Microsoft Corp. and Intel Corp. would become major shareholders of the Nasdaq Stock Market under a proposal that will be considered next week by the board of the National Association of Securities Dealers Inc., Nasdaq's parent company.

NASD is planning to spin off Nasdaq to form a privately held, for-profit corporation. NASD plans to sell shares to members, proportional to the amount of business they bring to Nasdaq.

In addition, NASD plans to offer shares to nine major companies whose stocks trade on Nasdaq--firms such as Microsoft, Intel, Cisco Systems Inc. and Dell Computer Corp. These firms could buy up to 21 percent of the shares of Nasdaq, which has been valued at about $1 billion.

"Some of the market makers are troubled by this. They want to know what these companies have done to deserve this," said one securities lawyer.

An executive at one major securities firm agreed that generally when a membership company does a private placement, shares are first offered to members. But he said most NASD members understood the importance of having companies such as Microsoft as major shareholders.

Microsoft, one of the most heavily traded stocks, has brought an enormous amount of business to Nasdaq. Indeed, the rival New York Stock Exchange has tried and failed to persuade Microsoft to leave Nasdaq--and Microsoft's decision to remain has raised the prestige and brand name of the smaller Nasdaq.

Both Nasdaq and NYSE are run by membership organizations. That has made decision-making extremely slow. To reform the process and avoid the tedious membership votes, the two stock markets are trying to convert to for-profit status. The NYSE had planned to go public this fall but backed away from the effort after internal dissent.

NASD plans to offer Nasdaq shares privately this winter. After the private placement is completed, the new board will decide whether to offer shares to the public.

In recent weeks, NASD officials have been traveling around the country to meet with many of NASD's 5,500 members to sell them on the plan, which the NASD board could vote on at its board meeting next Thursday.

Under the proposal, 43 percent of the shares would be offered to major market participants, probably the 100 largest players, with the biggest chunk going to the 10 most active players.

An additional 28 percent would be issued to all members. Alan Davidson, president of Zeus Securities and the Independent Broker Dealers Association, which has 224 members, said the smaller firms his association represents are not happy with process. They fear that the new structure would give the large Wall Street companies too much power.

Davidson's group recently met for dinner to discuss the private placement. The mood, he said, was angry. He said smaller firms are particularly upset that the initial sale will not be put forward for a membership vote.

NASD is planning to issue the shares in two steps. During the first round, which requires only a board vote, as much as 49 percent of the shares could be issued. Sometime later, NASD would issue the remaining shares, which would require a full membership vote. Davidson has asked the NASD board to allow members to vote on both actions.

Staff writer Ianthe Jeanne Dugan in New York contributed to this article.

CAPTION: NASD, the parent company of the Nasdaq, is headquartered at 1735 K St. NW. NASD's board will vote next week on a for-profit plan.