FRANKLIN RESOURCES INC
EXHIBIT 10.77
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>exhibit10-77.txt
<DESCRIPTION>EXHIBIT 10.77
<TEXT>
                                                                   EXHIBIT 10.77
                                                                   -------------

                            FRANKLIN RESOURCES, INC.

             AMENDED AND RESTATED ANNUAL INCENTIVE COMPENSATION PLAN
                    (amended and restated December 11, 2003)

I.   PURPOSE

     Franklin Resources, Inc. (the "Company") hereby establishes the Amended and
Restated Annual  Incentive  Compensation  Plan for Principals and Associates (as
hereinafter  defined)  to  reward  the  contributions  to the  Company  made  by
Principals  and  Associates  by providing  them an  opportunity  to share in the
organization's annual performance results. Through these incentives, the Company
intends to attract,  retain,  and  motivate  eligible  employees  to achieve the
highest levels of performance results in the financial services business.

II.  DEFINITIONS

     When used in this plan document, the following words and phrases shall have
the following meanings:

     2.1  "Associates'  Pool" means the portion of the Award Pool  allocated  to
Incentive Awards for Associates.

     2.2  "Award Pool"  means  the  total  dollars  available for funding awards
under the  Plan.  The  Award  Pool is comprised of the Associates' Pool and  the
Principals' Pool.

     2.3  "Committee" means the Compensation Committee of the Board of Directors
of the Company as described in Section 9.1 below.

     2.4  "Company" means Franklin Resources, Inc., a Delaware corporation,  and
its subsidiaries.

     2.5  "Incentive  Award"  means the actual  current  value of the award to a
Participant  regardless  of the form of the award,  determined at the end of the
Plan Year.

     2.6  "Participant"  means  all  Principals  and  Associates  who have  been
determined by the Committee to be Participants, except employees who participate
in commission-based incentive plans or who are non-exempt employees.

     2.7  "Plan" means the Amended and Restated  Annual  Incentive  Compensation
Plan for Principals  and  Associates as set forth in this  document,  as amended
from time to time.

     2.8  "Pre-Tax  Operating Income" (hereafter "PTOI") means the net operating
income of the  Company,  exclusive  of  passive  income  and  calculated  before
non-operating  interest,  taxes,  extraordinary  items and certain special items
(such as special  compensation  payouts  on  account  of merger)  and before the
accrual of Incentive  Awards under the Plan and awards under the Company's  2004
Key Executive Incentive Compensation Plan or any successor plan.

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     2.9  "Plan Year" means the 12-month  period  beginning  on the first day of
each fiscal year of the Company, currently October 1.

     2.10 "Principals'  Pool" means the portion of the Award Pool  allocated to
Incentive Awards for Principals.

     2.11 "Stock"  means  Franklin  Resources,  Inc.  common stock  reserved for
issuance under the Franklin Resources,  Inc. 2002 Universal Stock Incentive Plan
or successor  equity  compensation  plan and includes  shares issued  subject to
restrictions and stock options.

     2.12 "Target Award" means a potential  bonus  opportunity for a Participant
budgeted at the beginning of the Plan Year.

III. PARTICIPATION

     3.1  All Principals and Associates employed by the Company at the beginning
of the Plan Year are  eligible to be  Participants  during  that Plan Year.  The
Committee  shall in its sole discretion  determine  annually which employees are
Principals.  All other eligible exempt staff are Associates.  The Committee may,
in its sole discretion,  add exempt employees hired during a Plan Year as either
Principals  or  Associates  and may adjust  Target Awards for such persons based
upon such interim employment.

     3.2  A non-exempt  employee who becomes  exempt during a Plan Year shall be
eligible for an Incentive  Award from the  Associates'  Pool, in the Committee's
sole discretion.

     3.3  A Participant who changes status (e.g., Associate to Principal)  shall
continue in his former status for that Plan Year, unless otherwise determined by
the Committee.

     3.4  A  Participant's   award  will  be  based  upon  an  evaluation  of  a
Participant's  overall performance,  including the successful  accomplishment of
annual goals and objectives, as well as other performance factors. A Participant
who receives a formal  performance  appraisal and whose overall evaluation is at
less than the median level of performance  relative to such Participant's  peers
still  remains  eligible for an Incentive  Award,  but the award may be reduced,
even to zero.  Participants  on written warning may be eligible for an Incentive
Award at the sole  discretion  of the  Committee,  but the Award may be reduced,
even to zero.

IV.  AWARD POOL FUNDING AND INDIVIDUAL AWARDS

     4.1  At or near the beginning of each Plan Year, the Committee shall

          (a) Determine the  percentage,  not to exceed Twenty Percent (20%), if
any,  of PTOI that will be  allocated  to the Award  Pool at  various  levels of
Company  performance  measured  by  changes  in PTOI  from the prior  year.  The
Committee may also determine if in its opinion prevailing circumstance dictates,
that the  Award  Pool for  particular  identified  groups of  Principals  and/or
Associates shall be based upon the PTOI of particular  identified  subsidiary or
subsidiaries of the Company.  The determinations  made by the Committee shall be
subject to approval of the Board of Directors of the Company;

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<PAGE>

          (b) Determine the  allocation of the Award Pool of the Company and any
identified  subsidiary or subsidiaries of the Company as described in (a) above,
between the Associates' Pool(s) and the Principal's Pool(s);

     4.2  After consideration of recommendations  made by management  personnel,
the  Committee  shall  generally  determine  the  amount  of Target  Awards  for
Participants  under the Plan. The Committee may, in its sole discretion,  advise
Participants of particular  Target Awards or ranges of Target Awards at any time
during the Plan Year.

     4.3  The actual amounts  allocated to the Award Pool(s) shall be determined
after the end of each Plan Year, based upon actual Company performance and PTOI.

     4.4  Actual Incentive Awards are determined  following the end of each Plan
Year.  Actual Incentive Awards will vary from the Target Awards depending on the
PTOI allocated to the Award Pool and a Participant's individual performance.

     4.5  The  Principals' Pool will be allocated among any or all Principals on
the  basis  of  a  Participant's  individual  performance  and  based  upon  the
accomplishment of such Participant's  goals and objectives for the Plan Year. No
Principals are guaranteed a payout from the Principals' Pool.

     4.6  The  Associates' Pool will be allocated among any or all Associates on
the  basis  of the  Participant's  individual  performance  and  based  upon the
accomplishment of such Participant's  goals and objectives for the Plan Year. No
Associates are guaranteed a payout from the Associates' Pool.

     4.7  To promote the highest levels of individual  performance,  there is no
minimum  or  maximum  which  applies  to  individual  Incentive  Awards  of  any
Participant.  Amounts not allocated as awards do not carry over to the next Plan
Year, and may be used for  distribution  as incentive  compensation to employees
who are not Participants in the Plan.

     4.8  Notwithstanding a Participant's individual performance and anything to
the contrary in this Plan, the Committee may, in its sole  discretion,  increase
or decrease (even to zero) the Incentive Award payable to a Participant.

V.   PAYMENT OF ANNUAL AWARDS

     5.1  Incentive  Awards may, in the Committee's  discretion,  be paid in the
following time and manner:

          (a) Incentive  Awards may be paid in cash or in a combination  of cash
and Stock and shares of investment  companies in the Franklin  Templeton  funds,
subject  to  restrictions  and  vesting   determined  by  the  Committee  to  be
appropriate.  Incentive  Awards  paid in Stock  under the 2002  Universal  Stock
Incentive Plan or successor  equity  compensation  plan shall also be subject to
the limit on the maximum number of shares that may be issued under such plan and

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<PAGE>

any  additional  limitations on the maximum number of shares that may be awarded
to any individual in any fiscal or calendar year under the such plan.

          (b) At least 25% of the  Incentive  Award will be paid in cash at such
time after the end of the Plan Year as determined by the Committee.  The balance
(if any) of the cash portion of an  Incentive  Award shall be paid at such later
time and in such  manner  as the  Committee  determines.  Participants  shall be
notified  in writing  as to the date and time of  payment  of any such  deferred
portion of the Incentive Award.

          (c) Any immediately vested Stock awarded as part of an Incentive Award
shall be distributed (whether or not subject to restrictions) at such time after
the end of the Plan Year as determined by the Committee. Stock subject to future
vesting  shall be issued  (whether  or not subject to  restrictions)  as soon as
administratively practicable.

VI.  PAYMENT IN EVENT OF DEATH, DISABILITY, LEAVE OF ABSENCE OR RETIREMENT

     6.1  Death of Participant

     A Participant who dies is entitled to a pro-rated  Incentive Award based on
performance up to the last day worked. Payment shall be made in cash in a single
payment as soon as practical  following  the end of the Plan Year in which death
occurred.  If the  Participant  dies following the end of a Plan Year but before
Incentive Awards for that year have been paid, the Participant's  full Incentive
Award shall be paid in cash in a single  payment  when it would  otherwise  have
been paid.  Payment of Incentive Awards on account of death shall be paid to the
person designated by the Participant as beneficiary under this Plan. If there is
no  such  designation  or  the  designated  beneficiary  fails  to  survive  the
Participant,  payment shall be made to the  Participant's  spouse or if there is
none, the Participant's estate. Notwithstanding the foregoing provisions of this
Section 6.1 with respect to the payment of Incentive Awards,  the Committee,  in
its sole discretion,  may (a) pay the Participant's full Incentive Award (or any
greater  amount)  or (b)  decrease  (even to zero) the  Participant's  Incentive
Award.

     6.2  Disability

     A  Participant  who ceases to be an  employee on account of  permanent  and
total  disability  as a result of which the  Participant  shall be eligible  for
payments  under  Company  long  term  disability  insurance  policies,  shall be
entitled to receive a pro-rated  Incentive  Award based on performance up to the
last day worked.  Payment shall be made in cash in a single  installment as soon
as  practical  following  the  end  of  the  fiscal  year  in  which  employment
terminated.  Notwithstanding  the foregoing  provisions of this Section 6.2 with
respect  to the  payment  of  Incentive  Awards,  the  Committee,  in  its  sole
discretion,  may (a) pay the Participant's  full Incentive Award (or any greater
amount) or (b) decrease (even to zero) the Participant's Incentive Award.

     6.3  Leave of Absence

     The Committee, in its sole discretion, shall determine Incentive Awards, if
any, to be paid to  Participants on leave of absence for any portion of the Plan
Year.

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<PAGE>

     6.4  Retirement

     A  Participant  who  retires  during the Plan Year is eligible to receive a
pro-rated Incentive Award based on performance to the date of retirement in cash
in a single payment as soon as practical following the end of the fiscal year in
which the Participant  retires. A Participant has "retired" for purposes of this
Plan if he terminates  employment with the Company after reaching age 55 with at
least 10 years of service to the Company,  including  service to any entity that
is acquired by the Company.  Notwithstanding  the  foregoing  provisions of this
Section 6.4 with respect to the payment of Incentive Awards,  the Committee,  in
its sole discretion,  may (a) pay the Participant's full Incentive Award (or any
greater  amount)  or (b)  decrease  (even to zero) the  Participant's  Incentive
Award.

VII. PAYMENT IN EVENT OF TERMINATION OF EMPLOYMENT

     7.1  Involuntary Termination of Employment

          (a) If a  Participant's  employment  is terminated by the Company as a
result of the Company's  dissatisfaction  with the job related activities of the
Participant or conviction of the Participant of a felony,  the Participant shall
forfeit   any  rights  to  any   unpaid   Incentive   Awards   under  the  Plan.
Notwithstanding the foregoing,  the Committee,  in its sole discretion,  may (i)
pay the Participant a pro-rated  Incentive Award based upon  performance  during
the Plan  Year to the date of  termination  or (ii) pay the  Participant's  full
Incentive Award (or any greater amount).

          (b) If a Participant's employment is terminated for reasons other than
those described in 7.1(a) above, the Committee, in its sole discretion,  may (i)
pay the Participant a pro-rated  Incentive Award based upon  performance  during
the Plan  Year to the date of  termination  or (ii) pay the  Participant's  full
Incentive Award (or any greater amount).

     7.2  Voluntary Termination of Employment

     If a Participant  voluntarily  resigns from  employment at the Company,  no
Incentive  Awards will be paid. The  Participant  shall forfeit the right to any
Incentive  Awards  for  the  current   performance  year.   Notwithstanding  the
foregoing, the Committee, in its sole discretion,  may (a) pay the Participant a
pro-rated  Incentive  Award based upon  performance  during the Plan Year to the
date of termination or (b) pay the  Participant's  full Incentive  Award (or any
greater amount).

VIII. AMENDMENT OR TERMINATION

     8.1  Amendment.

     The  Committee  reserves the right in its  discretion to amend this Plan at
any time in whole or in part, provided,  however, that no amendment shall result
in the forfeiture of any Participant's  Incentive Awards earned as of the end of
the  fiscal  year  immediately  preceding  the date  the  Committee  adopts  the
amendment.

                                       5
<PAGE>

     8.2  Termination.

     The Committee may  terminate  the Plan at any time.  Termination  shall not
result in the forfeiture of any  Participant's  Incentive Awards which have been
determined but not yet paid.

IX.  ADMINISTRATION

     9.1  Administration of the Plan.

     This Plan shall be adopted by the shareholders of Franklin Resources,  Inc.
and  administered  by the  Compensation  Committee  of the Board of Directors of
Franklin  Resources,  Inc. The Compensation  Committee shall consist of no fewer
than three (3) members of the Board of Directors.

          (a) The  Committee  shall  meet at such times and places and upon such
notice  as  the  chairperson  determines.  A  majority  of the  Committee  shall
constitute a quorum.  Any acts by the  Committee  may be taken at any meeting at
which a quorum  is  present  and  shall  be by  majority  vote of those  members
entitled  to vote.  Additionally,  any acts  reduced to writing or  approved  in
writing  by all  the  members  of the  Committee  shall  be  valid  acts  of the
Committee.

          (b) Among the administrative  responsibilities  of the Committee shall
be the  determination of Principals and Associates,  Target Awards and Incentive
Awards. This may be accomplished by adopting specific methods of determining the
Awards which are then administered by other management personnel of the Company.

          (c) The  Committee  shall  have the sole  authority,  in its  absolute
discretion,  to adopt,  amend, and rescind such rules and regulations as, in its
opinion,  may be advisable in the  administration  of the Plan,  to construe and
interpret the Plan, the rules and  regulations,  and any instruments  evidencing
Incentive  Awards  and to make all  other  determinations  deemed  necessary  or
advisable for the administration of the Plan. All decisions, determinations, and
interpretations of the Committee shall be binding on all Participants.

          (d) The Plan is  intended  to meet the  requirements  under  Rule 16-b
promulgated by the Securities and Exchange Commission under Section 16(b) of the
Securities  Exchange  Act of  1934  and  shall  be  administered  and  construed
accordingly.

     9.2  Non-alienation of Benefits.

     No benefit under this Plan may be sold,  assigned,  transferred,  conveyed,
hypothecated, encumbered, anticipated, or otherwise disposed of, and any attempt
to do so shall be void.  No such benefit  shall,  prior to receipt  thereof by a
Participant,  be in any manner  subject to the  debts,  contracts,  liabilities,
engagements, or torts of such Participant.

     9.3  No Limitation of Rights.

     Nothing in this Plan shall be construed  to limit in any way the  Company's
general personnel policies and procedures particularly with respect to the right
of the  Company to  terminate  a

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Participant's  employment at any time for any reason  whatsoever with or without
cause;  nor shall it be evidence of any agreement or  understanding,  express or
implied,  that the  Company  (a) will  employ a  Participant  in any  particular
position,  (b) will ensure participation in any incentive programs,  or (c) will
grant any awards for such programs.

    9.4  Applicable Law.

    The  provisions of the Plan shall be governed by and construed in accordance
with the laws of the State of  California,  with the  exception of  California's
conflict of laws provisions.

     9.5  Mandatory Arbitration.

     As part of this Plan, the Company is  implementing  an alternative  dispute
resolution  procedure  for its  employees.  In the  event  there is any  dispute
arising  out  of  the  following:   unlawful   harassment;   discrimination  and
termination  of  employment  with the  Company,  which the parties are unable to
resolve through direct  discussion or mediation,  regardless of the kind or type
of dispute,  the  Participant  and the Company agree to submit all such disputes
exclusively to final and binding  arbitration  pursuant to the provisions of the
Federal Arbitration Act, or, if inapplicable, the provisions of applicable state
law, or any  successor  or  replacement  statutes,  upon a request  submitted in
writing to the Human Resources Department within the applicable statutory limits
or the statute of limitations.  Any failure to timely request  arbitration shall
constitute  a waiver of all rights to raise any claims in any forum  arising out
of any dispute that was subject to arbitration. The limitations period set forth
in this paragraph shall not be subject to tolling,  equitable or otherwise.  Any
agreement  to  arbitrate  disputes   contained  in  a  securities   registration
application  shall take precedence over this agreement.  All substantive  rights
guaranteed  under the statutes are still  recognized  through  arbitration,  and
arbitration is merely a substituted forum for dispute resolutions.

This Plan was originally  approved by the stockholders of the Company on January
19, 1994. The  stockholders of the Company  approved an amendment of the Plan on
January 24, 1995. The Board approved an amendment and restatement of the Plan on
December  11, 2003 to (a) provide that up to 20% of PTOI may be allocated to the
Award Pool by the  Committee  and (b) give broad  discretion to the Committee in
determining the amount of Incentive  Awards payable to Participants in the Plan,
which amendment and  restatement is subject to the approval of the  stockholders
of the Company.


FRANKLIN RESOURCES, INC.



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