EXHIBIT 4.1
		    LEGG MASON WOOD WALKER, INCORPORATED
		FINANCIAL ADVISOR DEFERRED COMPENSATION PLAN

     This document constitutes the Legg Mason Wood Walker, Incorporated
Financial Advisor Deferred Compensation Plan (the "Plan").

     1.  Purpose:  The purpose of the Plan is to enhance the ability of Legg
     Mason Wood Walker, Incorporated (the "Company") to attract and retain
     full-time financial advisors by providing for the payment of deferred
     bonus commissions.

     2.  Definitions:  As used herein, the following definitions shall apply:

	 (a)  "Account" means a Financial Advisor's combined Interest
Account and Phantom Stock Account.

	 (b)  "Committee" means the Legg Mason Wood Walker, Incorporated
Financial Advisor Deferred Compensation Plan Committee consisting of such
members as the Company's President shall select from time to time.

	 (c)  "Company" means Legg Mason Wood Walker, Incorporated.

	 (d)  "Credit Interest Asset Base" means for each month, the product
of (A) the product of (X) 0.0833 and (Y) the sum of the average credit
interest and Legg Mason money market fund balances of the FA for the month
(calculated by dividing the sum of the closing balances in the account for
each day by the number of days in the month), less the applicable threshold
for that Plan Year as set forth in the FA Compensation Schedule, and
(B) 0.001 (or the different number for the applicable Plan Year as is set
forth in the FA Compensation Schedule).

	 (e)  "Credit Interest Deferred Bonus" means the deferred bonus
credited under Section 4(b) with respect to the combined balance in credit
interest accounts and Legg Mason money market fund accounts in excess of the
applicable threshold contained in the FA Compensation Schedule.

	 (f)  "Credit Interest Rate" means the average of the twelve month
end rates of the Company's credit interest rate paid during a Plan Year to
the Company's cash reinvestment accounts.

	 (g)  "Deferred Bonus Commission" means the Production Deferred
Bonus, the Credit Interest Deferred Bonus and the 12b-1 Deferred Bonus.


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	 (h)  "Disability" means a medically determinable physical or mental
impairment which, as determined by the Committee using such criteria as it
establishes in its sole and absolute discretion, will prevent the FA from
performing his or her usual duties or any other similar duties available in
the Company's employ for a period of at least twelve (12) months.

	 (i)  "Distribution Valuation Date" means (i) in the case of a
distribution following the death of a FA or the termination of a FA's
employment as a result of Disability, the date that is ten (10) business
days before the applicable Payment Date; and (ii) in all other cases,
January 25th (or, if Legg Mason Common Stock is not traded on its principal
exchange on that day, the next following day on which Legg Mason Common Stock
is traded on its principal exchange) preceding the applicable Payment Date.

	 (j)  "Dividend Payment Date" has the meaning specified in Section
6(d)(i).

	 (k)  "Eligible FA" means a FA (i) who is employed in the Company's
Private Client Group, (ii) who is classified by the Company as a full-time
FA, and (iii) who is employed by the Company on the last day of the Plan
Year, or who terminated employment during the Plan Year by reason of death,
Disability or Retirement. A FA who is not classified by the Company as a
"full-time" FA is not eligible to participate in the Plan, regardless of
the number of hours devoted to services as a FA.

	 (l)  "Eligible Gross Production" means Gross Production that is
eligible for a Production Deferred Bonus, as determined annually in
accordance with the FA Compensation Schedule.

	 (m)  "FA Compensation Schedule" means the Legg Mason Financial
Advisor Compensation Schedule that is in effect for a particular Plan Year.

	 (n)  "Fair Market Value" means an amount equal to the average of the
closing prices on the principal exchange on which Legg Mason Common Stock is
traded for the date on which the price is being determined (i.e., the
Valuation Date, Dividend Payment Date, Distribution Valuation Date or other
specified date) and the four (4) trading days immediately following the
applicable date on which the value is being determined or, if Legg Mason
Common Stock is not then traded on an exchange, such amount as is determined
by the Committee, in its discretion, using any reasonable method of valuation.
Any decline in the actual trading price of Legg Mason Common Stock during the
five (5) day pricing period shall be the sole risk of the FA.

	 (o)  "Financial Advisor" or "FA" means an employee who devotes all
of his or her working time to the generation of commission and fee revenues
through the sale of investment products and services to the public and is
compensated on a commission basis.  This definition excludes any executive
office/departmental personnel unless specifically included by separate
agreement.  Notwithstanding the forgoing, a Branch Manager who receives
non-commission compensation shall be considered a "Financial Advisor" or
"FA" and shall be entitled to participate hereunder (but solely with respect
to his or her personal Gross Production).


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	 (p)  "Gross Production" means the gross commission and fee revenue
(other than investment banking fees and order fees, both of which are excluded
from the calculation of Gross Production) that is received by the Company from
sales of products and services by a Financial Advisor. If production is split
between one or more Financial Advisors, each Financial Advisor's "Gross
Production" will be based on his or her own cumulative production level.

	 (q)  "Interest Account" means the investment account established for
Deferred Bonus Commissions pursuant to Section 5(a) and Section 6(c) of the
Plan.

	 (r)  "Legg Mason Common Stock" means shares of common stock of
Legg Mason, Inc.

	 (s)  "Legg Mason Share Units" or "Share Units" means units that are
economically equivalent to, but are not actual, shares of Legg Mason Common
Stock.

	 (t)  "Legg Mason Tier II Assets" means mutual fund shares sold
between January 1, 1999 and August 21, 1999 (inclusive) and not redeemed in
those mutual funds that were classified as "Legg Mason funds" during such
period.

	 (u)  "Monthly Credit Interest Amount" means for each month, the
amount determined by multiplying 0.40 (or the different number for the
applicable Plan Year as is set forth in the FA Compensation Schedule) by the
Credit Interest Asset Base for the FA for that month, however, a Monthly
Credit Interest Amount that is a negative number shall be deemed to be zero.

	 (v)  "Payment Date" the date a FA receives a payment from the
Company pursuant to the Plan.

	 (w)  "Phantom Stock Account" means the investment account
established for Deferred Bonus Commissions pursuant to Section 5(a) and
Section 6(d) of the Plan.

	 (x)  "Plan Year" means the calendar year.

	 (y)  "Production Deferred Bonus" means the deferred bonus credited
under Section 4(a) with respect to Gross Production in excess of the
applicable Gross Production threshold contained in the FA Compensation
Schedule.
	 (z)  "Retirement" means a FA's termination of employment with the
Company (i) on or after age sixty-five (65); or (ii) at any time when the
sum of the FA's age at termination of employment and his or her years of
service with the Company equals at least seventy (70).

	 (aa) "12b-1 Applicable Percentage" means ten percent (10%) on Legg
Mason Tier II Assets over $5,000,000 (up to $20,000,000) and twelve percent
(12%) on Legg Mason Tier II Assets over $20,000,000.


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	 (bb) "12b-1 Deferred Bonus" means the deferred bonus credited under
Section 4(c) for the 2002 Plan Year with respect to Legg Mason Tier II Assets
in excess of the applicable threshold.

	 (cc) "Valuation Date" means February 15th of each year or, if that
day is not day on which Legg Mason Common Stock is traded on the principal
exchange on which it is regularly traded, the next following trading day.

     3.  Plan Participation:  Eligible FA's shall become participants in the
Plan on the last day of the first Plan Year during which they become an
Eligible FA.  In order to receive a Deferred Bonus Commission for any Plan
Year during which the Eligible FA was employed, the FA must be an Eligible FA,
and if the employment of a FA terminates during a Plan Year by reason of the
FA's death, Disability or Retirement, the FA shall be entitled to a prorated
Deferred Bonus Commission for such Plan Year (determined in accordance with
Section 4).

     If a FA ceases to be an Eligible FA (e.g., because he or she ceases to
be classified as a full-time FA), but remains in the employ of the Company,
the FA will continue to participate in the Plan, but only with respect to
amounts previously credited to the FA's Account. If a FA ceases to be an
Eligible FA, the value of the Account shall continue to be credited with
earnings pursuant to Section 5 (subject to the forfeiture provisions of
Section 7(a)), but no further Deferred Bonus Commissions will be credited
to the Account with respect to any subsequent periods.

     4.  Deferred Bonus Commissions:   As of the end of each Plan Year
commencing with the 2002 Plan Year, or in the case of Section 4(c) below,
only as of the end of the 2002 Plan Year, the Company will credit the
following amounts to the Account of each Eligible FA:

	 (a)  Production Deferred Bonus:  The amount determined by
applying the applicable rate schedule in the FA Compensation Schedule for
the Plan Year to the FA's Eligible Gross Production for that Plan Year.

	 (b)  Credit Interest Deferred Bonus:  The sum of the Monthly Credit
Interest Amounts of the FA for that Plan Year.

	 (c)  12b-1 Deferred Bonus:  An amount equal to the 12b-1 Applicable
Percentage times 12b-1 gross commissions generated with respect to Legg Mason
Tier II Assets for the Plan Year times forty-five percent (45%). This Section
4(c) shall apply only for the 2002 Plan Year, and no 12b-1 Deferred Bonus
shall be paid or earned for any Plan Year other than 2002.

     Deferred Bonus Commissions which the FA elects to invest in the Phantom
Stock Account will be allocated as of the Valuation Date following the close
of the Plan Year to which the Deferred Bonus Commission relates.


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     If the employment of an Eligible FA terminates during a Plan Year by
reason of the FA's death, Disability or Retirement, the FA shall be entitled
to a prorated Deferred Bonus Commission for such Plan Year. Such proration
shall be made by:

     (i)  multiplying the applicable thresholds in Sections 4(a) and 4(c) and
the related provisions of the FA Compensation Schedule by a fraction, the
numerator of which is the number of calendar days during which the FA was
employed by the Company and the denominator of which is 365; and

     (ii) applying such adjusted thresholds and making the required
determinations with respect to the FA's Eligible Gross Production (under
Section 4(a)) and 12b-1 Applicable Percentage (under Section 4(c)) as of
the last day of the  month during which the FA terminated employment and
adding to that amount any Credit Interest Deferred Bonus related to the
months in which the FA was employed.

     5.  Establishment of FA Accounts

	 (a)  Account Established for Each Eligible FA:  An individual
Account shall be established on the books of the Company in the name of each
Eligible FA, for the purpose of accounting for Deferred Bonus Commissions
credited to the FA, and to account for investment adjustments made pursuant
to Section 6.  A separate sub-account shall be established with respect to
Deferred Bonus Commissions credited for each Plan Year (to which Deferred
Bonus Commissions for the Plan Year and any investment adjustments made
pursuant to Section 6 shall be credited). Other sub-accounts may be
established as the Committee or the Company deems appropriate to properly
implement the provisions of the Plan.

	 (b)  Account Statements:  As soon as practicable after the Valuation
Date, the Company shall provide each Eligible FA who has a balance in his or
her Account with a statement showing the Deferred Bonus Commissions credited
to his or her Account with respect to each Plan Year, the manner in which
Deferred Bonus Commissions for a particular Plan Year are deemed to be
invested, the date on which the FA is scheduled to vest in the Deferred
Bonus Commissions (and investment adjustments thereon) for each Plan Year,
and such other information as the Committee shall deem relevant.

     6.  Investment of Deferred Bonus Commissions:

	 (a)  Phantom Stock or Interest Credit:  For investment purposes,
Deferred Bonus Commissions credited to a FA's Account shall be allocated to,
and accrue in, either the Phantom Stock Account or Interest Account.

	 (b)  Investment Designation:  Subject to such limitations, rules and
procedures as may from time to time be imposed by the Committee, each
Eligible FA shall elect annually, prior to the end of each Plan Year, on a
form prescribed by the Committee, whether any Deferred Bonus Commissions for
such Plan Year shall be allocated to, and accrue in, the Interest Account or
the Phantom Stock Account. Once an election has been made for a particular
Plan Year, it may not be changed. A separate election may be made with
respect to each Plan Year. Except as the Committee shall otherwise determine,
any investment election with respect


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to the Deferred Bonus Commission for a Plan Year shall apply to the Deferred
Bonus Commission for each following Plan Year unless and until a new
investment election is filed with the Committee. In the event the Committee
does not receive an initial investment election, or it receives an investment
election which it deems to be incomplete, unclear, not in accordance with
procedures established by the Committee, or otherwise improper, the FA's
existing investment election then in effect shall remain in effect, unless
the Committee provides for, and permits, corrective action. If there is no
existing investment election, or, if after the expiration of any opportunity
provided for corrective action, the Committee still possesses incomplete
investment instructions, the FA shall be deemed to have designated that any
non-directed Deferred Bonus Commission be allocated to the Interest Account.

	 (c)  Interest Account:  The Company will establish an Interest
Account on its books and records for the benefit of the FA and shall credit
such Interest Account with the Deferred Bonus Commissions allocated to the
Interest Account. As of the last day of each Plan Year, the balance of a
FA's Interest Account (as determined prior to the allocation of any Deferred
Bonus Commissions for such Plan Year) shall be credited with an amount equal
to one year's interest based on the Credit Interest Rate. Deferred Bonus
Commissions which the FA elects to invest in the Interest Account will be
allocated as of December 31 of the Plan Year to which the Deferred Bonus
Commission relates (but will not be included for purposes of determining
the amount of interest allocated for such Plan Year).

	 (d)  Phantom Stock Account:  All Deferred Bonus Commissions for
a Plan Year that are allocated to the Phantom Stock Account for that Plan
Year shall be deemed converted into Legg Mason Share Units. The Company will
establish a Phantom Stock Account on its books and records for the benefit of
the FA and shall credit such Phantom Stock Account with the amount of Share
Units resulting from the conversion of the Deferred Bonus Commissions. The
number of Share Units into which such Deferred Bonus Commission shall be
converted (calculated to four decimal places) will be determined as of the
Valuation Date and will be equal to the amount of the Deferred Bonus
Commission for the Plan Year divided by the Fair Market Value of a share of
Legg Mason Common Stock on the Valuation Date. The conversion of Deferred
Bonus Commission into Legg Mason Share Units will be made by the Committee
as soon as administratively practicable after the Valuation Date following
the Plan Year to which the Deferred Bonus Commission relates.

	      (i)  Adjustment to Phantom Stock Account upon Dividend
by the Company: If, prior to a Payment Date, the Company pays any dividend
(other than in Legg Mason Common Stock) on its Common Stock, or makes any
distribution (other than in Legg Mason Common Stock) with respect thereto,
the FA's Phantom Stock Account will be credited with a number of additional
Share Units determined by dividing the amount of the dividend or other
distribution allocable to the Share Units already credited to the Phantom
Stock Account as of the record date for the dividend or distribution, by 95%
of the Fair Market Value of a share of Legg Mason Common Stock on the payment
date for the dividend or distribution (the "Dividend Payment Date").  Amounts
to be credited under this subsection 6(d)(i) will be credited as soon as
administratively practicable after the applicable Dividend Payment Date.

	      (ii)    Adjustment to Phantom Stock Account upon Certain
Events:  In the event that, prior to a Payment Date, the number of outstanding
shares of Legg Mason Common Stock is changed by reason of a stock split,


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stock dividend, combination of shares or recapitalization, or Legg Mason
Common Stock is converted into or exchanged for other shares as a result of
a merger, consolidation, sale of assets or other reorganization or
recapitalization, the number of Share Units then credited to a FA's Phantom
Stock Account will be appropriately adjusted so as to reflect such change
(based upon the best estimate of the Company as to relative values).

	      (iii)   Rights as LMI Stockholder:  Neither the allocation of
Deferred Bonus Commissions to the Phantom Stock Account, nor any other
provision of the Plan, shall confer or be construed as conferring upon a FA
any rights as a stockholder of the Company or any right to have access to the
books and records of the Company or any affiliate or subsidiary.

     7.  Vesting; Forfeiture Of Account:

	 (a)  Vesting:  The Deferred Bonus Commission for each Plan Year is
subject to a six year "class year" vesting schedule; that is, the Deferred
Bonus Commission for a particular Plan Year (together with any related
investment adjustments thereto) shall vest if the FA remains continuously
employed by the Company through the last day of the sixth (6th) Plan Year
following the Plan Year to which the Deferred Bonus Commission relates. If a
FA's employment with the Company terminates for any reason (whether
involuntary or voluntary and whether with or without cause) other than death,
Disability or Retirement on or before the last day of the sixth Plan Year
following the year to which the Deferred Bonus Commission relates, the
portion of the FA's Interest Account and Phantom Stock Account that relates
to such non-vested Deferred Bonus Commission (and the related investment
adjustments thereto) shall be forfeited in their entirety.

	 (b)  Retirement, Death or Disability:  A FA shall become fully
(100%) vested in his or her Account upon Retirement, death or Disability.
However, the distribution (and potential forfeiture) of the Account to a
retired FA shall be conditioned upon his or her continued compliance with the
provisions of Section 10.

	 (c)  Forfeitures:  Forfeited amounts (including amounts forfeited
pursuant to Section 10) shall revert to the Company and will not be allocated
to other FA's.

     8.  Distributions:

	 (a)  During Employment:  Except for cases of Retirement, death or
Disability, and subject to Section 11, distributions of the Deferred Bonus
Commission credited to a FA's Account (together with any investment adjustments
made pursuant to Section 6 with respect to such Deferred Bonus Commission)
shall be made within seventy-five (75) days after the last day of the sixth
(6th) Plan Year following the Plan Year to which the Deferred Bonus Commission
relates.

	 (b)  Retirement:  In the event a FA's employment with the Company
terminates as a result of Retirement, distribution of the FA's remaining
Account (including any prorated Deferred Bonus Commission to which the FA
may be entitled for the Plan Year pursuant to Section 4) shall be made,
subject to Section 11, within seventy-five (75) days after

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the close of the Plan Year following the Plan Year in which the FA retired,
unless distribution of benefits is forfeited pursuant to Section 10.

	 (c)  Disability of FA:  In the event a FA's employment with the
Company terminates as a result of the FA's Disability, all amounts in the
FA's Account (including any prorated Deferred Bonus Commission to which the
FA may be entitled for the Plan Year pursuant to Section 4) shall be paid,
subject to Section 11, within seventy-five (75) days following the later of
(i) the date on which the FA's employment terminated and (ii) the date the
Committee determines that the FA's employment terminated as a result of the
FA's Disability.  The Committee, in its sole discretion, may determine that
a FA has a Disability and that the FA's employment with the Company terminated
as a result of such Disability at any time before, at the time of, or after
the FA's termination of employment.

	 (d)  Death:

	      (i)  Death During Employment:  If a FA's employment with
the Company terminates as a result of the FA's death, all amounts in the FA's
Account (including any prorated Deferred Bonus Commission to which the FA may
be entitled for the Plan Year pursuant to Section 4) shall be paid to the FA's
beneficiary (as determined pursuant to Section 8(d)(iii)) within seventy-five
(75) days following the date of the FA's death.

	      (ii)  Death Following Retirement:  In the event of a FA's
death subsequent to the date of the FA's Retirement and at a time during which
the FA's remaining Account under the Plan has not been distributed, all amounts
then remaining in the FA's Account shall be paid to the FA's beneficiary (as
determined pursuant to Section 8(d)(iii)) within seventy-five (75) days
following Committee's receipt of written notification of the FA's death.

	      (iii)  Designation of Beneficiary:  Each FA from time to time
may designate, on such form as the Committee may prescribe from time to time,
any person or persons (who may be named contingently or successively) to
receive any amount payable under the Plan upon or after his or her death,
and such designation may be changed from time to time by the FA by filing
a new designation with the Committee. Each designation will revoke all prior
designations by the FA, shall be on a form prescribed by the Committee, and
will be effective only when filed in writing with the Committee during the
FA's lifetime. In the absence of a valid beneficiary designation, or if, at
the time any amount is payable to a FA or beneficiary, there is no living
beneficiary eligible to receive the payment that has been validly named by
the FA, then Company shall pay any such amount to the FA's surviving spouse
(if the FA was legally married at the time of his or her death) or if there
is no surviving spouse, to the FA's estate.  In determining the existence or
identity of anyone entitled to payment, the Committee may rely conclusively
upon information supplied by the personal representative of the FA's estate.
In the event of a lack of adequate information having been supplied to the
Committee, or in the event that any question arises as to the existence or
identity of anyone entitled to receive a payment as aforesaid, or in the
event that a dispute arises with respect to any such payment, or in the event
that a beneficiary designation conflicts with applicable law, or in the event
the Committee is in doubt for any other reason as to the right of any person
to receive a payment as beneficiary then, notwithstanding the foregoing, the
Company, in its sole discretion, may, in complete discharge, and without
liability for any tax or other consequences


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which might flow therefrom: (i) distribute the payment to the FA's estate,
(ii) retain such payment, without liability for interest, until the
rights thereto are determined, or (iii) deposit the payment into any court
of competent jurisdiction.


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     9.  Form of Distribution:

	 (a)  Interest Account:  The portion allocable to a FA's Interest
Account shall be distributed in cash.

	 (b)  Phantom Stock Account:  The portion allocable to a FA's
Phantom Stock Account shall be distributed in whole shares of Legg Mason
Common Stock as described below, based on the Fair Market Value of Legg
Mason Common Stock on the Distribution Valuation Date.  Whole Share Units
to be distributed within an FA's Phantom Stock Account will be converted
into shares of Legg Mason Common Stock on a one-for-one basis.  The portion
of a FA's Phantom Stock Account that represents fractional Share Units and
thus cannot be converted into whole shares of Legg Mason Common Stock shall
be distributed in cash. There is no limit on the total number of shares of
Legg Mason Common Stock that may be distributed under this Section. Any
decline in the actual trading price of Legg Mason Common Stock during the
period between the Distribution Valuation Date and the applicable Payment
Date, as well as any brokerage commissions, fees or other charges incurred
by a FA in connection with the disposition of any shares of Legg Mason Common
Stock that are distributed to the FA, shall be the sole risk and
responsibility of the FA.

     10.  Non-Compete:  If a retired FA engages in competition with the
Company prior to the date of a distribution, the FA's Account shall be
forfeited in its entirety.  Forfeited amounts shall revert to the Company
and will not be allocated to other FAs.

	  (a)  For purpose of this Section, a FA shall be deemed to have
"engaged in competition" with the Company if he or she:

	       (i)  discloses the names of or otherwise identifies any of the
Company's customers to any person, firm, corporation, association, or other
entity which provides products or services that are similar to those
provided by the Company;

	       (ii)  discloses to any person, firm, corporation, association,
or other entity any information regarding the Company's general business
practices or procedures, methods of sale, list of products, personnel
information or any other information concerning the Company's business;

	       (iii)  owns, manages, operates, controls, is employed by, acts
as an agent for, participates in or is connected in any manner with the
ownership, management, operation or control of any firm, corporation,
association or other entity which is engaged in businesses which are or may
be competitive to the business of the Company; provided further that this
restrictive covenant shall encompass the State of Maryland and any other
states where the Company is engaged in business, and every city, county,
and other political subdivision of such states; or

<PAGE> 10

	       (iv)  solicits or calls, either by himself or at his or her
direction has any other person or firm solicit or call, any of the customers
of the Company on whom the FA called, with whom the FA became acquainted, or
of whom the FA learned of during his or her employment by the Company.

	  (b)  The determination of whether a FA has violated the terms of
Section 10(a) shall be made by the Committee, in its sole and absolute
discretion, and the determination of the Committee shall be final, conclusive
and binding upon both the FA (or any person or entity claiming through the FA)
and the Company.

	  (c)  As a condition precedent to any distribution, the Committee
may require a certificate from the FA certifying that he or she has not
violated any of the provisions of Section 10(a).

	  (d)  It is the intention of the Company that this Section be given
the broadest protection allowed by law with regard to the restrictions herein
contained.  Each restriction set forth in this Section shall be construed as
a condition separate and apart from any other restriction or condition.  To
the extent that any restriction contained in this Section is determined by
any court of competent jurisdiction to be unenforceable by reason of it being
extended for too great a period of time, or as encompassing too large a
geographic area, or over too great a range of activity, or any combination of
these elements, then such restriction shall be interpreted to extend only
over the maximum period of time, geographic area, and range of activities
which the court deems reasonable and enforceable.

	  (e)  In the event a FA desires a ruling as to the potential
application of this Section, he may request a ruling from the Committee in
accordance with Section 16.

	  (f)  If the Committee in its discretion determines that an activity
otherwise described herein would not be injurious to the Company, it may
waive the application of this Section to such activity, which waiver shall
be binding upon the FA and the Company.  The Committee shall exercise such
discretion in a uniform, nondiscriminatory manner.

     11.  Withholding Taxes:  Amounts payable under the Plan shall be subject
to such deductions or withholding as may be required by law. Notwithstanding
anything herein to the contrary, the Company may delay any distribution under
the Plan until the recipient of the distribution has separately provided for
the payment of any required withholding taxes with respect to the distribution
by check or other method approved by the Committee in its sole discretion.
The Company, to the extent permitted or required by law, shall have the right
(i) to deduct any federal, state or local taxes of any kind required by law to
be withheld with respect to any taxable event under the Plan from any amount
payable hereunder or from any Commission or other payment (including salary
or bonus) otherwise due to a FA, and (ii) to retain or sell without notice a
sufficient number of shares of Legg Mason Common Stock to be issued to such
FA (or any other person entitled to receive the payment due a FA) to cover
any such taxes.


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     12.  Assignment Of Benefits:  No amount payable, or other right or
benefit, under the Plan will, except as otherwise specifically provided by
the Plan or by applicable law, be subject to sale, assignment, transfer,
pledge, encumbrance, attachment, garnishment or levy prior to distribution
to a FA.  Since the Plan is intended to be a non-qualified, unfunded plan
not subject to the Employment Retirement Income Security Act of 1974, as
amended, payments under the Plan will not be subject to the provisions of
any qualified domestic relations order (as defined under the Internal Revenue
Code of 1986, as amended) applicable to a FA's Account.

     13.  Right To Offset:  Notwithstanding any provision herein to the
contrary, any distribution payable under the Plan may be used, at the
discretion of the Committee and subject to compliance with applicable law,
to offset any debt owed by a FA to the Company at the date such distribution
would otherwise be paid.  The Company may withhold distributions payable
under the Plan to offset any debts or other liabilities owed by a FA to the
Company.  If the Company is aware of any errors, loans outstanding, or
outstanding or pending liabilities of a FA, the Company may withhold
distributions under the Plan until such time as the liabilities are satisfied
or the Company has determined that an outstanding or pending liability no
longer exists.


     14.  Unfunded Nature Of The Plan:  The Company will not be required to
purchase, hold or dispose of any investments with respect to amounts credited
to the Account of any FA participating in the Plan.  A FA has no interest in
the Account or in any investments the Company may purchase with such amounts,
except as a general, unsecured creditor of the Company.

	  The Plan at all times shall be entirely unfunded.  The FA's Account
(including the Interest Account and Phantom Stock Account) is merely a record
for measuring and determining the amount of Deferred Bonus Commissions to be
paid by the Company to, or with respect to, the FA under the Plan, and such
Account shall be established solely for such bookkeeping purposes.  The
Company shall not be required to segregate any funds or other assets to be
used for payment of benefits under the Plan.  The FA's Account shall not be,
or be considered as evidence of the creation of, a trust fund, an escrow or
any other segregation of assets for the benefit of the FA or any beneficiary
of the FA.  There is no guaranty of benefit payments to the FA.

	  The obligation of the Company to make the payments described in the
Plan is an unsecured contractual obligation only, and neither the FA nor any
beneficiary of the FA shall have any beneficial or preferred interest by way
of trust, escrow, lien or otherwise in and to any specific assets or funds.
The FA and each beneficiary of the FA shall look solely to the general credit
of the Company for satisfaction of any obligations due or to become due under
the Plan.

	  Should the Company elect to make contributions to a trust
(hereinafter referred to as the "Trust") to assist the Company in paying the
benefits which may accrue hereunder, the amounts contributed shall be used
to purchase the deemed investments under Section 6, subject to application
of the provisions of this Section 14 to the actual investments.  However,
contributions to the Trust shall not reduce or otherwise affect the Company's
liability to pay benefits under the Plan (which benefits may be paid from the
Trust or from the Company's


<PAGE> 12

general assets, in the discretion of the Company), except that the Company's
liability shall be reduced by actual benefit payments from the Trust (and the
Account shall be appropriately adjusted to reflect such payments).  If any such
investments, or any contributions to the Trust, are made by the Company, such
investments shall have been made solely for the purpose of aiding the Company
in meeting its obligations under the Plan, and, except for actual contributions
to the Trust, no trust or trust fund is intended.  To the extent that the
Company does, in its discretion, purchase or hold any such investments (other
than through contributions to the Trust), the Company will be named sole owner
of all such investments and of all rights and privileges conferred by the
terms of the instruments or certificates evidencing such investments.  Nothing
stated herein will cause such investments, or the Trust, to form part of the
Account, or to be treated as anything but the general assets of the Company,
subject to the claims of its general creditors, nor will anything stated
herein cause such investments, or the Trust, to represent the vested, secured
or preferred interest of the FA.  The Company shall have the right at any
time to use such investments not held in the Trust in the ordinary course of
its business.  Neither the FA nor any of his or her beneficiaries shall at
any time have any interest in the Account or the Trust or in any such
investments, except as a general, unsecured creditor of the Company to the
extent of the Deferred Bonus Commissions which are the subject of the Plan.

     15.  Effect On Employment Rights And Other Benefit Programs:  Neither
participation in nor any of the provisions of the Plan shall give the FA any
right to be retained in the employment of the Company.  The Plan shall not
be construed as a contract of employment.  The Company maintains an employment-
at-will policy.  As a FA is free to end his or her employment with the Company
at any time for any reason or no reason, the Company is free to end the
employment with a FA at any time for any reason or no reason.  Furthermore,
the Company may end at any time a FA's employment as a Financial Advisor.
In the event a FA is no longer employed as a Financial Advisor or otherwise
ceases to be an Eligible FA, the FA will no longer be entitled to Deferred
Bonus Commissions pursuant to the Plan.  However, as long as a FA continues
to be employed in good standing by the Company, the FA shall continue to be
entitled to the Deferred Bonus Commissions previously credited to the FA's
Account under the Plan.  The Plan is in addition to, and not in lieu of, any
other employee benefit plan or program in which the FA may be or become
eligible to participate by reason of employment with the Company, and the
timing of receipt of benefits hereunder shall have no effect on contributions
to or benefits under such other plans or programs except as the provisions
hereof and of each such plan or program may specify.

     16.  Administration:  The Committee, as constituted from time to time,
shall have full power to interpret, construe and administer the Plan, including
authority to determine any dispute or claim with respect thereto.  The
determination of the Committee in any matter within the powers and discretion
granted to it under the Plan, made in good faith, shall be binding and
conclusive upon the Company, the FA and all other persons having any right
or benefit hereunder.  If the FA is a member of the Committee at any time,
the FA shall have no authority as such member with respect to any matter
specifically affecting the FA's interest hereunder (such as determination
of the amount, form or time of benefit payments to the FA), all such authority
being reserved to the other Committee members, to the exclusion of the FA,
and the FA shall act only in his or her individual capacity in connection
with any such matter.


<PAGE> 13


     17.  Paperless Communications - Notwithstanding anything contained herein
to the contrary, the Committee from time to time may establish uniform
procedures whereby with respect to any or all instances herein where a
writing is required, including but not limited to any required written notice,
election, consent, authorization, instruction, direction, designation,
request or claim, communication may be made by any other means designated by
the Committee, including by paperless communication, and such alternative
communication shall be deemed to constitute a writing to the extent permitted
by applicable law, provided that such alternative communication is carried
out in accordance with such procedures in effect at such time.


     18.  Arbitration:  As a condition precedent to the crediting and receipt
of Deferred Bonus Commissions under the Plan, each FA agrees that any
controversy or dispute arising under the Plan which cannot be resolved by
the Committee shall be submitted for arbitration upon demand of either party
in accordance with the rules of the National Association of Securities Dealers,
Inc.  or the New York Stock Exchange, Inc.

     19.  Controlling Law:  The Plan shall be construed, and the legal
relations between the parties in connection with any dispute relating to the
Plan shall be determined, in accordance with the laws of the State of
Maryland.

     20.  Amendment Or Termination:  The Company reserves the right to
amend or terminate the Plan at any time.  Any such amendment or termination
shall be by action of the Board of Directors of the Company or any Executive
Committee thereof.

     21.  Effect Of Amendment Or Termination - No amendment or termination
of the Plan shall directly or indirectly affect the rights of any FA (or the
FA's designated beneficiary) to payment of the amount in his or her Account,
to the extent that such amount was payable under the terms of the Plan prior
to the effective date of such amendment or termination.