<PAGE> 1
Filed pursuant to Rule 424(b)(5)
Registration No. 333-44475
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY ANY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SUPPLEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
SUCH STATE.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS SUPPLEMENT DATED JUNE 8, 1998
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JUNE , 1998)
600,000 SHARES
LEGG MASON, INC.
COMMON STOCK
($.10 PAR VALUE)
------------------------
This Prospectus Supplement relates to the offering of 600,000 shares (the
"Shares") of common stock, $.10 par value per share (the "Common Stock"), of
Legg Mason, Inc. (the "Company") by the Selling Stockholders named herein. The
sales of the Shares hereunder will be for the account of the Selling
Stockholders, and the Company will not receive any proceeds from such sales. See
"Use of Proceeds."
The Common Stock is listed on the New York Stock Exchange under the symbol
"LM." On June 5, 1998, the last sale price of the Common Stock as reported on
the New York Stock Exchange was $60 1/4 per share. See "Price Range of Common
Stock and Dividends."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
==============================================================================================================
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) SELLING STOCKHOLDERS(2)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share.............................. $ $ $
- --------------------------------------------------------------------------------------------------------------
Total(3)............................... $ $ $
==============================================================================================================
</TABLE>
(1) The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended (the "Securities Act"). See "Selling
Stockholders" and "Underwriting."
(2) Before deducting certain expenses payable by the Selling Stockholders
estimated at $ .
(3) The Selling Stockholders have granted the Underwriters a 30-day option to
purchase up to 90,000 additional shares of Common Stock, upon the same terms
and conditions set forth above, solely to cover over-allotments, if any. If
the option is exercised in full, the total Price to Public, Underwriting
Discount and Proceeds to Selling Stockholders will be $ ,
$ and $ , respectively. See "Underwriting."
------------------------
Legg Mason Wood Walker, Incorporated and Merrill Lynch & Co. are acting as
co-lead managers of this offering. Merrill Lynch & Co. is acting as book-running
manager for the offering. The Shares are being offered by each of the
Underwriters, subject to prior sale, when, as and if delivered to and accepted
by them, subject to approval of certain legal matters by counsel for the
Underwriters and certain other conditions. The Underwriters reserve the right to
withdraw, cancel or modify such offer and to reject any orders in whole or in
part. It is expected that delivery of the Shares offered hereby will be made
against payment therefor in New York, New York on or about June , 1998.
------------------------
LEGG MASON WOOD WALKER MERRILL LYNCH & CO.
INCORPORATED
------------------------
The date of this Prospectus Supplement is June , 1998.
<PAGE> 2
------------------------
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN THE
COMMON STOCK, AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE
OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
S-2
<PAGE> 3
THE COMPANY
The following information is qualified in its entirety by, and should be
read in conjunction with, the more detailed information appearing in the
accompanying Prospectus or documents incorporated herein and therein by
reference. Unless otherwise indicated, all information included in this
Prospectus Supplement has been adjusted for the four-for-three split of the
Common Stock effected on September 24, 1997 and further assumes that the
Underwriters' over-allotment option will not be exercised. Financial information
for all periods includes the operating results of Brandywine Asset Management,
Inc., an investment management company acquired on a pooling of interests basis
on January 16, 1998. Unless the context otherwise requires, all references to
the "Company" in this Prospectus Supplement and the accompanying Prospectus
include Legg Mason, Inc. and its predecessors and subsidiaries.
The Company is a holding company which, through its subsidiaries, is
engaged in securities brokerage and trading, investment management of
institutional and individual accounts and Company-sponsored mutual funds,
investment banking for corporations and municipalities, commercial mortgage
banking and provision of other financial services. The Company's principal
broker-dealer subsidiary is Legg Mason Wood Walker, Incorporated ("Legg Mason
Wood Walker"), a full service regional broker-dealer and investment banking firm
operating primarily in the Eastern and Mid-South regions of the United States.
Legg Mason Wood Walker is acting as one of the Underwriters for this offering.
See "Underwriting." The Company's principal investment advisory subsidiaries are
Western Asset Management Company, Brandywine Asset Management, Inc.
("Brandywine"), Legg Mason Fund Adviser, Inc., Batterymarch Financial
Management, Inc., Bartlett & Co. and Legg Mason Capital Management, Inc. Through
Legg Mason Wood Walker and its predecessors, the Company has been engaged in the
securities business since 1899.
The Company was incorporated in Maryland in 1981 to serve as a holding
company for Legg Mason Wood Walker and other subsidiaries. The predecessor
company to Legg Mason Wood Walker was formed in 1970 under the name Legg Mason &
Co., Inc. to combine the operations of Legg & Co., a Maryland-based
broker-dealer formed in 1899, and Mason & Company, Inc., a Virginia-based
broker-dealer formed in 1962. The Company's subsequent growth has occurred
through internal expansion as well as through its acquisitions of broker-dealer
and investment management firms.
The executive offices of the Company are located at 100 Light Street,
Baltimore, Maryland 21202, and its telephone number is (410) 539-0000.
RECENT DEVELOPMENTS
On May 4, 1998, the Company reported revenues for its fourth fiscal quarter
ended March 31, 1998 of $246.3 million, a 35% increase from revenues of $182.5
million in the corresponding quarter of the prior fiscal year. Net earnings were
$23.5 million, up 60% from net earnings of $14.7 million in the prior year's
quarter. For the fiscal year ended March 31, 1998, revenues were $889.1 million,
a 34% increase from revenues of $664.6 million in the prior fiscal year. Net
earnings were $76.1 million, up 33% from net earnings of $57.2 million in the
prior year.
USE OF PROCEEDS
The net proceeds to the Selling Stockholders from the sale of the Shares
offered hereby are estimated to be approximately $ million after
deducting certain expenses payable by the Selling Stockholders.
The Company will not receive any proceeds from the sale of the Shares
offered hereby with the exception of certain commissions payable to Legg Mason
Wood Walker. See "Underwriting."
S-3
<PAGE> 4
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Common Stock is traded on the New York Stock Exchange under the symbol
"LM". The following table sets forth for the periods indicated the high and low
sale prices for the Common Stock as reported on the New York Stock Exchange
Composite Tape and dividends declared per share.
<TABLE>
<CAPTION>
CASH
DIVIDENDS
DECLARED PER
COMMON
FISCAL YEARS ENDING MARCH 31, HIGH LOW SHARE
- ----------------------------- ------ ------ ------------
<S> <C> <C> <C>
1997
First Quarter............................................. $25.19 $20.63 $ .09
Second Quarter............................................ 25.50 21.00 .098
Third Quarter............................................. 29.50 23.81 .098
Fourth Quarter............................................ 38.50 28.31 .098
1998
First Quarter............................................. $40.50 $31.50 $.098
Second Quarter............................................ 54.00 39.06 .11
Third Quarter............................................. 56.31 44.94 .11
Fourth Quarter............................................ 63.88 46.75 .11
1999
First Quarter (through June 5, 1998)...................... $64.56 $57.00 $ .11
</TABLE>
See the cover page of this Prospectus for a recent sale price of the Common
Stock. The cash dividend declared in the first quarter of the 1999 fiscal year
is payable on July 13, 1998 to stockholders of record on June 16, 1998.
S-4
<PAGE> 5
CAPITALIZATION
The following table sets forth the unaudited consolidated short-term debt
and capitalization of the Company at March 31, 1998.
<TABLE>
<CAPTION>
(IN THOUSANDS)
MARCH 31, 1998
--------------
<S> <C>
Short-term debt............................................. $ 13,880
========
Long-term debt:
6 1/2% Senior Notes due February 15, 2006................. $ 99,628
--------
Stockholders' equity:
Preferred stock -- $10.00 par value; authorized 4,000,000
shares; none issued.................................... --
Common stock -- $.10 par value; authorized 100,000,000
shares; issued and outstanding 27,524,880 shares(1).... 2,753
Additional paid-in capital................................ 203,133
Retained earnings......................................... 293,263
Net unrealized appreciation on investment securities...... 946
--------
Total stockholders' equity........................ 500,095
--------
Total capitalization.............................. $599,723
========
</TABLE>
- ---------------
(1) Does not include 3,012,315 shares reserved for issuance upon exercise of
outstanding stock options.
S-5
<PAGE> 6
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth selected consolidated financial data for the
Company for the periods indicated. Such financial data should be read in
conjunction with the detailed information and consolidated financial statements,
including notes thereto, included in the documents incorporated by reference in
the accompanying Prospectus.
<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT SHARE DATA)
YEARS ENDED MARCH 31,
-------------------------------------------------------------------
1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
EARNINGS STATEMENT DATA(1):
Revenues:
Commissions......................... $ 241,284 $ 189,980 $ 169,181 $ 122,976 $ 143,775
Principal transactions.............. 86,748 73,181 65,870 59,470 53,949
Investment advisory and related
fees.............................. 295,645 208,243 162,063 117,656 91,020
Investment banking.................. 97,138 72,062 43,328 34,653 79,283
Interest............................ 127,268 84,129 57,125 39,728 30,343
Other............................... 40,977 37,006 35,776 29,751 28,639
----------- ----------- ----------- ----------- -----------
Total revenues........................ 889,060 664,601 533,343 404,234 427,009
----------- ----------- ----------- ----------- -----------
Expenses:
Compensation and benefits........... 511,413 382,909 312,870 242,098 250,395
Occupancy and equipment rental...... 56,740 43,793 37,016 31,354 28,394
Communications...................... 42,726 31,067 28,472 26,962 23,742
Floor brokerage and clearing fees... 5,464 5,912 5,063 5,467 6,232
Interest............................ 73,706 43,364 26,187 17,249 15,493
Other............................... 70,632 61,346 59,184 52,829 41,630
----------- ----------- ----------- ----------- -----------
Total expenses........................ 760,681 568,391 468,792 375,959 365,886
----------- ----------- ----------- ----------- -----------
Earnings before income taxes.......... 128,379 96,210 64,551 28,275 61,123
Income taxes........................ 52,258 39,018 26,270 11,673 23,912
----------- ----------- ----------- ----------- -----------
Net earnings.......................... $ 76,121 $ 57,192 $ 38,281 $ 16,602 $ 37,211
=========== =========== =========== =========== ===========
Earnings per Common Share(2):
Basic............................... $ 2.80 $ 2.24 $ 1.73 $ .81 $ $1.87
Diluted............................. 2.63 2.05 1.47 .73 1.54
Weighted Average Common Shares(2):
Basic............................... 27,215,479 25,569,128 22,157,031 20,545,003 19,870,331
Diluted............................. 29,003,334 27,992,706 27,392,748 26,754,938 25,921,010
</TABLE>
<TABLE>
<CAPTION>
MARCH 31,
-------------------------------------------------------------------
1998 1997 1996 1995 1994
----------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA(1):
Total assets......................... $2,832,329 $1,886,736 $1,320,820 $829,538 $824,154
Subordinated liabilities............. -- -- 68,000 102,487 102,487
Total liabilities.................... 2,332,234 1,463,697 950,631 493,990 503,784
Total stockholders' equity........... 500,095 423,039 302,189 233,061 217,883
</TABLE>
- ---------------
(1) Historical data have been restated to give effect to the Company's
acquisition, on a pooling of interests basis, of Brandywine on January 16,
1998.
(2) Earnings per Common Share data have been restated to give effect to
Financial Accounting Standards Board Statement Number 128. Under Statement
Number 128, basic and diluted earnings per share replace primary and fully
diluted earnings per share.
S-6
<PAGE> 7
SELLING STOCKHOLDERS
The following table sets forth the names of the Selling Stockholders and
the number of shares of Common Stock owned by each of them and offered
hereunder.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY NUMBER OF SHARES SHARES BENEFICIALLY
OWNED PRIOR TO OFFERING BEING OFFERED(2) OWNED AFTER OFFERING(2)
----------------------- ---------------- -----------------------
NAME NUMBER PERCENT(1) NUMBER PERCENT(1)
---- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C>
Robert F. Boyd................ 11,687 * 3,500 8,187 *
Benedict E. Capaldi........... 155,446 * 5,000 150,446 *
Paul D. Ehrlichman............ 188,687 * 90,000 98,687 *
W. Anthony Hitschler.......... 823,184 3.0% 200,600 622,584 2.3%
David F. Hoffman.............. 63,547(3) * 55,000(4) 8,547 *
Michael D. Jamison............ 229,748(3) * 27,000 202,748 *
Scott L. Kuensell............. 69,413(3) * 10,000(4) 59,413 *
Paul R. Lesutis............... 214,106 * 50,000 164,106 *
Carl M. Lindberg.............. 255,167 * 50,000 205,167 *
Henry F. Otto................. 165,223 * 65,000 100,223 *
Willard J. Scott.............. 58,659 * 6,000 52,659 *
Stephen S. Smith.............. 433,100(3) 1.6% 13,500 419,600 1.5%
Steven M. Tonkovich........... 25,419 * 4,400 21,019 *
Edward A. Trumpbour........... 88,966(3) * 20,000 68,966 *
--------- ----- ------- --------- -----
Total............... 2,782,352 10.0% 600,000 2,182,352 7.8%
========= ===== ======= ========= =====
</TABLE>
- ---------------
* Represents beneficial ownership of not more than one percent of the
outstanding Common Stock.
(1) Based upon 27,584,460 shares of Common Stock outstanding at June 1, 1998.
(2) Assumes no exercise of the Underwriters' over-allotment option. In the event
such option is exercised in full, each Selling Stockholder will sell an
additional number of shares of Common Stock to the Underwriters equal to 15%
of the number of Shares sold by such Selling Stockholder in this offering.
(3) Includes the following number of shares of Common Stock subject to stock
options that are currently exercisable: Mr. Hoffman -- 38,128; Mr.
Jamison -- 50,838; Mr. Kuensell -- 50,838; Mr. Smith -- 38,128; and Mr.
Trumpbour -- 41,061.
(4) Includes the following number of shares of Common Stock subject to stock
options that are currently exercisable: Mr. Hoffman -- 32,122; and Mr.
Kuensell -- 10,000.
All of the shares of Common Stock owned by the Selling Stockholders, as
well as the options described in Note 3, were acquired by the Selling
Stockholders from the Company in connection with the Company's acquisition on
January 16, 1998 of Brandywine, an investment advisory firm located in
Wilmington, Delaware (the "Acquisition"). Pursuant to the acquisition agreement,
10% of the shares of the Selling Stockholders is being held in an escrow that
will terminate one year after the closing date of the Acquisition. The purpose
of the escrow is to secure contingent obligations to indemnify the Company in
certain circumstances under the terms of the acquisition agreement.
The Company and the Selling Stockholders have agreed that the Company will
pay the costs and expenses incurred in connection with the registration of the
Common Stock and this offering, except that the Selling Stockholders shall pay
the fees of their own counsel and shall be responsible for all selling
commissions and all transfer taxes and related charges in connection with the
offer and sale of such Shares. In addition, the Company has agreed to indemnify
the Selling Stockholders against liability arising from actual or alleged
misstatements in the Registration Statement of which this Prospectus Supplement
forms a part (other than liabilities arising from information supplied by a
Selling Stockholder for use in the preparation of the Registration Statement),
and the Selling Stockholders have agreed to indemnify the Company against
liability arising from actual or alleged misstatements or omissions in the
Registration Statement as the result of
S-7
<PAGE> 8
misstatements or omissions in the information supplied by the Selling
Stockholders for use in the preparation of the Registration Statement.
The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act. See "Underwriting."
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 100,000,000 shares
of Common Stock, par value $.10 per share, and 4,000,000 shares of Preferred
Stock, par value $10.00 per share. As of June 1, 1998, there were 27,584,460
shares of Common Stock and no shares of Preferred Stock outstanding.
COMMON STOCK
Holders of Common Stock are entitled to one vote per share on matters to be
voted upon by the stockholders, to receive dividends out of funds legally
available for distribution when and if declared by the Board of Directors and to
share ratably in the assets of the Company legally available for distribution to
its stockholders in the event of liquidation, dissolution or winding up of the
Company, after provisions for distributions to the holders of any Preferred
Stock.
The Company may not pay any dividend (other than in shares of Common Stock)
or make any distributions of assets on shares of Common Stock until cumulative
dividends on any Preferred Stock then outstanding have been paid.
Holders of Common Stock have no preemptive, subscription, redemption or
conversion rights. The outstanding shares of Common Stock are fully paid and
nonassessable.
The holders of the Common Stock do not have cumulative voting rights, which
means that holders of more than half of the shares can elect all of the
directors and holders of the remaining shares will not be able to elect any
directors. The Company's By-Laws provide for a classified board of directors
consisting of three classes with staggered three-year terms.
TRANSFER AGENT
The transfer agent and registrar for the Company's Common Stock is First
Union National Bank of North Carolina, located in Charlotte, North Carolina.
PREFERRED STOCK
The Company's Articles of Incorporation authorize the Board of Directors to
issue shares of Preferred Stock, par value $10.00 per share, and to fix the
terms (including voting rights, dividends, redemption and conversion provisions,
if any, and rights upon liquidation) of any shares issued. Outstanding shares of
Preferred Stock which are redeemed or are converted to Common Stock are restored
to the status of authorized and unissued shares of Preferred Stock issuable in
series by the Board of Directors of the Company. There are presently no shares
of Preferred Stock outstanding.
The Board of Directors has the authority, under the Company's Articles of
Incorporation, to classify or reclassify any unissued Preferred Stock from time
to time by setting or changing the preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends, qualifications, or
terms or conditions of redemption of the stock.
TWO-TIER BUSINESS COMBINATION PROVISIONS
Maryland law requires the affirmative vote of at least a majority of all of
the outstanding shares entitled to vote to approve a merger, consolidation,
share exchange or disposition of all or substantially all of the Company's
assets. The Company's Articles of Incorporation require the affirmative vote of
not less than 70% of the then outstanding voting shares of the Company to
approve any "business combination" of the Company
S-8
<PAGE> 9
with any "Related Person" unless certain conditions have been met. In addition,
the 70% vote must include the affirmative vote of at least 55% of the
outstanding shares of voting stock held by stockholders other than the Related
Person. Accordingly, the actual vote required to approve the business
combination may be greater than the 70%, depending upon the number of shares
controlled by the Related Person. A Related Person is defined to include any
person or entity which is, directly or indirectly, the beneficial owner of 15%
or more of the outstanding shares of the Company's voting stock, including any
affiliate or associate of such person or entity. The term "business combination"
is defined to include a wide variety of transactions between the Company and a
Related Person, including a merger, consolidation, share exchange or sale of
assets having a fair market value greater than 10% of the book value of the
Company's consolidated assets.
However, if the Related Person pays a "fair price" to the Company's
stockholders in the transaction, the 70% requirement would not be applicable and
the proposed business combination could be approved by a simple majority of the
stockholders unless otherwise required by Maryland law, provided that such
affirmative vote includes at least 55% of the voting stock held by persons other
than the Related Person. Under the Articles, the "fair price" must be at least
equal to the greater of the highest price paid or agreed to be paid by the
Related Person to purchase shares of the Company's Common Stock, or the highest
market price of the Common Stock, in each case during the 24-month period prior
to the taking of such vote, or the per share book value of the Common Stock at
the end of the calendar quarter immediately preceding the taking of such vote.
In addition, the "fair price" consideration to be received by the Company's
stockholders must be of the same form and kind as the most favorable form and
kind of consideration paid by the Related Person in acquiring any of its shares
of Common Stock of the Company.
The special voting provisions are not applicable to a business combination
authorized by the Board of Directors by a vote which includes a majority of the
"Disinterested Directors" of the Company. A Disinterested Director is defined to
include any member of the Board of Directors who is not the Related Person (or
an affiliate or associate of the Related Person) and who was a Director prior to
the time that the Related Person became a Related Person, and any successor of a
Disinterested Director who is not the Related Person (or an affiliate or
associate of the Related Person) and who is recommended to succeed a
Disinterested Director by a majority of the Disinterested Directors then on the
Board.
These special voting provisions may not be amended, altered, changed or
repealed except by the affirmative vote of at least 70% of the shares of stock
entitled to vote at a meeting of the stockholders called for the consideration
of such amendment, alteration, change or repeal, and at least 55% of the
outstanding shares of stock entitled to vote thereon held by stockholders who
are not Related Persons, unless such proposal shall have been proposed by the
Board of Directors by a vote which includes a majority of the Disinterested
Directors.
The business combination provisions under the Company's charter could have
the effect of delaying, deterring or preventing a change in control of the
Company. Any possible change in control could also be affected by the
applicability of certain Maryland anti-takeover statutes dealing with business
combinations and acquisitions of controlling blocks of shares, as well as by the
Company's classified board of director provisions.
UNDERWRITING
Subject to the terms and conditions set forth in the underwriting agreement
(the "Purchase Agreement") among the Company, the Selling Stockholders and the
Underwriters, the Selling Stockholders have agreed to sell to the Underwriters
named below, and the Underwriters have each agreed to purchase, the respective
numbers of Shares set forth after their names below. The Purchase Agreement
provides that the obligations of the Underwriters are subject to certain
conditions precedent and that the Underwriters will be obligated to purchase all
of the Shares if any are purchased.
S-9
<PAGE> 10
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
- ----------- ---------
<S> <C>
Legg Mason Wood Walker, Incorporated........................
-------
Merrill Lynch, Pierce, Fenner & Smith Incorporated..........
-------
Total............................................. 600,000
=======
</TABLE>
The Underwriters have advised the Company and the Selling Stockholders that
they propose initially to offer the Shares to the public at the public offering
price set forth on the cover page of this Prospectus Supplement, and to certain
dealers at such price less a concession not in excess of $ per Share. The
Underwriters may allow, and such dealers may reallow, discounts not in excess of
$ per Share to certain other dealers. After shares of Common Stock are
released for sale to the public, the public offering price, concession and
discount may be changed.
Legg Mason Wood Walker is a wholly-owned subsidiary of the Company and its
participation in this offering is in compliance with the requirements of Rule
2720 of the Conduct Rules of the National Association of Securities Dealers,
Inc. regarding underwriting securities of an affiliate. Merrill Lynch, Pierce,
Fenner & Smith Incorporated performs services for the Company or one or more of
its affiliates in the ordinary course of business and may do so in the future.
The Underwriters intend to resell any Shares which they are unable to sell
in this offering from time to time, at prevailing market prices, subject to
applicable prospectus delivery requirements.
The Selling Stockholders have granted to the Underwriters an over-allotment
option, exercisable during the 30-day period from the date of this Prospectus
Supplement, to purchase up to an additional 90,000 shares of Common Stock at the
public offering price per Share offered hereby, less the underwriting discount.
Such option may be exercised only for the purpose of covering over-allotments,
if any, incurred in the sale of the Shares offered hereby. To the extent such
option is exercised in whole or in part, each Underwriter will be obligated,
subject to certain conditions, to purchase the number of the additional shares
of Common Stock proportionate to its initial commitment.
The Selling Stockholders have agreed with the Underwriters that, subject to
certain exceptions, they will not offer to sell, grant any option for the sale
of, or otherwise dispose of, any Common Stock, or security convertible into or
exchangeable for Common Stock of the Company, for a period of 180 days after the
date of this Prospectus Supplement without the prior consent of the
Underwriters.
The Company and the Selling Stockholders have agreed to indemnify the
Underwriters and others against certain liabilities under the Securities Act.
Pursuant to the rules of the New York Stock Exchange, after the
distribution of the Shares has been completed, Legg Mason Wood Walker and
Howard, Weil, Labouisse, Friedrichs Incorporated, as broker-dealer subsidiaries
of the Company and member firms of the New York Stock Exchange, may not effect
transactions in the Company's securities (except on an unsolicited basis) for
the account of any customer or make any recommendation with respect to such
securities.
Until the distribution of the Common Stock is completed, rules of the
Securities and Exchange Commission may limit the ability of the Underwriters and
certain selling group members to bid for and purchase the Common Stock. As an
exception to these rules, the Underwriters are permitted to engage in certain
transactions that stabilize the price of the Common Stock. Such transactions
consist of bids or purchases for the purposes of pegging, fixing or maintaining
the price of the Common Stock.
If the Underwriters create a short position in the Common Stock in
connection with the Offering, i.e., if they sell more shares of Common Stock
than are set forth on the cover page of this Prospectus Supplement, the
Underwriters may reduce that short position by purchasing Common Stock in the
open market. The Underwriters may also elect to reduce any short position by
exercising all or part of the over-allotment option described above.
S-10
<PAGE> 11
The Underwriters may also impose a penalty bid on certain Underwriters and
selling group members. This means that if the Underwriters purchase shares of
Common Stock in the open market to reduce the Underwriters' short position or to
stabilize the price of the Common Stock, they may reclaim the amount of the
selling concession from the Underwriters and selling group members who sold
those shares as part of the offering.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a security to the extent that it were
to discourage resales of the security.
Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Common Stock. In addition, neither
the Company nor the Underwriters makes any representation that the Underwriters
will engage in such transactions or that such transactions, once commenced, will
not be discontinued without notice.
ERISA MATTERS
The Company and its subsidiaries and affiliates may each be considered a
"party in interest" (within the meaning of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) or a "disqualified person" (within
the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended
(the "Code")) with respect to many employee benefit plans ("Plans") that are
subject to ERISA or the Code. The purchase of Shares by a Plan that is subject
to the fiduciary responsibility provisions of ERISA or the prohibited
transaction provisions of Section 4975 of the Code (including individual
retirement arrangements and other plans described in Section 4975(e)(1) of the
Code) and with respect to which the Company or its subsidiaries and affiliates
is a service provider (or otherwise is a party in interest or a disqualified
person) may constitute or result in a prohibited transaction under ERISA or
Section 4975 of the Code, unless such Shares are acquired pursuant to and in
accordance with an applicable exemption, such as Prohibited Transaction Class
Exemption 84-14 (an exemption for certain transactions approved by an
independent qualified professional asset manager). Any pension or other employee
benefit plan proposing to acquire any Shares should consult with its legal
counsel.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby have been passed
upon for the Company by Theodore S. Kaplan, Esq., the Company's General Counsel,
and certain legal matters will be passed upon for the Underwriters by Skadden,
Arps, Slate, Meagher & Flom LLP, New York, New York. Mr. Kaplan beneficially
owns, and has rights to acquire under an employee benefit plan of the Company,
an aggregate of less than one percent of the Common Stock of the Company.
S-11
<PAGE> 12
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY ANY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SUPPLEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
SUCH STATE.
SUBJECT TO COMPLETION, DATED JUNE 5, 1998
PROSPECTUS
2,572,156 SHARES
LEGG MASON, INC.
COMMON STOCK
($.10 PAR VALUE)
------------------------
This Prospectus relates to 2,572,156 shares of Common Stock, $.10 par value
per share (the "Common Stock"), of Legg Mason, Inc. (the "Company") which may be
offered for sale by the Selling Stockholders named herein or by pledgees,
donees, transferees or other successors in interest. The sales of shares of
Common Stock hereunder will be for the account of the Selling Stockholders or
such other persons, and the Company will not receive any proceeds from such
sales.
The shares offered hereby may be sold by the Selling Stockholders, or by
pledgees, donees, transferees or other successors in interest, from time to time
on the New York Stock Exchange, trading "regular way," in brokerage transactions
effected through Legg Mason Wood Walker, Incorporated, a wholly-owned subsidiary
of the Company ("Legg Mason Wood Walker"), directly to one or more purchasers,
through agents, through underwriters or dealers or through a combination of any
such methods of sale, at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, or at negotiated prices to which they agree. Legg
Mason Wood Walker and any such underwriter, dealer and agent may receive
compensation in the form of discounts, concessions or commissions from the
Selling Stockholders or such other persons who may be effecting sales hereunder.
The Selling Stockholders or other persons effecting sales hereunder, Legg Mason
Wood Walker and any underwriters, dealers or agents that participate with the
Selling Stockholders in the distribution of shares of Common Stock may be deemed
to be "underwriters" within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), and any commissions received by them and any
profit on the resale of the shares may be deemed to be underwriting discounts
and commissions under the Securities Act. The Selling Stockholders or other
persons effecting sales hereunder may agree to indemnify Legg Mason Wood Walker
and any such underwriter, dealer or agent against certain liabilities, including
liabilities under the Securities Act.
The Company has agreed to pay certain costs and expenses incurred in
connection with the registration of the shares of Common Stock offered hereby,
except that the Selling Stockholders will pay the fees of their own counsel and
will be responsible for certain other expenses. See "Selling Stockholders."
On June 3, 1998, the last sale price of the Common Stock as reported on the
New York Stock Exchange was $60 1/16 per share.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is June , 1998.
<PAGE> 13
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy and
information statements and other information filed with the Commission can be
inspected and copied during normal business hours at the public reference
facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at its regional offices at Seven World Trade
Center, 13th Floor, New York, New York 10048; and 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such material can be obtained at
prescribed rates from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549. Such materials can also be inspected on
the Commission's Internet site at "http://www.sec.gov" and at the offices of The
New York Stock Exchange, 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement," which term shall encompass all amendments,
exhibits, annexes and schedules thereto), pursuant to the Securities Act, and
the rules and regulations promulgated thereunder, with respect to the Common
Stock offered hereby. This Prospectus does not contain all of the information
set forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission, and to which
reference is hereby made. Statements contained in this Prospectus as to the
contents of any contract, agreement or other document referred to are not
necessarily complete. With respect to each such contract, agreement or other
document filed as an exhibit to the Registration Statement, reference is made to
the exhibit for a more complete description of the matter involved.
No dealer, salesman or any other person is authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus in connection with the offer
contained herein, and, if given or made, such information or representations
must not be relied upon as having been authorized by the Company, the Selling
Stockholders, any other person effecting sales hereunder, or any underwriter.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any securities other than the registered shares of Common Stock to
which it relates, or an offer to any person in any jurisdiction where such an
offer would be unlawful. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create any implication that there
has been no change in the affairs of the Company since the date hereof, or that
the information contained or incorporated by reference herein is correct as of
any time subsequent to the date hereof.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents heretofore filed by the Company under the Exchange
Act (File No. 1-8529) with the Commission are incorporated herein by reference:
(1) the Company's Annual Report on Form 10-K for the fiscal year ended March 31,
1997; (2) the Company's Quarterly Reports on Form 10-Q for the quarters ended
June 30, 1997, September 30, 1997 and December 31, 1997; and (3) the description
of the Company's Common Stock contained in the Amendment on Form 8 filed April
25, 1997 amending the Company's Registration Statement on Form 8-A.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of this offering shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide, without charge, to each person to whom this
Prospectus has been delivered, upon written or oral request of such person, a
copy of any or all of the documents referred to above which have
2
<PAGE> 14
been or may be incorporated by reference herein, other than exhibits to such
documents (unless such exhibits are specifically incorporated by reference
therein). Requests for such copies should be directed to Legg Mason, Inc., 100
Light Street, Baltimore, Maryland 21202, Attention: Charles A. Bacigalupo,
Secretary, telephone number (410) 539-0000.
THE COMPANY
The Company is a holding company which, through its subsidiaries, is
engaged in securities brokerage and trading, investment management of
institutional and individual accounts and Company-sponsored mutual funds,
investment banking for corporations and municipalities, commercial mortgage
banking and provision of other financial services. The Company's principal
broker-dealer subsidiary is Legg Mason Wood Walker, a full service regional
broker-dealer and investment banking firm operating primarily in the Eastern and
Mid-South regions of the United States. The Company's principal investment
advisory subsidiaries are Western Asset Management Company, Brandywine Asset
Management, Inc. ("Brandywine"), Legg Mason Fund Adviser, Inc., Batterymarch
Financial Management, Inc., Bartlett & Co. and Legg Mason Capital Management,
Inc. Through Legg Mason Wood Walker and its predecessors, the Company has been
engaged in the securities business since 1899.
The executive offices of the Company are located at 100 Light Street,
Baltimore, Maryland 21202, and its telephone number is (410) 539-0000. Unless
the context otherwise requires, all references to the "Company" herein include
Legg Mason, Inc. and its predecessors and subsidiaries.
SELLING STOCKHOLDERS
The following table sets forth the names of the Selling Stockholders and
the number of shares of Common Stock owned by each of them and offered
hereunder. Except for the shares listed below and an aggregate 218,993 shares
subject to stock options exercisable within 60 days of the date of this
Prospectus held by Messrs. Hoffman, Jamison, Kuensell, Smith and Trumpbour which
have been registered pursuant to a registration statement on Form S-8, none of
the Selling Stockholders is presently the beneficial owner of any shares of
Common Stock.
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES
---- ----------------
<S> <C>
Robert F. Boyd............................................. 11,687
Benedict E. Capaldi........................................ 155,446
Luz E. Carey............................................... 977
Alexander C. Cutler........................................ 1,955
Judy L. DiMaio............................................. 977
Paul D. Ehrlichman......................................... 188,687
Earl J. Gaskins............................................ 4,888
W. Anthony Hitschler....................................... 823,184
David F. Hoffman........................................... 25,419
Michael D. Jamison......................................... 178,910
Scott L. Kuensell.......................................... 18,575
Paul R. Lesutis............................................ 214,106
Carl M. Lindberg........................................... 255,167
Henry F. Otto.............................................. 165,223
Willard J. Scott........................................... 58,659
Stephen S. Smith........................................... 394,972
Steven M. Tonkovich........................................ 25,419
Edward A. Trumpbour........................................ 47,905
---------
Total............................................ 2,572,156
=========
</TABLE>
3
<PAGE> 15
The 2,572,156 shares of Common Stock to which this Prospectus relates were
acquired by the Selling Stockholders from the Company in connection with the
Company's acquisition on January 16, 1998 of Brandywine, an investment advisory
firm located in Wilmington, Delaware (the "Acquisition"). Pursuant to the
acquisition agreement, 10% of the shares owned by each person included in the
above table is being held in an escrow that will terminate one year after the
closing date of the Acquisition. The purpose of the escrow is to secure
contingent obligations to indemnify the Company in certain circumstances under
the terms of the acquisition agreement.
The Company and the Selling Stockholders have agreed that the Company will
pay the costs and expenses incurred in connection with the registration of the
Common Stock and this offering, except that the Selling Stockholders shall pay
the fees of their own counsel and shall be responsible for all selling
commissions and all transfer taxes and related charges in connection with the
offer and sale of such shares. In addition, the Company has agreed to indemnify
the Selling Stockholders against liability arising from actual or alleged
misstatements in the Registration Statement of which this Prospectus forms a
part (other than liabilities arising from information supplied by a Selling
Stockholder for use in the preparation of the Registration Statement), and the
Selling Stockholders have agreed to indemnify the Company against liability
arising from actual or alleged misstatements or omissions in the Registration
Statement as the result of misstatements or omissions in the information
supplied by the Selling Stockholders for use in the preparation of the
Registration Statement.
PLAN OF DISTRIBUTION
The sale of all or a portion of the shares of Common Stock offered hereby
by the Selling Stockholders, or by pledgees, donees, transferees or other
successors in interest, may be effected through underwriters or dealers,
directly to one or more purchasers, through agents, on the New York Stock
Exchange, trading "regular way," in brokerage transactions effected through Legg
Mason Wood Walker, or through a combination of any such methods of sale. Any
underwriter, dealer or agent involved in the offer and sale of the Common Stock
in an underwritten offering will be named in an applicable prospectus
supplement. The distribution of the Common Stock may be effected from time to
time in one or more transactions at a fixed price or prices, which may be
changed, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices.
Legg Mason Wood Walker and any underwriters or agents may receive
compensation in the form of discounts, concessions or commissions from the
Selling Stockholders or such other persons who may be effecting sales hereunder.
Underwriters may sell Common Stock to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions or commissions from
the underwriters and/or commissions from the purchasers for whom they may act as
agents. The Selling Stockholders or other persons effecting sales hereunder, any
such underwriters, dealers and agents, and Legg Mason Wood Walker may be deemed
to be "underwriters" within the meaning of the Securities Act, and any discounts
or commissions they receive and any profit on the sale of the Common Stock they
realize may be deemed to be underwriting discounts and commissions under the
Securities Act. Any discounts, commissions or other compensation paid by the
Selling Stockholders to underwriters, dealers or agents in connection with an
underwriting offering will be described in an applicable prospectus supplement.
The Selling Stockholders or other persons effecting sales hereunder may
agree to indemnify Legg Mason Wood Walker and any such underwriters, dealers and
agents against certain liabilities, including liabilities under the Securities
Act.
Pursuant to the acquisition agreement and an agreement entered into among
the Selling Stockholders, there are certain limitations on the aggregate number
of shares that can be sold hereunder during certain periods by the Selling
Stockholders. For the period beginning the date of this Prospectus and ending
November 1, 1998, the aggregate number of shares that can be sold by all of the
Selling Stockholders is 386,123 shares, less the total number of shares of
Common Stock sold by the Selling Stockholders in one or more underwritten public
offerings effected pursuant to the Registration Statement or otherwise.
4
<PAGE> 16
EXPERTS
The consolidated statements of financial condition as of March 31, 1997 and
1996 and the consolidated statements of earnings, cash flows, and stockholders'
equity for each of the three years in the period ended March 31, 1997, and the
consolidated financial statement schedules listed in Item 14(a)(1) and (2) of
the 1997 Form 10-K incorporated by reference in this Prospectus from the 1997
Form 10-K, have been incorporated herein in reliance on the reports of Coopers &
Lybrand L.L.P., independent accountants, given on the authority of that firm as
experts in accounting and auditing.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby have been passed
upon for the Company by Theodore S. Kaplan, Esq., the Company's General Counsel.
Mr. Kaplan beneficially owns, or has rights to acquire under an employee benefit
plan of the Company, less than one percent of the Common Stock of the Company.
5
<PAGE> 17
======================================================
NO UNDERWRITER, DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED IN
CONNECTION WITH THE OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF
THE SECURITIES OFFERED HEREBY TO ANY PERSON OR BY ANYONE IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING
SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE
HEREOF.
------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Company.......................... S-3
Recent Developments.................. S-3
Use of Proceeds...................... S-3
Price Range of Common Stock and
Dividends.......................... S-4
Capitalization....................... S-5
Selected Consolidated Financial
Data............................... S-6
Selling Stockholders................. S-7
Description of Capital Stock......... S-8
Underwriting......................... S-9
ERISA Matters........................ S-11
Legal Matters........................ S-11
PROSPECTUS
Available Information................ 2
Documents Incorporated by
Reference.......................... 2
The Company.......................... 3
Selling Stockholders................. 3
Plan of Distribution................. 4
Experts.............................. 5
Legal Matters........................ 5
</TABLE>
======================================================
======================================================
600,000 SHARES
LEGG MASON, INC.
COMMON STOCK
------------------------
PROSPECTUS SUPPLEMENT
------------------------
LEGG MASON WOOD WALKER
INCORPORATED
MERRILL LYNCH & CO.
JUNE , 1998
======================================================
