<PAGE> 1
As filed with the Securities and Exchange Commission on
July 24, 1996.
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
LEGG MASON, INC.
(Exact name of registrant as specified in its charter)
MARYLAND 52-1200960
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
111 South Calvert Street, Baltimore, Maryland 21202
(Address of Principal Executive Offices) (Zip Code)
LEGG MASON, INC.
1996 EQUITY INCENTIVE PLAN
(Full title of the plan)
THEODORE S. KAPLAN, ESQUIRE
Senior Vice President and General Counsel
Legg Mason, Inc.
111 South Calvert Street
Baltimore, Maryland 21202
(Name and address of agent for service)
(410) 539-0000
(Telephone number, including area code, of agent for service)
______________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Title of each Proposed Proposed
Class of Amount Maximum Maximum Amount of
Securities to to be Offering Price Aggregate Offering Registration
be Registered Registered Per Unit (1) Price Fee
Common Stock 3,000,000 shs. $29.4375 $88,312,500 $30,452.59
($.10 Par Value)
</TABLE>
(1) Estimated solely for the purpose of determining the
registration fee pursuant to Rule 457(h). The proposed
maximum offering price per share is based upon the average
of the high and low prices for the stock on the New York
Stock Exchange on July 23, 1996.
<PAGE> 2
PART I. INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information required by Part I is included in
documents sent or given to participants in the 1996 Equity
Incentive Plan of Legg Mason, Inc. (the "Company") pursuant to
Rule 428(b)(1). Such documents are not being filed with the
Securities and Exchange Commission (the "Commission") either as
part of this Registration Statement or as prospectuses or
prospectus supplements pursuant to Rule 424.
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by the Company with the
Securities and Exchange Commission are incorporated herein by
reference and made a part hereof:
(a) The Company's Annual Report on Form 10-K for the
year ended March 31, 1996, filed on June 28, 1996.
(b) All other reports filed pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 since the end of the
last fiscal year for which financial statements were included in
the report referred to in (a) above.
(c) The description of the Company's Common Stock,
$.10 par value, contained in Amendment No. 3 to the Company's
Application for Registration on Form 8-A, filed July 17, 1991.
In addition to the foregoing, all documents
subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior
to the filing of a post-effective amendment indicating that all
of the securities offered hereunder have been sold or
deregistering all securities then remaining unsold, shall be
deemed to be incorporated by reference in this Registration
Statement and to be part hereof from the date of filing of such
documents. Any statement contained in a document incorporated by
reference in this Registration Statement shall be deemed to be
modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in
any subsequently filed document that is also incorporated by
reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities.
Not Applicable.
<PAGE> 3
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
Section 2-418 of the Maryland General Corporation Law
establishes provisions whereby a Maryland corporation may
indemnify any director or officer made party to an action or
proceeding by reason of service in that capacity, against
judgments, penalties, fines, settlements and reasonable expenses
incurred in connection with such action or proceeding unless it
is proved that the director or officer (i) acted in bad faith or
with active and deliberate dishonesty, (ii) actually received an
improper personal benefit in money, property or services or (iii)
in the case of a criminal proceeding had reasonable cause to
believe that his act was unlawful. However, if the proceeding is
a derivative suit in favor of the corporation, indemnification
may not be made if the individual is adjudged to be liable to the
corporation. In no case may indemnification be made until a
determination has been reached that the director or officer has
met the applicable standard of conduct. Indemnification for
reasonable expenses is mandatory if the director or officer has
been successful on the merits or otherwise in the defense of any
action or proceeding covered by the indemnification statute. The
statute also provides for indemnification of directors and
officers by court order. The indemnification provided or
authorized in the indemnification statute does not preclude a
corporation from extending other rights (indemnification or
otherwise) to directors and officers.
The Registrant's By-laws provide for indemnification of
any person who is serving or has served as a director or officer
of the Registrant, against all liabilities and expenses incurred
in connection with any action, suit or proceeding arising out of
such service to the full extent permitted under Maryland law.
The Registrant's officers and directors are insured
against certain liabilities under a policy maintained by the
Registrant with aggregate coverage of $10,000,000.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
The Exhibits to this Registration Statement are listed
in the Exhibit Index on page 7 of this Registration Statement,
which Exhibit Index is incorporated herein by reference.
<PAGE> 4
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) That, for the purpose of determining any
liability under the Securities Act of 1933, each post-effective
amendment shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(2) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that,
for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report
pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d)
of the Securities Exchange Act of 1934) that is incorporated by
reference in the Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnifi-
cation by it is against public policy as expressed in
the Act and will be governed by the final adjudication of
such issue.
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Baltimore, State of Maryland, on the 24th day of
July, 1996.
LEGG MASON, INC.
By:/s/ Theodore S. Kaplan
Theodore S. Kaplan
Senior Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Raymond A.
Mason, John F. Curley, Jr. and Theodore S. Kaplan, and each of
them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and
all amendments (including pre-effective and post-effective
amendments) to this registration statement, and to file the same,
with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them acting
singly, full power and authority to do and perform each and every
act and thing necessary and requisite to be done, as fully and to
all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of
1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Raymond A. Mason Chairman of the Board July 24, 1996
Raymond A. Mason and President
(Principal Executive
Officer)
[SIGNATURES CONTINUED]
<PAGE> 6
[SIGNATURES CONTINUED]
<S> <C> <C>
/s/ F. Barry Bilson Vice President-Finance July 24, 1996
F. Barry Bilson (Principal Financial
and Accounting Officer)
/s/ Harold L. Adams Director July 24, 1996
Harold L. Adams
/s/ Charles A. Bacigalupo Director July 24, 1996
Charles A. Bacigalupo
/s/ James W. Brinkley Director July 24, 1996
James W. Brinkley
/s/ Edmund J. Cashman, Jr. Director July 24, 1996
Edmund J. Cashman, Jr.
/s/ John F. Curley, Jr. Director July 24, 1996
John F. Curley, Jr.
/s/ Harry M. Ford, Jr. Director July 24, 1996
Harry M. Ford, Jr.
/s/ Richard J. Himelfarb Director July 24, 1996
Richard J. Himelfarb
/s/ John E. Koerner, III Director July 24, 1996
John E. Koerner, III
[SIGNATURES CONTINUED]
<PAGE> 7
[SIGNATURES CONTINUED]
<S> <C> <C>
/s/ John B. Levert, Jr. Director July 24, 1996
John B. Levert, Jr.
/s/ W. Curtis Livingston Director July 24, 1996
W. Curtis Livingston
/s/ Edward I. O'Brien Director July 24, 1996
Edward I. O'Brien
/s/ Peter F. O'Malley Director July 24, 1996
Peter F. O'Malley
/s/ Nicholas J. St. George Director July 24, 1996
Nicholas J. St. George
/s/ Roger W. Schipke Director July 24, 1996
Roger W. Schipke
/s/ Margaret DeB. Tutwiler Director July 24, 1996
Margaret DeB. Tutwiler
/s/ James E. Ukrop Director July 24, 1996
James E. Ukrop
/s/ William Wirth Director July 24, 1996
William Wirth
</TABLE>
<PAGE> 8
EXHIBITS INDEX
Regulation S-K Description of
Exhibit Number Document
Exhibit 4 Legg Mason, Inc. 1996
Equity Incentive Plan
Exhibit 5 Opinion of Theodore S.
Kaplan, Esq., General
Counsel of the Registrant
Exhibit 23(a) Consent of Coopers &
Lybrand L.L.P., independent
public accountants
Exhibit 23(b) Consent of Theodore S.
Kaplan, Esq. (included
in Exhibit 5)
<PAGE> 1
LEGG MASON, INC.
1996 EQUITY INCENTIVE PLAN
1. Purpose
The purpose of the Plan is to provide motivation to Key
Employees of the Company and its Subsidiaries to put forth maximum
efforts toward the continued growth, profitability, and success of
the Company and its Subsidiaries by providing incentives to such
Key Employees through the ownership and performance of the Common
Stock or Common Stock derivatives of the Company. Toward this
objective, the Committee may grant stock options, stock
appreciation rights, Stock Awards, performance units, performance
shares, and/or other incentive awards to Key Employees of the
Company and its Subsidiaries on the terms and subject to the
conditions set forth in the Plan.
2. Definitions
2.1 "Award" means any form of stock option, stock
appreciation right, Stock Award, performance unit, performance
shares or other incentive award granted under the Plan, whether
individually, in combination, or in tandem, to a Participant by the
Committee pursuant to such terms, conditions, restrictions, and/or
limitations, if any, as the Committee may establish by the Award
Notice or otherwise.
2.2 "Award Notice" means a written notice from the Company
to a Participant that establishes the terms, conditions,
restrictions, and/or limitations applicable to an Award in addition
to those established by this Plan and by the Committee's exercise
of its administrative powers.
2.3 "Board" means the Board of Directors of the Company.
2.4 "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
2.5 "Committee" means the Compensation Committee of the
Board, or such other committee designated by the Board, authorized
to administer the Plan under paragraph 3 hereof. So long as
required by law, the Committee shall consist of not less than two
members, each of whom shall be a "disinterested person" within the
meaning of Rule 16b-3 promulgated under Section 16 of the Exchange
Act and an "outside director" within the meaning of Section 162(m)
of the Code and related Treasury regulations. The Committee shall
from time to time designate the Key Employees who shall be eligible
for Awards pursuant to this Plan.
2.6 "Common Stock" means common stock, par value $.10 per
share, of the Company.
Exhibit 4
<PAGE> 2
2.7 "Company" means Legg Mason, Inc.
2.8 "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
2.9 "Key Employee" means officers of the Company or a
Subsidiary and any other employee of the Company or a Subsidiary so
designated by the Committee.
2.10 "Participant" means any individual to whom an Award has
been granted by the Committee under this Plan.
2.11 "Plan" means the Legg Mason, Inc. 1996 Equity Incentive
Plan.
2.12 "Stock Award" means an award granted pursuant to
paragraph 10 hereof in the form of shares of Common Stock, Common
Stock derivatives, restricted shares of Common Stock, and/or Units
of Common Stock.
2.13 "Subsidiary" means a corporation or other business entity
in which the Company directly or indirectly has an ownership
interest of 50 percent or more.
2.14 "Unit" means a bookkeeping entry used by the Company to
record and account for the grant of the following Awards until such
time as the Award is paid, cancelled, forfeited or terminated, as
the case may be: Units of Common Stock, performance units, and
performance shares which are expressed in terms of Units of Common
Stock.
3. Administration
The Plan shall be administered by the Committee. The
Committee shall have the authority to (a) interpret the Plan and
make factual determinations; (b) establish or amend such rules and
regulations as it deems necessary for the proper operation and
administration of the Plan; (c) select Key Employees to receive
Awards under the Plan; (d) determine the form of an Award, whether
a stock option, stock appreciation right, Stock Award, performance
unit, performance share, or other incentive award established by
the Committee in accordance with clause (h) below, the number of
shares or Units subject to the Award, all the terms, conditions,
restrictions and/or limitations, if any, of an Award, including the
time and conditions of exercise or vesting, and the terms of any
Award Notice, which may include the waiver or amendment of prior
terms and conditions or acceleration or early vesting or payment of
an Award under certain circumstances determined by the Committee;
(e) determine whether Awards will be granted individually, in
combination or in tandem; (f) grant waivers of Plan terms,
conditions, restrictions, and limitations; (g) accelerate the
vesting, exercise, or payment of an Award or the performance period
<PAGE> 3
of an Award when such action or actions would be in the best
interest of the Company; (h) establish such other types of Awards,
besides those specifically enumerated in paragraph 2.1 hereof,
which the Committee determines are consistent with the Plan's
purpose; and (i) take any and all other action it deems necessary
or advisable for the proper operation or administration of the
Plan. The Committee shall also have the authority to grant Awards
in replacement of Awards previously granted under this Plan or any
other executive compensation plan of the Company or a Subsidiary.
All determinations of the Committee shall be made by a majority of
its members, and its determinations shall be final, binding and
conclusive. All actions required of the Committee under the Plan
shall be made in the Committee's sole discretion, not in a
fiduciary capacity and need not be uniformly applied to other
persons, including similarly situated persons. The Committee, in
its discretion, may delegate its authority and duties under the
Plan to the Chief Executive Officer and/or to other senior
officers of the Company under such conditions and/or subject to
such limitations as the Committee may establish; provided,
however, that only the Committee may select and grant Awards to
Participants who are subject to Section 16 of the Exchange Act or
to whom Section 162(m) of the Code applies.
4. Eligibility
Any Key Employee is eligible to become a Participant of
the Plan.
5. Shares Available
The maximum number of shares of Common Stock, $0.10 par
value per share, of the Company which shall be available for grant
of Awards under the Plan (including incentive stock options) during
its term shall not exceed 3,000,000. Notwithstanding anything in
the Plan to the contrary, the maximum aggregate number of shares of
Common Stock that shall be granted under the Plan to any one
individual during any calendar year shall be 250,000. (Such
amount shall be subject to adjustment as provided in paragraph
20.) Any shares of Common Stock related to Awards which terminate
by expiration, forfeiture, cancellation or otherwise without the
issuance of shares, are settled in cash in lieu of Common Stock, or
are exchanged in the Committee's discretion for Awards not
involving Common Stock, shall be available again for grant under
the Plan. Further, any shares of Common Stock which are used by a
Participant for the full or partial payment to the Company of the
purchase price of shares of Common Stock upon exercise of a stock
option, or for any withholding taxes due as a result of such
exercise, shall again be available for Awards under the Plan.
Similarly, shares of Common Stock with respect to which a stock
appreciation right ("SAR") has been exercised and paid in cash
shall again be available for grant under the Plan. The shares of
<PAGE> 4
Common Stock available for issuance under the Plan may be
authorized and unissued shares or treasury shares.
6. Term
The Plan shall become effective as of April 18, 1996,
subject to its approval by the Company's shareholders at the 1996
Annual Meeting. No Awards shall be exercisable or payable before
approval of the Plan has been obtained from the Company's
shareholders. Awards shall not be granted pursuant to the Plan
after April 17, 2006.
7. Participation
The Committee shall select, from time to time,
Participants from those Key Employees who, in the opinion of the
Committee, can further the Plan's purposes. Once a Participant is
so selected, the Committee shall determine the type or types of
Awards to be made to the Participant and shall establish in the
related Award Notices the terms, conditions, restrictions and/or
limitations, if any, applicable to the Awards in addition to those
set forth in this Plan and the administrative rules and regulations
issued by the Committee.
8. Stock Options
(a) Grants. Awards may be granted in the form of stock
options to purchase Common Stock or Common Stock derivatives.
These stock options may be incentive stock options within the
meaning of Section 422 of the Code or non-qualified stock options
(i.e., stock options which are not incentive stock options), or a
combination of both.
(b) Terms and Conditions of Options. An option shall
be exercisable in whole or in such installments and at such times
as may be determined by the Committee. The price at which Common
Stock may be purchased upon exercise of a stock option shall be
established by the Committee, but such price shall not be less than
50 percent of the fair market value of the Common Stock, as
determined by the Committee, on the date of the stock option's
grant.
(c) Restrictions Relating to Incentive Stock Options.
Stock options issued in the form of incentive stock options shall,
in addition to being subject to all applicable terms, conditions,
restrictions and/or limitations established by the Committee,
comply with Section 422 of the Code. Accordingly, to the extent
that the aggregate fair market value (determined at the time the
option was granted) of the Common Stock with respect to which
incentive stock options are exercisable for the first time by a
Participant during any calendar year (under this Plan or any other
plan of the Company or any of its Subsidiaries) exceeds $100,000
<PAGE> 5
(or such other limit as may be required by the Code), then such
option as to the excess shall be treated as a nonqualified stock
option. Further, the per share option price of an incentive stock
option shall not be less than 100 percent of the fair market value
of the Common Stock, as determined by the Committee, on the date of
the grant. An incentive stock option shall not be granted to any
Participant who is not an employee of the Company or any
"subsidiary" (within the meaning of section 424(f) of the Code).
An incentive stock option shall not be granted to any employee
who, at the time of grant, owns stock possessing more than 10
percent of the total combined voting power of all classes of stock
of the Company or any "parent" or "subsidiary" of the Company
(within the meaning of section 424(f) of the Code), unless the
purchase price per share is not less than 110% of the fair market
value of Common Stock on the date of grant and the option exercise
period is not more than five years from the date of grant.
Otherwise, each option shall expire not later than ten years from
its date of grant.
(d) Additional Terms and Conditions. The Committee
may, by way of the Award Notice or otherwise, establish such other
terms, conditions, restrictions and/or limitations, if any, of any
stock option Award, provided they are not inconsistent with the
Plan.
(e) Exercise. Upon exercise, the option price of a
stock option may be paid (i) in cash or by check, bank draft or
money order payable to the order of the Company; (ii) in shares of
Common Stock or shares of restricted Common Stock as to which
restrictions have lapsed; (iii) a combination of the foregoing; or
(iv) such other consideration as the Committee may deem
appropriate. Subject to the discretion of the Committee, any
option granted under the Plan may be exercised by a broker-dealer
acting on behalf of a Participant if (i) the broker-dealer has
received from the Participant or the Company a fully- and
duly-endorsed agreement evidencing such option and instructions
signed by the Participant requesting the Company to deliver the
shares of Common Stock subject to such option to the broker-dealer
on behalf of the Participant and specifying the account into which
such shares should be deposited, (ii) adequate provision has been
made with respect to the payment of any withholding taxes due upon
such exercise or, in the case of an incentive stock option, the
disposition of such shares and (iii) the broker-dealer and the
Participant have otherwise complied with Section 220.3(e)(4) of
Regulation T, 12 CFR Part 220 and any successor rules and
regulations applicable to such exercise. The Committee shall
establish appropriate methods for accepting Common Stock, whether
restricted or unrestricted, and may impose such conditions as it
deems appropriate on the use of such Common Stock to exercise a
stock option.
<PAGE> 6
(f) Rule 16b-3 Restrictions. A Participant who is a
director or officer subject to Section 16 of the Exchange Act shall
be required to exercise stock options in accordance with the
requirements of Rule 16b-3 under the Exchange Act, as such Rule may
be amended from time to time.
9. Stock Appreciation Rights
(a) Grants. Awards may be granted in the form of stock
appreciation rights ("SARs"). An SAR may be granted in tandem with
all or a portion of a related stock option under the Plan ("Tandem
SARs"), or may be granted separately ("Freestanding SARs"). A
Tandem SAR may be granted either at the time of the grant of the
related stock option or at any time thereafter during the term of
the stock option. SARs shall entitle the recipient to receive a
payment equal to the appreciation in market value of a stated
number of shares of Common Stock from the exercise price to the
market value on the date of exercise. In the case of SARs granted
in tandem with stock options granted prior to the grant of such
SARS, the appreciation in value is from the option price of such
related stock option to the market value on the date of exercise.
No SAR may be exercised for cash by an officer or director of the
Company who is subject to Section 16 of the Exchange Act, except
in accordance with Rule 16b-3 under the Exchange Act, as such Rule
may be amended from time to time.
(b) Terms and Conditions of Tandem SARS. A Tandem SAR
shall be exercisable to the extent, and only to the extent, that
the related stock option is exercisable, and the "exercise price"
of such an SAR (the base from which the value of the SAR is
measured at its exercise) shall be the option price under the
related stock option. However, at no time shall a Tandem SAR be
issued if the option price of its related stock option is less than
50 percent of the fair market value of the Common Stock, as
determined by the Committee, on the date of the Tandem SAR's grant.
If a related stock option is exercised as to some or all of the
shares covered by the Award, the related Tandem SAR, if any, shall
be cancelled automatically to the extent of the number of shares
covered by the stock option exercise. Upon exercise of a Tandem
SAR as to some or all of the shares covered by the Award, the
related stock option shall be cancelled automatically to the
extent of the number of shares covered by such exercise, and such
shares shall again be eligible for grant in accordance with
paragraph 5 hereof, except to the extent any shares of Common Stock
are issued to settle the SAR.
(c) Terms and Conditions of Freestanding SARS.
Freestanding SARs shall be exercisable in whole or in such
installments and at such times as may be determined by the
Committee and designated in the Award Notice. The exercise price
of a Freestanding SAR shall also be determined by the Committee;
provided, however, that such price shall not be less than 50
<PAGE> 7
percent of the fair market value of the Common Stock, as determined
by the Committee, on the date of the Freestanding SAR's grant.
(d) Deemed Exercise. The Committee may provide that an
SAR shall be deemed to be exercised at the close of business on the
scheduled expiration date of such SAR, if at such time the SAR by
its terms remains exercisable and, if exercised, would result in a
payment to the holder of such SAR.
(e) Additional Terms and Conditions. The Committee
may, by way of the Award Notice or otherwise, determine such other
terms, conditions, restrictions and/or limitations, if any, of any
SAR Award, provided they are not inconsistent with the Plan.
10. Stock Awards
(a) Grants. Awards may be granted in the form of Stock
Awards. Stock Awards may consist of grants of Common Stock or
Common Stock derivatives, and may be granted either for
consideration or for no consideration, as determined in the sole
discretion of the Committee. Stock Awards shall be awarded in such
numbers and at such time during the term of the Plan as the
Committee shall determine.
(b) Terms and Conditions of Awards. Stock Awards shall
be subject to such terms, conditions, restrictions, and/or
limitations, if any, as the Committee deems appropriate including,
but not by way of limitation, restrictions on transferability and
continued employment. The Committee may modify or accelerate the
delivery of a Stock Award under such circumstances as it deems
appropriate, unless the Stock Award is subject to the provisions of
paragraph 13.
(c) Rights as Shareholders. During the period in which
any restricted shares of Common Stock are subject to the
restrictions imposed under paragraph 10(b), the Committee may, in
its discretion, grant to the Participant to whom such restricted
shares have been awarded all or any of the rights of a shareholder
with respect to such shares, including, but not by way of
limitation, the right to vote such shares and to receive dividends.
(d) Evidence of Award. Any Stock Award granted under
the Plan may be evidenced in such manner as the Committee deems
appropriate, including, without limitation, book-entry
registration or issuance of a stock certificate or certificates.
11. Performance Units
(a) Grants. Awards may be granted in the form of
performance units. Performance units, as that term is used in this
Plan, shall refer to Units valued by reference to designated
criteria established by the Committee, other than Common Stock.
<PAGE> 8
(b) Performance Criteria. Performance units shall be
contingent on the attainment during a performance period of certain
performance objectives. The length of the performance period, the
performance objectives to be achieved during the performance
period, and the measure of whether and to what degree such
objectives have been attained shall be conclusively determined by
the Committee in the exercise of its absolute discretion. Subject
to the requirements of paragraph 13, if applicable, performance
objectives may be revised by the Committee, at such times as it
deems appropriate during the performance period, in order to take
into consideration any unforeseen events or changes in
circumstances.
(c) Additional Terms and Conditions. The Committee
may, by way of the Award Notice or otherwise, determine such
other terms, conditions, restrictions, and/or limitations, if any,
of any Award of performance units, provided they are not
inconsistent with the Plan.
12. Performance Shares
(a) Grants. Awards may be granted in the form of
performance shares. Performance shares, as that term is used in
this Plan, shall refer to shares of Common Stock or Units which are
expressed in terms of Common Stock.
(b) Performance Criteria. Performance shares shall be
contingent upon the attainment during a performance period of
certain performance objectives. The length of the performance
period, the performance objectives to be achieved during the
performance period, and the measure of whether and to what degree
such objectives have been attained shall be conclusively
determined by the Committee in the exercise of its absolute
discretion. Subject to the requirements of paragraph 13, if
applicable, performance objectives may be revised by the Committee,
at such times as it deems appropriate during the performance
period, in order to take into consideration any unforeseen events
or changes in circumstances.
(c) Additional Terms and Conditions. The Committee
may, by way of the Award Notice or otherwise, determine such other
terms, conditions, restrictions and/or limitations, if any, of any
Award of performance shares, provided they are not inconsistent
with the Plan.
13. Provisions Applicable to Section 162(m) Participants
(a) Designation of Participants and Goals. Within 90
days after the start of each fiscal year (or by such other time as
may be required or permitted by Section 162(m) of the Code), the
Committee shall, in writing: (i) designate the Participants for
whom the grant of Stock Awards, performance units, or performance
<PAGE> 9
shares (and the entitlement to dividends or dividend equivalents
with respect to such Awards, if any), or the forgiveness of any
loan pursuant to paragraph 14, shall be subject to this paragraph
13; (ii) select the performance goal or goals applicable to the
fiscal year or years included within any performance period; (iii)
establish the number or amount of Stock Awards, performance units
and performance shares which may be earned or the amount of any
loan which may be forgiven, for such year or such years within a
performance period by each such Participant; (iv) specify the
relationship between performance goals and the amount or number of
Stock Awards, performance units or performance shares to be earned
by each such Participant, or the amount of the forgiveness of any
loan made under paragraph 14, for such year or period and (v) the
method for computing the amount or number of Stock Awards,
performance units or performance shares payable, or the amount of
any loan which may be forgiven, if the performance goals are
attained.
The Committee may specify that the amount or number of
Stock Awards, performance units and performance shares (and the
entitlement to dividends or dividend equivalents with respect to
such Awards, if any) will be earned, or that the amount of any loan
will be forgiven, if the applicable target is achieved for one goal
or for any one of a number of goals for a fiscal year or years
within a performance period. The Committee may also provide that
the amount or number of Stock Awards, performance units and
performance shares to be earned, or the amount of any loan
forgiven, for a given fiscal year or years within a performance
period will vary based upon different levels of achievement of the
applicable performance targets.
(b) Performance Criteria. For purposes of this
paragraph 13, performance goals shall be limited to one or more of
the following: (i) future economic value per share of Common
Stock, (ii) earnings per shares, (iii) return on average common
equity, (iv) pre-tax income, (v) pre-tax operating income, (vi) net
revenue, (vii) net income, (viii) profits before taxes, (ix) book
value per share, (x) stock price and (xi) earnings available to
common stockholders.
(c) Annual Payment. Following the completion of each
fiscal year or completion of a performance period, the Committee
shall certify in writing whether the applicable performance goals
have been achieved for such year or performance period and the
amount or number of Stock Awards, performance shares or performance
units, if any, payable to a Participant or the amount of any loan
forgiven with respect to a Participant for such fiscal year or
performance period. The amounts due to a Participant to whom this
paragraph 13 applies will be paid following the end of the
applicable fiscal year or performance period after such
certification by the Committee. In determining the amount due to
<PAGE> 10
a Participant, or the amount of any loan forgiven on with respect
to a Participant, to whom this paragraph applies for a given fiscal
year or performance period, the Committee shall have the right to
reduce (but not to increase) the amount payable or forgiven at a
given level of performance to take into account additional factors
that the Committee may deem relevant to the assessment of
individual or corporate performance for the year.
(d) Restrictions. Anything in this paragraph 13 to the
contrary notwithstanding, the maximum annual amount that may be
paid to a Participant or the maximum amount of any loan that may be
forgiven under the Plan for (i) the fiscal year in which the Plan
is approved by the Stockholders of the Company shall equal no more
than $2,000,000 and (ii) each subsequent fiscal year shall equal
110% of such maximum amount for the preceding fiscal year;
provided that the maximum annual amount determined under this
paragraph 13 shall be determined without regard to the value of any
stock options granted to a Participant under the Plan.
(e) Adjustment for Non-Recurring Items, Etc.
Notwithstanding anything herein to the contrary, if the Company's
financial performance is affected by any event that is of a
non-recurring nature, the Committee in its sole discretion may make
such adjustments in the financial criteria as it shall determine to
be equitable and appropriate in order to make the calculations of
Awards, as nearly as may be practicable, equivalent to the
calculation that would have been made without regard to such event.
In the event of a significant change of the business or assets of
the Company under circumstances involving an acquisition or a
merger, consolidation or similar transaction, the Committee shall,
in good faith, recommend to the Board for approval such revisions
to the financial criteria and the other terms and conditions used
in calculating Awards for the then current Plan Year as it
reasonably deems appropriate in light of any such change.
(f) Repeal of Section 162(m). Without further action
by the Board, the provisions of this paragraph 13 shall cease to
apply on the effective date of the repeal of Section 162(m) of the
Code (and any successor provision thereto).
14. Loans
The Committee may authorize the making of loans or cash
payments to Participants in connection with any Award under the
Plan, the exercise of a stock option or the payment of
consideration in connection with a Stock Award, which loan may be
secured by any security, including Common Stock or Common Stock
derivatives, underlying or related to such Award or payment
(provided that such loan shall not exceed the fair market value of
the security subject to such Award or so purchased), and which may
be forgiven upon such terms and conditions as the Committee may
<PAGE> 11
establish at the time of such loans or at any time thereafter,
including the attainment of a performance goal or goals pursuant to
paragraph 13.
15. Payment of Awards
At the discretion of the Committee, payment of Awards may
be made in cash, Common Stock, Common Stock derivatives, a
combination of any of the foregoing, or any other form of property
as the Committee shall determine. In addition, payment of Awards
may include such terms, conditions, restrictions, and/or
limitations, if any, as the Committee deems appropriate,
including, in the case of Awards paid in the form of Common Stock,
restrictions on transfer and forfeiture provisions. Further,
payment of Awards may be made in the form of a lump sum or
installments, as determined by the Committee.
16. Dividends and Dividend Equivalents
If an Award is granted in the form of a Stock Award,
stock option, or performance share, or in the form of any other
stock-based grant, the Committee may choose, at the time of the
grant of the Award or any time thereafter up to the time of the
Award's payment, to include as part of such Award an entitlement to
receive dividends or dividend equivalents, subject to such terms,
conditions, restrictions, and/or limitations, if any, as the
Committee may establish. Dividends and dividend equivalents shall
be paid in such form and manner (i.e., lump sum or installments),
and at such time as the Committee shall determine. All dividends
or dividend equivalents which are not paid currently may, at the
Committee's discretion, accrue interest, be reinvested into
additional shares of Common Stock or, in the case of dividends or
dividend equivalents credited in connection with performance
shares, be credited as additional performance shares and paid to
the Participant if and when, and to the extent that, payment is
made pursuant to such Award.
17. Deferral of Awards
At the discretion of the Committee, payment of a Stock
Award, performance share, performance unit, dividend, dividend
equivalent, or any portion thereof may be deferred by a Participant
until such time as the Committee may establish. All such
deferrals shall be accomplished by the delivery of a written,
irrevocable election by the Participant at least six months (and in
the calendar year) prior to such time payment would otherwise be
made, on a form provided by the Company. Further, all deferrals
shall be made in accordance with administrative guidelines
established by the Committee to ensure that such deferrals comply
with all applicable requirements of the Code and its regulations.
Deferred payments shall be paid in a lump sum or installments, as
<PAGE> 12
determined by the Committee. The Committee may also credit
interest, at such rates to be determined by the Committee, on cash
payments that are deferred and credit dividends or dividend
equivalents on deferred payments denominated in the form of Common
Stock.
18. Termination of Employment
If a Participant's employment with the Company or a
Subsidiary terminates for a reason other than death, disability,
retirement, or any approved reason, all unexercised, unearned,
and/or unpaid Awards, including, but not by way of limitation,
Awards earned, but not yet paid, all unpaid dividends and dividend
equivalents, and all interest accrued on the foregoing shall be
cancelled or forfeited, as the case may be, unless the
Participant's Award Notice provides otherwise. The Committee
shall have the authority to promulgate rules and regulations to (i)
determine what events constitute disability, retirement, or
termination for an approved reason for purposes of the Plan, and
(ii) determine the treatment of a Participant under the Plan in the
event of his death, disability, retirement, or termination for an
approved reason. Notwithstanding the foregoing, and to the extent
that an incentive stock option is not treated as a nonqualified
stock option by the Committee or under the terms of the Plan, an
incentive stock option may not be exercisable more than 90 days
after the date the Participant terminates employment for any
reason; provided, however, that if the Participant terminates
employment because of a disability, the incentive stock option may
not be exercised more than one year after the date of such
termination.
19. Nonassignability
Unless the Committee determines otherwise, no stock
options, SARs, performance shares or other derivative securities
(as defined in the rules and regulations promulgated under Section
16 of the Exchange Act) awarded under the Plan shall be subject in
any manner to alienation, anticipation, sale, transfer, assignment,
pledge, or encumbrance, except for transfers by will or the laws of
descent and distribution; provided, however, that the Committee
may, subject to such terms and conditions as the Committee shall
specify, permit the transfer of an Award to a Participant's family
members or to one or more trusts established in whole or in part
for the benefit of one or more of such family members; provided,
further, that the restrictions in this sentence shall not apply to
the shares of Common Stock received in connection with an Award
after the date that the restrictions on transferability of such
shares set forth in the applicable Award Notice have lapsed.
During the lifetime of the Participant, an Option, SAR, or
similar-type other award shall be exercisable only by him or by the
family member or trust to whom such Option, SAR, or other Award
has been transferred in accordance with the previous sentence.
<PAGE> 13
20. Adjustment of Shares Available
If there is any change in the number of outstanding
shares of Common Stock through the declaration of stock dividends,
stock splits or the like, the number of shares available for
Awards, the shares subject to any Award and the option prices or
exercise prices of Awards shall be automatically adjusted. If
there is any change in the number of outstanding shares of Common
Stock through any change in the capital account of the Company, or
through any other transaction referred to in Section 424(a) of the
Code, the Committee shall make appropriate adjustments in the
maximum number of shares of Common Stock which may be issued under
the Plan and any adjustments and/or modifications to outstanding
Awards as it deems appropriate. In the event of any other change
in the capital structure or in the Common Stock of the Company, the
Committee shall also be authorized to make such appropriate
adjustments in the maximum number of shares of Common Stock
available for issuance under the Plan and any adjustments and/or
modifications to outstanding Awards as it deems appropriate.
21. Withholding Taxes
The Company shall be entitled to deduct from any payment
under the Plan, regardless of the form of such payment, the amount
of all applicable income and employment taxes required by law to be
withheld with respect to such payment or may require the
Participant to pay to it such tax prior to and as a condition of
the making of such payment. In accordance with any applicable
administrative guidelines it establishes, the Committee may allow
a Participant to pay the amount of taxes required by law to be
withheld from an Award by withholding from any payment of Common
Stock due as a result of such Award, or by permitting the
Participant to deliver to the Company, shares of Common Stock,
having a fair market value, as determined by the Committee, equal
to the amount of such required withholding taxes; provided that if
the Participant is a director or officer who is subject to Section
16 of the Exchange Act, the withholding of shares of Common Stock
must be made in compliance with Rule 16b-3 under the Exchange Act.
22. Noncompetition Provision
Unless the Award Notice specifies otherwise, a
Participant shall forfeit all unexercised, unearned, and/or unpaid
Awards, including, but not by way of limitation, Awards earned but
not yet paid, all unpaid dividends and dividend equivalents, and
all interest, if any, accrued on the foregoing if, (i) in the
opinion of the Committee, the Participant, without the written
consent of the Company, engages directly or indirectly in any
manner or capacity as principal, agent, partner, officer,
director, employee, or otherwise, in any business or activity
competitive with the business conducted by the Company or any
Subsidiary; or (ii) the Participant performs any act or engages in
<PAGE> 14
any activity which in the opinion of the Chief Executive Officer of
the Company is inimical to the best interests of the Company. In
addition, the Committee may, in its discretion, condition the
grant, exercise, payment or deferral of any Award, dividend, or
dividend equivalent made under the Plan on a Participant's
compliance with the terms of this paragraph 22 and any other terms
specified by the Committee in the Award Notice, and cause such a
Participant to forfeit any payment which is deferred or to grant to
the Company the right to obtain equitable relief if the Participant
fails to comply with the terms hereof.
23. Amendments to Awards
Subject to the requirements of paragraph 13, the
Committee may at any time unilaterally amend any unexercised,
unearned, or unpaid Award, including, but not by way of limitation,
Awards earned but not yet paid, to the extent it deems appropriate;
provided, however, that any such amendment which, in the opinion of
the Committee, is adverse to the Participant shall require the
Participant's consent.
24. Compliance with Law
Notwithstanding anything contained in this Plan to the
contrary, the Company shall have no obligation to issue or deliver
certificates of Common Stock evidencing Stock Awards or any other
Award resulting in the payment of Common Stock prior to (a) the
obtaining of any approval from, or satisfaction of any waiting
period or other condition imposed by, any governmental agency which
the Company shall, in its sole discretion, determine to be
necessary or advisable, (b) the admission of such shares to listing
on the stock exchange on which the Common Stock may be listed, and
(c) the completion of any registration or other qualification of
said shares under any state or federal law or ruling of any
governmental body which the Company shall, in its sole discretion,
determine to be necessary or advisable. With respect to persons
subject to Section 16 of the Exchange Act, it is the intent of the
Company that the Plan and all transactions under the Plan comply
with all applicable provisions of Rule 16b-3, as the Rule may be
amended or replaced, under the Exchange Act.
25. No Right to Continued Employment or Grants
Participation in the Plan shall not give any Key Employee
any right to remain in the employ of the Company or any
Subsidiary. The Company or, in the case of employment with a
Subsidiary, the Subsidiary, reserves the right to terminate any Key
Employee at any time. Further, the adoption of this Plan shall not
be deemed to give any Key Employee or any other individual any
right to be selected as a Participant or to be granted an Award.
<PAGE> 15
26. Amendment
The Committee may suspend or terminate the Plan at any
time. In addition, the Committee may, from time to time, amend the
Plan in any manner, but may not without Board and shareholder
approval adopt any amendment which would (a) materially increase
the benefits accruing to Participants under the Plan, (b)
materially increase the number of shares of Common Stock which may
be issued under the Plan (except as specified in paragraph 19), or
(c) materially modify the requirements as to eligibility for
participation in the Plan; and provided further that the Committee
shall not amend the Plan without the approval of the Board or the
shareholders if such approval is required by Rule 16b-3 of the
Exchange Act or Section 162(m) of the Code, in each case as such
provisions may be amended from time to time.
27. Governing Law
The Plan shall be governed by and construed in
accordance with the laws of the State of Maryland except as
superseded by applicable Federal Law.
<PAGE> 1
LEGG MASON, INC.
111 South Calvert Street
Baltimore, Maryland 21202
July 24, 1996
Board of Directors
Legg Mason, Inc.
111 South Calvert Street
Baltimore, Maryland 21202
Re: Legg Mason, Inc. 1996 Equity Incentive
Plan Registration Statement on Form S-8
Gentlemen:
This opinion is being furnished in connection with the
registration of 3,000,000 shares (the "Shares") of common stock,
par value $.10 per share, of Legg Mason, Inc. (the "Company") with
the Securities and Exchange Commission on Form S-8.
Please be advised that I have examined the corporate
records of the Company (including the Articles of Incorporation, as
amended, Bylaws, as amended, and minutes) and such other documents
as I considered necessary to give the opinion set forth below. In
connection with my examination, I have assumed the genuineness of
all signatures, the authenticity of all documents submitted to me
as originals, and the conformity to the original document of all
documents submitted to me as copies.
Based upon and subject to the foregoing, it is my opinion
that the Shares issuable as contemplated by the Registration
Statement or otherwise covered by the Registration Statement will,
upon issuance of such Shares by the Company in accordance with the
terms of the Legg Mason, Inc. 1996 Equity Incentive Plan, as such
Plan is incorporated by reference in the Registration Statement,
constitute legally issued, fully paid and non-assessable shares of
the Company.
Exhibits 5 and 23(b)
<PAGE> 2
July 24, 1996
Page 2
I hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the use of my name
therein and in the Prospectus. In giving this consent, I do not
admit that I am within the category of persons whose consent is
required by Section 7 of the Securities Act of 1933.
Very truly yours,
/s/ Theodore S. Kaplan
Theodore S. Kaplan
General Counsel
<PAGE> 1
CONSENT OF INDEPENDENT ACCOUNTANTS
___________________
We consent to the incorporation by reference in the
registration statement of Legg Mason, Inc. on Form S-8 (which
registers 3,000,000 shares of Legg Mason, Inc. Common Stock under
the Company's 1996 Equity Incentive Plan) of our reports dated May
1, 1996, on our audits of the consolidated financial statements and
financial statement schedules of Legg Mason, Inc. and Subsidiaries
as of March 31, 1996 and 1995, and for each of the three years in
the period ended March 31, 1996, which reports are included in Legg
Mason, Inc.'s 1996 Annual Report on Form
10-K.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
July 24, 1996
Exhibit 23(a)
