1
RAYMOND JAMES FINANCIAL, INC.
880 Carillon Parkway
St. Petersburg, Florida 33716
(813) 573-3800
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 13, 1997
To the Shareholders of Raymond James Financial, Inc.:
The Annual Meeting of Shareholders of Raymond James Financial, Inc.
will be held at the Raymond James Financial Center, 880 Carillon Parkway,
St. Petersburg, Florida, on Thursday, February 13, 1997 at 4:30 p.m. for
the following purposes:
1. To elect eleven nominees to the Board of Directors of the Company;
2. To ratify Incentive Compensation Criteria for certain of the Company's
executive officers;
3. To ratify the selection of Price Waterhouse LLP as independent
accountants of the Company for the fiscal year ending September 26,
1997;
4. To transact any other business as may properly come before the
meeting.
Shareholders of record as of the close of business on December 13,
1996 will be entitled to vote at this meeting or any adjournment thereof.
Information relating to the matters to be considered and voted on at the
Annual Meeting is set forth in the Proxy Statement accompanying this
Notice.
By order of the Board of Directors,
Barry Augenbraun, Secretary
December 20, 1996
If you do not expect
to attend the meeting in person,
please vote on the matters to be
considered at the meeting by
completing the enclosed Proxy and
mailing it promptly in the enclosed
envelope.
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Raymond James Financial, Inc.
(the "Company") for the Annual Meeting of Shareholders to be held on
February 13, 1997 at 4:30 p.m., or any adjournment thereof.
If the accompanying proxy form is completed, signed and returned, the shares
represented thereby will be voted at the meeting. Delivery of the proxy
does not affect the right to vote in person should the shareholder attend
the meeting. The shareholder may revoke the proxy at any time prior to the
voting thereof.
The affirmative vote of a majority of the shares of common stock represented
at the meeting, either in person or by proxy, will be required for the
election of any nominee, or the ratification of any proposal or other
business that may properly come before the meeting.
The annual report of the Company for the year ended September 27, 1996 is
being mailed with this proxy statement to shareholders entitled to vote at
the meeting. The cost of all proxy solicitation will be paid by the
Company.
SHAREHOLDERS ENTITLED TO VOTE
AND
PRINCIPAL SHAREHOLDERS
Shareholders of record at the close of business on December 13, 1996 will be
entitled to notice of, and to vote at, the Annual Meeting. At that date,
there were 20,970,681 shares of common stock outstanding and entitled to
vote. Shareholders are entitled to one vote per share on all matters.
The following table sets forth, as of December 13, 1996, information with
respect to the common stock ownership of each person known by the Company to
own beneficially more than 5% of the shares of the Company's common stock,
and of all Officers and Directors as a group:
Shares (1) Percent
Name Address Beneficially Owned of Class
Thomas A. James 880 Carillon Parkway 5,147,374 (2) 24.5%
St. Petersburg,
Florida 33716
All Officers and 6,822,960 32.5%
Directors as a Group
(18 Persons)
(1) Includes shares credited to Employee Stock Ownership Plan accounts and
shares which can be acquired within sixty days of record date through the
exercise of stock options.
(2) Includes 1,698,525 shares owned by the Robert A. James Trust*, established
for the benefit of members of the James family, and 267,115 shares owned
by the James' Children Annuity Trust*, for which Sound Trust Company, a
wholly-owned subsidiary of the Company, serves as trustee, and 75,511
shares owned by the James' Grandchildren's Trust*, for which Raymond
James Trust Company, a wholly-owned subsidiary of the Company, serves as
trustee.
*The beneficiaries of these trusts are the James family members, including
Thomas A. James and his son, Huntington A. James.
PROPOSAL 1: ELECTION OF DIRECTORS
Eleven directors are to be elected to hold office until the Annual
Meeting of Shareholders in 1998 and until their respective successors shall
have been elected. Nine of the nominees were elected by the shareholders
on February 15, 1996, to serve as Directors of the Company until the Annual
Meeting of Shareholders in 1997. Mr. Zank was appointed in May 1996. Mr.
Herbert E. Ehlers, who has been a director of the Company since 1986, is
not standing for re-election since his investment advisory company, Liberty
Investment Management, Inc., recently agreed to be acquired by Goldman,
Sachs Co. It is intended that proxies received will be voted to elect the
nominees named below.
Should any nominee decline or be unable to accept such nomination to
serve as a director, due to events which are not presently anticipated,
discretionary authority may be exercised to vote for a substitute nominee.
Principal Occupation, (1)
Directorships and Director
Nominee Age Security Ownership (2) Since
Jonathan A. Bulkley 62 Managing Director, Barents Group LLC 1986
(emerging markets/capital markets
development consulting) since 1992;
President and CEO, Charterhouse
Media Group (investment banking) from
1988 until 1992; President and CEO
Jesup & Lamont Securities Group, Inc.
(securities broker-dealer) from 1987
until 1988; Prior to 1986, President and
CEO of Moseley, Hallgarten, Estabrook
& Weeden Inc. (securities broker-dealer).
Member of Audit Committee, Chairman of
Compensation Committee.
Common shares owned: 23,687 (.11%)
Thomas S. Franke 55 President and COO of Raymond James & 1991
Associates, Inc. ("RJA")* since
January 1991; President and CEO
of Blunt Ellis & Loewi, Inc. (securities
broker-dealer) from 1986 to 1990.
Common shares owned: 77,887 (.37%)
Francis S. Godbold 53 President of Raymond James Financial, 1977
Inc. ("RJF"); Executive Vice President of
RJA.
Common shares owned: 484,995 (2.31%)
M. Anthony Greene 58 Chairman,CEO and President ofInvestment 1975
Management & Research, Inc. ("IM&R")*;
Executive Vice President of RJF.
Common shares owned: 267,555 (1.28%)
Harvard H.Hill, Jr. 60 Managing General Partner of Houston 1986
Partners (venture capital) since
July, 1985.
Director of Wonderware Corporation.
Chairman of Audit Committee,
Member of Compensation Committee
Common shares owned: 5,500 (.03%)
Huntington A.James 28 Syndicate Associate,RJA since 1994. ----
MBA Darden School of Business, University
of Virginia, 1992-1994. Corporate
Finance analyst, Smith Barney, 1990-1992.
Son of Thomas A. James.
Common shares owned: 53,081 (.25%)
Thomas A. James 54 Chairman of the Board and Chief 1970
Executive Officer of RJF; Chairman
of the Board of RJA. Director and
Officer of various affiliated
entities. Past Chairman of the
Securities Industry Association.
Director of Arbor Health Care Corporation
(nursing homes); and IMCO Recycling, Inc.
(metal recycling).
Common shares beneficially
owned: 5,147,374 (24.5%)(3)
Paul W. Marshall 55 Chairman and CEO of Rochester 1993
Shoe Tree Co., Inc. since 1992;
Senior Lecturer on Business Administration
at Harvard since 1996.
Adjunct Professor at Harvard Graduate
School of Business from 1989 through
1992; Chairman of Industrial Economics,
Inc. from 1989 through 1992.
Director of Applied Extrusion Technologies
(manufacturer); and Foodbrands America, Inc.
(food processing and distribution).
Member of Audit and Compensation
Committees.
Common shares owned: 6,000 (.03%)
J. Stephen Putnam 53 President of Robert Thomas Securi- 1989
ties, Inc. ("RTS")*; Executive Vice
President of RJF. Vice President and
Director of F.L. Putnam Securities.
Treasurer of Meescheart Fund, Inc.
(mutual fund). Director of F.L.
Putnam Investment Management Co.
(investment advisor).
Common shares owned: 80,148 (.38%)
Robert F. Shuck 59 Vice Chairman of RJF;Executive Vice 1970
President of RJA from 1975 through
1991.
Common shares owned: 331,125 (1.58%)
Dennis W. Zank 42 Executive Vice President, Operations 1996
and Administration, RJA. Director and
Officer of several affiliated entities.
Common shares owned: 37,715 (.18%)
* A wholly-owned subsidiary of Raymond James Financial, Inc.
(1) Unless otherwise noted, the nominee has had the same principal
occupation and employment during the last five years.
(2) Includes shares credited to their Employee Stock Ownership Plan
accounts and shares which can be acquired within sixty days of record
date through the exercise of stock options.
(3) See footnotes under the Principal Shareholders Ownership table.
The Board of Directors held 4 regular meetings during fiscal 1996.
Each of the directors attended a minimum of seventy five percent of the
meetings held during the year.
The current standing committees of the Board of Directors are the
Audit Committee and the Compensation Committee. These committees met four
times during the fiscal year ended September 27, 1996. Each member of
these committees attended a minimum of seventy five percent of the meetings
held during the year. The function of the Audit Committee is to ensure
that the Company has taken appropriate steps to safeguard assets, operate
efficiently and generate accurate financial information. The Committee
meets periodically with the Company's independent accountants to review the
scope and results of the audit and to consider various accounting and
auditing matters related to the Company, supervises the Company's system of
internal controls and reviews the results of regulatory examinations. The
Committee also makes recommendations to the Board of Directors regarding
the appointment of the Company's independent public accountants. The
Compensation Committee reviews and approves the compensation to be paid to
executive officers of the Company and its subsidiaries and performs certain
duties prescribed by the Board with respect to employee benefit plans.
Mssrs. Marshall, Hill, and Bulkley receive a $6,000 annual retainer, a
$1,500 attendance fee for each regular meeting, $250 for each telephone
meeting, and a $250 attendance fee for each Audit and Compensation
Committee meeting.
Outside Director Stock Options
The inside Directors who are also employees of the Company have voted
in favor of stock option issuances under which the Company's outside
Directors have been granted non-qualified options covering 73,060 shares of
the Company's common stock. These options, 30,878 of which were
outstanding at September 27, 1996, are exercisable at prices ranging from
$15.39 to $22.13 at various times through November 2001.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Overview and Philosophy
The Compensation Committee (the "Committee") reviews all corporate
compensation and benefit plan policies, as well as the structure and amount
of all compensation for executive officers of the Company. The Committee
is composed exclusively of outside directors of the Company and is
currently chaired by Mr. Bulkley.
The Committee's goal is to establish and maintain compensation
policies that will enable the Company to attract, motivate and retain high-
quality executives and to ensure that their individual interests are
aligned with the long-term interests of the Company and its investors.
The Company's objectives are met through a compensation package which
includes four major components - base salary, annual bonus, stock option
awards and retirement plans.
The cash compensation components (base salary and annual bonus) are
heavily weighted towards annual bonus. These bonuses are based on the
attainment of performance goals, specifically the profits of an individual
subsidiary/department or on the profits of the Company as a whole. The
emphasis on profit-based compensation serves two functions; it encourages
executives to be conscious of the "bottom line" and it keeps the Company's
base salary structure at a modest level, which is advantageous to the firm
given the cyclical nature of the securities industry.
The third component of the compensation package, incentive and
nonqualified stock option awards, is designed to provide a direct link
between the long-term interests of executives and shareholders.
Historically, options have been granted every three years to key management
employees. From time to time special awards may be granted when a unique
situation exists, or if job performance or a change in job duties warrants.
Beginning in fiscal 1996, the frequency of option grants to key management
employees was increased to every two years.
The fourth and final component of the compensation package is Company
contributions to various retirement plans. The Company maintains three
qualified retirement plans; a profit sharing plan, an employee stock
ownership plan and a 401(k) plan. Contributions to the profit sharing and
employee stock ownership plans, if any, are dependent upon the overall
profits of the Company. Since inception of the 401(k) plan in 1987, the
Company has matched a portion of the first $1,000 contributed annually by
employees to their 401(k) accounts. Effective January 1, 1994 the plan
provides for the Company to match 100% of the first $500 and 50% of the
next $500 of compensation deferred by each participant annually. These
three plans are offered to all full-time employees who meet the length of
service requirements (six months for the 401(k) plan and one year for the
other two plans). The Company also maintains a non-qualified deferred
management bonus plan. Eligibility is restricted to those who meet certain
compensation levels set annually by the Board of Directors. The class year
vesting schedule of this plan is designed to encourage long-term employment
with the firm, and the earliest a participant may become fully vested is at
age 55 with 20 years of service. Contributions to this plan are also
dependent upon the Company's earnings. In addition, the Company has an
employee stock purchase plan which allows employees to purchase shares of
the Company's common stock on four specified dates throughout the year at a
15% discount from the market value, subject to certain limitations.
Compensation of the Chief Executive Officer
In keeping with the general compensation philosophy outlined above,
Mr. James' base salary for calendar 1997 will be $226,000, which represents
a 4.6% increase from the $216,000 received in 1996. Mr. James' salary is
subject to an annual review, as is true of all employees. It was last
adjusted in December 1995, to be effective January 1, 1996.
In determining the bonus offered to Mr. James for fiscal 1996 the
Committee considered many factors including the following:
* 1996 was the twelfth consecutive record year for the firm in
terms of revenues;
* Record net income, increasing 43% over the prior year;
* Book value per share increased to $15.63, a 21% increase
over the prior yearend;
* Return on average equity for the year was 22.4%;
* The compensation of the chief executive officers of other
similar brokerage firms, as of their most recent proxy
statements.
Compensation Committee
December 9, 1996
Jonathan A. Bulkley, Chairman
Harvard H. Hill, Jr.
Paul W. Marshall
PROPOSAL 2: TO RATIFY INCENTIVE COMPENSATION CRITERIA
FOR CERTAIN OF THE COMPANY'S EXECUTIVE OFFICERS
In the past two years' proxy statements, dated December 29, 1995 and
December 28, 1994, executive officers' incentive compensation calculations
were formalized. This was done in consideration of the limitations on tax
deductibility imposed under Section 162(m) of the Internal Revenue Code of
1986, as amended. Section 162(m) limits deductions for compensation in
excess of $1 million per year by a public corporation to any one of its
executive officers unless certain criteria are met. This rule requires
that the incentive compensation be based on attainment of one or more
performance goals and that the Company's shareholders approve both the
performance goals and the formula used to calculate the payment amount.
The intention of the Committee remains that the executive officers be
compensated on a basis consistent with prior years; i.e., for obtaining
certain performance goals. It is the Company's practice that a portion of
any formula-driven bonus amount can be withheld based on a subjective
performance evaluation. The Compensation Committee considers the bonus
formulas for executive officers each year. For purposes of determining
incentive compensation for the executive officers for fiscal 1997, the
Committee has approved the executive bonus formulas described below and
recommends a vote FOR the approval of these amended formulas by
shareholders.
Recommended Bonus Formulas for Executive Officers
Percent for Calculation
Executive Officer Basis of Maximum Bonus
Thomas A. James Total company pretax profits 1.50%
Francis S. Godbold Subjective ----
Thomas S. Franke RJA retail division's pretax 4.00%
profits per Retail
Contribution Report*, and
pretax profits of the RJA
fixed income department,
Planning Corporation of
America, Inc. and
International operations
M. Anthony Greene IM&R pretax profits per Retail 4.50%
Contribution Report*
J. Stephen Putnam RTS pretax profits per Retail 4.00%
Contribution Report*
Correspondent clearing 2.50%
department's pretax profits
per Retail Contribution
Report*
* The Retail Contribution Report adjusts financial statement pretax
profits for items related to the retail sales force, primarily a credit
for interest income on cash balances arising from retail customers, and
also includes adjustments to actual clearing costs, a portion of mutual
fund revenues and expenses, credit for correspondent clearing profits
and accruals for benefit expenses.
SUMMARY COMPENSATION TABLE
The following table sets forth certain information with respect to the
remuneration earned during the last three fiscal years by the Chief
Executive Officer and each of the four other most highly compensated
executive officers of the Company.
Long-Term
Annual Compensation Compensation
Other
Annual Stock All Other
Fiscal Commis -Compen- Option Compen-
Name Year Salary Bonus sions sation(1)Awards sation(2)
Thomas A.James 1996$212,500 $1,250,000(3)$210,242 - - $58,389
Chairman 1995 200,100 875,000(3) 144,462 - - 45,795
and CEO 1994 194,000 760,000 161,239 - - 41,775
Francis S.
Godbold 1996 173,000 2,066,252(3) 23,630 $163,443 5,000 58,271
President
of RJF, 1995 171,250 741,000(3) 21,435 62,772 - 45,708
Executive
VP of RJA 1994 164,000 1,058,401 21,148 87,144 - 41,708
M. Anthony
Greene 1996 209,500 1,000,000(3) 462 - 5,000 58,093
President of
IM&R 1995 200,100 772,000(3) 13 - - 45,577
1994 192,050 678,451 28 - - 41,608
Thomas S.Franke1996 189,250 1,000,000(3)(4)4,524 - 5,000 56,897
President & 1995 182,500 375,000(3) 2,244 - - 45,239
COO of RJA 1994 176,000 420,000 2,173 - - 41,349
J. Stephen
Putnam 1996 131,600 492,000(3) 6,372 - 5,000 56,803
President of
RTS 1995 126,150 293,273(3) 7,910 - - 33,540
1994 120,800 257,771 8,517 - - 38,728
(1) Represents distributions received by Mr. Godbold from investor limited
partnerships which were syndicated by, and have as a General Partner,
a subsidiary of the Company. The distributions were a portion of the
General Partner's incentive profits ownership interest, which Mr.
Godbold had purchased in prior years for a nominal amount.
(2) This column includes the amount of the Company's contributions to its
401(k) Plan, Profit Sharing Plan, Employee Stock Ownership Plan, and
Deferred Management Bonus Plan.
(3) In accordance with the bonus formulas approved at the annual meetings
of the shareholders on February 15, 1996 and February 16, 1995.
(4) In addition to the bonus calculated by the bonus formula approved at
the annual meeting of the shareholders on February 15, 1996, Mr.
Franke's bonus includes a one-time special award of $248,000 in
consideration of his efforts in the day to day management of certain
Equity Capital Markets departments of RJA and in introducing certain
investment banking business during fiscal 1996.
Incentive Stock Options
The following tables contain information concerning options granted to
and exercised by the executive officers included in the Summary
Compensation Table during the fiscal year.
Option Grants in Last Fiscal Year
% of Total Potential Realizable
Options Value at Assumed
Granted to Annual Rates of
Options Employees Exercise Expir- Stock Appreciation
Granted in Fiscal Price ration for Option Term(2)
Name (#) (1) Year ($/share) Date 5% 10%
Francis S. Godbold 5,000 1.66 $22.125 12/14/00 $30,564 $67,538
M. Anthony Greene 5,000 1.66 22.125 12/14/00 30,564 67,538
Thomas S. Franke 5,000 1.66 22.125 12/14/00 30,564 67,538
J. Stephen Putnam 5,000 1.66 22.125 12/14/00 30,564 67,538
(1) All of these options were granted on November 14, 1995. The options
vest 60% after three years, an additional 20% after four years and the
remaining 20% after five years.
(2) Potential realized values represent the future value, net of exercise
price, of the options granted if the Company's stock price was to
appreciate by 5% and 10% during each year of the awards' five-year
life.
Aggregated Option Exercises during
Last Fiscal Year and Year End Value
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
Shares Sept. 27, 1996 Sept. 27, 1996
Acquired Value (Exercisable/ (Exercisable/
Name on Exercise Realized Unexercisable) Unexercisable)
Francis S. Godbold - - 4,500/ 8,000 $66,749/155,125
M. Anthony Greene - - 4,500/ 8,000 66,749/155,125
Thomas S. Franke 33,750 $509,389 525/11,975 7,787/214,085
J. Stephen Putnam - - 4,500/ 8,000 66,749/155,125
Comparative Stock Performance
The graph below compares the cumulative total shareholder return on
the common shares of the Company for the last five fiscal years with the
cumulative total return on the Standard & Poor's 500 Index and the Value
Line Securities Brokerage Index over the same period (assuming an
investment of $100 in each on October 1, 1991 and the reinvestment of all
dividends).
Name 1991 1992 1993 1994 1995 1996
Securities Brokers $100.00 $111.30 $196.49 $148.96 $245.96 $259.74
Raymond James Financial,
Inc. 100.00 99.43 164.71 139.57 199.77 226.52
Standard & Poors 500 100.00 111.20 125.68 130.62 169.56 201.70
TRANSACTIONS WITH MANAGEMENT & DIRECTORS
IM&R leases its Atlanta, Georgia headquarters office from Eagle
Management Associates (no relation to Eagle Asset Management, Inc., a
subsidiary of the Company), which is owned by M. Anthony Greene.
Management believes the rental paid to Eagle Management Associates, $77,800
in fiscal 1996, does not exceed that charged by unaffiliated parties for
similar space.
Mr. Francis S. Godbold, President and a Director of the Company, owns
7.5% of the outstanding shares of common stock of RJ Properties, Inc.
("RJP"). Such shares were acquired by Mr. Godbold for nominal
consideration in connection with the organization of RJP in 1980.
In fiscal 1995, the Company committed to invest $1 million in Houston
Partners - a venture capital fund managed by Houston Partners, of which
Harvard H. Hill, Jr. is the Managing General Partner. The commitment is
recorded as an investment and a liability in the Company's financial
statements.
As of January 1, 1995, Liberty Investment Management ("Liberty"), was
formed by Herbert E. Ehlers, director and former President and Chief
Investment Officer of Eagle Asset Management, Inc. ("Eagle"). At this
time, Liberty assumed responsibility for providing investment management
services to institutional growth equity accounts previously managed by
Eagle. Pursuant to Ehlers' employment contract with the Company, the
Company was to receive 50% of the revenues from these accounts through
December 31, 1999 while bearing none of the expenses. At the end of the 5-
year period, the Company was to have the option to purchase 20% of Liberty
at a predetermined price. However, 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 whereby the Company will receive a lump sum settlement
for its remaining three years' interest in Liberty's revenue stream and its
option to purchase 20% of Liberty at a future date. 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 in January of 1997. The Company will ultimately receive up to
$30 million as its settlement amount. Eagle will continue to receive 50%
of fee revenues until the closing.
The Company, in the ordinary course of its business, extends credit to
certain margin accounts in which certain of its officers and directors have
an interest, in connection with the purchase of securities. These
extensions of credit have been made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time
for comparable transactions with non-affiliated persons, and do not involve
more than normal risk of collectibility or present other unfavorable
features. The Company also, from time to time and in the ordinary course
of its business, enters into transactions involving the purchase or sale of
securities as principal from or to directors, officers and employees and
accounts in which they have an interest. These purchases and sales of
securities on a principal basis are effected on substantially the same
terms as similar transactions with unaffiliated third parties.
PROPOSAL 3: SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Price Waterhouse LLP has served as independent accountants
of the Company since fiscal 1979, and has audited the Company's
broker-dealer subsidiaries since fiscal 1970.
A representative of Price Waterhouse LLP will be present at the Annual
Meeting of Shareholders. Such representative will be available to respond
to appropriate questions and may make a statement if he so desires.
The Board of Directors recommends a vote FOR the appointment of Price
Waterhouse LLP as the Company's auditors for 1997.
OTHER MATTERS
Proposals which shareholders intend to present at the 1998 annual
meeting of shareholders must be received by the Company no later than
October 1, 1997 to be eligible for inclusion in the proxy material for that
meeting.
Management knows of no matter to be brought before the meeting which
is not referred to in the Notice of Meeting. If any other matters properly
come before the meeting, it is intended that the shares represented by
proxy will be voted with respect thereto in accordance with the judgment of
the persons voting them.
By Order of the Board of Directors,
Barry Augenbraun, Secretary
