FRANKLIN ELECTRIC CO INC

15. SUBSEQUENT EVENT

In July 2025, the Company began the process of terminating the Franklin Electric Co,, Inc. Pension Plan by making lump sum payments of $59.9 million directly to eligible participants who elected that payment option. Additionally, the Company purchased a single premium group annuity contract from an independent insurance company, in which $30 million in future pension obligations were transferred to the insurance company to pay the outstanding accrued benefits to participants and beneficiaries of the plan.The annuity contract and lump sum payments do not exceed the assets of the plan, there will be no cash or asset contributions made by the Company. Management estimates that the Company will recognize a one-time non-cash pre-tax pension settlement charge of approximately $60 million in the fiscal third quarter of 2025 related to actuarial losses previously recorded in Accumulated Other Comprehensive Loss. The actual charge will depend on finalization of the actuarial and other assumptions. As a result of the plan’s over-funded status, remaining surplus plan assets are expected to be utilized to fund certain employer contributions associated with one of the Company's qualified 401(k) plans.