XML 16 R23.htm IDEA: XBRL DOCUMENT v2.3.0.15
SHARE-BASED COMPENSATION
9 Months Ended
Oct. 01, 2011
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] 
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION
On April 24, 2009, the Amended and Restated Franklin Electric Co., Inc. Stock Plan (the “Stock Plan”) was approved by the Company’s shareholders.  Under the Stock Plan, employees and non-employee directors may be granted stock options or awards. The Stock Plan was amended and restated to, among other things, increase the number of shares available for issuance from 1,300,000 to 2,200,000 shares as follows:

 
Authorized Shares
Options
1,600,000
Awards
600,000


The Company currently issues new shares from its common stock balance to satisfy option exercises under the Stock Plan and a similar prior plan and stock awards under the Stock Plan.

Stock Option Grants
The fair value of each option award for options granted or vesting is estimated on the date of grant using the Black-Scholes option valuation model with a single approach and amortized using a straight-line attribution method over the option’s vesting period.

The assumptions used for the Black-Scholes model to determine the fair value of options granted during the nine months ended October 1, 2011 and October 2, 2010, are as follows:

 
 
October 1, 2011

 
October 2, 2010

Risk-free interest rate
 
0.05 - 4.84%

 
1.61 - 3.20%

Dividend yield
 
0.65 - 1.23%

 
0.65 – 1.72%

Weighted-average dividend yield
 
1.07
%
 
0.95
%
Volatility factor
 
0.355 - 0.434

 
0.355 – 0.398

Weighted-average volatility
 
0.432

 
0.396

Expected term
 
1.5 years

 
6.3 years

Forfeiture rate
 
3.59
%
 
2.70
%


A summary of the Company’s stock option plans activity and related information for the nine months ended October 1, 2011 and October 2, 2010, is as follows:

(Shares in thousands)
 
October 1, 2011
 
October 2, 2010
 
Stock Options
 
Shares
 
Weighted-Average
Exercise Price
 
Shares
 
Weighted-Average
Exercise Price
Outstanding beginning of period
 
1,817

 
$
27.95

 
1,979

 
$
26.80

Granted
 
113

 
43.43

 
157

 
29.03

Exercised
 
(160
)
 
24.49

 
(149
)
 
17.28

Forfeited
 
(14
)
 
39.27

 
(41
)
 
36.05

Outstanding end of period
 
1,756

 
$
29.17

 
1,946

 
$
27.49

Expected to vest after applying forfeiture rate
 
1,736

 
$
29.19

 
1,919

 
$
27.57

Vested and exercisable end of period
 
1,207

 
$
30.38

 
1,194

 
$
30.09



A summary of the weighted average remaining contractual term and aggregate intrinsic value for the nine months ended October 1, 2011 is as follows:

 
 
Stock Options
 
Weighted-Average
Remaining
Contractual Term
 
Aggregate
Intrinsic Value
(000’s)
Outstanding end of period
 
5.38 years
 
$
16,203

Expected to vest after applying forfeiture rate
 
5.35 years
 
$
15,998

Vested and exercisable end of period
 
4.24 years
 
$
10,022



There were no options granted during the third quarter 2011. The total intrinsic value of options exercised during the third quarter October 1, 2011 and October 2, 2010 was $0.8 million and $0.1 million, respectively.  There were no share-based liabilities paid during the third quarter 2011.

As of October 1, 2011, there was $2.7 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Stock Plan in the form of stock options. That cost is expected to be recognized over a weighted-average period of 1.67 years.

Stock Awards
A summary of the Company’s stock award activity and related information for the nine months ended October 1, 2011 and October 2, 2010, is as follows:

(Shares in thousands)
 
October 1, 2011
 
October 2, 2010
 
 
Nonvested Stock Awards
 
Shares
 
Weighted-Average Grant
 Date Fair Value
 
 
 
Shares
 
Weighted-Average Grant
 Date Fair Value
Nonvested at beginning of period
 
128

 
$
31.86

 
72

 
$
40.12

Awarded
 
68

 
43.40

 
101

 
29.89

Vested
 
(3
)
 
39.12

 
(41
)
 
41.31

Forfeited
 
(20
)
 
47.41

 
—

 
48.87

Nonvested at end of period
 
173

 
$
34.44

 
132

 
$
32.13



There were no stock awards granted during the third quarter of 2011. As of October 1, 2011, there was $3.7 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Stock Plan in the form of stock awards. That cost is expected to be recognized over a weighted-average period of 2.48 years.