RAYMOND JAMES FINANCIAL, INC.
880 Carillon Parkway
St. Petersburg, Florida 33716
(727) 573-3800
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JANUARY 28, 1999
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, January 28, 1999 at 4:00 p.m. for the
following purposes:
1. To elect thirteen 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 appointment of PricewaterhouseCoopers LLP as independent
accountants of the Company for the fiscal year ending September 24, 1999;
4. To adopt the 1998 Employee Stock Purchase Plan, which authorizes the
issuance of 1,500,000 shares of Common Stock, $.01 par value, of the
Company for purchase by employees of the Company and its subsidiaries;
5. To transact any other business as may properly come before the
meeting.
Shareholders of record as of the close of business on December 10,
1998 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,
/s/ BARRY AUGENBRAUN
Barry Augenbraun, Secretary
December 10, 1998
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 January
28, 1999 at 4:00 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 or approval of any proposal or
other business that may properly come before the meeting.
The annual report of the Company for the year ended September 25, 1998 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 10, 1998 will be
entitled to notice of, and to vote at, the Annual Meeting. At that date,
there were 48,149,410 shares of common stock outstanding and entitled to
vote. Shareholders are entitled to one vote per share on all matters. All
references to number of shares in this proxy statement have been adjusted to
reflect all stock splits.
The following table sets forth, as of December 10, 1998, 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 Executive Officers and Directors as a group:
Beneficially Percent
Name Address Owned Shares (1) of Class
- --------------- ----------------------- ---------------- ---------
Thomas A. James 880 Carillon Parkway 7,077,385 (2) 14.70%
St. Petersburg,
Florida 33716
All Executive Officers
and Directors as a Group 10,391,910 21.58%
(17 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 563,508 shares owned by the James' Children Annuity Trust of
which Thomas A. James is a beneficiary and for which Sound Trust Company,
a wholly-owned subsidiary of the Company, serves as trustee. Excludes
shares held by two trusts, of which he is not a beneficiary: 3,362,680
shares owned by the Robert A. James Trust and 152,909 shares owned by the
James' Grandchildren's Trust, for which Sound Trust Company serves as
trustee, and both of which have as beneficiaries other James family
members, including Huntington A. James. Thomas A. James disclaims any
beneficial interest in these two trusts.
PROPOSAL 1: ELECTION OF DIRECTORS
Thirteen directors are to be elected to hold office until the Annual
Meeting of Shareholders in 2000 and until their respective successors shall
have been elected. Twelve of the nominees were elected by the shareholders
on February 12, 1998, to serve as Directors of the Company until the Annual
Meeting of Shareholders in 1999. Ms. Chao was appointed by the Board of
Directors in November 1998. 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, 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
- ------------------ ------- -------------------------------- --------
Angela M. Biever 45 Independent Consultant since 1997
1997; Various senior management
positions with First Data
Corporation, an information
and transaction processor from
1991 to 1997, beginning as Senior
Vice President, Finance and
Planning and culminating as
Executive Vice President,
Integrated Services Division;
Vice President, American
Express Company from 1987 to 1991.
Member of Audit Committee.
Common shares owned: 2,500 (.005%)
Jonathan A. Bulkley 64 Managing Director, Barents 1986
Group LLC (emerging markets
/capital markets development
consulting) since 1992; President
and CEO, Charterhouse Media
Group (investment banking) from 1988
to 1992; President and CEO
Jesup & Lamont Securities Group,
Inc. (securities broker-dealer)
from 1987 to 1988; Prior to 1986,
President and CEO of Moseley,
Hallgarten, Estabrook & Weeden
Inc. (securities broker-dealer).
Chairman of Audit Committee.
Common shares owned: 40,420 (.084%)
Elaine L. Chao 45 Distinguished Fellow at The 1998
Heritage Foundation since 1996;
President and CEO of United Way
of America 1992 to 1996; Director
of the Peace Corps 1991 to 1992;
Deputy Secretary of the U.S.
Department of Transportation
1989 to 1991; Chairman of the
Federal Maritime Commission 1986
to 1989; Vice President,
Syndications at BankAmerica
Capital Markets Group 1984 to
1986. Member of Compensation
and Governance Committee.
Common shares owned: 500 (.001%)
Thomas S. Franke 57 President and COO of Raymond 1991
James & Associates, Inc.
("RJA")* since January 1991;
President and CEO of Blunt
Ellis & Loewi, Inc. (securities
broker-dealer) from 1986 to 1990.
Common shares owned: 147,598 (.307%)
Francis S. Godbold 55 President of Raymond James 1977
Financial, Inc. ("RJF");
Director and Officer of
various affiliated entities.
Executive Vice President of RJA.
Common shares owned: 916,319 (1.903%)
M. Anthony Greene 60 Chairman, CEO and President of 1975
Investment Management & Research,
Inc. ("IM&R")*; Executive Vice
President of RJF.
Common shares owned: 596,445 (1.239%)
Harvard H. Hill, Jr., CFP 62 Managing General Partner of 1986
Houston Partners (venture capital)
since 1985; Prior to 1985,
President and CEO of Criterion
Investments; President and COO
of Rotan Mosle; and Vice
President of Dean Witter & Co.
Member of Compensation and Governance
Committee.
Common shares owned: 12,375 (.026%)
Huntington A. James 30 Vice President of Corporate Client 1996
Services since 1998; Syndicate
Associate, RJA 1994 to 1998; MBA
Darden School of Business, University
of Virginia, 1992 to 1994; Corporate
Finance Analyst, Smith Barney,
1990 to 1992. Son of Thomas A. James.
Common shares owned: 572,669 (1.19%) (4)
Thomas A. James 56 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 World of Science, Inc.
(retail).
Common shares beneficially
owned: 7,077,385 (14.70%)(3)
Paul W. Marshall 56 Professor of Management at Harvard 1993
Graduate School of Business
Administration since 1996;
Chairman and CEO of Rochester
Shoe Tree Co., Inc. from 1992
to 1997; Chairman of Industrial
Economics, Inc. from 1989 to 1992.
Director of Applied Extrusion
Technologies (manufacturer).
Chairman of Compensation
and Governance Committee.
Common shares owned: 20,250 (.042%)
J. Stephen Putnam 55 President of Robert Thomas Securi- 1989
ties, Inc. ("RTS")*; Executive Vice
President of RJF; Senior Vice
President of RJA, Correspondent
Services. 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: 181,465 (.377%)
Robert F. Shuck 61 Vice Chairman of RJF; Executive 1970
Vice President of RJA from 1975
to 1991.
Common shares owned: 647,074 (1.344%)
Dennis W. Zank 44 Executive Vice President, Operations 1996
and Administration, RJA. Director
of several affiliated entities.
Common shares owned: 97,008 (.201%)
* 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.
(4) Includes 420,335 shares owned by the Robert A. James Trust and 16,990
shares owned by the James' Grandchildren's Trust, representing the shares
to which Huntington A. James is a beneficiary.
The Board of Directors held four regular meetings during fiscal 1998.
Each of the directors attended, in person or by telephone, all of the
meetings held during the year, except Ms. Chao, who attended the only
meeting since her appointment.
The current standing committees of the Board of Directors are the
Audit Committee and the Compensation and Governance Committee. These two
committees met four times during the fiscal year ended September 25, 1998.
Each member of these committees attended, in person or by telephone, all of
the meetings held during each director's tenure this 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 and Governance
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.
Directors Marshall, Hill, Chao, Bulkley and Biever receive a $6,000
annual retainer, a $1,500 attendance fee for each regular meeting, $250 for
each telephone meeting and a $500 attendance fee for Committee Service.
Outside Director Stock Options
The Directors who are also employees of the Company have voted in
favor of a non-qualified stock option plan for the Company's outside
Directors covering 379,688 shares of the Company's common stock. These
options, 37,125 of which were outstanding at September 25, 1998, are
exercisable at prices ranging from $ 6.84 to $25.96 at various times
through August 2000.
Section 16(a) Beneficial Ownership Reporting Compliance
Robert Shuck, Vice Chairman and Director, was late in filing two Form
4 Reports with respect to the sale of call options (obligations to sell)
10,000 shares of common stock during February 1998 and the purchase of
1,000 shares of common stock in September 1998.
COMPENSATION AND GOVERNANCE COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Overview and Philosophy
The Compensation and Governance Committee (the "Committee") reviews
corporate compensation and benefit plan policies, as well as the structure
and amount of all compensation for executive officers of the Company. The
Committee consists exclusively of outside directors of the Company and is
chaired by Paul W. Marshall.
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 shareholders.
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 toward 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 non-
qualified stock option awards, is designed to provide a direct link between
the long-term interests of executives and shareholders. Options
are granted every two 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.
The fourth 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 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. Finally, certain key employees of
the Company participate in a limited partnership arrangement in which the
Company makes a non-recourse loan to these employees for two thirds of the
purchase price per unit of the Raymond James Employee Investment Fund I,
L.P. The loan plus interest is intended to be paid back from the earnings
of the fund. The fund is invested in the merchant banking activities of
the Company and other venture capital limited partnerships.
Compensation of the Chief Executive Officer
In keeping with the general compensation philosophy outlined above,
Mr. James' base salary for calendar 1999 will be $245,000, which represents
a 3.4% increase from the $237,000 received in 1998. Mr. James' salary is
subject to an annual review, as is true of all employees. It was last
adjusted in November 1997, to be effective January 1, 1998.
In determining the bonus offered to Mr. James for fiscal 1998 the
Committee considered many factors, including the following:
1998 was the fourteenth consecutive record year for the firm in
terms of revenues;
Record net income, increasing 16% over the prior year;*
Book value per share increased to $10.56, a 19% increase over
the prior yearend;
Return on average equity for the year was 19.8%; and
The compensation of the chief executive officers of other similar
brokerage firms, as of their most recent proxy statements.
* Excluding the gain from the sale of Liberty Investment
Management, Inc. in 1997.
Compensation and Governance Committee
November 19, 1998
Paul W. Marshall, Chairman
Harvard H. Hill, Jr.
Elaine L. Chao
PROPOSAL 2: TO RATIFY INCENTIVE COMPENSATION CRITERIA
FOR CERTAIN OF THE COMPANY'S EXECUTIVE OFFICERS
Several years ago, the Company adopted a policy of formalizing
incentive compensation calculations for executive officers. 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 Compensation and Governance 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 Committee considers the
bonus formulas for executive officers each year. For purposes of
determining incentive compensation for the executive officers for fiscal
1998, the Committee has approved the executive bonus formulas described
below and recommends a vote FOR the approval of these formulas by
shareholders.
Recommended Bonus Formulas for Executive Officers
Percent for Calculation
Executive Officer Basis of Maximum Bonus
- --------------------------------------------------------------------------
Thomas A. James Total company pre-tax profits 1.30%
Francis S. Godbold Subjective ----
Thomas S. Franke RJA retail division's pre-tax 4.30%
profits per Retail
Contribution Report*, pre-tax
profits of the RJA fixed
income department and Planning
Corporation of America, Inc.
M. Anthony Greene Combined pre-tax profits of 2.75%
IM&R and RTS per Retail
Contribution Report*
J. Stephen Putnam Combined pre-tax profits of 1.75%
IM&R and RTS per Retail
Contribution Report*
Correspondent clearing 2.50%
department's pre-tax profits
per Retail Contribution
Report*
Richard K. Riess Pre-tax profits of 6.50%
Eagle Asset Management, Inc.
Pre-tax profits of Heritage 3.00%
Asset Management, Inc.,
RJA's Asset Management
Services division and
AWAD Asset Management, Inc.
* 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
------------------------------------ ------------------
Annual Stock All Other
Fiscal Commis- Compen- Option Compen-
Name Year Salary Bonus (1) sions sation(2) Awards(5) sation(3)
- -------------- ------ -------- ---------- -------- --------- --------- ---------
Thomas A. James 1998 $234,250 $1,550,000 $343,203 - - $55,019
Chairman and CEO 1997 223,005 1,450,000 288,114 - - 62,173
1996 212,500 1,250,000 210,242 - - 58,389
Francis S.Godbold1998 207,500 300,000 39,452 $819,766 9,000 55,639
President of RJF,1997 193,250 700,000 25,142 143,400 33,750 62,788
Executive VP of 1996 173,000 2,066,252 23,630 163,443 11,250 58,271
RJA
M. Anthony Greene1998 231,000 1,280,000 25 - 9,000 55,443
President of IM&R1997 219,500 1,020,000 - - 33,750 62,586
Executive VP of 1996 209,500 1,000,000 462 - 11,250 58,093
RJF
Thomas S. Franke 1998 200,500 908,000 5,192 - 9,000 54,922
President & 1997 192,500 855,000 4,888 - 33,750 62,063
COO of RJA 1996 189,250 1,000,000(4) 4,524 - 11,250 56,897
Richard K. Riess 1998 159,750 1,085,000 - - 9,000 55,183
President and CEO1997 151,250 531,237 - - 16,875 62,873
of Eagle 1996 145,000 508,000 - - 9,000 46,493
Executive VP of
RJF, Managing
Director Asset
Management
(1) In accordance with the bonus formulas approved at the annual meetings
of the shareholders on February 12, 1998, February 13, 1997, and
February 15, 1996.
(2) 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.
(3) 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.
(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 $248,000 in consideration of his
efforts in the day-to-day management of certain Equity Capital Markets
departments of RJA and in introducing certain investment banking business
during fiscal 1996.
(5) Share amounts adjusted to reflect all stock splits.
Incentive Stock Options
The following tables contain information concerning options granted
to, and exercised by, the executive officers included in the Summary
Compensation Table during the fiscal year.
Option Grants in Last Fiscal Year
--------------------------------------------------------
Potential Realizable
% of Total Value at Assumed
Options Annual Rates of
Options Granted Exercise Expir- Stock Appreciation
Granted in Fiscal Price ration for Option Term(2)
------------------
Name (#) (1) Year ($/share) Date 5% 10%
------- ----- --------- ------- ------------------
Francis S. Godbold 9,000 1.08% $22.17 1/18/2003 $55,118 $121,797
M. Anthony Greene 9,000 1.08% $22.17 1/18/2003 $55,118 $121,797
Thomas S. Franke 9,000 1.08% $22.17 1/18/2003 $55,118 $121,797
Richard K. Riess 9,000 1.08% $22.17 1/18/2003 $55,118 $121,797
(1) All of these options were granted on November 18, 1997. 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 were 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. 25, 1998 Sept. 25, 1998
Acquired Value (Exercisable/ (Exercisable/
Name on Exercise Realized Unexercisable) Unexercisable)
- ------------------ ----------- -------- -------------- --------------
Francis S. Godbold 16,875 $338,047 0/54,000 $0/$369,376
M. Anthony Greene 16,875 $334,532 0/54,000 $0/$369,376
Thomas S. Franke 14,513 $252,028 0/54,000 $0/$369,376
Richard K. Riess 6,750 $135,219 0/34,875 $0/$219,422
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, the Financial
Service Analytics stock price index ("FSA index") for regional securities
brokerage firms and the securities industry over the same period (assuming
an investment of $100 in each on October 1, 1992 and the reinvestment of
all dividends). The FSA index for the regional securities brokerage firms
is comprised of 16 publicly traded regional securities firms, including the
Company. The FSA index for the securities industry is comprised of the 16
publicly traded regional firms and 13 publicly traded national securities
firms.
Name 1993 1994 1995 1996 1997 1998
---- ------ ------- ------- ------- -------
Raymond James Financial, Inc.$100 $84.25 $120.70 $136.93 $308.98 $272.92
Regional Securities Brokerage
Firms 100 84.40 120.09 146.61 330.46 298.46
Securities Industry 100 78.53 126.44 129.66 273.82 214.22
Standard & Poors 500 100 103.67 134.46 161.79 227.20 247.76
Source: Financial Service Analytics
TRANSACTIONS WITH MANAGEMENT & DIRECTORS
IM&R leased 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, through
March 31, 1998. Management believes the rental paid to Eagle Management
Associates, $33,000 in fiscal 1998, does not exceed that charged by
unaffiliated parties for similar space.
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"), a
subsidiary of the Company. Substantially all the assets of RJP were sold
during fiscal 1998. 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. There have been no capital draws to date.
During 1998 the Company launched a merchant banking fund, Raymond
James Capital Partners, L.P.. Thomas A. James, Francis S. Godbold and Paul
W. Marshall have invested $2,000,000, $250,000 and $100,000 in this fund,
respectively, on the same terms and conditions as other investors.
As described in the Report on Executive Compensation, the Company has
non-recourse loans on investments in the Raymond James Employee Investment
Fund. Thomas S. Franke, Francis S. Godbold, J. Stephen Putnam, Richard K.
Riess, Robert F. Shuck, Dennis W. Zank and Jeffrey P. Julien all have such
loans from the Company. Committed loan amounts range from $40,000 to
$160,000 plus interest per person, with outstanding balances ranging from
$4,225 to $16,900 at September 25, 1998.
The Company, in the ordinary course of its business, extends credit to
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: RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The firm of PricewaterhouseCoopers 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 PricewaterhouseCoopers 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 ratification of the
appointment of PricewaterhouseCoopers LLP as the Company's auditors for
1999.
PROPOSAL 4: ADOPTION OF 1998 EMPLOYEE STOCK PURCHASE PLAN
In 1994, the Company adopted the 1994 Employee Stock Purchase Plan,
covering 500,000 shares of common stock of the Company; substantially all
of the shares authorized under the Plan have been issued. Accordingly, on
November 19, 1998, the Company's Board of Directors adopted, subject to the
approval of shareholders, the 1998 Employee Stock Purchase Plan covering
1,500,000 shares of the Company's common stock. The Board of Directors
believes that the plan will provide an incentive to employees to remain in
their capacities with the Company and it will encourage them to promote the
best interests of the Company by giving them the opportunity to acquire or
enlarge their stock ownership in the Company.
The plan provides employees of the Company the right to purchase, on a
quarterly basis, shares of the Company's common stock at 85% of fair market
value. The number of shares that can be purchased in any calendar year by
any individual is limited to the lesser of: (1) 1,000 shares; (2) shares
with a fair market value of $25,000; or (3) shares with a fair market value
of 20% of the individual's annual compensation. Shares purchased through
the plan must be held by the employee for one year, after which time the
employee is free to dispose of the stock.
The plan is intended to qualify under Section 423 of the Internal
Revenue Code of 1986, as amended. Accordingly, no income will be recognized
by the employee at the time shares are purchased under the plan. Upon
disposition of the shares within two years, the difference between the
employee's purchase price and the fair market value of the shares at date
of purchase will be taxable to the employee as ordinary income. Any
increase or decrease in market value from the date of purchase to the date
of disposition will be a capital gain or loss to the employee.
The Company will derive no tax deduction from the sale of shares under
the plan as long as such shares are held by the employee for a period of
two years from the date of purchase. If shares are disposed of by the
employee prior to the expiration of such period, the Company will be
entitled to a tax deduction, as compensation expense, equal to the
difference between the employee's purchase price and the market value of
the shares on the date of purchase. Such deduction would be available to
the Company in the period of disposition by the employee.
The Board of Directors recommends a vote FOR the adoption of this
plan.
OTHER MATTERS
Proposals which shareholders intend to present at the 2000 annual
meeting of shareholders must be received by the Company no later than
October 1, 1999 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,
/s/ Barry Augenbraun, Secretary
