MORGAN KEEGAN, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 21, 1995
NOTICE IS HEREBY GIVEN that the 1995 Annual Meeting of the
Shareholders of Morgan Keegan, Inc. (the "Annual Meeting") will be held
at the offices of Morgan Keegan, Inc. (the "Company"), Twenty-First
Floor, Morgan Keegan Tower, 50 Front Street, Memphis, Tennessee 38103 on
Tuesday, November 21, 1995, at 10:00 a.m., local time, for the following
purpose:
1. To elect directors to serve for the ensuing year or until their
successors have been duly elected and qualified;
Only shareholders of the Company of record as of the close of business
on September 29, 1995, will be entitled to notice of, and to vote at,
the Annual Meeting and any adjournment thereof.
There is enclosed, as a part of this Notice, a Proxy Statement which
contains further information regarding the meeting and the above
proposal.
BY ORDER OF THE BOARD OF
DIRECTORS
JOSEPH C. WELLER
Secretary
October 16, 1995
IMPORTANT
Shareholders who do not expect to attend the meeting
are requested to complete, date, sign and return the
accompanying proxy in the enclosed envelope. Sharehold-
ers who attend the meeting may vote in person even if
they have already sent in a proxy.
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MORGAN KEEGAN, INC.
PROXY STATEMENT
GENERAL INFORMATION
THIS PROXY STATEMENT is provided in connection with the solicitation
of proxies by the Board of Directors of Morgan Keegan, Inc. (the
"Company") for use at the annual meeting of shareholders to be held on
November 21, 1995, (the "Annual Meeting") and any adjournment thereof.
The mailing address of the principal executive offices of the Company is
Morgan Keegan Tower, 50 Front Street, Memphis, Tennessee 38103. This
Proxy Statement and the Proxy Form, Notice of Meeting and the Company's
Annual Report, all enclosed herewith, are first being mailed to the
shareholders of the Company on or about October 24, 1995.
The Proxy
The solicitation of proxies is being made primarily by the use of
the mails. The cost of preparing and mailing this Proxy Statement and
accompanying material, and the cost of any supplementary solicitations,
which may be made by mail, telephone, telegraph, telecopier or
personally by officers and employees of the Company, will be borne by
the Company. The shareholder giving the proxy has the power to revoke
it by delivering written notice of such revocation to the Secretary of
the Company prior to the Annual Meeting or by attending the meeting and
voting in person. The proxy will be voted as specified by the
shareholder in the spaces provided on the Proxy Form, or, if no
specification is made, it will be voted in accordance with the terms
thereof.
Common Shares represented by properly executed proxies, unless
previously revoked, will be voted in accordance with the instructions on
such proxies. If no instruction is indicated on the proxy, the named
holders of the proxies will vote such common shares FOR all director
nominees named in this Proxy Statement. The named holders of proxies
also will use their discretion in voting the Common Shares in connection
with any other business that properly may come before the Annual
Meeting.
Voting Rights
On March 9, 1984, Morgan, Keegan & Company, Inc. (the "Brokerage
Company") became a subsidiary of the Company, a holding Company,
pursuant to a plan of reorganization (the "Reorganization") approved by
the shareholders of the Brokerage Company and the Company. Pursuant to
the Reorganization, the shareholders of the Brokerage Company received
shares of common stock of the Company, $.625 par value, on a share-for-
share basis in exchange for the common stock of the Brokerage Company.
Each outstanding share is entitled to one vote. Only shareholders
of record at the close of business on September 29, 1995 will be
entitled to notice of, and to vote at, the Annual Meeting and any
adjournment thereof. As of the close of business on September 29, 1995,
the Company had outstanding 20,168,703 shares of common stock $.625 par
value per share (the "Common Shares"). Of the total number of
outstanding Common Shares on September 29, 1995, the Directors and
Executive Officers of the Company, consisting of eight persons, owned
5,299,104 shares comprising 26.3% of the total.
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REQUIRED VOTE
Approval of each matter submitted to the Shareholders of the Company
for a vote at the Annual Meeting will require the affirmative vote of a
majority of the Common Shares voting at the Annual Meeting in person or
by proxy.
OWNERSHIP OF THE COMPANY'S COMMON SHARES
Security Ownership of Certain Beneficial Owners
The following table sets forth information as of September 29,
1995, regarding each person known to the Company to be the beneficial
owner of more than five percent of its Common Shares:
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE
OF BENEFICIAL OF BENEFICIAL PERCENT OF CLASS(1)
OWNER OWNERSHIP
<S> <C> <C>
Allen B. Morgan, Jr. 2,471,059(2) 12.3%
Morgan Keegan Tower
Fifty Front Street
Memphis, Tennessee 38103
Joseph C. Weller 1,077,453(3) 5.3%
Morgan Keegan Tower
Fifty Front Street
Memphis, Tennessee 38103
____________________________
<FN>
(1) Based on 20,168,703 Common Shares outstanding at September 29, 1995.
(2) Excludes 56,097 shares owned by Mr. Morgan's spouse over which
shares Mr. Morgan has no voting power or investment power and in which
Mr. Morgan disclaims any beneficial ownership. Includes 72,912 shares
held by Mr. Morgan as custodian or Trustee for his minor children over
which shares Mr. Morgan has sole voting power and investment power.
(3) Includes 45,000 shares owned by Mr. Weller's spouse.
</TABLE>
Security Ownership of Management
The following table sets forth the beneficial ownership of the
Company's Common Shares as of September 29, 1995 by (i) each director,
(ii) each director nominee, (iii) each executive officer named in the
Summary Compensation Table, and (iv) all directors, nominees and
Executive Officers as a group:
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<TABLE>
<CAPTION>
NAME OF AMOUNT AND NATURE
BENEFICIAL OWNER OF BENEFICIAL PERCENT OF CLASS
OWNERSHIP
<S> <C> <C>
Allen B. Morgan, Jr. 2,471,059(1) 12.3%
William W. Deupree, Jr. 763,824 3.8%
John W. Stokes, Jr. 740,074(2) 3.7%
Joseph C. Weller 1,077,453(3) 5.3%
Kenneth F. Clark, Jr. 50,500(4) *
Donald Ratajczak, Ph.D. 64,575(5) *
Peter S. Willmott 85,497(4) *
James E. Harwood, III 46,122(6)(7) *
All Director, Nominees and 5,299,104 26.3%
Executive Officers as a Group
(8 Persons)
_______________
<FN>
(1) Excludes 56,097 shares owned by Mr. Morgan's spouse over which
shares Mr. Morgan has no voting power or investment power and in
which Mr. Morgan disclaims any beneficial ownership. Includes
72,912 shares held by Mr. Morgan as custodian or Trustee for his
minor children over which shares Mr. Morgan has sole voting power
and investment power.
(2) Includes 22,500 shares owned of record by Mr. Stokes' spouse.
(3) Includes 45,000 shares owned of record by Mr. Weller's spouse.
(4) Includes option to purchase 40,500 shares pursuant to the Company's
1991 Directors Stock Option Plan which have not been exercised.
(5) Includes option to purchase 31,500 shares pursuant to the Company's
1991 Directors Stock Option Plan which have not been exercised.
(6) Includes 3,375 shares owned by the estate of Mr. Harwood's deceased
father, over which shares Mr. Harwood has sole voting power and
investment power as executor of said estate.
(7) Includes option to purchase 36,000 shares pursuant to the Company's
1991 Directors Stock Option Plan which have not been exercised.
* Represents less than one 1% of total outstanding Common Shares.
</TABLE>
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(Proposal No.1)
Election of Directors
Committees and Meetings of the Board of Directors
The business of the Company is under the general management of its
Board of Directors as provided by the Company's by-laws and the laws of
Tennessee, the Company's state of incorporation. The Board of Directors
meets quarterly during the Company's fiscal year. There are presently
eight directors.
The Board of Directors held four meetings during fiscal 1995, and all
directors attended all of the meetings.
The Company does not have a standing Nominating Committee or a
Compensation Committee of its Board of Directors. The Compensation
Committee of the Brokerage Company ("Compensation Committee") determines
the compensation for all of the employees, including officers of the
Company (see "Report of the Brokerage Company Compensation Committee").
The entire Board of Directors serves in the capacity of a Nominating
Committee. The Board of Directors will accept recommendations for
director nominations from shareholders, and shareholders wishing to
propose such nominees for consideration should write to Joseph C.
Weller, Secretary, at the principal executive office of the Company.
The Company has a standing Audit Committee of its Board of Directors
composed entirely of directors who are not officers or employees of the
Company or the Brokerage Company ("Independent Directors"). During
fiscal 1995, the Audit Committee consisted of Kenneth F. Clark, Jr.,
Donald Ratajczak, Peter S. Willmott (Chairman) and James E. Harwood,
III. The Audit Committee's function is to determine that the Company's
assets are properly accounted for and safeguarded and that adequate
operating, accounting and financial controls, consistent with Company
policy, regulatory requirements and accepted accounting practice are in
existence and adequately functioning. The Audit Committee also may make
recommendations to the Board of Directors concerning the engagement of
independent accountants to audit the books, records and accounts of the
Company and its subsidiaries. The Audit Committee met four times during
the past fiscal year.
Compensation of Directors
Directors who are employees of the Company or one of its subsidiaries
do not receive additional remuneration as directors. Independent
Directors receive an annual retainer of $6,000, fees of $1,500 for each
board meeting, and $500 for each committee meeting attended, and are
annually granted options to acquire up to 9,000 Common Shares pursuant
to the Company's 1991 Directors Stock Option Plan.
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Nominees for Directors
The Company's bylaws provide for the election of all directors on an
annual basis. The Board of Directors proposes to nominate the following
eight individuals, each of whom is currently a director of the Company,
for election to serve as directors of the Company for the ensuing fiscal
year.
ALLEN B. MORGAN, JR., 53, is the Chairman of the Board and Chief
Executive Officer of the Company, positions he has held since 1983. He
has also been Chairman of the Board, Chief Executive Officer, employee
and Director of the Brokerage Company since 1969. Mr. Morgan is
President and a Director of Morgan Keegan Southern Capital Fund and a
Director of Catherine's Stores, Inc. (member of Compensation Committee).
He has been a Director of the Company since 1983.
Committees: None
WILLIAM W. DEUPREE, JR., 54, is the President of the Company and the
President and Chief Operating Officer of the Brokerage Company,
positions he has held since 1985. He has also been an employee and
Director of the Brokerage Company since 1974, and is Chairman of Morgan
Trust Company. Mr. Deupree is a director of NSA International, Inc.
(member of Compensation Committee) and Equity Inns, Inc. He has been a
Director of the Company since 1983.
Committees: None
JOHN W. STOKES, JR., 58, is the Vice President of the Company, Vice
Chairman of the Brokerage Company and President of the Equity Capital
Markets Division of the Brokerage Company, positions he has held since
1983. He has been an employee and Director of the Brokerage Company
since 1970. Mr. Stokes is a director of O'Charley's, Inc. (member of
Compensation Committee) and RFS Hotel Investors, Inc. He has been a
Director of the Company since 1983.
Committees: None
JOSEPH C. WELLER, 56, is the Secretary, Treasurer and Chief Financial
Officer of the Company, positions he has held since 1983. He has also
been an Executive Vice President and the Treasurer and Chief Financial
Officer, employee and Director of the Brokerage Company since 1969. Mr.
Weller has been a Director of the Company since 1983.
Committees: None
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KENNETH F. CLARK, JR., 68, is a Counsel to the Memphis office of the
Louisville, Kentucky law firm of Wyatt, Tarrant & Combs, a position held
since October 1, 1995. From September 1, 1994 to October 1, 1995, Mr.
Clark was a Member in the Memphis law firm of McDonnell Dyer, P.L.C.
From July 1990 to September 1, 1994, Mr. Clark was a partner in the
Memphis law firm of McDonnell Boyd. He was a Partner in the law firm of
Boone, Wellford, Clark, Langschmidt & Apperson for more than 10 years
prior thereto. Mr. Clark has been a Director of the Company since 1984.
Committees: Audit
DONALD RATAJCZAK, Ph. D., 53, is the Director of the Economic
Forecasting Project at Georgia State University in Atlanta, is a
Director of Morrison Restaurants Inc. and a Trustee of AIM High Yield
Fund, positions he has held for several years. He has been a consulting
economist to the Company and other businesses for more than five years.
Dr. Ratajczak has been a Director of the Company since 1984.
Committees: Audit
PETER S. WILLMOTT, 58, is the Chairman and Chief Executive Officer of
Willmott Services, Inc., a retail and consulting firm, positions held
since June 1989. He was Chairman of Carson Pirie Scott & Company, a
retail merchandising, food service and lodging concern, from June 1984
until June 1989, and was President and Chief Executive Officer of same
from June 1983 to June 1989. He was President and Chief Operating
Officer of Federal Express Corporation from September 1980 to May 1983.
Mr. Willmott is a Director of Browning-Ferris Industries, Inc., Federal
Express Corporation, International Multifoods Corporation, MacFrugal's
Bargains & Close-Outs, Inc., Maytag Corporation and Zenith Electronics
Corporation. He has been a Director of the Company since 1991.
Committees: Audit (Chairman)
JAMES E. HARWOOD, III, 59, is President of Sterling Equities, Inc., a
business planning, capital and management services firm founded by him
in 1991. He was corporate vice-president of Schering Plough
Corporation, a pharmaceutical and health care products concern, from
1988 until 1990, and was the president of Scholl, Inc., a subsidiary of
Schering Plough Corporation from 1983 until 1987, and an employee
thereof from 1980 until 1987. He held various executive positions with
Conwood Corporation from 1960 until 1980. Mr. Harwood is a director for
Leader Financial Corporation and American Maize Products, Inc. He has
been a Director of the Company since 1991.
Committees: Audit <PAGE>
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Unless a shareholder specifies otherwise, it is intended that such
shareholder's shares will be voted FOR the election of the foregoing
nominees to serve as directors until the next annual meeting and until
their successors are elected and qualified. If any nominee shall become
unavailable or unwilling to serve the Company as a director for any
reason, the persons named in the Proxy Form are expected to consult with
the management of the Company in voting the shares represented by them.
The Board of Directors has no reason to doubt the availability of any of
the nominees, and each has indicated his willingness to serve as a
director of the Company if elected.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ADOPTION OF
PROPOSAL NO. 1
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Business Relationships Between Company and Nominees
Mr. Clark is counsel to the law firm of Wyatt, Tarrant & Combs. The
Company and the Brokerage Company have retained McDonnell Dyer, P.L.C.
(which was dissolved effective October 1, 1995, with several members
(including Mr. Clark) joining Wyatt, Tarrant & Combs on that date)
during the past fiscal year and propose to retain Wyatt, Tarrant & Combs
during the present fiscal year as special counsel on select matters.
The Brokerage Company has retained Dr. Ratajczak as a consulting
economist to provide consulting services to it and its customers. Dr.
Ratajczak was so retained during the past fiscal year, and the Brokerage
Company proposes to retain Dr. Ratajczak in such capacity during the
current fiscal year.
Certain Transactions with Management
During the period from August 1, 1994 through July 31, 1995, except
for indebtedness as margin account customers of the Brokerage Company,
no director or executive officer was indebted to the Company in excess
of $60,000. The indebtedness of directors and executive officers as
margin account customers was as a result of debit balances in margin
accounts. Such indebtedness was incurred in transactions which were in
the ordinary course of business, on substantially the same terms,
including interest rates and collateral, as those prevailing at the time
for comparable transactions with unaffiliated customers, and did not
involve more than the normal risk of collectibility or present other
unfavorable features.
EXECUTIVE COMPENSATION
The following table sets forth the compensation for services rendered
for each of the Company's last three fiscal years, of the Chief
Executive Officer and its other most highly compensated executive
officers whose total annual salary and bonus exceeded $100,000:
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<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
ALL(7)
NAME AND RESTRICTED OTHER
PRINCIPAL YEAR SALARY BONUS(1) OTHER STOCK OPTIONS LTIP COMPEN-
POSITION ($) ($) ($) AWARDS(2) /SARs PAYOUTS SATION
($) (#) (#) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Allen B. 1995 $130,000 $ 790,259 0 $45,152(3) 0 0 $1,574
Morgan, Jr., 1994 130,000 1,206,327 0 $48,581 0 0 1,549
CEO 1993 130,000 1,071,660 0 $41,463 0 0 1,523
William W. 1995 $110,000 $ 690,000 0 $29,700(4) 0 0 $1,574
Deupree, Jr., 1994 110,000 945,000 0 $37,700 0 0 1,599
President 1993 110,000 911,673 0 $26,439 0 0 1,523
John W. Stokes 1995 $110,000 $ 857,475 0 $46,307(5) 0 0 $1,574
Jr., Vice 1994 110,000 1,435,278 0 $49,478 0 0 1,549
President 1993 110,000 1,157,232 0 $40,888 0 0 1,523
Joseph C. 1995 $110,000 $ 690,000 0 $29,560(6) 0 0 $1,574
Weller, 1994 110,000 945,000 0 $38,688 0 0 1,549
Secretary 1993 110,000 911,660 0 $32,748 0 0 1,523
<FN>
(1) Includes commissions earned on brokerage business as registered sales
representatives of the Brokerage Company. See "Report of Brokerage Company
Compensation Committee."
(2) Excludes dividends paid in respect of restricted stock at the same rate as
paid in respect of all outstanding Common Shares.
(3) Mr. Morgan held 21,192 shares of restricted stock as of July 31, 1995. The
total value of those shares, determined based on the closing market price of the
Common Shares as of the date of each grant, is $163,215. Dividends will be paid
on the restricted stock granted during the 1995 fiscal year.
(4) Mr. Deupree held 14,106 shares of restricted stock as of July 31, 1995. The
total value of those shares, determined based on the closing market price of the
Common Shares as of the date of each grant, is $109,827. Dividends will be paid
on the restricted stock granted during the 1995 fiscal year.
(5) Mr. Stokes held 20,353 shares of restricted stock as of July 31, 1995. The
total value of those shares, determined based on the closing market price of the
Common Shares as of the date of each grant, is $158,264. Dividends will be paid
on the restricted stock granted during the 1995 fiscal year.
(6) Mr. Weller held 15,436 shares of restricted stock as of July 31, 1995. The
total value of those shares, determined based on the closing market price of the
Common Shares as of the date of each grant, is $119,287. Dividends will be paid
on the restricted stock granted during the 1995 fiscal year.
(7) The amounts listed in this column are the amounts of matching contributions
made by the Company to the Revised Profit Sharing and Retirement Savings Plan on
behalf of the Executive Officers.
</TABLE>
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SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Company has adopted a Supplemental Executive Retirement Plan ("SERP") for
the benefit of executive officers and key employees of the Company and its
subsidiaries. The SERP is an unfunded, non-qualified deferred compensation plan
which provides for the payment of supplemental retirement benefits to
participants upon normal retirement, disability retirement or death after
reaching age 55 and completing at least 20 years of employment with the
Company or its subsidiaries.
Benefits under the SERP will not be paid to or will cease with respect to (if
applicable) any participant whose employment terminates prior to the
participant's attaining age 55 or 20 years of service, if such termination is
for cause, for acts of willful malfeasance or gross negligence or for
violation of the non-competition provisions of the SERP. Benefits are
payable out of the general assets of the Company.
Participation in the SERP is determined by the Board of Directors of the
Company, and the SERP is administered by an ad hoc committee consisting
exclusively of Independent Directors. Current participants are Messrs. Morgan,
Deupree, Stokes and Weller. The benefit payable from the SERP is a monthly
benefit, payable for 120 months based on the participant's age at the date of
termination of his employment, as follows:
<TABLE>
<CAPTION>
ATTAINED AGE
UPON MONTHLY
TERMINATION BENEFITS
<S> <C> <C>
62 or older $8,333
61 $7,917
60 $7,500
59 $7,083
58 $6,667
57 $6,250
56 $5,833
55 or younger $5,417
</TABLE>
The estimated annual benefit to any participant who retires at the normal
retirement age of 65 is $100,000.
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REPORT OF THE BROKERAGE COMPANY
COMPENSATION COMMITTEE
Compensation of Officers and Employees, Generally
The Compensation Committee of the Brokerage Company determines the
compensation for all officers and employees of the Company and its
subsidiaries, including the Executive Officers. The Company does not
have a compensation committee. The following report is given by the
Brokerage Company's Compensation Committee.
The Brokerage Company strives to offer to officers and key employees
compensation packages that are not only competitive with packages
offered by other regional brokerage firms but that also encourage a high
level of individual productivity, with a view toward retaining the
highest quality personnel available. The Compensation Committee's
policy is to base a substantial portion of each Executive Officer's
annual compensation upon his individual productivity, the performance of
the Company and its subsidiaries and such officer's contribution to the
overall success of the Company during the fiscal year. Compensation of
Executive Officers consists of the following elements:
Base Salary. The base salaries of the Company's Executive Officers
have remained the same for the more than five fiscal years. The
Compensation Committee has researched the base salaries of executive
officers in other firms in the securities brokerage industry and
believes the Company's salary levels to be very comparable to other
regional brokerage firms.
Incentive Compensation. Incentive bonuses are routinely paid to those
persons making significant contributions to the profitability of the
Company and its subsidiaries. The Brokerage Company maintains several
bonus pools which are distributed among officers and employees by the
Compensation Committee, based upon such factors as gross commission
production, contribution to the net income of the Company, new client
development, contribution to Company management and long-range planning,
management of individual profit centers and demonstrated firm
leadership. Bonuses are distributed to a broad cross-section of
employees of the Company and its subsidiaries, with 487 employees having
received bonuses totaling approximately $22.6 million for the 1995
fiscal year (approximately 20% less than the aggregate bonuses for the
1994 fiscal year). Of such bonuses for the 1995 fiscal year,
approximately $3.0 million was paid to the Executive Officers which was
approximately 33% less than the total bonus compensation of the
Executive Officers for the 1994 fiscal year. The lower aggregate bonus
compensation to Executive Officers was in response to an approximately
25% decrease in the Company's earnings from fiscal 1994 to fiscal 1995.
Messrs. Morgan, Deupree and Stokes, in addition to performing
responsibilities as Executive Officers and senior management of the
Company, maintain day-to-day client relationships and, consequently,
conduct significant levels of brokerage business on behalf of clients of
the Brokerage Company. An element of their incentive compensation is
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their respective share of brokerage commissions from their selling
efforts, which for the fiscal year ended July 31, 1995 amounted to
approximately $1,000,000 or 43.5% of their approximately $2.3 million
total incentive compensation paid to those three Executive Officers.
Restricted Stock Awards. Pursuant to the Company's 1983, 1985 and
1994 Restricted Stock and Incentive Stock Option Plans, the Company
periodically awards shares of restricted stock to officers and key
employees of the Company and its subsidiaries. Restricted stock must be
returned to the Company if the recipient forfeits such shares by reason
of termination of employment within a fixed period established by the
Compensation Committee. After the expiration of any of any restriction
period, the recipient owns such shares free of restrictions. The number
of shares awarded to a particular recipient is subjectively determined
by the Compensation Committee, which considers gross revenue production,
contribution to the net income of the Company, new client development,
management contribution and demonstrated leadership, among other things,
in determining the number of shares to be granted to a particular
person.
The Company believes that restricted stock awards are a key element in
the overall compensation packages of officers and key employees because
such awards recognize productivity and profitability while at the same
time giving recipients a vested long-term interest in the success of the
Company through stock ownership. Consequently, the Company routinely
grants restricted stock to a broad cross-section of employees of the
Company's subsidiaries, with approximately 23% of such employees having
received awards during the 1995 fiscal year. Each Executive Officer
received an award of restricted stock in 1995, in the aggregate amount
of 18,269 shares, which constituted approximately 5.8% of all shares of
restricted stock granted.
Compensation of Chief Executive Officer
Mr. Morgan's base salary has remained at $130,000 per year for the
last five years, consistent with the Compensation Committee's and Board
of Directors' view that the Company should continue to place greater
emphasis on incentive and production-based compensation for Executive
Officers tied to the financial and strategic performance of the Company.
Other cash compensation paid to Mr. Morgan in 1995 consisted of
$790,259 of incentive compensation based on the overall performance of
the Company and his role in achieving such performance, of which
approximately 33% was attributable to Mr. Morgan's share of commissions
on brokerage business conducted by him. In addition to the foregoing,
Mr. Morgan was granted 5,473 shares of the Company's restricted stock
during 1995, which shares had a value at the time of grant of
approximately $45,152.
Mr. Morgan presided over a profitable year for the Company despite
difficult securities markets which produced losses or below average
profits at other brokerage firms. Lipper Analytical ranks Morgan Keegan
as one of the top 10 securities firms in pre-tax operating margin,
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return on average equity and per-tax return on average assets. From
December 1990 until August 1995, shares of Morgan Keegan common stock
have appreciated in value 759%, more than triple the group average for
investment firms. The Compensation Committee determined Mr. Morgan's
incentive bonus based primarily upon the foregoing factors and his
continued high level of personal productivity and commitment to the
success of the Company. However, Mr. Morgan's incentive compensation
for the 1995 fiscal year was approximately 39% less than for the 1994
fiscal year, compared to a decline in earnings of approximately 25% from
fiscal 1994 to fiscal 1995. The Compensation Committee believes Mr.
Morgan's compensation to be commensurate with the compensation paid to
the chief executive officers of corporations within the Company's peer
group.
Compensation Committee Independent Directors
Allen B. Morgan, Jr. Kenneth F. Clark, Jr.
William W. Deupree, Jr. James E. Harwood III
John W. Stokes, Jr. Donald Ratajczak
Joseph C. Weller Peter S. Willmott
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Company does not have a compensation committee, and the Compensation
Committee of the Brokerage Company makes all decisions regarding executive
compensation. The members of the compensation committee of the Brokerage
Company are Messrs. Morgan, Deupree, Stokes and Weller, all of whom are
Executive Officers and each of whom during the 1995 fiscal year participated
in deliberations regarding Executive Officers' compensation.
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PERFORMANCE GRAPH
The following graph compares the Company's cumulative total shareholder
return on its Common Shares for a five year period (August 1, 1990 to July
31, 1995) with the cumulative total return of the Standard & Poor's 500 Stock
Index and the Regional Sub-Index of the Lipper Analytical Brokerage Stock
Price Index ("Lipper Regional") over the same period (assuming the investment
of $100 in each on August 1, 1990, and the reinvestment of all dividends).
The Lipper Regional is comprised of 15 publicly held regional securities
firms.
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Morgan Keegan $100 $176 $350 $500 $526 $800
S&P 500 Stock Index $100 $113 $127 $138 $145 $183
Lipper Regional $100 $142 $203 $269 $263 $395
</TABLE>
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SHAREHOLDER PROPOSALS FOR 1995
Pursuant to the Securities Exchange Act of 1934, shareholder proposals
intended to be presented at the 1996 annual meeting of shareholders of the
Company must be received by the Company at its executive offices on or before
July 15, 1996.
RELATIONSHIPS WITH INDEPENDENT PUBLIC ACCOUNTS
Ernst & Young, LLP has served as auditors for the Company and its
subsidiaries for many years and will continue to so serve until and unless
changed by action of the Board of Directors. It has not been the practice of
the Company, and it is not required by its Charter or By-Laws, to submit the
Company's selection of auditors to the shareholders for ratification.
A partner of Ernst & Young, LLP is expected to be present at the annual
meeting with the opportunity to make a statement if he desires to do so and
is expected to be available to respond to appropriate questions.
OTHER MATTERS
The Board of Directors knows of no other business to be brought before the
meeting. If any other matters properly come before the meeting, the proxies
will be voted on such matters in accordance with the judgment of the persons
named as proxies therein, or their substitutes, present and acting at the
meeting.
INCORPORATION BY REFERENCE
The consolidated financial statements of the Company, included in the
Company's 1995 Annual Report which accompanies this Proxy Statement, are
hereby incorporated by reference into this Proxy Statement as if stated
verbatim herein.
BY ORDER OF THE BOARD OF DIRECTORS
JOSEPH C. WELLER
Secretary
October 16, 1995
