EXHIBIT 10.4

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made as of this __ day of
______, 200_ by and between Franklin Resources, Inc., a Delaware corporation
(the “Company” or “Indemnitor”), and the individual whose name is set forth
under “Indemnitee” on the signature page to this Agreement (the “Indemnitee”).

WITNESSETH:

WHEREAS, it is essential to the Company to retain and attract as directors and
officers the most capable persons available;

WHEREAS, Indemnitee is a director or officer of the Company;

WHEREAS, both the Company and Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors and officers of
public companies in today’s environment;

WHEREAS, while basic protection against undue risk of personal liability of
directors and officers has been provided through insurance coverage, such
insurance may not provide adequate protection against such litigation and
claims;

WHEREAS, the Certificate of Incorporation and by-laws of the Company, as
amended, require the Company to indemnify its directors and officers as provided
therein and Indemnitee has been serving and continues to serve as a director or
officer of the Company in part in reliance on such Certificate of Incorporation
and by-laws;

WHEREAS, in recognition of Indemnitee’s need for substantial protection against
personal liability in order to enhance Indemnitee’s continued service to the
Company in an effective manner, and Indemnitee’s reliance on the aforesaid
Certificate of Incorporation and by-laws, and in part to provide Indemnitee with
specific contractual assurance that the protection specified in the Certificate
of Incorporation and by-laws, as amended, will be available to Indemnitee
(regardless of, among other things, any amendment to or revocation of such
Certificate of Incorporation or by-laws, any change in the composition of the
Company’s Board of Directors or any acquisition transaction relating to the
Company), the Company wishes to provide in this Agreement for the
indemnification of and the advancing of expenses to Indemnitee to the full
extent (whether partial or complete) permitted by law and as set forth in this
Agreement, and, to the extent insurance is maintained, for the continued
coverage of Indemnitee under the Company’s directors’ and officers’ liability
insurance policies;

 

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NOW, THEREFORE, in consideration of the premises and of Indemnitee continuing to
serve the Company directly or, at its request, with another enterprise, and
intending to be legally bound hereby, the parties hereto agree as follows:

1. Certain Definitions.

(a) Change in Control shall be deemed to have occurred if (i) any “person” (as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the “Act”)), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or a corporation owned
directly or indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company, is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing 20% or more of the total
voting power represented by the Company’s then outstanding Voting Securities,
except (A) a person who as of December 31, 2005 owned 15% or more of the total
voting power represented by the Company’s outstanding Voting Securities (the
“Existing Holder”) shall not be deemed to have caused a change in control until
such person becomes the beneficial owner, directly or indirectly, of more than
50% of the then outstanding Voting Securities, or (B) a person who becomes a
beneficial owner, directly or indirectly, of securities of the Company
representing 20% or more of the total voting power represented by the Company’s
then outstanding Voting Securities shall not be deemed to have caused a change
in control unless such person also owns more of the total voting power
represented by the Company’s outstanding Voting Securities than is owned by the
Existing Holder at the time such person becomes owner of such securities, or
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Company and
any new director whose election by the Board of Directors or nomination for
election by the Company’s stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof,
or (iii) the stockholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or consolidation
which would result in the Voting Securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into Voting Securities of the surviving
entity) at least 80% of the total voting power represented by the Voting
Securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s assets.

(b) Claim shall mean any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation, whether instituted by the Company
or any other party, that Indemnitee in good faith believes might lead to the
institution of any such action, suit or proceeding, whether civil, criminal,
administrative, investigative or other, including any appeal therefrom, provided
that Claim shall not include any action, suit or proceeding brought by
Indemnitee contemplated by Section 5.

(c) Expenses shall mean attorneys’ fees and all other costs, expenses and
obligations paid or incurred in connection with investigating, defending, being
a witness in or participating in (including on appeal), or preparing to defend,
be a witness in or participate in, any Claim relating to any Indemnifiable
Event.

 

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(d) Indemnifiable Event shall mean any event or occurrence related to the fact
that Indemnitee 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 Indemnitee in any such capacity.

(e) Potential Change in Control shall be deemed to have occurred if (i) the
Company enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control, or (ii) any person (including the Company)
publicly announces an intention to take or to consider taking actions which if
consummated would constitute a Change in Control, or (iii) any person, other
than a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, who is or becomes the beneficial owner,
directly or indirectly, of securities of the Company representing 9.5% or more
of the combined voting power of the Company’s then outstanding Voting
Securities, increases his beneficial ownership of such securities by 5% or more
over the percentage so owned by such person as of December 31, 2005, except
(A) an Existing Holder which increases its beneficial ownership of such
securities by 5% or more over the percentage so owned as of December 31, 2005
shall not be deemed to have caused a potential change in control, unless such
increase results in such person becoming the beneficial owner, directly or
indirectly, of more than 50% of the then outstanding Voting Securities, or (B) a
person who is or becomes the beneficial owner, directly or indirectly, of the
voting power representing 9.5% or more of the Company’s Voting Securities and
increases his beneficial ownership of such securities by 5% or more over the
percentage so owned by such person as of December 31, 2005 shall not be deemed
to have caused a potential change in control to have occurred unless, including
such increase in ownership, such person owns more of the voting power
represented by the Company’s Voting Securities than is owned by the Existing
Holder at the time such person increases his ownership, or (iv) the Company’s
Board of Directors adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control has occurred.

(f) Reviewing Party shall mean any appropriate person or body consisting of a
member or members of the Company’s Board of Directors or any other person or
body appointed by the Company’s Board of Directors (including the special,
independent counsel referred to in Section 3 hereof) who is not a party to the
particular Claim for which Indemnitee is seeking indemnification.

(g) Voting Securities shall mean any securities of the Company which have rights
to vote generally in the election of directors.

2. Basic Indemnification Agreement.

(a) In the event Indemnitee was, is or becomes a party to or witness or other
participant in, or is threatened to be made a party to or witness or other
participant in, a Claim by reason of (or arising in part out of) an
Indemnifiable Event, the Company shall indemnify Indemnitee to the fullest
extent permitted by law, as soon as practicable but in any event no later than
thirty days after written demand is presented to the Company, against any and
all Expenses, judgments, fines, penalties and amounts paid in settlement
(including all interest, assessments and other charges paid or payable in
connection with or in respect of such Expenses, judgments,

 

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fines, penalties or amounts paid in settlement) of such Claim. Notwithstanding
anything in this Agreement to the contrary, Indemnitee shall not be entitled to
indemnification pursuant to this Agreement in connection with any Claim
initiated by Indemnitee against the Company or any director or officer of the
Company unless the Company has joined in or consented to the initiation of such
Claim. If so requested by Indemnitee, the Company shall advance (within two
business days of such request) any and all Expenses to Indemnitee (an “Expense
Advance”). Any and all Expense Advances shall be made without regard to
Indemnitee’s ability to repay such amounts and without regard to Indemnitee’s
ultimate entitlement to indemnification under this Agreement or otherwise. Any
and all Expense Advances shall be made on an unsecured basis and be interest
free.

(b) Notwithstanding the foregoing, (i) the obligations of the Company to
indemnify Indemnitee under Section 2(a) shall be subject to the condition that
the Reviewing Party shall not have determined (in a written opinion, in any case
in which the special, independent counsel referred to in Section 3 hereof is
involved) that Indemnitee would not be permitted to be indemnified under
applicable law, and (ii) the obligation of the Company to make an Expense
Advance pursuant to Section 2(a) shall be subject to the condition that, if,
when and to the extent that the Reviewing Party determines that Indemnitee would
not be permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid; provided, however, that if
Indemnitee has commenced legal proceedings in a court of competent jurisdiction
to secure a determination that Indemnitee should be indemnified under applicable
law, (x) any determination made by the Reviewing Party that Indemnitee would not
be permitted to be indemnified under applicable law shall not be binding, and
(y) the Company shall continue to make Expenses Advances, and Indemnitee shall
not be required to reimburse the Company for any Expense Advance, in each case
until the final judicial determination is made with respect thereto (as to which
all rights of appeal therefrom have been exhausted or lapsed). If there has not
been a Change in Control, the Reviewing Party shall be selected by the Board of
Directors, and if there has been such a Change in Control, the Reviewing Party
shall be the special, independent counsel referred to in Section 3 hereof. If
there has been no determination by the Reviewing Party or if the Reviewing Party
determines that Indemnitee substantively would not be permitted to be
indemnified in whole or in part under applicable law, Indemnitee shall have the
right to commence litigation in any court in Indemnitee’s state of domicile or
Delaware having subject matter jurisdiction thereof and in which venue is proper
seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, and the Company
hereby consents to service of process and to appear in any such proceeding. Any
such adjudication shall be conducted in all aspects as a de novo trial on the
merits, and any prior adverse determination shall not be referred to or
introduced into evidence, create a presumption that Indemnitee is not entitled
to indemnification or advancement of expenses, be a defense or otherwise
adversely affect Indemnitee. Any determination by the Reviewing Party otherwise
shall be conclusive and binding on the Company and Indemnitee. In connection
with any determination by the Reviewing Party or otherwise as to whether
Indemnitee is entitled to be indemnified under this Agreement, Indemnitee shall
be entitled to a rebuttable presumption that he is entitled to such
indemnification and the burden of proof shall be on the Company to come forward
with evidence to establish and overcome the presumption that Indemnitee is not
so entitled.

3. Change in Control. The Company agrees that, if there is a Change in Control
of the Company (other than a Change in Control which has been approved by a
majority of the Company’s

 

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Board of Directors who were directors immediately prior to such Change in
Control), then with respect to all matters thereafter arising concerning the
rights of Indemnitee to indemnity payments and Expense Advances under this
Agreement or any other agreement or the Company’s Certificate of Incorporation
or by-laws now or hereafter in effect relating to Claims for Indemnifiable
Events, any determination regarding such matters shall be made by special,
independent counsel selected by Indemnitee and approved by the Company (which
approval shall not be unreasonably withheld), and who has not otherwise
performed services for the Company within the last five years (other than in
connection with such matters) or Indemnitee. Such counsel, among other things,
shall render its written opinion to the Company and Indemnitee as to whether and
to what extent Indemnitee would be permitted to be indemnified under applicable
law. The Company agrees to pay the reasonable fees and expenses of the special,
independent counsel referred to above and to fully indemnify such counsel
against any and all expenses (including attorneys’ fees), claims, liabilities
and damages arising out of or relating to this Agreement or its engagement
pursuant hereto.

4. Establishment of Trust. In the event of a Potential Change in Control, the
Company shall, upon written request by Indemnitee, create a trust for the
benefit of Indemnitee (the “Trust”) and from time to time upon written request
of Indemnitee shall fund the Trust in an amount sufficient to satisfy any and
all Expenses reasonably anticipated at the time of each such request to be
incurred in connection with investigating, preparing for, defending or otherwise
participating in (including as a witness) any Claim relating to an Indemnifiable
Event, and any and all judgments, fines, penalties and settlement amounts of any
and all Claims relating to an Indemnifiable Event from time to time actually
paid or claimed, reasonably anticipated or proposed to be paid. The amount or
amounts to be deposited in the Trust pursuant to the foregoing funding
obligation shall be determined by the Reviewing Party, in any case in which the
special, independent counsel referred to above is involved. The terms of the
Trust shall provide that upon a Change in Control (i) the trustee to the Trust
(the “Trustee”) shall advance, within two business days of a request by
Indemnitee, any and all Expenses to Indemnitee (and Indemnitee hereby agrees to
reimburse the Trust under the circumstances under which Indemnitee would be
required to reimburse the Company under Section 2(b) of this Agreement),
(ii) the Trust shall continue to be funded by the Company in accordance with the
funding obligation set forth above, (iii) the Trustee shall promptly pay to
Indemnitee all amounts for which Indemnitee shall be entitled to indemnification
pursuant to this Agreement or otherwise, and (iv) all unexpended funds in such
Trust shall revert to the Company upon a final determination by the Reviewing
Party or a court of competent jurisdiction, as the case may be, that Indemnitee
has been fully indemnified under the terms of the Agreement, or that it is no
longer anticipated that expenses will be incurred or amounts will be paid in
connection with the Indemnifiable Event. The Trustee shall be chosen by
Indemnitee. Nothing in this Section 4 shall relieve the Company of any of its
obligations under this Agreement.

5. Indemnification for Additional Expenses. The Company shall indemnify
Indemnitee against any and all expenses (including attorneys’ fees) and, if
requested by Indemnitee, shall (within two business days of such request)
advance such expenses to Indemnitee, which are incurred by Indemnitee in
connection with any claim or action brought by Indemnitee for
(i) indemnification or advance payment of Expenses by the Company under this
Agreement or any other agreement or the Company’s Certificate of Incorporation
or by-laws now or hereafter in effect relating to Claims for Indemnifiable
Events and/or (ii) recovery under any directors’ and officers’ liability
insurance policies maintained by the Company, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification, expense payment
or insurance recovery, as the case may be.

6. Partial Indemnity, Etc. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the
Expenses, judgments, fines, penalties and

 

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amounts paid in settlement of a Claim but not, however, for all of the total
amount thereof, the Company shall nevertheless indemnify Indemnitee for the
portion thereof to which Indemnitee is entitled. Moreover, notwithstanding any
other provision of this Agreement, to the extent that Indemnitee has been
successful on the merits or otherwise in defense of any or all Claims relating
in whole or in part to an Indemnifiable Event or in defense of any issue or
matter therein, including dismissal without prejudice, Indemnitee shall be
indemnified against all Expenses incurred in connection therewith.

7. No Presumption. For purposes of this Agreement, the termination of any claim,
action, suit or proceeding, by judgment, order, settlement (whether with or
without court approval) or conviction, or upon a plea of nolo contendere, or its
equivalent, shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by applicable law.

8. Non-Exclusivity, Etc. The rights of Indemnitee hereunder shall be in addition
to any other rights Indemnitee may have under the Company’s Certificate of
Incorporation, by-laws or the Delaware General Corporation Law or otherwise. To
the extent that a change in the Delaware General Corporation Law (whether by
statute or judicial decision) permits greater indemnification by agreement than
would be afforded currently under the Company’s Certificate of Incorporation,
by-laws and this Agreement, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
such change.

9. Liability Insurance. To the extent the Company maintains an insurance policy
or policies providing directors’ and officers’ liability insurance, Indemnitee
shall be covered by such policy or policies, in accordance with its or their
terms, to the maximum extent of the coverage provided under such policy or
policies in effect for any other Company director or officer.

10. Amendments, Etc. No supplement, modification or amendment of this Agreement
shall be binding unless executed in writing by both of the parties hereto. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provisions hereof (whether or not similar) nor
shall such waiver constitute a continuing waiver.

11. Subrogation. In the event of payment under this Agreement, the Company shall
be subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and shall do everything that
may be necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.

12. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, Certificate of Incorporation, by-law or otherwise)
of the amounts otherwise indemnifiable hereunder.

13. Binding Effect, Etc. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of the Company, spouses, heirs, and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as an officer or director of the Company or in any
capacity of any other enterprise at the Company’s request.

 

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14. Severability. The provisions of this Agreement shall be severable in the
event that any of the provisions hereof (including any provision within a single
section, paragraph or sentence) are held by a court of competent jurisdiction to
be invalid, void or otherwise unenforceable, and the remaining provisions shall
remain enforceable to the fullest extent permitted by law.

15. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of law.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth above.

 

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Indemnitor

FRANKLIN RESOURCES, INC.

By:      Name:      Title:     

Indemnitee

   Name:     

 

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