EXHIBIT 10.4

 

 

FRANKLIN RESOURCES, INC.

2006 DIRECTORS DEFERRED COMPENSATION PLAN

 

 

Amended and Restated Effective as of December 12, 2008

Originally Effective as of December 15, 2005

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FRANKLIN RESOURCES, INC.

2006 DIRECTORS DEFERRED COMPENSATION PLAN

Franklin Resources, Inc., a Delaware corporation, in order to retain the
services of and provide incentives to its non-employee Directors, hereby adopts
this amended and restated deferred compensation plan, effective as of
December 12, 2008; this plan was originally adopted effective as of December 15,
2005.

RECITALS

WHEREAS, the Company (as defined below) has adopted a deferred compensation plan
to permit its non-employee Directors (as defined below) to postpone receipt and
taxation of certain specific amounts of compensation in accordance with the
terms hereof;

NOW THEREFORE, the Company hereby amends and restates this deferred compensation
plan.

ARTICLE 1

DEFINITIONS

1.1 “Beneficiary” shall mean the beneficiary or beneficiaries designated by a
Director to receive his or her deferred compensation benefits in the event of
the Director’s death.

1.2 “Board of Directors” shall mean the board of directors of the Company.

1.3 “Change in Control” shall mean the occurrence of any change in ownership of
the Company, change in effective control of the Company, or change in the
ownership of a substantial portion of the assets of the Company, as defined in
Code Section 409A(a)(2)(A)(v), the Treasury regulations thereunder, and any
other published interpretive authority, as issued or amended from time to time.

1.4 “Code” shall mean the U.S. Internal Revenue Code of 1986, as amended from
time to time.

1.5 “Committee” shall mean the Compensation Committee of the Board of Directors
unless an alternate committee is designated by the Board of Directors to
administer the Plan in accordance with Article 8 below.

1.6 “Common Stock” shall mean the common stock of the Company.

1.7 “Company” shall mean Franklin Resources, Inc., a Delaware corporation, and
any successor organization thereto.

1.8 “Compensation” shall mean any fees (including meeting fees, committee fees,
chairperson fees as well as all other fees) payable or an annual or other stock
or Company equity or mutual fund grant issuable by the Company to a Director
with respect to his or her service as a Director.

 

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1.9 “Deferral” shall mean a contribution of Compensation credited under the Plan
made by the Company (or a subsidiary of the Company, as applicable) on behalf of
a specified Participant and shall include any notional distributions credited
pursuant to Section 3.4 below.

1.10 “Deferred Compensation Account” shall mean the separate account established
under the Plan and the Trust, if any, for each Participant. From time to time,
the Company shall furnish each Participant with a statement of his or her
Deferred Compensation Account balance.

1.11 “Director” shall mean:

(a) With respect to the period prior to January 1, 2009, (i) a member of the
Board of Directors who is not an employee of the Company, or (ii) a member of
the board of directors of any subsidiary of the Company who is not an employee
of the Company or such subsidiary of the Company; and

(b) Effective as of January 1, 2009, (i) a member of the Board of Directors who
is not an employee of the Company or any subsidiary or other affiliate of the
Company, or (ii) a member of the board of directors of any subsidiary of the
Company who is not an employee of the Company or any subsidiary or other
affiliate of the Company.

1.12 “Disability” shall mean the Participant is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than twelve (12) months, as defined in
Code Section 409A(a)(2)(C), the Treasury regulations thereunder, and any other
published interpretive authority, as issued or amended from time to time.

1.13 “Participant” shall mean a Director who has elected to participate in the
Plan; references to a Participant herein shall refer also to his or her
designated Beneficiary where the context so requires. Notwithstanding any
provision herein to the contrary, any individual whose participation in the Plan
commenced prior to January 1, 2009 and who is a Director (within the meaning of
Section 1.11(a)) shall remain eligible to participate thereafter.

1.14 “Plan” shall mean this Franklin Resources, Inc. 2006 Directors Deferred
Compensation Plan.

1.15 “Separation from Service” shall mean a Participant’s “separation from
service” within the meaning of Section Code 409A(a)(2)(A)(i) and its related
regulatory and administrative guidance, as determined by the Committee in its
sole discretion.

1.16 “Trust” or “Trust Agreement” shall mean the Franklin Resources, Inc.
Deferred Compensation Trust Agreement (if and when adopted by the Company) which
is intended to conform to terms of the model trust described in Revenue
Procedure 92-64, 1992-2 C.B. 422, including any amendments thereto, entered into
between the Company and the Trustee to carry out the provisions of the Plan.

 

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1.17 “Trust Fund” shall mean the cash and other property held and administered
by the Trustee pursuant to the Trust (if any) to carry out the provisions of the
Plan.

1.18 “Trustee” shall mean the designated trustee acting at any time under the
Trust.

1.19 “Unforeseeable Emergency” shall mean an unforeseeable emergency as defined
in Code Section 409A(a)(2)(B)(ii)(I) (as limited by Code
Section 409A(a)(2)(B)(ii)(II)), the Treasury regulations thereunder, and any
other published interpretive authority, as issued or amended from time to time.

ARTICLE 2

PARTICIPATION

2.1 Eligible Participants. The Committee shall, from time to time, designate by
name those Directors who are eligible to participate in the Plan and the date
upon which each such Director’s participation may commence. All designated
Directors shall be notified by the Committee of their eligibility to
participate.

2.2 Withdrawal from Participation. A Director who has joined the Plan as a
Participant in a prior year may elect to withdraw from active participation by
completing the withdrawal form attached hereto as Exhibit E and delivering it to
the Committee during the period prescribed by Section 3.1 for the submission of
deferral elections. Any such withdrawal shall only be effective with respect to
a Director’s participation in the calendar year immediately following the
calendar year during which the notice of withdrawal is submitted. Amounts
previously credited to a withdrawing Director’s Deferred Compensation Account
shall remain subject to the terms of the Plan in all respects during the
Director’s period of inactive participation, and any earnings and losses and any
notional dividends shall continue to be credited to such Director’s Deferred
Contribution Account in the manner provided by Sections 3.3 and 3.4,
respectively, during such period. A Director who has withdrawn from the Plan may
recommence active participation in a subsequent calendar year by timely
submitting a deferral election as provided by Section 3.1.

ARTICLE 3

CONTRIBUTIONS AND DETERMINATION OF BENEFITS

3.1 Contributions to the Plan. Participants may make Deferrals by electing to
defer the payment or issuance, as applicable, of all or any part of his or her
Compensation in accordance with the terms hereof. Elections shall be made in the
form attached hereto as Exhibit B. Elections must be made no later than the last
day of the deferral election period. The last day of the deferral election
period shall be (i) December 31st of the calendar year prior to the calendar
year in which the Participant will render the services for which he or she will
receive any part of the Compensation payable to the Participant during that year
or (ii) in the first year in which a Participant first becomes eligible to
participate in the Plan (within the meaning of Section 1.409A-2(a)(7)(ii)),
thirty (30) days after the Participant becomes eligible to participate in the
Plan. No direct contributions by Participants are required or permitted. An
election to defer Compensation shall be effective on the

 

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date an eligible Participant delivers a completed deferral election form to the
Committee or its designee; provided, however, that, if the Participant delivers
another properly completed election to defer Compensation prior to the close of
the deferral election period described in this Section 3.1, the deferral
election on the form bearing the latest date shall control. On the last day of
the deferral election period, the controlling election made prior to the close
of the period shall be irrevocable.

3.2 Investment Elections. In accordance with rules, procedures and options
established by the Committee, and subject to Section 3.5 hereof, each
Participant shall be permitted to provide written instructions regarding the
investment of his or her Deferred Compensation Account. Each Participant may
direct that his or her Deferred Compensation Account be invested in shares of
Common Stock and/or one or more Franklin Templeton mutual funds as selected by
the Participant; provided, however, that the Committee shall have the authority,
in its sole discretion, with or without notice, to change or eliminate one or
more of the foregoing investment alternatives available to the Participant at
any time. Each Participant shall direct the investment of his or her Deferred
Compensation Account by submitting to the Company an Investment Direction in the
form set forth at Exhibit D. In accordance with procedures established by the
Committee, each Participant may change his or her investment directions
effective as of the first day of any calendar quarter. Such changes may be made
on a validly submitted Investment Direction in the form set forth at Exhibit D
no later than the last day of any calendar quarter preceding the effective date
of the change. If a Participant fails to provide any investment directions at a
time when the Participant has a positive balance in the Deferred Compensation
Account, the Company or the Committee shall deem the entire Deferred
Compensation Account invested in shares of Company Common Stock. The Company may
invest assets allocable to a Participant’s Deferred Compensation Account in any
manner, in any amount and for any period of time which the Company in its sole
discretion may select; but the Company must credit or charge the Participant’s
Deferred Compensation Account with the same earnings, gains or losses that the
Participant would have incurred if the Company had invested the assets allocable
to the Participant’s Deferred Compensation Account in the specific investments,
in the specific amounts and for the specific periods directed by the
Participant.

3.3 Investment Earnings or Losses. Any amounts credited to a Participant’s
Deferred Compensation Account may increase or decrease as a result of the
Company’s investment of such amounts, as described in Section 3.2 above. In a
manner consistent with the allocations described in Section 3.2, the investment
earnings or losses under this Section 3.3 shall be credited to a Participant’s
Deferred Compensation Account, as determined in good faith by the Committee.
Each Participant and each Participant’s Beneficiary understand and agree that
they assume all risk in connection with any decrease in the value of the
Deferred Compensation Account as invested in accordance with these Sections 3.2
and 3.3.

3.4 Contribution of Notional Distributions. The Deferred Compensation Account of
each Participant shall be credited with notional dividends and other
distributions at the same time, in the same form and in the same manner, and in
equivalent amounts as dividends and other distributions that are payable from
time to time with respect to investments selected by the Participant under the
Deferred Compensation Account. Any such notional dividends and other
distributions shall be valued as of the date on which they are credited to a
Participant’s Deferred Compensation Account and reallocated to acquire
additional shares of the investments selected by a Participant under the
Deferred Compensation Account. If such notional dividends and other
distributions are credited in a form other than Common Stock, shares of Franklin
Templeton mutual funds or cash, the Committee will determine their value in good
faith.

 

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3.5 Blackout Periods. Notwithstanding anything herein to the contrary, during
any “blackout period” (as defined in Regulation BTR promulgated by the
Securities and Exchange Commission and referred to hereinafter as “Regulation
BTR”) in connection with the Plan, if a Participant otherwise would defer
receipt of such Participant’s Director fees for services rendered as a Director
during such blackout period under the Plan and/or direct the investment of such
fees in shares of the Common Stock during such blackout period, the Company
shall not cause an actual or deemed investment by the Company of such Director
fees into shares of Common Stock during such blackout period, but, rather, shall
take all steps necessary or appropriate to suspend such investment during, and
until then end of, such blackout period required by Regulation BTR. As soon as
practicable following the termination of the blackout period required by
Regulation BTR, the Company shall cause an actual or deemed investment of the
Director fees in shares of Common Stock in accordance with Section 3.2 and such
Director’s applicable deferral or investment election. Also, during any period
that the Director fees are not invested in Common Stock as a result of this
Section 3.5, such fees will be credited with interest at the same rate
applicable to dividends paid by a Franklin Templeton money market fund as
determined by the Committee.

3.6 Valuation of Participant’s Deferred Compensation Account. The value of a
Participant’s Deferred Compensation Account as of any date shall be determined
based on the value of the underlying investments (selected by the Participant or
otherwise in accordance with Section 3.2 hereof) as of the date the value of the
Deferred Compensation Account is determined. The value of each underlying
investment shall be determined based on the closing sales price for such
investment as quoted or otherwise reported on the date of determination (or, if
no closing sales price was reported on that date, on the last trading date such
closing sales price was reported), as reported in The Wall Street Journal or
such other source as the Committee deems reliable.

ARTICLE 4

VESTING AND DISTRIBUTION OF BENEFITS

4.1 Vesting of Deferred Compensation Accounts. A Participant’s Deferred
Compensation Account shall be fully vested at all times.

4.2 Form of Payment. Distributions under the Plan shall be paid solely in cash.

4.3 Scheduled Distribution of Deferred Compensation Accounts. Subject to
Sections 4.4, 4.5, 4.6, 4.7 and 4.8, distribution of a Participant’s Deferred
Compensation Account shall occur on the date or dates elected by the Participant
pursuant to Section 3.1. The amount to be distributed from a Participant’s
Deferred Compensation Account will be determined in accordance with Section 3.6
as of the date of each distribution. In the event the valuation and distribution
of all or a portion of a Participant’s Deferred Compensation Account shall occur
on the same date, the distribution of all or a portion of the Participant’s
Deferred Compensation Account shall be made as soon as administratively
practicable following the valuation of the Participant’s Deferred Compensation
Account but in no event later than the latest date permitted by
Section 1.409A-3(d) of the Treasury regulations.

 

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4.4 Change of Distribution Schedule. A Participant may elect, at any time, to
change his or her distribution date(s), provided that such election shall not
take effect for one (1) year from the date of the new election and that under
the amended payment schedule, each distribution installment (or lump sum) shall
occur no earlier than five (5) years after such installment (or lump sum) would
have been paid under the prior distribution schedule, and in conformance with
Code Section 409A(a)(4)(C), the Treasury regulations thereunder, and any other
published interpretive authority, as issued or amended from time to time.
Notwithstanding the foregoing, for purposes of subsequent changes to an election
to receive distributions in a series of installment payments, the series of
installment payments shall be treated as the entitlement to a single payment. As
a result, any change to a previously-scheduled distribution shall not take
effect for one (1) year from the date of the new election and distribution
installments (or a lump sum payment) shall occur no earlier than five (5) years
after the date the first distribution would have been paid under the prior
schedule of installment payments.

4.5 Change in Control. In the event of a Change in Control prior to complete
distribution to a Participant of the entire balance of his or her Deferred
Compensation Account, the remaining balance of the Participant’s Deferred
Compensation Account shall be determined and payable to the Participant either
(a) in accordance with the Participant’s distribution schedule, or (b) in a lump
sum immediately prior to the consummation of the Change in Control, as
previously elected by the Participant on Exhibit C or in the Supplemental
Deferral Election Form, as applicable.

4.6 Death Benefit. Upon the death of a Participant prior to complete
distribution to him or her of the entire balance of his or her Deferred
Compensation Account, the remaining balance of his or her Deferred Compensation
Account on the date of death shall be payable to the Participant’s Beneficiary
designated on Exhibit C. The remaining balance of a Participant’s Deferred
Compensation Account on the date of death shall be payable to the Participant’s
Beneficiary either (a) in accordance with the Participant’s distribution
schedule or (b) in a lump sum, as previously elected by the Participant on
Exhibit C.

4.7 Disability Benefit. Upon a Participant’s Disability prior to complete
distribution to him or her of the entire balance of his or her Deferred
Compensation Account, the remaining balance of his or her Deferred Compensation
Account on the date of Disability shall be payable to the Participant either
(a) in accordance with the Participant’s distribution schedule or (b) in a lump
sum, as previously elected by the Participant on Exhibit C or in the
Supplemental Deferral Election Form, as applicable.

4.8 Accelerated Full or Partial Distributions. Notwithstanding the foregoing,
the Committee may accelerate the payment of a Participant’s Deferred
Compensation Account in any of the following circumstances, and in such event,
the distributed amounts shall be deducted from the Participant’s Deferred
Compensation Account balance.

 

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(a) Unforeseeable Emergency. In the event of an Unforeseeable Emergency, the
Committee may, in its sole discretion, permit distribution to a Participant from
his or her Deferred Compensation Account of an amount no greater than the amount
necessary to satisfy the emergency plus any taxes reasonably anticipated as a
result of the distribution.

(b) Domestic Relations Order. In its sole discretion, the Committee may permit
acceleration of the time or schedule of a payment under the Plan to an
individual other than the Participant as may be necessary to fulfill a domestic
relations order (as defined in Code Section 414(p)(1)(B)).

(c) Conflict of Interest. In its sole discretion, the Committee may permit the
acceleration of the time or schedule of a payment under the Plan (i) to the
extent necessary to permit any Participant who becomes employed in the Federal
executive branch to comply with an ethics agreement with the Federal government;
or (ii) to the extent reasonably necessary to avoid the violation of an
applicable Federal, state, local, or foreign ethics or conflicts of interest
law.

(d) De Minimis Distribution. In its sole discretion, the Committee may
distribute a Participant’s entire Deferred Compensation Account balance in a
single lump sum payment to the Participant, provided that (i) the balance of the
Participant’s Deferred Compensation Account as of the relevant determination
date does not exceed the applicable dollar amount then in effect under
Section 402(g)(1)(B) of the Code; and (ii) the payment accompanies the
termination of the entirety of the Participant’s interest in the Plan within the
meaning of Section 1.409A-3(j)(4)(v) of the Treasury regulations.

(e) Employment Taxes. In its sole discretion, the Committee may permit
acceleration of the time or schedule of a distribution under the Plan as may be
necessary to pay the Federal Insurance Contributions Act (“FICA”) tax imposed
under Code Sections 3101, 3121(a) and 3121(v)(2) (as applicable) on amounts
deferred under the Plan. In addition, the Committee may permit acceleration of
the time or schedule of a distribution under the Plan as may be necessary to pay
the income tax at source on wages imposed under Code Section 3401 or the
corresponding withholding provisions of applicable state, local, or non-U.S. tax
laws as a result of the payment of the FICA tax, and to pay the additional
income tax at source on wages attributable to the pyramiding Section 3401 wages
and taxes. Notwithstanding the foregoing, the total accelerated distribution to
a Participant under this Section 4.8(e) shall not exceed the aggregate amount of
FICA taxes and the income tax withholding related to such amount of FICA taxes.

(f) Income Inclusion under Code Section 409A. In its sole discretion, the
Committee may permit acceleration of the time or schedule of a distribution
under the Plan at any time the Plan fails to meet the requirements of Code
Section 409A and its related Treasury regulations. Notwithstanding the
foregoing, the total accelerated distribution to a Participant under this
Section 4.8(f) shall not exceed the amount required to be included as income by
the Participant as a result of the failure to meet the requirements of Code
Section 409A and the applicable Treasury regulations.

4.9 Delay of Distributions. To the extent permitted under Code Section 409A and
the related Treasury regulations, a scheduled distribution of a Participant’s
Deferred Compensation Account shall be delayed to a date after the scheduled
payment date under any of the following circumstances:

(a) Company’s Financial Exigency. A scheduled distribution of a Participant’s
Deferred Compensation Account shall be delayed to a date after the scheduled
payment date in the event the Committee reasonably anticipates that making the
distribution will jeopardize the Company’s ability to continue as a going
concern. Any such delayed distribution shall be made during the first taxable
year of the Participant when the making of the distribution will not cause such
a risk to the Company.

 

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(b) Payments that would Violate Federal Securities Laws or other Applicable Law.
A scheduled distribution from a Participant’s Deferred Compensation Account
shall be delayed to a date after the scheduled payment date in the event the
Committee reasonably anticipates that making the distribution will violate
federal securities laws or other applicable law. The delayed distribution must
be made at the earliest date at which the Committee reasonably anticipates that
making the distribution will not cause such violation. For purposes of this
Section 4.9(b), making a payment that would cause inclusion in gross income or
the application of any penalty provision or other provision of the Code is not
considered a violation of applicable law.

(c) Other Events and Conditions. The Committee may delay a scheduled
distribution from the Participant’s Deferred Compensation Account upon such
other events and conditions as may be prescribed in generally applicable
guidance published in the Internal Revenue Bulletin relating to Code
Section 409A.

4.10 Participant’s Rights Unsecured. The right of Participants and their
Beneficiaries to receive a distribution hereunder shall be an unsecured claim
against the general assets of the Company, and neither the Participants nor
their Beneficiaries shall have any rights in or against any amount credited to
their Deferred Compensation Accounts or any other specific assets of the
Company, except as otherwise provided in the Trust Agreement. The Deferred
Compensation Accounts shall be kept solely as nominal accounts, may be carried
in cash or any other liquid assets, may be invested in Common Stock, or may be
invested in any other assets as may be selected by the Committee in its sole and
absolute discretion.

ARTICLE 5

DESIGNATION OF BENEFICIARY

5.1 Designation of Beneficiary. A Participant may designate a Beneficiary to
receive any amount due hereunder to the Participant via written notice thereof
to the Committee at any time prior to his or her death and may revoke or change
the Beneficiary designated therein without the Beneficiary’s consent by written
notice delivered to the Committee at any time and from time to time prior to the
Participant’s death, provided that any such designation or change of designation
naming a primary Beneficiary other than the Participant’s spouse shall be
effective only if written spousal consent is provided to the Committee. If a
Participant’s spouse is incapacitated, then the person who holds a power of
attorney for the incapacitated spouse or other person authorized to act on
behalf of the incapacitated spouse may provide the required spousal consent. If
a Participant

 

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fails to designate a Beneficiary, or if no such designated Beneficiary shall
survive him or her, then such amount shall be paid to his or her estate. The
designations of Beneficiaries shall be made in the form attached hereto as
Exhibit A.

ARTICLE 6

TRUST PROVISIONS

6.1 Trust Agreement. The Company may establish the Trust for the purpose of
retaining assets set aside by the Company pursuant to the Trust Agreement for
payment of all or a portion of the amounts payable pursuant to the Plan. Any
benefits not paid from the Trust shall be paid from the Company’s general funds,
and any benefits paid from the Trust shall be credited against and reduce by a
corresponding amount the Company’s liability under the Plan. All Trust Funds
shall be subject to the claims of general creditors of the Company in the event
the Company is insolvent as defined in the Trust Agreement. The obligations of
the Company to pay benefits under the Plan and the obligation of the Trustee to
pay benefits under the Trust constitute an unfunded, unsecured promise to pay
benefits in the future and the Participant and his or her Beneficiaries shall
have no greater rights than general creditors of the Company. No Trust may hold
assets located outside of the United States nor provide that assets will become
restricted to the provision of benefits under the Plan in connection with a
change in the Company’s financial health.

ARTICLE 7

AMENDMENT AND TERMINATION

7.1 Amendment or Termination.

(a) The Committee shall have the general authority, in its sole discretion, to
amend, suspend, or terminate the Plan at any time and for any reason it deems
appropriate; provided however, that neither an amendment to the Plan nor the
Plan’s suspension or termination may adversely affect a Participant’s vested
rights hereunder without such Participant’s prior written consent. Any
amendment, suspension, or termination of the Plan must be pursuant to a written
document that is executed by a duly-authorized officer of the Company. Except as
required under Code Section 409A, no Deferrals shall be made during any
suspension of the Plan or after termination of the Plan.

(b) Notwithstanding any provision in the Plan to the contrary, the Committee, in
its sole discretion, may amend or modify the Plan in any manner to provide for
the application and effects of Code Section 409A and any related regulatory or
administrative guidance issued by the Internal Revenue Service. The Committee
shall delay the payment of any benefits payable under this Plan to the extent
necessary to comply with Section 409A(a)(2)(B)(i) of the Code (relating to
payments made to certain “specified employees” of certain publicly-traded
companies) and in such event, any such amount to which a Participant would
otherwise be entitled during the six (6) month period immediately following his
or her Separation from Service will be paid on the first business day following
the expiration of such six (6) month period.

 

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7.2 Liquidation of the Plan. In connection with the termination of the Plan
under Section 7.1, the Committee may liquidate the Plan and distribute all
Deferred Compensation Account balances; provided, however, that

(a) The termination and liquidation of the Plan does not occur proximate to a
downturn in the financial health of the Company;

(b) All agreements, methods, programs, and other arrangements sponsored by the
Company that would be aggregated with the Plan under Section 1.409A-1(c) of the
Treasury regulations are also terminated and liquidated;

(c) No payments in liquidation of the Plan are made within twelve (12) months of
the date on which the Company takes all necessary action to irrevocably
terminate and liquidate the Plan other than payments that would have been
payable under the terms of the Plan if the action to terminate and liquidate it
had not occurred;

(d) All payments are made within twenty-four (24) months of the date the Company
takes all necessary action to irrevocably terminate and liquidate the Plan; and

(e) Neither the Company nor any related entity (within the meaning of
Section 1.409A-1(g) of the Treasury regulations) adopts a new plan that would be
aggregated with the Plan under Section 1.409A-1(c) of the Treasury regulations
within three (3) years following the date the Company takes all necessary action
to irrevocably terminate and liquidate the Plan.

7.3 Termination in the Event of Insolvency. To the extent permitted under Code
Section 409A, the Committee shall have the authority, in its sole discretion, to
terminate the Plan and distribute each Participant’s outstanding Deferred
Compensation Account balance within twelve (12) months of a corporate
dissolution taxed under Code Section 331 or with the approval of a bankruptcy
court pursuant to 11 U.S.C. § 503(b)(1)(a). The total accelerated distribution
under this Section 7.3 must be included in a Participant’s gross income in the
latest of:

(a) The calendar year in which the Plan is terminated;

(b) The calendar year in which the Participant’s Deferred Compensation Account
balance is no longer subject to a substantial risk of forfeiture; or

(c) The calendar year in which distribution of the Participant’s Deferred
Compensation Account is administratively practicable.

7.4 Automatic Termination of Plan. The Plan shall automatically terminate on the
date when no Participant (or Beneficiary) has any right to or expectation of
payment of further benefits under the Plan.

7.5 Other Termination Events. The Committee shall have the authority to
terminate the Plan and distribute all Deferred Compensation Account balances to
Participants or, if applicable, their Beneficiaries, upon the occurrence of such
other events and conditions as may be prescribed in generally applicable
guidance published in the Internal Revenue Bulletin relating to Code
Section 409A.

 

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ARTICLE 8

ADMINISTRATION

8.1 Administration. The Committee shall administer and interpret the Plan in
accordance with the provisions of the Plan and the Trust Agreement (if any) and
shall have the authority in its discretion to adopt, amend or rescind such rules
and regulations as it deems advisable in the administration of the Plan. Any
determination or decision by the Committee shall be made in its sole discretion
and shall be conclusive and binding on all persons who at any time have or claim
to have any interest under the Plan. Notwithstanding anything in the Plan to the
contrary, the Committee shall administer and construe the Plan in accordance
with Code Section 409A, the regulations thereunder, and any other published
interpretive authority, as issued or amended from time to time.

8.2 Liability of Committee, Indemnification. The Committee shall not be liable
for any determination, decision, or action made in good faith with respect to
the Plan. The Company will indemnify, defend and hold harmless the members of
the Committee from and against any and all liabilities, costs, and expenses
incurred by such person(s) as a result of any act, or omission, in connection
with the performance of such persons’ duties, responsibilities, and obligations
under the Plan, other than such liabilities, costs, and expenses as may result
from the bad faith, gross misconduct, breach of fiduciary duty or willful
failure to follow the lawful instructions of the Board or criminal acts of such
persons. All members of the Board or the Committee and each and any officer or
employee of the Company acting on their behalf shall, to the extent permitted by
law, be fully indemnified and protected by the Company in respect of any such
action, determination or interpretation.

8.3 Expenses. The cost of the establishment and the adoption of the Plan by the
Company, including but not limited to legal and accounting fees, shall be borne
by the Company. The expenses of administering the Plan shall be borne by the
Company, and the Company shall bear, and shall not be reimbursed by the Trust,
for any tax liability of the Company associated with the investment of assets
held by the Trust.

ARTICLE 9

GENERAL AND MISCELLANEOUS

9.1 Rights Against Company. Except as expressly provided by the Plan, the
establishment of the Plan shall not be construed as giving to any Participant,
employee or any person, any legal, equitable or other rights against the
Company, or against its officers, directors, agents or members, or as giving to
any Participant or Beneficiary any equity or other interest in the assets or
business of the Company or giving any Participant the right to be retained in
the employ of the Company. In no event shall the terms of service of a
Participant, expressed or implied, be modified or in any way affected by the
adoption of the Plan or Trust or any election under the Plan made by a
Participant. The rights of a Participant or his or her Beneficiaries hereunder
shall be solely those of an unsecured general creditor of the Company.

 

11

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9.2 Claims Procedures. Claims for benefits under the Plan by a Participant (or
his or her beneficiary or duly appointed representative) shall be filed in
writing with the Committee. The Committee shall follow the procedures set forth
in this Section 9.2 in processing a claim for benefits.

(a) A claim for benefits shall be considered filed only when actually received
by the Committee on a form prescribed by the Committee. Within ninety (90) days
following receipt by the Committee of a claim for benefits and all necessary
documents and information, the Committee shall furnish the Participant or
Beneficiary claiming benefits under the Plan (the “Claimant”) with written
notice of the decision rendered with respect to such claim. Should special
circumstances require an extension of time for processing the claim, written
notice of the extension shall be furnished to the Claimant prior to the
expiration of the initial 90-day period. In the event the Claimant’s claim is
wholly or partially denied, the Committee’s notice of denial will indicate the
reason for denial, the pertinent provisions of the Plan on which the denial is
based, an explanation of the claims appeal procedure set forth herein, and a
description of any additional material or information necessary to perfect the
claim and an explanation of why such material or information is necessary.

(b) Any Claimant who has had a claim for benefits denied by the Committee, or is
otherwise adversely affected by the action or inaction of the Committee, shall
have the right to request further review by the Committee. Such request must be
in writing, and must be received by the Committee within sixty (60) days after
such person receives notice of the Committee’s action. If written request for
review is not made within such 60-day period, the Claimant shall forfeit his or
her right to review. The Claimant or a duly authorized representative of the
Claimant may review all pertinent documents and submit issues and comments in
writing. The Committee shall then review the claim. The Committee may issue a
written decision reaffirming, modifying or setting aside its former action
within ninety (90) days after receipt of the written request for review. Should
special circumstances require an extension of time for processing the appeal,
written notice of the extension shall be furnished to the Claimant prior to the
expiration of the initial 90-day period. An original or copy of the decision on
appeal shall be furnished to the Claimant. The decision shall set forth the
reasons and pertinent plan provisions or relevant laws on which the decision
rests. The decision shall be final and binding upon the Claimant and the
Committee and all other persons having or claiming to have an interest in the
Plan or in any Account established under the Plan.

(c) In the event of any dispute over benefits under the Plan, all remedies
available to the disputing individual under this Section 9.2 must be exhausted
before legal recourse of any type is sought. A Claimant’s failure to submit a
claim or a request for review in accordance with the procedures and deadlines
set forth in Section 9.2 shall result in an automatic, conclusive, and binding
denial of the Claimant’s claim or appeal, as the case may be.

9.3 Assignment or Transfer. No right, title or interest of any kind in the Plan
shall be transferable or assignable by any Participant or Beneficiary or be
subject to alienation, anticipation,

 

12

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encumbrance, garnishment, attachment, execution or levy of any kind, whether
voluntary or involuntary, nor subject to the debts, contracts, liabilities,
engagements, or torts of a Participant or his or her Beneficiary. Any attempt to
alienate, anticipate, encumber, sell, transfer, assign, pledge, garnish, attach
or otherwise subject to legal or equitable process or to dispose of any interest
in the Plan shall be void.

9.4 Severability. If any provision of the Plan shall be declared illegal or
invalid for any reason, said illegal or invalid provision shall not affect the
remaining provisions of the Plan but shall be fully severable, and the Plan
shall be construed and enforced as if said illegal or invalid provision was not
part of the Plan.

9.5 Construction. The article and section headings and numbers are included only
for convenience of reference and are not to be taken as limiting or extending
the meaning of any of the terms and provisions of the Plan. Whenever
appropriate, words used in the singular shall include the plural or the plural
may be read as the singular. When used herein, the masculine gender includes the
feminine and neuter genders, the feminine gender includes the masculine and
neuter genders and the neuter gender includes the masculine and feminine
genders.

9.6 Governing Law. The validity and effect of the Plan and the rights and
obligations of all persons affected hereby shall be construed, administered and
enforced in accordance with the laws of the State of California, without giving
effect to any choice of law rule, except to the extent preempted by applicable
federal law.

9.7 Payment Due to Incompetence. If the Committee receives evidence that a
Participant or Beneficiary entitled to receive any payment under the Plan is
physically or mentally incompetent to receive such payment, the Committee may,
in its sole and absolute discretion, direct the payment to any other person who
or trust which has been legally appointed or established for the benefit of such
person.

9.8 Taxes. All amounts payable hereunder shall be reduced by any and all
federal, state, and local taxes imposed upon the Participant or his or her
Beneficiary which are required to be paid or withheld by the Company. The
determination of the Company regarding applicable income and employment tax
withholding requirements shall be final and binding on the Participant.

 

13

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IN WITNESS WHEREOF, the Company has caused the Plan to be executed by its duly
authorized officer as of this 12th day of December, 2008.

 

FRANKLIN RESOURCES, INC.,

a Delaware corporation

By:

 

/s/ Donna S. Ikeda

Its:

 

Vice President, Human Resources – International

 

14

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EXHIBIT A

FRANKLIN RESOURCES, INC.

2006 DIRECTORS DEFERRED COMPENSATION PLAN

BENEFICIARY DESIGNATION

In the event that I should die prior to the receipt of all amounts credited to
my Deferred Compensation Account under the Franklin Resources, Inc. 2006
Directors Deferred Compensation Plan (the “Plan”), and in lieu of disposing of
my interest1 in my Deferred Compensation Account by my will or the laws of
intestate succession, I hereby designate the following person(s) as primary
Beneficiary(ies) and contingent Beneficiary(ies) of my interest in my Deferred
Compensation Account (please attach additional sheets if necessary):

 

Primary Beneficiary(ies) (Select only one of the three alternatives)

    

            

(a)    Individuals and/or Charities

       

%
Share

Name

           

Address

   

Name

           

Address

   

Name

           

Address

   

Name

           

Address

   

 

1

A married Participant whose Deferred Compensation Account is community property
may dispose only of his or her own interest in the Deferred Compensation
Account. In such cases, the Participant’s spouse may designate the Participant
or any other person(s) as the beneficiary(ies) of his or her interest in the
Deferred Compensation Account on a separate Beneficiary Designation.

 

  Exhibit A   A-1

--------------------------------------------------------------------------------

    

(b)    Residuary Testamentary Trust

         

In trust, to the trustee of the trust named as the beneficiary of the residue of
my probate estate.

 

    

(c)    Living Trust

       

The

 

 

  Trust, dated  

 

  (print name of trust)  

(fill in date trust was established)

 

Contingent Beneficiary(ies) (Select only one of the three alternatives)

    

            

(a)    Individuals and/or Charities

       

%
Share

Name

           

Address

   

Name

           

Address

   

Name

           

Address

   

 

    

(b)    Residuary Testamentary Trust

         

In trust, to the trustee of the trust named as the beneficiary of the residue of
my probate estate.

 

  Exhibit A   A-2

--------------------------------------------------------------------------------

    

(c)    Living Trust

       

The

 

 

  Trust, dated  

 

  (print name of trust)    

(fill in date trust was established)

Should all the individual primary Beneficiary(ies) fail to survive me or if the
trust named as the primary Beneficiary does not exist at my death (or no will of
mine containing a residuary trust is admitted to probate within six months of my
death), the contingent Beneficiary(ies) shall be entitled to my interest in the
Deferred Compensation Account in the shares indicated. Should any individual
beneficiary fail to survive me or a charity named as a beneficiary no longer
exists at my death, such beneficiary’s share shall be divided among the
remaining named primary or contingent Beneficiaries, as appropriate, in
proportion to the percentage shares I have allocated to them. In the event that
no individual primary Beneficiary(ies) or contingent Beneficiary(ies) survives
me, no trust (excluding a residuary testamentary trust) or charity named as a
primary Beneficiary or contingent Beneficiary exists at my death, and no will of
mine containing a residuary trust is admitted to probate within six months of my
death, then my interest in the Deferred Compensation Account shall be disposed
of by my will or the laws of intestate succession, as applicable.

Capitalized terms used but not otherwise defined herein shall have the same
meanings as set forth in the Plan.

This Beneficiary Designation is effective until I file another such Beneficiary
Designation with the Company. Any previous Beneficiary Designations are hereby
revoked.

 

Submitted by:

   

Filing Acknowledgement:

¨ Participant         ¨ Participant’s Spouse

   

Franklin Resources, Inc.

 

   

By:

 

 

Name:

 

 

   

Its:

 

 

Date:

 

 

    Filed with the records of the Company this            day of
                    , 20    

 

  Exhibit A   A-3

--------------------------------------------------------------------------------

Spousal Consent for any interest in a Deferred Compensation Account that is
Community Property

Participant’s spouse should file a separate beneficiary designation for the
spouse’s community property interest in the Participant’s Deferred Compensation
Account.

Spousal Consent for any interest in a Deferred Compensation Account that is not
Community Property (necessary if beneficiary is other than Spouse):

I hereby consent to this Beneficiary Designation. This consent does not apply to
any subsequent Beneficiary Designation which may be filed by my spouse.

 

 

(Signature of Spouse)

Date:

 

 

 

  Exhibit A   A-4

--------------------------------------------------------------------------------

EXHIBIT B

FRANKLIN RESOURCES, INC.

2006 DIRECTORS DEFERRED COMPENSATION PLAN

DEFERRAL ELECTION FORM

Name:                     

I hereby elect to defer the following Compensation amounts in accordance with
the terms of the Franklin Resources, Inc. 2006 Directors Deferred Compensation
Plan (the “Plan”). This election shall be effective for amounts earned as a
Director of the Company and/or any subsidiary of the Company. This election
shall remain in effect indefinitely for all years of service until terminated or
modified by a subsequent deferral election form which shall generally be
effective for amounts earned in the calendar year following the calendar year
such subsequent deferral election form is filed with the Company:

 

¨

  

        % of my annual stock grant(s).

¨

  

        % of my other stock grant(s).

¨

  

        % of my Directors’ fees.

¨

  

        % of my meeting fees.

¨

  

        % of my committee fees.

¨

  

        % of my chairperson fees.

¨

  

        % of all other fees.

Note:

  

As stated above, this election shall remain in effect indefinitely for all years
of service until terminated or modified by a subsequent deferral election form.
You can file a new election form at any time with respect to deferrals in a
subsequent calendar year. A new election form must be filed no later than
December 31st of the calendar year prior to the calendar year for which the new
election will be effective.

[Signature page follows]

 

  Exhibit B   B-1

--------------------------------------------------------------------------------

Submitted by:

   

Filing Acknowledgement:

Participant

   

Franklin Resources, Inc.

 

   

By:

 

 

Name:

 

 

   

Its:

 

 

Date:

 

 

    Filed with the records of the Company this            day of
                    , 20    

 

  Exhibit B   B-2

--------------------------------------------------------------------------------

EXHIBIT C

FRANKLIN RESOURCES, INC.

2006 DIRECTORS DEFERRED COMPENSATION PLAN

DISTRIBUTION ELECTION FORM

Name:                     

Once I am eligible to receive distributions from the Plan, my Plan deferrals, as
adjusted for income, gains or losses under the Plan, shall be paid to me on the
following date(s) and in the following increment(s). If the payment date is a
Saturday, Sunday or holiday, then the payment shall be made on the next business
day. Please elect either “Lump Sum,” “Equal Payments Over a Period of Years,” or
“Fixed Payment Dates,” and then make the appropriate sub-election(s).

 

1.

Lump Sum

 

¨

100% upon a Separation from Service

 

2.

Equal Payments Over a Period of Years

 

  ¨

Substantially equal quarterly installments over five (5) years beginning on the
earlier of the January 20, April 20, July 20, or October 20 immediately
following my Separation from Service and continuing on each
January 20, April 20, July 20, or October 20 thereafter.

 

  ¨

Substantially equal quarterly installments over ten (10) years beginning on the
earlier of the January 20, April 20, July 20, or October 20 immediately
following my Separation from Service and continuing on each
January 20, April 20, July 20, or October 20 thereafter. (Note: Elect this
alternative if you are not a resident of California and intend to comply with
California R&TC Section 17952.5.)

 

Important Note:

  

For purposes of subsequent changes in the timing of the payments as elected
above, the series of installment payments shall be treated as the entitlement to
a single payment. If you wish to change this election for amounts previously
deferred, (a) any change shall not take effect for one (1) year from the date of
the new election and (b) the commencement of payments (or a lump sum payment)
shall occur no earlier than five (5) years after the date the first distribution
would have been paid under the prior distribution schedule.

 

  Exhibit C   C-1

--------------------------------------------------------------------------------

3.

Fixed Payment Dates

 

    ¨

                       

Pertcentage

      Month    Day    Year

    ¨

                       

Percentage

      Month    Day    Year

    ¨

                       

Percentage

      Month    Day    Year

    ¨

                       

Percentage

      Month    Day    Year

 

Important Note:

  

If you wish to change this election for amounts previously deferred, (a) any
change shall not take effect for one (1) year from the date of the new election
and (b) each distribution (or lump sum) shall occur no earlier than five
(5) years after such distribution (or lump sum) would have been paid under the
prior distribution election.

Once the payout of my Plan deferrals has commenced, dividends and other
distributions accrued with respect to my Plan deferrals shall be paid to me in
the following manner:

Dividends and other distributions accrued with respect to Franklin Templeton
Mutual Funds:

 

¨

 

Reinvested.

¨

 

Paid out on the next payment date.

Dividends and other distributions accrued with respect to Company Common Stock:

 

¨

 

Reinvested.

¨

 

Paid out on the next payment date.

 

  Exhibit C   C-2

--------------------------------------------------------------------------------

Upon my death prior to the complete distribution of my Plan deferrals (as
adjusted for income, gains and losses under the Plan), the remaining balance
shall be payable to my designated beneficiary in the following manner:

 

¨

 

In a lump sum.

¨

 

In accordance with the distribution schedule elected by me on this Exhibit C.

In the event of my Disability prior to the complete distribution of my Plan
deferrals (as adjusted for income, gains and losses under the Plan), the
remaining balance shall be payable in the following manner:

¨

 

In a lump sum.

¨

 

In accordance with the distribution schedule elected by me on this Exhibit C.

In the event of a Change in Control prior to the complete distribution of my
Plan deferrals (as adjusted for income, gains and losses under the Plan), the
remaining balance shall be payable in the following manner:

¨

 

In a lump sum immediately prior to the consummation of a Change in Control.

¨

 

In accordance with the distribution schedule elected by me on this Exhibit C.

 

Submitted by:

   

Filing Acknowledgement:

Participant

   

Franklin Resources, Inc.

 

   

By:

 

 

Name:

 

 

   

Its:

 

 

Date:

 

 

    Filed with the records of the Company this            day of
                    , 20    

 

  Exhibit C   C-3

--------------------------------------------------------------------------------

EXHIBIT D

FRANKLIN RESOURCES, INC.

2006 DIRECTORS DEFERRED COMPENSATION PLAN

INVESTMENT DIRECTION

 

Effective Date of Change in Investment Direction:  

                                        

(select first day of any upcoming calendar quarter)  

The Participant hereby directs the investment of his or her Deferred
Compensation Account in Franklin Resources, Inc. Common Stock and/or one or more
Franklin Templeton mutual funds in accordance with the percentages indicated
below.

 

INVESTMENT

   Percentage  

Franklin Resources, Inc. Common Stock

        %         %         %         %         %    100 %

 

Submitted by:

   

Filing Acknowledgement:

Participant

   

Franklin Resources, Inc.

 

   

By:

 

 

Name:

 

 

   

Its:

 

 

Date:

 

 

    Filed with the records of the Company this            day of
                    , 20    

 

  Exhibit D   D-1

--------------------------------------------------------------------------------

EXHIBIT E

FRANKLIN RESOURCES, INC.

2006 DIRECTORS DEFERRED COMPENSATION PLAN

WITHDRAWAL FORM

Name:                     

I am currently a participant in the Franklin Resources, Inc. 2006 Directors
Deferred Compensation Plan (the “Plan”).

Effective January 1,          (specify applicable calendar year), I hereby
withdraw from the Plan, and no additional amounts of compensation payable to me
on or after such date will be deferred under the Plan unless I file a subsequent
election form. I shall be eligible to defer additional amounts under the Plan
only by timely delivery to the Company of a new election form which shall
generally be effective for amounts earned in the calendar year following the
calendar year such subsequent deferral election form is filed with the Company.
A new election form must be filed no later than December 31st of the calendar
year prior to the calendar year for which the new election form will be
effective.

My Plan deferrals (including amounts deferred during the remainder of the
current calendar year), as adjusted for losses or gains under the Plan, shall be
paid to me in accordance with my most recent Deferral Election Form unless I
file a subsequent election form to which the Committee can give effect.

 

Submitted by:

   

Filing Acknowledgement:

Participant

   

Franklin Resources, Inc.

 

   

By:

 

 

Name:

 

 

   

Its:

 

 

Date:

 

 

   

Filed with the records of the Company this

           day of                     , 20    

 

  Exhibit E   E-1