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
(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.
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(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
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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.
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