As filed with the Securities and Exchange Commission on September 27, 2002
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
LEGG MASON, INC.
(Exact name of registrant as specified in its charter)
Maryland 52-1200960
(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
100 Light Street
Baltimore, Maryland 21202
(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, Secretary 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)
Copy to:
James S. Scott, Sr., Esq.
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
(212) 848-4000
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. [ ]
CALCULATION OF REGISTRATION FEE
=================================================================================================================================
Proposed Maximum Proposed Maximum
Title of Each Class of Securities Aggregate Amount to Aggregate Offering Aggregate Offering Amount of
to be Registered be Registered(1) Price Per Unit(2) Price(2)(3) Registration Fee
---------------------------------------------------------------------------------------------------------------------------------
Debt Securities, Convertible Debt
Securities (4)......................... $500,000,000(6)(7) 100% $500,000,000 $46,000(3)
Common Stock, $.10 par value (5) ...... -- -- -- --
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(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) Under Rule 457(i), there is no additional filing fee with respect to the
shares of common stock issuable upon conversion of any convertible debt
securities because no additional consideration will be received in
connection with the conversion.
(4) 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.
(5) Includes an indeterminate number of shares of common stock as may be issued
solely upon conversion of any convertible debt securities.
(6) 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 $500,000,000.
(7) Does not include $75,000,000 of securities previously registered on
Registration Statement No. 333-33298 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 $19,800.
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.
333-33298, previously filed by Legg Mason, Inc. on Form S-3. This Registration
Statement also constitutes a Post-Effective amendment to Registration Statement
No. 333-33298, 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.
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 SEPTEMBER 27, 2002
PROSPECTUS
$575,000,000
LEGG MASON, INC.
DEBT SECURITIES
CONVERTIBLE DEBT SECURITIES
COMMON STOCK ISSUABLE UPON
CONVERSION OF THE 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 state securities
commission 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.
The date of this Prospectus is , 2002
TABLE OF CONTENTS
WHERE YOU CAN FIND MORE INFORMATION 1
FORWARD-LOOKING INFORMATION 2
THE COMPANY 4
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES 5
USE OF PROCEEDS 6
DESCRIPTION OF DEBT SECURITIES 6
DESCRIPTION OF CAPITAL STOCK 23
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES 26
ERISA MATTERS 27
HOLDING COMPANY STRUCTURE 29
PLAN OF DISTRIBUTION 29
LEGAL MATTERS 32
EXPERTS 32
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 room at 450 Fifth Street,
N.W., Washington, D.C. 20549. 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, 2002.
o Quarterly Report on Form 10-Q for the quarter ended June 30, 2002.
o The description of our common stock, par value $.10 per share,
contained in Amendment No. 5 to our Application for Registration on
Form 8-A, filed February 23, 2001.
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
Exhibits to these filings will not be sent, however, unless those exhibits
have specifically been incorporated by reference in this document.
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.
FORWARD-LOOKING INFORMATION
Certain statements included or incorporated by reference in this prospectus
or included in any prospectus supplement may be deemed to be "forward-looking
statements" within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. These statements relate to future events or our future
financial performance and involve known and unknown risks, uncertainties and
other factors that may cause our actual results to be materially different from
those expressed or implied by any forward-looking documents. These
forward-looking statements may contain information related, but not limited to:
o anticipated growth in revenues or earnings per share;
o anticipated changes in our business or in the amount of client assets
under management;
o anticipated expense levels and expectations regarding financial market
conditions; and
o anticipated performance of recent, pending and future acquisitions.
In some cases, you can identify forward looking statements by terminology
such as "may," "will," "could," "would," "should," "expect," "plan,"
"anticipate," "intend," "believe," "estimate," "predict," "potential" or
"continue" or the negative of those terms
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or other comparable terminology. These statements are only predictions. Actual
events or results may differ materially due to a number of factors including,
but not limited to:
o the volatile and competitive nature of the financial services
industry;
o changes in domestic and foreign economic and market conditions;
o the loss of key employees or principals of our current or future
operating subsidiaries;
o the effect of current and future federal, state and foreign regulation
of the financial services industry, including potential liability
under applicable securities laws;
o market, credit and liquidity risks associated with our investment
management, underwriting, securities trading and market-making
activities;
o the impairment of acquired intangible assets and goodwill;
o potential restrictions on the business of, and withdrawal of capital
from, certain of our subsidiaries due to net capital requirements; and
o the effect of any acquisitions.
Moreover, we do not, nor does any other person, assume responsibility for
the accuracy and completeness of those statements. We have no duty to update any
of the forward-looking statements after the date of this prospectus. In
assessing these forward-looking statements you should carefully consider the
factors discussed under the captions "Management's Discussion and Analysis of
Results of Operations and Financial Condition--Forward Looking Statements" of
our reports on Form 10-Q and "Business--Factors Affecting the Company and the
Financial Services Industry" and "Management's Discussion and Analysis of
Results of Operations and Financial Condition--Forward-Looking Statements" of
our most recent annual report on Form 10-K, which describe the risks and factors
that could cause results to differ materially from those projected in such
forward looking statements.
We caution the reader that these risk factors may not be exhaustive. We
operate in a continually changing business environment, and new risks emerge
from time to time. Management cannot predict such new risks or the impact of
such new risks on our businesses. Accordingly, forward-looking statements should
not be relied upon as a prediction of actual results.
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THE COMPANY
We are a holding company that, through our subsidiaries, is principally
engaged in providing the following services to individuals, institutions,
corporations, governments and government agencies:
o asset management;
o securities brokerage;
o investment banking; and
o other related financial services.
We currently operate through four business segments: Asset Management,
Private Client, Capital Markets and Other.
In our Asset Management business segment, we provide investment advisory
services to company-sponsored investment funds and asset management services to
institutional and individual investors. As of June 30, 2002, our subsidiaries
had an aggregate of $177.7 billion of assets under management. We divide our
asset management business into three groups: Mutual Funds, Institutional and
Wealth Management.
In our Mutual Funds business, we sponsor domestic and international equity,
fixed income and money market mutual and closed-end funds and other proprietary
funds. We have two asset management subsidiaries that primarily focus on
managing proprietary investment funds:
o Legg Mason Funds Management, Inc., which is located in Baltimore,
Maryland; and
o Royce & Associates, LLC, which is located in New York, New York.
Our Institutional asset management subsidiaries provide a wide range of
asset management services and products to domestic and international
institutional clients. Our Institutional asset management subsidiaries are:
o Western Asset Management Company and Western Asset Management Company
Limited, which are primarily located in Pasadena, California and
London, England, respectively;
o Perigee Investment Counsel Inc., which is primarily located in
Toronto, Canada;
o Brandywine Asset Management, LLC, which is located in Wilmington,
Delaware;
o Batterymarch Financial Management, Inc., which is primarily located in
Boston, Massachusetts;
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o Legg Mason Capital Management, Inc., which is located in Baltimore,
Maryland; and
o Legg Mason Investors Holdings plc, which is located in London,
England.
Our Wealth Management subsidiaries provide customized, discretionary
investment management services and products to high net worth individuals and
families, endowments and foundations and institutions. Our Wealth Management
subsidiaries are:
o Private Capital Management, L.P., which is located in Naples, Florida;
o Bartlett & Co., which is primarily located in Cincinnati, Ohio;
o Barrett Associates, Inc., which is located in New York, New York;
o Gray, Seifert & Co., Inc., which is located in New York, New York;
o Berkshire Asset Management, Inc., which is located in Wilkes-Barre,
Pennsylvania;
o Legg Mason Focus Capital, Inc., which is primarily located in Bala
Cynwyd, Pennsylvania; and
o Legg Mason Trust, fsb, which is located in Baltimore, Maryland.
Our Private Client and Capital Markets business segments are primarily
conducted through Legg Mason Wood Walker, Incorporated ("Legg Mason Wood
Walker"), our principal broker-dealer subsidiary. Legg Mason Wood Walker is a
full service broker-dealer, investment adviser and investment banking firm
operating primarily in the Eastern and Southern regions of the United States.
Our Other business segment consists primarily of the operations of Legg
Mason Real Estate Services, Inc., our principal real estate finance subsidiary.
Legg Mason Real Estate Services is primarily engaged in commercial mortgage
banking and servicing and discretionary and non-discretionary management of
commercial real estate-related assets.
Legg Mason, Inc. was incorporated in Maryland in 1981 to serve as a holding
company for Legg Mason Wood Walker and other subsidiaries. The predecessor
company to Legg Mason Wood Walker was formed in 1970 under the name Legg Mason &
Co., Inc. to combine the operations of Legg & Co., a Maryland-based
broker-dealer formed in 1899, and Mason & Company, Inc., a Virginia-based
broker-dealer formed in 1962. Our subsequent growth has occurred through
internal expansion as well as through the acquisition of asset management,
broker-dealer and commercial mortgage banking firms.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our consolidated ratio of earnings to fixed
charges for the periods indicated.
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Three Months Ended Years Ended
June 30, March 31,
2002 2002 2001 2000 1999 1998
---- ---- ---- ---- ---- ----
3.6 2.7 2.3 2.7 2.4 2.5
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 one-third of our rent expense (considered
representative of the interest factor). As of the date hereof, we have one share
of 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
asset management and securities brokerage 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 each
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.
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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 Indentures. 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
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 this
caption "Description of Debt Securities," the term "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;
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(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);
(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;
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(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;
(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)
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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)
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.
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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;
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)
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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 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
12
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 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;
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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
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.
14
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 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, our 6.75% Senior
Notes due 2008 and our Liquid Yield Option(TM)1 Notes due 2031, 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
--------
1 Trademark of Merrill Lynch & Co., Inc.
15
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 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. (Section 10.7 of the Senior
Indenture)
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:
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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);
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:
17
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; and
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)
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.
18
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.
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
19
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.
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;
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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)
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)
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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)
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 250,000,000 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 September 1, 2002, we had 64,766,813 shares of
common stock and one share 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 Wachovia Bank,
N.A.
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, redemption and conversion provisions, if
any, and rights upon liquidation) of any shares issued.
23
Outstanding shares of preferred stock that 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.
On May 26, 2000, we issued one special voting share of preferred stock in
connection with our acquisition of Perigee Inc. This special voting share
provides the holders of exchangeable shares of our subsidiary, Legg Mason Canada
Holdings Ltd. with substantially the same voting rights as the holders of our
common stock. The special voting share has a number of votes, which may be cast
at a Legg Mason stockholders' meeting, equal to the number of exchangeable
shares outstanding. As of September 1, 2002, there were 2,415,894 exchangeable
shares outstanding.
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
24
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.
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.
25
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 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
26
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,
(3) entities whose underlying assets include plan assets by reason of a
plan's investment in such entities (each of (1), (2) and (3) is
referred to as 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
27
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.
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
28
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
June 30, 2002, our subsidiaries had a total of approximately $4.0 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
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.
29
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
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;
30
o it will comply with all applicable provisions of the Financial
Services and Markets Act 2000 with respect to anything done by it in
relation to the debt securities in, from or otherwise involving the
United Kingdom; and
o it will only communicate or cause to be communicated any invitation or
inducement to engage in investment activity within the meaning of
Section 21 of the Financial Services and Markets Act 2000 received by
it in connection with the issue or sale of any debt security in
circumstances in which Section 21(1) of the Financial Services and
Markets Act 2000 does not apply to us.
Certain persons participating in an offering of the debt securities may
engage in transactions that stabilize, maintain or otherwise affect the price of
the debt securities. Specifically, the underwriters, if any, may overallot in
connection with the offering, and may bid for, and purchase, the debt securities
in the open market.
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 an 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
31
otherwise. 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 financial statements and financial statement schedules incorporated in
this prospectus by reference to the Annual Report on Form 10-K of Legg Mason for
the year ended March 31, 2002 have been so incorporated in reliance on the
reports of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in accounting and auditing.
32
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......................$46,000
National Association of Securities Dealers, Inc. Filing Fee..............$30,500
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....................................................$406,500
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
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, filed as exhibit to quarterly report on Form 10-Q
for the quarter ended June 30, 2002 and incorporated herein by
reference.
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).
II-2
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.
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.
II-3
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 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.
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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 September 27, 2002.
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.
Signatures Title Date
---------- ----- ----
/s/ Raymond A. Mason Chairman of the Board, President, September 27, 2002
-------------------------- Chief Executive Officer and Director
Raymond A. Mason (Principal Executive Officer)
/s/ Charles J. Daley, Jr. Senior Vice President (Principal September 27, 2002
-------------------------- Financial and Accounting Officer)
Charles J. Daley, Jr.
/s/ James W. Brinkley Director September 27, 2002
--------------------------
James W. Brinkley
/s/ Harry M. Ford, Jr. Director September 27, 2002
--------------------------
Harry M. Ford, Jr.
II-5
Signatures Title Date
---------- ----- ----
/s/ Nicholas J. St. George Director September 27, 2002
--------------------------
Nicholas J. St. George
/s/ Richard J. Himelfarb Director September 27, 2002
--------------------------
Richard J. Himelfarb
/s/ James E. Ukrop Director September 27, 2002
--------------------------
James E. Ukrop
/s/ Harold L. Adams Director September 27, 2002
--------------------------
Harold L. Adams
/s/ John E. Koerner, III Director September 27, 2002
--------------------------
John E. Koerner, III
/s/ Roger W. Schipke Director September 27, 2002
--------------------------
Roger W. Schipke
/s/ Edward I. O'Brien Director September 27, 2002
--------------------------
Edward I. O'Brien
/s/ Peter F. O'Malley Director September 27, 2002
--------------------------
Peter F. O'Malley
/s/ Kurt L. Schmoke Director September 27, 2002
--------------------------
Kurt L. Schmoke
-------------------------- Director September 27, 2002
Dennis R. Beresford
-------------------------- Director September 27, 2002
Carl Bildt
II-6
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, filed as exhibit to quarterly report on Form 10-Q
for the quarter ended June 30, 2002 and incorporated herein by
reference.
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