Exhibit 10.1
EMPLOYMENT
AGREEMENT
--------------------
THIS
EMPLOYMENT AGREEMENT is entered into as of this 1 day of
April, 2008 between FRANKLIN ELECTRIC CO., INC.
(“Franklin”), an Indiana corporation, and John J.
Haines (the “Executive”).
WHEREAS,
Franklin desires to employ Executive as its Vice President and
Chief Financial Officer, and Executive is willing to accept
such employment upon the terms and conditions set forth
below;
NOW
THEREFORE, in consideration of the premises and mutual
covenants and agreements herein contained, the parties hereto
hereby agree as follows:
1. EMPLOYMENT. Franklin
agrees to employ Executive as its Vice President and Chief
Financial Officer to perform all such duties as are normally
associated with such position in companies of similar size and
nature or are prescribed for such office by the by-laws or
directed by the Board of Directors, and Executive agrees to
serve Franklin in such capacity and devote his full business
time and attention to the business of Franklin, subject to
vacations, holidays, normal illnesses and a reasonable amount
of time for civic, community and industry
affairs. Executive agrees not to accept membership
on the Board of Directors of any other business corporation
without the prior approval of the Management Organization and
Compensation Committee of the Board of Directors of
Franklin.
2. TERM. The
employment of Executive hereunder (the “Term”)
shall be for a three (3) year period commencing on April 14,
2008 and ending on April 14, 2011, provided that on April 14,
2011 and each April 14 thereafter the Term shall automatically
and without any action by either party hereto be extended for
an additional period of one year unless at least ninety (90)
days prior to any Anniversary Date either party notifies the
other of its election not to extend the then current Term, in
which case the Term shall end at the expiration of the Term as
last extended. Following any such notice by the
Company of its election not to extend the Term, Executive may
terminate his employment at any time prior to the expiration
of the Term by giving written notice to the Company at least
thirty (30) days prior to the effective date of termination,
and upon the earlier of such effective date of termination or
the expiration of the Term Executive shall be entitled to
receive the same compensation and benefits as are provided in
subparagraph (b) of paragraph 6 but for a severance period
which shall begin on the effective date of termination or
expiration of the Term, as the case may be, and ending on the
earlier of (i) the date on which Executive would attain his
normal retirement age (as defined in the Franklin Electric
Co., Inc. Basic Retirement Plan, hereinafter referred to as
“Normal Retirement Age”), or (ii)
twelve (12) months.
3. COMPENSATION. Franklin
shall pay for or provide to Executive for all services to be
performed by Executive under this Agreement the
following:
(a) A
fixed salary of $250,000 per annum, or such higher amount as
the Board of Directors of Franklin may from time to time
authorize (which amount shall not be reduced below the amount
at any time in
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effect
without Executive’s consent), payable in equal monthly
installments (such amount from time to time in effect being
referred to herein as “Executive’s
Salary”);
(b) Such
bonus as may be allocated to Executive by the Management
Organization and Compensation Committee of Franklin’s
Board of Directors pursuant to the Franklin Executive Officer
Bonus Plan; it being understood and agreed to that, for the
fiscal year ending 2008, such bonus, payable in the first
quarter of 2009, will not be less than $160,000;
(c) Participation
in the Franklin Electric Co., Inc. Stock Plan, and any
successor stock plans, as long as such plans remain in effect,
and in any future compensation plans covering senior
executives of Franklin; it being understood and agreed to
that, promptly after the release of First Quarter 2008
earnings and at a time when Franklin executive officers are
otherwise permitted by Franklin’s policies to effect
transactions in Franklin’s securities, under and subject
to the terms of the Franklin Electric Co., Inc. Stock Plan,
(i) Executive will receive an option to purchase 10,000 shares
of Franklin’s common stock at an option exercise price
equal to the closing price of Franklin’s common stock on
the grant date, with the option vesting ratably in four equal
annual installments, the first installment vesting on the
first anniversary of the grant date and (ii) Executive will
receive an 8,000 share grant of Franklin’s common stock,
such grant to vest 100% on the fourth anniversary of the grant
date;
(d) Participation
in Franklin’s employee benefit plans, policies,
practices and arrangements in which other senior executives of
Franklin participate as long as such plans, policies,
practices and arrangements remain in effect, and in any future
employee benefit plans and arrangements covering senior
executives, including without limitation any defined benefit
retirement plan, profit sharing plan, health or dental plan,
disability plan, or life insurance plan (collectively, the
“Benefit Plans”);
(e) Paid
vacations and sick leave in accordance with Franklin’s
policies respecting same as in effect from time to
time. Effective April 14, 2008 three (3) weeks
annual vacation and effective January 1, 2009 4 weeks annual
vacation; and
(f) All
fringe benefits and perquisites offered by Franklin from time
to time to senior executives.
4. EXPENSES. Franklin
shall promptly pay or reimburse Executive for all reasonable
expenses incurred by Executive in the performance of duties
hereunder in accordance with expense policies from time to
time in effect for senior executives of Franklin.
5. CONDITIONS
OF EMPLOYMENT. During the Term, Executive shall be
furnished office space, assistance and accommodations suitable
to the character of his position with Franklin and adequate
for the performance of his
duties. Executive’s services shall be
performed at Franklin’s principal executive office in
Bluffton, Indiana, except when the nature of Executive’s
duties hereunder requires reasonable domestic and foreign
travel.
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6. TERMINATION
OF EMPLOYMENT. Either Executive or Franklin may
terminate Executive’s employment hereunder at any time
upon giving the other at least ninety (90) days advance
written notice of such termination, provided that Franklin may
specify an earlier date of termination (not earlier than the
date of such notice) if termination is for Good Cause (as
defined below), and Executive may specify an earlier date of
termination (not earlier than the date of such notice) if
termination is for Good Reason (as defined below), and
provided further that if termination is due to the death of
Executive, termination shall be effective immediately upon
such death and without any requirement for written
notice. In the event of any termination hereunder
Executive shall be entitled to receive compensation and
benefits only as hereinafter set forth or as provided in
paragraph 2:
(a) If
Executive’s employment is terminated by Executive
without Good Reason or by Franklin with Good Cause (i)
Executive’s compensation under (a) and (b) of Paragraph
3 shall be limited to a pro-rata portion of Executive’s
Salary (and not any bonus) for the year of termination, and
(ii) Executive shall continue to be provided with the benefits
under (c), (d), (e) and (f) of Paragraph 3, (subject however
to all terms, if any, of the Benefit Plans that may be
applicable to termination of employment) until the effective
date of the termination;
(b) If
at any time other than as specified in subparagraph (c) of
this paragraph 6, Franklin shall terminate Executive’s
employment without Good Cause, or Executive shall voluntarily
terminate such employment with Good Reason, (i)
Executive’s compensation under (a) and (b) of Paragraph
3 for the portion of the year of termination prior to the
effective date of termination shall be a pro-rata portion of
Executive’s Salary for such year, together with a bonus
equal to not less than a pro-rata portion of his bonus paid or
payable for the year prior to the year of termination, (ii)
Executive shall receive as compensation for the severance
period described below an additional amount, payable in a lump
sum within thirty (30) days after the effective date of his
termination of employment, computed by annualizing the
compensation which he is to receive pursuant to clause (i)
above, (iii) Executive shall continue to be provided with the
benefits under (c) and (d) of Paragraph 3 for such severance
period, and (iv) any stock options granted to Executive by
Franklin shall be accelerated and become immediately
exercisable in full on the effective date of termination,
subject to any limitations on the order of exercise which may
be applicable to incentive stock options (as defined in
Section 422 of the Internal Revenue Code of 1986, as amended),
if any, that may hereafter be granted, and shall remain
exercisable for such period after the effective 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 this subparagraph (b) of paragraph 6
shall be the period beginning on the date of termination and
ending on the earlier of (A) the date on which Executive would
attain his Normal Retirement Age, or (B) twelve (12)
months.
(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
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first
anniversary of the Change in Control and ending thirty (30)
days thereafter, Franklin shall, within thirty (30) days after
any such termination, pay to Executive (A) a lump sum cash
amount as compensation under (a) and
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