FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark one)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended December 26, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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
(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)
(813) 573-3800_______
(Registrant's telephone number, including area code)
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 the number of shares outstanding of each of the registrant's
classes of common stock, as of the close of the latest practicable date.
32,112,017 shares of Common Stock as of February 3, 1998
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Form 10-Q for the Quarter Ended December 26, 1997
INDEX
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Consolidated Statement of Financial Condition as of
December 26, 1997 (unaudited) and September 26, 1997 2
Consolidated Statement of Operations (unaudited) for the
three month period ended December 26, 1997 and
December 27, 1996 3
Consolidated Statement of Cash Flows (unaudited) for the
three months ended December 26, 1997 and December 27,1996 4
Notes to Consolidated Financial Statements (unaudited) 5
Item 2. Management's Financial Discussion and Analysis 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 3: Restated and amended Bylaws of the Company
(filed electronically)
Exhibit 11: Computation of Earnings Per Share 11
Exhibit 27: Financial Data Schedule - EDGAR version only
(filed electronically)
(b) Reports on Form 8-K: None
All other items required in Part II have been previously filed or
are not applicable for the quarter ended December 26, 1997.
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
(in thousands, except share amounts)
December 26, September 26,
1997 1997
(Unaudited)
---------------------------
ASSETS
Cash and cash equivalents $ 158,445 $ 196,351
Assets segregated pursuant to Federal Regulations:
Cash and cash equivalents 43 375
Investments purchased under agreements to resell 655,670 692,054
Securities owned:
Trading and investment account securities 157,702 98,004
Available for sale investments 312,103 313,286
Receivables:
Clients, net 773,952 686,339
Stock borrowed 1,084,870 1,070,944
Brokers, dealers and clearing organizations 91,646 39,644
Other 44,581 38,118
Investment in leveraged leases 22,492 22,161
Property and equipment, net 64,114 51,674
Deferred income taxes 27,742 24,356
Deposits with clearing organizations 22,187 22,200
Prepaid expenses and other assets 29,772 23,139
-------------------------
$3,445,319 $3,278,645
-------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable $ 20,000 $ 14,215
Payables:
Clients 1,613,410 1,487,158
Stock loaned 1,060,371 1,035,035
Brokers, dealers and clearing organizations 34,198 24,954
Trade and other 85,531 81,217
Trading account securities sold but not yet purchased 52,498 52,596
Accrued compensation and commissions 113,942 141,781
Income taxes payable 20,475 18,413
-------------------------
3,000,425 2,855,369
-------------------------
Commitments and contingencies - -
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 32,665,720 shares 326 326
Additional paid-in capital 53,363 52,599
Unrealized gain on securities available for sale,
net of deferred taxes 372 341
Retained earnings 397,857 377,981
---------------------------
451,918 431,247
Less: 750,080 and 868,784 common shares in treasury,
at cost (7,024) (7,971)
---------------------------
444,894 423,276
---------------------------
$3,445,319 $3,278,645
===========================
See Notes to Consolidated Financial Statements.
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(in thousands, except per share amounts)
Three Months Ended
December 26, December 27,
1997 1996
-------------------------
Revenues:
Securities commissions and fees $143,054 $111,495
Investment banking 31,271 17,910
Investment advisory fees 16,415 14,224
Interest 46,190 35,878
Correspondent clearing 1,119 1,034
Net trading profits 1,874 4,689
Financial service fees 8,313 5,334
Other 4,068 4,255
------------------------
Total revenues 252,304 194,819
------------------------
Expenses:
Employee compensation 152,486 115,316
Communication and
information processing 9,785 7,861
Occupancy and equipment 7,518 6,184
Clearance and floor brokerage 3,030 2,403
Interest 29,419 23,479
Business development 6,579 4,715
Other 6,601 6,863
------------------------
Total expenses 215,418 166,821
------------------------
Income before provision for
income taxes 36,886 27,998
Provision for income taxes 14,141 10,830
------------------------
Net income $ 22,745 $ 17,168
------------------------
Net income per share-basic $ .71 $ .55 **
------------------------
Net income per share-diluted .70 $ .54 **
------------------------
Cash dividends declared per
common share $ .09 $ .073
------------------------
Average common shares
outstanding-basic 31,832 31,396 **
------------------------
Average common shares
outstanding-diluted 32,669 31,898 **
------------------------
** Restated in accordance with FAS 128.
See Notes to Consolidated Financial Statements.
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(in thousands)
Three Months Ended
December 26, December 27,
1997 1996
---------------------------
Cash flows from operating activities:
Net income $ 22,745 $ 17,168
Adjustments to reconcile net income to net cash --------------------------
provided by operating activities:
Depreciation and amortization 3,596 2,903
(Increase) decrease in assets:
Investments 1,183 (19,326)
Receivables:
Clients, net (87,613) (21,046)
Stock borrowed (13,926) (209,349)
Brokers, dealers and clearing organizations (52,002) (20,536)
Other (6,463) 2,784
Trading and investment account securities, net (59,796) 2,844
Deferred income taxes (3,386) 1,095
Prepaid expenses and other assets (6,951) (2,497)
Increase (decrease) in liabilities:
Payables:
Clients 126,252 130,888
Stock loaned 25,336 196,836
Brokers, dealers and clearing organizations 9,244 (27,588)
Trade and other 4,315 4,654
Accrued compensation and commissions (27,839) (18,731)
Income taxes payable 2,062 3,345
-------------------------
Total adjustments (85,988) 26,276
-------------------------
Net cash provided by (used by) operating activities (63,243) 43,444
-------------------------
Cash flows from investing activities:
Additions to property and equipment, net (16,036) (6,894)
-------------------------
Cash flows from financing activities:
Borrowings from banks 20,000
Repayments on notes (14,215) (2,493)
Exercise of stock options and employee stock options1,710 1,554
Cash dividends on common stock (2,869) (2,305)
Unrealized gain on securities available for sale, net 31 482
-------------------------
Net cash provided by (used by) financing activities 4,657 (2,762)
-------------------------
Net increase (decrease) in cash and cash equivalents(74,622) 33,788
Cash and cash equivalents at beginning of period 888,780 735,270
-------------------------
Cash and cash equivalents at end of period $814,158 $769,058
=========================
Supplemental disclosures of cash flow information:
Cash paid for interest $ 29,410 $ 19,592
=========================
Cash paid for taxes $ 15,465 $ 6,390
=========================
See Notes to Consolidated Financial Statements.
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
December 26, 1997
Basis of Consolidation
The consolidated financial statements include the accounts of Raymond
James Financial, Inc. and its consolidated subsidiaries (the "Company").
All material intercompany balances and transactions have been eliminated in
consolidation. These statements reflect all adjustments which are, in the
opinion of management, necessary for a fair presentation of the results for
the interim periods presented. All such adjustments made are of a normal,
recurring nature. The nature of the Company's business is such that the
results of any interim period are not necessarily indicative of results for
a full year. Certain amounts from prior years have been reclassified for
consistency with current year presentation. These reclassifications were
not material to the consolidated financial statements.
Commitments and Contingencies
The Company has committed to lend to, or guarantee other debt for,
Raymond James Tax Credit Funds, Inc. ("RJTCF") up to $15 million upon
request. RJTCF, a wholly-owned subsidiary of the Company, is a sponsor of
limited partnerships qualifying for low income housing tax credits. The
borrowings are secured by properties under development. The commitment
expires on November 30, 1998, at which time any outstanding balances will
be due and payable. At December 26, 1997, there were loans of $2,540,755
outstanding and guarantees of $2,241,470 outstanding.
The Company is a defendant or co-defendant in various lawsuits
incidental to its securities business. The Company is contesting the
allegations 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 financial position or
results of operations.
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. As of December 26, 1997, management has Board
authorization to purchase up to 1,047,500 shares at its discretion.
At their meeting on November 18, 1997, the Company's Board of
Directors declared a quarterly cash dividend of $.09 per share, payable
January 6, 1998 to shareholders of record December 17, 1997.
Also, at their November 18, 1997 meeting, the Company's Board of
Directors approved an increase in authorized shares of common stock from 50
million to 100 million shares. This proposal has been included in the proxy
statement for shareholder approval at the February 12, 1998 shareholders'
meeting.
Net Capital Requirements
The broker-dealer subsidiaries of the Company are subject to the
requirements of Rule 15c3-1 under the Securities Exchange Act of 1934.
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. The New York Stock Exchange may require a member
organization to reduce its business if its net capital is less 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. The net capital positions
of the Company's broker-dealer subsidiaries at December 26, 1997 were as
follows (dollar amounts in thousands):
Raymond James & Associates, Inc.:
(alternative method elected)
Net capital as a percent of aggregate debit items 18%
Net capital $146,626
Required net capital $16,398
Investment Management & Research, Inc.:
Ratio of aggregate indebtedness to net capital .75
Net capital $9,172
Required net capital $458
Robert Thomas Securities, Inc.:
Ratio of aggregate indebtedness to net capital 1.57
Net capital $3,381
Required net capital $400
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
(Any statements containing forward looking information should be read in
conjunction with Management's Discussion and Analysis of Results of
Operations and Financial Condition in the Company's Annual Report on Form
10-K for the year ended September 26, 1997.)
Results of Operations - Three months ended December 26, 1997 compared with
three months ended December 27, 1996.
Total revenues increased 30% to $252,304,000, the Company's second
highest quarter ever. Net income increased 33% to $22,745,000, setting a
record for first fiscal quarter profitability.
The 28% increase in securities commission and fee revenues is a
combined result of continued strong transaction volume and a sizable
increase in assets held within wrap fee accounts. While recruiting efforts
have been successful, leading to a 13% increase in the number of Financial
Advisors as compared to a year ago, the increased productivity of existing
Financial Advisors has been at least as great a contributing factor.
Investment banking revenues increased 75% over the prior year quarter,
reflecting an increase in the number of our "lead managed" offerings. The
lead manager generally receives a greater portion of the securities to
distribute, resulting in higher sales credits, which are a significant
component of the investment banking revenue line item. Merger and
acquisition fees were also higher in the current year quarter.
Despite the inclusion of $2.6 million in fee income in the prior
year's quarter from Liberty Investment Management, investment advisory fees
still managed a 15% increase. Strong investment performance by our
portfolio managers over the past year has resulted in significant asset
appreciation and record amounts of retail dollars raised.
December 26, December 27,
1997 1996 % Increase
---------------------------------------
Assets Under Management (000's):
Eagle Asset Mgmt., Inc. $4,137,186 $2,547,377 62%
Heritage Family of Mutual Funds 3,310,468 2,553,579 30%
Investment Advisory Services 1,425,051 1,057,806 35%
Awad and Assoc. Asset Mgmt. 817,721 514,387 59%
Carillon Asset Mgmt. 62,868 45,287 39%
Total Financial Assets Under ---------------------------------------
Management $9,753,294 $6,718,436 45%
=======================================
Tangible Assets Under Mgmt. $2,132,790 $1,817,657 17%
=======================================
Net interest income of $16.8 million was the fourteenth consecutive
quarterly record as client cash deposits and margin loan balances continued
their growth. In January 1998, combined client cash balances in our money
market funds, Client Interest Program and Raymond James Bank surpassed $4
billion.
The decline in principal trading profits is primarily the result of
changes in OTC equity order handling regulations, which have substantially
limited the ability to earn gross trading profits from this activity.
Financial service fees continued their rise as transaction-charge
accounts maintained their rapid growth rate and our customer account base
continued to increase, generating various service fees.
Support costs, including administrative and clerical compensation,
occupancy and equipment, communications and information processing and
business development, have continued to increase as general business volume
has increased and the Company builds the infrastructure to support future
growth.
Increased communications expense is related to a greater number of
Financial Advisors, branch offices and client accounts, all of which result
in increases in telephone, postage, printing and quote services. Increased
information processing costs are primarily related to software expenditures
and amortization, and computer maintenance and system enhancements
Occupancy and equipment increases are largely attributable to
depreciation of new computer equipment. In addition, with the opening of
new Raymond James & Associates offices and expansion of other locations,
including certain home office departments, rent expense has increased. To
accommodate future growth, the Company is nearing completion of its third
headquarters building, which is scheduled for occupancy in April 1998.
Accordingly, this facility will be a factor in future periods' occupancy
costs.
Business development costs include increased travel, lodging and sales
meetings expenses.
Financial Condition
The Company's total assets have increased to a record high since
fiscal year end. This growth is the combined result of increased inventory
balances and increased client cash balances, particularly in the Client
Interest Program and margin loans.
Liquidity and Capital Resources
Net cash used by operating activities for the three months was
$63,243,000. The primary use was increased inventory positions.
Investing and financing activities used $11,379,000 during the three
months, with the primary uses being the construction of the third
headquarters building, and the payment of cash dividends, net of increased
mortgage borrowing.
The Company has debt in the amount of $20,000,000 in the form of a
mortgage on its two current headquarters buildings. During the second
quarter of fiscal 1997, the Company commenced construction of a third
building at its headquarters complex. The 270,000 square foot tower,
including an adjacent parking garage, is scheduled for completion in March
1998. Although construction is currently being financed with internal
funds, the Company has committed to an additional borrowing of $20 million
to be executed on or before July 31, 1998, upon completion of the third
building.
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, Raymond James & Associates, Inc. has uncommitted
lines of credit aggregating $285 million.
The Company's broker-dealer subsidiaries are subject to requirements
of the Securities and Exchange Commission relating to liquidity and capital
standards (see Notes to Consolidated Financial Statements).
Effects of Inflation
The Company's assets are primarily liquid in nature and are not
significantly affected by inflation. Management believes that the changes
in 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.
EXHIBIT 11
RAYMOND JAMES FINANCIAL, INC.
COMPUTATION OF EARNINGS PER SHARE
(in thousands, except per share amounts)
Three Months Ended
December 26, December 27,
1997 1996
-------------------------
Net income $22,745 $17,168
=========================
Average number of common
shares outstanding during
the period 31,832 31,396
Additional shares assuming
exercise of stock
options (1) 837 502
-------------------------
Average number of
common shares used
to calculate diluted
earnings per share 32,669 31,898
==========================
Net income per share-basic $ .71 $ .55
==========================
Net income per share-diluted $ .70 $ .54
==========================
(1) 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.
SIGNATURES
Pursuant to the requirements 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.
RAYMOND JAMES FINANCIAL, INC.
(Registrant)
Date: February 5, 1998 ____/s/_ Thomas A. James ______
Thomas A. James
Chairman and Chief
Executive Officer
____/s/_ Jeffrey P. Julien ____
Jeffrey P. Julien
Vice President - Finance
and Chief Financial Officer
As Amended by the Board of
Directors on May 15, 1997
AMENDED AND RESTATED
BY-LAWS
OF
RAYMOND JAMES FINANCIAL, INC.
ARTICLE I
Offices
The Company shall maintain a principal office in the State of Florida, and
may also have offices in such other places either within or without the State
of Florida as the Board of Directors may from time to time designate or as the
business of the Company may require.
ARTICLE II
Seal
The seal of the Company shall be circular in form and shall have the name
of the Company on the circumference and the words "Corporate Seal Florida" in
the center.
ARTICLE III
Stockholders
Section 1. All meetings of the stockholders shall be held at the
principal office of the Company in the City of St. Petersburg, County of
Pinellas, State of Florida, or at such other place as shall be determined,
within or outside the State of Florida, from time to time, by the Board of
Directors, and the place at which such meeting shall be held shall be stated in
the notice of the meeting. A change in the place of meeting shall not be made
within sixty (60) days next before the day on which an election of directors is
to be held, and a notice of any change shall be sent to each stockholder at
least twenty (20) days before the election is to be held.
Section 2. The annual meeting of the stockholders of the Company
for the election of directors, and for the transaction of such other business
as may properly come before the meeting, shall be held each year on the date
and at the time set by the Board of Directors. If the annual meeting of the
stockholders be not held as herein prescribed, the election of directors may be
held at any meeting thereafter called pursuant to these By-laws.
At the annual meeting of the stockholders of the Company, only such
business shall be conducted as shall have been properly brought before the
meeting. To be properly brought before an annual meeting, business must either
be specified in the notice of meeting given by or at the direction of the
Board of Directors, otherwise brought before the meeting by or at the direction
of the Board of Directors, or otherwise properly brought before the meeting by
a stockholder. For business to be properly brought before an annual meeting by
a stockholder, the stockholder must have given timely notice thereof in writing
to the Secretary of the Company. To be timely, a stockholder's notice must be
received at the principal business office of the Company no later than the date
designated for receipt of stockholders' proposals in a prior public disclosure
made by the Company. If there has been no such prior public disclosure, then
to be timely, a stockholder's notice must be received at the principal business
office of the Company not less than sixty (60) days nor more than ninety (90)
days prior to the annual meeting of stockholders; provided, however, that in
the event that less than seventy (70) days' notice of the date of the meeting
is given to stockholders by notice or prior public disclosure, notice by the
stockholder, to be timely, must be received by the Company not later than the
close of business on the tenth day following the day on which the Company gave
notice or made a public disclosure of the date of the annual meeting of
stockholders. A stockholder's notice to the Secretary shall set forth as to
each matter the stockholder proposes to bring before the annual meeting: (a) a
brief description of the business or proposal desired to be brought before the
annual meeting and the reasons for conducting such business or making such
proposal at the annual meeting, (b) the name and address, as they appear on the
Company's records, of the stockholder proposing such business, (c) the class
and number of shares of the Company's stock which are beneficially owned by the
stockholder, (d) any material interest of the stockholder or any associate of
the stockholder in such business or proposal and (e) the same information
required by clauses (b), (c) and (d) above with respect to any other
stockholder that, to the knowledge of the stockholder proposing such business,
supports such proposal. Subject to the discretion vested in the chairman of
the meeting under Section 8 below, no business shall be conducted at an annual
meeting except in accordance with the procedures set forth in this Section 2.
The chairman of an annual meeting shall, if he so determines, declare to the
annual meeting that a matter of business was not properly brought before the
meeting in accordance with the provisions of this Section 2, and upon such
determination and declaration any such business not properly brought before the
meeting shall not be transacted.
Section 3. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute, may be called by the Chairman
of the Board of Directors, or, upon authorization by the Board of Directors, by
the President, or any Vice President and shall be called at any time by the
Chairman of the Board of Directors, the President, or any Vice President, or
the Secretary or the Treasurer, upon the request of stockholders owning twenty-
five per cent (25%) of the outstanding stock of the Company entitled to vote at
such meeting. Business transacted at all special meetings shall be confined to
the objects stated in the notice of meeting.
Section 4. Notice of the time and place of the annual meeting of
stockholders or any special meeting of stockholders shall be given by mailing
notice of the same at least ten (10) days and not more than sixty (60) days
prior to the meeting, with postage prepaid, to each stockholder of record of
the Company entitled to vote at such meeting at the address appearing on the
record books of the Company. The Board of Directors may fix in advance a date,
not exceeding seventy (70) days preceding the date of any meeting of
stockholders, as a record date for the determination of the stockholders
entitled to notice of and to vote at any such meeting.
Section 5. A quorum at any annual or special meeting of stockholders
shall consist of stockholders representing, either in person or by proxy, a
majority of the outstanding capital stock of the Company entitled to vote at
such meeting, except as otherwise specially provided by law or in the
Certificate of Incorporation.
Section 6. If a quorum be not present at a properly called
stockholders' meeting, the meeting may be adjourned by those present, and if a
notice of such adjourned meeting, sent to all stockholders entitled to vote
thereat, contains the time and place of holding such adjourned meeting and a
statement of the purpose of the meeting, that the previous meeting failed for
lack of a quorum, and that under the provisions of this section it is proposed
to hold the adjourned meeting with a quorum of those present, then, at such
adjourned meeting, except as may be otherwise required by law or provided in
the Certificate of Incorporation, any number of stockholders entitled to vote
thereat, represented in person or by proxy, shall constitute a quorum, and the
votes of a majority in interest of those present at such meeting shall be
sufficient to transact business.
Section 7. At all meetings of the stockholders every registered
owner of shares entitled to vote may vote in person or by proxy and shall have
one vote for each such share standing in his name on the books of the Company.
At all elections of directors the voting shall be by ballot. The Board of
Directors, or, if the Board shall not have made the appointment, the chairman
presiding at any meeting of stockholders, shall have power to appoint one or
more persons to act as inspectors or tellers to receive, canvass, and report
the votes cast by the stockholders at such meeting; but no candidate for the
office of director shall be appointed as inspector or teller at any meeting for
the election of directors.
Section 8. The Chairman of the Board or the President or, in their
absence, a Vice President shall preside at all meetings of the stockholders;
and, in the absence of the Chairman, the President and Vice President, the
Board of Directors may appoint any officer to act as chairman of the meeting.
The chairman of the meeting shall have broad discretion in determining the
order of business at a stockholders' meeting. The chairman's authority to
conduct the meeting shall include, but in no way be limited to, opening and
adjourning the meeting, recognizing stockholders entitled to speak, allowing
for and terminating questions by stockholders, calling for reports, stating
questions and putting them to a vote, calling for nominations, determining
whether any business or proposal is properly before the meeting and announcing
the results of voting. The chairman also shall take such actions as are
necessary and appropriate to preserve order at the meeting. The rules of
parliamentary procedure need not be observed in the conduct of stockholders'
meetings.
Section 9. The Secretary of the Company shall act as secretary of
all meetings of the stockholders; and, in his absence, the Chairman may appoint
any person to act as secretary of the meeting.
ARTICLE IV
Directors
Section 1. The management of all the affairs, property, and business
of the Company shall be vested in a Board of Directors, consisting of the
number of persons authorized under the Certificate of Incorporation, who shall
be elected at the annual meeting of the stockholders by a plurality vote, for a
term of one year, and shall hold office until their successors are elected and
qualify. In addition to the powers and authorities by these By-laws and the
Certificate of Incorporation expressly conferred upon it, the Board of
Directors may exercise all powers of the Company and do all lawful acts and
things which are not by statute or by the Certificate of Incorporation or by
these By-laws directed or required to be exercised or done by the stockholders.
Section 2. Subject to the Certificate of Incorporation, the number
of directors may at any time be increased or decreased by vote of a majority
of the Board of Directors at any regular or special meeting, if the notice of
such meeting contains a statement of the proposed increase or decrease. In
case of any such increase, the Board of Directors at any meeting shall have
power to elect such additional directors to hold office until the next annual
meeting of the stockholders, and until their successors are elected and
qualify.
Section 3. All vacancies in the Board of Directors, whether caused
by increase in number of directors, resignation, death, or otherwise, may be
filled by a majority of the remaining directors attending a meeting, even
though less than a quorum be present. A director thus elected to fill any
vacancy shall hold office for the unexpired term of his predecessor, and until
his successor is elected and qualifies.
Section 4. The Board of Directors may hold meetings and keep the
books of the Company outside the State of Florida.
Section 5. The annual meeting of the board of Directors, of which no
notice shall be necessary, shall be held immediately following the annual
meeting of the stockholders, or immediately following any adjournment thereof,
for the purpose of the organization of the Board and the election or
appointment of officers for the ensuing year and for the transaction of such
other business as may be brought before such meeting.
Section 6. Regular meetings of the Board of Directors may be held
without notice at the principal office of the Company or at such other place or
places, within or without the State of Florida, as the Board of Directors may
from time to time designate.
Section 7. Special meetings of the Board of Directors may be called
at any time by the Chairman of the Board of Directors, or the President, or, in
their absence, by any Vice President, or by any two directors, to be held at
the principal office of the Company, or at such other place or places, within
or without the State of Florida, as the directors may from time to time
designate.
Section 8. Notice of all special meetings of the Board of Directors
shall be given to each director by two (2) days' service of the same by
telecopier transmission, by mail, or personally.
Section 9. At meetings of the Board of Directors the Chairman of the
Board, or, in his absence, the President, or a designated Vice President shall
preside. A majority of the members of the Board of Directors shall constitute
a quorum for the transaction of business, but less than a quorum may adjourn
any meeting from time to time until a quorum shall be present, whereupon the
meeting may be held, as adjourned, without further notice. At any meeting at
which every director shall be present, even though without any notice, any
business may be transacted.
Section 10. The Board of directors may establish, from time to time,
a schedule of compensation for members of the Board of Directors, as well as a
fixed sum and expenses of attendance for attendance at each regular or special
meeting of the Board; provided that nothing herein contained shall be construed
to preclude any director from serving the Company in any other capacity and
receiving compensation therefor. Members of special or standing Committees may
be allowed compensation for attending Committee meetings. Unless otherwise
determined by the Board of Directors, directors who are employees of the
Company shall not receive any compensation for service on the Board of
Directors, but shall be reimbursed for expenses of attendance at meetings.
Section 11. No contract or other transaction between the Company and
one or more of its directors, or any other corporation, firm, association, or
entity in which one or more of its directors are directors or officers, or are
financially interested, shall be either void or voidable because of such
relationship or interest, because such director or directors are present at the
meeting of the Board of Directors or a Committee thereof which authorizes,
approves, or ratifies such contract or transaction, or because his or their
votes are counted for such purpose, if:
(a) The fact of such relationship or interest is disclosed or known
to the Board of Directors or Committee which authorizes, approves, or ratifies
the contract or transaction by a vote or consent sufficient for the purpose
without counting the votes or consents of such interested directors; or
(b) The fact of such relationship or interest is disclosed or known
to the shareholders entitled to vote and they authorize, approve, or ratify
such contract or transaction by vote or written consent; or
(c) The contract or transaction is fair and reasonable as to the
Company at the time it is authorized by the Board of Directors, a Committee or
the shareholders.
An interested director may be counted in determining the presence of a quorum
at a meeting of the Board of Directors or a Committee thereof which authorizes,
approves, or ratifies such contract or transaction.
Section 12. The Company shall:
(a) Indemnify any person made a party to an action by or in the
right of the Company to procure a judgment in its favor by reason of his being
or having been a director or officer of the Company, or of any other
corporation, firm, association or entity which he served as such at the request
of the Company, against the reasonable expenses, including attorneys' fees,
incurred by him in connection with the defense or settlement of such action, or
in connection with an
appeal therein, except in any case where such person is adjudged in a final
adjudication to have been guilty of conduct as to which, as a matter of law,
no such indemnification may be made;
(b) Indemnify any person made a party to an action, suit or
proceeding, other than one by or in the right of the Company to procure a
judgment in its favor, whether civil or criminal, brought to impose a liability
or penalty on such person for an act alleged to have been committed by such
person in his capacity of director or officer of the Company, or of any other
corporation, firm, association or entity which he served as such at the request
of the Company, against judgments, fines, amounts paid in settlement and
reasonable expenses, including attorneys' fees, incurred as a result of such
action, suit or proceeding, or any appeal therein, unless the Board of
Directors determines that such person did not act in good faith in the
reasonable belief that such action was in the best interests of the Company.
The termination of any such civil or criminal action, suit or proceeding by
judgment, settlement, conviction or upon a plea of nolo contendere shall not in
itself disqualify such person from indemnification except in any case where
such person is adjudged in a final adjudication to have been guilty of conduct
as to which, as a matter of law, no such indemnification may be made;
(c) Advance the payment of expenses, including attorneys' fees,
to any person entitled to indemnification hereunder during the pendency of any
claim, action or proceeding, unless otherwise determined by the Board of
Directors in any case.
The foregoing rights of reimbursement or indemnification shall not be exclusive
of other rights to which any such person may otherwise be entitled and, in the
event of his or her death, shall extend to his or her legal representatives.
(d) In any instance where more than one person is entitled to
reimbursement of attorneys' fees pursuant to this Section 12, the Company shall
select one attorney to serve as attorney for all such persons, unless, in the
opinion of the attorney selected by the Company, a conflict of interest exists
which would prevent representation by that attorney of one or more persons.
Notwithstanding the foregoing provision, any person may at any time decide to
be represented by an attorney of his choosing, at his own expense.
Section 13. Each officer, director, or member of any Committee
designated by the Board of Directors shall, in the performance of his or her
duties, be fully protected in relying on information, opinions, reports, or
statements, including financial statements and other financial data, if
prepared or presented by:
(a) one or more officers or employees of the Company whom he or
she reasonably believes to be reliable and competent in the matters presented;
(b) legal counsel, public accountants, or other persons, as to
matters he or she reasonably believes are within the persons' professional or
expert competence; or
(c) a Committee of the Board of Directors of which he or she is
not a member, if he or she reasonably believes the Committee merits confidence.
In discharging his or her duties, a director may consider such factors as
the director deems relevant, including the long-term prospects and interests of
the Company and its shareholders, and the social, economic, legal, or other
effects of any action on the employees, suppliers, customers of the Company or
its subsidiaries, the communities and society in which the Company or its
subsidiaries operate, and the economy of the state and the nation.
Section 14. No person shall be liable to the Company for any loss
or damage suffered by it on account of any action taken or omitted to be taken
by him or her as a director or officer of the Company, or of any other
corporation, firm, association, or entity in which he or she serves in any
position at the request of the Company, if such action was taken:
(a) In good faith;
(b) With the care an ordinarily prudent person in a like
position would exercise under similar circumstances; and
(c) In a manner he or she reasonably believes to be in the best
interests of the Company.
ARTICLE V
Committees
Section 1. The Board of Directors may appoint from among its members
an Executive Committee of not less than two nor more than nine members, one of
whom shall be the Chairman of the Board, and shall designate one of such
members as Chairman of the Executive Committee. The Board may also designate
one or more of its members as alternates to serve as a member or members of the
Executive Committee in the absence of a regular member or members. The Board
of Directors reserves to itself alone the power to declare dividends, issue
stock, recommend to stockholders any action requiring their approval, change
the membership of any committee at any time, fill vacancies therein, and
discharge any committee either with or without cause at any time. Subject to
the foregoing limitations, the Executive Committee shall possess and exercise
all other powers of the Board of Directors during the intervals between
meetings.
Section 2. The Board of Directors may also appoint from among its
own members such other committees as the Board may determine, including an
Audit Committee and a Compensation Committee, which shall in each case consist
of not less than two directors, and which shall have such powers and duties as
shall from time to time be prescribed by the Board.
Section 3. A majority of the members of any committee may fix its
rules of procedure. All actions by any committee shall be reported to the
Board of Directors at a meeting succeeding such action and shall be subject to
revision, alteration, and approval by the Board of Directors.
ARTICLE VI
Divisions
Section 1. The Board of Directors of the Company may appoint
individuals who may, but need not be directors, officers, or employees of the
Company, to serve as members of an Advisory Board of Directors of one or more
operating divisions of the company and may fix fees or compensation for
attendance at meetings of any such Advisory Boards. The members of any such
Advisory Board may adopt and from time to time may amend rules and regulations
for the conduct of their meetings and shall keep minutes which shall be
submitted to the Board of Directors of the Company. The term of office of any
member of the Advisory Board of Directors shall be at the pleasure of the Board
of Directors of the Company and shall expire the day of the annual meeting of
the stockholders of the Company. The function of any such Advisory Board of
Directors shall be to advise with respect to the affairs of the operating
divisions of the Company to which it is appointed.
Section 2. The Board of Directors of the Company, or the Chairman,
may from time to time confer on the employees of the company assigned to any
operating division of the Company, or discontinue, the title of President, Vice
President, and any other titles deemed appropriate. Any employee so designated
as an officer of an operating division shall have authorities,
responsibilities, and duties with respect to his operating division
corresponding to those normally vested in the comparable officer of the Company
by these By-laws, subject to such limitations as may be imposed by the Board of
Directors of the Company or the Chairman. The designation of any such title to
an employee of an operating division of the Company shall not be permitted to
conflict in any way with the executive or administrative authority of any
officer of the Company and shall not constitute authorization for such person
to act as an officer of the Company or to represent himself or herself as an
officer of the Company.
ARTICLE VII
Officers
Section 1. The Board of Directors shall elect from its own number a
Chairman of the Board and shall elect a President and such Vice Presidents (who
may or may not be directors, and who may be designated Executive or Senior Vice
Presidents) as in the opinion of the Board the business of the Company
requires, a Chief Financial Officer (who may also be a Vice President,
Treasurer and Controller of the Company), a Treasurer and a Secretary; and it
may elect or appoint from time to time such other or additional officers,
including a Vice Chairman, a Controller and a General Counsel, and one or more
Assistant Secretaries and Assistant Treasurers, as in its opinion are desirable
for the conduct of the business of the Company. In its discretion the Board of
Directors may leave unfilled any office except those of President, Chief
Financial Officer, Treasurer, and Secretary. Any individual may hold one or
more offices authorized under these By-laws.
Section 2. The Board of Directors may authorize the Company to enter
into employment contracts with any executive officer for periods longer than
one year, and any provision of the Certificate of Incorporation or By-laws for
annual election shall be without prejudice to the contract rights if any, of an
executive officer under such a contract. Subject to his rights under any such
employment contract, any officer or agent shall be subject to removal at any
time by the affirmative vote of a majority of the whole Board of Directors. An
officer, agent, or employee, other than officers appointed by the Board of
Directors, shall hold office at the discretion of the officer appointing him.
Section 3. The Chairman of the Board of Directors shall preside at
all meetings of the Board of Directors and stockholders and shall be the Chief
Executive Officer of the Company. He may appoint officers, agents, or
employees other than those appointed by the Board of Directors. He may sign,
execute, and deliver in the name of the Company powers of attorney, contracts,
bonds, and other obligations and shall perform such other duties as may be
prescribed from time to time by the Board of Directors or by the By-laws.
Section 4. The Vice Chairman shall have such powers and perform such
duties as may be assigned to him by the Board of Directors or the Chairman.
Section 5. The President shall exercise such duties as customarily
pertain to the office of President and, subject to the direction of the
Chairman and Chief Executive Officer, shall have general and active supervision
over the property, business, and affairs of the Company and over its several
officers. In the absence of the Chairman of the Board, he shall preside at all
meetings of the stockholders and at meetings of the Board of Directors.
Section 6. Each Vice President shall have such powers and perform
such duties as may be assigned by the Board of Directors, the Chairman, or the
corporate officer to whom the Vice President reports. In the absence or
disability of the President, the Board or the Chairman shall designate a Vice
President to perform the duties and exercise the powers of the President. A
Vice President may sign and execute contracts and other obligations pertaining
to the regular course of his duties.
Section 7. The Chief Financial Officer shall be responsible for the
financial reporting on a consolidated basis of the Company and its
subsidiaries. He or she shall perform such other duties as may be assigned by
the Board of Directors or the Chairman, including duties that may otherwise be
assigned to the Treasurer under these By-laws, and shall be responsible to the
Chairman for the performance of the duties of the office.
Section 8. The Controller shall be the chief accounting officer
of the Company, unless that responsibility is also being fulfilled by the Chief
Financial Officer. He or she shall perform such duties as shall be assigned by
the Chief Financial Officer.
Section 9. The Treasurer shall, subject to the direction of the
Chairman or the Chief Financial Officer, have general custody of all the funds
and securities of the Company and have general supervision of the collection
and disbursement of funds of the Company. He or she shall endorse on behalf of
the Company for collection checks, notes, and other obligations, and shall
deposit the same to the credit of the Company in such bank or banks or
depositories as the Board of Directors may designate, or shall designate others
to do so. He or she may sign, with the Chairman, the President, the Chief
Financial Officer, or such other person or persons as may be designated for the
purpose by the Board of Directors, all bills of exchange or promissory notes of
the Company. Unless such responsibilities are being fulfilled by the Chief
Financial Officer or the Controller, he or she shall enter or cause to be
entered regularly in the books of the Company full and accurate account of all
moneys received and paid on account of the Company; shall at all reasonable
times exhibit the books and accounts of the Company to any director of the
Company upon application at the office of the Company during business hours;
and, whenever required by the Board of Directors or the Chairman, shall render
a statement of accounts. He or she shall perform such other duties as may be
prescribed from time to time by the Board of Directors or by the By-laws. He
or she shall give bond for the faithful performance of these duties in such sum
and with such surety as shall be approved by the Board of Directors.
Any Assistant Treasurer shall have such authority to sign and endorse
checks, notes and other obligations of the Company, and open bank accounts, and
such other duties and responsibilities, as shall be authorized by the Treasurer
or the Chief Financial Officer.
Section 10. The Secretary shall keep the minutes of all meetings of
the stockholders and of the Board of Directors, and to the extent ordered by
the Board of Directors or the Chairman, the minutes of meetings of all
committees. He shall cause notice to be given of meetings of stockholders, of
the Board of Directors, and of any committee appointed by the Board. He shall
have custody of the corporate seal and general charge of the records,
documents, and papers of the Company not pertaining to the performance of the
duties vested in other officers, which shall at all reasonable times be open to
the examination of any director, and shall authenticate records of the Company
as required from time to time. He may sign or execute contracts with the
Chairman, the President, or a Vice President thereunto authorized, in the name
of the Company, and affix the seal of the Company thereto. He shall perform
such other duties as may be prescribed from time to time by the Board of
Directors or by the By-laws.
Any Assistant Secretary shall have the authority to perform the
duties of the Secretary and such other duties as may be assigned by the
Chairman or the Secretary.
Section 11. The General Counsel shall advise and represent the
Company generally in all legal matters and proceedings and shall act as counsel
to the Board of Directors and the Executive Committee. The General Counsel may
sign and execute pleadings, powers of attorney pertaining to legal matters, and
any other contracts and documents in the regular course of his duties.
Section 12. In addition to such bank accounts and brokerage accounts
as may be authorized in the usual manner by resolution of the Board of
Directors, the Treasurer or the Controller of the Company, with the approval of
any one of the Chairman, the President, or the Chief Financial Officer, may
authorize such bank accounts or brokerage accounts to be opened or maintained
in the name and on behalf of the Company as he or she may deem necessary or
appropriate. Payments from such bank accounts shall be made upon and according
to a check or draft which may be signed jointly or singly by either the manual
or facsimile signature or signatures of such officers or bonded employees of
the Company as shall be specified in the written instruction of the Chief
Financial Officer, the Treasurer, or the Controller of the Company. With
respect to any brokerage account established pursuant to this Section 12, any
of the Chairman, the Chief Financial Officer, the Treasurer, the Controller or
any other employee of the Company specified in written instructions by the
Chief Financial Officer or Treasurer of the Company shall be fully authorized
and empowered to purchase, sell, assign, transfer and deliver any and all
shares of stock, bonds, debentures, notes, evidences of indebtedness or other
securities owned by the Company or registered in the name of the Company, and
such persons shall be authorized to make, execute and deliver any and all
written instruments of assignment and transfer necessary or proper to give
effect to any transaction in such brokerage account.
Section 13. In case any office shall become vacant, the Board of
Directors shall have power to fill such vacancies. In case of the absence or
disability of any officer, the Board of Directors may delegate the powers or
duties of any officer to another officer or a director for the time being.
Section 14. Unless otherwise ordered by the Board of Directors, the
Chairman, the President, the Chief Financial Officer, the Secretary or any
officer thereunto duly authorized by the Chairman shall have full power and
authority on behalf of the Company to attend and to vote at any meeting of
stockholders of any corporation in which the Company may hold stock, and may
exercise on behalf of the Company any and all of the rights and powers incident
to the ownership of such stock at any such meeting, and shall have power and
authority to execute and deliver proxies and consents on behalf of the Company
in connection with the exercise by the Company of the rights and powers
incident to the ownership of such stock. The Board of Directors, from time to
time, may confer like powers upon any other person or persons.
Section 15. The salaries of officers, agents, and employees though
the same be directors and/or stockholders, shall be fixed by the Board of
Directors.
ARTICLE VIII
Capital Stock
Section 1. Certificates for stock of the company shall be in such
form as the Board of Directors may from time to time prescribe and shall be
signed by the Chairman of the Board or the President or a Vice President and by
the Secretary or an Assistant Secretary or the Treasurer or an assistant
Treasurer, manually or in facsimile. A stock certificate signed (manually or
in facsimile) by an officer of the Company shall be valid even though such
person no longer holds office when the certificate is issued.
Section 2. The Board of Directors shall have power to appoint one or
more Registrars and Transfer Agents for the registration and transfer of
certificates of stock of any class, and may require that stock certificates
shall be countersigned and registered by one or more of such Registrars and
Transfer Agents.
Section 3. Shares of capital stock of the Company shall be
transferable on the books of the Company only by the holder of record thereof
in person or by duly authorized attorney, upon surrender and cancellation of
certificates for a like number of shares.
Section 4. In case any certificate for shares of the capital stock
of the Company shall be lost, stolen, or destroyed, the Company may require
such proof of the fact and such indemnity to be given to it and to its Transfer
Agent and Registrar, if any, as shall be deemed necessary or advisable by it.
Section 5. The Company shall be entitled to treat the holder of
record of any share or shares of stock as the holder thereof in fact, and shall
not be bound to recognize any equitable or other claim to or interest in such
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise expressly provided by law.
Section 6. The Board of Directors may fix in advance a date, not
exceeding 70 days preceding the date of any meeting of stockholders, or the
date for the payment of any dividend, or the date when any change or conversion
or exchange of capital stock shall go into effect, as a record date for the
determination of the stockholders entitled to notice of and to vote at any such
meeting, or entitled to receive payment of any such dividends, or to exercise
the rights in respect to any such change, conversion, or exchange of capital
stock, and in such case only stockholders of record on the date so fixed shall
be entitled to such notice of and to vote at such meeting, or to receive
payment of such dividend, or allotment of rights, or exercise such rights, as
the case may be, and notwithstanding any transfer of any stock on the books of
the Company after any such record date fixed as herein provided.
ARTICLE IX
Miscellaneous; Dividends
Section 1. The Board of Directors shall have power to fix, and from
time to time change, the fiscal year of the company.
Section 2. Any notice required to be given under the provisions of
these By-laws or otherwise may be waived by the stockholder, director, or
officer to whom such notice is required to be given.
Section 3. The Board of Directors or any committee thereof, may take
any action contemplated under these By-laws by unanimous written consent in
lieu of meeting.
Section 4. Dividends may be declared by the Board of Directors and
paid to shareholders to the extent permitted by law, subject to any conditions
and limitations imposed by the Certificate of Incorporation of the Company.
ARTICLE X
The Board of Directors shall have power to add any provision to or to
amend or repeal any provision of these By-laws by the vote of a majority of all
of the directors at any regular or special meeting of the Board, provided that
a statement of the proposed action shall have been included in the notice or
waiver of notice of such meeting of the Board. The stockholders may amend or
repeal any provision of these By-laws by the vote of a majority of the stock at
any meeting, provided that a statement of the proposed action shall have been
included in the notice or waiver of notice of such meeting of stockholders.
<TABLE> <S> <C>
<ARTICLE> BD
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-25-1998
<PERIOD-END> DEC-26-1997
<CASH> 158,488,000
<RECEIVABLES> 910,179,000
<SECURITIES-RESALE> 655,670,000
<SECURITIES-BORROWED> 1,084,870,000
<INSTRUMENTS-OWNED> 469,805,000
<PP&E> 64,114,000
<TOTAL-ASSETS> 3,445,319,000
<SHORT-TERM> 0
<PAYABLES> 1,733,139,000
<REPOS-SOLD> 0
<SECURITIES-LOANED> 1,060,371,000
<INSTRUMENTS-SOLD> 52,498,000
<LONG-TERM> 20,000,000
0
0
<COMMON> 326,000
<OTHER-SE> 451,592,000
<TOTAL-LIABILITY-AND-EQUITY> 3,445,319,000
<TRADING-REVENUE> 1,874,000
<INTEREST-DIVIDENDS> 46,190,000
<COMMISSIONS> 143,054,000
<INVESTMENT-BANKING-REVENUES> 31,271,000
<FEE-REVENUE> 24,728,000
<INTEREST-EXPENSE> 29,419,000
<COMPENSATION> 152,486,000
<INCOME-PRETAX> 36,886,000
<INCOME-PRE-EXTRAORDINARY> 36,886,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22,745,000
<EPS-PRIMARY> .71
<EPS-DILUTED> .70
</TABLE>
