of the term of the stock option; (ii) all restrictions on any awards of restricted stock or restricted stock units shall terminate or lapse; and (iii) all performance goals applicable to any performance-based awards shall be deemed satisfied at the target performance level, and in each case settlement of such awards shall be made to Executive within 30 days of Executive’s termination.  To the extent any of the foregoing is not permissible under the terms of any plan pursuant to which the awards were granted, Franklin shall pay to Executive, in a lump sum within 30 days after termination of Executive’s employment, an amount as follows:  (A) to the extent the acceleration of the exercise of such stock options is not permissible, an amount equal to the excess, if any, of 

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the aggregate fair market value of the stock subject to such options, determined on the date of Executive’s termination of employment, over the aggregate exercise price of such stock options; (B) to the extent the termination or lapse of restrictions on restricted stock or restricted stock units is not permissible, an amount equal to the aggregate fair market value of the stock subject to the restrictions (determined without regard to such restrictions); and (C) to the extent performance awards are limited, an amount equal to the aggregate fair market value of the additional shares that were not awarded.  Executive shall surrender all outstanding awards for which payment pursuant to the preceding sentence is made.
(d)    During the Severance Period, Executive and his spouse and eligible dependents shall continue to be covered by all employee benefit plans of Franklin providing health, prescription drug, dental, vision, disability and life insurance in which he or his spouse or eligible dependents were participating immediately prior to the date of his termination of employment, as if he continued to be an active employee of Franklin, and Franklin shall continue to pay the costs of such coverage under such plans on the same basis as is applicable to active employees covered thereunder; provided that, if participation in any one or more of such plans is not possible under the terms thereof, Franklin shall provide substantially identical benefits. 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.
(e)    During the Severance Period, Executive will receive 12 months of executive outplacement services (not to exceed $50,000) with a professional outplacement firm selected by Franklin.
(f)    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, with the first payment to include the payments that otherwise would have been made during such period and including interest accruing thereon from the first day of the month following the date of such termination of employment until the date of payment, based on the applicable interest rate as defined in Section 417(e)(3) of the Internal Revenue Code.  Each payment made pursuant to Section 3 shall be considered a separate payment for purposes of Section 409A.
4.    Release of Claims.  Payment by Franklin of the termination benefits provided in Section 3 hereof shall be conditioned on Executive’s execution, and nonrevocation, of a release of claims.  Payment of such termination benefits shall be delayed until the expiration of the revocation period applicable to the executed release of claims, provided that if Executive does not execute the release of claims within 60 days of the date of termination of employment, the termination benefits described in Section shall be forfeited and Executive shall be entitled to receive only the benefits to which he is otherwise entitled under applicable law.

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5.    Death.  If Executive dies during the Severance Period, all amounts payable hereunder to Executive, to the extent not paid, shall be paid, within 30 days of the date of Executive’s death, to his surviving spouse or his designated beneficiary, or if none, then to his estate.  Executive’s surviving spouse and eligible dependents shall continue to be covered under plans described in Section 3(d) during the remainder of the Severance Period.  On the death of the surviving spouse and eligible dependents, no further coverage under such plans shall be provided (other than any coverage required pursuant to COBRA).
6.    Excise Tax.  
(a)    If in connection with the Change in Control or other event Executive would be or is subject to an excise tax under Section 4999 of the Internal Revenue Code (an “Excise Tax”) with respect to any cash, benefits or other property received, or any acceleration of vesting of any benefit or award (the “Change in Control Benefits”), Executive may elect to have the Change in Control Benefits otherwise payable under this Agreement reduced to the largest amount payable without resulting in the imposition of such Excise Tax.  Within 15 days after the occurrence of the event that triggers the Excise Tax, a nationally recognized accounting firm selected by Franklin shall make a determination as to whether any Excise Tax would be reported with respect to the Change in Control Benefits and, if so, the amount of the Excise Tax, the total net after-tax amount of the Change in Control Benefits (after taking into account federal, state and local income and employment taxes and the Excise Tax) and the amount of reduction to the Change in Control Benefits necessary to avoid such Excise Tax.  Any reduction to the Change in Control Benefits shall first be made from any cash benefits payable pursuant to this Agreement, if any, and thereafter, as determined by Executive, and Franklin shall provide Executive with such information as is necessary to make such determination. Franklin shall be responsible for all fees and expenses connected with the determinations by the accounting firm pursuant to this paragraph 6.
(b)    Executive agrees to notify Franklin in the event of any audit or other proceeding by the IRS or any taxing authority in which the IRS or other taxing authority asserts that any Excise Tax should be assessed against Executive and to cooperate with Franklin in contesting any such proposed assessment with respect to such Excise Tax (a “Proposed Assessment”). Executive agrees not to settle any Proposed Assessment without the consent of Franklin.  If Franklin does not consent to allow Executive to settle the Proposed Assessment, within 30 days following such demand therefor, Franklin shall indemnify and hold harmless Executive with respect to any additional taxes, interest and/or penalties that Executive is required to pay by reason of the delay in finally resolving Executive’s tax liability (such indemnification to be made as soon as practicable, but in no event later than the end of the calendar year following the calendar year in which Executive makes such remittance).
7.    Indemnification.  Franklin shall indemnify, protect, defend and hold harmless Executive from and against all liabilities, costs and expenses (including but not limited to attorneys’ fees) incurred as a result of Executive’s employment with Franklin to the fullest extent permitted by the Indiana Business Corporation Law.

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8.    Litigation Expenses.  Franklin shall reimburse Executive all out-of-pocket expenses, including attorneys’ fees, incurred by Executive in connection with any enforcement, claim or legal action or proceeding involving this Agreement, whether brought by Executive or by or on behalf of Franklin or by another party.  Such reimbursement shall be made within 30 days of Executive’s submission of an invoice following resolution of the claim.  Franklin shall pay prejudgment interest on any money judgment obtained by Executive, calculated at the published prime interest rate charged by Franklin’s principal banking connection from the date that payment(s) to him should have been made under this Agreement.
9.    Post-Termination Payment Obligations.  Subject to Section 4, Franklin's obligation to pay Executive the compensation and to make the other arrangements provided herein to be paid and made after termination of Executive's employment with Franklin shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right that Franklin may have against him or anyone else.  All amounts so payable by Franklin shall be paid without notice or demand.  Each and every such payment made by Franklin shall be final and Franklin will not seek to recover all or any part of such payment from Executive or from whomsoever may be entitled thereto, for any reason whatsoever.
10.    Disclosure Of Confidential Information.  Without the consent of Franklin, Executive shall not at any time divulge, furnish or make accessible to anyone (other than in the regular course of business of Franklin) any knowledge or information with respect to confidential or secret processes, inventions, formulae, machinery, plan, devices or materials of Franklin or with respect to any confidential or secret engineering development or research work of Franklin or with respect to any other confidential or secret aspect of the business of Franklin.  Executive recognizes that irreparable injury will result to Franklin and its business and properties, in the event of any breach by Executive of any of the provisions of this Section 10.  In the event of any breach of any of the commitments of Executive pursuant to this Section 10, Franklin shall be entitled, in addition to any other remedies and damages available, to injunctive relief to restrain the violation of such commitments by Executive or by any person or persons acting for or with Executive in any capacity whatsoever.
11.    Solicitation Of Employees.  During Executive’s employment with Franklin and for a period of 18 months after termination of employment, Executive shall not (a) directly or indirectly, employ or retain or solicit for employment or arrange to have any other person, firm or other entity employ or retain or solicit for employment or otherwise participate in the employment or retention of any person who is an employee of Franklin or (b) encourage or solicit any such employee to leave the service of Franklin.  Executive also acknowledges and agrees that he shall comply with the terms of the Confidentiality and Non-Compete Agreement in effect between him and Franklin.  Executive and Franklin agree that of the amount paid to Executive pursuant to Section 3 of this Agreement, a portion equal to one times Executive’s Base Salary and one times the Target Bonus paid or payable to Executive pursuant to subparagraph 3(c) shall serve as adequate consideration for the restrictive covenants set forth in this Section 11.
12.    Executive Assignment.  No interest of Executive or his spouse or any other beneficiary under this Agreement, or any right to receive any payment or distribution hereunder, 

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shall be subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment, or other alienation or encumbrance of any kind, nor may such interest or right to receive a payment or distribution be taken, voluntarily or involuntarily, for the satisfaction of the obligations or debts of, or other claims against, Executive or his spouse or other beneficiary, by operation of law or otherwise, other than pursuant to the terms of a qualified domestic relations order to which Executive is a party.
13.    Reimbursements or In-Kind Benefits.  Reimbursements or in-kind benefits provided under this Agreement that are subject to Section 409A of the Internal Revenue Code of 1986, as amended, are subject to the following restrictions:  (a) 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 (b) 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.
14.    Waiver, Modification.  No provisions of this Agreement may be waived, modified or discharged unless such waiver, modification or discharge is agreed to in a writing signed by Executive and Franklin.  No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same time or at any prior or subsequent time.
15.    Applicable Law.  This Agreement shall be construed and interpreted pursuant to the laws of Indiana.
16.    Entire Agreement.  This Agreement contains the entire Agreement between Franklin and Executive and supersedes any and all previous agreements, written or oral, between the parties relating to severance benefits, including any previous employment agreement or employment security agreement between Executive and Franklin.  No amendment or modification of the terms of this Agreement shall be binding upon the parties hereto unless reduced to writing and signed by Franklin and Executive.
17.    Severability. If any provision of this Agreement or the application thereof is held invalid, such invalidity shall not affect other provisions or applications of this Agreement that can be given effect without the invalid provision or application and, to such end, the provisions of this Agreement are declared to be severable.
18.    No Employment Contract.  Nothing contained in this Agreement shall be construed to be an employment contract between Executive and Franklin. Executive is employed at will and Franklin may terminate his employment at any time, with or without cause.
19.    Employment with an Affiliate.  If Executive is employed by Franklin and an Affiliate, or solely by an Affiliate, on the date of termination of employment of Executive under circumstances described in Section 2, then (a) employment or termination of employment as used in this Agreement shall mean employment or termination of employment of Executive with Franklin and such Affiliate, or with such Affiliate, as applicable, and related references to Franklin shall also 

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include Affiliate, as applicable, and (b) the obligations of Franklin hereunder shall be satisfied by Franklin and/or such Affiliate as Franklin, in its discretion, shall determine; provided that Franklin shall remain liable for such obligations to the extent not satisfied by such Affiliate.
20.    Successors.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, representatives and successors.  Any reference in this Agreement to Franklin shall be deemed a reference to any successor (whether direct or indirect, by purchase of stock or assets, merger or consolidation or otherwise) to all or substantially all of the business and/or assets of Franklin; provided that Executive’s employment by a successor shall not be deemed a termination of Executive’s employment with Franklin.
21.    Withholding.  Franklin may withhold from any payment that it is required to make under this Agreement amounts sufficient to satisfy applicable withholding requirements under any federal, state, or local law.
22.    Headings.  The headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of any provision of this Agreement.
23.    Notice.  Notices given pursuant to this Agreement shall be in writing and shall be deemed given when received or, if mailed, two days after mailing by United States registered or certified mail, return receipt requested, postage prepaid and addressed as herein provided.  Notice to Franklin shall be addressed to Corporate Secretary, Franklin Electric Co., Inc. at 400 East Spring Street, Bluffton, Indiana 46714.  Notices to Executive shall be addressed to Executive at his last permanent address as shown on Franklin's records.  Notwithstanding the foregoing, if either party shall designate a different address by notice to the other party given in the foregoing manner, then notices to such party shall be addressed as designated until the designation is revoked by further notice given in such manner.
24.    Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original.
IN WITNESS WHEREOF, the parties have executed this Employment Security Agreement as of the day and year written above.

FRANKLIN ELECTRIC CO., INC.

By:    /s/ Gregg Sengstack        
Gregg Sengstack
Its:    Chief Executive Officer

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EXECUTIVE

/s/ Jonathan Grandon        
Jonathan Grandon

-10-Exhibit

Exhibit 10.2
FIRST AMENDMENT TO NOTE PURCHASE AND PRIVATE SHELF  
AGREEMENT
THIS FIRST AMENDMENT TO NOTE PURCHASE AND PRIVATE SHELF AGREEMENT (this "Amendment"), is made and entered into as of October 28, 2016, by and among Franklin Electric Co., Inc., an Indiana corporation (the "Company"), NYL Investors LLC ("NYL Investors") and each of the undersigned holders of Notes (as defined in the Note Agreement defined below) that are signatories hereto (together with their successors and assigns, the "Noteholders").
WITNESSETH:
WHEREAS, the Company and the Noteholders are parties to that certain Note Purchase and Private Shelf Agreement, dated as of May 27, 2015, (as amended, restated, supplemented or otherwise modified from time to time, the "Note Agreement"; capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Note Agreement), pursuant to which the Noteholders have purchased Notes from the Company; and
WHEREAS, the Company has requested that the Noteholders amend certain provisions of the Note Agreement, and subject to the terms and conditions hereof, the Noteholders are willing to do so;
NOW, THEREFORE, for good and valuable consideration, the sufficiency and receipt of all of which are acknowledged, the Company and the Noteholders agree as follows:
1.Amendments 
(a)Section 9.1 of the Note Agreement is hereby amended by inserting the following after the last sentence thereof:
The Company acknowledges that any such Person permitted to act pursuant to this Section 9.1, after exercising its rights of inspection, may prepare and (subject to the terms of Section 20 hereof) distribute to the Significant Holders certain reports pertaining to the Company and its Subsidiaries’ assets for internal use by such Person and the Significant Holders
(b)Section 9.4 of the Note Agreement is hereby amended by inserting the following after the last sentence thereof:
The Company will maintain in effect and enforce policies and procedures designed to promote and achieve compliance by the Company, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable U.S. Economic Sanctions.
(c)Section 9.5 of the Note Agreement is hereby amended in its entirety with the following:
Section 9.5    Most Favored Lender Status.   Except in the case of any Qualified Receivables Transaction, in the event that the Company or any Subsidiary shall enter into, assume or otherwise become bound by or obligated under, or amend, any agreement evidencing any present or future Indebtedness in excess of $10,000,000 (collectively, an 

“Other Financing Agreement”) which includes one or more Additional Covenants or Additional Defaults, the terms of this Agreement shall, without any further action on the part of the Company or any of the holders of the Notes, be deemed to be amended automatically to include each Additional Covenant and each Additional Default contained in such agreement.  The Company further covenants to promptly execute and deliver at its expense (including the reasonable fees and expenses of counsel for the holders of the Notes), an amendment to this Agreement in form and substance satisfactory to the Required Holder(s) evidencing the amendment of this Agreement to include such Additional Covenants and Additional Defaults, provided that the execution and delivery of such amendment shall not be a precondition to the effectiveness of such amendment as provided for in this Section 9.5, but shall merely be for the convenience of the parties hereto
(d)Section 10.1 of the Note Agreement is hereby amended by inserting the following new clause (viii):
(viii)    Liens incurred in connection with any transfer of an interest in accounts or notes receivable or related assets as part of a Qualified Receivables Transaction;
(e)Section 10.1 of the Note Agreement is hereby further amended by amending the existing clause (viii) in its entirety as follows: 
(ix) Liens not otherwise permitted by the foregoing clauses provided that Priority Debt at no time exceeds twenty percent (20%) of Consolidated Total Tangible Assets, provided, further, that notwithstanding the foregoing, the Company shall not, and shall not permit any of its Subsidiaries to, secure pursuant to this Section 10.1(ix) any Indebtedness outstanding under or pursuant to any Principal Credit Facility unless and until the Notes (and any guaranty delivered in connection therewith) shall concurrently be secured equally and ratably with such Indebtedness pursuant to documentation reasonably acceptable to the Required Holders in substance and in form, including, without limitation, an intercreditor agreement and opinions of counsel to the Company and/or any such Subsidiary, as the case may be, from counsel that is reasonably acceptable to the Required Holders
(f)Section 10.2 of the Note Agreement is hereby amended by (1) deleting the word “and” following the “;” in clause (i), (2) amending clause (ii) in its entirety with the following, and (3) inserting a new clause (iii) with the following:
(ii) other Indebtedness of the Company or Subsidiaries (other than Significant Subsidiaries), so long as Priority Debt at no time exceeds twenty percent (20%) of Consolidated Total Tangible Assets; and
(iii)    Receivables Transaction Attributed Indebtedness and/or Indebtedness incurred pursuant to Qualified Receivables Transaction in an aggregate amount not to exceed $30,000,000 at any time.
(g)Section 10.3 of the Note Agreement is hereby amended by (1) deleting the word “and” following the “;” in clause (xi), (2) inserting the following new clauses (xii) and (xiii) and (3) replacing existing clause (xii) with the following new clause (xiv):
(xii)    make any Investments comprised of contributions (whether in the form of cash, a note, or other assets) to a Subsidiary or other special-purpose entity created solely 

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to engage in a Qualified Receivables Transaction or otherwise resulting from transfers of assets permitted by Section 10.7 to such a special-purpose entity;
(xiii) make any Investments permitted pursuant to Section 10.4; and
(xiv) make other new Investments not to exceed an amount equal to twenty-five percent (25%) of Consolidated Net Worth.
(h)Section 10.7 of the Note Agreement is hereby amended in its entirety with the following:
Section 10.7    Sale or Discount of Receivables.   Except in connection with any Qualified Receivables Transaction, sell with or without recourse, discount or pledge or otherwise sell any of its notes or accounts receivable excluding, however, the sale on a non-recourse basis of receivables in the ordinary course of business owing from foreign account debtors so long as such sale is not for the exclusive purpose of raising a financing (e.g., a securitization).
(i)Section 10.9 of the Note Agreement is hereby amended in its entirety with the following:
Section 10.9    Interest Coverage Ratio.   At the end of each Fiscal Quarter, the ratio of Consolidated EBITDA for the period of four consecutive Fiscal Quarters then ended to Consolidated Interest Expense for the period of four consecutive Fiscal Quarters then ended shall not be less than 3.00 to 1.00. 
(j)Section 10.10 of the Note Agreement is hereby amended in its entirety with the following:
Section 10.10    Debt to EBITDA Ratio.   At the end of each Fiscal Quarter, the ratio of Consolidated Net Debt as at the end of such Fiscal Quarter to Consolidated EBITDA for the period of four consecutive Fiscal Quarters then ended shall not exceed 3.50 to 1.00.
(k)Section 22.3 of the Note Agreement is hereby amended in its entirety with the following:
Section 22.3    Accounting Terms.  Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all determinations with respect to accounting matters hereunder shall be made, and all unaudited financial statements and certificates and reports as to financial matters required to be furnished hereunder shall be prepared, in accordance with GAAP applied on a basis consistent with the most recent audited consolidated financial statements of the Company and its Subsidiaries delivered pursuant to Section 7.1(b) or, if no such statements have been so delivered, the most recent audited financial statements referred to in clause (i) of Section 5.3.  Any reference herein to any specific citation, section or form of law, statute, rule or regulation shall refer to such new, replacement or analogous citation, section or form should such citation, section or form be modified, amended or replaced. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made (i) without giving effect to any election under Accounting Standards Codification 825-10-25 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result 

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or effect) to value any Indebtedness or other liabilities of the Company or any Subsidiary at “fair value”, as defined therein, (ii) without giving effect to any treatment of Indebtedness in respect of convertible debt instruments under Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof and (iii) without giving effect to any changes in GAAP occurring after the Effective Date, the effect of which would be to cause leases which would be treated as operating leases under GAAP as of the Effective Date to be treated as Capital Leases under GAAP. 
(l)Schedule A is hereby amended by replacing the defined terms “Consolidated EBITDA”, “Credit Agreement”, “Permitted Disposition”, “Priority Debt” and “Significant Subsidiary” in their entirety with the following:
“Consolidated EBITDA” for any period means the sum of (i) Consolidated EBIT for such period, (ii) Depreciation for such period, (iii) amortization of intangible assets of the Company and its Consolidated Subsidiaries for such period, and (iv) extraordinary or other non-operating losses for such period, MINUS extraordinary or other non-operating gains for such period, all determined in accordance with GAAP.  In determining Consolidated EBITDA for any period, (a) any Consolidated Subsidiary acquired during such period by the Company or any other Consolidated Subsidiary shall be included on a pro forma, historical basis as if it had been a Consolidated Subsidiary during such entire period and (b) any amounts which would be included in a determination of Consolidated EBITDA for such period with respect to assets acquired during such period by the Company or any Consolidated Subsidiary shall be included in the determination of Consolidated EBITDA for such period and the amount thereof shall be calculated on a pro forma, historical basis as if such assets had been acquired by the Company or such Consolidated Subsidiary prior to the first day of such period; provided, however, that the foregoing clauses (a) and (b) shall not apply to calculations made pursuant to Section 10.9. 
“Credit Agreement” means that certain Third Amended and Restated Credit Agreement, dated as of October 28, 2016, by and among the Company, Franklin Electric B.V., the lenders party thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent, as amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time.
“Permitted Dispositions” means and includes:
(i) any sale, lease, transfer or other disposition of assets from (a) a Subsidiary (other than a Significant Subsidiary) to the Company or to a Wholly-Owned Subsidiary, (b) the Company to a Wholly-Owned Subsidiary or (c) a Significant Subsidiary to the Company or to any other Significant Subsidiary, provided that notwithstanding the foregoing, in no event shall any sale, lease, transfer or other disposition of assets by the Company or any Subsidiary not in the Excluded Subsidiary Group be made to any member of the Excluded Subsidiary Group under this clause (i);
(ii) any sale and leaseback of any assets owned by the Company or any of its Subsidiaries; provided that the aggregate amount of assets sold and leased-back under this clause (iii) in the then most recent twelve (12) month period do not constitute more than 

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five percent (5%) of Consolidated Total Assets determined as of the end of the most recently ended fiscal year;
(iii) any sale, lease, transfer or other disposition of assets in the ordinary course of business; or
(iv) any sale, lease, transfer or other disposition of assets or stock to Persons outside of the ordinary course of business so long as the aggregate amount of assets and stock sold, leased, transferred or otherwise disposed of outside of the ordinary course of business in the then most recent twelve (12) month period which were not permitted by clauses (i), (ii) or (iii) above together with any assets then proposed to be sold, leased, transferred or otherwise disposed of outside of the ordinary course of business which are not permitted by clauses (i), (ii) or (iii) above (a) do not constitute more than fifteen percent (15%) of Consolidated Total Assets determined as of the end of the most recently ended fiscal year and (b) have not contributed more than fifteen percent (15%) of Consolidated Net Earnings for the most recently ended fiscal year of the Company; provided, however, that in the case of any event described in this clause (iv), if the Company shall deliver to the each Significant Holder a certificate of a Senior Financial Officer to the effect that the Company or its relevant Subsidiaries intend to apply the proceeds from such event (or a portion thereof specified in such certificate), within 180 days after receipt of such proceeds, to acquire (or replace or rebuild) real property, equipment or other assets to be used in the business of the Company and/or its Subsidiaries (including one or more Permitted Acquisitions), and certifying that no Default or Event of Default has occurred and is continuing, then the assets sold, leased or otherwise transferred pursuant to such event shall not be included in any determination made pursuant to this clause (iv)(a) or (iv)(b) to the extent such proceeds specified in such certificate are so reinvested during such 180-day period (or such extended period as agreed by the Required Holders in their sole discretion); provided further that, if such proceeds therefrom have not been so applied by the end of such 180-day period (or such extended period as agreed by the Required Holders in their sole discretion), such assets sold, leased or otherwise transferred pursuant to such event shall be included in each determination made pursuant to this clause (iv)(a) and (iv)(b) to the extent of such proceeds that have not been so applied.
“Priority Debt” means the sum, without duplication, of (i) Indebtedness of the Company or any Subsidiary Guarantor that is secured by a Lien under Section 10.1(ix), and (ii) Indebtedness of any Subsidiary (other than a Subsidiary Guarantor) (including, but not limited to, any Indebtedness of a Subsidiary which consists of a Guarantee of Indebtedness of the Company), but excluding for purposes of this clause (ii), (x) Indebtedness of Subsidiaries owing to the Company and (y) Indebtedness of any Subsidiary (other than a Significant Subsidiary) to any other Subsidiary.
“Significant Subsidiary” means each of (i) Franklin Electric International, Inc., a Delaware corporation, (ii) Franklin Fueling Systems, Inc., an Indiana corporation, and (iii) Intelligent Controls, LLC, a Maine limited liability company.
(m)Schedule A is hereby further amended by adding the following new defined terms in correct alphabetical order: 
“Acquisition” means any transaction pursuant to which the Company or any of its Subsidiaries, directly or indirectly, in its own name or by or through a nominee or an agent 

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(a) acquires equity securities (or warrants, options or other rights to acquire such securities) of any Person other than the Company or any Person which is not then (before giving effect to such transaction) a Subsidiairy of the Company, pursuant to a solicitation of tenders therefor, or in one or more negotiated block, market or other transactions not involving a tender offer or a combination of any of the foregoing or (b) makes any Person a Subsidiary of the Company or cause any Person to be merged into the Company or any of its Subsidiaries in any case pursuant to a merger, purchase of assets or any reorganization providing for the delivery of issuance to the holders of such Person’s then outstanding Securities, in exchange for such Securities, of cash or Securities of the Company of any of its Subsidiaries, or a combination thereof ot (c) purchases all of the business or assets of any Person.
“Capital Lease” means at any date any lease of property which in accordance with GAAP would be required to be capitalized on a balance sheet of the lessee.
“Consolidated Net Debt” shall mean, at any date, (a) Consolidated Total Debt as of such date minus (b) Unrestricted Cash as of such date; provided, that the aggregate dollar amount of Unrestricted Cash permitted to be included in any determination of Consolidated Net Debt pursuant to the foregoing clause (b) shall not exceed $75,000,000 at any time. 
“Consolidated Total Tangible Assets” means, at any time, Consolidated Total Assets at such time minus Consolidated Total Intangible Assets at such time.
“Consolidated Total Intangible Assets” means, at any time, the aggregate amount of all assets of the Company and its Consolidated Subsidiaries that are classified as intangible assets under GAAP (including, without limitation, customer lists, acquired technology, goodwill, computer software, trademarks, patents, copyrights, organization expenses, franchises, licenses, trade names, brand names, mailing lists, catalogs, unamortized debt discount and capitalized research and development costs), determined on a consolidated basis, as set forth or reflected on the most recent consolidated balance sheet of the Company and its Consolidated Subsidiaries, prepared in accordance with GAAP.
“Domestic Subsidiary” means a Subsidiary organized under the laws of a jurisdiction located in the United States of America.
“Permitted Acquisition” means any Acquisition (i) which is of a Person approved by the board of directors of the Company and (ii) which has been approved by the Person to be acquired in connection with such Acquisition.
“Qualified Receivables Transaction” means any transaction or series of transactions entered into by the Company or any Subsidiary pursuant to which the Company or any Subsidiary may sell, convey or otherwise transfer to a newly-formed Subsidiary or other special-purpose entity, or any other Person, any accounts or notes receivables and rights related thereto, provided that (i) all of the terms and conditions of such transaction or series of transactions, including without limitation the amount and type of any recourse to the Company or any Subsidiary with respect to the assets transferred, are reasonably acceptable to the Required Holders and (ii) the Indebtedness and/or Receivables Transaction Attributed Indebtedness incurred in respect of all such transactions or series of transactions does not exceed $30,000,000 at any time.

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“Receivables Transaction Attributed Indebtedness” means the amount of obligations outstanding under the legal documents entered into as part of any Qualified Receivables Transaction on any date of determination that would be characterized as principal if such Qualified Receivables Transaction were structured as a secured lending transaction rather than as a purchase.
“Unrestricted Cash” shall mean, at any date, the sum of (a) positive excess, if any, of (i) 100% of the unrestricted cash maintained by the Company or any of its Domestic Subsidiaries in accounts located in the United State and that are not subject to any Liens at such time over (ii) $5,000,000 and (b) 70% of the unrestricted cash maintained by the Company or any of its Subsidiaries in accounts not included in the foregoing clause (a) that are not subject to any Liens or legal or contractual restrictions on repatriation to the United States at such time. 
(n)Schedule 5.8 of the Note Agreement is hereby replaced in its entirety with Schedule 5.8 attached hereto.
2.Conditions to Effectiveness of this Amendment.  Notwithstanding any other provision of this Amendment and without affecting in any manner the rights of the holders of the Notes hereunder, it is understood and agreed that this Amendment shall not become effective, and the Company shall have no rights under this Amendment, until the Noteholders shall have received (i) an amendment fee in an amount equal to 0.025% of the outstanding aggregate principal amount of the Notes, (ii) reimbursement or payment of its costs and expenses incurred in connection with this Amendment or the Note Agreement (including reasonable fees, charges and disbursements of King & Spalding LLP, counsel to the Noteholders),  (iii) executed counterparts to this Amendment from the Company and the Required Holders, (iv) a  duly executed copy of the Credit Agreement, in form and substance reasonably satisfactory to the Noteholders, and (v) a duly executed copy of an amendment to the Prudential Note Purchase Agreement, in form and substance reasonably satisfactory to the Noteholders.
3.Representations, Covenants, and Warranties. To induce the Noteholders to enter into this Amendment, the Company hereby represents, covenants and warrants to the Noteholders that:
(a)The Company is a corporation duly organized and existing in good standing under the laws of the State of Indiana and has the corporate power to own its property and to carry on its business as now being conducted.  Each Subsidiary is duly organized and existing in good standing under the laws of its jurisdiction of incorporation and has the corporate power to own its property and to carry on its business as now being conducted except in such instances where the failure could not be reasonably expected to result in a Material Adverse Effect.  Each of the Company and its Subsidiaries is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect;

(b)The Company has the corporate power and authority to execute and deliver this Amendment and to perform the provisions hereof.  The execution, delivery and performance of this Amendment has been duly authorized by all requisite corporate action, and this Amendment has been duly executed and delivered by authorized officers of the Company and are valid obligations of the Company, legally binding upon and enforceable against the Company in accordance with their terms, except as such enforceability may be limited by (i) bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and

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(c)After giving effect to this Amendment, the representations and warranties  
contained in the Note Agreement are true, accurate and correct in all material respects (or in all respects in the case of any representation and warranty qualified by materiality or Material Adverse Effect) on and as of the date hereof, except to the extent that any such representation and warranty specifically relates to an earlier date, in which case they shall be true, accurate and correct as of such earlier date, and no Default or Event of Default has occurred and is continuing as of the date hereof.
4.Effect of Amendment. Except as set forth expressly herein, all terms of the Note Agreement, as amended hereby, shall be and remain in full force and effect and shall constitute the legal, valid, binding and enforceable obligations of the Company to all holders of the Notes. The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the holders of the Notes under the Note Agreement, nor constitute a waiver of any provision of the Note Agreement. From and after the date hereof, all references to the Note Agreement shall mean the Note Agreement as modified by this Amendment. 
5.Governing Law. This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of New York and all applicable federal laws of the United States of America.
6.No Novation. This Amendment is not intended by the parties to be, and shall not be construed to be, a novation of the Note Agreement or an accord and satisfaction in regard thereto.
7.Costs and Expenses. The Company agrees to pay on demand all costs and expenses of the Noteholders in connection with the preparation, execution and delivery of this Amendment, including, without limitation, the reasonable fees and out-of-pocket expenses of outside counsel for the Noteholders with respect thereto.
8.Counterparts. This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, each of which shall be deemed an original and all of which, taken together, shall be deemed to constitute one and the same instrument. Delivery of an executed counterpart of this Amendment by facsimile transmission or by electronic mail in pdf form shall be as effective as delivery of a manually executed counterpart hereof.
9.Binding Nature. This Amendment shall be binding upon and inure to the benefit of the parties hereto, any other holders of Notes from time to time and their respective successors, successors-in-titles, and assigns.
10.Entire Understanding. This Amendment sets forth the entire understanding of the parties with respect to the matters set forth herein, and shall supersede any prior negotiations or agreements, whether written or oral, with respect thereto.
11.Severability. If any term or provision of this Amendment shall be deemed prohibited by or invalid under any applicable law, such provision shall be invalidated without affecting the remaining provisions of this Amendment or the Note Agreement, respectively.
[Signature Pages to Follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed, under seal in the case of the Company, by its respective authorized officers as of the day and year first above written.

COMPANY:
FRANKLIN ELECTRIC CO., INC. 
                                                                                      By: /s/ Jeffrey T. Frappier

Name: Jeffrey T. Frappier

Title: Treasurer

[SIGNATURE PAGE TO FIRST AMENDMENT
TO NOTE PURCHASE AND PRIVATE SHELF AGREEMENT]

NYL INVESTORS LLC

By: /s/ James M. Belletire

Name: James M. Belletire

Title: Managing Director                

[SIGNATURE PAGE TO FIRST AMENDMENT
TO NOTE PURCHASE AND PRIVATE SHELF AGREEMENT]

NOTEHOLDERS

NEW YORK LIFE INSURANCE COMPANY

By: /s/ James M. Belletire

Name: James M. Belletire

Title: Vice President

NEW YORK LIFE INSURANCE
AND ANNUITY CORPORATION
By: NYL Investors LLC, its Investment Manager

By: /s/ James M. Belletire

Name: James M. Belletire

Title: Managing Director
    

[SIGNATURE PAGE TO FIRST AMENDMENT
TO NOTE PURCHASE AND PRIVATE SHELF AGREEMENT]

Schedule 5.8

Conflicting Agreements and Other Matters

Third Amended and Restated Credit Agreement dated as of October 28, 2016 by and among (i) the Franklin Electric Co., Inc., an Indiana corporation, Franklin Electric B.V., a Netherlands private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid, (ii) the financial institutions party thereto and (iii) JPMorgan Chase Bank, N.A., as Administrative Agent, as amended on October 1, 2013, February 27, 2015 and May 5, 2015, and related guarantees
 
Bond Purchase and Loan Agreement, dated December 31, 2012, among The Board of Commissioners of the County of Allen, as “Issuer”, Franklin Electric Co., Inc., an Indiana corporation, as “Borrower”, and the Bondholders referred to therein, as amended on May 5, 2015, and related guarantees

Amended and Restated Note Purchase and Private Shelf Agreement dated as of September 9, 2004, between Franklin Electric Co., Inc., an Indiana corporation, and Prudential Investment Management, Inc. and The Prudential Life Insurance Company, as amended on April 9, 2007, February 26, 2008, July 22, 2010, December 14, 2011 and May 5, 2015, and related guarantees

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