SC 13D

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. )*

LEGG MASON, INC.

(Name of Issuer)

Common Stock, $0.10 par value

(Title of Class of Securities)

524901105

(CUSIP Number)

Brian L. Schorr, Esq.

Chief Legal Officer

Trian Fund Management, L.P.

280 Park Avenue, 41st Floor

New York, New York 10017

Tel. No.:(212) 451-3000

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

December 17, 2009

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See Rule 13d-7 for other parties to whom copies are to be sent.

*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The Information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes)

1	NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Nelson Peltz
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) [_] (b) [_]
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)			[_]
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 9,373,544
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 9,373,544
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 9,373,544
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			[_]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.81%*
14	TYPE OF REPORTING PERSON IN

_______

* Calculated based on 161,337,832 shares of Common Stock outstanding as of November 2, 2009, as reported in the Issuer’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009 (the “Form 10-Q”).

1	NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Peter W. May
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) [_] (b) [_]
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)			[_]
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 9,373,544
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 9,373,544
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 9,373,544
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			[_]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.81%*
14	TYPE OF REPORTING PERSON IN

_______

* Calculated based on 161,337,832 shares of Common Stock outstanding as of November 2, 2009, as reported in the Issuer’s  Form 10-Q.

1	NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Edward P. Garden
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) [_] (b) [_]
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)			[_]
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 9,373,544
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 9,373,544
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 9,373,544
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			[_]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.81%*
14	TYPE OF REPORTING PERSON IN

_______

* Calculated based on 161,337,832 shares of Common Stock outstanding as of November 2, 2009, as reported in the Issuer’s  Form 10-Q.

1	NAME OF REPORTING PERSON Trian Fund Management, L.P. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 20-3454182
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) [_] (b) [_]
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)			[_]
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 9,373,544
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 9,373,544
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 9,373,544
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			[  ]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.81%*
14	TYPE OF REPORTING PERSON PN

_______

* Calculated based on 161,337,832 shares of Common Stock outstanding as of November 2, 2009, as reported in the Issuer’s  Form 10-Q.

1	NAME OF REPORTING PERSON Trian Fund Management GP, LLC S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 20-3454087
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) [_] (b) [_]
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)			[_]
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 9,373,544
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 9,373,544
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 9,373,544
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			[  ]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.81%*
14	TYPE OF REPORTING PERSON OO

_______

* Calculated based on 161,337,832 shares of Common Stock outstanding as of November 2, 2009, as reported in the Issuer’s  Form 10-Q.

1	NAME OF REPORTING PERSON Trian Partners General Partner, LLC S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 20-3453595
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) [_] (b) [_]
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)			[_]
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 9,228,122
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 9,228,122
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 9,228,122
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			[X]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.72%*
14	TYPE OF REPORTING PERSON OO

_______

* Calculated based on 161,337,832 shares of Common Stock outstanding as of November 2, 2009, as reported in the Issuer’s  Form 10-Q.

1	NAME OF REPORTING PERSON Trian Partners GP, L.P. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 20-3453775
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) [_] (b) [_]
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)			[_]
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 9,228,122
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 9,228,122
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 9,228,122
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			[X]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.72%*
14	TYPE OF REPORTING PERSON PN

_______

* Calculated based on 161,337,832 shares of Common Stock outstanding as of November 2, 2009, as reported in the Issuer’s  Form 10-Q.

1	NAME OF REPORTING PERSON Trian Partners Parallel Fund I General Partner, LLC S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 20-3694293
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) [_] (b) [_]
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)			[_]
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 140,964
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 140,964
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 140,964
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			[X]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.09%*
14	TYPE OF REPORTING PERSON OO

_______

* Calculated based on 161,337,832 shares of Common Stock outstanding as of November 2, 2009, as reported in the Issuer’s  Form 10-Q.

1	NAME OF REPORTING PERSON Trian Partners, L.P. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 20-3453988
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) [_] (b) [_]
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)			[_]
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 1,598,314
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 1,598,314
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,598,314
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			[X]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.99%*
14	TYPE OF REPORTING PERSON PN

_______

*Calculated based on 161,337,832 shares of Common Stock outstanding as of November 2, 2009, as reported in the Issuer’s  Form 10-Q.

1	NAME OF REPORTING PERSON Trian Partners Master Fund, L.P. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 98-0468601
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) [_] (b) [_]
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)			[_]
6	CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 3,958,794
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 3,958,794
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,958,794
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			[X]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.45%*
14	TYPE OF REPORTING PERSON PN

_______

* Calculated based on 161,337,832 shares of Common Stock outstanding as of November 2, 2009, as reported in the Issuer’s  Form 10-Q.

1	NAME OF REPORTING PERSON Trian Partners Parallel Fund I, L.P. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 20-3694154
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) [_] (b) [_]
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)			[_]
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 140,964
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 140,964
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 140,964
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			[X]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.09%*
14	TYPE OF REPORTING PERSON PN

_______

* Calculated based on 161,337,832 shares of Common Stock outstanding as of November 2, 2009, as reported in the Issuer’s  Form 10-Q.

1	NAME OF REPORTING PERSON Trian SPV (SUB) V, L.P. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 98-0624408
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) [_] (b) [_]
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)			[_]
6	CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 3,671,014
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 3,671,014
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,671,014
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			[X]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.28%*
14	TYPE OF REPORTING PERSON PN

_______

* Calculated based on 161,337,832 shares of Common Stock outstanding as of November 2, 2009, as reported in the Issuer’s  Form 10-Q.

Item 1. Security and Issuer

This Schedule 13D relates to the Common Stock, $0.10 par value per share (the “Shares”), of Legg Mason, Inc. a Maryland corporation (the “Issuer”). The address of the principal executive offices of the Issuer is 100 International Drive, Baltimore, MD 21202.

Item 2. Identity and Background

The persons filing this statement are Trian Partners GP, L.P., a Delaware limited partnership (“Trian GP”), Trian Partners General Partner, LLC, a Delaware limited liability company (“Trian GP LLC”), Trian Partners, L.P., a Delaware limited partnership (“Trian Onshore”), Trian Partners Master Fund, L.P., a Cayman Islands limited partnership (“Trian Offshore”), Trian Partners Parallel Fund I, L.P., a Delaware limited partnership (“Parallel Fund I”), Trian Partners Parallel Fund I General Partner, LLC, a Delaware limited liability company (“Parallel Fund I GP LLC”), Trian SPV (SUB) V, L.P., a Cayman Islands limited partnership (“SPV V”), Trian Fund Management, L.P., a Delaware limited partnership (“Trian Management”), and Trian Fund Management GP, LLC, a Delaware limited liability company (“Trian Management GP” and together with the foregoing, the “Trian Entities”), Nelson Peltz, a citizen of the United States of America, Peter W. May, a citizen of the United States of America, and Edward P. Garden, a citizen of the United States of America (the Trian Entities and Messrs. Peltz, May and Garden are sometimes hereinafter referred to collectively as the “Filing Persons” or the “Trian Group”). The principal business address and the address of the principal office of each of the Filing Persons is 280 Park Avenue, 41st Floor, New York, New York 10017, except that the principal business address of Trian Offshore and SPV V is Gardenia Court, Suite 3307, 45 Market Street, Camana Bay, Grand Cayman, Cayman Islands, KY1-1103.

Trian GP LLC is the general partner of Trian GP, which is the general partner of Trian Onshore, Trian Offshore and SPV V.  Parallel Fund I GP LLC is the general partner of Parallel Fund I.  Trian Management GP is the general partner of Trian Management, which serves as the management company for Trian Onshore, Trian Offshore, Parallel Fund I, and SPV V.  Each of Trian GP LLC, Parallel Fund I GP LLC and Trian Management GP are owned and/or controlled by Nelson Peltz, Peter W. May and Edward P. Garden, who therefore are in a position to determine the investment and voting decisions made by the Trian Entities.

Each of Trian Onshore, Trian Offshore, Parallel Fund I and SPV V is primarily engaged in the business of investing in securities. Trian GP is primarily engaged in the business of serving as the general partner of Trian Onshore, Trian Offshore and SPV V. Trian GP LLC is primarily engaged in the business of serving as the general partner of Trian GP. Parallel Fund I GP LLC is primarily engaged in the business of serving as the general partner of Parallel Fund I.  Trian Management is primarily engaged in the business of serving as a management company for certain of the Trian Entities.  Trian Management GP is primarily engaged in the business of serving as the general partner of Trian Management.

Nelson Peltz’s present principal occupation or employment is serving as Chief Executive Officer and a founding partner of Trian Management and, as such, managing the investments of Trian GP, Trian Onshore, Trian Offshore, Parallel Fund I and SPV V.  Peter W. May’s present principal occupation or employment is serving as President and a founding partner of Trian Management and, as such, managing the investments of Trian GP, Trian Onshore, Trian Offshore, Parallel Fund I and SPV V.  Edward P. Garden’s present principal occupation or employment is serving as Chief Investment Officer and a founding partner of Trian Management and, as such, managing the investments of Trian GP, Trian Onshore, Trian Offshore, Parallel Fund I and SPV V.

None of the Filing Persons, nor any director, executive officer, general partner or controlling person of any of the Filing Persons, has, during the past five years, (a) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (b) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting, or mandating activities subject to, Federal or State securities laws or a finding of any violation with respect to such laws.

Each of the Filing Persons is responsible for the completeness and accuracy of the information concerning him or it contained herein, but is not responsible for the completeness and accuracy of the information concerning the others, except to the extent that he or it knows or has reason to believe that such information is inaccurate.

Item 3. Source and Amount of Funds or Other Consideration

As of 4:00 p.m., New York City time, on December 28, 2009, the aggregate purchase price of the 9,043,586 Shares purchased by Trian Onshore, Trian Offshore, Parallel Fund I and SPV V collectively was $213,839,569 (including commissions).  In addition, as of such time and date, SPV V beneficially owned an additional 325,500Shares, which were acquired through a series of privately negotiated back-to-back call and put transactions with a financial institution (the “Options”) and as a result of which SPV V is subject to the same economic gain or loss as if it had purchased the underlying Shares.  As of December 28, 2009, these Options have an aggregate strike price of $9,136,947 (See Schedule A hereto for additional detail on the Options). In addition, as of December 28, 2009, Trian Management held 4,458 Shares (the “Director Shares”) that, pursuant to and under the conditions of the Legg Mason, Inc. Non-Employee Director Equity Plan, as amended, were issued to Mr. Peltz in connection with his service as a director of the Issuer.  As set forth in Item 5, none of the other Filing Persons directly own any Shares or Options.  Except with respect to the Shares issued to Mr. Peltz in connection with his service as a director of the Issuer, the source of funding for the purchase of the Shares was, and the source of funding for the purchase of any additional Shares and Options, the exercise of the Options or the purchase and/or exercise of any additional Options or other derivative securities related to the market price of the Shares acquired in the future is currently expected to be, the respective general working capital of the purchasers.

Item 4. Purpose of Transaction

The Filing Persons initially acquired Shares because they believed that they represented an attractive investment opportunity.  On October 25, 2009, Trian Management, certain funds managed by it and Nelson Peltz, Peter W. May and Edward P. Garden (collectively, the “Investors”) entered into an Agreement (the “Agreement”) with the Issuer, pursuant to which the Issuer expanded its Board of Directors from 13 to 14 directors and Nelson Peltz was appointed to the Issuer's Board of Directors. Mr. Peltz serves as a member of the class whose term expires at the Issuer's 2010 Annual Meeting of Stockholders and the Issuer has agreed that Mr. Peltz will be re-nominated by the Issuer's Board of Directors at the 2010 Annual Meeting of Stockholders to serve as a director with a term expiring in 2013. Mr. Peltz is entitled to serve as a member of the Nominating and Corporate Governance Committee of the Board while he serves as a member of the Board, subject to satisfying the requirements of the New York Stock Exchange and other applicable law.  Mr. Peltz has agreed to offer his resignation from the Issuer’s Board of Directors under certain circumstances set forth in the Agreement.

Pursuant to the Agreement, the Investors have agreed, among other things, and subject to certain limitations, that for a specified period of time, they will vote their shares in favor of each director nominated and recommended by the Board and vote against any shareholder nominations for director not approved or recommended by the Board of Directors for election and that they will use their commercially reasonable efforts (taking into account fiduciary duties, legal obligations and requirements, the Issuer’s Insider Trading Policy, economic and financial conditions, market and trading prices and conditions and other relevant matters) to cause the Investors and their affiliates to beneficially own at least 6.0% of the Issuer’s outstanding shares of Common Stock by or before December 31, 2009 and at least 8.0% of the Issuer’s outstanding shares of Common Stock by or before April 30, 2010, in each case calculated as set forth in the Agreement.  Under the Agreement, the Investors have agreed to certain restrictions, which, among other things, limit the Investors and their Affiliates (including the other Filing Persons) from acquiring economic ownership of more than 9.9% of the Issuer's outstanding Common Stock for a specified period of time unless authorized by the Issuer's Board of Directors or if the Issuer has announced or entered into a binding agreement providing for, or has recommended that its shareholders support, an Extraordinary Matter (as defined in the Agreement).  However, the Agreement does not restrict, among other things, (i) Mr. Peltz, in his capacity as a member of the Issuer's Board of Directors, from confidentially expressing or advocating his views to other members of the Board or during board meetings or (ii) the Investors' ability to discuss any matter confidentially with the Issuer, the Issuer's Board of Directors or any of its members.  The foregoing description of the Agreement is a summary only and is qualified in its entirety by reference to the Agreement, which is filed as Exhibit 2 hereto and incorporated herein by reference.

The Filing Persons believe that the Shares are undervalued in the marketplace and accordingly, Mr. Peltz, in his capacity as a director of the Issuer, and the Filing Persons intend to work with the Issuer’s management and Board of Directors in pursuing strategies to enhance shareholder value.

The Filing Persons intend to review their investment in the Issuer on a continuing basis. Subject to the provisions of the Agreement (including the targeted ownership holdings referred to above), depending on various factors including, without limitation, the Issuer’s financial position, results and strategic direction, price levels of the Shares, conditions in the securities markets and general economic and industry conditions, the Filing Persons may, from time to time and at any time,  in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, but not limited to, purchasing additional securities of the Issuer, entering into financial instruments or other agreements which increase or decrease the Filing Persons’ economic exposure with respect to their investment in the Issuer, selling some or all of their holdings in the Issuer and/or otherwise changing their intention with respect to any and all matters referred to in Item 4 of Schedule 13D.  The Filing Persons do not have any present plan or proposal that would relate to or result in any of the matters set forth in subparagraphs (a) – (j) of Item 4 of Schedule 13D except as set forth herein or in the Agreement or as would occur upon completion of any of the actions set forth in the Agreement.

Item 6 of this Schedule 13D is incorporated by reference in this Item 4 as if restated in full herein.

Item 5. Interest in Securities of the Issuer

(a) As of 4:00 pm, New York City time, on December 28, 2009, the Filing Persons beneficially owned, in the aggregate, 9,373,544 Shares, representing approximately 5.81% of the Issuer’s outstanding Shares (based upon 161,337,832 shares of Common Stock outstanding as of November 2, 2009, as reported in the Issuer’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009 (the “Form 10-Q”)).  Such Shares include an aggregate of 9,048,044 Shares beneficially owned by the Filing Persons through direct ownership of the Shares by Trian Onshore, Trian Offshore, Parallel Fund I and SPV V, representing approximately 5.61% of the Issuer’s outstanding Shares, and an additional 325,500 Shares underlying the Options which are beneficially owned by the Filing Persons, representing approximately 0.20% of the Issuer’s outstanding Shares.

(b) Each of Trian Management, Trian Onshore, Trian Offshore, Parallel Fund I and SPV V beneficially and directly owns and has sole voting power and sole dispositive power with regard to 4,458, 1,598,314, 3,958,794, 140,964and 3,671,014 Shares (including, in the case of SPV V, the Shares underlying the Options), respectively, except to the extent that other Filing Persons as described below may be deemed to have shared voting power and shared dispositive power with regard to such Shares.

Each of Trian GP, Trian GP LLC, Trian Management, Trian Management GP, Nelson Peltz, Peter W. May and Edward P. Garden, by virtue of their relationships to Trian Onshore, Trian Offshore, and SPV V (discussed in Item 2), may be deemed to have shared voting power and shared dispositive power with regard to, and therefore may be deemed to beneficially own (as that term is defined in Rule 13d-3), the Shares (including Shares underlying the Options) that Trian Onshore, Trian Offshore and SPV V directly and beneficially own. Each of Trian GP, Trian GP LLC, Trian Management, Trian Management GP, Nelson Peltz, Peter W. May and Edward P. Garden disclaims beneficial ownership of such Shares for all other purposes. Each of Parallel Fund I GP LLC, Trian Management, Trian Management GP, Nelson Peltz, Peter W. May and Edward P. Garden, by virtue of their relationships to Parallel Fund I (discussed in Item 2), may be deemed to have shared voting power and shared dispositive power with regard to, and therefore may be deemed to beneficially own (as that term is defined in Rule 13d-3), the Shares that Parallel Fund I directly and beneficially owns.  Each of Parallel Fund I GP LLC, Trian Management, Trian Management GP, Nelson Peltz, Peter W. May and Edward P. Garden disclaims beneficial ownership of such Shares for all other purposes.

Each of Mr. May, Mr. Garden, Trian Management and Trian Management GP, by virtue of an agreement with Mr. Peltz (discussed in Item 5), may be deemed to have shared voting power and shared dispositive power with regard to, and therefore may be deemed to beneficially own (as that term is defined in Rule 13d-3), the Director Shares.  Each of Mr. Peltz, Mr. May, Mr. Garden, Trian Management and Trian Management GP disclaims beneficial ownership of such Director Shares for all other purposes.

(c) Schedule A hereto (which is incorporated by reference in this Item 5 as if restated in full herein) sets forth all transactions with respect to the Shares effected during the past sixty (60) days by any of the Filing Persons, inclusive of the transactions effected through 4:00 pm, New York City time, on December 28, 2009.

(d) Except for the Filing Persons, no person is known by the Filing Persons to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Shares beneficially owned by the Filing Persons.

Item 6. Contracts, Arrangements, Understandings or Relationship with Respect to Securities of the Issuer

In addition to the Options referenced in Item 3 above, the Filing Persons may from time to time enter into and dispose of additional Options or other similar derivative transactions with one or more counterparties that are based upon the value of the Shares, which transactions could be significant in amount.  The profit, loss and/or return on such additional contracts may be wholly or partially dependent on the market value of the Shares, relative value of the Shares in comparison to one or more other financial instruments, indexes or securities, a basket or group of securities in which the Shares may be included or a combination of any of the foregoing.

Trian GP is the Managing General Partner and Trian Partners Cayman, Ltd. is the Administrative General Partner of SPV V pursuant to the Amended and Restated Limited Partnership Agreement of Trian SPV (SUB) V, L.P., dated June 1, 2009 (the “Trian SPV V Partnership Agreement”). The sole Limited Partner is Trian SPV V, L.P.  Pursuant to the Trian SPV V Partnership Agreement, Trian GP has voting and dispositive power over the Shares of the Issuer held by SPV V and is entitled, generally on an annual basis, to a portion of the appreciation in the value of the Shares. The foregoing description of the Trian SPV V Partnership Agreement is a summary only and is qualified in its entirety by reference to the Trian SPV V Partnership Agreement, which is filed as Exhibit 3 hereto and incorporated herein by reference.

Pursuant to an Agreement dated as of October 27, 2009 between Nelson Peltz and Trian Fund Management, L.P. (the “Director’s Fees Agreement”), Mr. Peltz agreed, among other things, that as long as he is an officer of Trian Management and for a period of 90 days thereafter, Trian Management shall have dispositive power over any Shares or restricted stock units (or Shares received in respect of such restricted stock units) that Mr. Peltz receives from the Issuer as compensation for his service as a director of the Issuer (including the Director Shares).  Trian Management is also entitled to receive the consideration received as a result of any disposition of such Shares or restricted stock units.  In connection with the Director’s Fee Agreement, Mr. Peltz transferred the Directors Shares to Trian Management upon receipt of such Shares.  The foregoing description of the Director’s Fees Agreement is a summary only and is qualified in its entirety by reference to the Director’s Fees Agreement, which is filed as Exhibit 4 hereto and incorporated herein by reference.

Except as described herein (including, without limitation, Items 3 and 4 above, which are incorporated by reference in this Item 6 as if restated in full herein), none of the Filing Persons has any contracts, arrangements, understandings or relationships (legal or otherwise) with any person with respect to any securities of the Issuer, including but not limited to the transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies.

Item 7. Material to be Filed as Exhibits

1.   Joint Filing Agreement of the Filing Persons.

2.   Agreement dated as of October 25, 2009 by and among the Issuer and the Investors.

3.   Amended and Restated Limited Partnership Agreement of Trian SPV (SUB) V, L.P., dated June 1, 2009.

4.   Agreement dated as of October 27, 2009 between Nelson Peltz and Trian Fund Management, L.P.

SIGNATURE

After reasonable inquiry and to the best of each of the undersigned knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: December 28, 2009

TRIAN FUND MANAGEMENT, L.P.

 By:   Trian Fund Management GP, LLC, its

  general partner

 By:  /s/EDWARD P. GARDEN

 Name:  Edward P. Garden

 Title:    Member

TRIAN FUND MANAGEMENT GP, LLC

 By: /s/EDWARD P. GARDEN

Name:  Edward P. Garden

Title:    Member

TRIAN PARTNERS, L.P.

By:  Trian Partners GP, L.P., General Partner

By:  Trian Partners General Partner, LLC,

 its general partner

By:  /s/EDWARD P. GARDEN

Name:   Edward P. Garden

Title:     Member

TRIAN PARTNERS MASTER FUND, L.P.

By:  Trian Partners GP, L.P., General Partner

By:  Trian Partners General Partner, LLC,

its general partner

By:  /s/EDWARD P. GARDEN

Name:  Edward P. Garden

Title:    Member

TRIAN SPV (SUB) V, L.P.

By:  Trian Partners GP, L.P., General Partner

By:  Trian Partners General Partner, LLC,

 its general partner

By:  /s/EDWARD P. GARDEN

        Name:  Edward P. Garden

        Title:    Member

TRIAN PARTNERS GP, L.P.

By:  Trian Partners General Partner, LLC, its

general partner

By:  /s/EDWARD P. GARDEN

Name:  Edward P. Garden

Title:    Member

TRIAN PARTNERS GENERAL PARTNER, LLC

By:  /s/EDWARD P. GARDEN

Name:  Edward P. Garden

Title:    Member

TRIAN PARTNERS PARALLEL FUND I, L.P.

By:  Trian Partners Parallel Fund I

        General Partner, LLC, its general partner

By:  /s/EDWARD P. GARDEN

Name:  Edward P. Garden

Title:    Member

TRIAN PARTNERS PARALLEL FUND I GENERAL PARTNER, LLC

By:  /s/EDWARD P. GARDEN

Name:  Edward P. Garden

Title:    Member

/s/NELSON PELTZ

NELSON PELTZ

/s/PETER W. MAY

PETER W. MAY

/s/EDWARD P. GARDEN

EDWARD P. GARDEN

Exhibit I

JOINT FILING AGREEMENT

In accordance with Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended, the persons named below agree to the joint filing on behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to the Common Stock of Legg Mason, Inc. and further agree that this Joint Filing Agreement be included as an Exhibit to such joint filings. In evidence thereof, the undersigned, being duly authorized, have executed this Joint Filing Agreement this 28th day of December, 2009.

TRIAN FUND MANAGEMENT, L.P.

By:  Trian Fund Management GP, LLC, its

general partner

By:  /s/EDWARD P. GARDEN

Name:  Edward P. Garden

Title:    Member

TRIAN FUND MANAGEMENT GP, LLC

By:  /s/EDWARD P. GARDEN

Name:  Edward P. Garden

Title:    Member

TRIAN PARTNERS, L.P.

By:  Trian Partners GP, L.P., General Partner

By:  Trian Partners General Partner, LLC,

 its general partner

By:  /s/EDWARD P. GARDEN

Name:  Edward P. Garden

Title:    Member

TRIAN PARTNERS MASTER FUND, L.P.

By:  Trian Partners GP, L.P., General Partner

By:  Trian Partners General Partner, LLC,

 its general partner

By:  /s/EDWARD P. GARDEN

Name:  Edward P. Garden

Title:    Member

TRIAN SPV (SUB) V, L.P.

By:  Trian Partners GP, L.P., General Partner

By:  Trian Partners General Partner, LLC,

 its general partner

By:  /s/EDWARD P. GARDEN

Name:  Edward P. Garden

Title:    Member

TRIAN PARTNERS GP, L.P.

By:  Trian Partners General Partner, LLC, its

general partner

By:  /s/EDWARD P. GARDEN

Name:  Edward P. Garden

Title:    Member

TRIAN PARTNERS GENERAL PARTNER, LLC

By:  /s/EDWARD P. GARDEN

Name:  Edward P. Garden

Title:    Member

TRIAN PARTNERS PARALLEL FUND I, L.P.

By: Trian Partners Parallel Fund I

       General Partner, LLC, its general partner

By:  /s/EDWARD P. GARDEN

Name:  Edward P. Garden

Title:    Member

TRIAN PARTNERS PARALLEL FUND I GENERAL PARTNER, LLC

By:  /s/EDWARD P. GARDEN

Name:  Edward P. Garden

Title:    Member

/s/NELSON PELTZ

NELSON PELTZ

/s/PETER W. MAY

PETER W. MAY

/s/EDWARD P. GARDEN

EDWARD P. GARDEN

Schedule A

Except with respect to the Director Shares, which were issued by the Issuer to Mr. Peltz on November 27, 2009 in connection with Mr. Peltz’s service as a director of the Issuer and which Mr. Peltz transferred to Trian Management pursuant to the Director’s Fees Agreement upon receipt, the following table sets forth all transactions with respect to the Shares effected during the past 60 days by any of the Filing Persons, inclusive of any transactions effected through 4:00 p.m., New York City time, on December 28, 2009.  Except as otherwise noted, all such transactions in the table were effected in the open market, and the table includes commissions paid in per share prices.

Name	Date	Shares		Price		Type
Trian SPV (SUB) V, L.P.	12/15/2009		325,500		28.0651	Purchase*
Trian SPV (SUB) V, L.P.	12/15/2009		217,000		28.0651	Purchase
Trian SPV (SUB) V, L.P.	12/16/2009		500,000		28.6554	Purchase
Trian SPV (SUB) V, L.P.	12/17/2009		630,618		28.4518	Purchase
Trian SPV (SUB) V, L.P.	12/18/2009		192,212		28.4991	Purchase
Trian SPV (SUB) V, L.P.	12/21/2009		200,000		29.3533	Purchase
Trian SPV (SUB) V, L.P.	12/22/2009		30,000		29.7686	Purchase
Trian Partners Master Fund, L.P.	12/23/2009		89,108		29.9572	Purchase
Trian Partners Master Fund, L.P.	12/24/2009		714		29.9700	Purchase
Trian Partners Master Fund, L.P.	12/28/2009		26,733		30.2372	Purchase
Trian Partners, L.P.	12/23/2009		156,214		29.9572	Purchase
Trian Partners, L.P.	12/24/2009		1,249		29.9700	Purchase
Trian Partners, L.P.	12/28/2009		46,864		30.2372	Purchase
Trian Partners Parallel Fund I, L.P.	12/23/2009		4,678		29.9572	Purchase
Trian Partners Parallel Fund I, L.P.	12/24/2009		37		29.9700	Purchase
Trian Partners Parallel Fund I, L.P.	12/28/2009		1,403		30.2372	Purchase
*On the date set forth above, and as more fully described below, the named person entered into a series of privately negotiated back-to-back call and put transactions (the “Options”) with Bank of America Merrill Lynch (the “Counterparty”) through which it acquired beneficial ownership of an aggregate of 325,500 Shares and as a result of which such named person is subject to the same economic gain or loss as if it had purchased the underlying Shares. More specifically, these transactions represent call options pursuant to which, on or prior to June 15, 2011 (the “Exercise Date”), the named person may acquire the number of Shares set forth above at the Price Per Share set forth above (the “Exercise Price”). These call options may be exercised at any time, in whole or in part, on or prior to the Exercise Date. Simultaneously with the purchase of each call option, the named person also sold a put option to the Counterparty for the same number of Shares pursuant to which, if on the Exercise Date the call options have not been exercised by the named person and the Exercise Price is greater than the closing price of the Shares on the Exercise Date (the “Closing Price”), the Counterparty may require the named person to, at such person’s election, either (i) pay the Counterparty an amount in cash equal to the product of (a) the excess of the Exercise Price over the Closing Price and (b) the number of Shares set forth above or (ii) acquire from the Counterparty the number of Shares set forth above at the Exercise Price. As part of these transactions, the named person pays the Counterparty a financing fee based on the number of days that the Options are outstanding, which fee is calculated using a monthly rate equal to the one month LIBOR rate plus 0.30%. Until they are exercised, the Options do not give the Filing Persons direct or indirect voting, investment or dispositive control over the underlying Shares.

EX-2

Exhibit 2

This AGREEMENT, dated as of October 25, 2009 (the "Agreement"), is by and among Legg Mason, Inc., a Maryland corporation (the "Company"), and the other entities and persons signatory hereto (collectively, the "Investors").

WHEREAS, the Board of Directors of the Company (the "Board") intends to (1) increase the size of the Board from thirteen (13) to fourteen (14) members and (2) appoint Nelson Peltz as a director to fill the newly created vacancy, with a term expiring in 2010;

WHEREAS, at the Company's 2010 annual meeting of shareholders, the Board intends to nominate Mr. Peltz for election as a member of the Board with a term expiring at the Company's 2013 annual meeting of shareholders, and recommend that the shareholders of the Company vote to elect him as a director of the Company;

WHEREAS, the Investors economically own (as defined below) the interests in Common Stock, $0.10 par value, of the Company (the "Common Stock") specified on Schedule A of this Agreement; and

WHEREAS, the Investors support the election of the new director to the Board;

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

REPRESENTATIONS

Section 1.1  Authority; Binding Agreement.  (a)  The Company hereby represents that this Agreement and the performance by the Company of its obligations hereunder (i) has been duly authorized, executed and delivered by it, and is a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, (ii) does not require the approval of the shareholders of the Company and (iii) does not and will not violate any law, any order of any court or other agency of government, the Articles of Incorporation of the Company, as amended and supplemented, or the By-laws of the Company, as amended and restated, or any stock exchange rule or regulation, or any provision of any indenture, agreement or other instrument to which the Company or any of its properties or assets is bound, or conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument, or result in the creation or imposition of, or give rise to, any lien, charge, restriction, claim, encumbrance or adverse penalty of any nature whatsoever pursuant to any such indenture, agreement or other instrument.

(b)Each of the Investors represents and warrants that this Agreement and the performance by such Investor of its obligations hereunder (i) has been duly authorized, executed and delivered by such Investor, and is a valid and binding obligation of such Investor, enforceable against such Investor in accordance with its terms, (ii) does not require approval by any owners or holders of any equity interest in such Investor (except as has already been obtained) and (iii) does not and will not violate any law, any order of any court or other agency of government, the charter or other organizational documents of such Investor, as amended, or any provision of any agreement or other instrument to which such Investor or any of its properties or assets is bound, or conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any such agreement or other instrument, or result in the creation or imposition of, or give rise to, any lien, charge, restriction, claim, encumbrance or adverse penalty of any nature whatsoever pursuant to any such agreement or instrument.

Section 1.2  Interests in Common Stock.  The Investors hereby represent and warrant that, as of the date hereof, they and their Affiliates (as such term is hereinafter defined) are, collectively, the "economic owners" (as such term is hereinafter defined) of such number of shares of Common Stock as are accurately and completely set forth (including, without limitation, as to the form of ownership) on Schedule A, and none of the Investors or any of their Affiliates economically own any other securities of the Company.  During the Standstill Period, Trian Fund Management, L.P. ("TFM"), on behalf of the Investors, shall promptly (and in any event within three business days) notify the Company in writing upon the Investors (a) first beneficially owning, in the aggregate, the Minimum Percentage of shares of Common Stock, which notice shall identify each of the entities owning any shares of Common Stock and the number of shares beneficially owned by such entity, (b) ceasing to beneficially own, in the aggregate, the Minimum Percentage of shares of Common Stock and (c) becoming the economic owners, in the aggregate, of more than 9.9% of the then outstanding shares of Common Stock.  At any time during the Standstill Period in which (a) the Investors beneficially own, in the aggregate, at least the Minimum Percentage of shares of Common Stock and (b) the Investors no longer report on Schedule 13D with the Securities and Exchange Commission (the "SEC")  the Investors' beneficial ownership of Common Stock, TFM, on behalf of the Investors shall, upon request of the Company (which request shall not be made more than once during any quarterly period), promptly (and no later than five business days after the request is made) provide the Company with a written report specifying the number of shares of Common Stock beneficially owned, in the aggregate, by the Investors as of the close of business on the date immediately preceding such request.

Section 1.3  Defined Terms.  For purposes of this Agreement:

(a) Except as provided in Section 2.7 hereof, the term "Affiliate"  has the meaning set forth in Rule 12b-2 promulgated by the  SEC under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), but shall not include any entity whose equity securities are registered under the Exchange Act (or are publicly traded in a foreign jurisdiction), solely by reason of the fact that a principal of any of the Investors serves as a member of its board of directors or similar governing body, unless the Investors or their Affiliates otherwise control such entity (as the term "control" is defined in Rule 12b-2 promulgated by the SEC under the Exchange Act).  For purposes of this Agreement, the Investors, on the one hand, and the Company, on the other, shall not be deemed to be affiliates of each other.

(b) The terms "beneficial owner" and "beneficially own" shall have the same meanings as set forth in Rule 13d-3 ("Rule 13d-3") promulgated by the SEC under the Exchange Act.  The terms "economic owner" and "economically own" shall have the same meanings as "beneficial owner" and "beneficially own," except that a person will also be deemed to economically own and to be the economic owner of (i) all shares of Common Stock which such person has the right to acquire pursuant to the exercise of any rights in connection with any securities or any agreement, regardless of when such rights may be exercised and whether they are conditional, and (ii) all shares of Common Stock in which such person has any economic interest, including, without limitation, pursuant to a cash settled call option or other derivative security, contract or instrument in any way related to the price of shares of Common Stock.

(c) The "Standstill Period" means the period from the date of this Agreement through the earlier of (w) the date that is 60 days prior to the first day of the notice period specified in the advance notice provision applicable to the Company's 2013 annual meeting of shareholders (whether pursuant to applicable law or regulation or the Company's Articles of Incorporation or By-laws, each as may hereafter be amended), (x) March 31, 2012, if the Director Designee has delivered to the Company a notice of resignation from the Board not less than 30 days prior to such date (in which case, if there are then less than 30 days remaining in the advance notice period for the Company's 2012 annual meeting of shareholders, the Board shall waive the advance notice provision in the Company's By-laws until April 30, 2012 so as to permit the Investors to nominate one or more or a slate of directors at the Company's 2012 annual meeting of shareholders), (y) that date that is 30 days after the date that the Director Designee has delivered to the Company a notice of resignation from the Board if such date of delivery is subsequent to March 1, 2012 and (z) if the Company shall have materially breached this Agreement and shall not have cured such breach within 15 days following written notice from the Investors describing such breach in reasonable detail, the date on or after such 15 day period on which the Investors have provided the Company written notice of the termination of the Standstill Period; provided, however, that the Investors may terminate the Standstill Period at any time by written notice to the Company in the event that (a) a Non-Election Date occurs, (b) the Director Designee is removed from the Board (for the avoidance of doubt, not including any resignation required hereunder), or (c)(i) the Director Designee is unable to serve as a director of the Company as a result of his death or incapacity and (ii) the Company and the Investors fail to agree on a replacement, or the Board fails to appoint such agreed replacement to the Board, within 90 days following the date that he ceased to be a director of the Company (in the event that a replacement is agreed and appointed pursuant to the foregoing subclauses (a) or (c), references to the applicable former director in Section 2.1(a), Section 2.1(b) and Section 2.1(c) shall be deemed to be references to such replacement).  The Company and the Investors agree that each of Peter W. May and Edward P. Garden shall be an acceptable replacement for the Director Designee.

(d) "Non-Election Date" means (i) the 45th day following the Company's 2010 annual meeting of shareholders if (x) the Director Designee (or any agreed upon replacement) is not elected at the Company's 2010 annual meeting of shareholders, and (y) the Director Designee or any replacement agreed upon by the Company and the Investors has not been appointed to the Board with a term expiring at the Company's 2013 annual meeting of shareholders, (ii) the 45th day following the Company's 2011 annual meeting of shareholders if (x) applicable law requires the Director Designee (or any agreed upon replacement) to be elected by shareholders at the Company's 2011 annual meeting of shareholders in order for the Director Designee (or any agreed upon replacement) to complete his term expiring at the Company's 2013 annual meeting of shareholders, (y) the Director Designee (or any agreed upon replacement) is not elected at the Company's 2011 annual meeting of shareholders, and (z) the Director Designee or any replacement agreed upon by the Company and the Investors has not been appointed to the Board with a term expiring at the Company's 2013 annual meeting of shareholders, or (iii) the 45th day following the Company's 2012 annual meeting of shareholders if (x) applicable law requires the Director Designee (or any agreed upon replacement) to be elected by shareholders at the Company's 2012 annual meeting of shareholders in order for the Director Designee (or any agreed upon replacement) to complete his term expiring at the Company's 2013 annual meeting of shareholders, (y) the Director Designee (or any agreed upon replacement) is not elected at the Company's 2012 annual meeting of shareholders, and (z) the Director Designee or any replacement agreed upon by the Company and the Investors has not been appointed to the Board with a term expiring at the Company's 2013 annual meeting of shareholders.  A failure to elect or appoint the Director Designee (or any agreed upon replacement) in accordance with the terms of this Agreement shall not result in a "Non-Election Date" to the extent resulting solely from the refusal of the Director Designee (or any agreed upon replacement) to serve.

(e)"Extraordinary Matter" means (x) any merger, consolidation, share exchange, recapitalization, or other business combination, in each case as a result of which the holders of the Common Stock of the Company immediately prior to the consummation of such transaction would cease to own at least a majority of the outstanding shares of common stock of the resulting company (or, if such resulting company is a subsidiary, then the ultimate parent company) or (y) any liquidation, dissolution or sale of all or substantially all of the assets of the Company, in each case referred to in (x) or (y) that is subject to Company shareholder approval.

(f) "Physical Shares" means shares beneficially owned by the Investors as to which the Investors directly or indirectly have voting and investment power and which are held either of record by the Investors or through a broker, dealer, agent, custodian or other nominee who is the holder of record of such shares.  For the avoidance of doubt, it is understood  that (i) "Physical Shares" shall not include shares beneficially owned by the Investors solely as a result of the operation of (x) clauses (i) and (ii) of Section 1.3(b) hereof or (y) Rule 13d-3(d)(1)(i)(A)-(B), and (ii) the fact that shares are held in a margin account or are pledged as collateral pursuant to customary loan documentation shall not result in such shares not being considered Physical Shares unless and until such shares are liquidated pursuant to a margin call or otherwise foreclosed upon by the applicable broker, lender or other third party.

ARTICLE II

COVENANTS

Section 2.1 Director.  (a)  As promptly as practicable following the date of this Agreement, the Board shall (i) increase the size of the Board from thirteen (13) to fourteen (14) directors, (ii) appoint Nelson Peltz as a director of the Company with a term expiring at the Company's 2010 annual meeting (the "Director Designee") and (iii) appoint the Director Designee to serve on the Nominating and Corporate Governance Committee of the Board.  The Director Designee shall be entitled to serve as a member of the Nominating and Corporate Governance Committee of the Board (or any committee performing such functions) at all times that the Director Designee shall serve as a member of the Board, subject to the Director Designee satisfying and continuing to satisfy applicable New York Stock Exchange requirements and other applicable law.  By entering into this Agreement, the Director Designee (including any agreed upon replacement) hereby agrees to resign as a member of the Board on the first date on which both (x) either (I) the Standstill Period has terminated, or (II) the Investors do not beneficially own, for a period of 30 consecutive days, Physical Shares of Common Stock equal to at least 5.0% of the outstanding shares of Common Stock calculated as provided in the last sentence of Section 2.5 hereof (the "Minimum Percentage") (each of the foregoing (I) and (II), a "Triggering Event") and (y) five days have elapsed since the Triggering Event and the Board (acting directly rather than by committee) has requested in writing the Director Designee's resignation, in which case the resignation shall take effect at the time the Board has delivered such request to the Director Designee and the Investors.  The Director Designee also agrees to resign in accordance with Section 3.1(b) under the circumstances specified therein.  For the avoidance of doubt, the Company may at any time or from time to time increase or decrease the size of the Board and/or change its composition, provided that such increase or decrease may not affect the tenure of the Director Designee.

(b)  The Company agrees that, provided that the Standstill Period has not terminated, the Board will:

(1)   at the 2010 annual meeting of shareholders, nominate the Director Designee (other than in the case of his refusal or inability to serve), together with the other persons included in the Company's slate of nominees for election as director at such 2010 annual meeting, as a director of the Company, with a term expiring at the Company's 2013 annual meeting; and

(2)   recommend that the shareholders of the Company vote to elect the Director Designee as a director of the Company at the 2010 annual meeting of shareholders.

(c) The Company shall use all reasonable best efforts (which shall include the solicitation of proxies) to ensure that the Director Designee is elected at the 2010 annual meeting of shareholders.

Section 2.2  Voting Provisions.  During the Standstill Period, the Investors, together with their respective Affiliates, will cause all shares of Common Stock for which they have the right to vote to be present for quorum purposes and to be voted at any meeting of shareholders or at any adjournments or postponements thereof, (x) in favor of each director nominated and recommended by the Board for election at any such meeting and (y) against any shareholder nominations for director which are not approved and recommended by the Board for election at any such meeting.

Section 2.3  Actions by the Investors.  Each of the Investors agrees that, during the Standstill Period, neither it nor any of its Affiliates will, unless specifically requested or authorized in writing by a resolution of the Board, directly or indirectly:

(a)  purchase or cause to be purchased or otherwise acquire or agree to acquire economic ownership of (i) any Common Stock, if in any such case, immediately after the taking of such action the Investors, together with their respective Affiliates, would, in the aggregate, economically own more than 9.9% of the then outstanding shares of Common Stock (the parties agree that (A) it shall not be a breach of this Agreement if the Investors inadvertently economically own more than such 9.9% if as soon as practicable the Investors divest themselves of economic ownership of sufficient shares so that they cease to economically own more than 9.9% of the then outstanding shares of  Common Stock, (B) it shall not be a breach of this Section 2.3(a) if the Investors' economic ownership of shares exceeds such 9.9% limitation solely as a result of share purchases, reverse share splits or other actions taken by the Company that by reducing the number of shares outstanding cause the Investors' economic ownership to exceed such 9.9% limitation, so long as the Investors' economic ownership shall not increase thereafter (except solely as a result of further corporate actions taken by the Company), unless and until the Investors' economic ownership before and after such subsequent increase does not exceed such 9.9% limitation, and (C) for purposes of any calculation under this Section 2.3(a), the number of outstanding shares of Common Stock then outstanding shall be the number as of the latest date set forth in the Company's most recently filed Quarterly Report on Form 10-Q or Form 10-K or, if more recently filed, Form 8-K, or (ii) any other securities issued by the Company;

(b) form, join in or in any other way participate in a "partnership, limited partnership, syndicate or other group" within the meaning of Section 13(d)(3) of the Exchange Act with respect to the Common Stock or deposit any shares of Common Stock in a voting trust or similar arrangement or subject any shares of Common Stock to any voting agreement or pooling arrangement, or grant any proxy with respect to any shares of Common Stock (other than to a designated representative of the Company pursuant to a proxy solicitation on behalf of the Board), other than solely with other Investors or one or more Affiliates of an Investor with respect to the shares of Common Stock acquired in compliance with paragraph (a) above or to the extent such a group may be deemed to result with the Company or any of its Affiliates as a result of this Agreement;

(c) solicit proxies or written consents of shareholders, or conduct any binding or nonbinding referendum with respect to Common Stock, or make, or in any way participate in, any "solicitation" of any "proxy" within the meaning of Rule 14a-1 promulgated by the SEC under the Exchange Act (but without regard to the exclusion set forth in Rule 14a-1(l)(2)(iv) from the definition of "solicitation") to vote any shares of Common Stock with respect to any matter, or become a participant in any contested solicitation for the election of directors with respect to the Company (as such terms are defined or used in the Exchange Act and the Rules promulgated thereunder), other than solicitations or acting as a participant in support of the voting obligations of the Investors and their Affiliates pursuant to Section 2.2;

(d) seek to call, or to request the call of, or call a special meeting of the shareholders of the Company, or seek to make, or make, a shareholder proposal (whether pursuant to Rule 14a-8 under the Exchange Act or otherwise) at any meeting of the shareholders of the Company, or make a request for a list of the Company's shareholders, or seek election to the Board, seek to place a representative on the Board or seek the removal of any director from the Board, or otherwise acting alone, or in concert with others, seek to control or influence the governance or policies of the Company;

(e) effect or seek to effect (including, without limitation, by entering into any discussions, negotiations, agreements or understandings whether or not legally enforceable with any third person), offer or propose (whether publicly or otherwise) to effect, or cause or participate in, or in any way assist or facilitate any other person to effect or seek, offer or propose (whether publicly or otherwise) to effect or participate in, (i) any acquisition of any securities (or economic ownership thereof as defined herein), or any material assets or businesses, of the Company or any of its subsidiaries, except purchases of Common Stock pursuant to the limits specified in paragraph (a) above, (ii) any tender offer or exchange offer, merger, acquisition, share exchange or other business combination involving the Company or any of its subsidiaries, or (iii) any recapitalization, restructuring, liquidation, disposition, dissolution or other extraordinary transaction with respect to the Company or any of its subsidiaries or any material portion of its or their businesses;

(f) publicly disclose, or cause or facilitate the public disclosure (including without limitation the filing of any document or report with the SEC or any other governmental agency or any disclosure to any journalist, member of the media or securities analyst) of any intent, purpose, plan or proposal to obtain any waiver, or consent under, or any amendment of, any of the provisions of Sections 2.2 or 2.3, or otherwise (i) seek in any manner to obtain any waiver, or consent under, or any amendment of, any provision of this Agreement or (ii) bring any action or otherwise act to contest the validity of Section 2.2 or 2.3 or seek a release from the restrictions or obligations contained in Section 2.2 or 2.3;

(g) make or issue or cause to be made or issued any public disclosure, announcement or statement (including without limitation the filing of any document or report with the SEC or any other governmental agency or any disclosure to any journalist, member of the media or securities analyst) (i) in support of any solicitation described in paragraph (c) above (other than solicitations on behalf of the Board), (ii) in support of any matter described in paragraph (d) above, (iii) concerning any potential matter described in paragraph (e) above or (iv) negatively commenting upon the Company, including the Company's corporate strategy, business, corporate activities or management; or

(h) enter into any discussions, negotiations, agreements or understandings with any person or entity with respect to the foregoing, advise, assist, encourage, support or seek to persuade others to take any action with respect to any of the foregoing, or act in concert with others or as part of a group (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any of the foregoing.

In the event the Company has announced or entered into a binding agreement providing for, or has recommended that its shareholders support, an Extraordinary Matter, the provisions of this Section 2.3 shall not operate to prevent the Investors from proposing or taking any actions in furtherance of or consummating a competing Extraordinary Matter, but all of the other provisions of this Agreement shall continue in full force and effect.

Notwithstanding anything herein to the contrary, nothing in this Section 2.3 shall be deemed to in any way restrict or limit (a) the Director Designee from, in his capacity as a member of the Board, confidentially expressing or advocating for his views to other members of the Board or during Board meetings or (b) the Investors' ability to (i) discuss any matter confidentially with the Company, the Board or any of its members, or (ii) vote their shares of Common Stock on any matter brought before the shareholders of the Company in any manner that they choose, other than as expressly provided in Section 2.2 above, (iii) sell any shares of Common Stock, including, without limitation, pursuant to a Company or third-party tender offer or exchange offer, or (iv) communicate, on a confidential basis, with attorneys, accountants or financial advisers (excluding any such advisor who has taken, takes or is expected by the Investors to take any action that if taken by the Investors would violate this Section 2.3).

Section 2.4 Additional Preparations by the Investors.  As of the date of this Agreement, the Investors are not engaged in any discussions or negotiations and do not have any agreements or understandings, whether or not legally enforceable, concerning the acquisition of economic ownership of any Common Stock, other than with investors or potential investors in funds and accounts managed or to be managed by TFM or an Affiliate thereof.

Section 2.5  Ownership Commitment.  The Investors will use their commercially reasonable efforts (taking into account fiduciary duties, legal obligations and requirements, the Company's  Insider Trading Policy, economic and financial conditions, market and trading prices and conditions and other relevant matters) to cause the Investors and their Affiliates (a) by or before December 31, 2009, to beneficially own an aggregate amount of shares of Common Stock equal to at least 6.0% of the Company's outstanding shares of Common Stock and (b) by or before April 30, 2010, to beneficially own an aggregate amount of shares of Common Stock equal to at least 8.0% of the Company's outstanding shares of Common Stock.  For purposes of any calculation of the Minimum Percentage and under this Section 2.5, the number of the Company's outstanding shares of Common Stock shall be the lesser of (A) 161,261,167 and (B) that number of shares set forth as outstanding in any filing of the Company made with the SEC after the date of this Agreement under the Exchange Act or the Securities Act of 1933, as amended.

Section 2.6 Publicity.  Promptly after the execution of this Agreement, the Company and the Investors will issue a joint press release in the form attached hereto as Schedule B (the "Joint Press Release").

Section 2.7  Maryland Law  (a) The Company covenants and agrees that if the Company shall repurchase shares of Common Stock, effect a reverse stock split or otherwise take any action that, by reducing the number of shares outstanding, would, solely as a result of such stock repurchase, stock split or Company action, increase the beneficial ownership of the Investors and its Affiliates to greater than 9.9% (each of the foregoing Company actions, a "Share Reducing Action"), the Company and/or the Board shall take all action necessary such that, solely as a result of such Share Reducing Action (or any successive Share Reduction Action), none of the Investors and/or their Affiliates and/or Associates (as such terms are defined in the Maryland Business Combination Act (Title 3, Subtitle 6 of the Maryland General Corporation Law)) will become an "interested stockholder" (as that term is defined in the Maryland Business Combination Act), such Board action to remain in effect until such time, if any, as the Investors and/or their Affiliates acquire beneficial ownership of any additional shares of Common Stock (other than solely as a result of further Share Reducing Actions) at a time when the Investors and their Affiliates otherwise have or would have as a result of such acquisition beneficial ownership of more than 9.9% of the then outstanding shares of Common Stock.  Any action taken by the Company or the Board pursuant to this Section 2.7(a), and the obligations of the Company or the Board pursuant to this Section 2.7(a), shall survive the termination of this Agreement.

(b) The Company agrees that if during the Standstill Period it shall adopt any anti-takeover measure, including, without limitation, a shareholder rights plan, board resolution or a by-law amendment that would have an anti-takeover effect (including opting into the provisions in 3-803 to 3-805 of the Maryland General Corporation Law), it shall provide that such action will not prevent the Investors and/or their Affiliates from taking any actions that would not otherwise be prohibited during the Standstill Period by this Agreement.

Section 2.8 Other Directorships.  The Company acknowledges that the Director Designee currently sits on the Boards of Directors of three other public companies.  The Company represents and warrants to the Investors that the Nominating and Corporate Governance Committee and the Board have taken all action necessary to approve the Director Designee serving on the Boards of Directors of the Company and such other three public companies upon his appointment to the Board and have adopted such resolutions and taken such other actions as are necessary for the Board to permit, without the prior consent of the Nominating and Corporate Governance Committee or the Board notwithstanding the Company's policy relating to service on multiple public company boards of directors, the Director Designee (or any agreed upon replacement) to serve on up to six public company Boards of Directors at any one time (including the Board) at any time that the Director Designee shall serve on the Board and to provide that such resolution shall remain in full force and effect at all times during the Standstill Period.

Section 2.9.  Economic Ownership of Shares.  The Company acknowledges that the acquisition by the Investors of economic ownership of shares of Common Stock through privately negotiated back-to-back call and put transactions pursuant to which, simultaneously with the purchase of each call option, the Investors also sell a put option for the same number of shares of Common Stock and which may, at the option of the Investors, be settled in shares of Common Stock, or any similar transaction that results in the Investors economically owning the equivalent of shares of Common Stock, cash settled call options or other derivative securities, contracts or instruments related to the price of shares of Common Stock, will not violate, or result in the breach of, any of the Company's policies applicable to directors of the Company, including without limitation, in the Policies and Procedures Regarding Acquisitions and Dispositions of Legg Mason Securities.  For the avoidance of doubt, the foregoing does not apply with respect to and is not a waiver of the Company's policies relating to trading windows, reporting, insider trading, short sales or pre-clearance.

ARTICLE III

OTHER PROVISIONS

Section 3.1  Specific Performance; Remedies.  (a)  Each party hereto hereby acknowledges and agrees, on behalf of itself and its Affiliates, that irreparable harm would occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that the parties will be entitled to specific relief hereunder, including, without limitation, an injunction or injunctions to prevent and enjoin breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof (other than the terms of Section 2.5 hereof) in the Chancery Court of the State of Delaware or if such court does not accept jurisdiction then any state or federal court in the State of Delaware, or, if such courts do not accept jurisdiction then any state or federal court in the State of New York, in addition to any other remedy to which they may be entitled at law or in equity.  Any requirements for the securing or posting of any bond with such remedy are hereby waived.

(b)  Notwithstanding any other section in this Agreement and without limiting any other remedies the Company may have in law or equity, in the event that the Investors shall have materially breached this Agreement and shall not have cured such breach within 15 days following written notice describing such breach in reasonable detail from the Company, the Director Designee shall, upon the written request of the Board, resign as a member of the Board, such resignation to be effective as of the time the Board has delivered such request to the Director Designee and the Investors.

(c)  Each party hereto agrees, on behalf of itself and its Affiliates, that any actions, suits or proceedings arising out of or relating to this Agreement or the transactions contemplated hereby will be brought solely and exclusively in the Chancery Court of the State of Delaware, or if such court does not accept jurisdiction then any federal court in the State of Delaware, or, if such courts do not accept jurisdiction then any state or federal court in the State of New York (and the parties agree not to commence any action, suit or proceeding relating thereto except in such courts), and further agrees that service of any process, summons, notice or document by U.S. registered mail to the respective addresses set forth in Section 3.3 will be effective service of process for any such action, suit or proceeding brought against any party in any such court.  Each party, on behalf of itself and its Affiliates, irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby, in the Chancery Court of the State of Delaware or if such court does not accept jurisdiction then the federal courts in the State of Delaware, or, if such courts do not accept jurisdiction then any state or federal court in the State of New York, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an improper or inconvenient forum.

Section 3.2  Entire Agreement.  This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and may be amended only by an agreement in writing executed by the parties hereto.

Section 3.3  Notices.  All notices, consents, requests, instructions, approvals and other communications provided for herein and all legal process in regard hereto shall be in writing and shall be deemed validly given, made or served, if (a) given by telecopy, when such telecopy is transmitted to the telecopy number set forth below and the appropriate confirmation is received or (b) if given by any other means, when actually received during normal business hours at the address specified in this subsection:

if to the Company:

 Legg Mason, Inc.

 100 International Drive

 Baltimore, Maryland  21202

 Facsimile:  (410) 454-4607

 Attention:  Corporate Secretary

with a copy to:

 Wachtell, Lipton, Rosen & Katz

 51 West 52nd Street

 New York, NY  10019

 Facsimile:  (212) 403-2000

 Attention:  Daniel A. Neff

Nicholas G. Demmo

if to the Investors:

 c/o Trian Fund Management, L.P.

 280 Park Avenue, 41st Floor

 New York, New York  10017

 Facsimile:  (212) 451-3216

 Attention:  Brian L. Schorr, Chief Legal Officer

Section 3.4  Governing Law.  This Agreement and any claim, controversy or dispute arising under or related to this Agreement, the relationship of the parties, and/or the interpretation and enforcement of the rights and duties of the parties shall be governed by and construed and enforced in accordance with the laws of the State of Delaware, without regard to any conflict of laws provisions thereof.

Section 3.5  Further Assurances.  Each party agrees to take or cause to be taken such further actions, and to execute, deliver and file or cause to be executed, delivered and filed such further documents and instruments, and to obtain such consents, as may be reasonably required or requested by the other parties in order to effectuate fully the purposes, terms and conditions of this Agreement.

Section 3.6  Third-Party Beneficiaries.  This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns, and nothing in this Agreement (other than Section 2.7 hereof) is intended to confer on any person other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

Section 3.7  Counterparts; Miscellaneous.  This Agreement may be executed and delivered (including by facsimile transmission or .pdf format) in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  The headings used herein are for convenience only and the parties agree that such headings are not to be construed to be part of this Agreement or to be used in determining the meaning or interpretation of this Agreement.  Unless the context otherwise requires, whenever used in this Agreement the singular shall include the plural, the plural shall include the singular, and the masculine gender shall include the neuter or feminine gender and vice versa.

Section 3.8  Interpretation.    Each of the parties hereto acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same with the advice of said counsel.  Each party and its counsel cooperated and participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the parties shall be deemed the work product of all of the parties and may not be construed against any party by reason of its drafting or preparation.  Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any party that drafted or prepared it is of no application and is hereby expressly waived by each of the parties hereto.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or caused the same to be executed by its duly authorized representative as of the date first above written.

LEGG MASON, INC.

By:  /s/ Mark R. Fetting                                           

Name:   Mark R. Fetting

Title:     Chief Executive Officer

/s/ Nelson Peltz__________________

Nelson Peltz

/s/ Peter W. May__________________

Peter W. May

/s/ Edward P. Garden_______________

Edward P. Garden

TRIAN PARTNERS GP, L.P.

By: Trian Partners General Partner, LLC,

its General Partner

By:  /s/ Edward P. Garden                                           

Name: Edward P. Garden

Title: Member

TRIAN PARTNERS, L.P.

By: Trian Partners GP, L.P., its General Partner

By: Trian Partners General Partner, LLC,

its General Partner

By:  /s/ Edward P. Garden                                           

Name: Edward P. Garden

Title: Member

TRIAN SPV (SUB) V, L.P.

By: Trian Partners GP, L.P., its General Partner

By: Trian Partners General Partner, LLC,

ots General Partner

By:  /s/ Edward P. Garden                                           

Name: Edward P. Garden

Title: Member

TRIAN PARTNERS MASTER FUND, L.P.

By: Trian Partners GP, L.P., its General Partner

By: Trian Partners General Partner, LLC,

its General Partner

By:  /s/ Edward P. Garden                                           

Name: Edward P. Garden

Title: Member

TRIAN PARTNERS PARALLEL FUND I, L.P.

By: Trian Partners Parallel Fund I General Partner,

LLC, its General Partner

By:  /s/ Edward P. Garden                                           

Name: Edward P. Garden

Title: Member

TRIAN FUND MANAGEMENT, L.P.

By: Trian Fund Management GP, LLC,

its General Partner

By:  /s/ Edward P. Garden                                           

Name: Edward P. Garden

Title: Member

SCHEDULE A

The Investors beneficially own, in the aggregate, 6,946,756 shares of Common Stock.  The Investors that own such shares and the number of shares that they beneficially own are set forth below.

Investor	Shares of Common Stock
Trian Partners Master Fund, L.P.	3,842,239
Trian Partners, L.P.	1,393,987
Trian Partners Parallel Fund I, L.P.	134,846
Trian SPV (SUB) V, L.P.	1,575,684

SCHEDULE B

For Immediate Release

Investor Relations:

Alan Magleby

410-454-5246

Media:

Mary Athridge

212-805-6035

Legg Mason To Elect Nelson Peltz to Board of Directors

Baltimore, Maryland -- October 26, 2009 -- Legg Mason, Inc. (NYSE: LM) announced today that Nelson Peltz, Chief Executive Officer and a founding partner of Trian Fund Management, L.P., ("Trian Partners") will be elected to the Company's Board of Directors, expanding the Board to 14 members, including 13 independent directors.  He will be elected on Tuesday, October 27, 2009.

Mark R. Fetting, Legg Mason's Chairman and Chief Executive Officer, said, "We welcome Nelson, whose firm is a significant investor in Legg Mason, as the newest member of our Board of Directors.  We look forward to benefiting from his insights and experience as we work together to build greater value for our clients and our shareholders."

Mr. Peltz commented, "Over the past several months, my colleagues and I have been engaged in constructive dialogue with Mark Fetting and other members of the Legg Mason management team.  We share their view that Legg Mason's recent strategic initiatives are improving the Company's operating performance and I look forward to contributing as a Board member and working with the management team and the Board to help this great company achieve its full potential."

Mr. Peltz also serves as a director of H. J. Heinz Company, is non-executive Chairman of the Board of Wendy's/Arby's Group, Inc. (formerly Triarc Companies, Inc.) and is Chairman of the Board of Trian Acquisition I Corp.  From April 1993 through June 2007, he served as Chairman and Chief Executive Officer of Triarc, which during that period of time owned Arby's Restaurant Group, Inc. and the Snapple Beverage Group, as well as other consumer and industrial businesses.

The addition of Mr. Peltz to the Board reflects an agreement between Legg Mason and Trian Fund Management, L.P., certain funds managed by it and certain of its affiliates.   In addition, pursuant to the agreement, Trian Partners has agreed to vote its shares in favor of Legg Mason's director nominees as provided in the agreement and made certain other commitments. The full text of the agreement with Trian Partners is available to the public as an Exhibit to the Form 8-K that the company is filing with the Securities and Exchange Commission.

Trian Partners owns 6,946,756 shares, or approximately 4.3% of Legg Mason's outstanding common stock.

About Legg Mason

Legg Mason is a global asset management firm, with $703 billion in assets under management as of September 30, 2009.  The Company provides active asset management in many major investment centers throughout the world.  Legg Mason is headquartered in Baltimore, Maryland, and its common stock is listed on the New York Stock Exchange (symbol: LM).

This release contains forward-looking statements subject to risks, uncertainties and other factors that may cause actual results to differ materially. For a discussion of these risks and uncertainties, see "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Legg Mason's Annual Report on Form 10-K for the fiscal year ended March 31, 2009.

EX-3

Exhibit 3

AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT

OF

TRIAN SPV (SUB) V, L.P.

Dated June 1, 2009

TABLE OF CONTENTS

ARTICLE I GENERAL PROVISIONS

Sec. 1.01 Formation of the Partnership 

Sec. 1.02 Partnership Name and Address 

Sec. 1.03 Fiscal Year 

Sec. 1.04 Liability of Partners 

Sec. 1.05 Purposes of the Partnership 

Sec. 1.06 Assignability of Interest 

ARTICLE II MANAGEMENT OF THE PARTNERSHIP

Sec. 2.01 Management Generally 

Sec. 2.02 Authority of the Managing General Partner 

Sec. 2.03 Reliance by Third Parties 

Sec. 2.04 Activity of the General Partners 

Sec. 2.05 Exculpation 

Sec. 2.06 Indemnification 

Sec. 2.07 Management Fee; Payment of Certain Costs and Expenses. 

Sec. 2.08 Principal Transactions 

ARTICLE III CAPITAL ACCOUNTS OF PARTNERS AND OPERATION THEREOF

Sec. 3.01 Definitions 

Sec. 3.02 Capital Contributions  [

Sec. 3.03 Capital Accounts 

Sec. 3.04 Partnership Percentages 

Sec. 3.05 Allocation of Net Capital Appreciation or Net Capital Depreciation 

Sec. 3.06 Amendment of Incentive Allocation 

Sec. 3.07 Valuation of Assets 

Sec. 3.08 Liabilities 

Sec. 3.09 Allocation for Tax Purposes 

Sec. 3.10 Determination by the Managing General Partner of Certain Matters 

Sec. 3.11 Adjustments to Take Account of Certain Events 

ARTICLE IV ADMISSION OF NEW PARTNERS

Sec. 4.01 New Partners 

ARTICLE V WITHDRAWALS AND DISTRIBUTIONS OF CAPITAL

Sec. 5.01 Withdrawal of Initial Limited Partner 

Sec. 5.02 Withdrawals and Distributions in General 

Sec. 5.03 Withdrawals 

Sec. 5.04 Required Withdrawals 

Sec. 5.05 Death, Disability, etc. of Limited Partners 

Sec. 5.06 Distributions 

Sec. 5.07 Effective Date of Withdrawal 

Sec. 5.08 Limitations on Withdrawal of Capital Account 

ARTICLE VI DURATION AND DISSOLUTION OF THE PARTNERSHIP

Sec. 6.01 Duration 

Sec. 6.02 Dissolution 

ARTICLE VII TAX RETURNS; REPORTS TO PARTNERS

Sec. 7.01 Independent Auditors 

Sec. 7.02 Filing of Tax Returns 

Sec. 7.03 Tax Matters Partner 

Sec. 7.04 Reports to Current Partners 

Sec. 7.05 Reports to Partners and Former Partners 

Sec. 7.06 Partner Tax Basis 

ARTICLE VIII INVESTOR COMMITTEE

Sec. 8.01 Investor Committee 

ARTICLE IX MISCELLANEOUS

Sec. 9.01 General 

Sec. 9.02 Power of Attorney 

Sec. 9.03 Amendments to Partnership Agreement 

Sec. 9.04 Non-Voting Interests of Registered Fund Limited Partners 

Sec. 9.05 Choice of Law 

Sec. 9.06 Consent to Jurisdiction 

Sec. 9.07 Tax Elections 

Sec. 9.08 No Third Party Rights 

Sec. 9.09 Confidentiality 

Sec. 9.10 Notices 

Sec. 9.11 Goodwill 

Sec. 9.12 Headings 

Sec. 9.13 Pronouns 

--

AMENDED AND RESTATED

LIMITED PARTNERSHIP AGREEMENT OF

TRIAN SPV (SUB) V, L.P.

Dated June 1, 2009

This Amended and Restated Limited Partnership Agreement dated on the date first above written (the "Agreement") among the undersigned (herein called the "Partners", which term shall include any persons hereafter admitted to Trian SPV (SUB) V, L.P. (the "Partnership") pursuant to Article IV of this Agreement and shall exclude any persons who cease to be Partners pursuant to Article V of this Agreement) shall govern the Partnership.

WHEREAS, the Administrative General Partner (as defined in Section 1.01) and David Marshall, as the initial limited partner (the "Initial Limited Partner"), heretofore entered into an Initial Exempted Limited Partnership Agreement dated May 26, 2009 (the "Initial Partnership Agreement"), and have formed and registered the Partnership as an exempted limited partnership pursuant to The Exempted Limited Partnership Law (as amended) of the Cayman Islands (the "Law"); and

WHEREAS, additional limited partners wish to be admitted as Limited Partners (as defined in Section 1.04) of the Partnership and the parties hereto desire to continue a limited partnership under the provisions of the Law and to set forth the terms pursuant to which the Partnership shall be governed.

NOW, THEREFORE, in consideration of the mutual promises and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Initial Partnership Agreement is amended and restated in its entirety to read as follows:

ARTICLE I

General Provisions

Sec. 1.01Formation of the Partnership.  The Partnership was formed and registered as an exempted limited partnership by the execution of the Initial Partnership Agreement and the filing of a Section 9 Statement with the Registrar of Exempted Limited Partnerships of the Cayman Islands on May 27, 2009.  Trian Partners Cayman, Ltd., a Cayman Islands exempted company serving as the administrative general partner of the Partnership (the "Administrative General Partner"), shall cause to be executed, filed and recorded, with the proper offices in the Cayman Islands, such certificates, and shall cause to be made such publications, as shall be required by the Law.  For so long as the interests in the Partnership are held by more than one Limited Partner and no more than fifteen Limited Partners, the majority in number of these Limited Partners shall be capable of appointing or removing the General Partners (as defined in Section 1.04) for the purpose of ensuring that the Partnership is not required to register as a mutual fund under the Mutual Funds Law (as amended) Revision of the Cayman Islands until such time as there are more than fifteen Limited Partners.

Sec. 1.02Partnership Name and Address.  The name of the Partnership is Trian SPV (SUB) V, L.P.  Its registered office is located at the offices of Goldman Sachs (Cayman) Trust, Limited, Gardenia Court, Suite 3307, 45 Market Street, Camana Bay, Grand Cayman KY1-1103, Cayman Islands, or at such other location in the Cayman Islands as the Managing General Partner in the future may designate.  The Administrative General Partner shall promptly notify the Limited Partners of any change in the Partnership's address.

Sec. 1.03Fiscal Year.  The fiscal year of the Partnership (herein called the "fiscal year") shall end on December 31 unless another date is required under the United States Internal Revenue Code of 1986, as amended (the "Code"), for U.S. Federal tax purposes.

Sec. 1.04Liability of Partners.  The names of all of the Partners and the amounts of their respective contributions to the Partnership (herein called the "Capital Contributions") are set forth in the books and records of the Partnership.

Trian Partners GP, L.P., a Delaware limited partnership, shall be the managing general partner (herein called the "Managing General Partner" and, together with the Administrative General Partner, the "General Partners" or each, a "General Partner").  The General Partners shall, in the event that the assets of the Partnership are inadequate, be liable for all debts and obligations of the Partnership.

The Partners designated in the books and records of the Partnership as limited partners (herein called the "Limited Partners"), and former Limited Partners (including the Initial Limited Partner), shall have no liability for any debt or obligation of the Partnership except to the extent of their respective interests in the Partnership, nor any obligation to contribute or make payments to the Partnership, except as provided by the Law or pursuant to the terms of this Agreement.

As used in this Section 1.04, the terms "interests in the Partnership" and "interest in the Partnership" shall mean, with respect to any fiscal year (or relevant portion thereof) and with respect to each Partner (or former Partner), the Capital Account(s) (as defined in Section 3.03) that such Partner (or former Partner) would have received (or in fact did receive) pursuant to the terms and provisions of Article V upon withdrawal from the Partnership as of the end of such fiscal year (or relevant portion thereof).

The Managing General Partner may, in its sole discretion, issue multiple classes of interests, which classes may carry different rights or be issued on different terms.

As used in this Agreement, the terms "former Limited Partner" and "former Partner" refer to such persons or entities as hereafter from time to time cease to be a Limited Partner or Partner, respectively, pursuant to the terms and provisions of this Agreement.

Sec. 1.05Purposes of the Partnership.  The Partnership is established for the purposes of engaging in any and all transactions permitted under applicable law including, without limitation, investing in Securities (as hereinafter defined) and engaging in all activities and transactions as the Managing General Partner may deem necessary or advisable in connection therewith, including, without limitation:

(a)to invest, on margin or otherwise, in (i) securities and other financial instruments of or relating to a U.S. "mid-cap" company to be identified by the Managing General Partner or any successor company or company that has been spun out of such company (such company, the "Company"), including, without limitation:  common stock; preferred stock; shares of beneficial interest; American Depositary Receipts; bonds and other fixed income investments, notes and debentures (whether subordinated, convertible or otherwise), and (ii) derivative products relating to securities issued by the Company, including, without limitation:  futures contracts (and options thereon) relating to stock indices, currencies, United States Government securities and securities of non-U.S. governments, other financial instruments and all other commodities, swaps, options, warrants, repurchase agreements, reverse repurchase agreements, caps, collars, floors and forward rate agreements (all such items in clauses (i) and (ii) being called herein a "Security" or "Securities"), and to sell Securities short and cover such sales;

(b)to engage in such other lawful transactions as the Managing General Partner may from time to time determine in furtherance of the purpose set forth in Section 1.05(a); and

(c)to do such other acts as is necessary or advisable in connection with the maintenance and administration of the Partnership.

Sec. 1.06Assignability of Interest.  A Partner may not pledge, transfer or assign its interest in the Partnership other than by operation of law pursuant to the death, bankruptcy or dissolution of such Partner, or with the consent of the Managing General Partner, which may be withheld in its sole discretion.  In no event, however, will any transferee or assignee be admitted as a Partner without the consent of the Managing General Partner, which may be withheld in its sole discretion.  Any attempted pledge, transfer or assignment not made in accordance with this Section 1.06 shall be void.

ARTICLE II

Management of the Partnership

Sec. 2.01Management Generally.  The management, conduct and control of the Partnership shall be vested exclusively in the Managing General Partner.  Except as authorized by the Managing General Partner, neither the Administrative General Partner nor the Limited Partners shall have any part in the management of the Partnership, nor shall they have any authority or right to act on behalf of the Partnership in connection with any matter.

Sec. 2.02Authority of the Managing General Partner.

(a)The Managing General Partner shall oversee the administration of the Partnership, and shall have the power to:

(i)communicate with the Partners, including furnishing reports as set forth in Article VII;

(ii)maintain the principal books and records of the Partnership;

(iii)cause the preparation of all necessary tax returns of the Partnership;

(iv)conduct meetings of the Partners;

(v)provide administrative, accounting and secretarial services to the Partnership;

(vi)bring and defend actions before any governmental, administrative or other regulatory agency, body or commission, for and on behalf of the Partnership; and

(vii)do all things and discharge all duties required of, or imposed on, a general partner by law, and do any other things and discharge any other duties required of or imposed on a general partner by law.

(b)The Managing General Partner shall have the power on behalf and in the name of the Partnership to carry out any and all of the objects and purposes of the Partnership set forth in Section 1.05, and to perform all acts and enter into and perform all contracts and other undertakings that it may deem necessary or advisable or incidental thereto, including, without limitation, the power to:

(i)provide research and analysis and direct the formulation of investment policies and strategies for the Partnership;

(ii)acquire a long position or a short position with respect to any Security and make purchases or sales increasing, decreasing or liquidating such position or changing from a long position to a short position or from a short position to a long position, without any limitation as to the frequency of the fluctuation in such positions or as to the frequency of the changes in the nature of such positions;

(iii)purchase Securities and hold them for investment, and initiate tender offers and proxy contests and other shareholder actions with respect to Securities, and take other actions to influence the management of issuers of Securities;

(iv)enter into contracts for or in connection with investments in Securities;

(v)invest in other pooled investment vehicles for cash management purposes, which investments shall be subject in each case to the terms and conditions of the respective governing document for such vehicle;

(vi)possess, transfer, mortgage, pledge or otherwise deal in, and exercise all rights, powers, privileges and other incidents of ownership or possession with respect to, Securities and other property and funds held or owned by the Partnership;

(vii)lend, either with or without security, any Securities, funds or other properties of the Partnership, including by entering into reverse repurchase agreements, and, from time to time, without limit as to the amount, borrow or raise funds, including by entering into repurchase agreements, and secure the payment of obligations of the Partnership by mortgage upon, or pledge or hypothecation of, all or any part of the property of the Partnership;

(viii)open, maintain and close accounts, including margin and custodial accounts, with brokers, including brokers affiliated with the General Partners, which power shall include the authority to issue all instructions and authorizations to brokers regarding the Securities and/or money therein; to pay, or authorize the payment and reimbursement of, brokerage commissions that may be in excess of the lowest rates available that are paid to brokers who execute transactions for the account of the Partnership and who (i) supply, or pay for (or rebate a portion of the Partnership's brokerage commissions to the Partnership for payment of) the cost of, brokerage, research or execution services utilized by the Partnership or the Other Accounts (as defined in (x) below) and/or (ii) pay for (or rebate a portion of the Partnership's brokerage commissions for the payment of) obligations of the Partnership (as provided in Section 2.08 hereof) or the Partnership's share of such obligations (such as computer facilities and the cost of an accounting software package), provided that the Partnership does not pay rates of commission in excess of what is competitively available from comparable brokerage firms for comparable services, taking into account various factors, including commission rates, reliability, financial responsibility, strength of the broker and ability of the broker to efficiently execute transactions, the broker's facilities, and the broker's provision or payment of the costs of research and other services or property that are of benefit to the Partnership, the Management Company (as defined in (xiv) below) and the Other Accounts;

(ix)open, maintain and close accounts, including custodial accounts, with banks, including banks located outside the United States, and draw checks or other orders for the payment of monies;

(x)combine purchase or sale orders on behalf of the Partnership with orders for the General Partners, the Management Company or their respective Affiliates (as defined in Section 2.04) or other accounts to whom the General Partners or any of their Affiliates provides investment services ("Other Accounts") and allocate the Securities or other assets so purchased or sold, on an average price basis, among such accounts;

(xi)enter into arrangements with brokers to open "average price" accounts wherein orders placed during a trading day are placed on behalf of the Partnership and Other Accounts and are allocated among such accounts using an average price;

(xii)organize one or more corporations or other entities to hold record title, as nominee for the Partnership (whether alone or together with the Other Accounts), to Securities or funds of the Partnership;

(xiii)organize one or more direct or indirect subsidiary entities;

(xiv)retain Trian Fund Management, L.P. (the "Management Company") to provide certain management and administrative services to the Partnership and to cause the Partnership to compensate the Management Company for such services; provided, however, management, control and conduct of the activities of the Partnership shall remain the responsibility of the Managing General Partner;

(xv)retain any other persons, firms or entities selected by the Managing General Partner to provide certain management and administrative services to the Partnership and to cause the Partnership to compensate such other persons, firms or entities for such services; provided, however, management, control and conduct of the activities of the Partnership shall remain the responsibility of the Managing General Partner;

(xvi)retain Goldman Sachs (Cayman) Trust, Limited or other persons, firms or entities selected by the Managing General Partner to provide certain management and administrative services to the Partnership (Goldman Sachs (Cayman) Trust, Limited or any such other persons, firm or entity providing such services from time to time is herein called the "Administrator") and to cause the Partnership to compensate the Administrator for such services; provided, however, management, control and conduct of the activities of the Partnership shall remain the responsibility of the Managing General Partner;

(xvii)cause the Partnership to engage in agency, agency cross and principal transactions with Affiliates to the extent permitted by applicable securities laws; provided, however, that, to the extent required by applicable law, in no event shall the Partnership engage in a principal transaction except pursuant to Section 2.08;

(xviii)maintain for the conduct of the Partnership's affairs one or more offices and in connection therewith rent or acquire office space, and do such other acts as the Managing General Partner may deem necessary or advisable in connection with the maintenance and administration of the Partnership;

(xix)engage personnel, whether part-time or full-time, and attorneys, independent accountants or such other persons as the Managing General Partner may deem necessary or advisable;

(xx)authorize any partner, employee or other agent of the General Partners or agent or employee of the Partnership to act for and on behalf of the Partnership in all matters incidental to the foregoing;

(xxi)do any and all acts on behalf of the Partnership as it may deem necessary or advisable in connection with the maintenance and administration of the Partnership, and exercise all rights of the Partnership, with respect to its interest in any person, including, without limitation, the voting of Securities, participation in arrangements with creditors, the institution and settlement or compromise of suits and administrative proceedings and other like or similar matters; and

(xxii)delegate such of its duties and functions as it may deem appropriate to the Administrative General Partner or any other persons.

Sec. 2.03Reliance by Third Parties.  Persons dealing with the Partnership are entitled to rely conclusively upon the certificate of a General Partner, to the effect that it is then acting as a General Partner, and upon the power and authority of the General Partners as herein set forth.

Sec. 2.04Activity of the General Partners.

(a)The Managing General Partner shall devote, and shall cause the Management Company to devote, so much of their time to the affairs of the Partnership as in the judgment of the Managing General Partner the conduct of its business shall reasonably require, and none of the General Partners, the Management Company or their respective Affiliates shall be obligated to do or perform any act or thing in connection with the business of the Partnership not expressly set forth herein.  Except as expressly provided in this Section 2.04, nothing contained in this Agreement, and no waivable provision of applicable law, shall be deemed to preclude the General Partners, the Management Company or their Affiliates or any shareholder, member, partner, director, officer or employee thereof (collectively, the "Management Group") from exercising investment responsibility, from engaging directly or indirectly in any other business or from directly or indirectly purchasing, selling, holding or otherwise dealing with any Securities for the account of any such other business, for their own accounts, for any of their family members or for other clients.  No Limited Partner shall, by reason of being a partner in the Partnership, have any right to participate in any manner in any profits or income earned, derived by or accruing to the Management Group from the conduct of any business other than the business of the Partnership (to the extent provided herein) or from any transaction in Securities effected by any of the Management Group for any account other than that of the Partnership.

(b)Trian Partners, L.P. (the "U.S. Fund"), Trian Partners Master Fund, L.P. (the "Offshore Master Fund") and any other investment vehicles or managed accounts formed to invest substantially in parallel with such vehicles, subject to tax and regulatory considerations ("Parallel Vehicles", collectively with the U.S. Fund and the Offshore Master Fund, the "Other Investors"), will make investments in Securities alongside the Partnership.  The Managing General Partner may commence acquisition of the Company's Securities prior to the initial closing of the Partnership (the "Initial Closing") through the Other Investors.  After the Initial Closing, further purchases of the Company's Securities will generally be allocated amongst the Partnership and the Other Investors pro rata based on the maximum amounts to be thereafter invested in the Company by each of the vehicles, as determined by the Managing General Partner in its sole discretion.

(c)Notwithstanding the foregoing, with respect to investments in Securities that the Partnership and one or more of the Other Investors elect to pursue, the Limited Partners acknowledge and agree that the Affiliated Investors (as defined in Section 2.04(e)) may co-invest with the Other Investors and the Partnership, but only if such co-investment (and subsequent disposition) is at the same time and price as applies to the Other Investors and the Partnership, unless otherwise approved by the Investor Committee (as defined in Section 8.01).  If multiple purchases of the same Security are made over time, Affiliated Investors may reduce or eliminate their participation in such later purchases.  Additionally, if Affiliated Investors do not participate at the same percentage level in each purchase made as part of a purchase program, they will ensure that their per-security profit is not higher than that of the Other Investors and the Partnership.

(d)The Limited Partners acknowledge and agree that the relationships referred to in this Section 2.04 present potential conflicts of interest between the Partnership on the one hand, and Affiliated Investors on the other hand.  In addition, the Limited Partners acknowledge and agree that the Managing General Partner may cause the Partnership, either alone or together with other members of a group (including the U.S. Fund, the Offshore Master Fund and any Parallel Vehicles), to acquire a "control" position in the Securities of the Company, and may secure the appointment of persons selected by the Managing General Partner or other members of the group to the Company's management team or board of directors.  In so doing, the Limited Partners acknowledge and agree that the Managing General Partner may acquire fiduciary duties to the Company and to the other shareholders of the Company; and that these fiduciary duties may compel the Managing General Partner to take actions that, while in the best interests of the Company and/or its shareholders and/or other third party constituencies, may not be in the best interests of the Limited Partners.  Accordingly, the Limited Partners acknowledge and agree that the Managing General Partner may have a conflict of interest between the fiduciary duties (if any) that it owes to the Company and its shareholders and other third party constituencies under applicable law, on the one hand, and those that it owes to the Limited Partners, on the other hand.  In the event that a situation that may present a conflict of interest arises, the Managing General Partner may refer such situation to the Investor Committee or another independent third party for a resolution.

(e)Definitions:

(i)"Affiliate" shall mean, with respect to any Person, any Person controlling, controlled by or under common control with, such Person;

(ii)"Affiliated Investors" shall mean Nelson Peltz, Peter W. May, Edward P. Garden, the Managing General Partner and/or their respective Affiliates;

(iii)"Non-Affiliated Investor" shall mean an investor who is not an Affiliated Investor;

(iv)"Person" shall mean any natural person, partnership, limited liability company, corporation, trust or other entity; and

(v)"Principals" shall mean Nelson Peltz, Peter W. May and Edward P. Garden.

Sec. 2.05Exculpation.

(a)None of the General Partners, any Investor Committee member, the Management Company, their respective Affiliates, and any of their respective shareholders, members, partners, directors, officers and employees (each, an "Indemnified Party" and collectively, "Indemnified Parties") shall be liable to any Partner or the Partnership for (i) any acts or omissions arising out of, related to or in connection with the Partnership or any entity in which it has an interest, any transaction or activity relating to the Partnership or any entity in which it has an interest, any investment or proposed investment made or held, or to be made or held by the Partnership, or this Agreement or any similar matter, unless such action or inaction was made in bad faith or constitutes fraud, willful misconduct or gross negligence (which "gross negligence", whenever used herein, shall have the meaning under the laws of the State of Delaware, United States) or (ii) any act or omission of any broker or agent of any Indemnified Party, provided that the selection, engagement or retention of such broker or agent was not made by the Indemnified Party seeking exculpation in bad faith and does not constitute fraud, willful misconduct or gross negligence of the Indemnified Party seeking exculpation.  Each of the Indemnified Parties may consult with counsel and accountants in respect of the Partnership's affairs and be fully protected and justified in any action or inaction that is taken in accordance with the advice or opinion of such counsel or accountants, provided that their selection of such counsel or accountants was not made by the Indemnified Party seeking exculpation in bad faith and does not constitute fraud, willful misconduct or gross negligence of the Indemnified Party seeking exculpation.

(b)Notwithstanding any of the foregoing to the contrary, the provisions of this Section 2.05 shall not be construed so as to provide for the exculpation of an Indemnified Party for any liability (including liability under U.S. Federal securities laws which, under certain circumstances, impose liability even on persons that act in good faith), to the extent (but only to the extent) that such liability may not be waived, modified or limited under applicable law, but shall be construed so as to effectuate the provisions of this Section 2.05 to the fullest extent permitted by law.

Sec. 2.06Indemnification.

(a)To the fullest extent permitted by law, the Partnership shall indemnify and hold harmless each Indemnified Party from and against any loss, cost or expense suffered or sustained by an Indemnified Party by reason of (i) any acts, omissions or alleged acts or omissions arising out of or in connection with the Partnership, or any entity in which it has an interest, any investment or proposed investment made or held, or to be made or held by the Partnership, or this Agreement or any similar matter (collectively, "Covered Acts"), including, without limitation, any judgment, award, settlement, reasonable attorneys' fees and other costs or expenses incurred in connection with the defense of any actual or threatened action, proceeding, or claim, provided that such acts, omissions or alleged acts or omissions upon which such actual or threatened action, proceeding or claim are based were not made in bad faith or did not constitute fraud, willful misconduct or gross negligence by the Indemnified Party seeking indemnification, or (ii) any acts or omissions, or alleged acts or omissions, of any broker or agent of any Indemnified Party (collectively, "Covered Broker Acts"), provided that the selection, engagement or retention of such broker was not made by the Indemnified Party seeking indemnification in bad faith and does not constitute fraud, willful misconduct or gross negligence of the Indemnified Party seeking indemnification.  Additionally, the Partnership (and not any Indemnified Party) will be responsible for any losses resulting from trading errors and similar human errors, absent bad faith, willful misconduct or gross negligence.  The Partnership shall advance to any Indemnified Party reasonable attorneys' fees and other costs and expenses incurred in connection with the defense of any action or proceeding that arises out of any Covered Act or any Covered Broker Act whether or not the provisos of (i) or (ii) apply.  In the event that such an advance is made by the Partnership, the Indemnified Party shall agree to reimburse the Partnership for such fees, costs and expenses to the extent that it shall be finally determined by non-appealable order of a court of competent jurisdiction that it was not entitled to indemnification under this Section 2.06.  The foregoing provisions shall survive the termination of this Agreement.

(b)Notwithstanding any of the foregoing to the contrary, the provisions of this Section 2.06 shall not be construed so as to provide for the indemnification of an Indemnified Party for any liability (including liability under Federal securities laws which, under certain circumstances, impose liability even on persons that act in good faith) to the extent (but only to the extent) that such indemnification would be in violation of applicable law, but shall be construed so as to effectuate the provisions of this Section 2.06 to the fullest extent permitted by law.  The Managing General Partner shall have the authority to enter into separate agreements to give effect to the obligation to indemnify pursuant to this Section 2.06.

Sec. 2.07Management Fee; Payment of Certain Costs and Expenses.

(a)The Partnership will pay a quarterly management fee on the first day of each quarter (the "Management Fee") to the Management Company equal to 0.5% (2.0% per annum) of the beginning balance for the quarter of each Capital Account (as defined in Section 3.03) of a Limited Partner.  A pro rata portion of the quarterly Management Fee will be paid out of any capital contributions made by new or existing Limited Partners to the Partnership on any date that does not fall on the first day of a fiscal quarter.  Such Management Fee will be paid upon contribution of the funds to the Partnership.  In the case of a withdrawal by a Limited Partner other than as of the last day of a quarter, a pro rata portion of the Management Fee (based on the actual number of days remaining in such partial quarter) will be repaid by the Management Company to the Partnership and distributed to the withdrawing Limited Partner.

(b)The General Partner's capital account will not be debited with any Management Fee.  The Management Company may, in its sole discretion, elect to reduce, waive or calculate differently the Management Fee with respect to any Affiliated Investor or an Affiliate, employee or relative of an Affiliated Investor or its Affiliates, or for any other Limited Partner.

(c)The Management Company will bear the administrative expenses of the Partnership, including costs and expenses related to salaries, employee benefits and bonuses of employees, occupancy expenses and accounting expenses (other than accounting expenses relating to investments or prospective investments and audit and tax return preparation fees).

(d)The Partnership will bear its own expenses including, but not limited to, expenses relating to the cost of purchasing investments (e.g., brokerage commissions and trading costs), fees of the Administrator (or to the extent any services typically provided by an administrator are provided by the Management Company, the Managing General Partner or any of their respective employees or affiliates, the cost of such services in amounts not to exceed those that would be payable to administrators engaged to perform such services as reasonably determined by the Managing General Partner in good faith), organizational expenses, expenses relating to the offer and sale of limited partnership interests in the Partnership, financing fees, prime brokerage fees, filing fees, entity-level taxes, registration fees and similar fees, audit and tax return preparation fees, fees in respect of consulting, custodial, accounting, investment banking, appraisal and financial advisory services provided by non-affiliated third parties relating to investments or prospective investments, due diligence expenses and fees relating to investments or prospective investments, conduct of proxy contests and tender offers, litigation expenses and legal expenses (including the cost of in-house counsel of the Management Company, the Managing General Partner and their respective affiliates in amounts not to exceed those that would be payable to outside counsel engaged to perform such services as reasonably determined by the Managing General Partner in good faith) incurred in connection with the making or administration of investments (to the extent not borne by the Company and regardless of whether consummated), liability insurance covering the Managing General Partner, the Management Company and their respective affiliates, members, directors, officers, employees and agents, and extraordinary expenses and other similar expenses related to the Partnership as the Managing General Partner determines in its sole discretion.  The expenses (other than the Management Fee) will be shared by all of the Partners including the Managing General Partner.

(e)Organizational expenses of the Partnership may be capitalized and amortized by the Partnership over up to a 60-month period from the Initial Closing.

Sec. 2.08Principal Transactions.  Each Limited Partner acknowledges that from time to time, the Managing General Partner may deem it appropriate for the Partnership to engage in "principal transactions" (as defined in Section 2.06(3) of the Investment Advisers Act of 1934, as amended).  Each Limited Partner hereby agrees that any "principal transaction" will be considered and approved or disapproved, to the extent required by applicable law, by the Investor Committee or another independent representative appointed by the Managing General Partner, as determined by the Managing General Partner in its sole discretion.  In no event shall any such transaction be entered into unless it complies with applicable law.

ARTICLE III

Capital Accounts of Partners

and Operation Thereof

Sec. 3.01Definitions.  For the purposes of this Agreement, unless the context otherwise requires:

(a)The term "Accounting Period" shall mean the following periods:  The initial Accounting Period shall begin upon the commencement of the Partnership. Each subsequent Accounting Period shall commence immediately after the close of the immediately preceding Accounting Period.  Each Accounting Period hereunder shall close at the close of business on the first to occur of (i) the last day of each quarter of the Partnership, (ii) the date immediately prior to the effective date of the admission of a new Partner pursuant to Section 4.01, (iii) the date immediately prior to the effective date of an additional Capital Contribution pursuant to Section 3.02, (iv) any date on which a Partner makes a withdrawal from a Capital Account, (v) any date on which the Managing General Partner makes a distribution to Partners or other disposition of all or a portion of the Securities or proceeds from the sale thereof, (vi) the date when the Partnership shall dissolve or (vii) such other date as is determined by the Managing General Partner.

(b)The term "Beginning Value" shall, with respect to any Accounting Period, mean the value of the Partnership's Net Assets at the beginning of such Accounting Period after giving effect to withdrawals relating to the immediately preceding Withdrawal Date and after giving effect to payment of the Management Fee.

(c)The term "Ending Value" shall, with respect to any Accounting Period, mean the value of the Partnership's Net Assets at the end of such Accounting Period (before any reduction for Withholding Taxes (as defined in Section 3.01(g))).

(d)The term "Net Assets" shall mean the excess of the Partnership's assets (valued in accordance with Section 3.07) over its liabilities (determined in accordance with Section 3.08).

(e)The term "Net Capital Appreciation" shall, with respect to any Accounting Period, mean the excess, if any, of the Ending Value over the Beginning Value.

(f)The term "Net Capital Depreciation" shall, with respect to any Accounting Period, mean the excess, if any, of the Beginning Value over the Ending Value.

(g)The term "Withholding Tax" shall mean tax withheld from the income of the Partnership or paid over by the Partnership that is determined based on the status of a Partner.

Sec. 3.02Capital Contributions.  (a)  Each Partner has paid or conveyed by way of contribution to the Partnership cash (a "Capital Contribution") having an aggregate value as set forth in the Partnership's books and records.  Additional Capital Contributions may be made by Limited Partners only in accordance with the provisions of this Section 3.02.

(b)With the prior approval of the Managing General Partner, a Limited Partner may make additional Capital Contributions to the Partnership in cash at such time as the Managing General Partner may permit.

(c)Subject to the prior approval of the Managing General Partner, each Limited Partner may make additional Capital Contributions in respect of an Indirect Investor's (as defined below) subscription to the Feeder Fund (as defined below) or capital contribution to a Limited Partner (including the Intermediate Fund (as defined below)), as the case may be.  Any such Capital Contributions shall be made in accordance with the provisions of this Section 3.02.  For purposes of this Agreement the "Feeder Fund" shall mean Trian SPV V, Ltd., a Cayman Islands exempted company, and the "Intermediate Fund" shall mean Trian SPV V, L.P., a Cayman Islands exempted limited partnership.

(d)The interests in the Partnership may be divided into separate Capital Accounts to correspond with each subscription or capital contribution by an Indirect Investor with respect to the classes, series and/or holders of interests or shares issued by the Intermediate Fund or the Feeder Fund to the respective Indirect Investors.  Any Capital Contributions by the Intermediate Fund that are derived from capital contributions made to the Intermediate Fund or subscriptions made to the Feeder Fund by Indirect Investors shall be credited to the corresponding Capital Accounts.  Any holder (other than the Feeder Fund) of a direct interest in the Intermediate Fund or any shareholder of the Feeder Fund is hereinafter called an "Indirect Investor."

Sec. 3.03Capital Accounts.  A separate capital account (herein called the "Capital Account") shall be established on the books of the Partnership for each General Partner and for each Limited Partner for each separate Capital Contribution made by such Partner, and such Capital Accounts of any particular Limited Partner shall be separated as and to the extent provided in or pursuant to Section 3.02(d).  The Capital Account of each Partner shall be in an amount equal to such Partner's initial Capital Contribution with respect to such Capital Account, adjusted as hereinafter provided.  At the end of each Accounting Period, each Capital Account of a Partner shall be (i) increased or decreased by the amount credited or debited to such Capital Account of such Partner pursuant to Section 3.05; and (ii) decreased by the amount of any withdrawals made by such Partner from such Capital Account pursuant to Section 5.03 or any distributions made to such Partner from such Capital Account pursuant to Section 5.06.  At the beginning of each fiscal quarter, each Capital Account of a Limited Partner shall be decreased by the amount of the Management Fee calculated in respect of such Capital Account pursuant to Section 2.07.  The Capital Account of each Limited Partner also shall be decreased by the amount of any fee paid with respect to any interest purchased on a date that does not fall on the first day of a fiscal quarter.

For administrative convenience, the Managing General Partner may combine multiple Capital Accounts in respect of any particular Indirect Investor that have been established pursuant to Section 3.02(d) that have the same characteristics (e.g., remaining Lock-up Period (as defined in Section 5.02), Loss Recovery Account (as defined in Section 3.05(c)) and fee terms).

Sec. 3.04Partnership Percentages.  A "Partnership Percentage" shall be determined for each Capital Account for each Accounting Period of the Partnership by dividing the amount of such Capital Account by the aggregate Capital Accounts of all Partners as of the beginning of such Accounting Period after taking into account Capital Contributions, withdrawals and distributions, as of such date.  The sum of the Partnership Percentages shall equal 100 percent.

Sec. 3.05Allocation of Net Capital Appreciation or Net Capital Depreciation.

(a)At the end of each Accounting Period, each Capital Account of each Partner (including each General Partner) for such Accounting Period shall be adjusted by crediting (in the case of Net Capital Appreciation) or debiting (in the case of Net Capital Depreciation) the Net Capital Appreciation or Net Capital Depreciation, as the case may be, in proportion to their respective Partnership Percentages.

(b)Subject to Section 3.05(c), at the end of each fiscal year of the Partnership, or at such other times as are required by Section 3.05(d), 20% of the Net Capital Appreciation, if any, allocated to each Capital Account of a Limited Partner for such fiscal year over the Management Fee (and in the case of the Feeder Fund or the Intermediate Fund, expenses paid directly by the Feeder Fund or the Intermediate Fund) debited to such Capital Account of a Limited Partner pursuant to Section 2.07 for such fiscal year shall be reallocated to the Capital Account of the General Partner (the "Incentive Allocation"); provided, however, that the Net Capital Appreciation upon which the calculation of the Incentive Allocation is based shall be reduced to the extent of any unrecovered balance remaining in the Loss Recovery Account maintained on the books and records of the Partnership for such Related Capital Account (as defined below).  The amount of the unrecovered balance remaining in the Loss Recovery Account at the time of calculating the Incentive Allocation shall be the amount existing immediately prior to its reduction pursuant to the second clause of the second sentence of Section 3.05(c).  The Managing General Partner may, in its sole discretion, elect to reduce, waive or calculate differently the Incentive Allocation with respect to any Affiliated Investor or an Affiliate, employee or relative of an Affiliated Investor or its Affiliates, or for any other Limited Partner.

(c)There shall be established on the books of the Partnership for each Capital Account a memorandum account (the "Loss Recovery Account"), the opening balance of which shall be zero.  For purposes of this Section 3.05, the Capital Account with respect to which a Loss Recovery Account was established shall be referred to as the "Related Capital Account."  At the end of each fiscal year or at such other date during a fiscal year as the calculation of an Incentive Allocation is required to be made for such Partner under this Section 3.05, the balance in each Loss Recovery Account shall be adjusted as follows:  first, if there has been, in the aggregate, Net Capital Depreciation (as adjusted pursuant to the last sentence of this paragraph) with respect to a Related Capital Account since the immediately preceding date as of which a calculation of an Incentive Allocation was made (or if no calculation has yet been made with respect to such Capital Account, since its creation), an amount equal to such Net Capital Depreciation shall be credited to such Loss Recovery Account, and, second, if there has been, in the aggregate, Net Capital Appreciation (as adjusted pursuant to the last sentence of this paragraph) with respect to such Related Capital Account since the immediately preceding date as of which a calculation of an Incentive Allocation was made, an amount equal to such Net Capital Appreciation, before any Incentive Allocation to the Managing General Partner, shall be debited to and reduce any unrecovered balance in such Loss Recovery Account, but not below zero.  Solely for purposes of this Section 3.05(c), in determining a Limited Partner's Loss Recovery Account, Net Capital Appreciation and Net Capital Depreciation for any applicable period shall be calculated by taking into account the amount of the Management Fee (and in the case of the Feeder Fund or the Intermediate Fund, expenses paid directly by the Feeder Fund or the Intermediate Fund), if any, debited to such Limited Partner's Capital Account for such period.

In the event that a Limited Partner withdraws all or a portion of a Capital Account when there is an unrecovered balance in the Loss Recovery Account established in respect of such Capital Account (other than a withdrawal to pay Feeder Fund expenses as described in Section 5.03(d)), the unrecovered balance in such Loss Recovery Account shall be reduced as of the beginning of the next Accounting Period by an amount equal to the product obtained by multiplying the balance in such Loss Recovery Account by a fraction, the numerator of which is the amount of the withdrawal from such Capital Account made by such Limited Partner with respect to the immediately preceding Withdrawal Date (other than a withdrawal described in Section 5.03(d)) and the denominator of which is the balance in such Capital Account on the last day of the prior Accounting Period.  Additional Capital Contributions shall not affect any Loss Recovery Account.

(d)In the event that (i) the Partnership is dissolved other than at the end of a fiscal year, (ii) the effective date of a Limited Partner's partial or complete withdrawal from any particular Capital Account is other than a fiscal year end, or (iii) a partial or complete distribution of all of the amounts contained in a Limited Partner's Capital Account occurs on a date other than a fiscal year end, then for purposes of determining the Incentive Allocation, Net Capital Appreciation shall be determined through the termination date (for all Limited Partners), withdrawal date or distribution date (for the Capital Account relating to such withdrawal or distribution (as applicable) only) as if such dates were the end of the fiscal year, and the Incentive Allocation shall be made at that time.

(e)For purposes of determining the impact of withdrawals on Incentive Allocations and Loss Recovery Accounts with respect to:  (i) Limited Partners having multiple Capital Accounts other than as contemplated in Section 3.02(d); and (ii) any Limited Partner holding multiple Capital Accounts that have been established in respect of any particular Indirect Investor, pursuant to Section 3.02(d), withdrawals will be deemed to be made in respect of such Capital Accounts on a "first in -first out" basis.

(f)In the event the Managing General Partner determines that, based upon tax or regulatory reasons, or any other reasons as to which the Managing General Partner and any Limited Partner agree, such Partner (or any Indirect Investor) should not participate in the Net Capital Appreciation or Net Capital Depreciation, attributable to any Security, type of Security or to any other transaction, or event if any, the Managing General Partner may allocate such Net Capital Appreciation or Net Capital Depreciation only to the Capital Accounts of Partners in respect of which such reasons do not apply.  In addition, if for any of the reasons described above, the Managing General Partner determines that a Partner (or any Indirect Investor) should have no interest whatsoever in a particular Security, type of Security or transaction, the interests in such Security, type of Security or transaction may be set forth in a separate memorandum account in which Partners shall participate only with respect to Capital Accounts that the Managing General Partner determines should have an interest in such Security, type of Security or transaction (any such Partner, for such Security, type of Security or transaction, being referred to the extent of such participating Capital Account as an "Unrestricted Partner") and in the Net Capital Appreciation and Net Capital Depreciation for each such memorandum account, which shall be separately calculated.

(g)At the end of each Accounting Period during which a memorandum account created pursuant to Section 3.05(f) (a "Memorandum Account") was in existence (or during which an interest in particular Securities was otherwise allocated away from the Capital Accounts of one or more Limited Partners), the Capital Accounts of each Unrestricted Partner may be debited pro rata in accordance with the Capital Accounts of all Unrestricted Partners at the opening of such Accounting Period in an amount equal to the interest that would have accrued on the amount used to purchase the Securities attributable to the Memorandum Account (the "Purchase Price") had the Purchase Price earned interest at the rate per annum being paid by the Partnership from time to time during the applicable Accounting Period for borrowed funds, or, if funds have not been borrowed by the Partnership during such Accounting Period, at the interest rate per annum that the Managing General Partner determines would have been paid if funds had been borrowed by the Partnership during such Accounting Period.  The amount so debited shall then be credited to the Capital Accounts of all of the Partners pro rata in accordance with their Capital Accounts as of the opening of the Accounting Period.

(h)If the Partnership incurs a Withholding Tax or other tax obligation with respect to the share of Partnership income allocable to any Partner, then the Managing General Partner, without limitation of any other rights of the Partnership or the Managing General Partner, shall cause the amount of such obligation to be debited against the Capital Account(s) of such Partner as of the close of the Accounting Period during which the Partnership pays such obligation or has the Withholding Tax withheld from its income.  The Managing General Partner shall not be obligated to apply for or obtain a reduction of or exemption from Withholding Tax on behalf of any Partner that may be eligible for such reduction or exemption.

Sec. 3.06Amendment of Incentive Allocation.  The Managing General Partner shall have the right to amend, without the consent of the Limited Partners, Section 3.05 of this Agreement so that the Incentive Allocation therein provided conforms to any applicable requirements of the U.S. Securities and Exchange Commission (the "SEC") and other regulatory authorities; provided, however, that no such amendment shall increase the Incentive Allocation that otherwise would be computed with respect to a Capital Account, other than as provided in Section 3.05.

Sec. 3.07Valuation of Assets.

(a)Securities that are listed on a securities exchange shall be valued at their last sales prices on the date of determination on the primary securities exchange on which such Securities shall have traded on such date (or, in the event that the date of determination is not a date upon which a securities exchange was open for trading, on the last prior date on which such securities exchange was so open not more than 10 days prior to the date of determination).  Securities that are not listed on an exchange but are traded over-the-counter shall be valued at the mean between the last "bid" and "asked" price for such security on such date.  Securities not denominated in U.S. dollars shall be translated into U.S. dollars at prevailing exchange rates as the Managing General Partner may determine in good faith.

(b)All other assets of the Partnership (except goodwill, which shall not be taken into account) shall be assigned such value as the Managing General Partner may determine in good faith.

(c)If the Managing General Partner determines in its sole discretion that the valuation of any Securities pursuant to Section 3.07(a) does not fairly represent market value, the Managing General Partner may value such Securities as it determines in good faith and shall set forth the basis of such valuation in writing in the Partnership's records.

(d)All values assigned to Securities and other assets by the Managing General Partner pursuant to this Section 3.07 shall be final and conclusive as to all of the Partners.

Sec. 3.08Liabilities.  Liabilities shall be determined using generally accepted accounting principles, as a guideline, applied on a consistent basis; provided, however, that the Managing General Partner in its discretion may provide reserves and holdbacks for estimated accrued expenses, liabilities or contingencies, including general reserves for unspecified contingencies (even if such reserves or holdbacks are not in accordance with generally accepted accounting principles).

Sec. 3.09Allocation for Tax Purposes.  For each fiscal year, items of income, deduction, gain, loss or credit shall be allocated for U.S. income tax purposes among the Partners in such manner as to reflect equitably amounts credited or debited to each Partner's Capital Account(s) for the current and prior fiscal years (or relevant portions thereof).  Allocations under this Section 3.09 shall be made pursuant to the principles of Section 704(b) and 704(c) of the Code, and U.S. Treasury Regulations Sections 1.704-1(b)(2)(iv)(f) and (g), 1.704-1(b)(4)(i) and 1.704-3(e) promulgated thereunder, as applicable, or the successor provisions to such Section and Treasury Regulations.  Notwithstanding anything to the contrary in this Agreement, there shall be allocated to the Partners such gains or income as shall be necessary to satisfy the "qualified income offset" requirements of U.S. Treasury Regulations Section 1.704-1(b)(2)(ii)(d).

If the Partnership realizes ordinary income and/or capital gains (including short-term capital gains) for U.S. Federal income tax purposes (collectively, "income") for any fiscal year during or as of the end of which one or more Positive Basis Partners (as hereinafter defined) withdraw from the Partnership pursuant to Article V, the Managing General Partner may elect, in its discretion, to allocate such income (including items of income) as follows:  (i) first, among such completely withdrawing Positive Basis Partners, pro rata in proportion to the respective Full Positive Basis (as hereinafter defined) of each such completely withdrawing Positive Basis Partner, until either the full amount of such income shall have been so allocated or the Full Positive Basis of each such Positive Basis Partner shall have been eliminated, (ii) then, among such partially withdrawing Positive Basis Partners, prorata in proportion to the respective Partial Positive Basis (as hereinafter defined) of each such partially withdrawing Positive Basis Partner, until either the remaining amount of such income shall have been so allocated or the Partial Positive Basis of each such Positive Basis Partner shall have been eliminated and (iii) then any income not so allocated to Positive Basis Partners to the other Partners in such manner as shall equitably reflect the amounts allocated to such Partners' Capital Accounts pursuant to Section 3.05.

If the Partnership realizes deductions, ordinary losses and/or capital losses (including long-term capital losses) for U.S. Federal income tax purposes (collectively, "losses") for any fiscal year during or as of the end of which one or more Negative Basis Partners (as hereinafter defined) withdraw from the Partnership pursuant to Article V, the Managing General Partner may elect, in its discretion, to allocate such losses (including items of loss) as follows:  (i) first, among such completely withdrawing Negative Basis Partners, prorata in proportion to the respective Full Negative Basis (as hereinafter defined) of each such completely withdrawing Negative Basis Partner, until either the full amount of such losses shall have been so allocated or the Full Negative Basis of each such Negative Basis Partner shall have been eliminated, (ii) then, among such partially withdrawing Negative Basis Partners, prorata in proportion to the respective Partial Negative Basis (as hereinafter defined) of each such partially withdrawing Negative Basis Partner, until either the remaining amount of such losses shall have been so allocated or the Partial Negative Basis of each such Negative Basis Partner shall have been eliminated and (iii) then any losses not so allocated to Negative Basis Partners to the other Partners in such manner as shall equitably reflect the amounts allocated to such Partners' Capital Accounts pursuant to Section3.05.

As used herein, (i) the term "Full Positive Basis" shall mean, with respect to any  completely withdrawing Partner and as of any time of calculation, the amount by which (x) its interest in the Partnership (determined in accordance with Section 1.04) as of such time plus an amount equal to any deemed distributions to such Partner for U.S. Federal income tax purposes pursuant to Section 752(b) of the Code resulting from its withdrawal exceeds (y) its "adjusted tax basis", for U.S. Federal income tax purposes, in its interest in the Partnership as of such time, (ii) the term "Partial Positive Basis" shall mean, with respect to any partially withdrawing Partner and as of the time of calculation, the amount by which the amount received (or to be received) upon such partial withdrawal as of such time plus an amount equal to any deemed distributions to such Partner for U.S. Federal income tax purposes pursuant to Section 752(b) of the Code resulting from its withdrawal exceeds the product of (x) its "adjusted tax basis," for U.S. Federal income tax purposes, in its interest in the Partnership as of such time and (y) a fraction, the numerator of which is the amount received (or to be received) upon such partial withdrawal, and the denominator of which is the value of such partially withdrawing Partner's Capital Account immediately prior to such partial withdrawal and (iii) the term "Positive Basis Partner" shall mean any Partner that withdraws some or all of its interest in the Partnership and who has Full Positive Basis or Partial Positive Basis as of the effective date of such withdrawal (determined prior to any allocations made pursuant to this Section 3.09).

As used herein, (i) the term "Full Negative Basis" shall mean, with respect to any completely withdrawing Partner and as of any time of calculation, the amount by which (x) its interest in the Partnership (determined in accordance with Section 1.04) as of such time plus an amount equal to any deemed distributions to such Partner for U.S. Federal income tax purposes pursuant to Section 752(b) of the Code resulting from its withdrawal is less than (y) its "adjusted tax basis", for U.S. Federal income tax purposes, in its interest in the Partnership as of such time, (ii) the term "Partial Negative Basis" shall mean, with respect to any partially withdrawing Partner and as of the time of calculation, the amount by which the amount received (or to be received) upon such partial withdrawal as of such time plus an amount equal to any deemed distributions to such Partner for U.S. Federal income tax purposes pursuant to Section 752(b) of the Code resulting from its withdrawal is less than the product of (x) its "adjusted tax basis," for U.S. Federal income tax purposes, in its interest in the Partnership as of such time and (y) a fraction, the numerator of which is the amount received (or to be received) upon such partial withdrawal, and the denominator of which is the value of such partially withdrawing Partner's Capital Account immediately prior to such partial withdrawal and (ii) the term "Negative Basis Partner" shall mean any Partner that withdraws some or all of its interest in the Partnership and who has Full Negative Basis or Partial Negative Basis as of the effective date of its withdrawal (determined prior to any allocations made pursuant to this Section 3.09).

Notwithstanding anything to the contrary in this Section 3.09, if a General Partner withdraws all or a portion of its Capital Account during any tax year, the Managing General Partner may specially allocate income to such General Partner equal to the amount by which such withdrawal plus an amount equal to any deemed distributions to such General Partner exceed its adjusted tax basis, for income tax purposes, in its interest in the Partnership (determined prior to any such allocations).

Sec. 3.10Determination by the Managing General Partner of Certain Matters.  All matters concerning the valuation of Securities and other assets, liabilities, profits and losses of the Partnership, the allocation of income, deductions, gains and losses among the Partners, including taxes thereon, and accounting procedures, not expressly provided for by the terms of this Agreement, shall be determined by the Managing General Partner whose determination shall be final and conclusive as to all of the Partners.

Sec. 3.11Adjustments to Take Account of Certain Events.  If the Code or Treasury Regulations promulgated thereunder require a withholding or other adjustment to the Capital Account of a Partner or some other event occurs necessitating in the Managing General Partner's judgment an equitable adjustment, the Managing General Partner shall make such adjustments in the determination and allocation among the Partners of Net Capital Appreciation, Net Capital Depreciation, Capital Accounts, Partnership Percentages, Management Fee, Incentive Allocation, items of income, deduction, gain, loss, credit or withholding for tax purposes, accounting procedures or such other financial or tax items as shall equitably take into account such event and applicable provisions of law, and the determination thereof by the Managing General Partner shall be final and conclusive as to all of the Partners.

ARTICLE IV

Admission of New Partners

Sec. 4.01New Partners.  Subject to the condition that each new Partner shall execute an appropriate supplement to this Agreement pursuant to which it agrees to be bound by the terms and provisions hereof, the Managing General Partner may, in its sole discretion, admit one or more new Partners as of the first Business Day of each month or at such other times as determined by the Managing General Partner in its sole discretion.  A "Business Day" shall be any day on which commercial banks in New York City and the Cayman Islands are open for business.  Admission of a new Partner shall not be a cause for dissolution of the Partnership.  In no event will the Partnership at any time have more than 100 Partners.  For purposes of this section, the number of Partners of the Partnership shall be determined in accordance with U.S. Treasury Regulations Section 1.7704-1(h).

ARTICLE V

Withdrawals and Distributions

of Capital

Sec. 5.01Withdrawal of Initial Limited Partner .  The Initial Limited Partner has made a Capital Contribution of USD 1.00 to the capital of the Partnership.  Upon one or more additional Partners becoming Limited Partners, the Initial Limited Partner shall automatically withdraw as a Limited Partner and shall accordingly cease to be a Limited Partner and shall be entitled to receive, and the Partnership shall pay to the Initial Limited Partner, the amount of USD 1.00, and no more and shall have no further interest or obligation of any kind whatsoever as a Partner of the Partnership.

Sec. 5.02Withdrawals and Distributions in General.  No Partner shall be entitled to (i) receive distributions from the Partnership, except as provided in Section 5.06 and Section 6.02 or (ii) withdraw any amount from a Capital Account, except as provided in Section 5.03, or upon the consent of, and upon such terms as may be determined by, the Managing General Partner in its sole discretion.

Sec. 5.03Withdrawals.

(a)Subject to Sections 5.03(b), 5.03(c), 5.03(d), 5.06, 5.07 and 5.08, each Limited Partner shall have the right, upon at least 65 days' prior written notice delivered to the Administrator, to withdraw all or a portion of the balance of a Capital Account established for such Limited Partner with respect to any particular Capital Contribution, determined in the case of the Feeder Fund in accordance with Section 3.02(d) as of (i) the last day of the fiscal quarter ending on or immediately following the later of (a) the expiration of the 36-month period commencing on the date of the creation of such Capital Account and (b) the Company's third annual shareholder meeting following the Partnership's Initial Closing date (the "Lock-Up Period") and (ii) the last day of each fiscal quarter thereafter.  For Limited Partners with multiple Capital Accounts, including multiple Capital Accounts established on account of any particular Indirect Investor, withdrawals will be deemed to be made on a "first in - first out" basis.  Each date as of which a Limited Partner is permitted to withdraw all or a portion of the balance in a Capital Account shall herein be referred to as a "Withdrawal Date."  If a Withdrawal Date does not fall on a Business Day, the Withdrawal Date will be the next Business Day.  Withdrawal requests will be irrevocable by the Limited Partner upon receipt by the Managing General Partner, but such irrevocability may be waived by the Managing General Partner in its sole discretion.  The Lock-up Period shall also apply to withdrawals (excluding withdrawals of Incentive Allocation) from the Capital Accounts of the Managing General Partner.  Upon the expiration of the Lock-up Period with respect to any Capital Contribution made by the Managing General Partner, the Managing General Partner may, on any Withdrawal Date, withdraw amounts in the applicable Capital Account.

(b)Payment of the amount withdrawn shall be made within 30 days of the Withdrawal Date; provided, however, that if a Limited Partner elects to withdraw 90% or more of its Capital Account(s) established in respect of the Capital Contributions of any particular Indirect Investor pursuant to Section 3.02(d), the Partnership shall pay the Limited Partner an amount equal to at least 90% of its estimated withdrawal proceeds (computed on the basis of unaudited data as of the Withdrawal Date) within 30 days after the Withdrawal Date and the balance of the withdrawal shall be paid (subject to audit adjustments) within 30 days after completion of the audit of the Partnership's books for the calendar year in which such Withdrawal Date occurs.  No interest will be paid on any balance due after a Withdrawal Date.  The interests (or portion thereof being withdrawn) of a Limited Partner that gives notice of withdrawal pursuant to this Section 5.03(b) shall not be included in calculating the Partnership Percentages of the Limited Partners required to take any action under this Agreement.

(c)In the event that aggregate withdrawal requests are received for any Withdrawal Date in an amount in excess of 20% of the net asset value of the Partnership as of such date, the Managing General Partner may, in its sole discretion, (i) satisfy all such withdrawal requests, or (ii) reduce all withdrawal requests pro rata so that only 20%, or more, in the sole discretion of the Managing General Partner, of the net asset value of the Partnership is withdrawn on such Withdrawal Date (such limitation, the "Gate").  A withdrawal request that is not satisfied in full as of the intended Withdrawal Date because of the application of the Gate will be satisfied at subsequent quarter-end Withdrawal Dates subject to the Gate; provided, however, that the withdrawal request will be fully satisfied (subject to the suspension provisions described in Section 5.08) no later than the last day of the twelfth full month following the initial Withdrawal Date to which the withdrawal request relates.  Until the Withdrawal Date as of which a withdrawal becomes fully satisfied, the Capital Account of the withdrawing Partner will remain at risk.

(d)The Managing General Partner reserves the right to enter into agreements with one or more Limited Partners that contain different withdrawal rights than those described in Section 5.03(a) including a shorter withdrawal notice period and more frequent withdrawal rights.  In addition, the Managing General Partner may waive notice requirements and require or permit withdrawals under such other circumstances as it approves, including to pay expenses of the Feeder Fund and/or the Intermediate Fund approved by the Management Company.

Sec. 5.04Required Withdrawals.  The Managing General Partner may, in its sole discretion, require a Limited Partner to withdraw all or any part of its Capital Accounts at any time, for any reason or no reason, upon five days' prior written notice.  The Managing General Partner also may terminate the entire interest of any Limited Partner in respect of any particular Capital Account(s) immediately in the event that the Managing General Partner, in its sole discretion, determines that (i) the Limited Partner or any Indirect Investor has made a material omission or material misstatement of fact with regard to the information such Limited Partner or such Indirect Investor provided to the Partnership or the Feeder Fund, (ii) such Partner's continued participation in the Partnership may cause the Partnership to fail to qualify for the safe harbor from "publicly traded partnership" status set forth in U.S. Treasury Regulations Section 1.7704-1(h) or (iii) such Limited Partner's or Indirect Investor's continued ownership of an interest in the Partnership or in the Limited Partner, respectively, may cause adverse legal, tax, regulatory or other consequences to the Partnership.  The Partner receiving such notice shall be treated for all purposes and in all respects as a Partner who has given notice of withdrawal of all or part of its Capital Accounts, as the case may be, under Section 5.03.

Sec. 5.05Death, Disability, etc. of Limited Partners.  The death, disability, incapacity, adjudication of incompetency, termination, bankruptcy, insolvency or dissolution of a Limited Partner shall not dissolve the Partnership.  The legal representatives of a Limited Partner shall succeed as assignee to the Limited Partner's interest in the Partnership upon the death, disability, incapacity, adjudication of incompetency, termination, bankruptcy, insolvency or dissolution of such Limited Partner, but shall not be admitted as a substituted Partner without the consent of the Managing General Partner, in its sole discretion.

Sec. 5.06Distributions.

(a)The Managing General Partner may at any time (including during the Lock-up Period), in its sole discretion, make distributions in cash or in kind (i) in connection with a withdrawal of funds from the Partnership by a Partner; provided that any distribution in-kind pursuant to this clause (a)(i) need not be pro rata and (ii) at any time to all of the Partners on a pro rata basis in accordance with the Partners' Partnership Percentages; provided, that the Managing General Partner may elect, in its sole discretion, to give Limited Partners the option of opting out of any distributions pursuant to clause (ii).  Additionally, upon the sale of all or substantially all of the Securities (and the determination of the Managing General Partner that the Partnership no longer intends to acquire Securities), the Managing General Partner will distribute the proceeds thereof to the Partners pro rata in accordance with their respective Partnership Percentages.

(b)If a distribution is made in kind, immediately prior to such distribution, the Managing General Partner shall determine the fair market value of the property distributed and adjust the Capital Accounts of all Partners upwards or downwards as if such gain or loss had been recognized upon an actual sale of such property and allocated pursuant to Section 3.05.  Each such distribution shall reduce the Capital Account(s) of the distributee Partner by the fair market value thereof.

(c)The provisions of this Section 5.06 shall apply to distributions made in connection with any withdrawal under this Article V and in connection with dissolution pursuant to Article VI, unless otherwise provided for in Article VI.

(d)(i)      The Managing General Partner may withhold and pay over to the U.S. Internal Revenue Service (or any other relevant taxing authority or withholding agent) such amounts as the Partnership is required to withhold or pay over, pursuant to the Code or any other applicable law, on account of a Partner's distributive share of the Partnership's items of gross income, income or gain.

(ii)For purposes of this Agreement, any taxes so withheld or paid over by the Partnership with respect to a Partner's distributive share of the Partnership's gross income, income or gain shall be deemed to be a distribution or payment to such Partner, reducing the amount otherwise distributable to such Partner, pursuant to this Agreement and reducing the Capital Account(s) of such Partner.  If the amount of such taxes is greater than any such distributable amounts, then such Partner and any successor to such Partner's interest shall pay the amount of such excess to the Partnership, as a contribution to the capital of the Partnership.

(iii)The Managing General Partner shall not be obligated to apply for or obtain a reduction of or exemption from withholding tax on behalf of any Partner that may be eligible for such reduction or exemption.  To the extent that a Partner claims to be entitled to a reduced rate of, or exemption from, a withholding tax pursuant to an applicable income tax treaty, or otherwise, the Partner shall furnish the Managing General Partner with such information and forms as such Partner may be required to complete where necessary to comply with any and all laws and regulations governing the obligations of withholding tax agents.  Each Partner represents and warrants that any such information and forms furnished by such Partner shall be true and accurate and agrees to indemnify the Partnership and each of the Partners from any and all damages, costs and expenses resulting from the filing of inaccurate or incomplete information or forms relating to such withholding taxes.

Sec. 5.07Effective Date of Withdrawal.  Unless otherwise specified herein, the effective date of a Partner's withdrawal with respect to any of its Capital Accounts shall mean the day immediately following:  (i) the Withdrawal Date in the case of a withdrawal pursuant to Section 5.03(a), or (ii) the date determined by the Managing General Partner if such Partner shall be required to withdraw from the Partnership pursuant to Section 5.04.  In the event the Withdrawal Date of a Partner shall be a date other than the last day of a fiscal year of the Partnership, each Capital Account of the withdrawing Partner that is subject to such withdrawal shall be adjusted pursuant to Section 3.05(b) as if the Withdrawal Date of such Partner's withdrawal were the last day of a fiscal year.

Sec. 5.08Limitations on Withdrawal of Capital Account.

(a)The right of any Partner or its legal representatives to withdraw any amount from a Capital Account and to have distributed to it any such amount (or any portion thereof) pursuant to this Article V is subject to the provision by the Managing General Partner for all Partnership liabilities in accordance with the Law and for reserves for contingencies and estimated accrued expenses and liabilities in accordance with Section 3.08, and for projected Incentive Allocations.  In addition, no withdrawal shall be permitted that would result in a Capital Account having a negative balance.  The unused portion of any reserve shall be distributed to the Partners to which the reserve applied, with interest at the prevailing savings bank rate for unrestricted deposits from time to time in effect in New York, New York, as determined by the Managing General Partner, after the Managing General Partner shall have determined that the need therefor shall have ceased.

(b)The Managing General Partnermay suspend withdrawal rights (including the right to receive withdrawal proceeds), in whole or in part:  (i) during any period when any stock exchange or over-the-counter market on which any of the Partnership's investments are quoted, traded or dealt in is closed, other than for ordinary holidays and weekends, or during periods in which dealings are restricted or suspended; (ii) during the existence of any state of affairs as a result of which, in the opinion of the Managing General Partner, disposal of part or all of the assets of the Partnership or the calculation of the net asset value would not be reasonably practicable or would be seriously prejudicial to the non-withdrawing Limited Partners; (iii) during any breakdown in the means of communication normally employed in determining the price or value of the Partnership's assets or liabilities, or of current prices in any stock market as aforesaid, or when for any other reason the prices or values of any assets or liabilities of the Partnership cannot reasonably be promptly and accurately ascertained; (iv) during any period when the transfer of funds involved in the realization or acquisition of any investments cannot, in the opinion of the Managing General Partner, be effected at normal rates of exchange; or (v) where such withdrawal would impede a pending tender offer, proxy contest, shareholder vote or other hostile action with respect to the Company.  Upon the determination by the Managing General Partnerthat any of the above-mentioned conditions no longer applies, withdrawal rights shall be promptly reinstated, and any pending withdrawal requests shall be honored as of the end of the fiscal quarter following such determination.

(c)No partial withdrawals will be permitted if such withdrawal will cause the aggregate Capital Account balances established with respect to a Limited Partner or an Indirect Investor to fall below $5 million, unless approved by the Managing General Partner in its sole discretion.

(d)The Managing General Partner, by written notice to any Limited Partner, may suspend withdrawal rights of such Limited Partner (including the right to receive withdrawal proceeds) if the Managing General Partner reasonably deems it necessary to do so to comply with anti-money laundering laws and regulations or any other legal or regulatory requirement applicable to the Partnership, the Administrative General Partner, the Management Company, the Managing General Partner, the Administrator and their respective Affiliates or any of the Partnership's other service providers.

ARTICLE VI

Duration and Dissolution of the Partnership

Sec. 6.01Duration.  The Partnership shall continue until the earliest of (i) a determination by the Managing General Partner, in its sole discretion, that the Partnership should be dissolved, (ii) the termination, bankruptcy, insolvency or dissolution of the Managing General Partner, or (iii) such time as the Managing General Partner determines that the Partnership no longer holds and no longer intends to acquire Securities.  Upon a determination to dissolve the Partnership, withdrawal requests and distributions in respect of pending withdrawals may not be made (other than pursuant to Section 5.03(d)).

Sec. 6.02Dissolution.

(a)Upon a determination to dissolve the Partnership or the occurrence of any of the events set out in Section 6.01, in accordance with this Agreement and the Law, the Managing General Partner shall, subject to applicable law, within no more than 30 days after completion of a final audit of the Partnership's financial statements (which shall be performed within 90 days of such determination or occurrence), make distributions out of the Partnership's assets, in the following manner and order:

(i)to creditors, including Partners who are creditors, to the extent otherwise permitted by law, in satisfaction of liabilities of the Partnership (whether by payment or by establishment of reserves); and

(ii)to the Partners in the proportion of their respective Capital Accounts.

(b)The Managing General Partner, in its discretion, at any time and from time to time, may designate one or more liquidators, including, without limitation, one or more members of the General Partners, who shall have full authority to wind up and liquidate the business of the Partnership and to make final distributions as provided in this Section 6.02.  The appointment of any liquidator may be revoked or a successor or additional liquidator or liquidators may be appointed at any time by an instrument in writing signed by the Managing General Partner.  Any such liquidator may receive compensation as shall be fixed, from time to time, by the Managing General Partner.

(c)In the event that the Partnership is dissolved on a date other than the last day of a fiscal year, the date of such dissolution shall be deemed to be the last day of a fiscal year for purposes of adjusting the Capital Accounts of the Partners pursuant to Section 3.05.  For purposes of distributing the assets of the Partnership upon dissolution, the Managing General Partner shall be entitled to a return, on a pari passu basis with the Limited Partners, of the amount standing to its credit in its Capital Accounts.

ARTICLE VII

Tax Returns; Reports to Partners

Sec. 7.01Independent Auditors.  The financial statements of the Partnership shall be audited by an independent certified public accountant selected by the Managing General Partner as of the end of each fiscal year of the Partnership.

Sec. 7.02Filing of Tax Returns.  The Managing General Partner or its designated agent shall prepare and file, or cause the accountants of the Partnership to prepare and file, a U.S. Federal information tax return in compliance with Section 6031 of the Code, and any required state and local income tax and information returns for each tax year of the Partnership.

Sec. 7.03Tax Matters Partner.  The Managing General Partner shall be designated on the Partnership's annual U.S. Federal information tax return, and have full powers and responsibilities, as the Tax Matters Partner of the Partnership for purposes of Section 6231(a)(7) of the Code.  Each person (for purposes of this Section 7.03, called a "Pass-Thru Partner") that holds or controls an interest as a Partner on behalf of, or for the benefit of, another person or persons, or which Pass-Thru Partner is beneficially owned (directly or indirectly) by another person or persons, shall, within 30 days following receipt from the Tax Matters Partner of any notice, demand, request for information or similar document, convey such notice or other document in writing to all holders of beneficial interests in the Partnership holding such interests through such Pass-Thru Partner.  In the event the Partnership shall be the subject of an income tax audit by any U.S. Federal, state or local authority, to the extent the Partnership is treated as an entity for purposes of such audit, including administrative settlement and judicial review, the Tax Matters Partner shall be authorized to act for, and its decision shall be final and binding upon, the Partnership and each Partner thereof.  All expenses incurred in connection with any such audit, investigation, settlement or review shall be borne by the Partnership.

Sec. 7.04Reports to Current Partners.  Within 90 days after the end of each audit date, or as soon thereafter as is reasonably possible, the Partnership shall cause its auditor to prepare and mail to each Partner, together with the report thereon of the accountants selected by the Managing General Partner, an audited financial report (which need not include the list of the Partnership's investments that may be required by generally accepted accounting principles) setting forth:

(a)a balance sheet of the Partnership as of the end of such fiscal year;

(b)a statement showing the Net Capital Appreciation or Net Capital Depreciation, as the case may be, for such year;

(c)such Partner's Capital Account as of the end of such year; and

(d)such Partner's Capital Account and Partnership Percentage for the then current Accounting Period.

The Partnership will also provide periodic unaudited performance information, no less frequently than quarterly, to the Limited Partners.

Sec. 7.05Reports to Partners and Former Partners.  Within 90 days of the end of each fiscal year, or as soon thereafter as is reasonably possible, the Partnership shall prepare and mail, or cause its accountants to prepare and mail, to each Partner and, to the extent necessary, to each former Partner (or its legal representatives), a report setting forth in sufficient detail such information as shall enable such Partner or former Partner (or such Partner's or former Partner's legal representatives) to prepare its U.S. Federal income tax return, if applicable, in accordance with the laws, rules and regulations then prevailing.

Sec. 7.06Partner Tax Basis.  Upon request of the Managing General Partner, each Partner agrees to provide to the Managing General Partner information regarding its adjusted tax basis in its Partnership interest along with documentation substantiating such amount.

ARTICLE VIII

Investor Committee

Sec. 8.01Investor Committee.

(a)The Managing General Partner may appoint (and may periodically reconstitute) an investor committee (the "Investor Committee") consisting of at least three individuals representing Indirect Investors in the Intermediate Fund and in the Feeder Fund that are not Affiliated Investors and wish to serve as members.

(b)The Investor Committee shall provide such advice and counsel (if any) as may be requested by the Managing General Partner in connection with, among other things, the Funds' investments and potential conflicts of interest.  Majority approval of the Investor Committee with respect to any investment or transaction for which the Managing General Partner has sought such approval will be binding on all Limited Partners and no Limited Partner shall have any claim in respect of any investment or transaction approved by the Investor Committee, including, but not limited to breach by the Managing General Partner of its fiduciary duties or breach of this Agreement.  An appointment to the Investor Committee is not transferable without the consent of the Managing General Partner, which consent may be given or withheld in its sole discretion.

(c)Meetings of the Investor Committee shall be held upon the request of the Managing General Partner.  No fees shall be paid by the Partnership to members of the Investor Committee; however, reasonable expenses incurred in attending meetings of the Investor Committee will be reimbursed by the Partnership.

ARTICLE IX

Miscellaneous

Sec. 9.01General.  This Agreement:  (i) shall be binding on the executors, administrators, estates, heirs, and legal successors and representatives of the Partners; and (ii) may be executed, through the use of separate signature pages or supplemental agreements, in any number of counterparts with the same effect as if the parties executing such counterparts had all executed one counterpart; provided, however, that each such counterpart shall have been executed by the Managing General Partner.

Sec. 9.02Power of Attorney.  Each of the Partners hereby appoints the Managing General Partner as its true and lawful representative and attorney-in-fact, in its name, place and stead to make, execute, sign, acknowledge, swear to and file:

(a)a Certificate of Limited Partnership of the Partnership and any amendments thereto as may be required under the Law;

(b)any duly adopted amendment to this Agreement;

(c)any and all instruments, certificates and other documents that may be deemed necessary or desirable to effect the dissolution and winding-up of the Partnership (including, but not limited to, a Certificate of Cancellation of the Certificate of Limited Partnership); and

(d)any business certificate, fictitious name certificate, amendment thereto or other instrument or document of any kind necessary or desirable to accomplish the business, purpose and objectives of the Partnership, or required by any applicable U.S. Federal, state or local law.

The power of attorney granted hereby is intended to secure an interest in property and, in addition, the obligations of each relevant Limited Partner under this Agreement, and shall be irrevocable and shall survive, and shall not be affected by, the subsequent death, disability, incapacity, adjudication of incompetency, termination, bankruptcy, insolvency or dissolution of such Limited Partner; provided, however, that such power of attorney will terminate upon the substitution of another limited partner for all of such Limited Partner's interest in the Partnership or upon the complete withdrawal of such Limited Partner from participation in the Partnership.

Sec. 9.03Amendments to Partnership Agreement.  The terms and provisions of this Agreement may be modified or amended and/or the Partnership may be restructured at any time and from time to time with the written consent of Limited Partners having in excess of 50% of the Partnership Percentages of the Limited Partners and the affirmative vote of the Managing General Partner, insofar as is consistent with the laws governing this Agreement; provided, however, that without the consent of the Limited Partners, the Managing General Partner may amend this Agreement to:  (i) reflect changes validly made in the membership of the Partnership and the Capital Contributions and Partnership Percentages of the Partners; (ii) change the provisions relating to the Incentive Allocation as provided in, and subject to the provisions of, Section 3.06; (iii) reflect a change in the name of the Partnership; (iv) make a change that is necessary or, in the opinion of the Managing General Partner, advisable to qualify the Partnership as a limited partnership or a partnership in which the Limited Partners have limited liability under the laws of any U.S. or non-U.S. jurisdiction, or ensure that the Partnership will not be treated as an association taxable as a corporation or as a publicly traded partnership taxable as a corporation for U.S. Federal tax purposes; (v)  make a change that does not adversely affect the Limited Partners in any material respect; (vi) make a change that is necessary or desirable to cure any ambiguity, to correct or supplement any provision in this Agreement that would be inconsistent with any other provision in this Agreement, or to make any other provision with respect to matters or questions arising under this Agreement that will not be inconsistent with the provisions of this Agreement, in each case so long as such change does not adversely affect the Limited Partners in any material respect; (vii) make a change that is necessary or desirable to satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, statute, ruling or regulation of any U.S. Federal, state or non-U.S. governmental entity, so long as such change is made in a manner that minimizes any adverse effect on the Limited Partners; (viii) make a change that is required or contemplated by this Agreement; (ix) make a change in any provision of this Agreement that requires any action to be taken by or on behalf of the General Partners or the Partnership pursuant to applicable Cayman Islands law if the provisions of applicable Cayman law are amended, modified or revoked so that the taking of such action is no longer required; (x) prevent the Partnership from in any manner being deemed an "Investment Company" subject to the provisions of the U.S. Investment Company Act of 1940, as amended (the "1940 Act"); (xi) change the legal structure of the Partnership (for example, from a partnership to a limited liability company or exempted company); or (xii) make any other amendments and/or restructurings similar to the foregoing.  Each Partner, however, must approve of any amendment that would (a) reduce its Capital Account or rights of contribution or withdrawal; or (b) amend the provisions of this Agreement relating to amendments.

Sec. 9.04Non-Voting Interests of Registered Fund Limited Partners.  A Limited Partner interest owned by an investment fund registered as an investment company under the 1940 Act (a "Registered Fund Limited Partner"), or by an Affiliate of a Registered Fund Limited Partner, or by a person controlling, controlled by or under common control with a Registered Fund Limited Partner, shall be a Non-Voting Interest; provided,however, that such Non-Voting Interest shall be permitted to vote on matters with respect to which voting rights are not considered to be "voting securities" as defined under Section 2(a)(42) of the 1940 Act.

Except as provided in this Section 9.04, an interest held by a Registered Fund Limited Partner as a Non-Voting Interest shall be identical in all regards to all other interests held by Limited Partners.

Sec. 9.05Choice of Law.  Notwithstanding the place where this Agreement may be executed by any of the parties hereto, the parties expressly agree that all of the terms and provisions hereof shall be construed under the laws of the Cayman Islands applicable to contracts made and to be entirely performed in such state and, without limitation thereof, that the Law as now adopted or as may be hereafter amended shall govern the partnership aspects of this Agreement.

Sec. 9.06Consent to Jurisdiction.  To the fullest extent permitted by law, in the event of any dispute arising out of the terms and conditions of this Agreement, the parties hereto consent and submit to the jurisdiction of the courts of the State of New York in the county of New York and of the U.S. District Court for the Southern District of New York.

Sec. 9.07Tax Elections.  The Managing General Partner may, in its sole discretion, cause the Partnership to make or revoke any tax election that the Managing General Partner deems appropriate, including without limitation an election pursuant to Section 754 of the Code and an election to cause the Partnership to be classified as a partnership for U.S. Federal tax purposes.

Sec. 9.08No Third Party Rights.  Except for the provisions of Sections 2.05 and 2.06, the provisions of this Agreement, including, without limitation, the provisions of Section 1.04 and Section 5.03, are not intended to be for the benefit of any creditor or other person (other than the Partners in their capacities as such) to whom any debts, liabilities or obligations are owed by (or who otherwise have a claim against or dealings with) the Partnership or any Partner, and no such creditor or other person shall obtain any rights under any of such provisions (whether as a third party beneficiary or otherwise) or shall by reason of any such provisions make any claim in respect to any debt, liability or obligation (or otherwise) including any debt, liability or obligation pursuant to Section 1.04, against the Partnership or any Partner.  Any amendment, modification or repeal of Sections 2.05 and 2.06 shall not adversely affect any right or protection of any person in respect of any act or omission occurring prior to the time of such amendment, modification or repeal.

Sec. 9.09Confidentiality.  (a)  In connection with the organization of the Partnership and its ongoing business, the Limited Partners (and the Indirect Investors) will receive or have access to confidential proprietary information concerning the Partnership, including, without limitation, portfolio positions, valuations, information regarding potential investments, financial information, trade secrets and the like (the "Confidential Information"), which is proprietary in nature and non-public.  Other than Affiliated Investors, no Partner, nor any Affiliate of any Partner, shall disclose or cause to be disclosed any Confidential Information to any person nor use any Confidential Information for its own purposes or its own account, except in connection with its investment in the Partnership and except as otherwise required by any regulatory authority, law or regulation, or by legal process.  Notwithstanding anything herein to the contrary, each Partner (and each employee, representative or other agent of such Partner) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of (i) the Partnership and (ii) any of its transactions, and all materials of any kind (including opinions or other tax analyses) that are provided to the Partner relating to such tax treatment and tax structure, it being understood that "tax treatment" and "tax structure" do not include the name or other identifying information of the Partnership or a transaction.

(b)The Managing General Partner or its Affiliates shall be the only party to communicate with the Company or to make any public statements, public disclosures or any other third party communications on behalf of the Partnership relating to the Company, the Securities, this Agreement or the activities of the Managing General Partner and its Affiliates pursuant to this Agreement, including the making of any proposals regarding corporate transactions involving the Company or the Securities.

Sec. 9.10Notices.  Each notice relating to this Agreement shall be in writing and delivered in person, by registered or certified mail, by Federal Express or similar overnight courier service or by telecopy.  All notices to the Partnership shall be addressed to its principal office and place of business.  All notices addressed to a Partner shall be addressed to such Partner at the address set forth on the books and records of the Partnership.  Any Partner may designate a new address by written notice to that effect given to the Partnership.  Unless otherwise specifically provided in this Agreement, a notice shall be deemed to have been effectively given when delivered personally, if delivered on a Business Day; the next Business Day after personal delivery if delivered personally on a day that is not a Business Day; four Business Days after being deposited in the United States mail, postage prepaid, return receipt requested, if mailed; on the next Business Day after being deposited for next day delivery with Federal Express or similar overnight courier; when receipt is acknowledged, if telecopied on a Business Day; and the next Business Day following the day on which receipt is acknowledged if telecopied on a day that is not a Business Day.

Sec. 9.11Goodwill.  No value shall be placed on the name or goodwill of the Partnership, which shall belong exclusively to the Managing General Partner.

Sec. 9.12Headings.  The titles of the Articles and the headings of the Sections of this Agreement are for convenience of reference only, and are not to be considered in construing the terms and provisions of this Agreement.

Sec. 9.13Pronouns.  All pronouns shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons, firm or corporation may require in the context thereof.

IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the date first set forth above.

GENERAL PARTNERS:

TRIAN PARTNERS GP, L.P.                                                                 TRIAN PARTNERS CAYMAN, LTD.

By:   Trian Partners General Partner, LLC

         its general partner                                                                           By:  /s/EDWARD P. GARDEN

        Name:  Edward P. Garden

        Title:    Director

By:  /s/EDWARD P. GARDEN

Name:  Edward P. Garden

Title:    Member

LIMITED PARTNER:

Executed as a Deed by

TRIAN SPV V, L.P.

By:  Trian Partners GP, L.P.

        its general partner

By:  Trian Partners General Partner, LLC

         its general partner

By:  /s/EDWARD P. GARDEN

        Name:  Edward P. Garden

        Title:    Member

In the presence of:  /s/JANE A. SINGLETARY

                                            Witness

INITIAL LIMITED PARTNER:

Solely to reflect the withdrawal of the Initial Limited

Partner pursuant to Section 5.01

David Marshall

By:  /s/DAVID MARSHALL

-  -

EX-4

Exhibit 4

TRIAN FUND MANAGEMENT, L.P.

280 Park Avenue

New York, NY 11050

                                                                                                                                            & #160;                                                  As of October 27, 2009

Mr. Nelson Peltz

280 Park Avenue

New York, New York 10017

Dear Nelson:

           In connection with the investment in Legg Mason, Inc. (“LM”) by funds managed by Trian Fund Management, L.P. (“Trian”), you were nominated by the Board of Directors of LM (the “Board”) to serve on the Board.

           We understand that, consistent with its practices, LM will be awarding to you, as a director of LM, equity compensation in the form of (i) shares of common stock (such equity compensation, “Shares”) or (ii) restricted stock units (such equity compensation, “RSUs”), and will be paying to you, in cash, retainer and meeting attendance fees, and, if you so elect, cash in addition to the grant of Shares referred to above (collectively, “Fees”).  This is to confirm our prior understanding that you are authorized to accept such Shares or RSUs and Fees in your individual capacity on behalf of Trian upon the terms and conditions of this letter, including your agreement that, as long as you are an officer of Trian and for a period of 90 days thereafter, you will follow the direction of Trian with respect to (x) the Transfer (as defined below) of any such Shares or RSUs and (y) the Transfer of any shares of common stock of LM that you receive in respect of the RSUs (“RSU Shares”).  You further agree that (i) you will request that LM deliver all Fees directly to an account designated by Trian and (ii) you will not dispose of, transfer, sell, assign, pledge, hypothecate or encumber (collectively, “Transfer”) any Shares, RSUs or RSU Shares without Trian’s prior written consent, which may be withheld in Trian's sole discretion.  Upon any Transfer of all or a portion of the or Shares, RSUs or RSU Shares, Trian shall be entitled to receive the consideration received as a result of such Transfer (the “Equity Consideration”).

           Trian agrees to indemnify you against any tax imposed on income to you, net of any corresponding deduction to which you are entitled as a result of the transfer of the Fees and Equity Consideration to Trian.  Such indemnification shall include all taxes imposed on a tax indemnification payment and shall apply to income reported by either LM or Trian.  For purposes of this letter agreement, taxes shall include any penalties, interest or additions to tax imposed upon you with respect to taxes.

           This letter agreement shall be governed by, and construed in accordance with, the laws of the State of New York, applicable to agreements made and to be performed entirely within such State.

           This letter shall be binding upon the parties hereto and their respective successors, assigns, heirs and estates.

           If the above is acceptable to you, please indicate your agreement by signing the enclosed duplicate copy of this letter agreement in the space indicated below.

                                                                        Very truly yours,

                                                                        TRIAN FUND MANAGEMENT, L.P.

                                                                        By:  Trian Fund Management GP, LLC,

                                                                                 its general partner

                                                                        By:    /s/EDWARD P. GARDEN

                                                                                  Name:  Edward P. Garden

                                                                                  Title:    Member

Agreed to and Accepted:

/s/NELSON PELTZ

Nelson Peltz