Document:

EMPLOYMENT AGREEMENT

            THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of
the 22nd day of December, 2000 by and among ANNE M. TATLOCK (the "Employee"),
FIDUCIARY TRUST COMPANY INTERNATIONAL, a bank organized under the New York State
Banking Law ("Company"), and FRANKLIN RESOURCES, INC., a Delaware corporation
("Parent").

            WHEREAS, Company is a bank organized and existing under Article III
of the New York State Banking Law (the "NYBL"); and

            WHEREAS, Company and Parent entered into an agreement whereby Parent
will acquire all the shares of Company (the "Agreement and Plan of Share
Acquisition"); and

            WHEREAS, pursuant to the Agreement and Plan of Share Acquisition,
the parties desire to enter into an employment agreement under which the
Employee shall be employed by Company and under which Company shall compensate
the Employee following the closing date of the acquisition (the "Closing Date");
provided, that if prior notification to or approval of the Board of Governors of
the Federal Reserve System, the New York State Banking Department or any other
governmental entity is required in connection with the employee entering into
this Agreement, such employment and compensation will begin, and this Agreement
shall only be effective, following the date on which any required notification
periods have expired or been terminated, such approvals have been obtained and
any waiting period or periods shall have passed.

            NOW, THEREFORE, in consideration of the foregoing recitals, the
mutual promises and agreements hereinafter set forth, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Company, Parent, and the Employee agree as follows:

                                    ARTICLE I

                                   EMPLOYMENT

     1.1 OFFICE;  RESPONSIBILITIES.  Subject to the terms hereof,  Company shall
employ the Employee,  and the Employee shall be employed by Company, as Chairman
and Chief Executive  Officer,  effective as of the Closing Date,  subject to the
direction and  supervision of the Chief Executive  Officer of Parent  ("Parent's
CEO").  The Employee  shall  report  directly to Parent's  CEO.  The  Employee's
responsibilities will be as determined by Parent's CEO and shall include,  among
other things,  assisting in  maintaining  and  enhancing  the material  business
relationships  of  Company.  In  addition,  the  Employee  shall be a member  of
Company's Executive Committee and Management  Committee and shall be a member of
Parent's Board of Directors,  so long as the Employee meets the  requirements to
be a director of a corporation  organized  under  Delaware  Corporation  Law and
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shall be a member of the office of the  Chairman of Parent,  for so long as such
office is in existence.

     1.2  FULL-TIME  COMMITMENT.  The Employee  hereby  accepts such  employment
hereunder,  and agrees  that she will  devote  substantially  all of her working
time, attention,  knowledge and skills, faithfully,  diligently, and to the best
of her  ability in  furtherance  of the  business  of Company  and as  otherwise
reasonably  necessary  to such  employment.  During  the term of her  employment
hereunder,  the Employee  will not accept  employment  or  compensation  from or
perform  services of any nature for any business  enterprise  other than Company
and its subsidiaries; PROVIDED, HOWEVER, that nothing in this Agreement shall be
deemed to  restrict  the  Employee  from  serving  on (i) the  unpaid  boards of
charitable,  not-for-profit or community organizations or (ii) the boards of the
organizations  set forth on Schedule A attached hereto, or any other boards with
the prior written  consent of Company's  Board of Directors and Parent's CEO, in
each case so long as such  activities do not interfere  with the  performance of
her duties hereunder.

                                   ARTICLE II

                               TERM OF EMPLOYMENT

     2.1 TERM. The employment of the Employee  pursuant hereto shall commence on
the Closing Date (or if later,  the date of regulatory  approval  referred to in
the third  whereas  clause  above) and remain in effect for a term  expiring  at
12:01 A.M.  New York City time five (5) years from the Closing Date (the "Term")
unless sooner terminated pursuant to the provisions hereof. The Employee must be
employed  by  Company on and prior to the  Closing  Date for this  Agreement  to
become effective.  Employment after the expiration of the Term, if any, shall be
on an employment at-will basis unless otherwise negotiated by the parties.

                                  ARTICLE III

                            COMPENSATION OF EMPLOYEE

     3.1  SALARY.  During  the Term,  Company  shall pay to the  Employee a base
salary  ("Base  Salary")  equal to five  hundred  and  ninety  thousand  dollars
($590,000) per year, payable in accordance with the regular payroll practices of
Company, but not less frequently than monthly. Such Base Salary shall be subject
to review on an annual  basis by  Parent's  CEO,  subject to review by  Parent's
Compensation  Committee,  which  review  shall not result in a decrease  in Base
Salary.  The Base Salary and all other  compensation  payments  to the  Employee
under this  Agreement  or any other  agreement  shall be subject to  withholding
taxes and other applicable deductions.

     3.2 BONUS AND INCENTIVE  COMPENSATION.  The Employee  shall be eligible for
short-term and long-term bonus (each as specified below, and  collectively,  the
"Bonus") and incentive compensation plan participation,  on terms and conditions

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no less  favorable  than those  available  for senior  management  employees  of
Parent.  The amount and payment of such Bonus and  incentive  compensation  plan
participation shall be subject to the attainment of such performance  objectives
as  Parent's  CEO shall  determine,  with the  approval  of  Company  and Parent
Compensation Committees.  Performance objectives may include management, Parent,
Company, and individual targets, and overall Parent performance.

          (a) MINIMUM BONUS  THROUGH  SEPTEMBER  30, 2002.  Notwithstanding  the
     other  provisions  of this  Section  3.2,  the  Bonus  for the  period  (i)
     commencing January 1, 2001 and ending December 31, 2001 and (ii) commencing
     January 1, 2002 and ending September 30, 2002, on an annualized basis shall
     not be less than six hundred and nine thousand,  two hundred and eighty one
     dollars ($609,281). The Bonus for such periods shall be payable as follows:

               (i)  SHORT-TERM  BONUS.  Employee  shall  receive  an  annualized
          short-term  bonus  ("Short-Term  Bonus")  of no less than two  hundred
          ninety six thousand,  five hundred dollars ($296,500),  which shall be
          payable in cash within  forty-five  (45) days following the end of the
          applicable period to which such Short-Term Bonus relates.

               (ii)  LONG-TERM  BONUS.  Employee  shall  receive  an  annualized
          long-term bonus ("Long-Term  Bonus") of no less than three hundred and
          twelve thousand, seven hundred and eighty one dollars($312,781), which
          shall be granted to Employee on the last day of the applicable period,
          and shall be in the form of Parent restricted stock,  which shall vest
          in three (3) equal  one-third (1/3)  increments on the first,  second,
          and third  anniversaries of the date of grant.  The Parent  restricted
          stock  granted  shall be for a number  of Parent  shares  equal to the
          Long-Term  Bonus  divided by the eleven (11) day average per share New
          York Stock Exchange closing price of Parent stock (which shall include
          the date of grant,  the five  trading  days prior to the date of grant
          and the five trading days following the date of grant).

          (b) BONUS AND INCENTIVE  COMPENSATION  AFTER SEPTEMBER 30, 2002. After
     September 30, 2002, the Employee shall become a participant in an incentive
     compensation  plan  established by Parent,  and will be eligible to receive
     awards,  grants or payments  thereunder,  in amounts  comparable to, senior
     management  employees  of  Parent.  Such  incentive  compensation  plan (or
     program) will consist of, among other components and without  limitation by
     specification,  a cash bonus, a long-term stock incentive bonus distributed
     in the form of Parent restricted stock and/or stock options.  To the extent
     employment  is not  continued  beyond  the Term,  the  bonus and  incentive
     compensation for the period  commencing  October 1, 2005 through the end of
     the Term shall not be less than the  pro-rated  amount of the prior  fiscal
     year's  incentive  compensation  payments to the Employee  pursuant to this
     Section  3.2(b) but shall not  extinguish any rights the Employee has under
     any then-existing award or grant.

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     3.3 ADDITIONAL  SERVICES  COMPENSATION.  (a) In consideration of additional
services to be rendered by the Employee in order to facilitate  the  integration
of the  business  of  Company  and  Parent  following  the  consummation  of the
Agreement and Plan of Share Acquisition,  during the Term, the Employee shall be
eligible to receive additional services cash compensation  ("Additional Services
Cash  Compensation")  in the  aggregate  amount  of  two  million,  one  hundred
twenty-five  thousand dollars  ($2,125,000)  payable as follows:  twenty percent
(20%) of such Additional Services Cash Compensation (equal to $425,000) shall be
payable on each of the first,  second,  third, fourth and fifth anniversaries of
the Closing Date. Such Additional Services Cash Compensation shall be payable in
cash as soon as practicable after each such anniversary of the Closing Date, but
in no event  later than  thirty  (30) days after  each such  anniversary  of the
Closing Date.

          (b) In addition,  Employee  shall be eligible to receive stock options
     calculated  using  the  amount  of  $530,000  ("Additional  Services  Stock
     Compensation").   The  Additional  Services  Stock  Compensation  shall  be
     distributed in the form of stock options granted on the Closing Date, fifty
     percent  (50%) of which shall become  exercisable  if the Employee  remains
     employed by Company  through the third  anniversary of the Closing Date and
     the remaining fifty percent (50%) shall become  exercisable if the Employee
     remains  employed by Company through the fourth  anniversary of the Closing
     Date.  Such stock options shall be for the number of Parent shares equal to
     (i) the Additional Services Stock Compensation divided by the per share New
     York Stock Exchange closing price of Parent stock on the Closing Date, (ii)
     multiplied by three. Once such stock options become exercisable, they shall
     remain  exercisable  until the earlier of: (x) the fifth anniversary of the
     date of grant, (y) the first anniversary of a Disabling Event or (z) ninety
     (90) days following  termination of employment  with Company.  The exercise
     price of such  options  shall be the per  share  New  York  Stock  Exchange
     closing price of Parent stock on the Closing Date.

     3.4 BENEFITS;  OTHER  COMPENSATION.  (a) The Employee  shall be entitled to
such health,  life,  disability or other insurance  benefits,  such qualified or
nonqualified  profit  sharing,   pension  or  other  deferred   compensation  or
supplemental  retirement plan benefits,  and such paid vacation and other fringe
benefits  and other  perquisites  (collectively,  "Benefits")  as are  generally
applicable to other senior management employees of Company from time to time. In
addition,  retiree medical  (including  prescription  drug and dental) insurance
benefits currently provided to retired employees of Company and its subsidiaries
shall be provided upon retirement to the Employees and shall not be reduced from
the levels provided prior to the Closing Date. The Employee shall be entitled to
participate  in such plans or programs  as are  generally  applicable  to senior
management  employees  of Parent  from time to time (it being the  intent of the
parties hereto that the Employee be treated with respect to Benefits in a manner
similar to Senior  management  employees  of  Parent)  unless  the  Employee  is
participating  in Benefit  plans of Company that provide  substantially  similar
Benefits to the  Employee.  If the Employee  becomes  subject to any Benefits of
Parent,  (i) the  Employee's  prior years of service with Company shall be taken
into account by Company with respect to eligibility,  benefits and vesting under

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any Parent employee  Benefit plan,  program or arrangement and (ii) Parent shall
cause  any and  all  pre-existing  condition  limitations,  eligibility  waiting
periods and  evidence of  insurability  requirements  under any group plan to be
waived,  or not  applicable,  with  respect  to the  Employee  and her  eligible
dependents to the same extent waived under  Company's  Benefit plans;  PROVIDED,
HOWEVER,  that prior  years of service  provided  in (i) shall not be taken into
account to the extent it would result in the duplication of benefits  accrued in
any prior year; and PROVIDED FURTHER,  HOWEVER,  that if the Employee  commences
participation in any Benefit plan of Parent,  the Employee shall not be entitled
to  participate  in the  corresponding  benefit plan  maintained by the Company.
Notwithstanding  anything  to the  contrary  contained  herein,  for a period of
eighteen (18) months  following the Closing Date,  Parent shall,  or shall cause
Company to,  provide the Employee  Benefits no less  favorable in the  aggregate
than the Benefits provided prior to the Closing Date.

     3.5  EXPENSES.  During the term of this  Agreement,  the Employee  shall be
entitled to receive prompt  reimbursement  for all reasonable  business expenses
incurred  by the  Employee  in  performing  services  hereunder,  provided  such
expenses are  properly  accounted  for in  accordance  with  Company  policy and
practices, as in effect from time to time.

     3.6  ALLOWANCE FOR  FINANCIAL  AND TAX  PLANNING.  Company shall  reimburse
Employee for up to fifteen thousand dollars ($15,000) for the fiscal year ending
September 30, 2001 and five thousand dollars ($5,000) for each subsequent fiscal
year, for actual expenses  incurred in retaining an outside financial and/or tax
planner,  provided such expenses are properly  accounted for in accordance  with
Company policy and practices, as in effect from time to time.

     3.7  ADDITIONAL  BENEFITS.  Company  shall  provide the Employee  with such
luncheon club  memberships and other such memberships in accordance with Company
policy and practices as in effect on the date hereof. Employee shall be entitled
to business  travel in accordance with Company policy and practices as in effect
on the date hereof.

     3.8 WAIVER.  Employee  acknowledges  that as of the effective  date of this
Agreement she is waiving all rights under Company's Change of Control  Severance
Plan, as in effect on the date hereof, which as to Employee shall be deemed null
and void and shall have no further force and effect.

                                   ARTICLE IV

                                   TERMINATION

     4.1 DISCHARGE FOR CAUSE. The Employee may be terminated by Company from her
employment  hereunder for Cause.  Discharge for Cause shall mean the termination
of the  Employee's  employment  with Company by reason of any one or more of the
following  events:  (a) the conviction of the Employee,  by a court of competent

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jurisdiction,  or entry of a plea of  guilty  or NOLO  CONTENDERE,  of any crime
(whether  or  not  involving   Company)  which   constitutes  a  felony  in  the
jurisdiction   involved,   (b)  the  Employee's   embezzlement   or  intentional
misappropriation  of any property of Company or its affiliates or any clients of
any of them including any violation of Section 6.4 or 6.5 of this Agreement, (c)
the commission by the Employee of an act that would cause the Employee,  Company
or any of its affiliates to be disqualified in any manner under Section 9 of the
Investment  Advisers Act of 1940, if the Securities and Exchange Commission (the
"Commission")  were not to grant an exemptive  order under  Section 9(c) thereof
(irrespective  of whether  such  order is  granted),  or that  would  constitute
grounds for the Commission to deny, revoke or suspend registration of Company or
any of its affiliates as an investment advisor, broker/dealer or transfer agent,
as applicable,  with the Commission, (d) if the Employee is an associated person
of a  broker-dealer,  the  commission  by the  Employee  of any act  that  would
constitute grounds for any order by the Commission against the Employee pursuant
to Section  15(b)(4) or  15(b)(6) of the  Securities  Exchange  Act of 1934,  as
amended  (the  "1934  Act"),  (e) a  material  breach of this  Agreement  by the
Employee, continued insubordination or dereliction of duties or serious multiple
infractions  of regulatory  compliance  requirements  such as Company's  Code of
Ethics,  in each case after written notice  specifying in reasonable  detail the
nature of the breach,  insubordination  or  dereliction of duties or infractions
and an  opportunity  to cure of not less than 30 days  having  been given to the
Employee,  (f)  continued  alcohol or other  substance  abuse or addiction  that
renders the Employee  incapable of satisfactorily  performing her duties,  after
written notice and an opportunity to cure in the first such instance of not less
than 30 days (90 days if the Employee enters an approved  rehabilitation program
within such 30-day period) have been given to the Employee or (g) the commission
by the  Employee of an act that  results in any bank  regulatory  authority  (i)
making a  determination  to the effect  that Parent may no longer  maintain  its
status as a financial  holding  company  ("FHC") or bank holding company ("BHC")
(as each  such term is  defined  in the Bank  Holding  Company  Act of 1956,  as
amended,  the "BHCA") or (ii)  pursuant to the BHCA, to Section 8 of the Federal
Deposit  Insurance Act (12 U.S.C. ss. 1818), as amended,  or to New York Banking
Law imposing any civil or criminal penalties on the Employee, Parent or Company,
or issuing an order for the removal or suspension of the Employee from office or
the prohibition of the Employee from participating in the conduct of the affairs
of Company; PROVIDED,  HOWEVER, that there shall be no discharge for Cause under
clauses (c),  (d), or (g) to the extent such act is performed by the Employee at
the direction of Parent's CEO.

     4.2 RESIGNATION.  The Employee's  employment  hereunder shall automatically
terminate upon her  Resignation  during the Term.  "Resignation"  shall mean the
termination of the Employee's  full-time  employment  with Company other than by
reason of a (i) Disabling Event (as defined below), (ii) termination by Employee
for Good Reason (as defined below),  (iii) termination by Company without Cause,
or (iv) termination by Company for Cause.

     4.3 DISABLING  EVENT. In the event of a Disabling Event with respect to the
Employee,  Company may terminate the Employee's employment hereunder.  Disabling

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Event  shall mean the  Employee's  death or the  Employee's  physical  or mental
disability (as determined  under Company's  long-term  disability  plan),  which
renders the Employee incapable of performing her material duties and services as
an employee of Company and which continues for more than six consecutive  months
or more than six months in total during any 12-month period.

     4.4 GOOD REASON.  The Employee may terminate her  employment  hereunder for
Good Reason (as defined  below) during the 60-day period  following the 30th day
after the Employee has notified Company of the  circumstances  constituting Good
Reason if Company has failed to eliminate the  circumstances  constituting  such
Good Reason within such 30-day period.  As used herein,  the Employee shall have
Good  Reason to  terminate  her  employment  with  Company in the event of (i) a
relocation of Company's  principal  office more than 50 miles from New York, New
York,  without the Employee's prior written  consent,  (ii) an adverse change in
the Employee's title,  position or responsibility level set forth in Section 1.1
from that in effect as of the Closing  Date,  taking into  account the effect of
changes  to  Company  and the  Employee's  responsibilities  as a result  of the
consummation  of the  Agreement  and  Plan of  Share  Acquisition,  without  the
Employee's  prior  written  consent,  (iii) a reduction in the  Employee's  Base
Salary,  (iv) failure to pay or grant Base Salary,  Bonus,  Additional  Services
Cash or Stock  Compensation  or any amounts to which the  Employee  shall become
entitled to in accordance with Section 3.2(b) of this Agreement, in each case as
provided by the terms hereof,  (v) a failure to comply in all material  respects
with the  provisions  of Section  3.4 of this  Agreement,  (vi) an  increase  in
required  travel on Company's  business  from that which is required on the date
hereof,  except that the Employee  acknowledges  that additional  travel will be
required due to the global nature of Parent's business,  the California location
of Parent's  headquarter's  office and the provisions of Section 6.20(vi) of the
Agreement and Plan of Share  Acquisition,  (vii) a Change of Control (as defined
below),  (viii) a material breach by Company or Parent of this Agreement or (ix)
any voluntary  termination of employment by the Employee with a termination date
during the twelve (12) month  period  following  the Change of Control,  in each
case after written  notice  specifying  in  reasonable  detail the nature of the
breach and an  opportunity to cure of not less than 30 days having been given to
Company or Parent, as the case may be.

     4.5  CHANGE OF  CONTROL.  A  "Change  of  Control"  shall be deemed to have
occurred  if at any time before the end of the Term there is a change of control
under any of clause (a), (b), (c), or (d),  below.  For these  purposes,  Parent
will be deemed to have become a  subsidiary  of another  corporation  if any one
other corporation owns,  directly or indirectly,  fifty percent (50%) or more of
the  total  combined  voting  power of all  classes  of stock of  Parent  or any
successor to Parent by merger, consolidation, or otherwise.

          (a) A Change of Control  will have  occurred  under this clause (a) if
     Parent is a party to a transaction  pursuant to which Parent is merged with
     or into,  or is  consolidated  with,  or becomes the  subsidiary of another
     corporation  and, at any time  within  twenty-four  (24)  months  after the
     effective  date of that  transaction,  individuals  who were  directors  of
     Parent on the day after the last annual meeting of  stockholders  of Parent
     occurring  before the  transaction  cease for any reason to  constitute  at

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     least  fifty-one  percent  (51%)  of  the  directors  of the  surviving  or
     resulting   corporation   or  (if  Parent   becomes  a  subsidiary  in  the
     transaction) of the ultimate parent of Parent.

          (b) A Change of Control  will have  occurred  under this clause (b) if
     Parent is a party to a transaction  pursuant to which Parent is merged with
     or into,  or is  consolidated  with,  or becomes the  subsidiary of another
     corporation  and, (i) after giving  effect to such  transaction,  less than
     forty  percent  (40%)  of the then  outstanding  voting  securities  of the
     surviving or resulting  corporation  or (if Parent  becomes a subsidiary in
     the  transaction) of the ultimate parent of Parent represent or were issued
     in exchange for voting securities of Parent  outstanding  immediately prior
     to such  transaction  and (ii) at any time within  twenty-four  (24) months
     after  the  effective  date  of  that  transaction,  individuals  who  were
     directors  of  Parent  on  the  date  after  the  last  annual  meeting  of
     stockholders of Parent  occurring  before that effective date cease for any
     reason to constitute at least  fifty-one  percent (51%) of the directors of
     the surviving or resulting  corporation  or (if Parent becomes a subsidiary
     in the transaction) of the ultimate parent of Parent.

          (c) A Change of Control  will have  occurred  under this clause (c) if
     any of the events  described in clause (i),  (ii),  (iii),  or (iv) of this
     clause (c) (a "Change Event") occurs:

               (i) There is a report filed on Schedule 13D of Schedule 14D-1 (or
          any successor  schedule,  form, or report),  each as adopted under the
          1934 Act,  disclosing the acquisition of twenty-five  percent (25%) or
          more of the  voting  stock of  Parent  in a  transaction  or series of
          transactions  by any person (as the term  "person"  is used in Section
          13(d) and Section 14(d)(2) of the 1934 Act, a "Person").

               (ii) Parent is a party to a transaction  pursuant to which Parent
          is merged  with or into,  or is  consolidated  with,  or  becomes  the
          subsidiary  of another  corporation  and,  after giving effect to such
          transaction,  less than fifty  percent  (50%) of the then  outstanding
          voting securities of the surviving or resulting  corporation represent
          or were issued in exchange for voting securities of Parent outstanding
          immediately prior to such transaction.

               (iii) There is a sale, lease, exchange, or other transfer (in one
          transaction  or  a  series  of  a  related  transactions)  of  all  or
          substantially all of the assets of Parent.

               (iv) The  stockholders of Parent approve any plan or proposal for
          the liquidation or dissolution of Parent.

          (d) A Change of Control  will have  occurred  under this clause (d) if
     any Person  announces an  intention to engage in an "election  contest" (as
     that term is defined in  Regulation  14 under the 1934 Act) relating to the
     election of  Directors  of Parent  and, at any time within the  twenty-four
     (24) month period  immediately  following the date of the  announcement  of
     that intention,  individuals  who, on the day after the last annual meeting

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     of stockholders of Parent occurring before that  announcement,  constituted
     the  directors  of Parent  cease for any  reason to  constitute  at least a
     majority thereof.

                                   ARTICLE V

                              EFFECT OF TERMINATION

     5.1 CAUSE OR RESIGNATION. If the Employee's employment is terminated (i) by
Company for Cause or (ii) by the  Employee by her  Resignation,  the  Employee's
Base Salary,  Bonus, and Additional  Services  Compensation,  and other benefits
specified in Article III hereof shall cease at the time of such  termination and
Employee shall not be entitled to any unpaid Bonus or unpaid Additional Services
Cash Compensation or Additional Services Stock  Compensation;  PROVIDED HOWEVER,
that if the  Employee's  employment  is  terminated  for such reasons  after the
second  anniversary of the Closing Date,  then the Employee shall be entitled to
any unpaid  Additional  Services Cash  Compensation  paid as soon as practicable
after  the   termination  of  employment  and  any  Additional   Services  Stock
Compensation shall be exercisable,  to the extent vested, in accordance with the
provisions of such stock option grant.

     5.2 DISABLING EVENT. If the Employee's  employment is terminated by Company
by reason of a Disabling Event, the Employee shall be entitled to receive:

                    (1) all unpaid Base  Salary up to the date of the  Disabling
               Event,  paid  periodically in accordance  with Company's  regular
               payroll practices;

                    (2)  pro-rated  Short-Term  Bonus  up to  the  date  of  the
               Disabling  Event,  based on the amount of the prior fiscal year's
               Short-Term Bonus, and any unpaid Short-Term Bonus relating to the
               fiscal year prior to the fiscal year in which the Disabling Event
               occurs,  paid as  soon as  practicable  following  the  Disabling
               Event;

                    (3) (i)  pro-rated  Long-Term  Bonus  up to the  date of the
               Disabling  Event,  based on the amount of the prior fiscal year's
               Long-Term Bonus, and any  undistributed  Long-Term Bonus relating
               to the  fiscal  year  prior  to the  fiscal  year  in  which  the
               Disabling  Event  occurs,  distributed  as  soon  as  practicable
               following the Disabling  Event,  where the restricted stock shall
               vest  immediately and the stock options shall become  immediately
               exercisable  and  shall  remain  exercisable  through  the  first
               anniversary  of the  Disabling  Event  and (ii) the  lapse of any
               restrictions  on prior  year's  grants  of  restricted  stock and
               acceleration  of  exercisability  on prior year's grants of stock
               options;

                    (4) Additional  Services Cash Compensation,  paid as soon as
               practicable   following  the  Disabling   Event,  and  Additional
               Services Stock Compensation shall become immediately  exercisable
               and shall remain exercisable through the first anniversary of the
               Disabling Event; and

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                    (5) other benefits provided for in Section 3.4 hereof, which
               shall  continue  or be  paid  or  provided  to  the  Employee  in
               accordance with the terms of such plans.

     5.3 WITHOUT  CAUSE;  GOOD REASON.  If (i) Company  desires to terminate the
Employee's  employment  without  Cause  or  (ii)  the  Employee  terminates  her
employment for Good Reason,  the Employee shall remain on the payroll of Company
and shall be entitled to receive:

                    (1) all  unpaid  Base  Salary and  unpaid  Bonus  Amount (as
               defined in Section 5.4 below) for the  balance of the Term,  paid
               in all cash, and paid  periodically  in accordance with Company's
               regular   payroll   practices;

                    (2) Additional   Services  Cash   Compensation,   paid  in
               accordance with the Additional Services Cash Compensation vesting
               provisions,  and any Additional Services Stock Compensation shall
               be  exercisable  in accordance  with the provisions of such stock
               option grant; and

                    (3) other benefits provided for in Section 3.4 hereof, which
               shall  continue to be paid or provided  to the  Employee  for the
               remainder  of  the  Term,   subject  to  such   deductibles   and
               co-payments  as applicable  under such plan or, if for any reason
               the  Employee is no longer  treated as an employee of Company and
               such benefits are not so payable, the cash value of such benefits
               shall be paid to the Employee.

     5.4 BONUS AMOUNT. Bonus Amount shall mean an amount equal to the greater of
(i) the annual  target  Bonus for the  Employee for the fiscal year in which the
termination  occurs or (ii) the annual  Bonus that was paid to the  Employee for
the fiscal year preceding the fiscal year in which the termination occurs.

     5.5 COMPANY  LIABILITY.  If the Internal Revenue Service (i) challenges the
deductibility  of payments  made to the  Employee by Company or (ii) imposes any
excise  tax on the  Employee,  in  each  case  pursuant  to this  Agreement,  in
connection with the consummation of the Agreement and Plan of Share  Acquisition
or in the event of a Change of Control, Company shall make the Employee whole in
connection  therewith and exclusively defend such action with counsel of its own
choice.

     5.6 RETIREE  MEDICAL  BENEFITS.  Notwithstanding  anything to the  contrary
contained in this Article V, the Employee  shall be entitled to retiree  medical
benefits as described in Section 3.4.

                                   ARTICLE VI

                   CONFIDENTIAL INFORMATION AND NONCOMPETITION

     6.1  ACKNOWLEDGEMENT.  The  Employee  agrees and  acknowledges  that in the
course of rendering  services to Company,  its Affiliates,  and their respective

                                       10
<PAGE>

clients and customers  she has had and shall  continue to have access to and has
become and shall  become  acquainted  with  confidential  information  about the
professional,  business and financial  affairs of Company,  its Affiliates,  and
their respective clients and customers and may have contributed to or may in the
future contribute to such information. The Employee acknowledges that Company is
engaged in a highly competitive  business and that the success of Company in the
marketplace  depends upon its goodwill and  reputation.  The Employee agrees and
acknowledges  that  reasonable  limits on her  ability  to engage in  activities
competitive with Company are warranted to protect its substantial  investment in
developing  and  maintaining  its  status  in the  marketplace,  reputation  and
goodwill.  The  Employee  recognizes  that in  order  to  guard  the  legitimate
interests  of  Company  it  is  necessary  to  protect  all  such   confidential
information, goodwill and reputation.

     6.2  PROPRIETARY  INFORMATION.  In the course of her service to Company and
her future  service to Company,  the Employee has had and shall continue to have
access to  confidential  information  relating  to  Company  or its  Affiliates,
including,   without  limitation,  trade  secrets,  client  or  customer  lists,
information  regarding  marketing  or  sales  plans,   management   organization
information (including but not limited to data and other information relating to
members of the Board), operating policies or manuals,  business plans, financial
records,  or  other  financial  commercial  business  or  technical  information
relating to the Company or to the Company's clients, customers, or others who do
business with the Company (collectively, "Proprietary Information"). Proprietary
Information shall include,  without limitation,  any and all items enumerated in
the preceding  sentence,  whether previously  existing,  now existing or arising
hereafter,  whether or not  conceived  or developed by others or by the Employee
alone or by the Employee with others,  and whether or not conceived or developed
during regular working hours; PROVIDED,  HOWEVER, that "Proprietary Information"
shall not include (i) any information  which is in the public domain, so long as
such  information  is not in the public domain as a consequence of disclosure by
the Employee in violation of this Agreement,  (ii) any information  that becomes
available to the Employee,  after she ceases to be an employee of Company,  on a
non-confidential basis from a source other than Company or any of its Affiliates
and (iii)  information  of a general  nature,  not  pertaining  primarily to the
business of Company,  which would  generally  be acquired in similar  employment
with a comparable company.

For purposes of this Article VI, the term Affiliates of Company shall mean
persons controlling, controlled by or under common control with Company.

     6.3  FIDUCIARY  OBLIGATIONS.  The  Employee  agrees and  acknowledges  that
Proprietary  Information is of critical importance to Company and that violation
of this  Article  VI would  seriously  and  irreparably  impair  and  damage the
business  of  Company.  The  Employee  therefore  agrees to keep,  at all times,
whether  during  the  Term  or  thereafter,  all  Proprietary  Information  in a
fiduciary  capacity  for  the  sole  benefit  of  Company  and its  clients  and
customers.

                                       11
<PAGE>

     6.4 NON-DISCLOSURE.  The Employee shall not at any time, whether during the
Term or thereafter, disclose, directly or indirectly (except as required by law,
but only after prior consultation with Company), any Proprietary  Information to
any person other than (a) authorized employees of Company or its Affiliates with
a  legitimate  need to know  related  to the  business  of  Company  or any such
Affiliate at the time of such  disclosure,  or (b) at the  direction of Company,
and in all such cases only in the course of the  Employee's  service to Company.
Immediately  upon  cessation of her employment  for any reason  whatsoever,  the
Employee  shall  deliver  to  Company  all notes,  letters,  records,  and other
documents  then in her  possession  or  control  which may  contain  Proprietary
Information,  and  Employee  shall  not  retain or use any  copies or  summaries
thereof.

     6.5  COMPETITIVE  ACTIVITIES.  (a) While  actively  employed as an employee
during the Term or, in the event of the termination of the Employee's employment
by the Company for Cause or by the  Employee  without  Good Reason  prior to the
completion of the Term, for the two-year period following such termination,  and
except as otherwise  expressly  consented to, approved or otherwise permitted by
Company in writing,  and to the fullest extent  permitted under  applicable law,
the Employee  shall not,  directly or  indirectly,  (i) own,  operate,  control,
accept  employment  from,  serve as an agent of or  consultant  to a business in
connection with its activity in providing investment advice, banking, trust, and
custodial   services   to   registered   investment   companies,   institutions,
individuals,  or other clients and customers of Company or (ii) extend credit to
or assist in  arranging  credit to establish  or conduct any such  activity,  or
(iii) permit her name,  reputation or affiliations to be used in connection with
any such  business.  The  restrictions  in this  Section  6.5 shall apply to all
geographical  areas where  Employee  performed  services  for Company and to all
other places where  Company does business  and/or did business  during the Term,
and at all places where, during the Term, the Company had plans to do business.

          (b) During the Term,  including any period during which Employee is on
     the Company  payroll,  and for the  two-year  period  after  Employee is no
     longer on the Company payroll,  and except as otherwise expressly consented
     to,  approved or  otherwise  permitted  by Company in  writing,  and to the
     fullest  extent  permitted  under  applicable  law, the Employee shall not,
     directly or indirectly,  request, induce or attempt to influence any client
     or customer of Company or of any Affiliate to limit,  curtail or cancel its
     business  with  Company or any  Affiliate  or  solicit  such party for such
     business.  For the  purpose  of this  Article  VI,  the  term  clients  and
     customers  of Company  or its  Affiliates  shall  include  any person  that
     received  services  from Company or any Affiliate  during the  twelve-month
     period prior to cessation of the Employee's  employment  with Company,  and
     any person to which  Company or any  Affiliate  had either  submitted on or
     prior to the  Employee's  date of  termination  a written  response to such
     client or customer's  request for proposal or had other  contacts,  whether
     oral or written,  regarding  retention  of Company or such  Affiliate as an
     investment  adviser,  as well as any potential clients or customers to whom
     Company or an  Affiliate  has made  presentations  within the  twelve-month
     period prior to cessation of the Employee's employment with Company.

                                       12
<PAGE>

          (c) During the Term,  including any period during which Employee is on
     the Company  payroll,  and for the  two-year  period  after  Employee is no
     longer on the Company payroll,  and except as otherwise expressly consented
     to,  approved or  otherwise  permitted  by Company in  writing,  and to the
     fullest  extent  permitted  under  applicable  law, the Employee shall not,
     directly or indirectly, request, induce or attempt to influence any current
     officer, director, employee, consultant, agent or representative of Company
     or of any  Affiliate,  as well as any person  with whom the  Company or any
     Affiliate  is at such  time  engaged  in  discussions  regarding  potential
     employment (i) to terminate his or her employment or business  relationship
     with Company or any  Affiliate or (ii) to commit any act that, if committed
     by the Employee, would constitute a breach of any provision hereof.

     6.6  EQUITABLE  REMEDIES.  Notwithstanding  any  other  provision  of  this
Agreement  to the  contrary,  the  Employee  acknowledges  and  agrees  that the
services to be rendered by the Employee  hereunder are of  irreplaceable  value,
that Company will suffer irreparable injury and damage and will have no adequate
remedy at law and could not be reasonably or adequately  compensated  in damages
for any  breach  or  threatened  or  attempted  breach  by the  Employee  of the
provisions of this Article VI, and that, in light of the foregoing, it is of the
utmost importance that the parties'  respective  obligations under Article VI of
this Agreement be maintained during any dispute resolution process. Accordingly,
the Employee expressly agrees that Company shall be entitled, in addition to the
other rights or remedies that may be available to it under this  Agreement or at
law, to seek a temporary or permanent  restraining  order or  injunction  in any
court of competent  jurisdiction  (i) enjoining or restraining the Employee from
engaging in any conduct in violation or threatened  violation of the  provisions
of this Article VI or (ii)  maintaining  the strict  performance of the parties'
respective  obligations  under Article VI of this  Agreement  during any dispute
resolution  process.   Employee  agrees  that  any  such  restraining  order  or
injunction  may be granted  without the  necessity of Company  posting any bond.
Pending arbitration pursuant to Section 7.6 of this Agreement,  Company shall be
entitled to cease making any payments or providing  any benefits to the Employee
and to obtain  temporary  and  preliminary  injunctive  relief as  described  in
Section 6.6(i) from a court of competent jurisdiction.

                                   ARTICLE VII

                                  MISCELLANEOUS

     7.1 NOTICES.  All notices hereunder,  to be effective,  shall be in writing
and shall be deemed  delivered  when  delivered by hand,  upon  confirmation  of
receipt by telecopy or when sent by first-class,  certified mail,  postage,  and
fees prepaid, as follows:

          (a) For notices and communications to Company:

                    Fiduciary  Trust Company  International
                    2 World Trade Center
                    New York, NY 10048

                                       13
<PAGE>

                    Attention: Michael O. Magdol
                    Facsimile: (212) 524-5029

                    With a copy to Parent:

                    Franklin Resources, Inc.
                    777 Mariners Island Blvd.
                    San Mateo, California 94404
                    Attention: Martin Flanagan
                    Facsimile: (650) 312-2804

                              -and-

                    Attention: Leslie M. Kratter
                    Facsimile: (650) 312-2804

          (b)  For notices and communications to the Employee:

                    Anne M. Tatlock
                    Fiduciary Trust Company International
                    2 World Trade Center
                    New York, NY 10048

By notice complying with the foregoing provisions of this Section 7.1, each
party shall have the right to change the address for future notices and
communications to such party.

     7.2 MODIFICATION. As of the date of this Agreement, this Agreement (and the
other  agreements and documents  referred to herein) shall constitute the entire
agreement  between the parties  hereto with regard to the subject matter hereof,
superseding all prior  understandings  and agreements,  whether written or oral.
Any amendment or modification shall require the written agreement of the parties
hereto. Notwithstanding anything herein to the contrary, this Agreement shall be
amended or modified prior to the Closing Date only with the written  approval of
the Board of Directors of Company and Parent.

     7.3 ASSIGNMENT. This Agreement and all rights hereunder are personal to the
Employee  and may  not,  unless  otherwise  specifically  permitted  herein,  be
assigned by him. If the Employee  dies,  payments  hereunder  may be made to the
Employee's  estate.  Notwithstanding  anything  else  in this  Agreement  to the
contrary,  Company  may  not  assign  its  rights  and  obligations  under  this
Agreement.

                                       14
<PAGE>

     7.4 CAPTIONS.  Captions herein have been inserted solely for convenience of
reference and in no way define,  limit or describe the scope or substance of any
provision of this Agreement.

     7.5 SEVERABILITY.  The provisions of this Agreement are severable,  and the
invalidity  of any  provision  shall  not  affect  the  validity  of  any  other
provision.  In the event that any provision of this Agreement or the application
thereof is held to be  unenforceable  because of the duration or scope  thereof,
the parties  hereto  agree that the panel of  arbitrators  or court  making such
determination  shall  have the power to reduce  the  duration  and scope of such
provision to the extent necessary to make it enforceable, and that the Agreement
in its reduced form shall be valid and enforceable to the full extent  permitted
by law.

     7.6 ARBITRATION.  Any controversy or claim arising from or relating to this
Agreement or breach  thereof shall be settled  exclusively by arbitration in New
York,  New York in  accordance  with  the  commercial  arbitration  rules of the
American  Arbitration  Association  then in effect.  The arbitration  shall take
place at a location mutually agreed by the parties or, if the parties are unable
to agree within 30 days of commencement  of arbitration,  in New York, New York.
Within 30 days after the commencement of arbitration, the parties shall mutually
select three arbitrators.  Judgment on the award rendered by the arbitrators may
be  entered  in any court  having  jurisdiction  thereof.  The  expense  of such
arbitration  shall be borne equally by the parties hereto.  Notwithstanding  the
foregoing,  any  controversy or claim arising out of or relating to any claim by
the Company for temporary or permanent  relief with respect to Section 6 of this
Agreement need not be resolved by arbitration  and may be resolved in accordance
with Section 6.6 of this Agreement.

     7.7 LEGAL FEES.  All legal fees  incurred  relating to any  controversy  or
claim  arising  from or relating to this  Agreement or breach  thereof  shall be
borne by Parent  if  Parent is the  non-prevailing  party.  If  Employee  is the
non-prevailing  party,  then each party shall be  responsible  for its own legal
fees.

     7.8 GOVERNING LAW. This Agreement  shall be construed under and governed by
the laws of the State of New York.

     7.9 TERMINATION. In the event that the Closing Date does not occur prior to
October 25, 2001, or in the event of a Disabling  Event to the Employee prior to
the effective date of this Agreement, this Agreement shall terminate and have no
force or effect.

                                       15
<PAGE>

            IN WITNESS WHEREOF, the parties hereto, being duly authorized, have
duly executed this Agreement as a binding contract as of the day and year first
above written.

                                    FRANKLIN RESOURCES, INC.

                                    By:/s/ Martin L. Flanagan
                                       ----------------------
                                        Martin L. Flanagan

                                    FIDUCIARY TRUST COMPANY INTERNATIONAL

                                    By: /s/ Michael O. Magdol
                                       ----------------------
                                        Michael O. Magdol

Accepted and agreed to
this 22nd day of December 2000

/s/ Anne M. Tatlock
------------------------
ANNE M. TATLOCK

                                       16
<PAGE>

                                   SCHEDULE A

                           Outside Paid Directorships

Fortune Brands, Inc.

Merck & Co., Inc.

American General Corp.

Andrew W. Mellon Foundation

                                       17FRANKLIN RESOURCES, INC.
            AMENDED AND RESTATED 1998 UNIVERSAL STOCK INCENTIVE PLAN

1.   GENERAL

     1.1  PURPOSE.  The  Franklin  Resources,  Inc.  Amended and  Restated  1998
Universal  Stock  Incentive  Plan (the "Amended  Plan") has been  established by
Franklin Resources,  Inc., a Delaware corporation (the "Company") to (i) attract
and retain persons  eligible to  participate in the Amended Plan;  (ii) motivate
Employees, by means of appropriate incentives, to achieve long-range performance
goals; (iii) provide incentive  compensation  opportunities that are competitive
with those of other  similar  companies;  and (iv) further  identify  Employees'
interests with those of the Company's other  stockholders  through  compensation
that is based on the Company's  common stock;  and thereby promote the long-term
financial interest of the Company and the Subsidiaries.

     1.2 PARTICIPATION. Subject to the terms and conditions of the Amended Plan,
the Committee shall  determine and designate,  from time to time, from among the
Eligible  Employees,  those persons who will be granted one or more Awards under
the  Amended  Plan.  An  Eligible  Employee  who  receives  an Award  shall be a
"Participant"  under the Amended Plan. In the  discretion of the  Committee,  an
Employee may be granted any Award  permitted under the provisions of the Amended
Plan,  and more than one Award may be  granted to a  Participant.  Awards may be
granted  as  alternatives  to or  replacement  of awards  outstanding  under the
Amended  Plan, or any other plan or  arrangement  of the Company or a Subsidiary
(including a plan or  arrangement  of a business or entity,  all or a portion of
which is acquired by the Company or a Subsidiary).

     1.3  OPERATION,   ADMINISTRATION,   AND  DEFINITIONS.   The  operation  and
administration of the Amended Plan,  including the Awards made under the Amended
Plan, shall be subject to the provisions of Section 4 (relating to operation and
administration).  Capitalized  terms in the Amended Plan shall be defined as set
forth in the Amended Plan  (including the definition  provisions of Section 8 of
the Amended Plan).

     1.4  STOCK  SUBJECT  TO  AMENDED  PLAN;  SHARE  COUNTING.  Subject  to  the
provisions of this Section 1.4 and Section 6.1 of the Amended Plan,  the maximum
aggregate  number of shares which may be delivered  pursuant to Options  granted
under the Plan is  20,000,000.  The shares may be authorized,  but unissued,  or
reacquired Common Stock.

          (a) To the extent any Shares  covered by an Award are not delivered to
     a Participant or beneficiary because the Award is forfeited or canceled, or
     the Shares are not  delivered  because  the Award is settled in cash,  such
     Shares  shall  not be  deemed  to  have  been  delivered  for  purposes  of
     determining the maximum number of Shares available for delivery pursuant to
     Awards granted under the Amended Plan.
<PAGE>

          (b) If the  exercise  price of any  Option  granted  under the Plan is
     satisfied by tendering  Shares to the Company (by either actual delivery or
     by  attestation),  only the  number  of  Shares  issued  net of the  Shares
     tendered shall be deemed  delivered for purposes of determining the maximum
     number of Shares  available  for  delivery  pursuant to Awards  (other than
     Options) granted under the Plan.

          (c) Subject to adjustment under Section 6.1, (i) the maximum number of
     shares  that may be granted  to any one  individual  pursuant  to Section 2
     (relating  to  Options  and  SARs)  shall  be  250,000  Shares  during  any
     one-calendar-year  period and (ii) the maximum number of Shares that may be
     granted to any one individual  subject to Section 3 (relating to Stock Unit
     Awards,   Restricted  Stock  Awards,   Restricted  Stock  Unit  Awards  and
     Performance   Share   Awards)   shall  be  1,000,000   Shares   during  any
     one-calendar-year period (regardless of when such Shares are deliverable).

2.   OPTIONS AND SARS

     2.1 OPTIONS.

          (a) An Option is a grant of rights to  purchase  Shares at an Exercise
     Price  established by the Committee.  Options  granted under this Section 2
     may be either Incentive Stock Options ("ISO") or Nonstatutory Stock Options
     ("NSO"), as determined in the discretion of the Committee.

          (b) Each Option shall be designated in the written option agreement as
     either an Incentive Stock Option or a Nonstatutory  Stock Option.  However,
     notwithstanding  such  designations,  to the extent that the aggregate Fair
     Market  Value of the Shares with  respect to which  Options  designated  as
     Incentive  Stock Options are exercisable for the first time by any Optionee
     during any  calendar  year (under all plans of the Company or any Parent or
     Subsidiary)  exceeds  $100,000,  such excess Options shall be automatically
     treated as  Nonstatutory  Stock  Options.  For  purposes of this  paragraph
     2.1(b), Incentive Stock Options shall be taken into account in the order in
     which they were  granted,  and the Fair Market Value of the Shares shall be
     determined  as of the original  date the Option with respect to such Shares
     is granted.

          (c) The term of each  Option  shall be the term  stated in the  Option
     Agreement;  provided,  however,  that in the  case of any  Incentive  Stock
     Option,  the term  shall be no more  than ten (10)  years  from the date of
     grant  thereof  or such  shorter  term  as may be  provided  in the  Option
     Agreement.  However, in the case of an Incentive Stock Option granted to an
     Optionee  who, at the time the Option is granted,  owns stock  representing
     more than ten percent  (10%) of the voting power of all classes of stock of
     the Company or any Parent or  Subsidiary,  the term of the Option  shall be
     five (5) years from the date of grant  thereof or such  shorter term as may
     be provided in the Option Agreement.

          (d) The date of grant of an Option  shall,  for all  purposes,  be the
     date on which the Committee makes the  determination  granting such Option,
     or  such  other  date  as  is  determined  by  the  Board.  Notice  of  the

                                       2
<PAGE>

     determination  shall be  given to each  Employee  to whom an  Option  is so
     granted within a reasonable time after the date of such grant.

     2.2 STOCK APPRECIATION  RIGHTS. A "Stock  Appreciation  Right" ("SAR") is a
grant of rights to receive,  in cash or Stock (as determined by the  Committee),
value equal to (or otherwise  based on) the excess of: (a) the Fair Market Value
of a specified  number of Shares at the time of  exercise;  over (b) an Exercise
Price established by the Committee.

     2.3 EXERCISE PRICE. The Exercise Price of each Option and SAR shall be
established by the Committee or shall be determined by a method established by
the Committee at the time the Option or SAR is granted; provided that:

          (a) In the case of an ISO,

                    (i) granted to an Employee  who, at the time of the grant of
               such Incentive Stock Option,  owns stock  representing  more than
               ten percent  (10%) of the voting power of all classes of stock of
               the Company or any Parent or  Subsidiary,  the per Share exercise
               price  shall be no less  than 110% of the Fair  Market  Value per
               Share on the date of grant.

                    (ii) granted to any Employee,  the per Share  exercise price
               shall be no less than 100% of the Fair Market  Value per Share on
               the date of grant.

     2.4 TIME AND MANNER OF EXERCISE.  Options and SARs shall be  exercisable in
accordance  with such terms and  conditions  and during  such  periods as may be
established by the Committee; subject to the following terms regarding Options:

          (a)  TERMINATION  OF  EMPLOYMENT.  In the event of  termination  of an
     Optionee's Continuous Status as an Employee with the Company, such Optionee
     may,  but only within  ninety (90) days after the date of such  termination
     (or  such  other  period  as is  set  out by the  Committee  in the  Option
     Agreement,  but in no event later than the  expiration  date of the term of
     such Option as set forth in the Option  Agreement),  exercise the Option to
     the extent that  Optionee  was  entitled to exercise it at the date of such
     termination.  To the extent that  Optionee was not entitled to exercise the
     Option at the date of such  termination,  or if Optionee  does not exercise
     such Option to the extent so entitled within the time specified herein, the
     Option shall terminate.

          (b)  DISABILITY  OF  OPTIONEE.   Notwithstanding   the  provisions  of
     paragraph  2.4(a)  above,  in the  event of  termination  of an  Optionee's
     Continuous  Status as an Employee as a result of disability  (as determined
     by the Board in accordance with the policies of the Company), Optionee may,
     but only within six (6) months from the date of such  termination  (or such
     other period as is set out by the Committee in the Option Agreement, but in
     no event later than the  expiration  date of the term of such Option as set
     forth in the Option Agreement), exercise the Option to the extent otherwise
     entitled to exercise it at the date of such termination. To the extent that
     Optionee   was  not  entitled  to  exercise  the  Option  at  the  date  of

                                       3
<PAGE>

     termination,  or if Optionee does not exercise such Option to the extent so
     entitled within the time specified herein, the Option shall terminate.

          (c) DEATH OF OPTIONEE.  In the event of the death of an Optionee,  the
     Option may be exercised,  at any time within  twelve (12) months  following
     the date of death (or such other  period as is set out by the  Committee in
     the Option Agreement, but in no event later than the expiration date of the
     term  of  such  Option  as set  forth  in  the  Option  Agreement),  by the
     Optionee's  estate or by a person who  acquired  the right to exercise  the
     Option by bequest or  inheritance,  but only to the extent the Optionee was
     entitled  to exercise  the Option at the date of death.  To the extent that
     Optionee   was  not  entitled  to  exercise  the  Option  at  the  date  of
     termination,  or if Optionee does not exercise such Option to the extent so
     entitled within the time specified herein, the Option shall terminate.

     2.5 PAYMENT OF EXERCISE  PRICE.  Payment of the Exercise Price of an Option
shall be subject to the following:

          (a) The full Exercise Price for Shares  purchased upon the exercise of
     any Option shall be paid at the time of such exercise  (except that, in the
     case of an exercise  arrangement approved by the Committee and described in
     paragraph  2.5(b),  payment  may be made as soon as  practicable  after the
     exercise).

          (b) The  consideration  to be paid for the  Shares to be  issued  upon
     exercise of an Option, including the method of payment, shall be determined
     by the Committee (and, in the case of an Incentive  Stock Option,  shall be
     determined at the time of grant) and may consist entirely of (i) cash, (ii)
     check,  (iii) other Shares (by  delivery of  certificates  or  attestation)
     which (x) either have been owned by the  Optionee  for more than six months
     on the date of surrender or were not acquired, directly or indirectly, from
     the  Company,  and (y) have a Fair  Market  Value on the date of  surrender
     equal to the aggregate exercise price of the Shares as to which said Option
     shall be  exercised,  (iv)  delivery  of  authorization  for the Company to
     retain from the total  number of Shares as to which the Option is exercised
     that number of Shares  having a Fair  Market  Value on the date of exercise
     equal to the exercise  price for the total number of Shares as to which the
     Option is exercised,  (v) delivery of a properly  executed  exercise notice
     together with  irrevocable  instructions to a broker to promptly deliver to
     the  Company  the  amount  of  sale or loan  proceeds  required  to pay the
     exercise price,  (vi) irrevocably  authorizing a third party to sell Shares
     (or a  sufficient  portion of the  shares)  acquired  upon  exercise of the
     Option and remit to the Company a sufficient  portion of the sale  proceeds
     to pay the entire  Exercise  Price and any tax  withholding  resulting from
     such exercise,  (vii) any combination of the foregoing  methods of payment,
     (viii) or such other  consideration  and method of payment for the issuance
     of Shares to the extent permitted under Applicable Laws.

     2.6 SETTLEMENT OF AWARD.  Shares  delivered  pursuant to the exercise of an
Option  or  SAR  shall  be  subject  to  such   conditions,   restrictions   and
contingencies  as the Committee may establish in the applicable  Award Agreement
at the time of grant.  Settlement of SARs may be made in Shares (valued at their
Fair  Market  Value  at the time of  exercise),  in  cash,  or in a  combination
thereof, as determined in the discretion of the Committee. The Committee, in its

                                       4
<PAGE>

discretion,  may impose such  conditions,  restrictions and  contingencies  with
respect to Shares  acquired  pursuant to the  exercise of an Option or an SAR as
the Committee determines to be desirable.

3.   OTHER STOCK AWARDS

     3.1 DEFINITIONS.

          (a) A "Stock Unit" Award is the grant of a right to receive  Shares in
     the future.

          (b) A  "Performance  Share"  Award is a grant  of a right  to  receive
     Shares or Stock Units which is contingent on the achievement of performance
     or other objectives during a specified period.

          (c) A "Restricted Stock" Award is a grant of Shares, and a "Restricted
     Stock Unit" Award is the grant of a right to receive  Shares in the future,
     with such Shares or right to future  delivery  of such Shares  subject to a
     risk  of  forfeiture  or  other  restrictions  that  will  lapse  upon  the
     achievement  of one or more goals  relating to completion of service by the
     Employee, or achievement of performance or other objectives,  as determined
     by the Committee.

     3.2 RESTRICTIONS ON STOCK AWARDS.  Each Stock Unit Award,  Restricted Stock
Award,  Restricted Stock Unit Award and Performance Share Award shall be subject
to the following:

          (a) Any such Award shall be subject to such  conditions,  restrictions
     and contingencies as the Committee shall determine.

          (b) The Committee  may designate  whether any such Award being granted
     to any Employee are intended to be "performance-based compensation" as that
     term is used in Section 162(m) of the Code.  Any such Awards  designated as
     intended to be "performance-based compensation" shall be conditioned on the
     achievement of one or more Performance  Measures.  The Performance Measures
     that may be used by the Committee for such Awards shall be based on any one
     or more of the criteria attached hereto on Attachment I, as selected by the
     Committee. For Awards intended to be "performance-based  compensation," the
     grant of the Awards and the establishment of the Performance Measures shall
     be made during the period  required  under  Section  162(m) of the Code and
     shall be subject to the  individual  share limit set out in Section  1.4(c)
     above.

4.   OPERATION AND ADMINISTRATION

     4.1  EFFECTIVE  DATE.  Subject to the approval of the  stockholders  of the
Company at the Company's  2000 annual meeting of its  stockholders,  the Amended
Plan shall be effective as of October 28, 2000 (the "Effective Date"); provided,
however, that to the extent that Awards are granted under the Amended Plan prior
to its approval by  stockholders,  the Awards shall be contingent on approval of
the Amended Plan by the stockholders of the Company at such annual meeting.  The

                                       5
<PAGE>

Amended Plan shall be  unlimited  in duration  and, in the event of Amended Plan
termination,  shall  remain  in  effect  as  long  as any  Awards  under  it are
outstanding; provided, however, that, to the extent required by the Code, no ISO
may be granted under the Amended Plan on a date that is more than ten years from
the date the Amended  Plan is adopted or, if earlier,  the date the Amended Plan
is approved by stockholders.

     4.2 GENERAL  RESTRICTIONS.  Delivery of Shares or other  amounts  under the
Amended Plan shall be subject to the following:

          (a)  Notwithstanding  any other  provision  of the Amended  Plan,  the
     Company  shall have no  liability  to deliver any Shares  under the Amended
     Plan or make any other  distribution  of benefits  under the  Amended  Plan
     unless such delivery or distribution  would comply with all applicable laws
     (including,  without limitation,  the requirements of the Securities Act of
     1933),  and the  applicable  requirements  of any  securities  exchange  or
     similar entity.

          (b) To the extent that the Amended Plan provides for issuance of stock
     certificates  to reflect  the  issuance  of  Shares,  the  issuance  may be
     effected  on a  non-certificated  basis,  to the extent not  prohibited  by
     applicable law or the applicable rules of any stock exchange.

     4.3 TAX WITHHOLDING.  All distributions  under the Amended Plan are subject
to  withholding  of all  applicable  taxes,  and the Committee may condition the
delivery of any shares or other benefits under the Amended Plan on  satisfaction
of the applicable withholding obligations. The Committee, in its discretion, and
subject to such requirements as the Committee may impose prior to the occurrence
of such  withholding,  may permit such  withholding  obligations to be satisfied
through cash payment by the Employee,  through the surrender of Shares which the
Employee  already owns, or through the surrender of Shares to which the Employee
is otherwise entitled under the Amended Plan, provided;  however, that in either
case only the number of Shares  sufficient  to  satisfy  the  Company's  minimum
required tax withholding obligations may be surrendered to the Company.

     4.4 USE OF  SHARES.  Subject  to the  overall  limitation  on the number of
Shares that may be  delivered  under the Amended  Plan,  the  Committee  may use
available  Shares  as the form of  payment  for  compensation,  grants or rights
earned or due under any other  compensation plans or arrangements of the Company
or a  Subsidiary,  including  the plans and  arrangements  of the  Company  or a
Subsidiary assumed in business combinations.

     4.5  DIVIDENDS  AND  DIVIDEND  EQUIVALENTS.  An  Award  (including  without
limitation  an Option or SAR Award) may provide the  Employee  with the right to
receive dividend payments or dividend  equivalent payments with respect to Stock
subject to the Award  (both  before and after the Stock  subject to the Award is
earned,  vested,  or acquired),  which  payments may be either made currently or
credited to an account for the Employee,  and may be settled in cash or Stock as
determined by the  Committee.  Any such  settlements,  and any such crediting of
dividends or dividend  equivalents or reinvestment in Shares,  may be subject to

                                       6
<PAGE>

such  conditions,   restrictions  and   contingencies  as  the  Committee  shall
establish,  including  the  reinvestment  of  such  credited  amounts  in  Stock
equivalents.

     4.6 PAYMENTS.  Awards may be settled through cash payments, the delivery of
Shares,  the  granting of  replacement  Awards,  or  combination  thereof as the
Committee shall determine.  Any Award settlement,  including payment  deferrals,
may be  subject  to  such  conditions,  restrictions  and  contingencies  as the
Committee shall  determine.  The Committee may permit or require the deferral of
any Award  payment,  subject to such rules and  procedures as it may  establish,
which may  include  provisions  for the payment or  crediting  of  interest,  or
dividend  equivalents,  including  converting  such credits into deferred  Stock
equivalents.  Each Subsidiary  shall be liable for payment of cash due under the
Amended Plan with  respect to any Employee to the extent that such  benefits are
attributable to the services  rendered for that Subsidiary by the Employee.  Any
disputes relating to liability of a Subsidiary for cash payments shall be
resolved by the Committee.

     4.7 TRANSFERABILITY.  Unless specifically  provided by the Committee in the
Award  Agreement,  Awards under the Amended Plan are  nontransferable  except as
designated by the Employee by will or by the laws of descent and distribution.

     4.8 FORM AND TIME OF ELECTIONS.  Unless otherwise  specified  herein,  each
election  required  or  permitted  to be made by any  Employee  or other  person
entitled to benefits under the Amended Plan, and any permitted modification,  or
revocation thereof,  shall be in writing filed with the Committee at such times,
in such form, and subject to such restrictions and limitations, not inconsistent
with the terms of the Amended Plan, as the Committee shall require.

     4.9  AGREEMENT  WITH  COMPANY.  An Award  under the  Amended  Plan shall be
subject to such terms and conditions, not inconsistent with the Amended Plan, as
the Committee shall, in its sole discretion, prescribe. The terms and conditions
of any Award to any Employee shall be reflected in such form of written document
as is determined by the Committee. A copy of such document shall be provided to
the Employee, and the Committee may, but need not require that the Employee
shall sign a copy of such document. Such document is referred to in the Amended
Plan as an "Award Agreement" regardless of whether any Employee signature is
required.

     4.10 ACTION BY COMPANY OR SUBSIDIARY.  Any action  required or permitted to
be taken by the Company or any Parent or  Subsidiary  shall be by  resolution of
its  board of  directors,  or by  action  of one or more  members  of the  board
(including  a  committee  of the board) who are duly  authorized  to act for the
board, or (except to the extent prohibited by applicable law or applicable rules
of any stock exchange) by a duly authorized officer of such company.

     4.11 GENDER AND NUMBER. Where the context admits, words in any gender shall
include any other gender, words in the singular shall include the plural and the
plural shall include the singular.

                                       7
<PAGE>

     4.12 LIMITATION OF IMPLIED RIGHTS.

          (a) Neither a  Participant  nor any other person  shall,  by reason of
     participation  in the  Amended  Plan,  acquire any right in or title to any
     assets,  funds or  property  of the  Company  or any  Parent or  Subsidiary
     whatsoever,  including,  without limitation, any specific funds, assets, or
     other property which the Company or any Parent or Subsidiary, in their sole
     discretion,  may set aside in anticipation of a liability under the Amended
     Plan. A  Participant  shall have only a  contractual  right to the Stock or
     amounts, if any, payable under the Amended Plan, unsecured by any assets of
     the  Company or any Parent or  Subsidiary,  and  nothing  contained  in the
     Amended Plan shall constitute a guarantee that the assets of the Company or
     any Parent or  Subsidiary  shall be  sufficient  to pay any benefits to any
     person.

          (b) The Amended Plan does not constitute a contract of employment, and
     selection as a  Participant  will not give any  participating  employee the
     right to be retained in the employ of the  Company or any  Subsidiary,  nor
     any right or claim to any benefit under the Amended Plan, unless such right
     or claim has  specifically  accrued  under the terms of the  Amended  Plan.
     Except as  otherwise  provided  in the  Amended  Plan,  no Award  under the
     Amended  Plan  shall  confer  upon  the  holder  thereof  any  rights  as a
     stockholder  of the  Company  prior  to the date on  which  the  individual
     fulfills all conditions for receipt of such rights.

5.   COMMITTEE

     5.1  COMMITTEE.  The  authority  to control  and manage the  operation  and
administration  of  the  Amended  Plan  shall  be  vested  in a  committee  (the
"Committee")  in accordance with this Section 5. The Committee shall be selected
by the Board, and shall be comprised  unless otherwise  determined by the Board,
solely of not less than two members who shall be "outside"  directors within the
meaning of Treasury  Regulation Section  1.162-27(e)(3)  under Section 162(m) of
the Code,  of the Board and, with respect to Awards  granted  subject to Section
162(m) of the Code,  the  Committee  shall be composed of two or more members of
the Board who are not employees of the Company. If the Committee does not exist,
or for any other reason  determined by the Board,  the Board may take any action
under the  Amended  Plan  that  would  otherwise  be the  responsibility  of the
Committee.

     5.2 POWERS OF COMMITTEE. The Committee's administration of the Amended Plan
shall be subject to the following:

          (a) Subject to the  provisions of the Amended Plan, the Committee will
     have the  authority  and  discretion  to select  from  among  the  Eligible
     Employees those persons who shall receive Awards,  to determine the time or
     times of receipt, to determine the types of Awards and the number of shares
     covered by the Awards,  to  establish  the terms,  conditions,  performance
     criteria  (except  that  for  purposes  of  Section  162(m)  of  the  Code,
     performance  measures shall be based on one or more of the criteria set out
     on  Attachment  I hereto) ,  restrictions,  and  other  provisions  of such
     Awards,  and (subject to the  restrictions  imposed by Section 8 hereof) to
     cancel or suspend Awards.

                                       8
<PAGE>

          (b) To the extent that the Committee  determines that the restrictions
     imposed by the  Amended  Plan  preclude  the  achievement  of the  material
     purposes  of the Awards in  jurisdictions  outside the United  States,  the
     Committee   will  have  the  authority  and   discretion  to  modify  those
     restrictions as the Committee  determines to be necessary or appropriate to
     conform to applicable requirements or practices of jurisdictions outside of
     the United States.

          (c) The Committee  will have the authority and discretion to interpret
     the  Amended  Plan,  to  establish,   amend,  and  rescind  any  rules  and
     regulations  relating  to the  Amended  Plan,  to  determine  the terms and
     provisions of any Award Agreement made pursuant to the Amended Plan, and to
     make all other  determinations  that may be necessary or advisable  for the
     administration of the Amended Plan.

          (d) Any  interpretation  of the Amended Plan by the  Committee and any
     decision  made by it under the  Amended  Plan is final and  binding  on all
     persons.

          (e) In controlling  and managing the operation and  administration  of
     the Amended Plan, the Committee shall take action in a manner that conforms
     to the articles and by-laws of the Company,  and applicable state corporate
     law.

     5.3 DELEGATION BY COMMITTEE.  Except to the extent prohibited by Applicable
Law or the applicable rules of a stock exchange,  the Committee may allocate all
or any  portion  of its  responsibilities  and  powers to any one or more of its
members and may  delegate  all or any part of its  administrative  duties to any
person or persons  selected  by it. Any such  allocation  or  delegation  may be
revoked by the Committee at any time.

     5.4  INFORMATION  TO BE FURNISHED TO COMMITTEE.  The Company and its Parent
and  Subsidiaries  shall furnish the Committee with such data and information as
it determines may be required for it to discharge its duties. The records of the
Company  and  its  Parent  and  Subsidiaries  as  to an  Employee's  employment,
termination of employment, leave of absence, reemployment and compensation shall
be conclusive on all persons  unless  determined to be incorrect.  Employees and
other  persons  entitled to benefits  under the  Amended  Plan must  furnish the
Committee  such  evidence,  data  or  information  as  the  Committee  considers
desirable to carry out the terms of the Amended Plan.

6.   ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR CORPORATE TRANSACTION

     6.1  CHANGES  IN  CAPITALIZATION.  Subject  to any  required  action by the
stockholders  of the Company,  the number of shares of Common  Stock  covered by
each outstanding Award, the price per share of Common Stock covered by each such
outstanding  Award,  the  number  of  shares of  Common  Stock  which  have been
authorized  for  issuance  under the Amended Plan but as to which no Awards have
yet  been  granted  or  which  have  been  returned  to the  Amended  Plan  upon
cancellation or expiration of an Award, and the maximum number of Options, SARs,
Stock Unit Awards,  Restricted  Stock Awards,  Restricted Stock Units Awards and
Performance   Share  Awards  which  may  be  granted  to  any  Employee  in  any
one-calendar-year  period shall be proportionately  adjusted for any increase or

                                       9
<PAGE>

decrease in the number of issued shares of Common Stock  resulting  from a stock
split,  reverse stock split, stock dividend,  combination or reclassification of
the Common  Stock,  or any other  increase  or  decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company;
provided,  however, that conversion of any convertible securities of the Company
shall not be deemed to have been "effected  without  receipt of  consideration."
Such adjustment shall be made by the Board, whose  determination in that respect
shall be final, binding and conclusive.  Except as expressly provided herein, no
issuance by the Company of Shares of any class, or securities  convertible  into
Shares of any class,  shall affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of shares of Common  Stock  subject to
an Award.

     6.2 TRANSACTIONS.  In the event of the proposed  dissolution or liquidation
of the Company or of a merger or  corporate  combination  (a  "Transaction")  in
which the successor corporation does not agree to assume the Award or substitute
an  equivalent  Award,  the  Committee  shall make a  determination  (subject to
Section 7 below) as to the equitable  treatment of outstanding  Awards under the
Amended Plan and shall notify  Participants  of such treatment no later than ten
(10) days  prior to such  proposed  Transaction.  To the  extent it has not been
previously  exercised,   an  Award  will  terminate  immediately  prior  to  the
consummation of such proposed Transaction.

7.   AMENDMENT AND TERMINATION

The Board may, at any time,  amend or terminate the Amended Plan,  provided that
no amendment or termination may, in the absence of written consent to the change
by the affected  Employee (or, if the Employee is not then living,  the affected
beneficiary),  adversely affect the rights of any Employee or beneficiary  under
any Award  granted  under the Amended  Plan prior to the date such  amendment is
adopted by the Board;  provided that adjustments  pursuant to subject to Section
6.2 shall in no event be  deemed to have an  adverse  affect  on any  Award.

8.   DEFINED TERMS

     In  addition  to the other  definitions  contained  herein,  the  following
definitions shall apply:

          (a)  APPLICABLE  LAW  means  the  corporate,  securities  and tax laws
     (including,  without  limitation,  the Delaware corporate law, the Exchange
     Act,  the  Securities  Act  of  1933  and  the  Code)   applicable  to  the
     establishment and administration of an employee stock incentive plans.

          (b) AWARD.  The term "Award"  shall mean any award or benefit  granted
     under  the  Amended  Plan,  including,  without  limitation,  the  grant of
     Options, SARs, Stock Unit Awards, Restricted Stock Awards, Restricted Stock
     Unit Awards and Performance Share Awards.

          (c) BOARD.  The term "Board"  shall mean the Board of Directors of the
     Company.

                                       10
<PAGE>

          (d) CODE. The term "Code" means the Internal  Revenue Code of 1986, as
     amended.  A reference to any provision of the Code shall include  reference
     to any successor provision of the Code.

          (e) COMMON  STOCK  shall mean the common  stock,  par value,  $.10 per
     share, of the Company.

          (f)  CONTINUOUS  STATUS  AS AN  EMPLOYEE  means  the  absence  of  any
     interruption  or termination of the employment  relationship by the Company
     or any Subsidiary. Continuous Status as an Employee shall not be considered
     interrupted  in the case of: (i) sick  leave,  military  leave or any other
     leave of absence  approved by the Board,  provided that such leave is for a
     period of not more than  ninety  (90) days,  unless  reemployment  upon the
     expiration of such leave is  guaranteed  by contract or statute,  or unless
     provided otherwise pursuant to Company policy adopted from time to time; or
     (ii) in the case of transfers  between  locations of the Company or between
     the Company, its Subsidiaries or its successor.

          (g) ELIGIBLE EMPLOYEE. The term "Eligible Employee" shall mean any key
     executive or other employee of the Company,  its Parent or  Subsidiary.  An
     Award may be granted to an employee,  in connection with hiring,  retention
     or otherwise,  prior to the date the employee first  performs  services for
     the Company or its Parent or Subsidiaries,  provided that such Awards shall
     not  become  vested  prior to the date the  employee  first  performs  such
     services.

          (h)  EXCHANGE  ACT  means  the  Securities  Exchange  Act of 1934,  as
     amended.

          (i) FAIR MARKET VALUE.  For purposes of  determining  the "Fair Market
     Value" of a share of Stock  granted  pursuant  to Section 2 as of any date,
     the following rules shall apply:

                    (i) If the  principal  market  for the Stock is the New York
               Stock Exchange ("NYSE"),  then the "Fair Market Value" as of that
               date  shall  be the  closing  price  of  the  stock  on the  NYSE
               composite  tape  on that  date as  reported  in the  Wall  Street
               Journal for such date;

                    (ii) If the  principal  market for the Stock is the  another
               national securities exchange or the NASDAQ stock market, then the
               "Fair Market Value" as of that date shall be the mean between the
               lowest and highest reported composite sale prices of the Stock on
               that date on such exchange for such date;

                    (iii) If sale prices are not  available or if the  principal
               market  for  the  Stock  is not  the  NYSE  or  another  national
               securities  exchange  and the Stock is not  quoted on the  NASDAQ
               stock  market,  the  average  between  the highest bid and lowest
               asked  prices for the Stock on such day as reported on the NASDAQ
               OTC Bulletin Board Service or by the National  Quotation  Bureau,
               Incorporated or a comparable service.

                    (iv)  If the day is not a  business  day,  and as a  result,
               paragraphs (i), (ii) and (iii) next above are  inapplicable,  the
               Fair Market Value of the Stock shall be determined as of the last

                                       11
<PAGE>

               preceding  business day. If  paragraphs  (i), (ii) and (iii) next
               above are otherwise  inapplicable,  then the Fair Market Value of
               the Stock shall be determined in good faith by the Committee.

          (j) INCENTIVE  STOCK OPTION means an Option  intended to qualify as an
     incentive stock option within the meaning of Section 422 of the Code.

          (k) NONSTATUTORY  STOCK OPTION means an Option not intended to qualify
     as an Incentive Stock Option.

          (l) OPTIONEE means an Employee who receives an Option.

          (m) PARENT  means a "parent  corporation",  whether  now or  hereafter
     existing, as defined in Section 424(e) of the Code.

          (n) SHARE means a share of the Common Stock, as adjusted in accordance
     with Section 6 of the Amended Plan.

          (o) STOCK.  The term "Stock"  shall mean shares of Common Stock of the
     Company.

          (p) SUBSIDIARIES.  The term "Subsidiary"  means any company during any
     period in which it is a "subsidiary  corporation"  (as that term is defined
     in Code section 424(f)) with respect to the Company.

                                       12
<PAGE>

                                  ATTACHMENT I

                              PERFORMANCE CRITERIA

      The Committee shall grant performance-based compensation Awards tied to
one or more of the following business criteria:

      1.    Changes in earnings per share
      2.    Changes in pre-tax operating income
      3.    Changes in value of stock (i.e., stock price)

                                       13

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