As filed with the Securities and Exchange Commission on July 29, 1999
Registration No. 333-__________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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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)
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Franklin Electronic Publishers, Incorporated 1998 Stock Option Plan
(full title of the plan or agreement)
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Gregory J. Winsky, Esq. Copy to:
Senior Vice President Edward H. Cohen, Esq.
Franklin Electronic Publishers, Incorporated Rosenman & Colin LLP
One Franklin Plaza 575 Madison Avenue
Burlington, New Jersey 08016 New York, New York 10022
(609) 386-2500 (212) 940-8580
(name, address and telephone number of agent for service)
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CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
maximum maximum
Title of offering aggregate Amount of
Securities to Amount to be price offering registration
Be registered registered per share(1) price(1) fee
Common Stock, no par
value 750,000 $3.00 $2,250,000 $626
================================================================================
(1) 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
July 26, 1999.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
Franklin Electronic Publishers, Incorporated (the "Company") is subject to
the informational requirements of the Securities Exchange Act of 1934, as
amended (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 (File No. 1-14130) are
incorporated by reference in this Registration Statement:
a. The Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1999 (File No. 0-14841).
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 in 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.
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.
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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 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.
Section 9-04(c) obligates the Company to advance to directors or 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 obtained such
insurance.
ITEM 8. EXHIBITS
Exhibit No. Description
- ----------- -----------
3(a) Certificate of Incorporation of the Company (Incorporated by
reference to Exhibit 3.01 to the Company's Registration
Statement on Form S-1, File No. 3-6612 (the "Company's 1986
S-1 Registration Statement))
3(b) Articles of Amendment to the Certificate of Incorporation of
the Company (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"))
3(c) By-laws of the Company (Incorporated by reference to Exhibit
3.02 to the Company's 1986 S-1 Registration Statement)
3(d) Amendment to 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)
3(e) Amendment to By-laws of the Company (Incorporated by reference
to Exhibit 3.05 to the Company's 1990 10-K)
3
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4 Franklin Electronic Publishers, Incorporated 1998 Stock Option
Plan
5 Opinion of Gregory J. Winsky, Esq.
23(a) Consent of Radin, Glass & Co., LLP
23(b) Consent of Gregory J. Winsky, Esq. (included in Exhibit 5
above)
4
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ITEM 9. UNDERTAKINGS
1. The undersigned 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 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 therein, 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 undersigned 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 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
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 29 day of
July, 1999.
FRANKLIN ELECTRONIC PUBLISHERS,
INCORPORATED
By: /s/ Barry J. Lipsky
-------------------------------------
Barry J. Lipsky
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.
/s/ Edward H. Cohen July 28, 1999
- -----------------------------------
Edward H. Cohen, Director
/s/ Bernard Goldstein July 28, 1999
- -----------------------------------
Bernard Goldstein, Director
/s/ Barry J. Lipsky July 22, 1999
- -----------------------------------
Barry J. Lipsky, Director
/s/ Leonard M. Lodish July 28, 1999
- -----------------------------------
Leonard M. Lodish, Director
/s/ James Meister July 28, 1999
- -----------------------------------
James Meister, Director
, 1999
- ----------------------------------- ---------------
Howard L. Morgan, Director
, 1999
- ----------------------------------- ---------------
Jerry R. Schubel, Director
, 1999
- ----------------------------------- ---------------
James H. Simons, Director
/s/ William H. Turner July 28, 1999
- -----------------------------------
William H. Turner, Director
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/s/ Arnold D. Levitt July 22, 1999
- -----------------------------------
Arnold D. Levitt, (Interim Chief
Financial Officer and Treasurer)
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EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
3(a) Certificate of Incorporation of the Company (Incorporated by
reference to Exhibit 3.01 to the Company's Registration
Statement on Form S-1, File No. 3-6612 (the "Company's 1986
S-1 Registration Statement))
3(b) Articles of Amendment to the Certificate of Incorporation of
the Company (Incorporated by reference to Exhibit 3.02 to the
Company's report on Form 10-K for the year ended March 31,
1990 (the "Company's 1990 10-K"))
3(c) By-laws of the Company (Incorporated by reference to Exhibit
3.02 to the Company's 1986 S-1 Registration Statement)
3(d) Amendment to 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)
3(e) Amendment to By-laws of the Company (Incorporated by reference
to Exhibit 3.05 to the Company's 1990 10-K)
4 Franklin Electronic Publishers, Incorporated 1998 Stock Option
Plan
5 Opinion of Gregory J. Winsky, Esq.
23(a) Consent of Radin, Glass & Co., LLP
23(b) Consent of Gregory J. Winsky, Esq. (included in Exhibit 5
above)
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FRANKLIN ELECTRONIC PUBLISHERS, INC.
1998 STOCK OPTION PLAN
(Effective May 1, 1998)
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 to the employ or service of the Company and the
Subsidiaries 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.
2. Effective Date of the Plan.
The Plan shall become effective on May 1, 1998, subject to ratification by
the stockholders at the 1998 Annual Meeting of the Stockholders of the Company.
3. Stock Subject to Plan.
750,000 of the authorized but unissued shares of the common stock, no par
value, of the Company (the "Common Stock") may be issued upon the exercise of
Options and are hereby reserved for such issue; 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
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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 (the "Committee") shall consist of two or more members of
the Board. The Committee shall be appointed annually by the Board, which may at
any time and from time to time remove any member 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 determination of the Committee 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.
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 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 shall have the authority to
determine whether Options granted hereunder shall be (a) "incentive stock
options" (which term, when used herein, shall have the
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meaning ascribed thereto by the provisions of Section 422(b) of the Internal
Revenue Code of 1986, as amended (the "Code")), (b) Options which are not
incentive stock options ("non-incentive stock options") or (c) a combination
thereof. The Committee's determination on the matters referred to in this
Section 5 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 interpretation 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
consulting services for the Company or a Subsidiary and (d) 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.
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 such Participant, 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.
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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 value 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 equal to (i) the closing sale price of the
Common Stock on the New York Stock Exchange on such date or (ii) if there is no
sale of the Common Stock on such Exchange on such date, the average of the bid
and asked prices on such Exchange at the close of the market on such date.
8. Option Term.
Except as otherwise provided in Section 21 hereof, 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, 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 such Participant, the
term with respect to such Option shall not be in excess of five years from the
date such Option is granted.
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.
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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 22 hereof, a Participant may
exercise each Option granted to such Participant in such installments as the
Committee shall determine at the time of the grant thereof; provided, however,
that, unless the Committee shall otherwise determine at the time of grant, a
Participant may not exercise an Option prior to the first anniversary of the
date of the granting of such Option and a Participant may (i) during the period
commencing on the first anniversary of the date of the granting of such Option
and ending on the day preceding the second anniversary of such date, exercise
such Option with respect to one-third of the shares subject thereto, (ii) during
the period 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 originally subject thereto and
(iii) during the period commencing on such third anniversary, exercise such
Option with respect to all of the shares subject thereto.
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 hereof.
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 of the amount of the option price for the number of shares of
the Common Stock so specified; provided, however, that all or any portion of
such payment may be made in kind by the delivery
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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
time) promulgated under the Securities Exchange Act of 1934, as amended, 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.
11. Transferability.
A. Except as otherwise provided in Section 11B hereof, 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
such Participant may be exercised only by him or her.
B. A Participant may, with the prior approval of the Committee, transfer
for no consideration an Option which is a non-incentive stock option to or for
the benefit of the Participant's Immediate Family, a trust for the exclusive
benefit of the Participant's Immediate Family or to a partnership or limited
liability company for one or more members of the Participant's Immediate Family,
subject to such limits as the Committee may establish, and the transferee shall
remain subject to all the terms and conditions applicable to the Option prior to
such transfer. The term "Immediate Family" shall mean the Participant's spouse,
parents, children, stepchildren, adoptive relationships, sisters, brothers and
grandchildren and any of their respective spouses.
12. Termination of Service.
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In the event a Participant leaves the employ or service of the Company and
the Subsidiaries for any reason, whether voluntarily or otherwise, other than by
reason of death, retirement on or subsequent to his or her 65th birthday or
permanent disability, each Option granted to such Participant 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 death, retirement
on or subsequent to his or her 65th birthday or permanent disability, each
Option granted to such Participant 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, retirement or permanent disability or (ii)
the expiration date specified in such Option.
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 which may
be issued pursuant to 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
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Common Stock then subject to any Option, for each share of the Common Stock
which may be issued pursuant to 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
equitably requires an adjustment in the number or kind of shares then subject to
any Option, the number or kind of shares which may be issued pursuant to the
Plan but not yet covered by Options and the number of 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, such Participant
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will be required, as a condition of the Company's obligation to issue such
shares, to give a representation in writing that he or she is acquiring such
shares for his or her 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.
15. No Stockholder Status.
Neither any Participant nor his or her 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.
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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 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.
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 which are intended to be incentive stock 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 receive Options which are
intended to be incentive stock options in the Plan. 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 30, 2008, 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
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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
(an "Acquired Subsidiary"), Options may be granted to employees and other
personnel of such Acquired Subsidiary in 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 the first business day of January of each year, each Outside
Director shall be granted an Option to purchase 3,000 shares of the Common
Stock. If an Outside Director shall become an Outside Director subsequent to the
first business day of January during any year, on the first business day on
which he or she shall be an Outside Director, he or she 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 lesser of four and
the
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<PAGE>
number of regularly scheduled meetings of the Board remaining in such calendar
year and the denominator of which shall be four.
II. The Committee may, with the approval of the Board, grant additional
Options, in such amounts and at such times as the Committee may determine, to
Outside Directors who perform services for the Company and who are not members
of the Committee at the time of such grant.
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 an 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.
12
Exhibit 5
July 29, 1999
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, DC 20549
Re: Franklin Electronic Publishers, Incorporated
Ladies/Gentlemen:
I am General Counsel to Franklin Electronic Publishers, Incorporated (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
to be filed with the Securities and Exchange Commission with respect to the
registration under the Securities Act of 1933, as amended, of shares (the
"Shares") of the Company's Common Stock, no par value, for issuance under the
Company's 1998 Stock Option Plan (the "Option Plan").
I have examined such documents, legal opinions and precedents, corporate and
other records of the Company and certificates of public officials and officers
of the Company as I have deemed necessary or appropriate to provide a basis for
the opinions set forth below.
Based upon and subject to the foregoing, it is my opinion that upon issuance of
the Shares upon the exercise of options granted or to be granted under the
Option Plan and upon payment of the exercise price, the Shares will be validly
issued, fully paid and non-assessable.
I consent to the use of this opinion as Exhibit 23(b) to said Registration
Statement.
Very truly yours,
/s/ Gregory J. Winsky
--------------------------
Gregory J. Winsky, Esq.
Senior Vice President
General Counsel
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Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-8 registration statement of our report dated June 10,
1999 included in the Franklin Electronic Publishers, Inc. Form 10-K for the year
ended March 30, 1999 and to all references to our Firm included in this Form S-8
registration statement.
RADIN, GLASS & CO., LLP
July 29, 1999
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