Resignation of Mark R. Fetting as President and CEO, Board Member and Chairman of the Board.

On September 10, 2012, Mark R. Fetting, President and Chief Executive Officer of Legg Mason, Inc. (the "Company"), a member of the Board of Directors (the "Board") and Chairman of the Board, notified the Board of his intention to step down from these positions, effective October 1, 2012. From that date until December 31, 2012, Mr. Fetting will serve as a consultant and render consulting services to the Company.

Appointment of Joseph A. Sullivan as Interim CEO.

In connection with Mr. Fetting's stepping down, the Board has appointed, effective October 1, 2012, Joseph A. Sullivan, age 54, as Interim Chief Executive Officer, pending the appointment of a permanent Chief Executive Officer or until otherwise determined by the Board. Before being appointed as Interim Chief Executive Officer, Mr. Sullivan oversaw the global distribution operations of the Company. He was elected Senior Executive Vice President of the Company in September 2008 and until January 2011 was responsible for overseeing administrative functions as Chief Administrative Officer. From December 2005 to September 2008 he was responsible for overseeing the fixed income capital markets operations of Stifel Nicolaus, a broker-dealer. From 1993 to December 2005 he oversaw the fixed income capital markets operations of Legg Mason Wood Walker, the Company's broker-dealer subsidiary that was sold in December 2005. In connection with his appointment as Interim Chief Executive Officer, Mr. Sullivan received a restricted stock grant as discussed below and an increase in his annual base salary to $500,000.

Compensatory Arrangements of Certain Named Executive Officers.


On September 10, 2012, the Company, in order to retain and motivate the named
executive officers listed below, made restricted stock grants to them as
follows:


                    Named Executive Officer         Number of
                                                Restricted Shares
                Ronald Dewhurst, Head of Global      58,117
                Investment Managers
                Thomas P. Lemke, Executive Vice      27,121
                President and General Counsel
                Peter H. Nachtwey, Chief             58,117
                Financial Officer
                Joseph A. Sullivan, Interim CEO      116,234

The restricted shares will vest in full on March 31, 2014, subject to the executive's continued employment on such date. Should the executive be terminated without cause or terminate his employment for good reason, 100% of the restricted shares will vest. Should the executive be terminated due to death or disability, a pro-rata portion of the restricted shares will vest based on the period of service during the vesting period with the remainder of the Restricted Shares being forfeited. If the executive's employment terminates for any other reason, the restricted shares will be forfeited.