Document:

Exhibit 10-19

EXHIBIT
10.19

[Director
Employees]

THIS
DOCUMENT CONSTITUTES PART OF THE SECTION 10(a) PROSPECTUS COVERING SECURITIES
THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933.

 

Franklin
Electric Co., Inc. Stock Option Plan

Non-Qualified
Stock Option Agreement

The
employee identified below has been selected to be a Participant in the Franklin
Electric Co., Inc. Stock Option Plan (the “Plan”) and has been granted a
Non-Qualified Option as outlined below:

 

Participant:

Date
of Grant:

Shares
Covered by the Option:

Option
Exercise Price: $

Expiration
Date:

Vesting
Schedule:

This
Agreement, effective as of the Date of Grant set forth above, is between
Franklin Electric Co., Inc., an Indiana corporation (the “Company”), and the
Participant named above. The parties hereto agree as follows:

 

The Plan
provides a complete description of the terms and conditions governing the
Option. If there is any inconsistency between the terms of this Agreement and
the terms of the Plan, the Plan’s terms shall govern. All capitalized terms
shall have the meanings ascribed to them in the Plan, unless otherwise set forth
herein. A copy of the Plan is attached hereto and the terms of the Plan are
hereby incorporated by reference.

 

1.  Stock
Option Grant. Subject
to the provisions set forth herein and the terms and conditions of the Plan, and
in consideration of the agreements of the Participant herein provided, the
Company hereby grants to the Participant an Option to purchase from the Company
the number of shares of Common Stock, at the exercise price per share, and on
the schedule, set forth above.

 

2.  Acceptance
by Participant. The
exercise of the Option is conditioned upon the execution of this Agreement by
the Participant and the return of an executed copy of the Agreement to the
Secretary of the Company no later than 60 days after the Date of Grant or, if
later, 30 days after the Participant receives this Agreement.

 

3.  Exercise
of Option. Subject
to Section 4 below, the Participant may exercise the vested portion of the
Option at any time prior to the Expiration Date. Written notice of an election
to exercise any portion of the Option shall be given by the Participant, or his
personal representative in the event of the Participant’s death, to the
Company’s Chief Financial Officer, in accordance with procedures established by
the Personnel and Compensation Committee of the Board of Directors of the
Company (the “Committee”) as in effect at the time of such exercise.

 

At the
time of exercise of the Option, payment of the purchase price for the shares of
Common Stock with respect to which the Option is exercised must be made by one
or more of the following methods: (i) in cash, (ii) in cash received from a
broker-dealer to whom the Participant has submitted an exercise notice and
irrevocable instructions to deliver the purchase price to the Company from the
proceeds of the sale of shares subject to the Option, or (iii) by delivery to
the Company of other Common Stock owned by the Participant that is acceptable to
the Company, valued at its then fair market value.

 

- 59
-

If
applicable, an amount sufficient to satisfy all minimum Federal, state and local
withholding tax requirements prior to delivery of any certificate for shares of
Common Stock must also accompany the exercise. Payment of such taxes can be made
by a method specified above, and/or by directing the Company to withhold such
number of shares of Common Stock otherwise issuable upon exercise of the Option
with a fair market value equal to the amount of tax to be withheld.

 

No shares
shall be issued upon exercise of the Option until full payment of the exercise
price and tax withholding obligation has been made.

 

4.  Exercise
Upon Termination of Employment. If the
Participant’s employment with the Company and all subsidiaries terminates for
any reason other than death, disability or retirement, and in connection
therewith his service on the Board terminates, the Option shall expire on the
date of such termination, and no portion shall be exercisable after the date of
such termination.

 

If the
Participant’s employment with the Company and all subsidiaries terminates due to
death, disability or retirement, the outstanding portion of the Option shall
become fully vested on such date. The Option shall continue to be exercisable
until the earlier of (i) the Option’s Expiration Date and (ii) in the case of
termination due to disability or retirement, 36 months after the date of such
termination, and in the case of termination due to death, 12 months after the
date of such termination. In such case, the Participant’s concurrent or
subsequent termination of service on the Board shall have no effect on the
Option.

 

In the
event the Participant’s employment with the Company and all subsidiaries
terminates for any reason other than death, disability or retirement, and the
Participant’s service on the Board continues thereafter, the Option shall
continue to vest and remain exercisable in accordance with its terms. If the
Participant’s service on the Board subsequently terminates, then (i) if the
termination of service is due to death, disability or retirement, the
outstanding portion of the Option shall become fully vested on such date and
shall continue to be exercisable until the earlier of (A) the Expiration Date
and (B) in the case of termination due to disability or retirement, 36 months
after the date of termination of service, and in the case of termination of
service due to death, 12 months after the date of termination of service and
(ii) if the termination of service is for any reason other than death,
disability or retirement, the Option shall expire on the date of such
termination of service, and no portion shall be exercisable after the date of
such termination.

 

For
purposes of this Section 4, (i) “disability” (A) while the Participant is
employed, has the meaning, and will be determined, as set forth in the Company’s
long term disability program in which the Participant participates, and (B)
while the Participant is a Non-Employee Director, means (as determined by the
Committee in its sole discretion) the inability of the Participant to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or disability
or which has lasted or can be expected to last for a continuous period of not
less than 12 months and (ii) “retirement” (A) while the Participant is employed,
means the Participant’s termination from employment with the Company and all
subsidiaries without cause (as determined by the Committee in its sole
discretion) when the Participant is 65 or older or 55 or older with 10 years of
service with the Company and its subsidiaries, and (B) while the Participant is
a Non-Employee Director, means termination of service on the Board when he is 70
or older.

 

The
foregoing provisions of this Section 4 shall be subject to the provisions of any
written employment or severance agreement that has been or may be executed by
the Participant and the Company, and the provisions in such employment or
severance agreement concerning exercise of the Option shall supercede any
inconsistent or contrary provision of this Section 4.

 

- 60
-

Nontransferability
of Options. The
Option may not be sold, transferred, pledged, assigned, or otherwise alienated
or hypothecated, other than by will or by the laws of descent and distribution.
Notwithstanding the preceding provisions of this Section 5, the Participant, at
any time prior to his or her death, may assign all or any portion of the Option
to (i) his or her spouse or lineal descendant, (ii) the trustee of a trust
established for the primary benefit of his or her spouse or lineal descendant,
(iii) a partnership of which his or her spouse and lineal descendants are the
only partners, or (iv) a tax-exempt organization as described in Section
501(c)(3) of the Code. In such event, the spouse, lineal descendants, trustee,
partnership or tax-exempt organization will be entitled to all the rights of the
Participant with respect to the assigned portion of the Option, and such portion
of the Option will continue to be subject to all of the terms, conditions and
restrictions applicable to the Option as set forth in the Plan and this
Agreement. Any such assignment will be permitted only if (i) the Participant
does not receive any consideration therefor, and (ii) the assignment is
expressly approved by the Board. Any such assignment shall be evidenced by an
appropriate written document executed by the Participant and a copy thereof
shall be delivered to the Board on or prior to the effective date of the
assignment.

 

5.  Beneficiary
Designation. The
Participant may, from time to time, name any beneficiary or beneficiaries (who
may be named contingently or successively) to whom any benefit under the Option
is to be paid in the event of his or her death. Each designation will revoke all
prior designations by the same Participant, shall be in a form prescribed by the
Board, and will be effectively only when filed by the Participant in writing
with the Board during his or her 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.

 

6.  Rights
as a Stockholder. The
Participant shall have no rights as a stockholder of the Company with respect to
the shares of Common Stock subject to the Option and this Agreement until such
time as the exercise price has been paid and the shares have been issued and
delivered to him or her.

 

7.  Surrender
of or Changes to Agreement. In the
event the Option shall be exercised in whole, this Agreement shall be
surrendered to the Company for cancellation. In the event the Option shall be
exercised in part or a change in the number of designation of the shares of
Common Stock shall be made, this Agreement shall be delivered by the Participant
to the Company for the purpose of making appropriate notation thereon, or of
otherwise reflecting, in such manner as the Company shall determine, the change
in the number or designation of such shares.

 

8.  Administration. The
Option shall be exercised in accordance with such administrative regulations as
the Committee shall from time to time adopt. It is expressly understood that the
Committee is authorized to administer, construe, and make all determinations
necessary or appropriate to the administration of, the Plan and this Agreement,
all of which shall be binding upon the Participant.

 

9.  Governing
Law. This
Agreement, and the Option, shall be construed, administered and governed in all
respects under and by the laws of the State of Indiana.

 

IN
WITNESS WHEREOF, this Agreement is executed by the parties this ____ day of
________, ____, effective as of the ____ day of ________, ____.

 

FRANKLIN
ELECTRIC CO., INC.

	
       
		
      By:
      
	
	
      Participant
	 

- 61
-

Franklin
Electric Co., Inc. Stock Option Plan

Name
(Please Print)

In the
event of my death, the following person is to receive any benefits payable under
the Franklin Electric Co., Inc. Stock Option Plan.

NOTE:  The
primary beneficiary(ies) will receive your Stock Option Plan benefits. If more
than one primary beneficiary is indicated, the benefits will be split among them
equally. If you desire to provide for a distribution of benefits among primary
beneficiaries on other than an equal basis, please attach a sheet explaining the
desired distribution in full detail. If any primary beneficiary is no longer
living on the date of your death, the benefit which the deceased primary
beneficiary would otherwise receive will be distributed to the secondary
beneficiary(ies), in a similar manner as described above for the primary
beneficiary(ies).

	
      ‘
      Primary Beneficiary
	
      ‘
      Secondary Beneficiary

	
       
	
       
	
       
	
       

	
      Last
      Name
	
      First
	
      M.I.
	
      Relationship

	
       
	
       

	
      Street
      Address
	
      City,
      State, Zip Code

	 
	
      ‘
      Primary Beneficiary
	
      ‘
      Secondary Beneficiary

	
       
	
       
	
       
	
       

	
      Last
      Name
	
      First
	
      M.I.
	
      Relationship

	
       
	
       

	
      Street
      Address
	
      City,
      State, Zip Code

	 
	
      ‘
      Primary Beneficiary
	
      ‘
      Secondary Beneficiary

	
       
	
       
	
       
	
       

	
      Last
      Name
	
      First
	
      M.I.
	
      Relationship

	
       
	
       

	
      Street
      Address
	
      City,
      State, Zip Code

	 	 
	
      If
      a trust or other arrangement is listed above, include name, address and
      date of arrangement below:

	
       
	
       
	
       

	
      Name
	
      Address
	
      Date

	
      ‘  
      For additional beneficiaries, check here and attach an additional sheet of
      paper.

This
supersedes any beneficiary designation previously made by me under this Plan. I
reserve the right to change the beneficiary at any time.

	
       
	
       

	
      Date
	
      Sign
      your full name here

	 	 
	
      Date
      received by Franklin Electric Co., Inc. 
	
       

	
       
	 
	 	
      By:
      

- 62
-AMENDMENT #2 TO THE THIRD RESTATED AND AMENDED LOAN AND SECURITY AGREEMENT

November 23, 2004

JACO ELECTRONICS, INC. ("Jaco")
145 Oser Avenue
Hauppauge, NY  11778

NEXUS CUSTOM ELECTRONICS, INC. ("Nexus")
Prospect Street
Brandon, VT  05733

INTERFACE ELECTRONICS CORP. ("Interface")
124 Grove Street
Franklin, MA  02028

Gentlemen:

         Reference is made to the Third Restated and Amended Loan and Security
Agreement in effect between GMAC Commercial Finance LLC, as successor by merger
to GMAC Commercial Credit LLC, which was the successor in interest to BNY
Financial Corporation ("GMAC"), as Agent and Lender, and PNC Bank, National
Association ("PNC") as Lender and Co-Agent, and Jaco, Nexus and Interface, dated
December 22, 2003, as supplemented and amended from time to time, (the
"Agreement"). Reference is also made to Amendment #1, to the Agreement, dated
September 20, 2004 (the "Amendment"). Both GMAC and PNC may hereinafter be
referred to jointly as the "Lenders", and individually, as a "Lender" and GMAC
may also be herein referred to as "Agent" when acting in such capacity, as the
case may be and PNC may also herein be referred as "Co-Agent", as the case may
be. Initially capitalized terms not defined herein shall have the meanings
ascribed to such terms in the Agreement. Jaco, Nexus and Interface may
hereinafter and in the Agreement, be referred to jointly and severally as
"Debtors", and each individually as a "Debtor".

         It is hereby agreed, among the parties to the Agreement, that the
Agreement and the Amendment are hereby amended effective as of the date hereof,
as follows:

1. The definition of "EBITDA" appearing in Section 1.2., of the Agreement,

<PAGE>

is hereby deleted, in its entirety, and replaced by the following definition:

                                    " "EBITDA" shall mean (i) for any period
                                    ending prior to October 1, 2004, earnings
                                    before interest, taxes, depreciation and
                                    amortization and (ii) for any period
                                    commencing on or after October 1, 2004,
                                    earnings minus any extraordinary gains,
                                    including any gains derived from the sale of
                                    assets of Nexus, before interest, taxes,
                                    depreciation and amortization."

               2.   The definition of "Fixed Charge Coverage Ratio" appearing in
                    Section 1.2., of the Agreement,  is hereby  deleted,  in its
                    entirety, and replaced by the following definition:

                                    " "Fixed Charge Coverage Ratio" shall mean,
                                    during any period, the ratio of (y) EBITDA
                                    (minus any extraordinary gains, including
                                    any gains derived from the sale of the
                                    assets of Nexus, for any period ending prior
                                    to October 1, 2004) minus unfunded Capital
                                    Expenditures, to (x) the sum of (i)
                                    interest, (ii) term debt repayments and
                                    other repayments of Indebtedness (other than
                                    Obligations under this Agreement), (iii)
                                    taxes due for such period, and (iv) required
                                    reductions of the Additional Availability
                                    Amount during such period."

               3.   Section  6.12. of the  Agreement is hereby  deleted,  in its
                    entirety, and replaced by the following Section 6.12.:

                                    "6.12. Permanent Undrawn Availability .

                                           Maintain at all times (for all Loan
                                           Parties) an aggregate Undrawn
                                           Availability of $1, 500,000, provided
                                           however, that such Undrawn
                                           Availability may be reduced to $500,
                                           000 at all times on the later to
                                           occur of (i) 3-31-05 or (ii) the last
                                           day of the second consecutive fiscal
                                           quarter during which the Fixed Charge
                                           Coverage Ratio equals 1.1 to 1.0,
                                           calculated on a rolling four quarter
                                           basis."

               4.   By their signatures below,  Jaco, Nexus and Interface hereby
                    ratify the  Agreement  (as hereby  amended)  and agree to be
                    jointly and severally  liable for all Obligations  under the
                    Agreement and agree that all of the  outstanding  amounts of
                    the Loans under the Agreement,  as of the date hereof, shall
                    be valid and binding  Obligations of each of them, and shall
                    be deemed Obligations  outstanding under the Agreement,  and
                    hereby  agree and  promise  to repay to the  Agent,  for the
                    benefit of the Lenders, such Obligations  (including but not

<PAGE>

                    limited to all applicable  interest) in accordance  with the
                    terms of the  Agreement,  but in no  event,  later  than the
                    Termination Date.

               5.   By their signatures below,  Jaco, Nexus and Interface hereby
                    ratify  and affirm to the Agent and the  Lenders  that as of
                    the  date  hereof,  they  are in full  compliance  with  all
                    covenants under the Agreement (except as waived above),  and
                    certify (i) that all  representations  and warranties of the
                    Agreement are true and accurate as of the date hereof,  with
                    the same  effect  as if they  had  been  made as of the date
                    hereof, (ii) no Default or Event of Default has occurred and
                    is continuing, or would result from the execution,  delivery
                    and  performance  by  Debtors,  of  this  Amendment  or  the
                    Agreement  (as  amended  by  this   Amendment),   except  as
                    specifically  waived  herein;  (iii)  each  Debtor  has full
                    power,  right and legal  authority  to execute,  deliver and
                    perform  its  obligations  under this  Amendment;  (iv) each
                    Debtor  has taken all  action  necessary  to  authorize  the
                    execution  and  delivery  of,  and  the  performance  of its
                    obligations  under this  Amendment;  and (v) this  Amendment
                    constitutes  a legal,  valid and binding  obligation of each
                    Debtor  enforceable  against such Debtor in accordance  with
                    its  terms,  and does not  constitute  a breach of any other
                    agreement or  understanding  to which such Debtor is a party
                    or by which its property is bound.

         Except as herein specifically amended, the Agreement shall remain in
full force and effect in accordance with its original terms, except as
previously amended.

         If the foregoing accurately reflects our understanding, kindly sign the
enclosed copy of this letter and return it to our office as soon as practicable.

                                               Very truly yours,
                                               GMAC COMMERCIAL FINANCE LLC
                                               (as Agent and Lender)

                                               By:/s/ Daniel Murray
                                                     --------------------
                                              Title:   1st VP

AGREED AND ACCEPTED:
JACO ELECTRONICS, INC.              PNC BANK NATIONAL ASSOCIATION
                                   (as Lender)

By:/s/ Jeffrey D, Gash              By: /s/ Wing Louie
     ----------------------                ------------------
Title: CFO                          Title: VP

<PAGE>

NEXUS CUSTOM ELECTRONICS, INC.      INTERFACE ELECTRONICS CORP.

By:/s/ Jeffrey D, Gash              By:/s/ Jeffrey D, Gash
     ----------------------              ----------------------
Title: CFO                          Title: CFO

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