SHARE-BASED COMPENSATION

3 Months Ended

Apr. 04, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

The Company maintains the Franklin Electric Co., Inc. 2012 Stock Plan (the "2012 Stock Plan"), which is a stock-based compensation plan that provides for discretionary grants of stock options, stock awards, and stock unit awards to key employees and non-employee directors.

The 2012 Stock Plan authorizes 2,400,000 shares for issuance as follows:

2012 Stock Plan	Authorized Shares
Stock Options	1,680,000
Stock/Stock Unit Awards	720,000

The Company also maintains the Amended and Restated Franklin Electric Co., Inc. Stock Plan (the "2009 Stock Plan") which, as amended in 2009, provided for discretionary grants of stock options and stock awards. The 2009 Stock Plan authorized 4,400,000 shares for issuance as follows:

2009 Stock Plan	Authorized Shares
Stock Options	3,200,000
Stock Awards	1,200,000

All options in the 2009 Stock Plan have been awarded.

The Company currently issues new shares from its common stock balance to satisfy option exercises and the settlement of stock awards and stock unit awards made under the 2009 Stock Plan and/or the 2012 Stock Plan.

Stock Options:

The fair value of each option award 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 first quarters ended April 4, 2015 and March 29, 2014, are as follows:

	April 4, 2015		March 29, 2014
Risk-free interest rate	1.59	%	1.68	%
Dividend yield	0.95	%	0.70	%
Volatility factor	0.379		0.387
Expected term	5.5 years		5.6 years
Forfeiture rate	3.67	%	3.81	%

There were 184,706 and 92,946 stock options granted during the first quarters ended April 4, 2015 and March 29, 2014.

A summary of the Company’s outstanding stock option activity and related information for the first quarters ended April 4, 2015 and March 29, 2014, is as follows:

(Shares in thousands)	April 4, 2015				March 29, 2014
Stock Options	Shares		Weighted-Average Exercise Price		Shares		Weighted-Average Exercise Price
Outstanding at beginning of period	1,397		$	21.17	1,476		$	19.01
Granted	185		36.67		93		43.27
Exercised	(46	)	19.36		(34	)	18.57
Forfeited	—		—		(2	)	26.95
Outstanding at end of period	1,536		$	23.09	1,533		$	20.48
Expected to vest after applying forfeiture rate	1,511		$	22.86	1,511		$	20.31
Vested and exercisable at end of period	1,124		$	18.75	1,070		$	16.34

A summary of the weighted-average remaining contractual term and aggregate intrinsic value for the first quarter ended April 4, 2015 is as follows:

	Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value (000's)
Outstanding at end of period	5.87 years	$	23,421
Expected to vest after applying forfeiture rate	5.82 years	$	23,365
Vested and exercisable at end of period	4.77 years	$	21,781

The total intrinsic value of options exercised was $0.8 million during the first quarters ended April 4, 2015 and March 29, 2014.

As of April 4, 2015, there was $2.5 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements related to stock options granted under the 2012 Stock Plan and the 2009 Stock Plan. That cost is expected to be recognized over a weighted-average period of 3.03 years.

Stock/Stock Unit Awards:

A summary of the Company’s restricted stock/stock unit award activity and related information for the first quarters ended April 4, 2015 and March 29, 2014, is as follows:

(Shares in thousands)	April 4, 2015				March 29, 2014
Stock/Stock Unit Awards	Shares		Weighted-Average Grant- Date Fair Value		Shares		Weighted-Average Grant- Date Fair Value
Non-vested at beginning of period	554		$	32.72	551		$	24.75
Awarded	120		36.67		172		43.37
Vested	(74	)	25.01		(110	)	15.75
Forfeited	—		—		(56	)	27.81
Non-vested at end of period	600		$	34.47	557		$	31.96

As of April 4, 2015, there was $11.7 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements related to stock/stock unit awards granted under the 2012 Stock Plan and the 2009 Stock Plan.  That cost is expected to be recognized over a weighted-average period of 2.70 years.