RAYMOND JAMES FINANCIAL, INC.
880 Carillon Parkway
St. Petersburg, Florida 33716
(727) 573-3800
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
February 8, 2001
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 8, 2001 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 approve an amendment to Article VII (A) of the Company's Articles
of Incorporation which will permit the Board of Directors to fix the size
of the Board of Directors.
4. To approve an amendment to Article IV of the Company's Articles of
Incorporation permitting the Board of Directors to issue shares of
preferred stock in series.
5. To transact any other business as may properly come before the
meeting.
Shareholders of record as of the close of business on December 13,
2000 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 13, 2000
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 8, 2001 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.
A copy of the Company's Annual Report is being furnished to each stockholder
together with this proxy statement. 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, 2000 will be
entitled to notice of, and to vote at, the Annual Meeting. At that date,
there were 46,886,453 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 13, 2000, 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 7,083,855 (2) 15.1%
St. Petersburg,
Florida 33716
All Executive Officers
and Directors as a Group 10,079,265 21.5%
(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 563,508 shares owned by the Robert A. and Helen James'
Children Annuity Trust of which Thomas A James is a remainder beneficiary
and for which Raymond James Trust Company West, 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 both of which Raymond James Trust Company West 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 2002 and until their respective successors shall
have been elected. All of the nominees were elected by the shareholders on
February 10, 2000, to serve as Directors of the Company until the Annual
Meeting of Shareholders in 2001. 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 47 President, Intel New Business Corp. 1997
since 2000; Director, Corporate
Business Development, supporting
Intel's New Business Group
in building its Internet participation
from 1998 to 1999; Independent Consultant,
working with a leading Internet Services
Provider from 1997 to 1998;
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: 3,625 (.008%)
Jonathan A. Bulkley 66 Bulkley Consulting LLC since 1999, 1986
Managing Director, Barents Group LLC
(emerging markets/capital markets
development consulting) from 1992 to 1999;
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: 43,795 (.093%)
Elaine L. Chao 47 Distinguished Fellow at The Heritage 1998
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. Director of Northwest
Airlines, Clorox Co., C.R. Bard, Inc.
(healthcare manufacturer) and
Columbia/HCA HealthCare Corp. Member of
Compensation and Governance Committee.
Common shares owned: 1,000 (.002%)
Thomas S. Franke 59 President and Chief Operating Officer 1991
of Raymond James & Associates, Inc.
("RJA")* since 1991; President and CEO
of Blunt Ellis & Loewi, Inc. (securities
broker-dealer) from 1986 to 1990.
Common shares owned: 183,135 (.391%)(2)
Francis S. Godbold 57 President of Raymond James Financial, 1977
Inc. ("RJF"); Director and Officer of
various affiliated entities. Executive
Vice President of RJA.
Common shares owned: 971,261 (2.072%)(2)
M. Anthony Greene 62 Chairman and Chief Executive Officer 1975
of Raymond James Financial
Services, Inc. ("RJFS")*;
Chairman, CEO and President of
Investment Management & Research,
Inc. ("IM&R")** from 1975 to 1998;
Executive Vice President of RJF.
Common shares owned: 595,833 (1.271%)(2)
Harvard H. Hill, Jr., CFP 64 Managing General Partner of Houston 1986
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: 6,600 (.014%)
Huntington A. James 32 Founder of Fun Holdings, LLC 1996
(technology in incubator) since 2000;
Vice President of Private Client
Group 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: 545,609 (1.164%) (2)(4)
Thomas A. James 58 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.
Common shares beneficially
owned: 7,083,855 (15.109%) (3)
Dr. Paul W. Marshall 58 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: 3,375 (.007%)
J. Stephen Putnam 57 President and Chief Operating Officer 1989
of Raymond James Financial Services, Inc.
("RJFS")*; President of Robert Thomas
Securities, Inc. ("RTS")** from 1989
to 1998; 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: 189,174 (.403%)(2)
Robert F. Shuck 63 Vice Chairman of RJF; Executive Vice 1970
President of RJA. Director and officer
of various affiliated entities.
Common shares owned: 635,361 (1.355%)(2)
Dennis W. Zank 46 Executive Vice President, Operations 1996
and Administration, RJA. Director
of several affiliated entities.
Director of Options Clearing Corporation
(industry clearing organization).
Common shares owned: 95,838 (.204%) (2)
* A wholly-owned subsidiary of Raymond James Financial, Inc.
** RTS and IM&R merged as of January 1, 1999 to become RJFS.
(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 including estimated fiscal 2000 ESOP alloctions, 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, including committee
meetings, and one telephone meeting during fiscal 2000. Each of the
directors attended all of the regular meetings held during the year except
Mr. Shuck, who missed one meeting.
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 29, 2000.
Each member of these committees attended, in person, all of the meetings
held during the year except Mr. Hill who missed one Compensation and
Governance Committee meeting. The activities of the Audit Committee are
set out in their report below. 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 $14,000
annual retainer, a $2,000 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 380,000 shares of the Company's common stock. These
options, 28,275 of which were outstanding at September 29, 2000, are
exercisable at prices ranging from $10.74 to $25.96 at various times
through February 2005. Outside directors are generally granted 1,500
options per year.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee of the Board of Directors consists of two
independent members of the Board; a third independent Director will be
added during 2001. The Committee conducts its activities pursuant to a
written charter approved by the Board of Directors (a copy of which is
annexed to this proxy statement - see appendix A). The Committee serves as
the principal agent of the Board of Directors in fulfilling the Board's
oversight responsibilities with respect to the Company's financial
reporting, the Company's systems of internal controls and the Company's
procedures for establishing compliance with regulatory requirements.
Management is responsible for the Company's financial statements and
the financial reporting process, including the Company's system of internal
controls. The Company's independent accountants are responsible for
performing an independent audit of the Company's consolidated financial
statements in accordance with generally accepted auditing standards and
issuing a report on the financial statements.
Members of the Committee have reviewed and discussed the consolidated
financial statements for fiscal 2000 contained in the Company's Annual
Report on Form 10-K with management and representatives of
PricewaterhouseCoopers, who reported on the consolidated financial
statements. In addition, the Committee discussed with the independent
accountants the matters required to be discussed by Statement on Auditing
Standards No. 61, Communication with Audit Committees, as amended. The
Committee also discussed with them their independence from the Company and
its management, including the matters in the written disclosures required
by Independence Standard Board Standard No. 1, Independence Discussions
with Audit Committees. The Charter describes other responsibilities and
duties undertaken by the Committee.
Based on the reviews and discussions referred to above, and in
reliance on the representations of management and the auditors' report of
the independent certified public accountants with respect to the financial
statements, the Committee recommended to the Board of Directors (and the
Board has approved) that the audited financial statements be included in
the Company's Annual Report on Form 10-K for the year ended September 29,
2000, for filing with the Securities and Exchange Commission.
Audit Committee November 28, 2000
Jonathan A. Bulkley, Chairman
Angela M. Biever
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 Dr. 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.
In doing so, individual performance, the compensation of executives of
similar firms and the Company's financial results are considered.
The Company's objectives are met through a compensation package which
includes four major components - base salary, annual bonus (including
restricted stock), stock option awards and retirement plans.
The cash and restricted stock 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. These bonuses are based on formulas with a subjective portion. 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. For fiscal 2000 the
Company began issuing restricted shares of Company stock in lieu of cash
for 10% to 20% of bonus amounts in excess of $250,000. These shares will
be issued at a 20% discount and will be restricted from sale for three
years, during which time the shares are forfeitable in the event of
voluntary termination.
The third component of the compensation package, incentive and non-
qualified stock option awards, is designed, along with the restricted
stock, 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, which are based on compensation
levels and years of service. 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 long term incentive
plan. Eligibility of executive officers 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. Contributions to this plan on behalf of executives officers
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 including a one-year holding period.
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. The loan,
plus interest, is intended to be paid back from the earnings of the
partnership. This partnership, Raymond James Employee Investment Funds I,
L.P., is invested in the merchant banking fund sponsored by the Company and
several unaffiliated 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 2001 will be $258,000, which represents
a 5% increase from the $245,000 received in 2000. Mr. James' salary is
subject to an annual review, as is true of all employees. It was last
adjusted in November 1999, effective January 1, 2000.
In determining the bonus offered to Mr. James for fiscal 2000 the
Committee considered many factors, including the following:
* 2000 was the sixteenth consecutive record year for the firm
in terms of revenues;
* 2000 net income was 47% above 1999;
* Book value per share increased to $14.05, an 18% increase
over the prior yearend;
* Return on average equity for the year was 21%; and
* The compensation of the chief executive officers of other
similar brokerage firms, as of their most recent proxy
statements.
_____________________________________________________
Compensation and Governance Committee
November 29, 2000
Dr. 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
2001, the Committee has approved the executive bonus formulas described
below.
MANAGEMENT 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 1.20%
Thomas S. Franke RJA retail division's pre-tax 3.10%
profits per Retail
Contribution Report*, pre-tax
profits of the RJA fixed
income department and Planning
Corporation of America, Inc.
M. Anthony Greene Pre-tax profits of RJFS 2.20%
per Retail Contribution
Report*
J. Stephen Putnam Pre-tax profits of RJFS 1.40%
per Retail Contribution
Report*
Correspondent clearing 2.50%
department's pre-tax profits
per Retail Contribution
Report*
Richard K. Riess Pre-tax profits of 4.25%
Eagle Asset Management, Inc.
Pre-tax profits of Heritage 3.00%
Asset Management, Inc.
RJA's Asset Management
Services division and Awad
Asset Management.
Jeffrey E. Trocin Pre-tax profits of RJA's 6.50%
Equity Capital Markets,
including international
institutional equity sales.
* The Retail Contribution Report adjusts financial statement pre-tax
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
----------------------------------- --------------------
Stock All Other
Fiscal Commis- Option Compen-
Name Year Salary Bonus (1) sions Awards(2) sation(3)
----------------------------------- --------------------
Thomas A. James 2000 $245,000 $2,200,000 $433,863 - $61,828
Chairman and CEO 1999 243,000 1,400,000 391,239 - $47,111
1998 234,250 1,550,000 343,203 - 55,019
M. Anthony Greene 2000 $249,250 $2,570,000 $ - 6,000 $62,258
Chairman of RJFS 1999 239,250 1,578,000 - - 47,600
Executive VP of RJF 1998 231,000 1,280,000 25 9,000 55,443
Richard K. Riess 2000 $177,500 $1,250,000 - 6,500 $62,000
President and
CEO of Eagle 1999 168,000 1,160,000 - - 47,390
Executive VP of RJF 1998 159,750 1,085,000 - 9,000 55,183
Managing Director,
Asset Management
J. Stephen Putnam 2000 $161,750 $1,706,000 $ 11,291 6,000 $61,250
President and
COO of RJFS 1999 153,750 1,070,000 7,141 - 47,390
Executive VP of RJF 1998 147,500 778,500 8,593 9,000 54,328
Sr. VP RJA,
Correspondent
Services
Thomas S. Franke 2000 $217,250 $1,177,000 $ 5,659 6,000 $61,744
President and
COO of RJA 1999 207,500 840,000 4,377 - 47,181
1998 200,500 908,000 5,192 9,000 54,922
(1) In accordance with the bonus formulas approved at the annual meetings
of the shareholders on February 10, 2000, January 28, 1999 and
February 12, 1998.
(2) Share amounts adjusted to reflect all stock splits.
(3) This column includes the amount of the Company's contributions to its
401(k) Plan, Profit Sharing Plan, Employee Stock Ownership Plan and
Deferred Management Bonus/Long Term Incentive Plan.
Incentive Stock Options
The following tables contain information concerning options granted
to, and exercised by, the executive officers included in the Summary
Compensation Table during the fiscal year.
Option Grants in Last Fiscal Year
---------------------------------
Potential Realizable
Value at Assumed
% of Total Annual Rates
Options Options Exercise of Stock Appreciation
Granted Granted in Price Expiration for Option Term (2)
Name (#)(1) Fiscal Year ($/share) Date 5% 10%
--------------------------------------------------------------------------------
M. Anthony Greene 6,000 .68% $20.625 1/18/2005 $34,190 $75,551
Richard K. Riess 6,500 .74% $20.625 1/18/2005 $37,039 $81,846
J. Stephen Putnam 6,000 .68% $20.625 1/18/2005 $34,190 $75,551
Thomas S. Franke 6,000 .68% $20.625 1/18/2005 $34,190 $75,551
--------------------------------------------------------------------------------
(1) All of these options were granted on November 18, 1999. 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.
Aggregate 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. 29, 2000 Sept. 29, 2000
Acquired Value (Exercisable/ (Exercisable/
Name on Exercise Realized Unexercisable) Unexercisable)
--------------------------------------------------------------------------------
M. Anthony Greene - - 29,250/30,750 $619,547/$497,203
Richard K. Riess - - 17,325/24,050 $372,155/$355,759
J. Stephen Putnam 16,875 $195,664 29,250/30,750 $619,547/$497,203
Thomas S. Franke - - 22,500/30,750 $463,594/$497,203
--------------------------------------------------------------------------------
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 ("S&P 500"), the
Financial Service Analytics stock price index ("FSA index") for regional
securities brokerage firms and for the securities industry over the same
period (assuming an investment of $100 in each on October 1, 1995 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 1995 1996 1997 1998 1999 2000
---- ---- ------- ------- ------- ------- -------
Raymond James Financial, Inc. $100 $113.45 $255.99 $226.11 $217.46 $364.77
Regional Securities Brokerage
Firms 100 119.26 259.18 222.90 269.03 426.99
Securities Industry 100 101.35 212.02 167.36 298.45 580.22
Standard & Poor's 500 100 120.31 168.96 184.24 235.46 266.82
Source: Financial Service Analytics
TRANSACTIONS WITH MANAGEMENT AND DIRECTORS
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. The fund has not yet closed, as a result there has not been a
capital draw.
During 1998 the Company launched a merchant banking fund, Raymond
James Capital Partners, L.P. Thomas A. James, Francis S. Godbold and Dr.
Paul W. Marshall have invested $2,000,000, $400,000 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
extended non-recourse loans to approximately 80 employees for investments
in the Raymond James Employee Investment Fund I, L.P. 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 $29,164 to $116,655 at
September 29, 2000.
In April 2000, at his request, the Company paid $200,000 to Dennis
Zank, director, as a prepayment on his fiscal year end September 29, 2000
bonus.
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: AMENDMENT TO ARTICLE VII (A) OF THE COMPANY'S ARTICLES OF
INCORPORATION TO ALLOW THE SIZE OF THE BOARD OF DIRECTORS TO BE
SET FROM TIME TO TIME BY THE BOARD OF DIRECTORS
At the present time, the Company's Articles of Incorporation provide for a
Board of Directors to consist of no fewer than three and no more than
thirteen persons. Under Florida Law, the Articles of Incorporation may
permit the Board of Directors to fix the size of the Board from time to
time.
Management has recommended, and the Board of Directors has agreed, that the
Company should have the ability to increase or decrease the size of the
Board of Directors from time to time, as the business of the Company may
require. Accordingly, management has proposed, and the Board of Directors
has approved, an amendment to Article VII (A) of the Articles of
Incorporation which would permit the Board of Directors to fix the size of
the Board of Directors. The text of the proposed amendment is set forth
below.
AMENDMENT: Article VII (A) of the Articles of Incorporation of the Company
shall be amended so that it shall read, in its entirety, as
follows:
(A) Number: The business of the corporation shall be managed by a Board
of Directors. The number of directors shall be fixed from time
to time by resolution of the Board of Directors. No decrease in
the number of directors shall have the effect of shortening the
term of any incumbent director.
If shareholders approve this amendment, it is contemplated that the size of
the Board will be increased to fifteen people immediately following the
annual meeting and that Kenneth A. Shields (appointment as a Board member is
a term of agreement to acquire Goepel McDermid Inc., anticipated to close
December 28, 2000) and Hardwick Simmons (appointment as a Board member is
subject to determination that no conflict will exist with Mr. Simmon's
recent appointment as the upcoming CEO of the NASDAQ Stock Market, Inc.,
effective February 2001) will be appointed by the Board as directors.
Information regarding Messrs. Shields and Simmons is set forth below.
Kenneth A. Shields 52 President and CEO of Goepel McDermid Inc.,
and predecessor Company since 1996
a Canadian Brokerage Firm.
Past Chairman of the Investment
Dealers Association of Canada.
Director of TimberWest Forest Corp.
Member of the Canadian Accounting
Standards Oversight Council.
Common shares owned: 000,000 (.000%)
Hardwick Simmons 60 Past President and CEO of Prudential
Securities Inc., and Prudential
Securities Group Inc. Member of
Prudential Securities Operating
Committee and Operating Council
and Prudential Securities Group Inc.
Board of Directors since 1991.
Prior to 1991 President of Private
Client Group at Shearson Lehman
Brother, Inc. Past Chairman of
the Securities Industry Association.
Former Director of the Chicago Board
Options Exchange. Director of the
New York City Partnership and
Chamber of Commerce, Inc.
Director of both the International
Tennis Hall of Fame and the National
Academy Foundation.
Common shares owned: 00,000 (.00%)
Approval of this amendment will require the affirmative vote of a
majority of the stockholders voting thereon. MANAGEMENT RECOMMENDS A VOTE
IN FAVOR OF THIS PROPOSAL.
PROPOSAL 4: AMENDMENT TO ARTICLE IV OF THE ARTICLES OF INCORPORATION OF
THE COMPANY TO PERMIT THE BOARD OF DIRECTORS TO ISSUE SHARES OF
PREFERRED STOCK IN SERIES
Under Article IV of the Company's Articles of Incorporation, the
Company has authority to issue up to ten million shares of Preferred Stock
with a par value of $0.10 per share. Under Florida Law, when so authorized
in the Articles of Incorporation, the Board of Directors can issue
Preferred Stock in series, from time to time. Each series of Preferred
Stock may provide for different preferences and rights, including
preferences with respect to liquidation and dividends, redemption
privileges and other rights which may be superior to the rights of the
holders of Common Stock ,and could, under some circumstances be dilutive of
the rights of the holders of common stock. The ability of the board to
issue series of preferred stock with special rights and privileges could be
employed as an anti-takeover device; this proposal is not being made by the
board as an anti-takeover measure, and the board has no present intention
of proposing anti-takeover measures.
Management believes that the Company should have the flexibility to
issue Preferred Stock when it would be advantageous for the Company to do
so, including acquisitions of other businesses or properties or raising
additional capital. Accordingly, management has proposed, and the Board of
Directors has approved, an amendment to Article IV of the Articles of
Incorporation which would provide this authorization. The text of the
proposed amendment is set forth below.
Management has no present plans to issue any series of Preferred
Stock.
AMENDMENT: Article IV of the Articles of Incorporation shall be amended by
renumbering the existing paragraph as Section (A) and adding
thereto a new Section (B) which shall read, in its entirety,
as follows:
(B) The Preferred Stock may be created and issued from time to time in
one or more series with such designations, preferences, limitations,
conversion rights, dividend rights, redemption provisions,
cumulative, relative, participating, optional or other rights,
including voting rights, qualifications, limitations or restrictions
thereof as determined by the Board of Directors of the corporation,
and set forth in the resolution or resolutions providing for the
creation and issuance of the stock in such series. Shares of one
class or series of the corporation's capital stock may be issued
through a stock dividend or stock split on shares of another class
or series of the corporation's capital stock. In addition to the
right to establish one or more such series of Preferred Stock,
the Board of Directors shall have full authority to increase or
decrease the number of shares of Preferred Stock designated for
any series.
Approval of this amendment will require the affirmative vote of a
majority of the stockholders voting thereon. MANAGEMENT RECOMMENDS A VOTE
IN FAVOR OF THIS PROPOSAL.
INDEPENDENT ACCOUNTANTS
Representatives of PricewaterhouseCoopers, LLC, independent accountants for
the Company for fiscal 2000, will be present at the annual meeting in order
to respond to questions from shareholders, and they will have the
opportunity to make a statement. The Company has not made a decision as to
the selection of independent accountants for fiscal 2001.
OTHER MATTERS
Proposals which shareholders intend to present at the 2001 Annual
Meeting of Shareholders must be received by the Company no later than
October 15, 2001 to be eligible for inclusion in the proxy material for
that meeting.
Reference is made to the Company's financial statements for the year
ended September 29, 2000 and related information contained therein, which
is incorporated herein by reference.
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
Appendix A
CHARTER OF THE AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS
Mission Statement
The Audit Committee serves as the principal agent of the Board of
Directors in fulfilling the Board's oversight responsibilities with respect
to the Company's financial reporting, the Company's systems of internal
controls and the Company's procedures for establishing compliance with
regulatory requirements.
Membership
The Audit Committee (the Committee) is composed solely of independent
directors who are financially literate, in the judgment of the Board of
Directors. At least one of the members of the Committee shall be a person
who, in the judgment of the Board of Directors, has accounting or financial
management expertise.
Meetings
Generally, the Audit Committee will hold formal meetings prior to each
meeting of the Board of Directors. Additional meetings may be held from
time to time as determined by the Chair of the Committee. In addition,
members of the Audit Committee are free to contact members of management,
the director of internal audit and the Company's independent accountants
whenever they consider appropriate.
Financial Reporting Oversight; Relationship with Company's Independent
Accountants
a. The Company's independent accountants are ultimately accountable
to the Board of Directors, as representative of the Company's shareholders.
The Audit Committee exercises the responsibility of the Board of Directors
in that oversight role.
b. The Audit Committee shall review management's recommendations
with respect to the selection or change of independent accountants; the
Audit Committee and the Board of Directors have the ultimate authority and
responsibility to select, evaluate and, where appropriate, replace the
independent accountants, or nominate them for approval of the shareholders,
as determined by the Board of Directors. In that connection, the Committee
may review the latest peer review report with respect to the independent
accountants and may inquire of them regarding any significant litigation
problems or any pending SEC investigation.
c. The Committee shall receive from the independent accountants, at
least annually, a written statement setting out all relationships between
them and the Company and the fees paid for those services. The Committee
shall review with the independent accountants any services that may affect
their independence or objectivity and recommend that the Board of Directors
take appropriate action with respect to any issues that may affect their
independence.
d. The Committee shall meet with the independent accountants on a
regular basis, as it determines appropriate. At least once a year, the
Committee shall meet with representatives of the independent accountants
without the presence of management representatives.
e. The Committee, or one of its members, shall meet with the
representatives of the independent accountants prior to commencement of the
annual audit in order to review the audit scope and approach, and any
specific areas of risk that the auditors propose to focus on.
f. Following conclusion of the year-end audit, but prior to release
of the financial statements, the Committee, or one of its members, shall
discuss with representatives of the independent accountants the financial
statements and the results of the audit, including any disagreements with
management regarding audit scope or accounting presentation.
g. At least annually, the Committee shall review with
representatives of the independent accountants their judgments concerning
the quality of the Company's accounting principles as reflected in its
financial reporting, whether those principles are consistent with industry
standards or represent minority positions, and the clarity of disclosure of
information. The Committee shall also review with the independent
accountants their views regarding any significant estimates made by
management which are reflected in the financial statements.
h. At least annually, the Committee shall receive from the
independent accountants a report of their recommendations to improve the
Company's internal control structure and operational efficiency. The
Committee shall obtain and review management's response to these
recommendations.
Oversight of the Internal Audit Department
a. The Committee shall have oversight responsibility with respect to
the Company's internal audit department. In that connection, the Committee
shall maintain regular contact with the director of internal audit and meet
with her/him at least once a year without the presence of management
representatives.
b. The Committee shall receive and review reports from the internal
audit department with respect to the results of audits undertaken and
management's response to recommendations from the department. The
Committee shall have the authority to direct the internal audit department
to undertake specific projects, including review of specific departments of
the Company.
c. The director of internal audit shall have access to the members
of the Audit Committee on a direct basis as necessary.
Oversight of the Broker-Dealer Compliance Departments
The Committee shall maintain regular contact with the compliance
directors of the broker-dealers. At least once a year, the compliance
directors shall meet with the Committee to report on activities undertaken
during the year, any regulatory problems encountered and regulatory issues
that may effect the Company in the future.
General
a. In exercising its oversight responsibility, the Committee shall
have access to members of management and may inquire into any issues that
it considers to be of material concern to the Committee or the Board of
Directors.
b. The Committee shall have authority to conduct or authorize
investigations into any matters within its scope of responsibilities and to
retain advisers, including counsel and other professionals, to assist in
the conduct of any investigation.
c. The Committee shall report regularly to the Board of Directors
with respect to its activities.
d. The Committee shall review this charter annually and make
changes as it considers appropriate.
