any amount remaining in the Participant's account following the purchase of shares on the Exercise Date due to the application of Section 423 (b) (8) of the Code, shall be returned to the Participant. During a Participant’s lifetime, a Participant’s option to purchase shares hereunder is exercisable only by such Participant.
Upon receipt of a request from a Participant after each Exercise Date on which a purchase of shares occurs, the Company shall arrange the delivery to such Participant, as promptly as practicable, of a certificate representing the shares purchased upon exercise of such Participant’s option. The shares purchased under the Plan may also be delivered in uncertificated form by way of an electronic transfer to the brokerage account of participant.
No interest shall accrue on the payroll deductions credited to a Participant’s account under the Plan under any circumstances or at any time.
available for purchase among the Participants in as uniform a manner as shall be practicable and as it shall determine to be equitable.
(b) A Participant will have no interest or voting right in shares covered by such Participant’s option until such shares are actually purchased on such Participant’s behalf in accordance with the applicable provisions of the Plan. No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date of such purchase.
(c) Shares to be delivered to a Participant under the Plan will be registered in the name of the Participant or in the name of the Participant and such Participant’s spouse.
The Plan shall be administered by the Board or a committee of members of the Board appointed by the Board. The Board or its committee shall have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to determine eligibility and to adjudicate all disputed claims filed under the Plan. Every finding, decision and determination made by the Board or its committee shall, to the full extent permitted by law, be final and binding upon all persons.
14. | Designation of Beneficiary. |
(a) Each Participant will file a written designation of a beneficiary who is to receive any shares and cash, if any, from the Participant’s account under the Plan in the event of such Participant’s death. If a Participant is married and the designated beneficiary is not the spouse, spousal consent shall be required for such designation to be effective.
(b) Such designation of beneficiary may be changed by the Participant (and such Participant’s spouse, if any) at any time by written notice. In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant’s death, the Company shall deliver such shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Plan Administrator), the Plan Administrator, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Plan Administrator, then to such other person as the Plan Administrator may designate.
Neither payroll deductions credited to a Participant’s account nor any rights with regard to the exercise of an option or to receive shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 14 hereof) by the Participant, nor shall it be subject to attachment or other legal process of whatever nature. Provided, however,
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that the shares purchased under the Plan may also be delivered in uncertificated form by way of an electronic transfer to the brokerage account of participant. Any such attempt at assignment, attachment, transfer, pledge or other disposition shall be without effect, except that the Plan Administrator may treat such act as an election to withdraw funds from a Purchase Period in accordance with Section 10.
All payroll deductions received along with any other funds held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions or funds.
Individual accounts will be maintained for each Participant in the Plan. Statements of account will be given to Participants at least annually, which statements will set forth the amounts of payroll deductions, the Purchase Price, the number of shares purchased and the remaining cash balance, if any.
18. | Changes in Capitalization; Corporate Transactions. |
(a) Subject to any required action by the stockholders of the Company, the Reserves, as well as the Purchase Price, shall be proportionately adjusted for any increase or 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 similar event resulting in an increase or decrease in the number of issued shares of Common Stock. Such adjustment shall be made by the Plan Administrator, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided for herein, no issue by the Company of shares of stock of any class, or securities convertible into shares of stock 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 option. The Plan Administrator may, if it so determines in the exercise of its sole discretion, make provision for adjusting the Reserves, as well as the price per share of Common Stock covered by each outstanding option, in the event the Company effects one or more reorganizations, recapitalizations, rights offerings or other increases or reductions of shares of its outstanding Common Stock.
(b) Corporate Transactions. In the event of a proposed Corporate Transaction, each option under the Plan shall be assumed by such successor corporation or a parent or subsidiary of such successor corporation, unless the Plan Administrator, in the exercise of its sole discretion and in lieu of such assumption, determines to shorten the Purchase Period then in progress by setting a new Exercise Date (the “New Exercise Date”). If the Plan Administrator shortens the Purchase Period then in progress in lieu of assumption in the event of a Corporate Transaction, the Plan Administrator shall notify each Participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the Participant’s option has been changed to the New Exercise Date and that either:
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(1) the Participant’s option will be exercised automatically on the New Exercise Date, unless prior to such date the Participant has withdrawn from the Purchase Period as provided in Section 10; or
(2) the Company shall pay to the Participant on the New Exercise Date an amount in cash, cash equivalents, or property as determined by the Plan Administrator that is equal to the excess, if any, of (i) the Fair Market Value of the shares subject to the option over (ii) the Purchase Price due had the Participant’s option been exercised automatically under Subsection (b)(1) above. In addition, all remaining accumulated payroll deduction amounts shall be returned to the Participant.
(c) For purposes of this Section 18, an option granted under the Plan shall be deemed to be assumed if, in connection with the Corporate Transaction, the option is replaced with a comparable option with respect to shares of capital stock of the successor corporation or Parent thereof. The determination of option comparability shall be made by the Plan Administrator prior to the Corporate Transaction and its determination shall be final, binding and conclusive on all persons.
19. | Amendment or Termination of the Plan. |
(a) The Plan Administrator may at any time and for any reason terminate or amend the Plan. Except as provided in Section 18 or this Section 19, no such termination can affect options previously granted, provided that a Purchase Period may be terminated by the Plan Administrator on any Exercise Date if the Plan Administrator determines that the termination of the Purchase Period is in the best interests of the Company and its stockholders. Except as provided in Section 18 or this Section 19, no amendment may make any change in any option theretofore granted which adversely affects the rights of any Participant. To the extent necessary to comply with Section 423 of the Code (or any successor rule or provision or any other applicable law or regulation), the Company shall obtain stockholder approval in such a manner and to such a degree as required.
(b) Without stockholder consent and without regard to whether any Participant rights may be considered to have been “adversely affected,” the Plan Administrator shall be entitled to change the Purchase Periods, limit the frequency and/or number of changes in the amount withheld during Purchase Periods, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, establish additional terms, conditions, rules or procedures to accommodate the rules or laws of applicable foreign jurisdictions, permit payroll withholding in excess of the amount designated by a Participant in order to adjust for delays or mistakes in the Company’s processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each Participant properly correspond with amounts withheld from the Participant’s Compensation, and establish such other limitations or procedures as the Plan Administrator determines in its sole discretion advisable and which are consistent with the Plan.
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(c) On December 13, 2006, the Board approved an amendment and restatement of the Plan to (i) increase the maximum number of shares which shall be made available for sale or as a matching grant under the Plan to eight million (8,000,000) shares, (ii) extend the term of the Plan to January 31, 2018, and (iii) remove, for Purchase Periods occurring on and after the date the Board approved such amendment and restatement, the provision that Employees will not be eligible to participate in the Plan for any relevant Purchase Period if such Employee’s customary employment is less than 20 hours per week. The increase in the maximum number of shares available requires the approval of the Company’s stockholders.
All notices or other communications by a Participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Plan Administrator at the location, or by the person, designated by the Plan Administrator for the receipt thereof.
21. | Conditions Upon Issuance of Shares. |
Shares shall not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance. As a condition to the exercise of an option, the Company may require the Participant to represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law. In addition, no options shall be exercised or shares issued hereunder before the Plan shall have been approved by stockholders of the Company in accordance with Section 423 of the Code.
The Plan shall become effective upon January 1, 1998. It shall continue until January 31, 2018 unless sooner terminated under Section 19. The first Effective Date under the Plan shall be determined as set forth in Section 2(i).
The Plan does not, directly or indirectly, create any right for the benefit of any employee or class of employees to purchase any shares under the Plan, or create in any employee or class of employees any right with respect to continuation of employment by the Company or a Designated Parent or Subsidiary, and it shall not be deemed to interfere in any way with such employer’s right to terminate, or otherwise modify, an employee’s employment at any time.
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The provisions of the Plan shall, in accordance with its terms, be binding upon, and inure to the benefit of, all successors of each Participant, including, without limitation, such Participant’s estate and the executors, administrators or trustees thereof, heirs and legatees, and any receiver, trustee in bankruptcy or representative of creditors of such Participant.
The laws of the State of Delaware (excluding that body of law pertaining to its conflicts of law) will govern all matters relating to this Plan except to the extent it is superseded by the laws of the United States.
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EXHIBIT A
FRANKLIN RESOURCES, INC.
1998 EMPLOYEE STOCK INVESTMENT PLAN
SUBSCRIPTION AGREEMENT
____ | Original Application | Enrollment Date: ____________ |
____ | Change in Payroll Deduction Rate | |
____ | Change of Beneficiary(ies) | |
| | | | |
I, _____________________________, hereby elect to participate in the Franklin Resources, Inc. 1998 Employee Stock Investment Plan (the “Plan”), for the Purchase Period __________________ to __________________, and hereby subscribe to purchase shares of the Company's Common Stock in accordance with this Subscription Agreement and the Plan. Capitalized terms not otherwise defined herein are used as defined in the Plan. I have received a copy of the complete Plan and understand that my participation in the Plan is in all respects subject to the terms of the Plan.
I hereby authorize payroll deductions in the amount of ________% of my Compensation from each paycheck during the Purchase Period. I understand that this amount must not be less than one percent (1%) and not more than ten percent (10%) of my Compensation during the Offering Period and that no fractional percentages are permitted. I further understand that:
(1) | all payroll deductions made by me shall be credited to my account under the Plan; |
(2) | I may not make any additional payments into such account; | |
(3) | all payments made by me shall be accumulated for the purchase of shares of Common Stock at the applicable purchase price determined in accordance with the Plan; |
(4) | except as otherwise set forth in the Plan, shares will be purchased for me automatically on the Exercise Date of each Accrual Period unless I otherwise withdraw from the Plan by giving written notice to the Company for such purpose; |
(5) | no interest will be credited on funds held in my account at any time for any reason including, but not limited to, before or after the purchase of shares under the Plan or in connection with any refund caused by my withdrawal from the Plan; |
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(6) | I may discontinue my participation in the Plan at any time prior to an Exercise Date as provided in Section 10 of the Plan; |
(7) | I can decrease the rate of my payroll deductions in whole percentage increments to not less than one percent (1%) on one (1) occasion only during any Accrual Period by completing and filing a new Subscription Agreement with such decrease taking effect as of the beginning of the payroll period following the date of filing of a new Subscription Agreement, filed at least fifteen (15) days prior to the beginning of such payroll period; |
(8) | I may not increase the rate of my payroll deductions during any Purchase Period. |
(9) | I may increase or decrease the rate of deductions for future Purchase Periods by filing a new Subscription Agreement, and that any such change will be effective as of the beginning of the next Purchase Period; |
(10) | unless I discontinue my participation in the Plan as provided in Section 10 of the Plan, my election will continue to be effective for each successive Purchase Period. |
Until I request the delivery of certificates, shares purchased for me under the Plan shall be owned by me beneficially and shall be held in street name of the nominee of the third party administrator selected by the Plan Administrator to administer the Plan records or in such other nominee name as shall be designated from time to time by the Plan Administrator. Upon delivery, shares should be issued in the name(s) of (name of employee or employee and spouse only):__________________________________________________
________________________________________________________________________
In the event of my death, I hereby designate the following as my beneficiary(ies) to receive all payments and shares due to me under the Plan
NAME: (Please print)
____________________________________ | ___________________________ |
(First) | (Middle) | (Last) | (Address) | |
| | | | | |
____________________________________ | ___________________________ |
(Relationship) | |
| | |
I understand that if I dispose (an “Early Disposition”) of any shares received by me pursuant to the Plan within two (2) years after the Enrollment Date or within one (1) year after the Exercise Date for such shares (the “Minimum Holding Period”), I will be treated for federal income tax purposes as having received ordinary compensation income at the time of such disposition in an amount equal to the excess of the Fair Market Value
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of the shares on the Exercise Date over the price which I paid for the shares, regardless of whether I disposed of the shares at a price less than their Fair Market Value on the Exercise Date. The remainder of the gain or loss, if any, recognized on such disposition will be treated as capital gain or loss. I hereby agree to notify the Company in writing within thirty (30) days after the date of any such Early Disposition.
If I dispose of shares purchased under the Plan at any time after expiration of such Minimum Holding Period, I understand that I will be treated for federal income tax purposes as having received compensation income only to the extent of an amount equal to the lesser of (1) the excess of the Fair Market Value of the shares at the time of such disposition over the purchase price which I paid for the shares under the option, or (2) ten percent (10%) of the Fair Market Value of shares on the Enrollment Date. The remainder of the gain or loss, if any, recognized on such disposition will be treated as capital gain or loss.
I will make adequate provision for federal, state or other tax withholding obligations, if any, which arise upon any disposition of the Common Stock. The Company may, but will not be obligated to, withhold from my compensation the amount necessary to meet any applicable withholding obligation including any withholding necessary to make available to the Company any tax deductions or benefits attributable to the sale or Early Disposition of Common Stock by me.
I understand that my ability to participate in the Plan is subject to my consent to access, and acknowledgement of having accessed, the Plan prospectus in connection with the Form S-8 registration statement for the Plan, any updates thereto, and the Plan (collectively, the “Plan Documents”) in electronic form through the People Page on the Company's Intranet. By signing below and participating in the Plan, I: (i) consent to access electronic copies (instead of receiving paper copies) of the Plan Documents via the Company’s Intranet; (ii) represent that I have access to the Company’s Intranet; (iii) acknowledge receipt of the electronic copies, or that I am already in possession of paper copies, of the Plan Documents and the Company’s most recent annual report to stockholders; (iv) acknowledge that I am familiar with and agree to participate in the Plan subject to the terms and provisions of the Plan Documents and (v) consent to access and receive in the future electronic copies via the Company’s Intranet or otherwise of all documents made a part of, or incorporated by reference into, the Plan Documents in the future as well as any other reports, proxy statements and other communications distributed in the future to security holders of the Company generally.
I acknowledge that I may receive, without charge, upon written or oral request, paper copies of any or all of the Plan Documents, documents incorporated by reference in the Form S-8 registration statement for the Plan, and the Company’s most recent annual report to stockholders or any other documents described in the preceding paragraph by requesting them from Stock Administration at the Company, One Franklin Parkway, San Mateo, CA 94403-1906. Telephone (650) 525-8037. I further acknowledge that I may also withdraw my consent to receive any or all documents electronically by notifying Stock Administration at the above address in writing.
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I understand that the tax information contained herein is only a summary of some of the basic provisions of the Code and related regulations applicable to the Plan in effect as of the date of execution of this Subscription Agreement and is subject to change. I further understand that the Company is not giving tax advice and that I should consult a tax advisor of my choice concerning the tax implications of the purchase and sale of stock under the Plan.
I hereby agree to be bound by the terms of the Plan and acknowledge that the effectiveness of this Subscription Agreement is dependent upon my eligibility to participate in the Plan.
SPOUSE'S SIGNATURE
SIGNATURE: _______________________ | (necessary if beneficiary is not spouse) |
EMPLOYEE NAME: _________________ | ______________________________ |
| (Signature) | |
| | | |
DATE: _____________________________ ______________________________
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EXHIBIT B
FRANKLIN RESOURCES, INC.
1998 EMPLOYEE STOCK INVESTMENT PLAN
NOTICE OF WITHDRAWAL
The undersigned Participant in the Purchase Period of the Franklin Resources, Inc. 1998 Employee Stock Investment Plan which began on _________________, hereby notifies the Company that such Participant hereby withdraws from the Purchase Period. Such Participant hereby directs the Company to pay to the undersigned as promptly as practicable all the payroll deductions credited such Participant’s account with respect to such Purchase Period. The undersigned understands and agrees that the option for such Purchase Period will be automatically terminated. The undersigned understands further that no further payroll deductions will be made for the purchase of shares in the current Purchase Period and the undersigned shall be eligible to participate in succeeding Purchase Periods only by delivering to the Company a new Subscription Agreement.
Name and Address
of Participant: | ________________________________________________ |
| ________________________________________________ |
| ________________________________________________ |
Signature: | ____________________________ |
Date: | ____________________________ |
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