<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
JMC GROUP, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO of JMCG]
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 1, 1995
To the Stockholders of JMC Group, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders (the "Annual
Meeting") of JMC Group, Inc., a Delaware corporation (the "Company"), will be
held at the Sheraton Grande Torrey Pines, 10950 North Torrey Pines Road, La
Jolla, California 92037, on Monday, May 1, 1995 at 2:00 p.m., Pacific Time, for
the following purposes:
1. To elect three Directors of the Company to serve for three years or until
their successors shall be duly appointed or elected; and
2. To transact such other business as may properly come before the Annual
Meeting or any adjournment(s) or postponement(s) thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on March 6, 1995 will be
entitled to notice of, and to vote at, the Annual Meeting and at any
adjournment thereof.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, whether or not you plan to attend in person, to assure your
representation at the Annual Meeting, you are urged to mark, sign, date, and
return the enclosed Proxy as promptly as possible in the postage-prepaid
envelope provided for that purpose. Any stockholder attending the meeting may
vote in person even if such stockholder returned a completed Proxy.
Requests for additional copies of proxy materials and other information
should be addressed to Investor Relations at the executive offices of the
Company, 9710 Scranton Road, Suite 100, San Diego, California 92121.
By Order of the Board of Directors of
JMC Group, Inc.
/s/ ROSS D. HANSEN
Ross D. Hansen
Corporate Secretary
San Diego, California
March 27, 1995
----------------
<PAGE>
[LOGO of JMCG]
----------------
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 1, 1995
----------------
GENERAL
The enclosed Proxy is solicited by the Board of Directors on behalf of JMC
Group, Inc., a Delaware corporation (the "Company"), for use at the Annual
Meeting of Stockholders (the "Annual Meeting") to be held on May 1, 1995 at
2:00 p.m., Pacific Time, or at any adjournment(s) or postponement(s) thereof,
for the purposes set forth herein and in the accompanying Notice of Annual
Meeting of Stockholders. The Annual Meeting will be held at the Sheraton Grande
Torrey Pines, 10950 North Torrey Pines Road, La Jolla, California 92037.
The Company's principal executive offices are located at 9710 Scranton Road,
Suite 100, San Diego, California 92121, and the Company's telephone number is
(619) 450-0055. These proxy solicitation materials were first mailed on or
about March 27, 1995 to all stockholders entitled to vote at the Annual
Meeting.
INFORMATION CONCERNING VOTING, SOLICITATION AND PROXIES
RECORD DATE AND SHARES OUTSTANDING
Stockholders of record at the close of business on March 6, 1995 (the "Record
Date") are entitled to notice of, and to vote at, the Annual Meeting. On the
Record Date, the Company had issued and outstanding approximately 6,198,898
shares of common stock, $0.01 par value (the "Common Stock"), and no shares of
preferred stock.
VOTING AND SOLICITATION
Each stockholder is entitled to one vote for each share of Common Stock held
by him.
Shares of Common Stock represented by properly executed proxies will, unless
such proxies have been previously revoked, be voted in accordance with the
instructions indicated thereon. In the absence of specific instructions to the
contrary, properly executed proxies will be voted FOR the election of each
person nominated by the Board of Directors for election as a Director. The
effect of an abstention or a broker nonvote on a proposal is the same as that
of a vote against such proposal. No business other than that set forth in the
accompanying Notice of Annual Meeting of Stockholders is expected to come
before the Annual Meeting. Should any other matter requiring a vote of
stockholders properly arise, the persons named in the enclosed form of proxy
(the "Proxy Holders") will have discretionary authority to vote such proxy in
accordance with their best judgment on such matter.
Directors are elected by a plurality vote.
The cost of this proxy solicitation will be paid by the Company. The Company
will reimburse brokerage firms and other persons representing beneficial owners
of shares for their expenses in forwarding soliciting materials to such
beneficial owners. Proxies may be solicited by certain of the Company's
Directors, officers, and regular employees, without additional compensation,
personally or by telephone or telegram.
1
<PAGE>
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company a written
notice of revocation or a duly executed proxy bearing a later date or by
attending the Annual Meeting and voting in person. Attending the Annual Meeting
in and of itself will not constitute a revocation of a proxy.
DEADLINES FOR RECEIPT OF STOCKHOLDER NOMINATIONS, PROPOSALS AND PROPOSALS FOR
INCLUSION IN THE PROXY STATEMENT FOR THE 1996 ANNUAL MEETING
Section 2.5 of the Company's Bylaws provides that nominations may be made by
the Board of Directors or by any stockholder entitled to vote in the election
of Directors generally, provided that all stockholders intending to nominate
Director candidates for election must deliver written notice thereof to the
Secretary of the Company, which notice must be received not less than sixty nor
more than ninety days prior to the meeting or, if less than seventy days'
notice or prior public disclosure of the date of the meeting is given or made
to stockholders, within ten days after the date on which notice of such meeting
is first given to stockholders. Such notice must set forth certain information
concerning such stockholder and his or her nominee(s), including their names
and addresses, such other information as would be required to be in the proxy
statement soliciting proxies for the election of the nominees of such
stockholder and the consent of each nominee to serve as a Director of the
Company if so elected. The chairman of the Annual Meeting will refuse to
acknowledge the nomination of any person not made in compliance with the
foregoing procedure.
The Company's Bylaws also require that stockholders give advance notice and
follow certain other procedures with regard to business they wish to bring
before an annual meeting of stockholders. Section 2.6 of the Company's Bylaws
provides that all stockholders intending to bring business before the meeting
deliver written notice thereof to the Secretary of the Company in the same
manner and within the same periods as required for stockholder nominees for the
Board of Directors, as described in the preceding paragraph. Such notice shall
set forth certain information concerning such stockholder and the proposed
business, including any material interest of the stockholder in such business.
The chairman of the Annual Meeting will refuse to permit business to be brought
before the Annual Meeting if notice is not given in compliance with the
foregoing procedure.
The Company intends to hold its next Annual Meeting of Stockholders on or
about May 15, 1996. Stockholders seeking to include a proposal in the Proxy
Statement for the Company's 1996 Annual Meeting must ensure that such proposal
is received at the executive offices of the Company on or before November 21,
1995. Inclusion of any such proposal is subject to certain other requirements.
2
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth names and certain other information concerning
the Company's Directors and executive officers, as of March 4, 1995:
<TABLE>
<CAPTION>
TERM OF
OFFICE AS
DIRECTOR
NAME AGE POSITION EXPIRES
---- --- -------- ---------
<S> <C> <C> <C>
James K. Mitchell.............. 56 Chairman, Chief Executive 1995
Officer and Director
Brian J. Finneran.............. 51 President, Chief Operating Officer 1995
and Director
D. Mark Carlson................ 35 Senior Vice President, --
Chief Financial Officer
Ross D. Hansen................. 40 Senior Vice President, General --
Counsel and Corporate Secretary
G. Richard Sippel.............. 48 Senior Vice President, --
Chief Marketing Officer
William L. Webster............. 47 Senior Vice President, --
Chief Administrative Officer
Pamela R. Schneider............ 35 Vice President, Assistant General --
Counsel and Assistant Corporate
Secretary
Edward J. Baran................ 58 Director 1997
Barton Beek.................... 71 Director 1996
Charles H. Black............... 68 Director 1997
Robert A. Cervoni.............. 42 Director 1996
Herbert G. Kawahara............ 66 Director 1996
Herman A. Schaefer............. 73 Director 1995
Donald A. Weeden............... 64 Director 1997
Robert G. Sharp................ 59 Nominee --
</TABLE>
Information with respect to the principal occupation during the past five
years of each nominee, each current Director and each executive officer is set
forth below. There are no family relationships among Directors or executive
officers of the Company.
James K. Mitchell became a Director in October 1988 and became Chairman and
Chief Executive Officer of the Company on January 1, 1993. Mr. Mitchell is the
founder of the Company's principal subsidiary, James Mitchell & Co. In 1973,
Mr. Mitchell was a founding officer of Security First Group (now The Holden
Group), a financial services firm which pioneered the concept of marketing
insurance and annuity products through stock brokerage firms. Before joining
that firm, Mr. Mitchell served as Vice President of Marketing for the Variable
Annuity Life Insurance Company of Houston, Texas. He attended Portland State
University and is a registered Principal with the National Association of
Securities Dealers, Inc. (the "NASD").
Brian J. Finneran became President and Chief Operating Officer and a Director
of the Company on January 10, 1994. From May 1, 1993 to January 9, 1994, he
served as Executive Vice President of the Company, with responsibility for
sales and marketing. Mr. Finneran joined James Mitchell & Co. in 1984. Prior to
that time, Mr. Finneran was an officer of Security First Group. He also held
marketing and
3
<PAGE>
management positions with Allstate Insurance Company and Investors Diversified
Services (IDS). Mr. Finneran received undergraduate and graduate degrees from
Fairfield University and is a registered Principal with the NASD.
D. Mark Carlson became Senior Vice President of the Company on January 10,
1994. Mr. Carlson joined James Mitchell & Co. in 1990 as Assistant Vice
President--Accounting and became Chief Financial Officer of James Mitchell &
Co. in January 1991. He became Vice President and Chief Financial Officer of
the Company on May 1, 1993. Prior to joining James Mitchell & Co., Mr. Carlson
was an audit manager with Steres, Alpert & Carne, a San Diego-based accounting
firm, which he joined in 1988 after serving as an audit supervisor with the
accounting firm of Arthur Young & Company. Mr. Carlson is a graduate of
California Lutheran University, is a certified public accountant and is a
registered Financial and Operations Principal with the NASD.
Ross D. Hansen became Senior Vice President and General Counsel of the
Company on January 10, 1994. Mr. Hansen joined James Mitchell & Co. in January
1992 as a Vice President and Associate Counsel and became Vice President and
Corporate Secretary of the Company on May 1, 1993. Prior to joining James
Mitchell & Co., Mr. Hansen was Assistant General Counsel at First Capital Life
Insurance Company, which he joined in 1986. Mr. Hansen is a graduate of the
University of Utah and has a J.D. from the University of Utah College of Law.
He is admitted to practice law in Utah and is a registered Principal with the
NASD.
G. Richard Sippel became Senior Vice President and Chief Marketing Officer of
the Company effective January 10, 1994. Mr. Sippel joined James Mitchell & Co.
in June 1985 as a Divisional Vice President. Since that time he has held
various sales and marketing positions. Mr. Sippel graduated from the University
of Southern California and is a registered Principal with the NASD.
William L. Webster became Senior Vice President and Chief Administrative
Officer of the Company on January 10, 1994. Mr. Webster joined James Mitchell &
Co. in June 1993 as Vice President of Operations. Prior to that time, he was
Vice President of New Business Administration and Vice President of Information
Systems for The Holden Group. In such capacities, Mr. Webster was responsible
for the administration of the company's annuity sales business which consisted
of over 250,000 accounts representing approximately $4 billion in assets. Prior
to joining The Holden Group, Mr. Webster was an Administrative Services Manager
with Arthur Andersen & Co. Mr. Webster received his undergraduate degree from
Lehigh University.
Pamela R. Schneider became Vice President, Assistant General Counsel and
Assistant Corporate Secretary of the Company on January 10, 1994. Ms. Schneider
joined James Mitchell & Co. in November 1993 as Vice President and Assistant
General Counsel. From June 1991 to October 1993, Ms. Schneider was an Assistant
Vice President and Associate Counsel with San Diego Trust & Savings Bank. Prior
to that time, she was an associate attorney with the law firm of Latham &
Watkins. Ms. Schneider is a graduate of The University of Pennsylvania and The
University of Chicago Law School. She is admitted to practice law in
California, Illinois and the District of Columbia.
Edward J. Baran became a Director in August 1992. Mr. Baran, who has spent
more than thirty years in the insurance business, is currently Chairman and
Chief Executive Officer of BCS Financial Corporation, a financial services
holding company. Prior to joining BCS in November 1987, Mr. Baran was Vice
Chairman, President and Chief Executive Officer of Capitol Life Insurance
Company of Denver, Colorado. He is a graduate of Georgetown University and a
member of the Compensation Committee of the Board of Directors.
Barton Beek became a Director in January 1984. Mr. Beek is a senior partner
of O'Melveny & Myers, a law firm which he joined in 1955, with offices
worldwide. Mr. Beek is a graduate of the California Institute of Technology,
the Stanford University Graduate School of Business and Loyola College of Law.
Mr. Beek is a director of Wynns International, Inc. He is a member of the
Compensation Committee of the Board of Directors.
4
<PAGE>
Charles H. Black became a Director in June, 1993. Mr. Black is currently a
private investor, having most recently served as Vice Chairman of Pertron
Controls Corporation. From 1982 to 1985, Mr. Black served as Executive Vice
President, Director and Chief Financial Officer of Kaiser Steel Corporation. He
served as Executive Vice President and Chief Financial Officer of Great Western
Financial Corporation and Great Western Savings and Loan from 1980 to 1982
after having spent over 20 years in various financial and management positions
with Litton Industries, Inc., the most recent being Corporate Vice President
and Treasurer. Mr. Black is a member of the Board of Governors of the Pacific
Stock Exchange and serves as a director of Investment Company of America, AMCAP
Fund, Inc., Fundamental Investors, Inc., American Variable Insurance Trust, and
The Global Swap Fund, all mutual funds. He also serves as a director of First
Los Angeles Bank and Wilshire Technologies, Inc., in addition to several
privately-held corporations. Mr. Black is a graduate of the University of
Southern California. He is a member of the Audit Committee of the Board of
Directors.
Robert A. Cervoni became a Director in June 1987. Mr. Cervoni is the Managing
Director of Finance and Compliance of Weeden & Co., L.P., a New York Stock
Exchange member firm. Weeden & Co., L.P. makes a market in the Common Stock on
the NASDAQ National Market System. Mr. Cervoni served as Treasurer and Chief
Financial Officer of the Company and its subsidiaries until July 1989. Prior to
joining the Company, Mr. Cervoni was Controller of Trading Company of the West.
Before joining Trading Company of the West in April 1982, Mr. Cervoni was audit
manager with the public accounting firm of Spicer & Oppenheim, formerly
Oppenheim, Appel, Dixon & Co., where he specialized in auditing securities
brokerage firms and financial institutions. Mr. Cervoni is a certified public
accountant and an allied member of and a Registered Financial Principal and
Registered Compliance Officer with the New York Stock Exchange. Mr. Cervoni is
Chairman of the Audit Committee of the Board of Directors.
Herbert G. Kawahara became a Director in June 1989. Mr. Kawahara is the
former President of the Pacific Stock Exchange, having served in that capacity
from January 1988 to May 1989. Previously, Mr. Kawahara had a 29-year career
with E.F. Hutton and Company Inc., starting as trainee in 1958 and filling
various positions in the retail system. From 1982 to 1987, he served as an
Executive Vice President and was the firm's top executive in Southern
California. Mr. Kawahara was also a member of the Board of Directors of E.F.
Hutton and Company, Inc. from 1982 to 1987. He is a graduate of the University
of California at Los Angeles. Mr. Kawahara is Chairman of the Compensation
Committee of the Board of Directors.
Herman A. Schaefer became a Director in March 1984 and served a six-month
term as Vice-Chairman of the Board from January 1 to June 30, 1993. Mr.
Schaefer retired from Pepsico, Inc. in June 1984. He joined Pepsico in 1958,
serving in various financial capacities since that date, most recently as
Executive Vice President, Chief Financial Officer and a Director. He is a
certified public accountant and is admitted to practice law in Pennsylvania.
Mr. Schaefer is a graduate of the Wharton School of Business and Finance and
the Law School of the University of Pennsylvania. He is a member of the Audit
Committee of the Board of Directors. Mr. Schaefer will be retiring from the
Board effective as of the Annual Meeting.
Donald E. Weeden became a Director in February 1987. Since January 1986, Mr.
Weeden has been the Chief Executive Officer of Weeden & Co., L.P. Weeden & Co.,
L.P. makes a market in the Common Stock on the NASDAQ National Market System.
Prior to that time, he was Vice President of Moseley, Hallgarten, Estabrook &
Weeden Inc. Mr. Weeden is a director of National Semiconductor, Inc. Mr. Weeden
is a member of the Compensation Committee of the Board of Directors.
Robert G. Sharp is a nominee for Director. Mr. Sharp retired from his
position as President and Chief Executive Officer of Keyport Life Insurance
Company in February 1992 after having served in that position since 1979. Mr.
Sharp is the past chairman of the National Association for Variable Annuities
and a former director of the National Association of Life Companies. Mr. Sharp
is a graduate of the California State University at Sacramento and is a
registered Principal with the NASD.
5
<PAGE>
BOARD MEETINGS AND COMMITTEES
The business affairs of the Company are managed by or under the direction of
the Board of Directors, although it is not involved in day-to-day operations.
During the year ended December 31, 1994, the Board of Directors met eight
times.
The Board of Directors of the Company has standing Audit and Compensation
Committees. The Board of Directors has no nominating committee or any committee
performing the functions of a nominating committee.
Audit Committee. The Audit Committee recommends to the Board of Directors the
appointment of the firm selected to be independent public accountants for the
Company and monitors and evaluates the performance of such firm; reviews and
approves the scope of the annual audit and evaluates with the independent
public accountants the Company's annual audit and annual consolidated financial
statements; reviews the Company's financial reporting policies and practices;
reviews with management the status of internal audit and control procedures,
adequacies of financial staff and other matters and makes such recommendations
to the Board of Directors as may be appropriate; evaluates problem areas having
a potential financial impact on the Company which may be brought to its
attention by management, the independent public accountants or the Board of
Directors; and reviews all public financial reporting documents of the Company.
The current members of the Audit Committee are Messrs. Cervoni, Black and
Schaefer. Mr. Cervoni is the Chairman. The Audit Committee held four meetings
during fiscal 1994.
Compensation Committee. The Compensation Committee reviews and makes
recommendations to the full Board of Directors with respect to the specific
compensation to be paid or provided to executive officers and also administers
the Company's 1993 Executive Stock Option Plan. The current members of the
Compensation Committee are Messrs. Baran, Beek, Kawahara and Weeden. Mr.
Kawahara is the Chairman. The Compensation Committee held five meetings during
fiscal 1994.
During the fiscal year ended December 31, 1994, each of the Directors of the
Company attended at least 75% of the aggregate of (1) the total number of
meetings of the Board of Directors and (2) the total number of meetings of the
committee(s) of the Board on which he served during the period he served in
such capacities.
6
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding compensation
paid during each of the Company's last three fiscal years to the Company's
Chief Executive Officer and the four highest paid executive officers of the
Company (the "named executive officers"):
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------
SECURITIES ALL OTHER
ANNUAL COMPENSATION (1) UNDERLYING COMPENSATION
NAME AND PRINCIPAL ------------------------- OPTIONS/ ------------
POSITION YEAR SALARY($) BONUS($)(2) SARS(#)(3) ($)
------------------ ---- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
James K. Mitchell, 1994 280,500 42,075 75,000 8,740
Chairman and 1993 275,000 267,027 0 8,617
Chief Executive Officer(4) 1992 196,783 200,000 0 8,484
Brian J. Finneran, 1994 240,000 36,000 30,000 7,970
President and 1993 306,450 106,171 30,000 7,847
Chief Operating Officer(5) 1992 -- -- -- --
D. Mark Carlson, 1994 130,000 19,500 15,000 3,600(6)
Senior Vice President and 1993 101,100 45,179 15,000 3,547(6)
Chief Financial Officer 1992 -- -- -- --
G. Richard Sippel, 1994 134,486 16,500 15,000 4,175
Senior Vice President and 1993 -- -- -- --
Chief Marketing Officer(7) 1992 -- -- -- --
Ross D. Hansen, Senior Vice 1994 115,000 17,250 15,000 3,564(6)
President, General Counsel 1993 85,500 45,179 15,000 3,289(6)
and Corporate Secretary 1992 -- -- -- --
</TABLE>
--------
(1) Disclosure of compensation for fiscal 1992 is not required for Messrs.
Finneran, Carlson, Sippel and Hansen, who were not executive officers of
the Company at any time during 1992. Disclosure of compensation for fiscal
1993 is not required for Mr. Sippel, who was not an executive officer of
the Company at any time during 1993.
(2) Reflects bonuses earned during the fiscal year. In some instances all or a
portion of the bonus was paid during the subsequent fiscal year.
(3) The Company does not have any outstanding Stock Appreciation Rights
("SARs").
(4) Amounts reported for Mr. Mitchell in the "All Other Compensation" column
include $4,620, $4,497 and $4,364, respectively, for 1994, 1993 and 1992,
representing the Company's contributions to its 401(k) Savings Plan on his
behalf and $4,120 for 1994, 1993 and 1992, representing life insurance
premiums advanced by the Company pursuant to a split dollar insurance
agreement.
(5) Salary amount includes commission overrides of $171,650 for 1993. Amounts
reported for Mr. Finneran in the "All Other Compensation" column include
$4,620 and $4,497 representing the Company's contributions to its 401(k)
Savings Plan on his behalf for 1994 and 1993, respectively, and $3,350 for
1994 and 1993 representing life insurance premiums advanced by the Company
pursuant to a split dollar insurance agreement.
(6) Represents the Company's contributions to its 401(k) Savings Plan on behalf
of the named executive officer.
(7) Salary amount includes commission overrides of $24,486. Amounts reported
for Mr. Sippel in the "All Other Compensation" column represent the
Company's contribution to its 401(k) Savings Plan on his behalf.
7
<PAGE>
OPTION GRANTS
The following table provides information related to grants of options to
purchase Common Stock to the named executive officers during the 1994 fiscal
year:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------------------------------
PERCENT OF TOTAL POTENTIAL REALIZABLE
NUMBER OF OPTIONS/SARS VALUE AT ASSUMED
SECURITIES GRANTED TO ALL ANNUAL RATE OF
UNDERLYING EMPLOYEES EXERCISE PRICE STOCK PRICE
OPTIONS/SARS DURING FISCAL OR BASE PRICE APPRECIATION FOR
NAME GRANTED(1) YEAR(1) ($/SH) EXPIRATION DATE OPTION TERM(2)
---- ------------ ---------------- -------------- --------------- --------------------
5%($) 10%($)
--------- ----------
<S> <C> <C> <C> <C> <C> <C>
James K. Mitchell....... 75,000 30.9 $4.40 5/16/99 40,919 138,054
Brian J. Finneran....... 30,000 12.3 $4.00 5/16/99 28,368 67,222
D. Mark Carlson......... 15,000 6.2 $4.00 5/16/99 14,184 33,611
Ross D. Hansen.......... 15,000 6.2 $4.00 5/16/99 14,184 33,611
G. Richard Sippel....... 15,000 6.2 $4.00 5/16/99 14,184 33,611
</TABLE>
--------
(1) The Company does not have any outstanding SARs. Each of the options shown
vests in three equal annual installments beginning May 16, 1995.
(2) The 5% and 10% assumed rates of appreciation are mandated by rules of the
Securities and Exchange Commission and do not represent the Company's
estimate or projection of the future Common Stock price. The potential
realizable value was calculated using the closing price of the Common Stock
on May 15, 1994 of $3.88 per share. The exercise price was determined by
using the opening price of the Common Stock on that same date, plus 10% in
the case of Mr. Mitchell.
OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table provides information related to options exercised by the
named executive officers during the 1994 fiscal year and the number and value
of options held at fiscal year-end.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT FY- IN-THE-MONEY OPTIONS/
END(#)(1) SARS AT FY-END($)(1)(2)
SHARES ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE (#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James K. Mitchell....... 0 0 0 75,000 0 0
Brian J. Finneran....... 0 0 10,000 50,000 0 0
D. Mark Carlson......... 0 0 5,000 25,000 0 0
Ross D. Hansen.......... 0 0 7,000 26,000 0 0
G. Richard Sippel....... 0 0 3,000 15,000 0 0
</TABLE>
--------
(1) The Company does not have any outstanding SARs.
(2) The closing price for the Common Stock on December 30, 1994, as reported by
the NASDAQ National Market System, was $1.563. All of the named executive
officers' outstanding options were exercisable for a price greater than
$1.563 at fiscal year end.
COMPENSATION OF DIRECTORS
The members of the Board of Directors who are not full-time employees of the
Company are entitled to receive reimbursement for out-of-pocket expenses they
incur in attending Board meetings and otherwise performing their duties and
receive fees of $1,000 for each meeting of the Board of Directors which they
attend. Members of committees additionally receive $500 per committee meeting
held on the same day as a Board of Directors' meeting, or $1,000 per committee
meeting if held on a different day. Committee chairpersons receive an
additional $500 per committee meeting. Non-employee Directors receive formula
8
<PAGE>
grants of non-qualified stock options under the Company's 1993 Executive Stock
Option Plan. Options to acquire 12,000 shares of Common Stock are to be granted
within six months after an individual takes office as a Director and options to
acquire an additional 12,000 shares are to be granted within six months after
every third anniversary of such Director's taking office. Officers of the
Company are not compensated for their services as Directors or committee
members.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
Effective January 1, 1993, the Company entered into an Employment Agreement
with Mr. Mitchell. Pursuant to the Employment Agreement, Mr. Mitchell is to
serve as Chief Executive Officer of the Company. The initial term of the
Employment Agreement is three years. During that time, Mr. Mitchell is to be
paid a base salary of $275,000 per annum. Such base salary will automatically
increase on January 1 of each year based on any increase in the consumer price
index as provided in the Employment Agreement. In addition, Mr. Mitchell will
be paid annual incentive compensation equal to 3% of the Company's consolidated
pre-tax operating income, but in no event shall such incentive compensation
exceed Mr. Mitchell's then current base salary. Mr. Mitchell is entitled to
receive all other benefits of employment generally available to the Company's
employees.
In the event that Mr. Mitchell is terminated without cause prior to the
expiration of the initial three- year term of the Employment Agreement, Mr.
Mitchell will be entitled to receive salary and incentive compensation in the
manner, timeframe and amounts provided in the Employment Agreement as though he
had continued in the Company's employ for the stated term thereof. If Mr.
Mitchell is terminated for cause, then he is entitled to receive salary and
incentive compensation pro-rated to a date which is three months following the
date of such termination. Termination for cause is defined in the Employment
Agreement as termination by reason of malfeasance or misconduct which the Board
of Directors reasonably believes violates legal or ethical responsibilities, or
by reason of gross negligence in the conduct of the Company's business.
Pursuant to the Employment Agreement, Mr. Mitchell agrees that he will not
appropriate for his own use any of the Company's confidential information and,
during the term of this employment with the Company and for a period of one
year thereafter, that he will not solicit, hire, contract with, or otherwise
take away any customer or employee of the Company or participate in any such
solicitation, hiring, contracting or taking away. Finally, Mr. Mitchell agrees
that he will not, at any time, utilize any trade secret information regarding
the Company's customers and employees which he acquires during the term of the
Employment Agreement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee of the Board of Directors served as
an officer or employee of the Company or its subsidiaries. No executive
officers of the Company served during fiscal 1994 on the board of directors of
any company which had a representative on the Company's Board of Directors. No
member of the Company's Board of Directors served during 1994 as an executive
officer of a company whose board of directors had a representative from the
Company or the Company's Board of Directors.
9
<PAGE>
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Company's Compensation Committee (the "Committee") is composed entirely
of independent members of the Board of Directors. During fiscal 1994, this
Committee met five times. The Committee recommends executive compensation
policy and practice to the Board of Directors and administers the Company's
1993 Executive Stock Option Plan. The Board of Directors did not modify or
reject in any material way any action or recommendation of the Compensation
Committee during fiscal year 1994.
The Committee's compensation policy with regard to the Company's executive
officers has been to provide these officers, in the aggregate, with salary and
incentive compensation competitive with the marketplace. Compensation has
primarily consisted of salaries, stock options and cash bonuses based upon the
Company's pre-tax earnings. No executive officer other than the Chief Executive
Officer is a party to an employment contract. For 1994, the salary of the Chief
Executive Officer remained as fixed by his employment agreement at $280,500 and
salaries for executive officers other than the Chief Executive Officer were set
by the Committee upon the recommendation of the Chief Executive Officer.
The Compensation Committee, at its December, 1994 meeting, considered the
estimated operating results for the year and the extraordinary items, including
the restructuring charge, the loss from the write-off of goodwill and the
payment from a client financial institution for the right to recruit certain
employees which had impacted the Company's net earnings. The Committee
recognized that regardless of how the extraordinary items were treated, the
bonus pool determined as a percentage of pre-tax earnings, would result in the
executive officers receiving little or no bonus compensation. In prior years,
bonuses for the Company's executive officers had been based on consolidated
pre-tax operating income. After discussion, the Compensation Committee decided
that, under all the circumstances, discretionary bonuses should be awarded to
encourage and support management and to retain their loyalty and diligent
efforts. The Committee's conclusion was based upon a determination that
management had acted in a decisive and timely manner, had made difficult
decisions and made the best out of a series of adverse circumstances beyond
management's control. Accordingly, the Company's six senior executive officers
were awarded bonuses equal to 15% of their annual salaries. The 1994 salary and
bonuses of the Chief Executive Officer and President were, respectively, 40.5%
and 33% less than their 1993 compensation. Other officers experienced slight
increases or declines in their 1994 compensation compared with 1993. Those
whose compensation increased realized the increases as a result of receiving a
full-year's salary at a higher level.
While there is no established policy with respect to the frequency or amount
of option grants, the Committee desires that the executive officers own Company
Stock to both provide incentive compensation based on performance factors
deemed important to the Company's stockholders and to provide an element of
downside risk to more closely align the interests of executives with the
interests of the stockholders. The Committee considers the granting of stock
options annually taking into account the individual executive officers'
contributions to the Company and the amount and terms of existing options. The
grants of options made by the Committee in 1994 to executive officers of the
Company other than the Chief Executive Officer, covering 95,000 shares at an
exercise price of $4.00 per share, were based in large part upon the
recommendations of the Chief Executive Officer who desired to continue to
provide key executives with stock options to encourage retention and to
reenforce the objectives of the Compensation Committee as articulated above.
The grant of options to Mr. Mitchell, covering 75,000 shares at an exercise
price of $4.40 per share, was based on the fact that Mr. Mitchell had no
currently outstanding options and the Committee felt he should have options in
proportion to other executive officers. The options granted to executive
officers represented less than three percent of the outstanding Common Stock.
Mr. Mitchell's compensation as Chairman and Chief Executive Officer of the
Company is governed by the terms of a written Employment Agreement. See
"Executive Compensation -Employment Contracts and Termination of Employment and
Change-in-Control Agreements." Mr. Mitchell, who became Chief Executive Officer
of the Company effective January 1, 1993, received the following compensation
for fiscal
10
<PAGE>
1994: $280,500 salary and $42,075 bonus for a total of $322,575, exclusive of
standard benefits and stock options. In addition, Mr. Mitchell was granted an
option to purchase 75,000 shares of Common Stock at an exercise price of $4.40
per share. This option vests in three equal installments beginning in May,
1995. This compares to $275,000 salary and $267,027 bonus for a total of
$542,027 in 1993. Mr. Mitchell's salary under his Employment Agreement was set
by the committee in early 1993 based upon compensation payable to his
predecessor, the former Chief Executive Officer of the Company, and involved an
increase in his 1993 base salary on account of Mr. Mitchell's assumption of the
additional responsibilities of Chief Executive Officer of the Company in
addition to his duties as Chief Executive Officer of the Company's principal
operating subsidiary. At the close of 1994, Mr. Mitchell was the largest
stockholder of the Company with a total of 703,607 shares.
In November 1993, the Compensation Committee engaged Sibson & Company to
assist the Committee in assembling factual data regarding "competitive"
compensation and in evaluating the Company's compensation practices in
comparison with those of similarly-situated companies. Sibson & Company
assembled compensation data from eleven companies it identified as the
Company's competitors. All of these companies were third-party marketers of
annuities, insurance products and mutual funds to customers of financial
institutions. Almost all of the companies in the survey are either subsidiaries
of other companies or are privately held and, as a result, do not appear in the
NASDAQ Financial Stocks Industry Index presented under the heading "Performance
Graph." These companies were selected because they are in substantially the
same business as the Company. In establishing compensation levels, the
Committee has and will continue to make reference to the Sibson & Company
report and other sources of information. Sibson & Company compared the
Company's compensation practices with those reflected in the Sibson & Company
peer group and advised the Committee that the 1993 aggregate compensation
levels are comparable to those predicted by the survey results given the
Company's size and independent corporate structure. Differences in individual
executive officer compensation from those of their peers result from variations
in experience and performance. Although most 1994 aggregate compensation levels
are less than in 1993, the Compensation Committee believes the compensation
remains competitive and within the levels reflected in the Sibson & Company
report. The Committee is also reviewing the effect of the $1 million limit on
the deductibility of certain compensation pursuant to Section 162(m) of the
Internal Revenue Code upon the Company's compensation policies and intends to
take the steps necessary to cause the Company's compensation policies to comply
with this provision.
The report of the Compensation Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
HERBERT G. KAWAHARA, CHAIRMAN OF THE COMPENSATION COMMITTEE
EDWARD J. BARAN
BARTON BEEK
DONALD E. WEEDEN
11
<PAGE>
PERFORMANCE GRAPH
The following chart compares the yearly percentage change in the cumulative
total stockholder return on the Common Stock during the five fiscal years ended
December 31, 1994 with the cumulative total return on the S&P 500 Index and the
NASDAQ Financial Stocks Industry Index.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG JMCG, S&P 500 INDEX AND NASDAQ
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period S&P
1995 JMCG 500 INDEX NASDAQ
------------------- ----------- --------- ---------
<S> <C> <C> <C>
Measurement Pt-12/31/89
FYE 12/31/89 $100 $100 $100
FYE 12/31/90 $150 $ 96.83 $ 76.69
FYE 12/31/91 $169 $126.41 $118.67
FYE 12/31/92 $313 $136.11 $169.40
FYE 12/31/93 $419 $149.70 $196.90
FYE 12/31/94 $ 78 $151.50 $196.90
</TABLE>
The foregoing information shall not be deemed incorporated by reference by
any general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
12
<PAGE>
SECURITY OWNERSHIP
Unless otherwise noted below, the following table presents certain
information with respect to the ownership of the Common Stock as of March 4,
1995 by each person known by the Company to own beneficially more than 5% of
the Common Stock, by each person who is a Director or nominee for Director of
the Company, by each named executive officer and by all executive officers and
Directors of the Company as a group:
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK
BENEFICIALLY OWNED
AS OF MARCH 4, 1994 (1)
-----------------------
NAME NUMBER(2)(3) %
---- ------------- -------
<S> <C> <C>
James K. Mitchell.............................. 703,607 11.1
JMC Group, Inc.
9710 Scranton Road, Suite 100
San Diego, CA 92121
Thomas W. Smith(4)............................. 515,000 8.1
Edward J. McAree
Thomas N. Tryforos
323 Railroad Avenue
Greenwich, CT 06830
The T.K. Bliss Investment Fund(5).............. 320,000 5.0
Timothy K. Bliss
Terry Whalen
1485 E. Valley Road, Suite J
Santa Barbara, CA 93108
Brian J. Finneran.............................. 221,439 3.5
D. Mark Carlson................................ 25,051 *
Ross D. Hansen................................. 14,482 *
G. Richard Sippel.............................. 6,474 *
Edward J. Baran................................ 8,000 *
Charles H. Black(6)............................ 253,031 4.0
Barton Beek.................................... 36,000 *
Robert A. Cervoni.............................. 30,000 *
Herbert G. Kawahara............................ 16,000 *
Herman A. Schaefer............................. 138,000 2.2
Donald E. Weeden(7)............................ 76,938 1.2
Robert G. Sharp ............................... 0 *
All Executive Officers and Directors as a group
(14 persons).................................. 1,530,458 24.1
Total outstanding shares(8).................. 6,353,898
</TABLE>
13
<PAGE>
--------
* Less than 1%
(1) All ownership figures include options to purchase shares of Common Stock
exercisable within 60 days of March 4, 1994, as set forth below. Except as
otherwise noted below, each individual, directly or indirectly, has sole or
shared voting and investment power with respect to the shares listed.
(2) Includes 4,497; 4,439; 3,051; 729; 3,474; and 17,255 vested shares of
Common Stock contributed by the Company to the Company's 401(k) Savings
Plan for Messrs. Mitchell, Finneran, Carlson, Hansen, Sippel and for all
executive officers and Directors as a group, respectively.
(3) Includes options to purchase 16,000; 10,000; 12,000; 3,000; 8,000; 4,000;
12,000; 12,000; 8,000; 62,000; 8,000 and 155,000 shares of Common Stock for
Messrs. Finneran, Carlson, Hansen, Sippel, Baran, Black, Beek, Cervoni,
Kawahara, Schaefer, Weeden and for all executive officers and Directors as
a group, respectively.
(4) Information is as of January 19, 1994. Each of Messrs. Smith, McAree and
Tryforos beneficially own the shares shown in his capacity as investment
manager for three private investment limited partnerships of which he is a
general partner.
(5) Information is as of September 19, 1994. Mr. Bliss is the sole general
partner of the T.K. Bliss Investment Fund, a California Limited Partnership
(the "Investment Fund"). Mr. Whalen is an employee of Mr. Bliss and
disclaims beneficial ownership of the shares of Common Stock owned by the
Investment Fund. Mr. Bliss disclaims beneficial ownership of the shares
deemed to be beneficially owned by the Investment Fund, except to the
extent of his proportionate interest in the shares as a partner of the
Investment Fund.
(6) Includes 22,800 shares held by the Charles H. Black Pension Trust and
14,000 shares held by Mr. Black as trustee for the benefit of Richard S.
Black, Charles H. Black, Jr., and Mr. Black in which Mr. Black has a 1/3
beneficial ownership interest. Also includes 36,200 shares owned
individually by Mr. Black's wife as to which he disclaims beneficial
ownership.
(7) Includes 50,000 shares held by Weeden Ventures, a general partnership of
which Mr. Weeden is a general partner and 3,000 shares held by Weeden &
Co., L.P., of which Mr. Weeden is Chief Executive Officer.
(8) Includes 155,000 shares issuable upon exercise of stock options.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and executive officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file with the
Securities and Exchange Commission, NASDAQ and the Pacific Stock Exchange
initial reports of ownership and reports of changes in ownership of Common
Stock and other equity securities of the Company. Executive officers, Directors
and greater than 10% stockholders are required by Securities and Exchange
Commission regulations to furnish the Company with copies of all Section 16(a)
reports they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1994 all
Section 16(a) filing requirements applicable to its executive officers,
Directors and greater than 10% beneficial owners were complied with.
14
<PAGE>
ELECTION OF DIRECTORS
NOMINEES
Three of the Company's total of nine Directors are to be elected at the
Annual Meeting. The Board of Directors of the Company has authorized the
nomination at the Annual Meeting of the persons named below as candidates.
Unless otherwise directed, the Proxy Holders will vote the proxies received by
them for the three nominees named below. Messrs. Mitchell and Finneran are
presently Directors of the Company. Mr. Sharp has been nominated to succeed Mr.
Schaefer, whose term expires and who will retire effective as of the Annual
Meeting. In the event that any such nominee is unable or declines to serve as a
Director at the time of the Annual Meeting, the proxies will be voted for any
nominee who shall be designated by the existing Board of Directors to fill the
vacancy. It is not expected that any nominee will be unable or will decline to
serve as a Director.
Information with respect to the nominees to the Board of Directors is set
forth above in "Directors and Executive Officers." The names of the nominees
are as follows:
James K. Mitchell
Brian J. Finneran
Robert G. Sharp
The Directors elected at this Annual Meeting will serve a three-year term,
until the annual meeting of stockholders in 1998, or until their successors are
duly elected.
REQUIRED VOTE
The affirmative vote of a plurality of the shares of Common Stock present in
person or represented by proxy and entitled to vote is required for the
election of each Director nominee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH PERSON
NOMINATED FOR ELECTION AS A DIRECTOR.
INDEPENDENT AUDITORS
Deloitte & Touche LLP has audited the financial statements of the Company and
its subsidiaries for fiscal year 1994 and will audit the financial statements
for fiscal 1995. Representatives of Deloitte & Touche LLP are expected to be
present at the Annual Meeting with the opportunity to make a statement, if they
desire to do so, and will be available to respond to appropriate questions.
15
<PAGE>
OTHER MATTERS
The Board of Directors knows of no other business which will be presented at
the Annual Meeting. If any other business is properly brought before the Annual
Meeting, it is intended that proxies in the enclosed form will be voted in
respect thereof in accordance with the judgments of the persons voting the
proxies. It is important that your shares be represented at the meeting,
regardless of the number of shares which you hold. WHETHER OR NOT YOU INTEND TO
BE PRESENT AT THE ANNUAL MEETING, YOU ARE URGED TO COMPLETE, SIGN, AND RETURN
YOUR PROXY PROMPTLY.
By Order of the Board of Directors of
JMC Group, Inc.
/s/ ROSS D. HANSEN
Ross D. Hansen
Corporate Secretary
Dated: March 27, 1995
THE COMPANY'S ANNUAL REPORT, INCLUDING THE FINANCIAL STATEMENTS FOR THE
COMPANY'S 1994 FISCAL YEAR, HAS EITHER ACCOMPANIED OR PRECEDED THIS PROXY
STATEMENT. IF A STOCKHOLDER DESIRES A COPY OF THE COMPANY'S ANNUAL REPORT ON
FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1994, ONE WILL BE FURNISHED WITHOUT CHARGE UPON WRITTEN
REQUEST. PLEASE WRITE TO INVESTOR RELATIONS, JMC GROUP, INC., 9710 SCRANTON
ROAD, SUITE 100, SAN DIEGO, CALIFORNIA 92121.
16
<PAGE>
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JMC GROUP, INC.
FORM OF PROXY
FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 1, 1995
The undersigned hereby appoints James K. Mitchell, Brian J. Finneran and D.
Mark Carlson, and each of them, as his agents and proxies with full power of
substitution to vote any and all shares of Common Stock of JMC GROUP, INC.
which the undersigned is entitled to vote at the Annual Meeting of Stockholders
of said Company to be held May 1, 1995, or any adjournment or postponement
thereof, as specified below.
1. Election of the following nominees as directors: James K. Mitchell, Brian J.
Finneran and Robert G. Sharp.
[_] FOR [_] WITHHOLD AUTHORITY
(except as indicated TO VOTE FOR
to the contrary below)
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S
NAME ON THE LINE PROVIDED BELOW.
--------------------------------------------------------------------------------
2. As they shall in their sole judgment determine on any other matter that may
properly come before the meeting or any adjournment or postponement thereof.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
(PLEASE SIGN AND DATE THE PROXY ON THE REVERSE SIDE)
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This proxy will be voted as you specify on the reverse hereof. UNLESS
OTHERWISE MARKED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL OF THE
PERSONS NAMED IN PROPOSAL 1 ON THE REVERSE HEREOF, ALL OF WHOM WILL BE
NOMINATED BY THE BOARD OF DIRECTORS OF JMC GROUP, INC. FOR ELECTION AS
DIRECTORS. If any such nominee is unable or unwilling to serve or is otherwise
unavailable, said proxy holders shall have discretion and authority to vote in
accordance with their judgment for other nominees as they in their sole
judgment shall determine.
Dated: _____________, 1995.
-------------------------------------
-------------------------------------
-------------------------------------
(signature)
Sign exactly as name appears hereon.
Give your full title if signing in
other than an individual capacity.
All joint owners should sign.
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