SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FRANKLIN CAPITAL CORPORATION
(formerly, The Franklin Holding Corporation (Delaware)
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation or organization)
13-3419202
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(I.R.S. employer identification no.)
450 Park Avenue, 10th Floor, New York, New York 10022
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(Address of principal executive offices) (Zip code)
Non-Statutory Stock Option Plan for the Directors
of the Franklin Holding Corporation
The Franklin Holding Corporation Stock Incentive Plan
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(Full title of the plans)
Spencer L. Brown
Senior Vice President and Secretary
The Franklin Capital Corporation
450 Park Avenue, 10th Floor
New York, New York 10022
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(Name and address of agent for service)
(212) 486-2323
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(Telephone number, including area code, of agent for service)
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CALCULATION OF REGISTRATION FEE
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Title of Amount Proposed maximum Proposed maximum Amount of
securities to be offering price aggregate registration
to be registered registered per share offering price fee
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<S> <C> <C> <C> <C>
Common Stock, $1.00 par
value per share 75,000 $17.45 (1) $1,308,750 $345.51
====================================================================================================================
</TABLE>
(1) Represents shares to be offered at prices not presently determinable.
Pursuant to paragraphs (c) and (h) of Rule 457 of the Securities Act of
1933, as amended, the proposed maximum offering price for such 75,000
shares is estimated solely for the purpose of determining the
registration fee and is based on the average of the high and low sales
prices per share of the registrant's Common Stock reported on The
American Stock Exchange on February 16, 2000.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information
The documents containing the information specified in this Item will be
sent or given to employees or directors who have been awarded options under
Non-Statutory Stock Option Plan for the Directors of The Franklin Holding
Corporation (the "Director Plan") and the Franklin Holding Corporation Stock
Incentive Plan (the "Employee Plan" and together with the Director Plan, the
"Plans") in accordance with Rule 428(b)1 under the Securities Act of 1933, as
amended (the "Securities Act") and are not being filed with, or included in,
this Registration Statement on Form S-8 (the "Registration Statement") in
accordance with the rules and regulations of the Securities and Exchange
Commission (the "Commission").
Item 2. Registrant Information and Employee Plan Annual Information
The documents containing the information specified in this Item will be
sent or given to employees or directors who have been awarded options under the
Plans, and are not being filed with, or included in this Registration Statement
in accordance with rules and regulations of the Commission.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents which heretofore have been filed with the
Commission by THE FRANKLIN CAPITAL CORPORATION, a Delaware corporation (the
"Company" or "Registrant"), are incorporated by reference in this Registration
Statement.
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998 (File No. 811-05103) as filed with the Commission on
March 31, 1999;
(b) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1999 (File No. 811-05103) as filed with the
Commission on November 11, 1999;
(c) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1999 (File No. 811-05103) as filed with the Commission on
August 16, 1999;
(d) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1999 (File No. 811-05103) as filed with the Commission
on May 5, 1999; and
(e) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-B filed with the Commission on
October 14, 1987 (File Number 87 21 7251) and any amendment or report filed with
the Commission for purposes of updating such description;
All documents subsequently filed by the Registrant with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities and Exchange
Act of 1934 (the "Exchange Act"), prior to the filing of a post-effective
amendment, which indicates that all securities offered have been sold or which
deregisters all such securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such documents. Any statement contained herein or in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is incorporated or deemed to be incorporated by reference herein modifies
or supersedes such
<PAGE>
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
Section 145 ("Section 145") of the Delaware General Corporation Law, as
amended (the "DGCL"), permits indemnification of directors, officers, agents and
controlling persons of a corporation under certain conditions and subject to
certain limitations. Section 145 empowers a corporation to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was a
director, officer or agent of the corporation or another enterprise if serving
at the request of the corporation. Depending on the character of the proceeding,
a corporation may indemnify against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with such action, suit or proceeding if the person indemnified
acted in good faith and in a manner he reasonably believed to be in or not
opposed to, the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. In the case of an action by or in the right of the corporation, no
indemnification may be made with respect to any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine that despite the adjudication of
liability such person is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper. Section 145 further provides that to
the extent a present or former director or officer of a corporation has been
successful in the defense of any action, suit or proceeding referred to above or
in the defense of any claim, issue or matter therein, such person shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by such person in connection therewith.
In accordance with Section 145, the Registrant's Bylaws provide that
the Registrant shall indemnify its officers and directors, and any employee who
serves as an officer or director of any corporation at the Registrant's request.
According to Article IV of the Bylaws, directors and officers as well as
employees and individuals may be indemnified against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement in connection
with specified actions, suits or proceedings, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation as a derivative action) if they acted in good faith and in a manner
they reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful.
The Registrant has obtained a director and officer liability insurance
policy, under which each director and certain officers of the Registrant would
be insured against certain liabilities.
Item 7. Exemption From Registration Claimed
Not applicable.
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<PAGE>
Item 8. Exhibits
4.1 Non-Statutory Stock Option Plan for the Directors of The Franklin
Holding Corporation.
4.2 The Franklin Holding Corporation Stock Incentive Plan
5 Opinion of Battle Fowler LLP regarding the legality of the
securities being registered.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Battle Fowler LLP (included in Exhibit 5 hereto).
24 Power of Attorney (included in the signature pages to this
Registration Statement).
Item 9. Undertakings
(a) The Registrant hereby undertakes:
(1) 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 the registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933 (the "Securities 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.
(3) 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.
(b) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 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 therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described under Item 6 above, 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 Securities 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
Securities Act and will be governed by the final adjudication of such issue.
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<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 New York, State of New York, on this 17th day of
February, 2000
THE FRANKLIN CAPITAL CORPORATION
By: /s/ Stephen L. Brown
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Stephen L. Brown
Chairman and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Stephen L. Brown, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
or all amendments to this Registration Statement, including post-effective
amendments, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent full power and authority to do and perform
each and every act and thing necessary or desirable to be done, as fully to all
intents and purposes as he might or could do in person, and hereby ratifies and
confirms all acts and things his said attorney-in-fact and agent, or his
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
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 date indicated.
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Name Title Date
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<S> <C> <C>
/s/Stephen L. Brown Chairman and Chief Executive Officer February 17, 2000
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Stephen L. Brown
/s/Spencer L. Brown Senior Vice President and February 17, 2000
- ------------------------ Secretary
Spencer L. Brown
/s/Hiram M. Lazar Chief Financial Officer February 17, 2000
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Hiram M. Lazar
/s/Miles L. Berger Director February 17, 2000
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Miles L. Berger
/s/Irving Levine Director February 17, 2000
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Irving Levine
726435.5
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<PAGE>
/s/Jonathan A. Marshall Director February 17, 2000
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Jonathan A. Marshall
/s/Michael P. Rolnick Director February 17, 2000
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Michael P. Rolnick
</TABLE>
726435.5
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<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit Page Number
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4.1 Non-Statutory Stock Option Plan for the
Directors of The Franklin Holding Corporation.
4.2 Franklin Holding Corporation Stock Incentive Plan
5 Opinion of Battle Fowler LLP regarding the legality
of the securities being registered.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Battle Fowler LLP (included in Exhibit
5 hereto).
24 Power of Attorney (included in the signature pages
to this Registration Statement).
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Non-Statutory Stock Option Plan
For the Directors of
The Franklin Holding Corporation
SECTION 1. Purpose; Definitions
The purpose of this Plan is to further the interests of Franklin Holding, its
Stockholders, and its employees, by providing to the ("outside") Directors of
Franklin Holding the opportunity to purchase Franklin Holding Stock. Franklin
Holding believes that such opportunity is an appropriate reward for the
dedication and loyalty of the Directors included herein, and that the adoption
of the Plan is an integral and important feature of the relationship.
"Board" means the Board of Directors of Franklin Holding.
"Disability" means permanent and total disability as determined under procedures
established by the Board for purposes of the Plan.
"Director" means a member of the Board who is eligible in accordance with the
provisions of this Plan.
"Franklin Holding" means The Franklin Holding Corporation, a Delaware
corporation.
"Franklin Holding Stock" means voting common stock, par value $0.01 per share,
of Franklin Holding.
"Plan" means the Non-Statutory Stock Option Plan for the Directors of The
Franklin Holding Corporation.
"Option" means a stock option granted pursuant to the provisions of this Plan.
"Outside" means a director who is not employed by The Franklin Holding
Corporation.
SECTION 2. Eligibility; Administration
Eligibility to Participate. Options to purchase shares of Franklin Holding Stock
shall be made available under this Plan to the Directors of Franklin Holding who
are not also officers or employees of Franklin Holding. Such designation shall
be made by the Board, which shall inform each Director so designated of the fact
of his eligibility to participate.
Administration. The Board shall establish rules and regulations for the
administration of the Plan, and to construe and interpret its provisions. All
determinations of the Board with respect
<PAGE>
to the Plan shall be final. All Options granted pursuant to this Plan shall be
approved in accordance with Section 52(o) of the Investment Company Act of 1940.
SECTION 3. Common Stock Subject to Plan
Available Shares. There shall be available for the grant of Stock Options 30,000
shares of Common Stock. The shares subject to any Option which is surrendered,
expires, or otherwise ceases to be exercisable, shall be available for the grant
of further Options. Shares subject to option may consist of authorized but
unissued shares of Franklin Holding or of Treasury shares.
SECTION 4. Stock Options
Stock Options. The number of shares to be subject to an Option granted hereunder
shall be determined in the discretion of the Board. The terms respecting any
Stock Option granted hereunder, except as otherwise determined from time to time
in a uniform and nondiscriminatory manner by the Board, shall be as follows:
A. Option Price. The option price shall be an amount equal to the "Fair
Market Value" of the Stock subject to the Option, determined on the day of
the grant of the Option. For this purpose, Fair Market Value shall be
determined as the closing price of Franklin Holding Stock on the American
Stock Exchange on the applicable day, or if on any day such security is
not so listed, "Fair Market Value" shall be determined as the closing
price of Franklin Holding Stock quoted in the NASDAQ System, in the
domestic over-the-counter market. If at any time such security is not
listed on any securities exchange or quoted in the NASDAQ System or the
over-the-counter market, "Fair Market Value" will be the current net asset
value of the Franklin Holding Stock.
B. Right to Exercise. Any Option granted under this Plan shall be exercisable
in accordance with the following terms and conditions:
1. An Option to purchase shares of Franklin Holding Stock granted
hereunder shall not be exercisable prior to (vesting provision, if
applicable) (except that in the event of the death or Disability of
the person receiving such Option, this condition shall be deemed
automatically waived). No Option granted hereunder shall be
exercisable more than ten years from the date that the Option is
granted.
2. In the event the appointment of a Director then holding Options to
purchase Franklin Holding Stock hereunder is terminated (except if
such termination be by reason of death or permanent and total
disability), said Option shall be exercisable only during the period
of thirty (30) days following said termination of the Director's
appointment. In the event the appointment of a Director then holding
Options to purchase Franklin Holding Stock hereunder is terminated by
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<PAGE>
reason of Disability, said Option shall be exercisable only during the
period of twelve (12) months following said termination of the
Director's appointment. If said person then holding Options for the
purchase of Franklin Holding Stock shall die while appointed or within
thirty (30) days following the termination of such appointment, each
said Option shall remain exercisable during the period of twelve (12)
months thereafter by the personal representatives of such deceased
person's estate, or the successors to his estate.
In the event of termination of appointment under circumstances other
than as stated above, all Options then held shall terminate, and shall
no longer be exercisable, as of the date of termination of appointment
unless an exception is granted by the Board.
3. Method of Exercise. The Option shall be exercised by written notice
directed to the Board, at Franklin Holding's principal place of
business, accompanied by check in payment of the option price for such
shares. Should the Director wish to exercise the Option in exchange
for shares of previously owned shares of Franklin Holding, the Fair
Market Value of which is greater than the option exercise price, the
Director shall tender the number of shares which, when multiplied by
the Fair Market Value of Franklin Holding's Stock at exercise, would
equal the total option exercise price, to Franklin Holding at the
above address. Should the Director wish to exercise Options and
immediately sell the shares received to fund the option price, the
Option shall be exercised by delivery of an irrevocable letter of
instruction directing Franklin Holding to deliver the Option to a
broker, with whom the optionee has opened an account, within five (5)
business days of exercise of the Option, to Franklin Holding at its
principal place of business. Franklin Holding shall make immediate
delivery of such shares, provided that if any law or regulation
requires Franklin Holding to take any action with respect to the
shares specified in such notice before the issuance thereof, then the
date of delivery of such shares shall be extended for the period
necessary to take such action.
4. Reclassification, Consolidation, or Merger. If and to the extent that
the number of issued shares of the single class of voting common Stock
of Franklin Holding shall be increased or reduced by change in par
value, split up, reclassification, distribution of a dividend payable
in Stock, or the like, the number of shares subject to Option and the
option price per share shall be proportionately adjusted. If Franklin
Holding is reorganized or consolidated or merged with or into another
corporation, the Director shall be entitled to receive Options
covering shares of such reorganized, consolidated, or merged Franklin
Holding in the same proportion, at an equivalent price, and subject to
the same conditions. For purposes of the preceding sentence, the
excess of the aggregate fair market value of the shares subject to the
Option immediately after the
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<PAGE>
reorganization, consolidation, or merger over the aggregate Option
price of such shares shall not be more than the excess of the
aggregate fair market value of all shares subject to the Option
immediately before such reorganization, consolidation, or merger over
the aggregate Option price of such shares, and the new Option or
assumption of the old Option shall not give the Director additional
benefits which he did not have under the old Option, or deprive him of
benefits which he had under the old Option.
5. Rights Prior to Exercise of Option. This Option is nontransferable by
the Director, except in the event of his death or pursuant to a
qualified domestic relations order as defined in Section 414(p) of the
Internal Revenue Code of 1986, as amended and during his lifetime is
exercisable only by him. The Director shall have no rights as a
Stockholder with respect to the Option shares until payment of the
Option price and delivery to him of such shares as herein provided.
6. Restrictions on Disposition. Directors are prohibited from disposing
of shares acquired upon the exercise of their Options within six
months of the date of grant of such Options in compliance with the
short swing-profit rules contained in Section 16(b) of the Securities
Exchange Act of 1934.
SECTION 5. Termination; Amendment
Termination or Amendment of Plan. Franklin Holding expressly retains the right
to at any time terminate, suspend, or amend the Plan, in any respect and as
Franklin Holding deems advisable under circumstances then prevailing. Provided,
however, that no amendment hereto shall expand the number of shares of Franklin
Holding Stock subject to the Plan. No amendment, alteration, or discontinuation
shall be made which would impair the rights of any Director under an Option
theretofore granted without the Director's consent except such amendment
necessary to comply with applicable Securities laws.
SECTION 6. Governing Law
Applicable Law. This Plan is adopted by Franklin Holding in the State of New
York and is to be construed and interpreted in accordance with the laws of the
State of New York. The intention of Franklin Holding is that this Plan not
constitute an "incentive stock" plan within the meaning of section 422 of the
Internal Revenue Code of 1986, except to the extent such treatment is permitted
upon a subsequent amendment of the Plan.
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THE FRANKLIN HOLDING CORPORATION
STOCK INCENTIVE PLAN
SECTION 1. Purpose; Definitions
The purpose of the Plan is to give Franklin Holding and its Affiliates (as
defined below) a competitive advantage in attracting, retaining and motivating
officers, employees and consultants and to align the interests of officers,
employees and consultants with both the success of Franklin Holding and the
financial interest of its stockholders. The Plan is intended to encourage stock
ownership in Franklin Holding by eligible officers, employees and consultants
thus giving them a proprietary interest in the business of Franklin Holding.
For purposes of the Plan, the following terms are defined as set forth below:
(a) "Affiliate" of a Person means a Person controlled by, controlling or under
common control with such Person.
(b) "Award" means a Stock Appreciation Right, Stock Option or Restricted
Stock.
(c) "Award Agreement" means a Restricted Stock Agreement or Option Agreement.
An Award Agreement may consist of provisions of an employment agreement.
(d) "Board" means the Board of Directors of Franklin Holding.
(e) "Change in Control" shall mean (1) the acquisition by any Person or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act)
of more than 25% of the voting securities of Franklin Holding or (2) the
sale of or other disposition (other than by way of merger or
consolidation) of all or substantially all of the assets of Franklin
Holding to any Person or group (as defined above), or the liquidation of
the assets of Franklin Holding.
(f) "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.
(g) "Commission" means the Securities and Exchange Commission or any successor
agency.
(h) "Committee" means the Board or the Compensation Committee of the Board as
the Board may designate, which shall be composed of not less than two
directors each of whom shall qualify as a Non-Employee Director, and an
"outside director" within the meaning of Section 162(m) of the Code, and
each of whom shall be appointed by and serve at the pleasure of the Board.
913643.1
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(i) "Common Stock" means voting common stock, par value $0.01 per share, of
Franklin Holding.
(j) "Disability" means, unless otherwise defined in an applicable Restricted
Stock Agreement or Option Agreement, permanent and total disability as
determined under procedures established by the Committee for purposes of
the Plan.
(k) "Employment" means, unless otherwise defined in an applicable Restricted
Stock Agreement or Option Agreement, employment with Franklin Holding or
any of its affiliates.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor thereto.
(m) "Fair Market Value" of the Common Stock means, except as provided in
Sections 5(g) and 6(b)(ii)(2), as of any given date, the mean between the
highest and lowest reported sales prices of the Common Stock on the
American Stock Exchange or, if not listed on such exchange, on any other
national securities exchange on which the Common Stock is listed or, if
not so listed on NASDAQ. If such sales prices are not so available, the
Fair Market Value of the Common Stock shall be the current net asset value
of the Common Stock.
(n) "Franklin Holding" means The Franklin Holding Corporation, a Delaware
corporation.
(o) "Incentive Stock Option" means any Stock Option designated as, and
qualified as, an "incentive stock option" within the meaning of Section
422 of the Code.
(p) "Initial Public Offering" means the consummation of a registered
underwritten public offering or offerings of Common Stock.
(q) "Non-Employee Director" means a member of the Board who qualifies as a
Non- Employee Director as defined in Rule 16b-3(b)(3), as promulgated by
the Commission under the Exchange Act, or any successor definition adopted
by the Commission.
(r) "Nonqualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
(s) "Option Agreement" means an agreement setting forth the terms and
conditions of an Award of Stock Options and, if applicable, Stock
Appreciation Rights.
(t) "Person" means an individual corporation, partnership, joint venture,
trust, unincorporated organization, government (or any department or
agency thereof or other entity.
2
<PAGE>
(u) "Plan" means; the Franklin Holding Corporation Stock Incentive Plan, as
set forth herein and as hereinafter amended from time to time.
(v) "Restricted Stock" means an Award granted under Section 7.
(w) "Restricted Stock Agreement" means an agreement setting forth the terms
and conditions of an Award of Restricted Stock.
(x) "Rule 13d-3" means Rule 13d-3, as promulgated by the Commission under the
Exchange Act, as amended from time to time.
(y) "Rule 16b-3" means Rule 16b-3, as promulgated by the Commission under
Section 16(b) of the Exchange Act, as amended from time to time.
(z) "Securities Act" means the Securities Act of 1933, as amended from time to
time, and any successor thereto.
(aa) "Stock Appreciation Right" means a right granted under Section 6.
(ab) "Stock Option" means an option granted under Section 5.
(ac) "Stockholders Agreement" has the meaning as set forth in Section 12(a).
In addition, certain other terms used herein have definitions otherwise ascribed
to them herein.
SECTION 2. Administration
The Plan shall be administered by the Committee.
Among other things, the Committee shall have the authority, subject to the terms
of the Plan, to:
(a) select the Participants (as defined below) to whom Awards may from time to
time be granted;
(b) determine whether and to what extent Incentive Stock Options, Nonqualified
Stock Options, Stock Appreciation Rights and Restricted Stock or any
combination thereof are to be granted hereunder; provided that each such
Award is approved pursuant to Section 57(o) of the Investment Company Act
of 1940;
(c) determine the number of shares of Common Stock to be covered by each Award
granted hereunder;
(d) determine the terms and conditions of any Award granted hereunder
(including but not limited to, the exercise price, any vesting conditions,
restrictions or limitations (which may be related to the performance of
the participant, Franklin Holding or any of its Affiliates) and any
acceleration of vesting or waiver of
3
<PAGE>
forfeiture regarding any Award and the shares of Common Stock relating
thereto, based on such factors as the Committee shall determine;
(e) modify, amend or adjust the terms and conditions of any Award, at any time
or from time to time;
(f) determine to what extent and under what circumstances Common Stock and
other amounts payable with respect to an Award shall be deferred;
(g) determine under what circumstances an Award may be settled in cash or
Common Stock under Section 5(g);
(h) adopt, alter and repeal such administrative rules, guidelines and
practices governing the Plan as it shall from time to time deem advisable;
(i) interpret the terms and provisions of the Plan any Award issued under the
Plan (any agreement relating thereto); and
(j) otherwise supervise the administration of the Plan.
The Committee may act only by a majority of its members then in office, except
that the members thereof may authorize any one or more of their number or any
officer of Franklin Holding to execute and deliver documents on behalf of the
Committee.
Any dispute or disagreement which may arise under, or as a result of, or in any
way relate to, the interpretation, construction or application of the Plan or an
Award (or related Award Agreement) granted hereunder shall be determined by the
Committee. Any determination made by the Committee pursuant to the provisions of
the Plan with respect to the Plan, any Award of Award Agreement shall be made in
the sole discretion of the Committee and, with respect to an Award, at the time
of the grant of the Award or, unless in contravention of any express term of the
Plan, at any time thereafter. All decisions made by the Committee shall be final
and binding on all persons, including Franklin Holding and the participants.
SECTION 3. Common Stock Subject to Plan
The total number of shares of Common Stock reserved and available for
grant under the Plan shall be 45,000. Shares subject to an Award under
the Plan may be authorized and unissued shares or may be treasury
shares.
If any shares of Restricted Stock are forfeited for which the Participant did
not receive any benefits of ownership (as such phrase is construed by the
Commission or its Staff), or if any Stock Option (and related Stock Appreciation
Right, if any) terminates without being exercised, or if any Stock Appreciation
Right is exercised for cash, the shares subject to such Awards shall again be
available for distribution in connection with Awards under the Plan.
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In the event of any merger, reorganization, consolidation, recapitalization,
spin-off, stock dividend, stock split, reverse stock split, extraordinary
distribution with respect to the Common Stock or other change in corporate
structure affecting the Common Stock, the Committee or Board may make such
substitution or adjustment in the aggregate number and kind of shares reserved
for issuance under the Plan, in the number, kind and Exercise Price (as defined
herein) of shares subject to outstanding Stock Options and Stock Appreciation
Rights, in the number and kind of shares subject to Restricted Stock Awards,
and/or such other equitable substitution or adjustments as it may determine to
be fair and appropriate in its sole discretion, provided, however, that the
number of shares subject to any Award shall always be a whole number. Any such
adjusted Exercise Price shall also be used to determine the amount payable by
Franklin Holding upon the exercise of any Stock Appreciation Right associated
with any Stock Option.
SECTION 4. Participants
Officers, employees, and consultants of Franklin Holding and its Affiliates who
are responsible for or contribute to the management, growth and profitability of
the business of Franklin Holding and its Affiliates shall be "Participants"
eligible to be granted Awards under the Plan.
SECTION 5. Stock Options
The Committee shall have the authority to grant any Participant Incentive Stock
Options, Nonqualified Stock Options or both types of Stock Options ( in each
case with or without Stock Appreciation Rights). Incentive Stock Options may be
granted only to employees, officers or consultants of Franklin Holding and its
subsidiaries (within the meaning of Section 424(f) of the Code). To the extent
that any Stock Option is not designated as an Incentive Stock Option or even if
so designated does not qualify as an Incentive Stock Option, it shall constitute
a Nonqualified Stock Option.
Stock Options shall be evidenced by Option Agreements, which shall include such
terms and provisions as the Committee may determine from time to time. An Option
Agreement shall expressly indicate whether it is intended to be an agreement for
an Incentive Stock Option or a Nonqualified Stock Option. The grant of a Stock
Option shall occur on the date, the Committee by resolution selects an
individual to be a Participant in any grant of a Stock Option, determines the
number of shares of Common Stock to be subject to such Stock Option to be
granted to such individual and specifies the terms and provisions of the Stock
Option, or on such other date as the Committee may determine. Franklin Holding
shall notify a Participant of any grant of a Stock Option, and a written Option
Agreement shall be duly executed and delivered by Franklin Holding to the
Participant. Subject to Section 12(a), such Option Agreement shall become
effective upon execution by Franklin Holding and the Participant.
Anything in the Plan to the contrary notwithstanding, no term of the Plan
relating to Incentive Stock Options shall be interpreted, amended or altered,
nor shall any discretion or authority granted under the Plan be exercised, so as
to disqualify the Plan
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under Section 422 of the Code or, without the consent of the participant
affected, to disqualify any Incentive Stock Option under such Section 422.
Stock Options shall be subject to the following terms and conditions and shall
contain such additional terms and conditions as the Committee shall deem
desirable:
(a) Exercise Price. The price per share of Common Stock purchasable under a
Stock Option shall be determined by the Committee and set forth in the
Option Agreement (the "Exercise Price"); provided, however, the Exercise
Price shall not be less than the Fair Market Value of a share of Common
Stock on the date of grant of the Option.
(b) Option Term. The term of each Stock Option shall be fixed by the
Committee. Absent any such term being fixed by the Committee, pursuant
to an Option Agreement or otherwise, such term shall be ten years.
(c) Exerciseability. Except as otherwise provided herein, Stock Options
shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee. If the Committee
provides that any Stock Option is exercisable only in installments, the
Committee may at any time waive such installment exercise provisions, in
whole or in part, based on such factors as the Committee may determine.
In addition, the Committee may at any time accelerate the
exerciseability of any Stock Option.
(d) Method of Exercise. Subject to the provisions of this Section 5, vested
Stock Options may be exercised, in whole or in part, at any time during
the option term by giving written notice of exercise to Franklin Holding
specifying the number of shares of Common Stock subject to the Stock
Option to be purchased.
Such notice shall be accompanied by payment in full of the Exercise Price by
certified or bank check or such other instrument as Franklin Holding may accept.
If approved by the Committee, payment, in full or in part, may also be made in
the form of unrestricted Common Stock already owned by the Participant of the
same class as the Common Stock subject to the Stock Option (based on the Fair
Market Value of the Common Stock on the date the Stock Option is exercised);
provided, however, that, in the case of an Incentive Stock Option the right to
make a payment in the form of already owned shares of Common Stock of the same
class as the Common Stock subject to the Stock Option may be authorized only at
the time the Stock Option is granted.
In the discretion of the Committee, payment for any shares subject to a Stock
Option may also be made by delivering a properly executed exercise notice to
Franklin Holding, together with a copy of irrevocable instructions to a broker
to deliver promptly to Franklin Holding the amount of sale or loan proceeds to
pay the Exercise Price, and, local or foreign withholding taxes. To facilitate
the foregoing, Franklin Holding may enter into agreements for coordinated
procedures with one or more brokerage firms.
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In addition, in the discretion of the Committee, payment for any shares subject
to a Stock Option may also be made by instructing the Committee to withhold a
number of such shares having a Fair Market Value on the date of exercise equal
to the aggregate Exercise Price of such Stock Option.
No shares of Common Stock shall be issued until full payment therefor has been
made. Except as otherwise provided in the applicable Option Agreement, a
Participant shall have all of the rights of a stockholder of Franklin Holding
holding the class or series of Common Stock that is subject to such Stock Option
(including, if applicable, the right to vote the shares and the right to receive
dividends and distributions), when the Participant has given written notice of
exercise, has paid in full for such shares and, if requested, has given the
representations referred to in Section 12(c).
(e) Nontransferability of Stock Options. No Stock Option shall be transferable
by the Participant other than (I) by will or by the laws of descent and
distribution or (II) in the case of a Nonqualified Stock Option, pursuant
to a qualified domestic relations order (as defined in the Code or Title I
of the Employee Retirement Income Security Act of 1974, as amended, or the
rules thereunder). All Stock Options shall be exercisable, subject to the
terms of this Plan, during the Participant's lifetime, only by the
Participant or by the legal representative of the Participant or, in the
case of a Nonqualified Stock Option, the Participant's alternative payee
pursuant to such a qualified domestic relations order. The term
"Participant" includes the estate of the Participant or the legal
representative of the Participant named in the Option Agreement any person
to whom an Option is transferred by will or the laws of descent and
distribution or, in the case of a Nonqualified Stock Option, pursuant to a
qualified domestic relations order; provided, however, that references
herein to Employment of a Participant or termination of Employment of a
Participant shall continue to refer to the Employment or termination of
Employment of the applicable grantee of an Award hereunder.
(f) Termination of Employment. Upon the Participant's death or when the
participant's Employment is terminated for any reason, the Participant:
a. shall forfeit all Stock Options that have not previously vested;
b. shall have three months to exercise the participant's vested Stock
Options that are vested on the date of the Participant's termination
of Employment if such termination is for any reason other than the
Participant's death; and
c. shall have one year to exercise the Participant's vested Stock
Options that are vested on the date of death if the Participant's
termination of Employment is due to the participant's death.
Any vested Stock Options not exercised within the permissible period of time
shall be forfeited by the Participant.
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(g) Cashing Out of Stock Option. On receipt of written notice of exercise,
the Committee may elect to cash out all or any portion of the shares of
Common Stock for which a Stock Option is being exercised by paying the
Participant an amount, in cash or Common Stock, equal to the excess of
the Fair Market Value of one share of Common Stock over the Exercise
Price per share times the number of shares of Common Stock for which the
Option is being exercised on the effective date of such cash-out. The
Committee may determine Fair Market Value under the pricing rule set
forth in Section 6(b)(ii).
SECTION 6. Stock Appreciation Rights
(a) Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan.
In the case of a Nonqualified Stock Option, such rights may be granted
either at or after the time of grant of such Stock Option. In the case
of an Incentive Stock Option, such rights may be granted only at the
time of grant of such Stock Option. A Stock Appreciation Right shall
terminate and no longer be exercisable upon the termination or exercise
of the related Stock Option. In either case, the terms and conditions of
a Stock Appreciation Right shall be set forth in the Option Agreement
for the related Stock Option or an amendment thereto.
A Stock Appreciation Right may be exercised by a participant in
accordance with Section 6(b) by surrendering the applicable portion of
the related Stock Option in accordance with procedures established by
the Committee. Upon such exercise and surrender, the Participant shall
be entitled to receive an amount determined in the manner prescribed in
Section 6(b). Stock Options which have been so surrendered shall no
longer be exercisable to the extent the related Stock Appreciation
Rights have been exercised.
(b) Terms and Condition. Stock Appreciation Rights shall be subject to such
terms and conditions as shall be determined by the Committee, including
the following:
(i) Stock Appreciation Rights shall be exercisable only at such time
or times and to the extent that the Stock Options to which they
relate are exercisable in accordance with the provisions of
Section 5 and this Section 6;
(ii) upon the exercise of a Stock Appreciation Right, a Participant
shall be entitled to receive an amount equal to the product of (a)
the excess of the Fair Market Value of one share of Common Stock
over the Exercise Price per share specified on the related Stock
Option times (b) the number of shares in respect of which the
Stock Appreciation Right shall have been exercised, in cash,
shares of Common Stock or both, with the Committee having the
right to determine the form of payment;
(iii) Stock Appreciation Rights shall be transferable only with the
related Stock Option in accordance with Section 5(e); and
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(iv) upon the exercise of a Stock Appreciation Right, the Stock Option
or part thereof to which such Stock Appreciation Right is related
shall be deemed to have been exercised for the purpose of the
limitation set forth in Section 3 on the number of shares of
Common Stock to be issued under the Plan, but only to the extent
of the number of shares covered by the Stock Appreciation Right at
the time of exercise.
SECTION 7. Restricted Stock
The Committee shall determine the participants to whom and the time or times at
which grants of Restricted Stock will be awarded, the number of shares to be
awarded to any Participant, the conditions for vesting, the time or times within
which such Awards may be subject to forfeiture and restrictions on transfer and
any other terms and conditions of the Awards (including provisions (i) relating
to placing legends on certificates representing shares of Restricted Stock, (ii)
permitting Franklin Holding to require that shares of Restricted Stock be held
in custody by Franklin Holding with a stock power from the owner thereof until
restrictions lapse and (iii) relating to any rights to purchase the Restricted
Stock on the part of Franklin Holding and its Affiliates), in addition to those
contained in the Stockholders Agreement. The terms and conditions of Restricted
Stock Awards shall be set forth in a Restricted Stock Agreement, which shall
include such terms and provisions as the Committee may determine from time to
time. Except as provided in this Section 7, the Restricted Stock Agreement, the
Stockholders Agreement and any other relevant agreements, the participant shall
have, with respect to the shares of Restricted Stock, all of the rights of a
stockholder of Franklin Holding holding the class or series of Common Stock that
is the subject of the Restricted Stock Award, including, if applicable, the
right to vote the shares and the right to receive any cash dividends or
distributions (but, subject to the third paragraph of Section 3, not the right
to receive non-cash dividends or distributions). If so determined by the
Committee in the applicable Restricted Stock Agreement, cash dividends and
distributions on the class or series of Common Stock that is the subject of the
Restricted Stock Award shall be automatically deferred and reinvested in
additional Restricted Stock, held subject to the vesting of the underlying
Restricted Stock, or held subject to meeting conditions applicable only to
dividends and distributions.
SECTION 8. Tax Offset Bonuses
At the time an Award is made hereunder or at any time thereafter, the Committee
may grant to the Participant receiving such Award the right to receive a cash
payment in an amount specified by the Committee, to be paid at such time or
times (if ever) as the Award results in compensation income to the Participant,
for the purpose of assisting the Participant to pay the resulting taxes, all as
determined by the Committee, and on such other terms and conditions as the
Committee shall determine.
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SECTION 9. Change in Control Provisions
Notwithstanding any other provision of the Plan to the contrary, unless
otherwise provided in the applicable Award Agreement or the Stockholders
Agreement, in the event of a Change in Control:
(a) immediately prior to the occurrence of a Change in Control, all Stock
Options and Stock Appreciation Rights outstanding as of such date, and
which are not then exercisable and vested, shall become fully
exercisable and vested to the full extent of the original grant; and
(b) the restrictions and deferral limitations applicable to any Restricted
Stock shall lapse, and such Restricted Stock shall become free of all
restrictions, fully vested and transferable to the full extent of the
not theretofore forfeited portion of the original grant.
SECTION 10. Term, Amendment and Termination
The Plan will terminate ten years after the effective date of the Plan. Awards
outstanding as of such date shall not be affected or impaired by the termination
of the Plan.
The Board of Directors may terminate, suspend, amend or revise the Plan at any
time except that (i) the number of shares available for issuance under the Plan
may not be increased and (ii) no amendment shall cause the Plan Awards to fail
to comply with Rule 16b-3. The Board may not, without the consent of the
Participant, alter or impair rights under any Award previously granted except in
order to comply with applicable law.
The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, but no such amendment shall be made which would
impair the rights of any Participant thereunder without the Participant's
consent, except such an amendment made in connection with or after Section 16 of
the Exchange Act becoming applicable to Awards or the grant, exercise or
termination thereof, to cause the Award to qualify for the exemption provided by
Rule 16b-3.
SECTION 11. Unfunded Status of Plan
It is presently intended that the Plan constitute an 'unfunded" plan for
incentive and deferred compensation. The Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver Common Stock or make payments; provided, however, that unless the
Committee otherwise determines, the existence of such trusts or other
arrangements is consistent with the "unfunded" status of the Plan.
SECTION 12. General provisions
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(a) Awards and Certificates. Shares of Restricted Stock and shares of Common
Stock issuable upon the exercise of a Stock Option or Stock Appreciation
Right (together, "Plan Shares") shall be evidenced in such manner as the
Committee may deem appropriate, including book-entry registration or
issuance of one or more stock certificates. Any certificate issued in
respect of Plan Shares shall be registered in the name of such Participant
and shall bear appropriate legends referring to the terms, conditions, and
restrictions applicable to such Award, substantially in the following
form:
"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms, conditions
and restrictions (including forfeiture) of the Franklin
Holding Corporation Stock Incentive Plan and [a Restricted
Stock Agreement) [an Option Agreement] between the issuer and
the registered holder hereof. Copies of such Plan and
Agreement are on file a the offices of Franklin Holding
Corporation [address]."
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or
under the securities laws of any state, and may not be sold or
otherwise disposed of except pursuant to an effective
registration statement under said Act and applicable state
securities laws or an applicable exemption to the registration
requirements of such Act and laws."
Such shares may bear other legends to the extent the Committee or the
Board determines it to be necessary or appropriate, including any
required by the Stockholders Agreement or pursuant to any applicable
Restricted Stock Agreement or Option Agreement. If and when all
restrictions expire without a prior forfeiture of the Plan Shares
theretofore subject to such restrictions, new certificates for such
shares shall be delivered to the participant without the first legend
listed above.
The Committee may require that any certificates evidencing Plan Shares
be held in custody by Franklin Holding until the restrictions thereon
shall have lapsed and that the Participant deliver a stock power,
endorsed in blank, relating to the Plan Shares.
(b) Representations and Warranties. The Committee may require each person
purchasing or receiving Plan Shares to (i) represent to and agree with
Franklin Holding in writing that such person is acquiring the shares
without a view to the distribution thereof and (ii) make any other
representations and warranties that the Committee deems appropriate.
(c) Additional Compensation. Nothing contained in the Plan shall prevent
Franklin Holding or any of its Affiliates thereof from adopting other
or additional Compensation arrangements for its employees.
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(d) No Right of Employment or Service. Adoption of the Plan or grant of any
Award shall not confer upon any Participant any right to continued
Employment or service with Franklin Holding nor shall it interfere in
any way with the right of Franklin Holding or any of its Affiliates
thereof to terminate the Employment or service of any Participant at
any time.
(e) Withholding Taxes. No later than the date as of which an amount first
becomes includable in the gross income of a Participant for federal
income tax purposes with respect to any Award under the Plan, such
Participant shall pay to Franklin Holding or, if appropriate, any of
its Affiliates, or make arrangements satisfactory to the Committee
regarding the payment of, any federal state, local or foreign taxes of
any kind required by law to be withheld with respect to such amount. If
approved by the Committee, withholding obligations may be settled with
Common Stock, including Common Stock that is part of the Award that
gives rise to the withholding requirement. The obligations of Franklin
Holding under the Plan shall be conditional on such payment or
arrangements, and Franklin Holding and its Affiliates shall, to the
extent permitted by law, have the right to deduct any such taxes from
any payment otherwise due to the Participant. The Committee may
establish such procedures as it deems appropriate, including making
irrevocable elections, for the settlement of withholding obligations
with Common Stock.
(f) Beneficiaries. The Committee shall establish such procedures as it
deems appropriate for a Participant to designate a beneficiary to whom
any amounts payable in the event of the Participant's death are to be
paid or by whom any rights of the Participant, after the Participant's
death, may be exercised.
(g) Pooling of Interests. Notwithstanding anything contained in the Plan to
the contrary, in the event of a Change in Control which is also
intended to constitute a Pooling transaction (as defined in APB No.
16), the Committee shall take such actions, if any, which are
specifically recommended by an independent accounting firm retained by
Franklin Holding to the extent reasonably necessary in order to assure
that the pooling transaction will qualify as such, including but not
limited to (i) deferring the Vesting exercise, payment or settlement
with respect to any Award, (ii) providing that the payment or
settlement in respect of any Award be made in the form of cash, shares
of Common Stock or securities of a successor or acquired of Franklin
Holding or a combination of the foregoing and (iii) providing for the
extension of the term of any Award to the extent necessary to
accommodate the foregoing, but not beyond the maximum term permitted
for any Award.
(h) Governing Law. The Plan and all Awards made and actions thereunder
shall be governed by and construed and enforced in accordance with the
law as of the State of New York without regard to the principles of
conflicts of law thereof.
(i) Compliance with Laws. If any law or any regulation of any commission or
agency having jurisdiction shall require Franklin Holding or a
Participant seeking to
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exercise Stock Options or Stock Appreciation Rights to take any action
with respect to the Plan Shares to be issued upon the exercise of Stock
Options of Stock Appreciation Rights then the date upon which Franklin
Holding shall issue or cause to be issued the certificate or
certificates for the Plan Shares shall be postponed until full
compliance has been made with all such requirements of law or
regulation; provided, that Franklin Holding shall use its reasonable
efforts to take all necessary action to comply with such requirements
of law or regulation. Moreover, in the event that Franklin Holding
shall determine that, in compliance with the Securities Act or other
applicable statutes or regulations, it is necessary to register any of
the Plan Shares with respect to which an exercise of a Stock Option or
Stock Appreciation Right has been made, or to qualify any such Plan
Shares for exemption from any of the requirements of the Securities Act
or any other applicable statute or regulation, no Stock Options or
Stock Appreciation Rights may be exercised and no Plan Shares shall be
issued to the exercising Participant until the required action has been
completed; provided, that Franklin Holding shall use its reasonable
efforts to take all necessary action to comply with such requirements
of law or regulation. Notwithstanding anything to the contrary
contained herein, neither the Board nor the members of the Committee
owes a fiduciary duty to any Participant in his or her capacity as
such.
SECTION 13. Effective Date of Plan
The Plan shall be effective as of the date it is approved by the holders of a
majority of the outstanding shares of Common Stock.
13
BATTLE FOWLER LLP
PARK AVENUE TOWER
75 East 55th Street
New York, New York 10022
(212) 856-7000
February 17, 2000
Franklin Capital Corporation
450 Park Avenue, 10th Floor
New York, New York 10022
Re: Franklin Capital Corporation
Registration of Non-Statutory Stock Option Plan and Stock
Incentive Plan on Form S-8
Ladies and Gentlemen:
We have acted as counsel for Franklin Capital Corporation, a Delaware
corporation (the "Company"), in connection with the preparation and filing of a
registration statement on Form S-8 for the Non-Statutory Stock Option Plan for
Directors of The Franklin Holding Corporation and The Franklin Holding
Corporation Stock Incentive Plan (the "Registration Statement"). Pursuant to the
Registration Statement, the Company may issue up to an aggregate of 75,000
shares (the "Shares") of its Common Stock, par value $1.00 per share ("Common
Stock") under the plans. You have requested that we furnish our opinion as to
the matters hereinafter set forth.
In connection with this opinion we have examined a copy of (i) the
Certificate of Incorporation of the Company; (ii) the By-laws of the Company;
(iii) the resolutions of the Board of Directors of the Company (the "Board"),
dated February 3, 2000, approving the filing of the Registration Statement,
(iv) the resolutions of the Board, dated August 5, 1997, August 6, 1997 and
September 9, 1997 respectively, approving the Non-Statutory Stock Option Plan
for the Directors of The Franklin Holding Corporation (the "Director Plan")
and The Franklin Holding Corporation Stock Incentive Plan (the "Employee Plan")
and reserving an aggregate of 75,000 shares of Common Stock; (v) the Director
Plan; (vi) the Employee Plan; and (vii) the Registration Statement.
<PAGE>
In rendering the opinion herein expressed we have assumed the
genuineness of all signatures, the authenticity of all original documents,
instruments and certificates examined by us, the conformity with the original
documents, instruments and certificates of all copies of documents, instruments
and certificates examined by us and the legal capacity to sign of all
individuals executing documents. We have relied upon the representations of the
Company as to the accuracy and completeness of (i) the By-laws of the Company;
(ii) the Director Plan; (iii) the Employee Plan (iv) the Registration Statement;
and (v) the resolutions of the Company. We also have relied upon the
representations of the Company that (i) the resolutions of the Board, dated
February 3, 2000, approving the filing of the Registration Statement, (ii) the
resolutions of the Board, dated August 5, 1997, August 6, 1997 and September 9,
1997, approving the plans and reserving the Shares, and (iii) the By-laws of
the Company have not been rescinded, modified or revoked.
We are not admitted to the practice of law in any jurisdiction but the
State of New York, and we do not express any opinion as to the laws of other
states or jurisdictions other than the laws of the State of New York, the
federal law of the United States and the General Corporation Law of the State of
Delaware. No opinion is expressed as to the effect that the law of any other
jurisdiction may have upon the subject matter of the opinion expressed herein
under conflicts of law principles, rules and regulations or otherwise.
Based upon and subject to the foregoing, we are of the opinion that
all of the Shares have been duly authorized for issuance, and when (i) the
Registration Statement shall have become effective, (ii) the Shares shall have
been issued in the proposed form, and (iii) the Shares shall have been delivered
as contemplated by the Plan, the Shares will be validly issued, fully paid and
non- assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/Battle Fowler LLP
New York, New York
February 16, 2000
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the Non-Statutory Stock Option Plan for Directors
and the Stock Incentive Plan of The Franklin Holding Corporation of our
report dated February 24, 1999, with respect to the financial statements of
Franklin Capital Corporation (formerly, The Franklin Holding Corporation)
included in its Annual Report (Form 10-K) for the year ended December 31,
1998, filed with the Securities and Exchange Commission.
/s/Ernst & Young LLP
