SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark one) FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended SEPTEMBER 27, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ______________to____________
Commission file number 1-9109
RAYMOND JAMES FINANCIAL, INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
FLORIDA NO. 59-1517485
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
880 CARILLON PARKWAY, ST. PETERSBURG, FLORIDA 33716
- --------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (813) 573-3800
-----------------
Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
- ---------------------------- -----------------------------------------
Common Stock, $.01 Par Value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
NONE
--------------
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Aggregate market value of the voting stock held by non-affiliates of the
registrant as of December 13, 1996: $284,886,701.
Number of common shares outstanding (December 13, 1996): 20,970,681
DOCUMENTS INCORPORATED BY REFERENCE
Proxy Statement for Annual Meeting of Shareholders to be held on February 13,
1997. (The Company intends to file with the Commission a definitive proxy
statement pursuant to Regulation 14A prior to January 24, 1997.)
<PAGE>
PART I
ITEM 1. BUSINESS
(a) GENERAL DESCRIPTION OF BUSINESS
Raymond James Financial, Inc. ("RJF") is a Florida-based holding company
that was incorporated in 1974 as a successor to its predecessor corporation
founded in 1962. Its principal subsidiaries include Raymond James & Associates,
Inc. ("RJA"), Investment Management & Research, Inc. ("IM&R"), Robert Thomas
Securities, Inc. ("RTS"), Eagle Asset Management, Inc. ("Eagle"), Heritage Asset
Management, Inc. ("Heritage") and Raymond James Bank, FSB. All of these
subsidiaries are wholly-owned by RJF. RJF and its subsidiaries are hereinafter
collectively referred to as the "Company".
RJF's principal subsidiary, RJA, was organized in Florida in 1962. RJA is
a regional securities brokerage firm engaged in most aspects of the securities
business. All but 11 of RJA's 42 retail branch offices are located in Florida,
and the Company is the largest brokerage and investment firm headquartered in
that state. RJA also has 16 institutional sales offices, 7 of which are located
in Europe. RJA is a member of the New York Stock Exchange ("NYSE") and other
principal stock and option exchanges.
IM&R was formed in 1973 as an independent contractor financial planning
organization and participates in the distribution of all products and services
offered by RJA to its retail customers through its 439 offices and 78 satellite
offices in all 50 states. IM&R is a member of the National Association of
Securities Dealers ("NASD") and Securities Investor Protection Corporation
("SIPC"), but not of any exchange, as it clears its trades on a fully-disclosed
basis through RJA.
RTS was organized in 1981. It serves independent contractor brokers who do
a majority of their business in individual securities and currently operates 299
branch offices and 106 satellite offices in 48 states. RTS, like IM&R, is a
member of the NASD and SIPC, but not of any exchange, as it also clears all of
its business on a fully-disclosed basis through RJA.
Eagle was formed in 1984 as a registered investment advisor and at
September 27, 1996 had approximately $2.4 billion of client assets under
management. Prior to the inception of Eagle, the asset management operation had
been a division of RJA.
Heritage was organized in 1985 to act as the manager of the Company's
internally sponsored Heritage family of mutual funds. At September 27, 1996 the
eleven funds managed by Heritage had a total of approximately $2.4 billion in
assets.
Raymond James Bank was formed in 1994 in conjunction with the purchase
from the RTC of the deposits of a failed thrift. Its primary purpose is to
provide traditional banking products and services to the clients of the
Company's broker-dealer subsidiaries. At September 27, 1996, Raymond James Bank
had $227 million in assets.
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(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
The Company's operations consist of various financial services provided to
its clients. The following table shows revenues by source for the last three
years:
<TABLE>
<CAPTION>
YEAR ENDED
--------------------------------------------------------------------
Sept. 27, Sept. 29, Sept. 30,
1996 % 1995 % 1994 %
-------- ------ -------- ------ -------- ------
(dollar amounts in thousands)
<S> <C> <C> <C> <C> <C> <C>
SECURITIES COMMISSIONS:
Listed products $ 90,536 12.5 $ 82,738 14.9 $ 68,938 13.6
Over-the-counter .. 133,543 18.5 110,062 19.9 92,609 18.3
Mutual funds 96,099 13.3 68,994 12.4 76,115 15.0
Asset management .. 45,005 6.2 31,159 5.6 27,202 5.4
Annuities and other
insurance products 56,964 7.9 34,238 6.2 36,199 7.1
Other 340 0.1 356 .1 2,130 .4
-------- ------ -------- ------ -------- ------
Total 422,487 58.5 327,547 59.1 303,193 59.8
-------- ------ -------- ------ -------- ------
INVESTMENT BANKING:
Corporate finance
(including underwriting
sales credits) 67,799 9.4 38,262 6.9 54,238 10.7
Limited partnerships 4,797 0.7 4,742 .9 5,981 1.2
-------- ----- -------- ----- -------- -----
Total 72,596 10.1 43,004 7.8 60,219 11.9
-------- ----- -------- ----- -------- -----
INVESTMENT ADVISORY FEES 50,715 7.0 42,922 7.7 51,153 10.1
INTEREST 126,453 17.5 97,211 17.5 58,542 11.5
CORRESPONDENT CLEARING 3,985 0.6 3,721 .7 3,866 .8
NET TRADING PROFITS 12,243 1.7 12,637 2.3 6,843 1.3
FINANCIAL SERVICE FEES 18,191 2.5 14,740 2.7 13,446 2.7
OTHER 15,082 2.1 12,288 2.2 9,874 1.9
-------- ----- -------- ----- -------- -----
Total revenues $721,752 100.0 $554,070 100.0 $507,136 100.0
======== ===== ======== ===== ======== =====
SECURITIES COMMISSIONS BY
BROKER-DEALER:
Raymond James & Associates,
Inc. $190,042 45.0 $146,004 44.6 $130,565 43.1
Investment Management &
Research, Inc. 149,181 35.3 118,738 36.3 114,506 37.8
Robert Thomas Securities,
Inc. 83,264 19.7 62,805 19.1 58,122 19.1
-------- ----- -------- ----- -------- -----
Total $422,487 100.0 $327,547 100.0 $303,193 100.0
======== ===== ======== ===== ======== =====
</TABLE>
(c) NARRATIVE DESCRIPTION OF BUSINESS
At September 27, 1996 the Company employed 2,986 individuals. RJA employed 2,445
of these individuals, 510 of whom were full-time retail account executives. In
addition, 1,993 full-time retail account executives were affiliated with the
Company as independent contractors through IM&R and RTS. Through its
broker-dealer subsidiaries, the Company provides securities services to
approximately 500,000 client accounts. No single client accounts for a material
percentage of the Company's total business.
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RAYMOND JAMES & ASSOCIATES, INC.
RJA's activities in the securities business include retail and
institutional securities brokerage, origination and distribution of limited
partnership interests, management of and participation in underwritings of
equity and fixed income securities, market making in corporate and municipal
securities, origination, distribution and management of mutual funds and unit
trusts, and research and investment advisory services. RJA also offers financial
planning services for individuals and provides clearing services for IM&R, RTS
and other unaffiliated broker-dealers. For the year ended September 27, 1996 the
revenues of RJA accounted for 62% of the consolidated revenues of the Company.
RJA is a member of the NYSE, American Stock Exchange, Philadelphia Stock
Exchange, Chicago Board Options Exchange, New York Futures Exchange, Pacific
Exchange and Chicago Stock Exchange. It is also a member of the Securities
Industry Association, NASD and SIPC. SIPC provides insurance protection for
customers' accounts of up to $500,000 each (limited to $100,000 for claims for
cash) in the event of the Company's liquidation. In addition, RJA carries up to
$24,500,000 per account of excess customer insurance.
BROKERAGE TRANSACTIONS. RJA provides securities brokerage services to both
retail and institutional customers. RJA charges commissions to its retail
customers, on both exchange and over-the-counter transactions, in accordance
with its established commission schedule. In certain instances, varying
discounts from the schedule are given, generally based upon the customer's level
of business, the trade size and other relevant factors. RJA discounts its
commissions substantially on institutional transactions based on trade size and
the amount of business conducted annually with each institution.
Customers' transactions in securities are effected on either a cash or
margin basis. In margin transactions, the customer pays a portion of the
purchase price, and RJA makes a loan to the customer for the balance,
collateralized by the securities purchased or by other securities owned by the
customer. Interest is charged to customers on the amount borrowed to finance
margin transactions. The financing of margin purchases is an important source of
revenue to RJA, since the interest rate paid by the customer on funds loaned by
RJA exceeds RJA's cost of short-term funds. The interest rates charged to
customers on such loans depend on the average margin loan balance in the
customer's account and range from prime plus 1% to prime minus .75%.
Typically, secured bank borrowings and equity capital are the primary
sources of funds to finance customers' margin account borrowings. Since the
inception of the Credit Interest Program in 1981, however, the Company's primary
source of funds to finance customers' margin account balances has been cash
balances in customers' accounts which are awaiting investment. In addition,
pursuant to written agreements with customers, broker-dealers are permitted by
Securities and Exchange Commission ("SEC") and NYSE rules to lend customer
securities in margin accounts to other brokers. SEC regulations, however,
restrict the use of customers' funds derived from pledging and lending
customers' securities, as well as funds awaiting investment, to the financing of
margin account balances, and to the extent not so used, such funds are required
to be deposited in a special account for the benefit of customers. The
regulations also require broker-dealers, within designated periods of time, to
obtain possession or
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control of, and to segregate, customers' fully paid and excess margin
securities.
OVER-THE-COUNTER AND OTHER TRADING. Trading securities in the
over-the-counter ("OTC") market involves the purchase of securities from, and
the sale of securities to, clients of the Company or other dealers who may be
purchasing or selling securities for their own account or acting as agent for
their clients. Profits and losses are derived from the spreads between bid and
asked prices, as well as market trends for the individual securities during the
holding period. RJA makes markets in corporate stocks and bonds, municipal bonds
and various government securities. At September 27, 1996 RJA made markets in 198
common stocks traded in the OTC market. Most of these are companies with whom
RJA has an investment banking relationship or companies whose securities are
followed by RJA Research.
RJA frequently acts as agent in the execution of OTC orders for its
customers and as such transacts these trades with other dealers. When RJA
receives a customer order in a security in which it makes a market, it may act
as principal if it matches or improves upon the best price in the dealer market,
plus or minus a mark-up or mark-down not exceeding the equivalent agency
commission charge. Recently adopted regulations require that customer limit
orders be satisfied prior to the brokerage firm buying securities into their own
inventory at the same price.
STOCK BORROW/STOCK LOAN PROGRAM. This program involves the borrowing and
lending of securities from and to other broker-dealers and other financial
institutions. The borrower of the securities puts up a cash deposit, commonly
102% of the market value of the securities. This deposit, which is adjusted
daily to reflect changes in current market value, earns interest at a negotiated
rate, typically .2% to .5% below what the lender of the securities can earn on
the funds.
MUTUAL FUNDS. RJA sells a number of professionally managed, load mutual
funds and offers, in addition, a selection of no-load funds. RJA maintains
dealer-sales agreements with most major distributors of mutual fund shares sold
through broker-dealers. Commissions on such sales generally range from 1% to 5%
of the dollar value of the transaction. Alternative sales compensation
structures typically include front-end charges, "back-end" or deferred sales
charges, and an annual charge in the form of a fund expense.
At September 27, 1996, the Company had eleven internally sponsored mutual
funds for which RJA acts as distributor. (See Heritage Asset Management, Inc.
description on pages 7 & 8.) As the distributor of these funds, RJA has the
right to enter into dealer agreements with other broker-dealers for the sale of
Heritage funds to their clients.
ASSET MANAGEMENT SERVICES ("AMS"). RJA formed this department in April
1990 to encompass several programs involving portfolio management, primarily
Investment Advisory Services ("IAS"), the Passport Program ("Passport"), the
Managed Investment Program ("MIP") and the Preferred Portfolio Account ("PPA").
IAS, which commenced operations in August 1987, assists clients in selecting
portfolio managers, establishes custodial facilities, monitors performance of
client accounts, provides clients with accounting and other administrative
services and assists portfolio managers with certain trading management
activities. IAS earns fees generally ranging from .5%-1.0% of asset balances per
annum, a substantial portion of
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which is paid to portfolio managers who direct the investment of the client's
account. At September 27, 1996, this program had approximately $980 million in
assets under management through agreements with 22 independent investment
advisors. In addition, two proprietary asset managers, Awad and Associates Asset
Management ("AWAD") and Carillon Asset Management ("Carillon"), are offered
through this program.
Passport is a non-discretionary advisory fee alternative that allows
clients of RJA, IM&R and RTS to pay a quarterly fee plus low transaction charges
in lieu of commissions. Fees are based on the individual account size and are
also dependent on the type of securities in the account. In addition, AMS
collects an administrative fee of up to .2% of asset balances annually, for
which clients receive a quarterly performance report and other services. As of
September 27, 1996, Passport had approximately $1.3 billion in assets serviced
by account executives.
MIP is a program that allows selected account executives to manage
customer portfolios on a discretionary, wrap fee basis. The account executives
must satisfy certain criteria and complete educational courses to be selected
for this program. Fees are dependent on the size of the account and the type of
securities in the account. AMS establishes custodial facilities, monitors
performance of client portfolios, provides clients with accounting and other
administrative services and assists the account executives with certain trading
management activities. AMS collects an administrative fee of up to .2% of asset
balances. As of September 27, 1996, MIP had approximately $92 million in assets
serviced by fourteen account executives.
PPA is another non-discretionary wrap fee pricing alternative that allows
clients to pay a quarterly fee in lieu of commissions. Unlike Passport, no
transaction charge is imposed. The fee structure and services provided by AMS
are similar to Passport and MIP. As of September 27, 1996, PPA had approximately
$56 million in assets.
AWAD is primarily a small and mid-cap equity portfolio management division
of RJA which was formed in March of 1992. Clients pay fees and/or commissions
for management of their accounts. Present fees range from .5% to 1.0% of asset
balances annually. In addition to private accounts, AWAD also manages a portion
of the Heritage Small Cap Stock Fund Portfolio. AWAD, which is offered through
the IAS program, had approximately $560 million under management at September
27, 1996.
Carillon commenced operations in 1993. Carillon manages approximately $50
million for private accounts investing exclusively in closed-end funds.
Fees are currently .375% of assets annually.
In addition to the foregoing programs, AMS also monitors various outside
money managers that are not a part of the IAS program.
INSTITUTIONAL SALES, TRADING AND RESEARCH. RJA has a domestic staff of 144
professionals who provide research, sales and execution services to RJA's
institutional clients. In addition, RJA services 7 institutional sales offices
located in Europe which have 45 account executives. RJA's research is focused on
the identification of industries and companies which its staff believe are
undervalued and/or have above average growth potential. These professionals also
attempt to provide general coverage on public companies located in Florida and
throughout the southeastern United
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States. Proprietary research reports, supplemented by research purchased from
outside services, are also provided to retail clients.
INVESTMENT BANKING GROUP. The 55 professionals of RJA's Investment Banking
Group, located primarily in St. Petersburg with satellite offices in Atlanta,
Boston, Dallas, and Houston, operate in two distinct areas. The Corporate
Finance Department is involved in a variety of activities including public and
private debt and equity financing for corporate clients, merger and acquisition
consulting services, fairness opinions and evaluations. The Real Estate
Investment Banking Department originates, syndicates, markets and monitors the
performance of public and private limited partnerships, primarily in the real
estate and equipment leasing industries. An active secondary trading market is
also maintained for the purchase and resale of public limited partnership units.
RJA's affiliates frequently act as a general or co-general partner for the
limited partnerships the Company syndicates and/or manages. See the description
of the Company's other subsidiaries on page 10.
SYNDICATE DEPARTMENT. The Syndicate Department coordinates the
distribution of newly issued securities to institutional and retail investors.
They handle public offerings that are managed or co-managed by RJA as well as
selling group and syndicate participations managed by other firms. This
department primarily deals with equity underwritings and brokered certificate of
deposit offerings.
FIXED INCOME DEPARTMENT. Through the Fixed Income Department, RJA
distributes both taxable and tax-exempt fixed income products to its
institutional and retail clients. These products include municipal, corporate,
government and mortgage-backed bonds, preferred stock and unit investment
trusts. RJA carries inventory positions of taxable and municipal securities in
both the primary and secondary market. The department's Public Finance Division,
operating out of 6 offices located throughout the State of Florida as well as
Atlanta and Birmingham, acts as financial advisor or underwriter to various
municipal agencies or political subdivisions. RJA also acts as an underwriter or
selling group member for corporate bonds, agency bonds, preferred stock and unit
investment trusts. When underwriting new issue securities, RJA agrees to
purchase the issue through a negotiated sale or submits a competitive bid. In
addition to St. Petersburg, the Fixed Income Department maintains institutional
sales and trading offices in New York, Chicago, Los Angeles, Houston, Boston,
Washington D.C., and Dublin, Ohio. To assist our institutional clients, the
department's Fixed Income Research Group provides value-added services and
publishes research reports containing both specific product information and
information on topics of interest such as market and regulatory developments.
OPERATIONS AND ADMINISTRATION. RJA's operations/administrative personnel
are responsible for the execution of orders, processing of securities
transactions, custody of customer securities, receipt, identification and
delivery of funds and securities, compliance with regulatory and legal
requirements, internal financial accounting and controls and general office
administration for most of the Company's operations.
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INVESTMENT MANAGEMENT & RESEARCH, INC.
IM&R participates in the distribution of all the products and services
offered by RJA to its retail customers through 1,071 independent contractor
registered representatives in 517 offices and satellite offices throughout all
50 states. The number of registered representatives in these offices ranges from
1 to 21. Such representatives devote all or substantially all of their time to
the sale of securities and, while these independent contractors must conduct all
securities business through IM&R, their contracts permit them to conduct
insurance, real estate brokerage, accounting services or other business for
their clients or for their own account. Many IM&R registered representatives are
better characterized as financial planners than as stock brokers, although they
are not required to conduct their business as financial planners. Independent
contractors are responsible for all of their direct costs.
ROBERT THOMAS SECURITIES, INC.
RTS has 922 full-time independent contractor registered representatives in
48 states who offer securities and investment advice to individuals and
institutions through a network of 405 branch offices and satellite offices. Of
these branches, 101 are located within depository institutions (banks, savings
and loans and credit unions). RTS representatives offer the full range of
securities products and services of RJA. RTS branches have the independence to
set their own commissions on agency business within regulatory guidelines. RTS
branches and their registered personnel may offer non-securities financial
products (i.e., life insurance) to customers outside of their relationship with
RTS.
EAGLE ASSET MANAGEMENT, INC.
Eagle is a registered investment advisor with approximately $2.4 billion
under management at September 27, 1996. Eagle's clients include pension and
profit sharing plans, retirement funds, foundations, endowments, trusts and
individuals. Accounts are managed on a discretionary basis in accordance with
the investment objective(s) specified by the client. Eagle manages approximately
$400 million for 173 institutional clients and $2.0 billion for 7,658 retail
accounts.
Eagle's investment management fee generally ranges from .25%-1.0% of asset
balances per year depending upon the size and investment objective of the
account. In addition to the management fees, clients are required to pay
brokerage commissions (or a fee in lieu thereof) for transactions in their
account.
HERITAGE ASSET MANAGEMENT, INC.
Heritage is the manager of the internally sponsored Heritage family of
mutual funds, currently consisting of Heritage Cash Trust (a money market fund
with taxable and tax-exempt portfolios), Heritage Capital Appreciation Trust (a
mutual fund seeking long-term appreciation), Heritage Income-Growth Trust (a
mutual fund seeking long-term total return with approximately equal emphasis on
current income and capital appreciation), Heritage Income Trust (a trust
consisting of the High Yield Bond Fund which seeks high current income and the
Intermediate Government Fund which seeks
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high current income consistent with the preservation of capital), Heritage
Series Trust (a trust consisting of the Small Cap Stock Fund which seeks
long-term capital appreciation through investments in small capitalization
stocks, the Value Equity Fund which seeks long-term capital appreciation and
secondarily current income, and the Growth Equity Fund which seeks growth
through long-term capital appreciation), and the Heritage U.S. Government Income
Fund (a closed-end fund seeking high current income with the potential for
capital appreciation). Heritage also serves as the administrator for the
Heritage Series Trust-Eagle International Equity Portfolio, which seeks
long-term capital appreciation through investments in international stocks.
Heritage serves as the transfer agent for all Heritage open-end funds and as
fund accountant for all Heritage open-end funds except for the Eagle
International Equity Portfolio; however, custody of all assets is maintained by
State Street Bank, Boston, Mass. Net assets at September 27, 1996 were as
follows (in thousands):
Heritage Cash Trust:
Money Market Fund $1,679,652
Municipal Money Market Fund 319,880
Heritage Capital Appreciation Trust 74,306
Heritage Income-Growth Trust 48,867
Heritage Income Trust:
High Yield Bond Fund 39,703
Intermediate Government Fund 18,117
Heritage Series Trust:
Small Cap Stock Fund 120,430
Value Equity Fund 24,870
Eagle International Equity Portfolio 3,975
Growth Equity Fund 15,544
Heritage U.S. Government Income Fund 37,326
----------
$2,382,670
==========
Portfolio management for the Growth Equity Fund and the Income-Growth
Trust is subcontracted to Eagle. Portfolio management for the Small Cap Stock
Fund is subcontracted to AWAD and Eagle. Portfolio management for the Capital
Appreciation Trust is subcontracted to Liberty Investment Management, Inc. (See
Notes to Consolidated Financial Statements.)
PLANNING CORPORATION OF AMERICA
Planning Corporation of America ("PCA"), a wholly-owned subsidiary of RJA,
is a general insurance agency and represents a number of insurance companies.
PCA provides products and marketing support for a broad range of insurance
products, principally fixed and variable annuities, all forms of life insurance,
disability insurance and long-term care coverage to the account executives of
the Company's broker-dealer subsidiaries.
RJ PROPERTIES, INC.
RJ Properties, Inc. ("RJP"), headquartered in Atlanta, Georgia, acts as a
general or co-general partner for private and public limited partnerships
currently owning 33 apartment properties and 5 shopping centers. RJP acquires
properties for syndications for which it serves as a
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general partner and receives acquisition fees and residual interests in profits
and proceeds from future sales of the projects. Through its subsidiary, Raymond
James Realty Advisors, RJP acts as the advisor for real estate portfolios of
institutional clients. At September 27, 1996, RJP acted as advisor for
approximately $837 million of such assets. In addition, RJP performs the
property management function for certain properties owned either by partnerships
in which RJP is a general partner or properties in portfolios of institutional
clients. At September 27, 1996, RJP had 32 properties with a total of 7,087
apartment units under management. The Company owns 85% of the outstanding shares
of RJP. Mr. Francis S. Godbold, President and a Director of the Company, owns
7.5%, and Mr. J. Robert Love, President of RJP, owns the remaining 7.5%.
RAYMOND JAMES TRUST COMPANY
SOUND TRUST COMPANY
Raymond James Trust Company was chartered in 1992 and opened for business
in September 1992. This wholly-owned subsidiary of the Company was formed
primarily to provide personal trust services to existing clients of the
broker-dealer subsidiaries. Portfolio management of trust assets is generally
subcontracted to the asset management operations of the Company. In October 1993
the Company acquired a second trust company, Sound Trust Company, in Tacoma,
Washington. This subsidiary provides personal trust services primarily to
broker-dealer clients outside the State of Florida. These two subsidiaries had a
combined total of $297 million in client assets at September 27, 1996.
RAYMOND JAMES BANK, FSB
Raymond James Bank, FSB, ("RJ Bank") was chartered as a federal savings
bank on May 6, 1994, in conjunction with the acquisition of deposits of certain
branches of a failed thrift from the Resolution Trust Corporation. As a member
of the Federal Deposit Insurance Corporation ("FDIC"), RJ Bank offers
FDIC-insured deposit and residential lending products to clients of the
broker-dealer subsidiaries and directly to the public within its assessment
area. At September 27, 1996, RJ Bank had total assets of approximately $227
million.
RAYMOND JAMES INTERNATIONAL HOLDINGS, INC.
Raymond James International Holdings, Inc. is a Delaware corporation
formed in 1994 to house the Company's foreign operations. To date, operations
consist of joint venture investments in broker-dealers in India and South
Africa, as well as participation in asset management companies in Dublin and
Paris.
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OTHER SUBSIDIARIES
Over time, the Company has formed several subsidiaries to act as general
or co-general partner for various public and private limited partnerships
syndicated by RJA. These subsidiaries include:
SUBSIDIARY TYPE OF PARTNERSHIP(S)
---------------------------- --------------------------------
RJ Leasing, Inc. Equipment leasing
RJ Leasing - 2, Inc. Equipment leasing
RJ Equities, Inc. Real estate
RJ Health Properties, Inc. Nursing homes
RJ Credit Partners, Inc. Government subsidized apartments
Raymond James Partners, Inc. Various
RJ Medical Investors, Inc. Nursing homes
RJ Partners, Inc. Various
The Company has several other subsidiaries, but their activities are not
material to the Company's operations.
COMPETITION
The Company's subsidiaries compete with many larger, better capitalized
providers of financial services, including other securities firms, some of which
are affiliated with major financial services companies, insurance companies,
banking institutions and other organizations. They also compete with a number of
firms offering discount brokerage services, usually with lower levels of
service, to individual customers. The Company's subsidiaries compete principally
on the basis of service, product selection, location and reputation in local
markets.
SECURITIES VOLUME AND PRICES
The securities industry can be subject to substantial fluctuations in
volume of securities transactions. These fluctuations can occur on a daily basis
as well as over longer periods as a result of national and international
economic and political events, and broad trends in business and finance. Reduced
volume generally results in lower brokerage and investment banking revenues.
Profitability is adversely affected in periods of reduced volume because fixed
costs remain relatively unchanged. To the extent that purchases of securities
are permitted to be made on margin, securities firms also are subject to risks
inherent in extending credit, especially during periods of rapidly declining
securities prices, in that a market decline could reduce collateral value below
the amount of a customer's indebtedness.
REGULATION
The securities industry in the United States is subject to extensive
regulation under federal and state laws. The Securities and Exchange Commission
("SEC") is the federal agency charged with administration of the federal
securities laws. Much of the regulation of broker-dealers, however, has been
delegated to self-regulatory organizations, principally the NASD and the NYSE.
These self-regulatory organizations adopt rules (which are subject to approval
by the SEC) for governing the industry and
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conduct periodic examinations of member broker-dealers. Securities firms are
also subject to regulation by state securities commissions in the states in
which they are registered. RJA, IM&R and RTS are currently registered in all 50
states.
The regulations to which broker-dealers are subject cover all aspects of
the securities business, including sales methods, trade practices among
broker-dealers, capital structure of securities firms, record keeping and the
conduct of directors, officers and employees. Additional legislation, changes in
rules promulgated by the SEC and by self-regulatory organizations or changes in
the interpretation or enforcement of existing laws and rules often directly
affect the method of operation and profitability of broker-dealers. The SEC and
the self-regulatory organizations may conduct administrative proceedings which
can result in censure, fine, suspension or expulsion of a broker-dealer, its
officers or employees. The principal purpose of regulation and discipline of
broker-dealers is the protection of customers and the securities markets rather
than protection of creditors and shareholders of broker-dealers.
See Notes 12 and 13 of the Notes to Consolidated Financial Statements for
further description of certain SEC regulations.
ITEM 2. PROPERTIES
Properties owned by the Company at September 27, 1996 include a 310,000
square foot headquarters complex (two buildings) and the 86,000 square foot
former headquarters building, both located in St. Petersburg, Florida. The
former headquarters building is presently unoccupied and available for sale or
lease. In addition, the Company leases 74,000 square feet in a nearby office
building. The Company owns 13.87 acres (28.97 acres as of December 13, 1996)
near the current headquarters for long-term growth purposes and is planning
construction of a third headquarters building. The RJA branch office building in
Crystal River, Florida, is owned by the Company; all other RJA branches are
leased with various expiration dates through 2002. The IM&R and RJP headquarters
offices in Atlanta, Georgia are also under leases. See Notes 4 and 9 of the
Notes to Consolidated Financial Statements for further information regarding the
Company's leases.
Leases for branch offices of IM&R and RTS are the responsibility of the
respective independent contractor registered representatives.
ITEM 3. LEGAL PROCEEDINGS
The Company is a defendant or co-defendant in various lawsuits incidental
to its securities business. The Company is contesting the allegations of the
complaints in these cases and believes that there are meritorious defenses in
each of these lawsuits. In view of the number and diversity of claims against
the Company, the number of jurisdictions in which litigation is pending and the
inherent difficulty of predicting the outcome of litigation and other claims,
the Company cannot state with certainty what the eventual outcome of pending
litigation or other claims will be. In the opinion of management, based on
discussions with counsel, the outcome of these matters will not result in a
material adverse effect on the consolidated financial position or results of
operations of the Company.
11
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER
MATTERS
The Company's common stock is traded on the NYSE under the symbol "RJF".
The following table sets forth for the periods indicated the high and low prices
for the common stock.
1996 1995
----------------- ----------------
HIGH LOW HIGH LOW
------- ------- ------- -------
First Quarter $25-1/4 $20-1/8 $15-1/2 $13-1/4
Second Quarter 23-3/8 19 18 13-3/4
Third Quarter 23-1/2 20-1/2 20-1/2 16-1/4
Fourth Quarter 24-3/8 19-3/4 22-5/8 18-1/2
Since the Company initiated payment of a cash dividend in 1985, there have
been thirteen increases in the dividend rate, five of which were in the form of
stock splits and stock dividends. The dividend rate in fiscal 1996 was $.095 per
quarter; the dividend rate was raised to $.11 for the first quarter of fiscal
1997.
The payment of dividends on the Company's common stock is subject to the
availability of funds from the Company's subsidiaries, including the
broker-dealer subsidiaries which may be subject to restrictions under the net
capital rules of the SEC and the NYSE. Such restrictions have never become
applicable with respect to the Company's dividend payments. (See Note 12 of the
Notes to Consolidated Financial Statements.)
At December 13, 1996 there were approximately 7,800 holders of the
Company's common stock.
12
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
(in thousands, except per share data)
<TABLE>
<CAPTION>
YEAR ENDED
--------------------------------------------------------------
SEPT. 27, SEPT. 29, SEPT. 30, SEPT. 24, SEPT. 25,
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ----------
OPERATING RESULTS:
<S> <C> <C> <C> <C> <C>
Revenues $ 721,752 $ 554,070 $ 507,136 $ 451,747 $ 361,134
Net income $ 65,978 $ 46,141 $ 42,069 $ 49,347 $ 41,022
Net income per share:*
Primary $ 3.14 $ 2.23 $ 1.97 $ 2.28 $ 1.89
Fully diluted $ 3.12 $ 2.21 $ 1.97 $ 2.27 $ 1.89
Weighted average shares
outstanding:*
Primary 21,025 20,705 21,359 21,623 21,737
Fully diluted 21,116 20,877 21,359 21,713 21,737
Cash dividends declared
per share* $ .38 $ .36 $ .32 $ .21 $ .16
FINANCIAL CONDITION:
Total assets $2,566,381 $2,012,715 $1,698,262 $1,447,570 $ 806,230
Long-term debt $ 12,909 $ 13,084 $ 13,243 $ 13,387 $ 13,518
Shareholders' equity $ 326,632 $ 266,193 $ 227,452 $ 205,565 $ 160,935
Shares outstanding* 20,894 20,614 20,494 21,316 21,225
Equity per share
at end of period* $ 15.63 $ 12.91 $ 11.09 $ 9.64 $ 7.58
</TABLE>
* Gives effect to the common stock splits paid on February 3, 1992 and
November 15, 1993.
13
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
RESULTS OF OPERATIONS - THREE YEARS ENDED SEPTEMBER 27, 1996
Fiscal 1996 was the Company's twelfth consecutive year of record revenues.
More importantly, earnings also reached a new record level as, a very favorable
equity market spurred investor and capital markets activity.
Fiscal 1995 was a mixed year, with the first six months a continuation of
1994's subdued market conditions in a period of rising interest rates. The
second half of fiscal 1995 saw a dramatic turnaround, with a return to declining
interest rates and a vibrant, rapidly rising stock market.
Fiscal 1994 was a mirror image of 1995, with the first half a continuation
of the ebullient 1993 conditions and a dramatic slowdown occurring in the second
half as interest rates began a rapid ascent.
YEAR ENDED
---------------------------------------------------
SEPT. 27, % INCR. SEPT. 29, % INCR. SEPT. 30,
1996 (DECR.) 1995 (DECR.) 1994
--------- ------- --------- ------- ---------
Revenues: (000's) (000's) (000's)
Securities commissions $422,487 29% $327,547 8% $303,193
Investment banking 72,596 69% 43,004 (29%) 60,219
Investment advisory fees 50,715 18% 42,922 (16%) 51,153
Interest 126,453 30% 97,211 66% 58,542
Correspondent clearing 3,985 7% 3,721 (4%) 3,866
Net trading profits 12,243 (3%) 12,637 85% 6,843
Financial service fees 18,191 23% 14,740 10% 13,446
Other 15,082 23% 12,288 24% 9,874
-------- -------- --------
$721,752 30% $554,070 9% $507,136
======== ======== ========
Continued strength of the securities markets and record transaction volume
in fiscal 1996 resulted in increased securities commissions from the sales of
all lines of products, with the largest increases in absolute terms in mutual
funds, over-the-counter stocks and annuities. While the sales force grew at an
acceptable rate over fiscal 1995, as illustrated below, the increased
productivity of existing account executives provided a significant portion of
the increased commission revenues.
Despite the volatility of the markets in fiscal 1995, the Company managed
to realize a modest rate of increase over 1994 in securities commission
revenues. From a product line perspective, the largest volume increase, by a
wide margin, was in equities.
<TABLE>
<CAPTION>
YEAR ENDED
--------------------------------------------------------
SEPT. 27, SEPT. 29, % INCR. SEPT. 30,
1996 % INCR. 1995 (DECR.) 1994
--------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Number of retail account executives
at yearend 2,503 9% 2,288 4% 2,207
Retail commission revenues (000's) $332,722 26% $264,211 12% $236,548
Number of institutional salesmen
at yearend 129 10% 117 13% 104
Institutional commission revenues
(000's) $ 89,765 42% $ 63,336 (5%) $ 66,645
Number of trades processed 2,526,000 20% 2,104,000 12% 1,878,000
</TABLE>
14
<PAGE>
Fiscal 1996 was a year of record equity underwriting levels and merger and
acquisition activity, particularly in our fourth fiscal quarter. Investment
banking revenues, including new issue sales credits, increased 69% over the
prior year to a record $72.6 million after a decline from fiscal 1994 to 1995.
Fiscal 1994 and 1995 revenues each reflected partial years of slower market
conditions. The number of managed or co-managed underwritings and the dollar
volume of these transactions were as follows: 1996 - 38 offerings for $2.7
billion; 1995 - 24 offerings for $1.4 billion; and 1994 - 35 offerings for $2.2
billion. In addition, merger and acquisition fees have increased each year
during this period to $12 million in 1996 from $4.9 million in 1995 and $3.7
million in 1994.
Assets under management showed a strong increase during fiscal 1996 as a
result of net new account sales and appreciation of existing accounts. The
decline in investment advisory fees from 1994 to 1995 reflects the fees on the
$4.3 billion in assets previously managed by Eagle for which management was
assumed by Liberty Investment Management, Inc. ("Liberty") beginning on January
1, 1995. As described in Note 15 of the Notes to Consolidated Financial
Statements, the Company has received 50% of the fees from these accounts while
bearing none of the expenses. This was to continue through December 31, 1999,
however, subsequent to fiscal 1996 yearend, Liberty entered into an agreement
for the sale of Liberty's assets to a third party, scheduled to close in January
1997. Accordingly, the Company will receive a lump sum settlement for its
remaining 3 years' interest in Liberty's revenues, as well as for its option to
purchase 20% of Liberty at a future date.
As shown in the table below, the Company's various asset management
operations have had somewhat disparate growth rates:
<TABLE>
<CAPTION>
SEPT. 27, % INCR. SEPT. 29, % INCR. SEPT. 30,
1996 (DECR.) 1995 (DECR.) 1994
----------- ---- ---------- ---- ----------
<S> <C> <C> <C> <C> <C>
(000's) (000's) (000's)
Eagle Asset Management $ 2,388,922 29% $1,856,284 (70%) $6,129,827
Heritage Family of Mutual Funds 2,382,670 24% 1,921,377 30% 1,479,711
Investment Advisory Services 980,415 17% 836,065 10% 763,313
Awad and Associates Asset Management 490,477 48% 331,236 64% 202,301
Focus Investment Advisors -- -- -- (100%) 50,775
Carillon Asset Management 50,795 (28%) 70,217 (25%) 93,636
----------- ---------- ----------
Subtotal 6,293,279 25% 5,015,179 (42%) 8,719,563
Liberty Investment Management, Inc. 5,468,913 14% 4,806,210 --
----------- ---------- ----------
Total Financial Assets Under
Management $11,762,192 20% $9,821,389 13% $8,719,563
=========== ========== ==========
</TABLE>
During 1995, real estate assets under management increased significantly
and continued to grow in fiscal 1996, as the Company's RJ Properties subsidiary
has become a recognized manager of institutional real estate portfolios.
Including partnerships for which the Company's various subsidiaries act as
general or co-general partner, total tangible assets under management at yearend
for 1996, 1995 and 1994 were $1.6 billion, $1.3 billion and $980 million,
respectively.
15
<PAGE>
Net interest income is a growing source of earnings. A large majority of
the increase has been a result of the dramatic growth in retail brokerage
account balances, including resultant segregated account assets. The major
components of interest earnings are as follows:
<TABLE>
<CAPTION>
YEAR ENDED
---------------------------------------------------------
SEPT. 27, SEPT. 29, SEPT. 30,
1996 1995 1994
--------- --------- ---------
(balances in 000's)
<S> <C> <C> <C> <C> <C>
Margin balances:
Average balance $386,422 $337,969 $298,674
Average rate 8.2% 8.3% 6.3%
-------- -------- --------
$31,529 $27,974 $18,875
Stock borrowed:
Average balance 947,412 761,204 955,597
Average rate 4.7% 4.8% 2.8%
-------- -------- --------
44,361 36,228 26,625
Assets segregated pursuant
to Federal Regulations:
Average balance 452,710 294,664 132,169
Average rate 5.4% 5.7% 3.9%
-------- -------- --------
24,538 16,813 5,184
Raymond James Bank, FSB 11,980 7,197 597
Other interest revenue 14,045 8,999 7,261
------- -------- --------
Total interest revenue 126,453 97,211 58,542
------- -------- --------
Credit interest program:
Average balance 678,910 482,985 303,123
Average rate 4.8% 5.1% 3.3%
-------- -------- --------
32,374 24,625 9,908
Stock loaned:
Average balance 941,937 765,799 955,328
Average rate 4.4% 4.4% 2.6%
-------- -------- --------
41,165 33,867 24,584
Raymond James Bank,FSB 7,782 4,268 221
Other interest expense 2,150 1,998 1,441
-------- -------- --------
Total interest expense 83,471 64,758 36,154
-------- -------- --------
Net interest $ 42,982 $ 32,453 $ 22,388
======== ======== ========
</TABLE>
Net trading profits remained consistent in total from fiscal 1995 to 1996.
These profits arose primarily from over-the-counter equity inventory positions
as the equity markets continued to rise and record volume generated higher
spread retention. In addition, 1996 is the first year of trading profits from
the newly acquired specialist operations. The large improvement in trading
results from fiscal 1994 to 1995 is a reflection of the difficult environment
for fixed income securities during 1994.
The increase in financial service fees in both fiscal 1996 and 1995 is a
result of the growth of the Company's retail client base. Examples of items in
this category are IRA account fees, transfer and postage fees, passport
transaction fees and money market distribution and processing fees.
The increase in other income from 1995 to 1996 was due to increased floor
brokerage revenues as the Company increased its number of floor traders during
this active market period. In addition, the Company's RJ Properties subsidiary
16
<PAGE>
has increased substantially the number of apartment units for which it receives
property management fees.
<TABLE>
<CAPTION>
YEAR ENDED
--------------------------------------------------------
SEPT. 27, % INCR. SEPT. 29, % INCR. SEPT. 30,
1996 1995 (DECR.) 1994
--------- ------- --------- ------- ---------
(000's) (000's) (000's)
<S> <C> <C> <C> <C> <C>
Expenses:
Employee compensation:
Sales commissions $294,031 33% $221,629 1% $219,291
Administrative and benefit
costs 80,092 12% 71,364 8% 65,895
Incentive compensation 49,781 49% 33,433 2% 32,893
-------- -------- --------
Total employee compensation 423,904 30% 326,426 3% 318,079
-------- -------- --------
Communications 30,585 19% 25,619 (3%) 26,420
Occupancy and equipment 23,927 10% 21,653 37% 15,758
Clearance and floor brokerage 10,098 22% 8,257 8% 7,644
Interest 83,471 29% 64,758 79% 36,154
Business development 16,053 13% 14,210 - 14,220
Other 25,189 35% 18,688 (14%) 21,644
-------- -------- --------
$613,227 28% $479,611 9% $439,919
======== ======== ========
</TABLE>
Since several of the expense line items are explained by the fluctuation
in related revenues and others were relatively constant or experienced a general
corporate growth rate during this three year period, the following discussion
will focus on the expense items not falling into either of these two categories.
Incentive compensation expenses are based on departmental, subsidiary and
firm-wide profitability and reflect the record earnings in fiscal 1996.
The increase in communications expense in fiscal 1996 reflects the costs
of increased automation: software, communication and archival equipment,
satellites and quote services. General increased business volume also resulted
in increased telephone, printing and supplies costs.
The occupancy and equipment expense increase between fiscal 1994 and 1995
is a result of increased and upgraded retail office space and account executive
workstations, the latter being depreciated over very short periods (e.g. two
years) for financial statement purposes.
The fluctuation in other expense is primarily the result of the timing of
legal expenses and settlements. In addition, there was a one-time FDIC
assessment of approximately $600,000 for RJ Bank in 1996.
LIQUIDITY AND CAPITAL RESOURCES
Net cash from operating activities during the current year was
$394,531,000. Cash was generated by increased customer balances in the credit
interest program and by fluctuations in various asset and liability accounts.
Investing activities required $84,342,000 during fiscal 1996. Net
additions to fixed assets consumed $10,093,000, the majority of which was for
the purchase of computers and office furniture and equipment. Net purchases of
investments consumed $74,249,000. These investments were primarily
mortgage-backed securities purchased by RJ Bank.
17
<PAGE>
Financing activities provided $4,702,000, primarily the result of
borrowings from banks and employee stock purchases and exercise of stock
options.
The Company has notes payable consisting of long-term debt in the amount
of $12.9 million in the form of a mortgage on its headquarters office building
and a balance of $11.9 million on the Raymond James Credit Corporation line of
credit.
The Company has two committed lines of credit. During 1995, the parent
company obtained an unsecured $50 million line for general corporate purposes.
In addition, a $50 million line was established to finance Raymond James Credit
Corporation, a Regulation G subsidiary organized to provide loans collateralized
by restricted or control shares of public companies. In addition, RJA has
uncommitted lines of credit aggregating $255,000,000.
The Company's broker-dealer subsidiaries are subject to requirements of
the SEC relating to liquidity and capital standards (see Notes to Consolidated
Financial Statements).
EFFECTS OF RECENTLY ISSUED ACCOUNTING STANDARDS
During fiscal 1996, the Financial Accounting Standards Board issued
Statement No. 123 "Accounting for Stock-Based Compensation" ("FAS 123") and No.
125 "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities" ("FAS 125").
The Company will adopt FAS 123 in fiscal year 1997. FAS 123 is not
expected to have a material impact on the Company's financial position or
results of operations but will require several disclosures regarding the
Company's stock option and employee stock purchase plans.
The impact of adopting FAS 125 is not anticipated to be material to the
Company's financial position or results of operation. The Company plans to adopt
the provisions of FAS 125 when required, beginning in fiscal 1997.
EFFECTS OF INFLATION
The Company's assets are primarily liquid in nature and are not
significantly affected by inflation. Management believes that the replacement
cost of property and equipment would not materially affect operating results.
However, the rate of inflation affects the Company's expenses, including
employee compensation, communications and occupancy, which may not be readily
recoverable through charges for services provided by the Company.
FACTORS AFFECTING "FORWARD-LOOKING STATEMENTS"
From time to time, the Company may publish "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities and Exchange Act of 1934, as amended, or make oral
statements that constitute forward-looking statements. These forward-looking
statements may relate to such matters as anticipated financial performance,
future revenues or earnings, business prospects, projected ventures, new
products, anticipated market performance, and similar matters. The Private
Securities Litigation Reform Act of 1995 provides a safe harbor for for
forward-looking statements. In order to comply with the terms of the safe
harbor, the Company cautions readers that a variety of factors could cause the
Company's actual results to differ materially from the anticipated results or
other expectations expressed in the Company's forward-
18
<PAGE>
looking statements. These risks and uncertainties, many of which are beyond the
Company's control, include, but are not limited to: (i) transaction volume in
the securities markets, (ii) the volatility of the securities markets, (iii)
fluctuations in interest rates, (iv) changes in regulatory requirements which
could affect the cost of doing business, (v) fluctuations in currency rates,
(vi) general economic conditions, both domestic and international, (vii) changes
in the rate of inflation and related impact on securities markets, (viii)
competition from existing financial institutions and other new participants in
the securities markets, (ix) legal developments affecting the litigation
experience of the securities industry, and (x) changes in federal and state tax
laws which could affect the popularity of products sold by the Company. The
Company does not undertake any obligation to publicly update or revise any
forward-looking statements.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
(a) Financial statements, schedules and exhibits filed under this item
are listed in the index appearing on page F-1 of this report.
(b) QUARTERLY FINANCIAL INFORMATION
(In thousands, except share amounts)
1996 1ST QTR. 2ND QTR. 3RD QTR. 4TH QTR.
- ---- -------- -------- -------- --------
Revenues $152,026 $178,719 $198,194 $192,813
Income before income taxes 20,288 24,665 30,522 33,050
Net income 12,541 15,313 18,582 19,542
Net income per share .60 .73 .88 .93
1995 1ST QTR. 2ND QTR. 3RD QTR. 4TH QTR.
- ---- -------- -------- -------- --------
Revenues $115,712 $125,678 $148,943 $163,737
Income before income taxes 12,524 16,295 21,670 23,970
Net income 7,891 10,100 13,838 14,312
Net income per share .38 .49 .67 .69
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
19
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Executive officers of the registrant (including its significant
subsidiaries) who are not Directors of the registrant are as follows:
Lynn Pippenger 58 Treasurer, Senior Vice President -
Finance of RJA, Secretary and/or
and Treasurer Director of certain
RJF subsidiaries.
Jeffrey P. Julien 40 Vice President - Finance and Chief
Financial Officer, Director and/or
officer of certain RJF subsidiaries.
Barry S. Augenbraun 57 Senior Vice President and Corporate
Secretary.
Mary Jean Kissner 39 Vice President and Tax Manager.
Jennifer Ackart 32 Controller.
The information required by Item 10 relating to Directors of the registrant is
incorporated herein by reference to the registrant's definitive proxy statement
for the 1997 Annual Meeting of Shareholders. Such proxy statement will be filed
with the SEC prior to January 24, 1997.
ITEMS 11,12 AND 13.
The information required by Items 11, 12 and 13 is incorporated herein by
reference to the registrant's definitive proxy statement for the 1997 Annual
Meeting of Shareholders. Such proxy statement will be filed with the SEC prior
to January 24, 1997.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K
(a) Financial statement schedules required by this Item are listed in the
index appearing on page F-1 of this report.
(b) No reports on Form 8-K were filed during the fiscal year ended
September 27, 1996.
(c) Exhibits required by this Item are listed in the index on page F-2.
20
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of St.
Petersburg, State of Florida, on the 20th day of December, 1996.
RAYMOND JAMES FINANCIAL, INC.
By /s/ THOMAS A. JAMES
--------------------------
Thomas A. James, Chairman
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ THOMAS A. JAMES Chairman and Chief December 20, 1996
- --------------------------- Executive Officer
Thomas A. James
/s/ FRANCIS S. GODBOLD President and Director December 20, 1996
- ---------------------------
Francis S. Godbold
/s/ M. ANTHONY GREENE Executive Vice President December 20, 1996
- --------------------------- and Director
M. Anthony Greene
/s/ ROBERT F. SHUCK Vice Chairman and Director December 20, 1996
- ---------------------------
Robert F. Shuck
/s/ JEFFREY P. JULIEN Vice President - Finance December 20, 1996
- --------------------------- (Chief Financial Officer)
Jeffrey P. Julien
/s/ JENNIFER C. ACKART Controller (Chief December 20, 1996
- --------------------------- Accounting Officer)
Jennifer C. Ackart
/s/ JONATHAN A. BULKLEY Director December 20, 1996
- ---------------------------
Jonathan A. Bulkley
/s/ HERBERT E. EHLERS Director December 20, 1996
- ---------------------------
Herbert E. Ehlers
/s/ THOMAS S. FRANKE Director December 20, 1996
- ---------------------------
Thomas S. Franke
/s/ HARVARD H. HILL, JR. Director December 20, 1996
- ---------------------------
Harvard H. Hill, Jr.
/s/ CHRISTOPHER W. JAMES Director December 20, 1996
- ---------------------------
Christopher W. James
Director December 20, 1996
- ---------------------------
Paul W. Marshall
/S/ J. STEPHEN PUTNAM Executive Vice President December 20, 1996
- --------------------------- and Director
J. Stephen Putnam
/S/ DENNIS W. ZANK Director December 20, 1996
- ---------------------------
Dennis W. Zank
21
<PAGE>
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS
FINANCIAL STATEMENTS PAGE(S)
- -------------------- -------
Report and Consent of Independent Certified Public
Accountants F-3
Consolidated Statement of Financial Condition
as of September 27, 1996 and September 29, 1995 F-4
Consolidated Statement of Income for the Three Years
Ended September 27, 1996 F-5
Consolidated Statement of Changes in Shareholders' Equity
for the Three Years Ended September 27, 1996 F-6
Consolidated Statement of Cash Flows for the
Three Years Ended September 27, 1996 F-7-8
Summary of Significant Accounting Policies F-9-12
Notes to Consolidated Financial Statements F-13-22
F - 1
<PAGE>
EXHIBITS PAGE(S)
- -------- -------
3.1 Certificate Incorporation of RJ Financial Corp. as filed
on January 24, 1974, and amendments thereto filed on
March 26, 1974, May 16, 1983, June 2, 1983, February 20,
1987, June 13, 1991, March 8, 1993, and February 28, 1994. X-1-36
3.2 By-Laws of the Company, incorporated by reference to
Exhibit 3(b) to Registration statements on form S-1,
No. 2-84010.
10.1 Raymond James Financial, Inc. Amended Stock Option Plan
for Outside Directors, dated December 12, 1986, incorporated
by reference to Exhibit 4.1(b) to Registration Statement on
Form S-8, No. 33-38350.
10.2 Raymond James Financial, Inc. 1992 Incentive Stock Option
Plan effective August 20, 1992, incorporated by reference
to Exhibit 4.1 to Registration Statement on From S-8,
No. 33-60608.
10.3 Raymond James Financial, Inc. Deferred Management Bonus
Plan, effective as of October 1, 1989. X-37-49
10.4 Employment contract with Corporate Secretary effective
as of October 21, 1996. X-50-51
10.5 Termination and Release Agreement between Liberty Asset
Management, Inc. and Raymond James Financial, Inc. X-52-64
11 Computation of Earnings per Share X-65
21 List of Subsidiaries X-66
23 Independent Auditor's Consent X-67
27 Financial Data Schedule (for SEC use only)
SCHEDULES AND EXHIBITS EXCLUDED
All schedules and exhibits not included are not applicable, not required or
would contain information which is included in the Consolidated Financial
Statements, Summary of Significant Accounting Policies, or the
Notes to Consolidated Financial Statements.
F - 2
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders of
Raymond James Financial, Inc.
In our opinion, the consolidated financial statements listed in the index
appearing on page F-1 present fairly, in all material respects, the financial
position of Raymond James Financial, Inc. and its subsidiaries at September 27,
1996 and September 29, 1995, and the results of their operations and their cash
flows for each of the three years in the period ended September 27, 1996, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
PRICE WATERHOUSE LLP
Tampa, Florida
November 18, 1996
F - 3
<PAGE>
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
(in thousands, except share amounts)
SEPTEMBER 27, SEPTEMBER 29,
1996 1995
------------- -------------
ASSETS
Cash and cash equivalents $ 258,206 $ 86,417
Assets segregated pursuant to Federal Regulations:
Cash and cash equivalents 119 3,158
Securities purchased under agreements to resell 476,945 330,804
Short-term investments -- 34,017
Securities owned:
Trading and investment account securities 124,253 74,815
Available for sale securities 208,897 114,941
Held to maturity securities -- 11,210
Receivables:
Customers 459,180 397,201
Stock borrowed 864,140 775,288
Brokers, dealers and clearing organizations 24,306 49,135
Other 28,980 24,886
Investment in leveraged leases 20,318 10,581
Property and equipment, net 39,585 40,946
Deferred income taxes 21,189 20,980
Deposits with clearing organizations 22,044 22,157
Prepaid expenses and other assets 18,219 16,179
----------- -----------
$ 2,566,381 $ 2,012,715
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable $ 24,898 $ 15,594
Payables:
Customers 1,086,406 774,476
Stock loaned 848,595 785,784
Brokers, dealers and clearing organizations 56,928 17,542
Trade and other 54,007 56,211
Trading account securities sold but not yet
purchased 57,210 17,377
Accrued compensation 101,300 73,367
Income taxes payable 10,405 6,171
----------- -----------
2,239,749 1,746,522
----------- -----------
Commitments and contingencies (Note 9)
Shareholders' equity:
Preferred stock; $.10 par value; authorized
10,000,000 shares; issued and outstanding
-0- shares -- --
Common stock; $.01 par value; authorized
50,000,000 shares; issued 21,777,271 shares 217 217
Additional paid-in capital 50,271 50,685
Unrealized gain (loss) on securities available
for sale, net of deferred taxes (791) 146
Retained earnings 289,096 231,029
----------- -----------
338,793 282,077
Less: 882,811 and 1,163,573 common shares
in treasury, at cost (12,161) (15,884)
----------- -----------
326,632 266,193
----------- -----------
$ 2,566,381 $ 2,012,715
=========== ===========
The accompanying Summary of Significant Accounting Policies and Notes to
Consolidated Financial Statements are integral parts of
these financial statements.
F - 4
<PAGE>
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share amounts)
YEAR ENDED
--------------------------------------------
SEPTEMBER 27, SEPTEMBER 29, SEPTEMBER 30,
1996 1995 1994
------------- ------------- -------------
Revenues:
Securities commissions $422,487 $327,547 $303,193
Investment banking 72,596 43,004 60,219
Investment advisory fees 50,715 42,922 51,153
Interest 126,453 97,211 58,542
Correspondent clearing 3,985 3,721 3,866
Net trading profits 12,243 12,637 6,843
Financial service fees 18,191 14,740 13,446
Other 15,082 12,288 9,874
-------- -------- --------
721,752 554,070 507,136
-------- -------- --------
Expenses:
Employee compensation 423,904 326,426 318,079
Communications 30,585 25,619 26,420
Occupancy and equipment 23,927 21,653 15,758
Clearance and floor brokerage 10,098 8,257 7,644
Interest 83,471 64,758 36,154
Business development 16,053 14,210 14,220
Other 25,189 18,688 21,644
-------- -------- --------
613,227 479,611 439,919
-------- -------- --------
Income before provision for
income taxes 108,525 74,459 67,217
Provision for income taxes 42,547 28,318 25,148
-------- -------- --------
Net income $ 65,978 $ 46,141 $ 42,069
======== ======== ========
Net income per share $ 3.14 $ 2.23 $ 1.97
======== ======== ========
Average common and common
equivalent shares outstanding 21,025 20,705 21,359
======== ======== ========
The accompanying Summary of Significant Accounting Policies and Notes to
Consolidated Financial Statements are integral parts of
these financial statements.
F - 5
<PAGE>
<TABLE>
<CAPTION>
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(in thousands, except per share amounts)
UNREALIZED
GAIN (LOSS) TREASURY STOCK
PREFERRED STOCK COMMON STOCK ADDITIONAL ON SECURITIES -----------------
--------------- --------------- PAID-IN RETAINED AVAILABLE COMMON SHAREHOLDERS'
SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS FOR SALE SHARES AMOUNT EQUITY
------ ------ ------ ------ ---------- -------- ------------- ------ -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balances at September 24,
1993 - - 21,777 $217 $52,141 $156,949 - (462) $ (3,742) $205,565
Net income 42,069 42,069
Cash dividends - common
stock ($.32 per share) (6,733) (6,733)
Purchase of treasury
shares (1,113) (16,604) (16,604)
Employee stock purchases 442 165 1,789 2,231
Exercise of stock
options (632) 127 1,137 505
Sale of put options 202 202
Tax benefit related to
Non-qualified option
exercises 222 222
Cash Paid for fractional
shares (5) - (5)
Balances at
------ ------ ------ ------ ---------- -------- ------------- ------ -------- -------------
September 30, 1994 - - 21,777 217 52,375 192,280 - (1,283) (17,420) 227,452
------ ------ ------ ------ ---------- -------- ------------- ------ -------- -------------
Net income 46,141 46,141
Cash dividends - common
stock ($.36 per share) (7,392) (7,392)
Purchase of treasury shares (234) (3,296) (3,296)
Employee stock purchases 139 107 1,455 1,594
Exercise of stock options (1,974) 247 3,377 1,403
Tax benefit related to
Non-qualified option
exercises 145 145
Net unrealized gain on
securities available
for sale $ 146 146
------ ------ ------ ------ ---------- -------- ------------- ------ -------- -------------
Balances at
September 29, 1995 - - 21,777 217 50,685 231,029 146 (1,163) (15,884) 266,193
------ ------ ------ ------ ---------- -------- ------------- ------ -------- -------------
Net income 65,978 65,978
Cash dividends - common
stock ($.38 per share) (7,911) (7,911)
Purchase of treasury
shares (18) (367) (367)
Employee stock purchases 585 106 1,455 2,040
Exercise of stock options (1,250) 192 2,635 1,385
Tax benefit related to
Non-qualified option
exercises 251
Net unrealized (loss) on
securities available
for sale (937) (937)
------ ------ ------ ------ ---------- -------- ------------- ------ -------- -------------
Balances at
September 27, 1996 - - 21,777 $217 $50,271 $289,096 $(791) (883) $(12,161) $326,632
------ ------ ------ ------ ---------- -------- ------------- ------ -------- -------------
</TABLE>
The accompanying Summary of Significant Accounting Policies and Notes to
Consolidated Financial Statements are integral parts of
these financial statements.
F - 6
<PAGE>
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
(continued on next page)
YEAR ENDED
-------------------------------------------
SEPTEMBER 27, SEPTEMBER 29, SEPTEMBER 30,
1996 1995 1994
------------- ------------- -------------
Cash flows from operating
activities:
Net income $ 65,978 $ 46,141 $ 42,069
-------- -------- --------
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 11,299 9,673 7,011
Unrealized loss (gain) and
premium amortization on
securities 152 (1,033) (716)
Gain on sale of securities (199) (489) -
Gain on sale of property and
equipment 155 117 128
Provision for bad debts 27 234 (25)
Provision for other accruals (1,690) 2,890 5,041
Decrease (increase) in assets:
Short-term investments 34,017 500 20,490
Securities and investments (12,963) (13,905)
Receivables:
Customers (62,006) (49,358) (80,712)
Stock borrowed (88,852) (28,016) 16,106
Brokers, dealers and clearing
organizations 24,829 (34,725) 17,588
Other (4,094) (10,243) 10,579
Trading and investment account
securities, net (18,992) 50,260 (64,202)
Deferred income taxes (209) (396) (2,690)
Prepaid expenses and other
assets (11,664) (2,689) 2,683
Increase (decrease) in
liabilities:
Payables:
Customers 311,930 257,682 183,835
Stock loaned 62,811 14,118 20,226
Brokers, dealers and clearing
organizations 39,386 (6,295) 7,870
Trade and other (514) 6,510 359
Accrued compensation 27,933 13,853 (2,706)
Income taxes payable 4,234 258 (2,384)
-------- -------- --------
Total adjustments 328,553 209,888 124,576
-------- -------- --------
Net cash provided by operating
activities 394,531 256,029 166,645
-------- -------- --------
The accompanying Summary of Significant Accounting Policies and Notes to
Consolidated Financial Statements are integral parts of
these financial statements.
F - 7
<PAGE>
<TABLE>
<CAPTION>
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
(continued from preceding page)
YEAR ENDED
-------------------------------------------
SEPTEMBER 27, SEPTEMBER 29, SEPTEMBER 30,
1996 1995 1994
------------- ------------- -------------
<S> <C> <C> <C>
Cash flows from investing activities:
Additions to property and equipment (10,093) (9,646) (14,677)
Sales of property and equipment -- 990 627
Sales of securities 51,050 28,805 5,076
Purchases of securities (167,512) (92,926) (63,303)
Purchases of held to maturity
securities 0 (8,033) --
Security maturations and repayments 42,213 23,157 --
--------- --------- ---------
Net cash used in investing activities (84,342) (57,653) (72,277)
--------- --------- ---------
Cash flows from financing activities:
Repayments on mortgage note (2,686) (159) (144)
Borrowings from banks 11,990 2,510
Exercise of stock options and
employee stock purchases 3,676 3,142 2,958
Purchase of treasury stock (367) (3,296) (16,604)
Cash dividends on common stock (7,911) (7,392) (6,733)
Sale of stock options -- -- 202
Cash paid for fractional shares -- -- (5)
--------- --------- ---------
Net cash provided by (used in)
financing activities 4,702 (5,195) (20,326)
--------- --------- ---------
Net increase in cash and cash
equivalents 314,891 193,181 74,042
Cash and cash equivalents at
beginning of year 420,379 227,198 153,156
--------- --------- ---------
Cash and cash equivalents at end of
year $ 735,270 $ 420,379 $ 227,198
========= ========= =========
Supplemental disclosures of cash
flow information:
Cash paid for interest $ 88,599 $ 57,834 $ 36,663
========= ========= =========
Cash paid for taxes $ 41,371 $ 29,216 $ 30,033
========= ========= =========
</TABLE>
The accompanying Summary of Significant Accounting Policies and Notes to
Consolidated Financial Statements are integral parts of
these financial statements.
F - 8
<PAGE>
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Raymond James Financial, Inc. is a holding company which, through its
subsidiaries, is engaged principally in the securities brokerage business,
including the underwriting, distribution, trading and brokerage of equity and
debt securities and the sale of mutual funds and other investment products. In
addition, it provides investment management services for retail and
institutional customers and banking services for retail customers. The
accounting and reporting policies of Raymond James Financial, Inc. and its
subsidiaries (the "Company") conform to generally accepted accounting
principles, the more significant of which are summarized below:
BASIS OF CONSOLIDATION
The consolidated financial statements include the accounts of Raymond
James Financial, Inc. and its subsidiaries. All material intercompany balances
and transactions have been eliminated in consolidation. The consolidated
subsidiaries at September 27, 1996 are as follows:
Raymond James & Associates, Inc. RJ Government Securities, Inc.
Investment Management & Research, Inc. RJ Health Properties, Inc.
Robert Thomas Securities, Inc. RJ Leasing, Inc.
Eagle Asset Management, Inc. RJ Leasing - 2, Inc.
Heritage Asset Management, Inc. RJ Medical Investors, Inc.
Raymond James Trust Company RJ Mortgage Acceptance Corporation
Raymond James Bank, FSB RJ Partners, Inc.
Sound Trust Company RJ Realty, Inc.
Planning Corporation of America RJ Specialist, Inc.
RJ Properties, Inc. RJ Washington Square
Gateway Assignor Corporation, Inc. Raymond James Credit Corporation, Inc.
Heritage International, Ltd. Raymond James International
Raymond James International, Ltd. Holdings, Inc.
PCAF, Inc. Raymond James Mortgage Capital,
RJA Municipal ABS, Inc. Inc.
RJ Communication, Inc. Raymond James Partners, Inc.
RJ Credit Partners, Inc. Raymond James Realty Advisors, Inc.
RJ Equities, Inc. Value Partners, Inc.
RJ Equities - 2, Inc.
All consolidated subsidiaries are 100% owned by the Company except for RJ
Properties, Inc., which is 85% owned.
REPORTING PERIOD
The Company's fiscal year ends on the last Friday in September of each
year.
RECOGNITION OF REVENUES
Securities transactions and related commission revenues and expenses are
recorded on a trade date basis for fiscal years 1996 and 1995 and on a
settlement date basis for fiscal year 1994, which was not materially different
from trade date.
F - 9
<PAGE>
Revenues from limited partnerships and investment banking are recorded at
the time the transaction is completed and the related income is reasonably
determinable. Investment banking revenues include sales credits earned in
connection with the distribution of the underwritten securities.
The Company earns an advisory fee based on a client's portfolio value on
portfolios managed by its investment advisory subsidiaries. These fees are
recorded under the accrual method. In addition, on certain portfolios, the
Company earns performance fees which are recorded when earned.
MANAGEMENT ESTIMATES AND ASSUMPTIONS
The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with an initial
maturity of three months or less to be cash equivalents for purposes of the
consolidated statement of cash flows. These consist primarily of U.S. Treasury
securities and are stated at cost, which approximates market at fiscal yearend.
It is the Company's policy to obtain possession and control of securities
purchased under resale agreements. The net fair value of securities purchased
under resale agreements approximates their carrying value, as such financial
instruments are predominantly short-term in nature. The Company monitors the
risk of loss by assessing the market value of the underlying securities as
compared to the related receivable or payable, including accrued interest, and
requests additional collateral where deemed appropriate. At September 27, 1996,
there were no agreements with any individual counterparties where the risk of
loss exceeded 10% of shareholders' equity.
SHORT-TERM INVESTMENTS
Short-term investments segregated pursuant to Federal Regulations are
stated at market.
SECURITIES OWNED
The Company adopted Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities" ("FAS 115"),
as of October 1, 1994. FAS 115 requires investments in debt and equity
securities to be classified as either "held to maturity," "trading," or
"available for sale." The accounting treatment for unrealized gains and losses
on those securities is then determined by the classification chosen. The trading
and investment account securities held by the brokerage
F - 10
<PAGE>
subsidiaries are classified as trading. Investment account securities not
readily marketable are carried at estimated fair value as determined by
management with unrealized gains and losses included in earnings. Trading
securities are carried at market value with realized and unrealized gains and
losses included in earnings. Securities available for sale are carried at fair
value, with unrealized gains and losses reported as a separate component of
shareholders' equity, net of deferred taxes, and realized gains and losses,
determined on a specific identification basis, included in earnings.
Securities classified as held to maturity are carried at amortized cost
and adjusted for premium amortization or discount accretion with realized gains
and losses included in earnings. At September 29, 1995, Raymond James Bank, FSB,
held one FHLMC mortgage-backed security in its held to maturity portfolio with
an amortized cost of $2,800,000 and an estimated market value of $2,865,000, and
the parent company held U.S. Treasury Notes and municipal bonds with an
amortized cost of $8,410,000 and an estimated market value of $8,475,000. U.S.
Treasury Notes with an amortized cost of $3,003,000 matured within the year. In
November, 1995 the Company took advantage of a one-time opportunity and
reclassified all securities classified as held to maturity to available for
sale. At September 27, 1996, the Company had no securities classified as held to
maturity.
For fiscal year 1994, trading and investment account securities are
recorded at market value with unrealized appreciation or depreciation reflected
in income currently. Other short-term investments are stated at amortized cost,
which approximates market value at fiscal yearend.
PROPERTY AND EQUIPMENT
Property, equipment and leasehold improvements are stated at cost less
accumulated depreciation. Depreciation of assets is provided principally using
the straight-line method for financial reporting purposes over the estimated
useful lives of the assets, which range from two to seven years for furniture
and equipment and fifteen to thirty-one years for buildings and land
improvements. Leasehold improvements are amortized using the straight-line
method over the shorter of the lease term or the estimated useful lives of the
assets. For income tax purposes, assets are depreciated using accelerated
methods.
Additions, improvements and expenditures for repairs and maintenance that
significantly extend the useful life of an asset are capitalized. Other
expenditures for repairs and maintenance are charged to operations in the period
incurred. Gains and losses on disposals of fixed assets are reflected in income
in the period incurred.
GOODWILL
Goodwill is stated at cost less accumulated amortization. Amortization of
goodwill is provided using the straight-line method for financial reporting
purposes over three to ten years. Goodwill is reflected in prepaid expenses and
other assets.
F - 11
<PAGE>
CORRESPONDENT CLEARING
Under clearing agreements, the Company clears trades for unaffiliated
correspondent brokers and retains a portion of commissions as a fee for its
services. The Company records clearing charges net of commissions remitted.
Total commissions generated by correspondents were $18,742,000, $16,155,000 and
$17,232,000, and commissions remitted totaled $14,757,000, $12,434,000 and
$13,366,000 for the years ended September 27, 1996, September 29, 1995 and
September 30, 1994, respectively.
INCOME TAXES
The Company utilizes the asset and liability approach defined in Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("FAS
109"). FAS 109 requires the recognition of deferred tax assets and liabilities
for the expected future tax consequences of temporary differences between the
financial statement amounts and the tax bases of assets and liabilities.
NET INCOME PER SHARE
Earnings per share are computed using weighted average common stock and
common stock equivalents outstanding. Common stock equivalents include shares
issuable under stock options and are determined under the treasury stock method.
All per share amounts have been restated to give retroactive effect to the
common stock dividend on November 15, 1993.
RECLASSIFICATIONS
Certain amounts from prior years have been reclassified for consistency
with current year presentation. These reclassifications were not material to the
consolidated financial statements.
F - 12
<PAGE>
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - RECEIVABLES FROM AND PAYABLES TO CUSTOMERS:
Receivables from and payables to customers include amounts arising from
normal cash and margin transactions. Securities owned by brokerage customers are
held as collateral for receivables. Such collateral is not reflected in the
accompanying consolidated financial statements. The amount receivable from
customers is shown net of an allowance for doubtful accounts of approximately
$1,204,000 and $1,177,000 as of September 27, 1996 and September 29, 1995,
respectively. The Company pays interest at varying rates for qualifying customer
funds on deposit awaiting reinvestment. Such funds on deposit totaled
$755,281,000 and $571,628,000 at September 27, 1996 and September 29, 1995,
respectively. Other funds on deposit on which the Company does not pay interest
totaled $130,547,000 and $101,160,000 at September 27, 1996 and September 29,
1995, respectively. Unsecured receivables, other than affiliated company amounts
which are eliminated in consolidation, are not significant.
NOTE 2 - TRADING AND INVESTMENT ACCOUNT SECURITIES (IN THOUSANDS):
SEPTEMBER 27, 1996 SEPTEMBER 29, 1995
------------------------ ------------------------
SECURITIES SECURITIES
SOLD BUT SOLD BUT
SECURITIES NOT YET SECURITIES NOT YET
OWNED PURCHASED OWNED PURCHASED
---------- ---------- ----------- ----------
Marketable:
Stocks and warrants $ 12,341 $11,177 $ 14,348 $ 10,897
Municipal obligations 72,881 454 20,366 979
Corporate obligations 7,894 1,536 11,346 434
Government obligations 26,086 44,031 15,611 5,067
Other 4,904 12 11,229 -
Non-marketable 147 - 1,915 -
------- ------- -------- --------
$124,253 $57,210 $ 74,815 $ 17,377
======== ======= ======== ========
NOTE 3 - AVAILABLE FOR SALE SECURITIES (IN THOUSANDS):
The amortized cost and estimated market values of securities available for
sale at September 27, 1996 are as follows:
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
--------- ---------- ---------- ------------
Mortgage-backed securities:
FNMA $ 75,014 $ 194 $ (433) $ 74,775
FHLMC 95,076 206 (246) 95,036
GNMA 29,053 - (949) 28,104
U.S. Treasury Securities 11,047 24 (98) 10,973
Stocks 5 4 - 9
-------- -------- ------ --------
$210,195 $ 428 $(1,726) $208,897
======== ======== ======== ========
F - 13
<PAGE>
The amortized cost and estimated market values of securities available for
sale at September 29, 1995 are as follows:
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
--------- ---------- ---------- ---------
Mortgage-backed securities:
FNMA $ 38,912 $182 $ (10) $ 39,084
FHLMC 44,837 157 (85) 44,909
GNMA 15,183 42 (31) 15,194
CMO 771 - (2) 769
U.S. Treasury securities 10,013 57 (5) 10,065
U.S. government agency
obligations 4,988 - (68) 4,920
-------- ---- ----- --------
$114,704 $438 $(201) $114,941
======== ==== ===== ========
The U.S. Treasury securities and U.S. government agency obligations mature
after one year and within 5 years.
NOTE 4 - LEVERAGED LEASES (IN THOUSANDS):
On September 24, 1993, the Company became the lessor in their first
leveraged commercial aircraft transaction with a major domestic airline. On June
27, 1996, the Company entered into their second such transaction. The Company's
combined equity investments represented 21% of the aggregate purchase prices;
the remaining 79% was funded by public debt issues in the form of equipment
trust certificates. The residual values of the aircrafts at the end of an
average lease term of 20 years is projected to be an average of 10% of the
original cost.
SEPTEMBER 27, SEPTEMBER 29,
1996 1995
------------- -------------
Rents receivable (net of principal and
interest on the non-recourse debt) $ 21,056 $ 9,793
Unguaranteed residual values 10,719 2,026
Unearned income (11,457) (1,238)
-------- --------
Investment in leveraged leases 20,318 10,581
Deferred taxes arising from leveraged
leases (13,414) (8,617)
-------- --------
Net investment in leveraged leases $ 6,904 $ 1,964
======== ========
NOTE 5 - PROPERTY AND EQUIPMENT (IN THOUSANDS):
SEPTEMBER 27, SEPTEMBER 29,
1996 1995
------------- -------------
Land $ 6,287 $ 6,287
Buildings and improvements 26,626 26,643
Furniture, fixtures, equipment
and leasehold improvements 63,280 53,946
------- -------
96,193 86,876
Less: accumulated depreciation
and amortization (56,608) (45,930)
------- -------
$39,585 $40,946
======= =======
F - 14
<PAGE>
NOTE 6 - BORROWINGS:
The mortgage note payable requires monthly principal and interest payments
of approximately $120,000 with a balloon payment due December 1, 1997. The
mortgage bears interest at 9.75% and is secured by land, buildings and
improvements with a net book value of $9,595,570 at September 27, 1996.
Principal maturities under this mortgage note payable for the succeeding five
fiscal years are as follows: 1997 - $193,000; 1998 - $12,716,000; 1999 and
beyond - $0.
The Company currently has two $50 million committed lines of credit with
commercial banks. Borrowings under the lines of credit bear interest at various
rates (Fed Funds plus 2%, the lesser of prime rate or Fed Funds plus 1/2%, or
LIBOR plus 3/4%). One of these lines of credit requires that the Company
maintain certain net worth levels, limit other leases and debt and requires the
Company to follow certain other sound business practices. The Company paid
$64,000 and $100,000 in loan commitment fees during fiscal years 1996 and 1995,
respectively. There were borrowings of $11,989,000 at September 27, 1996 at 6.2%
on one of the lines of credit. All borrowings on this line of credit were
collateralized by customer securities with a maximum loan to value of fifty
percent. The interest rate on these borrowings was the one-month LIBOR rate plus
.75%, and ranged from 6.1% to 6.8% during 1996. At September 29, 1995, there
were borrowings of $2,510,000 at 8.2%, collateralized by mortgage loans with a
fair value of $7,376,000, outstanding on a separate $50 million line of credit
for the mortgage companies which was terminated during fiscal 1996. During 1996,
there were maximum borrowings of $2,510,000 on this line of credit,
collateralized by mortgage loans. The interest rate on these borrowings was Fed
Funds plus 2% and ranged 7.6% to 8.3% in 1996 and from 7.5% to 8.2% during 1995.
The Company also maintains uncommitted lines of credit aggregating
$255,000,000 with commercial banks ($200,000,000 secured and $55,000,000
unsecured). Borrowings under the lines of credit bear interest, at the Company's
option, at the bank's prime rate, Fed Funds rate plus 1 1/4%, or LIBOR plus
3/4%. There were no short-term borrowings outstanding at September 27, 1996 or
September 29, 1995. The interest rate on these borrowings ranged from 5.64% to
6.50% in 1996 and 5.08% to 7.00% in 1995. Loans on the secured, uncommitted
lines of credit are collateralized by firm or customer margin securities.
NOTE 7 - BANK OPERATIONS AND DEPOSITS:
On May 6, 1994, the Company chartered Raymond James Bank, FSB, ("RJ Bank")
in conjunction with the purchase of the deposits of certain branches of a
federal savings bank from the Resolution Trust Corporation ("RTC") for a nominal
purchase price. The Company contributed $25 million in capital to fund the
bank's start-up.
F - 15
<PAGE>
A summary of customer deposit accounts (in thousands) and weighted average
interest rates follows:
SEPTEMBER 27, 1996 SEPTEMBER 29, 1995
----------------------- -----------------------
WEIGHTED WEIGHTED
BALANCE AVERAGE RATE BALANCE AVERAGE RATE
-------- ------------ -------- ------------
Demand deposits:
Non-interest bearing $ 161 - $ 56 -
Interest bearing 1,056 2.33% 525 2.95%
Money market accounts 1,256 3.58% 235 3.49%
Savings accounts 155,131 4.63% 89,998 4.95%
Certificates of deposit 42,892 5.43% 10,874 5.59%
-------- --------
(3.00% - 9.00%)
$200,496 4.78% $101,688 5.00%
======== ========
The certificates of deposit at September 27, 1996 mature as follows:
$32,370,000 in 1997, $5,885,000 in 1998, $2,034,000 in 1999, $1,071,000 in 2000
and $1,532,000 in 2001. Certificates of deposit and savings accounts in amounts
of $100,000 or more at September 27, 1996 and September 29, 1995 were
approximately $43,834,000 and $22,558,000, respectively.
A summary of loan distribution (in thousands) is as follows:
SEPTEMBER 27, SEPTEMBER 29,
1996 1995
------------- -------------
Residential mortgage loans $6,365 $10
Consumer loans 20 30
------ ---
6,385 40
Allowance for loan losses (64) -
Purchase premium 40 -
------ ---
$6,361 $40
====== ===
Activity in the allowance for loan losses for 1996 consists solely of the
provision for loan losses. There were no loan losses in 1996 or 1995.
Generally, mortgage loans are secured by either first or second mortgages
on residential property, and consumer loans are secured by time deposit
accounts. As of September 27, 1996 and September 29, 1995, all of RJ Bank's loan
portfolio was secured.
RJ Bank is subject to various regulatory and capital requirements and was
in compliance with all requirements throughout the fiscal year.
F - 16
<PAGE>
Pursuant to the Federal Deposit Insurance Corporation Improvement Act of
1991 ("FDICIA"), RJ Bank is subject to rules limiting brokered deposits and
related interest rates. Under these rules, banks that are deemed
"well-capitalized" may accept brokered deposits without restriction, and banks
deemed "adequately capitalized" may do so with a waiver from the FDIC. An
"undercapitalized" bank is not eligible for a waiver and may not accept brokered
deposits. At September 27, 1996, management believes RJ Bank met the definition
of the well-capitalized category.
At September 27, 1996, RJ Bank exceeded the tangible capital, core
capital, core/leverage capital, tier 1/risk-based capital and total risk-based
capital levels mandated by the Financial Institutions Reform, Recovery and
Enforcement Act of 1989 and FDICIA. As part of the purchase of deposits from the
RTC, RJ Bank was required to maintain a tier 1 capital ratio of at least 10% for
its first three years of operations. This requirement was subsequently reduced
to 6%. At September 27, 1996, RJ Bank's tier 1 capital to average assets ratio
was 13.8%.
NOTE 8 - FEDERAL AND STATE INCOME TAXES (IN THOUSANDS):
The provision (benefit) for income taxes consists of:
YEAR ENDED
-------------------------------------------
SEPTEMBER 27, SEPTEMBER 29, SEPTEMBER 30,
1996 1995 1994
------------- ------------- -------------
Current provision:
Federal $35,473 $24,790 $23,975
State 6,730 4,000 3,762
------- ------- -------
42,203 28,790 27,737
------- ------- -------
Deferred provision (benefit):
Federal 383 (425) (2,277)
State (39) (47) (312)
------- ------- -------
344 (472) (2,589)
------- ------- -------
$42,547 $28,318 $25,148
======= ======= =======
The Company's effective tax rate on pre-tax income differs from the
statutory federal income tax rate due to the following:
YEAR ENDED
-------------------------------------------
SEPTEMBER 27, SEPTEMBER 29, SEPTEMBER 30,
1996 1995 1994
------------- ------------- -------------
Provision calculated at
statutory rates $38,034 $26,061 $23,526
State income taxes, net
of federal benefit 4,349 2,570 2,243
Other 164 (313) (621)
------- ------- -------
$42,547 $28,318 $25,148
======= ======= =======
F - 17
<PAGE>
The major deferred tax asset (liability) items, as computed under FAS 109,
are as follows:
SEPTEMBER 27, SEPTEMBER 29,
1996 1995
------------- -------------
Deferred tax assets:
Deferred compensation $18,658 $ 15,728
Accrued expenses 13,259 13,501
Other 5,625 3,558
-------- --------
Total deferred tax assets 37,542 32,787
-------- --------
Deferred tax liabilities:
Aircraft leases (13,416) (8,617)
Other, net (2,937) (3,190)
-------- --------
Total deferred tax liabilities (16,353) (11,807)
-------- --------
Net deferred tax assets $ 21,189 $ 20,980
======== ========
NOTE 9 - COMMITMENTS AND CONTINGENCIES:
Long-term lease agreements expire at various times from 1997 through 2002.
Minimum annual rentals under such agreements for the succeeding five fiscal
years are approximately: $6,064,000 in 1997, $4,581,000 in 1998, $3,405,000 in
1999, $3,112,000 in 2000, and $2,712,000 in 2001. Rental expense incurred under
all leases, including equipment under short-term agreements, aggregated
$7,589,000, $5,481,000, and $5,435,000 in 1996, 1995 and 1994, respectively.
At September 27, 1996, the Company had committed to lend to, or guarantee
other debt for, Gateway Tax Credit Funds ("Gateway") up to $6 million upon
request. Subsequent to yearend, the amount was increased to $10 million. Any
borrowings bear interest at broker call plus 1% per annum. Gateway is charged 1%
for amounts guaranteed. The borrowings are secured by properties under
development. At September 27, 1996, balances of $1,892,000 were guaranteed. The
commitment expires in November 1997, at which time any outstanding balances
would be due and payable.
In the normal course of business, the Company enters into underwriting
commitments. Transactions relating to such commitments that were open at
September 27, 1996 and were subsequently settled had no material effect on the
consolidated financial statements as of that date.
At September 27, 1996, the Company had a letter of credit outstanding of
$100,000 and excess customer margin securities valued at $20,599,000 on deposit
with a clearing organization, which are used to satisfy margin deposit
requirements.
In the normal course of business, the Company, as general partner, is
contingently liable for the obligations of various limited partnerships engaged
primarily in securities investments and real estate activities. In the opinion
of the Company, such liabilities, if any, for the obligations of the
partnerships will not in the aggregate have a material adverse effect on the
Company's consolidated financial position.
F - 18
<PAGE>
The Company is a defendant or co-defendant in various lawsuits incidental
to its securities business. The Company is contesting the allegations of the
complaints in these cases and believes that there are meritorious defenses in
each of these lawsuits. In view of the number and diversity of claims against
the Company, the number of jurisdictions in which litigation is pending and the
inherent difficulty of predicting the outcome of litigation and other claims,
the Company cannot state with certainty what the eventual outcome of pending
litigation or other claims will be. In the opinion of management, based on
discussions with counsel, the outcome of the matters will not result in a
material adverse effect on the financial position or results of operations of
the Company.
NOTE 10 - CAPITAL TRANSACTIONS:
The Company's Board of Directors has, from time to time, adopted
resolutions authorizing the Company to repurchase its common stock for the
funding of its incentive stock option and stock purchase plans and other
corporate purposes. On May 12, 1994, the Board of Directors authorized the
repurchase of 1,000,000 shares of common stock, and on February 17, 1995, the
Board of Directors authorized the purchase of an additional 386,000 shares of
common stock, bringing the cummulative total authorized to 5,745,000. Of these,
4,764,000 shares have been purchased through September 27, 1996.
NOTE 11 - EMPLOYEE BENEFIT PLANS:
The Company's profit sharing plan and employee stock ownership plan
provide certain death, disability or retirement benefits for all employees who
meet certain service requirements. Such benefits become fully vested after seven
years of qualified service. The Company also offers a plan pursuant to section
401(k) of the Internal Revenue Code which, effective January 1, 1994, provides
for the Company to match 100% of the first $500 and 50% of the next $500 of
compensation deferred by each participant annually. The Company's deferred
management bonus plan is a non-qualified plan that provides retirement benefits
for employees who meet certain length of service and compensation requirements.
Contributions to these plans are made in amounts approved annually by the Board
of Directors. Compensation expense includes aggregate contributions to these
plans of $12,527,000, $8,530,000, and $7,257,000 for 1996, 1995 and 1994,
respectively. The employee stock purchase plan allows employees to purchase
shares of the Company's common stock on four specified dates throughout the year
at a 15% discount from market value, subject to certain limitations.
On September 30, 1982, the Board of Directors of the Company adopted an
Incentive Stock Option Plan ("1982 Plan"), which covered an aggregate of
1,900,125 shares of common stock. On August 20, 1992, the Board of Directors
adopted the 1992 Incentive Stock Option Plan which covers an aggregate of
1,050,000 shares of common stock. The Plan was established to replace, on
substantially the same terms and conditions, the 1982 Plan. Options are granted
to registered representatives of Raymond James & Associates, Inc. who achieve
certain gross commission levels and to key administrative employees of the
Company. The options are granted at fair market value. No compensation expense
was recognized with respect to these options. Options
F - 19
<PAGE>
are exercisable in the 36th to 72nd months following the date of grant and only
in the event that the grantee is an employee of the Company at that time.
On December 13, 1985, the Company's Board of Directors adopted a
non-qualified stock option plan which currently covers 1,013,000 shares of
common stock for the benefit of independent contractor registered
representatives of the Company. Options are exercisable five years after grant
date provided that the representative is still associated with the Company.
The directors who are also employees of the Company adopted a non-qualified
stock option plan on December 13, 1990 under which the Company's outside
directors have been granted options covering 66,560 shares of the Company's
common stock. Options vest over a five year period from grant date provided that
the director is still associated with the Company.
The following table summarizes the option activity under these programs
for the three years ended September 27, 1996:
SHARES UNDER OPTION PRICE
OPTION RANGE
------------ ------------
Outstanding at September 24, 1993 1,081,314 $ 2.74 to $18.75
Granted 208,999 16.36 to 16.63
Canceled (31,787) 4.21 to 14.83
Exercised (127,475) 2.74 to 5.00
---------
Outstanding at September 30, 1994 1,131,051 3.00 to 16.63
Granted 109,625 13.75 to 21.75
Canceled (66,771) 4.74 to 18.08
Exercised (247,064) 3.25 to 14.67
----------
Outstanding at September 29, 1995 926,841 3.00 to 21.75
Granted 340,700 19.38 to 23.13
Canceled (23,428) 5.00 to 22.13
Exercised (192,516) 3.00 to 18.08
----------
Outstanding at September 27, 1996 1,051,597 $11.22 to $23.13
NOTE 12 - NET CAPITAL REQUIREMENTS:
The broker-dealer subsidiaries of the Company are subject to the
requirements of the Uniform Net Capital Rule (Rule 15c3-1) under the Securities
Exchange Act of 1934 and the rules of the securities exchanges of which Raymond
James & Associates, Inc. is a member, whose requirements are substantially the
same. This rule requires that aggregate indebtedness, as defined, not exceed
fifteen times net capital, as defined. Rule 15c3-1 also provides for an
"alternative net capital requirement" which, if elected, requires that net
capital be equal to the greater of $250,000 or two percent of aggregate debit
items computed in applying the formula for determination of reserve requirements
(see Note 13). The New York Stock Exchange may require a member organization to
reduce its business if its net capital is less
F - 20
<PAGE>
than four percent of aggregate debit items and may prohibit a member firm from
expanding its business and declaring cash dividends if its net capital is less
than five percent of aggregate debit items. Net capital positions of the
Company's broker-dealer subsidiaries were as follows:
SEPTEMBER 27, SEPTEMBER 29,
1996 1995
-------------- -------------
RAYMOND JAMES & ASSOCIATES, INC.: (dollar amounts in thousands)
(alternative method elected)
Net capital as a percent of
aggregate debit items 26.00% 23.00%
Net capital $127,302 $97,955
Required net capital 9,703 8,594
-------- -------
Excess net capital $117,599 $89,361
======== =======
INVESTMENT MANAGEMENT & RESEARCH, INC.:
Ratio of aggregate indebtedness to
net capital 1.28 2.14
Net capital $ 5,261 $ 2,877
Required net capital 449 410
-------- -------
Excess net capital $ 4,812 $ 2,467
======== =======
ROBERT THOMAS SECURITIES, INC.:
Ratio of aggregate indebtedness to net
capital 5.99 4.95
Net capital $ 1,213 $ 1,217
Required net capital 484 402
-------- -------
Excess net capital $ 729 $ 815
======== =======
NOTE 13 - RESERVE REQUIREMENTS:
Rule 15c3-3 of the Securities Exchange Act of 1934 specifies certain
conditions under which brokers and dealers carrying customer accounts are
required to maintain cash or qualified securities in a special reserve account
for the exclusive benefit of customers. Amounts to be maintained, if required,
are computed in accordance with a formula defined in the Rule. At September 27,
1996, Raymond James & Associates, Inc. had $477,064,000 in special reserve
accounts which consisted of $476,945,000 of securities purchased under
agreements to resell and $119,000 in cash as compared to a reserve requirement
of $474,430,000 at that date. At September 29, 1995, this subsidiary had
$367,979,000 in special reserve accounts which consisted of $330,804,000 of
securities purchased under agreements to resell, $34,017,000 in U.S. Treasury
Notes and $3,158,000 in cash as compared to a reserve requirement of
$321,377,000 at that date. At September 27, 1996, and September 29, 1995, all
such repurchase agreements were on an overnight basis with Cantor Fitzgerald
Partners, Eastbridge Capital, Inc., BT Securities Corporation and First Union
Capital Markets Corp. The Company monitors the market value of the underlying
securities as compared to the related receivable, including accrued interest,
and requires additional collateral where deemed appropriate.
Investment Management & Research, Inc. and Robert Thomas Securities, Inc.
are exempt from the provisions of Rule 15c3-3, since they clear all transactions
with and for customers on a fully disclosed basis with Raymond James &
Associates, Inc.
F - 22
<PAGE>
NOTE 14 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK:
In the normal course of business, the Company purchases and sells
securities and commodities as either principal or agent on behalf of its
customers. If either the customer or a counterparty fails to perform, the
Company may be required to discharge the obligations of the nonperforming party.
In such circumstances, the Company may sustain a loss if the market value of the
security or futures contract is different from the contract value of the
transaction.
The Company also acts as an intermediary between broker-dealers and other
financial institutions whereby the Company borrows securities from one
broker-dealer and then lends them to another. Securities borrowed and securities
loaned are carried at the amount of cash collateral advanced and received in
connection with the transactions. The Company measures the market value of the
securities borrowed and loaned against the cash collateral on a daily basis. The
market value of securities borrowed and securities loaned was $816,362,000 and
$798,968,000, respectively, at September 27, 1996 and $772,101,000 and
$784,767,000, respectively, at September 29, 1995. Additional cash is obtained
as necessary to ensure such transactions are adequately collateralized. If
another party to the transaction fails to perform as agreed (such as failure to
deliver a security or failure to pay for a security), the Company may incur a
loss if the market value of the security is different from the contract amount
of the transaction.
The Company has also loaned, to brokers and dealers, securities owned by
customers and others for which it has received cash or other collateral. If a
borrowing institution or broker-dealer does not return a security, the Company
may be obligated to purchase the security in order to return it to the owner. In
such circumstances, the Company may incur a loss equal to the amount by which
the market value of the security on the date of nonperformance exceeds the value
of the loan from the institution or the collateral from the broker or dealer.
The Company has sold securities that it does not currently own and will,
therefore, be obligated to purchase such securities at a future date. The
Company has recorded $57,210,000 and $17,377,000 at September 27, 1996 and
September 29, 1995, respectively, which represents the market value of the
related securities at such dates. The Company is subject to loss if the market
price of those securities not covered by a hedged position increases subsequent
to September 27, 1996. The Company utilizes short government obligations and
equity securities to hedge long proprietary inventory positions. At September
27, 1996, the Company had $31,203,000 in short government obligations and
$512,000 in short equity securities which represented hedge positions. At
September 29, 1995, the Company had $7,712,000 in short government obligations
and $3,844,000 in short equity securities which represented hedge positions.
The Company enters into security transactions involving forward
settlement. Transactions involving future settlement give rise to market risk,
which represents the potential loss that can be caused by a change in the market
value of a particular financial instrument. The Company's exposure to market
risk is determined by a number of factors, including the size, composition and
diversification of positions held, the absolute and relative levels of interest
rates, and market volatility.
F - 22
<PAGE>
The majority of the Company's transactions and, consequently, the
concentration of its credit exposure is with customers, broker-dealers and other
financial institutions in the United States. These activities primarily involve
collateralized arrangements and may result in credit exposure in the event that
the counterparty fails to meet its contractual obligations. The Company's
exposure to credit risk can be directly impacted by volatile securities markets
which may impair the ability of counterparties to satisfy their contractual
obligations. The Company seeks to control its credit risk through a variety of
reporting and control procedures, including establishing credit limits based
upon a review of the counterparties' financial condition and credit ratings. The
Company monitors collateral levels on a daily basis for compliance with
regulatory and internal guidelines and requests changes in collateral levels as
appropriate.
NOTE 15 - RELATED PARTIES:
On October 27, 1994, the Company and the then President and Chief
Investment Officer of its Eagle Asset Management, Inc. ("Eagle") subsidiary,
Herbert E. Ehlers ("Ehlers"), entered into a Separation Agreement by which
Ehlers (a director of the Company) and certain other Eagle personnel became
employees of a new firm, Liberty Investment Management, Inc. ("Liberty"),
effective December 31, 1994. Ehlers began operating Liberty as of January 1,
1995, and he remained a dual employee of Eagle and Liberty through June 1995,
continuing as investment manager on certain retail accounts until they were
assigned to other portfolio managers. As of January 1, 1995, Liberty assumed the
responsibility for providing investment management services to institutional
growth equity accounts totaling $4.3 billion formerly managed by Eagle.
In accordance with Ehlers' employment agreement, Eagle received 50% of the
revenues from these accounts, while bearing none of the expenses. In addition,
the Company was granted an option to purchase 20% of Liberty in the year 2000 at
a predetermined price. For the years ended September 27, 1996 and September 29,
1995, Eagle recognized $9,813,000 and $7,233,000, respectively, in fees from
Liberty, which are included in investment advisory fees in the consolidated
statement of income. At September 29, 1996 and September 29, 1995, $5,004,000
and $4,921,000 due from Liberty is included in other receivables on the
consolidated statement of financial condition.
Subsequent to year end, Liberty entered into an agreement to sell
substantially all of its assets to Goldman Sachs Asset Management. Accordingly,
the Company, Eagle, Ehlers and Liberty reached an agreement in principle whereby
the Company will receive a lump sum settlement for its remaining three years'
interest in Liberty's revenue stream and the Company's option to purchase 20% of
Liberty at a future date. Upon closing, the Company will receive up to $30
million pretax income as its settlement amount.
The amount and timing of the payments to the Company from Liberty are
contingent upon the occurrence of several events prior to or shortly after the
scheduled closing date of January, 1997. Eagle will continue to receive 50% of
fee revenues until the closing.
F - 23
EXHIBIT 3.1
STATE OF FLORIDA
DEPARTMENT OF STATE [SEAL]
I, RICHARD (DICK) STONE, Secretary of State of the State of Florida, do hereby
certify that the following is a true and correct copy of
CERTIFICATE OF INCORPORATION
OF
R J FINANCIAL CORP.
a corporation organized and existing under the Laws of the State of Florida,
filed on the 24th day of January A.D., 1974 as shown by the records of this
office.
[SEAL] GIVEN under my hand and the Great
Seal of the State of Florida, at
Tallahassee, the Capital, this the
25th day of January
A.D., 1974
/s/ RICHARD (DICK) STONE
-----------------------------
SECRETARY OF STATE
<PAGE>
ARTICLES OF INCORPORATION
OF
R J FINANCIAL CORP.
The undersigned natural persons of the age of twenty-one or more,
acting as incorporators under the provisions of Florida Statutes, Chapter 608,
adopt the following Articles of Incorporation;
ARTICLE I
NAME
The name of this corporation shall be: R J FINANCIAL CORP.
ARTICLE II
TERM OF EXISTENCE
The duration of this corporation is to be perpetual.
ARTICLE III
PURPOSES
The principal purposes of the corporation shall be:
To engage in and carry on a general securities brokerage and financial
business.
To underwrite, subscribe for, buy, sell, pledge, mortgage, hold and
otherwise deal in stocks, bonds, obligations
X - 2
<PAGE>
or securities of any private or public corporation, government or municipality,
trusts, syndicates, partnerships or individuals and to do any other act or
thing permitted by law for the preservation, protection, improvement or
enhancement of the value of such shares of stock, bonds, securities or other
obligations including the right to vote thereon.
To undertake and carry on any business transaction or operation
commonly carried on or undertaken by capitalists, promoters, financiers,
contractors, merchants, commission men or agents.
To promote or assist financially or otherwise, corporations,
syndicates, partnerships, individuals or associations of all kinds and to give
any guarantee in connection therewith for the payment of money or for the
performance of any obligation or undertaking.
To deal in shares, stocks, bonds, notes, debentures, or other evidence
of indebtedness or securities of any domestic or foreign corporations, or mutual
investment companies, either as principal, or as agent or broker, or otherwise.
To acquire by lease, purchase, gift, devise, contract, concession, or otherwise,
and to hold, own, develop, explore, exploit, improve, operate, lease, enjoy,
control, manage, or otherwise turn to account, mortgage, grant, sell, exchange,
convey, or otherwise dispose of, wherever situated, within or without the State
of Florida, any and all real estate, lands, options, concessions,
X - 3
<PAGE>
grants, land patents, franchises, rights, privileges, easements, tenements,
estates, hereditaments, interests, and properties of every kind, nature and
description whatsoever.
To acquire, and to make payment therefor in cash or the stock or bonds
of the corporation, or by undertaking or assuming the obligations and
liabilities of the transferor, or in any other way, the good will, rights and
property, the whole or any part of the assets, tangible or intangible, and to
undertake or assume the liabilities of, any person, firm, association or
corporation, to hold or in any manner dispose of the whole or any part of the
property so purchased, to conduct in any lawful manner the whole or any part of
the business so acquired and to exercise all of the powers necessary or
convenient for the conduct and management thereof.
To adopt, apply for, obtain, register, produce, take, purchase,
exchange, lease, hire, acquire, secure, own, hold, use, operate, contract, or
negotiate for, take licenses or other rights in respect of, sell, transfer,
grant licenses and rights in respect of, manufacture under, introduce, sell,
assign, collect the royalties on, mortgage, pledge, create liens upon, or
otherwise dispose of, deal in, and turn to accounts letters patent, patents,
patent rights, patents applied for or to be applied for, trade-marks, trade
names and symbols, distinction marks and indications of origin or ownership,
copyrights,
X - 4
<PAGE>
syndicate rights, inventions, discoveries, devices, machines, improvements,
licenses, processes, data, and formulae of any and all kinds granted by, or
recognized under or pursuant to laws of the United States of America, or of any
other country or countries whatsoever and with a view to the working and
development of the same, to carry on any business, whether manufacturing or
otherwise, which the corporation may think calculated, directly or indirectly,
to effectuate these objects.
To manufacture, purchase, or otherwise acquire, hold, own, sell,
assign, transfer, lease, exchange, invest in, mortgage, pledge, or otherwise
encumber or dispose of and generally deal and trade in and with, both within and
without the State of Florida, and in any part of the world, goods, wares,
merchandise, and property of every kind, nature and description.
To enter into, make and perform contracts of every kind and description
with any person, firm, association or corporation, municipality, body
politics, country, territory, state, government or colony or dependency thereof.
To borrow or raise money for any of the purposes of the corporation,
without limit as to amount, and in connection therewith to grant collateral or
other security either alone or jointly with any other person, firm or
corporation, and to make, execute, draw, accept, endorse, discount, pledge,
issue, sell or otherwise dispose of promissory notes, drafts, bills of
X - 5
<PAGE>
exchange, warrants, bonds, debentures and other evidences of indebtedness,
negotiable or non-negotiable, transferable or non-transferable, and to confer
upon the holders of any of its obligations such powers, rights and privileges as
from time to time may be deemed advisable by the Board of Directors, to the
extent permitted under the General Corporation Law of the State of Florida; to
lend and advance money, extend credit, take notes, open accounts and every kind
and nature of evidence of indebtedness and collateral security in connection
therewith.
To purchase or otherwise acquire, hold, sell, pledge, transfer or
otherwise dispose of shares of its own capital stock, provided that the funds or
property of the corporation shall not be used for the purchase of its own shares
of capital stock when such use would cause any impairment of the capital of the
corporation and provided further, that shares of its own capital stock belonging
to the corporation shall not be voted upon directly or indirectly.
To have one or more offices, conduct and carry on its business and
operations and promote its objects within and without the State of Florida, in
other states, the District of Columbia, the territories, colonies and
dependencies of the United States, and in foreign countries, without restriction
as to place or amount, but subject to the laws of such state, district,
territory, colony dependency or country.
X - 6
<PAGE>
To engage in any other business or businesses, whether related thereto
or not, as may be approved by the Board of Directors and which businesses are
permitted by law.
In general to do any or all of the things herein set forth to the same
extent as natural persons might or could do and in any part of the world, as
principals, agents, contractors, trustees, or otherwise, within or without the
State of Florida, either alone or in company with others, and to carry on any
other business in connection therewith whether manufacturing or otherwise, and
to do all things not forbidden, and with all the powers conferred upon
corporations by the laws of the State of Florida.
It is the intention that each of the objects, purposes and powers
specified in each of the paragraphs of this third article of this Certificate
of Incorporation shall, except where otherwise specified, be nowise limited or
restricted by reference to or inference from the terms of any other paragraph or
of any other article in this Certificate of Incorporation, but that the objects,
purposes and powers specified in this article and in each of the articles or
paragraphs of this Certificate shall be regarded as independent objects,
purposes and powers, and the enumeration of specific purposes and powers shall
not be construed to restrict in any manner the general terms and powers of this
corporation, nor shall
X - 7
<PAGE>
the expression of one thing be deemed to exclude another, although it be of like
nature. The enumeration of objects or purposes herein shall not be deemed to
exclude or in any way limit by inference any powers, objects, or purposes which
this corporation is empowered to exercise, whether expressly by force of the
laws of the State of Florida, now or hereafter in effect, or impliedly by any
reasonable construction of said law.
ARTICLE IV
STOCK CLAUSE
The aggregate number of shares of stock which this corporation shall
have authority to issue shall be 2,000,000 shares of Common Stock (each with a
par value of $0.01 [one cents]).
ARTICLE V
MINIMUM, CAPITAL
The amount of capital with which the corporation shall begin business
shall not be less than $500.00.
ARTICLE VI
SUBSCRIBERS, INCORPORATORS & DIRECTORS
The names and addresses of the Subscribers, Incorporators and Directors
are:
X - 8
<PAGE>
NAME ADDRESS
---- -------
STEVEN C. KOEGLER 14006-79th Avenue North
Seminole, Florida
RICHARD 0. JACOBS 1742 Serpentine Drive South
St. Petersburg, Florida
H. ANNE THOMAS 5531-E 17th Way South
St. Petersburg, Florida
ARTICLE VII
PRE-EMPTIVE RIGHTS
No holder of any shares of stock of the corporation shall have any
pre-emptive rights whatsoever to subscribe for or acquire additional shares of
the corporation of any class, whether such shares shall be hereby or hereafter
authorized; and no holder of shares shall have any right to subscribe to or
acquire any shares which may be hold in the treasury of the corporation; nor
shall any holder have a right to subscribe to or acquire any bonds,
certificates of indebtedness, debentures or other securities convertible into
stock, or carrying any right to purchase stock. All such additional or treasury
shares or securities convertible into stock or carrying any right to purchase
stock may be sold for such consideration, at such time, on such terms and to
such person or persons, firms, corporations or associations as the Board of
Directors may from time to time determine. Florida Statute 608.42(2),
pre-emptive rights, shall not apply to this corporation.
X - 9
<PAGE>
ARTICLE VIII
DIRECTORS
A. NUMBER
The business of the corporation shall be managed initially by a board
of not less than three (3) directors. The number of directors may, as provided
in the by-laws, be from time to time increased or decreased, but shall never
be less than three (3) nor more than twelve (12).
B. INTERESTED DIRECTORS
No contract or other transaction between this corporation and any other
corporation, whether or not a majority of the shares of the capital stock of
such other corporation is owned by this corporation, and no act of this
corporation, shall in any way be affected or invalidated by the fact that any of
the directors of this corporation are pecuniarily or otherwise interested in,
or are directors or officers of, such other corporation. Any director
individually, or any firm of which such director may be a member, may be a party
to, or may be pecuniarily or otherwise interested in, any contract or
transaction of the corporation, provided that the fact that he or such firm is
so interested shall be disclosed or shall have been known to the Board of
Directors, or a majority thereof. Any director of this corporation who is also a
director or officer of such other corporation, or who is so interested,
X - 10
<PAGE>
may be counted in determining the existence of a quorum at any meeting of the
Board of Directors of this corporation that shall authorize such contract or
transaction, and may vote thereat to authorize such contract or transaction,
with like force and effect as if he were not such director or officer of such
other corporation or not so interested.
C. AUTHORITY TO MAKE LONG-TERM EMPLOYMENT CONTRACTS
The Board of Directors may authorize the corporation to enter into
employment contracts with any executive officer for periods longer than one
year, and any charter or by-law provision for annual election shall be without
prejudice to the contract rights, if any, of executive officer under such
contracts.
D. RELIANCE ON CORPORATION BOOKS
Each officer, director, or member of any committee designated by the
Board of Directors shall, in the performance of his duties, be fully protected
in relying in good faith upon the books of account or reports made to the
company by any of its officials or by an independent public accountant or by an
appraiser selected with reasonable care by the Board of Directors or by any such
committee or in relying in good faith upon other records of the company.
ARTICLE IX
INITIAL OFFICE AND REGISTERED AGENT
The address of the initial office of corporation
X - 11
<PAGE>
is 6090 Central Avenue, St. Petersburg, Florida. The name of the initial
registered agent of this corporation is RICHARD 0. JACOBS, 445 - 31st Street
North, St. Petersburg, Florida.
ARTICLE X
AMENDMENTS
The corporation reserves the right to amend, alter or repeal any
provision contained in the Certificate of Incorporation in the manner now or
hereafter prescribed by the statutes of Florida, and all rights and powers
conferred on directors and stockholders herein are granted subject to this
reservation.
IN WITNESS WHEREOF, the undersigned, being the incorporators of this
corporation, execute these Articles of Incorporation and certify to the truth of
the facts herein stated, this 18th day of January, 1974.
/s/ STEVEN C. KOEGLER
-------------------------------
Steven C. Koegler
/s/ RICHARD O. JACOBS
--------------------------------
Richard O. Jacobs
/s/ H. ANNE THOMAS
--------------------------------
H. Anne Thomas
STATE OF FLORIDA
COUNTY OF PINELLAS
Before me the undersigned officer duly authorized to administer oaths
and take acknowledgments, personally appeared
X - 12
<PAGE>
STEVEN C. KOEGLER, RICHARD O. JACOBS and H. ANNE THOMAS, who, after being duly
cautioned and sworn, depose and say that they have affixed their names to the
foregoing Articles of Incorporation of R J FINANCIAL CORP. as the original
subscribers to said corporation, for the purposes therein expressed.
WITNESS my hand and official seal at St. Petersburg, Pinellas County,
Florida, this 18th day of January, 1974.
/s/ ILLEGIBLE
-------------------------------
NOTARY PUBLIC
My commission expires:
NOTARY PUBLIC, STATE of FLORIDA at LARGE
MY COMMISSION EXPIRES JULY 4, 1977
Bonded By American Bankers Insurance Co.
X - 13
<PAGE>
STATE OF FLORIDA
DEPARTMENT OF STATE
I, RICHARD (DICK) STONE, Secretary of State of the State of Florida, do hereby
certify that the following is a true and correct copy of Certificate of
Amendment to Certificate of Incorporation of R J FINANCIAL CORP., a corporation
organized and existing under the Laws of the State of Florida, amending ARTICLE
IV, filed on the 26th day of March, A. D., 1974 as shown by the records of this
office.
[SEAL] GIVEN UNDER MY HAND AND THE GREAT
SEAL OF THE STATE OF FLORIDA, AT
TALLAHASSEE, THE CAPITAL, THIS THE 27TH DAY
OF MARCH, A.D., 1974.
/s/ RICHARD (DICK) STONE
----------------------------------
SECRETARY OF STATE
X - 14
<PAGE>
AMENDMENT TO THE ARTICLES OF INCORPORATION
OF
R J FINANCIAL CORP.
We, the undersigned, being all of the Directors (there being no
President and Secretary) of R J FINANCIAL CORP., a corporation organized under
the laws of the State of Florida and located in the City of St. Petersburg,
hereby certify:
1. The name of the corporation is R J FINANCIAL CORP.
2. The Articles of Incorporation are amended by the following
resolution adopted by the Board of Directors (there being no Shareholders):
"RESOLVED, That the Articles of Incorporation shall be amended so that Article
IV is eliminated and the following substituted for such Article IV:
ARTICLE IV
STOCK CLAUSE
1. SHARES AUTHORIZED. The aggregate number of shares of stock which
this corporation shall have authority to issue shall be Two Million (2,000,000)
shares of common stock (each with a par value of One Cents [$0.01]) and Two
Hundred Thousand (200,000) shares of preferred stock, (each with a par value of
Two Dollars [$2.00]).
X - 15
<PAGE>
2. PREFERRED STOCK. Except as limited elsewhere in this Article IV, the
rights, preferences and privileges of the shares thereof shall be determined by
the Board of Directors in the resolution or resolutions by which it authorizes
the issuance of such stock. By way of illustration, and not by way of
limitation, the Board of Directors shall have the power to decide on the
following terms:
(a). whether the shares of preferred stock shall be participating;
(b). the dividend rate or rates, if any, on the shares of preferred
stock and the relation which dividends of preferred stock shall bear to the
dividends payable on any other class or classes or of any other series of any
class or classes of capital stock of the corporation;
(c). the terms and conditions upon which and the periods in respect to
which any such dividends shall be payable;
(d). whether and upon what conditions any dividends of preferred stock
shall be cumulative and, if cumulative, the date or dates from which dividends
shall accumulate;
(e). whether the shares shall be limited in dividends, if any, or
whether they shall participate in dividends over and above the dividend rate, if
any, provided for the shares;
(f). whether any such dividends shall be payable in cash in shares of
such series, in shares of any other class or classes or of any other series of
any class or classes of capital stock of the corporation, or in other property,
or in more than one of the foregoing;
(g). whether the shares of preferred stock shall be redeemable or
callable, the limitations and restrictions with respect to such redemption or
call, the time or times of redemption, and the price or prices (which may be
greater than par value) at which and the manner in which shares shall be
redeemable or callable, including the manner of selecting shares for redemption
if less than all shares are to be redeemed or called;
X - 16
<PAGE>
(h). whether the shares of preferred stock shall be subject to the
operation of a purchase, retirement or sinking fund, and, if so, whether and
upon what conditions the purchase, retirement or sinking fund shall be
cumulative or non-cumulative, and the extent to which and the manner in which
the fund shall be applied to the purchase or redemption of the shares for
retirement or to other corporate purposes and the terms and provisions relative
to the operation thereof;
(i). the terms on which preferred stock shall be convertible into or
exchangeable for shares of any other class or classes or of any other series of
any class or classes of capital stock of the corporation, and the price or
prices or the rate or rates of conversion or exchange and the method, if any, of
adjusting the same, and any other terms and conditions of such conversion or
exchange;
(j). the extent to which holders of preferred stock shall be entitled
to vote generally with respect to matters relating to the corporation and the
matters on which the holders of preferred stock shall be entitled to vote as a
class;
(k). the preferences in respect to the assets of the corporation upon
liquidation or winding up the corporation including the amount (which may be
greater than par value) payable to holders of preferred stock before any amount
is payable to holders of common stock; and
(1). any other preferences, privileges and powers, and relative,
participating, optional or other special rights and qualifications of or
limitations or restrictions which the Board of Directors may deem advisable,
provided they are not inconsistent with the provisions of these Articles of
Incorporation.
Notwithstanding anything herein to the contrary, each share of
preferred stock shall stand on a parity with each other share of preferred stock
upon the voluntary or involuntary liquidation, dissolution or distribution of
assets, or winding up of the corporation.
No dividend shall be paid, declared or set apart for payment on any
preferred stock in respect of any period unless
X - 17
<PAGE>
accumulated dividends shall be or shall have been paid, or declared and set
apart for payment, pro rata, on all shares of outstanding preferred stock.
3. COMMON STOCK. Whenever cash dividends upon the preferred stock at
the time outstanding, to the extent of the preference to which such stock is
entitled, shall have been paid in full for all past dividend periods or declared
and set apart for payment, such dividends, payable in cash, stock or otherwise,
as may be determined by the Board of Directors, may be declared by the Board of
Directors, and paid from time to time to the holders of common stock out of the
remaining net profit or surplus of the corporation.
In the event of any liquidation, dissolution or winding up of the
affairs of the corporation, whether voluntary or involuntary, all assets and
funds of the corporation remaining after the payment to the holders of the
preferred stock of the full amounts to which they shall be entitled, as provided
by the Board of Directors in the resolution or resolutions by which it
authorizes the issuance of such stock, shall be divided and distributed among
the holders of the common stock according to their respective shares.
The corporation may issue and sell its authorized shares of capital
stock from time to time for such consideration as, from time to time, may be
fixed by the Board of Directors, and any and all shares so issued shall be
deemed
X - 18
<PAGE>
fully paid and non-assessable and the holder of such shares shall not be liable
to the corporation or its creditors in respect thereto."
SIGNED AND DATED at St. Petersburg, Pinellas County, Florida, this day
of 1974.
R J FINANCIAL CORP.
BY /s/ STEVEN C. KOEGLER
--------------------------
Director
BY /s/ H. ANNE THOMAS
--------------------------
Director
BY /s/ RICHARD O. JACOBS
---------------------------
Director
SWORN AND SUBSCRIBED to before me this 7th day of March, 1974.
/s/ ILLEGIBLE
---------------------------
NOTARY PUBLIC
Notary Public, State of Florida
My Commission Expires. AUG. 11, 1974
My commission expires:
X - 19
<PAGE>
STATE OF FLORIDA
DEPARTMENT OF STATE
I certify that the attached is a true and correct copy of Certificate of
Amendment to Articles of Incorporation of R J FINANCIAL CORP., a Florida
corporation, filed on May 16, 1983, as shown by the records of this office.
The charter number of this corporation is 444750.
Given under my hand and the
Great Seal of the State of Florida,
at Tallahassee, the Capital, this the
16th day of May, 1983.
/s/ George Firestone
---------------------
George Firestone
Secretary of State
[SEAL}
X - 20
<PAGE>
AMENDMENT TO
ARTICLES OF INCORPORATION
OF
R J FINANCIAL CORP.
FILED
MAY 16 12 27PM'83
SECRETARY OF STATE
TALLAHASSEE, FLORIDA
The undersigned officers of R J Financial Corp., (the "Corporation") do
hereby certify that at a duly held meeting of the Board of Directors of the
Corporation held May 9, 1983 and at the Annual Meeting of Shareholders of the
Corporation held May 9, 1983, the following Resolutions were adopted amending
the Corporation's Articles of Incorporation as follows:
RESOLVED, that Article IV of the Articles of Incorporation of this
Corporation is hereby amended in its entirety to read as follows:
ARTICLE IV
STOCK CLAUSE
1. SHARES AUTHORIZED. The aggregate number of shares of stock which this
corporation shall have authority to issue shall be Ten Million (10,000,000)
shares of common stock (each with a par value of One Cent [$0.01]) and One
Million (1,000,000) shares of preferred stock (each with a par value of Two
Dollars [$2.00]).
2. PREFERRED STOCK. Except as limited elsewhere in this Article IV, the
rights, preferences and privileges of the shares thereof shall be determined by
the Board of Directors shall have the power to decide on the following terms:
(a). whether the shares of preferred stock shall be participating;
(b). the dividend rate or rates, if any, on the shares of preferred
stock and the relation which dividends of preferred stock shall bear to the
dividends payable on any other class or classes or of any other series of any
class or classes of capital stock of the corporation;
(c). the terms and conditions upon which and the periods in respect to
which any such dividends shall be payable;
(d). whether and upon what conditions any dividends of preferred stock
shall be cumulative and, if cumulative, the date or dates from which dividends
shall accumulate;
(e). whether the shares shall be limited in dividends, if any, or
whether they shall participate in dividends over and above the dividend rate, if
any, provided for the shares;
(f). whether any such dividends shall be payable in cash, in shares of
such series, in shares of any other class or classes or of any other series of
any class or classes of capital stock of the corporation, or in other property,
or in more than one of the foregoing;
X - 21
<PAGE>
(g). whether the shares of preferred stock shall be redeemable or
callable, the limitations and restrictions with respect to such redemption or
call, the time or times of redemption, and the price or prices (which may be
greater than par value) at which and the manner in which shares shall be
redeemable or callable, including the manner of selecting shares for redemption
if less than all shares are to be redeemed or called;
(h). whether the shares of preferred stock shall be subject to the
operation of a purchase, retirement or sinking fund, and, if so, whether and
upon what conditions the purchase, retirement or sinking fund shall be
cumulative or non-cumulative, and the extent to which and the manner in which
the fund shall be applied to the purchase or redemption of the shares for
retirement or to other corporate purposes and the terms and provisions relative
to the operation thereof;
(i). the terms on which preferred stock shall be convertible into or
exchangeable for shares of any other class or classes or of any other series of
any class or classes of capital stock of the corporation, and the price or
prices or the rate or rates of conversion or exchange and the method, if any, of
adjusting the same, and any other terms and conditions of such conversion or
exchange;
(j). the extent to which holders of preferred stock shall be entitled to
vote generally with respect to matters relating to the corporation and the
matters on which the holders of preferred stock shall be entitled to vote as a
class;
(k). the preferences in respect to the assets of the corporation upon
liquidation or winding up the corporation including the amount (which may be
greater than par value) payable to holders of preferred stock before any amount
is payable to holders of common stock; and
(1). any other preferences, privileges and powers, and relative,
participating, optional or other special rights and qualifications of or
limitations or restrictions which the Board of Directors may deem advisable,
provided they are not inconsistent with the provisions of these Articles of
Incorporation.
Notwithstanding anything herein to the contrary, each share of preferred
stock shall stand on a parity with each other share of preferred stock upon the
voluntary or involuntary liquidation, dissolution or distribution of assets, or
winding up of the corporation.
No dividend shall be paid, declared or set apart for payment on any
preferred stock in respect of any period unless accumulated dividends shall be
or shall have been paid, or declared and set apart for payment, pro rata, on all
shares of outstanding preferred stock.
3. COMMON STOCK. Whenever cash dividends upon the preferred stock at the
time outstanding, to the extent of the preference to which such stock is
entitled, shall have been paid in full for all past dividend periods or declared
and set apart for payment, such dividends, payable in cash, stock or otherwise,
as may be determined by the Board of Directors, may be declared by the Board of
Directors, and paid from time to time to the holders of common stock out of the
remaining net profit or surplus of the corporation.
X - 22
<PAGE>
In the event of any liquidation, dissolution or winding up of the affairs
of the corporation, whether voluntary or involuntary, all assets and funds of
the corporation remaining after the payment to the holders of the preferred
stock of the full amounts to which they shall be entitled, as provided by the
Board of Directors in the resolution or resolutions by which it authorizes the
issuance of such stock, shall be divided and distributed among the holders of
the common stock according to their respective shares.
The corporation may issue and sell its authorized shares of capital stock
from time to time for such consideration as, from time to time, may be fixed by
the Board of Directors, and any and all shares so issued shall be deemed fully
paid and non-assessable and the holder of such shares shall not be liable to
the corporation or its creditors in respect thereto.
RESOLVED, that a new Article V to the Articles of Incorporation is hereby
adopted to read as follows:
ARTICLE V
VOTE TO EFFECT BUSINESS COMBINATION
The affirmative vote of two-thirds (2/3) of all the shares outstanding and
entitled to vote shall be required to approve any of the following:
(a). any merger or consolidation of the corporation with or into any
other corporation;
(b). any share exchange in which a corporation, person, or entity
acquires the issued or outstanding shares of stock of this corporation pursuant
to a vote of stockholders;
(c). any sale, lease, exchange or other transfer of all, or
substantially all, of the assets of this corporation to any other corporation,
person or entity;
(d). any transaction similar to, or having a similar effect as, any of
the foregoing transactions.
Such affirmative vote shall be in lieu of the vote of stockholders
otherwise required by law.
RESOLVED, that a new Article IX to the Articles of Incorporation is hereby
amended in its entirety to read as follows:
ARTICLE IX
AMENDMENT
These Articles of Incorporation may be amended in the manner provided by
law. Every amendment shall be approved by the Board of Directors, proposed by
them to the stockholders, and approved at a stockholders' meeting by a
majority of the stock entitled to vote thereon; provided, however, that the
provisions set forth in Article V may not be altered, amended or repealed unless
such alteration, amendment or repeal is approved by the affirmative vote of
two-thirds (2/3) of all of the shares outstanding and entitled to vote.
X - 23
<PAGE>
The current Article V and all subsequent Articles were renumbered to
reflect the addition of the new Article V.
IN WITNESS WHEREOF, we have duly executed this certificate for and on
behalf of said Corporation, this 13TH day of May, 1983.
Corporate R J FINANCIAL CORP.
Seal
By: /s/ THOMAS A. JAMES
-----------------------------
Thomas A. James, President
Attest: By: /s/ LYNN PIPPENGER
-----------------------------
Lynn Pippenger, Secretary
STATE OF FLORIDA )
) ss.
COUNTY OF PINELLAS )
I HEREBY CERTIFY that on this 13d, day of May, 1983, before me personally
appeared Thomas A. James and Lynn Pippenger, known to me and known to be the
President and Secretary, respectively, of R J Financial Corp., the persons
described in and who executed the foregoing Amendment, and they acknowledged
before me the execution thereof to be their free act and deed as such, for the
use and purposes therein mentioned.
/S/ JEAN C. CRANE
-----------------------------
Notary Jean E. Crane
Seal Notary Public
My Commission Expires:
X - 24
<PAGE>
STATE OF FLORIDA
DEPARTMENT OF STATE
I certify that the attached is a true and correct copy of Certificate of
Amendment to the Articles of Incorporation of R J FINANCIAL CORP., changing
its name to RJ FINANCIAL CORPORATION, a Florida corporation, filed on
June 2, 1983, as shown by the records of this office.
The charter number of this corporation is 444750.
Given under my hand and the
Great Seal of the State of Florida
at Tallahassee, the Capital, this the
7TH day of June, 1983.
/s/ GEORGE FIRESTONE
-------------------
George Firestone
Secretary of State
X - 25
[SEAL]
<PAGE>
AMENDMENT
TO ARTICLES OF INCORPORATION
OF
R J FINANCIAL CORP.
FILED
1983 JUN-2 AM 10:58
SECRETARY OF STATE
TALLAHASSEE, FLORIDA
The undersigned officers of R J Financial Corp., (the "Corporation") do
hereby certify that at a duly held meeting of the Board of Directors of the
Corporation held May 9, 1983 and at the Annual Meeting of Shareholders of the
Corporation held May 9, 1983, the following Resolutions were adopted amending
the Corporation's Articles of Incorporation as follows:
RESOLVED, that Article I of the Articles of Incorporation of this
Corporation is hereby amended in its entirety to read as follows:
ARTICLE I
NAME
The name of the corporation shall be: RJ FINANCIAL CORPORATION.
IN WITNESS WHEREOF, we have duly executed this certificate for and on
behalf of said Corporation, this 25TH day of May, 1983.
Corporate R J FINANCIAL CORP.
Seal
By: /s/ THOMAS A. JAMES
--------------------------------
Thomas A. James, President
Attest: By: /s/ LYNN PIPPENGER
--------------------------------
Lynn Pippenger, Secretary
STATE OF FLORIDA )
) ss.
COUNTY OF PINELLAS )
I HEREBY CERTIFY that on this 25TH day of May, 1983, before me personally
appeared Thomas A. James and Lynn Pippenger, known to me and known to be the
President and Secretary, respectively, of R J Financial Corp., the persons
described in and who executed the foregoing Amendment, and they acknowledged
before me the execution thereof to be their free act and deed as such, for the
use and purposes therein mentioned.
Notary /s/ JEAN E. CRANE
Seal -----------------------------
Jean E. Crane
Notary Public
My Commission Expires:
X - 26
<PAGE>
STATE OF FLORIDA
DEPARTMENT OF STATE
I certify that the attached is a true and correct copy of the Articles of
Amendment, filed on February 20, 1987, to the Articles of Incorporation
for RJ FINANCIAL CORPORATION, changing its name to RAYMOND JAMES FINANCIAL,
INC., a Florida corporation, as shown by the records of this office.
The document number of this corporation is 444750.
Given under my hand and the
Great Seal of the State of Florida
at Tallahassee, the Capital, this the
24TH day of February, 1987.
/s/ GEORGE FIRESTONE
---------------------
George Firestone
Secretary of State
[SEAL]
X - 27
<PAGE>
AMENDMENT TO
ARTICLES OF INCORPORATION
OF
RJ FINANCIAL CORPORATION
FILED
1987 FEB 20 PM 1:00
SECRETARY OF STATE
TALLAHASSEE, FLORIDA
The undersigned officers of RJ Financial Corporation, (the Corporation), do
hereby certify that at the Annual Meeting of the Shareholders Corporation, held
February 12, 1987, at the recommendation of the Board of Directors, the
following Resolution was adopted amending the Corporation's Articles
Incorporation as follows:
RESOLVED, that Article I of the Articles of Incorporation of this
Corporation is hereby amended in its entirety to read as follows:
ARTICLE I
NAME
The name of the Corporation shall be:
RAYMOND JAMES FINANCIAL, INC.
IN WITNESS WHEREOF, we have duly executed this certificate for and on
behalf of said Corporation, this 12TH day of FEBRUARY 1987.
ARTICLE I
NAME
The namn of the Corporation shall be:
RAYMOND JAMES FINANCIAL, INC.
IN WITNESS WHEREOF, we have duly executed this certificate for and on
behalf of said Corporation, this 12TH day of FEBRUARY, 1987.
(Corporate Seal) RJ FINANCIAL CORPORATION
By /s/ FRANCIS S. GODBOLD
---------------------------
Francis S. Godbold
President
By /s/ LYNN PIPPENGER
---------------------------
Lynn Pippenger
Secretary
STATE OF FLORIDA
COUNTY OF PINELLAS
I HEREBY CERTIFY that on this 12TH day of FEBRUARY 1987, before me
personally appeared Francis S. Godbold and Lynn Pippenger, known to me and known
to be the President and Secretary, respectively, of RJ Financial Corporation,
the persons described in and who executed the foreagoing Amendment, and they
acknowledged before me the execution thereof to be their free act and deed as
such, for the use and purposes therein mentioned.
/s/ JEAN E. CRANE
-----------------------------
Notary Seal Jean E. Crane
Notary Public
My Commission Expires:
Notary Public, State of Florida at
Large
My Commission, Expires JULY 27, 1989
X - 28
<PAGE>
STATE OF FLORIDA
STATE OF FLORIDA
I certify that the attached is a true and correct copy of the Article
of Amendment, filed on June 13, 1991, to Article of Incorporation for
RAYMOND JAMES FINANCIAL, INC., a Florida corporation, as shown by the
record of this office.
The document number of this corporation is 444750.
Given under my hand and the
Great Seal of the State of Florida
at Tallahassee, the Capital, this the
25th day of June, 1991.
/s/ JIM SMITH
-------------------
Jim Smith
Secretary of State
[SEAL]
X-29
<PAGE>
AMENDMENT TO
ARTICLES OF INCORPORATION
OF
RAYMOND JAMES FINANCIAL, INC.
FILED
1991 JUNE 13 AM 10:25
SECRETARY OF STATE
TALLAHASSEE, FLORIDA
The undersigned officers of Raymond James Financial, Inc., (the Corporation), do
hereby certify that at a Special Meeting of the Shareholders of the Corporation,
held June 4, 1991, at the recommendation of the Board of Directors, the
following Resolution was adopted amending the Corporation's Articles
of Incorporation as follows:
RESOLVED, that Article IV of the Articles of Incorporation of this
corporation is hereby amended in its entirety to read as follows:
ARTICLE IV
STOCK CLAUSE
1. SHARES AUTHORIZED. The aggregate number of shares of stock which this
corporation shall have authority to issue shall be twenty-five million
(25,000,000) shares of common stock (each with a par value of one cent
($.0l)) and one million (1,000,000) shares of preferred stock (each with
a par value of two dollars ($2.00)).
IN WITNESS WHEREOF, we have duly executed this certificate for and on
behalf of said Corporation, this 7TH day of JUNE, 1991.
RAYMOND JAMES FINANCIAL, INC.
By /s/ FRANCIS S. GOLDBOLD
----------------------------------
(Corporate Seal) Francis S. Goldbold
By /s/ LYNN PIPPENGER
----------------------------------
Lynn Pippenger
President
X - 30
<PAGE>
STATE OF FLORIDA
COUNTY OF PINELLAS
I HEREBY CERTIFY, that on this 7TH day of June, 1991, before me personally
appeared Francis S. Godbold, Lynn Pippenger, known to me to be the President and
Secretary, respectively, of Raymond James Financial, Inc., the persons described
in and who executed the foregoing Amendment, and they acknowledged before me the
execution thereof to be their free act and deed as such, for the use and
purposes therein mentioned.
/s/ JEAN E. CRANE
----------------------
Jean E. Crane
Notary Public
Notary Public, State of Florida at Large
My Commission expires July 27,1993
X - 31
<PAGE>
STATE OF FLORIDA
DEPARTMENT OF STATE
I certify the attached is a true and correct copy of the Articles of Amendment,
filed on March 8, 1993, to Article of Incorporation for RAYMOND JAMES FINANCIAL,
INC., a Florida corporation, as shown by the records of this office.
The document number of this corporation is 444750.
Given under my hand and the
Great Seal of the State of Florida,
at Tallahassee, the Capital, this the
Eighth day of March, 1993
/s/ JIM SMITH
------------------
Jim Smith
Secretary of State
X - 32
<PAGE>
AMENDMENT TO
ARTICLES OF INCORPORATION
OF
RAYMOND JAMES FINANCIAL, INC.
FILED
1993 MAR -8 PM 12:21
SECRETARY OF STATE
TALLAHASSEE, FLORIDA
Article IV of the Articles of Incorporation of Raymond James Financial,
Inc. was amended at the Annual Meeting of Shareholders of Raymond James
Financial, Inc., held on February 11, 1992.
1. The name of the Corporation is Raymond James Financial, Inc.
2. Article IV of the Articles of Incorporation of Raymond James
Financial, Inc., was amended as follows:
"SHARES AUTHORIZED. The aggregate number of shares of stock which
this corporation shall have authority to issue shall be fifty million
(50,000,000) shares of common stock (each with a par value of one cent
($.01) and ten million (10,000,000) shares of preferred stock (each
with a par value of ten cents ($.l0))."
3. The foregoing amendment was approved and adopted by the shareholders
at the Annual Meeting of Shareholders held on February 11, 1993.
4. Of the issued and outstanding 14,045,702 shares of common stock,
12,837,499 shares were represented either in person or by proxy, constituting
91.3% of the outstanding shares, which represented a quorum. The number of votes
cast for the amendment was sufficient for approval.
IN WITNESS WHEREOF, we have duly executed this certificate for and on behalf of
said corporation, this 3RD day of MARCH, 1993.
RAYMOND JAMES FINANCIAL, INC.
By: /s/ FRANCIS S. GODBOLD
-----------------------------
Francis S. Godbold, President
By: /s/ LYNN PIPPENGER
-----------------------------
Lynn P. Pippenger, Secretary
(Corporate Seal)
X - 33
<PAGE>
STATE OF FLORIDA
DEPARTMENT OF STATE
I certify the attached is a true and correct copy of the Articles of Amendment,
filed on February 28, 1994, to Articles of Incorporation for RAYMOND JAMES
FINANCIAL, INC., a Florida corporation, as shown by the records of this office.
The document number of this corporation is 444750.
Given under my hand and the
Great Seal of the State of Florida,
at Tallahassee, the Capital, this the
Seventh day of March, 1994
/s/ JIM SMITH
--------------------
Jim Smith
Secretary of State
[SEAL]
X - 34
<PAGE>
AMENDMENT TO
ARTICLES OF INCORPORATION
OF
RAYMOND JAMES FINANCIAL
FILED
94 FEB 28 PM 2:29
SECRETARY OF STATE
TALLAHASSEE, FLORIDA
Article VIII of the Articles of Incorporation of Raymond James Financial,
Inc., was amended at the Annual Meeting of the Shareholders of Raymond James
Financial, Inc., held February 10, 1994.
1. The name of the Corporation is Raymond James Financial, Inc.
2. Article VIII of the Articles of Incorporation of Raymond James
Financial, Inc., was amended as follows:
"A. NUMBER
The business of the corporation shall be managed initially by a
board of not less than three (3) directors. The number of directors
may, as provided in the by-laws, be from time to time increased or
decreased, but shall never be less than three (3) nor more than
thirteen (13)."
3. The foregoing amendment was approved and adopted by the shareholders
at the Annual Meeting of Shareholders held on February 10, 1994.
4. Of the issued and outstanding 21,342,622 shares of common stock,
19,265,549 shares were represented either in person or by proxy,
constituting over 91.75% of the outstanding shares, which represented
a quorum. The number of votes cast for the amendment was sufficient
for approval.
IN WITNESS WHEREOF, we have duly executed this certificate for and on behalf of
said corporation, this day of February, 1994.
RAYMOND JAMES FINANCIAL, INC.
By: /s/ FRANCIS S. GODBOLD
-----------------------------
Francis S. Godbold, President
By: /s/ LYNN PIPPENGER
-----------------------------
Lynn Pippenger, Secretary
(Corporate Seal)
X - 35
<PAGE>
STATE OF FLORIDA
COUNTY OF PINELLAS
I HEREBY CERTIFY, that on the 18TH day of February, 1994, before me personally
appeared Francis S. Godbold and Lynn Pippenger, known to me to be the President
and Secretary, respectively, of Raymond James Financial, Inc., the persons
described in and who executed the foregoing Amendment, and they acknowledged
before me the execution thereof to be their free act and deed as such, for the
use and purposes therein mentioned.
NOTARY PUBLIC, STATE OF FLORIDA.
MY COMMISSION EXPIRES: Feb. 21, 1995.
BONDED THRU NOTARY PUBLIC UNDERWRITERS.
/s/ GRACE M. PALSHA
--------------------
Grace M. Palsha
Notary Public
My Commission expires________________________
X - 36
EXHIBIT 10.3
RAYMOND JAMES FINANCIAL, INC.
DEFERRED MANAGEMENT BONUS PLAN
This document, consisting of the 22 sections set forth below, constitutes
the Raymond James Financial, Inc. Deferred Management Bonus Plan (the "Plan").
The Plan shall be effective as of October 1, 1989.
1. PURPOSE. The purpose of the Plan is to enhance the ability of Raymond
James Financial, Inc. and its subsidiaries (the "Company") to attract and retain
key management employees.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "COMMITTEE" shall mean the Deferred Management Bonus Plan Committee
consisting of such members as the Board of Directors may deem
appropriate.
(b) "GROSS COMPENSATION" shall mean the total salary, commissions,
bonuses and other amounts paid to an employee during the Plan Year
(including amounts contributed to the Raymond James Financial, Inc.
STAR Plan and Cafeteria Plan).
(c) "EXCESS COMPENSATION" shall mean the amount of Gross Compensation
that exceeds the minimum level as set annually by the Committee, and
does not exceed the maximum level as set annually by the Committee.
(d) "MANAGEMENT EMPLOYEE" ("ME") shall mean any employee who satisfies
the criteria established by the Committee. This
X - 37
<PAGE>
definition shall exclude any full time retail account executive who is
eligible, subject to achieving specified gross commission levels, to
participate in the Raymond James & Associates, Inc. Deferred Sales
Bonus Compensation Plan, or any other employee who is eligible to
participate in a comparable deferred compensation plan.
(e) "PLAN YEAR" shall mean the fiscal year of the Company.
(f) "ENTRY DATE" shall mean April 1 or October 1.
(g) "YEAR OF SERVICE" shall mean a consecutive 12-month period of service
during which time the employee completes at least 1,000 hours of
service.
(h) "BREAK IN SERVICE" shall mean a Plan Year in which an employee has 500
or fewer hours of service.
(i) "DISABILITY" shall mean a medically determinable physical or mental
impairment which can be expected to result in death or which has
lasted, or can be expected to last, for a continuous period of twelve
months or longer and which renders him unable to engage in any
substantial gainful employment. Disability must be certified by a
physician acceptable to the Plan Administrator.
3. ELIGIBILITY. All MEs, as defined herein, are eligible to participate in
the Plan commencing on the first Entry Date following their completion of one
continuous year of service. In the case of a break in service an ME will become
immediately eligible to re-enter the Plan at the next entry date if the break in
service was for a shorter time than their employment prior to the break in
service. However, if
X - 38
<PAGE>
the break in service exceeds five (5) Plan Years, the ME will be deemed to be a
new employee for purposes of eligibility.
4. PLAN CONTRIBUTIONS. Plan contributions shall be made annually at the
discretion of the Company's Board of Directors. Contributions shall be allocated
to each eligible ME based on relative excess compensation for such Plan Year. If
an ME is first eligible to enter the plan on April 1, his Gross Compensation
used to determine his eligibility for a contribution and his allocated
contribution that Plan Year shall be based on his gross compensation from April
1 through the end of the Plan Year.
5. VESTING PERIOD. The contribution amount computed for each Plan Year
shall vest at the rate of twelve and one half percent (12.5%) per year over the
subsequent eight year period subject to the exceptions provided in sections 7,
10 and 11 below. Unless otherwise provided, a contribution amount shall be
considered fully vested at the end of the eighth Plan Year following the year in
which such bonus amount was earned. A participant shall not receive vesting
credit for a given Plan Year unless such participant is employed by the Company
on the last day of the Plan Year.
6. INTEREST CREDIT. Any contribution amount allocated to an ME shall be
recorded by the Company in a Deferred Management Bonus Plan Account maintained
in the name of the ME. As of the last day of each Plan Year, all contribution
amounts which were allocated to an ME's account as of the first day of the
Plan Year then ended shall be
X - 39
<PAGE>
credited with an amount equal to one year's interest based on the average annual
rate of the Raymond James & Associates, Inc. Credit Interest Program. Such
interest credits shall be computed and compounded annually. Interest earned on a
year's contribution shall be vested to the same extent as that year's
contribution.
7. RIGHT OF OFFSET. Notwithstanding any other provision in the Plan to the
contrary, any distribution payable hereunder shall be used, at the discretion
of the Committee, to offset any debt owed by the ME to the Company at the date
such distribution would otherwise be made. In the event that the Company is
aware of any outstanding or pending potential liabilities to the Company arising
from actions of the ME, the Committee may withhold distribution hereunder until
such time as said liabilities are satisfied or extinguished or the Company has
determined that a potential liability no longer exists.
8. DEATH, DISABILITY, AGE 65. At the end of the Plan Year during which
occurs death, disability or the attainment of age 65 by the ME, all contribution
amounts and interest accrued thereon shall be fully vested. Distributions shall
commence as soon as practicable following the end of the Plan Year in which
occurs death or disability. Distributions shall commence as soon as practicable
after the end of the Plan Year following the Plan Year in which occurs
retirement on or after the attainment of age 65, unless payment is forfeited in
accordance with section 11 below. Said distribution shall include interest
earned through the end of the Plan Year preceding distribution.
X - 40
<PAGE>
9. EARLY RETIREMENT. An ME shall be deemed to have retired for purposes of
determining vesting in the Plan if at the time of his departure from the firm he
is either a) at least 55 years old and the sum of his age at retirement plus his
years of service with the Company equals at least 75 or b) at least 60 years old
and has a minimum of 5 years of service with the Company. If an employee meets
these qualifications for early retirement then he shall be fully vested in his
account balance. Distribution will be made in three equal annual installments
commencing as soon as practicable after the end of the Plan Year FOLLOWING the
Plan Year during which the retirement of the ME occurs, subject to forfeiture
in accordance with section 11 below. Said distribution shall include interest
earned through the end of the Plan Year preceding distribution.
An employee eligible for early retirement treatment shall have the right
to elect to be treated as a regular termination, in which case his vesting and
distribution will be in accordance with sections 5 and 10, respectively.
10. TERMINATION. Upon termination prior to reaching age 65, and if not
eligible for early retirement, all vested amounts as of the end of the Plan Year
preceding the Plan Year during which termination occurs shall be distributed as
soon as practicable after the end of the Plan Year FOLLOWING the Plan Year
during which termination occurs unless payment is forfeited in accordance with
section 11 below. Said distribution shall include interest earned through the
end of the Plan Year preceding distribution. Any non-vested amounts as of the
end of the Plan Year preceding the Plan Year during which termination occurs
X - 41
<PAGE>
shall be forfeited as of the date of termination. Forfeited amounts shall revert
back to the Company and will not be allocated to other MEs.
11. NON-COMPETE REQUIREMENT. If a terminated or retired ME engages in
competition with the Company prior to the date of distribution the balance in
the ME's account, both vested and nonvested (including interest earned
thereon), shall be forfeited in its entirety.
(a) For purposes of this section, an ME shall be deemed to have "engaged
in competition" with the Company if he/she:
(i) owns, manages, operates, controls, is employed by, acts as
an agent for, participates in or is connected in any manner with the
ownership, management, operation or control of any business which is
engaged in businesses which are or may be competitive to the business
of the Company; provided further that this restrictive covenant shall
encompass the State of Florida and any other states where the Company
is engaged in business, and every city, county, and other political
subdivision of such states; or
(ii) solicits or calls, either by himself or at his direction
has any other person or firm solicit or call, any of the customers of
the Company on whom the ME called, with whom the ME became acquainted,
or of whom the ME learned of during his employment with the Company.
(iii) discloses a list of the Company's customers or any part
thereof to any person, firm, corporation,
X - 42
<PAGE>
association, or other entity for any reason or purpose whatsoever; or
(iv) discloses to any persons, firm, corporation, association,
or other entity any information regarding the Company's general
business practices or procedures, methods of sale, list of products,
personnel information and any other valuable, special information
unique to the Company's business;
(b) It is the intention of the Company that this section be given the
broadest protection allowed by law with regard to the restrictions
herein contained. Each restriction set forth in this section shall be
construed as a condition separate and apart from any other restriction
or condition. To the extent that any restriction contained in this
section is determined by any court of competent jurisdiction to be
unenforceable by reason of it being extended for too great a period of
time, or as encompassing too large a geographic area, or over too
great a range of activity, or any combination of these elements, then
such restriction shall be interpreted to extend only over the maximum
period of time, geographic area, and range of activities which said
court deems reasonable and enforceable.
(c) In the event any ME who terminates employment is concerned as to the
potential application of this section, he may request a ruling from
the Committee as to its application, which determination shall be a
binding upon all parties.
X - 43
<PAGE>
(d) If the Committee in its discretion determines that an activity
otherwise described herein would not be injurious to the Company, it
may waive the application of this section to such activity, which
waiver shall be binding upon the ME and the Company. The Company shall
exercise such discretion in a uniform, nondiscriminatory manner.
12. NATURE OF ACCOUNT AND COMPANY'S OBLIGATION. The Plan at all times
shall be entirely unfunded. The Deferred Management Bonus Plan Account is
merely a record for measuring and determining the amount of deferred
compensation benefits to be paid by the Company to, or with respect to, the ME
under this Plan, and such Account shall be established solely for such
bookkeeping purposes. The Company shall not be required to segregate any funds
or other assets to be used for payment of benefits under this Plan. The Deferred
Management Bonus Plan Account shall not be, or be considered as evidence of the
creation of, a trust fund, an escrow or any other segregation of assets or
funding arrangement for the benefit of the ME or any beneficiary of the ME and
thus there is no guarantee of benefit payments to the ME.
The obligation of the Company to make the payments described in the Plan
is an unsecured contractual obligation only, and neither the ME nor any
beneficiary of the ME shall have any beneficial or preferred interest by way of
trust, escrow, lien or otherwise in and to any specific assets or funds. The ME
and each beneficiary of the ME shall look solely to the general assets of the
Company for satisfaction of
X - 44
<PAGE>
any obligations due or to become due under this Plan.
If the Company should, in its sole discretion, earmark or set aside any
funds or other assets in preparation for the payment of benefits hereunder, the
same shall, nevertheless, remain and be regarded as part of the general assets
of the Company subject to the claims of its general creditors (and shall not be
considered to be held in a fiduciary capacity for the benefit of the ME or any
beneficiary hereunder), and neither the ME nor any beneficiary of the ME shall
have any legal, beneficial, security or other property interest therein.
13. REPORTS. As soon after the close of each Plan Year as is
administratively feasible, the Committee shall provide a report to the ME (or,
in the event of the ME's death, to the ME's beneficiary) showing the status of
the ME's Deferred Management Bonus Plan Account as of the end of the Plan Year.
14. BENEFICIARY. The ME may designate, upon forms to be furnished by and
filed with the Committee, one or more primary beneficiaries or contingent
beneficiaries under the Plan to receive all or a specified part of any deferred
compensation benefits which, at the time of the ME's death, remain unpaid under
this Plan. An ME may change or revoke any such designation from time to time. No
such designation, change or revocation shall be effective unless executed by the
ME and accepted by the Committee during the ME's lifetime. Each such
designation, change or revocation shall be applicable to all balances in the
ME's Deferred Management Bonus Plan Account, including
X - 45
<PAGE>
all such amounts subsequently credited, and any such beneficiary designation
under the Plan presently on file with the Committee shall be effective under
this Plan until changed or revoked in the manner specified herein. No such
change or revocation shall require the consent of any beneficiary theretofore
designated by the ME. If an ME fails to designate a beneficiary, or subsequent
facts render a designation invalid or inoperative, then the benefits shall be
payable to a personal representative of the ME's estate. Unless the ME has
otherwise specified in the beneficiary designation, the beneficiary or
beneficiaries designated by the ME shall become fixed as of the ME's death so
that, if a beneficiary survives the ME but dies before the receipt of all
payments due such beneficiary, such remaining payments shall be payable to the
representative of such beneficiary's estate.
15. BENEFITS NOT TRANSFERABLE. Neither the ME nor any beneficiary
hereunder shall have any transferable interest in the payments due hereunder nor
any right to anticipate, alienate, dispose of, pledge or encumber the same prior
to actual receipt thereof, nor shall the same be subject to attachment,
garnishment, execution following judgment or other legal process instituted by
creditors of the ME or any such beneficiary; provided, however, that the balance
of the ME's Deferred Management Bonus Plan Account and any payments due
hereunder shall at all times be subject to set-off for debts owed by the ME to
the Company as set forth in paragraph 7 of this document.
16. WITHHOLDING TAXES. The Company shall withhold from any payment to be
made under this Plan (and transmit to the proper taxing
X - 46
<PAGE>
authority) such amount as it may be required to withhold under any federal,
state or other law.
17. EFFECT ON EMPLOYMENT RIGHTS AND OTHER BENEFIT PROGRAMS. The provisions
of the Plan shall not give the ME any right to be retained in the employment of
the Company. This Plan shall not replace any contract of the ME but shall be
considered a supplement thereto. This Plan is in addition to, and not in lieu
of, any other employee benefit plan or program in which the ME may be or become
eligible to participate by reason of employment with the Company, and the timing
of receipt of benefits hereunder shall have such effect on contributions to and
benefits under such other plans or programs as the provisions of each such plan
or program may specify.
18. ADMINISTRATION. The Committee, which will initially be comprised of
Thomas A. James, Jeffrey P. Julien and Mary Jean Kissner, shall have full power
to interpret, construe and administer this Plan, including authority to
determine any dispute or claim with respect thereto. The determination of the
Committee in any matter within the powers and discretions granted to it under
this Plan, made in good faith, shall be binding and conclusive upon the Company,
the ME and all other persons having any right or benefit hereunder. If the ME
should be a member of the Committee at any time, the ME shall have no authority
as such member with respect to any matter specifically affecting the ME's
interest hereunder (such as determination of the amount, form or time of benefit
payments to the ME), all such authority being reserved to the other Committee
members, to the
X - 47
<PAGE>
exclusion of the ME, and the ME shall act only in his or her individual capacity
in connection with any such matter.
19. CONTROLLING LAW. This Plan shall be construed and the legal relations
between the parties determined in accordance with the laws of the State of
Florida.
20. NO GUARANTEE OF BENEFITS. Nothing contained in the Plan shall
constitute a guarantee by the Company or any other entity or person that the
assets of the Company will be sufficient to pay any benefit hereunder.
21. AMENDMENT OR TERMINATION. The Company intends the Plan to be permanent
but reserves the right to amend or terminate the Plan when, in the sole opinion
of the Company, such amendment or termination is advisable. Any such amendment
or termination shall be made pursuant to a resolution of the Board and shall be
effective as of the date of such resolution.
22. EFFECT OF AMENDMENT OR TERMINATION. No amendment or termination of the
Plan shall directly or indirectly deprive any ME (or his designated beneficiary)
of all or any portion of a benefit payment which has commenced prior to the
effective date of such amendment or termination or which would be payable if the
ME terminated employment for any reason on such effective date.
/s/ THOMAS A. JAMES
-------------------------
Thomas A. James, Chairman
X - 48
<PAGE>
<TABLE>
<CAPTION>
Exhibit A
REVISED
19X1 19X2 19X3 19X4 19X5 19X6 19X7 19X8 19X9 19X0 19Y1
---- ---- ---- ---- ---- ---- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Contribution 2500 3000 2700 3200 3300 3250 2750 2900 3100 3000 3050
Vested balance 0 338 1134 2420 4337 6991 10480 14854 20252 26212 32652
Interest rate 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8%
</TABLE>
<TABLE>
<CAPTION>
CONTRIBUTION YEAR BALANCE
- ----------------- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
19X1 2500 2700 2916 3149 3401 3673 3967 4285 2627 4998 5397
19X2 3000 3240 3499 3779 4081 4408 4761 5141 5553 5997
19X3 2700 2916 3149 3401 3673 3967 4285 4627 4998
19X4 3200 3456 3732 4031 4354 4702 5078 5484
19X5 3300 3564 3849 4157 4490 4849 5237
19X6 3250 3510 3791 4094 4422 4775
19X7 2750 2970 3208 3464 3741
19X8 2900 3132 3383 3653
19X9 3100 3348 3616
19X0 3000 3240
19Y1 3050
-----------------------------------------------------------------------------------
2500 5700 8856 12764 17086 21702 26189 31184 36778 42721 49188
</TABLE>
Example 1
If an ME left the Company during 19X6 he would receive his distribution
following the close of 19X7. The distribution would be calculated as follows:
BALANCE INTEREST INTEREST VESTED VESTED
l9X5 19X6 19X7 BALANCE % BALANCE
------- -------- ------- ------- ------ -------
19Xl 3401 272 294 3967 50.0% 1983
19X2 3779 302 327 4408 37.5% 1653
19X3 3149 252 272 3673 25.0% 918
19X4 3456 276 299 4031 12.5% 504
19X5 3300 264 285 3849 0.0% 0
-------
5059
Example 2
If an ME retired, after age 65 during 19X6 he would receive his
distribution following the close of 19X7. The distribution would be calculated
as follows:
INTEREST INTEREST VESTED VESTED
19X6 19X7 BALANCE % BALANCE
-------- ------- ------- ------ -------
19Xl 3673 294 3967 100% 3967
19X2 4081 326 4407 100% 4407
19X3 3401 272 3673 100% 3673
19X4 3732 299 4031 100% 4031
19X5 3564 285 3849 100% 3894
19X6 3250 260 3510 100% 3510
-------
23437
X - 49
EXHIBIT 10.4
This letter agreement sets out the terms under which we have agreed that you
will serve as Corporate Secretary and Senior Vice President of Raymond
James Financial, Inc. (the Company).
1. EFFECTIVE DATE: TERM OF AGREEMENT. This agreement is effective
immediately, but you will not receive a salary or any benefits until you
begin performing services for the Company, which is anticipated to be on
October 21, 1996. The term of this agreement will be through September 30,
1998. At that time, employment will be terminable at will and not subject
to an agreement. The "at will" doctrine and many other important policies
and procedures, which will govern your employment and the below terms,
are set forth in the RJ Employee Handbook. A copy of the Handbook will be
provided for your review.
2. OFFICES AND REPORTING RESPONSIBILITIES. As Secretary of the Company, you
shall be responsible for management of the Corporate Secretary function,
including attendance at meetings of the Board of Directors and Committees
thereof, preparation of minutes, co-ordination of the corporate calendar
and other related functions.
As Senior Vice President, you shall be responsible for supervising risk
management for the Company and all subsidiaries and divisions: your
responsibilities shall include supervision of the legal department, the
compliance function, the internal audit function and other such other
duties as may be assigned to you from time to time by the Company,
consistent with your primary responsibility for supervising the risk
management function of the Company.
You shall report directly to the Chairman of the Board and Chief Executive
Officer of the Company.
3. DUTIES. You shall devote all of your business time, attention and efforts
to the business of the Company and shall serve the Company's interests
diligently and to the best of your ability. During your employment
hereunder you may: (a) serve on civic, professional and charitable boards
and committees, (b) undertake speaking engagements and (c) manage your
personal investments, so long as these activities do not interfere with
the performance of your duties as a senior executive of the Company.
4. SALARY: BONUS: OTHER BENEFITS: STOCK OPTIONS. Your salary during the
fiscal year ending September 30, 1997 will be $150,000 per year payable in
semi-monthly increments, and shall be subject to annual review thereafter
in accordance with Company policy. Upon satisfying eligibility
requirements, you shall be entitled to participate in all benefits and
programs made available to senior management of the Company to the full
extent made available to them, including (but not limited to) medical,
disability and life insurance, retirement plans, deferred compensation
plans, employee stock purchase plans, and other benefit programs.
During each year of your employment, you shall be entitled to participate
in the Bonus program for senior executives of the Company. For the fiscal
year ending September 30, 1997, you shall receive a minimum bonus of
$75,000.
Upon commencement of your employment hereunder, you shall receive options
to purchase 3,000 shares of the Company's common stock under the Company's
1992 Incentive Stock Option Plan; the exercise price shall be fixed at the
price of the Company's common stock at the close of business on the day of
the next Board of Directors meeting. The option grant shall be reflected
in a stock option agreement in the form customarily used by the Company
for senior executives. You shall be eligible for consideration for the
grant of additional options at future award dates.
5. VACATION. You shall be entitled to four weeks of paid vacation during each
year of employment and shall be eligible to take vacation during your
first year of employment.
X - 50
RAYMOND JAMES
FINANCIAL, INC.
<PAGE>
6. REIMBURSEMENT OF EXPENSES. You shall be entitled to reimbursement of
expenses incurred in accordance with Company policy. You shall be
reimbursed for costs of attendance at meetings of the American Bar
Association, and for bar membership and bar association fees which are
approved in advance by the Company.
7. RIGHTS UPON TERMINATION. In the event your employment is terminated
without cause by the Company during the first year of this agreement, you
shall be entitled to receive the prompt payment of your current salary for
the balance of the term plus the $75,000 first year bonus guaranteed under
your agreement. If a termination without cause occurs during year two, you
will be entitled to the remainder of your current salary for that year.
It shall constitute termination without cause within the meaning of this
agreement if you are assigned duties materially inconsistent with those
set out in paragraph 2 above, or if you suffer any material diminution in
your title, position, authority or responsibilities.
The following shall constitute cause for termination under this agreement:
(i) any illness or other disability which makes it impossible for
you to perform your duties for a period of 120 consecutive days;
(ii) a plea of guilty or conviction of a felony offense by you;
(iii) a material breach by you of a fiduciary duty owed by you to the
Company;
(iv) violation of regulatory polices imposed by securities industry
regulators, including but not limited to the NYSE, Securities and Exchange
Commission or state securities regulators;
(v) violation of the firm's internal policies, or
(vi) the willful and gross neglect by you of the material duties required
to be performed by you under this agreement;
PROVIDED, HOWEVER that you shall be given thirty days' notice that grounds
exist for termination for "cause" under clauses (iii) or (vi) above, and a
reasonable opportunity to cure such breach or neglect.
In the event you are terminated for cause by the Company, you shall
receive no further compensation other than salary accrued to the date of
termination. Bonuses are earned only if you are still employed on the date
of distribution.
8. INDEMNIFICATION. You shall be indemnified by the Company to the fullest
extent permitted by Florida law and the Company's Certificate of
Incorporation and by-laws for any claim of damage or liability, or any
expenses incurred, which arise from actions taken by you as an officer of
the Company or any of its subsidiaries, to the same extent as the
indemnification rights made available to other senior executives of the
Company.
9. APPOINTMENT BY THE BOARD OF DIRECTORS. The Company will promptly submit to
the Board of Directors for approval your employment as Corporate Secretary
and Senior Vice President.
10. BINDING AGREEMENT. This agreement shall be binding upon the Company, its
successors and assigns.
Please confirm your agreement to these terms of employment by signing and
returning to me a copy of this letter agreement.
Very truly yours,
/s/ THOMAS A. JAMES
--------------------------------
Thomas A. James
Chairman and Chief Executive Officer
Accepted and agreed to as of the date set forth above:
/s/ BARRY S. AUGENBRAUN
-------------------
Barry S. Augenbraun
X - 51
RAYMOND JAMES
FINANCIAL, INC.
EXHIBIT 10.5
LIBERTY - RJF
TERMINATION AND RELEASE AGREEMENT
THIS TERMINATION AND RELEASE AGREEMENT (the "AGREEMENT") is made and
entered into this 17 day of December, 1996, by and among RAYMOND JAMES FINANCIAL
, INC., a Florida corporation ("RJF"), EAGLE ASSET MANAGEMENT, INC., a Florida
corporation ("EAGLE"), HERITAGE ASSET MANAGEMENT, INC., a Florida corporation
("HERITAGE") (RJF, Eagle and Heritage are collectively referred to herein as the
"RJF GROUP"), HERBERT E. EHLERS, an individual ("EHLERS"), and LIBERTY
INVESTMENT MANAGEMENT, INC., formerly known as Eagle Institutional Asset
Management, Inc., a Florida corporation (the "CORPORATION").
BACKGROUND AND PURPOSE
WHEREAS, RJF, Eagle, Heritage, Ehlers and the Corporation are parties
to that certain Separation Agreement dated October 27, 1994, as amended on May
19, 1995, (the "SEPARATION AGREEMENT"), pursuant to which the parties agreed to
terminate Ehlers' full-time employment with Eagle, subject to the terms and
conditions set forth therein, and the Corporation agreed to pay to Eagle
"Institutional Customer Liquidated Damages" as such term is defined in the
Separation Agreement (herein, the "INSTITUTIONAL CUSTOMER LIQUIDATED DAMAGES"),
subject to the terms and conditions of the Separation Agreement; and
WHEREAS, the Corporation and RJF are parties to that certain Option and
Option Agreement dated as of December 31, 1994 (the "OPTION AGREEMENT"),
pursuant to which RJF was granted an option by the Corporation to acquire a
number of non-voting shares of common stock of the Corporation which, upon
exercise, would represent twenty percent (20%) of the issued and outstanding
common stock of the Corporation, subject to the terms and conditions set
forth therein (the "OPTION"); and
WHEREAS, the Corporation has agreed to sell substantially all of the
assets of the Corporation (collectively, the "ASSETS") to Goldman, Sachs & Co.,
a New York limited partnership ("GOLDMAN") pursuant to the terms and conditions
of an Agreement to Acquire the Business of Liberty Investment Management,
dated October 23, 1996 (the "ACQUISITION AGREEMENT"), in exchange for certain
payments to be made by Goldman to the Corporation as described in the
Acquisition Agreement, and
WHEREAS, the Corporation has furthermore agreed to purchase the Option
from RJF, AND RJF has agreed to sell the Option to the Corporation; and
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<PAGE>
WHEREAS, pursuant to the terms and conditions set forth herein, the
Corporation has agreed to prepay the Institutional Customer Liquidated Damages
due under the Separation Agreement, and in consideration of such prepayment
Eagle has agreed to waive the right to receive any further Institutional
Customer Liquidated Damages under the Separation Agreement and, accordingly,
RJF, Eagle, Heritage, Ehlers and the Corporation have agreed to terminate the
Separation Agreement subject to and effective as of the closing of the
transactions described in the Acquisition Agreement; and
WHEREAS, RJF and the Corporation have agreed to terminate the Option
Agreement, subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties do hereby agree as follows:
AGREEMENT
1 . PAYMENT OF INSTITUTIONAL CUSTOMER LIQUIDATED DAMAGES AND
TERMINATION OF SEPARATION AGREEMENT. Subject to and in accordance with the terms
and conditions of this Agreement, the Corporation agrees to pay to RJF the
amounts described in this Section 1 (the "TOTAL PAYMENT"), which shall be
allocated as described in Section 5 of this Agreement:
1.1 The Corporation shall pay to RJF, on behalf of Eagle, the
installments due on January 15, 1997, and April 15, 1997, for the
Institutional Customer Liquidated Damages (the "1996 INSTALLMENTS"),
such installments to be paid on or before their respective due dates in
accordance with and computed pursuant to the terms and conditions of
the Separation Agreement. The 1996 Installments shall represent the
payments due to Eagle pursuant to Section 1.2 of the Separation
Agreement for investment advisory services rendered by the Corporation
through December 31, 1996. Any of the 1996 Installments which are paid
prior to the due date described in the Separation Agreement may be
discounted by the Corporation on a 5% per annum discounted basis.
1.2 Subject to the provisions of Section 1.3 hereof, the
Corporation shall pay to RJF (for itself and on behalf of any member of
the RJF Group, including Eagle, who is owed payments under the
Separation Agreement or under the Option) one-half (1/2) of the "Net
Proceeds" to be received by the Corporation as the "Initial Purchase
Price" pursuant to the terms and conditions of the Acquisition
Agreement. For purposes of this Agreement, the term "Net Proceeds"
shall mean (i) the gross proceeds paid to the Corporation by Goldman as
the "Initial Purchase Price" described in Section 2.5(a) of the
Acquisition Agreement to be paid for the Assets of the Corporation,
MINUS (ii) any and all fees, costs and expenses associated with the
sale of the Assets under the Acquisition Agreement (other than the
amounts to be paid by the Corporation to RJF under this Agreement),
but not in excess of $450,000.
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<PAGE>
1.3 Notwithstanding the provisions of Section 1.2 above, to the
extent the "Initial Purchase Price" of $61,743,270 is adjusted as
described in Section 2.5(a) of the Acquisition Agreement, RJF and the
Corporation agree to share in any such adjustment as follows:
(a) To the extent any such adjustment to the "Initial Purchase
Price" of $61,743,270 is equal to or less than $2,400,000, such
adjustment shall be allocated to and solely borne by RJF; and
(b) To the extent such adjustment to the "Initial Purchase
Price" of $61,743,270 exceeds $2,400,000, the excess of such
adjustment over $2,400,000 shall be borne on an equal basis
(50%-50%) by RJF and the Corporation.
1.4 To the extent the adjustments described in Section 1.3 above
are recaptured by the Corporation pursuant to Section 2.5(b) or Section
2.5(c) of the Acquisition Agreement, the Corporation shall pay a
portion of such recaptured amount to RJF as follows: (i) first, such
recaptured amount shall be allocated to the Corporation and RJF to the
extent of any adjustment previously allocated pursuant to the
provisions of Section 1.3(b) above, and (ii) then, the balance of any
such recaptured amount, if any, shall be allocated to RJF to the extent
of any adjustment previously allocated to RJF pursuant to the
provisions of Section 1.3(a) above.
1.5 By way of example only, the "Initial Purchase Price" is
currently specified to be $61,743,270. Therefore, assuming there were
no adjustments to the "Initial Purchase Price," RJF and the Corporation
would each receive $30,871,635 prior to any fees, costs or expenses as
described above. If the "Initial Purchase Price" is adjusted pursuant
to Section 2.5(a) of the Acquisition Agreement by $2,000,000, then RJF
would receive $28,871,635 and the Corporation would receive $30,871,635
prior to any fees, costs or expenses as described above. If the
"Initial Purchase Price" is adjusted by $3,000,000, then RJF would
receive $28,171,635 and the Corporation would receive $30,571,635. If
the "Initial Purchase Price" is adjusted by $3,000,000 pursuant to
Section 2.5(a) of the Acquisition Agreement, and if $1,500,000 of such
adjustment were recaptured pursuant to Section 2.5(c) of the
Acquisition Agreement, then such $1,500,000 of recapture amount would
be paid $1,200,000 to RJF and $300,000 to the Corporation.
1.6 Except for the 1996 Installments, which shall be paid as
described in Section 1.1 hereof, any amount allocated to the payment
of the Institutional Customer Liquidated Damages as described in
Section 5 hereof (the "LIQUIDATED DAMAGES PAYMENT") shall be paid by
the Corporation to RJF prior to or simultaneously with the closing of
the transactions described in the Acquisition Agreement. The balance
of the Total Payment due to RJF hereunder, after deducting the payment
of the 1996 Installments and the Liquidated Damages Payment (such
balance is hereinafter referred to as the
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<PAGE>
"OPTION PAYMENT") shall be paid by the Corporation to RJF
simultaneously with the closing of the transactions described in the
Acquisition Agreement.
2. PURCHASE OF OPTION AND TERMINATION OF OPTION AGREEMENT. On the
Closing Date, RJF hereby agrees to sell the Option, and the Corporation hereby
agrees to purchase the Option. Effective as of the Closing Date, and subject to
the performance by the Corporation of its obligations hereunder, RJF and the
Corporation agree that the Option Agreement shall be terminated in its
entirety and shall be considered null, void and of no further force or effect
whatsoever.
3. CLOSING DATE. The closing of the transactions contemplated by this
Agreement (the "CLOSING") shall occur simultaneously on the date of the closing
of the transactions described in the Acquisition Agreement (the "CLOSING DATE").
4. DOCUMENTS TRANSFERRED AT CLOSING.
4.1 Upon the Closing Date at the Closing, the Corporation will
deliver to RJF, on behalf of Eagle, the Liquidated Damages Payment (to
the extent not previously paid) by wire transfer or certified funds.
The RJF Group shall provide documentation reasonably safisfactory to
Ehlers and the Corporation to the effect that all obligations under the
Separation Agreement have been fulfilled and Ehlers, the Corporation
and the Corporation's employees are thereby released of and from any
and all restrictions under the terms of the Separation Agreement.
4.2 Upon the Closing Date at the Closing, RJF shall transfer, sell
and assign the Option to the Corporation pursuant to such documents and
instruments of transfer as are reasonably acceptable to the Corporation
and the Corporation shall pay to RJF the Option Payment by wire
transfer or by certified funds.
4.3 The Corporation and the RJF Group shall provide such other
documents, agreements, certificates or instruments as may be
reasonably requested by any other party hereto in order to fully
consummate the transactions described in this Agreement.
5. ALLOCATION OF PAYMENTS. The parties hereto agree that the 1996
Installments and an amount equal to the lesser of (x)(i) the Total Payment,
MINUS (ii) the 1996 Installments, and MINUS (iii) $275,000, or (y) $25,000,000,
shall be allocated to the prepayment of the Institutional Customer Liquidated
Damages under the Separation Agreement. The balance of the Total Payment
shall be allocated to the Option. It is the intent of the parties hereto that
the payment of the Institutional Customer Liquidated Damages hereunder,
excluding, the 1996 Installments, is to be allocated for the twelve
payments due from the Corporation to RJF for investment advisory services to be
rendered by the Corporation during the period beginning on January 1, 1997,
and ending on December 31, 1999.
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<PAGE>
6. REPRESENTATIONS AND WARRANTIES.
6.1 CORPORATION. The Corporation hereby represents and warrants to the
other parties hereto as follows:
(a) The Corporation is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Florida and has all requisite power and authority, corporate and
otherwise, to own, lease, and operate its properties and carry on
its business as and in the places where such properties are now
owned, leased or operated or such business is now being conducted.
(b) The Corporation has all requisite capacity, power and
authority, corporate or otherwise, to enter into this Agreement and
to assume and perform its obligations hereunder. The execution and
delivery of this Agreement and the performance by the Corporation
of its obligations hereunder have been duly and validly authorized
by all necessary corporate action and no further action or
approval, corporate or otherwise, is required in order to
constitute this Agreement as a valid and binding obligation of the
Corporation, enforceable in accordance with its terms. The
execution and delivery of this Agreement and the performance by
the Corporation of its obligations hereunder (i) do not and will
not conflict with or violate any provision of the Articles of
Incorporation or By-Laws of the Corporation, (ii) do not and will
not conflict with or result in any breach of any condition or
provisions of, or constitute a default under or give rise to any
right of termination, cancellation or acceleration of any
contract, mortgage, lien, lease, agreement, indenture,
instrument, judgment or decree to which the Corporation is a party
or which is binding upon the Corporation, and (iii) does not and
will not result in the creation or imposition of any lien, charge,
pledge, security interest or other encumbrance upon the
Corporation.
(c) The Corporation is acquiring the Option for its own account
for investment purposes only within the meaning of the Securities
Act of 1933, with no intention of assigning, selling, or otherwise
transferring the Option or any participation or interest therein
and with no view to the sale or distribution thereof in violation
of any Federal or State securities laws.
6.2 REPRESENTATIONS AND WARRANTIES OF THE RJF GROUP. Each member
of the RJF Group. Jointly and severally, hereby represents and warrants
to the Corporation and to Ehlers, as follows:
(a) Each member of the RJF Group is a corporation duly
organized, validly existing, and in good standing under the laws of
its respective state of incorporation and each such member has all
requisite power and authority, corporate and otherwise, to own,
lease, and operate its properties and carry on its
X - 56
<PAGE>
business as and in the places where such properties are now owned, leased or
operated or such business is now being conducted.
(b) The Option and the right to receive payments under the
Separation Agreement for the Institutional Customer Liquidated
Damages are owned solely by RJF and Eagle, respectively, free and
clear of any and all security interests, liens, pledges, claims,
charges, escrows, encumbrances, rights of first refusal, security
interests or other contracts, and RJF has the unrestricted right to
sell the Option hereunder and to accept prepayment on behalf of
Eagle, in full satisfaction of all Institutional Customer
Liquidated Damages owed under the Separation Agreement.
(c) Each member of the RJF Group has all requisite capacity,
power and authority, corporate or otherwise, to enter into this
Agreement and to assume and perform its obligations hereunder. The
execution and delivery of this Agreement and the performance by
each such member of the RJF Group of its obligations hereunder
have been duly and validly authorized by all necessary corporate
action on the part of each member of the RJF Group and no further
action or approval, corporate or otherwise, is required in order to
constitute this Agreement as a valid and binding obligation of each
member of the RJF Group, enforceable in accordance with its terms.
The execution and delivery of this Agreement and the performance by
each member of the RJF Group of its obligations hereunder (i) do
not and will not conflict with or violate any provisions of the
Articles of Incorporation or By-Laws of any member of the RJF
Group, (ii) do not and will not conflict with or result in any
breach of any condition or provisions of, or constitute a default
under or give rise to any right of termination, cancellation or
acceleration of any contract, mortgage, lien, lease, agreement,
indenture, instrument, judgment or decree to which a member of the
RJF Group is a party, and (iii) does not and will not result in the
creation or imposition of any lien, charge, pledge, security
interest or other encumbrance upon the Option or any of the rights
of RJF to payments of Institutional Customer Liquidated Damages
under the Separation Agreement.
(d) RJF has had access to such information concerning the
Corporation as RJF has deemed necessary in order for RJF to enable
it to make an informed decision concerning its disposition of the
Option and its acceptance of the prepayments for the Institutional
Customer Liquidated Damages due to RJF under the Separation
Agreement. RJF has consulted with its investment, accounting, legal
and tax advisors concerning the transactions described herein and
is sufficiently experienced in financial and business matters to
fully evaluate the risks and merits of the transactions described
in this Agreement. RJF understands that no Federal or state
agency has made any finding, or determination as to the fairness of
the terms and conditions of this Agreement as it relates to RJF.
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<PAGE>
7. INDEMNITY.
7.1 Notwithstanding the provisions of Section 1.2 hereof, RJF
hereby agrees to indemnify and hold the Corporation and Ehlers harmless
of and from 35% of any payments required to be made by the Corporation
or Ehlers in connection with the indemnity provisions contained in
the Acquisition Agreement as described in Article VIII thereof but not
in excess of the Option Payment; provided, however, that in no event
shall RJF be required to indemnify the Corporation or Ehlers if such
indemnification obligation arises as a result of the gross negligence
or willful misrepresentation by the Corporation or Ehlers under the
Acquisition Agreement.
7.2 In the event Ehlers or the Corporation seek indemnity from RJF
pursuant to the provisions of Section 7.1, the party seeking such
indemnification (the "INDEMNIFIED PARTY") shall give written
notice to RJF of the loss or potential loss. Written notice to RJF of
the existence of the loss or potential loss shall be given by the
Indemnified Party promptly after notice of the loss or potential loss;
provided, however, that the Indemnified Party shall not be foreclosed
from seeking indemnification pursuant to Section 7.1 by any failure to
provide prompt notice of the existence of a loss or potential loss
except and only to the extent that RJF actually incurs an incremental
out-of-pocket expense or otherwise has been materially damaged or
prejudiced as a result of such delay.
7.3 Except as otherwise provided herein, RJF may elect to defend at
RJF's own expense and by RJF's own counsel (which counsel shall be
reasonably satisfactory to the Indemnified Party), any claim giving
rise to a loss or potential loss to the extent of RJF's
indemnification obligation hereunder. If RJF elects to defend the
potential claim it shall, within thirty (30) days after receiving
notice of the claim, notify the Indemnified Party of RJF's intent to
defend and the Indemnified Party shall cooperate, at the expense of
RJF, in the defense of the third party claim. Such cooperation shall
include, if requested by RJF, not opposing RJF's intervention in any
judicial actions concerning the third party claim. If RJF elects not
to defend against a third-party claim or fails to notify the
Indemnified Party of its election to do so as herein provided or
otherwise abandons the defense of the third party claim (i) the
Indemnified Party may pay (without prejudice of any of its rights as
against RJF), compromise or defend the third party claim and (ii) the
costs and expenses of the Indemnified Party incurred in connection
therewith to the extent indemnification is due hereunder shall be
indemnifiable by RJF pursuant to the terms of this Agreement.
Notwithstanding anything to the contrary contained herein, in
connection with any third party claim in which the Indemnified Party
and RJF shall reasonably conclude based upon the written advice of
their respective counsel, that (x) there is a conflict of interest
between RJF and the Indemnified Party in the conduct of the defense of
the claim or (y) there are specific defenses available to the
Indemnified Party which are different from or additional to those
available to RJF and which could be materially adverse to RJF, then
the Indemnified Party shall have the right to assume and direct the
defense of the third party claim as it relates to the Indemnified
Party. Notwithstanding, the
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<PAGE>
foregoing, the Indemnified Party shall have the right to settle or
compromise any claim upon providing written notice to RJF unless and
only to the extent that the settlement of the claim is proven by RJF in
a court of competent jurisdiction to have been unreasonable and the
claim was without merit. In any other event, RJF and the Indemnified
Party may each participate, at their own expense, in the defense of the
third party claim. RJF and the Indemnified Party shall cooperate with
each other in the defense of any claim in all respects including
making reasonably available to the other party any personnel or any
books, records or other documents within their control which are
reasonably necessary or appropriate for the defense, subject to the
receipt of appropriate confidentiality agreements or such other
agreements as counsel to the parties may deem reasonably necessary in
order to ensure that the attorney-client privileges applicable to a
party are not inadvertently waived.
8. MUTUAL RELEASE. Except for (i) the obligations of the parties as
described herein, and (ii) subject to verification by RJF that all obligations
of the Corporation under the Separation Agreement which have accrued prior to
the date hereof (the "Prior Obligations") have been fully paid in accordance
with the terms thereof (which PRIOR OBLIGATIONS shall not be released until
fully paid as described in the Separation Agreement), each member of the RJF
Group, on the one hand, and the Corporation and Ehlers, on the other hand, on
behalf of themselves, and their successors and assigns, jointly and severally,
hereby mutually agree to fully remise, release, acquit and forever discharge one
another, and each of their respective successors and assigns, their boards of
directors, shareholders, officers, employees and agents, and their respective
partners, agents, employees, stockholders, officers, successors and assigns,
jointly and severally, of and from any and all debts, costs, liabilities,
obligations, losses, suits, controversies, disputes, rights, claims, demands,
damages, actions and causes of action of any nature whatsoever, whether arising
at law or in equity, which any of the foregoing parties may have had, may now
have, or may have, or may hereafter have, against one another by reason of any
matter, cause, happening, thing, document, agreement, partnership agreement,
separation agreement, option agreement, lease, note, instrument or any other
matter whatsoever, from the beginning of time, to and including this date
hereof. Without limiting the foregoing, after payment of the Total Payment, and
subject to verification by RJF that the Prior Obligations have been paid in full
(which verification RJF agrees to complete within six (6) months after the
Closing Date), the parties hereto agree that the Corporation shall have no
further obligation to RJF or any member of the RJF Group, including Eagle, to
make any other payments whatsoever under this Agreement, the Separation
Agreement, the Option Agreement or any other agreement between the parties
hereto. Effective as of the Closing Date, and subject to the obligations of the
parties hereto to consummate the transactions described herein, the parties
hereto agree that the Separation Agreement shall be terminated in its entirety
and shall be considered null, void and of no further force or effect whatsoever.
9. OTHER AGREEMENTS OF THE PARTIES.
9.1 The Corporation agrees to provide RJF with such documents,
schedules and financial information as RJF shall reasonably request in
connection with the verification
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<PAGE>
by RJF that all amounts due to it or Eagle under the provisions of the
Separation Agreement and this Agreement shall have been fully paid.
9.2 RJF and Eagle agree that, prior to December 31, 1999, neither
RJF nor Eagle shall amend their respective articles of incorporation or
bylaws in any way or manner so as to limit the indemnity available to
officers and directors (or former officers and directors) of RJF and
Eagle and shall ensure that Ehlers and any employees of the Corporation
who would be entitled to indemnification under the provisions of the
current articles of incorporation and bylaws of RJF, Eagle or Heritage
continue in full force and effect. Until December 31, 1999, Eagle will
maintain "Directors and Officers Errors and Omissions Liability
Insurance" in an amount of not less that $10,000,000 and will cause
such policies to include as "Insureds" any past directors or officers
as is provided presently by Eagle pursuant to its insurance policy with
Gulf Underwriters Insurance Company.
9.3 RJF shall indemnify and hold Ehlers harmless of and from any
and all costs, expenses, liability, damages or other impositions
whatsoever (including reasonable attorneys' fees) incurred by Ehlers
with respect to that certain litigation styled DAVID W. JONSSON V.
RAYMOND JAMES & ASSOCIATES, INC., ET AL; NASD Arbitration No.
93-01860, and any other suits or actions filed by David W. Jonsson.
10. AUTOMATIC TERMINATION. In the event of the termination of the
Acquisition Agreement pursuant to the terms thereof, this Agreement shall
automatically terminate and shall be deemed null, void and of no further force
or effect whatsoever effective as of the date of such termination of the
Acquisition Agreement, and the parties hereto acknowledge and agree that the
Separation Agreement and the Option Agreement shall remain in full force and
effect in the event of such termination of the Acquisition Agreement.
11. COOPERATION. The RJF Group hereby agrees to cooperate and to do all
things necessary in order to assist the Corporation in obtaining the approval of
any and all mutual funds and accounts controlled by the RJF Group to the
assignment of the investment advisory agreements or subadvisory agreements
from the Corporation to Goldman; including, without limitation, the Heritage
Capital Appreciation Trust, the RJF Profit Sharing Plan and Trust and the United
Way of Pinellas County, Inc. Endowment Fund and Reserve Fund.
12. WAIVER. In connection with the termination of the Separation
Agreement, each party to this Agreement hereby agrees to waive and fully
discharge any and all rights and continuing obligations whatsoever existing
under the Separation Agreement effective as of the date of such termination,
including, without limitation, any and all restrictive covenants and
nonsolicitation provisions contained therein (including, without limitation,
Section 4.2, Section 4.3 and Section 9.1 of the Separation Agreement).
13. NOTICES. All notices or other communications required or
permitted to be given pursuant to this Agreement shall be in writing and
shall be deemed to have been properly given
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<PAGE>
or made, when deposited in the United States mail, postage prepaid, addressed to
the parties at their respective addresses shown on the signature pages hereof.
No other method of providing notice is hereby precluded, provided that (i) such
method is a reasonably acceptable, commercially utilized means of providing
notices (such as Federal Express, Purolator or United States Mail Next Day
Delivery, or if delivered by hand-delivery), (ii) such method of delivery
provides the sender with a receipt or other evidence that the person to whom the
notice has been sent has received same, and (iii) the postage or any charge
required to be paid in connection with such notice is prepaid by the sender.
14. GOVERNING LAW. The validity, construction, interpretation and
enforceability of this Agreement shall be governed by the laws of the State of
Florida.
15. NO JOINT VENTURE. The provisions of this Agreement shall not be
deemed to create any type of joint venture, partnership or other joint
enterprise between Ehlers and the Corporation, on the one hand, and RJF, Eagle
or Heritage, on the other hand.
16. COUNTERPARTS AND ORIGINALS. The parties may execute this Agreement
in counterparts. Each executed counterpart shall be deemed an original, and all
of them, together, shall constitute the same agreement.
17. SUCCESSORS AND ASSIGNS. This Agreement is not assignable by any
party without the prior written consent of the other parties, and any attempted
assignment without the prior written consent of the other parties shall be
invalid and unenforceable against the other parties. Subject to the foregoing,
this Agreement is binding upon, and inures to the benefit of, the respective
heirs, authorized assignees, successors and personal representatives of the
parties to it.
18. HEADINGS, CAPTIONS AND PRONOUNS. The section headings, captions or
abbreviations are included solely for convenient reference and shall not control
the meanings or interpretation of any of the provisions of this Agreement. As
used herein, words in the singular include the plural and the words in the
masculine include the feminine and neuter gender, and vice versa whenever the
context so requires.
19. WAIVER. No waiver of any breach or default under this Agreement
shall be deemed to be a waiver of any subsequent breach or default.
20. FURTHER ASSURANCES. Each of the parties hereto agrees to take such
action as may be reasonably requested by any other party hereto in order to more
effectively carry out the terms and conditions of this Agreement or any
exhibit hereto.
21. INCORPORATION OF RECITALS. The recitals set forth at the beginning
of this Agreement are hereby incorporated into this Agreement by this
reference and this Agreement shall be interpreted with reference to such
recitals.
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<PAGE>
22. SEVERABILTY. This Agreement shall not be severable in any way, but
if any provision shall be held to be invalid, the invalidity shall not affect
the validity of the remainder of this Agreement and the remainder of this
Agreement shall continue in full force and effect.
23. COSTS AND EXPENSES. Each of the parties hereto shall bear its own
costs and expenses with respect to the negotiation, execution and performance of
this Agreement and all exhibits hereto, including, without limitation, the costs
and expenses of each party's attorneys, accountants and financial advisors.
24. ANNOUNCEMENTS. Except for such statements and regulatory filings as
may be required by any applicable law, and except as may be required in order to
allow a party to comply with the terms and conditions of this Agreement, no
party shall make any public statements or disclose the terms and conditions of
this Agreement including, without limitation, making any press releases with
respect to this Agreement and the transactions contemplated herein without the
prior written consent of the other parties hereto (which consent may not be
unreasonably withheld).
* * *
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<PAGE>
IN WITNESS WHEREOF, have executed this Termination and Release
Agreement the day and year first above written.
Attest: RAYMOND JAMES FINANCIAL, INC.
By: /s/ SHARRY L MAUNEY By: /s/ THOMAS A. JAMES
---------------------------- --------------------------
Sharry L. Mauney, Thomas A. James, Chairman
Assistant Secretary
"RJF"
(Corporate Seal)
Address: 880 Carillon Parkway
St. Petersburg, Florida 33716
Attest: EAGLE ASSET MANAGEMENT, INC.
By: /s/ STEPHEN W. FABER By: /s/ THOMAS A. JAMES
---------------------------- --------------------------
Stephen Faber, Secretary Thomas A. James, Chairman
"Eagle"
(Corporate Seal)
Address: 880 Carillon Parkway
St. Petersburg, Florida 33716
Witnesses:
HERITAGE ASSET MANAGEMENT, INC.
/s/ LINDA HARTER By: /s/ THOMAS A. JAMES
- ------------------------------- -----------------------------
Name: Linda Harter Thomas A. James, Chairman
--------------------------
(Type or Print Name)
(Corporate Seal)
/s/ DEBBIE GESUALDA
- -------------------------------
Name: Debbie Gesualda
-------------------------- "Heritage"
(Type or Print Name)
Address: 880 Carillon Parkway
St. Petersburg, Florida 33716
[Signature Lines Continued on Next Page]
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<PAGE>
Witnesses:
/s/ LYNN A TABER /s/ HERBERT E. EHLERS
- ------------------------------ ------------------------------
Name Lynn A. Taber Herbert E. Ehlers
-------------------------
(Type or Print Name)
"Ehlers"
/s/ BEATRICE BREWER LEE
- ------------------------------
Name: Beatrice Brewer Lee
------------------------
(Type or Print Name)
Address: Two Seaside Lane, Apt. 204
Belleair, Florida 34616
Attest: LIBERTY INVESTMENT
MANAGEMENT, INC., formerly known as
Eagle Institutional Asset Management,
Inc., a Florida corporation
By:/s/ Sidney D. Goff By: /s/ HERBERT E. EHLERS
--------------------------- ------------------------------
Sydney D. Goff, Secretary W Herbert E. Ehlers, Chairman
(Corporate Seal) "Corporation"
Address: Suite 500
2502 Rocky Point Drive
Tampa, Florida 33607
[Signature Page to termination and Release Agreement]
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EXHIBIT 11
RAYMOND JAMES FINANCIAL, INC.
COMPUTATION OF EARNINGS PER SHARE
(in thousands, except per share amounts)
YEAR ENDED
-------------------------------------------
SEPTEMBER 27, SEPTEMBER 29, SEPTEMBER 30,
1996 1995 1994
------------- ------------- -------------
Net income applicable to common
stock and other dilutive
securities $65,978 $46,141 $42,069
======= ======= =======
Average number of common
shares and equivalents
outstanding during the
period (1) 20,791 20,520 21,038
Additional shares assuming
exercise of stock options
and warrants (1)(2) 234 185 321
------- ------- ------
Average number of common
shares used to calculate
earnings per share (1) 21,025 20,705 21,359
======= ======= =======
Income per share $ 3.14 $ 2.23 $ 1.97
======= ======= =======
(1) Restated to give retroactive effect to all common stock dividends.
(2) Represents the number of shares of common stock issuable on the exercise
of dilutive employee stock options less the number of shares of common
stock which could have been purchased with the proceeds from the exercise
of such options. These purchases were assumed to have been made at the
average market price of the common stock during the period, or that part
of the period for which the option was outstanding.
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EXHIBIT 21
<TABLE>
<CAPTION>
RAYMOND JAMES FINANCIAL, INC.
LIST OF SUBSIDIARIES
The following listing includes the registrant's subsidiaries all of which are
included in the consolidated financial statements:
STATE OF
NAME OF COMPANY INCORPORATION SUBSIDIARY OF
- --------------- ------------- -------------
<S> <C> <C>
Raymond James & Associates, Inc. Florida Raymond James Financial, Inc. ("RJF")
Eagle Asset Management, Inc. Florida RJF
Heritage Asset Management, Inc. Florida RJF
Investment Management & Research, Inc. Florida RJF
Planning Corporation of America ("PCA") Florida Raymond James & Associates, Inc. ("RJA")
PCAF, Inc. Florida PCA
Raymond James Bank, FSB Florida RJF
Raymond James Credit Corporation Delaware RJF
Raymond James International Holdings, Inc. Delaware RJF
Raymond James Mortgage Capital, Inc. Delaware RJF
Raymond James Partners, Inc. Florida RJF
Raymond James Realty Advisors, Inc. Florida RJP
Raymond James Trust Company Florida RJF
RJ Communication, Inc. Florida RJF
RJ Credit Partners, Inc. Florida RJF
RJ Equities, Inc. Florida RJF
RJ Equities-2, Inc. Florida RJF
RJ Government Securities, Inc. Florida RJF
RJ Health Properties, Inc. Florida RJF
RJ Leasing, Inc. Florida RJF
RJ Leasing-2, Inc. Florida RJF
RJ Medical Investors, Inc. Florida RJF
RJ Mortgage Acceptance Corporation Delaware RJF
RJ Partners, Inc. Florida RJF
RJ Properties, Inc. ("RJP") Florida RJF
RJ Realty, Inc. Florida RJF
RJ Specialist, Inc. Florida RJF
RJ Washington Square Georgia RJF
RJA Municipal ABS, Inc. Delaware RJF
Robert Thomas Securities, Inc. Florida RJF
Sound Trust Company Washington RJF
Value Partners, Inc. Florida RJF
Heritage International, Ltd. Mauritius Raymond James International Holdings,
Inc. ("RJIH")
Raymond James & Associates, Ltd. Bermuda RJIH
Raymond James Financial International, Ltd. United Kingdom RJIH
</TABLE>
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EXHIBIT 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 33-54071, 33-60608 and 33-38390) of Raymond James
Financial, Inc. of our report dated November 18, 1996 appearing on page F-3 of
this Form 10-K.
PRICE WATERHOUSE LLP
Tampa, Florida
December 12, 1996
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<TABLE> <S> <C>
<ARTICLE> BD
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-27-1996
<PERIOD-START> SEP-30-1995
<PERIOD-END> SEP-27-1996
<CASH> 98,566,000
<RECEIVABLES> 512,466,000
<SECURITIES-RESALE> 636,704
<SECURITIES-BORROWED> 864,140,000
<INSTRUMENTS-OWNED> 333,150,000
<PP&E> 39,585,000
<TOTAL-ASSETS> 2,566,381,000
<SHORT-TERM> 11,989,000
<PAYABLES> 1,309,046,000
<REPOS-SOLD> 0
<SECURITIES-LOANED> 848,595,000
<INSTRUMENTS-SOLD> 57,210,000
<LONG-TERM> 12,909,000
0
0
<COMMON> 217,000
<OTHER-SE> 326,415,000
<TOTAL-LIABILITY-AND-EQUITY> 2,566,381
<TRADING-REVENUE> 12,243,000
<INTEREST-DIVIDENDS> 126,453,000
<COMMISSIONS> 422,487,000
<INVESTMENT-BANKING-REVENUES> 72,596,000
<FEE-REVENUE> 68,906,000
<INTEREST-EXPENSE> 83,471,000
<COMPENSATION> 423,904,000
<INCOME-PRETAX> 108,525,000
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 65,978,000
<EPS-PRIMARY> 3.14
<EPS-DILUTED> 3.12
</TABLE>
