LEGG MASON WOOD WALKER, INCORPORATED
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PRIVATE CLIENT GROUP DEFERRED COMPENSATION PLAN
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(December, 1999 Amending Restatement)
This document constitutes the Legg Mason Wood Walker,
Incorporated Private Client Group Deferred Compensation Plan (the "Plan"),
formerly known as the Legg Mason Wood Walker, Incorporated Retail Deferred Bonus
Compensation Plan.
1. PURPOSE. The purpose of the Plan is to enhance the ability
of Legg Mason Wood Walker, Incorporated (the "Company") to attract and retain
full-time financial advisors.
2. DEFINITIONS. As used herein, the following definitions
shall apply:
(a) "Account" means a Financial Advisor's combined Credit
Interest Account and Phantom Stock Account.
(b) "Committee" means the Legg Mason Wood Walker,
Incorporated Private Client Group Deferred Compensation Plan Committee consist-
ing of such members as the Company's President shall select from time to time.
(c) "Company" shall have the meaning set forth in Section
1 of this Plan.
(d) "Compensation Credit" shall have the meaning set forth
in Section 4(b) of this Plan.
(e) "Credit Interest Account" means a deferred
compensation account established pursuant to Section 4(a) of this Plan.
(f) "Credit Interest Rate" means the average of the twelve
month end rates of the Company's credit interest rate paid during a Plan Year to
the Company's cash reinvestment accounts.
(g) "Disability" shall have the meaning set forth in
Section 9(h) of this Plan.
(h) "Eligible Gross Production" means gross commission and
fee revenues generated from sales of all products and services in the capacity
of a Financial Advisor of the Company, excluding production as determined
annually by the PCG Legg Mason Financial Advisor compensation schedule.
Exhibit 4.1
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(i) "Fair Market Value" shall have the meaning set forth
in Section 4(b)(i) of this Plan.
(j) "Financial Advisor" or "FA" means an employee who
devotes full time to the generation of commission and fee revenues through the
sale of investment products and services to the public and is compensated on a
commission basis. This definition excludes any executive office/departmental
personnel unless specifically included by separate agreement. A Branch Manager
who receives some compensation in addition to commissions shall be eligible to
participate in the Plan solely on the basis of personal Gross Production.
(k) "Gross Production" means gross commission and fee
revenues generated from sales of all products and services in the capacity of a
Financial Advisor of the Company.
(l) "Interest Credits" shall have the meaning set forth in
Section 5 of this Plan.
(m) "LMI" shall have the meaning set forth in Section 4(b)
of this Plan.
(n) "Phantom Stock Account" means a deferred compensation
account established pursuant to Section 4(b) of this Plan.
(o) "Payment Date" shall have the meaning set forth in
Section 4(b)(ii) of this Plan.
(p) "Plan Year" means the calendar year.
(q) "Retirement" shall have the meaning set forth in
Section 9(b) of the Plan.
(r) "Share Units" shall have the meaning set forth in
Section 4(b) of this Plan.
3. ELIGIBILITY. All FA's are eligible to participate in
the Plan commencing on their date of employment and remain eligible to
participate in the Plan until the calendar year during which their 60th birthday
occurs. For the calendar year during which an FA's 60th birthday occurs and each
subsequent calendar year during which the FA is employed as an FA, the FA may
elect annually, on a form prescribed by the Company and attached hereto as
Exhibit D, whether or not to participate in the Plan, provided, however, that
once an FA elects to not participate in the Plan, the FA shall not thereafter be
eligible to participate in the Plan in any subsequent calendar year. In order to
receive a Compensation Credit for any Plan Year during which the FA was
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employed, the FA must have been employed for the entire Plan Year, except,
however, that if the employment of an FA terminates during a Plan Year by reason
of the FA's death or Disability, the FA shall, for purposes of receiving a
Compensation Credit for such Plan Year, be deemed to have been employed for
the entire Plan Year during which such death or Disability occurred.
4. DEFERRED COMPENSATION. As of the end of each Plan Year
commencing with the year 1994, the Company will defer the payment of, and will
credit or allocate to the Account of each FA who is eligible to participate in
the Plan, an amount determined by applying the rate schedule for Gross
Production applicable for such year to the FA's Eligible Gross Production for
the Plan Year. The FA shall elect annually on a form prescribed by the Company
and attached as Exhibit A hereto prior to the beginning of each Plan Year
whether such deferred compensation amount for any such Plan Year shall be
allocated to, and accrue in, a Credit Interest Account or a Phantom Stock
Account, as set forth below. For the 1999 Plan Year, each FA shall have the
ability to make a special election prior to the end of the 1999 Plan Year, in
the form attached hereto as Exhibit A (1999), for the purposes (i) of selecting
whether deferred compensation for the 1999 Plan Year shall be allocated to, and
accrue in, a Credit Interest Account or a Phantom Stock Account, and (ii)
described in Section 4(c).
(a) Credit Interest Account. As of the last day of
each Plan Year, all deferred bonus amounts allocated to a Credit Interest
Account for prior Plan Years shall be credited with an amount equal to one
year's interest based on the Credit Interest Rate; and
(b) Phantom Stock Account. As of the last day of each
Plan Year, all deferred bonus amounts allocated to a Phantom Stock Account for
prior Plan Years shall be deemed converted into units that are economically
equivalent to, but are not actual, shares of Legg Mason, Inc. ("LMI") Common
Stock (but only to the extent not previously converted into Share Units or
credited with Interest Credits, except as set forth in Section 4(c) below).
These "phantom" shares of LMI Common Stock are referred to as "Share Units." The
Company will establish a Phantom Stock Account on its books and records for the
benefit of the FA wherein the Company will credit to such Phantom Stock Account
Share Units based on the conversion of the compensation deferred by the FA under
this Plan (hereafter the "Compensation Credit"). Each Compensation Credit will
be made by the Committee as soon as practicable after the last day of the Plan
Year during which the Compensation Credit was deferred. The number of Share
Units into which such Compensation Credit shall be converted (calculated to four
decimal places) will be determined as of the fifth trading day after the date
the Compensation Credit is made and will be equal to the amount of the
Compensation Credit divided by the fair market value of a share of LMI Common
Stock, determined as set forth below.
(i) Fair Market Value. Fair market value of a
share of LMI Common Stock will equal the five day average of the closing prices
on the principal exchange on which LMI Common Stock is traded for the four
trading days immediately preceding the applicable valuation date and the
valuation date (where the valuation date is the fifth trading day after the date
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on which the Phantom Stock Account is credited), or, if LMI Common Stock is not
then traded on an exchange, such amount as is determined by the Company using
any reasonable method of valuation ("Fair Market Value").
(ii) Adjustment to Phantom Stock Account upon
Dividend by LMI. If, prior to the date an FA receives a payment from the Company
pursuant to this Plan (a "Payment Date"), LMI pays any dividend (other than in
LMI Common Stock) upon its Common Stock, or makes any distribution (other than
in LMI Common Stock) with respect thereto, the FA's Phantom Stock Account will
be credited with additional Share Units equivalent to that number of phantom
shares of LMI Common Stock determined by dividing the amount of the dividend or
other distribution allocable to the Share Units already credited to the Phantom
Stock Account as of the record date for the dividend or distribution, by 95% of
the Fair Market Value of a share of LMI Common Stock on the fifth business day
after the payment date for the dividend or distribution.
(iii) Adjustment to Phantom Stock Account upon
Certain Events. In the event that, prior to a Payment Date, the number of
outstanding shares of LMI Common Stock is changed by reason of a stock split,
stock dividend, combination of shares or recapitalization, or LMI Common Stock
is converted into or exchanged for other shares as a result of a merger,
consolidation, sale of assets or other reorganization or recapitalization, the
number of Share Units then credited to an FA's Phantom Stock Account will be
appropriately adjusted so as to reflect such change (based upon the best
estimate of the Company as to relative values).
(iv) Rights as LMI Stockholder. Nothing contained
in this Plan shall confer or be construed as conferring upon Employee any rights
as a stockholder of LMI or any right to have access to the books and records of
LMI or any subsidiary.
(c) Elective Transfer to Phantom Stock. Prior to the
conclusion of Plan Year 1999, an FA may make a one time election, on a form
prescribed by the Company and attached as Exhibit A (1999), to transfer (i) his
entire Credit Interest Account, or (ii) that portion of his entire Credit
Interest Account representing Interest Credits accrued during an entire Plan
Year, to a Phantom Stock Account in accordance with Section 4(b) hereof
5. INTEREST CREDITS. In the event that an FA elects to have
his or her Account accrue income based on the Credit Interest Rate pursuant to
Section 4(a) of this Plan, any such accrued credits (hereinafter "Interest
Credits") that are based on the Credit Interest Rate will be computed and
compounded annually and immediately prior to distribution to the FA or his or
her beneficiary. Interest Credits shall be distributed to an FA at the same time
as the deferred bonus amount to which it relates. The aggregate total of
deferred bonus amounts and Interest Credits accrued thereon shall be referred to
herein as "Interest Units".
6. ASSIGNMENT OF BENEFITS. No amount payable, or other right
or benefit, under this Plan will, except as otherwise specifically provided by
this Plan or by applicable law, be subject to sale, assignment, transfer,
pledge, encumbrance, attachment, garnishment or levy prior to distribution to an
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FA. Since this Plan is intended to be a non-qualified, unfunded plan not subject
to the Employment Retirement Income Security Act of 1974, as amended, payments
under this Plan will not be subject to the provisions of any qualified domestic
relations order (as defined under the Internal Revenue Code of 1986, as amended)
applicable to an FA's deferred compensation benefit.
7. RIGHT TO OFFSET. Notwithstanding any provision herein to
the contrary, any distribution payable under this Plan may be used, at the
discretion of the Committee and subject to compliance with applicable law, to
offset any debt owed by an FA to the Company at the date such distribution would
otherwise be paid. The Company may withhold distributions payable under this
Plan to offset any debts or other liabilities owed by an FA to the Company. If
the Company is aware of any errors, loans outstanding, or outstanding or pending
liabilities of an FA, the Company may withhold distributions under this Plan
until such time as the liabilities are satisfied or the Company has determined
that an outstanding or pending liability no longer exists,
8. UNFUNDED NATURE OF THE PLAN. The Company will not be
required to purchase, hold or dispose of any investments with respect to amounts
credited to the Account of any FA participating in the Plan. An FA has no
interest in the Account or in any investments the Company may purchase with such
amounts, except as a general, unsecured creditor of the Company.
The Plan at all times shall be entirely unfunded. The FA's
Account is merely a record for measuring and determining the amount of deferred
compensation benefits to be paid by the Company to, or with respect to, the FA
under this Plan, and such Account shall be established solely for such
bookkeeping purposes. The Company shall not be required to segregate any funds
or other assets to be used for payment of benefits under this Plan. The FA's
Account shall not be, or be considered as evidence of the creation of, a trust
fund, an escrow or any other segregation of assets for the benefit of the FA or
any beneficiary of the FA. There is no guaranty of benefit payments to the FA.
The obligation of the Company to make the payments described
in the Plan is an unsecured contractual obligation only, and neither the FA nor
any beneficiary of the FA shall have any beneficial or preferred interest by way
of trust, escrow, lien or otherwise in and to any specific assets or funds. The
FA and each beneficiary of the FA shall look solely to the general credit of the
Company for satisfaction of any obligations due or to become due under this
Plan.
Should the Company elect to make contributions to a trust
(hereinafter referred to as the "Trust") to assist the Company in paying the
benefits which may accrue hereunder, the amounts contributed shall be used to
purchase the deemed investments under Section 4(b), subject to application of
the provisions of this Section 8 to the actual investments. However,
contributions to the Trust shall not reduce or otherwise affect the Company's
liability to pay benefits under this Plan (which benefits may be paid from the
Trust or from the Company's general assets, in the discretion of the Company),
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except that the Company's liability shall be reduced by actual benefit payments
from the Trust (and the Account shall be appropriately adjusted to reflect such
payments). If any such investments, or any contributions to the Trust, are made
by the Company, such investments shall have been made solely for the purpose of
aiding the Company in meeting its obligations under the Plan, and, except for
actual contributions to the Trust, no trust or trust fund is intended. To the
extent that the Company does, in its discretion, purchase or hold any such
investments (other than through contributions to the Trust), the Company will be
named sole owner of all such investments and of all rights and privileges
conferred by the terms of the instruments or certificates evidencing such
investments. Nothing stated herein will cause such investments, or the Trust, to
form part of the Account, or to be treated as anything but the general assets of
the Company, subject to the claims of its general creditors, nor will anything
stated herein cause such investments, or the Trust, to represent the vested,
secured or preferred interest of the FA. The Company shall have the right at any
time to use such investments not held in the Trust in the ordinary course of its
business. Neither the FA nor any of his beneficiaries shall at any time have any
interest in the Account or the Trust or in any such investments, except as a
general, unsecured creditor of the Company to the extent of the deferred
compensation arrangement which is the subject of the Plan.
9. DISTRIBUTIONS. Except as otherwise provided in Sections
9(f), 9(g), 9(h) and 10 below, distributions of Share Units and/or Interest
Units in an FA's Account shall be made in accordance with the FA's irrevocable
election on a form provided by the Company and attached hereto as Exhibit B (the
"Payment Option Election") to receive distributions under the Plan:
(a) as soon as practicable following the last day, but in
any event not later than sixty (60) days following the last day, of the sixth
Plan Year following the Plan Year for which such amount was credited or
allocated to the Account of the FA; or
(b) in the event an FA's employment with the Company
terminates as a result of Retirement, unless distribution of benefits is
forfeited pursuant to Section 10 due to the FA engaging in competition, either
(i) in a single lump sum as soon as practicable following the last day, but in
any event not later than sixty (60) days following the last day, of the Plan
Year during which the FA's Retirement occurred or (ii) in three (3) annual
installment distributions of the balance of the Account, the first of which
shall occur as soon as practicable following the last day, but in any event not
later than sixty (60) days following the last day, of the Plan year during which
the FA's Retirement occurred; provided, however, that if the balance in the FA's
Account at the time of Retirement is less than $20,000, the FA may not elect
this option (ii). For purposes of this Plan, "Retirement" means an FA's
termination of employment with the Company provided that such termination occurs
(i) on or after the FA is age 65; (ii) on or after the FA is age 55 if the sum
of the FA's age at termination of employment and his or her years of service
with the Company equals at least 75; or (iii) on or after the FA is age 60 if
the FA has a minimum of ten years of service with the Company.
(c) Interest Unit Distributions. In connection with an
FA's Credit Interest Account, the Company will make all distributions in cash.
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(d) Phantom Stock Distributions. In connection with an
FA's Phantom Stock Account, the Company will make all distributions in shares of
LMI Common Stock. There is no limit on the total number of shares of LMI Common
Stock that may be distributed under this Section.
(e) Market Risk. When the Company distributes stock, an FA
will be subject to some market risk if the trading price of LMI Common Stock
declines during the five day period since Fair Market Value will be measured by
taking into account stock prices over a five day period preceding the date a
distribution is due. After the date of distribution, an FA must make his or her
own decision as to whether to sell or retain the shares received under this
Section. Any brokerage commissions or other charges incurred in the event the FA
decides to sell such shares will be the sole responsibility of the FA, not the
Company.
(f) Termination of Employment. Except as provided below,
for purposes of determining the amount of any distribution payable to an FA, the
FA shall not be entitled to receive any partial or pro-rated credit for amounts
allocated to the FA's Account for Plan Years ending after the date which is six
(6) years prior to the date of termination. If an FA's employment with the
Company terminates for any reason other than death, Disability or Retirement (as
such terms are defined herein), whether involuntary or voluntary and for
whatever cause or for no cause, the FA shall have no right or claim to any such
Share Units or Interest Units, and such Share Units and Interest Units shall be
forfeited in their entirety. Forfeited amounts shall revert to the Company and
will not be allocated to other FA's. In the event any FA desires a ruling as to
the potential application of this Section, he may request a ruling from the
Committee in accordance with Section 15.
(g) Death of FA.
(i) In the event an FA's employment with the
Company terminates as a result of the FA's death, all Share Units and Interest
Units in his Account shall be paid, in accordance with the FA's Payment Option
Election, to the FA's estate or to the FA's beneficiary (if the FA has named a
beneficiary as described in Section 12) as soon as practicable following the
last day, but in any event not later than sixty (60) days following the last
day of the Plan Year during which the FA's death occurred.
(ii) In the event of an FA's death subsequent
to the date of the FA's Retirement and at a time during which the FA is
receiving distributions under the Plan, all Share Units and Interest Units
then remaining in the FA's Account shall be paid, notwithstanding the FA's
Payment Option Election, in a lump sum, to the FA's estate or to the FA's
beneficiary (if the FA has named a beneficiary as described in Section 12) as
soon as practicable following the date of death of the FA.
(h) Disability of FA. In the event an FA's employment with
the Company terminates as a result of the FA's Disability, all Share Units and
Interest Units in his Account shall be paid, in accordance with the FA's Payment
Option Election, as soon as practicable following the last day, but in any event
not later than sixty (60) days following the last day, of the
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Plan Year during which the FA's Disability occurred. For purposes of this Plan,
"Disability" shall mean a medically determinable physical or mental impairment
which, as determined by the Committee using such criteria as it establishes in
its sole and absolute discretion, will prevent the FA from performing his usual
duties or any other similar duties available in the Company's employ.
10. NON-COMPETE. If a Retired FA engages in competition with
the Company prior to the date of a distribution, the FA's Account shall be
forfeited in its entirety. Forfeited amounts shall revert to the Company and
will not be allocated to other FAs.
(a) For purpose of this Section, an FA shall be
deemed to have "engaged in competition" with the Company if he or she:
(i) discloses the names of or otherwise identifies
any of the Company's customers to any person, firm, corporation, association, or
other entity for any reason or purpose whatsoever;
(ii) discloses to any person, firm, corporation,
association, or other entity any information regarding the Company's general
business practices or procedures, methods of sale, list of products, personnel
information or any other information concerning the Company's business;
(iii) owns, manages, operates, controls, is employed
by, acts as an agent for, participates in or is connected in any manner with the
ownership, management, operation or control of any firm, corporation,
association or other entity which is engaged in businesses which are or may be
competitive to the business of the Company; provided further that this
restrictive covenant shall encompass the State of Maryland and any other states
where the Company is engaged in business, and every city, county, and other
political subdivision of such states; or
(iv) solicits or calls, either by himself or at his
direction has any other person or firm solicit or call, any of the customers of
the Company on whom the FA called, with whom the FA became acquainted, or of
whom the FA learned of during his employment by the Company.
(b) It is the intention of the Company that this Section
be given the broadest protection allowed by law with regard to the restrictions
herein contained. Each restriction set forth in this Section shall be construed
as a condition separate and apart from any other restriction or condition. To
the extent that any restriction contained in this Section is determined by any
court of competent jurisdiction to be unenforceable by reason of it being
extended for too great a period of time, or as encompassing too large a
geographic area, or over too great a range of activity, or any combination of
these elements, then such restriction-shall be interpreted to extend only over
the maximum period of time, geographic area, and range of activities which the
court deems reasonable and enforceable.
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(c) In the event any FA desires a ruling as to the
potential application of this Section, he may request a ruling from the
Committee in accordance with Section 15.
(d) If the Committee in its discretion determines that an
activity otherwise described herein would not be injurious to the Company, it
may waive the application of this Section to such activity, which waiver shall
be binding upon the FA and the Company. The Company shall exercise such
discretion in a uniform, nondiscriminatory manner.
11. REPORTS. After the close of each Plan Year, the Committee
shall provide reports to the FA (or, in the event of the FA's death, to the FA's
beneficiary) showing the status of the FA's Accounts as of the end of the Plan
Year.
12. BENEFICIARY. The FA may designate, upon the form attached
as Exhibit C hereto and to be filed with the Committee, one or more primary
beneficiaries or contingent beneficiaries under the Plan to receive all or a
specified part of any deferred compensation benefits which at the time of the
FA's death remain unpaid under this Plan. An FA may change or revoke any such
designation from time to time. No such designation, change or revocation shall
be effective unless executed by the FA and received by the Committee during the
FA's lifetime. Each such designation, change or revocation shall be applicable
to all balances in the FA's Account, specifically including all such amounts
subsequently credited, and any such beneficiary designation under the Plan
presently on file with the Committee shall be effective under this Plan until
changed or revoked in the manner specified herein. No such change or revocation
shall require the consent of any beneficiary theretofore designated by the FA.
If the FA fails to designate a beneficiary, or subsequent facts render a
designation invalid or inoperative, then the benefits shall be payable to a
personal representative of the FA's estate. Unless the FA has otherwise
specified in the beneficiary designation, the beneficiary or beneficiaries
designated by the FA shall become fixed as of the FA's death so that if a
beneficiary survives the FA but dies before the receipt of all payments due such
beneficiary such remaining payments shall be payable to the representative of
such beneficiary's estate. In the event of the death of an FA who has an
undistributed balance in his or her Account, then the FA's Beneficiary will be
entitled to receive the balance of the Account in accordance with the FA's
Payment Option Election.
13. WITHHOLDING TAXES. Amounts payable under the Plan shall
be subject to such deductions or withholding as may be required by law. In the
event a deduction or withholding is required prior to distribution of benefits
hereunder, the Company shall have the right to deduct any required withholding
from any other compensation or amount otherwise payable by the Company to the
FA.
14. EFFECT ON EMPLOYMENT RIGHTS AND OTHER BENEFIT PROGRAMS.
Neither participation in nor any of the provisions of the Plan shall give the FA
any right to be retained in the employment of the Company. This Plan shall not
be construed as a contract of employment. The Company maintains an
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employment-at-will policy. As an FA is free to end his or her employment with
the Company at any time for any reason or no reason, the Company is free to end
the employment with an FA at any time for any reason or no reason. Furthermore,
the Company may end at any time an FA's employment as a Financial Advisor. In
the event an FA is no longer employed as a Financial Advisor, the FA will no
longer be entitled to defer compensation pursuant to this Agreement. However, as
long as an FA continues to be employed in good standing by the Company, the FA
shall continue to be entitled to the benefits due the FA under this Agreement.
This Plan is in addition to, and not in lieu of, any other employee benefit plan
or program in which the FA may be or become eligible to participate by reason of
employment with the Company, and the timing of receipt of benefits hereunder
shall have no effect on contributions to or benefits under such other plans or
programs except as the provisions hereof and of each such plan or program may
specify.
15. ADMINISTRATION. The Committee, as constituted from time
to time, shall have full power to interpret, construe and administer this Plan,
including authority to determine any dispute or claim with respect thereto. The
determination of the Committee in any matter within the powers and discretion
granted to it under this Plan, made in good faith, shall be binding and
conclusive upon the Company, the FA and all other persons having any right or
benefit hereunder. If the FA is a member of the Committee at any time, the FA
shall have no authority as such member with respect to any matter specifically
affecting the FA's interest hereunder (such as determination of the amount, form
or time of benefit payments to the FA), all such authority being reserved to the
other Committee members, to the exclusion of the FA, and the FA shall act only
in his or her individual capacity in connection with any such matter.
16. ARBITRATION FA agrees that any controversy or dispute
arising under this Plan which cannot be resolved by the Committee, or out of
FA's employment by the Company (including, but not limited to, claims arising
under the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act of 1967, and analogous state statutes), shall
be submitted for arbitration upon demand of either party in accordance with the
rules of the National Association of Securities Dealers, Inc. or the New York
Stock Exchange, Inc., provided, however, that in the event of termination of
FA's employment, the Company shall be entitled to seek injunctive relief or
confess judgment against FA pursuant to the terms of any other applicable
agreement and that the Company shall be entitled to apply for and obtain from
any state or federal court such relief before or after the commencement of any
arbitration proceeding, such relief to be afforded to the Company pending the
decision of the arbitrators.
17. CONTROLLING LAW. This Plan shall be construed, and the
legal relations between the parties in connection with any dispute relating to
the Plan shall be determined, in accordance with the laws of the State of
Maryland.
18. AMENDMENT OR TERMINATION. The Company reserves the right
to amend or terminate the Plan at any time. Any such amendment or termination
shall be by action of the Board of Directors of the Company or the Executive
Committee thereof.
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19. EFFECT OF AMENDMENT OR TERMINATION. No amendment or
termination of the Plan shall directly or indirectly affect the rights of any FA
(or the FA's designated beneficiary) to payment of the amount in his Account, to
the extent that such amount was payable under the terms of the Plan prior to the
effective date of such amendment or termination.
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EXHIBIT A (1999)
PRIVATE CLIENT GROUP DEFERRED COMPENSATION PLAN
Special Compensation Deferral Election
FOR PLAN YEAR 1999 ELECTION ONLY
I. Pursuant to the Plan, I agree to the following method of deferral of
amounts that would otherwise be payable to me as current compensation for Plan
Year 1999 (specify percentages below):
(a) Credit Interest ---------------%
or
(b) "Phantom" Share Units of Legg
Mason, Inc. Common Stock ---------------%
100%
================
II. I hereby make a one-time election to transfer my entire account
balance under the Plan from the Credit Interest option to the Phantom Share Unit
option for any one or more of the following Plan Years checked below:
Plan Year 1994 Plan Year 1995 Plan Year 1996
Plan Year 1997 Plan Year 1998
Having read and understood the Plan and prospectus provided to me by
the Company, I understand and agree that:
1. My deferrals will be made from compensation payable to me in
the Plan Year 1999 and all subsequent Plan Years until I
submit to the Company a new Compensation Deferral Election in
accordance with the terms of the Plan and which is received by
the Company prior to the first day of the Plan Year for which
it is to be effective.
2. Elections may not be changed or revoked except at the end of a
Plan Year. Any such change or revocation shall only be
effective for subsequent Plan Years.
3. Any deferral is subject to all of the terms and conditions of
the Plan, including particularly that: (i) compensation which
I defer is not invested directly in common stock (therefore, I
have no rights as a stockholder by virtue of this Plan), (ii)
Phantom Share Units may not be converted to an alternative
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investment mode except as written in the Plan, and (iii) my
only claim in the event of financial difficulty of the Company
is as an unsecured general creditor for the benefits due to me
under the Plan.
Financial Advisor:
---------------------------------------
Signature Date
----------------------------------------
Print full name
Receipt Acknowledged:
LEGG MASON WOOD WALKER, INCORPORATED
By:__________________________________________
Signature
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EXHIBIT A
-----------
PRIVATE CLIENT GROUP DEFERRED COMPENSATION PLAN
Compensation Deferral Election
Pursuant to the Plan, I agree to the following method of
deferral of amounts that would otherwise be payable to me as current
compensation for Plan Year __________ (specify percentages below):
(i) Credit Interest ---------------%
or
(ii) "Phantom" Share Units of Legg
Mason, Inc. Common Stock ---------------%
100%
================
Having read and understood the Plan and prospectus provided to
me by the Company, I understand and agree that:
1. My deferrals will be made from compensation payable to me in
the Plan Year specified above and all subsequent Plan Years
until I submit to the Company a new Compensation Deferral
Election in accordance with the terms of the Plan and which is
received by the Company prior to the first day of the Plan
Year for which it is to be effective.
2. Elections may not be changed or revoked except at the end of a
Plan Year. Any such change or revocation shall only be
effective for subsequent Plan Years.
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3. Any deferral is subject to all of the terms and conditions of
the Plan, including particularly that: (i) compensation which
I defer is not invested directly in common stock (therefore, I
have no rights as a stockholder by virtue of this Plan), (ii)
Phantom Share Units may not be converted to an alternative
investment mode except as written in the Plan, and (iii) my
only claim in the event of financial difficulty of the Company
is as an unsecured general creditor for the benefits due to me
under the Plan.
Financial Advisor:
----------------------------------------
Signature Date
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Print full name
Receipt Acknowledged:
LEGG MASON WOOD WALKER, INCORPORATED
By:__________________________________________
Signature
2
<PAGE>
EXHIBIT B
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PRIVATE CLIENT GROUP DEFERRED COMPENSATION PLAN
Payment Option Election
I hereby elect to receive Share Units and Interest Units in my Account under the
Plan in the following manner: (check one)
a. ______ as soon as practicable following the last day, but in
any event not later than sixty (60) days following the last
day, of the sixth Plan Year following the Plan Year for
which such amounts were credited or allocated to my Account.
b. ______ in a lump sum as soon as practicable following the
last day, but in any event not later than sixty (60) days
following the last day, of the Plan Year in which my
employment with Legg terminates as a result of my death,
"Disability" or "Retirement," as defined in the Plan.
c. _____ in three annual installments with the first of such
installments occurring as soon as practicable following the
last day, but in any event not later than sixty (60) days
following the last day, of the Plan Year in which my
employment with Legg terminates as a result of my death,
"Disability" or "Retirement," as defined in the Plan.
I understand that if I elect to receive distributions in installments, each
installment will be determined by dividing the then value of the amount to be
distributed by the number of installments remaining to be paid (including the
installment then due). If the amount of the total distribution is less than
$20,000.00, I understand installment option c. above will not be available and I
will receive a single lump sum payment. I understand that if I elect options a.
or c. above and am receiving installments as a result of my "Retirement," then
if I die before receiving all amounts to which I am entitled under the Plan, the
<PAGE>
balance in my Account at the time of my death will be distributed to my estate
or beneficiary in a lump sum as soon as practicable after my death.
Financial Advisor:
------------------------------------------
Signature Date
------------------------------------------
Print full name
Receipt Acknowledged:
LEGG MASON WOOD WALKER, INCORPORATED
By:_________________________________________
Signature
<PAGE>
EXHIBIT C
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PRIVATE CLIENT GROUP DEFERRED COMPENSATION PLAN
Designation of Beneficiary(ies)
By virtue of my right under the Agreement to designate the beneficiary(ies) of
any death benefits payable under the Agreement, and subject to any future
exercise of said right by me, I hereby direct that any and all such death
benefits shall be paid, in accordance with the terms of the Agreement, to the
person(s) named below who are living at the time of each such payment, and,
unless otherwise expressly indicated, in equal shares among them if more than
one such person shall be living at the time of each such payment:
PRIMARY BENEFICIARY(IES)
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Name/Relationship Address
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Name/Relationship Address
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Name/Relationship Address
In the event that no primary beneficiary shall be living at the time of any
death benefit payment, I hereby direct that such remaining payment(s) shall be
made to those person(s) named below who are living at the time of each such
remaining payment, and, unless otherwise expressly indicated, in equal shares
among them if more than one such person shall be living at the time of each such
remaining payment:
CONTINGENT BENEFICIARY(IES)
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Name/Relationship Address
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Name/Relationship Address
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Name/Relationship Address
<PAGE>
Private Client Group Deferred Compensation Plan
Designation of Beneficiary(ies)
Page Two
In the further event that none of the persons named above, either as primary or
contingent beneficiary(ies), shall be living at the time of any death benefit
payment, all remaining payment(s) shall be made to my estate pursuant to the
Agreement.
NOTE: If so specified in the above designations, "person" includes a trust or
corporation.
Financial Advisor: _________________________________________
Signature Date
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Print full name
-----------------------------------------
Witness
Receipt Acknowledged:
LEGG MASON WOOD WALKER, INCORPORATED
By:_________________________________________
Date
