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JW CHARLES FINANCIAL SERVICES, INC.
980 NORTH FEDERAL HIGHWAY
SUITE 210
BOCA RATON, FLORIDA 33432
SUPPLEMENT TO
PROXY STATEMENT
DATED APRIL 30, 1996 FOR THE
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 11, 1996
To the Stockholders of
JW Charles Financial Services, Inc.:
This is a Supplement to the Proxy Statement previously mailed to
stockholders on or about April 30, 1996 in connection with the solicitation of
proxies by the Board of Directors of JW Charles Financial Services, Inc. (the
"Company") for use at the Annual Meeting of Stockholders of the Company to be
held on Tuesday, June 11, 1996 at 10:00 a.m. Eastern Time, at the Company's
Executive Offices, 980 North Federal Highway, Suite 310, Boca Raton, Florida
(the "Annual Meeting"). The purpose of this Supplement is to update the
stockholders about a proposed transaction that could affect the voting at the
Annual meeting, because it would reduce the number of shares outstanding and
entitled to be voted at the Annual Meeting by 1,915,849 shares or approximately
49%. The proposed transaction, which has been reported in the Company's recent
report on Form 10-Q for the quarter ended March 31, 1996, is described below.
AGREEMENT IN PRINCIPLE FOR ACCELERATED REPURCHASE
OF ALL SHARES OWNED BY GILMAN CMG, INC.
As recently reported, on May 15, 1996, the Company entered into an agreement
in principle (the "Agreement") with Gilman CMG, Inc. ("GCMG") for an accelerated
repurchase of all of the Company's shares of Common Stock owned by GCMG --
representing approximately 49% of the outstanding Common Stock that would be
entitled to be voted at the Annual Meeting -- which are currently subject to
that certain Stock Repurchase Agreement, dated May 15, 1995, between the Company
and certain affiliates of GCMG ("Gilman") described in the Proxy Statement under
"Certain Transactions". According to the terms proposed for the transaction, the
Company would repurchase all of the shares owned by GCMG at a closing expected
to occur prior to the Annual Meeting (the "Transaction"). If the Transaction is
consummated prior to the Annual Meeting as anticipated, the shares formerly
owned by GCMG would no longer be outstanding and would not be entitled to be
voted at the Annual Meeting. That result would not affect the rights of any
other stockholder to vote his or her shares of Common Stock at the Annual
Meeting, although it would change the number of shares required to constitute a
quorum at the Annual Meeting and the number of shares for approval of any action
taken at the Annual Meeting. These potential effects are described below with
respect to the matters to be voted on at the Annual Meeting, which otherwise
have not changed from the descriptions contained in the Notice of Annual Meeting
and the Proxy Statement previously disseminated.
The total consideration payable by the Company in the Transaction would
consist of a promissory note in the principal amount of $6,125,000 (the "Stock
Note") and the $1,155,000 in cash that has previously been paid to GCMG for the
1996 installment purchase of GCMG shares under the original stock repurchase
arrangement. The Company and GCMG are currently engaged in negotiations and
preparations of definitive documents with respect to the Transaction, and they
anticipate that such documents will be executed and the Transaction consummated
before the Annual Meeting.
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VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS
Giving effect to the consummation of the Transaction as proposed, the table
and accompanying notes under the heading "Voting Securities and Principal
Stockholders" appearing on Page 2 of the Proxy Statement would read as follows:
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED PERCENT OF CLASS
------------------------------------------------------------------------------ ----------------- -------------------
<S> <C> <C>
Marshall T. Leeds (1)(2)...................................................... 630,000 29%
Joel E. Marks (1)(3)(4)....................................................... 244,989 12%
Gregg S. Glaser (4)........................................................... 51,000 3%
William Dennis Ferguson (4)................................................... 35,000 2%
Stephen W. Cropper (5)........................................................ 0 *
John R. Faiella (5)........................................................... 0 *
Joseph P. Robilotto (5)....................................................... 0 *
Michael B. Weinberg (5)....................................................... 0 *
All directors and executive officers as a group
(8 persons) (2)(3)(4)........................................................ 960,989 43%
</TABLE>
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* Less than one percent (1%).
(1) In connection with the Transaction, Mr. Leeds and Mr. Marks would agree, for
so long as the Company is obligated to make payments to GCMG under the Stock
Note, to support for election as directors of the Company a number of
persons, constituting one-half of the Board of Directors, identified by
GCMG. See "Election of Directors," below.
(2) Includes 150,000 shares of Common Stock issuable upon exercise of currently
exercisable stock options.
(3) Includes 114,000 shares of Common Stock owned by Mr. Marks' wife and 80,000
shares of Common Stock owned by Mr. Marks as custodian for his minor
children.
(4) Includes 30,000 shares of Common Stock issuable upon exercise of currently
exercisable stock options held by each of Messrs. Marks, Glaser and
Ferguson.
(5) Messrs. Cropper, Faiella, Robilotto and Weinberg are the nominees identified
by GCMG.
ELECTION OF DIRECTORS
In connection with the Transaction, Mr. Leeds and Mr. Marks would agree, for
so long as the Company is obligated to make payments to GCMG under the Stock
Note, to support for election as directors of the Company a number of persons,
constituting one-half of the Board of Directors, identified by GCMG. The effect
of that agreement would not be different from the existing arrangements among
GCMG and Messrs. Leeds and Marks previously described in the Proxy Statement
under "ELECTION OF DIRECTORS -- Arrangements for Board and Management". With
respect to the election of directors at the Annual Meeting, GCMG previously
identified four of the eight current nominees listed in the Proxy Statement and
the accompanying proxy card, and there would be no change of any nominees as a
result of the Transaction.
GENERAL
The proposed Transaction, whether or not it is consummated before the Annual
Meeting, does not directly affect your vote of your shares of Common Stock. Your
vote and participation are still important to the Company. Accordingly, all
stockholders are urged to fill in, date and sign the form of proxy previously
delivered to them with the Notice of Annual Meeting and Proxy Statement and
return it to the Company as soon as possible if they have not already done so.
Of course, if any stockholder wishes to revoke a proxy previously given (whether
because of the proposed Transaction
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or otherwise), he or she is free to do so by notifying the Company in the manner
described in the Proxy Statement, by attending the Annual Meeting and voting in
person, or by giving a later date proxy to another person. The Company believes,
however, that the Transaction would be beneficial to it and to the remaining
stockholders.
NO PROXY CARD IS ENCLOSED WITH THIS SUPPLEMENT. PLEASE USE THE PROXY CARD
PREVIOUSLY DELIVERED WITH THE NOTICE OF ANNUAL MEETING TO CAST YOUR VOTE. IF YOU
HAVE MISLAID YOUR PROXY CARD, OR OTHERWISE DESIRE TO RECEIVE A NEW PROXY CARD
(OR ANOTHER COPY OF THE PROXY STATEMENT), PLEASE CONTACT THE COMPANY AS FOLLOWS:
JW Charles Financial Services, Inc.
980 North Federal Highway
Suite 310
Boca Raton, Florida 33432
Attn: Investors Relations Department
BY ORDER OF THE BOARD OF DIRECTORS
Joel E. Marks
SECRETARY
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