SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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LEGG MASON, INC.
(Exact name of registrant as specified in its charter)
Maryland 52-1200960
(State or other jurisdiction (I.R.S. employer incorporation
of identification no.) or organization)
100 Light Street
Baltimore, Maryland 21202
(410) 539-0000
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
---------------------------
Robert F. Price
Senior Vice President and General Counsel
Legg Mason, Inc.
100 Light Street
Baltimore, Maryland 21202
(410) 539-0000
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
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Copy to:
Faith Grossnickle, Esq.
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
(212) 848-8015
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Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this registration statement. If the
only securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, check the following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<PAGE>
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Each Class of Securities Aggregate Amount to be Aggregate Offering Aggregate Offering Amount of
to be Registered Registered(1) Price Per Unit(2) Price(2) Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities, Convertible Debt
Securities and Common Stock, $.10 par
value (3)............................... $450,000,000(4)(5) 100% $450,000,000 $118,800(5)
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) In United States dollars or the equivalent thereof in any other
currency, currency unit or units, or composite currency or currencies.
(2) Estimated for the sole purpose of computing the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933.
(3) Also includes such indeterminate number of shares of common stock as
may be issued solely upon conversion of any convertible debt
securities; and also relates to offers and sales of debt securities in
connection with the broker-dealer business conducted by and through
affiliates of the Registrant, including Legg Mason Wood Walker,
Incorporated.
(4) Or, in the event of the issuance of original issue discount securities,
such higher principal amount as may be sold for an initial public
offering price of up to $450,000,000.
(5) Does not include $50,000,000 of securities previously registered on
Registration Statement No.333-00151 being carried forward pursuant to
Rule 429 under the Securities Act of 1933 none of which has been issued
or sold and for which we paid a registration fee of $17,241.
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The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the commission, acting pursuant to said section 8(a),
may determine.
Pursuant to Rule 429 of the General Rules and Regulations under the
Securities Act of 1933, the Prospectus included in this Registration Statement
is a combined Prospectus which also relates to Registration Statement No.
333-00151, previously filed by Legg Mason, Inc. on Form S-3. This Registration
Statement also constitutes a Post-Effective amendment to Registration Statement
No. 333-00151, and such Post-Effective Amendment shall hereafter become
effective concurrently with the effectiveness of this Registration Statement in
accordance with Section 8(c) of the Securities Act of 1933.
---------------------------
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED March 27, 2000
PROSPECTUS
$500,000,000
LEGG MASON, INC.
DEBT SECURITIES
CONVERTIBLE DEBT SECURITIES
Pursuant to a "shelf" registration statement of which this prospectus
is a part, we, Legg Mason, Inc., may offer notes, debentures or other debt
securities, including debt securities which may be convertible into shares of
our common stock, par value $.10 per share. Pursuant to this process, we may
sell such debt securities from time to time in one or more separate offerings,
in amounts, at prices and on terms to be determined at the time of sale.
This prospectus will describe the general terms of the debt securities
and the general manner in which we will offer such securities. Each time we sell
debt securities, we will provide a prospectus supplement that will contain the
specific terms of the securities offered. The prospectus supplement will also
describe the specific manner in which we will offer the securities.
The prospectus supplement may also add, update or change information
contained in this prospectus. You should read this prospectus, the prospectus
supplement and the additional information described under "Where You Can Find
More Information" carefully before you invest.
Neither the Securities and Exchange Commission nor any other regulatory
body has approved or disapproved of these securities or passed upon the accuracy
or adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
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The date of this Prospectus is , 2000
<PAGE>
TABLE OF CONTENTS
PROSPECTUS
WHERE YOU CAN FIND MORE INFORMATION............................................1
THE COMPANY....................................................................2
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES................................3
USE OF PROCEEDS................................................................4
DESCRIPTION OF DEBT SECURITIES.................................................4
DESCRIPTION OF CAPITAL STOCK..................................................21
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES..................................23
ERISA MATTERS.................................................................24
HOLDING COMPANY STRUCTURE.....................................................26
PLAN OF DISTRIBUTION..........................................................26
LEGAL MATTERS.................................................................29
EXPERTS.......................................................................29
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission. You may read and
copy any document we file at the SEC's public reference rooms at 450 Fifth
Street, N.W., Washington, D.C. 20549 and in New York, New York and Chicago,
Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. Our SEC filings are also available to the public from
the SEC's web site at http:/www.sec.gov. Our common stock is listed on the New
York Stock Exchange under the Symbol "LM". Information about us also is
available at the exchange.
This prospectus is part of a registration statement we filed with the
SEC. This prospectus omits some information contained in the registration
statement in accordance with SEC rules and regulations. You should review the
information and exhibits in the registration statement for further information
about us and our consolidated subsidiaries and the securities we are offering.
Statements in this prospectus concerning any document we filed as an exhibit to
the registration statement or that we otherwise filed with the SEC are not
intended to be comprehensive and are qualified by reference to these filings.
You should review the complete document to evaluate these statements.
The SEC allows us to incorporate by reference much of the information
we file with them. This means that we can disclose important information to you
by referring you to those documents that are considered part of this prospectus.
The information that we incorporate by reference in this prospectus is
considered to be part of this prospectus. Because we are incorporating by
reference future filings with the SEC, this prospectus is continually updated
and those future filings may modify or supersede some of the information
included or incorporated in this prospectus. This means that you must look at
all of the SEC filings that we incorporate by reference to determine if any of
the statements in this prospectus or in any document previously incorporated by
reference have been modified or superseded. We incorporate by reference the
documents listed below and any future filings we make with the SEC under Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until the date
our offering of securities has been completed or, if later, the date on which
our affiliates cease offering and selling these securities:
o Annual Report on Form 10-K for the year ended March 31, 1999.
o Quarterly Reports on Form 10-Q for the quarters ended June 30,
1999, September 30, 1999 and December 31, 1999.
o Current Reports on Form 8-K dated June 3, 1999 and March 10,
2000.
o The description of our common stock, par value $.10 per share,
contained in Amendment No. 4 to our Application for
Registration on Form 8-A, filed April 25, 1997.
<PAGE>
You may obtain a copy of these filings at no cost, by writing or
telephoning us at the following address:
Legg Mason, Inc.
100 Light Street
Baltimore, Maryland 21202
Attn: Corporate Secretary
(410) 539-0000
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different or additional information. We are not
making an offer of these securities in any state where the offer is not
permitted. The information contained in this prospectus is current only as of
the date hereof. Unless the context requires otherwise, the terms "Legg Mason,"
"we," "us," and "our" refers to Legg Mason, Inc. and its predecessors and
subsidiaries.
THE COMPANY
We are a holding company which, through our subsidiaries, engages in:
o investment management of institutional and individual accounts
and company-sponsored mutual funds;
o securities brokerage and trading;
o investment banking for corporations and municipalities;
o commercial mortgage banking; and
o other related financial services.
Our principal investment advisory subsidiaries are:
o Legg Mason Fund Adviser, Inc., which manages company-sponsored
mutual funds;
o Western Asset Management Company, which manages fixed income
assets for our institutional clients;
o Brandywine Asset Management, Inc., which primarily manages
equity portfolios for our institutional and high net worth
individual clients;
o Batterymarch Financial Management, Inc., which manages U.S.,
international and emerging markets equity portfolios for our
institutional clients;
o Bartlett & Co., which manages equity, balanced and fixed
income portfolios for our high-net worth individual and
institutional clients;
o Berkshire Asset Management, Inc., which manages equity and
fixed income portfolios for individual investors and family
groups;
o Legg Mason Capital Management, Inc., which manages equity and
fixed income portfolios for our individual and institutional
accounts;
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o Gray, Seifert & Co., Inc., which primarily manages equity
portfolios for our wealthy individual, family group, endowment
and foundation clients;
o Johnson Fry Holdings PLC, which manages retail funds in the
United Kingdom; and
o Western Asset Management Company Limited, which manages
international fixed income and currency assets for our
institutional clients.
All of these subsidiaries, except Berkshire Asset Management and Johnson Fry
Holdings PLC, also serve as investment advisors to company-sponsored mutual
funds and/or other company-structured investment products.
Our principal broker-dealer subsidiary is Legg Mason Wood Walker,
Incorporated, a full service regional broker-dealer and investment banking firm
operating primarily in the Eastern and Mid-South regions of the United States.
Another broker-dealer subsidiary, Howard, Weil, Labouisse, Friedrichs
Incorporated, engages primarily in energy-related investment banking and
institutional brokerage.
Our real estate finance subsidiary is Legg Mason Real Estate Services,
Inc., which is primarily engaged in commercial mortgage banking and commercial
loan servicing.
We were incorporated in Maryland in 1981 to serve as a holding company
for Legg Mason Wood Walker and our 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. Our subsequent growth has occurred through internal expansion as well
as through our acquisitions of investment management, broker-dealer and
commercial mortgage banking firms. Our principal offices are located at 100
Light Street, Baltimore, Maryland 21202. Our telephone number is (410) 539-
0000.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our consolidated ratio of earnings to
fixed charges for the periods indicated.
<TABLE>
<CAPTION>
Nine Months Ended Years Ended
December 31, March 31,
----------------- ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1999 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ----
2.5 2.4 2.5 2.8 2.8 2.1
</TABLE>
The ratio of earnings to fixed charges was computed by dividing the sum
of our earnings before income taxes plus fixed charges by fixed charges. Fixed
charges consist of all interest and
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one-third of our rent expense (considered representative of the interest
factor). As of the date hereof, we have no preferred stock outstanding.
USE OF PROCEEDS
Except as may be described otherwise in a prospectus supplement, we
intend to use the net proceeds from the sale of our debt securities for general
corporate purposes. This may include our continued expansion and
diversification, both by internal growth and by acquisition, primarily of our
securities brokerage and investment advisory businesses and repayment of our
outstanding indebtedness. Pending any of the foregoing applications, the net
proceeds may be invested temporarily in short-term, interest bearing securities.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and
provisions that are common to all debt securities that we may offer. Most of the
financial terms and other specific terms of any debt securities that we offer
will be described in a prospectus supplement to be attached to the front of this
prospectus. If the information in the prospectus supplement is different than
information contained in this prospectus, you should rely on information in the
prospectus supplement.
The debt securities will constitute either senior debt (the "Senior
Securities") or subordinated debt (the "Subordinated Securities") of Legg Mason.
Senior Securities will be issued under the Indenture dated as of February 9,
1996 between us and The Bank of New York, as Trustee (the "Senior Trustee") (as
it may be supplemented from time to time, the "Senior Indenture"). Subordinated
Securities will be issued under a separate Indenture to be entered into between
us and The Bank of New York (the "Subordinated Trustee") (as it may be
supplemented from time to time, the "Subordinated Indenture"). We will refer to
the Senior Indenture and the Subordinated Indenture together as the "Indentures"
and each as an "Indenture." The Indentures are subject to and governed by the
Trust Indenture Act of 1939, as amended (the "TIA"). We have filed forms of the
indentures together with our Form S-3, filed with the SEC on January 11, 1996,
and an execution copy of the Senior Indenture together with our Form 8-K, filed
with the SEC on February 12, 1996. The term "Trustee" refers to either the
Senior Trustee or the Subordinated Trustee, as the context requires.
Because this section is a summary, it does not describe every aspect of
the debt securities. This summary is subject to, and qualified in its entirety
by reference to, all the provisions of the Indentures, including definitions of
certain terms used in the Indentures. For example, in this section we use
capitalized words to signify terms that have been specifically defined in the
Indentures. Some of the definitions are repeated herein, but for the rest you
will need to read the Indenture. We also include references in parentheses to
certain sections of the Indentures or the TIA. Whenever we refer to particular
sections or defined terms of the Indentures in this prospectus or in the
prospectus supplement, such sections or defined terms are incorporated by
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reference herein or in the prospectus supplement. Unless otherwise noted, the
section numbers refer to both Indentures. Except as otherwise indicated, the
terms of the Indentures are identical. As used in the discussion under the
caption "Description of Debt Securities," the term "Company," "we" or "us" means
Legg Mason, Inc.
General
Neither Indenture limits the aggregate principal amount of debt
securities that we may issue from time to time. Each Indenture provides that we
may issue debt securities from time to time in one or more series. (Section 3.1)
Unless otherwise specified in the prospectus supplement, the Senior Securities,
when issued, will be our unsecured and unsubordinated obligations and will rank
equally and ratably with all of our other unsecured and unsubordinated
indebtedness. The Subordinated Securities, when issued, will be our unsecured
obligations, subordinated in right of payment to the prior payment in full of
all our Senior Debt (as defined in the Subordinated Indenture) under the
circumstances described herein and in the applicable prospectus supplement.
(Section 15.1 of the Subordinated Indenture) Substantially all of our assets are
owned by our subsidiaries. Therefore, our rights and the rights of our
creditors, including holders of debt securities, to participate in the
distribution of the assets of any of our subsidiaries upon its liquidation,
recapitalization or otherwise, will generally be subject to the prior claims of
such subsidiary's creditors. In addition, dividends, loans and advances to us
from certain of our subsidiaries, including Legg Mason Wood Walker, are
restricted by net capital requirements under the Exchange Act and under rules of
certain exchanges and various domestic and foreign regulatory bodies.
You should read the prospectus supplement for the following terms and
provisions with respect to the offered debt securities:
(1) the title of the debt securities;
(2) whether the debt securities are Senior Securities or
Subordinated Securities;
(3) the aggregate principal amount, and any limit on the aggregate
principal amount, of the debt securities;
(4) the form of such debt securities, including whether such debt
securities are to be issuable in permanent or temporary global
form or in the form of Book-Entry Securities, as Registered
Securities, Bearer Securities or both, any restrictions on the
offer, sale or delivery of Bearer Securities and the terms, if
any, upon which Bearer Securities may be exchanged for
Registered Securities and vice versa (if permitted by
applicable laws and regulations);
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(5) the circumstances under which any global securities or
Book-Entry Securities may be registered to a Person other than
the Depository for these global securities or Book-Entry
Securities or its nominee;
(6) the price or prices (expressed as a percentage of the
aggregate principal amount of the debt securities) at which
the debt securities will be issued;
(7) the date or dates on which the debt securities will mature;
(8) the rate or rates per annum at which the debt securities will
bear interest, if any, and the date from which any such
interest will accrue;
(9) the Interest Payment Dates on which any such interest on the
debt securities will be payable, the Regular Record Date for
any interest payable on any debt securities which are
registered securities on any Interest Payment Date and the
extent to which, or the manner in which, any interest payable
on a temporary global security on an Interest Payment Date
will be paid;
(10) any mandatory or optional sinking fund or analogous
provisions;
(11) each office or agency where, subject to the terms of the
applicable Indenture as described below under "Payment and
Paying Agents," the principal of and any premium and interest
on the debt securities will be payable;
(12) each office or agency where, subject to the terms of the
applicable Indenture as described below under "Form, Exchange,
Registration and Transfer," the debt securities may be
presented for registration of transfer or exchange;
(13) the date, if any, after which and the price or prices at which
the debt securities may, pursuant to any optional or mandatory
redemption provisions, be redeemed, in whole or in part, and
the other detailed terms and provisions of any such optional
or mandatory redemption provisions, which may include with
respect to a particular series or particular debt securities
within a series, a redemption option of Holders upon certain
conditions, as defined in the applicable Indenture;
(14) the denominations in which any debt securities which are
Registered Securities will be issuable, if other than
denominations of $1,000 and any integral multiple thereof, and
the denomination or denominations in which any debt securities
which are Bearer Securities will be issuable, if other than
the denomination of $5,000;
(15) the currency or currency units of payment of the principal of
(and premium, if any) and interest on the debt securities;
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(16) any index or formula used to determine the amount of payments
of the principal of (and premium, if any) and interest on the
debt securities and the manner in which such amounts shall be
determined;
(17) the terms and conditions, if any, pursuant to which such debt
securities are convertible or exchangeable into other
securities, including our debt securities or common stock or
securities of another company;
(18) the terms pursuant to which such debt securities are subject
to defeasance; and
(19) any other terms of such debt securities.
Any prospectus supplement will also describe any special provisions for the
payment of additional amounts with respect to the debt securities.
We may issue debt securities as Original Issue Discount Securities. An
Original Issue Discount Security is a debt security, including any Zero-Coupon
Security, which is issued at a price lower than the amount payable upon the
Stated Maturity of the debt security and which provides that upon redemption or
acceleration of the maturity, an amount less than the amount payable upon the
Stated Maturity, determined in accordance with the terms of the debt security,
shall become due and payable. (Sections 3.1 and 5.2) We will describe certain
special United States federal income tax considerations applicable to debt
securities sold at an original issue discount in any prospectus supplement
relating to these debt securities. In addition, we will describe certain special
United States federal income tax or other considerations applicable to any debt
securities which are denominated in a currency or currency unit other than
United States dollars in any prospectus supplement relating to these debt
securities.
Under the Indentures, we will have the ability to issue debt securities
with terms different from those of debt securities previously issued. In
addition, we will have the ability, without the consent of the holders, to
reopen a previous issue of a series of debt securities and issue additional debt
securities of this series (unless a reopening was restricted when this series
was created), in an aggregate principal amount determined by us. (Section 3.1)
Form, Exchange, Registration and Transfer
Form
We may issue debt securities of a series in definitive form
o solely as Registered Securities;
o solely as Bearer Securities; or
o as both Registered Securities and Bearer Securities. (Section
3.1)
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Unless otherwise indicated in the prospectus supplement, we will attach
interest coupons to all Bearer Securities. (Section 2.1) The Indentures also
provide that we may issue debt securities of a series in temporary or permanent
global form and as Book-Entry Securities that will be deposited with, or on
behalf of, The Depository Trust Company (the "Depository") or another depository
named by us and identified in a prospectus supplement with respect to such
series. See "Global and Book-Entry Debt Securities." Each Bearer Security, and
any coupon attached thereto, other than a temporary global Bearer Security will
bear the following legend: "Any United States person who holds this obligation
will be subject to limitations under the United States income tax laws,
including the limitations provided in Sections 165(j) and 1287(a) of the United
States Internal Revenue Code."
In connection with its original issuance, we may not mail or otherwise
deliver a Bearer Security (including a debt security exchangeable for a Bearer
Security or a debt security in global form that is either a Bearer Security or
exchangeable for Bearer Securities) to any location in the United States or to
any United States person (as defined under "Limitations on Issuance of Bearer
Securities"). Also, we may deliver a Bearer Security in connection with its
original issuance only if the Person entitled to receive such Bearer Security
furnishes written certification of the beneficial ownership of the Bearer
Security as required by Treasury Regulation Section 1.163-5(c)(2)(i)(D)(3) (or
any comparable successor provisions). If you hold a Bearer Security in permanent
global form, you must give certification of the beneficial owner's interest in
such Bearer Security at the time such debt security is originally issued. See
"Global and Book-Entry Debt Securities" and "Limitations on Issuance of Bearer
Securities."
Exchange
You may exchange Registered Securities of any series for other
Registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor. In addition, if debt securities of
any series are issuable as both Registered Securities and Bearer Securities, you
as holder have the option to exchange Bearer Securities of such series into
Registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor.
If you surrender Bearer Securities in exchange for Registered
Securities before the relevant date for payment of interest on such Bearer
Securities, you must do so without the coupon relating to that date for payment
of interest. Interest accrued as of that date will not be paid on the Registered
Security but only to the holder of the coupon when due.
You may not register a Book-Entry Security for transfer or exchange
unless
o the Depository or a nominee of the Depository notifies us that
it is unwilling or unable to continue as Depository;
o the Depository ceases to be qualified as required by the
applicable Indenture;
o we instruct the Trustee otherwise;
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o there exists an Event of Default or an event which after
notice or lapse of time would be an Event of Default with
respect to the debt securities evidenced by such Book-Entry
Securities; or
o there exists such other circumstances if any, as may be
specified in the prospectus supplement.
You may present debt securities for exchange as provided above. You may
present or surrender Registered Securities for registration of transfer or for
exchange (with the form of transfer endorsed thereon duly executed) at the
office of the Security Registrar or at the office of any transfer agent
designated by us for such purpose with respect to any series of debt securities
and referred to in the prospectus supplement, without service charge and upon
payment of any taxes and other governmental charges as described in the
applicable Indenture. Any transfer or exchange will be effected after the
Security Registrar or a transfer agent, as the case may be, has verified the
documents of title and identity of the person making the request.
We may at any time rescind the designation of any transfer agent
initially made by us and referred to in the prospectus supplement or approve a
change in its location. We will be required, however, to maintain a transfer
agent in each Place of Payment for any series of debt securities issuable solely
as Registered Securities. For any series issuable as Bearer Securities, we will
be required to maintain a transfer agent in a Place of Payment for such series
located outside the United States. We may at any time designate additional
transfer agents with respect to any series of debt securities. (Section 10.2)
If the debt securities are redeemable and we redeem less than all of
the debt securities of a particular series, we may block the transfer or
exchange of debt securities during the period beginning 15 days before the day
we mail the notice of redemption or publish such notice (in the case of Bearer
Securities) and ending on the day of that mailing or publication, as the case
may be, in order to freeze the list of holders to prepare the mailing. We may
also refuse to register transfers or exchanges of debt securities selected for
redemption, except that we will continue to permit transfers and exchanges of
the unredeemed portion of any debt security being partially redeemed and except
that we will continue to exchange Bearer Securities for Registered Securities if
such Bearer Securities are simultaneously surrendered for redemption. (Section
7.5)
Payment and Paying Agents
If Bearer Securities are issued, unless otherwise indicated in the
prospectus supplement, we will maintain an office or agency outside the United
States for the payments of all amounts due on the Bearer Securities. Unless
otherwise indicated in the prospectus supplement, payment of interest on any
Bearer Securities on any Interest Payment Date will be made only against
surrender to the Paying Agent of the coupon for such Interest Payment Date.
(Section 10.1) No payment with respect to any Bearer Security will be made at
any office or agency of ours in the United States or by check mailed to any
address in the United States or by transfer to an account maintained with a bank
located in the United States. Notwithstanding the foregoing, payments of
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the principal of, premium and interest, if any, on Bearer Securities payable in
U.S. dollars will be made at the office of our Paying Agent in The City of New
York, if (but only if) payment of the full amount thereof in U.S. dollars at all
offices or agencies outside the United States is illegal or effectively
precluded by exchange controls or other similar restrictions. (Section 10.2)
Unless otherwise indicated in the prospectus supplement, we will pay
principal, interest, and premium, if any, on Registered Securities to you at the
office of the Paying Agent as we may designate from time to time, except that we
have the option to pay by wire transfer of immediately available funds or check
mailed to the address of the entitled person in the Security Register. Unless
otherwise indicated in the prospectus supplement, payment of any installment of
interest on Registered Securities will be made to the Holders of Record on the
Record Date. (Section 3.7)
Unless otherwise indicated in the prospectus supplement, for payment
with respect to Registered Securities, we will designate the Corporate Trust
Office of our Trustee in The City of New York as our Paying Agent. For Payment
with respect to debt securities which are issuable solely as Bearer Securities,
or both as Registered Securities and Bearer Securities, we will maintain a
Paying Agent outside of the United States. (Section 10.2) The prospectus
supplement will name any Paying Agents outside the United States and any other
Paying Agent in the United States initially designated by us for the debt
securities. We may at any time designate additional Paying Agents or rescind the
designation of any Paying Agent or approve a change in the location of any
office or agency, except that if debt securities of a series are issuable solely
as Registered Securities, we will be required to maintain a Paying Agent in each
Place of Payment for such series and, if debt securities of a series are
issuable as Bearer Securities, we will be required to maintain (1) a Paying
Agent in The City of New York for payments with respect to any Registered
Securities of the series (and for payments with respect to Bearer Securities of
the series in the circumstances described above, but not otherwise), and (2) a
Paying Agent in a Place of Payment located outside the United States where debt
securities of such series and any coupons relating to these debt securities may
be presented and surrendered for payment. If the debt securities are listed on
The Stock Exchange of the United Kingdom and the Republic of Ireland or the
Luxembourg Stock Exchange or any other stock exchange located outside the United
States, we will maintain a Paying Agent in any city located outside the United
States required by such stock exchange. (Section 10.2)
We will make payments of any amounts due on Book-Entry Securities
registered in the name of the Depository or its nominee to the Depository or its
nominee, as the case may be, as the registered owner of the global security
representing such Book-Entry Securities. We expect that the Depository, upon
receipt of any amounts due on any debt securities, will credit immediately the
accounts of the participants in amounts proportionate to their respective
beneficial interests. Neither we, the Trustee, any Paying Agent nor the
Securities Registrar for such debt securities will have any responsibility or
liability for any aspects of the records relating to, or payments made on
account of, such beneficial ownership interests in the Book-Entry
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Securities, or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
All moneys we pay to a Paying Agent for the payment of any amounts due
on any debt securities which remain unclaimed at the end of two years after the
amount has become due will be repaid to us and the Holder of such debt security
or any coupon will thereafter be an unsecured general creditor and look only to
us for payment of any such amount. (Section 10.3)
Global and Book-Entry Debt Securities
Debt securities of a series may be issued in whole or in part in global
form that will be deposited with, or on behalf of, a depository identified in
the prospectus supplement. If so specified in the prospectus supplement, debt
securities of a series which are issuable as Bearer Securities will initially be
represented by one or more temporary or permanent global debt securities,
without interest coupons, to be deposited with a common depository in London for
the benefit of the Euroclear System ("Euroclear") and Cedel Bank, Societe
Anonyme ("Cedel") and credited to the accounts of the beneficial owners of such
debt securities. (Section 3.4) Unless otherwise indicated by the prospectus
supplement, on or after 40 days following its issuance, each temporary global
debt security will be exchangeable for definitive Bearer Securities, definitive
Registered Securities, all or a portion of a permanent global debt security, or
any combination thereof, as specified in the prospectus supplement, only upon
written certification in the form and to the effect described under "Form,
Exchange, Registration and Transfer." No Bearer Security (including a debt
security in permanent global form) delivered in exchange for a portion of a
temporary or permanent global debt security shall be mailed or otherwise
delivered to any location in the United States in connection with such exchange.
(Section 3.5)
An investor should be aware that when debt securities are issued in the
form of global debt securities:
o the investor cannot get debt securities registered in his or
her own name;
o the investor cannot receive physical certificates for his or
her interest in the debt securities;
o the investor must look to his or her own bank or brokerage
firm for payments on the debt securities and protection of his
or her legal rights relating to the debt securities;
o the investor may not be able to sell interests in the debt
securities to some insurance companies and other institutions
that are required by law to hold the physical certificates of
debt securities that they own;
o the Depository's policies will govern payments, transfers,
exchange and other matters relating to the investor's interest
in the global debt security. We and the Trustee have no
responsibility for any aspect of the Depository's actions or
for its records of ownership interests in the global security.
We and the Trustee also do not supervise the Depository in any
way; and
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o the Depository will usually require that interests in a global
debt security be purchased or sold within its system using
same-day funds.
If debt securities to be sold in the United States are designated by us
in a prospectus supplement as Book-Entry Securities, a global debt security
representing the Book-Entry Securities will be deposited in the name of Cede &
Co., as nominee for the Depository representing the securities to be sold in the
United States. Upon such deposit of the Book-Entry Securities, the Depository
shall credit an account maintained or designated by an institution to be named
by us or any purchaser of the debt securities represented by the Book-Entry
Securities with an aggregate amount of debt securities equal to the total number
of debt securities that have been so purchased. The specific terms of any
depository arrangement with respect to any portion of a series of debt
securities to be represented by one or more global securities will be described
in the prospectus supplement. Beneficial interests in such debt securities will
only be evidenced by, and transfers thereof will only be effected through,
records maintained by the Depository and the institutions that are Depository
participants.
Subordination of Subordinated Securities
Unless otherwise indicated in the prospectus supplement, the following
provisions will apply to the Subordinated Securities.
Upon any distribution of our assets in the event of any dissolution,
winding up, liquidation or reorganization, the payment of any amounts due on the
Subordinated Securities is to be subordinated to the extent provided in the
Subordinated Indenture in right of payment to the prior payment in full of all
Senior Debt (Section 15.1 of the Subordinated Indenture). To that end, the
holders of our Senior Debt shall be entitled to receive, for application to the
payment of such debt, any payment or distribution of any kind or character,
whether in cash, property or securities, which may be payable or deliverable in
respect of the Subordinated Securities. (Section 15.2 of the Subordinated
Indenture)
By reason of such subordination, in the event of liquidation or
insolvency, our creditors may recover less, ratably, than holders of Senior Debt
and may recover more, ratably, than the Holders of the Subordinated Securities.
In the event of the acceleration of the maturity of any Subordinated
Securities, we must first pay the Holders of all Senior Debt outstanding at the
time of such acceleration payment in full of all amounts due before we pay the
Holders of the Subordinated Securities any payment upon the principal of (and
premium, if any) or interest on, the Subordinated Securities. (Section 15.3 of
the Subordinated Indenture)
We may not make any payments on account of any amounts due in respect
of the Subordinated Securities if there shall have occurred and be continuing a
default in any payment with respect to Senior Debt, or an event of default with
respect to any Senior Debt resulting in
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the acceleration of the maturity of such Senior Debt, or if any judicial
proceeding shall be pending with respect to any such default. (Section 15.4 of
the Subordinated Indenture) For purposes of the subordination provisions, the
payment, issuance and delivery of cash, property or securities (other than our
stock and certain subordinated securities) upon conversion of a Subordinated
Security will be deemed to constitute payment on account of the principal of
such Subordinated Debt Security. (Section 15.14 of the Subordinated Indenture)
The Subordinated Indenture does not limit or prohibit us from incurring
additional Senior Debt, which may include indebtedness that is senior to the
Subordinated Securities, but subordinate to our other obligations. The Senior
Securities constitute Senior Debt under the Subordinated Indenture.
"Senior Debt" is defined to include the principal of (and premium, if
any) and interest on all of our indebtedness (including indebtedness of others
guaranteed by us), including our 6.50% Senior Notes due 2006, other than any
obligations specifically designated as being subordinate in right of payment to
Senior Debt, whether outstanding on the date of the Subordinated Indenture or
thereafter created, incurred or assumed, which is for money borrowed or
evidenced by bonds, debentures, notes or similar instruments and amendments,
renewals, extensions, modifications and refundings of any such indebtedness or
obligation. (Section 1.1 of the Subordinated Indenture)
The prospectus supplement may further describe the provisions, if any,
applicable to the subordination of the Subordinated Securities of a particular
series.
Conversion or Exchange Rights
The terms on which debt securities of any series are convertible into
or exchangeable for other securities, including our debt securities or common
stock or securities of another company will be set forth in the prospectus
supplement relating to such securities. Such terms will include provisions as to
whether conversion or exchange is mandatory, at the option of the Holder or at
our option, and may include provisions pursuant to which the number of shares or
amount of the security to be received by the Holders of debt securities would be
subject to adjustment. (Section 3.1 and Article XIV)
Certain Covenants
Negative Pledge. The Senior Debt Indenture provides that we and any
successor corporation will not, and will not permit any Subsidiary (as defined
in such Indenture) to create, assume, incur or guarantee any indebtedness for
borrowed money secured by a pledge, lien or other encumbrance (except for
certain liens specifically permitted by such Indenture) on the Voting Securities
(as defined in such Indenture) of Legg Mason Wood Walker without making
effective provision whereby the debt securities issued under such Indenture will
be secured equally and ratably with such secured indebtedness. (Senior Debt
Indenture, Section 10.7)
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Unless otherwise specified in any prospectus supplement, the Indentures
contain no other restrictive covenants or other provisions providing for a put
or increased interest or otherwise, including any that would afford holders of
the debt securities protection in the event of a highly leveraged transaction
involving us or any of our affiliates, or any covenants relating to total
indebtedness, interest coverage, stock repurchases, recapitalizations, dividends
and distributions to shareholders, current ratios and acquisitions and
divestitures.
Consolidation, Merger or Sale of Assets. We, without the consent of the
Holders of any of the Outstanding debt securities under the applicable
Indenture, may consolidate with or merge with or into, or sell, lease, transfer
or otherwise dispose of our assets substantially as an entirety to, any Person
which is a corporation, partnership or trust organized and validly existing
under the laws of any domestic jurisdiction, or may permit any such Person to
consolidate with or merge with or into us or sell, lease, transfer or otherwise
dispose of its assets substantially as an entirety to us, provided that, among
other things,
o any successor Person assumes our obligations on the debt
securities and under the applicable Indenture,
o after giving effect to the transaction no Event of Default,
and no event which, after notice or lapse of time, would
become an Event of Default, shall have occurred and be
continuing, and
o certain other conditions are met. (Section 8.1)
Events of Default
You will have special rights if an Event of Default occurs in respect
of the debt securities of your series and is not cured, as described later in
this subsection. (Section 5.1)
What Is An Event of Default? The term "Event of Default" in respect of
the debt securities of your series means any of the following:
o we do not pay the principal of a debt security of your series
on its due date;
o we do not pay interest on a debt security of your series
within 30 days of its due date;
o we remain in breach of a covenant in respect of debt
securities of your series for 60 days after we receive a
written notice of default stating we are in breach. The notice
must be sent by either the Trustee or holders of 25% of the
principal amount of debt securities of your series.
o we file for bankruptcy or certain other events in bankruptcy,
insolvency or reorganization occur;
o we do not pay an amount due at maturity on indebtedness of
over $10 million for 30 days after we receive notice of such
default. The notice must be sent by either the Trustee or
holders of 25% of the aggregate principal amount of all
outstanding debt securities under the relevant Indenture
(treated as one class);
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o we default on indebtedness and, as a result, over $10 million
of our indebtedness is accelerated and not cured within 30
days after we receive a written notice of default. The notice
must be sent by either the Trustee or holders of 25% of the
aggregate principal amount of all outstanding debt securities
under the relevant Indenture (treated as one class); and
o any other Event of Default in respect of debt securities of
your series described in the prospectus supplement occurs.
(Section 5.1)
Remedies If An Event of Default Occurs. If an Event of Default has
occurred and has not been cured, the Trustee or the holders of 25% in principal
amount of the debt securities of the affected series may declare the entire
principal amount of all the debt securities of that series to be due and
immediately payable. This is called a declaration of acceleration of maturity. A
declaration of acceleration of maturity may be canceled by the Holders of at
least a majority in principal amount of the debt securities of the affected
series. (Section 5.2)
Except in cases of default, where the Trustee has some special duties,
the Trustee is not required to take any action under the Indenture at the
request of any Holders unless the Holders offer the Trustee reasonable
protection from expenses and liability (called an "indemnity"). (Section 5.7 and
TIA Section 315) If reasonable indemnity is provided, the Holders of a majority
in principal amount of the Outstanding debt securities of the relevant series
may direct the time, method and place of conducting any lawsuit or other formal
legal action seeking any remedy available to the Trustee. The Trustee may refuse
to follow those directions in certain circumstances. (Section 5.12) No delay or
omission in exercising any right or remedy will be treated as a waiver of such
right, remedy or Event of Default. (Section 5.11)
Before you are allowed to bypass the Trustee and bring your own lawsuit
or other formal legal action or take other steps to enforce your rights or
protect your interests relating to the debt securities, the following must
occur:
o you must give the Trustee written notice that an Event of
Default has occurred and remains uncured;
o the Holders of 25% in principal amount of all outstanding debt
securities of the relevant series must make a written request
that the Trustee take action because of the default and must
offer the Trustee indemnity satisfactory to the Trustee
against the cost and other liabilities of taking that action;
o the Trustee must not have taken action for 60 days after
receipt of the above notice and offer of indemnity;
o the holders of a majority in principal amount of the debt
securities must not have given the Trustee a direction
inconsistent with the above notice. (Section 5.12)
However, you are entitled at any time to bring a lawsuit for the payment of
money due on your debt securities on or after the due date. (Section 5.8)
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Holders of a majority in principal amount of the debt securities of the
affected series may waive any past defaults other than (1) the payment of
principal, any premium, interest or (2) in respect of a covenant that cannot be
modified or amended without the consent of each Holder. (Section 5.13)
If your securities are held for you by a bank or brokerage firm, you should
consult such bank or brokerage firm for information on how to give notice or
direction to or make a request of the trustee and to make or cancel a
declaration of acceleration.
Each Indenture contains a covenant that we will file annually with the
Trustee a certificate of no default or a certificate specifying any default that
exists. (Section 10.8 of the Senior Indenture; Section 10.7 of the Subordinated
Indenture)
Defeasance and Discharge
If so specified with respect to any particular series of debt
securities, we may discharge our indebtedness and our obligations or certain of
our obligations under the applicable Indenture with respect to such series by
depositing funds or obligations issued or guaranteed by the United States of
America with the Trustee. (Section 4.3)
If so specified with respect to the debt securities of any series, we
will be discharged from our obligations in respect of the debt securities of
such series (except for certain obligations relating to temporary debt
securities and exchange of debt securities, registration of transfer or exchange
of debt securities of such series, replacement of stolen, lost or mutilated debt
securities of such series, maintenance of paying agencies to hold monies for
payment in trust and payment of additional amounts, if any, required in
consequence of United States withholding taxes imposed on payments to non-United
States persons) upon the deposit in trust to your benefit and the benefit of all
other holders of debt securities of a combination of money and U.S. Government
Obligations that will generate enough cash to make interest, principal and any
other payments on the debt securities on their various due dates. (Section 4.6)
Such a trust may only be established if, among other things:
o we have delivered to the applicable Trustee an opinion of
counsel confirming that under current federal income tax law
we may make the above deposit without causing you to be taxed
on the debt securities any differently than if we did not make
the deposit and just repaid the debt securities ourselves;
o the debt securities of such series, if then listed on any
domestic or foreign securities exchange, will not be delisted
as a result of such deposit, defeasance and discharge; and
o in the case of the Subordinated Securities, no default with
respect to any Senior Debt has occurred and is continuing or
has resulted in the acceleration of such Senior Debt.
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In the event of any such defeasance and discharge of debt securities of
such series, holders of debt securities of such series would be able to look
only to such trust fund for payment of principal of and any premium and any
interest on their debt securities until Maturity. (Section 4.6)
Defeasance of Certain Obligations
If so specified with respect to the debt securities of any series, we
may omit to comply with any covenants applicable to such debt securities which
are subject to covenant defeasance and any such omission shall not be an Event
of Default with respect to the debt securities of such series, upon the
irrevocable deposit in trust to your benefit and the benefit of all other
Holders of debt securities of a combination of money and U.S. Government
Obligations that will generate enough cash to make interest, principal and any
other payments on the debt securities on their various due dates. (Sections 4.5
and 4.6) Our obligations under the applicable Indenture and the debt securities
of such series other than with respect to such covenants shall remain in full
force and effect. (Section 4.5) Such a trust may be established only if, among
other things,
o under current federal income tax law we may make the above
deposit without causing you to be taxed on the debt securities
any differently than if we did not make the deposit and just
repaid the debt securities ourselves; and
o the debt securities of such series, if then listed on any
domestic or foreign securities exchange, will not be delisted
as a result of such deposit, defeasance and discharge.
(Section 4.6)
In the event we exercise our option to omit compliance with the
covenants described under "Covenants" above with respect to the debt securities
of any series or in any prospectus supplement with respect to the debt
securities of such series and such debt securities are declared due and payable
because of the occurrence of any Event of Default and the amount of money and
U.S. Government Obligations on deposit with the Trustee may not be sufficient to
pay amounts due on the debt securities of such series at the time of the
acceleration resulting from such Default, then we will in any event remain
liable for such payments as provided in the Indentures.
The Trustee must deliver or pay to us from time to time, upon our
request, any amounts held by it with respect to any debt securities which, in
the opinion of a nationally recognized firm of independent public accountants,
are in excess of the amount which would then be required to be deposited to
effect a satisfaction, discharge or defeasance, as the case may be, with respect
to such debt securities.
Modification and Waiver
There are three types of changes we can make to the indentures and the
debt securities.
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Changes Not Requiring Approval
First, there are changes that we and the Trustee may make without the
consent of the Holders. These include changes to:
o secure any debt securities in a manner not prohibited under
the Indentures;
o evidence the assumption by a successor corporation of our
obligations;
o add covenants for the protection of the holders of debt
securities;
o cure any ambiguity or correct any inconsistency in an
Indenture;
o establish the forms or terms of debt securities of any series;
and
o evidence the acceptance of appointment by a successor trustee.
(Section 9.1)
Changes Requiring Each Holder's Approval
Second, there are changes that we and the Trustee cannot make without
the approval of each holder of debt securities affected by the change. We
cannot:
o change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any such debt
security;
o reduce the principal amount of (and premium, if any) or
interest on, any such debt security;
o change any obligation of us to pay additional amounts;
o reduce the amount of principal of an Original Issue Discount
Security or any other debt security payable upon acceleration
of the maturity thereof;
o change the coin or currency in which any debt security or any
premium or interest thereon is payable;
o impair the right to institute suit for the enforcement of any
payment on or with respect to any debt security;
o adversely change the right to convert or exchange, including
decreasing the conversion rate or increasing the conversion
price of, such debt security (if applicable);
o in the case of the Subordinated Indenture, modify the
subordination provisions in a manner adverse to the holders of
the Subordinated Securities;
o reduce the percentage in principal amount of Outstanding debt
securities of any series, the consent of whose holders is
required for modification or amendment of the applicable
Indenture or for waiver of compliance with certain provisions
of the applicable Indenture or for waiver of certain defaults;
o reduce the requirements contained in the applicable Indenture
for quorum or voting,
o change any obligations of us to maintain an office or agency
in the places and for the purposes required by the Indentures;
or
o modify any of the above provisions. (Section 9.2)
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Changes Requiring Majority Approval
Unless otherwise specified in the prospectus supplement for such
series, any other change to the Indentures and the debt securities of such
series may be made by us and the Trustee under the applicable Indenture with the
consent of the holders of not less than a majority in principal amount of the
Outstanding debt securities of those series affected by such change (voting as
one class).
Unless otherwise specified in the prospectus supplement for such
series, the same majority approval would be required for us to obtain a waiver
of any of our covenants in each Indenture and, if applicable, the debt
securities of such series. If the holders agree to waive a covenant, we will not
have to comply with it. Unless otherwise specified in the applicable prospectus
supplement for such series, the same majority approval would also be required
for us to obtain a waiver of any past default under the applicable Indenture,
except a default
o in the payment of principal of (and premium, if any) or any
interest on any debt security, and
o in respect of a covenant or provision of the applicable
Indenture and, if applicable, such debt securities, which
cannot be modified or amended without the consent of the
holder of each Outstanding debt security. (Section 5.13)
Notices
Except as otherwise provided in the applicable Indenture, we will give
notices to Holders of Bearer Securities by publication at least twice in a daily
newspaper in The City of New York and in such other city or cities as may be
specified in such debt securities. We will give notices to Holders of Registered
Securities by mail to the address of such Holders as they appear in the Security
Register. (Section 1.6)
Title
Title to any temporary global debt security, any Bearer Securities
(including Bearer Securities in permanent global form) and any coupons relating
thereto will pass by delivery. We, the Trustee and any of our or the Trustee's
agents may treat the bearer of any Bearer Security, the bearer of any coupon and
the registered owner of any Registered Security as the absolute owner thereof
(whether or not such debt security or coupon shall be overdue and
notwithstanding any notice to the contrary) for the purpose of making payment
and for all other purposes. (Section 3.8)
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Replacement of Debt Securities and Coupons
We will replace any mutilated debt security or a debt security with a
mutilated coupon attached thereto at the expense of the Holder upon surrender of
such debt security to the Trustee. We will replace debt securities or coupons
that became destroyed, stolen or lost at the expense of the Holder upon delivery
of the Trustee of the debt security and coupons or evidence of the destruction,
loss or theft thereof satisfactory to us and the Trustee. We will replace any
coupon which becomes destroyed, stolen or lost by issuance of a new debt
security in exchange for the debt security to which such coupon appertains. In
the case of a destroyed, lost or stolen debt security or coupon, we may require
an indemnity satisfactory to the Trustee and us at the expense of the Holder of
such debt security or coupon before a replacement debt security will be issued.
(Section 3.6)
Governing Law
The Indentures, the debt securities and the coupons will be governed
by, and construed in accordance with, the laws of the State of New York without
regard to principles of conflicts of laws. (Section 1.13)
Regarding the Trustee
The Indentures contain limitations on the right of a Trustee, as our
creditor, to obtain payment of claims in certain cases or to realize on certain
property received in respect of any such claim as security or otherwise.
(Section 6.11) In addition, a Trustee may be deemed to have a conflicting
interest and may be required to resign as Trustee if at the time of a default
under one of the Indentures it is our creditor. (Section 6.9) We and our
subsidiaries may from time to time maintain deposit accounts and credit
facilities and conduct our banking transactions with a Trustee in the ordinary
course of business. (Section 6.4)
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DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock 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 February 28, 2000, we had 57,746,463 shares of
common stock and no shares of preferred stock outstanding. Prior to the issuance
of Convertible Debt Securities under the Indentures, we may need to increase our
authorized common stock, which would require the approval of our stockholders.
Common Stock
Holders of our common stock are entitled to:
o one vote per share on matters to be voted upon by the
stockholders;
o receive dividends out of funds legally available for
distribution when and if declared by our board of directors;
and
o share ratably in our assets legally available for
distribution to our stockholders in the event of our
liquidation, dissolution or winding up, after provisions for
distributions to the holders of any preferred stock.
We may not pay any dividend (other than in shares of our common stock)
or make any distributions of assets on shares of our common stock until
cumulative dividends on any preferred stock then outstanding have been paid.
Holders of our common stock have no preemptive, subscription,
redemption or conversion rights. The outstanding shares of our common stock are,
and the shares which may be issued upon conversion of the Convertible Debt
Securities will be, when issued, fully paid and nonassessable.
The holders of our common stock do not have cumulative voting rights.
This 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. Our 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 our common stock is First Union
National Bank, Charlotte, North Carolina.
Preferred Stock
Our Articles of Incorporation authorize our board of directors to issue
shares of preferred stock, par value $10.00 per share, and to fix the terms
(including voting rights, dividends,
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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 our board of directors.
Our board of directors has the authority, under our 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 our
assets. Our Articles of Incorporation require the affirmative vote of not less
than 70% of our then outstanding voting shares to approve any "business
combination" of us 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 our 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 us 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 our
consolidated assets.
However, if the Related Person pays a "fair price" to our 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 our Articles of Incorporation, the "fair price" must be at least
equal to the greater of
o the highest price paid or agreed to be paid by the Related
Person to purchase shares of our common stock during the
24-month period prior to the taking of such vote; or
o the highest market price of the common stock during the
24-month period prior to the taking of such vote; or
o the per share book value of our common stock at the end of the
calendar quarter immediately preceding the taking of such
vote.
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In addition, the "fair price" consideration to be received by our 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 our
common stock.
The special voting provisions are not applicable to a business
combination authorized by our board of directors by a vote which includes a
majority of our "Disinterested Directors". A Disinterested Director is defined
to include any member of our 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
our board of directors.
Our 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 was proposed by our board of
directors by a vote which includes a majority of the Disinterested Directors.
The business combination provisions under our Articles of Incorporation
could have the effect of delaying, deterring or preventing a change in control.
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 our classified board
of director provisions.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States federal tax laws and regulations,
o Bearer Securities (including debt securities that are
exchangeable for Bearer Securities and debt securities in
permanent global form that are either Bearer Securities or
exchangeable for Bearer Securities) may not be offered, sold,
resold or delivered in connection with their original issuance
in the United States or to United States persons (each as
defined below) except as otherwise permitted by Treasury
Regulation Section 1.163-5(c)(2)(i)(D) including offers and
sales to offices located outside the United States of United
States financial institutions (as defined in Treasury
Regulation Section 1.165-12(c)(1)(v)) which agree in writing
to comply with the requirements of Section 165(j)(3)(A), (B)
or (C) of the Code (as defined below) and the regulations
thereunder; and
o any underwriters, agents and dealers participating in the
offering of Bearer Securities must agree in writing that they
will not offer, sell or resell any Bearer Securities to
23
<PAGE>
persons within the United States or to United States persons
(except as described above) nor deliver Bearer Securities
within the United States.
In addition,
o any such underwriters, agents and dealers must have in effect,
in connection with the offer and sale of the Bearer
Securities, procedures reasonably designed to ensure that
their employees or agents who are directly engaged in selling
the debt securities are aware that Bearer Securities cannot be
offered or sold to a person who is within the United States or
is a United States person except as otherwise permitted by
Treasury Regulation Section 1.163-5(c)(2)(i)(D);
o the owner of the Bearer Security (or the financial institution
or clearing organization through which the owner holds the
obligation) must certify that the owner is not a United States
person; and
o Bearer Securities and any coupons attached thereto must bear
the following legend: "Any United States person who holds this
obligation will be subject to limitations under the United
States income tax laws, including the limitations provided in
Sections 165(j) and 1287(a) of the United States Internal
Revenue Code."
Purchasers of Bearer Securities may be affected by certain limitations under
United States tax laws.
As used herein, "United States person" means:
(1) an individual who is, for United States Federal income tax
purposes, a citizen or resident of the United States,
(2) a corporation, partnership or one of certain other entities
created or organized in or under the laws of the United States
or of any political subdivision thereof, or
(3) an estate or trust the income of which is subject to United
States Federal income taxation regardless of its source.
"United States" means the United States of America (including the States and the
District of Columbia), its territories and its possessions.
ERISA MATTERS
The Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and the Internal Revenue Code of 1986, as amended (the "Code"),
impose certain restrictions on
(1) "employee benefit plans" (as defined in Section 3(3) of ERISA),
(2) "plans" described in Section 4975(e)(1) of the Code, including individual
retirement accounts or Keogh plans,
24
<PAGE>
(3) entities whose underlying assets include plan assets by reason of a plan's
investment in such entities (each of (a), (b) and (c) a "Plan"), and
(4) persons who have certain specified relationships to Plans ("parties in
interest" under ERISA and "disqualified persons" under the Code).
In addition to the foregoing exemptions, certain insurance company
general accounts, which support policies issued by an insurer on or after
December 31, 1998 to or for the benefit of Plans, are allowed to purchase debt
securities in reliance upon regulations promulgated by the Department of Labor
pursuant Section 1460 of the Small Business Job Protection Act of 1996. If such
policies satisfy the Section 1460 regulations, then the insurer will be deemed
in compliance with ERISA's fiduciary requirements and prohibited transaction
rules with respect to those assets of the insurer's general account which
supports such policies.
ERISA also imposes certain duties on persons who are fiduciaries of
Plans subject to ERISA, and both ERISA and the Code prohibit certain
transactions between a Plan and parties in interest or disqualified persons.
Because of our activities or the activities of our affiliates, we may
be deemed to be a party in interest or disqualified person with respect to a
number of Plans (e.g., those to which we provide brokerage, investment or other
financial services). If the debt securities are acquired and held by a Plan with
respect to which we are a party in interest or disqualified person, such
acquisition and holding could be deemed to be a direct or indirect prohibited
transaction, which could result in the imposition of taxes or penalties on the
parties to the prohibited transaction.
Such transactions may, however, be exempt from the otherwise applicable
taxes and penalties by reason of one or more statutory or administrative
exemptions such as those described below. Such administrative exemptions may
include
o Prohibited Transaction Class Exemption ("PTE") 95-60, 60 FR
35925, July 12, 1995, which exempts certain transactions
involving insurance company general accounts;
o PTE 90-1, 55 FR 2891, January 29, 1990, which exempts certain
transactions involving insurance company pooled separate
accounts;
o PTE 91-38, 56 FR 31966, June 12, 1991, which exempts certain
transactions involving bank collective investment funds; and
o PTE 84-14, 49 FR 9494, March 13, 1984, which exempts certain
transactions entered into on behalf of a Plan by a qualified
professional asset manager.
If the conditions of one or more of these exemptions (or some other applicable
exemption) are met, the acquisition and holding of the debt securities by or on
behalf of a Plan should be exempt from certain of the prohibited transaction
provisions of ERISA and the Code. It should be noted, however, that even if such
conditions are met, the scope of relief provided by such exemptions may not
necessarily cover all acts that might be construed as prohibited transactions
under ERISA and the Code.
25
<PAGE>
Further, each Plan fiduciary should take into account, among other
considerations,
o whether the fiduciary has the authority to make the
investment;
o whether the investment constitutes a direct or indirect
transaction with a party in interest or disqualified person;
o the composition of the Plan's portfolio with respect to
diversification by type of asset;
o the Plan's funding objectives; the tax effects of the
investment; and
o whether under the general fiduciary standards of investment
procedure and diversification an investment in the debt
securities is appropriate for the Plan, taking into account
the overall investment policy of the Plan, the composition of
the Plan's investment portfolio and all other appropriate
factors.
Prior to making an investment in the debt securities, a Plan investor
must determine whether we are a party in interest or disqualified person with
respect to such Plan and, if so, whether such transaction is subject to one or
more statutory or administrative exemptions, including those described above,
and whether the investment is otherwise a permissible and appropriate investment
for the Plan. Prospective investors should consult with their legal and other
advisors concerning the impact of ERISA and the Code and the potential
consequences of such investment with respect to their specific circumstances.
HOLDING COMPANY STRUCTURE
We are a holding company and our assets consist primarily of
investments in our subsidiaries. A substantial portion of our consolidated
liabilities have been incurred by our subsidiaries. Our rights and the rights of
our creditors, including Holders of debt securities, to participate in the
distribution of assets of any subsidiary upon liquidation or reorganization of
this subsidiary or otherwise will be subject to prior claims of such
subsidiary's creditors, including trade creditors, except to the extent that we
may be a creditor with recognized claims against the subsidiary. Accordingly,
the Holders of debt securities may be deemed to be effectively subordinated to
such claims. As of December 31, 1999, our subsidiaries had a total of
approximately $3.8 billion of outstanding liabilities, including indebtedness.
Our ability to service our indebtedness and other obligations,
including the debt securities, and our ability to pay dividends on our common
stock is dependent primarily upon the earnings and cash flow of our subsidiaries
and the distribution or other payment to us of such earnings and cash flow.
PLAN OF DISTRIBUTION
We may sell debt securities being offered by this prospectus in three
ways: (1) to or through underwriters or dealers, which may include Legg Mason
Wood Walker, (2) directly to other purchasers, or (3) through agents. The
prospectus supplement with respect to the debt securities will set forth the
terms of the offering of the debt securities, including
26
<PAGE>
o the name or names of any underwriters, dealers or agents;
o the price of the offered debt securities;
o the net proceeds to us from such sale;
o any underwriting discounts or other items constituting
underwriters' compensation;
o any discounts or concessions allowed or reallowed or paid to
dealers; and
o any securities exchanges on which the debt securities may be
listed.
If we use underwriters in the sale of the debt securities, we will
enter into an underwriting agreement with those underwriters when we and they
determine the offering price of the debt securities. The debt securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public price or at varying prices determined at the time of sale. We will
name the underwriter or underwriters with respect to a particular underwritten
offering of debt securities in the prospectus supplement relating to such
offering, and if an underwriting syndicate is used, we will name the managing
underwriter or underwriters on the cover of such prospectus supplement. Unless
otherwise set forth in the prospectus supplement, the obligations of the
underwriters or agents to purchase the debt securities will be subject to
certain conditions precedent and the underwriters will be obligated to purchase
all the debt securities if any are purchased. Any initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
If we use a dealer to offer and sell any debt securities in respect of
which this prospectus is delivered, we will sell such debt securities to the
dealer, as principal. The dealer may then resell such securities to the public
at varying prices to be determined by such dealer at the time of resale. The
name of the dealer and the terms of the transaction will be set forth in the
prospectus supplement relating thereto.
Our net proceeds will be the purchase price in the case of sales to a
dealer, the public offering price less discount in the case of sales to an
underwriter or the purchase price less commission in the case of sales through
an agent -- in each case, less other expenses attributable to issuance and
distribution. Underwriters, agents, and dealers participating in the
distribution of the debt securities may be deemed to be underwriters, and any
discounts or commissions received by them from us and any profit on the resale
of the debt securities by them may be deemed to be underwriting discounts or
commissions under the Securities Act.
Each underwriter, dealer and agent participating in the distribution of
any debt securities which are issuable in bearer form will agree that it will
not offer, sell or deliver, directly or indirectly, debt securities in bearer
form in the United States or to United States persons except as otherwise
permitted by Treasury Regulation Section 1.163-5(c)(2)(i)(D). See "Limitations
on Issuance of Bearer Securities."
Each underwriter, dealer and agent participating in the distribution of
any Securities will agree that
27
<PAGE>
o it will not offer or sell any debt securities to persons in
the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which do not
constitute an offer to the public in the United Kingdom for
the purposes of the Public Offers of Securities Regulations
1995;
o it will comply with all applicable provisions of the Financial
Services Act 1986 of Great Britain with respect to anything
done by it in relation to the Securities in, from or otherwise
involving the United Kingdom; and
o it will only issue or pass on in the United Kingdom any
document in connection with the issue of the debt securities
to a person who is of a kind described in Article 8 of the
Financial Services Act 1986 (Investment Advertisements)
(Exemptions) (No. 2) Order 1995 of Great Britain or is a
person to whom the document may otherwise lawfully be issued
or passed on.
We may issue series of debt securities with no established trading
market. Any underwriters to whom debt securities are sold by us for public
offering and sale may make a market in such debt securities, but such
underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. No assurance can be given as to the liquidity
of the trading market for any debt securities.
If so indicated in the prospectus supplement, one or more firms,
including Legg Mason Wood Walker, which we refer to as "remarketing firms,"
acting as principals for their own accounts or as agents for us, may offer and
sell these securities as part of a remarketing upon their purchase, in
accordance with their terms. We will identify any remarketing firm, the terms of
its agreement, if any, with us and its compensation in the prospectus
supplement.
Remarketing firms, agents, dealers, and underwriters may be entitled
under agreements entered into with us to indemnification by us against certain
civil liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments that such agents, dealers, or underwriters
may be required to make with respect thereto. Underwriters, dealers, or agents
and their associates may be customers of, engage in transactions with and
perform services for, us in the ordinary course of business.
Legg Mason Wood Walker, our affiliate, may participate in distributions
of the debt securities. Accordingly, each offering of debt securities and any
market-making activities by Legg Mason Wood Walker with respect to debt
securities will be conducted in compliance with the requirements of Rule 2720 of
the National Association of Securities Dealers, Inc., which is commonly referred
to as the NASD, regarding a NASD member firm's distributing the securities of an
affiliate. Following the initial distribution of any debt securities, Legg Mason
Wood Walker may offer and sell debt securities in the course of its business as
a broker-dealer. Legg Mason Wood Walker may act as principal or agent in such
transactions. This prospectus may be used by Legg Mason Wood Walker in
connection with such transactions. Such sales, if any, will be made at varying
prices related to prevailing market prices at the time of sale or otherwise.
28
<PAGE>
Legg Mason Wood Walker is not obligated to make a market in any debt securities
and may discontinue any market-making activities at any time without notice.
LEGAL MATTERS
The validity of the debt securities offered hereby will be passed upon
for us by Shearman & Sterling, New York, New York, who will rely on the opinion
of Robert F. Price, Esq., our General Counsel, as to all matters of Maryland
law. Mr. Price beneficially owns, or has rights to acquire under our employee
benefit plan, less than one percent of our common stock.
EXPERTS
The consolidated financial statements and financial statement schedules
of Legg Mason 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 Legg Mason'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.
29
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following are the expenses in connection with the issuance and
distribution of the securities being registered, other than underwriting fees
and commissions. All such expenses other than the Securities and Exchange
Commission registration fee and National Association of Securities Dealers, Inc.
filing fee are estimates.
Securities and Exchange Commission Registration Fee.....................$118,800
National Association of Securities Dealers, Inc. Filing Fee..............$35,000
Trustees' Fees and Expenses..............................................$20,000
Printing and Engraving Fees and Expenses.................................$60,000
Accounting Fees and Expenses.............................................$60,000
Blue Sky Fees and Expenses................................................$5,000
Legal Fees..............................................................$120,000
Rating Agency Fees.......................................................$60,000
Miscellaneous (including Listing Fees, if applicable).....................$5,000
Total...................................................................$483,800
Item 15. Indemnification of 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.
Section 2-418 of the Maryland General Corporation Law 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 in bad faith or with active and deliberate
dishonesty, (ii) actually received an improper personal benefit in money,
property or services or (iii) in the case of a criminal proceeding, had
reasonable cause to believe that his act was unlawful. However, if the
proceeding is a derivative suit in favor of the corporation, indemnification may
not be made if the individual is adjudged to be liable to the corporation. In no
case may indemnification be made until a determination has been reached that the
director or officer has met the applicable standard of conduct. Indemnification
for reasonable expenses is mandatory if the director or officer has been
successful on the merits or otherwise in the defense of any action or proceeding
covered by the indemnification statute. The statute also provides for
indemnification of directors and officers by court order. The indemnification
provided or
II-1
<PAGE>
authorized in the indemnification statute does not preclude a corporation from
extending other rights (indemnification or otherwise) to directors and officers.
The Registrant's officers and directors are insured against certain
liabilities under certain policies maintained by the Registrant with aggregate
coverage of $35,000,000.
The foregoing summaries are subject to the complete text of the
statute, by-laws and agreements referred to above and are qualified in their
entirety by reference thereto.
Item 16. Exhibits
The following is a list of all exhibits filed as a part of this
Registration Statement on Form S-3, including those incorporated herein by
reference.
Exhibit
Number Description of Exhibit
- ------- ----------------------
1 The Form of Underwriting Agreement.
4(a) Indenture for Senior Securities between Legg Mason, Inc. and The Bank
of New York, as Trustee, filed as exhibit to Form 8-K dated February
9, 1996 and incorporated herein by reference.
4(b) Form of Indenture for Subordinated Securities between Legg Mason, Inc.
and The Bank of New York, as Trustee, filed as exhibit to Registration
Statement (file number 333-00151) on Form S-3 and incorporated herein
by reference.
4(c) The form or forms of debt securities with respect to each particular
series of debt securities registered hereunder will be filed as an
exhibit to a Current Report of the Registrant on Form 8-K and
incorporated herein by reference.
5.1 Opinion of Shearman & Sterling.
5.2 Opinion of Robert F. Price, Esq.
12 Statements re: Computation of Consolidated Ratios of Earnings to Fixed
Charges.
23(a) Consent of PricewaterhouseCoopers LLP, Independent Public Accountants.
23(b) Consent of Shearman & Sterling (included in Exhibit 5.1).
23(c) Consent of Robert F. Price, Esq. (included in Exhibit 5.2).
24 Powers of Attorneys (included in the signature pages).
25(a) The Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of the Trustee for the Senior Indenture.
25(b) The Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of the Trustee for the Subordinated Indenture.
II-2
<PAGE>
Item 17. Undertakings
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; (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% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the effective
registration statement; and (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 (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and 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 section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such 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; and
(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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement 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.
The undersigned Registrant hereby undertakes that (i) for purposes of
determining any liability under the Securities Act of 1933, the information
omitted from the form of prospectus filed as part of this registration statement
in reliance upon Rule 430A and contained in a form of
II-3
<PAGE>
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective and (ii) for the purpose of
determining any liability under the Securities Act of 1933, each post-effective
amendment that contains a form of prospectus 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions set forth in Item 15, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 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 March 27, 2000.
LEGG MASON, INC.
(Registrant)
By /s/ Raymond A. Mason
------------------------
Name: Raymond A. Mason
Title: Chairman of the Board, President and Chief
Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Raymond A. Mason, Robert F. Price
and Richard J. Himelfarb, or any of them, his true and lawful attorneys-in-fact,
with full powers 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 any post-effective amendments, to this registration statement, and to
file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as they might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact or their
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ Raymond A. Mason Chairman of the Board, President, Chief March 27, 2000
- ------------------------------- Executive Officer and Director (Principal
Raymond A. Mason Executive Officer)
/s/ Thomas L. Souders Senior Vice President and Treasurer March 27, 2000
- ------------------------------- (Principal Financial and Accounting
Thomas L. Souders Officer)
/s/ James W. Brinkley Director March 27, 2000
- -------------------------------
James W. Brinkley
/s/ Edmund J. Cashman, Jr. Director March 27, 2000
- -------------------------------
Edmund J. Cashman, Jr.
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Harry M. Ford, Jr. Director March 27, 2000
- -------------------------------
Harry M. Ford, Jr.
/s/ Nicholas J. St. George Director March 27, 2000
- -------------------------------
Nicholas J. St. George
/s/ Charles A. Bacigalupo Director March 27, 2000
- -------------------------------
Charles A. Bacigalupo
/s/ Richard J. Himelfarb Director March 27, 2000
- -------------------------------
Richard J. Himelfarb
/s/ James E. Ukrop Director March 27, 2000
- -------------------------------
James E. Ukrop
/s/ Harold L. Adams Director March 27, 2000
- -------------------------------
Harold L. Adams
/s/ John E. Koerner, III Director March 27, 2000
- -------------------------------
John E. Koerner, III
/s/ Roger W. Schipke Director March 27, 2000
- -------------------------------
Roger W. Schipke
/s/ W. Curtis Livingston Director March 27, 2000
- -------------------------------
W. Curtis Livingston
/s/ Edward I. O'Brien Director March 27, 2000
- -------------------------------
Edward I. O'Brien
/s/ Peter F. O'Malley Director March 27, 2000
- -------------------------------
Peter F. O'Malley
/s/ Margaret DeB. Tutwiler Director March 27, 2000
- -------------------------------
Margaret DeB. Tutwiler
/s/ William Wirth Director March 27, 2000
- -------------------------------
William Wirth
</TABLE>
II-6
<PAGE>
Exhibit
Number Description of Exhibit
- ------- ----------------------
1 The Form of Underwriting Agreement.
4(a) Indenture for Senior Securities between Legg Mason, Inc. and The Bank
of New York, as Trustee, filed as exhibit to Form 8-K dated February 9,
1996 and incorporated herein by reference.
4(b) Form of Indenture for Subordinated Securities between Legg Mason, Inc.
and The Bank of New York, as Trustee, filed as exhibit to Registration
Statement (file number 333-00151) on Form S-3 and incorporated herein
by reference.
4(c) The form or forms of debt securities with respect to each particular
series of debt securities registered hereunder will be filed as an
exhibit to a Current Report of the Registrant on Form 8-K and
incorporated herein by reference.
5.1 Opinion of Shearman & Sterling.
5.2 Opinion of Robert F. Price, Esq.
12 Statements re: Computation of Consolidated Ratios of Earnings to Fixed
Charges.
23(a) Consent of PricewaterhouseCoopers LLP, Independent Public Accountants.
23(b) Consent of Shearman & Sterling (included in Exhibit 5.1).
23(c) Consent of Robert F. Price, Esq. (included in Exhibit 5.2).
24 Powers of Attorneys (included in the signature pages).
25(a) The Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of the Trustee for the Senior Indenture.
25(b) The Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of the Trustee for the Subordinated Indenture.
II-7
EXHIBIT 1
LEGG MASON, INC.
(a Maryland corporation)
Debt Securities
FORM OF UNDERWRITING AGREEMENT
To the Underwriters
to be named in the applicable
Pricing Agreement supplemental hereto
Dear Sirs:
Legg Mason, Inc., a Maryland corporation (the "Company"),
proposes to sell up to $________ aggregate principal amount, or its equivalent
based on the applicable exchange rate at the time of offering, in such foreign
currencies or units of two or more thereof as the Company shall designate at the
time of offering, of its senior debt securities ("Senior Debt Securities"), and
its subordinated debt securities ("Subordinated Debt Securities," and, together
with the Senior Debt Securities, the "Debt Securities"). Unless otherwise
specified in the applicable Pricing Agreement (as defined below), the Senior
Debt Securities are to be issued under an indenture (the "Senior Indenture")
between the Company and The Bank of New York, as trustee (the "Senior Debt
Trustee"). Unless otherwise specified in the applicable Pricing Agreement, the
Subordinated Debt Securities are to be issued under an indenture (the
"Subordinated Indenture") between the Company and The Bank of New York, as
trustee (the "Subordinated Debt Trustee"). The Senior Indenture and the
Subordinated Indenture are collectively referred to herein as the "Indentures"
and the Senior Debt Trustee and the Subordinated Debt Trustee are collectively
referred to herein as the "Trustees." Each issue of Debt Securities may vary,
where applicable, as to aggregate principal amount, maturity, interest rate or
rates and timing of payments thereof, redemption provisions, conversion
provisions and sinking fund requirements, if any, and any other variable terms
which the applicable Indenture contemplates may be set forth in the Debt
Securities as issued from time to time. As used herein, "Securities" shall mean
the Debt Securities covered by the applicable Pricing Agreement.
Whenever the Company determines to make an offering of Debt
Securities, it will enter into an agreement (a "Pricing Agreement") providing
for the sale of such Securities to, and the purchase and offering thereof by,
the underwriter or underwriters named therein (the
<PAGE>
2
"Underwriters" or "you," which terms shall include the underwriter or
underwriters named therein whether acting alone in the sale of Securities or as
members of an underwriting syndicate and any underwriters substituted pursuant
to Section 10 hereof). The Pricing Agreement, which shall be substantially in
the form of Exhibit A hereto, may take the form of an exchange of any standard
form of written telecommunication between you and the Company. The Pricing
Agreement relating to each offering of Securities shall specify such applicable
information as is indicated in Exhibit A hereto. Each offering of Securities
will be governed by this Agreement, as supplemented by the applicable Pricing
Agreement, and this Agreement and such Pricing Agreement shall inure to the
benefit of and be binding upon each Underwriter participating in the offering of
such Securities.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No. ______)
and Post-Effective Amendment No. 1 to its registration statement on Form S-3
(No. 333-00151) relating to the Debt Securities and the offering thereof from
time to time in accordance with Rule 415 under the Securities Act of 1933 (the
"1933 Act") and the rules and regulations thereunder (the "1933 Act
Regulations"), and has filed such amendments thereto as may have been required
to the date hereof. Such registration statements as amended have been declared
effective by the Commission, and the respective Indentures have been qualified
under the Trust Indenture Act of 1939 (the "1939 Act") and the rules and
regulations of the Commission thereunder (collectively, the "1939 Act
Regulations"). Such registration statements as amended and the prospectus
relating to the sale of Debt Securities by the Company constituting a part
thereof, including all documents incorporated therein by reference, as from time
to time amended or supplemented pursuant to the Securities Exchange Act of 1934
(the "1934 Act"), the 1933 Act or otherwise, are collectively referred to herein
as the "Registration Statement" and the "Prospectus," respectively; provided,
however, that a supplement of the Prospectus contemplated by Section 3(a) hereof
and any term sheet as contemplated by Rule 434 of the 1933 Act Regulations (a
"Prospectus Supplement") shall be deemed to have supplemented the Prospectus
only with respect to the offering of Securities to which it relates.
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" in
the Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and include the
filing of any document under the 1934 Act which is or is deemed to be
incorporated by reference in the Registration Statement or the Prospectus, as
the case may be.
<PAGE>
3
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to each Underwriter as
of the date hereof and as of the date of the execution of the Pricing Agreement
(such latter date being hereinafter referred to as the "Representation Date") as
follows:
(i) The Company meets the requirements for use of Form S-3
under the 1933 Act and at the time the Registration Statement became
effective and as of the applicable Representation Date, the
Registration Statement and the Prospectus complied in all material
respects with the requirements of the 1933 Act, the 1933 Act
Regulations, the 1939 Act and the 1939 Act Regulations, and did not,
and will not, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading. The Prospectus, at the time
the Registration Statement became effective and as of the applicable
Representation Date and at the Closing Time referred to in Section 2,
did not, and will not, include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the representations
and warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus made in
reliance upon and in conformity with information furnished to the
Company in writing by any Underwriter expressly for use in the
Registration Statement or the Prospectus (or to that part of the
Registration Statement that shall constitute the Statement of
Eligibility under the 1939 Act (Form T-1) of the respective Trustees).
(ii) The Accountants who certified the financial statements
and supporting schedules incorporated in the Registration Statement are
independent public accountants for the Company as required by the 1933
Act and the 1933 Act Regulations.
(iii) The financial statements, including the notes thereto,
incorporated in the Registration Statement and the Prospectus present
fairly the financial position of the Company and its consolidated
subsidiaries as at the dates indicated and the results of their
operations for the periods specified; except as otherwise stated in the
Registration Statement, said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved; and the supporting
schedules incorporated in the Registration Statement present fairly the
information required to be stated therein.
(iv) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse change
in the condition, financial or otherwise, or in the earnings, affairs
or business prospects of the Company and its Significant Subsidiaries
(as
<PAGE>
4
defined below), taken as a whole, whether or not arising in the
ordinary course of business, (B) there have been no transactions
entered into by the Company or any of its Significant Subsidiaries,
other than those in the ordinary course of business, that are material
to the Company and its Significant Subsidiaries, taken as a whole, and
(C) except for regular quarterly dividends, there has been no dividend
or distribution of any kind declared, paid or made by the Company on
any class of its capital stock.
(v) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Maryland with corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Prospectus or documents incorporated by reference therein; and the
Company is not required to be qualified as a foreign corporation to
transact business in any other jurisdiction except when the failure to
be so qualified would not have a material adverse effect on the Company
and its Subsidiaries, taken as a whole.
(vi) Each of the subsidiaries of the Company set forth on
Schedule I to the applicable Pricing Agreement (each a "Significant
Subsidiary") has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and
operate its properties and to conduct its business as described or
incorporated by reference in the Prospectus and is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, except to
the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and Significant
Subsidiaries taken as a whole. All of the issued and outstanding
capital stock of each Significant Subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable and is owned by
the Company, directly or indirectly, free and clear of any mortgage,
pledge, lien, encumbrance, claim or equity except as set forth into the
pricing agreement.
(vii) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus under "Capitalization" or
in documents incorporated therein by reference (except for subsequent
issuances, if any, pursuant to reservations, agreements, employee
benefit plans or the exercise of convertible securities referred to in
the Prospectus or in documents incorporated therein by reference); the
shares of issued and outstanding capital stock of the Company have been
duly authorized and validly issued and are fully paid and
non-assessable; any shares of the Company's common stock, par value
$.10 per share (the "Common Stock"), initially issuable upon conversion
of Securities that are designated in a Pricing Agreement as being
convertible into Common Stock ("Convertible Debt Securities") have been
duly authorized and reserved for issuance (or will have been so
authorized or reserved prior to each issuance of such Securities), and
such shares when issued and delivered in accordance with the provisions
<PAGE>
5
of the Securities and Indenture, will be validly issued, fully paid and
non-assessable and conform to the description of the Common Stock in
the Prospectus.
(viii) The Securities have been duly authorized for issuance
pursuant to this Agreement (or will have been so authorized prior to
each issuance of Securities) and, when executed, issued and delivered
by the Company and authenticated by the Trustee pursuant to the
provisions of the applicable Indenture and this Agreement against
payment of the consideration set forth in the Pricing Agreement, will
have been duly executed, issued and delivered by the Company and will
constitute legal, valid and binding obligations of the Company entitled
to the benefits of the applicable Indenture and enforceable against the
Company in accordance with their terms, except as the enforcement
thereof may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or similar laws now or hereafter in
effect relating to creditors' rights generally and (b) general
principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity). The Indentures have
been duly authorized by the Company, will be substantially in the forms
heretofore delivered to you and, when duly executed and delivered by
the Company and the Trustees, will constitute legal, valid and binding
obligations of the Company enforceable against the Company in
accordance with their respective terms, except as the enforcement
thereof may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or similar laws now or hereafter in
effect relating to creditors' rights generally and (b) general
principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity). The Securities and the
Indentures conform in all material respects to all statements relating
thereto contained in the Prospectus.
(ix) Neither the Company nor any of its Significant
Subsidiaries is in violation of its charter, or in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Company or
any of its Significant Subsidiaries is a party or by which it or any of
them may be bound. The execution and delivery of this Agreement, the
applicable Indenture and the Pricing Agreement and the consummation of
the transactions contemplated herein have been, or will be, duly
authorized by all necessary corporate action and do not and will not
conflict with or constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its Significant
Subsidiaries pursuant to, any material contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Company or
any of its Significant Subsidiaries is a party or by which it or any of
them may be bound, or to which any of the property or assets of the
Company or any of its Significant Subsidiaries is subject, nor will
such action result in any violation of the provisions of the charter or
by-laws of the
<PAGE>
6
Company or any applicable law or administrative regulation or any
administrative or court decree and no consent, approval, authorization
or order of any court or governmental authority or agency is required
for the consummation by the Company of the transactions contemplated by
this Agreement, except such as have been obtained under the 1933 Act,
the 1933 Act Regulations, the 1939 Act or the 1939 Act Regulations or
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters.
(x) The Company and the Significant Subsidiaries own or
possess or have obtained all material governmental licenses, permits,
consents, orders, approvals and other authorizations necessary to lease
or own, as the case may be, and to operate their respective properties
and to carry on their respective businesses as presently conducted.
(xi) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Company, threatened against or affecting
the Company or any of its Significant Subsidiaries, which is required
to be disclosed in the Registration Statement (other than as disclosed
therein or in documents incorporated therein by reference) and is not
so disclosed, or which might result in any material adverse change in
the condition, financial or otherwise, or in the earnings, affairs or
business prospects of the Company and its Significant Subsidiaries,
taken as a whole or which might materially and adversely affect the
properties or assets thereof or which might materially and adversely
affect the consummation of this Agreement; all pending legal or
governmental proceedings to which the Company or any Significant
Subsidiary is a party or of which any of their property is the subject
which are not described in the Registration Statement or documents
incorporated therein by reference, including ordinary routine
litigation incidental to the business, are, considered in the
aggregate, not material to the Company and its Significant
Subsidiaries, taken as a whole; and there are no contracts or documents
of the Company or any of its Significant Subsidiaries which are
required to be filed as exhibits to the Registration Statement by the
1933 Act or by the 1933 Act Regulations which have not been so filed.
(xii) The Company and its Significant Subsidiaries own or
possess, or can acquire on reasonable terms, adequate trademarks,
service marks and trade names necessary to conduct the business now
operated by them, and neither the Company nor any of its Significant
Subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in any material adverse
change in the condition, financial or otherwise, or in the earnings,
affairs or business prospects of the Company and its Significant
Subsidiaries, taken as a whole.
<PAGE>
7
(xiii) (a) Each of the broker-dealers listed in Schedule I
hereto has been duly registered as a broker-dealer under the 1934 Act
and is duly licensed or qualified as such, is a member of the National
Association of Securities Dealers, Inc. ("NASD"), the Securities
Investor Protection Corporation ("SIPC") and the Stock Exchanges
indicated in the documents incorporated by reference in the
Registration Statement and is in compliance in all material respects
with all applicable laws, rules, regulations, orders, by-laws and
similar requirements in connection with such registration, licenses,
qualifications or memberships, in all states in which the conduct of
each of its businesses as presently conducted requires such
registration, licensing or qualification; and (b) each of the
investment advisers listed in Schedule II hereto has been duly
registered as an investment adviser under the Investment Advisers Act
and is duly licensed or qualified as such, and is in compliance in all
material respects with all applicable laws, rules, regulations, orders
and similar requirements in connection with such registration, licenses
or qualifications, in all states in which the conduct of each of its
businesses as presently conducted requires such registration, licensing
or qualification.
(xiv) The Company has not taken and will not take, directly or
indirectly, any action designed to, or which might be reasonably
expected to, cause or result in stabilization or manipulation of the
price of the Securities or, in the case of an offering of Convertible
Debt Securities, the Common Stock.
(xv) The Company has complied and will comply with all the
provisions of Florida H.B. 1771, codified as Section 517.075 of the
Florida statutes, as contemplated by the regulations promulgated
thereunder relating to issuers doing business with Cuba.
(xvi) The documents (as amended prior to the date hereof, as
the case may be) incorporated or deemed to be incorporated by reference
in the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with
the requirements of the 1934 Act, and the rules and regulations of the
Commission under the 1934 Act (the "1934 Act Regulations"), and, when
read together with the other information in the Prospectus, at the time
the Registration Statement and any amendments thereto become effective
and at the Closing Time (as defined below), will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
(b) Any certificate signed by any officer of the Company and
delivered to the Underwriters or to counsel for the Underwriters shall
be deemed a representation and warranty by the Company to each
Underwriter as to the matters covered thereby.
<PAGE>
8
SECTION 2. Purchase and Sale. The several commitments of the
Underwriters to purchase Securities pursuant to any Pricing Agreement shall be
deemed to have been made on the basis of the representations and warranties
herein contained and shall be subject to the terms and conditions herein set
forth.
Payment of the purchase price for, and delivery of, the
Securities shall be made at the date, time and location specified in the
applicable Pricing Agreement relating to the Securities, or at such other date,
time and location as shall be agreed upon by the representatives (as defined in
Section 3 below) and the Company, or as shall be otherwise be provided in
Section 10 (such time and date of payment and delivery being herein called the
"Closing Time"). Unless otherwise specified in the applicable Pricing Agreement,
payment shall be made to the Company by wire transfer of same-day funds at the
Closing Time to an account or accounts designated by the Company against
delivery to the Representatives for the respective accounts of the Underwriters
of the Securities to be purchased by them (unless such Securities are issuable
only in the form of one or more global Securities registered in the name of a
depository or a nominee of a depository, in which event the Underwriters'
interest in such global certificate shall be noted in a manner satisfactory to
the Underwriters and their counsel). Such Securities shall be in such authorized
denominations and registered in such names as the Representatives may request in
writing at least two business days prior to the applicable Closing Time. Such
Securities, which may be in temporary form, will be made available for
examination and packaging by the Representatives on or before the first business
day prior to Closing Time.
SECTION 3. Covenants of the Company. The Company covenants
with each Underwriter as follows:
(a) Immediately following the execution of each Pricing
Agreement, the Company will prepare a Prospectus Supplement setting forth the
principal amount of Debt Securities covered thereby and their terms not
otherwise specified in the applicable Indenture, whether the Debt Securities
will be Senior Debt Securities or Subordinated Debt Securities, the names of the
Underwriters participating in the offering and the principal amount of Debt
Securities which each severally has agreed to purchase, the names of any
Underwriters acting as manager or co-managers in connection with the offering
(the "Representatives" which term shall include each Underwriter in the event
that there be no manager or co-manager), the price at which the Securities are
to be purchased by the Underwriters from the Company, the initial public
offering price, the selling concession and reallowance, if any, and such other
information as you and the Company deem appropriate in connection with the
offering of the Securities. The Company will promptly transmit copies of the
Prospectus Supplement to the Commission for filing pursuant to Rule 424 of the
Regulations and will furnish to the Underwriters named therein as many copies of
the Prospectus and such Prospectus Supplement as the Representatives shall
reasonably request.
<PAGE>
9
(b) The Company will notify the Underwriters promptly, and
confirm the notice in writing, (i) of the effectiveness of any amendment to the
Registration Statement, (ii) of the receipt of any comments from the Commission
with respect to the Registration Statement, the Prospectus or any Prospectus
Supplement, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose and (v) of the mailing or the delivery to the
Commission for filing of any supplement to the Prospectus or any document to be
filed pursuant to the 1934 Act. The Company will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest possible moment.
(c) The Company will give the Underwriters notice of its
intention to file or prepare any amendment to the Registration Statement or any
amendment or supplement to the Prospectus, whether pursuant to the 1933 Act, the
1934 Act or otherwise, will furnish the Underwriters with copies of any such
amendment or supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file any such amendment or
supplement or use any such prospectus to which the Representatives or counsel to
the Underwriters shall reasonably object, unless required to do so pursuant to
the applicable federal securities laws.
(d) The Company will deliver to the Representatives signed
copies of the Registration Statement as initially filed and of each amendment
thereto (including exhibits filed therewith or incorporated by reference therein
and documents incorporated or deemed to be incorporated by reference therein)
and will also deliver to the Underwriters as many conformed copies of the
Registration Statement as initially filed and of each amendment thereto (without
exhibits) as the Underwriters may reasonably request.
(e) If at any time when the Prospectus is required by the
1933 Act to be delivered in connection with sales of Securities any event shall
occur or condition exist as a result of which it is necessary, in the opinion of
counsel for the Underwriters, to further amend or supplement the Prospectus in
order that the Prospectus will not include an untrue statement of a material
fact or omit to state any material fact necessary to make the statements therein
not misleading in the light of the circumstances existing at the time it is
delivered to a purchaser or if it shall be necessary, in the view of such
counsel, at any such time to amend or supplement the Registration Statement or
the Prospectus in order to comply with the requirements of the 1934 Act or the
1934 Act Regulations, the Company will promptly prepare and file with the
Commission such amendment or supplement, whether by filing documents pursuant to
the 1934 Act or otherwise, as may be necessary to correct such untrue statement
or omission or make the Registration Statement comply with such requirements.
<PAGE>
10
(f) The Company will endeavor, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions of the United
States as the Representatives may designate and will maintain such qualification
in effect for as long as may be required for the distribution of the Securities;
provided, however, that the Company shall not be obligated to qualify as a
foreign corporation in any jurisdiction in which it is not so qualified. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement.
(g) With respect to each sale of Securities, the Company will
make generally available to its security holders as soon as practicable, but not
later than 60 days after the close of the period covered thereby, an earnings
statement (in a form which complies with the provisions of Rule 158 under the
1933 Act Regulations) covering a twelve month period beginning not later than
the first day of the Company's fiscal quarter next following the "Effective
Date" (as defined in said Rule 158) of the Registration Statement.
(h) The Company will use the net proceeds received by it from
the sale of the Securities in the manner specified in the Prospectus under "Use
of Proceeds."
(i) The Company, during the period when the Prospectus is
required to be delivered under the 1933 Act, will file all documents required
to be filed with the Commission pursuant to Section 13, 14 or 15 of the 1934 Act
within the time periods required by the 1934 Act and the 1934 Act Regulations.
(j) Between the date of any Pricing Agreement and the later
of termination of any trading restrictions or Closing Time with respect to the
Securities, the Company will not, without your prior written consent, directly
or indirectly, offer to sell, sell, enter into an agreement to sell, grant any
option for the sale of, or otherwise dispose of, any new issue of debt
securities of the Company with a maturity of more than one year, including
additional Debt Securities (except for (i) any debt securities issued upon
exercise of warrants, (ii) any debt securities of the Company denominated in a
currency other than the currency in which the Securities subject to such Pricing
Agreement shall be denominated) or any warrants for the purchase of debt
securities of the Company with a maturity of more than one year. If the
Securities designated in the applicable Pricing Agreement are convertible into
Comon Stock, for a period of 90 days from the date of the applicable Pricing
Agreement, the Company will not, without your prior written consent, directly or
indirectly, offer to sell, sell, enter into an agreement 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 other than
pursuant to existing employee incentive plans as set forth in the Registration
Statement or documents incorporated by reference therein or in connection with
an acquisition.
<PAGE>
11
(k) If any Securities are designated by the applicable
Pricing Agreement to be convertible into Common Stock, the Company will reserve
and keep available at all times, free of preemptive rights, shares of Common
Stock of the Company for the purpose of enabling the Company to satisfy any
obligations to issue shares of its Common stock upon conversion of the
Securities.
SECTION 4. Payment of Expenses. The Company will pay all
expenses incident to the performance of its obligations under this Agreement,
including (i) the printing and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the printing of this
Agreement and each Pricing Agreement covered below, (iii) the preparation,
issuance and delivery of the certificates for the Securities to the
Underwriters, (iv) the fees and disbursements of the Company's counsel and
accountants, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and
the fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey and any
Legal Investment Survey, (vi) the printing and delivery to the Underwriters in
quantities as hereinabove stated of copies of the Registration Statement as
originally filed and of each amendment thereto, of any preliminary prospectus,
and of the Prospectus and any amendments or supplements thereto, (vii) the fees
and expenses of the applicable Trustee, (viii) the printing and delivery to the
underwriters of copies of the Blue Sky Survey, the applicable Indenture and any
Legal Investment Survey, (ix) the fees charged by the rating agencies in
connection with the rating of the Securities, (x) the fee of the National
Association of Securities Dealers, Inc. and (xi) the fees and expenses, if any,
incurred in connection with the listing of the Securities on the New York Stock
Exchange or any other national exchange.
If a Pricing Agreement is terminated by the Representatives in
accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the
Company shall reimburse the Underwriters named in such Pricing Agreement for all
of their out-of-pocket expenses, including the reasonable fees and disbursements
of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The
obligations of the Underwriters to purchase Securities pursuant to any Pricing
Agreement are subject to the accuracy of the representations and warranties of
the Company herein contained, to the accuracy of the statements of the Company's
officers made in any certificate furnished pursuant to the provisions hereof, to
the performance by the Company of all of its covenants and other obligations
hereunder and to the following further conditions:
(a) At the applicable Closing Time (i) no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act, and no proceedings under the 1933 Act therefor shall
have been initiated or threatened by the Commission, and (ii) the rating
assigned by any nationally recognized securities rating agency to
<PAGE>
12
any debt securities, preferred stock or other obligations of the Company as of
the date of the applicable Pricing Agreement shall not have been lowered since
the execution of such Pricing Agreement and no notice shall have been given of
any intended or potential down-grading or of any review for a possible change
that does not indicate the direction of the possible change, in the rating
accorded any of the Company's securities by any "nationally recognized
statistical rating organization," as such term is defined for purposes of Rule
436(g)(2) under the 1933 Act.
(b) At Closing Time the Underwriters shall have received:
(1) The favorable opinion, dated as of Closing Time, of
Robert F. Price, General Counsel of the Company, in form and substance
reasonably satisfactory to counsel for the Underwriters, to the effect
that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Maryland.
(ii) The Company has corporate power and authority to
own, lease and operate its properties and to conduct its
business as described in the Registration Statement.
(iii) To the best of his knowledge and information, the
Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which
the conduct of its business requires such qualification and
the failure to so qualify would not have a material adverse
effect on the Company.
(iv) The authorized, issued and outstanding capital stock
of the Company is as set forth in the Prospectus under
"Capitalization" or in documents incorporated therein by
reference (except for subsequent issuances, if any, pursuant
to reservations, agreements, employee benefit plans or the
exercise of convertible securities referred to in the
Prospectus or in documents incorporated therein by reference),
and the shares of issued and outstanding Common Stock have
been duly authorized and validly issued and are fully paid and
nonassessable.
(v) The Securities, including any Securities in global
form, are in the form contemplated by the applicable Indenture
and have been duly authorized for issuance and sale to the
Underwriters by all necessary corporate action. The Securities
have been duly executed, issued and delivered by the Company
and, when authenticated as specified in the applicable
Indenture and delivered against payment pursuant to this
Agreement, as supplemented by the applicable Pricing
<PAGE>
13
Agreement, will be legal, valid and binding obligations of the
Company entitled to the benefits of the applicable Indenture
and enforceable against the Company in accordance with their
terms, except as the enforcement thereof may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or similar laws now or hereafter in effect relating
to creditors' rights generally, (b) general principles of
equity (regardless of whether enforceability is considered in
a proceeding at law or in equity) and (c) requirements that a
claim (or a foreign currency judgment in respect of such
claim) be converted into United States dollars at a rate of
exchange prevailing on a date determined pursuant to
applicable law. The definitive Securities in bearer form
issuable in exchange for any global Security, when duly
executed, authenticated, issued and delivered in exchange for
such global Security as specified in the applicable Indenture,
will be valid and binding obligations of the Company,
enforceable in accordance with their terms, except as the
enforcement thereof may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or
similar laws now or hereafter in effect relating to creditors'
rights generally, (b) general principles of equity (regardless
of whether enforceability is considered in a proceeding at law
or in equity) and (c) requirements that a claim (or a foreign
currency judgment in respect of such claim) be converted into
United States dollars at a rate of exchange prevailing on a
date determined pursuant to applicable law. The applicable
Indenture has been duly authorized, executed and delivered by
the Company, and, assuming due authorization, execution and
delivery by the applicable Trustee, constitutes a legal, valid
and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as the
enforcement thereof may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or
similar laws now or hereafter in effect relating to creditors'
rights generally and (b) general principles of equity
(regardless of whether enforceability is considered in a
proceeding at law or in equity).
(vi) Each Significant Subsidiary has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Registration Statement and, to the best of
his knowledge, is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction
in which the conduct of its business requires such
qualification and the failure to so qualify would have a
material adverse effect on such Significant Subsidiary. All of
the issued and outstanding capital stock of each Significant
Subsidiary has been duly authorized and validly issued, and is
fully paid and nonassessable, and all of such capital stock
is, to the best of his knowledge and
<PAGE>
14
information, owned by the Company, directly or indirectly,
free and clear of any pledge, lien, encumbrance, claim or
equity.
(vii) (a) Each of the broker-dealers listed in Schedule I
hereto has been duly registered as a broker-dealer under the
1934 Act and is duly licensed or qualified as such, is a
member of the NASD, the SIPC and the Stock Exchanges indicated
in the documents incorporated by reference in the Registration
Statement and, to the best of his knowledge, is in compliance
in all material respects with all material applicable laws,
rules, regulations, orders, by-laws and similar requirements
in connection with such registration, licenses, qualifications
or memberships, in all states in which the conduct of each of
its businesses as presently conducted requires such
registration, licensing or qualification; and (b) each of the
investment advisers listed in Schedule II hereto has been duly
registered as an investment adviser under the Investment
Advisers Act and is duly licensed or qualified as such, and,
to the best of his knowledge, in compliance in all material
respects with all material applicable laws, rules,
regulations, orders and similar requirements in connection
with such registration, licenses or qualifications, in all
states in which the conduct of each of its businesses as
presently conducted requires such registration, licensing or
qualification.
(viii) This Agreement and the applicable Pricing
Agreement have been duly authorized, executed and delivered by
the Company.
(ix) At the time the Registration Statement became
effective and at the Representation Date, the Registration
Statement (other than the financial statements and supporting
schedules and any other financial or statistical data included
or incorporated by reference therein, as to which no opinion
need be rendered) compiled as to form in all material respects
with the applicable requirements of the 1933 Act, the 1933 Act
Regulations, the 1939 Act and the 1939 Act Regulations.
(x) The applicable Indenture and Securities conform in
all materials respects to the description thereof contained in
the Prospectus.
(xi) The Registration Statement is effective under the
1933 Act and, to the best of his knowledge, no stop order
suspending the effectiveness of the Registration Statement has
been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission.
(xii) The applicable Indenture is qualified under the
1939 Act.
<PAGE>
15
(xiii) Any shares of Common Stock initially issuable
upon conversion of Securities will be, when the Securities are
issued, validly authorized and reserved for issuance, and such
shares, when issued and delivered in accordance with the
provisions of the Securities and the applicable Indenture,
will be duly and validly issued and fully paid and
non-assessable; the issuance of such shares upon conversion
will not be subject to preemptive rights; and the Common Stock
conforms in all material respects to the description thereof
in the Prospectus.
(xiv) To the best of his knowledge, there are no legal or
governmental proceedings pending or threatened which are
required to be disclosed in the Registration Statement, other
than those disclosed therein or in documents incorporated by
reference therein, and all pending legal or governmental
proceedings to which the Company or any Significant Subsidiary
is a party or to which any of their property is subject which
are not described in the Registration Statement or documents
incorporated by reference therein, including ordinary routine
litigation incidental to the business are considered in the
aggregate, not material.
(xv) To the best of his knowledge and information, there
are no contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments or documents required to be
described or referred to in the Registration Statement or to
be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as
exhibits thereto, the descriptions thereof or references
thereto are correct, and no default exists in the due
performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument so described, referred to, filed or incorporated by
reference.
(xvi) No authorization, approval, consent or order of
any court or governmental agency is required in connection
with the sale of the Securities to the Underwriters, except
such as may be required under the 1933 Act, the 1933 Act
Regulations, the 1939 Act, the 1939 Act Regulations or state
securities laws or the NYSE; and, to the best of his
knowledge, the execution and delivery of this Agreement, the
Pricing Agreement, the applicable Indenture and the
consummation of the transactions contemplated herein will not
conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any
of its Significant Subsidiaries pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of them is a party or
by which it or any of them may be bound, or to which any of
the property or assets of the Company or any of them is
subject; nor will such action
<PAGE>
16
result in any violation of the provisions of the charter or
by-laws of the Company, or any applicable law, administrative
regulation or administrative or court decree.
(xvii) Each document filed pursuant to the 1934 Act
(other than the financial statements and supporting schedules
included therein, as to which no opinion need be rendered) and
incorporated or deemed to be incorporated by reference in the
Prospectus complied when so filed as to form in all material
respects with the 1934 Act and the 1934 Act Regulations.
In rendering the opinions set forth in this paragraph, Robert
F. Price may rely on such opinions of counsel as he may reasonably request,
provided that such counsel is reasonably satisfactory to counsel for the
Underwriters and that copies of such opinions are attached to his opinion.
(2) The favorable opinion, dated as of Closing Time, of
Shearman & Sterling, counsel for the Company, with respect to the matters set
forth in (i), (v), (viii) through (xiii) and (xvii) of subsection (b)(1) of this
Section. In rendering such opinion, Shearman & Sterling may rely as to the
matters set forth in (xvii) of subsection (b)(1) of this Section and the
incorporation of the Company and all other matters governed by Maryland law upon
the opinion of Robert F. Price referred to above.
(3) The favorable opinion, dated as of Closing Time,
_____________, counsel for the Underwriters, with respect to the matters set
forth in (i), (v) and (viii) through (xiii) of subsection (b)(1) of this
Section. In rendering such opinion, _____________ may rely as to the
incorporation of the Company and all other matters governed by Maryland law upon
the opinion of Robert F. Price referred to above.
(4) In giving their opinions required by subsections (b)(1),
(b)(2) and (b)(3) of this Section, Robert F. Price, Shearman & Sterling and
counsel to the Underwriters, respectively, shall each additionally state that
although they are not passing upon, and do not assume any responsibility for,
the accuracy, completeness or fairness of the statements contained in the
Registration Statement and Prospectus and have not made any independent check or
verification thereof, on the basis of the foregoing (relying as to materiality
upon the opinions of officers and other representatives of the Company) nothing
has come to their respective attention that would lead them to believe that the
Registration Statement, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectus, at Closing Time, included an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that none of them expresses any belief
with respect to the financial statements and related schedules or other
financial and statistical data included or
<PAGE>
17
incorporated by reference in the Registration Statement or the Prospectus or
with respect to the Statement of Eligibility on Form T-1 of the Trustee).
(c) At Closing Time, there shall not have been, since the
date of the applicable Pricing Agreement or since the respective dates as of
which information is given in the Registration Statement and the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
Significant Subsidiaries, taken as a whole, whether or not arising in the
ordinary course of business, and the Underwriters shall have received a
certificate of the Chairman of the Board, the President or a Vice President of
the Company and of the chief financial officer or chief accounting officer of
the Company, dated as of Closing Time, to the effect that (i) there has been no
such material adverse change, (ii) the representations and warranties in Section
1 hereof are true and correct with the same force and effect as though expressly
made at and as of Closing Time, (iii) the Company has complied in all material
respects with all agreements and satisfied all conditions on its part to be
performed or satisfied by it at or prior to Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been initiated or, to the knowledge of the
Company, threatened by the Commission.
(d) The Underwriters shall have received from
PricewaterhouseCoopers LLP or other independent certified public accountants
acceptable to the Representatives letters dated as of the date of the applicable
Pricing Agreement and as of the date of the applicable Closing Time,
respectively, in form and substance reasonably satisfactory to the
Representatives.
(e) At Closing Time, counsel for the Underwriters shall
have been furnished with such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the issuance and sale of
the Securities as herein contemplated and related proceedings, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be reasonably satisfactory in form and substance to
the Underwriters and their counsel.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, the applicable Pricing Agreement
may be terminated by the Representatives by written notice to the Company at any
time at or prior to Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4
hereof. Notwithstanding any such termination, the provisions of Sections 6, 7, 8
and 13 shall remain in effect.
SECTION 6. Indemnification. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act as
follows:
<PAGE>
18
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), or the omission
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(d) hereof, the reasonable fees and
disbursements of counsel chosen by the Underwriters), reasonably
incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Underwriters expressly for use in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
expressly for use in the Registration Statement (or any
<PAGE>
19
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) The Company agrees to indemnify and hold harmless each
Underwriter against any documentary stamp or similar issue tax and any related
interest or penalties on the issue or sale of the Securities to the Underwriters
which are due in the United States of America, the United Kingdom or any other
jurisdiction.
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought hereunder, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") as promptly as reasonably practicable, but failure to so
notify an indemnifying party shall not relieve such indemnifying party from any
liability which it may have otherwise than on account of this indemnity
agreement. The indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties, except that the Company shall be liable for the fees and expenses of
one counsel representing Legg Mason Wood Walker Incorporated and one counsel
representing the other Underwriters and the persons controlling the other
Underwriters.
Insofar as this indemnity may permit indemnification for
liabilities under the 1933 Act of any person who is a partner of an Underwriter
or who controls an Underwriter within the meaning of Section 15 of the 1933 Act
and who, at the date of the applicable Pricing Agreement, is a director, officer
or controlling person of the Company, such indemnity agreement is subject to the
undertaking of the Company in the Registration Statement.
SECTION 7. Contribution. In order to provide for just and
equitable contribution in circumstances in which the indemnity agreement
provided for in Section 6 hereof is for any reason held to be unenforceable by
the indemnified parties although applicable in accordance with its terms, the
Company and the Underwriters shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by said
indemnity
<PAGE>
20
agreement incurred by the Company and one or more of the Underwriters, as
incurred, in such proportions that the Underwriters are responsible for that
portion represented by the percentage that the underwriting discount set forth
in the applicable Pricing Agreement bears to the initial public offering price
set forth in the applicable Pricing Agreement and the Company is responsible for
the balance; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as such Underwriter, and each director of
the Company, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of Section
15 of the 1933 Act shall have the same rights to contribution as the Company.
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of the Company
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement. (a) The Representatives
may terminate the applicable Pricing Agreement, by notice to the Company, at any
time at or prior to the applicable Closing Time (i) if there has been, since the
date of the applicable Pricing Agreement or since the respective dates as of
which information is given in the Registration Statement or documents
incorporated by reference therein, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its Significant Subsidiaries, taken as a whole,
whether or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets in the United
States or elsewhere or any outbreak of hostilities or escalation thereof or
other calamity or crisis, the effect of which is such as to make it, in the
judgment of the Underwriters, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in the
Common Stock has been suspended by the Commission, or if trading generally on
either the American Stock Exchange or the New York Stock Exchange has been
suspended, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by either of said Exchanges
or by order of the Commission or any other governmental authority, or if a
banking moratorium has been declared by either Federal, New York or Maryland
authorities or if a banking moratorium has been declared by the relevant
authorities in the country or countries of origin of any foreign currency or
currencies underlying the Securities.
(b) If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4.
<PAGE>
21
Notwithstanding any such termination, the provisions of Sections 6, 7, 8 and 13
shall remain in effect.
SECTION 10. Default by One or More of the Underwriters. If one
or more of the Underwriters participating in an offering of Securities shall
fail at the applicable Closing Time to purchase the Securities which it or they
are obligated to purchase hereunder and under the applicable Pricing Agreement
(the "Defaulted Securities"), then you, as the Representatives of the
Underwriters, shall use your reasonable efforts to procure within 36 hours
thereafter one or more of the other Underwriters, or any others, to purchase
from the Company such amounts as may be agreed upon and upon the terms set forth
therein and in the applicable Pricing Agreement, the Securities which the
defaulting Underwriter or Underwriters failed to purchase. If during such 36
hours you, as such Representatives, shall not have procured such other
Underwriters, or any others, to purchase the Securities agreed to be purchased
by the defaulting Underwriter or Underwriters, then (a) if the aggregate amount
of the Defaulted Securities does not exceed 10% of the Securities covered by the
applicable Pricing Agreement, the other Underwriters shall be obligated,
severally, in proportion to the respective numbers of Securities which they are
obligated to purchase under such Pricing Agreement, to purchase the Securities
which such defaulting Underwriter or Underwriters failed to purchase, or (b) if
the aggregate amount of the Defaulted Securities exceeds 10% of the Securities
covered by the applicable Pricing Agreement, the Company or you as the
Representatives of the Underwriters will have the right, by written notice given
within the next 36-hour period to the parties to the applicable Pricing
Agreement, to terminate the applicable Pricing Agreement without liability on
the part of any nondefaulting Underwriter.
No action pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of the applicable Pricing Agreement, either the non-defaulting
Underwriter or Underwriters, as the case may be, or the Company shall have the
right to postpone the Closing Time for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangement.
SECTION 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed as set forth in the applicable Pricing Agreement;
notices to the Company shall be directed to it at Legg Mason, Inc., 100 Light
Street, Baltimore, Maryland 21202, attention of Robert F. Price, Senior Vice
President and General Counsel.
SECTION 12. Parties. This Agreement and each applicable
Pricing Agreement shall each inure to the benefit of and be binding upon the
Underwriters and the Company and
<PAGE>
22
their respective successors. Nothing expressed or mentioned in this Agreement or
any such Pricing Agreement is intended or shall be construed to give any person,
firm or corporation, other than the Underwriters and the Company and their
respective successors and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any Pricing Agreement or any provision herein or therein contained. This
Agreement and each applicable Pricing Agreement and all conditions and
provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the Underwriters and the Company and their respective successors, and
said controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
SECTION 13. Governing Law and Time. This Agreement and the
Pricing Agreement shall be governed by and construed in accordance with the laws
of the State of New York applicable to agreements made and to be performed in
said State. Except as otherwise set forth herein, specified times of day refer
to New York time.
Very truly yours,
LEGG MASON, INC.
By:
-----------------------------
Name:
Title:
<PAGE>
23
SCHEDULE I
[LIST OF BROKER-DEALERS]
<PAGE>
24
SCHEDULE II
[LIST OF INVESTMENT ADVISERS]
<PAGE>
Exhibit A
LEGG MASON, INC.
(a Maryland corporation)
___% Debt Securities due _____
PRICING AGREEMENT
-----------, ----
[Name and address of the
Underwriter(s) or Representative(s)
of the Underwriter(s), if any]
Dear Sirs:
Legg Mason, Inc., a Maryland corporation (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated __________, ____ (the "Underwriting Agreement"),
to issue and sell to [___________ (the "Underwriter(s)")] [the several
Underwriters listed on Schedule I hereto, for whom ____________ is/are acting as
representative(s) (the "Representative(s)")], the Securities specified herein
(the "Securities"). This agreement is the Pricing Agreement relating to the
Securities referred to in the Underwriting Agreement.
Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Pricing Agreement to the same extent as if such provisions had been
set forth in full herein. Each reference to the Representatives herein and in
the provisions of the Underwriting Agreement so incorporated by reference shall
be deemed to refer to you. Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined. The address of the
Underwriter(s) referred to in Section 11 of the Underwriting Agreement is
______________________, Attention: ______________.
An amendment to the Registration Statement, or the Prospectus
Supplement, as the case may be, relating to the Securities, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
[LIST OF "SIGNIFICANT SUBSIDIARIES NOT OWNED FREE AND CLEAR
OF ENCUMBRANCES"]
Subject to the terms and conditions set forth herein and in
the Underwriting Agreement incorporated herein by reference, the Company agrees
to issue and to sell to the
A-1
<PAGE>
Underwriters, and the Underwriters agree to purchase from the Company, at the
time and place and at the purchase price to the Underwriters set forth herein,
the aggregate principal amount of Securities.
Pursuant to Section 2 of the Underwriting Agreement, the
Company agrees with the Underwriters as follows:
Title of Debt Securities:
Whether Senior or Subordinated Debt Securities:
Indenture (if other than as specified in the Underwriting
Agreement):
Principal amount to be issued: $
Current ratings:
Interest rate: % Payable
Date of maturity:
[Currency of Denomination:
Currency of Payment:
Form and Denomination:
Overseas Paying Agent:]
Redemption provisions:
Conversion:
Sinking fund requirements:
[Public offering price: %, plus accrued interest, or
amortized original issue discount, if any,
from , 19 .]
Purchase price: %, plus accrued interest, or amortized
original issue discount, if any, from ______, ____
(payable in next day funds).
Closing date and location:
This Agreement shall be governed by the laws of the State of
New York.
--------------------
If the foregoing is in accordance with your understanding of
the agreement between you and the Company, please sign and return to the Company
a counterpart hereof, whereupon this instrument along with all counterparts
(including the provisions of the Underwriting Agreement incorporated by
reference herein) shall be a binding agreement between the Underwriter and the
Company in accordance with its terms and the terms of the Underwriting
Agreement.
A-2
<PAGE>
Very truly yours,
LEGG MASON, INC.
By:
-----------------------------
Name:
Title:
Accepted as of the date first above written:
UNDERWRITER(S) or
REPRESENTATIVE(S),
on behalf of the several Underwriters
named in Schedule I hereto
By:
-----------------------------------
Name:
Title:
Aggregate
Principal
Amount
Name of Underwriter of Securities
- ------------------ --------------
Total.....................................................
A-3
<PAGE>
SCHEDULE I
TO THE PRICING AGREEMENT
Significant Subsidiaries of the Company
A-4
EXHIBIT 5.1
[S&S LETTERHEAD]
March 27, 2000
To the Board of Directors
of Legg Mason, Inc.
Ladies and Gentlemen:
We are acting as counsel for Legg Mason, Inc. (the "Company")
in connection with the combined Registration Statement on Form S-3 and
Post-Effective Amendment No. 1 to Registration Statement No. 333-00151
(collectively, the "Registration Statement") being filed with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended, relating to the offering from time to time, as set forth in the
combined prospectus pursuant to Rule 429 contained in the Registration Statement
(the "Prospectus") and as to be set forth in one or more supplements to the
Prospectus (each such supplement, a "Prospectus Supplement"), of the Company's:
(i) debt securities ("Debt Securities"), and (ii) debt securities convertible or
exchangeable into shares of Common Stock, par value $.10 per share ("Common
Stock"), of the Company ("Convertible Debt Securities"). The aggregate gross
proceeds from the offer, sale and distribution of the Debt Securities and
Convertible Debt Securities under the Registration Statement will not exceed
$500 million. The Debt Securities and the Convertible Debt Securities are
collectively referred to as the "Securities".
The Securities will be issued in one or more series and may be
either senior debt securities (including senior debt securities convertible or
exchangeable into shares of Common Stock) ("Senior Securities") issued pursuant
to an Indenture dated as of February 9, 1996 (the "Senior Indenture") between
the Company and The Bank of New York), as trustee (the "Senior Trustee"), or
subordinated debt securities ("Subordinated Securities") issued pursuant to an
Indenture (including subordinated debt securities convertible or exchangeable
into shares of Common Stock) (the "Subordinated Indenture") between the Company
and The Bank of New York, as trustee (the "Subordinated Trustee").
<PAGE>
2
We are familiar with the corporate proceedings of the Company
to date with respect to the proposed issuance and sale of the Securities,
including resolutions of the Board of Directors of the Company (the
"Resolutions") authorizing the Indentures and the issuance, offering and sale of
the Securities, and we have examined such corporate records of the Company and
such other documents and certificates as we have deemed necessary as a basis for
the opinions hereinafter expressed.
Based on the foregoing, and having regard for such legal
considerations as we have deemed relevant, we are of the opinion that:
1. The Senior Indenture has been duly authorized, executed and
delivered by the Company pursuant to the authority granted in the Resolutions
and, assuming the due authorization, execution and delivery thereof by the
Senior Trustee, constitutes a valid and legally binding instrument of the
Company enforceable against the Company in accordance with its terms.
2. The Senior Securities have been duly authorized and, when
the final terms thereof have been duly established and approved and when duly
executed by the Company, in each case pursuant to the authority granted in the
Resolutions, and authenticated by the Senior Trustee in accordance with the
Senior Indenture and delivered to and paid for by the purchasers thereof, will
constitute valid and legally binding obligations of the Company entitled to the
benefits of the Senior Indenture.
3. The Subordinated Indenture has been duly authorized by the
Company and, when executed and delivered by the Company pursuant to the
authority granted in the Resolutions and assuming the due authorization,
execution and delivery thereof by the Subordinated Trustee, will constitute a
valid and legally binding instrument of the Company enforceable against the
Company in accordance with its terms.
4. The Subordinated Securities have been duly authorized and,
when the final terms thereof have been duly established and approved and when
duly executed by the Company, in each case pursuant to the authority granted in
the Resolutions, and authenticated by the Subordinated Trustee in accordance
with the Subordinated Indenture and delivered to and paid for by the purchasers
thereof, will constitute valid and legally binding obligations of the Company
entitled to the benefits of the Subordinated Indenture.
5. The Common Stock issuable pursuant to the conversion or
exchange of Convertible Debt Securities, when duly authorized by the
stockholders of the Company and
<PAGE>
3
issued upon conversion or exchange in accordance with the terms of Convertible
Debt Securities, will be validly issued, fully paid and nonassessable.
The opinions set forth above are subject, as to enforcement,
to (i) bankruptcy, insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or other similar laws
relating to or affecting the enforcement of creditors' rights generally, (ii)
general equitable principles (regardless of whether enforcement is considered in
a proceeding in equity or at law) and (iii) provisions of law that require that
a judgment for money damages rendered by a court in the United States be
expressed only in United States dollars.
We hereby consent to the use of this opinion as an exhibit to
the Registration Statement and to the use of our name under the heading "Legal
Opinions" in the Prospectus.
Very truly yours,
/s/ Shearman & Sterling
FDG/MAE/MPI
EXHIBIT 5.2
March 27, 2000
Legg Mason, Inc.
100 Light Street
Baltimore, Maryland 21202
Ladies and Gentlemen:
You have requested me, as General Counsel of Legg Mason, Inc.
(the "Company"), to render my opinion in connection with the preparation and
filing with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended, of the combined Registration Statement on
Form S-3 and Post-Effective Amendment No. 1 to Registration Statement No.
333-00151 (collectively, the Registration Statement") relating to the offering
from time to time, as set forth in the combined prospectus pursuant to Rule 429
contained in the Registration Statement (the "Prospectus") and as to be set
forth in one or more supplements to the Prospectus (each such supplement, a
"Prospectus Supplement"), of the Company's: (i) debt securities ("Debt
Securities"), and (ii) debt securities convertible or exchangeable into shares
of Common Stock, par value $.10 per share ("Common Stock"), of the Company
("Convertible Debt Securities"). The aggregate gross proceeds from the offer,
sale and distribution of the Debt Securities and Convertible Debt Securities
under the Registration Statement will not exceed $500 million. The Debt
Securities and the Convertible Debt Securities are collectively referred to as
the "Securities".
The Securities will be issued in one or more series and may be
either senior debt securities (including senior debt securities convertible or
exchangeable into shares of Common Stock) ("Senior Securities") issued pursuant
to an Indenture dated as of February 9, 1996 (the "Senior Indenture") between
the Company and The Bank of New York, as trustee (the "Senior Trustee"), or
subordinated debt securities (including subordinated debt securities convertible
or exchangeable into shares of Common Stock) ("Subordinated Securities") issued
pursuant to an Indenture (the "Subordinated Indenture") between the Company and
The Bank of New York, as trustee (the "Subordinated Trustee").
I am familiar with the Company's articles of incorporation and
by-laws, as amended to date, and have examined the originals, or copies
certified or otherwise identified to my satisfaction, of corporate records of
the Company, statutes and other instruments and documents as the basis for the
opinions expressed herein. I am, or someone under my supervision is, familiar
with the forms of Indentures and the Securities.
Based upon the foregoing, and having regard for such legal
considerations as I have deemed relevant, I am of the opinion that:
<PAGE>
2
1. The Company is a corporation validly existing and in good
standing under the laws of the State of Maryland.
2. The Senior Indenture has been duly authorized, executed and
delivered by the Company.
3. The Subordinated Indenture and the Securities, when
executed by a duly authorized officer of the Company, will have been duly
authorized by the Company.
4. The Common Stock issuable pursuant to the conversion or
exchange of Convertible Debt Securities, when duly authorized by the
stockholders of the Company and issued upon conversion or exchange in accordance
with the terms of Convertible Debt Securities, will be validly issued, fully
paid and nonaccessable.
I am admitted to practice in the State of Maryland. The
opinions set forth herein are limited to matters of the General Corporation Law
of the State of Maryland. I am furnishing this opinion solely for your benefit
and, as to certain matters of Maryland law, for the benefit of your counsel,
Shearman & Sterling and of counsel for the underwriters in one or more offerings
under the Registration Statement. It may not be relied upon by any other person
without my express written consent.
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
<TABLE>
<CAPTION>
EXHIBIT 12
Legg Mason, Inc.
Computation of Consolidated Ratio of Earnings to Fixed Charges
(dollars in thousands)
Nine
Months Ended
December 31, Years Ended March 31,
------------------ --------------------------------------
1999 1999 1998
---- ---- ----
<S> <C> <C> <C>
Earnings before income taxes $158,254 $148,775 $128,379
Fixed Charges:
Interest Expense 93,100 94,910 73,706
Portion of rental expense
representative of interest factor* 12,658 14,273 12,636
Earnings available for fixed charges $264,012 $257,958 $214,721
Fixed Charges:
Interest Expense $ 93,100 $ 94,910 $ 73,706
Portion of rental expense
representative of interest factor* 12,658 14,273 12,636
Total Fixed Charges $105,758 $109,183 $ 86,342
Consolidated ratio of earnings to fixed charges 2.5 2.4 2.5
---------------------------------------------
1997 1996 1995
---- ---- ----
Earnings before income taxes $ 96,210 $64,551 $28,275
Fixed Charges:
Interest Expense 43,364 26,187 17,249
Portion of rental expense
representative of interest factor* $ 10,017 8,980 7,977
Earnings available for fixed charges $149,591 $99,718 $53,501
Fixed Charges:
Interest Expense $ 43,364 $26,187 $17,249
Portion of rental expense
representative of interest factor* 10,017 8,980 7,977
Total Fixed Charges $ 53,381 $35,167 $25,226
Consolidated ratio of earnings to fixed charges 2.8 2.8 2.1
- --------
* The portion of rental expense representative of interest factor is calculated as one third of the total of Rent, DP Service
Bureau, and Equipment Rental expenses.
</TABLE>
EHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our reports dated June 2, 1999 relating to the
financial statements and financial statement schedules, which appear in Legg
Mason, Inc.'s Annual Report on Form 10-K for the year ended March 31, 1999. We
also consent to the references to us under the heading "Experts" in such
Registration Statement.
PricewaterhouseCoopers LLP
Baltimore, Maryland
March 22, 2000
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
===========================
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
===========================
LEGG MASON, INC.
(Exact name of obligor as specified in its charter)
Maryland 52-1200960
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
100 Light Street
Baltimore, Maryland 21202
(Address of principal executive offices) (Zip code)
===========================
Subordinated Debt Securities
(Title of the indenture securities)
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York, N.Y.
New York 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y.
10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 21st day of March, 2000.
THE BANK OF NEW YORK
By: /s/MICHAEL CULHANE
----------------------
Name: MICHAEL CULHANE
Title: VICE PRESIDENT
<PAGE>
Exhibit 7
---------
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1999, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provi- sions of the Federal Reserve Act.
Dollar Amounts
ASSETS In Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.. $6,394,412
Interest-bearing balances........................... 3,966,749
Securities:
Held-to-maturity securities......................... 805,227
Available-for-sale securities....................... 4,152,260
Federal funds sold and Securities purchased under
agreements to resell................................ 1,449,439
Loans and lease financing receivables:
Loans and leases, net of unearned
income...............37,900,739
LESS: Allowance for loan and
lease losses............572,761
LESS: Allocated transfer risk
reserve..................11,754
Loans and leases, net of unearned income,
allowance, and reserve............................ 37,316,224
Trading Assets......................................... 1,646,634
Premises and fixed assets (including capitalized
leases)............................................. 678,439
Other real estate owned................................ 11,571
Investments in unconsolidated subsidiaries and
associated companies................................ 183,038
Customers' liability to this bank on acceptances
outstanding......................................... 349,282
Intangible assets...................................... 790,558
Other assets........................................... 2,498,658
------------
Total assets........................................... $60,242,491
============
LIABILITIES
Deposits:
In domestic offices................................. $26,030,231
Noninterest-bearing.......................11,348,986
Interest-bearing..........................14,681,245
In foreign offices, Edge and Agreement
subsidiaries, and IBFs............................ 18,530,950
Noninterest-bearing..........................156,624
Interest-bearing..........................18,374,326
Federal funds purchased and Securities sold under
agreements to repurchase............................ 2,094,678
Demand notes issued to the U.S.Treasury................ 232,459
Trading liabilities.................................... 2,081,462
Other borrowed money:
With remaining maturity of one year or less......... 863,201
With remaining maturity of more than one year
through three years............................... 449
With remaining maturity of more than three years.... 31,080
Bank's liability on acceptances executed and
outstanding......................................... 351,286
Subordinated notes and debentures...................... 1,308,000
Other liabilities...................................... 3,055,031
------------
Total liabilities...................................... 54,578,827
============
EQUITY CAPITAL
Common stock........................................... 1,135,284
Surplus................................................ 815,314
Undivided profits and capital reserves................. 3,759,164
Net unrealized holding gains (losses) on
available-for-sale securities....................... (15,440)
Cumulative foreign currency translation adjustments.... (30,658)
------------
Total equity capital................................... 5,663,664
------------
Total liabilities and equity capital................... $60,242,491
============
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Renyi |
Alan R. Griffith | Directors
Gerald L. Hassell |
- --------------------------------------------------------------------------------
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
===========================
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
===========================
LEGG MASON, INC.
(Exact name of obligor as specified in its charter)
Maryland 52-1200960
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
100 Light Street
Baltimore, Maryland 21202
(Address of principal executive offices) (Zip code)
===========================
Senior Debt Securities
(Title of the indenture securities)
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York, N.Y.
New York 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y.
10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 21st day of March, 2000.
THE BANK OF NEW YORK
By: /s/MICHAEL CULHANE
----------------------
Name: MICHAEL CULHANE
Title: VICE PRESIDENT
<PAGE>
Exhibit 7
---------
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1999, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provi- sions of the Federal Reserve Act.
Dollar Amounts
ASSETS In Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.. $6,394,412
Interest-bearing balances........................... 3,966,749
Securities:
Held-to-maturity securities......................... 805,227
Available-for-sale securities....................... 4,152,260
Federal funds sold and Securities purchased under
agreements to resell................................ 1,449,439
Loans and lease financing receivables:
Loans and leases, net of unearned
income...............37,900,739
LESS: Allowance for loan and
lease losses............572,761
LESS: Allocated transfer risk
reserve..................11,754
Loans and leases, net of unearned income,
allowance, and reserve............................ 37,316,224
Trading Assets......................................... 1,646,634
Premises and fixed assets (including capitalized
leases)............................................. 678,439
Other real estate owned................................ 11,571
Investments in unconsolidated subsidiaries and
associated companies................................ 183,038
Customers' liability to this bank on acceptances
outstanding......................................... 349,282
Intangible assets...................................... 790,558
Other assets........................................... 2,498,658
------------
Total assets........................................... $60,242,491
============
LIABILITIES
Deposits:
In domestic offices................................. $26,030,231
Noninterest-bearing.......................11,348,986
Interest-bearing..........................14,681,245
In foreign offices, Edge and Agreement
subsidiaries, and IBFs............................ 18,530,950
Noninterest-bearing..........................156,624
Interest-bearing..........................18,374,326
Federal funds purchased and Securities sold under
agreements to repurchase............................ 2,094,678
Demand notes issued to the U.S.Treasury................ 232,459
Trading liabilities.................................... 2,081,462
Other borrowed money:
With remaining maturity of one year or less......... 863,201
With remaining maturity of more than one year
through three years............................... 449
With remaining maturity of more than three years.... 31,080
Bank's liability on acceptances executed and
outstanding......................................... 351,286
Subordinated notes and debentures...................... 1,308,000
Other liabilities...................................... 3,055,031
------------
Total liabilities...................................... 54,578,827
============
EQUITY CAPITAL
Common stock........................................... 1,135,284
Surplus................................................ 815,314
Undivided profits and capital reserves................. 3,759,164
Net unrealized holding gains (losses) on
available-for-sale securities....................... (15,440)
Cumulative foreign currency translation adjustments.... (30,658)
------------
Total equity capital................................... 5,663,664
------------
Total liabilities and equity capital................... $60,242,491
============
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Renyi |
Alan R. Griffith | Directors
Gerald L. Hassell |
- --------------------------------------------------------------------------------
