8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  December 12, 2008

FRANKLIN ELECTRIC CO., INC.

(Exact name of registrant as specified in its charter)

Indiana (State or other jurisdiction of incorporation)	0-362 (Commission File Number)	35-0827455 (I.R.S. Employer Identification No.)
400 E. Spring Street Bluffton, IN                                                       (Address of principal executive offices)		46714 (Zip Code)
Registrant’s telephone number, including area code: (260) 824-2900

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[  ]    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

        (17 CFR 240.14d-2(b))

[  ]    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

        (17 CFR 240.13e-4(c))

Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers.

Employment Security Agreements

On December 12, 2008, the Board of Directors of Franklin Electric Co., Inc. (the “Company”) approved the form of an Employment Security Agreement (the “ESA”) pertaining to the terms of the employment security the Company is providing the following key executive officers of the Company (each, an “Executive”):

Name	Title
DeLancey W. Davis	Vice President FE, Director of Americas Water Systems
Daniel J. Crose	Vice President FE, Director of Operations
Robert J. Stone	Senior Vice President FE, President Americas Water Systems
Thomas J. Strupp	Vice President FE, President Water Transfer Systems
Gary D. Ward	Vice President FE, Director of Human Resources

The ESA pertaining to Mr. Strupp supersedes his employment agreement previously entered into with the Company.  A copy of the form of ESA is filed as Exhibit 10.1 to this report and incorporated herein by reference.

The ESA provides that if within two years after a Change in Control the Company terminates Executive’s employment for any reason other than Good Cause, or Executive terminates his employment with the Company for Good Reason, Executive is entitled to the following:

(i) a lump sum payment equal to the sum of two times Executive’s base salary, a pro-rata portion of Executive’s target bonus for the current year (based on the termination date), and two times 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 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); and

(v) 12 months of executive outplacement services (not to exceed $50,000) with a professional outplacement firm selected by the Company.

The ESA provides for a gross-up payment to Executive 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.

If Executive dies while receiving benefits under the ESA, all amounts payable thereunder to Executive shall be paid to his surviving spouse or his designated beneficiary, or if none, then to his estate, and Executive’s surviving spouse and eligible dependents shall continue to be covered under the Company’s health and welfare plans for the duration of the period described in (ii) above.

Deferred Compensation Plan

In addition, on December 12, 2008, the Board of Directors of the Company adopted the Franklin Electric Co., Inc. Deferred Compensation Plan (the “Plan”).  A copy of the form of the Plan is filed as Exhibit 10.2 to this report and incorporated herein by reference.

The Plan permits executive officers of the Company to defer up to 90% of their bonus awards and up to 50% of their salary.  The Company does not contribute any amounts to the Plan.  A participant must make an election to defer salary prior to the beginning of the calendar year for which the salary is earned and a participant must make an election to defer bonus awards by June 30 of the year for which the bonus is paid, or in the case of a long-term award, by June 30 of the initial year of the performance period (provided that a participant may elect by December 31, 2008 to defer his long-term bonus award otherwise payable in 2009).

Amounts deferred by a participant will be credited to a notional account maintained on his behalf, which will be adjusted for earnings and losses based on investment funds made available under the Company’s 401(k) plan, as elected by the participant.

A participant’s Plan account will be distributed to him as soon as practicable after the first of the month following termination of employment (provided that distribution to a “key employee” as defined in Section 409A of the Internal Revenue Code will be deferred for six months).  Such amount will be paid in a lump sum unless the participant elects, on his deferral election form, to have an amount paid in semi-annual installments not to exceed 10 years.  A participant may also request a distribution to be made prior to his termination of employment upon an unforeseeable emergency.

The Board may amend the Plan upon 30 days’ prior notice to participants, provided that any change that adversely affects a participant’s rights needs the participant’s written consent.  The Board can terminate the Plan at any time, in which case participants’ accounts will be paid to them in a lump sum, to the extent permitted by Section 409A of the Internal Revenue Code.

Item 9.01.                                Financial Statements and Exhibits.

(d)           Exhibits.

10.1	Form of Employment Security Agreement, effective December 12, 2008.
10.2	Franklin Electric Co., Inc. Deferred Compensation Plan, effective December 12, 2008.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FRANKLIN ELECTRIC CO., INC. (Registrant)
Date:  December 12, 2008	By:  ______________________ John J. Haines Vice President, Chief Financial Officer and Secretary

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EXHIBIT INDEX

10.1	Form of Employment Security Agreement, effective December 12, 2008.
10.2	Franklin Electric Co., Inc. Deferred Compensation Plan, effective December 12, 2008.

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EX-10.1

EMPLOYMENT SECURITY AGREEMENT

This Employment Security Agreement (“Agreement”) is entered into as of this ____ day of _______________, _____, by and between Franklin Electric Co., Inc., an Indiana corporation (“Franklin”), and ____________________ (“Executive”).

WITNESSETH:

WHEREAS, Executive is currently employed by Franklin as the ____________________;

WHEREAS, Franklin desires to provide certain security to Executive in connection with Executive’s employment with Franklin; and

WHEREAS, Executive and Franklin desire to enter into this Agreement pertaining to the terms of the security Franklin is providing to Executive with respect to his employment.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:

1.Definitions.                                           For purposes of this Agreement:

(a)“Affiliate” has the meaning set forth in Rule 12b-2 under the Securities Exchange Act of 1934.

(b)“Base Salary” means Executive’s annual base salary at the rate in effect on the date of a Change in Control, or if greater, the rate in effect immediately prior to Executive’s termination of employment with Franklin.

(c)“Change in Control” means the occurrence of any of the following events:

(i)any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity (other than Franklin or a trustee or other fiduciary holding securities under an employee benefit plan of Franklin), or any syndicate or group deemed to be a person under Section 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is or becomes the "beneficial owner" (as defined in Rule 13d-3 of the General Rules and Regulations under the Exchange Act), directly or indirectly, of securities of Franklin representing 20% or more of the combined voting power of Franklin’s then outstanding securities entitled to vote generally in the election of directors;

(ii)Franklin is party to a merger, consolidation, reorganization or other similar transaction with another corporation or other legal person unless, following such transaction, more than 50% of the combined voting power of the outstanding securities of the surviving, resulting or acquiring corporation or person or its parent entity entitled to vote generally in the election of directors (or persons performing similar functions) is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of Franklin’s outstanding securities entitled to vote generally in the election of directors immediately prior to such transaction, in substantially the same proportions as their ownership, immediately prior to such transaction, of Franklin’s outstanding securities entitled to vote generally in the election of directors;

(iii)The stockholders of Franklin approve a plan of complete liquidation or dissolution of Franklin or Franklin sells all or substantially all of its business and/or assets to another corporation or other legal person unless, following such sale, more than 50% of the combined voting power of the outstanding securities of the acquiring corporation or person or its parent entity entitled to vote generally in the election of directors (or persons performing similar functions) is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of Franklin’s outstanding securities entitled to vote generally in the election of directors immediately prior to such sale, in substantially the same proportions as their ownership, immediately prior to such sale, of Franklin’s outstanding securities entitled to vote generally in the election of directors; or

(iv)during any period of two consecutive years or less, individuals who at the beginning of such period constituted the Board of Directors of Franklin (and any new Directors, whose appointment or election by the Board of Directors or nomination for election by Franklin’s stockholders was approved by a vote of at least two-thirds of the Directors then still in office who either were Directors at the beginning of the period or whose appointment, election or nomination for election was so approved) cease for any reason to constitute a majority of the Board of Directors.

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur by virtue of any transaction in which Executive is a participant in a group effecting an acquisition of Franklin if Executive holds an equity interest in the entity acquiring Franklin at the time of such acquisition.

(d)“Good Cause” means:

(i)Executive’s intentional and material misappropriation of, or damage to, the property or business of Franklin;

(ii)Executive’s conviction of a criminal violation involving fraud or dishonesty or of a felony that causes material harm or injury (whether financial or otherwise) to Franklin; or

(iii)Executive’s willful and continuous failure to perform his obligations under the Agreement, provided that Franklin shall first give written notice to Executive describing such failure and, as long as it is capable of being cured and does not involve acts of material dishonesty directed against Franklin, Executive does not substantially cure or correct such failure within 30 days thereafter, or if such failure can not reasonably be cured within such period, cure is not commenced within such period and diligently pursued and fully cured within 60 days of Franklin’s original notice to Executive.

Notwithstanding anything herein to the contrary, in the event Franklin terminates the employment of Executive for Good Cause hereunder, Franklin shall give Executive at least 30 days prior written notice specifying in detail the reason or reasons for Executive’s termination.

(e)“Good Reason” means:

(i)a material reduction in Executive’s salary or retirement benefits or a material reduction in Executive’s compensation and benefits in the aggregate, excluding, in the case of incentive benefits that are based upon the performance of Executive or Franklin, reductions in benefits resulting from diminished performance by Executive or Franklin;

(ii)any purchaser (or affiliate thereof) who purchases substantially all of the assets of Franklin shall decline to assume all of Franklin’s obligations under this Agreement; or

(iii)                      the relocation of the Executive’s principal place of employment by more than 50 miles.

(f)“Severance Period” means the period beginning on the date Executive’s employment with Franklin terminates under circumstances described in Section 2 and ending on the earlier of the date 24 months thereafter or the date Executive attains age 65.

(g)“Target Bonus” means the amount that would be payable to Executive under the Executive Officer Annual Incentive Cash Bonus Program or any successor plan thereto for the year in which Executive’s employment with Franklin terminates, assuming attainment of the target performance goals at 100% level and employment of Executive at the end of such year (such amount to be determined regardless of whether Executive would otherwise be eligible for a bonus under the terms of any such plan or the extent to which the performance goals are actually met).

2.Termination of Employment.  If within two years after a Change in Control, (a) Franklin terminates Executive’s employment for any reason other than Good Cause, or (b) Executive terminates his employment with Franklin for Good Reason, Franklin shall make the payments and provide the benefits described in Section 3 below.

3.Benefits Upon Termination of Employment. Upon termination of Executive’s employment with Franklin under circumstances described in Section 2 above:

(a)Within 30 days following the date of such termination, Franklin shall pay Executive a lump sum cash payment equal to the sum of (i), (ii)  and (iii) below:

(i)           unpaid Base Salary earned by Executive through the date of termination (which shall include payment for all accrued but unused vacation pay);

(ii)           two times Executive’s Base Salary; and

(iii)                      an amount equal to the sum of (A) a  prorata portion of Executive’s Target Bonus (based on the date on which such termination of employment occurs), and (B) two times Executive’s Target Bonus.

(b)Franklin shall pay Executive a lump sum payment within 30 days following his termination of employment of an amount equal to the increase in benefits under all tax-qualified and supplemental retirement plans maintained by Franklin in which Executive participates at termination of employment that results from crediting Executive with an additional 24 months of service for all purposes under such plans, and deeming Executive to be an employee of Franklin during the Severance Period. The amounts attributable to additional benefits under any such plan shall be based on Executive’s compensation level as of his termination of employment.  The amounts attributable to additional benefits under any retirement plan that is a defined contribution plan shall include the additional Franklin contributions that would have been made or credited on Executive’s behalf had he authorized the same elective contributions he had elected for the year in which the termination of employment occurs, and shall include earnings that would have accrued under the applicable plan during the Severance Period based on the investment alternatives elected by Executive as of his termination of employment.  Benefits accrued under such plans prior to Executive’s termination of employment shall be paid in accordance with the terms of such plans.  Notwithstanding the foregoing, the payment under this Section 3(b) shall be offset by the lump sum value of the amounts of additional benefits paid or payable in accordance with the terms of such plans as a result of the occurrence of a Change in Control but not below zero.

(c)If Executive holds any stock-based awards as of the date of his termination of employment, (i) all such awards that are stock options shall immediately become exercisable on such date and shall be exercisable for 12 months following such termination of employment, or if earlier, until the expiration of the term of the stock option; (ii) all restrictions on any awards of restricted stock or restricted stock units shall terminate or lapse; and (iii) all performance goals applicable to any performance-based awards shall be deemed satisfied at the highest level, and in each case settlement of such awards shall be made to Executive within 30 days of Executive’s termination.  To the extent any of the foregoing is not permissible under the terms of any plan pursuant to which the awards were granted, Franklin shall pay to Executive, in a lump sum within 30 days after termination of Executive’s employment, an amount as follows:  (A) to the extent the acceleration of the exercise of such stock options is not permissible, an amount equal to the excess, if any, of the aggregate fair market value of the stock subject to such options, determined on the date of Executive’s termination of employment, over the aggregate exercise price of such stock options; (B) to the extent the termination or lapse of restrictions on restricted stock or restricted stock units is not permissible, an amount equal to the aggregate fair market value of the stock subject to the restrictions (determined without regard to such restrictions); and (C) to the extent performance awards are limited, an amount equal to the aggregate fair market value of the additional shares that were not awarded.  Executive shall surrender all outstanding awards for which payment pursuant to the preceding sentence is made.

(d)During the Severance Period, Executive and his spouse and eligible dependents shall continue to be covered by all employee benefit plans of Franklin providing health, prescription drug, dental, vision, disability and life insurance in which he or his spouse or eligible dependents were participating immediately prior to the date of his termination of employment, as if he continued to be an active employee of Franklin, and Franklin shall continue to pay the costs of such coverage under such plans on the same basis as is applicable to active employees covered thereunder; provided that, if participation in any one or more of such plans is not possible under the terms thereof, Franklin shall provide substantially identical benefits. The date of Executive’s termination of employment shall be considered a “qualifying event” as such term is defined in Title I, Part 6 of the Employee Retirement Income Security Act of 1974 (“COBRA”), and any continued coverage by Executive, his spouse or eligible dependents under Franklin’s group health plan after Executive’s termination of employment shall be considered COBRA coverage.

(e)During the Severance Period, Executive will receive 12 months of executive outplacement services (not to exceed $50,000) with a professional outplacement firm selected by Franklin.

(f)If at the time of Executive’s termination of employment for reasons other than death he is a “Key Employee” as determined in accordance with the procedures set forth in Treas. Reg. §1.409A-1(i), any amounts payable to Executive pursuant to this Agreement that are subject to Section 409A of the Internal Revenue Code shall not be paid or commence to be paid until six months following Executive’s termination of employment, or if earlier, Executive’s subsequent death, with the first payment to include the payments that otherwise would have been made during such period and including interest accruing thereon from the first day of the month following the date of such termination of employment until the date of payment, based on the applicable interest rate as defined in Section 417(e)(3) of the Internal Revenue Code.

4.Release of Claims.Payment by Franklin of the termination benefits provided in Section 3 hereof shall be conditioned on Executive’s execution of a release of claims substantially in the form attached hereto as Exhibit A.

5.Death. If Executive dies during the Severance Period, all amounts payable hereunder to Executive, to the extent not paid, shall be paid, within 30 days of the date of Executive’s death, to his surviving spouse or his designated beneficiary, or if none, then to his estate.  Executive’s surviving spouse and eligible dependents shall continue to be covered under plans described in Section 3(d) during the remainder of the Severance Period.  On the death of the surviving spouse and eligible dependents, no further coverage under such plans shall be provided (other than any coverage required pursuant to COBRA).

6.Excise Tax Gross-Up Payment.

(a)Subject to Section 6(b) below, if in connection with a Change in Control Executive would be or is subject to an excise tax under Section 4999 of the Internal Revenue Code with respect to any cash, benefits or other property received, or any acceleration of vesting of any benefit or award (the “Change in Control Benefits”), Franklin shall pay Executive an amount (a “Gross-Up Payment”) equal to the sum of (i) the amount of such excise tax plus (ii) all taxes, interest and penalties, including, without limitation, any federal, state and local income taxes and any additional excise taxes, that become payable by Executive as a result of the receipt of the Gross-Up Payment or the assessment of any excise tax against Executive (the “Excise Tax”).  In determining the amount of any Gross-Up Payment, Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made, and state and local taxes at the highest marginal rates of taxation for such year in the state and locality of Executive’s residence. For such purposes, federal income taxes shall be determined net of the maximum reduction in such federal income taxes that could be obtained from the deduction of such state and local taxes.

(b)Notwithstanding Section 6(a), if the Change in Control Benefits, when calculated on a net-after-tax basis (using the assumptions set forth in the last sentence of Section 6(a)), are less than 110% of the amount that could be paid to Executive without imposition of the excise tax under Section 4999 of the Internal Revenue Code, the Change in Control Benefits payable under this Agreement shall be reduced to the largest amount payable without resulting in the imposition of such excise tax.

(c)Within 30 days after Executive’s termination of employment, a nationally recognized accounting firm selected by Franklin shall make a determination as to whether any Excise Tax should be reported and paid by Executive, and if applicable, the amount of such Excise Tax and the related Gross-Up Payment.  Within 30 days after such determination, Franklin shall pay the amount of such Gross-Up Payment to Executive, and Executive shall report and pay such Excise Tax.  Franklin shall be responsible for all fees and expenses connected with the determinations by the accounting firm pursuant to this Section 6.

(d)In the event that Executive is at any time required to pay any Excise Tax in addition to any amount determined pursuant to subsection (a), Franklin shall pay Executive a Gross-Up Payment determined with respect to such additional Excise Tax, within 30 days of such determination. In the event that Executive receives any refund of any Excise Tax with respect to which Executive has previously received a Gross-Up Payment hereunder, Executive shall promptly pay to Franklin the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto).

(e)Executive agrees to notify Franklin in the event of any audit or other proceeding by the IRS or any taxing authority in which the IRS or other taxing authority asserts that any Excise Tax should be assessed against Executive and to cooperate with Franklin in contesting any such proposed assessment with respect to such Excise Tax (a “Proposed Assessment”). Executive agrees not to settle any Proposed Assessment without the consent of Franklin.  If Franklin does not settle the Proposed Assessment, or does not consent to allow Executive to settle the Proposed Assessment, within 30 days following such demand therefor, Franklin shall indemnify and hold harmless Executive (i) with respect to any additional interest and/or penalties that Executive is required to pay by reason of the delay in finally resolving Executive’s tax liability and (ii) with respect to any taxes, interest and penalties that Executive is required to pay by reason of any indemnification payment under this subsection (e).

(f)Franklin shall pay Executive all Gross Up Payments at the times described herein, but in no event later than the end of the calendar year following the calendar year in which Executive made such remittance.

7.Indemnification.  Franklin shall indemnify, protect, defend and hold harmless Executive from and against all liabilities, costs and expenses (including but not limited to attorneys’ fees) incurred as a result of Executive’s employment with Franklin to the fullest extent permitted by the Indiana Business Corporation Law.

8.Litigation Expenses.  Franklin shall pay to Executive all out-of-pocket expenses, including attorneys’ fees, incurred by Executive in connection with any enforcement, claim or legal action or proceeding involving this Agreement, whether brought by Executive or by or on behalf of Franklin or by another party.  Franklin shall pay prejudgment interest on any money judgment obtained by Executive, calculated at the published prime interest rate charged by Franklin’s principal banking connection from the date that payment(s) to him should have been made under this Agreement.

9.Post-Termination Payment Obligations.  Subject to Section 4,Franklin's obligation to pay Executive the compensation and to make the other arrangements provided herein to be paid and made after termination of Executive's employment with Franklin shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right that Franklin may have against him or anyone else.  All amounts so payable by Franklin shall be paid without notice or demand.  Each and every such payment made by Franklin shall be final and Franklin will not seek to recover all or any part of such payment from Executive or from whomsoever may be entitled thereto, for any reason whatsoever.

10.Disclosure Of Confidential Information.  Without the consent of Franklin, Executive shall not at any time divulge, furnish or make accessible to anyone (other than in the regular course of business of Franklin) any knowledge or information with respect to confidential or secret processes, inventions, formulae, machinery, plan, devices or materials of Franklin or with respect to any confidential or secret engineering development or research work of Franklin or with respect to any other confidential or secret aspect of the business of Franklin.  Executive recognizes that irreparable injury will result to Franklin and its business and properties, in the event of any breach by Executive of any of the provisions of this Section 10.  In the event of any breach of any of the commitments of Executive pursuant to this Section 10, Franklin shall be entitled, in addition to any other remedies and damages available, to injunctive relief to restrain the violation of such commitments by Executive or by any person or persons acting for or with Executive in any capacity whatsoever.

11.Solicitation Of Employees.  During Executive’s employment with Franklin and for a period of 18 months after termination of employment, Executive shall not (a) directly or indirectly, employ or retain or solicit for employment or arrange to have any other person, firm or other entity employ or retain or solicit for employment or otherwise participate in the employment or retention of any person who is an employee of Franklin or (b) encourage or solicit any such employee to leave the service of Franklin.

12.Executive Assignment.  No interest of Executive or his spouse or any other beneficiary under this Agreement, or any right to receive any payment or distribution hereunder, shall be subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment, or other alienation or encumbrance of any kind, nor may such interest or right to receive a payment or distribution be taken, voluntarily or involuntarily, for the satisfaction of the obligations or debts of, or other claims against, Executive or his spouse or other beneficiary, by operation of law or otherwise, other than pursuant to the terms of a qualified domestic relations order to which Executive is a party.

13.Reimbursements or In-Kind Benefits.  Reimbursements or in-kind benefits provided under this Agreement that are subject to Section 409A of the Internal Revenue Code of 1986, as amended, are subject to the following restrictions:  (a) the amount of expenses eligible for reimbursements, or in-kind benefits provided, to Executive during a calendar year shall not affect the expenses eligible for reimbursement or the in-kind benefits provided in any other calendar year, and (b) reimbursement of an eligible expense shall be made as soon as practicable, but in no event later than the last day of the calendar year following the calendar year in which the expense was incurred.

14.Waiver, Modification.  No provisions of this Agreement may be waived, modified or discharged unless such waiver, modification or discharge is agreed to in a writing signed by Executive and Franklin.  No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same time or at any prior or subsequent time.

15.Applicable Law.  This Agreement shall be construed and interpreted pursuant to the laws of Indiana.

16.Entire Agreement.  This Agreement contains the entire Agreement between Franklin and Executive and supersedes any and all previous agreements, written or oral, between the parties relating to severance benefits, including any previous Employment Agreement between Executive and Franklin.  No amendment or modification of the terms of this Agreement shall be binding upon the parties hereto unless reduced to writing and signed by Franklin and Executive.

17.Severability. If any provision of this Agreement or the application thereof is held invalid, such invalidity shall not affect other provisions or applications of this Agreement that can be given effect without the invalid provision or application and, to such end, the provisions of this Agreement are declared to be severable.

18.No Employment Contract.  Nothing contained in this Agreement shall be construed to be an employment contract between Executive and Franklin. Executive is employed at will and Franklin may terminate his employment at any time, with or without cause.

19.Employment with an Affiliate. If Executive is employed by Franklin and an Affiliate, or solely by an Affiliate, on the date of termination of employment of Executive under circumstances described in Section 2, then (a) employment or termination of employment as used in this Agreement shall mean employment or termination of employment of Executive with Franklin and such Affiliate, or with such Affiliate, as applicable, and related references to Franklin shall also include Affiliate, as applicable, and (b) the obligations of Franklin hereunder shall be satisfied by Franklin and/or such Affiliate as Franklin, in its discretion, shall determine; provided that Franklin shall remain liable for such obligations to the extent not satisfied by such Affiliate.

20.Successors. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, representatives and successors.  Any reference in this Agreement to Franklin shall be deemed a reference to any successor (whether direct or indirect, by purchase of stock or assets, merger or consolidation or otherwise) to all or substantially all of the business and/or assets of Franklin; provided that Executive’s employment by a successor shall not be deemed a termination of Executive’s employment with Franklin.

21.Withholding.  Franklin may withhold from any payment that it is required to make under this Agreement amounts sufficient to satisfy applicable withholding requirements under any federal, state, or local law.

22.Headings.  The headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of any provision of this Agreement.

23.Notice. Notices given pursuant to this Agreement shall be in writing and shall be deemed given when received or, if mailed, two days after mailing by United States registered or certified mail, return receipt requested, postage prepaid and addressed as herein provided.  Notice to Franklin shall be addressed to Corporate Secretary, Franklin Electric Co., Inc. at 400 East Spring Street, Bluffton, Indiana 46714.  Notices to Executive shall be addressed to Executive at his last permanent address as shown on Franklin's records.  Notwithstanding the foregoing, if either party shall designate a different address by notice to the other party given in the foregoing manner, then notices to such party shall be addressed as designated until the designation is revoked by further notice given in such manner.

24.Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original.

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IN WITNESS WHEREOF, the parties have executed this Employment Security Agreement as of the day and year written above.

FRANKLIN ELECTRIC CO., INC.

By:                           

Its:           

EXECUTIVE

CH2\2186237.7

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EX-10.2

FRANKLIN ELECTRIC CO., INC.

DEFERRED COMPENSATION PLAN

Effective December 12, 2008

December 2008

INTRODUCTION

This Franklin Electric Co., Inc. ("Franklin") Deferred Compensation Plan (the "Plan") is hereby established, effective December 12, 2008, to allow eligible executive officers of Franklin and certain affiliates to defer receipt of portions of their base salary and bonus awards.  The Plan is unfunded and is maintained by Franklin primarily for the purpose of providing deferred compensation for a select group of management or highly-compensated employees.

ARTICLE 1.

DEFINITIONS

1.1.   "Account" shall mean the bookkeeping account maintained for each Participant to record his Salary Deferrals, and the amount of any Awards he has elected todefer under this Plan, asadjusted pursuant to Article 5.  

1.2.   "Administrator" shall mean Franklin.  The duties of the Administrator shall be performed by the Committee.

1.3.   "Affiliated Company" shall mean Franklin and any company or corporation directly or indirectly controlled by Franklin.

1.4.   "Award" shall mean the amount awarded to a Participant as a bonus under any bonus program adopted by Franklin from time to time.

1.5.   "Award Deferral Agreement" shall mean a Deferral Agreement filed in accordance with the award deferral program described in Article 3.

1.6.   "Board" shall mean the board of directors of Franklin.

1.7.   "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time.

1.8.   "Committee" shall mean the Board or a committee designated by the Board.

1.9.   "Compensation" shall mean the base compensation and Award payable to an Eligible Executive.

1.10.   "Deferral Agreement" shall mean either an Award Deferral Agreement or a Salary Deferral Agreement, or both if the context so requires.  A Deferral Agreement shall be a completed agreement between an Eligible Executive and a Participating Company of which he is an employee under which the Eligible Executive agrees to defer an Award or make Salary Deferrals under the Plan, as the case may be.  The Deferral Agreement shall be on a form prescribed by the Administrator and shall include any amendments, attachments or appendices.

1.11.   "Distribution Option(s)" shall mean, with respect to an Account under the Plan, the election by the Participant of the form of payment Distribution Option elections made on the initial Deferral Agreement.

1.12.   "Effective Date" shall mean December 12, 2008 or, with respect to the Eligible Executives of a company or corporation that adopts the Plan, the date such company or corporation becomes a Participating Company.

1.13.   "Eligible Executive" shall mean an executive officer of a Participating Company who is so notified of his eligibility in writing by the Administrator, at any time after the Administrator has designated any other executive officer or former executive officer of an Affiliated Company as an Eligible Executive; provided, however, that only those executive officers or former executive officers considered to be a select group of management or highly compensated may be designated as Eligible Executives under this Plan.  Any change to the eligibility must be pre-approved by the Management Organization and Compensation Committee of the Board.

1.14.   "Employment Termination" shall mean, with respect to a Participant, the termination of the Participant's employment for any reason by the Participating Company that had been employing the Participant and all other Affiliated Companies; provided, however, that no event shall constitute an "Employment Termination" under this Plan if it does not constitute a "separation from service" within the meaning of Code section 409A(a)(2)(A)(i).

1.15.   "Participant" shall mean, except as otherwise provided in Article 2, each Eligible Executive who has executed a Deferral Agreement as described in Section 2.1.

1.16.   "Participating Company" shall mean Franklin and any company or corporation directly or indirectly controlled by Franklin which the Board designates for participation in the Plan in accordance with Section 8.5(b).

1.17.   "Plan" shall mean the Franklin Electric Co., Inc. Deferred Compensation Plan, as amended from time to time.

1.18.   "Plan Year"  shall mean the Effective Date through December 31, 2008 and, thereafter, the calendar year.

1.19.   "Salary Deferrals" shall mean the amounts credited to a Participant's Account under Section 4.3.

1.20.   "Salary Deferral Agreement" shall mean a completed agreement between an Eligible Executive and a Participating Company of which he is an employee under which the Eligible Executive agrees to make Salary Deferrals under the Plan in accordance with the salary-deferral program described in Article 4.  The Salary Deferral Agreement shall be on a form prescribed by the Administrator and shall include any amendments, attachments or appendices.

1.21.   "Trust" shall mean the trust, if any, established to hold assets of the Plan and which substantially conforms to the terms of the Internal Revenue Service model trust as described in Revenue Procedure 92-64, 1992-2 C.B. 422.

1.22.   "Unforeseeable Emergency" shall mean a severe financial hardship as defined in Section 6.3 of this Plan.

1.23.   "Valuation Date" shall mean each business day on which the securities markets are open.

ARTICLE 2.

MEMBERSHIP AND DEFERRAL AGREEMENTS

2.1.   In General.

(a)   An Eligible Executive shallbecome a Participant as of the date he fileshis initial Deferral Agreement with the Administrator.  However, such Deferral Agreement shall be effective for purposes of deferring an Award or making Salary Deferrals only as provided in Articles 3 and 4.

(b)   A Deferral Agreement shall be in writing and properly completed on a form approved by the Administrator, which shall be the sole judge of the proper completion thereof.  Except as provided in Sections 3 or 4, such Agreement shall provide for the deferral of an Award or for Salary Deferrals, shall specify the Distribution Option applicable to the deferrals, and may include such other provisions as the Administrator deems appropriate.  A Deferral Agreement and Distribution Option elected shall not be revoked or modified with respect to the allocation of prior deferrals except pursuant to Section 2.2 or Article 6.

(c)   As a condition of membership the Administrator may require such other information as it deems appropriate.

2.2.   Modification of Deferral Agreement.

(a)   A Participant may elect to change, modify or revoke a Deferral Agreement as follow:

(i)   With respect to an Award attributable to a Participant's service for a calendar year, the Participant may change the amount he elects to defer by completing and filing an Award Deferral Agreement prior to June 30 of that calendar year, as provided in Article 3.

(ii)   A Participant may change the rate of his future Salary Deferrals, or suspend his Salary Deferrals prior to the beginning of a calendar year for that calendar year or on account of Unforeseeable Emergency.

2.3.   Employment Termination:  Re-employment.

(a)   A Participant's deferrals shall cease, subject to Section 2.4, upon a Participant's Employment Termination.

(b)   Upon re-employment as an Eligible Executive, a former Participant may become a Participant again as follows:

(i)   in the case of a former Participant who prior to re-employment received the balance in his Account, by executing a Deferral Agreement under Section 2.1 as though for all purposes of the Plan the Affiliated Companies had never employed the former Participant;

(ii)   in the case of a former Participant who prior to re-employment did not receive the balance in his Account, by executing a Deferral Agreement under Section 2.1; provided his Distribution Options and beneficiary designation with respect to the balance in his Account shall remain in effect.

2.4.   Change in Status.

(a)   In the event that a Participant ceases to be an Eligible Executive with respect to Salary Deferrals but continues to be employed by an Affiliated Company, his Salary Deferrals shall thereupon be suspended until such time as he shall once again become an Eligible Executive.  All other provisions of his Salary Deferral Agreement shall remain in force and he shall continue to be a Participant of the Plan.

(b)   In the event that a Participant ceases to be an Eligible Executive with respect to the deferral of Awards but continues to be employed by an Affiliated Company, he shall continue to be a Participant of the Plan but shall not be eligible to defer any portion of any future Awards until such time as he shall once again become an Eligible Executive.

ARTICLE 3.

AWARD DEFERRAL PROGRAM

3.1.   Filing Requirements.

(a)   (i)  With respect to an Award for services rendered for a Plan Year or a period of years (in the case of a long-term Award), an Eligible Executive may elect up to 90% of that Award.  Such election shall be made by filing an Award Deferral Agreement with the Administrator on or before the close of business on June 30 of that calendar year, or, in the case of a long-term Award, by June 30 of the initial year.  In the event that June 30 does not fall on a weekday, such filing must be made by the close of business on the last prior business day.

(ii)  Notwithstanding the foregoing, for the initial Plan Year, an Eligible Executive, pursuant to transition relief rules issued by the Internal Revenue Service, may elect to defer an Award, including a long-term Award, payable in 2009 by filing an Award Deferral Agreement within 20 days of the Effective Date (but in no event later than December 31, 2008.)

(b)   With respect to an Award identified in Section 1.6, an Eligible Executive's election to defer a portion of hisAward shall be effective on the last day that such deferral may be elected under Section 3.1(a) or 3.1(b) and shall be effective only for the Award in question.  An Eligible Executive may not revoke or change his election to defer all or a portion of his Award at any time after the date the election becomes effective, as described in the preceding sentence.

3.2.   Amount of Deferral.

(a)   The maximum Award deferred shall be 90% of any Award, and must be in 10% increments.

(b)   The minimum amount which an Eligible Executive may defer in any year shall be the lesser of $5,000 or the maximum amount determined under Section 3.2(a) above.  If an Eligible Executive elects to defer less than this amount, his election shall not be effective.

3.3.   Crediting to Account.  The amount of Award which an Eligible Executive has elected to defer for a calendar year shall be credited to his Account as of the Valuation Date coincident with or next following the date the Award would have been paid to the Eligible Executive.

ARTICLE 4.

SALARY DEFERRAL PROGRAM

4.1.   Filing Requirements.

(a)   Effective as of January 1, 2009, an individual who becomes an Eligible Executive on or after the Effective Date may file a Salary Deferral Agreement with the Administrator within thirty (30) days after he becomes an Eligible Executive, in such manner as the Administrator may prescribe.

(b)   An Eligible Executive who fails to file a Salary Deferral Agreement with the Administrator as provided in Section 4.1(b) may file a Salary Deferral Agreement during any December for deferrals of salary otherwise payable for services during in the following calendar year.

4.2.   Salary Deferral Agreement.  An Eligible Executive's Salary Deferral Agreement shall authorize a reduction in his base pay with respect to his Salary Deferrals under the Plan.  The Agreement shall be effective for payroll periods beginning on or after the later of (a) the Effective Date; or (b) the first day of the month following the date the Salary Deferral Agreement is filed with the Administrator in accordance with Section 4.1.  Paychecks applicable to those payroll periods shall be reduced accordingly.

4.3.   Amount of Salary Deferrals.  Effective as soon as practicable after each pay date following the effective date of an Eligible Executive's Salary Deferral Agreement, his Accounts shall be credited with an amount of Salary Deferral, if any, for each payroll period, as he elects in his Salary Deferral Agreement. The maximum percentage deferral is 50%, and must be made in 10% increments.

4.4.   Changing Salary Deferrals.

(a)   An Eligible Executive's election on his Salary Deferral Agreement of the rate at which he authorizes Salary Deferrals under the Plan shall remain in effect in subsequent calendar years unless he files with the Administrator an amendment to his Salary Deferral Agreement modifying or revoking such election.  The amendment shall be filed by December 31 and shall be effective for payroll periods beginning on or after the following January 1.

(b)   Notwithstanding Section 4.4(a), an Eligible Executive may, in the event of an Unforeseeable Emergency, request a suspension of his Salary Deferrals under the Plan.  The request shall be made in a time and manner determined by the Administrator, and shall be effective as of such date as the Administrator prescribes.  The Eligible Executive may apply to the Administrator to resume his Salary Deferrals with respect to payroll periods beginning on or after the January 1 following the date the Unforeseeable Emergency no longer exists.

ARTICLE 5.

MAINTENANCE OF ACCOUNTS

5.1.   Accounts Generally.

The Administrator shall credit Deferrals to an Account, which shall be a record keeper entry, adjusted for earnings or losses, pursuant to Section 5.2.

5.2.   Adjustment of Account for Earnings/Losses.

(a)   As of each Valuation Date, a Participant's Account shall be credited or debited with the amount of earnings or losses with which such Account would have been credited or debited, assuming it had been invested in one or more investment funds, or earned the rate of return of one or more indices of investment performance based on those funds actually used for the Franklin 401(k) Plan and set forth in Schedule 5.2, as amended from time to time, and elected by the Participant or former Participant, for purposes of measuring the investment performance of his Account.

(b)   The designation of any such investment funds or indices shall not require the Affiliated Companies to invest or earmark their general assets in any specific manner.

5.3.   Investment Performance Elections.  Each Participant and, if applicable, former Participant, shall file an initial investment election with the Administrator with respect to the investment of his Account within such time period and on such written form or identity-secured internet or telephonic means as the Administrator may prescribe.  The election shall designate the investment fund or funds or index or indices of investment performance which shall be used to measure the investment performance of the Participant's Account.

5.4.   Changing Investment Elections.  As of any Valuation Date, a Participant may change his election in Section 5.3 with respect to his future Award and Salary Deferrals or may reallocate the current balance of his Account, thereby changing the investment fund or funds or index or indices of investment performance used to measure the future investment performance of his existing Account balance, by filing an appropriate written form or through identity-secured internet or telephonic means as approved by the Administrator from time to time.

5.5.   Vesting of Account.  Each Participant shall be fully vested in his Account.

5.6.   Individual Account Records.  The Administrator shall maintain, or cause to be maintained, records showing the individual balances of his Account.  At least once a year, each Participant and, if applicable, former Participant shall be furnished with a statement setting forth she value of his Account.

ARTICLE 6.

PAYMENT OF BENEFITS

6.1.   Commencement of Payment.

(a)   Except as provided in Section 6.3, the distribution of the Participant's or former Participant's Account shall commence, pursuant to Section 6.2, on or after the occurrence of the Participant's Employment Termination.

(b)   At any time that Franklin or a Participating Company is publicly traded on an established securities market or otherwise, any Participant employed by that Participating Company who is a "key employee" within the meaning of Code section 416(i) (without regard to paragraph (5) of that subsection) shall not receive a distribution on account of Employment Termination before six months after the date of the Participant's Employment Termination.

6.2.   Method of Payment.  Each of a Participant's or former Participant's Account shall be distributed to him, or in the event of his death to his Beneficiary, in a cash single sum payment as soon as administratively practicable following the 1st of the month following the date the Participant the distributable event.  Notwithstanding the foregoing, a Participant may make a Distribution Option election to receive distribution of his Account in semi-annual installments over a period not to exceed ten (10) years.  Installments shall be determined as of each June 30 and December 31 and shall be paid as soon as administratively practicable thereafter.  Installments shall commence as of the July 1 or January 1 coincident with or next following the date the Participant incurs the distributable event elected as a Distribution Option under Section 6.1, or as soon as administratively practicable thereafter.  The amount of each installment shall equal the balance in the Account as of the Valuation Date of determination, divided by the number of remaining installments (including the installment being determined).  The Distribution Option election shall be irrevocable.

6.3.   Hardship Withdrawal.

(a)   While employed by the Participating Companies, a Participant or former Participant may, in the event of an Unforeseeable Emergency, as defined below, request a withdrawal from his Account.  The request shall be made in a time and manner determined by the Administrator, shall not be for a greater amount than the amount reasonably needed to satisfy the emergency need, plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, and shall be subject to approval by the Administrator.

(b)   Unforeseeable Emergency shall be determined by the Administrator in its sole discretion, and shall mean severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant, the Participant's spouse, or of a dependent (as defined in Section 152(a) of the Code), loss of the Participant's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.  The circumstances that will constitute an Unforeseeable Emergency will depend upon the facts of each case, but, in any case, payment may not be made to the extent that such hardship is or may be relieved:

(i)   Through reimbursement or compensation by insurance or otherwise; or

(ii)   By liquidation of the Participants assets, to the extent the liquidation of such assets would not itself cause severe financial hardship.

Examples of what are not considered to be Unforeseeable Emergencies include the need to send a Participant's child to college or the desire to purchase a home.

6.4.   Designation of Beneficiary.  A Participant or former Participant may, in a time and manner determined by the Administrator, designate a beneficiary and one or more contingent beneficiaries (which may include the Participant's or former Participant's estate) to receive any benefits which may be payable under this Plan upon his death.  If the Participant or former Participant fails to designate a beneficiary or contingent beneficiary, or if the beneficiary and the contingent beneficiaries fail to survive the Participant or former Participant, such benefits shall be paid to the Participant's or former Participant's estate.  A Participant or former Participant may revoke or change any designation made under this Section 6.4 in a time and manner determined by the Administrator.

6.5.   Status of Account Pending Distribution.  Pending distribution, a former Participant's Account shall continue to be credited with earnings and losses as provided in Section 5.2.  The former Participant shall be entitled to change his investment elections under Section 5.3 or apply for hardship withdrawals under Section 6.3 to the same extent as if he were a Participant of the Plan.

6.6.   Installments and Withdrawals Pro-Rata.  In the event of an installment payment or hardship withdrawal, such payment or withdrawal shall be made on a pro-rata basis from the portions of the Participant's or former Participant's existing Account balance which are subject to different measures of investment performance.

ARTICLE 7.

AMENDMENT OR TERMINATION

7.1.   Right to Terminate.  The Board may, in its sole discretion, terminate this Plan and the related Deferral Agreements at any time.  To the extent consistent with Section 8.7, each Participant, former Participant and beneficiary shall, in that event, receive a single sum payment equal to the balance in his Account.  In that event, the single sum payment shall be made as soon as practicable following the date the Plan is terminated and shall be in lieu of any other benefit which may be payable to the Participant, former Participant or beneficiary under this Plan.  To the extent such single sum payments would violate Section 8.7; those benefits shall be paid according the Deferral Agreements in effect immediately before the Plan termination.

7.2.   Right to Amend.  The Board may, in its sole discretion, amend this Plan and the related Deferral Agreements on thirty (30) days' prior notice to the Participants and, where applicable, former Participants.  If any amendment to this Plan or to the Deferral Agreements shall adversely affect the rights of a Participant or former Participant, such individual must consent in writing to such amendment prior to its effective date.  Notwithstanding the foregoing, the change in any investment funds or investment index under Section 5.1 or the restriction of future deferrals under the salary deferral program or award deferral program shall not be deemed to adversely affect any Participant's or former Participant's rights.

7.3.   Uniform Action.  Notwithstanding anything in the Plan to the contrary, any action to amend or terminate the Plan or the Deferral Agreements must be taken in a uniform and nondiscriminatory manner.

ARTICLE 8.

GENERAL PROVISIONS

8.1.   No Funding.  Nothing contained in this Plan or in a Deferral Agreement shall cause this Plan to be a funded retirement plan.  Neither a Participant, former Participant, his beneficiary, contingent beneficiaries, heirs or personal representatives shall have any right, title or interest in or to any funds of the trust or the Affiliated Companies on account of this Plan or on account of having completed a Deferral Agreement.  The assets held in any trust shall be subject to the claims of creditors of Franklin.  Each Participant or former Participant shall have the status of a general unsecured creditor of the Affiliated Companies and this Plan constitutes a mere promise by the Affiliated Companies to make benefit payments in the future.

8.2.   No Contract of Employment.  The existence of this Plan or of a Deferral Agreement does not constitute a contract for continued employment between an Eligible Executive or a Participant and an Affiliated Company. The Affiliated Companies reserve the right to modify Eligible Executive's or Participant's remuneration and to terminate an Eligible Executive or a Participant for any reason and at any time, notwithstanding the existence of this Plan or of a Deferral Agreement.

8.3.   Withholding Taxes.  All payments under this Plan and all amounts credited to Accounts hereunder shall be net (unless withholdings are, with the Administrator's consent, netted from other income) of an amount sufficient to satisfy any federal, state or local income and employment tax withholding requirements.

8.4.   Non-alienation.  The right to receive any benefit under this Plan may not be transferred, assigned, pledged or encumbered by a Participant, former Participant, beneficiary or contingent beneficiary in any manner and any attempt to do so shall be void.  No such benefit shall be subject to garnishment, attachment or other legal or equitable process without the prior written consent of the Affiliated Companies.

8.5.   Administration.

(a)   This Plan shall be administered by the Committee.  Certain administrative functions, as set forth in the Plan, shall be the responsibility of the Administrator.  The Committee shall interpret the Plan with discretionary authority, establish regulations to further the purposes of the Plan and take any other action necessary to the proper operation of the Plan in accordance with guidelines established by the Committee or, if there are no such guidelines, consistent with furthering the purpose of the Plan.

(b)   The Board, in its sole discretion and upon such terms as it may prescribe, may permit any company or corporation directly or indirectly controlled by Franklin to participate in the Plan.

(c)   Prior to paying any benefit under this Plan, the Administrator or the Committee may require the Participant, former Participant, beneficiary or contingent beneficiary to provide such information or material as they, in their sole discretion, shall deem necessary for it to make any determination it may be required to make under this Plan.  The Committee or Administrator may withhold payment of any benefit under this Plan until it receives all such information and material and is reasonably satisfied of its correctness and genuineness.

(d)   Subject to applicable law, any interpretation of the provisions of the Plan and any decision on any matter within the discretion of the Committee made by the Committee in good faith shall be binding on all persons.  A misstatement or other mistake of fact shall be corrected when it becomes known and the Committee shall make such adjustment on account thereof as the Committee considers equitable and practicable.

(e)   If a claim for benefits made by a Participant or his beneficiary is denied, the Administrator shall within ninety (90) days (or one hundred eighty (180) days if special circumstances require an extension of time) after the claim is made furnish the person making the claim with a written notice specifying the reasons for the denial.  Such notice shall also refer to the pertinent Plan provisions on which the denial is based, describe any additional material or information necessary for properly completing the claim and explain why such material or information is necessary, and explain the Plan's claim review procedures.  If requested in writing, the Committee shall afford each claimant whose claim has been denied a full and fair review of the Administrator's decision and, within sixty (60) days (one hundred twenty (120) days if special circumstances require additional time) of the request for reconsideration of the denied claim, the Committee shall notify the claimant in writing of the Committee's final decision.

8.6.   Construction.

(a)   The Plan is intended to constitute an unfunded deferred compensation arrangement for a select group of management or highly compensated employees and a rights hereunder shall, to the extent not preempted by federal law, be governed by and construed in accordance with the laws of the State of Indiana without giving effect to applicable principles of conflicts of law to the extent that the application of the law of another jurisdiction would be required thereby.

(b)   The masculine pronoun shall mean the feminine wherever appropriate.

(c)   The captions in this Plan document are inserted as a matter of convenience and shall not affect the construction of the Plan.

8.7.   Code Section 409A Standards.  This Plan, and all Deferral Agreements pursuant to this Plan, shall be affected, interpreted, and applied in a manner consistent with the standards for nonqualified deferred compensation plans established by Code section 409A and its interpretive regulations (the "Section 409A Standards"). To the extent that any terms of the Plan or a Deferral Agreement would subject any Participant to gross income inclusion, interest, or additional tax pursuant to Code section 409A, those terms are to that extent superseded by the applicable Section 409A Standards.

This Plan adopted by Franklin as of the Effective Date, and signed by an authorized officer hereof as of its ratification by the Board on December 12, 2008.

By:                                                              

Title:                                                                

December 2008                                                                - --

SCHEDULE 5.2

FRANKLIN ELECTRIC CO., INC.

DEFERRED COMPENSATION PLAN

Pursuant to Section 5.2 of the Plan, the investment benchmarks offered, as of December 12, 2008, are:

1.           Wells Fargo Stable Return Fund

2.           American Beacon Large Cap Value Fund

3.           American Century Small Company Fund

Dated this 12th day of December 2008.

BDDB01 5473903v1

December 2008                                                                - --