Item 1.02 Termination of a Material Definitive Agreement.

On October 1, 2009, Franklin Templeton Companies, LLC, an indirect wholly-owned subsidiary of Franklin Resources, Inc. (together with its affiliates, the "Company"), provided written notice of termination pursuant to the terms of that certain Managed Operations Services Agreement, dated February 6, 2001 (the "Agreement"), as amended, between Franklin Templeton Companies, LLC and International Business Machines Corporation ("IBM"), to terminate the Agreement
(other than Schedule M to the Agreement for Business Recovery Services)
effective as of April 5, 2010 (the "Effective Termination Date"). It is currently anticipated that Schedule M will survive through its term ending February 28, 2011. Pursuant to the terms and conditions of the Agreement, IBM has provided managed operations services to the Company, including operations management, systems engineering, performance and problem management, storage, data base and output management, technical support and production control services for the Company's U.S. data centers.

Following the Effective Termination Date: (i) IBM will provide the Company with transition assistance services for up to six months, (ii) the majority of the services previously covered by the Agreement will be performed by the Company, and (iii) a third party will provide certain infrastructure technology support services.

The Company will not incur any material early termination penalties in connection with the termination of the Agreement.

IBM and certain of its affiliates have had various relationships with the Company involving the provision by IBM of a variety of equipment and services to the Company.

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