SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
(x ) Filed by the Registrant
( ) 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-b(e)(2))
(x ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to (section mark)240.14a-11(c) or
(section mark)240.14a-12
Alex. Brown Incorporated
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement If Other Than Registrant)
PAYMENT OF FILING FEE (Check the appropriate box):
(x ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
( ) $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: *
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
(Set forth the amount on which the filing fee is calculated and state how
it was determined)
( ) Fee previously paid 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.:
3) Filing Party:
4) Date Filed:
<PAGE>
ALEX. BROWN INCORPORATED
135 East Baltimore Street
Baltimore, Maryland 21202
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Alex. Brown Incorporated will be held
on Tuesday, April 25, 1995, at 4:30 p.m. at the Company's offices on the 15th
floor at 120 East Baltimore Street, Baltimore, Maryland, for the following
purposes:
(a) Election of directors to hold office until the next Annual Meeting of
Stockholders or until their respective successors are duly elected and
qualified;
(b) Consideration of a proposal to approve the Alex. Brown Incorporated
1995 Non-Employee Director Stock Purchase Plan; and
(c) Consideration of such other business as may properly come before the
meeting.
Holders of the Company's Common Stock as of the close of business on March
9, 1995 are entitled to notice of and to vote at the meeting. For your
convenience, a form of proxy is enclosed. You are urged to complete and return
the proxy.
By Order of the Board of Directors
Robert F. Price
Secretary
March 23, 1995
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(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE>
ALEX. BROWN INCORPORATED
135 East Baltimore Street
Baltimore, Maryland 21202
PROXY STATEMENT
(First Mailed to Stockholders on March 23, 1995)
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Alex. Brown Incorporated (the
"Company") to be voted at the Annual Meeting of Stockholders (the "Meeting")
scheduled to be held on Tuesday, April 25, 1995 at the Company's offices on the
15th floor at 120 East Baltimore Street, Baltimore, Maryland and at any
adjournment or adjournments thereof. The solicitation of proxies generally will
be by mail and by directors and officers of the Company. In some instances,
solicitations may be made by telephone, telegraph or other means.
All costs incurred in connection with the solicitation of proxies will be
borne by the Company. No compensation will be paid by the Company in connection
with the solicitation of proxies, but custodians, nominees and fiduciaries will
be requested to send proxies and proxy material to their principals, and the
Company will reimburse those custodians, nominees and fiduciaries for reasonable
out-of-pocket and clerical expenses.
Any stockholder giving a proxy pursuant to this solicitation may revoke it
at any time prior to exercise of the proxy by giving written notice of such
revocation to the Secretary of the Company at 135 East Baltimore Street,
Baltimore, Maryland 21202, or by attending the Meeting and voting in person.
The presence in person or by proxy of stockholders entitled to cast a
majority of all the votes entitled to be cast at the Meeting will constitute a
quorum for the Meeting. Abstentions and withhold-authority votes will count for
the purpose of determining a quorum. On March 9, 1995, the record date for the
determination of stockholders entitled to notice of and to vote at the Meeting,
the Company had outstanding and entitled to vote 14,811,926 shares of common
stock, par value $.10 per share (the "Common Stock"). The Common Stock has no
cumulative voting rights, and each issued and outstanding share of Common Stock
is entitled to one vote at the Meeting or any adjournment or adjournments
thereof.
Each properly executed proxy will be voted in accordance with the
instructions marked on it. With regard to the election of directors, votes may
be cast "FOR" or "WITHHELD." With regard to the proposal to approve the Alex.
Brown Incorporated 1995 Non-Employee Director Stock Purchase Plan, votes may be
cast "FOR" "AGAINST" or "ABSTAIN."
In the absence of specific instructions, a proxy will be voted FOR the
election, as directors of the Company, of the nominees identified in this Proxy
Statement, FOR the approval of the Alex. Brown Incorporated 1995 Non-Employee
Director Stock Purchase Plan, and in the sole discretion of the proxy holders as
to any other matters. The affirmative vote of a plurality of all votes cast at
the Meeting is required for the election of directors. All other matters require
the affirmative vote of a majority of all votes cast. Shares voted include votes
FOR or AGAINST a proposal but do not include broker non-votes, abstentions or
withhold-authority votes.
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<PAGE>
ELECTION OF DIRECTORS AND RELATED MATTERS
It is proposed that ten directors, constituting the entire Board of
Directors (the "Board") of the Company, be elected at the Meeting, each to serve
until the next annual meeting of stockholders or until his successor is duly
elected and qualified. THE BOARD RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF
THE NOMINEES.
Each of the nominees has agreed to serve, if elected. If one or more of the
nominees is unable to serve for any reason, the holders of proxies solicited
hereby reserve the right to nominate and vote for any other person or persons of
their choice. There is no family relationship between any of the
director-nominees or between any of such nominees and any executive officer of
the Company. Certain other pertinent information regarding each of the nominees
follows:
LEE A. AULT III
Mr. Ault, who is 58 years of age, has been a private investor since 1992.
Previously, Mr. Ault was Chairman and Chief Executive Officer of Telecredit,
Inc., a supplier of payment services. Mr. Ault has been a member of the
Company's Board since 1992, and he currently serves on its Audit Committee and
its Compensation Committee, of which he is Chairman. Mr. Ault is also a director
of Equifax Inc., Sunrise Medical Inc. and Viking Office Products, Inc.
NEIL R. AUSTRIAN
Mr. Austrian, who is 54 years of age, has been President of The National
Football League since 1991. He was previously a Managing Director of Dillon,
Read & Co., Inc., an investment banking firm. Mr. Austrian, who is being
nominated for election to the Board for the first time, is also a director of
Viking Office Products, Inc. and REFAC Technology Development Corp.
THOMAS C. BARRY
Since December 1993, Mr. Barry, who is 51 years of age, has been President
and Chief Executive Officer of Zephyr Management, Inc. a financial consulting
and investment management firm. Previously, Mr. Barry was President and Chief
Executive Officer of Rockefeller & Co., Inc., a registered investment advisor.
Mr. Barry has been a member of the Company's Board since 1987, and he currently
serves on its Organization Committee. Mr. Barry is also a director of The France
Growth Fund, Inc. and Pacific Basin Bulk Shipping, Ltd.
BENJAMIN H. GRISWOLD IV
Mr. Griswold, who is 54 years of age, is a Managing Director of Alex. Brown
& Sons Incorporated ("Alex. Brown"), the Company's principal subsidiary, and
Chairman Emeritus of the Board. Mr. Griswold has been a member of the Board
since 1986, and he currently serves on its Organization Committee. Mr. Griswold
is also a director of The Baltimore Life Insurance Company and Life of Maryland,
Inc.
DONALD B. HEBB, JR.
Mr. Hebb, who is 52 years of age, is a Managing Director of Alex. Brown and
the managing general partner of ABS Partners, LP, which acts as the general
partner of ABS Capital Partners, LP, a merchant banking investment fund
organized by the Company. Prior to February, 1991, Mr. Hebb was President and
Chief Executive Officer of the Company. Mr. Hebb has been a member of the
Company's Board since 1986, and he currently serves on its Organization
Committee.
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A. B. KRONGARD
Mr. Krongard, who is 58 years of age, has been Chairman of the Board of the
Company since April, 1994, and Chief Executive Officer of the Company since
July, 1991. From May, 1989 to July, 1991, Mr. Krongard was the Company's Chief
Operating Officer. Mr. Krongard has been a member of the Company's Board since
1989.
STEVEN MULLER, PH.D.
Dr. Muller, who is 67 years of age, is President Emeritus of The Johns
Hopkins University. Since 1990, Dr. Muller has been Chairman of the 21st Century
Foundation, an educational initiative to provide unity among democratic nations.
Dr. Muller is also Co-Chairman of the American Institute for Contemporary German
Studies. Dr. Muller has been a member of the Company's Board since 1987, and he
currently serves on its Audit Committee and its Compensation Committee. Dr.
Muller is also a director of Beneficial Corporation, Millipore Corporation,
American Capital Closed End and Common Sense Funds and The Law Companies Group,
Inc.
DAVID M. NORMAN
Since 1987, Mr. Norman, who is 54 years of age, has been Chairman and Chief
Executive Officer of BNB Resources PLC (U.K.), an executive search, recruitment
and human resource training firm. Mr. Norman has been a member of the Company's
Board since 1992, and he currently serves on its Audit Committee, of which he is
Chairman, and its Compensation Committee.
FRANK E. RICHARDSON
Mr. Richardson, who is 55 years of age, is President of Wesray Capital
Corporation, a merchant banking firm. Mr. Richardson has been a member of the
Company's Board since 1991, and he currently serves on its Organization
Committee, of which he is Chairman. Mr. Richardson is also a director of Outlet
Communications, Inc., Sonic Corp. and Dyersburg Fabrics Inc.
MAYO A. SHATTUCK III
Mr. Shattuck, who is 40 years of age, has been President and Chief
Operating Officer of the Company since July, 1991. Previously, Mr. Shattuck was
a Managing Director of Alex. Brown. Mr. Shattuck has been a member of the
Company's Board since 1991.
OTHER INFORMATION REGARDING THE BOARD OF DIRECTORS
Andre W. Brewster is not a candidate for reelection to the Board, in light
of his reaching the Board's mandatory retirement age. Mr. Brewster served as a
member of the Board since 1987.
BOARD COMMITTEES
During 1994, the Board had three standing committees -- the Audit
Committee, the Compensation Committee and the Organization Committee.
The Audit Committee oversees the financial reporting and the related
financial and accounting control systems of the Company and its subsidiaries.
The Audit Committee also recommends to the Board the appointment of the
Company's independent auditors.
The Compensation Committee reviews and approves cash compensation and
grants under the Company's equity incentive plans and supervises the
administration of the Company's other compensation plans. The Compensation
Committee Report on Executive Compensation is included beginning on page 14 of
this Proxy Statement.
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<PAGE>
The Organization Committee provides guidance and assistance to the Board in
discharging its organizational overview and corporate governance
responsibilities and serves as the nominating committee for the Board.
ATTENDANCE AT MEETINGS
During the year ended December 31, 1994, the Board held nine meetings, the
Audit Committee held four meetings, the Compensation Committee held five
meetings, and the Organization Committee held three meetings. All of the
Company's directors attended 75% or more of the aggregate of all Board meetings
and all meetings of committees of which they were members.
DIRECTORS' FEES
Directors who are employed by the Company receive no additional
compensation for serving on the Board. Each Director who is not an employee of
the Company (a "Non-Employee Director") receives an annual retainer equal to
$20,000 plus $1,000 per Board meeting or committee meeting attended and
reasonable travel expenses incurred in connection with attendance at such
meetings. In addition, chairmen of committees of the Board are paid an annual
stipend of $2,500 in cash for each committee which they chair. A portion of the
annual retainer (currently a minimum of 50%) is paid in Common Stock pursuant to
the 1991 Non-Employee Director Equity Plan (the "Director Plan") described
below.
1991 NON-EMPLOYEE DIRECTOR EQUITY PLAN
The Director Plan, which was approved by the Company's stockholders in May,
1991, provides Non-Employee Directors with incentives to improve the Company's
performance by increasing their level of stock ownership and provides an
additional means of attracting and retaining Non-Employee Directors through the
issuance of the Company's Common Stock and the granting of Stock Options.
Participation in the Director Plan by Non-Employee Directors is mandatory.
The Director Plan provides that, immediately following the date of the
annual meeting of stockholders, each Non-Employee Director will receive a
portion of his or her annual retainer in Common Stock and will also receive a
stock option to purchase 1,500 shares of Common Stock. The number of shares of
Common Stock to be issued to each Non-Employee Director is determined by
dividing 90% of the average of the daily closing prices for the ten consecutive
business days preceding the date of the annual meeting of stockholders of the
Company (the "Market Price") into the annual retainer payable to each
participant, and multiplying that number by a designated percentage determined
by the Board. The minimum designated percentage is currently 50%, but each Non-
Employee Director may designate a higher percentage. The purchase price for the
Common Stock subject to the stock option is the Market Price. The maximum
aggregate number of shares of Common Stock that may be issued under the Director
Plan is 300,000, which may be appropriately adjusted in the event of any
extraordinary dividend, recapitalization, reorganization, merger, spin-off, or
similar change affecting the Common Stock.
In 1994, pursuant to the Director Plan, the Company issued a total of 2,646
shares of Common Stock and options to purchase 9,000 shares of Common Stock to
the six Non-Employee Directors. The Director Plan will terminate on May 15,
2001.
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<PAGE>
PROPOSAL TO APPROVE THE ALEX. BROWN INCORPORATED
1995 NON-EMPLOYEE DIRECTOR STOCK PURCHASE PLAN
The following constitutes the Alex. Brown Incorporated 1995 Non-Employee
Director Stock Purchase Plan (the "Plan"), which was adopted by the Board on
March 1, 1995, subject to stockholder approval. Pursuant to the Plan,
Non-Employee Directors have the option to purchase up to $100,000 of the
Company's Common Stock at a 15% discount. The Plan also imposes various
restrictions on the sale or assignment of Common Stock purchased under the Plan.
THE BOARD RECOMMENDS A VOTE "FOR" APPROVAL OF THE PLAN.
1995 NON-EMPLOYEE DIRECTOR STOCK PURCHASE PLAN
SECTION 1. PURPOSES
The purposes of the Alex. Brown Incorporated 1995 Non-Employee Director
Stock Purchase Plan (the "Plan") are to encourage Non-Employee Directors of
Alex. Brown Incorporated (the "Company") to increase the level of their
ownership of the Company's Common Stock (the "Stock"), to reinforce
participating directors' roles in enhancing stockholder value and to provide an
additional means of attracting and retaining Non-Employee Directors.
SECTION 2. PARTICIPANTS
All persons who are elected or appointed to the Company's Board of
Directors at or after the 1995 Annual Meeting of Stockholders, and who are not
officers or employees of the Company or any of its subsidiaries or affiliates,
are eligible to participate in the Plan.
SECTION 3. AVAILABLE SHARES
A total of 150,000 shares of Stock will be available for purchase under the
Plan. In the event of a subdivision or combination of the Stock, or of a Stock
dividend, the maximum number of shares which may thereafter be issued and sold
under the Plan will be proportionately increased or decreased.
SECTION 4. PURCHASE PRICE OF STOCK
Stock may be purchased under the Plan at 85% of the "Fair Market Value" of
the Stock (the "Purchase Price"). "Fair Market Value" means the last reported
sale price of the Stock reflected on the New York Stock Exchange Composite
Listing on the applicable purchase date, or if there are no sales on such date,
on the next preceding business day on which there were such sales. No commission
or related expenses will be charged with respect to purchases under the Plan.
SECTION 5. PURCHASE LIMITATIONS
Each Non-Employee Director has the option to purchase up to a maximum of
$100,000 Fair Market Value of Stock under the Plan in any calendar year in which
the Plan is in effect. Notwithstanding any other provision of the Plan, no
participating director may purchase Stock under the Plan if immediately after
such purchase, the director owns, actually or beneficially (within the meaning
of Section 13(d) of the Securities Exchange Act of 1934, as amended) or has any
other option to purchase, as much as 5% of the shares (either in voting power or
value) of the Stock.
SECTION 6. PURCHASE DATES
Stock may be purchased under the Plan on any day during any period
commencing on the third trading day following the Company's release for
publication of quarterly or annual summary statements of earnings and
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<PAGE>
ending on the thirtieth calendar day thereafter, subject to such further
restrictions as may be imposed by the Company's General Counsel, or his or her
delegate, in order to ensure that all purchases of Stock by officers and
directors are in compliance with applicable laws.
SECTION 7. VESTING; RESTRICTIONS ON SALE OR ASSIGNMENT
Stock purchased under the Plan vests immediately upon payment of the
applicable Purchase Price. Stock acquired pursuant to the Plan may not be sold
or assigned until six (6) months after the applicable purchase date (the
"Restriction Period") and, if Stock acquired pursuant to the Plan is sold (other
than in connection with a cash tender offer) within two (2) years from the
applicable purchase date (the "Forfeiture Period"), the participant shall remit
to the Company, at the time of sale, the excess, if any, of the net sale
proceeds over the Purchase Price; in each such case transactions shall be
measured using the "first-in, first-out method." The Stock certificates for
shares of Stock issued under the Plan shall be held by the Company during the
Forfeiture Period. As soon as practicable following the expiration of the
Forfeiture Period, the Company shall deliver to the participant the Stock
certificate with respect to that Stock. During the Forfeiture Period, the
participating director shall have all the rights of a stockholder with respect
to such Stock, except that during the Restriction Period such Stock shall not be
transferable other than by will or laws of descent and distribution and during
the remainder of the Forfeiture Period, any transfer other than by sale, will or
laws of descent and distribution must be approved by the Company and the
transferee must agree to be bound by the same limitations as the transferor.
SECTION 8. ADMINISTRATION, AMENDMENTS AND TERMINATION
The Plan shall be administered and interpreted by the Company's Board of
Directors as a formula plan meeting the conditions of Rule 16b-3(c)(2)(ii)
promulgated under the Securities Exchange Act of 1934. The Company's Board of
Directors reserves the right to amend, modify or discontinue the Plan at any
time, except that (1) no action which would materially (i) increase the benefits
accruing to participants under the Plan, (ii) increase the number of securities
which may be issued under the Plan, or (iii) modify the requirements as to
eligibility for participation under the Plan, shall become effective unless it
has been approved, directly or indirectly, by the affirmative vote of the
holders of a majority of the securities present, or represented, and entitled to
vote at a meeting duly held in accordance with the laws of the State of
Maryland; and (2) the provisions of the Plan which specify the amount and price
of securities that may be purchased under the Plan and the timing of such
purchases, shall not be amended more than once every six (6) months, other than
to comport with changes in the Internal Revenue Code, the Employee Retirement
Income Security Act of 1974, or the rules thereunder. The Plan shall terminate
automatically upon issuance of certificates for all Stock available for purchase
under the Plan.
SECTION 9. EFFECT OF CERTAIN RECORD DATES
In the event that a record date is fixed by the Company's Board of
Directors for the issuance of subscription rights, a Stock dividend or for a
subdivision or combination of outstanding shares, no purchase of Stock will be
deemed to be completed on such record date. The right to have the purchase of
Stock completed, although temporarily suspended on such a record date, will be
restored on the next following business day which is not such a record date.
SECTION 10. NON-TRANSFERABILITY
Rights to purchase Stock under the Plan may not be sold, pledged, assigned
or transferred in any manner.
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BENEFITS UNDER THE PLAN
The actual benefits that will be received under the Plan are not currently
determinable as they will depend on the amount of Stock actually purchased by
Plan participants, and the value of the discounts afforded to Plan participants
will depend on the Fair Market Value of the Stock. The maximum benefit to
individual participants will be $15,000 per year. Similarly, since the Plan was
not in effect for 1994, it is not possible to determine the amounts under the
Plan which would have been received by Plan participants had the Plan been in
effect for such year. If all six of the Non-Employee Director nominees are
elected, all of them will be eligible to participate in the Plan.
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BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information, as of March 9, 1995,
with respect to the beneficial ownership of the Company's Common Stock by each
person who is known by the Company, based on filings made with the Securities
and Exchange Commission, to own more than 5% of the outstanding shares of Common
Stock, by each director and nominee for election as a director of the Company,
by the Company's Chief Executive Officer, by the other four most highly
compensated executive officers in 1994, and by all directors and executive
officers as a group:
<TABLE>
<CAPTION>
NAME OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
<S> <C> <C>
Peter R. Kellogg..................................... 1,594,900(1) 10.8%
115 Broadway
New York, New York 10006
Benjamin H. Griswold IV.............................. 418,013(2)(3)(4) 2.8
A. B. Krongard....................................... 287,918(2)(4) 1.9
Donald B. Hebb, Jr................................... 221,692(2)(4) 1.5
Mayo A. Shattuck III................................. 128,291(2)(4) *
Bruce H. Brandaleone................................. 101,105(2)(4) *
Andre W. Brewster.................................... 49,340(4)(5) *
W. Gar Richlin....................................... 47,210(2)(4) *
Denis J. Callaghan................................... 45,688(2)(4)(6) *
Frank E. Richardson.................................. 29,275(4) *
Lee A. Ault III...................................... 19,579(4) *
Thomas C. Barry...................................... 13,275(4) *
Steven Muller........................................ 8,275(4) *
David M. Norman...................................... 6,179(4) *
Neil R. Austrian..................................... 0 *
All directors and executive.......................... 2,014,716(2)(4)(6) 13.6
officers as a group (21 persons)
</TABLE>
*Indicates less than 1% beneficial ownership.
(1) All information pertaining to Peter R. Kellogg and the number of shares
owned by Mr. Kellogg is based upon a Form 3 dated April 5, 1994, which was
provided to the Company by Mr. Kellogg. According to that Form 3, Mr.
Kellogg owns 754,900 shares directly and 700,000 shares indirectly through a
corporation which he owns. In addition, members of his immediate family own
140,000 shares.
(2) Managing Directors and Principals of Alex. Brown & Sons Incorporated and
certain other persons are parties to the Company's First Amended and
Restated Stockholders' Agreement (the "Stockholders' Agreement") and as of
the record date hold in the aggregate approximately 4,216,999 shares of the
Company's Common Stock under the Stockholders' Agreement. The parties to the
Stockholders' Agreement are required to vote their shares of the Company's
Common Stock in accordance with the vote of the holders of the majority of
the shares subject to the Stockholders' Agreement. Subject to certain
limitations, parties to the Stockholders' Agreement retain dispositive
control of stock held subject to the terms of the Stockholders' Agreement.
The share number listed in the table excludes shares (other than those of
the designated individual or of those individuals included under "All
directors and executive officers as a group") subject to the Stockholders'
Agreement.
(3) Included is an aggregate of 59,292 shares held in seven trusts of which Mr.
Griswold is a trustee for the benefit of certain family members. Mr.
Griswold disclaims beneficial ownership of such shares.
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(4) Beneficial ownership shown for the following individuals and group also
includes the number of indicated shares of Common Stock that may be
purchased within the next sixty days upon the exercise of Stock Options as
well as shares of Common Stock which may be received upon conversion of
debentures within the next sixty days: Mr. Griswold -- Options for 5,722
shares of Common Stock and debentures convertible into 13,711 shares of
Common Stock; Mr. Krongard -- debentures convertible into 24,594 shares of
Common Stock; Mr. Hebb -- Options for 5,722 shares of Common Stock and
debentures convertible into 7,024 shares of Common Stock; Mr.
Shattuck -- debentures convertible into 16,701 shares of Common Stock; Mr.
Brandaleone -- Options for 20,470 shares of Common Stock and debentures
convertible into 12,917 shares of Common Stock; Mr. Brewster -- Options for
6,000 shares of Common Stock; Mr. Richlin -- Options for 7,679 shares of
Common Stock and debentures convertible into 8,703 shares of Common Stock;
Mr. Callaghan -- Options for 3,733 shares of Common Stock and debentures
convertible into 1,432 shares of Common Stock; Mr. Richardson -- Options for
6,000 shares of Common Stock; Mr. Ault -- Options for 4,500 shares of Common
Stock; Mr. Barry -- Options for 6,000 shares of Common Stock; Mr.
Muller -- Options for 6,000 shares of Common Stock; Mr. Norman -- Options
for 4,500 shares of Common Stock; and all executive officers as a
group -- Options for 114,194 shares of Common Stock and debentures
convertible into 118,174 shares of Common Stock.
(5) Included are 16,065 shares owned by a trust of which Mr. Brewster is a
co-trustee. Mr. Brewster disclaims beneficial ownership of these shares.
(6) In a Form 5 dated March 9, 1995, Denis J. Callaghan reported a purchase of
2,205 shares of Common Stock in March, 1994, which had not been previously
reported. In a Form 4 dated March 9, 1994, David L. Hopkins, an executive
officer of the Company, corrected information reflected in his January,
1994, Form 4, in order to report the acquisition on January 17, 1994 of a
stock option to purchase 9,000 shares of Common Stock.
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EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the prior three fiscal years, the cash
compensation paid by the Company, as well as certain other compensation paid or
accrued for those years, to the Chief Executive Officer and each of the other
four most highly compensated executive officers of the Company for 1994 in all
capacities in which they served:
SUMMARY COMPENSATION TABLE (1)
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
AWARDS PAYOUTS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
<CAPTION>
(A) (B) (C) (D) (E) (F) (G) (H) (I)
OTHER
ANNUAL RESTRICTED SECURITIES
COMPEN- STOCK UNDERLYING LTIP ALL OTHER
SALARY BONUS SATION AWARD(S) OPTIONS PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($)(2) (#) ($)(3) ($)(4)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A. B. Krongard 1994 200,000 2,113,043 0 0 0 256,862 86,409
CHAIRMAN 1993 200,000 2,723,354 0 0 0 114,685 208,687
& CHIEF EXECUTIVE OFFICER 1992 200,000 1,613,676 0 0 0 0 6,647
Mayo A. Shattuck III 1994 200,000 1,865,878 0 0 0 204,962 66,381
PRESIDENT 1993 200,000 2,329,826 0 0 0 32,902 158,648
& CHIEF OPERATING OFFICER 1992 200,000 1,320,026 0 0 0 0 18,085
W. Gar Richlin 1994 200,000 1,109,264 0 0 0 88,379 42,495
MANAGING DIRECTOR, 1993 200,000 1,220,132 0 0 0 44,290 96,459
ALEX. BROWN & SONS INCORPORATED 1992 200,000 689,513 0 0 7,500 0 4,465
Bruce H. Brandaleone 1994 200,000 932,718 0 0 0 95,768 6,614
MANAGING DIRECTOR, 1993 200,000 1,169,691 0 0 0 68,259 8,755
ALEX. BROWN & SONS INCORPORATED 1992 200,000 714,734 0 0 5,000 0 4,465
Denis J. Callaghan 1994 200,000 655,290 0 0 0 4,057 26,532
MANAGING DIRECTOR, 1993 200,000 827,443 0 0 0 13,161 58,720
ALEX. BROWN & SONS INCORPORATED 1992 200,000 422,923 0 0 4,000 0 4,465
</TABLE>
NOTES:
(1) Cash compensation and equity awards are reported for the year in which
earned, regardless of when paid or granted.
(2) The total number of unvested shares of restricted stock and the value of
these shares at year-end 1994 were as follows: Mr. Krongard held 4,807
shares, valued at $146,013; Mr. Shattuck held 3,845 shares, valued at
$116,792; Mr. Richlin held 962 shares, valued at $29,221; Mr. Brandaleone
held 1,922 shares valued at $58,381. Dividends are paid on vested and
unvested restricted stock.
(3) Consists of loan forgiveness (and related interest forgiven) on one-sixth of
loans to purchase 1990 debentures and one-half of loans to purchase 1991
debentures based upon achievement of ROE objectives.
(4) Consists of the Company's matching contributions to its 401(k) Plan and
Profit Sharing Plan (Mr. Krongard -- $6,338; Mr. Shattuck -- $6,338; Mr.
Richlin -- $6,338; Mr. Brandaleone -- $6,338; and Mr. Callaghan -- $6,338),
as well as forgiveness in 1994 of a portion of loans made pursuant to the
purchase of securities pursuant to the Equity Partnership Plan (Mr.
Krongard -- $79,873; Mr. Shattuck -- $59,905; Mr. Richlin -- $35,943; and
Mr. Callaghan -- $19,968) and the "current dollar value" of the benefit from
split dollar life insurance premiums paid by the Company (Mr.
Krongard -- $198; Mr. Shattuck -- $138; Mr. Richlin -- $214; Mr.
Brandaleone -- $276; and Mr. Callaghan -- $226.)
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<PAGE>
OPTION EXERCISES
The following table sets forth information with respect to the exercise of
options during the last fiscal year by the Chief Executive Officer and the other
four most highly compensated executive officers of the Company, as well as
information concerning unexercised options held by those individuals at the end
of 1994:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUE
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED ON VALUE OPTIONS AT FY-END IN-THE-MONEY OPTIONS
EXERCISE REALIZED (#) AT FY-END ($)
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
A. B. Krongard 4,000 71,400 12,861 22,861 181,334 300,084
Mayo A. Shattuck III 14,480 264,040 34,480 22,480 450,750 291,750
W. Gar Richlin 0 0 9,679 9,179 111,291 74,916
Bruce H. Brandaleone 4,000 66,900 23,470 10,536 375,544 101,213
Denis J. Callaghan 5,000 83,625 6,733 4,267 76,741 17,135
</TABLE>
11
<PAGE>
LONG-TERM INCENTIVE PLANS
The following table provides information concerning awards made to the
Chief Executive Officer and the other four most highly compensated executive
officers of the Company for 1994 under the Company's Long-Term Incentive Plan:
LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR (1)
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E) (F)
NUMBER OF PERFORMANCE OR
SHARES, UNITS OTHER PERIOD ESTIMATED FUTURE PAYOUTS UNDER
OR OTHER UNTIL NON-STOCK PRICE BASED PLANS
RIGHTS MATURATION THRESHOLD TARGET MAXIMUM
NAME (#) OR PAYOUT ($ OR #)(3) ($ OR #)(3) ($ OR #)(2)
<S> <C> <C> <C> <C> <C>
A. B. Krongard NA 6 years NA $ 1,482,800 NA
Mayo A. Shattuck III NA 6 years NA 1,179,500 NA
W. Gar Richlin NA 6 years NA 404,400 NA
Bruce H. Brandaleone NA 6 years NA 269,600 NA
Denis J. Callaghan NA 6 years NA 269,600 NA
</TABLE>
NOTES:
(1) Awards relate to the year in which earned, regardless of when granted.
(2) 1994 debentures were purchased by executives in January 1995 under the 1991
Equity Incentive Plan. The debentures bear interest at 8% per year and
mature in June, 2001. The debentures are convertible into the Company's
Common Stock at a price of $33.70 per share beginning in January, 1998; this
conversion feature will vest to the employee if he is an employee in
January, 1998. To finance such purchases, the Company loaned executives an
amount equal to the debentures' purchase price which amount is set forth in
column (e) above. The interest charged on the loan is 8% per year.
(3) The Company has agreed to forgive one-sixth of the loan at the end of each
of the three years from 1995 through 1997 if the Company's ROE exceeds an
annual target of 15% which has been set by the Compensation Committee for
each of the years in the three-year period ending December 31, 1997 or
one-half of the loan if the Company's ROE exceeds a cumulative target of 17%
for that three-year period. Annual and cumulative loan forgiveness targets
for 1998-2000 for the remaining one-half of the original loan balance will
be set by the Compensation Committee in late 1997 or early 1998.
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<PAGE>
STOCK PERFORMANCE CHART
The following chart and table compare the five-year cumulative total return
on shares of the Company's Common Stock against the cumulative total return of
the S&P 500 Stock Index and the cumulative total return of certain comparable
publicly traded investment banking companies. The investment banking companies
used for comparison purposes below are publicly traded companies which have
market capitalization generally in excess of $100 million and which operate in
areas of the securities industry similar to those of the Company. The chart and
table assume that $100 was invested on 12/31/89 in the Company's Common Stock,
the comparable publicly traded investment banking companies and the S&P 500, and
that all dividends were reinvested over the five-year period.
Comparison of Five-Year Cumulative Total Return of
Alex. Brown vs. Comparable Investment Banking
Companies and S&P 500
(Stock Performance Chart appears here. The plot points are listed below:)
Alex. Comparable Investment S&P 500
Brown Banking Companies
1989 100.0 100.0 100.0
1990 79.9 91.9 96.9
1991 218.8 199.2 126.4
1992 199.1 206.9 136.1
1993 253.2 274.4 149.8
1994 316.7 228.5 151.7
(1) Comparable Investment Banking Companies consist of:
The Advest Group, Inc. Morgan Stanley Group Inc.
The Bear Stearns Companies Inc. Paine Webber Group
A. G. Edwards Inc. Piper Jaffray Companies
Inter-Regional Financial Group Raymond James Financial, Inc.
Legg Mason, Inc. Salomon Inc.
Merrill Lynch & Co., Inc.
13
<PAGE>
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The following report is submitted by the Compensation Committee of the
Board (the "Committee"), of which all members are Non-Employee Directors. This
report, as well as other Committee reports and decisions, has been reviewed by
the Board. The report addresses the Company's 1994 compensation policies
applicable to executive officers, including the Company's five most highly paid
executives in 1994 (collectively, the "Senior Executives"). The report also
specifically reviews the basis for the compensation of the Chief Executive
Officer ("CEO".)
GENERAL
The Company's compensation plans are intended to reward the accomplishment
of specific objectives that have been designed to result in the creation of
stockholder value. Incentive plans provide the opportunity for employees to earn
competitive rates of total compensation by reaching goals expressed in financial
and strategic terms.
As a general matter, base salaries for Managing Directors of Alex. Brown &
Sons Incorporated ("Alex. Brown") are $200,000 per annum, and total cash
compensation is heavily based on performance. As Managing Directors of Alex.
Brown, each of the Company's Senior Executives received a base salary of
$200,000 in 1994. Base salaries for executive officers are set at a level such
that a substantial portion of anticipated aggregate cash compensation is at
risk. Aggregate cash compensation of executive officers is materially linked to
operating performance as measured by such factors as return on stockholders'
equity, operating income and other financial and operating results measured
against predetermined objectives. Historically, in years in which the Company's
performance has been favorable, as measured by these factors, cash compensation
has increased and, in less favorable years, cash compensation has been reduced.
A subjective evaluation of individual contribution to overall results is also an
important factor in determining cash compensation.
Since the Committee believes that compensation for executive officers
should be closely aligned to stockholder interests, the Company has adopted
several forms of incentive compensation based on stock ownership and
appreciation.
INCENTIVE BONUSES
The Company's annual incentive bonuses for its executive officers,
including bonuses paid to Senior Executives as reported in column (d) of the
Summary Compensation Table, are based on both objective and subjective
performance criteria and typically constitute a substantial portion of an
individual's total compensation. Objective criteria include a comparison of
actual versus target operating income and performance versus specific financial
and strategic objectives for both the Company as a whole and each executive's
operating unit, as established in connection with the Company's annual planning
meeting. Subjective criteria encompass evaluation of the executive's initiative,
ability, attitude and contribution to overall unit and corporate performance. No
formal weighting of the various criteria was employed in setting incentive
bonuses. A portion of these incentives was paid through the Management
Compensation Plan which was approved by stockholders in 1994. For 1994, Messrs.
Krongard and Shattuck determined the incentive bonuses of the Company's
executive officers, other than the Senior Executives. Mr. Krongard made specific
recommendations regarding the incentive bonuses for each of the Senior
Executives. The Committee determined Mr. Krongard's incentive bonus and accepted
Mr. Krongard's recommendations regarding the incentive bonuses of the other
Senior Executives.
EQUITY COMPENSATION PLAN
In 1992, the Committee instituted the Company's Equity Compensation Plan
whereby 10% of total earned cash compensation above a specified amount was
withheld from the compensation of Managing Directors. Of the withheld amount 50%
is paid in the Company's Common Stock (calculated at a 15% discount from
market), and
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<PAGE>
the individual is allowed to invest the remaining 50% of the withheld amount
either in additional shares of the Company's Common Stock at market or in
certain investment vehicles sponsored by the Company. The stock and investments
are not available to the individual for three years (five years in the event the
individual leaves the Company). In 1993, participation in the Equity
Compensation Plan was expanded to include all Managing Directors and Principals
of Alex. Brown. In 1994, $7,080,300 of cash compensation was withheld pursuant
to the Equity Compensation Plan, including $637,000 for the Senior Executives,
and replaced by shares of the Company's Common Stock and investments in
Company-sponsored investment vehicles.
The Committee believes that the increase in stock ownership pursuant to the
Equity Compensation Plan is beneficial in aligning management's and
stockholders' interests and, over the long-term, increasing stockholder value.
EQUITY INCENTIVE PLAN
The other long-term incentive components of executive officers' 1994
compensation arose under the Company's 1991 Equity Incentive Plan. Awards of
stock options and rights to purchase securities under the 1991 Equity Incentive
Plan are designed to promote the identity of long-term interests between the
Company's key employees and its stockholders.
At the end of 1994, 404,000 options were issued at a 25% premium over the
average stock price for the 30 days prior to the award date. The options have a
ten-year term and vest pro-rata over the first six years. In setting the amounts
and terms of annual option awards, the Committee considers a number of factors
including the amounts and terms of prior awards of option grants. Option share
amounts awarded in 1994 and the option terms were approximately the same as in
the past several years. Options are generally granted to new Managing Directors,
Principals and Vice Presidents of Alex. Brown. Awards other than to newly
promoted officers are made on a subjective basis. None of the Senior Executives
received options in 1994.
At the end of 1994, executive officers were awarded the right to buy a
total of $5,392,000 of 8% Convertible Subordinated Debentures, including
$3,605,900 for the Senior Executives. The debentures are convertible into Common
Stock at $33.70 per share, a 15% premium over the average stock price for the 30
days prior to the award date, after vesting at the end of a three-year period.
The purchase of the debentures was financed by loans which the Company granted
to the recipients at an annual interest rate of 8%. These loans are subject to
forgiveness over a six-year period based upon annual or cumulative return on
stockholders' equity objectives which are set by the Committee every three
years. In determining the amount of debentures to be purchased by executive
officers, the Committee reviewed such amount relative to cash compensation for
each executive officer, although no specific percentage relationships were
employed. In general, the Committee's policies call for the amount of
convertible debentures sold to the CEO and other executive officers to be
significant relative to their total compensation.
Under the Equity Partnership Plan, certain key employees purchased Common
Stock and Convertible Subordinated Debentures at market. The purchases were
financed by recourse loans from the Company. Pursuant to the Plan a portion of
the principal amount of such loans may be forgiven provided that the aggregate
amount of loan forgiveness does not exceed the difference between market value
and book value at the time of purchase. In 1994, the Company forgave $1,250,000
of the principal amount of such loans, including $195,689 to the Senior
Executives. The timing and extent of any future loan forgiveness will be at the
discretion of the Committee, based on Company and individual performance.
OTHER COMPENSATION PLANS
At various times in the past, the Company has adopted certain employee
benefit plans in which executive officers are permitted to participate on the
same terms as other employees who meet applicable eligibility criteria, subject
to any legal limitations on the amounts that may be contributed or the benefits
that may be payable under the plans. The Company provides 401(k) matching
contributions and contributions to a profit sharing plan in
15
<PAGE>
amounts determined annually based upon Company performance. In 1994 these
amounts totalled 3% of the salaries of the Senior Executives. Managing Directors
of Alex. Brown, including the Senior Executives, and Non-Employee Directors of
the Company also participate in split dollar life insurance arrangements.
MR. KRONGARD'S 1994 COMPENSATION
Mr. Krongard's annual and long-term incentive compensation was earned under
the same plans available to executive officers and other key employees, with
annual bonus and long-term incentive compensation based predominantly on the
Company's return on stockholders' equity and other financial ratios, operating
results and achievement of specified goals.
In early 1994, the Board of Directors accepted the Company's three-year
plan which set the Company's financial and operating objectives for 1994-1996.
In turn, the Committee, in conjunction with the Board's Organization Committee,
approved specific standards, goals and objectives for Mr. Krongard.
In establishing Mr. Krongard's 1994 annual compensation and long-term
incentives, the Committee reviewed his performance relative to the standards,
goals and objectives established early in the year although no formal or
absolute weighting of these factors was utilized. Specifically, in determining
Mr. Krongard's compensation for 1994, the factors considered by the Committee
included the following:
(Bullet) The fact that 1994 was the second best year in the Company's
history in terms of both revenues and net income;
(Bullet) The Company's performance relative to the industry;
(Bullet) A 16% increase in book value per share to $26.13;
(Bullet) Return on average equity for the year of 19.7%, as compared to
28.8% in the prior year;
(Bullet) Pre-tax income of 19.5% as a percentage of revenues, as compared
to 23.6% in the prior year;
(Bullet) Mr. Krongard's role in promoting the long-term strategic growth of
the Company.
In light of the foregoing, the Committee approved aggregate cash
compensation for Mr. Krongard that was 21% less than in the prior year.
SECTION 162(M) CONSIDERATION
Effective January 1, 1994 Section 162(m) of the Internal Revenue Code of
1986 (the "Code") generally denies a tax deduction to any publicly-held
corporation for compensation that exceeds $1 million paid to any Senior
Executive in a taxable year, subject to an exception for "performance-based
compensation" as defined in the Code. In 1994, the stockholders approved the
Management Compensation Plan which provides for performance-based compensation
for executive officers. In determining compensation for the Senior Executives,
the primary consideration will be achievement of the Company's strategic goals,
taking into consideration competitive practices, market conditions and other
factors. To the extent that fulfilling these goals is consistent with obtaining
tax deductions, the Company is committed to making compensation awards that will
qualify for tax deductions.
SUBMITTED BY THE COMPENSATION COMMITTEE
OF THE COMPANY'S BOARD OF DIRECTORS:
Lee A. Ault III, Chairman Steven Muller, Ph.D. David M. Norman
16
<PAGE>
CERTAIN TRANSACTIONS
REAL ESTATE LEASES
The Company leases approximately 15,000 square feet of office space at 135
East Baltimore Street in Baltimore, Maryland, from Brown Realty Limited
Partnership, all except one of the owners of which are members of the family of
Benjamin H. Griswold IV. The lease, which expires on March 31, 1997, calls for
rental payments of $125,750 per year during the lease term. The lease is a net
lease, and accordingly, the Company is responsible for all taxes, utilities,
insurance and maintenance charges during the lease term. The Company believes
that the lease terms are no less favorable than those which could have been
obtained in arm's length dealings with an unaffiliated third party.
The Company also leases approximately 36,000 square feet of office space at
119-131 East Baltimore Street in Baltimore, Maryland from Alex. Brown Partners
(the "Partnership"), which was the entity through which the Company's investment
banking and securities brokerage business was conducted until 1984. The
Partnership is a Maryland limited partnership, the partners of which include
certain officers and directors of the Company and other Managing Directors and
Principals of Alex. Brown. The maximum Partnership interest of any current
director, officer or employee of the Company is less than 3%. The lease, which
expires on March 31, 1997, calls for rental payments of $262,500 per year during
the lease term. The lease is a net lease, and accordingly, the Company is
responsible for all taxes, utilities, insurance and maintenance charges during
the lease term. The Company believes that the lease terms are no less favorable
than those which could have been obtained in arm's length dealings with an
unaffiliated third party.
MARGIN ACCOUNTS
Certain directors and executive officers maintain margin accounts with the
Company. Such extensions of credit have been made in the ordinary course of the
Company's business and are on the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
non-affiliated persons, and do not involve more than the normal risk of
collectibility or present other unfavorable features.
PROFESSIONAL SERVICES
Andre Brewster, a member of the Board during 1994, is a partner in the law
firm of Piper & Marbury, which from time to time performed legal services for
the Company in 1994.
EMPLOYMENT AGREEMENTS
During 1993, the Company entered into an employment agreement with Mr.
Griswold which provides for his employment until December 31, 1996. Under his
agreement, Mr. Griswold will be compensated during the employment period at an
annual rate which shall be determined by the Compensation Committee of the Board
but shall not be less than $500,000. If Mr. Griswold ceases to be employed by
the Company during the employment period for any reason other than the
termination of his employment for cause and is not in breach of his agreement,
the Company has agreed to immediately vest and extend the term of all
outstanding stock options or other similar employment related benefits held by
Mr. Griswold. The agreement further provides that in connection with the annual
meeting of stockholders for 1995 and 1996, the Board will nominate Mr. Griswold
for election as a director of the Company. Additionally, Mr. Griswold may not
engage in any activity competitive with the business of the Company during the
employment period.
17
<PAGE>
EMPLOYEE PARTICIPATION IN
PRIVATE INVESTMENTS
In connection with the establishment and management of certain private
investments and investment funds, certain key employees, including Senior
Executives, receive interests in the appreciation of investment assets,
including merchant banking investments. These interests generally have little or
no value at the time of grant and, accordingly, do not result in compensation
expense to the Company. The ultimate amount, if any, received by such
participants will depend on the performance of the particular investments.
Certain key employees, including Senior Executives, may also receive interests
in any gains realized on certain equity instruments received in connection with
the Company's investment banking activities.
OTHER PERTINENT INFORMATION
ACCOUNTING MATTERS
KPMG Peat Marwick LLP ("KPMG") has served as auditor for the Company and
its predecessors since 1977 and has been selected by the Board to continue as
the Company's auditor for the next fiscal year. The audit services rendered by
KPMG for the fiscal year ended December 31, 1994 included: audit of the
financial statements of the Company, review of unaudited quarterly financial
information, consultation in connection with the preparation of the annual
report to stockholders and the filing of the Annual Report on Form 10-K with the
Securities and Exchange Commission and consultation with, and assistance to,
Company personnel on accounting and related matters.
Representatives of KPMG will attend the Meeting, will have an opportunity
to make a statement if they desire to do so and will be available to respond to
appropriate questions by stockholders.
STOCKHOLDER PROPOSALS
The Company provides all stockholders with the opportunity, under certain
circumstances, to participate in the governance of the Company by submitting
proposals that they believe merit consideration at the next annual meeting of
stockholders, to be held in April 1996. Stockholders may also submit the names
of individuals that they wish to be considered by the Organization Committee of
the Board as nominees for directors. To enable management to analyze and respond
adequately to proposals and to prepare appropriate proposals for presentation in
the Company's Proxy Statement for the next annual meeting of stockholders, any
such proposal must be received by the Company no later than November 24, 1995,
and should be addressed to the attention of its Secretary at its principal place
of business in Baltimore, Maryland.
OTHER MATTERS
Management is not aware of any other matters that may be brought before the
meeting. If any matters properly come before the meeting, the persons named in
the proxy will vote in accordance with their judgment as to the best interests
of the Company with respect to such matters.
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****************************************************************************
APPENDIX
ALEX. BROWN INCORPORATED
PROXY FOR 1995 ANNUAL MEETING OF STOCKHOLDERS
This proxy is solicited on behalf of the Board of Directors
The undersigned hereby acknowledges receipt of the Annual Report to
Stockholders and the Notice of Annual Meeting and Proxy Statement relating to
the Annual Meeting of Stockholders of Alex. Brown Incorporated, called to
convene on April 25, 1995, and hereby constitutes and appoints A. B. KRONGARD
and MAYO A. SHATTUCK III, and either of them, the true and lawful attorneys
and Proxies of the undersigned with full power of substitution to each, to
vote all the shares of Common Stock of the corporation which the undersigned
is entitled to vote at the meeting and at any adjournment thereof in their
discretion, on any matter which may properly come before the meeting and as
follows:
<PAGE>
The shares represented by this proxy are to be voted in accordance with the
specific instructions below and, if no choice is indicated, are to be voted
FOR the election of the nominees listed and FOR Proposal II.
please mark
[X] your votes
as this
Proposal I. ELECTION OF DIRECTORS, as nominated by the Board.
FOR all nominees WITHHOLD Lee A. Ault III, Neil R. Austrian,
listed at right (except AUTHORITY Thomas C. Barry, Benjamin H.
those named below) for all Nominees Griswold IV, Donald B. Hebb, Jr.,
listed at right A.B. Krongard, Steven Muller,
[ ] [ ] David M. Norman, Frank E.
Richardson and Mayo A. Shattuck
III.
(Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name on the line below.)
_____________________________________________________________________________
FOR AGAINST ABSTAIN
PROPOSAL II. TO APPROVE THE ALEX. BROWN INCORPORATED [ ] [ ] [ ]
1995 NON-EMPLOYEE DIRECTOR STOCK PURCHASE
PLAN, AS RECOMMENDED BY THE BOARD.
Please sign, date and return this proxy promptly in
the enclosed envelope which requires no postage if
mailed in the United States.
___________________________________________________
___________________________________________________
SIGNATURE(S) OF STOCKHOLDER(S)
(Signature(s) should conform with the name(s) printed hereon. If
stock is held in joint names, all should sign. When signing as
attorney, as executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign in full corporate
name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.)
Date:____________________________________________________, 1995
PLEASE DO NOT FOLD, STAPLE OR DAMAGE
