¨
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Preliminary
Proxy Statement
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¨
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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x
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Definitive
Proxy Statement
|
¨
|
Definitive
Additional Materials
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¨
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Soliciting
Material Pursuant to §240.14a-12
|
x
|
No
fee required.
|
¨
|
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
|
(1)
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Title
of each class of securities to which transaction
applies:
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[Missing Graphic Reference]
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(2)
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Aggregate
number of securities to which transaction
applies:
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[Missing Graphic Reference]
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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[Missing Graphic Reference]
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(4)
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Proposed
maximum aggregate value of transaction:
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[Missing Graphic Reference]
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(5)
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Total
fee paid:
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[Missing Graphic Reference]
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¨
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Fee
paid previously with preliminary
materials.
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¨
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Check
box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its
filing.
|
(1)
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Amount
previously paid:
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[Missing Graphic Reference]
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(2)
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Form,
Schedule or Registration Statement No.:
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[Missing Graphic Reference]
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(3)
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Filing
Party:
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[Missing Graphic Reference]
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(4)
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Date
Filed:
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1.
|
Elect
R. Scott Trumbull and Thomas L. Young as directors for terms expiring at
the 2013 Annual Meeting of
Shareholders;
|
2.
|
Approve
the Franklin Electric Co., Inc. Management Incentive
Plan;
|
3.
|
Ratify
the appointment of Deloitte & Touche LLP as the Company’s independent
registered public accounting firm for the 2010 fiscal year;
and
|
4.
|
Transact
any other business that may properly come before the Annual Meeting or any
adjournment or postponement
thereof.
|
·
|
FOR
the election of the nominees for director as set forth in this Proxy
Statement;
|
·
|
FOR
the approval of Franklin Electric Co., Inc. Management Incentive
Plan;
|
·
|
FOR
the ratification of the appointment of Deloitte & Touche LLP as the
Company’s independent registered public accounting firm for the 2010
fiscal year; and
|
·
|
In
accordance with the recommendations of management with respect to other
matters that may properly come before the Annual
Meeting.
|
Name
and address of beneficial owner
|
Amount
and
nature
of beneficial ownership
|
Percent
of class
|
|
||
Patricia
Schaefer
5400
Deer Run Court
Muncie,
IN 47304
|
2,000,084(1)
|
8.65
|
Select
Equity Group, Inc., jointly with George S. Loening (and related entities)
380 Lafayette Street, 6th Floor
New
York, NY 10003
|
1,913,967(2)
|
8.27
|
Diane
D. Humphrey
2279
East 250 North Road
Bluffton,
IN 46714
|
1,838,657(3)
|
7.95
|
Invesco,
Ltd.
301
West Roosevelt Road
Wheaton,
IL 60187-5053
|
1,426,219(4)
|
6.17
|
Snyder
Capital Management, LP
1
Market Plaza Suite 1200
San
Francisco, CA 94105-1012
|
1,260,027(5)
|
5.45
|
BlackRock
Inc.
40
East 52nd Street
New
York, NY 10022
|
1,183,789(6)
|
5.12
|
(1) Pursuant
to agreements with Ms. Schaefer, the Company has a right of first refusal
with respect to 1,708,040 shares owned by Ms. Schaefer.
(2) According
to a Schedule 13G jointly filed with the Securities and Exchange
Commission (“SEC”), as of December 31, 2009, Select Equity Group, Inc.,
Select Offshore Advisors, LLC and George S. Loening have sole investment
and voting power with respect to all shares.
(3) Pursuant
to agreements with Ms. Humphrey, the Company has a right of first refusal
with respect to 1,665,307 shares owned by Ms. Humphrey.
(4) According
to a Schedule 13G filed with the SEC, as of December 31, 2009,
subsidiaries of Invesco, Ltd. have sole investment and voting power with
respect to all shares.
(5) According
to a Schedule 13G filed with the SEC, as of December 31, 2009, Snyder
Capital Management, LP, and Snyder Capital Management, Inc., filing
jointly, have shared investment power with respect to 1,260,027 shares and
shared voting power with respect to 1,084,177 shares.
(6) According
to a Schedule 13G filed with the SEC, as of December 31, 2009, BlackRock
Inc., has sole investment and voting power with respect to all
shares.
|
Name
of beneficial owner
|
Amount
and nature of beneficial ownership
|
Percent
of class
|
|
Jerome
D. Brady
|
87,890(1)(2)
|
*
|
|
David
T. Brown
|
0(2)
|
*
|
|
David
A. Roberts
|
19,267(1)(2)
|
*
|
|
David
M. Wathen
|
2,249(2)
|
*
|
|
Howard
B. Witt
|
45,652(1)
|
*
|
|
Thomas
L. Young
|
14,067
|
*
|
|
John
J. Haines
|
20,808
(1)(3)(4)(6)(9)
|
*
|
|
Peter-Christian
Maske
|
131,514(1)(3)(4)(6)(7)
|
*
|
|
Gregg
C. Sengstack
|
279,024(1)(3)(4)(5)(6)(7)
|
1.21
|
|
Robert
J. Stone
|
110,925(1)(3)(4)(6)(7)
|
*
|
|
R.
Scott Trumbull
|
467,053(1)(2)(3)(4)(6)(7)(8)
|
2.02
|
|
Gary
D. Ward
|
46,207(1)(3)(4)(7)
|
*
|
|
All
directors and executive officers as a group
|
1,391,323(1)(2)(3)(4)(5)(6)(7)(8)(9)
|
6.02
|
|
*
Less than 1 percent of class
(1) Includes
shares issuable pursuant to stock options exercisable within 60 days after
February 26, 2010 as follows: Mr. Trumbull, 274,456; Mr. Sengstack,
144,182; Mr. Maske, 38,532; Mr. Brady, 56,000; Mr. Stone, 74,832; Mr.
Witt, 36,000; Mr. Roberts, 8,000; Mr. Haines; 7,623; and Mr. Ward, 26,575.
All directors and executive officers as a group, 789,504.
(2) Does
not include stock units credited to: Mr. Trumbull, 1,930; Mr. Brady,
5,413; Mr. Roberts, 1,162; Mr. Wathen, 14,233; and Mr. Brown, 10,018;
pursuant to the terms of the Non-employee Directors’ Deferred Compensation
Plan described under “Director Compensation.”
(3) Includes
shares held by the ESOP Trustee as of December 31, 2009: Mr. Trumbull,
1,032; Mr. Sengstack, 7,506; Mr. Maske, 1,906; Mr. Haines, 39; Mr. Stone,
5,255; and Mr. Ward, 6,054. All executive officers as a group,
22,010.
(4) Includes
shares held by the 401(k) Plan Trustee as of December 31, 2009: Mr.
Trumbull, 1,345; Mr. Sengstack, 6,501; Mr. Maske, 552; Mr. Haines, 1,146;
Mr. Stone 6,474; and Mr. Ward 369. All executive officers as a group,
18,657.
(5) Includes
restricted shares which vest three years after the grant date as follows:
Mr. Sengstack, 4,000. All executive officers as a group,
8,000.
(6) Includes
restricted shares which vest at the end of four years as follows: Mr.
Haines, 4,000; Mr. Maske, 1,500; Mr. Sengstack, 4,000; Mr. Stone, 4,000;
and Mr. Trumbull, 12,500. All executive officers as a group,
32,300.
(7) Includes
restricted shares which vest four years after the grant date, subject to
the attainment of certain performance goals. If these goals are not
attained, the shares will be forfeited, as described in this proxy
statement. These restricted shares are as follows: Mr. Trumbull, 16,100;
Mr. Sengstack, 3,700; Mr. Maske, 3,700; Mr. Stone 13,700; and Mr. Ward,
2,450. All executive officers as a group, 55,250.
(8) Includes
2,720 restricted shares awarded to Mr. Trumbull, which vest evenly over
the next three years.
(9) Includes
8,000 restricted shares awarded to Mr. Haines, which vest four years after
the grant date.
|
Nominees
for terms expiring in 2013
|
|
R.
Scott Trumbull,
Chairman
of the Board and Chief Executive Officer of the Company
|
Age: 61
|
Director Since: 1998
|
|
Principal Occupation:
Chairman of the Board and Chief Executive Officer of the Company since
2003.
Formerly: Executive Vice
President and Chief Financial Officer of Owens-Illinois, Inc., a global
manufacturer of glass and plastic packaging products from October 2001 to
December 2002, prior thereto, Executive Vice President of International
Operations & Corporate Development of Owens-Illinois, Inc. from 1993
to 2001.
|
|
Directorships – Public
Companies: Health Care REIT
|
|
Relevant Experience: Mr.
Trumbull received his bachelors of economics from Denison University and
his MBA from Harvard Business School. His positions at Owens-Illinois gave
him significant experience in leading both domestic and global
manufacturing businesses. Prior to joining Franklin Electric’s board, Mr.
Trumbull served as a board member of Calphelon and presently serves on the
board of another public company. His experience as a director of the
Company since 1998, and as CEO since 2003, means that he brings a unique
understanding of the Company’s markets and businesses to the Board’s
deliberations.
|
|
Thomas
L. Young,
Director
of the Company
|
Age: 65
|
Director Since: 2005
|
|
Principal Occupation:
President, Titus Holdings Ltd., a private investment company.
Formerly: Executive Vice
President and Chief Financial Officer, Owens-Illinois, Inc., a global
manufacturer of glass and plastic packaging, from 2003 until retirement in
2005, Co-Chief Executive Officer from January 2004 to April 2004. Prior
thereto, Executive Vice President, Administration and General Counsel from
1993 through 2003.
|
|
Directorships – Public
Companies: Owens-Illinois, Inc.
|
|
Relevant Experience: Mr.
Young received his bachelors degree from St. John’s College and his JD
with honors from Notre Dame Law School. Mr. Young’s background qualifies
him to serve as an “audit committee financial expert” on the Audit
Committee. He also brings to the Board extensive experience as an
executive officer of a publicly traded manufacturing company, as well as
experience from present and prior
directorships.
|
Directors
with terms expiring in 2011
|
|
David
T. Brown,
Director
of the Company
|
Age: 62
|
Director Since: 2008
|
|
Principal Occupation:
Retired in 2007.
Formerly: President and
Chief Executive Officer of Owens Corning, a world leader in building
materials systems and glass fiber composites, from April 2002 until 2007;
prior thereto, Executive Vice President and Chief Operating Officer from
2001 through 2002; prior thereto, Vice President and President, Insulating
Systems Business from 1997 through 2000.
|
|
Directorships – Public
Companies: BorgWarner, Inc.
|
|
Relevant Experience: Mr.
Brown earned his bachelors degree in economics from Purdue University. Mr.
Brown adds to the Board his experience in a long career at Owens Corning,
where he moved through the ranks from salesman to regional sales manager
to chief operating officer and ultimately chief executive officer, where
he led the company out of an asbestos related bankruptcy. In addition to
his perspective as a successful CEO of a global manufacturer, he brings
his experience on the Board of Borg Warner, Inc.
|
|
David
A. Roberts,
Director
of the Company
|
Age: 63
|
Director Since: 2003
|
|
Principal Occupation:
Chairman, President and Chief Executive Officer, Carlisle Companies
Incorporated, a diversified global manufacturing company, since June
2007.
Formerly: Chairman,
President and Chief Executive Officer, Graco, Inc., a manufacturer of
fluid-handling equipment and systems, from June 2001 to June
2007.
|
|
Directorships – Public
Companies: Arctic Cat, Carlisle Companies, Inc.; Graco Inc.
(2001-2007)
|
|
Relevant Experience: Mr.
Roberts received his bachelors degree in technology from Purdue University
and his MBA from Indiana University. He brings to the Board his experience
as CEO of two substantial publicly-held manufacturing companies, as well
as other relevant board experience. His experience on the Board of the
Company also helps give the Board a historical perspective in its
deliberations.
|
|
Howard
B. Witt,
Director
of the Company
|
Age: 69
|
Director Since: 1994
|
|
Principal Occupation:
Retired in 2005.
Formerly: Chairman of
the Board, President, and Chief Executive Officer, Littelfuse, Inc., a
manufacturer of electronic, electrical and automotive fuses, from 1990 to
2004.
|
|
Directorships – Public
Companies: Artisan Funds, Inc.
|
|
Relevant Experience: Mr.
Witt received his bachelors degree from Purdue University. He received his
MBA from Northwestern University Business School. Mr. Witt adds to the
Board his long experience as CEO of Littlefuse, Inc., a publicly-held
manufacturer with U.S. and international operations, as well as other
relevant board experience. His experience on the Board of the Company also
helps give the Board a historical perspective in its
deliberations.
|
Directors
with terms expiring in 2012
|
|
Jerome
D. Brady,
Director
of the Company
|
Age: 66
|
Director Since: 1998
|
|
Principal Occupation:
Retired in 2000.
Formerly: President and
Chief Executive Officer of C&K Components from 1997-2000, a
manufacturer of electro-mechanical switches; prior thereto, President, CEO
and Chairman of AM International, Inc., a manufacturer of printing
equipment, from 1995-1997.
|
|
Directorships – Public
Companies: Circor International, Inc.
|
|
Relevant Experience: Mr.
Brady received his bachelors of economics from the University of
Pennsylvania, Wharton School. He received his MBA in finance from the
University of California at Los Angeles, Anderson School. Mr. Brady brings
to the Board experience as CEO of two publicly-held, global manufacturing
companies, as well as other relevant board experience. His background
enables him to serve as an “audit committee financial expert.” His
experience on the Board of the Company also helps give the Board a
historical perspective in its deliberations.
|
|
David
M. Wathen,
Director
of the Company
|
Age: 57
|
Director Since: 2005
|
|
Principal Occupation:
President and Chief Executive Officer of TriMas Corporation, a
manufacturer of engineered products since January 2009.
Formerly: President and
Chief Executive Officer, Balfour Beatty, Inc. (U.S. Operations), an
engineering, construction and building management services company, from
2002-2006; prior thereto, Operating partner, Questor Management Company
from 2000-2002; prior thereto, Group Executive/Corporate Officer, Eaton
Corporation from 1997-2000.
|
|
Relevant Experience: Mr.
Wathen received his bachelors degree from Purdue University and his MBA
from Saint Francis College. Mr. Wathen brings to the Board his experience
as CEO of two companies and leadership positions in others, including over
twenty years direct technical and general management experience in the
same industry as the Company and direct experience managing electrical
businesses serving pump OEMs and distributor channels similar to those
served by the Company. His background enables him to serve as an “audit
committee financial expert.”
|
|
Pay
Component
|
Targeted
Pay Objectives
|
Base
Salary
|
At
or above the median
|
Annual
Bonus Opportunity
|
Between
the 60th and 65th percentiles
|
Long-Term
Incentives
|
Between
the 50th and 60th percentiles
|
Action
|
Considerations
|
Reason
for Action
|
Postponed
2009 base salary increases for executives, other than Mr.
Sengstack
|
Annual
salary increases based on performance and market competitive data will be
reinstated in 2010
|
Cost-cutting
initiative due to the economic turbulence at the beginning of the fiscal
year
|
In
February, Mr. Sengstack’s base salary was increased by approximately 5% to
$312,000
|
Mr.
Sengstack’s role changed in early 2009 to include oversight responsibility
for all international Water Systems businesses outside of the Americas in
addition to his continuing responsibility for Fueling Systems
|
Recognition
of increased responsibilities
|
For
business unit leaders, inventory turns was introduced as a metric under
the annual bonus plan
|
To
provide an incentive for business unit leaders to control inventory and
focus on cash generation through working capital improvements
|
To
better align the goals of the executive with the strategic goals of the
Company
|
AMCOL
International Corporation
|
Ameron
International Corporation
|
Badger
Meter, Inc.
|
Baldor
Electric Company
|
Ceradyne,
Inc.
|
Clean
Harbors, Inc.
|
Crane
Co.
|
Curtiss-Wright
Corporation
|
Eagle
Materials Inc.
|
ESCO
Technologies Inc.
|
Esterline
Technologies Corporation
|
Global
Industries, Ltd.
|
Graco
Inc.
|
GrafTech
International Ltd.
|
H&E
Equipment Services, Inc.
|
IDEX
Corporation
|
Kaman
Corporation
|
Matthews
International Corporation
|
Mueller
Water Products, Inc.
|
Neenah
Paper, Inc.
|
Nordson
Corporation
|
Orbital
Sciences Corporation
|
Otter
Tail Corporation
|
Pike
Electric Corporation
|
Robbins
& Myers, Inc.
|
Sauer-Danfoss
Inc.
|
Simpson
Manufacturing Co., Inc.
|
Tecumseh
Products Company
|
Valmont
Industries, Inc.
|
Waste
Connections, Inc.
|
Walters
Corporation
|
Watts
Water Technologies, Inc.
|
Woodward
Governor Company
|
Performance
Measure
|
R.
Scott Trumbull
|
John
J. Haines
|
Peter-Christian
Maske
|
Gregg
C. Sengstack
|
Robert
J. Stone
|
Gary
D. Ward
|
||||||||||||||||||
Return
on Net Assets
|
50 | % | 23.6 | % | --- | --- | --- | 23.6 | % | |||||||||||||||
Earnings
Per Share
|
50 | % | 33.8 | % | 23.6 | % | 26.3 | % | 23.6 | % | 33.8 | % | ||||||||||||
Business
Unit Operating Income
|
--- | --- | 23.6 | % | 26.3 | % | 23.6 | % | --- | |||||||||||||||
Inventory
Turns
|
--- | --- | 10.1 | % | 11.2 | % | 10.1 | % | --- | |||||||||||||||
Strategic
Objectives
|
--- | 10.1 | % | 10.1 | % | 11.2 | % | 10.1 | % | 10.1 | % | |||||||||||||
Target
Bonus Level
|
100 | % | 67.5 | % | 67.5 | % | 75.0 | % | 67.5 | % | 67.5 | % |
Threshold
|
Target
|
Maximum
|
Actual
|
%
of Attainment of Target
|
||||||||||||||||
Return
on Net Assets
|
12.9 | % | 18.4 | % | 20.2 | % | 13. 7 | % | 74.5 | % | ||||||||||
Earnings
Per Share
|
$ | 1.42 | $ | 2.03 | $ | 2.24 | $ | 1.26 | 62.1 | % | ||||||||||
Business
Unit OI
|
--- | --- | --- | --- | 46% - 150 | % | ||||||||||||||
Inventory
Turns
|
2.5 | 3.6 | 4.0 | 2.9 | 80.6 | % |
Executive
|
Payout
Percentage
(%
of Target)
|
|||
R.
Scott Trumbull
|
18 | % | ||
John
J. Haines
|
28 | % | ||
Peter-Christian
Maske
|
55 | % | ||
Gregg
C. Sengstack
|
33 | % | ||
Robert
J. Stone
|
40 | % | ||
Gary
D. Ward
|
16 | % |
Executive
|
Base
Salary
|
Target
Economic Value
(%
of Base Salary)
|
Target
Economic Value
|
Actual
Economic Value Granted(3)
|
||||||||||||
R.
Scott Trumbull
|
$ | 637,500 | 95 | % | $ | 605,625 | $ | 549,000 | ||||||||
John
J. Haines
|
$ | 250,000 | 45 | % | $ | 112,500 | $ | 112,500 | ||||||||
Peter-Christian
Maske
|
$ | 366,500 | (1) | 55 | % | $ | 201,575 | $ | 174,165 | |||||||
Gregg
C. Sengstack
|
$ | 297,000 | (2) | 55 | % | $ | 163,350 | $ | 174,165 | |||||||
Robert
J. Stone
|
$ | 286,500 | 55 | % | $ | 157,575 | $ | 174,165 | ||||||||
Gary
D. Ward
|
$ | 208,000 | 45 | % | $ | 93,600 | $ | 93,600 | ||||||||
1) Based on monthly average Euro exchange rate.
(
2) Salary in effect when long-term incentive awards were
determined.
3)
These amounts represent the economic value to the executive and are
different than the cost recognized by the Company.
|
·
|
CEO:
five times annual base salary.
|
·
|
Senior
Vice Presidents: three times annual base
salary.
|
·
|
Corporate
Vice Presidents: one times annual base
salary.
|
·
|
An
opening balance for participants in the Plan at December 31, 1999, equal
to the present value of the participant’s accrued benefit earned at
December 31, 1999 under the applicable prior pension
plan;
|
·
|
Annual
contributions made by the Company as of the end of each calendar year that
range from 3% to 12% of the participant’s
compensation;
|
·
|
Pay
credits equal to a percentage of eligible compensation based on credited
service and transition credits from 2000-2004 equal to 6% of eligible
compensation for participants with 45 points (age plus service) at
December 31, 1999; and
|
·
|
Interest
credits based on the 30-year Treasury rate for the November preceding each
plan year.
|
Employee
Contribution
|
Company
Match
|
|||||
1 | % | 1.0 | % | |||
2 | % | 2.0 | % | |||
3 | % | 2.5 | % | |||
4 | % | 3.0 | % | |||
5 | % | 3.5 | % |
·
|
A
lump sum payment equal to the sum of two times the executive’s base
salary, a prorated portion of the executive’s target bonus for the current
year (based on the termination date), and two times the executive’s target
bonus for the current year;
|
·
|
A
lump sum payment equal to the increase in benefits under the Company’s
tax-qualified and supplemental retirement plans that results from
crediting the executive with additional service for 24 months (or, if
earlier, until age 65);
|
·
|
Immediate
vesting of all stock-based awards and deemed satisfaction of all
performance-based awards;
|
·
|
Continued
coverage under the Company’s health and welfare plans for 24 months
following termination (or, if earlier, until age
65);
|
·
|
12
months of executive outplacement services (not to exceed $50,000) with a
professional outplacement firm selected by the Company;
and
|
·
|
A
gross-up payment to cover any excise and related income tax liability
under Section 280G of the Internal Revenue Code as a result of payments
made or benefits provided under the ESA (except that if the payments and
benefits subject to Section 280G are less than 110% of the amount that
could be paid without incurring Section 280G liability, the payments under
the ESA will be reduced so that no such liability will be
incurred).
|
Pay
Component
|
Targeted
Pay Objectives
|
Base
Salary
|
Approximately
the 50th percentile
|
Annual
Bonus Opportunity
|
Between
the 60th and 65th percentiles
|
Long-Term
Incentives
|
Between
the 60th and 65th percentiles
|
·
|
All
executives will be rewarded on return on net invested capital in addition
to earnings per share. The Committee replaced the return on net assets
with return on net invested capital due to the belief that it is a primary
and consistent measure many of the Company’s shareholders use to evaluate
performance and compare the Company to its
peers.
|
·
|
Mr.
Trumbull’s bonus opportunity for 2010 will include individual strategic
goals that will represent 10% of his annual bonus
opportunity.
|
·
|
Messrs.
Haines, Sengstack, and Stone will also be rewarded on fixed costs
management.
|
·
|
Mr.
Stone’s bonus target as a percent of base salary will increase to 75% to
reflect the additional responsibilities he acquired in 2009. All other
executives will have the same target bonus levels used to make annual cash
incentive payments for 2009.
|
·
|
The
maximum bonus opportunity for each named executive officer will be
increased to 200% of the target level bonus opportunity for performance
attainment of 120% or more of target level
performance.
|
·
|
To
earn any portion of his bonus, each executive must achieve a threshold of
at least 80% of the performance measure target, rather than the 70%
threshold used for 2009. Payouts at threshold level performance will be
approximately 33% of the target level
payout.
|
Name
and Principal Position
(a)
|
Year
(b)
|
Salary
($)(c)
|
Bonus
($)(d)
|
Stock
Awards
($)(e)(4)
|
Option
Awards
($)(f)(4)
|
Non-Equity
Incentive Plan Compensation ($)(g)
|
Change
in Pension Value & Nonqualified Deferred Compensation
Earnings
($)(h)(6)
|
All
Other Compensation ($)(i)(8)
|
Total
($)(j)
|
||||||||||||||||||||||||
R.
Scott Trumbull, Chairman of the Board & CEO
|
2009
|
637,513 | 0 | 249,759 | 581,861 | 115,390 | 863,245 | 69,487 | 2,517,255 | ||||||||||||||||||||||||
2008
|
631,888 | 0 | 0 | 672,129 | 1,039,625 | 360,584 | 8,107 | 2,712,333 | |||||||||||||||||||||||||
2007
|
600,010 | 150,000 | 459,378 | 288,405 | 0 | 423,673 | 7,929 | 1,929,395 | |||||||||||||||||||||||||
John
J. Haines,
VP,
CFO, Secretary
|
2009
|
250,005 | 0 | 0 | 119,235 | 46,501 | 9,896 | 8,562 | 434,199 | ||||||||||||||||||||||||
2008
|
179,171 | 15,000 | (3) | 264,000 | 70,663 | 160,000 | 4,846 | 210,347 | 904,027 | ||||||||||||||||||||||||
2007
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||
Peter-Christian
Maske, Sr. VP, President-Europa Water Systems
|
2009
|
379,952 | (2) | 0 | 162,618 | 184,589 | 133,072 | 309,371 | (7) | 17,400 | 1,187,002 | ||||||||||||||||||||||
2008
|
400,739 | (2) | 0 | 0 | 158,202 | 451,829 | 51,429 | (7) | 17,400 | 1,079,599 | |||||||||||||||||||||||
2007
|
373,403 | (2) | 63,140 | 112,401 | 68,220 | 84,726 | 164,872 | (7) | 16,200 | 882,962 | |||||||||||||||||||||||
Gregg
C. Sengstack, Sr. VP, President Int’l Water Systems & Fueling
Group
|
2009
|
308,257 | 11,714 | 212,426 | 184,589 | 65,967 | 441,747 | 26,606 | 1,251,306 | ||||||||||||||||||||||||
2008
|
294,387 | 0 | 0 | 179,469 | 405,127 | 87,388 | 8,107 | 974,478 | |||||||||||||||||||||||||
2007
|
283,770 | 47,889 | 112,401 | 71,604 | 70,443 | 61,649 | 7,929 | 655,685 | |||||||||||||||||||||||||
Robert
J. Stone,
Sr.
VP, President Americas Water Systems
|
2009
|
286,507 | 33,234 | 115,875 | 184,589 | 43,836 | 29,798 | 8,842 | 702,681 | ||||||||||||||||||||||||
2008
|
284,014 | 0 | 0 | 179,469 | 334,632 | 16,856 | 8,178 | 823,149 | |||||||||||||||||||||||||
2007
|
271,774 | 45,930 | 112,401 | 71,604 | 21,742 | 17,521 | 8,374 | 549,346 | |||||||||||||||||||||||||
Gary
D. Ward,(1)
VP,
Director of Human Resources
|
2009
|
146,636 | 0 | 83,553 | (5) | 99,201 | (5) | 22,568 | 0 | 229,685 | (9) | 581,643 | |||||||||||||||||||||
2008
|
206,143 | 0 | 0 | 104,397 | 257,804 | 75,668 | 8,107 | 652,119 | |||||||||||||||||||||||||
2007
|
196,846 | 0 | 73,305 | 45,747 | 53,150 | 69,290 | 7,929 | 446,267 | |||||||||||||||||||||||||
(1) Mr.
Ward’s position with the Company was eliminated on July 31,
2009.
(2) Mr.
Maske’s salary in 2009, 2008 and 2007 was 271,724 Euros. This amount was
converted to USD using an average monthly exchange rate of 1.3983 for
2009, 1.4748 for 2008 and 1.3742 for fiscal 2007.
(3) This
amount represents an employment acceptance payment made to Mr. Haines in
connection with his employment beginning April 14, 2008.
(4) The
amounts in columns (e) and (f) are the grant date fair values of the
restricted stock and option awards computed in accordance with FASB
Codification Topic 718 and represent the Company’s total projected expense
of grants made to the named executive officers in each of 2009, 2008, and
2007. See Note 16 of the Company’s Annual Report to Shareholders for the
fiscal years ended January 2, 2010, January 3, 2009 and December 29, 2007,
respectively, for a complete description of the assumptions used for these
valuations.
(5) These
amounts represent the grant date fair value of the restricted stock and
options awarded to Mr. Ward in March 2009. The additional grant date fair
value of the awards as modified pursuant to the terms of Mr. Ward’s
separation agreement were $71,280 for the restricted stock awards and
$360,482 for the stock options.
(6) The
amounts in column (h) represent the annual change in the present value of
each named executive officer’s benefits under the Company’s defined
benefit pension plans.
(7) This
amount represents the annual change in present pension value of Mr.
Maske’s pension benefits under both the domestic defined benefit plans and
the defined benefit plan maintained by the Company’s German subsidiary.
Regarding the German plan, the annual change was calculated based on the
value in USD of this Euro-denominated benefit at December 31 in each
of the years 2009 (1.433), 2008 (1.392), 2007 (1.4603) and 2006 (1.3197),
using the exchange rate on each of those dates noted in
parentheses.
(8) For
the named executive officers other than Mr. Maske (and other than Mr. Ward
for 2009 and Mr. Haines for 2008 and 2009), these amounts represent the
Company’s life insurance contributions for 2009, 2008 and 2007 of $46, $57
and $54 respectively, the Company’s matching contributions under its
401(k) plan for 2009 of $8,575 and $8,516 for Mr. Haines, and the
Company’s matching contributions under its 401(k) plan and contributions
under its ESOP for 2008 and 2007 of $8,050 and $7,875 respectively. Mr.
Maske’s use of a Company vehicle is valued at $17,400 for 2009 and 2008
and $16,200 for 2007. In 2009 Messrs. Trumbull and Sengstack received a
Medicare tax reimbursement related to the Pension Restoration Plan
covering 1998 thru 2009 for Mr. Trumbull of $60,866 and 1988 thru 2009 for
Mr. Sengstack of $17,985. Mr. Stone received a Medicare tax reimbursement
related to the Pension Restoration Plan in each year listed of $445, $71,
$221, respectively. In 2008, Mr. Haines received a life insurance
contribution of $43, a 401(k) and ESOP contribution of $6,107, and a
reimbursement for relocation costs of $204,197 (which includes
tax-gross-ups of $80,146).
(9) This
amount includes the Company’s life insurance contribution of $27, the
Company’s matching contributions under its 401(k) plan and contributions
under its ESOP of $8,575, a Medicare tax reimbursement related to the
Pension Restoration Plan of $13,079 and a cash lump-sum severance payment
of $208,004.
|
Name
(a)
|
Grant
Date
(b)
|
Estimated
Possible Payouts Under Non-Equity Incentive Plan Awards(1)
|
Estimated
Possible Payouts Under Equity Incentive Plan Awards(2)
|
All
Other Stock Awards: Number of Shares of Stock
(#)(i)(3)
|
All
Other Option Awards: Number of Securities Underlying Options
(#)(j)(4)
|
Exercise
or Base Price of Option Awards
($/sh)(k)
|
Grant
Date Fair Value of Options and Awards
($)(l)(5)
|
||||
Threshold
($)(c)
|
Target
($)(d)
|
Maximum
($)(e)
|
Threshold
($)(f)
|
Target
($)(g)
|
Maximum
($)(h)
|
||||||
R.
Scott Trumbull
|
03-05-09
|
159,378
|
637,513
|
956,270
|
138,750
|
277,500
|
277,500
|
0
|
100,000
|
17.34
|
581,861
|
John
J. Haines
|
03-05-09
|
42,188
|
168,753
|
275,005
|
N/A
|
N/A
|
N/A
|
0
|
20,492
|
17.34
|
119,235
|
Peter
C. Maske
|
03-05-09
|
61,022
|
244,087
|
397,771
|
90,350
|
180,700
|
180,700
|
0
|
31,724
|
17.34
|
184,589
|
Gregg
C. Sengstack
|
03-05-09
|
57,798
|
231,192
|
393,082
|
68,875
|
137,750
|
137,750
|
4,000
|
31,724
|
17.34
|
273,029
|
Robert
J. Stone
|
03-05-09
|
48,348
|
193,392
|
315,158
|
64,375
|
128,750
|
128,750
|
0
|
31,724
|
17.34
|
184,589
|
Gary
D. Ward
|
03-05-09
|
35,101
|
140,403
|
228,804
|
46,425
|
92,850
|
92,850
|
0
|
17,049
|
17.34
|
99,201
|
(1) The
amounts reflected in the non-equity incentive compensation estimate for
2009 were established under the Executive Officer Annual Incentive Bonus
Program. The estimated payouts shown in the Table were based on
performance in 2009, which has now occurred. Thus, the amounts shown in
“threshold”, “target”, and “maximum” columns reflect the range of
potential payouts when the performance goals were set in early 2009.
Actual amounts paid for 2009 are reflected in the Summary Compensation
Table. A description of this program can be found in the “Compensation
Discussion and Analysis” section of this proxy statement.
(2) The
amounts reflected in the equity incentive compensation estimate for 2009
were established under the Long-Term Bonus Program. Payouts under this
program occurred in 2009 based on the level of attainment of performance
goals set for 2004-2008. A description of this program, including the
number of shares of stock that were awarded, can be found in the narrative
discussion following the Summary Compensation Table.
(3) Mr.
Sengstack received a restricted stock award for 4,000 shares. The award
vests on April 28, 2012 if he is still employed on such date.
(4) The
exercise price for grants of stock options is determined using the closing
price of the Company’s Common Stock on the date of grant. The option
grants expire after ten years and are vested over four years, at 25% per
year. Vesting is accelerated upon a change in control of the Company,
death, disability or retirement.
(5) The
grant date fair value of the stock options and stock awards shown in the
above table was computed in accordance with FASB Codification Topic 718
and represents the grant date fair value of the grants made in
2009.
|
Name
(a)
|
Option
Awards(1)
|
Stock
Awards
|
||||||
Number
of Securities Underlying Unexercised Options (#) Exercisable
(b)
|
Number
of Securities Underlying Unexercised Options (#)
Unexercisable
(c)
|
Option
Exercise price
($/sh)(d)
|
Option
Expiration Date
(e)
|
Number
of Shares or Units of Stock That Have Not Vested
(#)(f)
|
Market
Value of Shares or Units of Stock That Have Not Vested
($)(g)(4)
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights
That Have Not Vested
(#)(h)(5)
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units,
or Other Rights That Have Not Vested
($)(i)
(4)
|
|
R.
Scott Trumbull
|
20,000
80,430
60,800
30,200
13.875
7,250
14,325
0
|
0
0
0
0
4.625
7,250
42,975
100,000
|
24.9755
24.005
29.95
40.93
45.90
48.87
32.19
17.34
|
04-19-2012
01-01-2013
02-12-2014
02-10-2015
02-17-2016
02-09-2017
02-28-2018
03-05-2019
|
N/A
|
N/A
|
16,100
|
467,705
|
John
J. Haines
|
2,500
0
|
7,500
20,492
|
40.45
17.34
|
05-01-2018
03-05-2019
|
8,000(2)
|
232,400
|
N/A
|
N/A
|
Peter-Christian
Maske
|
9,600
6,750
2,925
1,800
3,825
0
|
0
0
975
1,800
11,475
31,724
|
29.95
40.93
45.90
48.87
32.19
17.34
|
02-12-2014
02-10-2015
02-17-2016
02-09-2017
02-28-2018
03-05-2019
|
N/A
|
N/A
|
3,700
|
107,485
|
Gregg
C. Sengstack
|
55,000
26,000
16,000
16,000
9,000
2,925
1,800
3,825
0
|
0
0
0
0
0
975
1,800
11,475
31,724
|
16.125
19.6375
24.075
29.95
40.93
45.90
48.87
32.19
17.34
|
07-28-2010
12-13-2011
12-13-2012
02-12-2014
02-10-2015
02-17-2016
02-09-2017
02-28-2018
03-05-2019
|
4,000(3)
|
116,200
|
3,700
|
107,485
|
Robert
J. Stone
|
40,000
7,200
5,450
2,925
1,800
3,825
0
|
0
0
0
975
1,800
11,475
31,724
|
16.125
29.95
40.93
45.90
48.87
32.19
17.34
|
07-28-2010
02-12-2014
02-10-2015
02-17-2016
02-09-2017
02-28-2018
03-05-2019
|
N/A
|
N/A
|
13,700
|
397,985
|
Gary
D. Ward
|
10,000
5,800
5,450
1,950
1,150
2,225
0
|
0
0
0
650
1,150
6,675
17,049
|
24.075
29.95
40.93
45.90
48.87
32.19
17.34
|
12-13-2012
02-12-2014
02-10-2015
02-17-2016
02-09-2017
02-28-2018
03-05-2019
|
N/A
|
N/A
|
2,450
|
71,172
|
(1) Each
option grant has a ten-year term and vests pro rata over four or five
years beginning on the first anniversary of the grant date. Options with
grant dates prior to January 1, 2005 vest over five years, and options
with grant dates after January 1, 2005 vest over four years. Vesting is
accelerated upon a change in control of the Company. Pursuant to his
separation agreement, Mr. Ward’s options will vest on June 27, 2010.
Exercise prices are determined using the closing price of the Company’s
Common Stock on the date of grant.
(2) Mr.
Haines received a restricted stock award for 8,000 shares on April 14,
2008. The award vests on April 14, 2012.
(3) Mr.
Sengstack received a restricted stock award for 4,000 shares on April 28,
2009. The award vests on April 28, 2012.
(4) The
market value of the stock awards was determined using the closing price of
the Company’s common stock on January 2, 2010 ($29.05 per
share).
(5) These
restricted stock awards generally vest on the fourth anniversary of the
grant date, provided that the Company’s return on invested capital at the
end of the four-year vesting period exceeds the average return on invested
capital of a peer group of companies (Flowserve Corporation; ITT
Corporation; Pentair, Inc.; Regal Beloit Corporation; A.O. Smith
Corporation; The Gorman Rupp Company; The KSB Group; Ebara Corporation;
and Grundfos Group), over the same four-year period. Vesting is
accelerated upon a change in control of the Company. The awards vest as
follows for each name executive officer:
· Mr.
Trumbull: February
11, 2011 (9,400 shares); February 17, 2010 (6,700 shares)
· Mr.
Maske:
February 11, 2011 (2,300 shares); February 17, 2010 (1,400
shares)
· Mr.
Sengstack: February
11, 2011 (2,300 shares); February 17, 2010 (1,400 shares)
· Mr.
Stone:
February 11, 2011 (2,300 shares); February 17, 2010 (1,400 shares); March
3, 2010 (10,000 shares)
· Mr.
Ward: February
11, 2011 (1,500 shares) (pursuant to his separation agreement, Mr. Ward
will vest in 1,250 of these shares on June
27, 2010 and the remaining shares will be forfeited); February 17, 2010
(950)
|
Option
Awards
|
Stock
Awards
|
|||||||||||||||
Name
(a)
|
Number
of Shares Acquired on Exercise
(#)(b)
|
Value
Realized on Exercise
($)(c)(1)
|
Number
of Shares Acquired on Vesting (#)(d)
|
Value
Realized on Vesting
($)(e)
|
||||||||||||
Gary
D. Ward
|
12,000 | 158,175 | 0 | 0 | ||||||||||||
(1) Represents
the difference between the closing price of the stock on the date of
exercise and the exercise price, multiplied by the number of shares
covered by the options.
|
Named
Executive Officer
(a)
|
Plan
(b)
|
Number
of Years of Credited Service
(c)
|
Present
Value of Accumulated Benefit
($)(d)(2)
|
Payments
During Last Fiscal Year
($)(e)
|
R.
Scott Trumbull
|
Basic
Retirement Plan
Cash
Balance Pension Plan
Pension
Restoration Plan
|
7.0
7.0
12.0(1)
|
18,833
57,367
4,137,731
|
0
0
0
|
John
J. Haines
|
Basic
Retirement Plan
Cash
Balance Pension Plan
Pension
Restoration Plan
|
N/A
2.0
2.0
|
N/A(4)
10,773
3,969
|
0
0
0
|
Peter-Christian
Maske
|
Basic
Retirement Plan
Cash
Balance Pension Plan
F.E.
Europa GmbH Pension Plan
|
4.0
4.0
30.0
|
10,835
102,715
1,235,466(3)
|
0
0
0
|
Gregg
C. Sengstack
|
Basic
Retirement Plan
Cash
Balance Pension Plan
Pension
Restoration Plan
|
21.0
21.1
21.1
|
41,603
296,720
1,203,343
|
0
0
0
|
Robert
J. Stone
|
Basic
Retirement Plan
Cash
Balance Pension Plan
Pension
Restoration Plan
|
17.3
9.5
9.5
|
24,851
67,880
43,850
|
0
0
0
|
Gary
D. Ward
|
Basic
Retirement Plan
Cash
Balance Pension Plan
Pension
Restoration Plan
|
22.3
22.3
22.3
|
41,136
291,196
465,123
|
0
0
0
|
(1) In
the Pension Restoration Plan, Mr. Trumbull is credited with his years of
service on the Board for purposes of vesting and benefit accruals.
$558,643 of column (d) is attributable to this additional credited
service.
(2) The
amounts in this column are based on a retirement age of 65 for Messrs.
Trumbull, Haines, Maske and Ward, and a retirement age of 62 for Messrs.
Sengstack and Stone, since these are the ages at which each executive can
retire and receive benefits without any reduction due to age.
(3) This
amount was converted to USD at the December 31, 2009, Euro exchange rate
of 1.433.
(4) Mr.
Haines is ineligible for the Basic Retirement
Plan.
|
Name
(a)
|
Executive
Contribution in Last Fiscal Year
(b)(1)
|
Company
Contribution in Last Fiscal Year
(c)
|
Aggregate Earnings
in Last Fiscal Year
(d)
(2)
|
Aggregate
Withdrawals/
Distributions
(e)
|
Aggregate
Balance at Last Fiscal Year End
(f)
|
|||||||||||||||
R.
Scott Trumbull
|
$ | 300,000 | $ | 0 | $ | 67,158 | $ | 0 | $ | 367,158 | ||||||||||
(1)
The amount of the executive contributions reported in this column is
included in the “Non-Equity Incentive Plan Compensation” column of the
Summary Compensation Table for 2008.
(2) The earnings reported in this
column are not included in the Summary Compensation
Table.
|
·
|
Termination – Nonrenewal of
Employment Agreement. If the executive terminates his employment at
any time during the term of the agreement after receipt of notice from the
Company of its decision to not extend the term, he is entitled to an
immediate payment equal to a pro-rata portion of the bonus paid for the
preceding year (or, in the case of Mr. Trumbull, later payment of a
pro-rata portion of the bonus payable for the year of termination), an
immediate payment equal to 12 months of his then current salary and one
times the bonus paid for the preceding year, immediate vesting of all
outstanding stock options, and continued participation in all of the
Company’s employee benefit plans for the applicable severance
period.
|
·
|
Termination – Prior to a
Change in Control. If a Change in Control of the Company (as
defined in the agreements) has not occurred and the executive’s employment
is terminated by the Company for other than “Cause” or the executive
terminates his employment for “Good Reason,” he is entitled to an
immediate payment equal to a pro-rata portion of the bonus paid for the
preceding year (or, in the case of Mr. Trumbull, later payment of pro-rata
portion of the bonus payable for the year of termination), an immediate
payment equal to 18 months of his then current salary and one and one-half
times the bonus paid for the preceding year (12 months and one times the
bonus paid for the preceding year for Mr. Haines), immediate vesting of
all outstanding stock options, and continued participation in all of the
Company’s employee benefit plans for the applicable severance
period.
|
·
|
Termination – Following a
Change in Control. If following a Change in Control of the Company
(as defined in the agreements) the executive’s employment is terminated
within two years of the Change in Control by the Company for other than
Cause or by the executive for Good Reason, or the executive terminates his
employment at any time during the 13th month following the Change in
Control, he is entitled to an immediate payment equal to a pro-rata
portion of the bonus paid for the preceding year, an immediate payment
equal to 36 months of his then-current salary and three times the bonus
paid for the preceding year (24 months and two times the bonus paid for
the preceding year for Mr. Haines), immediate vesting and cash out of all
outstanding stock options, and continued participation in all of the
Company’s employee benefit plans for the applicable severance period, and
a gross-up payment to cover any excise and related income tax liability
arising under Section 280G of the Internal Revenue Code as a result of any
payment or benefit under the
agreement.
|
·
|
“Good
Cause” means the executive’s death or disability, his fraud,
misappropriation of, or intentional material damage to, the property or
business of the Company, his commission of a felony likely to result in
material harm or injury to the Company, or his willful and continued
material failure to perform his
obligations.
|
·
|
“Good
Reason” exists if (a) there is a change in the executive’s title or a
significant change in the nature or the scope of his authority, (b) there
is a reduction in the executive’s salary or retirement benefits or a
material reduction in the executive’s compensation and benefits in the
aggregate, (c) the Company changes the principal location in which the
executive is required to perform services to more than fifty miles away,
(d) the executive reasonably determines that, as a result of a change in
circumstances significantly affecting his position, he is unable to
exercise the authority or duties attached to his positions, or (e) any
purchaser of substantially all of the assets of the Company declines to
assume the obligations under the employment
agreement.
|
(i)
|
a
lump sum payment equal to the sum of two times the executive’s base
salary, a pro-rata portion of the executive’s target bonus for the current
year (based on the termination date), and two times the executive’s target
bonus for the current year;
|
(ii)
|
a
lump sum payment equal to the increase in benefits under the Company’s
tax-qualified and supplemental retirement plans that results from
crediting the executive with additional service for 24 months (or, if
earlier, until age 65);
|
(iii)
|
immediate
vesting of all stock-based awards and deemed satisfaction of all
performance-based awards;
|
(iv)
|
continued
coverage under the Company’s health and welfare plans for 24 months
following termination (or, if earlier, until age
65);
|
(v)
|
12
months of executive outplacement services (not to exceed $50,000) with a
professional outplacement firm selected by the Company;
and
|
(vi)
|
a
gross-up payment to cover any excise and related income tax liability
under Section 280G of the Internal Revenue Code as a result of payments
made or benefits provided under the ESA (except that if the payments and
benefits subject to Section 280G are less than 110% of the amount that
could be paid without incurring Section 280G liability, the payments under
the ESA will be reduced so that no such liability will be
incurred).
|
·
|
“Good
Cause” means the executive’s intentional and material misappropriation of,
or damage to, the property or business of the Company, his conviction of a
criminal violation involving fraud or dishonesty or of a felony that
causes material harm or injury to the Company, or his willful and
continuous failure to perform his obligations under the ESA that is not
cured.
|
·
|
“Good
Reason” means a material reduction in the executive’s salary or retirement
benefits or a material reduction in his compensation and benefits in the
aggregate, or any purchaser of substantially all of the assets of the
Company declines to assume all of the Company’s obligations under the
ESA.
|
Name
(a)
|
Salary
($)(b)
|
Non-Equity
Incentive Plan Compensation
($)(c)
|
Accelerated
Vesting of Options
($)(d)
|
Additional
Retirement Benefits
($)(e)(1)
|
Continued
Benefit Plan Coverage
($)(f)
|
|||||||||||||||
R.
Scott Trumbull
|
637,500 | 905,265 | 1,171,000 | 305,724 | 11,877 | |||||||||||||||
John
J. Haines
|
250,000 | 320,000 | 239,960 | 18,416 | 11,207 | |||||||||||||||
Peter-Christian
Maske
|
0 | 0 | 371,489 | 0 | 0 | |||||||||||||||
Gregg
C. Sengstack
|
312,000 | 562,304 | 371,489 | 278,102 | 8,159 | |||||||||||||||
Robert
J. Stone
|
0 | 0 | 371,489 | 0 | 0 | |||||||||||||||
(1) Represents
additional accruals under defined benefit pension plans and employer
contributions under the 401(k) plan.
|
Name
(a)
|
Salary
($)(b)
|
Non-Equity
Incentive Plan Compensation
($)(c)
|
Accelerated
Vesting of Options
($)(d)
|
Additional
Retirement Benefits
($)(e)(1)
|
Continued
Benefit Plan Coverage
($)(f)
|
|||||||||||||||
R.
Scott Trumbull
|
956,250 | 1,300,203 | 1,171,000 | 715,767 | 17,816 | |||||||||||||||
John
J. Haines
|
250,000 | 320,000 | 239,960 | 18,416 | 11,207 | |||||||||||||||
Peter-Christian
Maske
|
194,690 | (2) | 0 | 371,489 | 0 | 4,278 | ||||||||||||||
Gregg
C. Sengstack
|
468,000 | 702,880 | 371,489 | 389,333 | 12,238 | |||||||||||||||
Robert
J. Stone
|
0 | 0 | 371,489 | 0 | 0 | |||||||||||||||
(1) Represents
additional accruals under defined benefit pension plans and employer
contributions under the 401(k) plan.
(2) Mr.
Maske’s salary was converted to USD at the December 31, 2009 Euro exchange
rate of 1.433.
|
Name
(a)
|
Salary
($)(b)
|
Non-Equity
Incentive Plan Compensation
($)(c)
|
Vesting
of Restricted Stock
($)(d)
|
Accelerated
Vesting and Cash Out of Options
($)(e)
|
Additional
Retirement Benefits Credits
($)(f)(1)
|
Continued
Benefit Plan Coverage
($)(g)
|
Outplace-ment
Services
($)(h)
|
Gross
Up
($)(i)
|
||||||||||||||||||||||||
R.
Scott Trumbull
|
1,912,500 | 3,159,500 | 273,070 | 1,171,000 | 1,636,878 | 35,632 | 0 | 0 | ||||||||||||||||||||||||
John
J. Haines
|
500,000 | 480,000 | 232,400 | 239,960 | 36,833 | 22,413 | 0 | 0 | ||||||||||||||||||||||||
Peter-Christian
Maske
|
778,761 | (2) | 631,411 | 66,815 | 371,489 | 0 | 17,113 | 0 | 0 | |||||||||||||||||||||||
Gregg
C. Sengstack
|
936,000 | 1,124,608 | 183,015 | 371,489 | 374,714 | 22,930 | 0 | 978,931 | ||||||||||||||||||||||||
Robert
J. Stone
|
573,000 | 580,163 | 66,815 | 371,489 | 62,286 | 0 | 50,000 | 0 | ||||||||||||||||||||||||
(1) Represents
additional accruals under defined benefit pension plans and employer
contributions under the 401(k) plan.
(2) Mr.
Maske’s salary was converted to USD at the December 31, 2009, Euro
exchange rate of 1.433.
|
Name
(a)
|
Fees
Earned or Paid in Cash
($)(b)
|
Stock
Awards
($)(c)(2)
|
Option
Awards
($)(d)(3)
|
Non-Equity
Incentive Plan Compensation
($)(e)
|
Change
in Pension Value and Nonqualified Deferred Compensation
Earnings
($)(f)(4)
|
All
Other Compensation
($)(g)
|
Total
($)(h)
|
|||||||||||||||||||||
Jerome
Brady
|
56,000 | 80,000 | 0 | N/A | 2,664 | 0 | 138,664 | |||||||||||||||||||||
David
T. Brown
|
54,500 | (1) | 80,000 | 0 | N/A | 949 | 0 | 135,449 | ||||||||||||||||||||
David
Roberts
|
54,500 | 80,000 | 0 | N/A | 572 | 0 | 135,072 | |||||||||||||||||||||
David
Wathen
|
56,500 | (1) | 80,000 | 0 | N/A | 6,358 | 0 | 142,858 | ||||||||||||||||||||
Howard
Witt
|
55,000 | 80,000 | 0 | N/A | 0 | 0 | 135,000 | |||||||||||||||||||||
Thomas
Young
|
53,000 | 80,000 | 0 | N/A | 0 | 0 | 133,000 | |||||||||||||||||||||
(1) Mr.
Brown deferred $54,500 and Mr. Wathen deferred $35,000 of fees into the
Directors’ Deferred Compensation Plan.
(2) The
amounts in column (c) are the grant date fair value, of the stock awards
granted to the non-employee directors, computed in accordance with FASB
Codification Topic 718 and represent the Company’s total expense of grants
made in 2009. Messrs. Brady, Roberts, Witt, and Young received an award of
3,618 shares. Messrs. Brown and Wathen elected to defer their stock award
into the Directors’ Deferred Compensation Plan.
(3) No
options were granted to non-employee directors in 2009. As of January 2,
2010, the non-employee directors held the following options: Mr. Brady:
56,000; Mr. Roberts: 8,000; and Mr. Witt: 36,000.
(4) The
amounts in column (f) represent 2009 earnings credited under the
Non-Employee Directors’ Deferred Compensation Plan.
|
Plan
Category
(a)
|
Number
of Securities to be Issued Upon Exercise of Outstanding Options, Warrants
& Rights
(b)
|
Weighted-Average
Exercise Price of Outstanding Options, Warrants & Rights
($)(c)
|
Number
of Securities Remaining Available for Future Issuance Under Equity
Compensation Plans (Excluding Securities Reflected in Column
[b])
(d)
|
|||||||||
Equity
Compensation Plans Approved by Securities Holders(1)
|
1,993,897 | $ | 26.79 | 649,720 | ||||||||
Equity
Compensation Plans Not Approved by Security Holders(2)
|
32,757 | n/a | 67,243 | |||||||||
(1) This
Plan category includes the following plans: Franklin Electric Co., Inc.
Stock Option Plan (0 shares remain available for issuance) and Franklin
Electric 2009 Amended & Restated Stock Plan (649,720 shares remain
available for issuance).
(2) This
Plan category includes the Non-Employee Directors’ Deferred Compensation
Plan, adopted in 2000 and described above under the caption Director
Compensation. The information included in column (a) represents shares
underlying stock units, payable on a one-for-one basis, credited to the
directors’ respective stock unit accounts as of February 26, 2010.
Non-employee directors may elect to receive the distribution of stock
units in cash or in shares of the Company’s Common Stock.
|
·
|
The
Audit Committee has reviewed and discussed with management and Deloitte
& Touche LLP, the Company’s independent registered public accounting
firm, the Company’s audited financial statements for the fiscal year ended
January 2, 2010.
|
·
|
The
Audit Committee has reviewed and discussed with Deloitte & Touche LLP,
the matters required to be discussed by the Statement on Auditing
Standards No. 114, Communication with Audit
Committees, as adopted by the Public Company Accounting Oversight
Board (PCAOB) in Rule 3526T.
|
·
|
The
Audit Committee has received the written disclosures and the letter from
Deloitte & Touche LLP required by the applicable independence rules of
the PCAOB, and has discussed with Deloitte & Touche LLP the
independent registered public accounting firm’s
independence.
|
2.1
|
“Board”
shall mean the Board of Directors of the
Company.
|
2.2
|
“Code”
shall mean the Internal Revenue Code of 1986, as amended, or the
corresponding provisions of any subsequent federal internal revenue
law.
|
2.3
|
“Committee”
shall mean the Management Organization and Compensation Committee of the
Board or such other committee appointed by the Board to administer the
Plan that is comprised of not less than two directors of the Company, each
of whom shall qualify in all respects as an “outside director” within the
meaning of Section 162(m) of the
Code.
|
2.4
|
“Company”
shall mean Franklin Electric Co., Inc., an Indiana
corporation.
|
2.5
|
“Covered
Employee” shall mean an employee of the Company or its affiliates who is a
“covered employee,” as defined in Section 162(m) of the Code and the
Regulations, or other guidance promulgated by the Internal Revenue Service
under Section 162(m) of the Code, or any successor statute, and such other
key executives as the Committee shall
determine.
|
2.6
|
“Disability”
shall mean disability as defined under the Company’s long-term disability
insurance plan under which the Participant is then covered or, if the
Participant is not covered under such a plan, shall have the meaning set
forth in Code Section 22(e)(3).
|
2.7
|
“Incentive
Bonus” shall mean, for each Participant, an annual bonus to be paid under
the Program, or if applicable, a bonus to be paid under another
arrangement approved by the Committee, in each case in the amount
determined by the Committee pursuant to Article V
below.
|
2.8
|
“Maximum
Potential Incentive Bonus” shall mean, with respect to any Participant for
any fiscal year, $3,000,000.
|
2.9
|
“Participant”
means, with respect to any Performance Period, a Covered Employee who has
been designated as eligible to participate in the Plan for such
Performance Period in accordance with
Section 4.
|
2.10
|
“Performance
Goal(s)” means a measurement established with respect to one or more
Performance Measures.
|
2.11
|
“Performance
Measures” means, with respect to any Performance Period, one or more of
the following, which may be expressed with respect to the Company or one
or more operating units or groups, as the Committee may determine: cash
flow; cash flow from operations; total earnings; earnings per share or
earnings per share growth, diluted or basic; earnings per share from
continuing operations, diluted or basic; earnings before interest and
taxes; earnings before interest, taxes, depreciation and/or amortization;
earnings from operations; net contribution; net asset turnover; inventory
turnover; capital expenditures; net earnings; operating earnings or
income; gross or operating margin; debt; working capital; return on
equity; return on net assets; return on total assets; return on capital;
return on invested capital; return on investment; return on sales; net or
gross sales; market share; economic value added; cost of capital; change
in assets; expense reduction levels; fixed costs; debt reduction;
productivity; delivery performance; safety record; stock price; and total
stockholder return. Performance Goals may be determined on an absolute
basis or relative to internal goals or relative to levels attained in
prior years or related to other companies or indices or as ratios
expressing relationships between two or more performance goals. The
Committee shall provide how any Performance Measure shall be adjusted to
the extent necessary to prevent dilution or enlargement of any award as a
result of extraordinary events or circumstances, as determined by the
Committee, or to exclude the effects of extraordinary, unusual, or
non-recurring items, including: restructuring charges; changes in
applicable laws, regulations, or accounting principles; currency
fluctuations; discontinued operations; non-cash items, such as
amortization, depreciation or reserves; asset impairment; or any
recapitalization, restructuring, reorganization, merger, acquisition,
divestiture, consolidation, spin-off, split-up, combination, liquidation,
dissolution, sale of assets, or other similar corporation transaction;
provided, however, that no such adjustment will be made if the effect of
such adjustment would cause an award to fail to qualify as performance
based compensation within the meaning of Code Section 162(m) with respect
to a Covered Employee.
|
2.12
|
“Performance
Period” means the Company’s fiscal year, or such other period as
determined by the Committee.
|
2.13
|
“Regulations”
shall mean the Treasury Regulations promulgated under the Code, as amended
from time to time.
|
2.14
|
“Retirement”
shall mean termination of employment with the Company and its affiliates
which occurs (i) pursuant to a voluntary early retirement program approved
by the Board or the Committee, (ii) after attaining age 65, or (iii) after
attaining age 55 or older with 10 or more years of service with the
Company and its affiliates. For this purpose, a year of service shall be a
completed 12-month period of service beginning on the first day of the
Participant’s service with the Company or an affiliate or an anniversary
of such date.
|
5.1
|
Awards. Not later than
the 90th day of each fiscal year of the Company (or before 25% of the
Performance Period has expired, if such Performance Period is shorter in
duration than a fiscal year), the Committee shall designate, in writing,
(i) the Performance Goal(s) to be attained for such Performance Period,
the attainment of which will result in Participant’s eligibility for an
Incentive Bonus, and (ii) the maximum amount of Incentive Bonus which
may be available for payout to each Participant based upon the attainment
of the Performance Goal(s).
|
5.2
|
Committee Certification.
As soon as reasonably practicable after the end of each Performance
Period, but in no event later than two and one-half months following the
end of the fiscal year that includes the Performance Period, the Committee
shall certify, in writing, (i) whether and to what extent the Performance
Goal(s) described in Section 5.1 were satisfied, and (ii) the amount
available for each Participant’s Incentive Bonus for such Performance
Period based upon the level of attainment of such Performance Goal(s). The
Committee may in its discretion authorize payment to a Participant of less
than the amount available and may provide that a Participant will not
receive any payment with respect to an Incentive Bonus opportunity. In
exercising its discretion, the Committee may consider such factors as it
deems appropriate.
|
5.3
|
Termination of
Employment. If a Participant’s employment terminates prior to the
last day of a Performance Period, no Incentive Bonus will be payable to
such Participant with respect to such Performance Period, provided that
the Committee may determine that if a Participant’s employment with the
Company and subsidiaries terminates during the Performance Period due to
Retirement, death, or Disability, the Participant shall be entitled to
receive a pro rata portion of the Incentive Bonus for such Performance
Period in an amount equal to the Incentive Bonus the Participant would
have received had he remained employed until the end of the Performance
Period, prorated based on the number of days in the Performance Period
prior to the Participant’s termination of
employment.
|
5.4
|
Payment of Incentive
Bonuses. The amount of the Incentive Bonus actually paid to a
Participant for a Performance Period shall not exceed the lesser of (i)
the amount determined as payable by the Committee under Section 5.1 for
the Performance Period or (ii) the Maximum Potential Incentive Bonus.
Incentive Bonuses shall be paid in cash at such times and on such terms as
are determined by the Committee in its sole and absolute discretion, but
in no event later than two and one-half months following the fiscal year
that includes the Performance
Period.
|
6.1
|
No Right to Continued
Employment. Neither the establishment of the Plan, the provision
for or payment of any amounts hereunder, nor any action of the Company,
the Board or the Committee with respect to the Plan shall be held or
construed to confer upon any person any legal right to continue to serve
as an officer or employee of the Company or any affiliate of the Company.
The Company expressly reserves any and all rights to discharge any
Participant without incurring liability to any person under the Plan or
otherwise.
|
6.2
|
Withholding. The Company
shall have the right to withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy any applicable federal, state,
local or foreign withholding tax requirements imposed with respect to the
payment of any Incentive Bonus.
|
6.3
|
Nontransferability.
Except as expressly provided by the Committee, the rights and benefits
under the Plan are personal to the Participant and shall not be subject to
any voluntary or involuntary alienation, assignment, pledge, transfer or
other disposition.
|
6.4
|
Unfunded Plan. The
Company shall have no obligation to reserve or otherwise fund in advance
any amounts that are or may in the future become payable under the Plan.
Any funds that the Company, acting in its sole and absolute discretion,
determines to reserve for future payments under the Plan may be commingled
with other funds of the Company and need not in any way be segregated from
other assets or funds held by the Company. A Participant’s rights to
payment under the Plan shall be limited to those of a general creditor of
the Company.
|
6.5
|
Repayment/Forfeiture of
Incentive Bonus. If the Company, as a result of misconduct, is
required to prepare an accounting restatement due to material
noncompliance with any financial reporting requirement under the
securities laws, then (a) any Participant whose Incentive Bonus is subject
to automatic forfeiture due to such misconduct and restatement under
Section 304 of the Sarbanes-Oxley Act of 2002, and (b) any Participant who
the Committee determines either knowingly engaged in or failed to prevent
the misconduct, or whose actions or inactions with respect to the
misconduct and restatement constituted gross negligence, shall be required
to reimburse the Company the amount of any payment of any Incentive Bonus
earned or accrued during the twelve month period following the first
public issuance or filing with the SEC (whichever first occurred) of the
financial document embodying such financial reporting requirement. To the
extent such Incentive Bonus was deferred under a nonqualified deferred
compensation plan maintained by the Company rather than paid to the
Participant, the amount of bonus deferred (and any earnings thereon) shall
be forfeited.
|
6.6
|
Adoption,
Amendment, Suspension and Termination of the
Plan.
|
6.6.1
|
The
Plan shall be effective for the fiscal year of the Company commencing
January 1, 2010 and shall continue in effect until terminated as
provided below; provided, however, any Award to a Covered Employee shall
be contingent on stockholder approval of the Plan at the Company’s 2010
Annual Meeting of Stockholders. If the Plan is not approved by
stockholders at the Company’s 2010 Annual Meeting of Stockholders, any
awards granted under the Plan to Covered Employees shall be null and void
and of no effect.
|
6.6.2
|
Subject
to the limitations set forth in Section 6.6.3 below, the Board may at any
time suspend or terminate the Plan and may amend it from time to time in
such respects as the Board may deem advisable, subject to any requirement
for stockholder approval imposed by applicable law, including Section
162(m) of the Code.
|
6.6.3
|
No
amendment, suspension or termination of the Plan shall, without the
consent of the person affected thereby, materially, adversely alter or
impair any rights or obligations under any Incentive Bonus previously
earned and awarded under the Plan.
|
6.7
|
Governing Law. The
validity, interpretation and effect of the Plan, and the rights of all
persons hereunder, shall be governed by and determined in accordance with
the laws of the State of Indiana, other than the choice of law rules
thereof.
|