As filed with the Securities and Exchange Commission on October 3, 1995
Registration No. 33- _____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________
FRANKLIN ELECTRONIC PUBLISHERS, INCORPORATED
(Exact name of registrant as specified in its charter)
Pennsylvania 22-2476703
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification Number)
One Franklin Plaza
Burlington, New Jersey 08016
(Address of principal executive offices)
___________________
Franklin Electronic Publishers, Incorporated
1988 Amended and Restated Stock Option Plan
(Full title of the plan)
___________________
Gregory J. Winsky, Esq. Copy to:
Senior Vice President Edward H. Cohen,Esq.
One Franklin Plaza Rosenman & Colin
Burlington, New Jersey 08016 575 Madison Avenue
(609) 386-2500 New York, New York 10022
(Name, address and telephone (212) 940-8580
number of agent for service)
___________________
CALCULATION OF REGISTRATION FEE
Title of Proposed maximum Proposed maximum Amount of
securities to Amount to be offering price aggregate offering registration
be registered registered per share* price* fee
Common Stock,
no par value 500,000 $35.4375 $17,718,750 $6,110
* Estimated solely for the purpose of calculating the registration fee;
computed, pursuant to Rule 457(c), upon the basis of the average of the high
and low prices of the Common Stock on the New York Stock Exchange on
September 27, 1995.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Franklin Electronic Publishers, Incorporated (the "Company")
is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance
therewith, files reports and other information with the
Securities and Exchange Commission (the "Commission"). The
following documents, or portions thereof, filed by the Company
with the Commission pursuant to the Exchange Act are incorporated
in this Registration Statement by reference:
a. The Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 1995 (File No. 0-14841).
b. The Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended June 30, 1995 (File No. 0-14841).
c. The information in respect of the Company's common
stock, no par value, under the caption "Description of
Capital Stock" contained in the Company's Registration
Statement on Form 8-A, filed on June 24, 1994 (Registration
Number 1-13198).
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment hereto indicating that
all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be
incorporated by reference into this Registration Statement and to
be a part of this Registration Statement from the respective
dates of filings of such documents.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 9-04(a) of the By-Laws provides that a director of
the Company shall not be personally liable for monetary damages
for any action taken or any failure to take any action, unless
(i) the director has breached or failed to perform the duties of
his office as set forth in Section 512 of the Pennsylvania
Business Corporation Law (the "Pennsylvania BCL") (relating to
standard of care and justifiable reliance, as described below)
and (ii) the breach or failure to perform constitutes self-
dealing, willful misconduct or recklessness. The Section does
not apply to the responsibility or liability of a director
pursuant to any criminal statute or to the liability of a
director for the payment of taxes pursuant to local, state or
federal law. The Section does not limit the liability of
directors for violations of the federal securities laws in their
capacities as directors and officers of the Company.
<PAGE>
Section 512 of the Pennsylvania BCL sets forth the standard
of care for directors. As fiduciaries with respect to the
corporation they serve, directors are obligated to perform their
duties in good faith, in a manner they reasonably believe to be
in the best interests of the corporation, and with such care,
including reasonable inquiry, skill and diligence, as a person of
ordinary prudence would use under similar circumstances. Section
512 also entitles a director to rely in good faith on
information, opinions, reports or statements, including financial
statements and other financial data, prepared or presented by
officers or employees of the corporation, attorneys, public
accountants, other experts or committees of the board upon which
the director does not serve, provided that the director
reasonably believes that such persons or committees are competent
with respect to the matter in question and the director has no
actual knowledge that would cause such reliance to be
unwarranted. Directors may, in considering the best interests of
the corporation, consider the effects of any action upon the
corporation's employees, suppliers and customers, and upon the
communities in which the corporation has offices or other
establishments, as well as all other pertinent factors. While
Section 9-04(a) of the By-Laws provides directors with protection
from awards of monetary damages for breaches of their duties,
including grossly negligent business decisions, it does not
eliminate their duty and standard of care. Accordingly,
equitable remedies for such breaches, including injunctions, are
available.
Sections 1741 and 1742 of the Pennsylvania BCL permit
Pennsylvania corporations to grant indemnification rights to
their directors, officers and other persons. The following
provisions of Section 9-04 of the By-Laws are based upon the
indemnification provisions of these Pennsylvania statutes.
Section 9-04(b) provides that each director or officer of
the Company who was or is a party to, or is threatened to be made
a party to, or is otherwise involved in, any threatened, pending
or completed action, suit or proceeding, including, without
limitation, an action by or in the right of the Company (a
shareholder's derivative action), by reason of being or having
been a director or officer of the Company (or serving at the
request of or for the benefit of the Company in any other
capacity, including as a director, officer, employee, agent,
partner or fiduciary for another entity), shall be indemnified by
the Company to the fullest extent permitted by Pennsylvania law,
against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement incurred by such person in
connection therewith. The Company shall not, however, indemnify
any person for actions determined by a court to have constituted
willful misconduct or recklessness.
<PAGE>
Section 9-04(c) obligates the Company to advance to
directors and officers the expenses incurred by them in defending
any of the proceedings specified above in advance of the final
disposition of such proceedings, provided that, so long as
Pennsylvania law continues so to require, such payment shall only
be made upon delivery to the Company by the indemnified party of
an undertaking to repay all amounts so advanced if it shall
ultimately be determined by a court that the person receiving
such payments is not entitled to be indemnified.
Section 9-04(d) provides that the rights to indemnification
and to the advancement of expenses conferred in the By-Laws shall
be contractual rights and shall not be exclusive of any other
right that any person may have or acquire under the Company's
Articles of Incorporation or By-Laws or any statute, agreement or
otherwise.
Section 9-04(f) provides that the Company may procure and
maintain insurance, or create a fund, to secure or insure its
indemnification obligations whether arising under the By-Laws or
otherwise. The Company has not obtained such insurance.
ITEM 8. EXHIBITS
Exhibit No. Description
*4(a) - Franklin Electronic Publishers, Incorporated 1988
Stock Option Plan, as amended and restated.
4(b) - Certificate of Incorporation (incorporated by
reference to Exhibit 3.01 to the Company's
Registration Statement on Form S-1, Registration
No. 33-6621 (the "Company's 1986 Registration
Statement")).
4(c) - Articles of Amendment to the Certificate of
Incorporation (incorporated by reference to
Exhibit 3.02 to the Company's Annual Report on
Form 10-K for the year ended March 31, 1990 (the
"Company's 1990 10-K")).
4(d) - By-Laws of the Company (incorporated by reference
to Exhibit 3.03 to the Company's 1986 Registration
Statement).
4(e) - Amendment to the By-Laws of the Company
(incorporated by reference to Exhibit A to the
Company's Proxy Statement relating to the 1987
Annual Meeting of Shareholders).
4(f) - Amendment to the By-Laws of the Company
(incorporated by reference to Exhibit 3.05 to the
<PAGE>
Company's 1990 10-K).
4(g) - Amendment to the By-Laws of the Company
(incorporated by reference to Exhibit 3.06 to the
Company's Annual Report on Form 10-K for the year
ended March 31, 1991).
4(h) - Specimen of common stock certificate of the
Company (incorporated by reference to Exhibit 4(h)
to the Company's Registration Statement on Form S-
8 (Registration No. 33-71112).
*5 - Opinion of Gregory J. Winsky, Esq.
23(a) - Consent of Feldman Radin & Co., P.C. (included on
page II-8).
23(b) - Consent of Gregory J. Winsky, Esq. (included in
Exhibit 5).
___________________________
* Filed herewith
<PAGE>
ITEM 9. UNDERTAKINGS
1. The Registrant hereby undertakes: (a) to file, during
any period in which offers or sales are being made, a post-
effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution of
the securities being registered hereby not previously disclosed
in this Registration Statement or any material change to such
information in this Registration Statement; (b) that, for the
purpose of determining any liability under the Securities Act of
1933 (the "Act"), each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof; and (c) to remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
2. The Registrant hereby undertakes that, for purposes of
determining liability under the Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of
the Exchange Act that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under
the Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that, in the
opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Burlington, State of New Jersey, on this 3rd day of
October, 1995.
FRANKLIN ELECTRONIC PUBLISHERS,
INCORPORATED
By MORTON E. DAVID
Morton E. David
Chairman, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
Signature Title Date
MORTON E. DAVID Chairman, President, October 3, 1995
Morton E. David Chief Executive Officer,
and Director
EDWARD H. COHEN Director October 3, 1995
Edward H. Cohen
Director
Bernard Goldstein
LEONARD M. LODISH Director October 3, 1995
Leonard M. Lodish
HOWARD L. MORGAN Director October 3, 1995
Howard L. Morgan
JERRY R. SCHUBEL Director October 3, 1995
Jerry R. Schubel
JAMES H. SIMONS Director October 3, 1995
James H. Simons
<PAGE>
RICHARD E. SNYDER Director October 3, 1995
Richard E. Snyder
MICHAEL R. STRANGE Director October 3, 1995
Michael R. Strange
WILLIAM H. TURNER Director October 3, 1995
William H. Turner
KENNETH H. LIND Vice President, Finance October 3, 1995
Kenneth H. Lind (principal financial
and accounting officer)
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated May 12,
1995, relating to the financial statements of Franklin Electronic
Publishers, Incorporated and its subsidiaries (File No. 0-14841)
in its Annual Report on Form 10-K for the fiscal year ended March
31, 1995.
FELDMAN RADIN & CO., P.C.
Certified Public Accountants
New York, New York
September 28, 1995
<PAGE>
EXHIBIT INDEX
Document
*4(a) - Franklin Electronic Publishers, Incorporated
1988 Stock Option Plan, as amended and
restated.
4(b) - Certificate of Incorporation (incorporated by
reference to Exhibit 3.01 to the Company's
Registration Statement on Form S-1,
Registration Number 33-6621 (the "Company's
1986 Registration Statement")).
4(c) - Articles of Amendment to the Certificate of
Incorporation (incorporated by reference to
Exhibit 3.02 to the Company's Annual Report
on Form 10-K for the year ended March 31,
1990 (the "Company's 1990 10-K")).
4(d) - By-Laws of the Company (incorporated by
reference to Exhibit 3.03 to the Company's
1986 Registration Statement).
4(e) - Amendment to the By-Laws of the Company
(incorporated by reference to Exhibit A to
the Company's Proxy Statement relating to the
1987 Annual Meeting of Shareholders).
4(f) - Amendment to the By-Laws of the Company
(incorporated by reference to Exhibit 3.05 to
the Company's 1990 10-K).
4(g) - Amendment to the By-Laws of the Company
(incorporated by reference to Exhibit 3.06 to
the Company's Annual Report on Form 10-K for
the year ended March 31, 1991).
4(h) - Specimen of common stock certificate of the
Company (incorporated by reference to Exhibit
4(h) to the Company's Registration Statement
on Form S-8 (Registration No. 33-71112).
*5 - Opinion of Gregory J. Winsky, Esq.
23(a) - Consent of Feldman Radin & Co., P.C.
(included on page II-8).
23(b) - Consent of Gregory J. Winsky, Esq. (included
in Exhibit 5).
___________________________
* Filed herewith
<PAGE>
FRANKLIN ELECTRONIC PUBLISHERS, INC.
STOCK OPTION PLAN
(As Amended and Restated Effective as of July 27, 1995)
1. Purpose.
The purpose of this Stock Option Plan (the "Plan") is to
induce key personnel, including employees, officers, directors
and independent contractors, to remain in the employ or service
of Franklin Electronic Publishers, Inc. (the "Company") and its
present and future subsidiary corporations ("Subsidiaries"), to
attract new key personnel and to encourage such key personnel to
secure or increase on reasonable terms their stock ownership in
the Company. The Board of Directors of the Company (the "Board")
believes that the granting of stock options ("Options") under the
Plan will promote continuity of management and increased
incentive and personal interest in the welfare of the Company and
aid in securing its continued growth and financial success by
those who are or may become primarily responsible for shaping and
carrying out the long range plans of the Company. Options
granted hereunder are intended to be either (a) "incentive stock
options" (which term, when used herein, shall have the meaning
ascribed thereto by the provisions of Section 422(b) of the
Internal Revenue Code of 1986, as amended (the "Code"), or (b)
options which are not "incentive stock options" ("non-incentive
stock options") or (c) a combination thereof, as determined by
the Committee (the "Committee") referred to in Section 4 hereof
at the time of the grant thereof.
2. Effective Date of the Plan.
The Plan, as amended and restated by resolution of the Board
on July 12, 1995, shall become effective on July 12, 1995,
subject to ratification by the stockholders at the 1995 Annual
Meeting of the Stockholders of the Company.
<PAGE>
3. Stock Subject to Plan.
2,250,000 of the authorized but unissued shares of the
common stock, no par value, of the Company (the "Common Stock")
are hereby reserved for issue upon the exercise of Options;
provided, however, that the number of shares so reserved may from
time to time be reduced to the extent that a corresponding number
of issued and outstanding shares of the Common Stock are
purchased by the Company and set aside for issue upon the
exercise of Options. If any Option expires or terminates for any
reason without having been exercised in full, the unpurchased
shares subject thereto shall again be available for the purposes
of the Plan.
4. Committee.
The committee shall consist of two or more members of the
Board, both or all of whom shall be "disinterested persons"
within the meaning of Rule 16b-3(c)(2)(i) promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and "outside directors" within the contemplation of Section
162(m)(4)(C) of the Code. The Committee shall be appointed
annually by the Board, which may at any time and from time to
time remove any members of the Committee, with or without cause,
appoint additional members to the Committee and fill vacancies,
however caused, in the Committee. A majority of the members of
the Committee shall constitute a quorum. All determinations of
the Committee shall be made by a majority of its members present
at a duly called meeting of the Committee at which a quorum is
present. Any decision or determination of the Committee reduced
to writing and signed by all of the members of the Committee
shall be fully as effective as if it had been made at a meeting
duly called and held.
<PAGE>
5. Administration.
The Plan shall be administered by the Committee. The
Committee shall have complete authority, in its discretion, to
interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it, to determine the terms and provisions
of the option agreements or certificates which evidence Options,
to determine the individuals (the "Participants") to whom and the
times and the prices at which Options shall be granted, the
periods during which Options shall be exercisable, the number of
shares of the Common Stock to be subject to Options and whether
Options shall be incentive stock options or non-incentive stock
options and to make all other determinations necessary or
advisable for the administration of the Plan. In making such
determinations, the Committee may take into account the nature of
the services rendered by the respective Participants, their
present and potential contributions to the success of the Company
and the Subsidiaries and such other factors as the Committee in
its discretion shall deem relevant. The Committee's deter-
mination on the matters referred to in this Section 4 shall be
conclusive. Any dispute or disagreement which may arise under or
as a result of or with respect to any Option shall be determined
by the Committee, in its sole discretion, and any interpretations
by the Committee of the terms of any Option shall be final,
binding and conclusive.
6. Eligibility.
An Option may be granted only to (a) key employees of the
Company or a Subsidiary (including officers and/or directors),
(b) directors of the Company who are not employees or officers of
the Company or a Subsidiary, (c) independent contractors hired by
the Company or a Subsidiary to provide, on a regular basis,
consulting services for the Company or a Subsidiary and (4)
employees of a corporation which has been acquired by the Company
or a Subsidiary, whether by way of exchange or purchase of stock,
purchase of assets, merger or reverse merger, or otherwise, who
hold options with respect to the stock of such corporation which
the Company has agreed to assume.
<PAGE>
7. Option Prices.
A. Except as otherwise provided in Section 21 hereof, the
initial per share option price of any Option which is an
incentive stock option shall not be less than the fair market
value of a share of the Common Stock on the date such Option is
granted; provided, however, that, in the case of a Participant
who owns more than 10% of the Common Stock at the time an Option
which is an incentive stock option is granted to him, the initial
per share option price shall not be less than 110% of the fair
market value of a share of the Common Stock on the date such
Option is granted.
B. Except as otherwise provided in Section 21 hereof, the
initial per share option price of any Option which is a non-
incentive stock option shall not be less than 75% of the fair
market value of a share of the Common Stock on the date such
Option is granted; provided, however, that the initial per share
option price of any non-incentive option which is granted to a
person who is or who in the opinion of the Committee may become a
"covered employee" within the contemplation of Section 162(m)(3)
of the Code shall not be less than 100% of the fair market of a
share of the Common Stock on the date such Option is granted.
C. For all purposes of the Plan, the fair market value of
a share of the Common Stock on any date shall be determined in
good faith by the Committee.
8. Option Term.
Participants shall be granted Options for such term as the
Committee shall determine, not in excess of ten years from the
date of the granting thereof; provided, however, that, except as
otherwise provided in Section 21 hereof, in the case of a
Participant who owns more than 10% of the Common Stock at the
time an Option which is an incentive stock option is granted to
him, the term with respect to such Option shall not be in excess
of five years from the date of the granting thereof.
<PAGE>
9. Limitations on Amount of Stock Options Granted.
A. Except as otherwise provided in Section 21 hereof, the
aggregate fair market value of the shares of the Common Stock for
which any Participant may be granted incentive stock options
which are exercisable for the first time in any calendar year
(whether under the terms of the Plan or any other stock option
plan of the Company) shall not exceed $100,000.
B. No Participant shall, during any fiscal year of the
Company, be granted Options to purchase more than 100,000 shares
of the Common Stock.
10. Exercise of Options.
A. Except as otherwise provided in Section 9A hereof, a
Participant may exercise each Option granted to him in such
installments as the Committee shall determine at the time of the
grant thereof; provided, however, that, unless the Committee
shall otherwise determine, a Participant may not exercise an
Option prior to the first anniversary of the date of the granting
of such Option to him and a Participant may (i) during the period
commencing on the first anniversary of the date of the granting
of an Option to him and ending on the day preceding the second
anniversary of such date, exercise such Option with respect to
one-third of the shares granted thereby, (ii) during the period
<PAGE>
commencing on such second anniversary and ending on the day
preceding the third anniversary of the date of the granting of
such Option, exercise such Option with respect to two-thirds of
the shares granted thereby and (iii) during the period commencing
on such third anniversary, exercise such Option with respect to
all of the shares granted thereby; provided, further, however,
that, except as otherwise provided in Section 21 hereof,
notwithstanding any other provisions of the Plan to the contrary,
no Option shall be exercisable until the date which is six months
after the date on which such Option is granted.
B. Except as hereinbefore otherwise set forth, an Option
may be exercised either in whole at any time or in part from time
to time.
C. The Committee may, in its discretion, permit any Option
to be exercised, in whole or in part, prior to the time when it
would otherwise be exercisable in accordance with the provisions
of Section 10A.
D. An Option may be exercised only by a written notice of
intent to exercise such Option with respect to a specific number
of shares of the Common Stock and payment to the Company of the
Common Stock so specified; provided, however, that all or any
portion of such payment may be made in kind by the delivery of
shares of the Common Stock which have been owned by the
Participant for a minimum period of six months having a fair
market value on the date of delivery equal to the portion of the
option price so paid; provided, further, however, that, subject
to the requirements of Regulation T (as in effect from time to
tim) promulgated under the Exchange Act, the Committee may
implement procedures to allow a broker chosen by a Participant to
make payment of all or any portion of the option price payable
upon the exercise of an Option and to receive, on behalf of such
Participant, all or any portion of the shares of the Common Stock
issuable upon such exercise.
E. If the Company and/or one or more of its Subsidiaries
shall maintain a "cash or deferred arrangement" within the
meaning of Section 401(k)(2) of the Code, and if any Participant
<PAGE>
shall effect a withdrawal therefrom by reason of a "hardship"
within the contemplation of section 401(k)(2)(B)(iv) of the Code,
then, notwithstanding any other provision of the Plan or of any
stock option agreement or certificate entered into or issued in
accordance with the provisions of the Plan, no Option may be
exercised by such Participant during the period of one year
commencing on the date of such withdrawal.
11. Transferability.
No Option shall be assignable or transferable except by will
and/or by the laws of descent and distribution and, during the
life of any Participant, each Option granted to him may be
exercised only by him.
12. Termination of Service.
In the event a Participant leaves the employ or service of
the Company and the Subsidiaries for any reason other than death,
retirement on or subsequent to his 65th birthday or permanent
disability, whether voluntarily or otherwise, each Option granted
to him shall, to the extent it is exercisable on the date of such
termination of employment or service, terminate upon the earlier
to occur of (i) the expiration of 90 days after such termination
of employment or service or (ii) the expiration date specified in
such Option. In the event a Participant's employment or service
with the Company and the Subsidiaries terminates by reason of his
death or permanent disability or by reason of his retirement on
or subsequent to his 65th birthday, each Option granted to him
shall become immediately exercisable in full and shall terminate
upon the earlier to occur of (i) the expiration of six months
after the date of such death or permanent disability or such
retirement or (ii) the expiration date specified in such Option.
<PAGE>
13. Adjustment of Number of Shares.
In the event that a dividend shall be declared upon the
Common Stock payable in shares of the Common Stock, the number of
shares of the Common Stock then subject to any Option, the number
of shares of the Common Stock reserved for issuance in accordance
with the provisions of the Plan but not yet covered by Options
and the number of shares set forth in Sections 9B and 22B hereof
shall be adjusted by adding to each share the number of shares
which would be distributable thereon if such shares had been
outstanding on the date fixed for determining the stockholders
entitled to receive such stock dividend. In the event that the
outstanding shares of the Common Stock shall be changed into or
exchanged for a different number or kind of shares of stock or
other securities of the Company or of another corporation,
whether through reorganization, recapitalization, stock split-up,
combination of shares, sale of assets, merger or consolidation in
which the Company is the surviving corporation, then, there shall
be substituted for each share of the Common Stock then subject to
any Option, for each share of the Common Stock reserved for
issuance in accordance with the provisions of the Plan but not
yet covered by Options and for each share of the Common Stock
referred to in Sections 9B and 22B hereof the number and kind of
shares of stock or other securities into which each outstanding
share of the Common Stock shall be so changed or for which each
such share shall be exchanged. In the event that there shall be
any change, other than as specified in this Section 13, in the
number or kind of outstanding shares of the Common Stock, or of
any stock or other securities into which the Common Stock shall
have been changed, or for which it shall have been exchanged,
then, if the Committee shall, in its sole discretion, determine
that such change equitable requires an adjustment in the number
or kind of shares then subject to any Option, the number or kind
of shares reserved for issuance in accordance with the provisions
of the Plan but not yet covered by Options and the number of
<PAGE>
shares set forth in Sections 9B and 22B hereof, such adjustment
shall be made by the Committee and shall be effective and binding
for all purposes of the Plan and of each outstanding Option. In
the case of any substitution or adjustment in accordance with the
provisions of this Section 13, the option price in each Option
for each share covered thereby prior to such substitution or
adjustment shall be the option price for all shares of stock or
other securities which shall have been substituted for such share
or to which such share shall have been adjusted in accordance
with the provisions of this Section 13. No adjustment or
substitution provided for in this Section 13 shall require the
Company to sell a fractional share under any Option. In the
event of the dissolution or liquidation of the Company, or a
merger or consolidation in which the Company is not the surviving
corporation, all outstanding Options shall terminate.
14. Purchase for Investment, Withholding and Waivers.
A. Unless the shares to be issued upon the exercise of an
Option by a Participant shall be registered prior to the issuance
thereof under the Securities Act of 1933, as amended, such
Participant will be required, as a condition of the Company's
obligation to issue such shares, to give a representation in
writing that he is acquiring such shares for his own account as
an investment and not with a view to, or for sale in connection
with, the distribution of any thereof.
B. In the event of the death of a Participant, a condition
of exercising any Option shall be the delivery to the Company of
such tax waivers and other documents as the Committee shall
determine.
C. Each Participant shall be required, as a condition of
exercising any non-incentive stock option, to make such
arrangements with the Company with respect to withholding as the
Committee may determine.
<PAGE>
15. No Stockholder Status.
Neither any Participant nor his legal representatives,
legatees or distributees shall be or be deemed to be the holder
of any share of the Common Stock covered by an Option unless and
until a certificate for such share has been issued. Upon payment
of the purchase price thereof, a share issued upon exercise of an
Option shall be fully paid and non-assessable.
16. No Restrictions on Corporate Acts.
Neither the existence of the Plan nor any Option shall in
any way affect the right or power of the Company or its
stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the
Company's capital structure or its business or any merger or
consolidation of the Company, or any issue of bonds, debentures,
preferred or prior preference stock ahead of or affecting the
Common Stock or the rights thereof, or dissolution or liquidation
of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding
whether of a similar character or otherwise.
17. Decline in Market Price.
In the event that the fair market value of the Common Stock
declines below the option price set forth in any Option, the
Committee may, at any time, adjust, reduce, cancel and regrant
any unexercised Option or take any similar action it deems to be
for the benefit of the Participant in light of the declining fair
market value of the Common Stock; provided, however, that none of
the foregoing actions may be taken without the prior approval of
the Board.
18. No Employment Right.
Neither the existence of the Plan nor the grant of any
Option shall require the Company or any Subsidiary to continue
any Participant in the employ or other service of the Company or
such Subsidiary.
<PAGE>
19. Amendment of the Plan.
The Board may at any time make such modifications of the
Plan as it shall deem advisable; provided, however, that the
Board may not without further approval of stockholders
representing a majority of the outstanding shares of the Common
Stock present in person or by proxy at any special or annual
meeting of the stockholders increase the number of shares of the
Common Stock as to which Options may be granted under the Plan
(as adjusted in accordance with the provisions of section 13
hereof), or change the class of persons eligible to participate
in the Plan or change the manner of determining the option prices
which would result in a decrease in the option price, or extend
the period during which an Option may be granted or exercised.
No termination or amendment of the Plan may, without the consent
of the Participant to whom any Option shall theretofore have been
granted, adversely affect the rights of such Participant under
such Option.
20. Expiration and Termination of the Plan.
The Plan shall terminate on April 25, 1998, or at such
earlier time as the Board may determine. Options may be granted
under the Plan at any time and from time to time prior to its
termination. Any Option outstanding under the Plan at the time
of the termination of the Plan shall remain in effect until such
Option shall have been exercised or shall have expired in
accordance with its terms.
21. Options Granted in Connection with Acquisitions.
In connection with the acquisition by the Company or a
Subsidiary of another corporation which will become a Subsidiary
or division of the Company (such corporation being hereafter
referred to as an "Acquired Subsidiary"), Options may be granted
to employees and other personnel of an Acquired Subsidiary in
<PAGE>
exchange or substitution for then outstanding options to purchase
securities of the Acquired Subsidiary, such Options may be
granted at such option prices, may be exercisable immediately or
at any time or times either in whole or in part, and may contain
such other provisions not inconsistent with the Plan, as the
Committee, in its discretion, shall deem appropriate at the time
of the granting of such Options.
22. Options for Outside Directors.
A. Notwithstanding any other provision of the Plan, a
director of the Company who is not an employee of the Company or
a Subsidiary (an "Outside Director") shall be eligible to receive
an Option only in accordance with the terms and conditions of
this Section 22. Except as otherwise provided in this Section
22, each such Option shall be subject to all of the provisions of
the Plan.
B. I. On July 27, 1995, each Outside Director shall be
granted an Option to purchase 1,600 shares of the Common Stock;
provided, however, that, in the case of any Outside Director who
shall have become such after the first regularly scheduled
meeting of the Board during calendar year 1995, the number
"1,600" shall be deemed to be the number equal to the excess of
the product of 3,000 and the fraction the numerator of which
shall be the number of regularly scheduled meetings of the Board
remaining in such calendar year and the denominator of which
shall be four over the number of Options previously granted to
such Outside Director during such calendar year.
<PAGE>
II. On the first business day of January 1996 and on
the first business day of January of each year thereafter, each
Outside Director shall be granted an Option to purchase 3,000 shares
of the Common Stock; provided, however, that, if an
Outside Director shall become an Outside Director after the first
regularly scheduled meeting of the Board during any calendar
year, on the first business day on which he shall be an Outside
Director, he shall be granted an Option to purchase the number of
shares of the Common Stock equal to the product of 3,000 and the
fraction the numerator of which shall be the number of regularly
scheduled meetings of the Board remaining in such calendar year
and the denominator of which shall be four.
III. The per share option price of each Option granted
to an Outside Director pursuant to the provisions of this Section
22B shall be equal to the fair market value of a share of the
Common Stock on the date such Option is granted.
IV. The term of each Option granted to an Outside
Director shall be ten years.
C. Any Option granted to any Outside Director shall be
exercisable as to all shares of the Common Stock covered thereby
commencing on the date six months after the date on which such
Option is granted.
D. The provisions of this Section 22 may not be amended
except by the vote of a majority of the members of the Board and
by the vote of a majority of the members of the Board who are not
Outside Directors, and the provisions of this Section 22 shall
<PAGE>
not be amended more than once every six months, other than to
comport with changes in the Code, the Employee Retirement Income
Security Act of 1974 or the regulations or rules thereunder
September 27, 1995
Securities and Exchange Commission
450 Fifth Street N.W.
Washington, DC 20549
Gentlemen:
I am General Counsel to Franklin Electronic Publishers, Inc. (the
"Company") and a member in good standing of the bar of the
Supreme Court of the Commonwealth of Pennsylvania. I refer to
the Registration Statement on Form S-8 (the "Registration
Statement") to be filed with the Securities and Exchange
Commission with respect to the registration under the Securities
Act of 1933, as amended, of an additional 500,000 shares (the
"Shares") of the Common Stock of the Company for a maximum of
2,250,000 shares for issuance under the Company's 1988 Amended
Stock Option Plan (the "Amended Plan").
I have examined such documents as I considered necessary for the
purposes of this opinion. Based on such examination, it is my
opinion that the Shares (which may be authorized but heretofore
unissued shares or may be delivered out of the treasury of the
Company) have been duly authorized and, upon issuance and/or
delivery in accordance with the terms of the allocations made and
other actions taken by the administering committee pursuant to
the Amended Plan, will be legally issued, fully-paid and non-
assessable under the laws of the Commonwealth of Pennsylvania,
the place of incorporation of the Company.
I consent to the use of this opinion as Exhibit 5 to the
Registration Statement.
Very truly yours,
GREGORY J. WINSKY
Gregory J. Winsky
Senior Vice President
General Counsel
