Exhibit 4.6
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FRANKLIN RESOURCES, INC.
1998 EMPLOYEE STOCK INVESTMENT PLAN
The following constitute the provisions of the 1998 Employee Stock
Investment Plan of Franklin Resources, Inc.
1. PURPOSE.
The purpose of the Plan is to provide employees of the Company (as
hereinafter defined) and its Designated Parents or Subsidiaries with
an opportunity to purchase Common Stock of the Company through
accumulated payroll deductions. It is the intention of the Company to
have the Plan qualify as an "Employee Stock Investment Plan" under
Section 423 of the Code (as hereinafter defined). The provisions of
the Plan, accordingly, shall be construed so as to extend and limit
participation in a manner consistent with the requirements of that
section of the Code.
2. DEFINITIONS.
As used herein, the following definitions shall apply:
(a) "Accrual Period" means a period of approximately six (6) months,
commencing on February 1 and August 1 of each year and
terminating on the next following July 31 or January 31,
respectively, except with respect to the first accrual period
which may be shorter if so determined by the Plan Administrator.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Common Stock" means the common stock of the Company.
(e) "Company" means Franklin Resources, Inc., a Delaware corporation.
(f) "Compensation" means an Employee's base salary and commissions
from the Company including paid time off and overtime or one or
more Designated Parents or Subsidiaries, including such amounts
of base salary and commissions as are deferred by the Employee
(i) under a qualified cash or deferred arrangement described in
Section 401(k) of the Code, or (ii) to a plan qualified under
Section 125 of the Code. Compensation does not include bonuses,
restricted stock awards, other annual awards, other incentive
payments, reimbursements or other expense allowances, fringe
benefits (cash or noncash), moving expenses, deferred
compensation, profit sharing or other employer matching
contributions (other than employee deferral contributions
described in the first sentence) made on the Employee's behalf by
the Company or one (1) or more Designated Parents or Subsidiaries
under any employee benefit or welfare plan now or hereafter
established, and any other payments not specifically referenced
in the first sentence.
(g) "Corporate Transaction" means any of the following
stockholder-approved transactions to which the Company is a
party:
(i) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose
of which is to change the state in which the Company is
incorporated;
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company (including the
capital stock of the Company's subsidiary corporations) in
connection with complete liquidation or dissolution of the
Company; or
(iii) any reverse merger in which the Company is the surviving
entity, but in which securities possessing more than fifty
percent (50%) of the total combined voting power of the Company's
outstanding securities are transferred to a person or persons
different from those who held such securities immediately prior
to such merger.
(h) "Designated Parents or Subsidiaries" means the Parents or
Subsidiaries which have been designated by the Plan Administrator
from time to time as eligible to participate in the Plan.
(i) "Effective Date" means February 1, 1998 or such later date as is
designated by the Plan Administrator for the commencement of the
first Purchase and Accrual Period hereunder. However, should any
Designated Parent or Subsidiary become a participating company in
the Plan after such date, then such entity shall designate a
separate Effective Date with respect to its
employee-participants.
(j) "Employee" means any individual, including an officer or
director, who is an employee of the Company or a Designated
Parent or Subsidiary for purposes of Section 423 of the Code. For
purposes of the Plan, the employment relationship shall be
treated as continuing intact while the individual is on medical
leave or other leave of absence approved by the individual's
employer. Where the period of leave exceeds ninety (90) days and
the individual's right to reemployment is not guaranteed either
by statute or by contract, the employment relationship will be
deemed to have terminated on the ninety-first (91st) day of such
leave for purposes of determining eligibility to participate in
the Plan.
(k) "Enrollment Date" means the first day of each Purchase Period.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(m) "Exercise Date" means the last day of each Accrual Period.
(n) "Fair Market Value" means, as of any date, the closing price of
the Common Stock on the New York Stock Exchange Composite Tape on
such date. In the event such date is not a day on which the New
York Stock Exchange is open for trading or the Company's Common
Stock was not traded on such date, then such closing price for
the last market trading day immediately prior to such date shall
be used.
(o) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(p) "Participant" means an Employee of the Company or Designated
Parent or Subsidiary who is actively participating in the Plan.
(q) "Plan" means the Franklin Resources, Inc. 1998 Employee Stock
Investment Plan.
(r) "Plan Administrator" means either the Board or a Committee of the
Board that is responsible for the administration of the Plan as
is designated from time to time by resolution of the Board.
(s) "Purchase Period" means a purchase period established pursuant to
Section 4 hereof.
(t) "Purchase Price" shall mean an amount equal to Ninety Percent
(90%) of the Fair Market Value of a share of Common Stock on the
Enrollment Date or on the Exercise Date, whichever is lower.
(u) "Reserves" means the sum of the number of shares of Common Stock
covered by each option under the Plan which have not yet been
exercised and the number of shares of Common Stock which have
been authorized for issuance under the Plan but not yet placed
under option.
(v) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. ELIGIBILITY.
(a) Any individual who is an Employee for the ten (10) day period
prior to and including a given Enrollment Date, shall be eligible to
participate in the Plan for the Purchase Period commencing with such
Enrollment Date.
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) if, immediately
after the grant, such Employee (taking into account stock owned by any
other person which would be attributed to such Employee pursuant to
Section 424(d) of the Code) would own stock and/or hold outstanding
options to purchase stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the
Company or of any Parent or Subsidiary, or (ii) which permits such
person's rights to purchase stock under all employee stock purchase
plans of the Company and its Parents or Subsidiaries to accrue at a
rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of
stock (determined at the Fair Market Value of the shares at the time
such option is granted prior to any discounts provided for in such
plan) for each calendar year in which such option is outstanding at
any time. The determination of the accrual of the right to purchase
stock shall be made in accordance with Section 423(b)(8) of the Code
and the regulations thereunder.
(c) Notwithstanding subsection (a), above, the following Employees
shall not be eligible to participate in the Plan for any relevant
Purchase Period: (i) Employees whose customary employment is less than
20 hours per week; and (ii) Employees who are subject to rules or laws
of a foreign jurisdiction that prohibit or make impractical the
participation of such Employees in the Plan.
4. PURCHASE PERIODS.
(a) The Plan shall be implemented through overlapping or consecutive
Purchase Periods until such time as (i) the maximum number of shares
of Common Stock available for issuance under the Plan shall have been
purchased or (ii) the Plan shall have been sooner terminated in
accordance with Section 19 hereof. The maximum duration of a Purchase
Period shall be twenty-seven (27) months. Initially, the Plan shall be
implemented through overlapping Purchase Periods of twenty-four (24)
months' duration commencing each February 1 and August 1 following the
first Effective Date designated by the Plan Administrator (except that
the initial Purchase Period shall commence on the Effective Date and
shall end on January 31, 2000). The Plan Administrator shall have the
authority to change the length of any Purchase Period and the length
of Accrual Periods within any such Purchase Period subsequent to the
initial Purchase Period by announcement at least thirty (30) days
prior to the commencement of the Purchase Period and to determine
whether subsequent Purchase Periods shall be consecutive or
overlapping.
(b) A Participant will be granted a separate option for each Purchase
Period in which such individual participates. The option shall be
granted on the Enrollment Date and will be automatically exercised in
successive installments on the Exercise Dates ending within the
Purchase Period.
(c) An Employee may participate in only one Purchase Period at a time.
Accordingly, except as provided in subsection 4(d) below, an Employee
who wishes to join a new Purchase Period must withdraw from the
current Purchase Period in which such Employee is participating and
must also enroll in the new Purchase Period prior to the Enrollment
Date for that Purchase Period.
(d) If on the first day of any Accrual Period in a Purchase Period in
which a Participant is participating, the Fair Market Value of the
Common Stock is less than the Fair Market Value of the Common Stock on
the Enrollment Date of the Purchase Period (after taking into account
any adjustment during the Purchase Period pursuant to Section 18(a)),
the Purchase Period shall be terminated automatically and the
Participant shall be enrolled automatically in the new Purchase Period
which has its first Accrual Period commencing on that date, provided
the Participant is eligible to participate in the Plan on that date
and has not elected to terminate participation in the Plan.
(e) Except as otherwise specifically provided herein, the acquisition
of Common Stock through participation in the Plan for any Purchase
Period shall neither limit nor require the acquisition of Common Stock
by a Participant in any subsequent Purchase Period.
5. PARTICIPATION.
(a) An eligible Employee may become a Participant in the Plan by
completing a subscription agreement authorizing payroll deductions in
the form of Exhibit "A" to this Plan and filing it with the designated
payroll office of the Company at least fifteen (15) days prior to the
Enrollment Date for the Purchase Period in which such participation
will commence, unless a later time for filing the subscription
agreement is set by the Plan Administrator for all eligible Employees
with respect to a given Purchase Period.
(b) Payroll deductions for a Participant shall commence with the first
payroll period following the Enrollment Date and shall end on the last
complete payroll period during the Purchase Period, unless sooner
terminated by the Participant as provided in Section 10.
6. PAYROLL DEDUCTIONS.
(a) At the time a Participant files a subscription agreement, such
Participant shall elect to have payroll deductions made during the
Purchase Period in amounts between one percent (1%) and not exceeding
ten percent (10%) of the Compensation which such Participant receives
during the Purchase Period.
(b) All payroll deductions made for a Participant shall be credited to
such Participant's account under the Plan and will be withheld in
whole percentages only. A Participant may not make any additional
payments into such account.
(c) A Participant may discontinue participation in the Plan as
provided in Section 10, or may decrease the rate of payroll deductions
during the Purchase Period by completing and filing with the Company a
new subscription agreement authorizing a decrease in the payroll
deduction rate. The decrease in rate shall be effective with the first
full payroll period commencing fifteen (15) days after the Company's
receipt of the new subscription agreement unless the Company elects to
process a given change in participation more quickly. A Participant
may increase the rate of payroll deductions for a future Purchase
Period by filing with the Company a new subscription agreement
authorizing an increase in the payroll deduction rate within fifteen
(15) days (unless the Company elects to process a given change in
participation more quickly) before the commencement of the upcoming
Purchase Period. A Participant's subscription agreement shall remain
in effect for successive Purchase Periods unless terminated as
provided in Section 10. The Plan Administrator shall be authorized to
limit the number of payroll deduction rate changes during any Purchase
Period.
(d) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) herein, a
Participant's payroll deductions may be decreased to 0% at such time
during any Accrual Period which is scheduled to end during the current
calendar year (the "Current Accrual Period") that the aggregate of all
payroll deductions which were previously used to purchase stock under
the Plan in a prior Accrual Period which ended during that calendar
year plus all payroll deductions accumulated with respect to the
Current Accrual Period equal $22,500. Payroll deductions shall
recommence at the rate provided in such Participant's subscription
agreement at the beginning of the first Accrual Period which is
scheduled to end in the following calendar year, unless terminated by
the Participant as provided in Section 10.
7. GRANT OF OPTION.
(a) On the Enrollment Date, each Participant in such Purchase Period
shall be granted an option to purchase on each Exercise Date of such
Purchase Period (at the applicable Purchase Price) up to a number of
shares of the Common Stock determined by dividing such Participant's
payroll deductions accumulated prior to such Exercise Date by the
applicable Purchase Price; provided (i) that such purchase shall be
subject to the limitations set forth in Sections 3(b) and 12 hereof,
and (ii) the maximum number of shares of Common Stock a Participant
will be permitted to purchase in any Accrual Period will be two
thousand (2,000) shares, subject to adjustment as provided in Section
18 hereof. Exercise of the option shall occur as provided in Section
8, unless the Participant has withdrawn pursuant to Section 10, and
the option, to the extent not exercised, shall expire on the last day
of the Purchase Period.
(b) The Company may, in its sole discretion, provide matching grants
in a uniform and non-discriminatory manner (in whole or partial
shares) of Common Stock to Participants who satisfy specified ongoing
holding period requirements
with respect to shares purchased hereunder upon such terms and
conditions as are determined from time to time by the Plan
Administrator.
8. EXERCISE OF OPTION.
Unless a Participant withdraws from the Plan as provided in Section 10
below, such Participant's option for the purchase of shares will be
exercised automatically on each Exercise Date, and the maximum number
of shares (including fractional shares) subject to the option shall be
purchased for such Participant at the applicable Purchase Price with
the accumulated payroll deductions in such Participant's account. The
Plan Administrator shall be authorized to establish procedures for the
handling of fractional shares, including the distribution of cash in
lieu thereof. Notwithstanding the foregoing, 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.
9. DELIVERY.
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.
10. WITHDRAWAL; TERMINATION OF EMPLOYMENT.
(a) A Participant may withdraw all, but not less than all of the
payroll deductions credited to such Participant's account and not yet
used to exercise such Participant's option under the Plan at any time
by giving at least fifteen (15) days prior written notice to the
Company in the form of Exhibit "B" to this Plan. All of the
Participant's payroll deductions credited to such Participant's
account will be paid to such Participant as promptly as practicable
after receipt of notice of withdrawal, such Participant's option for
the Purchase Period will be automatically terminated, and no further
payroll deductions will be made during the Purchase Period. If a
Participant withdraws from a Purchase Period, payroll deductions will
not resume at the beginning of the succeeding Purchase Period unless
the Participant delivers a new subscription agreement to the Company.
(b) Upon a Participant's ceasing to be an Employee for any reason or
upon termination of a Participant's employment relationship (as
described in Section 2(j)), the payroll deductions credited to such
Participant's account during the Purchase Period, but not yet used to
purchase shares will be returned to such
Participant or, in the case of such Participant's death, to the person
or persons entitled thereto under Section 14, and such Participant's
option will be automatically terminated.
11. INTEREST.
No interest shall accrue on the payroll deductions credited to a
Participant's account under the Plan under any circumstances or at any
time.
12. STOCK.
(a) The maximum number of shares of Common Stock which shall be made
available for sale or as a matching grant under the Plan shall be two
million (2,000,000) shares, subject to adjustment upon changes in
capitalization of the Company as provided for in Section 18. If on a
given Exercise Date, the number of shares with respect to which
options are to be exercised exceeds the number of shares then
available under the Plan, the Plan Administrator shall make a pro rata
allocation of the shares remaining 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.
13. ADMINISTRATION.
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.
15. TRANSFERABILITY.
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, 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.
16. USE OF FUNDS.
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.
17. REPORTS.
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) In the event of a proposed Corporate Transaction, each option
under the Plan shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of
such successor corporation, unless the Plan Administrator determines,
in the exercise of its sole discretion and in lieu of such assumption
or substitution, 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 or substitution in the event of a Corporate Transaction,
the Plan Administrator shall notify each Participant in writing, at
least ten (10) days prior to the New Exercise Date, that the Exercise
Date for such Participant's option has been changed to the New
Exercise Date and that such Participant's option will be exercised
automatically on the New Exercise Date, unless prior to such date such
Participant has withdrawn from the Purchase Period as provided in
Section 10. For purposes of this Section, an option granted under the
Plan shall be deemed to be assumed if, following the Corporate
Transaction, the option confers the right to purchase, for each share
of Common Stock subject to the option immediately prior to the
Corporate Transaction, the consideration (whether stock, cash or other
securities or property) received in the Corporate Transaction by
holders of Common Stock for each share of Common Stock held on the
effective date of the Corporate Transaction (and if such holders were
offered a choice of consideration, the type of consideration chosen by
the holders of a majority of the outstanding shares of Common Stock);
provided, however, that if such consideration received in the
Corporate Transaction was not solely common stock of the successor
corporation or its Parent, the Plan Administrator may, with the
consent of the successor corporation and the Participant, provide for
the consideration to be received upon exercise of the option to be
solely common stock of the successor corporation or its Parent equal
in fair market value to the per share consideration received by
holders of Common Stock in the Corporate Transaction.
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, 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 Plan is in the best interests of the Company and
its stockholders. Except as provided in Section 18, 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.
20. NOTICES.
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 as provided in Section 23.
22. TERM OF PLAN.
The Plan shall become effective upon January 1, 1998. It shall
continue in effect for a term of ten (10) years unless sooner
terminated under Section 19. The first Effective Date under the Plan
shall be determined as set forth in Section 2(i).
23. STOCKHOLDER APPROVAL.
Continuance of the Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months before or after
the date the Plan is adopted by the Board. If such stockholder
approval is obtained at a duly held stockholders' meeting, the Plan
must be approved by a majority of the votes cast at such stockholders'
meeting at which a quorum representing a majority of all outstanding
voting stock of the Company is, either in person or by proxy, present
and voting on the Plan. If such stockholder approval is obtained by
written consent, it must be obtained by the written consent of the
holders of a majority of all outstanding voting stock of the Company.
However, approval at a meeting or by written consent may be obtained
by a lesser degree of stockholder approval if the Plan Administrator
determines, in its discretion after consultation with the Company's
legal counsel, that such a lesser degree of stockholder approval will
comply with all applicable laws and will not adversely affect the
qualification of the Plan under Section 423 of the Code.
24. NO EMPLOYMENT RIGHTS.
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.
25. EFFECT OF PLAN.
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.
26. APPLICABLE LAW.
The laws of the State of California (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.
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;
(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 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 the Plan prospectus 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, you: (i) consent to access electronic
copies (instead of receiving paper copies) of the Plan Documents via the
Company's Intranet; (ii) represent that you have access to the Company's
Intranet; (iii) acknowledge receipt of the electronic copies, or that you are
already in possession of paper copies, of the Plan Documents and the Company's
most recent Annual Report; and (iv) acknowledge that you are familiar with and
agree to participate in the Plan subject to the terms and provisions of the Plan
Documents.
You may receive paper copies of the Plan Documents by requesting them in writing
addressed to Leslie M. Kratter, the Corporate Secretary, at One Franklin
Parkway, San Mateo, CA 94403-1906.
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: _____________________________ ________________________________________
(Print name)
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: ____________________________