<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
JEFFERIES GROUP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------
(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
JEFFERIES GROUP, INC.
11100 SANTA MONICA BOULEVARD
LOS ANGELES, CALIFORNIA 90025
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
THURSDAY, MAY 4, 1995
------------------------
To the Shareholders of Jefferies Group, Inc.:
The Annual Meeting of Shareholders of Jefferies Group, Inc. will be held at
The Sports Club LA, located at 1835 S. Sepulveda Boulevard, Los Angeles,
California 90025, on Thursday, May 4, 1995, at 1:30 p.m., local time, to
consider and act upon:
1. Election of seven Directors to serve until the next Annual Meeting
and until their successors have been duly elected and qualified.
2. Any other business which may properly come before the meeting or
any adjournment thereof.
Shareholders of record at the close of business on March 31, 1995, are
entitled to notice of and to vote at the meeting or any adjournment thereof. A
list of such shareholders will be open to examination by any shareholder at the
Annual Meeting and for a period of ten days prior to the meeting during ordinary
business hours at the offices of the Company located at 11100 Santa Monica
Boulevard, Twelfth Floor, Los Angeles, California 90025.
You are cordially invited to attend the Annual Meeting. If you do not
expect to attend, we urge you to return your proxy promptly in the enclosed
envelope. The return of the proxy does not affect your right to vote in person
should you decide to attend the meeting.
For the Board of Directors,
Jerry M. Gluck, Secretary
April 3, 1995
<PAGE> 3
JEFFERIES GROUP, INC.
11100 SANTA MONICA BOULEVARD
LOS ANGELES, CALIFORNIA 90025
April 3, 1995
PROXY STATEMENT
The proxy of each shareholder of Jefferies Group, Inc. (the "Company") is
being solicited by the Board of Directors of the Company for use at the Annual
Meeting of Shareholders to be held at The Sports Club LA, located at 1835 S.
Sepulveda Boulevard, Los Angeles, California 90025, on Thursday, May 4, 1995, at
1:30 p.m., local time, and at any adjournment thereof. All shareholders of
record at the close of business on March 31, 1995, are entitled to notice of and
to vote at the meeting. The notice of Annual Meeting, Proxy Statement, and form
of proxy are being mailed to shareholders on or about April 5, 1995.
The enclosed form of proxy is for use by the Board of Directors at the
meeting and any adjournment thereof. Any shareholder who signs and returns the
proxy may revoke it at any time before it has been voted by (i) delivering
written notice of its revocation to the Secretary of the Company, (ii)
delivering to the Secretary of the Company a duly executed proxy bearing a later
date, or (iii) attending the meeting and voting in person.
In the absence of contrary direction, all shares represented by valid
proxies received pursuant to this solicitation will be voted (i) for the
election of the seven nominees for Director whose names are listed herein, and
(ii) as to other matters which may properly come before the meeting, in
accordance with the best judgment of the proxy holders named in the accompanying
proxy.
Each nominee has consented to being a nominee and, if elected, intends to
serve as a Director. In the event that any nominee shall be unable to serve as a
Director (which is not now anticipated), proxies will be voted for substitute
nominees recommended by the Board of Directors of the Company.
All costs of solicitation of proxies will be borne by the Company. Although
there are no formal agreements to do so, the Company will reimburse banks,
brokerage firms and other custodians, nominees and fiduciaries for reasonable
expenses incurred by them in sending proxy materials and annual reports to the
beneficial owners of the Company's Common Stock. In addition to solicitation by
mail, proxies may be solicited in person, or by telephone, telegraph or
facsimile transmission, by Directors and Officers of the Company, who will not
receive special compensation for such solicitations.
The outstanding voting securities of the Company consisted of 5,482,954
shares of Common Stock, par value of $.01 per share, on March 31, 1995, which is
the record date for determining shareholders entitled to notice of and to vote
at the meeting. Each share is entitled to one non-cumulative vote for each
Director to be elected and one vote on each separate matter of business properly
brought before the meeting.
The election of Directors will be determined by a plurality of the votes of
the shares present in person or represented by proxy and entitled to vote at the
meeting, while approval of other items at the meeting will require the
affirmative vote of holders of a majority of the shares present in person or
represented by proxy and entitled to vote on such items at the meeting.
Accordingly, in the case of shares that are present or represented at the
meeting for quorum purposes, not voting such shares for a particular nominee for
Director, including by withholding authority on the proxy, will not operate to
prevent the election of such nominee if he otherwise receives affirmative votes;
an abstention on any other item will operate to prevent approval of the item to
the same extent as a vote against approval of such item; and a broker "non-vote"
on any other item (which results when a broker holding shares for a beneficial
owner has not received timely voting instructions on certain matters from such
beneficial owner) will have no effect on the outcome of the vote on such item.
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<PAGE> 4
The votes of each shareholder will be held in confidence and not disclosed
to the Company or its Directors, Officers and employees except (i) as necessary
to meet applicable legal requirements and to assert or defend claims for or
against the Company; (ii) in case of a contested proxy solicitation; (iii) in
the event that a shareholder makes a written comment on the proxy card or
otherwise communicates his/her vote to management; or (iv) to allow the
independent inspector of election to certify the results of the vote. The
Company has retained First Chicago Trust Company of New York, its transfer
agent, as an independent inspector of election to receive and tabulate the
proxies, to certify the results, and to perform any other acts required by the
Delaware General Corporation Law.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock (i) by each Director, each other
Executive Officer named in the Summary Compensation Table appearing under the
caption "EXECUTIVE COMPENSATION," and all Directors and Executive Officers as a
group, and (ii) for each person, other than Mr. Baxter (who is listed under
Directors), known by the Company to own beneficially more than 5% of such
outstanding Common Stock. The information set forth below is as of February 28,
1995, except that the number of shares reported for the beneficial owners of
more than 5% of the outstanding Common Stock (other than Mr. Baxter) is as of
December 31, 1994, or such other date as indicated in the footnotes, based upon
information contained in Schedules 13D and 13G filed with the Securities and
Exchange Commission ("SEC") and furnished to the Company by such owners:
<TABLE>
<CAPTION>
NUMBER OF
DIRECTORS SHARES(1)(2)(3)(4)(5) PERCENT
--------- --------------------- -------
<S> <C> <C>
Frank E. Baxter................................... 436,218(6)(7) 7.75%
Richard G. Dooley................................. 12,000 0.22
Tracy G. Herrick.................................. 9,262 0.17
Michael L. Klowden................................ 7,000 0.13
Frank J. Macchiarola.............................. 9,000 0.16
Barry M. Taylor................................... 188,039 3.36
Mark A. Wolfson................................... 8,000(8) 0.14
OTHER NAMED EXECUTIVE OFFICERS
------------------------------
Louis V. Bellucci, Sr............................. 84,686 1.52
Raymond L. Killian, Jr............................ 195,321(9) 3.49
Richard B. Handler................................ 92,740 1.67
All Directors and Executive Officers
as a Group (18 persons)......................... 1,377,899 23.42
</TABLE>
<TABLE>
<CAPTION>
5% SHAREHOLDERS NUMBER OF SHARES(1) PERCENT
--------------- ------------------- -------
<S> <C> <C>
Jefferies Group, Inc.
Employee Stock Ownership Plan................... 685,870(6)(7) 12.34%
Tweedy, Browne Company L.P. ...................... 662,159(10) 11.91
Ronald R. Mostero................................. 374,067(11) 6.73
</TABLE>
- ---------------
(1) Unless otherwise indicated in a footnote and subject to applicable
community property and similar statutes, each person listed as the
beneficial owner of the shares possesses sole voting and dispositive power
with respect to such shares.
(2) Includes shares subject to options exercisable within sixty days of
February 28, 1995, by the following: Mr. Baxter: 71,250 shares; Mr. Dooley:
6,000 shares; Mr. Herrick: 1,000 shares; Mr. Klowden: 1,000 shares; Mr.
Macchiarola: 6,000 shares; Mr. Taylor: 34,500 shares; Mr. Wolfson: 1,000
shares; Mr. Bellucci: 15,000 shares; Mr. Killian: 41,094 shares; Mr.
Handler: -0- shares; and all Directors and Executive Officers as a group:
325,948 shares.
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<PAGE> 5
(3) Includes shares allocated to the accounts of the following persons under
the Jefferies Group, Inc. Capital Accumulation Plan for Key Employees (the
"CAP"): Mr. Baxter: 7,094 shares; Mr. Taylor: 3,510 shares; Mr. Bellucci:
6,199 shares; Mr. Killian: 5,477 shares; Mr. Handler: 7,625 shares; and all
Directors and Executive Officers as a group: 47,055 shares. Participants in
the CAP have no voting power and are subject to certain restrictions on
disposition.
(4) Includes shares held by the Jefferies Group, Inc. Employees' Profit Sharing
Plan allocated to the accounts of the following persons as of November 30,
1994: Mr. Baxter: 35,462 shares; Mr. Taylor: 208 shares; Mr. Bellucci: 208
shares; Mr. Killian: 7,430 shares; Mr. Handler: -0- shares; and all
Directors and Executive Officers as a group: 44,072 shares.
(5) Includes shares held pursuant to the Jefferies Group, Inc. Employee Stock
Ownership Plan (the "ESOP") allocated to the accounts of the following
persons as of November 30, 1994: Mr. Baxter: 8,703 shares; Mr. Taylor:
6,380 shares; Mr. Bellucci: 8,703 shares; Mr. Killian: 8,703 shares; Mr.
Handler: 2,614 shares; and all Directors and Executive Officers as a group:
67,858 shares. These individuals have sole voting power and may be deemed
to share dispositive power over shares held by the ESOP. (See also Footnote
(7) below.)
(6) The business address of the person listed is 11100 Santa Monica Boulevard,
Tenth Floor, Los Angeles, California 90025.
(7) The terms of the ESOP provide for the voting rights associated with the
shares held by the ESOP to be passed through and exercised exclusively by
the participants in the ESOP to the extent that such securities are
allocated to a participant's account. As of November 30, 1992, all shares
were allocated to the accounts of ESOP participants. Those shares allocated
to the accounts of Directors and Executive Officers are discussed in
Footnote (5) above. The ESOP and the Trustee of the ESOP (First Interstate
Bank of California) may be deemed to have shared dispositive power over the
shares held by the ESOP. The Board of Directors of the Company appoints the
members of the committee which serves as the Plan Administrator of the
ESOP. Messrs. Frank E. Baxter, a Director of the Company, Alan D. Browning,
an Executive Vice President of the Company, and Melvin W. Locke, Jr.,
Director of Human Resources of the Company, presently serve on the
committee. These individuals each disclaim beneficial ownership of the
shares held by the ESOP except that each such individual does not disclaim
beneficial ownership of those shares in which he has beneficial ownership
as a participant in the ESOP.
(8) Mr. Wolfson also owns 5,000 shares (less than 1%) of the Common Stock of
Investment Technology Group, Inc. ("ITGI"), a subsidiary which is 80.8%
owned by the Company.
(9) Includes 1,230 shares held by Mr. Killian's wife, as to which Mr. Killian
disclaims beneficial ownership. In addition, Mr. Killian owns 5,000 shares
(less than 1%) of the Common Stock of ITGI.
(10) Tweedy, Browne Company L.P., a Delaware limited partnership ("TBC"),
together with TBK Partners, L.P., a Delaware limited partnership ("TBK"),
and Vanderbilt Partners L.P., a Delaware limited partnership
("Vanderbilt"), filed a combined statement on Schedule 13D dated and
reporting beneficial ownership at January 18, 1994. TBC reported beneficial
ownership of 578,688 shares, with sole voting power over 506,056 shares and
shared dispositive power over all 578,688 shares. TBK reported beneficial
ownership of 56,510 shares over which it has sole voting and dispositive
power. Vanderbilt reported beneficial ownership of 26,961 shares over which
it has sole voting and dispositive power. The aggregate number of shares
with respect to which TBC, TBK and Vanderbilt could be deemed to be the
beneficial owner is 662,159 shares. The four general partners in Vanderbilt
(Christopher H. Browne, William H. Browne, James M. Clark, Jr., and John D.
Spears) are the four general partners of TBC and are also four of the five
general partners of TBK (Thomas P. Knapp is also a general partner of TBK,
but is not a general partner of TBC or Vanderbilt). The general partners in
each of TBC, TBK and Vanderbilt, as the case may be, solely by reason of
their positions as such, may be deemed to have shared power to vote and
dispose of the shares held by TBC, TBK and Vanderbilt, respectively. The
business address for TBC, TBK, Vanderbilt and each of their general
partners is 52 Vanderbilt Avenue, New York, New York 10017.
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<PAGE> 6
(11) The address of the person listed is 505 Chiswick Road, Palos Verdes,
California 90274. Includes 1,087 shares held by Mr. Mostero's wife as to
which Mr. Mostero disclaims beneficial ownership.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's Directors and Executive Officers, and persons who beneficially own
more than 10% of the Company's outstanding Common Stock, to file with the SEC
initial reports of beneficial ownership and reports of changes in beneficial
ownership of Common Stock and other equity securities of the Company on Forms 3,
4 and 5. Directors, Executive Officers, and greater-than-10% shareholders are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file. With respect to 1994, the Form 5 required to be filed by
Louis V. Bellucci, Sr. was timely filed; however, it omitted one transaction
which should have been reported. An amended Form 5, which reported the omitted
transaction, was filed by Mr. Bellucci approximately three months late. During
1995, the Form 3 required to be filed by Clarence T. Schmitz upon his
appointment as an Executive Officer of the Company was filed approximately six
weeks late.
ELECTION OF DIRECTORS
Under the Company's By-Laws, the Board of Directors is authorized to
determine the number of Directors of the Company, which may not be less than
five nor more than twelve Directors. The number of authorized Directors to be
elected at the Annual Meeting has been fixed at seven. Such Directors will be
elected to serve until the next Annual Meeting and until their successors shall
be elected and qualify.
All of the nominees for election as a Director are present members of the
Board of Directors, and were elected to their positions by a vote of
shareholders at the 1994 Annual Meeting.
INFORMATION CONCERNING NOMINEES FOR DIRECTOR AND EXECUTIVE OFFICERS
NOMINEES
The following information is submitted concerning the nominees for election
as Directors:
FRANK E. BAXTER, 58, a nominee, has been Chairman of the Board since
September 26, 1990, Chief Executive Officer since March 19, 1987, President
since January 1986, and a Director of the Company and of Jefferies & Company,
Inc. ("Jefferies"), the Company's wholly owned subsidiary, since 1975. Mr.
Baxter has previously served as Executive Vice President, National Sales Manager
and New York Branch Manager of Jefferies, and Managing Director of the Company's
U.K. subsidiary. Mr. Baxter has been a Director of ITGI since March 1994, and a
Director of ITG Inc. ("ITG"), ITGI's wholly owned broker-dealer subsidiary,
since January 1994.
RICHARD G. DOOLEY, 65, a nominee, has been a Director of the Company since
November 1993. From 1978 until his retirement in June 1993, Mr. Dooley was
Executive Vice President and Chief Investment Officer of Massachusetts Mutual
Life Insurance Company ("Mass Mutual"); Mr. Dooley is currently a consultant to
Mass Mutual. Mr. Dooley is also a director of Advest Group, Inc. (since 1983),
Hartford Steam Boiler Inspection and Insurance Company (since 1984), Kimco
Realty Corporation (since 1990), and various Mass Mutual sponsored investment
companies. Mr. Dooley is also a trustee of Saint Anselm College and Chairman of
the Board of The New England Education Loan Marketing Corporation. Mr. Dooley is
a member of the Company's Audit and Compensation Committees.
TRACY G. HERRICK, 61, a nominee, has been a Director of the Company since
1983 and of Jefferies since 1981. He is also President of Tracy G. Herrick,
Inc., an economic consulting firm, and a Director of Anderson Capital
Management, a registered investment adviser, and of The Committee for Monetary
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<PAGE> 7
Research and Education. Mr. Herrick is Chairman of the Company's Audit Committee
and a member of the Compensation Committee.
MICHAEL L. KLOWDEN, 50, a nominee, has been a Director of the Company since
May 1987. He has been, for more than the past five years, a senior partner of
Morgan, Lewis & Bockius, a law firm which has rendered legal services to the
Company. Mr. Klowden is a member of the Company's Audit and Compensation
Committees.
FRANK J. MACCHIAROLA, 54, a nominee, has been a Director of the Company
since August 1991. He is currently a Professor of Law and Political Science and
the Dean of the Benjamin N. Cardozo School of Law at Yeshiva University in New
York City (1991-present). Previously, he was a Professor of Business in the
Graduate School of Business at Columbia University (1987-1991), and President
and Chief Executive Officer of the New York City Partnership, Inc. (1983-1987).
Prior to 1985, he was a faculty member at the City University of New York and
Chancellor of the New York City Public School System. Mr. Macchiarola is
Chairman of the Company's Compensation Committee and a member of the Audit
Committee.
BARRY M. TAYLOR, 54, a nominee, has been an Executive Vice President and
Director of the Company since 1983 and a Director of Jefferies since 1981. Mr.
Taylor has been a sales executive of Jefferies since 1974 and was Los Angeles
Branch Manager from February 1983 through June 1984.
MARK A. WOLFSON, 42, a nominee, has been a Director of the Company since
July 1991. Mr. Wolfson is the Dean Witter Professor at the Graduate School of
Business, Stanford University, where he has been a faculty member since 1977.
From 1990 through 1993, Mr. Wolfson served as Associate Dean at the Graduate
School of Business, Stanford University. He has taught at the University of
Chicago (1981-1982) and Harvard University (1988-1989). He was a Visiting
Scholar at M.I.T.'s Sloan School of Management (1988-1989) and at the Hoover
Institute, Stanford University (1993-1994), Director of the Academy of Financial
Services (1989-1991), and Vice President of the American Accounting Association
(1990-1992). Mr. Wolfson has been a Research Associate at the National Bureau of
Economic Research since 1988, a member of the Steering Committee of the Center
for Economic Policy Research at Stanford University since 1991, a director of
New American Holdings, Inc. since 1992, and a Director of ITGI since June 1994,
and is Chairman of ITGI's Compensation Committee. Mr. Wolfson is a member of the
Company's Audit and Compensation Committees.
OTHER EXECUTIVE OFFICERS
The Executive Officers of the Company are appointed by the Board of
Directors and serve at the discretion of the Board. Other than Messrs. Baxter
and Taylor, for whom information is provided above, the following sets forth
information as to the Executive Officers:
CHRISTOPHER W. ALLICK, 41, has been a Director, Executive Vice President
and Managing Director of Jefferies since May 1993. Mr. Allick has been the
Director of Structured Finance of Jefferies since April 1990. From April 1990
through April 1993, Mr. Allick was a Senior Vice President of Jefferies. Prior
to April 1990, Mr. Allick was a First Vice President of Drexel Burnham Lambert
Inc., a registered securities broker-dealer.
LOUIS V. BELLUCCI, SR., 58, has been National Equity Sales Manager of
Jefferies since January 1991 and Executive Vice President, New York Regional
Sales Manager and a Director of Jefferies since 1985. Prior to 1985, Mr.
Bellucci was Co-Manager of Jefferies' New York branch office.
ALAN D. BROWNING, 54, was a Director of the Company from May 1985 to May
1992, and has been an Executive Vice President of the Company since 1986, and a
Director and Executive Vice President of Jefferies since March 1984. From 1986
until 1994, Mr. Browning was the Chief Financial Officer and Chief
Administrative Officer of the Company, and from March 1984 until 1994, Mr.
Browning was the Chief Administrative Officer of Jefferies.
5
<PAGE> 8
DAVID F. EISNER, 37, has been an Executive Vice President of the Company
and Executive Vice President and a Director of Jefferies since August 1992.
Prior to August 1992, Mr. Eisner was Chairman of Madison Capital Advisors, Inc.,
a consulting and financial advisory firm (April 1992 to August 1992), Senior
Vice President of Providence Capital, Inc., a securities broker-dealer (January
1991 to March 1992), and a Vice President of Jefferies (March 1988 to December
1990). Mr. Eisner has been a Director of ITGI since March 1994 and of ITG since
January 1994.
JERRY M. GLUCK, 47, has been Secretary and General Counsel of the Company
and Jefferies since May 1985 and a Director of Jefferies since November 1984.
Mr. Gluck has been the Secretary of ITGI since March 1994.
RICHARD B. HANDLER, 33, has been an Executive Vice President of Jefferies
since April 1990, and has been a Director of Jefferies since May 1993. Prior to
April 1990, Mr. Handler was a Senior Vice President of Drexel Burnham Lambert
Inc., a registered securities broker-dealer. Mr. Handler received his MBA from
Stanford University in May 1987, and his B.A. in Economics from the University
of Rochester in 1983.
RAYMOND L. KILLIAN, JR., 57, has been the President, Chief Executive
Officer and a Director of ITGI since March 1994. Mr. Killian has directed the
activities of ITG since 1987, and has been President, Chief Executive Officer
and a Director of ITG since 1992. Mr. Killian was a Director of the Company from
1985 to 1992, an Executive Vice President of the Company from 1985 to 1995, a
Director and an Executive Vice President of Jefferies from 1985 to 1991, and
served as National Sales Manager of Jefferies from 1985 to 1990. Mr. Killian is
no longer an officer of the Company; however, he remains an Executive Officer of
the Company because of its relationship with ITGI.
JEREMIAH P. O'GRADY, 54, has been an Executive Vice President of Jefferies
since May 1992 and a Director and Manager of the Convertible Securities
Department of Jefferies since 1986. From 1986 to May 1992, Mr. O'Grady was a
Senior Vice President of Jefferies.
CLARENCE T. SCHMITZ, 46, has been an Executive Vice President and the Chief
Financial Officer of the Company and an Executive Vice President and a Director
of Jefferies since February 1995. Prior to 1990, Mr. Schmitz founded and chaired
KPMG Peat Marwick's ("KPMG") International Mergers and Acquisitions Group. From
1990 until May 1993, Mr. Schmitz was the Managing Partner of KPMG's Los Angeles
Business Unit and a member of KPMG's Board of Directors. From June 1993 until
January 1995, Mr. Schmitz was the National Managing Partner for KPMG's
Manufacturing, Retailing and Distribution line of business, and was a member of
KPMG's Management Committee.
CLIFFORD A. SIEGEL, 38, has been an Executive Vice President of Jefferies
since May 1992, and a Director of Jefferies since May 1991. From June 1990 until
May 1992, Mr. Siegel was a Senior Vice President of Jefferies. Prior to June
1990, Mr. Siegel was President of Cresvale International Inc., a registered
securities broker-dealer.
MAXINE SYRJAMAKI, 50, has been Controller of the Company since May 1987, an
Executive Vice President of Jefferies since November 1986 and Chief Financial
Officer of Jefferies since September 1984. Prior to September 1984, Ms.
Syrjamaki was First Vice President and Controller of Jefferies.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS
The Board of Directors of the Company held eight meetings during 1994. Each
incumbent member of the Board of Directors attended, during his term of office,
at least 75% of the total number of meetings of the Board of Directors and
Committees thereof of which such Director was a member.
The Board of Directors has an Audit Committee and a Compensation Committee.
The Board does not have an Executive Committee or a Nominating Committee.
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<PAGE> 9
The current Audit Committee members are Tracy G. Herrick, Chairman, Richard
G. Dooley, Michael L. Klowden, Frank J. Macchiarola and Mark A. Wolfson. The
Audit Committee is responsible for reviewing with the independent auditors of
the Company the independent auditors' audit and review programs and procedures,
the financial statements and the adequacy of the Company's system of internal
accounting controls. The Committee also reviews the professional services
provided by the independent auditors and makes recommendations to the Board as
to the auditors' engagement or discharge. During 1994, there were seven meetings
of the Audit Committee.
The current Compensation Committee members are Frank J. Macchiarola,
Chairman, Richard G. Dooley, Tracy G. Herrick, Michael L. Klowden and Mark A.
Wolfson. The Compensation Committee develops and implements compensation
policies, plans and programs for the Company's Executive Officers. During 1994,
there were nine meetings of the Compensation Committee.
DIRECTOR COMPENSATION
During 1994, until the Annual Meeting of the Company held on May 5, 1994,
the non-employee Directors, Messrs. Dooley, Herrick, Klowden, Macchiarola and
Wolfson, were each paid a Director's fee at the rate of $30,000 per annum for a
total of six regularly scheduled meetings of the Board of Directors, $2,000 for
each special meeting of the Board attended, and $500 for each Committee meeting
attended.
The Board changed this Directors' compensation policy, effective in May
1994, at which time each non-employee Director began receiving a Director's fee
at the rate of $25,000 per annum for a total of six regularly scheduled meetings
of the Board of Directors, $2,000 for each special meeting of the Board
attended, and $750 for each Committee meeting attended. The Chairmen of the
Audit and Compensation Committees are also paid an annual fee of $3,000. At the
1994 Annual Meeting, the shareholders of the Company approved the Non-Employee
Directors' Stock Option Plan pursuant to which each non-employee Director is
automatically granted, each year, an option to purchase 1,000 shares of the
Company's Common Stock after each annual shareholder's meeting at which he is
elected a Director at the market price on the date of grant.
Directors who are also employees of the Company are not paid Directors'
fees and are not granted stock options for serving as Directors.
During fiscal year 1994, Tracy G. Herrick and Mark A. Wolfson, Directors of
the Company, provided the Company with certain financial and other consulting
services. Mr. Herrick was paid $114,000 and Mr. Wolfson was paid $9,688 for
their respective services. (See also "Compensation Committee Interlocks and
Insider Participation.")
Each Director may participate in the Company's Charitable Gifts Matching
Program pursuant to which the Company will match 50% of charitable contributions
made by such Directors up to a maximum dollar amount of $1,500 per person per
year.
The children of Directors may also participate (along with the children of
all employees of the Company) in the Stephen A. Jefferies Educational Grant
Program which provides scholarship awards for secondary and post-secondary
education based on factors such as financial need, academic merit and personal
statements. The grants are made by an independent scholarship committee, none of
whose members are affiliated with the Company.
7
<PAGE> 10
EXECUTIVE COMPENSATION
Shown below is information concerning the annual and long-term compensation
for services in all capacities to the Company for the fiscal years ended
December 31, 1994, 1993, and 1992, of those persons who were, during 1994, the
Chief Executive Officer and the other most highly compensated Executive Officers
of the Company specified by SEC rules (collectively, the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ANNUAL COMPENSATION(2) AWARDS PAYOUTS
--------------------------------------- ---------------------- ----------
(A) (B) (C) (D) (E) (F) (G) (H)
SECURITIES
OTHER RESTRICTED UNDERLYING
ANNUAL STOCK OPTIONS/ LTIP
SALARY BONUS COMPENSATION AWARD(S) SARS PAYOUTS
NAME AND PRINCIPAL POSITION(1) YEAR ($) ($) ($)(3) ($) (#) ($)
------------------------------ ----- ------- --------- ------------ ------- ---------- ----------
Frank E. Baxter, Chairman, 1994 400,000 282,987(4) 13,883 1,119,972(5)
Chief Executive Officer 1993 400,000 571,862 20,951 703,704
and President 1992 400,000 425,016
Richard B. Handler 1994 479,167 2,869,471(7) 268 616,679(8)
Executive Vice President and 1993
Manager of the Taxable Fixed Income 1992
Division of Jefferies & Company,
Inc., the Company's wholly owned
subsidiary ("Jefferies")
Raymond L. Killian, Jr. 1994 341,667 1,350,000 13,909 750,000(9)
President and Chief 1993 425,000 1,430,017 13,445 15,000
Executive Officer of Investment 1992 425,000 710,393 50,000
Technology Group, Inc., the Company's (9)
majority owned subsidiary ("ITGI")
Louis V. Bellucci, Sr. 1994 300,000 1,641,333 13,889
Executive Vice President 1993 408,333 1,727,138 16,659 15,000 296,000
and National Equity Sales 1992 500,000 700,000 50,000
Manager of Jefferies
Barry Taylor 1994 950,028(11) 60,000 23,560(12) 2,000
Executive Vice 1993 574,801 75,000 6,096 15,000
President 1992 481,519 50,000
<CAPTION>
<S> <C>
(A) (I)
ALL OTHER
COMPENSATION
NAME AND PRINCIPAL POSITION(1) ($)
------------------------------ ------------
Frank E. Baxter, Chairman, 26,156(6)
Chief Executive Officer 18,598
and President 10,984
Richard B. Handler 29,140(6)
Executive Vice President and
Manager of the Taxable Fixed Income
Division of Jefferies & Company,
Inc., the Company's wholly owned
subsidiary ("Jefferies")
Raymond L. Killian, Jr. 10,049,894(6)(10)
President and Chief 18,971
Executive Officer of Investment
Technology Group, Inc., the Company's
majority owned subsidiary ("ITGI")
Louis V. Bellucci, Sr. 18,972(6)
Executive Vice President 16,908
and National Equity Sales 9,784
Manager of Jefferies
Barry Taylor 15,056(6)
Executive Vice 15,493
President 9,784
</TABLE>
- ---------------
(1) Mr. Handler did not become an Executive Officer of the Company until May
1994; therefore, the table only reflects Mr. Handler's compensation for
1994. Mr. Killian resigned as an officer of the Company in January 1995;
however, he remains an Executive Officer of the Company because of its
relationship with ITGI.
(2) The amounts shown include cash and non-cash compensation earned by the Named
Executive Officers as well as amounts earned but deferred at the election of
those Named Executive Officers.
(3) Each Named Executive Officer participating in the Jefferies Group, Inc.
Capital Accumulation Plan for Key Employees (the "CAP") was credited with
units representing shares of the Company's Common Stock ("CSUs") at a price
equal to eighty-five percent (85%) of the Company's average cost per share
of the shares available for distribution in the CAP. The Company's average
cost per share is based upon the average cost of shares repurchased
specifically for purposes of the CAP, and held as treasury shares pending
distribution upon settlement of CSUs. The cash account of the CAP
participant was debited by an amount equal to the number of CSUs multiplied
by 85% of the average cost per share. During 1994, the amount of the 15%
discount on the CSUs with respect to each Named Executive Officer was as
follows: Mr. Baxter: $13,883; Mr. Bellucci: $13,889; Mr. Handler: $268; Mr.
Killian: $13,909; and Mr. Taylor: $11,560.
(4) The amount shown is that portion of the incentive compensation which Mr.
Baxter was actually paid with respect to 1994. In addition to the amount
actually paid, Mr. Baxter may, as a result of a mandatory deferral feature
of his incentive compensation plan, receive additional amounts of incentive
compensation which would be payable in 1995 and 1996 (with respect to the
incentive compensation deferred in 1994). (See "Long-Term Incentive Plan
Awards Table.")
(5) The amount shown as an "LTIP Payout" is a payment of incentive compensation
which was deferred in 1992 and 1993 in the form of phantom shares and
subject to certain performance conditions, and includes a payment of $11,754
for dividends attributed to such phantom shares. Because the performance
conditions which had been set by the Compensation Committee were not met in
1994, the amount of the long term incentive compensation which Mr. Baxter
received in
8
<PAGE> 11
1994 was automatically reduced. The Compensation Committee decreased Mr.
Baxter's long term incentive compensation by $112,524, with an additional
reduction of $756 for accrued dividends attributable to the phantom shares
associated with the amount of the decrease, for a total reduction of $113,280.
(6) The total amounts for 1994 shown in the "All Other Compensation" column
include the following:
(a) The Company's matching contributions under the Company's Section 401(k)
Plan. During the plan year ended November 30, 1994, Messrs. Baxter and
Handler each received $2,864, and Messrs. Killian and Taylor each
received $2,788 as the Company's matching contributions.
(b) Forfeitures under the Company's Employee Stock Ownership Plan ("ESOP").
During the plan year ended November 30, 1994, each Named Executive
Officer's account was credited with 35 shares at an original cost of
$10.51 per share, for a total of $366, as a result of such forfeitures.
(c) The Company's matching contributions to the Employee Stock Purchase Plan
("ESPP"). During the year ended December 31, 1994, Messrs. Baxter and
Mr. Killian each received 100 shares at prices ranging from $30.50 to
$42.50, for a total matching contribution of $3,600, Mr. Bellucci
received approximately 29 shares at a price of $31.50 for a total
matching contribution of $900, and Mr. Taylor received approximately 9
shares at a price of $31.50 for a total matching contribution of $300.
(d) Contributions of $4,419 and forfeiture allocations of $618 for each of
the Named Executive Officers under the Company's Profit Sharing Plan.
(e) Dividends and interest payments to the cash accounts of the Named
Executive Officers under the CAP, paid at a rate equal to the average
percentage rate Jefferies paid on its margin accounts carrying credit
balances, as follows: Mr. Baxter: $1,137; Mr. Taylor: $758; Mr. Handler:
$1,520; Mr. Killian: $1,333; and Mr. Bellucci: $1,176.
(f) An amount of "deemed interest" credited to each CAP participant
determined by multiplying (i) the daily weighted average amount in the
CAP participant's Profit-Based Deferred Compensation Account by (ii) an
interest rate equal to the fully diluted earnings per share (if any) of
Common Stock for that fiscal year divided by the fair market value of a
share at the end of the preceding fiscal year. In 1994, the Named
Executive Officers received the following amounts of such "deemed
interest": Mr. Baxter: $13,152; Mr. Killian: $12,311; Mr. Bellucci:
$11,493; Mr. Taylor: $5,807; and Mr. Handler: $19,353.
(7) A portion of Mr. Handler's bonus consisted of shares of Common Stock,
including (i) 5,665 shares on March 10, 1995, at which date the closing
price of the Company's Common Stock was $30.50 per share, in lieu of
$202,848 of Mr. Handler's cash bonus for the fiscal year ended December 31,
1994, and (ii) 8,333 shares granted on April 1, 1994, at which date the
closing price (based on the closing price on the preceding day because no
shares traded on April 1, 1994) of the Common Stock was $37.00 per share.
(8) On April 1, 1994, Mr. Handler was granted 16,667 shares of restricted stock
at which date the closing price (based on the closing price on the
preceding day, because no shares traded on April 1, 1994) of the Common
Stock was $37.00 per share. Such restricted stock fully vested on March 31,
1995. At December 31, 1994, Mr. Handler held an aggregate of 33,334 shares
of restricted stock which had a fair market value at December 31, 1994, of
$991,687. Dividends are paid on shares of restricted stock.
(9) Represents options to purchase 750,000 shares of the Common Stock of ITGI,
which is 80.8% owned by the Company. These options were granted in
connection with the initial public offering of ITGI. Mr. Killian's prior
option to purchase 700,000 shares of the predecessor of ITG Inc. was
settled and terminated in connection with the initial public offering of
ITGI.
(10) Mr. Killian received $10,024,459 as a payment in connection with the
settlement and termination of his pre-existing option to purchase 700,000
shares of the predecessor of ITG Inc., and for the termination of Mr.
Killian's old employment agreement, and the bonus provided for therein. As
part of his agreement to terminate the pre-existing option and employment
agreement, Mr. Killian was required to purchase 121,287 shares of Common
Stock of the Company at a total cost of $5,276,031.
(11) Mr. Taylor does not receive a salary from the Company. Instead, the amount
reflected in the "Salary" column for Mr. Taylor consists of commissions
paid to Mr. Taylor.
(12) Mr. Taylor received an automobile allowance of $12,000 as compensation for
reaching certain performance criteria as an equity salesperson.
9
<PAGE> 12
OPTION/SAR GRANTS TABLE
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES
OF STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
- -------------------------------------------------------------------------------------------- ------------------------------
(A) (B) (C) (D) (E) (F) (G) (H)
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS EXERCISE MARKET
UNDERLYING GRANTED TO OR BASE PRICE ON
OPTIONS/SARS EMPLOYEES IN PRICE DATE OF EXPIRATION
NAME GRANT(#) FISCAL YEAR ($/SH) GRANT($) DATE 0%($) 5%($) 10%($)
---- ------------ ------------ -------- -------- ---------- ------ --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Frank E. Baxter........... 0 0%
Richard B. Handler........ 0 0
Raymond L. Killian, Jr.... 750,000(1) 31.5%(1) 13.00 13.00 4/30/99 0 2,693,745 5,952,473
Louis V. Bellucci, Sr..... 0 0
Barry M. Taylor........... 2,000(2) 2% 32.50 32.50 12/31/98 0 7,381 20,251
</TABLE>
- ---------------
(1) Represents an option to purchase shares of the common stock of ITGI, granted
in connection with the initial public offering of ITGI. The exercise price
of the option is equal to the initial public offering price of ITGI common
stock. The exercise price is to be adjusted in the event ITGI pays a cash
dividend. The option is not subject to forfeiture upon termination of
employment and will become first exercisable on May 1, 1997, subject to
earlier exercisability in the event of a change in control of ITGI (as
defined).
(2) The exercise price may be paid by delivery of already-owned shares and tax
withholding obligations related to exercise may be paid by delivery of
already-owned shares or by withholding of the underlying shares upon
exercise, subject to certain conditions.
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END AT FY-END
(#) ($)(1)
SHARES ACQUIRED VALUE ---------------- ----------------
ON EXERCISE REALIZED EXERCISABLE(E)/ EXERCISABLE(E)/
NAME (#) ($) UNEXERCISABLE(U) UNEXERCISABLE(U)
---- --------------- ----------- ---------------- ----------------
<S> <C> <C> <C> <C>
Frank E. Baxter................. 10,000 200,000 71,250(E) 1,335,398(E)
Richard B. Handler.............. 27,500 370,000 0 0
Raymond L. Killian, Jr.......... 0 0 41,094(E) 680,513(E)
750,000(U)(2) 0(U)(2)
Louis V. Bellucci, Sr........... 0 0 65,000(E) 1,016,250(E)
Barry M. Taylor................. 0 0 34,500(E) 556,875(E)
2,000(U) 0(U)(3)
</TABLE>
- ---------------
(1) At year-end 1994, the closing price of the Company's Common Stock was
$29.75, which was the price used to determine the year-end values in Column
(e).
(2) Represents an option to purchase 750,000 shares of the common stock of ITGI,
which is not exercisable until May 1, 1997. The option is exercisable at
$13.00 per share. At year end 1994, the closing price of ITGI's Common Stock
was $6.75.
(3) The option is not exercisable until January 1, 1997, and is exercisable at
$32.50 per share.
10
<PAGE> 13
LONG-TERM INCENTIVE PLAN AWARDS TABLE
LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE
PAYOUTS UNDER NON-STOCK
PRICE BASED PLANS
------------------------------------------------
<S> <C> <C> <C> <C> <C>
(A) (B) (C) (D) (E) (F)
NUMBER OF PERFORMANCE OR
SHARES, UNITS OR OTHER PERIOD
OTHER RIGHTS UNTIL MATURATION THRESHOLD TARGET MAXIMUM
NAME (#) OR PAYOUT (# OF UNITS) (# OF UNITS) (# OF UNITS)
---- ---------------- ---------------- ------------ ------------ ------------
9,512(1) 12/31/95(1) 9,512 9,512(3) 9,512(4)
Frank E. Baxter...... 9,512(1) 12/31/96(1) 9,512 9,512(3) 9,512(4)
Richard B. Handler... 0 -- -- -- --
Louis V. Bellucci,
Sr................. 0 -- -- -- --
Raymond L. Killian,
Jr................. 0 -- -- -- --
Barry M. Taylor...... 0 -- -- -- --
</TABLE>
- ---------------
(1) In addition to the salary and bonus which were actually paid to Mr. Baxter
with respect to 1994 as reflected in the Summary Compensation Table, Mr.
Baxter will receive an additional amount of incentive compensation payable
in two installments at the end of 1995 and 1996 (the "deferred incentive
compensation") pursuant to the terms of the Incentive Compensation Plan for
Frank E. Baxter, a copy of which is attached hereto as Appendix A. The
deferred incentive compensation will be calculated by dividing that portion
of the 1994 incentive compensation which has been deferred ($565,973) by
the closing price of the Company's Common Stock on December 31, 1994
($29.75), and designating the result (19,024) as "phantom" shares of the
Company's Common Stock. In the case of the 1994 award, one-half of such
number of phantom shares is payable in each of 1995 and 1996. The amount of
the deferred payment which is actually made to Mr. Baxter will be
determined at the time it is to be paid by multiplying (a) the number of
phantom shares by (b) the sum of (1) the closing price of the Company's
Common Stock on the first trading day coincident with or following the
close of the Company's fiscal year and (2) the amount of dividends, if any,
declared on shares of the Company's Common Stock during the years of
deferral.
(2) Because the threshold number (i.e., the minimum amount payable to Mr.
Baxter) is dependent upon the closing price of the Company's Common Stock
on the first trading day coincident with or following the close of the
Company's fiscal year for which the adjustment is being determined, it is
not possible to determine the threshold number for purposes of this table.
(3) The exact amount of Mr. Baxter's compensation is not currently calculable,
as it is dependent upon the price at which the Company's Common Stock is
trading at the close of 1995 and 1996.
(4) The maximum number of phantom shares is not subject to upward or downward
adjustment. However, the maximum amount which may be paid to Mr. Baxter in
1995 or 1996 is not currently calculable, as it is dependent upon the price
at which the Company's Common Stock is trading at the close of each of
those fiscal years.
11
<PAGE> 14
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE FUTURE FILINGS,
INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART, THE FOLLOWING REPORT OF THE
COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION AND THE PERFORMANCE GRAPH ON
PAGE 16 SHALL NOT BE INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors, the members of which are
Messrs. Macchiarola, Dooley, Herrick, Klowden and Wolfson, has furnished the
following report on executive compensation:
To: The Board of Directors and Shareholders of Jefferies Group, Inc.
Under the supervision of the five members of the Compensation Committee
(the "Committee"), each of whom is a non-employee Director, the Company has
developed and implemented compensation policies, plans and programs which seek
to enhance the profitability of the Company and thus shareholder value. The
Committee has established compensation policies, plans and programs for the
Company's Executive Officers which are designed to provide competitive levels of
compensation, reward productivity and profitability, and encourage long-term
service to the Company.
The Committee also administers the Company's stock-based incentive plan,
the 1993 Stock Ownership and Long-Term Incentive Plan (the "1993 Plan").
Decisions about awards to Executive Officers under the 1993 Plan must be made
solely by the Committee in order for grants or awards under such Plan to satisfy
Rule 16b-3 under the Securities Exchange Act of 1934, as amended. The Committee
believes that stock ownership by Executive Officers and stock-based performance
compensation arrangements are beneficial in aligning the interests of Executive
Officers with the interests of shareholders, and therefore the Committee has
used stock option grants and other stock-related awards and arrangements to
provide a portion of the incentive compensation of Executive Officers.
The Committee has retained the services of Martin Wertlieb Associates, a
compensation consulting firm, to assist the Committee in connection with the
performance of its various duties.
In implementing compensation policies, plans, and programs for 1994, the
Committee sought to respond to the adoption of new Section 162(m) of the
Internal Revenue Code in 1993. Section 162(m) generally disallows a public
company's tax deduction for compensation to the chief executive officer and the
four other most highly compensated executive officers in excess of $1 million in
any tax year. Under Section 162(m), compensation that qualifies as
"performance-based compensation" is excluded from the $1 million deductibility
cap, and therefore remains fully deductible even though such compensation may
(together with other compensation) exceed $1 million in a given year. The
Committee intends to seek to preserve the tax deductibility of compensation to
Executive Officers to the greatest extent possible without substantially
impairing the operation and effectiveness of the Company's compensation
policies, plans, and programs. To this end, the Committee established and the
Board of Directors adopted the Jefferies Group, Inc. Pay-For-Performance Plan in
order that compensation thereunder will qualify as "performance-based
compensation," which plan was approved by the shareholders at the 1994 Annual
Meeting. The Committee also intends to grant options under the 1993 Plan with an
exercise price at least equal to 100% of fair market value of the underlying
stock at the date of grant, and the Committee has likewise been advised that
such options should qualify as "performance-based compensation." Since final
regulations have not been adopted and other guidance has not been provided by
the Internal Revenue Service, however, there can be no assurance that any
particular compensation in excess of $1 million will qualify as
"performance-based compensation" that is fully deductible by the Company under
Section 162(m).
12
<PAGE> 15
COMPENSATION PAID TO EXECUTIVE OFFICERS IN 1994 (OTHER THAN THE CHIEF EXECUTIVE
OFFICER)
Compensation paid to those Executive Officers having responsibility for
revenue-producing departments or divisions of the Company's subsidiaries,
including the Named Executive Officers of the Company reflected in the foregoing
tables (other than Mr. Taylor), consisted of a base salary and/or draw and an
annual bonus which was determined primarily by reference to departmental or
divisional profitability, and, in some cases, revenues. The amount of base
salary or non-forfeitable draw is intended by the Committee to provide a level
of income that is predictable and not at risk, so that such Executive Officers
will be able to meet living expenses and financial commitments. Although the
Committee considers competitive practices in this regard, its determination of
the level of base salary or non-forfeitable draw generally is a subjective one.
For 1994, the Committee sought to formalize its policies with respect to linking
annual bonuses for such Executive Officers to departmental and divisional
operating results by establishment of the Pay-For-Performance Plan. In
accordance with that Plan, the Committee determined formulas for payment of an
annual bonus to each such Executive Officer in early 1994 with a view to
providing overall compensation which would provide him with a competitive
compensation package and align his interests with those of the Company's
shareholders. The Committee also received significant input from the Chief
Executive Officer in determining the formulas for such Executive Officers'
compensation. The Committee assessed the contribution such department or
division could make to the Company's overall financial performance and sought to
provide a substantial incentive to the Executive Officer to maximize such
contribution. In determining amounts of bonus potentially payable under the
Pay-For-Performance Plan, although the Committee considered competitive
practices, its determinations for individuals were generally subjective.
The compensation of Barry Taylor (a Named Executive Officer) which is
reflected in the "Salary" column of the Summary Compensation Table, consists of
commissions, which are paid to Mr. Taylor at the same rate as paid to the other
equity salespeople at Jefferies. In addition, Mr. Taylor received a bonus of
$60,000 to compensate him for performing various administrative services for the
Company and for Jefferies, such as serving on the Executive Committee of
Jefferies. Mr. Taylor also received an option to purchase 2,000 shares of the
Common Stock of the Company and received an automobile allowance of $1,000 per
month, as did other equity salespersons meeting certain sales performance
criteria which had been set by the Equity Division.
Compensation paid to the remaining Executive Officers who perform
predominantly administrative functions were paid in the form of a base salary
and an annual bonus, the amount of which was based generally upon the same
considerations as those for the Named Executive Officers, except that the
Committee also considered, in determining the amount of annual bonus payable,
both Company profitability and individual initiative and performance.
Finally, the Company's Capital Accumulation Plan for Key Employees (the
"CAP"), which was adopted by the Board of Directors and approved by shareholders
during 1993, is designed to allow Executive Officers to defer receipt of (and
thus defer taxation on) a substantial portion of their income. Under the CAP,
part of such deferred amounts are deemed invested in Common Stock of the Company
at a 15% discount from the average cost of shares repurchased by the Company for
purposes of the CAP, and part of such deferred amounts are deemed invested in a
hypothetical instrument that pays interest based on the rate represented by the
fully diluted earnings per share (if any) of Common Stock for a given year
divided by the fair market value of a share at the end of the Company's
preceding fiscal year. However, if the Company's earnings per share are
negative, the CAP participant will not receive interest, but will instead be
charged by an amount equal to the fully diluted loss per share for the given
year divided by the fair market value of a share at the end of the preceding
fiscal year. In the Committee's view, the CAP's method of valuing deferred
compensation adds an additional incentive for participants therein to maximize
the value of the Company's Common Stock and the Company's profitability.
13
<PAGE> 16
COMPENSATION PAID TO THE CHIEF EXECUTIVE OFFICER IN 1994
As members of the Compensation Committee, it is our responsibility to
evaluate the performance and establish the compensation level of the Company's
CEO, Mr. Frank E. Baxter.
Mr. Baxter's compensation package for 1994 was intended to motivate and
reward Mr. Baxter for achieving profit levels that were in the best interests of
the Company's shareholders and to encourage him to remain with the Company to
continue to serve those interests. In setting Mr. Baxter's compensation for
1994, the Committee intended that Mr. Baxter's compensation would be competitive
with other companies of comparable size in the securities industry, but that a
large percentage of his target compensation would be based upon objective
performance criteria, specifically, the profitability of the Company.
For the year 1994, Mr. Baxter's compensation consisted of a base salary of
$400,000 (which was approximately 29% of Mr. Baxter's total target compensation
for 1994), and an incentive award determined pursuant to an Incentive
Compensation Plan (the "ICP," a copy of which is set forth in Appendix A to this
Proxy Statement), adopted during 1992 specifically for Mr. Baxter. Mr. Baxter's
base salary was set at a level deemed most appropriate by the Committee when
taking into consideration the Committee's desire to provide Mr. Baxter with some
certainty in the level of his compensation through this non-performance based
element of compensation. In making this subjective determination, the Committee
recognized that by providing a non-performance based element to the CEO's
compensation, some trade-off exists between a desire to avoid exposing the CEO
to excessive amounts of risk and the desire to align the interests of the CEO as
closely as possible with those of the shareholders.
During the first quarter of 1994, the Committee also established the terms
of Mr. Baxter's incentive award under the ICP. The ICP authorizes the Committee
to set a rate, stated as a percentage of annual after-tax profits, at which Mr.
Baxter's target compensation would be (a) increased, if the Company's annual
after-tax profits exceeded the target profit level or (b) reduced (but not below
the amount of his base salary) if the Company's annual after-tax profits did not
equal or exceed the target profit level. For 1994, the Committee determined that
Mr. Baxter's compensation would be increased above the target compensation level
at the rate of 6% or 8% of annual after-tax profits in excess of the targeted
profit level, and reduced from the target compensation level at the rate of 4%
of the amount by which such profits fell short of the targeted profit level.
The Committee determined that Mr. Baxter's 1994 target base salary and
bonus should be $1,400,000. In setting this target, the Committee considered
1993 compensation for chief executive officers at investment management and
securities industry companies, as well as subjective factors, including the fact
that Mr. Baxter's leadership had enabled the Company to greatly improve its
financial performance and enhance shareholder value in the two preceding years.
The Committee factored into its determination of Mr. Baxter's actual
compensation for 1994 the amount of the Company's profits after tax and after
incentives but retained the right to make specific adjustments to the
profitability measure for purposes of determining Mr. Baxter's incentive
compensation. After considering both positive and negative adjustments which are
permissible under the ICP, the Committee determined to make no net adjustments
to the Company's profits after tax.
The 1994 target level for Company profits was set at $24,000,000. This was
arrived at by multiplying a target after-tax rate of return on investment for
shareholders of 15-16% by the aggregate adjusted book value of the Company's
Common Stock as of January 1, 1994 (as adjusted by the Committee to reflect
possible dilution resulting from the exercise of stock options), which aggregate
adjusted book value was estimated to be approximately $145 million.
The Company fell short of the target level of after-tax profits set by the
Committee for 1994 by approximately $3.8 million. Accordingly, as provided for
by the ICP, the actual compensation payable to Mr. Baxter for 1994 performance
under the ICP (two-thirds of which is deferred under the ICP) was reduced from
the targeted compensation level by approximately $151,040. In addition, as
required under the ICP, the Committee reduced the amount of the incentive
compensation which had been deferred from 1993, and which
14
<PAGE> 17
was to be paid out in 1994 as long term incentive compensation. Mr. Baxter's
long term incentive compensation was automatically reduced by $112,524, with an
additional reduction of $756 for accrued dividends attributable to the phantom
shares associated with the amount of the decrease, for a total reduction of
$113,280.
Mr. Baxter has not yet been paid the entire amount of his 1994 incentive
award. In addition to his base salary of $400,000, Mr. Baxter was paid one-third
of his incentive compensation for 1994, which was determined under the ICP as
discussed above. Half of the remaining two-thirds of Mr. Baxter's incentive
compensation for 1994 is potentially payable at the end of each of fiscal years
1995 and 1996. The amounts of such deferred incentive compensation are deemed to
be invested in "phantom shares" of the Company's Common Stock at the closing
price of such stock on the last day of 1994, with amounts equal to dividends
thereafter credited to Mr. Baxter as well.
Mr. Baxter also participates in the CAP, the terms of which are described
above. Amounts deferred by Mr. Baxter during and with respect to 1994 under the
CAP include both salary and incentive compensation.
The foregoing report has been furnished by:
Frank J. Macchiarola, Chairman
Richard G. Dooley
Tracy G. Herrick
Michael L. Klowden
Mark A. Wolfson
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
During 1994, the members of the Compensation Committee of the Board of
Directors were Messrs. Macchiarola, Dooley, Herrick, Klowden and Wolfson. Mr.
Herrick provides financial consulting services to the Company, for which he was
paid $114,000 in 1994. Mr. Klowden is a senior partner of Morgan, Lewis &
Bockius, which acted as legal counsel to the Company during 1994.
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the yearly change in the
cumulative total shareholder return on the Company's Common Stock against the
cumulative total return of the Russell 2000 and Lipper Analytical Brokerage
Composite Indices for the period of five fiscal years commencing January 1,
1990, and ending December 31, 1994.
15
<PAGE> 18
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
JEFFERIES GROUP, INC.'S COMMON STOCK, RUSSELL 2000 & LIPPER ANALYTICAL
BROKERAGE COMPOSITE INDICES
<TABLE>
<CAPTION>
LIPPER
JEFFERIES ANALYTICAL
MEASUREMENT PERIOD GROUP, INC. RUSSELL 2000 BROKERAGE
(FISCAL YEAR COVERED) COMMON STOCK INDEX COMPOSITE INDEX
<S> <C> <C> <C>
1989 100 100 100
1990 102 80 86
1991 101 118 196
1992 179 139 206
1993 297 166 275
1994 274 163 232
</TABLE>
- ---------------
* Normalized so that the value of Jefferies Group, Inc.'s Common Stock and each
index was $100 on December 31, 1989, and that all dividends were reinvested.
EMPLOYMENT CONTRACTS AND TERMINATION OF
EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS
Mr. Baxter does not have an employment contract with the Company. However,
his Incentive Compensation Plan (a copy of which is attached as Appendix A)
provides that if Mr. Baxter's employment is terminated for cause, he will
forfeit any deferred amounts not yet payable as of the date of termination. In
the event of Mr. Baxter's approved retirement, termination for other than cause,
death, or permanent disability, any deferred amounts not yet payable as of the
date of such event shall be paid on their regularly scheduled payment date, or
earlier at the sole discretion of the Compensation Committee.
On May 1, 1994, in connection with the initial public offering of ITGI, the
employment agreement in effect between the former Investment Technology Group,
Inc. and Mr. Killian was terminated and a new employment agreement became
effective. The new employment agreement is for a term ending April 30, 1997.
Under the terms of this agreement, Mr. Killian is employed as the President and
Chief Executive Officer of ITGI. ITGI is required to pay Mr. Killian an annual
salary of $300,000, subject to increase in the discretion of the ITGI Board of
Directors, and an annual bonus based upon the net after-tax profits of ITGI; the
target for Mr. Killian's bonus is $450,000. Prior to the beginning of each year,
the Compensation Committee of ITGI will determine a target net after-tax profit
that is reasonable and appropriate based upon an analysis of peer companies and
is commensurate with a target level of profits set by ITGI. Annual bonuses will
be increased or decreased by specified amounts if ITGI's net after-tax profits
exceed or are less than the target net after-tax profits. The agreement also
provided for the grant by ITGI to Mr. Killian of a nonqualified
16
<PAGE> 19
stock option to purchase 750,000 shares of ITGI Common Stock at a price per
share, payable in cash, equal to the IPO price of ITGI's Common Stock ($13.00
per share). The option was fully vested on the date of grant, will expire on
April 30, 1999, and may be exercised in whole or in part at any time at the
earlier of May 1, 1997, or upon a change in control of ITGI. The agreement may
be terminated with or without cause or if Mr. Killian becomes permanently
disabled. Mr. Killian may terminate his agreement for "good reason," consisting
of a material reduction in title, duties or responsibilities. Upon termination
for cause or by reason of death, disability, or resignation other than for good
reason, Mr. Killian will not be entitled to any further compensation or, except
as required under applicable laws, benefits. Upon termination without cause or
upon resignation for good reason, ITGI is required to pay base salary in effect
at the time of termination or resignation until April 30, 1997, to pay the bonus
in the year that termination occurs and to provide benefits required by
applicable laws. The agreement further provides that upon termination of
employment, Mr. Killian will not compete with ITGI for a period of six months
following such termination provided that ITGI continues to pay base salary
during such period. The non-competition period may be extended until any date on
or prior to December 31, 1997, if ITGI agrees to continue to pay during that
period base salary and, in the case of termination without cause or resignation
for good reason, the bonus in effect at the time of termination.
In connection with the termination of Mr. Killian's pre-May 1, 1994
employment agreement and the bonus provided for therein, and stock options, Mr.
Killian received cash in the amount of approximately $10,000,000, and Mr.
Killian was required to, and did, purchase Common Stock of the Company at a cost
of $5,276,031.
PENSION PLAN
All employees of the Company who are citizens or residents of the United
States, who are 21 years of age, and who have completed one year of service with
the Company are covered by the Company's Employees' Pension Plan (the "Pension
Plan"), a defined benefit plan, which was originally adopted in 1964 and amended
in January 1987. The Pension Plan is funded through contributions by the Company
and earnings on the existing assets in conformance with annual actuarial
evaluations. The Pension Plan provides for annual benefits following normal
retirement at age 65 equal to 1% of the employee's covered remuneration from
January 1, 1987, until termination of employment plus 20% of the first $4,800
and 50% of amounts exceeding $4,800 of annual average covered remuneration for
1985 and 1986, reduced proportionately for service of less than fifteen years
(as of December 31, 1986). Benefits payable under the Pension Plan are not
subject to deduction for Social Security benefits or other offsets.
Covered remuneration for purposes of the Pension Plan includes the
employee's total annual compensation (salaries, commissions, and bonuses) not to
exceed $100,000 for 1985 and 1986 and $200,000 for 1987. From 1988 to 1993, this
latter dollar limitation was adjusted automatically for each plan year to the
amount prescribed by the Secretary of the Treasury, or his delegate, for such
plan year. In 1994, the maximum covered remuneration was reduced to $150,000. An
employee who retires upon normal retirement at age 65 with at least seven years
of service will receive a full vested benefit. An employee who retires at age 55
with at least seven years of service will receive the normal retirement benefit
reduced by 1/2% for each month benefit payments commence before age 65.
Employees who terminate employment with the Company for reasons other than death
or retirement will be entitled to the vested portion of their benefits at their
normal or early retirement age. Benefits vest at the rate of 10% for each of the
first four years of service and 20% for each of the next three years of service.
The retirement benefits payable at age 65 for those employees with service prior
to January 1, 1987, will be composed of two items: (1) a benefit for service up
to December 31, 1986, in accordance with the original Pension Plan formula
recognizing pay as the average of 1985 and 1986 remuneration up to $100,000, and
(2) a benefit for service commencing on January 1, 1987, equal to 1% of covered
remuneration through the date of termination. Total years of credited service
apply to both the original and amended Pension Plans for purposes of determining
vesting and eligibilities.
17
<PAGE> 20
As of December 31, 1993 (the most recent period for which such information
is available), the estimated annual benefits payable upon retirement at normal
retirement age for each of the Named Executive Officers of the Company are: Mr.
Baxter: $51,799; Mr. Bellucci: $38,617; Mr. Handler: $57,516; Mr. Killian:
$36,502; and Mr. Taylor: $59,119.
CERTAIN RELATED TRANSACTIONS
Jefferies has extended credit to certain of its Directors, Officers,
employees, and shareholders in connection with their purchase of securities on
margin. Receivables from its Officers and Directors were $2,145,000 at December
31, 1994. Such extensions of credit were made in the ordinary course of
business, on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other persons, and did not involve more than the normal risk of collectibility
or present other unfavorable features.
For information concerning Certain Related Transactions with respect to
Messrs. Herrick and Klowden, Directors of the Company, see "Compensation
Committee Interlocks and Insider Participation."
During 1994, in the ordinary course of business, Jefferies executed
securities transactions on behalf of Tweedy, Browne Company L.P., a shareholder
of the Company beneficially owning in excess of 5% of the Company's Common
Stock, and received commissions of approximately $241,036.
The Company believes the foregoing transactions were on terms no less
favorable to the Company than could have been obtained from unaffiliated
parties. The Board of Directors has adopted a policy which provides that the
Company will not enter into any transactions with its Directors, Officers, or
affiliates (not including companies consolidated with it for financial reporting
purposes), other than those related to employee compensation or expense
reimbursement and other than those having terms no less favorable to the Company
than could be obtained from unaffiliated parties, unless approved by the
Company's disinterested and independent Directors.
OTHER MATTERS
Management does not know of any other matters to come before the Annual
Meeting. However, if any additional matters are properly presented to the
meeting, it is the intention of the persons named in the accompanying proxy to
vote such proxy in accordance with their best judgment on such matters.
ANNUAL REPORT AND INDEPENDENT AUDITORS
The Annual Report and the Company's Annual Report on Form 10-K, for the
Company's fiscal year ended December 31, 1994, accompany this Proxy Statement,
but are not deemed a part of the proxy soliciting material. KPMG Peat Marwick
LLP was the Company's independent auditors for the year ended December 31, 1994.
The appointment of independent auditors is approved annually by the Board of
Directors, which approval is based, in part, on the recommendations of the Audit
Committee. In making its recommendations, the Audit Committee reviews both the
audit scope and estimated audit fees for the coming year. Shareholder approval
is not sought in connection with this selection.
A representative of KPMG Peat Marwick LLP, the independent auditors who
examined the consolidated financial statements of the Company for 1994, is
expected to be present at the meeting to respond to appropriate questions of
shareholders and will have the opportunity to make a statement if he so desires.
18
<PAGE> 21
SHAREHOLDER PROPOSALS
Shareholder proposals for inclusion in the proxy material relating to the
1996 Annual Meeting of Shareholders must be received by the Company at its
principal executive offices in Los Angeles, California, at the address set forth
on the first page hereof, no later than December 6, 1995. Nothing in this
paragraph shall be deemed to require the Company to include in its proxy
materials relating to the 1996 Annual Meeting of Shareholders any shareholder
proposal which does not meet all of the requirements for inclusion established
by the Securities and Exchange Commission and the Company's By-Laws at that time
in effect.
For the Board of Directors,
Jerry M. Gluck, Secretary
April 3, 1995
19
<PAGE> 22
APPENDIX A
INCENTIVE COMPENSATION PLAN
FOR
FRANK E. BAXTER,
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
JEFFERIES GROUP, INC.
1. Purpose
The purpose of this Plan is to motivate and reward Mr. Baxter for achieving
profit levels that are in the best interests of the Company's shareholders and
to encourage him to remain with the Company to continue to serve those
interests.
2. Administration
The Plan shall be administered by the Compensation Committee of the Board
of Directors (the "Committee"), who shall have sole discretion in interpreting
the terms of this Plan, in setting goals and objectives as provided for herein,
in defining those items that should or should not be included in the definition
of "profits" for Plan purposes, and in approving any exceptions hereto.
No member of the Board of Directors or the Committee shall be liable for
any action or determination made in good faith pursuant to this Plan, and the
members shall be entitled to indemnification and reimbursement in the manner
provided in the Company's charter or by-laws, and under any directors and
officers liability insurance coverage which may be in effect from time to time.
3. Operation of the Plan
(a) At or as close to the start of the Company's fiscal year, as may be
practical, the Committee shall establish the following:
(i) A "target" level of Company profits after tax and all incentive
payments, including payments under this Plan, that must be achieved during
the fiscal year in order for Mr. Baxter to earn his targeted level of
compensation and that is deemed to be a reasonable, desired and competitive
level of return to the Company's shareholders.
(ii) A "target" level of compensation for Mr. Baxter in his capacity
as Chairman, President and Chief Executive Officer of the Company that is
deemed to be reasonable and appropriate based on an analysis of peer
companies and is commensurate with the target level of profits set by the
Committee.
(iii) The amount of the target level of compensation that will be paid
to Mr. Baxter at regular intervals as salary during the Company's fiscal
year.
(iv) The rate, stated as a percentage of after-tax profits, at which
Mr. Baxter's compensation will be reduced from the target compensation
level if such profits do not equal or exceed the target level.
(v) The rate or rates, stated as percentages of after-tax profits, by
which Mr. Baxter's compensation will be increased from the target
compensation level if such profits exceed the target level.
(b) At the end of the Company's fiscal year and subsequent to adjustments
to the Company's financial results, if any, determined by the Company's outside
auditors, the Committee shall:
(i) Determine the amount of the Company's profits after tax and after
incentives from this or any other plan or arrangement and may make
adjustments to such profits as it deems appropriate to reflect gains or
losses on the sale of assets, repurchase or sale of Company stock, issuance
and/or exercise of
A-1
<PAGE> 23
stock options or any other similar transaction that it deems appropriate
and consistent with serving the best interests of the Company's
shareholders.
(ii) Based on such determination of profits, the Committee shall
determine the amount of reduction or increase from Mr. Baxter's target
compensation and shall authorize payment, in accordance with paragraph 4,
below, of the amount, if any, over and above his salary that reflects
compensation earned under this Plan.
4. Payment of Amount Earned Under the Plan
Amounts earned under this Plan, pursuant to paragraph 3(b)(ii), above,
shall be paid as follows:
(a) Thirty-three and one-third percent (33 1/3%) of the amount earned will
be paid as soon after it is determined as may be practical.
(b) Thirty-three and one-third percent (33 1/3%) of the amount earned will
be paid at the end of the next succeeding fiscal year, subject to the provisions
of paragraph 5, below.
(c) Thirty-three and one-third percent (33 1/3%) of the amount earned will
be paid at the end of the second succeeding fiscal year, subject to the
provisions of paragraph 5, below.
5. Adjustments to Deferred Payments
(a) Amounts deferred for payment, pursuant to paragraphs 4(b) and 4(c),
above, will be converted, at the time of their initial determination, into
"phantom" shares of Jefferies Group, Inc. stock. The number of such phantom
shares will be determined by dividing (i) the sum of the amounts deferred by
(ii) the closing price per share as of the first trading day of the Company's
stock following or coincident with the end of the Company's fiscal year for
which the incentive payments were earned.
(b) In the event any portion of the amount deferred for payment, pursuant
to paragraphs 4(b) and 4(c) above, is attributable to profits that are in excess
of "target," as determined pursuant to paragraph 3(a)(i) of this Plan, the
number of phantom shares determined pursuant to paragraph 5(a) will be reduced
prior to payment if profits in either of the two fiscal years during deferral
are below "target."
The amount by which such phantom shares will be reduced is determined by
dividing (i) the product of the amount by which profits are below target (up to
the amount by which profits in the year or years in which the deferred payments
were earned exceeded target), and the difference between the rate applied to
such excess and the rate at which Mr. Baxter's target compensation is reduced
for profits below target, by (ii) an amount equal to the sum of the closing
price of the Company's stock on the first trading day following or coincident
with the close of the Company's fiscal year for which such adjustment is being
determined, and the amount of dividends, if any, declared on shares of the
Company's Common Stock during the years of deferral.
For purposes of the above paragraph, the adjustment will be determined
first using the highest rate paid to Mr. Baxter during a fiscal year for which
there was an "excess" over target and then to the next highest rate, until the
amount of the compensation reduction attributable to the shortfall of profits,
or the amount of the excess profits, whichever is lesser, is offset against the
deferred payments attributable to "excess" profits.
(c) The amount of a deferred payment to be made to Mr. Baxter will be
determined at the time it is to be paid by multiplying the number of phantom
shares, adjusted pursuant to paragraph 5(a), to be paid, by the sum of (i) the
closing price of the Company's stock on the first trading day following or
coincident with the close of the Company's fiscal year for which such adjustment
is being determined, and (ii) the amount of dividends declared on shares of the
Company's Common Stock during the years of deferral.
A-2
<PAGE> 24
6. Forfeiture of Deferred Payments
In the event Mr. Baxter is terminated for cause, he will forfeit any
deferred amounts not yet payable as of the date of such termination. In the
event of Mr. Baxter's approved retirement, termination for other than cause,
death or permanent disability, any deferred amounts not yet payable as of the
date of such event shall be paid on their regularly scheduled payment date, or
earlier at the sole discretion of the Committee, without regard to the
adjustment described in paragraph 5(b), above.
7. Discretionary Payments
Notwithstanding any of the preceding, the Committee, in its sole
discretion, may authorize payments to Mr. Baxter when it deems such payments are
consistent with the purpose of this Plan and are in the best interests of the
Company's shareholders.
8. Withholding of Payroll Taxes
Prior to payment, the Company may withhold such amounts as may be
appropriate to pay payroll taxes on amounts earned under this Plan.
9. Participation in Other Compensation or Benefit Plans
Nothing in this Plan shall preclude Mr. Baxter's participation in any other
Company compensation or benefit plans.
10. No Guarantee of Continued Employment
Nothing in the Plan shall constitute a guarantee of Mr. Baxter's continued
employment with the Company.
A-3
<PAGE> 25
JEFFERIES GROUP, INC.
Proxy/Voting Direction Card for
Annual Meeting of Stockholders on May 4, 1995
This Proxy/Voting Direction is solicited by Management of the Company.
The undersigned hereby appoints Frank E. Baxter, Tracy G. Herrick and Barry M.
Taylor, and each of them, as proxies, with full power of substitution, to
represent the undersigned and to vote all shares of Common Stock of Jefferies
Group, Inc., held of record by the undersigned on March 31, 1995 or which the
undersigned would be otherwise entitled to vote at the Annual Meeting of
Stockholders to be held on May 4, 1995 and any adjournment thereof, upon all
matters that may properly come before the meeting. All shares votable by the
undersigned, including shares held of record by agents or trustees for the
undersigned as participants in the Jefferies Group, Inc. Employee Stock
Ownership Plan, Employee Profit Sharing Plan and Employee Stock Purchase Plan,
will be voted by the proxies named above in the manner specified on the reverse
side of this card, and such proxies are authorized to vote in their discretion
on such other matters as may properly come before the meeting.
The Board of Directorss recommends a vote FOR the election of Directors.
Election of Directors:
Frank E. Baxter, Richard G. Dooley, Tracy G. Herrick, Michael L. Klowden,
Frank J. Macchiarola, Barry M. Taylor, Mark A. Wolfson.
(Continued and to be signed on the reverse side)
Please mark your
[X] votes as in this
example.
This proxy, when properly executed, will be voted in the manner directed by the
undersigned stockholder. If no direction is made, this proxy will be voted FOR
-----------------------------------------------------
election of Directors.
- ----------------------
FOR WITHHELD
Election of Directors. [ ] [ ]
(see reverse)
For, except vote withheld from
the following nominee(s):
- ----------------------------------
The undersigned acknowledges receipt of the Annual Report, the Form 10-K, the
Notice of Annual Meeting of Stockholders and the Proxy Statement, and hereby
revokes all previously granted proxies.
(Please sign exactly as name appears. Joint owners should each sign personally.
Trustees and others signing in a representative capacity should indicate the
capacity in which they sign.)
----------------------------------
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SIGNATURE(S) DATE
