FRANKLIN RESOURCES, INC.
UNITED KINGDOM STOCK OPTION PLAN #1
1. Purpose of the Plan. The purposes of this United Kingdom
Stock Option Plan #1 are to promote the success of the
Company's business by attracting and retaining the best
available personnel for positions of substantial
responsibility with the Company's United Kingdom
Subsidiaries and to provide additional incentive to such
personnel.
2. Definitions. As used herein, the following definitions
shall apply:
(a) "Board" shall mean the Board of Directors of the
Company.
(b) "Common Stock" shall mean the Common Stock,
U.S.$.10 par value, of the Company.
(c) "Company" shall mean Franklin Resources, Inc., a
Delaware Corporation.
(d) "Committee" shall mean the Committee appointed by the
Board in accordance with paragraph (a) of Section 4
of the Plan, if one is appointed.
(e) "Continuous Status as an Employee" shall mean the
absence of any interruption or termination of
service as an employee of the Company or a
Subsidiary thereof. Such Continuous Status shall not
be considered interrupted in the case of sick leave,
military leave, or any other leave of absence
approved by the Board.
(f) "Disinterested Person" shall mean a person who, at
the time he or she acts with respect to the granting
of any Option, is not eligible, and within one year
prior thereto has not been eligible, to receive
stock, options to purchase stock, or any rights with
respect to stock, of the Company or any affiliated
company pursuant to this Plan.
(g) "Employee" shall mean any person, including
officers and directors, who is, at the time of the
grant of an Option hereunder, an employee of any
United Kingdom Subsidiary of the Company, which now
exists or is hereafter organized or is acquired by
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the Company. Thereafter, such Employee may accept
employment directly with the Company or a non United
Kingdom Subsidiary of the Company and retain his or
her status as an Employee hereunder. The payment of
a director's fee by the Company or a Subsidiary
thereof shall not be sufficient to constitute
"employment" by such United Kingdom Subsidiary
hereunder.
(h) "Option" shall mean a stock option granted pursuant
to the Plan.
(i) "Optioned Stock" shall mean the Common Stock subject
to an Option.
(j) "Optionee" shall mean an Employee of a United
Kingdom Subsidiary of the Company who initially
receives an Option hereunder.
(k) "Plan" shall mean this United Kingdom Stock Option
Plan #1.
(l) "Share" shall mean a share of the Common Stock, as
adjusted in accordance with Section 11 of the Plan.
(m) "Subsidiary" or "Subsidiaries" as used herein shall
mean majority owned Subsidiaries of the Company.
3. Stock Subject to the Plan. Subject to the provisions of
Section 11 of the Plan, as of November 1, 1992, the
maximum aggregate number of Shares which may be optioned
and sold under the Plan is one hundred thirty one
thousand (131,000) Shares of the Common Stock or the
number and kind of shares of stock or other securities
which shall be substituted for such Shares or to which
such Shares shall be adjusted as provided in Section 11.
The Shares may be authorized, but unissued, or reacquired
Common Stock.
4. Administration of the Plan.
(a) Procedure. The Plan shall be administered by the
Board. The Board may appoint a Committee consisting
of not less than three (3) members of the Board to
administer the Plan on behalf of the Board, subject
to such terms and conditions as the Board may
prescribe. Once appointed, the Committee shall
continue to serve until otherwise directed by the
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Board. From time to time the Board may increase the
size of the Committee and appoint additional members
thereof, remove members (with or without cause), and
appoint new members in substitution therefor, fill
vacancies however caused and remove all members of
the Committee, and thereafter directly administer
the Plan. No options shall be granted to the Board
pursuant to this Plan. As used in the Plan and in
any Option, the term "Board" shall refer to either
the Committee or the Board if no Committee is then
designated.
(b) Powers of the Board. Subject to the provisions of
the Plan, the Board shall have the authority, in its
discretion: (i) to determine the Employees to whom,
and the time or times at which, Options shall be
granted and the number of Shares to be represented
by each Option; (ii) to determine the exercise price
per share of Options to be granted; (iii) to
interpret the Plan; (iv) to prescribe, amend and
rescind rules and regulations relating to the Option
granted under the Plan (which need not be identical)
and, with the consent of the holder thereof, to
modify or amend each Option; (v) to accelerate or
defer (with the consent of the Optionee) the
exercise date of any Option; (vi) to authorize any
person to execute on behalf of the Company any
instrument required to effectuate the grant of an
Option previously granted by the Board; and (vii) to
make all other determinations deemed necessary or
advisable for the administration of the Plan,
including conforming the Plan with applicable laws
and regulations.
(c) Effect of Board's Decision. All decisions,
determinations and interpretations of the Board
shall be final and binding on all Optionees and any
other holders of any Options granted under the Plan.
5. Eligibility. Options may be granted hereunder only to
Employees of United Kingdom Subsidiaries of the Company.
Thereafter, such Employee may accept employment directly
with the Company or a non United Kingdom Subsidiary of
the Company and retain his or her status as an Employee
hereunder. Any person who files with the Board, in a
form satisfactory to the Board, a written waiver of
eligibility to receive Options under this Plan shall not
be eligible to receive any Option under this Plan for the
duration of such waiver.
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The Plan shall not confer upon any Optionee any right
with respect to continuation of employment by the Company
or any Subsidiary thereof, nor shall it interfere in any
way with his right or the Company or a Subsidiary's right
to terminate his employment at any time.
6. Term of Plan. The Plan shall become effective as of
November 1, 1992. It shall continue in effect until
October 31, 1999, unless sooner terminated under Section
14 of the Plan.
7. Term of Option. Notwithstanding any other provision
hereunder, or anything to the contrary contained in any
option agreement issued hereunder, the term of each
Option and all exercise rights thereunder shall not
exceed seven (7) years from the date of grant thereof.
8. Option Price and Consideration.
(a) The per Share Option price for the Shares to be
issued pursuant to an Option shall be such price as
is determined by the Board.
(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 Board
and shall consist entirely of cash to be paid upon
exercise of an Option unless, in the sole discretion
of the Board, other methods of payment for issuance
of Shares as may be permitted under applicable law
are authorized by the Board. The determination of
consideration shall be deemed to be such as may be
reasonably expected to benefit the Company under
applicable law.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. An
Option granted hereunder shall be exercisable at
such time and under such conditions as determined by
the Board, including performance criteria with
respect to the Company, a Subsidiary thereof and/or
the Optionee, and as shall be permissible under the
terms of the Plan. An Option may not be exercised
for a fraction of a Share.
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An Option shall be deemed to be exercised when
written notice of such exercise has been given to
the Company in accordance with the terms of the
stock option agreement by the person entitled to
exercise the Option and full payment for the Shares
with respect to which the Option is exercised has
been received by the Company. Until the issuance,
which in no event will be delayed more than thirty
(30) days from the date of the exercise of the
Option, (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized
transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote
or receive dividends or any other rights as a
stockholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option.
No adjustment will be made for a dividend or other
right for which the record date is prior to the date
the stock certificate shall have been issued, except
as provided in Section 11 of the Plan.
Exercise of an Option in any manner shall result in
a decrease in the number of Shares which thereafter
may be available, both for purposes of the Plan and
for purchase under the Option, in the amount of the
number of Shares as to which the Option is
exercised.
(b) Termination of Continuous Employment Status By
Optionee. If an Optionee ceases to serve as an
employee of the Company or a Subsidiary thereof , he
may, but only within thirty (30) days (or such other
period of time not exceeding three (3) months as is
determined by the Board) after the date he ceases to
so serve , exercise his Option to the extent that he
was entitled to exercise it at the date of such
termination. To the extent that he was not entitled
to exercise the Option at the date of such
termination, or if he does not exercise an Option
(which he was entitled to exercise) within the time
specified herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the
provisions of Section 9(b) above, in the event such
Optionee is unable to continue his employment as
provided for hereunder, as a result of his total and
permanent disability (as determined by the insurers
in accordance with the long term disability
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insurance policy applicable to such Optionee), he
may, but only within three (3) months (or such other
period of time not exceeding twelve (12) months as
is determined by the Board) from the date of
disability, exercise his Option in full even if the
right to exercise shall not have otherwise accrued
at the date of such disability. If such Optionee
does not exercise such Option (which he was entitled
to exercise hereunder) within the time specified
herein, the Option shall terminate. Notwithstanding
any of the foregoing, the actual date of exercise
shall in no event be later than the expiration of
the term of the Option.
(d) Death of Optionee. In the event of the death,
during the term of the Option, of an Optionee:
(i) who is at the time of his death an employee of
the Company or a Subsidiary thereof and who
shall have been in Continuous Status as an
Employee since the date of grant of the Option,
the Option may be exercised, at any time
determined by the Board, not in excess of
twelve (12) months following his death by the
Optionee's estate or by a person who acquired
the right to exercise the Option by bequest or
inheritance, as the case may be, even if the
right to exercise shall not have otherwise
accrued at the date of death; provided,
however, that the actual date of exercise shall
in no event be later than the expiration of the
term of the Option;
(ii) within one month after the termination of
Continuous Status as an Employee, the Option
may be exercised, at any time determined by the
Board, not in excess of twelve (12) months
following the date of termination of Continuous
Status as an Employee, by the Optionee's
estate or by a person who acquired the right to
exercise the Option by bequest or inheritance,
as the case may be, even if the right to
exercise had not otherwise accrued at the date
of termination, provided that the actual date
of exercise shall in no event be later than the
expiration of the term of the Option.
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10. Non-transferability of Options. An Option may not be
sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by will or by the
laws of descent or distribution and may be exercised,
during the lifetime of the Optionee, only by the
Optionee.
11. Adjustments Upon Changes in Capitalization or Merger.
Subject to any required action by the shareholders of the
Company, the number of Shares of Common Stock covered by
each outstanding Option, as well as the price per Share
of Common Stock covered by each such outstanding Option,
shall be proportionately adjusted for any increase or
decrease in the number of issued Shares of Common Stock
resulting from a stock split or the payment of a stock
dividend (but only on the Common Stock) or any other
increase or decrease in the number of such Shares of
Common Stock effected without receipt of consideration by
the Company in order to provide comparable rights to
Optionees after such adjustment; 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 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.
In the event that the Company effects one or more
reorganizations, recapitalizations, rights offerings, or
other increases or reductions of Shares of its
outstanding Common Stock, and in the event of the
Company's being consolidated with or merged into any
other corporation, or in the event of the proposed
dissolution or liquidation of the Company, or in the
event of the proposed sale of substantially all of the
assets of the Company, the Board may, if it so determines
in the exercise of its sole discretion, either (i) make
provision for proportionately adjusting the number or
class of Shares covered by an Option, as well as the
price to be paid therefor in a manner such as to provide
a reasonably comparable interest to an Optionee or (ii)
declare that any Option shall terminate as of a date to
be fixed by the Board, provided that the Board shall give
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each Optionee the right to exercise his Option
immediately prior to such sale, dissolution, liquidation,
merger or consolidation (which right to exercise shall be
conditioned upon the consummation of one of the foregoing
events) as to all or any part of the Shares, including
Shares, in the Board's discretion, as to which the Option
would not otherwise be exercisable. The foregoing
matters may be provided for in a stock option agreement
or otherwise by the Board.
12. Date of Grant. The date of grant of the Options
hereunder shall, for purposes hereof, be as of November
1, 1992.
13. Notice of Sale. If Shares acquired by exercise of an
Option granted pursuant to this Plan are sold or disposed
of, the holder of the Shares immediately prior to the
disposition shall, within five (5) days after such sale
or disposition, notify the Company in writing of the date
and terms of the disposition and shall provide such other
information regarding the disposition as the Company may
reasonably require.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may amend or
terminate the Plan from time to time in such
respects as the Board may deem advisable.
(b) Effect of Amendment or Termination. Subject to the
provisions of Section 11, any such amendment or
termination of the Plan shall not affect Options
already granted and such Options shall remain in
full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed
between the Optionee and the Board, which agreement
must be in writing and signed by the Optionee and
the Company.
15. Conditions Upon Issuance of Shares.
(a) Compliance. Shares shall not be issued with respect
to an Option granted under the Plan unless the
exercise of such Option and the issuance and
delivery of such Shares pursuant thereto shall
comply with all relevant provisions of United States
and United Kingdom law, including, without
limitation, the Securities Act of 1933, as amended,
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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
reasonable approval of counsel for the Company with
respect to such compliance.
(b) Representations. As a condition to the exercise of
an Option, the Company may require the person
exercising such Option 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 relevant provisions of law.
(c) Withholding Taxes; Delivery of Shares. The
Company's obligation to deliver Shares of Common
Stock upon exercise of an Option, in whole or in
part, shall be subject to the satisfaction of any
applicable governmental income, excise or employment
tax withholding obligations.
16. Reservation of Shares. The Company, during the term of
this Plan, or during the term of any Option outstanding
hereunder after expiration of the term of the Plan, will
at all times reserve and keep available such number of
Shares as shall be sufficient to satisfy the requirements
of the Plan.
Inability of the Company, after the exercise of
reasonable efforts, to obtain from any regulatory body
having jurisdiction authority deemed by the Company's
counsel to be necessary to the lawful issuance and sale
of any Shares hereunder shall relieve the Company of any
liability in respect of the non-issuance or sale of such
Shares as to which such requisite authority shall not
have been obtained.
17. Option Agreement. Options shall be evidenced by written
option agreements in such form as the Board shall
approve, which agreements may contain other terms,
provisions, and conditions not inconsistent with this
Plan.
18. Application of Funds. The proceeds received by the
Company from the sale of Shares pursuant to Options
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granted under the Plan shall be used for general
corporate purposes.
19. Governmental Regulations. The Company's obligation to
sell and deliver Shares of the Common Stock under this
Plan is subject to the approval of any governmental
authority required in connection with the authorization,
issuance or sale of such Shares.
20. Notices. Any notice to be given to the Company pursuant
to the provisions of this Plan shall be addressed to the
Company in care of its Secretary at its principal office,
and any notice to be given to an Employee to whom an
Option is granted hereunder shall be delivered personally
or addressed to him/her at the address given beneath
his/her signature on his/her stock option agreement, or
at such other address as such Employee or his/her
transferee (upon the transfer of the Optioned Stock) may
hereafter designate in writing to the Company. All such
notices shall be sent registered or certified mail. It
shall be the obligation of each Optionee and each
transferee holding Shares purchased upon exercise of an
Option to provide the Secretary of the Company, by letter
mailed as provided hereinabove, with written notice of
his/her direct mailing address.
21. No Enlargement of Employee Rights. This Plan is purely
voluntary on the part of the Company, and the continuance
of the Plan shall not be deemed to constitute a contract
between the Company and any Employee, or to be
consideration for or a condition of the employment of any
Employee. Nothing contained in this Plan shall be deemed
to give any Employee the right to be retained in the
employ of the Company or its, Subsidiaries, or a
successor corporation, or to interfere with the right of
the Company or any such corporations to discharge or
retire any Employee thereof at any time. No Employee
shall have any right to or interest in Options authorized
hereunder prior to the grant of such Option to such
Employee, and upon such grant he shall have only such
rights and interests as are expressly provided herein,
subject, however, to all applicable provisions of the
Company's Certificate of Incorporation, as the same may
be amended from time to time.
22. Invalid Provisions. In the event that any provision of
this Plan is found to be invalid or otherwise
unenforceable under any applicable law, such invalidity
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or unenforceability shall not be construed as rendering
any other provisions contained herein as invalid or
unenforceable, and all such other provisions shall be
given full force and effect to the same extent as though
the invalid or unenforceable provision was not contained
herein.
23. Governing Laws. The validity and construction of the
Plan and the instruments evidencing Options shall be
governed by the laws of the State of California.