<PAGE> COVER
As filed with the Securities and Exchange Commission on September 10, 1999
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 Identification No.)
incorporation or organization)
100 Light Street, Baltimore, Maryland 21202
(Address of Principal Executive Offices) (Zip Code)
LEGG MASON, INC.
1996 EQUITY INCENTIVE PLAN
(Full Title of the Plan)
ROBERT F. PRICE, ESQUIRE
Senior Vice President and General Counsel
Legg Mason, Inc.
100 Light 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>
Proposed
Proposed Maximum
Title of Amount Maximum Aggregate Amount of
Securities to to be Offering Price Offering Registration
be Registered Registered (1) Per Share (2) Price Fee
<S> <C> <C> <C> <C>
Common Stock 5,000,000 shs. $ 39.1875 $ 195,937,500 $ 54,470.63
($.10 Par Value)
</TABLE>
(1) Pursuant to Rule 416(a) under the Securities Act, this Registration
Statement also registers such indeterminate number of additional
shares as may be issuable under the Legg Mason, Inc. 1996 Equity
Incentive Plan in connection with stock splits, stock dividends or
similar transactions.
(2) 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 sale prices for
Legg Mason, Inc. common stock on the New York Stock Exchange on
September 9, 1999.
<PAGE> 1
EXPLANATORY NOTE
This Registration Statement is filed pursuant to General
Instruction E of Form S-8 for the purpose of registering an additional
5,000,000 shares of common stock, $.10 par value, of Legg Mason, Inc. (the
"Company" or the "Registrant") issuable pursuant to the Legg Mason, Inc.
1996 Equity Incentive Plan (the "Plan").
This Registration Statement hereby incorporates by reference the
contents of the Company's previously-filed Registration Statement on Form
S-8 (Registration No.: 333-08721).
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 (the "Commission") are incorporated herein by
reference and made a part hereof:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1999.
(b) The Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999.
(c) The Company's Current Report on Form 8-K dated June 3, 1999.
(d) The description of the Company's common stock, $.10 par value,
contained in Amendment No. 4 to the Company's Application for Registration on
Form 8-A, filed April 25, 1997.
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, as amended (the "Exchange Act"), 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 or deemed to be
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 also is or is deemed to be 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.
<PAGE> 2
Experts
The consolidated financial statements and financial statement
schedules of the Company and its subsidiaries as of March 31, 1999 and 1998
and for each of the years in the three-year period ended March 31, 1999,
incorporated in this Registration Statement by reference to the Company's
Annual Report on Form 10-K for the year ended March 31, 1999, have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts
in accounting and auditing.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
The validity of the shares of the Company's common stock registered
hereby have been passed upon for the Company by Robert F. Price, Esq., the
Company's General Counsel and Senior Vice President. Mr. Price beneficially
owns, and has rights to acquire under the Plan, an aggregate of less than
one percent of the common stock of the Company.
Item 6. Indemnification of Directors and Officers.
Section 2-418 of the Maryland General Corporation Law ("Section
2-418") establishes provisions whereby a Maryland corporation may indemnify
any director or officer made a 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 or failed to act
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
or omission 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
Section 2-418. Section 2-418 also provides for indemnification of directors
and officers by court order. The indemnification provided or authorized in
Section 2-418 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.
<PAGE> 3
The Registrant's officers and directors are insured against certain
liabilities under certain policies maintained by the Registrant with
aggregate maximum coverage of $35,000,000.
The foregoing summaries are subject to the complete text of the
statute, By-Laws and policies referred to above and are qualified in their
entirety by reference thereto.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
Description of
Exhibit Number Document
4.1 Legg Mason, Inc. 1996 Equity Incentive Plan
(as amended July 27, 1999)
4.2 Articles of Incorporation of the Company, as amended
(incorporated by reference to Form 10-Q for the
quarter ended September 30, 1996).
4.3 By-laws of the Company, as amended and restated
April 25, 1988 (incorporated by reference to the
Company's Annual Report on Form 10-K for the year
ended March 31, 1988).
5 Opinion of Robert F. Price, Esq.,
Senior Vice President and
General Counsel of the Registrant.
23(a) Consent of PricewaterhouseCoopers LLP,
independent public accountants.
23(b) Consent of Robert F. Price, Esq.
(included in Exhibit 5).
24 Powers of Attorney of certain directors
of the Registrant (included on signature
pages hereto).
<PAGE> 4
The Plan is not intended to be qualified under Section 401 of the
Internal Revenue Code of 1986, as amended.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective Registration Statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to
the Commission by the Registrant pursuant to Section 13 or 15(d) of the
Exchange Act that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, 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.
(3) 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.
<PAGE> 5
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing
of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference herein shall be deemed to be a new registration
statement relating to the securities offered herein, 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 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 Commission such
indemnification is against public policy as expressed in the Securities 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 indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
<PAGE> 6
SIGNATURES
The Registrant. 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 10th day of September, 1999.
LEGG MASON, INC.
By: /s/ Robert F. Price
Robert F. Price
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, Richard J. Himelfarb
and Robert F. Price, 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 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.
Signature Title Date
/s/ Raymond A. Mason Chairman of the Board, September 10, 1999
Raymond A. Mason President and Chief
Executive Officer
(Principal Executive
Officer)
[SIGNATURES CONTINUED]
<PAGE> 7
/s/ Timothy C. Scheve Executive Vice President September 10, 1999
Timothy C. Scheve (Principal Financial Officer)
/s/ Charles J. Daley, Jr. Vice President September 10, 1999
Charles J. Daley, Jr. (Principal Accounting Officer)
/s/ Harold L. Adams Director September 10, 1999
Harold L. Adams
/s/ Charles A. Bacigalupo Director September 10, 1999
Charles A. Bacigalupo
/s/ James W. Brinkley Director September 10, 1999
James W. Brinkley
/s/ Edmund J. Cashman, Jr. Director September 10, 1999
Edmund J. Cashman, Jr.
/s/ Harry M. Ford, Jr. Director September 10, 1999
Harry M. Ford, Jr.
/s/ Richard J. Himelfarb Director September 10, 1999
Richard J. Himelfarb
/s/ John E. Koerner, III Director September 10, 1999
John E. Koerner, III
[SIGNATURES CONTINUED]
<PAGE> 8
/s/ W. Curtis Livingston Director September 10, 1999
W. Curtis Livingston
/s/ Edward I. O'Brien Director September 10, 1999
Edward I. O'Brien
/s/ Peter F. O'Malley Director September 10, 1999
Peter F. O'Malley
/s/ Nicholas J. St. George Director September 10, 1999
Nicholas J. St. George
/s/ Roger W. Schipke Director September 10, 1999
Roger W. Schipke
/s/ Margaret DeB. Tutwiler Director September 10, 1999
Margaret DeB. Tutwiler
/s/ James E. Ukrop Director September 10, 1999
James E. Ukrop
/s/ William Wirth Director September 10, 1999
William Wirth
<PAGE> 9
EXHIBIT INDEX
Description of
Exhibit Number Document
4.1 Legg Mason, Inc. 1996 Equity Incentive Plan
(as amended July 27, 1999).
4.2 Articles of Incorporation of the Company, as amended
(incorporated by reference to Form 10-Q for the quarter
ended September 30, 1996).
4.3 By-laws of the Company, as amended and restated
April 25, 1988 (incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended
March 31, 1988).
5 Opinion of Robert F. Price, Esq.,
Senior Vice President and
General Counsel of the Registrant.
23(a) Consent of PricewaterhouseCoopers LLP,
independent public accountants.
23(b) Consent of Robert F. Price, Esq.
(included in Exhibit 5).
24 Powers of Attorney of certain directors
of the Registrant (included on signature
pages hereto).
<PAGE> COVER
LEGG MASON, INC.
1996 EQUITY INCENTIVE PLAN
(As Amended July 27, 1999)
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.
Exhibit 4.1
<PAGE> 2
2.6 "Common Stock" means common stock, par value $.10 per share, of
the Company.
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 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
<PAGE> 3
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
13,000,000 (such amount shall be subject to adjustment as provided in
paragraph 20 for events occurring after July 27, 1999). 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 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
<PAGE> 4
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 (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.
<PAGE> 5
(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.
(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.
<PAGE> 6
(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 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.
<PAGE> 7
(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.
(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
<PAGE> 8
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 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
<PAGE> 9
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 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 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.
<PAGE> 10
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 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.
<PAGE> 11
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.
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
<PAGE> 12
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 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.
<PAGE> 24
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.
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. LETTERHEAD]
September 10, 1999
Board of Directors
Legg Mason, Inc.
100 Light Street
Baltimore, Maryland 21202
Re: Legg Mason, Inc. 1996 Equity Incentive Plan
Registration Statement on Form S-8
Ladies and Gentlemen:
This opinion is being furnished in connection with the registration
of 5,000,000 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, By-Laws, 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 covered by the Registration Statement will, upon issuance of such
Shares pursuant to the Legg Mason, Inc. 1996 Equity Incentive Plan (the
"Plan") by the Company (assuming such issuances are made in accordance with
the terms of the Plan, as such Plan is filed as an Exhibit to and
incorporated by reference into the Registration Statement), constitute
legally issued, fully paid and non-assessable shares of common stock of the
Company.
Exhibits 5 and 23(b)
<PAGE> 2
September 10, 1999
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/ Robert F. Price
Robert F. Price
General Counsel
RFP:pc
<PAGE> 1
CONSENT OF INDEPENDENT ACCOUNTANTS
___________________
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated June 2, 1999 relating to the
financial statements, which appears in Legg Mason, Inc.'s Annual Report on
Form 10-K for the year ended March 31, 1999. We also consent to the
incorporation by reference of our report dated June 2, 1999 relating to
the financial statement schedules, which appears in such Annual Report on
Form 10-K. We also consent to the reference to our firm under the caption
"Experts".
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Baltimore, Maryland
September 10, 1999
Exhibit 23(a)
