Exhibit 10.17

                      LEGG MASON WOOD WALKER, INCORPORATED

                     PRODUCING BRANCH MANAGER RETENTION PLAN

         This document constitutes the Legg Mason Wood Walker, Incorporated
Producing Branch Manager Retention Plan (the "Plan"), as amended and restated
effective as of January 1, 2003. The Plan, as amended and restated, constitutes
the continuation of the plan as in effect immediately prior to January 1, 2003
(the "Prior Plan") and applies to Deferred and Retention Bonuses (as defined
herein) for Plan years commencing on or after April 1, 2003. The Prior Plan was
known as the Legg Mason Wood Walker, Incorporated Producing Branch Manager
Deferred Compensation Plan, and the terms of the Prior Plan govern the payment
of amounts accrued for Plan Years beginning before April 1, 2003.

         1.    Purpose - The purpose of the Plan is to provide for the payment
of deferred compensation to producing branch managers and to further enhance the
ability of Legg Mason Wood Walker, Incorporated to attract and retain producing
branch managers by providing additional payments to those producing branch
managers who remain employed by the Company for specific periods of time. The
additional compensation payable to a producing branch manager for remaining with
the Company for a specified period is in addition to the compensation provided
for services rendered and is intended solely to encourage producing branch
managers to remain employed by the Company as producing branch managers.

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

               (a)   "Account" means a Branch Manager's combined Interest
Account and Phantom Stock Account.

               (b)   "Branch Manager" means an employee who devotes all or a
portion of his or her working time to the management of a retail branch office
of the Company and who is classified by the Company as a branch manager. This
definition excludes any executive office/departmental personnel unless
specifically included by separate agreement.

               (c)   "Committee" means the Legg Mason Wood Walker, Incorporated
Producing Branch Manager Retention Plan Committee consisting of such members as
the Company's President shall select from time to time.

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

               (e)   "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.

               (f)   "Deferred Bonus" means the deferred bonus credited to an
Eligible Branch Manager under Section 4 of this Plan.



               (g)   "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 Branch
Manager 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.

               (h)   "Distribution Valuation Date" means (i) in the case of a
distribution following the death of a Branch Manager or the termination of a
Branch Manager'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,
April 25/th/ (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.

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

               (j)   "Eligible Branch Manager" means a Branch Manager (i) who is
employed in the Company's Private Client Group, (ii) who is classified by the
Company as a producing Branch Manager and is paid, in whole or in part, in
accordance with the Producing Branch Manager Compensation Schedule, (iii) who
does not defer compensation under a Legg Mason Wood Walker, Incorporated
Professional Branch Manager Phantom Stock Agreement during the applicable Plan
Year, and (iv) 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.

               (k)   "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 Branch Manager.

               (l)   "Formula Compensation" means the Legg Mason Branch Manager
Bonus for a Branch Manager for a Plan Year calculated on the Branch Manager
Worksheet provided to the Branch Manager by the Company.

               (m)   "Interest Account" means the investment account established
for Deferred and Retention Bonuses pursuant to Section 5(a) and Section 6(c) of
the Plan.

               (n)   "Tier I Deferred Bonus Percentage" means, in the case of an
Eligible Branch Manager whose Formula Compensation exceeds the Tier I
Compensation Threshold but does not exceed the Tier II Compensation Threshold,
the percentage (as specified in the Producing Branch Manager Compensation
Schedule) of Formula Compensation for the

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Plan Year that is subject to deferral. For Plan Year 2004, the Tier I Deferred
Bonus Percentage shall be 2%.

               (o)   "Tier II Deferred Bonus Percentage" means, in the case of
an Eligible Branch Manager whose Formula Compensation exceeds the Tier II
Compensation Threshold, the percentage (as specified in the Producing Branch
Manager Compensation Schedule) of Formula Compensation for the Plan Year that is
subject to deferral. For Plan Year 2004, the Tier II Deferred Bonus Percentage
shall be 2 1/2%.

               (p)   "Tier I Retention Bonus Percentage" means, in the case of
an Eligible Branch Manager whose Formula Compensation exceeds the Tier I
Compensation Threshold but does not exceed the Tier II Compensation Threshold,
the retention percentage specified in the Producing Branch Manager Compensation
Schedule that is to be applied in calculating the amount of the Retention Bonus
to be credited to the Account of such Eligible Branch Manager for that Plan
Year. For Plan Year 2004, the Tier I Retention Bonus Percentage shall be 2%.

               (q)   "Tier II Retention Bonus Percentage" means, in the case of
an Eligible Branch Manager whose Formula Compensation exceeds the Tier II
Compensation Threshold, the retention percentage specified in the Producing
Branch Manager Compensation Schedule that is to be applied in calculating the
amount of the Retention Bonus to be credited to the Account of such Eligible
Branch Manager for that Plan Year. For Plan Year 2004, the Tier II Retention
Bonus Percentage shall be 2 1/2%.

               (r)   "Tier I Threshold" means for any Plan Year the amount of
compensation specified in the Producing Branch Manager Compensation Schedule for
that Plan Year as the amount of compensation above which (i) a portion of the
Branch Manager's compensation for that Plan Year will be subject to deferral,
and (ii) the Branch Manager will be eligible for a Retention Bonus (which
amount, for Plan Year 2004, shall be $75,000).

               (s)   "Tier II Threshold" means for any Plan Year the amount of
compensation specified in the Producing Branch Manager Compensation Schedule for
that Plan Year as the amount of compensation above which (i) a higher portion of
the Branch Manager's compensation for that Plan Year will be subject to
deferral, and (ii) a Branch Manager's Retention Bonus for that Plan will be
computed using the higher Tier II Retention Bonus Percentage. For Plan Year
2004, the Tier II Compensation Threshold shall be $150,000).

               (t)   "Legg Mason Common Stock" means shares of common stock of
Legg Mason, Inc., par value $. 10 per share.

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

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

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

                        (x)   "Plan Year" means the fiscal year of the Company,
which, as of the date this Plan is adopted, is the 12 month period beginning
April 1 and ending March 31. References herein to any certain Plan Year will
refer to the Plan Year ended on the March 31 of the year specified in such
references.

                        (y)   "Producing Branch Manager Compensation Schedule"
means the Producing Branch Manager Compensation Schedule that is in effect at
the Company for a particular Plan Year.

                        (z)   "Retention Bonus" means the retention bonus
credited to an Eligible Branch Manager under Section 4 of this Plan.

                        (aa)  "Retirement" means a Branch Manager'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 Branch Manager's age at termination of employment
and his or her years of service, with the Company equals at least seventy (70).

                        (bb)  "Valuation Date" means May 15th of each year
(beginning with May 15,2003) or, if that day is not a 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 Branch Managers shall
become participants in the Plan on the last day of the first Plan Year during
which they become an Eligible Branch Manager. In order to receive a Deferred
Bonus or a Retention Bonus for any Plan Year during which the Eligible Branch
Manager was employed, the Branch Manager must be an Eligible Branch Manager, and
if the employment of a Branch Manager terminates during a Plan Year by reason of
the Branch Manager's death, Disability or Retirement, the Branch Manager shall
be entitled to a prorated Deferred Bonus and a Retention Bonus for such Plan
Year (determined in accordance with Section 4).

     If a Branch Manager ceases to be an Eligible Branch Manager (e.g., because
he or she ceases to be classified as a Producing Branch Manager by the Company),
but remains in the employ of the Company, the Branch Manager will continue to
participate in the Plan, but only with respect to amounts previously credited to
the Branch Manager's Account. If a Branch Manager ceases to be an Eligible
Branch Manager, the value of the Account shall continue to be credited with
earnings pursuant to Section 6 (subject to the forfeiture provisions of Section
7), but no further Deferred Bonuses or Retention Bonuses will be credited to the
Account with respect to any subsequent periods.

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                  4.    Deferred and Retention Bonuses -

                        (a)   Deferred Bonuses - As of the end of each Plan
Year, the Company will credit the amount specified in either clause (i) or (ii)
below, as applicable, to the Account of each Eligible Branch Manager whose
Formula Compensation for that Plan Year exceeds the Tier I Threshold for that
Plan Year:

                              (i)     Tier I Deferred Bonus Amount - For
Eligible Branch Managers whose Formula Compensation exceeds the Tier I Threshold
but does not exceed the Tier II Threshold, the product of (X) the Branch
Manager's Formula Compensation for that Plan Year and (Y) the Tier I Deferred
Bonus Percentage for that Plan Year.

                              (ii)    Tier II Deferred Bonus Amount - For
Eligible Branch Managers whose Formula Compensation exceeds the Tier II
Threshold, the product of (X) the Branch Manager's Formula Compensation for that
Plan Year and (Y) the Tier II Deferred Bonus Percentage for that Plan Year.

                        (b)   Retention Bonuses - As an incentive for Branch
Managers to continue their employment with the Company, as of the end of each
Plan Year, the Company will credit the amount specified in either clause (i) or
(ii) below, as applicable, to the Account of each Eligible Branch Manager whose
Formula Compensation for that Plan Year exceeds the Tier I Threshold for that
Plan Year:

                              (i)     Tier I Retention Bonus Amount - For
Eligible Branch Managers whose Formula Compensation exceeds the Tier I Threshold
but does not exceed the Tier II Threshold, the product of (X) the Branch
Manager's Formula Compensation for that Plan Year and (Y) the Tier I Retention
Bonus Percentage for that Plan Year.

                              (ii)    Tier II Retention Bonus Amount - For
Eligible Branch Managers whose Formula Compensation exceeds the Tier II
Threshold, the product of (X) the Branch Manager's Formula Compensation for that
Plan Year and (Y) the Tier II Retention Bonus Percentage for that Plan Year.

                        (c)   Allocation of Deferred and Retention Bonuses -
Deferred and Retention Bonuses which the Branch Manager elects to invest in the
Phantom Stock Account will be allocated as of the first Valuation Date following
the close of the Plan Year to which the Deferred or Retention Bonus relates.

                        (d)   Allocation in Case of Death, Disability or
Retirement - If the employment of an Eligible Branch Manager terminates during a
Plan Year by reason of the Branch Manager's death, Disability or Retirement, the
Branch Manager shall be entitled to prorated Deferred and/or Retention Bonuses
for such Plan Year. Such proration shall be made by :

                              (i)     multiplying the Initial Deferred or
Retention Bonus Threshold and Second Deferred or Retention Bonus Threshold for
that Plan Year by a fraction, the numerator of which is the number of calendar
days during the Plan

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Year during which the Branch Manager was employed by the Company and the
denominator of which is 365; and

                              (ii)    applying such adjusted thresholds to the
Branch Manager's actual Formula Compensation for that Plan Year as of the last
day of the month during which the Branch Manager terminated employment.

                  5.    Establishment of Branch Manager Accounts

                        (a)   Account Established for Each Eligible Branch
Manager - An individual Account shall be established on the books of the Company
in the name of each Eligible Branch Manager, for the purpose of accounting for
Deferred and Retention Bonuses credited to the Branch Manager, and to account
for investment adjustments made pursuant to Section 6. A separate sub-account
shall be established with respect to Deferred and Retention Bonuses credited for
each Plan Year (to which Deferred and Retention Bonuses 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 Branch Manager who
has a balance in his or her Account with a statement showing the Deferred and
Retention Bonuses credited to his or her Account with respect to each Plan Year,
the manner in which Deferred and Retention Bonuses for a particular Plan Year
are deemed to be invested, the date on which the Branch Manager is scheduled to
vest in the Retention Bonus (and any investment adjustments thereon made
pursuant to Section 6) for each Plan Year, and such other information as the
Committee shall deem relevant.

                  6.    Investment of Deferred and Retention Bonuses

                        (a)   Phantom Stock or Interest Credit - For investment
purposes, Deferred and Retention Bonuses credited to a Branch Manager's Account
for a Plan Year 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 Branch Manager shall elect annually, prior to the end
of each Plan Year, on a form prescribed by the Committee, whether any Deferred
or Retention Bonuses 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. Except as provided
above, a separate election may be made with respect to each Plan Year and shall
apply to both Deferred and Retention Bonuses credited for such Plan Year. Except
as the Committee shall otherwise

                                       6



determine, any investment election with respect to the Deferred and Retention
Bonuses for a Plan Year shall apply to the Deferred and Retention Bonuses 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 Branch Manager'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
Branch Manager shall be deemed to have designated that any non-directed Deferred
and Retention Bonuses 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 Branch Manager
and shall credit such Interest Account with the Deferred and Retention Bonuses
allocated to the Interest Account. As of the last day of each Plan Year
commencing with Plan Year 2004, the balance of a Branch Manager's Interest
Account (as determined prior to the allocation of any Deferred or Retention
Bonuses for such Plan Year) shall be credited with an amount equal to one year's
interest based on the Credit Interest Rate. Deferred and Retention Bonuses which
the Branch Manager elects to invest in the Interest Account will be allocated as
of March 31 of the Plan Year to which the Deferred or Retention Bonus relates
(but will not be included for purposes of determining the amount of interest
allocated for such Plan Year), provided that Deferred Bonuses related to the
Transition Period under the Prior Plan will be credited as of March 31,2003.

                        (d)   Phantom Stock Account - All Deferred and Retention
Bonuses 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 Branch Manager and shall credit such Phantom Stock Account with the
amount of Share Units resulting from the conversion of the Deferred and
Retention Bonuses. The number of Share Units into which such Deferred and
Retention Bonus shall be converted (calculated to four decimal places) will be
determined as of the first Valuation Date following the Plan Year to which the
Deferred and Retention Bonuses relate and will be equal to the amount of the
Deferred and Retention Bonuses for the Plan Year divided by the Fair Market
Value of a share of Legg Mason Common Stock on such Valuation Date. The
conversion of Deferred and Retention Bonuses into Legg Mason Share Units will be
made by the Committee as soon as administratively practicable after the first
Valuation Date following the Plan Year to which the Deferred and Retention
Bonuses relate.

                              (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 Branch Manager'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

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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, 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 Branch Manager'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 or Retention Bonuses to the Phantom Stock Account, nor
any other provision of the Plan, shall confer or be construed as conferring upon
a Branch Manager any rights as a stockholder of the Company or of Legg Mason,
Inc. 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 of Deferred Bonus - The Deferred Bonus
for each Plan Year shall be fully vested at all times.

                        (b)   Vesting of Retention Bonus - The Retention Bonus
is designed to encourage a Eligible Branch Manager to remain employed by the
Company. The Retention Bonus for each Plan Year is subject to a six year "class
year" vesting schedule; that is, the Retention Bonus for a particular Plan Year
(together with any related investment adjustments thereto) shall vest if the
Branch Manager remains continuously employed by the Company through the last day
of the sixth (6/th/) Plan Year following the Plan Year to which the Retention
Bonus relates. If a Branch Manager'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 Plan Year to which the Retention Bonus relates,
the portion of the Branch Manager's Interest Account and Phantom Stock Account
that relates to such non-vested Retention Bonus (and the related investment
adjustments thereto) shall be forfeited in their entirety.

                        (c)   Retirement, Death or Disability - A Branch Manager
shall become fully (100%) vested in the portion of his or her Account consisting
of Retention Bonuses (and investment adjustments thereto) upon Retirement, death
or Disability. However, the distribution (and potential forfeiture) of such
portion of the Account to a retired Branch Manager shall be conditioned upon his
or her continued compliance with the provisions of Section 10.

                        (d)   Forfeitures - Forfeited amounts (including amounts
forfeited pursuant to Section 10) shall revert to the Company and will not be
allocated to other Branch Managers.

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                  8.    Distributions -

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

                        (b) Retirement - In the event a Branch Manager's
employment with the Company terminates as a result of Retirement, distribution
of the Branch Manager's remaining Account (including any prorated Deferred or
Retention Bonus to which the Branch Manager may be entitled for the Plan Year
pursuant to Section 4) shall be made, subject to Section 11, within seventy-five
(75) days after the close of the Plan Year following the Plan Year in which the
Branch Manager retired, unless distribution of benefits is forfeited pursuant to
Section 10.

                        (c) Disability of Branch Manager - In the event a Branch
Manager's employment with the Company terminates as a result of the Branch
Manager's Disability, all amounts in the Branch Manager's Account (including any
prorated Deferred or Retention Bonus to which the Branch Manager 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
Branch Manager's employment terminated and (ii) the date the Committee
determines that the Branch Manager's employment terminated as a result of the
Branch Manager's Disability. The Committee, in its sole discretion, may
determine that a Branch Manager has a Disability and that the Branch Manager's
employment with the Company terminated as a result of such Disability at any
time before, at the time of, or after the Branch Manager's termination of
employment.

                        (d) Death -

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

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

                              (iii)   Designation of Beneficiary - Each Branch
Manager from time to time may designate, on such form as the Committee may
prescribe from time to time, any

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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 Branch Manager by filing a
new designation with the Committee. Each designation will revoke all prior
designations by the Branch Manager, shall be on a form prescribed by the
Committee, and will be effective only when filed in writing with the Committee
during the Branch Manager's lifetime. In the absence of a valid beneficiary
designation, or if, at the time any amount is payable to a Branch Manager or
beneficiary, there is no living beneficiary eligible to receive the payment that
has been validly named by the Branch Manager, then Company shall pay any such
amount to the Branch Manager's surviving spouse (if the Branch Manager was
legally married at the time of his or her death) or if there is no surviving
spouse, to the Branch Manager'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 Branch Manager'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 which might flow therefrom: (i)
distribute the payment to the Branch Manager'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.

                  9.    Form of Distribution -

                        (a)   Interest Account - The portion allocable to a
Branch Manager's Interest Account shall be distributed in cash.

                        (b)   Phantom Stock Account - The portion allocable to a
Branch Manager'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 a Branch Manager's Phantom Stock Account will be converted
into shares of Legg Mason Common Stock on a one-for-one basis. The portion of a
Branch Manager'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 Branch Manager in
connection with the disposition of any shares of Legg Mason Common Stock that
are distributed to the Branch Manager, shall be the sole risk and responsibility
of the Branch Manager.

                  10.   Non-Compete - If a retired Branch Manager engages in
competition with the Company prior to the date of a distribution, the portion of
the Branch Manager's Account attributable to Retention Bonuses (including any
investment adjustments made pursuant to

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Section 6 with respect to such Retention Bonuses) shall be forfeited in its
entirety. Forfeited amounts shall revert to the Company and will not be
allocated to other Branch Managers.

                        (a)   For purpose of this Section, a Branch Manager
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

                              (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 Branch Manager called, with whom the Branch
Manager became acquainted, or of whom the Branch Manager learned of during his
or her employment by the Company.

                        (b)   The determination of whether a Branch Manager 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 Branch Manager (or any person or entity
claiming through the Branch Manager) and the Company.

                        (c)   As a condition precedent to any distribution, the
Committee may require a certificate from the Branch Manager certifying that he
or she has not violated any of the provisions of Section 1O(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.

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                        (e) In the event a Branch Manager 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 Branch Manager 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 Branch Manager, and (ii) to
retain or sell without notice a sufficient number of shares of Legg Mason Common
Stock to be issued to such Branch Manager (or any other person entitled to
receive the payment due a Branch Manager) to cover any such taxes.

                  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
Branch Manager. 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 Branch Manager'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 Branch Manager 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 Branch
Manager to the Company. If the Company is aware of any errors, loans
outstanding, or outstanding or pending liabilities of a Branch Manager, 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 Branch Manager participating in the Plan. A
Branch Manager 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.

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              The Plan at all times shall be entirely unfunded. The Branch
Manager's Account (including the Interest Account and Phantom Stock Account) is
merely a record for measuring and determining the amount of Deferred and
Retention Bonuses to be paid by the Company to, or with respect to, the Branch
Manager 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 Branch
Manager'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 Branch Manager or any beneficiary of the Branch Manager. There is no
guaranty of benefit payments to the Branch Manager.

              The obligation of the Company to make the payments described in
the Plan is an unsecured contractual obligation only, and neither the Branch
Manager nor any beneficiary of the Branch Manager shall have any beneficial or
preferred interest by way of trust, escrow, lien or otherwise in and to any
specific assets or funds. The Branch Manager and each beneficiary of the Branch
Manager 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 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 Branch Manager. 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 Branch Manager 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 and Retention Bonuses 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
Branch Manager 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 an employee at will,

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the Branch Manager 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 Branch Manager at any time for any reason or no reason. Furthermore, the
Company may end at any time a Branch Manager's employment as a Branch Manager or
a producing Branch Manager. In the event a Branch Manager is no longer employed
as a Branch Manager or otherwise ceases to be an Eligible Branch Manager, the
Branch Manager will no longer be entitled to Deferred or Retention Bonuses
pursuant to the Plan. However, as long as a Branch Manager continues to be
employed in good standing by the Company, the Branch Manager shall continue to
be entitled to the Deferred and Retention Bonuses previously credited to the
Branch Manager'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 Branch Manager
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 Branch Manager and all other persons having any
right or benefit hereunder. If the Branch Manager is a member of the Committee
at any time, the Branch Manager shall have no authority as such member with
respect to any matter specifically affecting the Branch Manager's interest
hereunder (such as determination of the amount, form or time of benefit payments
to the Branch Manager), all such authority being reserved to the other Committee
members, to the exclusion of the Branch Manager, and the Branch Manager shall
act only in his or her individual capacity in connection with any such matter.

                  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 and Retention Bonuses under the Plan, each Branch
Manager 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; provided, however, that employment laws

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(including wage and hour laws) shall be based on the law of the jurisdiction in
which the FA is employed.

                  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
Branch Manager (or the branch Manager'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.


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