Item 5.02.  Departure of Directors or Certain Officers? Election of Directors?
Appointment of Certain Officers? Compensatory Arrangements of Certain Officers.
On April 29, 2020, in connection with pending acquisition of the Legg Mason (the
"Merger") under the Agreement and Plan of Merger by and among Legg Mason, Inc.,
a Maryland corporation (the "Company"), Franklin Resources, Inc., a Delaware
corporation ("Parent"), and Alpha Sub Inc., a Maryland corporation and
wholly-owned subsidiary of Parent ("Merger Sub"), the Company entered into
certain retention letter agreements (the "Retention Agreements") with each of
Joseph A. Sullivan, Peter H. Nachtwey, Terence A. Johnson, Patricia Lattin and
Thomas C. Merchant, all of whom are executive officers of the Company (each an
"Executive," and collectively, the "Executives"). These Retention Agreements
were designed to promote retention and to incentivize efforts to consummate and
achieve the anticipated benefits of the proposed Merger. The Compensation
Committee of the Company's Board of Directors approved the entry into these
Retention Agreements on April 27, 2020, and the independent directors of the
Company ratified the Retention Agreement for Mr. Sullivan, the Company's Chief
Executive Officer, on April 28, 2020.
Pursuant to the Retention Agreements, each Executive is eligible for a retention
bonus (the "Retention Bonus") if he or she (i) reasonably cooperates in the
transaction process, including satisfactorily performing assigned job duties and
cooperating with the Company to ensure the orderly transition of job duties,
responsibilities and knowledge, and (ii) remains continuously employed with the
Company through the closing of the Merger ("Closing Date"). Mr. Johnson must
also continue to comply with the terms of his Service Agreement, dated April 1,
2013 (the "Service Agreement").
The Retention Bonus for each Executive will be a lump sum cash payment equal to
the greater of (a) fifty percent (50%) of total compensation, which includes the
Executive's base salary plus gross annual incentive compensation (for Mr.
Johnson, the total compensation includes the sum of the his base salary as in
effect on the date of his Retention Agreement plus his annual incentive
compensation for the most recently completed fiscal quarter) and, if applicable,
commission received for the most recently completed fiscal year, or (b)
seventy-five percent (75%) of the Executive's base salary as in effect on the
date of his or her Retention Agreement, pro-rated for the period from February
18, 2020 until the Closing Date. Payment of the Retention Bonus is also
conditioned on the Executive agreeing to certain restrictive covenants,
including non-solicitation (except for Mr. Johnson, who must comply with certain
post-termination restrictions contained in his Service Agreement),
non-disparagement and confidentiality provisions. If the Executive's Retention
Bonus, together with any other payments or benefits provided by the Company
under the Retention Agreement, would otherwise exceed the Section 280G of the
Internal Revenue Code limit applicable to the Executive, the retention amount
will be reduced to the minimum extent necessary to avoid exceeding such limit.
The amount of Retention Bonus for each of the Executives, assuming the Closing
Date is August 1, 2020 and there is no reduction related to Section 280G, is as
follows: Joseph A. Sullivan $2,200,000; Peter H. Nachtwey $868,750; Terence A.
Johnson $751,652; Thomas C. Merchant $537,500; and Patricia Lattin $318,750.
Payment of the Retention Bonus is in addition to any severance or other benefits
that the Executive may otherwise be eligible to receive. Each Executive other
than Mr. Johnson is entitled to severance payments and benefits pursuant to (i)
certain letter agreements entered into on May 21, 2019 in the event of an
involuntary termination by the Company of the Executive's employment other than
for Cause (as defined in the Retention Agreement) on or before September 30,
2020 and (ii) thereafter under the terms of the Company's severance benefits
plan for reductions in force, as such plan may be amended, in each case, subject
to the Executive's execution of a general employment release of claims. Mr.
Johnson may be entitled to certain rights, including notice and/or compensation,
upon a termination of his employment under both his Service Agreement and
English law.
Mr. Sullivan has also entered into a Non-Competition Agreement, dated April 29,
2020 (the "Non-Competition Agreement"), with the Company in connection with his
Retention Agreement. Pursuant to the terms of the Non-Competition Agreement, Mr.
Sullivan agreed that during his employment with the Company and for the twelve
(12) month period commencing on his date of termination of employment with the
Company for any reason, Mr. Sullivan will not, directly or indirectly, own any
interest in, manage, control, participate in, consult with, or render services,
anywhere the Company currently conducts business or proposes to conduct
business, for any Competitor (as defined in the Non-Competition Agreement);
provided, that Mr. Sullivan is not restricted from owning less than two percent
(2%) of the stock of a publicly held corporation.
The foregoing summary of the forms of Retention Letter Agreement for Mr.
Sullivan, Mr. Nachtwey, Ms. Lattin and Mr. Merchant, the U.K. Retention Letter
Agreement for Mr. Johnson and the Non-Competition Agreement for Mr. Sullivan do
not purport to be complete and is subject to, and qualified in its entirety by,
the full text of the applicable agreements, forms of which are attached hereto
as Exhibits 10.1, 10.2, and 10.3 respectively, and incorporated herein by
reference.





--------------------------------------------------------------------------------


Forward-Looking Statements
Statements in this Current Report on Form 8-K (the "Form 8-K") and the exhibits
attached hereto and incorporated by reference herein that are not historical
facts are "forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. When used in this Form 8-K and the
exhibits attached hereto and incorporated by reference herein, words or phrases
generally written in the future tense and/or preceded by words such as "will,"
"may," "could," "expect," "believe," "anticipate," "intend," "plan," "seek,"
"estimate," "preliminary" or other similar words are forward-looking statements.
Various forward-looking statements in this Form 8-K and the exhibits attached
hereto and incorporated by reference herein relate to the acquisition by Parent
of the Company, including regarding the timing of closing of the transaction.
Forward-looking statements involve a number of known and unknown risks,
uncertainties and other important factors, some of which are listed below, that
could cause actual results and outcomes to differ materially from any future
results or outcomes expressed or implied by such forward-looking statements.
Important transaction-related and other risk factors that may cause such
differences include: (i) the occurrence of any event, change or other
circumstances that could give rise to the termination of the Merger? (ii) the
transaction closing conditions may not be satisfied in a timely manner or at
all, including due to the failure to obtain the Company stockholder approval and
regulatory and client approvals? (iii) the announcement and pendency of the
Merger may disrupt the Company's business operations (including the threatened
or actual loss of employees, clients or suppliers)? and (iv) the Company could
experience financial or other setbacks if the transaction encounters
unanticipated problems.
For a detailed discussion of other risk factors, please refer to the risks,
uncertainties and factors described in Parent's and the Company's recent filings
with the U.S. Securities and Exchange Commission ("SEC"), including, without
limitation, each company's most recent Annual Report on Form 10-K and subsequent
periodic and current reports.
Any forward-looking statement made in this Form 8-K and the exhibits attached
hereto and incorporated by reference herein speaks only as of the date on which
it is made. Factors or events that could cause actual results to differ may
emerge from time to time, and it is not possible for the Company to predict all
of them. Parent and the Company undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information, future
developments or otherwise, except as may be required by law.
Additional Information and Where to Find It
This filing may be deemed solicitation material in respect of the proposed
acquisition of the Company by Parent. This filing does not constitute a
solicitation of any vote or approval. In connection with the proposed Merger,
the Company has filed with the SEC and furnished to the Company's stockholders a
definitive proxy statement and other relevant documents. STOCKHOLDERS ARE URGED
TO READ THE PROXY STATEMENT AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN
CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY REFERENCE IN THE PROXY
STATEMENT BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
MERGER.
Investors may obtain free of charge the proxy statement and other documents
filed with the SEC at the SEC's website at http://www.sec.gov. In addition, the
proxy statement and the Company's annual reports on Form 10-K, quarterly reports
on Form 10-Q, current reports on Form 8-K and amendments to those reports filed
or furnished pursuant to section 13(a) or 15(d) of the Securities Exchange Act
of 1934 are or will be available free of charge through the Company's website at
www.leggmason.com as soon as reasonably practicable after they are
electronically filed with, or furnished to, the SEC.
The directors, executive officers and certain other members of management and
employees of the Company may be deemed "participants" in the solicitation of
proxies from stockholders of the Company in favor of the proposed Merger.
Information regarding the persons who may, under the rules of the SEC, be
considered participants in the solicitation of the stockholders of the Company
in connection with the proposed Merger are set forth in the proxy statement and
the other relevant documents filed with the SEC. You can find information about
the Company's executive officers and directors in the definitive proxy statement
on Schedule 14A in connection with the Company's 2019 Annual Meeting of
Shareholders, filed with the SEC on June 6, 2019.



--------------------------------------------------------------------------------

Item 9.01. Financial Statements and Exhibits.



(d) Exhibits.



Exhibit
No.  Description

10.1 Form of Retention Letter Agreement with each Peter H. Nachtwey, Patricia Lattin and Thomas C. Merchant.*



  10.2      Form of Retention Letter Agreement with Joseph A. Sullivan.*

  10.3      Form of Retention Letter Agreement with Terence A. Johnson.*

10.4 Form of Non-Competition Agreement by and between Joseph A. Sullivan and Legg Mason, Inc.*

104 Cover Page Interactive Data File (embedded within the Inline XBRL document).

* Schedules (or similar attachments) omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to provide a copy of any omitted schedule to the SEC upon request.

--------------------------------------------------------------------------------

© Edgar Online, source Glimpses