UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
July 5, 2004
FRANKLIN CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-9727 13-3419202
(State or Other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
450 Park Avenue, 20th Floor
New York, NY 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 486-2323
ITEM 5. OTHER EVENTS AND REQUIRED FD DISCLOSURE.
Background
As of March 31, 2004, an investment by Franklin Capital Corporation
("Franklin") in certain equity securities of Excelsior Radio Networks, Inc.
("Excelsior") represented 57.1% and 96.7% of Franklin's total assets and net
assets, respectively.
On June 30, 2004, Franklin entered into a stock purchase agreement (the
"June Purchase Agreement") with Quince Associates, LP, a Maryland limited
partnership ("Quince"), pursuant to which Franklin sold to Quince 200,000 shares
of Excelsior common stock, at a price of $2.50 per share, for an aggregate
purchase price of $500,000 (the "June Sale"). Pursuant to the June Purchase
Agreement, Franklin and Quince agreed on the terms of a potential purchase price
adjustment with respect to the June Sale whereby, in the event that the per
share net proceeds from any liquidation of Excelsior exceed $3.00 (or an amount
equal to $3.00 plus $0.50 multiplied by the number of years, up to five, elapsed
since June 30, 2004), Franklin will be entitled to receive 80% of the value
greater than $3.00 (or such other applicable amount) per share. The purchase
price adjustment for the June Sale will expire as of June 30, 2009.
Reported Event
On July 5, 2004, Franklin entered into a second stock purchase agreement
(the "July Purchase Agreement") with Quince, pursuant to which Quince agreed to
purchase from Franklin 650,000 shares of Excelsior common stock, at a price of
$2.50 per share, and warrants to purchase an additional 87,111 shares of
Excelsior common stock, at a price of $2.50 per share less the per share
exercise price payable under the warrants, for an aggregate purchase price of
$1,739,210 (the "July Sale"). As with the June Sale, pursuant to the July
Purchase Agreement, Franklin and Quince agreed on the terms of a potential
purchase price adjustment with respect to the July Sale whereby, in the event
that the per share net proceeds from any liquidation of Excelsior exceed $3.00
(or an amount equal to $3.00 plus $0.50 multiplied by the number of years, up to
five, elapsed since the closing date of the July Sale), Franklin will be
entitled to receive 80% of the value greater than $3.00 (or such other
applicable amount) per share. The purchase price adjustment for the July Sale
will expire as of a date 5 years following the closing of the July Sale.
Pursuant to the terms of the July Purchase Agreement, the closing of July
Sale is contingent upon the receipt by Franklin of stockholder approval of the
July Sale at an upcoming special meeting of Franklin's stockholders, the date of
which shall be announced separately by Franklin. The shares of Excelsior common
stock and warrants to purchase shares of Excelsior common stock to be sold to
Quince pursuant to the July Purchase Agreement represent all of Franklin's
remaining interest in Excelsior.
Copies of the July Purchase Agreement and the June Purchase Agreement are
filed herewith as exhibits and are incorporated by reference herein.
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Additional Information
In connection with the July Sale, Franklin will be filing a proxy
statement and other relevant documents concerning the transaction with the
Securities and Exchange Commission (the "SEC"). STOCKHOLDERS OF FRANKLIN ARE
URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH
THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Investors and security holders can obtain free copies of the proxy
statement and other documents when they become available by contacting Franklin
Capital Corporation at 450 Park Avenue, New York, New York 10022, or at (212)
486-2323. In addition, documents filed with the SEC by Franklin will be
available free to charge at the SEC's web site at http://www.sec.gov.
Franklin and their executive officers and directors may be deemed to be
participants in the solicitation of proxies from the stockholders of Franklin in
favor of the July Sale. Information about the executive officers and directors
of Franklin and their ownership of Franklin stock is set forth in the proxy
statement for Franklin's 2003 Annual Meeting of Stockholders. Certain directors
and executive officers of Franklin may have direct or indirect interests in the
July Sale due to securities holdings, pre-existing or future indemnification
arrangements or vesting of options, or, in the case of Mr. Brown, rights to
certain severance payments. Additional information regarding Franklin and the
interests of their executive officers and directors in the July Sale will be
contained in the proxy statement that will be filed by Franklin with the SEC.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
2.1 Stock Purchase Agreement, dated as of July 5, 2004, between
Franklin Capital Corporation and Quince Associates, LP.
2.2 Stock Purchase Agreement, dated as of June 30, 2004, between
Franklin Capital Corporation and Quince Associates, LP.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: July 23, 2004
FRANKLIN CAPITAL CORPORATION
By: /s/ Stephen L. Brown
------------------------------------
Name: Stephen L. Brown
Title: Chairman and Chief Executive
Officer
EXHIBIT INDEX
Exhibit Description
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2.1 Stock Purchase Agreement, dated as of July 5, 2004, between Franklin
Capital Corporation and Quince Associates, LP.
2.2 Stock Purchase Agreement, dated as of June 30, 2004, between
Franklin Capital Corporation and Quince Associates, LP.
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