As filed with the Securities and Exchange Commission on June 12,
2002
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________
Franklin Financial Services Corporation
(Exact name of Registrant as specified in its charter)
Pennsylvania 25-1440803
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Franklin Financial Services Corporation
Incentive Stock Option Plan of 2002
(Full title of Plan)
Franklin Financial Services Corporation
20 South Main Street
Chambersburg, Pennsylvania 17201-0819
(717) 264-6116
(Address, including zip code, and
telephone number, including area code,
of Registrant's principal executive offices)
Elaine G. Meyers
Chief Financial Officer
Franklin Financial Services Corporation
20 South Main Street
Chambersburg, Pennsylvania 17201-0819
(717) 264-6116
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)
Copies to:
Clinton W. Kemp, Esquire
Stevens & Lee, P.C.
P.O. Box 1594
25 North Queen Street
Suite 602
Lancaster, Pennsylvania 17608-1594
(717) 399-6623
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CALCULATION OF REGISTRATION FEE
Proposed Proposed Amount
Title of each Maximum Maximum of
Class of Amount Offering Aggregate Regist-
Securities to to be Price per Offering ration
Registered(1) Registered Share(2) Price(2) Fee
Common Stock, 200,000 $27.25 $5,450,000 $501.40
$1.00 par value
(1) Based on the maximum number of shares of Franklin Financial
Services Corporation common stock, $1.00 par value per
share, authorized for issuance under the Plan set forth
above.
(2) Estimated pursuant to Rule 457(c) and (h)(1) solely for the
purpose of calculating the amount of the registration fee
based upon the average of the bid and asked prices for a
share of the Registrant's common stock on June 6, 2002.
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PART II
Item 3. Incorporation of Documents by Reference.
In this Registration Statement, "we," "us" and "our"
refer to Franklin Financial Services Corporation.
The following documents filed with the Securities and
Exchange Commission (the "SEC") are incorporated by reference in
this Registration Statement and made a part hereof:
(a) our Annual Report on Form 10-K for the fiscal
year ended December 31, 2001;
(b) our Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 2002;
(c) our Current Reports on Form 8-K filed with the
SEC on March 7, 2002 and April 26, 2002; and
(d) all other documents filed by us after the date of
this Registration Statement under Section 13(a),
13(c),14 and 15(d) of the Securities Exchange Act
of 1934, prior to the filing of a post-effective
amendment to the Registration Statement which
indicates that all securities offered have been
sold or which deregisters all securities then
remaining unsold, shall be deemed to be
incorporated by reference in this Registration
Statement and part of this Registration Statement
from the date of filing of such documents.
Item 4. Description of Securities.
Our authorized capital stock consists of 15,000,000 shares
of Common Stock, $1.00 par value, and 5,000,000 shares of no par
value stock, which may be issued in one or more classes or
series as common or preferred stock possessing such terms as
determined by our Board of Directors. As of March 31, 2002,
there were 2,689,000 shares of our Common Stock issued and
outstanding and no shares of our no par value stock issued and
outstanding. There are no other shares of capital stock
authorized, issued or outstanding.
Common Stock
The holders of our Common Stock share ratably in dividends
when and if declared by our board of directors from legally
available funds. Our declaration and payment of cash dividends
depends upon dividend payments by our subsidiary, Farmers and
Merchants Trust Company of Chambersburg, which is our primary
source of revenue and cash flow. We are a legal entity separate
and distinct from our subsidiary. Accordingly, our right, and
consequently the right of our creditors and shareholders, to
participate in any distribution of the assets or earnings of the
subsidiary is necessarily subject to the prior claims of
creditors of the subsidiary, except to the extent that our
claims in our capacity as a creditor may be recognized.
Except as provided in any resolution adopted by our board
of directors establishing the terms of any class or series of no
par stock, each outstanding share of our Common Stock is
entitled to one vote on all matters presented to our
shareholders. Our shareholders cannot cumulate votes in the
election of directors.
Our articles of incorporation authorize our board of
directors to issue authorized shares of our Common Stock without
shareholder approval. The holders of our Common Stock have no
preemptive rights to acquire any additional shares of our Common
Stock. Our Common Stock is presently included for quotation on
the OTC Bulletin Board.
In the event of our liquidation, dissolution or winding-up,
whether voluntary or involuntary, holders of our Common Stock
share ratably in any of our assets or funds that are available
for distribution to shareholders after the satisfaction of our
liabilities or after adequate provision is made for the payment
of such liabilities.
Amendment of Articles or Bylaws
Unless our board of directors has previously approved an
amendment to our articles of incorporation, any amendment to our
articles of incorporation must be approved by the holders of
two-thirds of the outstanding shares entitled to vote. If the
amendment was previously approved by our board of directors,
then only the affirmative vote of the holders of a majority of
the outstanding shares entitled to vote is necessary to approve
the amendment.
Our board of directors has the power to amend our bylaws,
subject to the right of our shareholders to amend, repeal, or
alter any provision of the bylaws by an affirmative vote of the
holders of two-thirds of the outstanding shares entitled to
vote.
Antitakeover Provisions
Certain provisions of our articles of incorporation may
have the effect of deterring an unsolicited tender offer for our
stock or a proxy contest to obtain control of the board of
directors. Certain of these provisions are summarized below.
Our articles of incorporation provide that the affirmative
vote of holders of two-thirds of the outstanding shares entitled
to vote is required to approve any merger, consolidation or
dissolution, unless such action was approved in advance by our
board of directors. If our board of directors approved such
action in advance, then the affirmative vote of the holders of
only a majority of the outstanding shares entitled to vote is
required to approve any merger, consolidation or dissolution.
Our articles of incorporation provide that if any person or
corporation shall acquire beneficial ownership of 50% or more of
our outstanding Common Stock, then we will within 30 days offer
in writing to redeem all or any shares of our Common Stock held
by any shareholder, except the person or corporation that
acquired 50% or more of our outstanding Common Stock, at a price
equal to the greatest of:
(1) the highest price paid by that person for any
share of our Common Stock during the 12 month period preceding
the date of such redemption offer;
(2) the highest market price for our Common Stock on
any trading day during the 12 month period preceding the date of
the redemption offer; or
(3) the book value per share of our Common Stock as
reported in its statement of condition for the quarterly period
immediately preceding the date of the redemption offer.
We are not required to make a redemption offer if our board
of directors approves the acquisition of 50% or more of our
outstanding Common Stock prior to that person's or corporation's
acquisition of beneficial ownership of 5% or more of our
outstanding Common Stock.
In addition, in determining whether to oppose any tender
offer for our outstanding stock, our board of directors may
consider the effect of such offer on our employees, customers
and depositors and the communities we serve.
Staggered Board
Our bylaws provide that our board of directors shall be
divided into three classes, with one class of directors being
elected each year. Accordingly, any person who desires to
acquire control of our board of directors through a proxy
contest must wait two years to elect a majority of the
directors.
Pennsylvania Corporate Law Provisions
The Pennsylvania Business Corporation Law of 1988 also
contains certain provisions applicable to us that may have the
effect of impeding a change in control. These provisions, among
other things:
* require that, following any acquisition of 20% of a
public corporation's voting power, the remaining
shareholders have the right to receive payment for their
shares, in cash, from the acquiring person or group in
an amount equal to the "fair value" of the shares,
including an increment representing a proportion of any
value payable for control of the corporation; and
* prohibit for five years, subject to certain exceptions,
a "business combination," which includes a merger or
consolidation of the corporation or a sale, lease or
exchange of assets, with a shareholder or group of
shareholders beneficially owning 20% or more of a public
corporation's voting power.
* our board of directors can consider the effects of a
transaction on employees and the communities we serve as
well as our shareholders in determining whether a
certain action is in the best interests of the
corporation;
* provide that our board of directors need not consider
the interests of any particular group as dominant or
controlling;
* provide that our directors, in order to satisfy the
presumption that they have acted in the best interests
of the corporation, need not satisfy any greater
obligation or higher burden of proof for actions
relating to an acquisition or potential acquisition of
control;
* provide that actions relating to acquisitions of
control that are approved by a majority of
"disinterested directors" are presumed to satisfy the
directors' standard, unless it is proven by clear and
convincing evidence that the directors did not assent to
such action in good faith after reasonable
investigation; and
* provide that the fiduciary duty of our directors is
solely to the corporation and may be enforced by the
corporation or by a shareholder in a derivative action,
but not by a shareholder directly.
The Pennsylvania Business Corporation Law of 1988
explicitly provides that the fiduciary duty of directors does
not require directors to:
* redeem any rights under, or to modify or render
inapplicable, any shareholder rights plan;
* render inapplicable, or make determinations under,
provisions of the Pennsylvania Business Corporation Law
of 1988, relating to control transactions, business
combinations, control share acquisitions or disgorgement
by certain controlling shareholders following attempts
to acquire control; or
* act as the board of directors, a committee of the board
or an individual director solely because of the effect
such action might have on an acquisition or potential or
proposed acquisition of control of the corporation or
the consideration that might be offered or paid to
shareholders in such an acquisition.
One effect of these provisions may be to make it more
difficult for a shareholder to successfully challenge the
actions of our board of directors in a potential change in
control context. Pennsylvania case law appears to provide that
the fiduciary duty standard under the Pennsylvania Business
Corporation Law grants directors the statutory authority to
reject or refuse to consider any potential or proposed
acquisition of the corporation.
We opted out of coverage by the "short-term profits
disgorgement" and "control-share acquisition" statutes included
in the Pennsylvania Business Corporation Law, as permitted by
the legislation. As a result of our decision to opt-out of
these provisions, neither the "short-term disgorgement" nor the
"control share acquisition" statute would apply to a
nonnegotiated attempt to acquire control of us, although such an
attempt would still be subject to the special charter and other
provisions described in the preceding paragraphs. We can
reverse this action, and thereby cause the "short-term
disgorgement" and "control share acquisition" statutes to apply
to an attempt to acquire control of us, by means of an amendment
to our bylaws, which could be adopted by our board of directors,
without shareholder approval.
Item 5. Interest of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Pennsylvania law provides that a Pennsylvania corporation
may indemnify directors, officers, employees and agents of the
corporation against liabilities they may incur in such
capacities for any action taken or any failure to act, whether
or not the corporation would have the power to indemnify the
person under any provision of law, unless such action or failure
to act is determined by a court to have constituted recklessness
or willful misconduct. Pennsylvania law also permits the
adoption of a bylaw amendment, approved by shareholders,
providing for the elimination of a director's liability for
monetary damages for any action taken or any failure to take any
action unless (1) the director has breached or failed to perform
the duties of his office and (2) the breach or failure to
perform constitutes self-dealing, willful misconduct or
recklessness.
Our bylaws provide for (1) indemnification of our
directors, officers, employees and agents and (2) the
elimination of a director's liability for monetary damages, to
the fullest extent permitted by Pennsylvania law.
Directors and officers are also insured against certain
liabilities for their actions, as such, by an insurance policy
obtained by us.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits
Exhibits:
Number Description
4.1 Amended and Restated Articles of Incorporation of
Franklin Financial Services Corporation (Incorporated
by reference to Exhibit 3 to Franklin Financial
Services Corporation's quarterly report on Form 10-Q
for the quarter ended June 30, 1999.)
5.1 Opinion and consent of Stevens & Lee.
23.1 Consent of Beard Miller Company LLP.
23.2 Consent of Stevens & Lee (included in Exhibit 5.1).
24.1 Powers of Attorney of Directors and Officers (included
on signature page).
99.1 Franklin Financial Services Corporation Incentive
Stock Option Plan of 2002.
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by
section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the 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 the registration
statement. Notwithstanding the foregoing, any increase or
decrease in 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 end 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% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the
effective registration statement.
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such
information in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
do not apply if the information required to be included in a
post-effective amendment by these paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant
to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on
Form S-8 and that it has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly
authorized, in Chambersburg, Pennsylvania, on June 6, 2002.
FRANKLIN FINANCIAL SERVICES
CORPORATION
By: /s/ William E. Snell, Jr.
William E. Snell, Jr.,
President and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints William E.
Snell, Jr. or Theodore D. McDowell, and each of them, his or her
true and lawful attorney-in-fact, as agent with full power of
substitution and resubstitution of him or her and in his or her
name, place and stead, in any and all capacity, to sign any or
all amendments to this Registration Statement and to file the
same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto such attorney-in-fact and agent full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as they might
or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or their substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
Signature Title
/s/Robert G. Zullinger Chairman of the Board June 6, 2002
Robert G. Zullinger and Director
/s/William E. Snell, Jr. President, Chief June 6, 2002
William E. Snell, Jr. Executive Officer and
Director
/s/Charles S. Bender, II Director June 6, 2002
Charles S. Bender, II
/s/G. Warren Elliott Director June 6, 2002
G. Warren Elliott
/s/Donald A. Fry Director June 6, 2002
Donald A. Fry
/s/Dennis W. Good Director June 6, 2002
Dennis W. Good
Director June 6, 2002
Allan E. Jennings, Jr.
/s/H. Huber McCleary Director June 6, 2002
H. Huber McCleary
/s/Jeryl C. Miller Director June 6, 2002
Jeryl C. Miller
/s/Stephen E. Patterson Director June 6, 2002
Stephen E. Patterson
/s/Charles H. Sioberg Director June 6, 2002
Charles H. Sioberg
/s/Kurt E. Suter Director June 6, 2002
Kurt E. Suter
/s/Martha B. Walker Director June 6, 2002
Martha B. Walker
/s/Elaine G. Meyers Treasurer and Chief June 6, 2002
Elaine G. Meyers Financial Officer
EXHIBIT INDEX
Number Description
4.1 Amended and Restated Articles of Incorporation of
Franklin Financial Services Corporation (Incorporated
by reference to Exhibit 3 to Franklin Financial
Services Corporation's quarterly report on Form 10-Q
for the quarter ended June 30, 1999.)
5.1 Opinion and consent of Stevens & Lee.
23.1 Consent of Beard Miller Company LLP.
23.2 Consent of Stevens & Lee (included in Exhibit 5.1).
24.1 Powers of Attorney of Directors and Officers (included
on signature page).
99.1 Franklin Financial Services Corporation Incentive
Stock Option Plan of 2002.
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