UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934 (Amendment No. __ )
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Filed
by the Registrant x
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Filed
by a Party other than the Registrant ¨
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Check
the appropriate box:
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x
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Preliminary
Proxy Statement
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¨
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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¨
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Definitive
Proxy Statement
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¨
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Definitive
Additional Materials
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¨
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Soliciting
Material Pursuant to §240.14a-12
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Raymond
James Financial, Inc.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment
of Filing Fee (Check the appropriate
box):
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¨
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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__________________________________________________________________________________________________________
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(2)
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Aggregate
number of securities to which transaction
applies:
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__________________________________________________________________________________________________________
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(3)
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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):
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__________________________________________________________________________________________________________
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(4)
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Proposed
maximum aggregate value of
transaction:
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__________________________________________________________________________________________________________
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__________________________________________________________________________________________________________
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¨
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Fee
paid previously with preliminary
materials.
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¨
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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.
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(1)
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Amount
Previously Paid:
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__________________________________________________________________________________________________________
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(2)
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Form,
Schedule or Registration Statement
No.:
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__________________________________________________________________________________________________________
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__________________________________________________________________________________________________________
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__________________________________________________________________________________________________________
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Persons
who are to respond to the collection of information contained in this form
are
not
required
to respond unless the form displays a currently valid OMB control
number.
RAYMOND
JAMES FINANCIAL, INC.
880
Carillon Parkway
St.
Petersburg, Florida 33716
(727)
567-1000
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
February
14, 2008
To
the
Shareholders of Raymond James Financial, Inc.:
The
Annual Meeting of Shareholders of Raymond James Financial, Inc. will be held
at
the Raymond James Financial Center, 880 Carillon Parkway, St. Petersburg,
Florida, on Thursday, February 14, 2008 at 4:30 p.m. for the following
purposes:
1.
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To
elect eleven nominees to the Board of Directors of the
Company.
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2.
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To
ratify the appointment by the Audit Committee of the Board of Directors
of
KPMG LLP as the Company's
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independent
registered public accounting firm.
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3.
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To
approve an amendment to the Company’s Articles of Incorporation, as
amended, to increase the number of
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authorized
shares of common stock to 350 million shares, $.01 par
value.
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Shareholders
of record as of the close of business on December 20, 2007 will be entitled
to
vote at this meeting or any adjournment thereof. Information relating to
the
matters to be considered and voted on at the Annual Meeting is set forth
in the
Proxy Statement accompanying this Notice.
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By
order of the Board of Directors,
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/s/
PAUL L. MATECKI
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Paul
L. Matecki, Secretary
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January
?, 2008
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YOUR
VOTE IS IMPORTANT TO THE COMPANY. If you do not expect
to attend the meeting in person, please vote on the matters to
be
considered at the meeting by completing the enclosed proxy and
mailing it
promptly in the enclosed envelope, or by telephone or internet
vote.
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Important
Notice Regarding the Availability of Proxy Materials
For
the Shareholder Meeting to be held on February 14, 2008
The
proxy statement, proxy card and 2007 annual report to shareholders are available
at
www.RaymondJames.com
under “About Our Company–Investor Relations–Shareholders’
Meeting”
The
annual meeting of shareholders of Raymond James Financial, Inc. will be held
on
February 14, 2008 at 4:30 p.m. at the offices of the Company at 880 Carillon
Parkway, St. Petersburg, Florida.
The
matters intended to be acted upon are:
1. To
elect eleven nominees to the Board of Directors of the
Company.
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2. To
ratify the appointment by the Audit Committee of the Board of Directors
of
KPMG LLP as the Company's
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independent
registered public accounting firm.
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3. To
approve an amendment to the Company’s Articles of Incorporation, as
amended, to increase the number
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of
authorized shares of common stock to 350 million shares, $.01 par
value.
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The
Board
of Directors recommends voting in favor of the nominees listed in the proxy
statement and for the appointment of KPMG LLP and approval of the
amendment.
The
following proxy materials are being made available at the website location
specified above.
1.
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The
proxy statement for the 2008 annual meeting of
shareholders;
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2.
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The
2007 annual report to shareholders;
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3.
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The
form of proxy card being distributed to shareholders in connection
with
the 2008 annual meeting of
shareholders.
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Control/identification
numbers are contained in the proxy materials accompanying this
notice.
To
obtain
directions to attend the annual meeting and vote in person, contact the
Corporate Secretary at (727) 567-1000.
If
the
form of proxy is completed, signed and returned, the shares represented thereby
will be voted at the meeting. Delivery of the proxy does not affect
your right to attend the meeting. However, if your shares are held in
the name of a bank, broker or other holder of record, you must obtain a proxy
from the holder of record, executed in your favor, to be able to vote at
the
meeting. Otherwise, your shares will be voted in the manner in which
you instructed the record holder of your shares.
ii
TABLE
OF CONTENTS
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Page
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Proxy
Statement
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1
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Shareholders
Sharing the Same Last Name and Address
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1
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Electronic
Access to Corporate Governance Documents
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2
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Electronic
Access to Proxy Materials and Annual Report; Internet
Voting
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2
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Shareholders
Entitled to Vote and Principal Shareholders
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2
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Proposal
1: Election of Directors
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4
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Information
Regarding Board and Committee Structure
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6
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Director
Compensation
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7
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Section
16(a) Beneficial Ownership Reporting Compliance
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8
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Report
of the Audit Committee of the Board of Directors
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8
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Compensation
Discussion and Analysis
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10
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Summary
Compensation Table
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15
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Grants
of Plan Based Awards for Fiscal Year Ended September 30,
2007
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16
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Outstanding
Equity Awards at Fiscal Year End September 30, 2007
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17
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Option
Exercises and Stock Awards Vested for Fiscal Year Ended September
30,
2007
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18
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Nonqualified
Deferred Compensation
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18
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Transactions
with Related Persons
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Equity
Compensation Plan Information
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Proposal
2: To ratify the appointment by the Audit Committee of the Board
of
Directors of
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22
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KPMG
LLP as the Company’s Independent Registered Public Accounting
Firm
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Fees
Paid to Independent Registered Public Accounting Firm
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22
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Proposal
3: To approve an amendment to the Company’s Articles of Incorporation, as
amended,
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23
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to
increase the number of authorized shares of common stock to 350
million
shares, $.01
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par
value
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Shareholder
Proposals and Other Matters
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23
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Appendix
A: Text of Article IV of the Company’s Articles of Incorporation, as
amended, as
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24
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proposed
to be amended
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PROXY
STATEMENT
This
proxy statement is furnished in connection with the solicitation of proxies
on
behalf of the Board of Directors of Raymond James Financial, Inc. (the
"Company") for the Annual Meeting of Shareholders to be held on February
14,
2008 at 4:30 p.m., or any adjournment thereof. These proxy materials
are expected to be mailed out on or about January ?, 2008, to all shareholders
entitled to vote at the meeting.
If
the accompanying proxy form is completed, signed and returned, the shares
represented thereby will be voted at the meeting. Delivery of the
proxy does not affect your right to attend the meeting. However, if
your shares are held in the name of a bank, broker or other holder of record,
you must obtain a proxy from the holder of record, executed in your favor,
to be
able to vote at the meeting. Otherwise, your shares will be voted in
the manner in which you instructed the record holder of your
shares.
If
you are a shareholder of record, you may revoke your proxy at any time prior
to
the close of the polls at the Annual Meeting by submitting a later dated
proxy
to the Company’s Corporate Secretary, or delivering a written notice of
revocation to the Corporate Secretary, at Raymond James Financial, Inc. 880
Carillon Parkway, St. Petersburg, Florida, 33716. If you hold
shares through a bank, broker or other holder of record, you must contact
that
entity to revoke any prior voting instructions.
Each
share of the Company's common stock outstanding on the record date will be
entitled to one vote on each matter. The eleven nominees for election
as directors who receive the most votes “for” election will be
elected. Ratification of the appointment of the Company's independent
registered public accounting firm and approval of any proposal or other business
that may properly come before the meeting will each require that the votes
cast
favoring the action exceed the votes cast opposing the action, except for
action
on Proposal 3, which will require approval of the holders of a majority of
the
outstanding shares of common stock.
For
election of directors, withheld votes, abstentions and broker non-votes do
not
affect whether a nominee has received sufficient votes to be
elected. For the purpose of determining whether the shareholders have
approved matters other than the election of directors, withheld votes,
abstentions and broker non-votes do not have the same effect as a negative
vote,
except for action on Proposal 3. Since Proposal 3 requires the
approval of the holders of a majority of the outstanding shares of common
stock,
withheld votes, abstentions and broker non-votes have the same effect as
a
negative vote. Shares represented at the Annual Meeting in person or
by proxy are counted for quorum purposes, even if they are not voted on any
matter. Please note that banks and brokers that have not received
voting instructions from their customers may vote their customers’ shares on the
election of directors and the ratification of KPMG LLP as the Company's
independent registered public accounting firm, but not on Proposal
3.
A
copy of the Company's Annual Report is being furnished to each shareholder
together with this proxy statement. All proxy solicitation costs will
be paid by the Company.
SHAREHOLDERS
SHARING THE SAME LAST NAME AND ADDRESS
In
accordance with notices that certain banks and brokerage firms sent to certain
shareholders, shareholders who share the same last name and address are
receiving only one copy of the Company’s annual report and proxy statement,
unless they have notified the Company that they want to continue receiving
multiple copies. This practice, known as “householding,” is designed to reduce
duplicate mailings and save significant printing and postage costs as well
as
natural resources.
If
you received a household mailing this year and you would like to have additional
copies of the Company’s annual report and/or proxy statement mailed to you, or
you would like to opt out of this practice for future mailings, please contact
the Corporate Secretary at (727) 567-1000 or write to him care of Raymond
James
Financial, Inc., 880 Carillon Parkway, St. Petersburg, FL 33716. We will
promptly send additional copies of the annual report and/or proxy statement
upon
receipt of such request.
Householding
for bank and brokerage accounts is limited to accounts within the same bank
or
brokerage firm. For example, if you and your spouse share the same last name
and
address, and you and your spouse each have accounts containing Raymond James
Financial stock at two different brokerage firms, your household will receive
two copies of the Company’s annual meeting materials—one from each brokerage
firm. To reduce the number of duplicate sets of annual meeting materials
your
household receives, you may want to take advantage of the Company’s electronic
access program. See “Electronic Access to Proxy Materials and Annual Report;
Internet Voting.”
ELECTRONIC
ACCESS TO CORPORATE GOVERNANCE DOCUMENTS
The
Company also makes available on its Internet site at http://www.raymondjames.com
under “About Our Company – Investor Relations - Corporate Governance” a number
of the Company’s corporate governance documents. These include: the
Corporate Governance Principles, the charters of the Audit Committee and
the
Corporate Governance, Nominating and Compensation Committee of the Board
of
Directors, the Senior Financial Officers’ Code of Ethics and the Codes of Ethics
for Employees and the Board of Directors. Printed copies of these
documents will be furnished to any shareholder who requests them. The
information on the Company’s Internet site is not incorporated by reference into
this proxy statement.
ELECTRONIC
ACCESS TO PROXY MATERIALS AND ANNUAL REPORT; INTERNET
VOTING
This
notice of Annual Meeting and Proxy Statement and the 2007 Annual Report are
available on the Company’s Internet site. If you are a shareholder of record and
would like to view future proxy statements and annual reports over the Internet
instead of receiving copies in the mail, follow the instructions provided
when
you vote over the Internet. If you hold your shares through a bank,
broker, or other holder, check the information provided by that entity for
instructions on how to elect to view future proxy statements and annual reports
electronically in lieu of receiving copies and how to vote your shares over
the
Internet. Opting to access your proxy materials online saves the
Company the cost of producing and mailing these materials to your home or
office
and gives you an automatic link to the proxy voting site.
Most
shareholders of record have a choice of voting over the Internet, by telephone,
or by using a traditional proxy card. Please check your proxy card or
the information forwarded by your bank, broker or other holder of record
to see
which options are available to you.
SHAREHOLDERS
ENTITLED TO VOTE
AND
PRINCIPAL
SHAREHOLDERS
Shareholders
of record at the close of business on December 20, 2007 will be entitled
to
notice of, and to vote at, the Annual Meeting. As of December 20,
2007, there were 120,998,277 shares of common stock outstanding and
entitled to vote. Shareholders are entitled to one vote per share on
all matters.
The
following table sets forth, as of December 20, 2007, information regarding
the
beneficial ownership of the Company's common stock by each person known by
the
Company to own beneficially more than 5% of the shares of the Company's common
stock, each director and new nominee for director, the Company's Chief Executive
Officer, Chief Financial Officer and the three other highest paid executive
officers (those five executive officers are listed in the “Summary Compensation
Table” and are collectively referred to as the "Named Executive Officers"), and
all directors and executive officers as a group.
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Beneficially
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Percent
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Name
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Owned
Shares
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of
Class
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Earnest
Partners LLC
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9,989,173
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(1)
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8.26%
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1180
Peachtree Street NE, Suite 2300
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Atlanta,
GA 30309
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Private
Capital Management, L.P.
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11,419,272
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(2)
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9.44%
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8889
Pelican Bay Blvd., Suite 500
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Naples,
FL 34108
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Robert
A. James Trust
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7,566,030
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6.25%
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1201
Pacific Avenue, Suite 150
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Tacoma,
WA 98401
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Thomas
A. James, Chairman, CEO, Director
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14,801,790
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(3)
(4)
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12.23%
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Angela
M. Biever, Director
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18,257
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(5)
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*
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Shelley
G. Broader, Nominee for Director
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100
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*
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Francis
S. Godbold, Vice Chairman, Director
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424,005
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(3)
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*
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H.
William Habermeyer, Jr., Director
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9,175
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(6)
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*
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Chet
Helck, President, COO, Director
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248,802
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(3)
(7)
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*
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Jeffrey
P. Julien, CFO,
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103,616
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(3)
(8)
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*
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Dr.
Paul W. Marshall, Director
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23,345
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(9)
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*
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Paul
C. Reilly, Director
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1,000
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*
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Richard
K. Riess, Executive Vice President
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89,344
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(3)
(10)
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*
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Kenneth
A. Shields, Director
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47,070
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(11)
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*
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Robert
P. Saltzman, Director
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1,000
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*
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Hardwick
Simmons, Director
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30,656
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(12)
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*
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Susan
N. Story, Nominee for Director
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100
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*
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Jeffrey
E. Trocin, Executive Vice President
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176,683
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(3)
(13)
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*
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All
Executive Officers
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and
Directors as a Group
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16,970,822
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(3)
(14)
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14.03%
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(24
persons)
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(1)
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Based
on information contained in Form 13F-HR filed with the Securities
and
Exchange Commission (“SEC”) on November 13, 2007. Earnest
Partners LLC is the beneficial owner of these shares of common
stock held
in accounts managed for clients.
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(2)
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Based
on information contained in Form 13F-HR filed with the SEC on November
14,
2007. Private Capital Management, L.P. is the beneficial owner
of these shares of common stock held in accounts managed for
clients.
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(3)
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Includes
shares credited to Employee Stock Ownership Plan
accounts.
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(4)
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Includes
315,893 shares owned by the Robert A. and Helen James' Annuity
Trust, of
which Thomas A. James is a remainder beneficiary and for which
Raymond
James Trust Company West, a wholly owned subsidiary of the Company,
serves
as trustee. Excludes shares held by two trusts, of which he is
not a beneficiary: 7,566,030 shares owned by the Robert A. James
Trust and
204,212 shares owned by the James' Grandchildren's Trust, for both
of
which Raymond James Trust Company West serves as trustee, and both
of
which have as beneficiaries other James family members. Thomas
A. James
disclaims any beneficial interest in these two
trusts.
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(5)
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Includes
8,444 outstanding stock options that are exercisable as of or within
60
days from December 20, 2007.
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(6)
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Includes
5,625 outstanding stock options that are exercisable as of or within
60
days from December 20, 2007.
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(7)
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Includes
118,871 outstanding stock options that are exercisable as of or
within 60
days from December 20, 2007 and 93,994 shares of common stock held
in a
margin account.
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(8)
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Includes
12,600 outstanding stock options that are exercisable as of or
within 60
days from December 20, 2007 and 54,110 shares of common stock held
in a
margin account.
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(9)
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Includes
9,000 outstanding stock options that are exercisable as of or within
60
days from December 20, 2007.
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(10)
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Includes
10,800 outstanding stock options that are exercisable as of or
within 60
days from December 20, 2007.
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(11)
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Exchangeable
shares that were issued January 2, 2001 in connection with the
acquisition
of Goepel McDermid, Inc. They are exchangeable into shares of
the Company's common stock on a one-for-one basis and are held
in a margin
account.
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(12)
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Includes
5,625 outstanding stock options that are exercisable as of or within
60
days from December 20, 2007.
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(13)
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Includes
14,044 outstanding stock options that are exercisable as of or
within 60
days from December 20, 2007.
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(14)
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Includes
404,790 outstanding stock options that are exercisable as of or
within 60
days from December 20, 2007 and 580,858 shares of common stock
held in
margin accounts.
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PROPOSAL
1: ELECTION OF DIRECTORS
The
Company's Board of Directors presently consists of six independent directors
and
four management directors. All of the present members of the Board of
Directors have been proposed for re-election by the Corporate Governance,
Nominating and Compensation Committee of the Board of Directors, except for
Dr.
Paul Marshall who is retiring from the Board in accordance with the term
limitations of the Company’s Corporate Governance Principles.
The
eleven directors to be elected are to hold office until the Annual Meeting
of
Shareholders in 2009 and until their respective successors shall have been
elected. All of the nominees were elected by the shareholders on
February 15, 2007, to serve as directors of the Company until the Annual
Meeting
of Shareholders in 2008, except for Mr. Saltzman, who was elected in November
2007, and Ms. Broader and Ms. Story who are new nominees.
It
is intended that proxies received will be voted to elect the nominees named
below. Should any nominee decline or be unable to accept such
nomination to serve as a director due to events which are not presently
anticipated, discretionary authority may be exercised by the holder of the
proxies to vote for a substitute nominee.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING
NOMINEES:
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Principal
Occupation (1) and
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Director
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Nominee
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Age
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Directorships
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Since
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Angela
M. Biever*
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54
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Vice
President, Managing Director, Consumer Internet, Intel Capital
since 2006;
General Manager, Intel New Business Initiatives from 2000 to 2006;
Director, Intel Capital from 1999 to 2000; Independent Consultant,
working
with a leading Internet Services Provider from 1997 to 1998; Various
senior management positions with First Data Corporation, an information
and transaction processor from 1991 to 1997. Chairperson of the
Audit Committee.
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1997
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Shelley
G. Broader*
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47
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President
and Chief Executive Officer, Kash n’ Karry Food Stores, Inc., (doing
business as Sweetbay Supermarket) since 2006. President and Chief
Operating Officer, Kash n’ Karry Food Stores, Inc., 2003 to 2006. From
1991 to 2003, positions of increasing management responsibility
at
Hannaford Bros. Co., culminating in Senior Vice President, Business
Strategy, Marketing and Communications. Prior financial service
industry
experience includes Massachusetts Financial Services Company and
Assistant
Vice President at First Albany Corporation. Trustee, St. Leo
University. Director of United Way of Tampa Bay. Member, Board
of Advisors, H. Lee Moffitt Cancer Center & Research
Institute.
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Francis
S. Godbold
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64
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Vice
Chairman of Raymond James Financial, Inc. ("RJF"); Director and
Officer of
various affiliated entities. Executive Vice President of
Raymond James & Associates, Inc. ("RJA"), a wholly owned subsidiary of
the Company.
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1977
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H.
William Habermeyer, Jr.*
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65
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Director,
Southern Company since 2007; former President and CEO, Progress
Energy Florida from 2000 to 2006; Vice President, Carolina Power
&
Light from 1993 to 2000; U.S. Navy from 1964 to 1992 - retired
a Rear
Admiral. Member of the Audit Committee.
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2003
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Principal
Occupation (1) and
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Director
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Nominee
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Age
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Directorships
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Since
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Chet
Helck
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55
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President
and Chief Operating Officer of RJF since 2002; Executive Vice President
of
Raymond James Financial Services, Inc. ("RJFS"), a wholly owned
subsidiary
of the Company, from 1999 to 2002; Senior Vice President, RJFS
from 1997
to 1999. Director of RJFS, RJA and Raymond James Ltd (“RJ
Ltd.”), the Company’s wholly owned Canadian subsidiary (formerly Goepel
McDermid Inc, a Canadian brokerage firm); Director, Securities
Industry
and Financial Markets Association.
|
|
|
2003
|
|
|
|
|
|
|
|
|
|
|
Thomas
A. James
|
|
65
|
|
Chairman
of the Board and Chief Executive Officer of RJF. Director and
Officer of various affiliated entities. Chairman of the Financial
Services
Roundtable. Past Chairman of the Securities Industry
Association.
|
|
|
1963
|
|
|
|
|
|
|
|
|
|
|
Paul
C. Reilly*
|
|
53
|
|
Chairman,
Korn Ferry International since 2001. Chairman and Chief
Executive Officer, Korn Ferry International 2001 to 2007. Chief
Executive
Officer, KPMG International 1998 to 2001. Prior to being named
to that position, Vice Chairman, Financial Services of KPMG LLP,
the
United States member firm of KPMG International.
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
Robert
P. Saltzman*
|
|
65
|
|
Retired
in 2001, after a 37 year career in the insurance industry; a president
or
chief executive officer for 16 of those years. From 1994 to
2001, President and Chief Executive Officer of Jackson National
Life
Insurance Co. A Director of WNC First Corporation since
November 2004, a property and casualty insurance underwriter. A
Director
and Audit Committee Chairman of Enhance Financial Services, a New
York
Stock Exchange (“NYSE”) listed company, from 1996 until its acquisition in
March 2001. Trustee of Northwestern University.
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
Kenneth
A. Shields
|
|
59
|
|
Chairman
and Chief Executive Officer of Conifex, Inc., a Canadian company
pursuing
acquisition opportunities in the Canadian forest products industry,
since
2007. Non-executive Chairman of RJ Ltd. since 2006; Chairman
and Chief Executive Officer of RJ Ltd. and its predecessor company
from
1996 to January 31, 2006. Past Chairman of the Investment Dealers
Association of Canada; Director of TimberWest Forest Corp.; Lead
Director
and Deputy Chairman, Mercer International Inc.
|
|
|
2001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
Occupation (1) and
|
|
|
Director
|
Nominee
|
|
Age
|
|
Directorships
|
|
|
Since
|
|
|
|
|
|
|
|
|
Hardwick
Simmons*
|
|
67
|
|
Director,
Geneva Acquisition Corp. since 2007; Director, Lions Gate Entertainment
Corp. since 2005; Chairman and CEO of the NASDAQ Stock Market from
2001 to
2003; President and CEO of Prudential Securities from 1990 to 2001;
President, Shearson Lehman Brothers - Private Client Group, from
1983 to
1990, Past Chairman of the Securities Industry Association; Past
Director
of the NASD. Lead Director and Member of Corporate Governance,
Nominating
and Compensation Committee.
|
|
|
2003
|
|
|
|
|
|
|
|
|
Susan
N. Story*
|
|
47
|
|
President
and Chief Executive Officer, Gulf Power Company, since 2003. Executive
Vice President, Southern Company Services, Inc., 2001 to 2003.
Senior Vice
President, Southern Power Company, 2002 to 2003. Chair, Florida
Chamber of Commerce. Chairman of the Board, Gulf Power Company.
Vice
Chair, Florida Council of 100. Immediate past Vice Chair, Enterprise
Florida. Director, Association of Edison Illuminating Companies,
James
Madison Institute, and Southeastern Electric Exchange. Member,
Board of Advisors, H. Lee Moffitt Cancer Center & Research
Institute
|
|
|
|
*
|
Determined
to be independent directors under NYSE standards; see "Information
Regarding Board and Committee Structure"
below.
|
(1)
|
Unless
otherwise noted, the nominee has had the same principal occupation
and
employment during the last five
years.
|
INFORMATION
REGARDING BOARD AND COMMITTEE STRUCTURE
The
Board of Directors held four regular and two special telephonic meetings
during
fiscal 2007. All directors attended at least 75% of the meetings held
during the fiscal year.
The
current standing Committees of the Board of Directors are the Corporate
Governance, Nominating and Compensation Committee and the Audit
Committee. The Corporate Governance, Nominating and Compensation
Committee met five times during the fiscal year. All Committee
members attended at least 75% of the meetings held during the fiscal year.
The
Audit Committee met eight times during the fiscal year. Each member
of this Committee participated in at least 75% of the meetings held during
the
fiscal year. The activities of the Committees are set out in their
reports below.
The
Corporate Governance, Nominating and Compensation Committee is comprised
of
three independent directors as determined under New York Stock Exchange rules.
This Committee conducts its activities pursuant to a written charter approved
by
the Board of Directors, which is reviewed annually and was last revised by
the
Board of Directors on November 27, 2007. This Committee
identifies potential nominees to the Board of Directors, including candidates
recommended by management, and reviews their qualifications and
experience. Candidates for board membership are expected to
demonstrate high standards of integrity and character and offer important
perspectives on some aspect of the Company's business based on their own
business experience. The Company has not paid any third party a fee
to assist in the process of identifying and evaluating candidates. Ms. Broader
and Ms. Story were recommended to the Corporate Governance, Nominating and
Compensation Committee by the Company’s Chief Executive Officer.
This
Committee has not adopted any specific process or policy for considering
nominees put forward by shareholders and has never been requested to consider
such a nominee.
This
Committee has also determined that the directors identified as independent
directors have no material relationship with the Company that would impair
their
independence. In that connection, the Committee considered that the
Company purchases its electric power needs for its headquarters from Progress
Energy Florida, of which William Habermeyer, Jr. was President and CEO until
June 1, 2006, and determined that the nature of this business relationship
did
not constitute any impairment of independence. It also considered
that RJA purchases electricity for its Panama City, Florida sales office
from
Gulf Power Company, of which Susan N. Story is President and CEO, and determined
that the nature of this business relationship did not constitute any impairment
of independence.
The
Committee also considered that RJA and RJ Ltd paid Korn Ferry International,
of
which Paul C. Reilly is Chairman, recruiting fees of approximately $703,550
during fiscal 2007 and determined that these fees did not result in any
impairment of his independence. In connection with the solicitation of proxies
for the Company’s 2006 Annual Meeting of Shareholders, Institutional
Shareholders Services (“ISS”) considered Mr. Reilly an affiliated outside
director because Korn Ferry provided executive recruiting services to the
Company for which it was paid $218,000. ISS recommended withholding
votes not only for Mr. Reilly, but for all “inside” directors as well, due to
his affiliated designation. ISS categorizes executive recruiting as a
professional service similar to accounting or legal services. At that time,
the
ISS position on that relationship was absolute, lacking any de minimis
threshold, unlike the New York Stock Exchange’s independence
requirements.
Since
2007, ISS has applied a $10,000 de minimis threshold. During
fiscal 2007, the Company’s Canadian subsidiary paid Korn Ferry approximately
$219,450 in connection with two recruiting engagements, neither of which
involved an executive officer of the Company. RJA paid Korn Ferry
approximately $484,100 in connection with two recruiting engagements, neither
of
which involved an executive officer of the Company. The amount paid
to Korn Ferry represented 0.1% of its fiscal 2007 fee revenue of $653.4 million.
Under the NYSE rules, the Company’s Board of Directors determined that the Korn
Ferry engagements did not constitute a material relationship since the dollar
amount paid to Korn Ferry did not exceed the greater of $1,000,000 or two
percent of Korn Ferry’s revenues during the past three years. The
Company believes that ISS’s position with respect to Korn Ferry’s and Mr.
Reilly’s relationship with the Company remains unduly restrictive and
inappropriate, because it eliminates the exercise of business judgment on
the
part of the Company’s Board with respect to Mr. Reilly’s
independence.
Mr.
Hardwick Simmons is the Company’s Lead Director. As such, he presides
at the regular executive sessions of the independent
directors. Shareholders and other interested parties may communicate
with Company directors, including Mr. Simmons, or any of the individual
independent directors, by writing to them at the Company's headquarters,
or by
contact through the Company's website. Communications addressed to
the Board of Directors will be reviewed by the Corporate Secretary of the
Company and directed to them for their consideration, if
appropriate.
It
is the Company's policy that directors attend the Annual Meeting of
Shareholders; at the Annual Meeting of Shareholders on February 15, 2007,
all of
the Company's directors at that date were present, except for Mr. Marshall,
whose presence was prevented by a snowstorm in New England.
DIRECTOR
COMPENSATION
Independent
directors receive a $25,000 annual retainer, a $5,000 attendance fee for
each
regular meeting, $500 for each telephonic meeting and a $1,000 attendance
fee
for Committee service. The Lead Director and the Audit Committee
Chair each receive an additional $7,500 as part of their annual retainer,
and
the Chairman of the Corporate Governance, Nominating and Compensation Committee
receives an additional $4,000 as part of his annual
retainer. Management directors do not receive any additional
compensation for service as directors.
There
is a non-qualified stock option plan for the Company's outside directors
covering 854,298 shares of the Company's common stock. These options,
60,600 of which were outstanding at September 30, 2007, are exercisable at
prices ranging from $11.02 to $31.82 at various times through February 2012.
Outside directors are currently granted 2,500 options each per
year.
The
table below sets forth the total compensation, and the components thereof,
of
the Company’s directors who are not Named Executive Officers of the
Company.
DIRECTOR
COMPENSATION FOR FISCAL YEAR ENDED SEPTEMBER 30, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
|
|
|
|
|
|
|
|
|
In
Pension
|
|
|
|
|
|
|
|
|
Value
and
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
Non-Equity
|
Deferred
|
|
|
|
|
Fees
Paid
|
Stock
|
Option
|
Incentive
Plan
|
Compensation
|
All
Other
|
|
|
Name
|
in
Cash
|
Awards
|
Awards
(1)
|
Compensation
|
Earnings
|
Compensation
|
|
Total
|
Angela
M. Biever (2)
|
$54,125
|
$
-
|
$19,535
|
$
-
|
$
-
|
$ -
|
|
$ 73,660
|
Francis
S. Godbold (3)
|
$ -
|
$
-
|
$ -
|
$
-
|
$
-
|
$ -
|
|
$ -
|
H.
William Habermeyer, Jr. (4)
|
$46,500
|
$
-
|
$19,535
|
$
-
|
$
-
|
$ -
|
|
$ 66,035
|
Dr.
Paul W. Marshall (5)
|
$43,500
|
$
-
|
$19,535
|
$
-
|
$
-
|
$ -
|
|
$ 63,035
|
Paul
C. Reilly (6)
|
$47,500
|
$
-
|
$11,848
|
$
-
|
$
-
|
$ -
|
|
$ 59,348
|
Kenneth
A. Shields
|
$41,750
|
$
-
|
$22,306
|
$
-
|
$
-
|
$76,935
|
(7)
|
$140,991
|
Hardwick
Simmons (8)
|
$51,625
|
$
-
|
$19,535
|
$
-
|
$
-
|
$ -
|
|
$ 71,160
|
(1)
|
The
amounts shown in the Option Awards column represent the amount
the Company
recognized for financial statement reporting purposes in fiscal
year 2007
for the fair value of equity awards granted to the Company’s directors who
are not Named Executive Officers in fiscal year 2007 and prior
years, in
accordance with Statement of Financial Accounting Standards (“SFAS”)
No. 123(R), excluding the impact of estimated
forfeitures.
|
(2)
|
As
of September 30, 2007, Ms. Biever held outstanding options to purchase
13,194 shares of the Company’s common
stock.
|
(3)
|
Mr.
Godbold is an executive officer, other than a Named Executive Officer,
who
does not receive any additional compensation for services provided
as a
director.
|
(4)
|
As
of September 30, 2007, Mr. Habermeyer held outstanding options
to purchase
12,906 shares of the Company’s common
stock.
|
(5)
|
As
of September 30, 2007, Dr. Marshall held outstanding options to
purchase
13,750 shares of the Company’s common
stock.
|
(6)
|
As
of September 30, 2007, Mr. Reilly held outstanding options to purchase
4,750 shares of the Company’s common
stock.
|
(7)
|
Since
February 2006, Mr. Shields has been paid a retainer at an annual
rate of
CDN$30,000 for his services as Non-Executive Chairman of RJ
Ltd. From October 2006 through March 2007, Mr. Shields
undertook a special assignment for RJ Ltd. for which he was paid
US$50,000, plus reimbursement of his out-of pocket
expenses.
|
(8)
|
As
of September 30, 2007, Mr. Simmons held outstanding options to
purchase
10,375 shares of the Company’s common
stock.
|
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Jeffrey
Julien, an officer of the Company, filed a late Form 4 reflecting a disposition
of 697 shares of stock. Richard Averitt, Timothy Eitel, Chet Helck,
Thomas James, Jeffrey Julien, Richard Riess, Van Sayler, Thomas Tremaine,
Jeffrey Trocin and Dennis Zank, all officers of the Company, filed late
Form 4s with respect to their award of restricted stock under the Company’s
Stock Bonus Plan due to a Company internal communications failure.
REPORT
OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The
Audit Committee of the Board of Directors consists of Angela Biever
(Chairperson), Paul C. Reilly and H. William Habermeyer. This
Committee conducts its activities pursuant to a written charter approved
by the
Board of Directors, which is reviewed annually and was last revised by the
Board
of Directors on November 27, 2007. The Committee serves as the
principal agent of the Board of Directors in fulfilling the Board's oversight
responsibilities with respect to the Company's financial reporting, the
qualifications and independence of the independent registered public accounting
firm, the Company's systems of internal controls and the Company's procedures
for establishing compliance with legal and regulatory requirements.
The
Charter of the Audit Committee provides that the Audit Committee is responsible
for the appointment, compensation and oversight of the work of the independent
registered public accounting firm and must approve in advance any work to
be
performed by the independent registered public accounting firm. The
Audit Committee has not established any general pre-approval procedures,
but
instead reviews each proposed engagement to determine whether the provision
of
services is compatible with maintaining the independence of the independent
registered public accounting firm.
In
addition to four regularly scheduled meetings during the course of the fiscal
year, members of the Audit Committee held four telephonic meetings, generally
to
review with management and representatives of KPMG LLP the Company's quarterly
financial results prior to release to the public.
Members
of the Committee have reviewed and discussed with management and with
representatives of KPMG LLP the integrated audit of the consolidated financial
statements and internal control over financial reporting for fiscal 2007.
The
consolidated financial statements for fiscal 2007 are contained in the Company's
Annual Report on Form 10-K. In addition, the Committee reviewed with
the independent registered public accounting firm the matters required to
be
discussed by Statement on Auditing Standards No. 61, Communication with Audit
Committees, as amended. The Committee also received the written
disclosures and the letter from KPMG LLP required by Independence Standards
Board Standard No. 1 and discussed with KPMG LLP their independence from
the
Company and its management, and considered their independence in connection
with
any non-audit services provided. The Audit Committee also reviewed with KPMG
LLP
the critical accounting policies and practices followed by the Company and
certain written communications between KPMG LLP and the management of the
Company.
Based
on the reviews and discussions referred to above, and in reliance on the
representations of management and the independent registered public accounting
firm's report with respect to the financial statements, the
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-K for fiscal
2007 for filing with the Securities and Exchange Commission. The
Board of Directors approved the recommendation.
Management
is responsible for the Company's financial statements and the financial
reporting process, including the Company's system of internal
controls. The Company's independent registered public accounting firm
is responsible for the integrated audit of the consolidated financial statements
and internal control over financial reporting in accordance with the standards
of the Public Company Accounting Oversight Board and issuing reports on the
Company's consolidated financial statements and the effectiveness of internal
control over financial reporting.
The
Audit Committee members are not professional accountants or auditors, and
their
functions are not intended to duplicate or to certify the activities of
management and the independent registered public accounting firm. The
Audit Committee serves a board-level oversight role, in which it provides
advice, counsel and direction to management and the independent registered
public accounting firm on the basis of the information it receives, discussions
with management and the independent registered public accounting firm, and
the
experience of the Audit Committee's members in business, financial and
accounting matters. In its oversight role, the Committee relies on
the work and assurances of the Company's management, which has the primary
responsibility for financial statements and reports, and of the independent
registered public accounting firm, who, in their report, express an opinion
on
the conformity of the Company's annual financial statements with accounting
principles generally accepted in the United States of America.
The
Board of Directors has determined that each of the members of the Audit
Committee qualifies as an Audit Committee Financial Expert and as independent
as
determined under New York Stock Exchange rules.
Angela
M. Biever, Chairperson
|
Paul
C. Reilly
|
H.
William Habermeyer, Jr.
|
|
December
20, 2007
|
COMPENSATION
DISCUSSION AND ANALYSIS
Overview
and Philosophy
The
Corporate Governance, Nominating and Compensation Committee (“CGN&C
Committee”) reviews corporate compensation and benefit plan policies, as well as
the structure and amount of all compensation for the eleven members of the
Company’s Operating Committee which includes all but three of the Company’s
executive officers and all the Named Executive Officers of the
Company. The CGN&C Committee consists of Dr. Paul W. Marshall
(Chairman), Hardwick Simmons and, since November 27, 2007, Robert
Saltzman. The Company’s Board of Directors normally approves all
grants of options and restricted stock, based upon the recommendations of
the
CGN&C Committee, except for grants made for recruiting and retention awards,
which can be made by Operating Committee members, the Chief Operating and
Chief
Executive Officers and the CGN&C Committee, if they are within specified
ranges. The Company’s Chief Executive Officer makes recommendations
to the CGN&C Committee concerning the compensation of Operating Committee
members, except himself. The Chief Financial Officer makes
recommendations to the CGN&C Committee concerning the compensation of
directors. The Company does not engage compensation consultants in
connection with executive or director compensation.
The
CGN&C Committee's goal is to establish and maintain compensation policies
that will enable the Company to attract, motivate and retain high-quality
executives and to ensure that their individual interests are aligned with
the
long-term interests of the Company and its shareholders. In doing so,
individual performance, the compensation of executives of similar firms and
the
Company's financial results are considered. The CGN&C Committee
was provided executive compensation disclosures from the proxy statements
of
A.G. Edwards, Inc., Stifel Financial Corp., Piper Jaffray Companies, Jefferies
Group, Inc., Freidman, Billings Ramsey Group, Inc., Thomas Weisel Partners
Group, Inc., Evercore Partners, Inc., and Greenhill & Co., Inc. for
comparative information to use in its decision making process. The Company
does
not formally benchmark the compensation of its executive officers against
those
companies.
The
Company's objectives are met through a compensation package which includes
four
major components - base salary, annual bonus (including restricted stock),
stock
option awards and retirement plan contributions.
Base
Salary and Annual Bonus
For
executive officers of the Company, the cash and restricted stock compensation
components (base salary and annual bonus) are heavily weighted toward annual
bonus. The bonus formulas for the Named Executive Officers for fiscal 2007
were
published in the Company’s 2007 Proxy Statement. All of those formulas were
based upon pre-tax profits of the Company, a subsidiary or
department. The emphasis on profit-based compensation serves
two functions: it encourages executives to be conscious of the "bottom line"
and
it keeps the Company's base salary structure at a modest level, which is
advantageous to the firm given the cyclical nature of the securities
industry. Salaries are reviewed and adjusted in December of each
year, consistent with other exempt employees. Typically,
executive officer salaries are increased by an amount within a percentage
range
that is also applicable to other Company employees. Promotions
or cases of expanded responsibility are exceptions to this policy.
In
prior years, bonuses were generally based on formulas related solely to the
profits of the specific subsidiary/department managed by an
executive. Since fiscal 2006, the CGN&C Committee has determined
to give greater emphasis to the Company's overall performance in determining
bonus payments for some executive officers. Accordingly, the
CGN&C Committee has reduced by approximately 25% the percentage of bonus to
be awarded based on specific subsidiary/department performance and has
established a bonus pool equal to .75% of the Company's total pre-tax profit
(the “Company Performance Bonus Pool”). For fiscal 2007, the
Company’s Performance Bonus Pool was allocated equally among the Operating
Committee members participating in that pool, i.e., Messrs. Helck,
Averitt, Riess, Sayler, Trocin and Zank. Historically, up to 30% of the amount
generated by each bonus formula could be withheld based on subjective
performance evaluation by the Chief Executive Officer and the CGN&C
Committee. For fiscal 2008, that percentage will increase to
50%.
In
early November 2007, the CGN&C Committee reviewed the results generated by
bonus formulas for fiscal 2007. The formulas for the Named Executive
Officers were published in the Company’s 2007 proxy statement. Later
in that month, Mr. James made recommendations to the CGN&C Committee for the
annual bonuses to be awarded to each Named Executive Officer other than himself,
based on his assessment of their performance against individual goals he
had
set. The CGN&C Committee approved those recommendations. In
each case, the amount of the bonus awarded to each of the Named Executive
Officers was less than the amount generated by the applicable bonus formula.
The
CGN&C Committee has also approved the bonus formulas for fiscal
2008. The fiscal 2008 bonus formulas for the executive officers most
likely to be Named Executive Officers in the 2009 proxy statement are set
forth
in a table below entitled “Fiscal 2008 Bonus Formulas for Certain Executive
Officers as Approved by the CGN&C
Committee”.
The
Company issues restricted shares of Company stock in lieu of cash for up
to 20%
of bonus amounts in excess of $250,000. For fiscal year 2007 bonuses,
the number of restricted shares issued to members of the Company's Operating
Committee was determined based upon the market value at the date of grant
and
the number of restricted shares issued to other employees was determined
using a
10% discount from the market value at the date of grant. The
restricted shares vest after three years. Thus, a portion of annual
bonus awards have a retention element.
Stock
Options
The
third component of the compensation package, incentive and non-qualified
stock
option awards, is designed, along with the restricted stock, to provide a
direct
link between the long-term interests of executives and
shareholders. Options are granted every two years to key management
employees. From time to time, stock options may be granted when a
special situation exists, as inducements when employees are hired, or if
job
performance or a change in job responsibilities warrants. It is the
Company's policy to maintain the number of outstanding options at less than
ten
percent of the Company's outstanding shares. As members of the
Company’s Operating Committee, all of the Named Executive Officers except Mr.
James are granted an equal number of options every two
years. During the past five years, the number of outstanding
options has represented between 4.6% and 7.3% of the Company's outstanding
shares. The Company first determines how many options to grant to
department heads and other key employees in total. The number of
options that could be granted without all outstanding options exceeding 7%
of
outstanding shares was calculated. The number of options to be
granted to those employees in November 2007, in the aggregate was based on
that
limiting calculation. That total number was allocated among all
grantees based upon responsibility and compensation levels. The
Operating Committee grantees are awarded the highest number of options among
all
grantees. The award of options is intended to be a retention and
shareholder alignment device rather than a major component of
compensation. There is no relationship between the number of options
granted and the amount of annual bonuses.
No
Backdating or Spring Loading. The Company does not back
date options or grant options retroactively. In addition, the Company
does not coordinate grants of options so that they are made before announcement
of favorable information, or after announcement of unfavorable
information. Options for the Company’s stock are granted at fair
market value on a fixed date or event, with all required approvals obtained
in
advance of or on the actual grant date. The Company’s general
practice is to have grants of options reviewed and recommended by the CGN&C
Committee and approved by the Board of Directors, except for grants to new
hires
and retention grants which can be made by Operating Committee members and
the
CGN&C Committee in accordance with limits specified by the
Board. Such new hire or retention grants are reported to the Board at
its next meeting. Fair market value is determined by the closing price on
the
grant date.
Retirement
Plans
The
fourth component of the compensation package is Company contributions to
various
retirement plans, which are based on compensation levels and years of
service. The Company maintains three qualified retirement plans: a
profit sharing plan, an employee stock ownership plan and a 401(k)
plan. Contributions to the profit sharing and employee stock
ownership plans, if any, are dependent upon the overall profits of the
Company. Since inception of the 401(k) plan in 1987, the Company has
matched a portion of the first $1,000 contributed annually by employees to
their
401(k) accounts. The plan currently provides for the Company to match
100% of the first $500 and 50% of the next $500 of compensation deferred
by each
participant annually. These three plans are offered to employees who
meet the length of service and minimum hours worked requirements specified
in
the plans. The Company also maintains a non-qualified long term
incentive plan for highly compensated employees, including executive
officers. Eligibility is restricted to those who meet certain
compensation levels set annually by the CGN&C Committee. The
vesting schedule of this plan is designed to encourage long-term employment
with
the firm. Contributions to this plan are also dependent upon the
Company's earnings.
In
addition, the Company has an employee stock purchase plan which allows employees
to purchase shares of the Company's common stock on four specified dates
throughout the year at a 15% discount from the market value, subject to certain
limitations, including a one-year holding period.
Compensation
of the Chief Executive Officer
In
keeping with the general compensation philosophy outlined above, Mr. James'
base
salary for calendar 2008 will be $325,000, a 4.2% increase over his 2007
salary
of $312,000. Mr. James' salary is subject to an annual review, as is
true of all employees. It was last adjusted in November 2007,
effective January 1, 2008.
In
determining the bonus paid to Mr. James for fiscal 2007, the CGN&C Committee
began with the recognition that it had approved bonuses for Operating Committee
members that ranged from 70% to 98% of the amounts generated by their bonus
formulas. The CGN&C Committee considered that the Company had
achieved record net revenues and net income in fiscal 2007 and the bonuses
received by chief executive officers of other financial services
firms. The CGN&C Committee also reviewed Mr. James
accomplishments against his personal objectives. In addition, the
CGN&C Committee took into account that the Company had not experienced
write-offs in connection with the current credit market crisis and attributed
that to the Company culture Mr. James has fostered over the years as to prudent
risk taking. Considering all those factors, the CGN&C
Committee determined to award Mr. James a bonus of $3.7 million, which was
94.4%
of the amount generated by his bonus formula as disclosed in the Company’s 2007
Proxy Statement.
Stock
Ownership Guidelines
The
Company grants stock-based compensation in order to align the interests of
its
employees with those of its stockholders. With the exception of
accelerated vesting for death or disability, Company issued options and
restricted stock are not transferable. Members of the Company’s
Operating Committee are expected to acquire and hold at least 10,000 shares
of
the Company’s common stock within two years of becoming an Operating Committee
member. They are also expected to retain for three years twenty-five
percent of the shares of common stock acquired through the exercise of options
or vesting of restricted stock.
Derivatives
Trading. Company policy permits Executive Officers to implement only the
following strategies with listed options on Company stock: sales of
covered calls against Company stock held free and clear in street name and
put writing. They are not permitted to purchase puts on
Company stock.
Return
of Executive Compensation by an Executive
The
Company does not have a policy regarding adjustment or recovery of
awards/payments if financial results used in performance measures are restated
or adjusted such that the award would have been reduced.
Benefits
As
salaried, U.S. based employees, the Named Executive Officers participate
in
health and welfare, and paid time-off benefits designed to enable the Company
to
attract and retain its workforce in a competitive marketplace. Health and
welfare and paid time-off benefits help ensure that the Company has a productive
and focused workforce through reliable and competitive health and other
benefits.
Perquisites
The
Company provides minimal perquisites to its Directors and Named Executive
Officers, primarily spousal travel expenses in conjunction with sales
meetings and the long range planning Board meeting.
Separation
and Change in Control Arrangements
None
of the Named Executive Officers is a party to a separation or change in control
agreement with the Company.
Section
162(m)
None
of the salaries of the Named Executive Officers exceed $1
million. The Company believes that the annual bonuses and stock
options awarded to the Named Executive Officers constitute performance based
compensation and are deductible for federal income tax purposes.
CGN&C
Committee Report
The
CGN&C Committee of the Board of Directors, comprised of independent
directors, reviewed and discussed the above Compensation Discussion and Analysis
(“CD&A”) with the Company’s management. Based on the review and
discussions, the CGN&C Committee (except Mr. Saltzman, who joined the Board
after the relevant CGN&C Committee meetings occurred) recommended to the
Company’s Board of Directors that the CD&A be included in these Proxy
Materials.
Corporate
Governance, Nominating
|
and
Compensation Committee
|
Dr.
Paul W. Marshall, Chairman
|
Hardwick
Simmons
|
|
December
20, 2007
|
Fiscal
2008 Bonus Formulas for Certain Executive Officers as Approved
by the
CGN&C Committee
|
|
|
|
|
Executive
Officer
|
|
Basis
|
|
|
|
|
|
Thomas
A. James
|
|
1.0%
of total Company pre-tax profits.
|
|
Chairman
and Chief Executive
|
|
|
|
Officer
- RJF
|
|
|
|
|
|
|
|
Chet
Helck
|
|
0.8%
of total pre-tax profits of domestic PCG
|
|
President
and Chief Operating
|
|
per
PCG Contribution Report*, Raymond
|
|
Officer
- RJF
|
|
James
Ltd., and Raymond James Investment
|
|
|
|
Services;
|
|
|
|
|
|
|
|
plus,
participation in the Company Performance Bonus Pool.
|
|
|
|
|
|
Richard
G. Averitt, III
|
|
0.85%
of pre-tax profits of RJFS per PCG Contribution Report *;
|
|
Chairman
and Chief Executive
|
|
|
|
Officer
- RJFS
|
|
plus,
participation in the Company Performance Bonus Pool.
|
|
|
|
|
|
Richard
K. Riess
|
|
3.5%
of pre-tax profits of Eagle Asset Management, Inc.
|
|
Executive
Vice President - RJF
|
|
(“Eagle”)
and the Heritage Asset Management load funds
|
|
|
|
division;
|
|
|
|
|
|
|
|
plus,
1.75% of pre-tax profits of RJA's Asset Management
|
|
|
|
Services
division;
|
|
|
|
|
|
|
|
plus,
participation in the Company Performance Bonus Pool.
|
|
|
|
|
|
Van
C. Sayler
|
|
A
portion of the pre-tax profits of RJA's Fixed Income
|
|
Senior
Vice President,
|
|
department
equal to:
|
|
Fixed
Income - RJA
|
|
|
|
|
|
6.0%
on the first $16 million of such profits, plus,
|
|
|
|
3.75%
on such profits exceeding $16 million;
|
|
|
|
|
|
|
|
plus,
participation in the Company Performance Bonus Pool.
|
|
|
|
|
|
Jeffrey
E. Trocin
|
|
5.0%
of the pre-tax profits of RJA's Equity Capital Markets,
|
|
Executive
Vice President,
|
|
including
European institutional equity sales and trading;
|
|
Equity
Capital Markets Group - RJA
|
|
|
|
|
|
plus,
participation in the Company Performance Bonus Pool.
|
|
|
|
|
|
Dennis
W. Zank
|
|
2.6%
of the pre-tax profits of RJA per PCG contribution
report*;
|
|
President
- RJA
|
|
|
|
|
|
plus,
participation in the Company Performance Bonus Pool.
|
|
|
|
|
|
Jeffrey
P. Julien
|
|
0.3%
of total Company pre-tax profits.
|
|
Senior
Vice President, Finance
|
|
|
|
and
Chief Financial Officer – RJF; Chairman, Raymond James Bank,
FSB
|
|
|
|
|
|
|
|
Peter
A. Bailey
|
|
4.25%
of the pretax profits of Raymond James Ltd.
|
|
President
– RJ Ltd.
|
|
|
|
|
|
|
|
*
|
The
PCG Contribution Report adjusts the Private Client Group financial
statement pre-tax profits for items related to the private client
group
sales force, primarily a credit for interest income on cash balances
arising from private clients, and also includes adjustments to
actual
clearing costs, mutual fund revenues and expenses, credit for
correspondent clearing, insurance agency and certain asset management
profits, accruals for benefit expenses, profits generated by certain
private client support operations and other adjustments. These
adjustments
may include or exclude items to measure specific objectives, such
as
losses from discontinued operations, extraordinary, unusual or
nonrecurring gains and losses, the cumulative effect of accounting
changes, acquisitions or divestitures, and foreign exchange
impacts.
|
The
following table summarizes compensation earned for the fiscal year ended
September 30, 2007 for the Company’s Chief Executive Officer, Chief Financial
Officer and the three other most highly compensated executive officers (the
“Named Executive Officers”).
SUMMARY
COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
Other
|
|
|
|
|
|
Stock
|
Option
|
Compen-
|
|
Name
|
Year
|
Salary
|
Bonus
(1)
|
Awards
(2)
|
Awards
(2)
|
sation
(3)
|
Total
|
Thomas
A. James
|
2007
|
$309,000
|
$3,060,000
|
$559,994
|
$ -
|
$175,376
|
$4,104,370
|
Chairman
and CEO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey
E. Trocin
|
2007
|
$259,000
|
$2,110,000
|
$519,907
|
$ 77,085
|
$ 148,582
|
$3,114,574
|
Executive
VP, Equity
|
|
|
|
|
|
|
|
Capital
Markets Group - RJA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard
K. Riess
|
2007
|
$259,000
|
$1,836,000
|
$207,332
|
$ 65,711
|
$ 133,555
|
$2,501,598
|
President
and CEO of Eagle
|
|
|
|
|
|
|
|
Executive
VP of RJF
|
|
|
|
|
|
|
|
Managing
Director,
|
|
|
|
|
|
|
|
Asset
Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chet
Helck
|
2007
|
$286,750
|
$1,740,000
|
$181,744
|
$136,759
|
$ 118,425
|
$2,463,678
|
President
and COO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey
P. Julien
|
2007
|
$178,000
|
$ 832,000
|
$ 50,480
|
$ 52,230
|
$ 112,229
|
$1,224,939
|
Senior
VP, Finance
|
|
|
|
|
|
|
|
Chief
Financial Officer
|
|
|
|
|
|
|
|
(1)
|
The
amounts disclosed in the Bonus column represent the annual cash
bonus, as
described in the Compensation Discussion and Analysis, awarded
to the
Named Executive Officers.
|
(2)
|
The
amounts shown in the Stock Awards and Option Awards columns represent
the
amount the Company recognized for financial statement reporting
purposes
in fiscal year 2007 for the fair value of equity awards granted
to the
Named Executive Officers in fiscal year 2007 and prior years, in
accordance with SFAS No. 123(R), excluding the impact of estimated
forfeitures related to service-based vesting conditions. As a result,
these amounts do not reflect the amount of compensation actually
received
by the Named Executive Officer during the fiscal year. For a description
of the assumptions used in calculating the fair value of equity
awards
under SFAS No. 123(R), see Note 17 of the Company's financial
statements in its Form 10-K for the year ended September 30,
2007. Under SFAS No. 123(R), equity awards to retirement-eligible
employees are expensed over the period from the date of grant to
the date
at which an employee becomes retirement-eligible. Since Mr. James
is
retirement-eligible, the expense for his 2007 fiscal year equity
award was
recognized during the 2007 fiscal year. For Mr. Trocin, Mr.
Helck, and Mr. Julien, since they are not retirement-eligible,
the expense
for their 2007 fiscal year equity awards will be recognized in
the
Company's financial statements over the vesting period. Mr. Riess
is
retirement-eligible for awards made pursuant to the Company's Stock
Bonus
Plan, however he is not retirement-eligible for awards made pursuant
to
any other plans in which he participates. This difference in accounting
for equity awards under SFAS No. 123(R) results in variability
between retirement-eligible employees and non retirement-eligible
employees in the Summary Compensation
Table.
|
(3)
|
Mr.
James' other compensation consists of $49,300 in Long Term Incentive
Plan
(“LTIP”) contribution, $62,430 in LTIP and Deferred Management Bonus Plan
(“DMBP”) earnings, $22,730 in commissions, $20,913 in dividends on
unvested stock, $15,053 in profit sharing contribution, and $4,950
in
Employee Stock Ownership Plan (“ESOP”) contribution. Mr. Trocin's other
compensation consists of $49,300 in LTIP contribution, $55,331
in LTIP and
DMBP earnings, $43 in commissions, $24,830 in dividends on unvested
stock,
$13,378 in profit sharing contribution, $4,950 in ESOP contribution,
and
$750 in matching Company contributions under 401(k) plan. Mr. Riess'
other
compensation consists of $49,300 in LTIP contribution, $56,117
in LTIP and
DMBP earnings, $8,821 in dividends on unvested stock, $13,617 in
profit
sharing contribution, $4,950 in ESOP contribution, and $750 in
matching
Company contributions under 401(k) plan. Mr. Helck's other
compensation consists of $49,300 in LTIP contribution, $40,959
in LTIP and
DMBP earnings, $672 in commissions, $8,656 in dividends on unvested
stock,
$13,138 in profit sharing contribution, $4,950 in ESOP contribution,
and
$750 in matching Company contributions under 401(k) plan. Mr.
Julien's other compensation consists of $49,300 in LTIP contribution,
$40,488 in LTIP and DMBP earnings, $828 in commissions, $2,296
in
dividends on unvested stock, $13,617 in profit sharing contribution,
$4,950 in ESOP contribution, and $750 in matching Company contributions
under 401(k) plan.
|
GRANTS
OF PLAN BASED AWARDS FOR FISCAL YEAR ENDED SEPTEMBER 30,
2007
|
|
|
|
|
|
|
All
Other
|
Grant
Date
|
|
|
Stock
Awards:
|
Fair
|
|
|
Number
of
|
Value
of
|
|
|
Shares
of
|
Stock
|
|
Grant
|
Stock
or
|
and
Option
|
Name
|
Date
|
Units
(1)
|
Awards
(2)
|
Thomas
A. James
|
12/1/2006
|
18,076
|
$559,994
|
Chairman
and CEO
|
|
|
|
|
|
|
|
Jeffrey
E. Trocin
|
12/1/2006
|
14,267
|
$441,992
|
Executive
VP, Equity
|
|
|
|
Capital
Markets Group – RJA
|
|
|
|
|
|
|
|
Richard
K. Riess
|
12/1/2006
|
8,457
|
$261,998
|
President
and CEO of Eagle
|
|
|
|
Executive
VP of RJF
|
|
|
|
Managing
Director,
|
|
|
|
Asset
Management
|
|
|
|
|
|
|
|
Chet
Helck
|
12/1/2006
|
6,455
|
$199,976
|
President
and COO
|
|
|
|
|
|
|
|
Jeffrey
P. Julien
|
12/1/2006
|
2,259
|
$ 69,984
|
Senior
VP, Finance
|
|
|
|
Chief
Financial Officer
|
|
|
|
(1)
|
The
Company grants restricted stock in lieu of a portion of the annual
bonus
awarded to highly compensated employees (see the Compensation Discussion
and Analysis section for more information). Dividends are paid
to the holders of the stock. The restricted stock
vests approximately three years from the date of
grant.
|
(2)
|
Options
are granted every two years to key management employees (i.e. fiscal
year
2006 and fiscal year 2008).
|
The
following table provides information on exercisable and unexercisable options
and unvested stock awards held by the Named Executive Officers on September
30,
2007.
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR END SEPTEMBER 30, 2007
|
Option
Awards
|
Stock
Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
Number
of
|
Number
of
|
|
|
|
Number
of
|
|
Value
of
|
|
Securities
|
Securities
|
|
|
|
Shares
or
|
|
Shares
or
|
|
Underlying
|
Underlying
|
|
|
|
Units
of
|
|
Units
of
|
|
Unexercised
|
Unexercised
|
Option
|
Option
|
|
Stock
That
|
|
Stock
That
|
|
Options
|
Options
|
Exercise
|
Expiration
|
|
Have
Not
|
|
Have
Not
|
Name
|
Exercisable
|
Unexercisable
|
Price
|
Date
|
|
Vested
|
|
Vested
(1)
|
Thomas
A. James
|
-
|
-
|
$
-
|
-
|
|
21,600
|
(2)
|
$ 709,560
|
Chairman
and CEO
|
|
|
|
|
|
15,994
|
(3)
|
$ 525,403
|
|
|
|
|
|
|
18,076
|
(4)
|
$ 593,797
|
|
|
|
|
|
|
|
|
|
Jeffrey
E. Trocin
|
8,092
|
9,908
|
$16.80
|
2/4/09
|
(5)
|
32,092
|
(2)
|
$1,054,222
|
Executive
VP, Equity
|
-
|
15,000
|
$24.97
|
2/1/12
|
(6)
|
21,434
|
(3)
|
$ 704,107
|
Capital
Markets Group - RJA
|
|
|
|
|
|
14,267
|
(4)
|
$ 468,671
|
|
|
|
|
|
|
|
|
|
Richard
K. Riess
|
5,400
|
10,800
|
$16.80
|
2/4/09
|
(7)
|
9,256
|
(2)
|
$ 304,060
|
President
and CEO of Eagle
|
-
|
15,000
|
$24.97
|
2/1/12
|
(8)
|
6,278
|
(3)
|
$ 206,232
|
Executive
VP of RJF
|
|
|
|
|
|
8,457
|
(4)
|
$ 277,812
|
Managing
Director,
|
|
|
|
|
|
|
|
|
Asset
Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chet
Helck
|
6,228
|
7,130
|
$14.02
|
2/10/08
|
(9)
|
10,491
|
(2)
|
$ 344,629
|
President
and COO
|
83,772
|
15,369
|
$14.02
|
2/10/08
|
(9)
|
5,997
|
(3)
|
$ 197,001
|
|
-
|
10,800
|
$16.80
|
2/4/09
|
(7)
|
6,455
|
(4)
|
$ 212,047
|
|
7,200
|
-
|
$16.80
|
2/4/09
|
(10)
|
|
|
|
|
-
|
15,000
|
$24.97
|
2/1/12
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey
P. Julien
|
3,600
|
10,800
|
$16.80
|
2/4/09
|
(7)
|
2,097
|
(2)
|
$ 68,886
|
Senior
VP, Finance
|
3,600
|
-
|
$16.80
|
2/4/09
|
(10)
|
1,869
|
(3)
|
$ 61,397
|
Chief
Financial Officer
|
-
|
15,000
|
$24.97
|
2/1/12
|
(8)
|
2,259
|
(4)
|
$ 74,208
|
(1)
|
The
market value of the stock awards is based on the closing market
price of
the Company's Common Stock as of September 28, 2007, which was
$32.85.
|
(2)
|
The
stock award was granted on December 3, 2004 and cliff vests in
approximately three years.
|
(3)
|
The
stock award was granted on December 2, 2005 and cliff vests in
approximately three years.
|
(4)
|
The
stock award was granted on December 1, 2006 and cliff vests in
approximately three years.
|
(5)
|
The
option was granted five years and two months prior to the option
expiration date. The remaining unexercisable options vest 33%
in four years and one month and 22% in five years and one month
from date
of grant.
|
(6)
|
The
option was granted six years and two months prior to the option
expiration
date. The unexercisable options vest 41% in three years, 9% in
three years and two months, 27% in four years and two months, and
23% in
five years and two months from date of
grant.
|
(7)
|
The
option was granted five years and two months prior to the option
expiration date. The remaining unexercisable options vest 50%
in four years and one month and 50% in five years and one month
from date
of grant.
|
(8)
|
The
option was granted six years and two months prior to the option
expiration
date. The unexercisable options vest 25% in three years, 25% in
four years, 25% in five years, and 25% in five years and two months
from
date of grant.
|
(9)
|
The
option was granted five years and two months prior to the option
expiration date. The remaining unexercisable options vest 100%
in five years from date of grant.
|
(10)
|
The
option was granted five years and two months prior to the option
expiration date. All options are
exercisable.
|
The
following table provides information, on an aggregate basis, about stock
options
that were exercised and stock awards that vested during the fiscal year ended
September 30, 2007 for each of the Named Executive Officers.
OPTION
EXERCISES AND STOCK AWARDS VESTED FOR FISCAL YEAR ENDED
SEPTEMBER
30, 2007
|
Option
Awards
|
Stock
Awards
|
|
Number
of Shares
|
Value
Realized
|
Number
of Shares
|
Value
Realized
|
Name
|
Acquired
on Exercise (1)
|
On
Exercise (2)
|
Acquired
on Vesting (3)
|
On
Vesting (4)
|
Thomas
A. James
|
-
|
$ -
|
15,060
|
$482,372
|
Chairman
and CEO
|
|
|
|
|
|
|
|
|
|
Jeffrey
E. Trocin
|
17,930
|
$301,012
|
2,628
|
$ 84,175
|
Executive
VP, Equity
|
|
|
|
|
Capital
Markets Group - RJA
|
|
|
|
|
|
|
|
|
|
Richard
K. Riess
|
24,300
|
$421,472
|
4,761
|
$152,495
|
President
and CEO of Eagle
|
|
|
|
|
Executive
VP of RJF
|
|
|
|
|
Managing
Director,
|
|
|
|
|
Asset
Management
|
|
|
|
|
|
|
|
|
|
Chet
Helck
|
13,500
|
$230,280
|
5,676
|
$181,802
|
President
and COO
|
|
|
|
|
|
|
|
|
|
Jeffrey
P. Julien
|
22,500
|
$368,671
|
1,393
|
$ 44,618
|
Senior
VP, Finance
|
|
|
|
|
Chief
Financial Officer
|
|
|
|
|
(1)
|
Total
number of shares underlying the options exercised during fiscal
year
2007.
|
(2)
|
Amounts
in this column reflect the difference between the market price
on the date
of exercise and the exercise price of the options exercised, multiplied
by
the number of options exercised.
|
(3)
|
Total
number of restricted shares that vested during fiscal year
2007.
|
(4)
|
The
value of the shares on December 5, 2006 (the date of vesting) using
the
closing market price for the Company's common stock, which was
$32.03.
|
The
table below reflects Company credits and deemed earnings thereon under two
deferred compensation plans for the Company’s Named Executive
Officers.
NONQUALIFIED
DEFERRED COMPENSATION
|
|
Registrant
|
Aggregate
|
Aggregate
|
|
|
Executive
Contributions
|
Contributions
in Last
|
Earnings
in Last
|
Withdrawals/
|
Aggregate
Balance at
|
Name
|
In
Last Fiscal Year
|
Fiscal
Year (1)
|
Fiscal
Year (1)
|
Distributions
|
Last
Fiscal Year-End (2)
|
Thomas
A. James
|
$-
|
$49,300
|
$62,430
|
$36,822
|
$852,287
|
Chairman
and CEO
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey
E. Trocin
|
$-
|
$49,300
|
$55,331
|
$ -
|
$608,235
|
Executive
VP, Equity
|
|
|
|
|
|
Capital
Markets Group - RJA
|
|
|
|
|
|
|
|
|
|
|
|
Richard
K. Riess
|
$-
|
$49,300
|
$56,117
|
$36,822
|
$708,953
|
President
and CEO of Eagle
|
|
|
|
|
|
Executive
VP of RJF
|
|
|
|
|
|
Managing
Director,
|
|
|
|
|
|
Asset
Management
|
|
|
|
|
|
|
|
|
|
|
|
Chet
Helck
|
$-
|
$49,300
|
$40,959
|
$36,822
|
$381,783
|
President
and COO
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey
P. Julien
|
$-
|
$49,300
|
$40,488
|
$31,468
|
$477,880
|
Senior
VP, Finance
|
|
|
|
|
|
Chief
Financial Officer
|
|
|
|
|
|
(1)
|
The
amounts presented in these columns are reported as other compensation
in
the Summary Compensation Table.
|
(2)
|
The
amounts presented in this column include previously and currently
reported
compensation with regards to LTIP contributions made by the
Company. The following amounts represent vested balances of the
Named Executive Officers at September 30, 2007: Mr. James $852,287,
Mr.
Trocin $395,137, Mr. Riess $708,953, Mr. Helck $168,685 and Mr.
Julien
$299,239.
|
The
Company’s Long Term Incentive Plan (“LTIP”), originally adopted effective
October 1, 2000, is an unfunded deferred compensation plan benefiting key
management and other highly compensated employees. Under the LTIP,
the Company determines each year which employees will be participants for
that
plan year and then establishes an account on its books for that plan year
for
each participant. Although the Company can elect to use other
allocation formulas, historically, the allocations under the LTIP have been
made
based upon the individual participant’s level of compensation above a minimum,
and not in excess of a maximum, amount (for fiscal 2007, these amounts were
$220,000 and $800,000, respectively). The CGN&C Committee then
decides the percentage, if any, by which that compensation is multiplied
to
determine the amount credited to each participant’s account for the particular
plan year. Each account is thereafter credited (or debited), based
upon the account’s allocable share of the return that would have been earned
(including any negative return) had all accounts been invested in a group
of
unaffiliated mutual funds. The Chief Executive Officer selects those
mutual funds each year, pursuant to authority delegated by the CGN&C
Committee. Annual allocations and their deemed earnings vest after
five years, subject to earlier vesting in the case of death, disability or
separation of service after attaining age 65. In the case of early
retirement, a participant can continue to accrue vesting credit after such
retirement so long as certain non-competition covenants are not
violated. The Company pays the vested account balance in a cash lump
sum after five years of credited service, subject to earlier payment in the
case
of death, disability or separation of service after normal retirement age
and
subject to certain deferral rights that must be exercised at least twelve
months
in advance. Because the account balances are unfunded, they represent
only unsecured claims in the event of a Company bankruptcy.
The
Company’s Deferred Management Bonus Plan (“DMBP”), which was originally adopted
effective as of October 1, 1989, preceded the LTIP. The DMBP remains
in effect to administer certain amounts credited prior to the adoption of
the
LTIP. The last bonus allocation that was made to the DMBP was with
respect to fiscal year 1999. Since that time, additional amounts
credited to the DMBP accounts have been based on a deemed interest return
on the
amounts in the respective DMBP accounts. Like the LTIP, the DMBP is
an unfunded plan that was established to benefit key management and other
highly
compensated employees. For fiscal years 1990 through 1999, each
participant’s account was credited with an amount, if any, determined by the
Company in a manner similar to the LTIP. During such period and
thereafter, participants’ accounts have been credited with a deemed interest
return, based upon the average annual interest rate payable by RJA on brokerage
client account funds. Annual amounts credited to a participant’s
account and the deemed interest vest ratably over an eight year period, subject
to earlier vesting in the case of death, disability, attaining age 65 or
a
qualified early retirement. The Company pays the vested account
balance as soon as practical after the end of a plan year in which death
or
disability occurs and pays the vested account balance as soon as practical
after
the end of the plan year following the plan year in which retirement occurs
after attaining age 65 or following certain other separations from service,
subject to forfeiture upon violation of certain non-competition provisions
prior
to the date of distribution. Other provisions apply in the case of
early retirement. Because the account balances are unfunded, they
represent only unsecured claims in the event of a Company
bankruptcy.
TRANSACTIONS
WITH RELATED PERSONS
Review
of Related Person Transactions
The
Corporate Governance, Nominating and Compensation Committee adopted a Related
Person Transaction Approval Policy which is in writing and administered by
that
Committee. This policy applies to any transaction or series of
transactions in which the Company or a subsidiary is a participant, the amount
involved exceeds $120,000 and a related person has a direct or indirect material
interest. Under the policy, Company management will determine whether
a transaction meets the requirements of a related person transaction requiring
review by the Committee. Transactions that fall within this
definition will be referred to the Committee for approval, ratification or
other
action. Based on its consideration of all of the relevant facts and
circumstances, the Committee will decide whether or not to approve such
transaction and will approve only those transactions that are in the best
interests of the Company. If the Company becomes aware of an existing
transaction with a related person which has not been approved under this
policy,
the matter will be referred to the Committee. The Committee will
evaluate all options available, including ratification, revision or termination
of such transaction. For purposes of the policy, the term “related
person” has the meaning ascribed to it in SEC regulation S-K 404(a)
“Transactions with related persons, promoters and certain control
persons”.
Transactions
The
Company, in the ordinary course of its business, makes bank loans to, and
holds
bank deposits for certain of its officers and directors and also extends
margin
credit in connection with the purchase of securities to certain of its officers
and directors who are affiliated with one of the Company's broker-dealers,
as
permitted under the Sarbanes-Oxley Act (the “Act”). These transactions have been
made on substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with non-affiliated
persons, and do not involve more than normal risk of collectibility or present
other unfavorable features. The Company also, from time to time and
in the ordinary course of its business, enters into transactions involving
the
purchase or sale of securities as principal from, or to, directors, officers
and
employees and accounts in which they have an interest. These purchases and
sales
of securities on a principal basis are effected on substantially the same
terms
as similar transactions with unaffiliated third parties.
The
Company has from time to time established private investment funds to permit
certain officers to participate in its merchant banking, venture capital
and
other similar activities by investing alongside the funds that it raises
and
manages for non-employee investors. Trusts benefiting family
members of these officers have also invested in these funds. One
employee “alongside” fund is not subject to a management carried
interest. In addition, certain of our directors and executive
officers from time to time may invest their personal moneys in funds managed
by
subsidiaries of the Company on substantially the same terms and conditions
as
other similarly situated investors in these funds who are neither directors
nor
officers.
The
only director, executive officer or affiliated entity who received distributions
of profits earned on investments made by, and other income from, any fund
from
which total distributions, including return of capital invested by such
directors and officers, exceeded $120,000 in fiscal 2007, was a trust affiliated
with Mr. James which, in the aggregate, received $467,584, of which,
$264,443 was a return of capital.
In
1998, as a retention vehicle, the Company extended non-recourse loan commitments
to approximately 84 employees for investments in the Raymond James Employee
Investment Fund I, L.P., including the following executive
officers: Richard G. Averitt, Jeffrey P. Julien, Richard K. Riess,
Van C. Sayler, Jeffrey E. Trocin and Dennis W. Zank. Committed loan
amounts to these individuals range from $38,400 to $153,600 plus interest
per
person, with outstanding balances ranging from $11,264 to $45,058 at September
30, 2007.
Similarly
in 2001, the Company extended non-recourse loan commitments to approximately
75
employees for investments in Raymond James Employee Investment Fund II, L.P;
including Richard G. Averitt, Tim Eitel, Chet B. Helck, Thomas A.
James, Jeffrey P. Julien, Paul L. Matecki, Van C. Sayler, Jeffrey E. Trocin,
and
Dennis W. Zank. Committed loan amounts to these individuals range
from $66,667 to $333,335 plus interest per person, with outstanding balances
of
$20,561 to $102,803 at September 30, 2007.
All
of the foregoing loan commitments were entered into prior to the passage
of the
Act in 2002. Under the Act, the Company is permitted to complete the
funding of those commitments.
Thomas
A. James permits the Company to display over 1,500 pieces from his nationally
known art collection throughout the Raymond James home office complex, without
charge to the Company. The art collection is a marketing attraction for
businesses and other organizations, and the Company provides regular tours
for
clients and local schools, business groups and nonprofit
organizations. In return, the Company bears the cost of insurance and
the salaries of three staff persons who serve as curators for the collection
and
conduct business tours. The total cost to the Company for these services
during
fiscal 2007 was approximately $175,000.
In
fiscal 2007, two subsidiaries of the Company paid approximately
$703,550 in recruiting/placement fees to Korn Ferry International, of which
Paul
C. Reilly, a director of the Company, is Chairman. See "Information
Regarding Board and Committee Structure" above with respect to considerations
of
Mr. Reilly's independence.
Courtland
James, a son of Thomas A. James, is the Company's Director of Human Resources.
He was paid compensation for fiscal 2007 of $249,147. Huntington James, a
son of
Thomas A. James, is employed in a non-executive position by the
Company. He was paid compensation for fiscal 2007 of
$276,146. Donald Blair, the son-in-law of Francis S. Godbold,
is an investment banker with RJA. He was paid compensation for fiscal 2007
of
$460,471, a portion of which was paid in restricted stock.
EQUITY
COMPENSATION PLAN INFORMATION
The
following table includes stock options and restricted stock that can be issued
pursuant to the Company's stock-based compensation plans. The table
below does not include equity compensation plans that meet the qualification
requirements of Section 401(a) of the Internal Revenue Code, namely the Profit
Sharing Plan and Employee Stock Ownership Plan.
Plan
Category
|
(a)
Number
of securities to be
issued
upon exercise of
outstanding
options,
warrants
and rights
|
(b)
Weighted-average
exercise
price of
outstanding
options,
warrants
and rights
|
(c)
Number
of securities
remaining
available for
future
issuance under equity
compensation
plans.
(Excludes
securities
reflected
in column (a))
|
|
Equity
compensation plans
|
|
|
|
|
approved
by shareholders (1)
|
3,504,637
|
$20.14
|
15,515,679
|
(3)
|
Equity
compensation plans not
|
|
|
|
|
approved
by shareholders (2)
|
2,048,955
|
$20.31
|
1,387,565
|
|
Total
|
5,553,592
|
$20.21
|
16,903,244
|
|
(1)
|
The
Company has six plans that were approved by shareholders: the 1992
and
2002 Incentive Stock Option Plans, the 2003 Employee Stock Purchase
Plan,
the 2005 Restricted Stock Plan, the 2007 Stock Bonus Plan and the
2007
Stock Option Plan for Independent
Contractors.
|
(2)
|
The
Company has two active non-qualified option plans that were not
required
to be approved by shareholders under which it will continue to
issue
shares.
|
(3)
|
Includes
2,973,642 shares remaining available for issuance under the 2007
Stock
Bonus Plan, 2,010,833 shares remaining available for issuance under
the
2005 Restricted Stock Plan, and 1,500,832 shares remaining available
for
issuance under the 2003 Employee Stock Purchase Plan as of September
30,
2007.
|
The
material features of the Company's equity compensation plans which have not
been
approved by shareholders are, as required by the SEC rules, described
below. These descriptions do not purport to be complete and are
qualified in their entirety by reference to the plan documents which are
included as exhibits to the Company's Annual Report on Form 10-K for the
fiscal
year ended September 30, 2007.
Under
one of the Company's non-qualified stock option plans, the Company may grant
options to the Company's outside directors. Options vest over a
three-year period from grant date provided that the director is still serving
on
the Board of the Company. Under the Company's second non-qualified
stock option plan, the Company may grant options to key management
personnel. Option terms are specified in individual agreements and
expire on a date no later than the tenth anniversary of the grant
date. Under all plans, the exercise price of each option equals the
market price of the Company's stock on the date of grant.
The
Company’s 1990 Stock Option Plan for Independent Contractors was not approved by
shareholders. Options remain outstanding under the 1990 plan. Options
are exercisable five years after grant date provided that the Independent
Contractor Financial Advisor is still associated with the Company. The 1990
plan was succeeded by the 2007 Stock Option Plan for Independent Contractors
which was approved by the shareholders in February 2007.
Two
of the Company's restricted stock plans were not approved by
shareholders. Shares have not been issued under the 1999 Restricted
Stock Plan since it was succeeded by the 2005 Restricted Stock Plan upon
the
shareholders’ approval of that plan in February 2005.
No
additional shares will be issued under the Company's 1999 Stock Bonus
Plan. That plan was succeeded by the 2007 Stock Bonus Plan which was
approved by the shareholders in February 2007. Like the 1999 Stock
Bonus Plan, restricted shares are issued under the 2007 Stock Bonus Plan
to
officers and certain other employees in lieu of cash for 10% to 20% of annual
bonus amounts in excess of $250,000.
The
shares are generally restricted for a three year period, during which time
the
shares are forfeitable in the event of voluntary termination. The
compensation cost is recognized over the three year vesting period based
on the
market value of the shares on the date of grant.
PROPOSAL
2: TO RATIFY THE APPOINTMENT BY THE AUDIT COMMITTEE OF THE BOARD OF
DIRECTORS OF KPMG LLP AS THE COMPANY'S INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The
Audit Committee of the Board of Directors has selected KPMG LLP as the Company's
independent registered public accounting firm for the fiscal year ending
September 30, 2008, and the Board of Directors has directed that management
submit the appointment of the independent registered public accounting firm
for
ratification by the shareholders at the Annual Meeting. KPMG LLP has served
as
the Company's independent registered public accounting firm since
2001. Representatives of KPMG LLP are expected to be present at the
Annual Meeting. They will have an opportunity to make a statement at
the Annual Meeting and will be available to respond to appropriate
questions.
Neither
the Company's By-Laws nor other governing documents or law require shareholder
ratification of appointment of KPMG LLP as the Company's independent registered
public accounting firm. However, the Audit Committee of the Board of
Directors recommended, and the Board of Directors is, submitting the appointment
of KPMG LLP to the shareholders for ratification as a matter of good corporate
practice. If the shareholders fail to ratify the appointment, the
Audit Committee will reconsider whether or not to retain that
firm. Even if the appointment is ratified, the Audit Committee in its
discretion may direct the appointment of a different independent registered
public accounting firm at any time if it determines that such a change would
be
in the best interests of the Company and its shareholders.
Ratification
of the appointment of KPMG LLP will require that the votes cast favoring
the
appointment exceed the votes cast opposing it.
FEES
PAID TO INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The
following table shows information about fees paid by Raymond James Financial,
Inc. to KPMG LLP related to the fiscal years indicated. All fees were
approved by the Audit Committee (see discussion in the "Report of the Audit
Committee of the Board of Directors").
|
2007
|
|
2006
|
Audit
fees
|
$1,973,916
|
|
$1,715,670
|
Audit
– related fees
|
-
|
|
15,300
|
Tax
fees(a)
|
109,050
|
|
128,868
|
All
other fees
|
-
|
|
-
|
(a)
|
Tax
fees include fees related to the preparation of Canadian tax returns,
consultation on various tax matters and support during income tax
audit or
inquiries.
|
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
PROPOSAL
3: TO APPROVE AN AMENDMENT TO THE COMPANY’S ARTICLES OF INCORPORATION, AS
AMENDED, TO INCREASE THE NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK TO 350 MILLION SHARES, $.01 PAR
VALUE
At
December 20, 2007 the Company had outstanding 120,998,277 shares of its
common stock, out of a total authorized shares of 180 million. The
Board of Directors has determined that it would be advisable for the Company
to
amend the Articles of Incorporation to increase the total authorized shares
to
350 million shares, $.01 par value. The text of the Articles as
proposed to be amended is contained in Appendix A. Holders of shares
of the Company’s common stock have no pre-emptive rights.
The
increased shares will be available to fund existing stock option and restricted
stock plans, as well as for use in connection with possible future acquisitions
and stock splits. The Company has no present plans for the use of the
additional authorized shares. Since 1991, the Board of Directors has
approved seven three-for-two stock splits, which have resulted in fifty percent
increases in the number of outstanding shares each time. In view of
that history, the Board of Directors has determined that it would be prudent
to
authorize additional shares so as to make possible stock splits in the future,
should the Board of Directors consider that to be in the best interest of
shareholders.
There
can be no assurance that any such stock splits will be authorized in the
future.
A
favorable vote of the holders of a majority of the Company's outstanding
stock
is required for approval of this proposal.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
SHAREHOLDER
PROPOSALS AND OTHER MATTERS
Proposals
which shareholders intend to present at the 2009 Annual Meeting of Shareholders
must be received by the Company’s Secretary no later than September 19, 2008 to
be eligible for inclusion in the proxy material for that meeting or otherwise
submitted at the meeting.
Management
knows of no matter to be brought before the meeting which is not referred
to in
the Notice of Meeting. If any other matters properly come before the
meeting, it is intended that the shares represented by proxy will be voted
with
respect thereto in accordance with the judgment of the persons voting
them.
By
Order of the Board of Directors,
|
|
/s/
Paul L. Matecki, Secretary
|
January
?, 2008
|
APPENDIX
A
Text
of
Article IV of the Company’s Articles of Incorporation, as amended, as proposed
to be amended. New text indicated by bold
typeface.
Article
IV
Stock
Clause
Shares
Authorized. The aggregate number of shares of stock which this
Corporation shall have authority to issue shall be three hundred fifty
million (350,000,000) shares of common stock, each with a par value of
one cent ($.01) and ten million (10,000,000) shares of preferred stock, each
with a par value of ten cents ($.10).
24