UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


   Date of Report (Date of earliest event reported):        December 23, 2004




                            FRANKLIN RESOURCES, INC.
             (Exact name of registrant as specified in its charter)



          Delaware                       1-9318                  13-2670991
(State or other jurisdiction    (Commission File Number)        (IRS Employer
 of incorporation)                                           Identification No.)


One Franklin Parkway, San Mateo, California                             94403
 (Address of principal executive offices)                             (Zip Code)


       Registrant's telephone number, including area code: (650) 312-3000

                                 Not Applicable
                 ----------------------------------------------
          (Former name or former address, if changed since last report)


Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions (See General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
    230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
    240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
    Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
    Act (17 CFR 240.13e-4(c))




ITEM 1.01  ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

On December 15, 2004, after the fiscal year 2004, the Compensation  Committee of
the Board of Directors  approved the grant of restricted  stock awards under the
2002 Stock Plan to Mr. Flanagan and Mr. G. Johnson, the Company's Presidents and
Co-Chief Executive Officers.  The following were the numbers of shares and value
of the restricted stock awards that were granted to Mr. Flanagan: 15,625 shares,
($1,000,000)  and Mr. G. Johnson:  15,625 shares,  ($1,000,000).  The restricted
stock awards vest upon the achievement of certain increases in pre-tax operating
income for a fiscal year of the Corporation. Pre-tax operating income is defined
as total  operating  revenue  less  total  operating  expenses  determined  on a
consolidated  basis  and is  reported  in  the  Corporation's  annual  financial
statements  as operating  income.  One-third of the shares of  restricted  stock
shall vest if pre-tax operating income for the 2005, 2006 or 2007 fiscal year is
at least 15% greater  than  pre-tax  operating  income for the 2004 fiscal year.
Two-thirds  of the shares of  restricted  stock shall vest if pre-tax  operating
income for the 2005,  2006 or 2007 fiscal year is at least  32.25%  greater than
pre-tax  operating  income  for the  2004  fiscal  year.  All of the  shares  of
restricted  stock shall vest if pre-tax  operating  income for the 2005, 2006 or
2007 fiscal year is at least 52.09%  greater than pre-tax  operating  income for
the 2004 fiscal year.  After the  conclusion of the 2007 fiscal year, any shares
of restricted stock that do not vest based upon the achievement of the foregoing
performance  goals  related to  increases in pre-tax  operating  income shall be
forfeited back to the  Corporation.  These awards differ in structure from those
granted to other top contributing employees and officers of the Company, in that
specific  installments  of  restricted  stock  are  subject  to  company-related
performance metrics in order to be vested over a three-year period. Should those
performance  metrics not be  achieved,  the awards will be  forfeited  either in
whole or in part at the end of the performance-vesting  period. The Compensation
Committee  intended  that the design and  structure  of the  Co-Chief  Executive
Officer  performance  share  awards  be  aligned  wholly  and  clearly  with the
Company's performance, and therefore, the stockholders' interests.

On December  23,  2004,  the  Compensation  Committee  of the Board of Directors
established  maximum  individual target awards of $5,000,000 for the 2005 fiscal
year for each of Mr.  Flanagan and Mr. G. Johnson under the  Company's  2004 Key
Executive Incentive  Compensation Plan. If the Company's operating profit margin
is at least 26.35% for the 2005 fiscal year, then each  participant will receive
$1,500,000 of the aggregate maximum  individual target awards. If such operating
profit margin is less than 26.35%,  then each participant will forfeit any right
to  receive  this  $1,500,000  portion  of the  target  awards.  If the  average
percentage  growth of earnings  per share and pre-tax  operating  income for the
2005  fiscal  year  is  25% or  greater,  then  each  participant  will  receive
$3,500,000 of the aggregate maximum individual target awards. If such percentage
is 20% to 24%, then the award will be  $2,800,000;  if the  percentage is 15% to
19%, then the award will be  $2,100,000;  if the  percentage is 10% to 14%, then
the award will be $1,400,000;  and if the percentage is 5% to 9%, then the award
will be $700,000. If such percentage is less than 5%, then each participant will
forfeit  any right to receive  this  $3,500,000  portion of the  maximum  target
award.  Notwithstanding these potential target awards, the actual awards payable
to  either  or both of Mr.  Flanagan  and Mr.  G.  Johnson  are  subject  to the
Compensation  Committee's authority to reduce the award otherwise payable to the
participant.  The awards are payable in cash or Company stock at the  discretion
of the Compensation Committee.









                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.


                                    FRANKLIN RESOURCES, INC.


Date: December 30, 2004             /s/ Barbara J. Green
                                    --------------------
                                    Barbara J. Green
                                    Vice President, Deputy General Counsel
                                    and Secretary