As filed with the Securities and Exchange Commission on September 16, 1996
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
AND POST-EFFECTIVE AMENDMENT UNDER
THE SECURITIES ACT OF 1933
FRANKLIN RESOURCES, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 13-2670991
(State or Other Jurisdiction of
Incorporation or Organization) (I.R.S. Employer Identification No.)
777 MARINERS ISLAND BLVD.
SAN MATEO, CALIFORNIA 94404
(415) 312-3000
(Address, Including Zip Code, and Telephone Number, including Area Code,
of Registrant's Principal Executive Offices)
LESLIE M. KRATTER
VICE PRESIDENT AND
ASSISTANT SECRETARY
FRANKLIN RESOURCES, INC.
777 MARINERS ISLAND BLVD.
SAN MATEO, CALIFORNIA 94404
(415) 312-3000
(Name and Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent For Service)
Copies to:
JEFFREY E. TABAK, ESQ. ERIC S. HAUETER, ESQ.
WEIL, GOTSHAL & MANGES LLP BROWN & WOOD LLP
767 FIFTH AVENUE 555 CALIFORNIA STREET
NEW YORK, NEW YORK 10153 SAN FRANCISCO, CALIFORNIA 94104
(212) 310-8000 (415) 772-1200
Approximate date of commencement of proposed sale of the securities to the
public: From time to time after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box.[_]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] __________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [x]
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Title of Each Class of Proposed Maximum Proposed Maximum Aggregate Amount of
Securities to be Registered Amount to be Registered(1)(2) Offering Price Per Unit(3) Offering Price(3) Registration Fee(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Debt Securities $500,000,000 100% $500,000,000 $137,932
====================================================================================================================================
<FN>
(1) Such amount shall be increased, if any Debt Securities are issued at an
original issue discount, by an amount such that the net proceeds to be
received by the Registrant shall be equal to the above amount to be
registered. Any offering of Debt Securities denominated other than in
U.S. dollars will be treated as the equivalent in U.S. dollars based on
the official exchange rate applicable to the purchase of such Debt
Securities from the Registrant.
(2) Pursuant to Rule 429 under the Securities Act of 1933, $100,000,000 of
Debt Securities included in this table are being carried forward from
Registration Statement No. 33-53147 previously filed by the Registrant
on Form S-3, and the registration fee of $34,483 associated with such
Debt Securities was previously paid by the Registrant in connection with
such earlier filed Registration Statement.
(3) Estimated solely for the purpose of determining the registration fee.
The Registrant reserves the right to issue Debt Securities in series
having varying principal amounts and offering prices. Nevertheless, the
maximum aggregate offering price of the Debt Securities will not exceed
the amount to be registered set forth above.
</FN>
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
included in this Registration Statement is a combined Prospectus and relates to
this Registration Statement and Registration Statement No. 33-53147 previously
filed by the Registrant on Form S-3 and declared effective on May 19, 1994. This
Registration Statement also constitutes Post-Effective Amendment No. 1 to
Registration Statement No. 33-53147, and such Post-Effective Amendment shall
hereafter become effective concurrently with the effectiveness of this
Registration Statement in accordance with Section 8(c) of the Securities Act of
1933.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement thereafter shall become effective in accordance with Section 8(c) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(c),
may determine.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED SEPTEMBER 16, 1996
PROSPECTUS
$500,000,000
FRANKLIN RESOURCES, INC.
DEBT SECURITIES
Franklin Resources, Inc. (the "Company") may, from time to time, offer or
solicit offers to purchase its unsecured debt securities (the "Debt Securities")
in an aggregate principal amount (or net proceeds in the case of securities
issued at an original issue discount) not to exceed $500,000,000 or, if
applicable, the equivalent thereof in one or more foreign or composite
currencies. The Debt Securities may be offered in one or more series with the
same or various maturities on terms to be determined at the time of sale.
The specific designation, aggregate principal amount, authorized
denominations, purchase price, maturity, rate or rates (which may be fixed or
variable), and time of payment of any interest, any terms for mandatory or
optional redemption (including any sinking fund), any listing on a securities
exchange and any other specific terms of the Debt Securities in respect of which
this Prospectus is being delivered, together with the terms of offering of such
Debt Securities, will be set forth in one or more supplements to this Prospectus
(each, a "Prospectus Supplement") and one or more pricing supplements (each, a
"Pricing Supplement") accompanying this Prospectus. The Prospectus Supplement
will also contain information, where applicable, about certain U.S. federal
income tax, accounting and other considerations relating to the Debt Securities
covered by it. As used herein, Debt Securities shall include debt securities
denominated in United States dollars or, if so specified in an applicable
Prospectus Supplement, in any other currency or in composite currencies or in
amounts determined by reference to an index. See "Description of Debt
Securities."
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS OR ANY SUPPLEMENT
HERETO. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The Debt Securities may be offered through underwriters, agents or dealers,
or directly to purchasers by the Company or subsidiaries of the Company. Such
underwriters, agents or dealers may include, and may include a group of
underwriters managed by one or both of, Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Goldman, Sachs & Co. If an underwriter,
agent or dealer is involved in the offering of any Debt Securities, the
underwriter's discount, agent's commission or dealer's purchase price will be
described in an applicable Prospectus Supplement, and the net proceeds to the
Company from such offering will be the public offering price of the offered Debt
Securities less such discount in the case of an underwriter, the purchase price
of the offered Debt Securities less such commission in the case of an agent or
the purchase price of the offered Debt Securities in the case of a dealer, and
less, in each case, the other expenses of the Company associated with the
issuance and distribution of such Debt Securities. See "Plan of Distribution."
--------------------
This Prospectus may not be used to consummate sales of Debt
Securities unless accompanied by a Prospectus Supplement
--------------------
The date of this Prospectus is _________, 1996.
IN CONNECTION WITH THE OFFERING OF DEBT SECURITIES HEREUNDER, THE
UNDERWRITERS, IF ANY, MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR
MAINTAIN THE MARKET PRICES OF SUCH SECURITIES AT LEVELS ABOVE THOSE WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or any underwriter, dealer or agent. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy securities by
anyone in any jurisdiction in which such offer or solicitation is not authorized
or in which the person making such offer or solicitation is not qualified to do
so or to any person to whom it is unlawful to make such offer or solicitation.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files annual and quarterly reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information may be inspected and copied at
the public reference facilities maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at the
Commission's Regional Offices in New York (Seven World Trade Center, 13th Floor,
New York, New York 10048), and Chicago (500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511). Copies of these materials may be obtained from
the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Such information may also be
accessed electronically by means of the Commission's home page on the Internet
at http://www.sec.gov. The Company's common stock is listed on the New York
Stock Exchange and the Pacific Stock Exchange, and reports, proxy statements and
other information concerning the Company may be inspected at the offices of the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005 and the
Pacific Stock Exchange, Incorporated, 115 Sansome Street, Suite 1104, San
Francisco, California 94104.
This Prospectus constitutes a part of a Registration Statement filed by
the Company with the Commission under the Securities Act of 1933, as amended
(the "Securities Act"). This Prospectus omits certain of the information
contained in the Registration Statement in accordance with the rules and
regulations of the Commission. Reference is hereby made to the Registration
Statement and related exhibits for further information with respect to the
Company and the Debt Securities. Statements contained herein concerning the
provisions of any document are not necessarily complete and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the Commission
and are incorporated herein by reference: (i) the Company's Annual Report on
Form 10-K for the fiscal year ended September 30, 1995, (ii) the Company's
Quarterly Reports on Form 10-Q for the fiscal quarters ended December 31, 1995,
March 31, 1996 and June 30, 1996, and (iii) Current Reports on Form 8-K and
8-K/A filed by the Company on October 27, 1995, January 26, 1996, April 26,
1996, June 25, 1996, June 26, 1996, July 26, 1996 and August 30, 1996.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to
the termination of the offering of the Debt Securities, shall be deemed to be
incorporated by reference into this Prospectus 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 Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement or document so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute part of this Prospectus.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon request, a copy of any and all of the documents
described above other than exhibits to such documents which are not specifically
incorporated by reference in such documents. Written or telephone requests
should be directed to: Leslie M. Kratter, Vice President, Franklin Resources,
Inc., 777 Mariners Island Boulevard, San Mateo, California 94404; telephone
number (415) 312-3000.
FORWARD-LOOKING STATEMENTS
Certain statements set forth or incorporated by reference in this
Prospectus and any Supplement hereto may be "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995, and
reference is made to the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended December 31, 1995, incorporated herein by reference, for a summary
of certain cautionary statements and risk factors to be considered in connection
with such forward-looking statements.
_________________
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THE COMPANY
The Company is a diversified financial services holding company which,
primarily through its various domestic and international subsidiaries,
principally provides investment management, financial advisory and related
services to open end investment companies (mutual funds), closed end investment
companies, international equivalents of open and closed end investment
companies, private accounts, qualified retirement plans and private trusts. The
Company also provides advisory services to and sponsors and manages public and
private real estate programs, offers consumer banking services, insured
deposits, auto loans and credit cards and provides custodial, trustee and
fiduciary services to IRA and Keogh plans and to qualified retirement plans and
private trusts.
The wide range of financial services offered by the Company gives both
domestic and international institutional and individual investors a variety of
investment alternatives designed to meet varying investment objectives,
affording customers the opportunity both to allocate and to modify their
investment resources among investment products as changing economic and market
conditions warrant.
The Company's principal office is located at 777 Mariners Island
Boulevard, San Mateo, California 94404 and its telephone number is (415)
312-3000.
The Company was incorporated under the laws of the State of Delaware in
November 1969, and is the successor by merger to businesses previously conducted
since 1947.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement or
Pricing Supplement, the Company intends to use the net proceeds from the sale of
the Debt Securities:
(a) to provide a source for a portion of the financing of the acquisition
of certain assets of Heine Securities Corporation ("HSC") pursuant to that
certain Agreement to Merge the Businesses of HSC, Franklin Mutual
Advisers, Inc. (a wholly-owned subsidiary of the Company formerly known as
Elmore Securities Corporation) and the Company, dated as of June 25, 1996,
as amended, as more particularly described in the Company's Current Report
on Form 8-K/A filed June 26, 1996 and Current Report on Form 8-K filed
August 30, 1996, which descriptions and the financial information with
respect to the HSC acquisition set forth therein are incorporated herein
by reference. The Company anticipates that the aggregate purchase price of
the HSC acquisition will be financed with a combination of the Company's
available cash, shares of the Company's common stock, and one or more
sources of third-party financing including, without limitation, sales of
Debt Securities. In addition, the Company may from time to time evaluate
the possibility of acquiring other businesses providing financial services
and products similar to those provided by the Company and its
subsidiaries. If such businesses were to be acquired, the Company may use
the net proceeds from the sale of Debt Securities to finance all or a
portion of such acquisitions;
(b) to repay (i) outstanding medium term notes and short-term unsecured
notes previously issued by the Company and (ii) other indebtedness of the
Company; and
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(c) to add to working capital, to invest in or extend credit to
subsidiaries, and for other general corporate purposes.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges was (i) 11.5, 11.4, 9.2, 43.0 and
64.3 for the fiscal years ended September 30, 1995, 1994, 1993, 1992 and 1991,
respectively, and (ii) 13.1 for the nine months ended June 30, 1996. These
ratios were calculated by dividing the sum of fixed charges into the sum of
earnings before taxes and fixed charges. Fixed charges for these purposes
consist of all interest expense and one-third of rental expenses (the
approximate portion of rental expense representing interest).
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under an Indenture (the "Indenture"),
dated as of May 19, 1994, as amended from time to time, between the Company and
The Chase Manhattan Bank (formerly Chemical Bank), as Trustee (the "Trustee"), a
copy of which is filed as an exhibit to the Registration Statement. The
following summaries of certain provisions of the Indenture do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all provisions of the Indenture, including the definitions therein of
certain terms. Wherever particular Sections or defined terms of the Indenture
are referred to, it is intended that such Sections or defined terms (including,
unless otherwise indicated herein, definitions of terms capitalized in these
summaries) shall be incorporated herein by reference. The following sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Debt Securities so offered, will be
described in the Prospectus Supplement relating to such Debt Securities.
The Company's assets consist principally of the stock in its subsidiaries.
Therefore, its rights and the rights of its creditors, including the holders of
Debt Securities, to participate in the assets of any subsidiary upon the
latter's liquidation or recapitalization or otherwise will be subject to the
prior claims of the subsidiary's creditors, except to the extent that claims of
the Company itself as a creditor of the subsidiary may be recognized. In
addition, dividends, loans and advances from certain subsidiaries to the Company
may be restricted by net capital requirements under the Exchange Act and under
rules of certain regulatory bodies.
GENERAL
The Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provides that Debt Securities may
be issued from time to time in one or more series. The Debt Securities will be
unsecured obligations of the Company. Neither the Indenture nor the Debt
Securities will limit or otherwise restrict the amount of other indebtedness
which may be incurred or other securities which may be issued by the Company or
any of its subsidiaries. The Debt Securities will rank on a parity with all
other unsecured unsubordinated indebtedness of the Company.
Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities offered thereby for the following terms: (1) the title
of such Debt Securities; (2) any limit on the aggregate principal amount of such
Debt Securities; (3) the price or prices (expressed as a percentage of the
aggregate principal amount thereof)
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at which such Debt Securities will be issued; (4) the date or dates, or the
method or methods, if any, by which such date or dates shall be determined, on
which such Debt Securities will mature; (5) the rate or rates (which may be
fixed or variable) per annum at which such Debt Securities will bear interest,
if any, or the method or methods, if any, by which such rate or rates are to be
determined; (6) the date or dates from which such interest, if any, on such Debt
Securities will accrue or the method or methods, if any, by which such date or
dates are to be determined, the dates on which such interest, if any, will be
payable, the date or dates on which payment of such interest, if any, will
commence and the Regular Record Dates for such Interest Payment Dates, if any;
(7) the dates, if any, on which and the price or prices at which the Debt
Securities will, pursuant to any mandatory sinking fund provisions, or may,
pursuant to any optional sinking fund or to any purchase fund provisions, be
redeemed by the Company, and the other detailed terms and provisions of such
sinking and/or purchase funds; (8) the date, if any, after which and the price
or prices at which the Debt Securities may, pursuant to any optional redemption
provisions, be redeemed at the option of the Company or of the holders thereof
and the other detailed terms and provisions of such optional redemption; (9) the
extent to which any of the Debt Securities will be issuable in temporary or
permanent global form and, if so, the identity of the depositary for such global
Debt Security, or the manner in which any interest payable on a temporary or
permanent global Debt Security will be paid; (10) the denomination or
denominations in which such Debt Securities are authorized to be issued; (11)
whether such Debt Securities will be issued in registered or bearer form or both
and, if in bearer form, the terms and conditions relating thereto and any
limitations on issuance of such bearer Debt Securities (including exchange for
registered Debt Securities of the same series); (12) information with respect to
book-entry procedures; (13) whether any of the Debt Securities will be issued as
Original Issue Discount Securities; (14) each office or agency where, subject to
the terms of the Indenture, such Debt Securities may be presented for
registration of transfer or exchange; (15) the currencies or currency units in
which such Debt Securities are issued and in which the principal of, premium and
interest, if any, on, and additional amounts, if any, in respect of such Debt
Securities will be payable; (16) whether the amount of payments of principal of,
premium and interest, if any, on, and additional amounts, if any, in respect of
such Debt Securities may be determined with reference to an index, formula or
other method or methods (which index, formula or method or methods may, but need
not, be based on one or more currencies, currency units or composite currencies,
commodities, equity indices or other indices) and the manner in which such
amounts shall be determined; (17) whether the Company or a holder may elect
payment of the principal of, premium or interest, if any, on, and additional
amounts, if any, in respect of such Debt Securities in a currency, currencies,
currency unit or units or composite currency or currencies other than that in
which such Debt Securities are denominated or stated to be payable, the period
or periods within which, and the terms and conditions upon which, such election
may be made, and the time and manner of determining the exchange rate between
the currency, currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are denominated or stated to be payable
and the currency, currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are to be so payable; (18) if other
than the Trustee, the identity of each Security Registrar, Paying Agent and
Authenticating Agent; (19) if applicable, the defeasance of certain obligations
by the Company pertaining to Debt Securities of the series; (20) the person to
whom any interest on any registered Debt Security of the series shall be
payable, if other than the person in whose name that Debt Security (or one or
more predecessor Debt Securities) is registered at the close of business on the
Regular Record Date for such interest, the manner in which, or the person to
whom, any interest on any bearer Debt Security of the series shall be payable,
if otherwise than upon presentation and surrender of the coupons appertaining
thereto as they severally mature, and the extent to which, or the manner in
which, any interest payable on a temporary global Debt Security on an Interest
Payment Date will be paid if other than in the manner provided in the Indenture;
(21) whether and under what circumstances the Company will pay additional
amounts as contemplated by Section 1004 of the Indenture (the term "interest,"
as used in this Prospectus, shall include such additional amounts) on such Debt
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Securities to any holder who is not a United States person (including any
modification to the definition of such term as contained in the Indenture as
originally executed) in respect of any tax, assessment or governmental charge
and, if so, whether the Company will have the option to redeem such Debt
Securities rather than pay such additional amounts (and the terms of any such
option); (22) any deletions from, modifications of or additions to the Events of
Default or covenants of the Company with respect to any of such Debt Securities;
and (23) any other terms of the series.
Debt Securities may be issued as Original Issue Discount Securities to be
sold at a substantial discount below their principal amount. In the event of an
acceleration of the maturity of any Original Issue Discount Security, the amount
payable to the holder of such Original Issue Discount Security upon such
acceleration will be determined in accordance with the applicable Prospectus
Supplement, the terms of such Debt Security and the Indenture, but will be an
amount less than the amount payable at the maturity of the principal of such
Original Issue Discount Security. Special federal income tax and other
considerations applicable thereto will be described in the Prospectus Supplement
relating thereto.
The Indenture does not contain any provisions that would limit the ability
of the Company to incur indebtedness or that would afford holders of Debt
Securities protection in the event of a highly leveraged or similar transaction
involving the Company. Reference is made to the Prospectus Supplement relating
to the particular series of Debt Securities offered thereby for information with
respect to any deletions from, modifications of or additions to the Events of
Default described below or covenants of the Company contained in the Indenture,
including any addition of a covenant or other provision providing event risk or
similar protection.
REGISTRATION, TRANSFER, PAYMENT AND PAYING AGENT
Unless otherwise indicated in the Prospectus Supplement, each series of
Debt Securities will be issued in registered form only, without coupons. The
Indenture, however, provides that the Company may also issue Debt Securities in
bearer form only, or in both registered and bearer form. Debt Securities in
bearer form shall not be offered, sold, resold or delivered in connection with
their original issuance in the United States or to any United States person (as
defined below) other than offices located outside the United States of certain
United States financial institutions. As used herein, "United States person"
means any citizen or resident of the United States, any corporation, partnership
or other entity created or organized in or under the laws of the United States,
or any estate or trust, the income of which is subject to United States federal
income taxation regardless of its source, and "United States" means the United
States of America (including the States and the District of Columbia), its
territories, its possessions and other areas subject to its jurisdiction.
Purchasers of Debt Securities in bearer form will be subject to certification
procedures and may be affected by certain limitations under United States tax
laws. Such procedures and limitations will be described in the Prospectus
Supplement relating to the offering of the Debt Securities in bearer form.
Unless otherwise indicated in the applicable Prospectus Supplement,
registered Debt Securities will be issued in denominations of $1,000 or any
integral multiple thereof and bearer Debt Securities will be issued in
denominations of $5,000. No service charge will be made for any transfer or
exchange of the Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
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Unless otherwise described in the Prospectus Supplement relating thereto,
the principal, premium, if any, and interest, if any, of or on the Debt
Securities will be payable, and transfer of the Debt Securities will be
registrable, at the corporate trust office of The Chase Manhattan Bank, as
Paying Agent and Security Registrar under the Indenture, in The City of New
York, New York, provided that payments of interest may be made at the option of
the Company by check mailed to the address appearing in the Security Register of
the person in whose name such registered Debt Security is registered at the
close of business on the Regular Record Date (Sections 305, 307 and 1002).
Unless otherwise indicated in the applicable Prospectus Supplement,
payment of principal of, premium, if any, and interest, if any, on Debt
Securities in bearer form will be made payable, subject to any applicable laws
and regulations, at such office outside the United States as specified in the
Prospectus Supplement and as the Company may designate from time to time, at the
option of the holder, by check or by transfer to an account maintained by the
payee with a bank located outside the United States. Unless otherwise indicated
in the applicable Prospectus Supplement, payment of interest and certain
additional amounts on Debt Securities in bearer form will be made only against
surrender of the coupon relating to such Interest Payment Date. Except in
limited circumstances, no payment with respect to any Debt Security in bearer
form will be made at any office or agency of the Company in the United States or
by check mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities ("Global Debt Securities") that will be
deposited with, or on behalf of, a depositary (the "Depositary") identified in
the Prospectus Supplement relating to such series. Global Debt Securities may be
issued in either registered or bearer form and in either temporary or permanent
form. Unless and until it is exchanged in whole or in part for individual
certificates evidencing Debt Securities in definitive form represented thereby,
a Global Debt Security may not be transferred except as a whole by the
Depositary for such Global Debt Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor of such
Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Global Debt Securities and certain limitations and restrictions relating to a
series of bearer Global Debt Securities, will be described in the Prospectus
Supplement relating to such series.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to
Debt Securities of any series: (a) failure to pay principal of or any premium on
any Debt Security of that series when due; (b) failure to pay any interest on
any Debt Security of that series when due, continued for 30 days; (c) failure to
deposit any sinking fund payment, when due, in respect of any Debt Security of
that series; (d) breach of any other covenant or warranty of the Company in the
Indenture (other than a covenant or warranty included in the Indenture solely
for the benefit of series of Debt Securities other than that series), continued
for 60 days after written notice by the Trustee or the holders of at least 25%
in aggregate principal amount of the Outstanding Debt Securities of such series
as provided in the Indenture; (e) certain events in bankruptcy, insolvency or
reorganization involving the Company or any Material Subsidiary (as hereinafter
defined); (f) acceleration of Indebtedness (defined in the Indenture as any
indebtedness for
8
borrowed money or for the unpaid purchase price of real or personal property of,
or guaranteed by, the Company or any Material Subsidiary and computed in
accordance with generally accepted accounting principles) of the Company or any
Material Subsidiary in a principal amount in excess of $10,000,000 under the
terms of the instrument under which such Indebtedness was issued or secured, if
such acceleration is not annulled within 30 days after written notice by the
Trustee or the holders of at least 25% in aggregate principal amount of the
Outstanding Debt Securities of such series as provided in the Indenture; and (g)
any other Event of Default provided with respect to Debt Securities of that
series (Section 501). If an Event of Default with respect to Debt Securities of
any series at the time Outstanding occurs and is continuing, either the Trustee
or the holders of at least 25% in aggregate principal amount of the Outstanding
Debt Securities of that series may declare the principal amount of all the Debt
Securities of that series to be due and payable immediately. At any time after a
declaration of acceleration with respect to Debt Securities of any series has
been made, but before a judgment or decree based on acceleration has been
obtained, the holders of a majority in aggregate principal amount of Outstanding
Debt Securities of that series may rescind and annul such acceleration, provided
that, among other things, all Events of Default with respect to such series,
other than payment defaults caused by such acceleration, have been cured or
waived as provided in the Indenture (Section 502).
"Material Subsidiary" means (a) Franklin Advisers, Inc., a California
corporation, (b) Franklin/Templeton Distributors, Inc., a New York corporation,
(c) Franklin/Templeton Investor Services, Inc., a California corporation, (d)
Templeton Global Advisers Limited (formerly Templeton, Galbraith & Hansberger,
Ltd.), a Bahamas corporation, (e) Templeton Investment Counsel, Inc., a Florida
corporation, (f) from and after the consummation, if any, of the acquisition of
HSC as described under "Use of Proceeds," Franklin Mutual Advisers, Inc.
(formerly Elmore Securities Corporation), a Delaware corporation, (g) any other
Subsidiary which owns, directly or indirectly, any of the capital stock of any
corporation listed in (a) through (f) above or any successor entity and (h) any
other Subsidiary with which any corporation listed in (a) through (f) above or
any successor entity is merged or consolidated or which acquires or succeeds to
a significant portion of the business, properties or assets of any corporation
listed in (a) through (f) above or any successor entity.
ADDITIONAL PROVISIONS
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the holders, unless such holders shall have
offered to the Trustee reasonable indemnity (Section 601). Subject to such
provisions for the indemnification of the Trustee and certain other conditions,
the holders of a majority in aggregate principal amount of the Outstanding Debt
Securities of any series will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the Debt
Securities of that series (Section 512).
No holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless: (i) such holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to Debt Securities
of that series; (ii) the holders of not less than 25% in aggregate principal
amount of the Outstanding Debt Securities of that series shall have made written
request, and offered reasonable indemnity, to the Trustee to institute such
proceeding as trustee; (iii) the Trustee shall have failed to institute such
proceeding within 60 days after receipt of such written request; and (iv) the
Trustee shall not
9
have received from the holders of a majority in principal amount of the
Outstanding Debt Securities of that series a direction inconsistent with such
request (Section 507). However, the holder of any Debt Security will have an
absolute right to receive payment of the principal of (and premium, if any) and
interest on such Debt Security on or after the due dates expressed in such Debt
Security and to institute suit for the enforcement of any such payment (Section
508).
The Company is required to furnish to the Trustee annually a statement as
to performance by the Company of certain of its obligations under the Indenture
and as to any default in such performance. The Company is also required to
deliver to the Trustee, within five days after the occurrence thereof, written
notice of any event which after notice or lapse of time or both would constitute
an Event or Default (Section 1009).
OUTSTANDING DEBT SECURITIES
In determining whether the holders of the requisite principal amount of
Outstanding Debt Securities have given any request, demand, authorization,
direction, notice, consent or waiver under the Indenture, (i) the portion of the
principal amount of an Original Issue Discount Security that shall be deemed to
be Outstanding for such purposes shall be that portion of the principal amount
thereof that could be declared to be due and payable upon acceleration pursuant
to the terms of such Original Issue Discount Security as of the date of such
determination, (ii) the principal amount of any Indexed Security shall be the
principal face amount of such Indexed Security determined on the date of its
original issuance and (iii) any Debt Security owned by the Company or any other
obligor on such Debt Security or any Affiliate of the Company or such other
obligor shall be deemed not to be Outstanding (Section 101).
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the holders of 66 2/3% in aggregate
principal amount of the Outstanding Debt Securities of each series affected by
such modification or amendment: provided, however, that no such modification or
amendment may, without the consent of the holder of each Outstanding Debt
Security affected thereby: (a) change the stated maturity date of the principal
of, or any premium or installment of interest on, or any additional amounts with
respect to, any Debt Security; (b) reduce the principal amount of, or any
premium or interest on, any Debt Security; (c) reduce the amount of principal of
an Original Issue Discount Security payable upon acceleration of the maturity
thereof or the amount thereof provable in bankruptcy; (d) adversely affect the
right of repayment at the option of any holder; (e) change the place of payment
of, currency of payment of principal of, or any premium or interest on, any Debt
Security; (f) impair the right to institute suit for the enforcement of any
payment on or with respect to any Debt Security; or (g) reduce the percentage in
principal amount of Outstanding Debt Securities of any series the consent of
whose holders is required for modification or amendment of the Indenture or for
waiver of compliance with certain provisions of the Indenture or for waiver of
certain defaults (Section 902).
The holders of a majority in aggregate principal amount of the Outstanding
Debt Securities of each series may, on behalf of all holders of Debt Securities
of that series, waive, insofar as that series is concerned, compliance by the
Company with certain restrictive provisions of the Indenture (Section 1008). The
holders of a majority in aggregate principal amount of the Outstanding Debt
Securities of each series may, on behalf of all holders of Debt Securities of
that series, waive any past default under the Indenture with respect to Debt
Securities of that series, except a default in the payment of principal or any
premium or interest, or a default in respect of a provision which
10
under the Indenture cannot be modified or amended without the consent of the
holder of each affected Outstanding Debt Security of that series (Section 513).
Modification and amendment of the Indenture may be made by the Company and
the Trustee without the consent of any holder for any of the following purposes:
(i) to evidence the succession of another corporation to the Company; (ii) to
add to the covenants of the Company for the benefit of the holders of all or any
series of Debt Securities; (iii) to add Events of Default; (iv) to add or change
any provisions of the Indenture to facilitate the issuance of bearer Debt
Securities; (v) to add to, delete from or revise the conditions, limitations and
restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of Debt Securities; (vi) to establish the form or
terms of Debt Securities of any series and any related coupons; (vii) to provide
for the acceptance of appointment by a successor Trustee; (viii) to cure any
ambiguity, defect or inconsistency in the Indenture, provided such action does
not adversely affect the interests of holders of Debt Securities of any series
or any related coupons in any material respect; (ix) to supplement any of the
provisions of the Indenture to such extent as shall be necessary to permit or
facilitate the defeasance and discharge of any series of Debt Securities,
provided such action does not adversely affect the interests of holders of Debt
Securities of such series or any related coupons in any material respect; (x) to
secure the Debt Securities; and (xi) to amend or supplement any provision
contained in the Indenture or in any supplemental indenture, provided that such
amendment or supplement does not materially adversely affect the interests of
the holders of any Debt Securities then Outstanding (Section 901).
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may consolidate or merge with or into, or transfer its assets
substantially as an entirety to, any corporation organized under the laws of any
domestic jurisdiction, provided that the successor corporation assumes the
Company's obligations on the Debt Securities and under the Indenture, that
immediately after giving effect to the transaction no Event of Default, and no
event which, after notice or lapse of time, would become an Event of Default,
shall have occurred and be continuing, and that certain other conditions are met
(Section 801).
CONCERNING THE TRUSTEE
The Company and certain of its subsidiaries maintain banking relationships
with the Trustee in the ordinary course of their businesses.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities being offered hereby: (i)
directly to purchasers; (ii) through agents; (iii) through underwriters; (iv)
through dealers; or (v) through a combination of any such methods of sale. Such
underwriters, agents or dealers may include, and may include a group of
underwriters managed by one or both of, Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Goldman, Sachs & Co.
The distribution of the Debt Securities may be effected from time to time
in one or more transactions: (i) at a fixed price or prices, which may be
changed; (ii) at market prices prevailing at the time of sale; (iii) at prices
related to such prevailing market prices; or (iv) at negotiated prices.
11
Offers to purchase Debt Securities may be solicited directly by the
Company or by agents designated by the Company from time to time. Any such
agent, which may be deemed to be an underwriter as that term is defined in the
Securities Act, involved in the offer or sale of the Debt Securities in respect
of which this Prospectus is delivered will be named, and any commissions payable
by the Company to such agent will be set forth, in the Prospectus Supplement or
Pricing Supplement. Unless otherwise indicated in the Prospectus Supplement or
Pricing Supplement, any such agent will be acting on a reasonable efforts basis.
If an underwriter or underwriters are utilized in the sale, the Company
will execute an underwriting agreement with such underwriters at the time of
sale to them and the names of the underwriters and the terms of the transaction
will be set forth in the Prospectus Supplement or Pricing Supplement, which will
be used by the underwriters to make resales of the Debt Securities in respect of
which this Prospectus is delivered to the public.
If a dealer is utilized in the sale of the Debt Securities in respect of
which this Prospectus is delivered, the Company will sell such Debt Securities
to the dealer, as principal. The dealer may then resell such Debt Securities to
the public at varying prices to be determined by such dealer at the time of
resale.
Certain of the underwriters, dealers or agents may be customers of, engage
in transactions with, and perform services for, the Company or one or more of
its affiliates in the ordinary course of business. Underwriters, dealers, agents
and other persons may be entitled, under agreements which may be entered into
with the Company, to indemnification against certain civil liabilities,
including liabilities under the Securities Act.
If so indicated in the Prospectus Supplement or Pricing Supplement, the
Company will authorize agents and underwriters to solicit offers by certain
institutions to purchase Debt Securities from the Company at the public offering
price set forth in the Prospectus Supplement or Pricing Supplement pursuant to
Delayed Delivery Contracts ("Contracts") providing for payment and delivery on
the date stated in the Prospectus Supplement or Pricing Supplement. Each
Contract will be for an amount not less than, and, unless the Company otherwise
agrees, the aggregate principal amount of Debt Securities sold pursuant to
Contracts shall be not less nor more than, the respective amounts stated in the
Prospectus Supplement or Pricing Supplement. Institutions with whom Contracts,
when authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and other institutions, but shall in all cases be subject to the
approval of the Company. Contracts will not be subject to any conditions except
(i) that the purchase by an institution of the Debt Securities covered by its
Contract shall not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is subject and (ii)
if such Debt Securities are being sold to underwriters, the Company shall have
sold to such underwriters the total principal amount of such Debt Securities
less the principal amount thereof covered by applicable Contracts. A commission
indicated in the Prospectus Supplement or Pricing Supplement will be paid to
underwriters and agents soliciting purchases of Debt Securities pursuant to
Contracts accepted by the Company.
ERISA CONSIDERATIONS
Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code"), prohibits the borrowing of money, the sale of property and certain
other transactions involving the assets of plans that are qualified under the
Code ("Qualified Plans") or individual retirement accounts ("IRAs") and persons
who have certain specified relationships to them. Section 406 of the Employee
Retirement Income Security Act of 1974, as amended
12
("ERISA"), prohibits similar transactions involving employee benefit plans that
are subject to ERISA ("ERISA Plans"). Qualified Plans, IRAs and ERISA Plans are
hereinafter collectively referred to as "Plans."
Persons who have such specified relationships are referred to as "parties
in interest" under ERISA and as "disqualified persons" under the Code. "Parties
in interest" and "disqualified persons" encompass a wide range of persons,
including any fiduciary (e.g., investment manager, trustee or custodian), any
person providing services (e.g., a broker), the Plan sponsor, an employee
organization any of whose members are covered by the Plan, and certain persons
related to or affiliated with any of the foregoing.
The Company's subsidiaries are considered "parties in interest" or
"disqualified persons" with respect to many Plans, including IRAs established
with any of them. The purchase and/or holding of Debt Securities by a Plan with
respect to which any of the Company's subsidiaries is a fiduciary and/or a
service provider (or otherwise is a "party in interest" or "disqualified
person") would constitute or result in a prohibited transaction under Section
406 of ERISA or Section 4975 of the Code, unless such Debt Securities are
acquired or held pursuant to and in accordance with an applicable statutory or
administrative exemption. An IRA that engages in a non-exempt prohibited
transaction could forfeit its tax-exempt status under Section 408 of the Code.
Applicable exemptions may include the exemption for services under Section
408(b)(2) of ERISA and certain prohibited transaction class exemptions (e.g.,
Prohibited Transaction Class Exemption 84-14 relating to qualified professional
asset managers, Prohibited Transaction Class Exemption 96-23 relating to certain
in-house asset managers and Prohibited Transaction Class Exemptions 75-1 and
86-128 relating to securities transactions involving employee benefit plans and
broker-dealers).
In accordance with ERISA's general fiduciary requirement, a fiduciary with
respect to any ERISA Plan who is considering the purchase of Debt Securities on
behalf of such plan should determine whether such purchase is permitted under
the governing plan document and is prudent and appropriate for the ERISA Plan in
view of its overall investment policy and the composition and diversification of
its portfolio. No IRA established with, or for which services are provided by,
any subsidiary of the Company should acquire any Debt Securities and other Plans
established with, or for which services are provided by, any subsidiary of the
Company should consult with counsel prior to making any such acquisition.
LEGAL OPINIONS
The legality of the Debt Securities offered hereby will be passed upon for
the Company by Weil, Gotshal & Manges LLP, New York, New York, and for the
underwriters or agents by Brown & Wood LLP, San Francisco, California.
EXPERTS
The audited consolidated financial statements and schedules of the Company
as of September 30, 1995 and 1994 and for each of the three years in the period
ended September 30, 1995, have been incorporated herein by reference in reliance
on the report of Coopers & Lybrand L.L.P., independent accountants, given the
authority of that firm as experts in accounting and auditing. The audited
financial statements of HSC as of December 31, 1995
13
and 1994 and for each of the two years in the period ended December 31, 1995,
have been incorporated herein by reference in reliance on the report of Graber &
Co., independent accountants, given the authority of that firm as experts in
accounting and auditing.
14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the expenses in connection with this
Registration Statement. All such expenses are estimates, other than the filing
fee payable to the Securities and Exchange Commission.
Item Amount
- ---- ------
SEC registration fee $ 137,932
Trustee's fees and expenses $ 10,000
Printing and engraving expenses $ 25,000
Legal fees and expenses $ 25,000
Accounting fees and expenses $ 10,000
Rating agencies' fees $________
Blue Sky fees and expenses $ 15,000
Miscellaneous $________
Total $________
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law (the "DGCL") is
applicable to the officers, directors, employees and agents of the Company
("Covered Persons") and provides certain specific statutory rights and
limitations on indemnification to persons involved as plaintiff or defendant in
actual or threatened litigation or an investigation by reason of the status of
such person as an officer, director, employee or agent of a corporation.
Indemnification of Covered Persons for judgments or amounts paid in settlement
in civil cases, including attorneys' fees and other expenses is permitted,
provided such action or civil case is not brought by or in the right of the
corporation. In such instance, a Covered Person seeking indemnification must
have acted in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the corporation in respect of the claim; or, in
addition, in the case where a Covered Person is seeking indemnification for
fines and costs in a criminal action, such Covered Person did not have
reasonable cause to believe his conduct was unlawful.
Indemnification of a Covered Person for expenses, including attorneys'
fees, in connection with actions brought by or in the right of the corporation
is also permitted but only where such Covered Person shall not have been
adjudged to be liable to the Company unless a court determines that despite such
finding of liability, indemnification for such expenses is proper in view of all
the circumstances of the matter.
The DGCL requires that a corporation indemnify a Covered Person to the
extent such Covered Person has been successful on the merits in connection with
any action described therein, provides procedures for determining
II-1
the merits of indemnification by the corporation and permits an unsecured
advance of expenses prior to the final disposition of such proceeding upon a
repayment undertaking by the Covered Person if such person is not entitled to be
so indemnified.
The above provisions are non-exclusive and indemnification is also
permitted by law, agreement, vote of stockholders or disinterested directors or
otherwise. In addition, the DGCL permits the procurement of officers and
directors liability insurance by a corporation to insure against various
liabilities even if indemnification of such liability may not otherwise be
permitted.
In addition to the above described provisions, the Company's certificate
of incorporation eliminates liability for breach of fiduciary duty, except: (i)
for a breach of the duty of loyalty, (ii) for failure to act in good faith,
(iii) for intentional misconduct or knowing violation of law, (iv) for
violations of Section 174 of the DGCL or (v) for any transaction from which the
director derived an improper personal benefit. Section 174 of the DGCL provides
that directors shall, under certain circumstances, be jointly and severally
liable for willful or negligent violations of Sections 160 and 173 of the DGCL.
Section 160 of the DGCL imposes certain requirements with respect to stock
repurchases and redemptions, and Section 173 imposes certain requirements with
respect to dividends.
The Company's by-laws also provide that directors and certain other
personnel of the Company shall be indemnified against expenses and certain other
liabilities as provided in Section 145 of the DGCL.
The Company has also entered into indemnification agreements (the
"Indemnification Agreements") with its directors, some of whom are also
executive officers (the "Indemnified Persons") which provide for the prompt
indemnification "to the fullest extent permitted by law," and the prompt
advancing, of attorneys' fees and all other costs, expenses and obligations
(collectively, "Expenses") paid or incurred by the Indemnified Person in
connection with the investigation, defending, being a witness or otherwise
participating in any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation that the Indemnified Person in good
faith believes might lead to the institution of any such action, suit or
proceeding (any of the foregoing, a "Claim") related to the fact that the
Indemnified Person is or was a director, officer, employee, agent or fiduciary
of the Company or is or was serving at the request of the Company as a director,
officer, employee, trustee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise, or
by reason of anything done or not done by a director in any such capacity.
However, the Indemnification Agreements prohibit such indemnification (i) in
connection with any Claim initiated by the Indemnified Person against the
Company or any director or officer of the Company when the Company has joined in
or consented to such Claim, or (ii) if the Board of Directors or other person or
body appointed by the Board of Directors (the "Reviewing Party") determines that
such indemnification is not permitted under applicable law (and, in the event of
such determination, requires the Indemnified Person to reimburse the Company for
all amounts theretofore paid in respect of such indemnification).
The Indemnification Agreements also provide: (i) that the Indemnified
Person is entitled to indemnification for Expenses to the extent he is
successful in defending any Claim, whether on the merits or otherwise, and to
partial indemnification if he is entitled to indemnification for some, but not
all, of such Expenses, (ii) a mechanism through which the Indemnified Person may
seek court relief if the Reviewing Party determines that the Indemnified Person
would not be permitted to be indemnified under applicable law (and therefore is
not entitled to indemnification under the Indemnification Agreements), (iii)
that the Indemnified Person is entitled to indemnification against all Expenses
incurred in seeking to collect an indemnity claim from the Company or in seeking
to recover under a directors' and officers' liability insurance policy and (iv)
that the Company has the burden of proving that the Indemnified Person is
II-2
not entitled to indemnification in any particular case and that the termination
of any Claim by judgment, order, settlement or conviction shall not create a
presumption that the indemnification is not permitted by applicable law.
The Indemnification Agreements provide that in the event of a change in
control of the Company, the Company will seek legal advice from special,
independent counsel selected by the Indemnified Person and approved by the
Company with respect to matters thereafter arising concerning rights of the
Indemnified Person under the Indemnification Agreements. Additionally, such
agreements provide that in the event of a potential change in control, the
Company will, upon written request of the Indemnified Person, create and fund a
trust to satisfy expenses incurred in connection with a claim relating to an
indemnifiable event. The Company is not currently, nor does it expect to be,
subject to a change in control.
The rights of the Indemnified Persons under the Indemnification Agreements
will not be exclusive of any rights they may have under the DGCL, directors' and
officers' liability insurance, the Company's by-laws, or otherwise; however, the
Indemnification Agreements will not permit double payment. The Indemnification
Agreements, while not requiring that the Company maintain directors' and
officers' liability insurance, do require that the Indemnified Person be
provided with full coverage under any policy or policies actually obtained.
Additionally, the Indemnification Agreements provide that if the Company pays an
Indemnified Person pursuant to the Indemnification Agreements, the Company will
be subrogated to the Indemnified Person's rights to recover from other parties.
To the extent that the Board of Directors or the stockholders of the
Company may in the future wish to limit or repeal the ability of the Company to
indemnify directors or other persons, such repeal or limitation will not affect
the indemnification of the Indemnified Persons under the Indemnification
Agreements referred to above, since their rights to full protection are
contractually assured by the Indemnification Agreements.
The Company has purchased an insurance policy indemnifying its officers
and directors and the officers and directors of its subsidiaries against claims
and liabilities (with stated exceptions) to which they may become subject by
reason of their positions with the Company as directors and officers.
Item 16. Exhibits
1* Form of Distribution Agreement
4.1** Indenture, dated as of May 19, 1994,
between the Company and The Chase Manhattan
Bank (formerly Chemical Bank), as trustee
4.2*** Supplemental Indenture
4.3** Form of Fixed Rate Note
4.4** Form of Floating Rate Note
5* Opinion of Weil, Gotshal & Manges LLP
12* Computation of Ratio of Earnings to Fixed Charges
23.1* Consent of Coopers & Lybrand L.L.P.
II-3
23.2* Consent of Graber & Co.
23.3* Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5)
24* Power of Attorney (included as part of the signature page hereof)
25* Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of The Chase Manhattan Bank (separately bound)
------------------------
* Filed herewith.
** Incorporated by reference from the Company's Registration Statement on
Form S-3 (Registration No. 33-53147), originally filed with the
Commission on April 14, 1994.
*** To be filed by amendment.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended (the
"Securities Act");
(ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in this Registration Statement. Notwithstanding
the foregoing, any increase or decrease in the volume
of securities offered (if the total dollar value of
securities offered would not exceed that which was
registered), and any deviation from the low or high
and of the estimated maximum offering range, may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent
no more than a 20 percent change in the maximum
aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective
Registration Statement; and
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in
this Registration Statement or any material change to
such information in this Registration Statement;
provided, however, that the undertakings set forth in paragraphs (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
II-4
periodic reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), that are incorporated by reference in this Registration Statement.
(b) That, for the purpose of determining any liability under 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.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered hereby which remain
unsold at the termination of the offering.
(d) 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 15(d) of the Exchange Act that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered herein and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(e) That, for purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed
as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared
effective.
(f) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus 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.
(g) That, 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 foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
hereby certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Mateo, State of California, on the 16th day of
September, 1996.
FRANKLIN RESOURCES, INC.
By: /s/ LESLIE M. KRATTER
-------------------------
Leslie M. Kratter
Vice President and Assistant
Secretary
POWER OF ATTORNEY
Each officer or director whose signature appears below hereby appoints
Leslie Kratter his true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, to sign on his behalf, as an individual and
in the capacity stated below, any amendment or post-effective amendment to this
Registration Statement, 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 which such attorney-in-fact and agent may
deem appropriate or necessary, as fully to all intents and purposes as he might
or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or any 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 on the 16th day
of September, 1996 in the capacities indicated.
Signature Title
- --------- -----
/s/ CHARLES B. JOHNSON Chairman, President and Chief Executive Officer,
- ------------------------- Principal Executive Officer and Director
Charles B. Johnson
/s/ HARMON E. BURNS Executive Vice President, Legal and
- -------------------------- Administrative, Secretary and Director
Harmon E. Burns
/s/ MARTIN L. FLANAGAN Senior Vice President and Chief Financial Officer,
- -------------------------- Principal Financial Officer and Principal Accounting
Martin L. Flanagan Officer
II-6
/s/ RUPERT H. JOHNSON, JR. Director
- --------------------------
Rupert H. Johnson, Jr.
/s/ JUDSON R. GROSVENOR Director
- --------------------------
Judson R. Grosvenor
/s/ CHARLES E. JOHNSON Director
- --------------------------
Charles E. Johnson
/s/ HARRY O. KLINE Director
- --------------------------
Harry O. Kline
/s/ LOUIS E. WOODWORTH Director
- --------------------------
Louis E. Woodworth
/s/ F. WARREN HELLMAN Director
- --------------------------
F. Warren Hellman
/s/ PETER M. SACERDOTE Director
- --------------------------
Peter M. Sacerdote
II-7
INDEX TO EXHIBITS
Exhibit No. Page
- ----------- ----
1* Form of Distribution Agreement
4.1** Indenture, dated as of May 19, 1994,
between the Company and The Chase Manhattan
Bank (formerly Chemical Bank), as trustee
4.2*** Supplemental Indenture
4.3** Form of Fixed Rate Note
4.4** Form of Floating Rate Note
5* Opinion of Weil, Gotshal & Manges LLP
12* Computation of Ratio of Earnings to Fixed Charges
23.1* Consent of Coopers & Lybrand L.L.P.
23.2* Consent of Graber & Co.
23.3* Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5)
24* Power of Attorney (included as part of the signature page hereof)
25* Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of The Chase Manhattan Bank (separately bound)
------------------------
* Filed herewith.
** Incorporated by reference from the Company's Registration Statement on
Form S-3 (Registration No. 33-53147), originally filed with the
Commission on April 14, 1994.
*** To be filed by amendment.
II-8
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