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): June 10, 2005
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.
FIVE-YEAR FACILITY CREDIT AGREEMENT DATED AS OF JUNE 10, 2005.
On June 10, 2005, Franklin Resources, Inc. (the "Company" or "Franklin") entered
into a $420 million Five-Year Facility Credit Agreement with certain banks and a
financial institution (collectively, the "Bank Parties"), Bank of America, N.A.
and The Bank of New York, as Co-Syndication Agents, Citibank, N.A. and BNP
Paribas, as Co-Documentation Agents, JP Morgan Chase Bank, N.A., as
Administrative Agent, and J.P. Morgan Securities Inc., as Sole Bookrunner and
Sole Lead Arranger (the "Five-Year Credit Agreement"). The Five-Year Credit
Agreement replaces Franklin's $210 million 364-Day revolving credit facility,
which matured by its terms on June 2, 2005 and Franklin's $210 million five year
revolving credit facility, which was terminated on June 10, 2005, prior to its
scheduled expiration date of June 6, 2007. The Company desired to replace both
the former 364-Day and five-year credit facilities with a single $420 million
five-year credit facility. There were no amounts outstanding under either the
former 364-Day or the five-year credit facilities on the respective dates of
termination and no early termination penalties were incurred by Franklin.
The Five-Year Credit Agreement provides for a $420 million revolving credit
facility, of which the entire amount is currently undrawn and available. Under
the Five-Year Credit Agreement, the Bank Parties are required to make revolving
credit loans to Franklin and Franklin may borrow, repay and re-borrow such
amounts from time to time until the maturity of the Five-Year Credit Agreement
on June 10, 2010. Franklin may also, at its discretion, borrow amounts under bid
loans, where the Bank Parties, at their discretion, can offer to bid on short
term loans requested by Franklin based on a competitive auction procedure (the
"Bid Loans"). Except for Bid Loans, prepayments and commitment reductions are
permitted without premium or penalty upon proper notice and subject to a minimum
dollar requirement. Loans under the Five-Year Credit Agreement shall bear
interest, depending on the type of loan requested by Franklin, at a rate based
on LIBOR plus a margin, at a rate based on an alternate base rate (as such term
is defined in the Five-Year Credit Agreement) plus a margin, or an absolute or
fixed rate to be determined at the time that Franklin requests a loan under the
Five-Year Credit Agreement.
The Five-Year Credit Agreement contains affirmative, negative and financial
covenants customary for financings of this type and substantially similar to the
prior financing arrangements, including, among other things, limits on the
incurrence of additional debts and liens, a minimum limit on the ratio of
earnings to interest expense, a maximum limit on the ratio of debt in relation
to liabilities and capital, and maintenance of a minimum level of working
capital. The Five-Year Credit Agreement includes customary events of default for
facilities of this type (with customary grace periods, as applicable) and
provides that, upon the occurrence of an event of default, payment of all
outstanding loans under the Five-Year Credit Agreement may be accelerated and/or
the lenders' commitments may be terminated. In addition, upon the occurrence of
certain insolvency or bankruptcy related events of default, all amounts payable
under the Five-Year Credit Agreement automatically become immediately due and
payable, and the lenders' commitments automatically terminate.
Some of the Bank Parties have or may have had various relationships with the
Company and its affiliates involving the provision of a variety of financial
services, including cash management, investment banking, and the issuance of
letters of credit and bank guarantees. In addition, the Company and certain
affiliates have entered into interest rate and foreign exchange derivative
arrangements with some of the financial institutions.
The foregoing does not constitute a complete summary of the terms of the
Five-Year Credit Agreement, and reference is made to the complete text of the
agreement, which is attached hereto as Exhibit 10.1
ITEM 1.02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT.
The disclosure required by this item is included in Item 1.01 and is
incorporated herein by reference.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER
AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The disclosure required by this item is included in Item 1.01 and is
incorporated herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
EXHIBIT NO. DESCRIPTION
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10.1 Five-Year Facility Credit Agreement dated as of
June 10, 2005 among Franklin Resources, Inc., the
Bank Parties hereto, Bank of America, N.A. and The
Bank of New York, as Co-Syndication Agents,
Citibank, N.A. and BNP Paribas, as Co-Documentation
Agents, and JP Morgan Chase Bank, N.A., as
Administrative Agent.
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: June 16, 2005 /s/ Barbara J. Green
-----------------------
Barbara J. Green
Vice President, Deputy General Counsel
and Secretary
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
10.1 Five-Year Facility Credit Agreement dated as of June 10, 2005
among Franklin Resources, Inc., the Bank Parties hereto, Bank
of America, N.A. and The Bank of New York, as Co-Syndication
Agents, Citibank, N.A. and BNP Paribas, as Co-Documentation
Agents, and JP Morgan Chase Bank, N.A., as Administrative
Agent.