MORGAN KEEGAN, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 22, 1996
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of the
Shareholders of Morgan Keegan, Inc. (the "Annual Meeting") will be
held at the offices of Morgan Keegan, Inc. (the "Company"), Twenty-
First Floor, Morgan Keegan Tower, 50 Front Street, Memphis,
Tennessee 38103 on Friday, November 22, 1996, at 10:00 a.m., local
time, for the following purpose:
1. To elect directors to serve for the ensuing year or until
their successors have been duly elected and qualified;
Only shareholders of the Company of record as of the close of
business on September 27, 1996, will be entitled to notice of, and
to vote at, the Annual Meeting and any adjournment thereof.
There is enclosed, as a part of this Notice, a Proxy Statement
which contains further information regarding the meeting and the
above proposal.
BY ORDER OF THE BOARD OF
DIRECTORS
JOSEPH C. WELLER
Secretary
October 18, 1996
IMPORTANT
Shareholders who do not expect to attend the meeting
are requested to complete, date, sign and return the
accompanying proxy in the enclosed envelope. Sharehold-
ers who attend the meeting may vote in person even if
they have already sent in a proxy.
MORGAN KEEGAN, INC.
PROXY STATEMENT
GENERAL INFORMATION
THIS PROXY STATEMENT is provided in connection with the
solicitation of proxies by the Board of Directors of Morgan Keegan,
Inc. (the "Company") for use at the annual meeting of shareholders
to be held on November 22, 1996, (the "Annual Meeting") and any
adjournment thereof. The mailing address of the principal
executive offices of the Company is Morgan Keegan Tower, 50 Front
Street, Memphis, Tennessee 38103. This Proxy Statement and the
Proxy Form, Notice of Meeting and the Company's Annual Report, all
enclosed herewith, are first being mailed to the shareholders of
the Company on or about October 18, 1996.
The Proxy
The solicitation of proxies is being made primarily by the use
of the mails. The cost of preparing and mailing this Proxy
Statement and accompanying material, and the cost of any
supplementary solicitations, which may be made by mail, telephone,
telegraph, telecopier or personally by officers and employees of
the Company, will be borne by the Company. The shareholder giving
the proxy has the power to revoke it by delivering written notice
of such revocation to the Secretary of the Company prior to the
Annual Meeting or by attending the meeting and voting in person.
The proxy will be voted as specified by the shareholder in the
spaces provided on the Proxy Form, or, if no specification is made,
it will be voted in accordance with the terms thereof.
Common Shares represented by properly executed proxies, unless
previously revoked, will be voted in accordance with the
instructions on such proxies. If no instruction is indicated on
the proxy, the named holders of the proxies will vote such common
shares FOR all director nominees named in this Proxy Statement.
The named holders of proxies also will use their discretion in
voting the Common Shares in connection with any other business that
properly may come before the Annual Meeting.
Voting Rights
Each outstanding share is entitled to one vote. Only
shareholders of record at the close of business on September 27,
1996 will be entitled to notice of, and to vote at, the Annual
Meeting and any adjournment thereof. As of the close of business
on September 27, 1996, the Company had outstanding 20,437,596
shares of common stock $.625 par value per share (the "Common
Shares"). Of the total number of outstanding Common Shares on
September 27, 1996, the Directors and Executive Officers of the
Company, consisting of seven persons, owned
5,248,728 shares comprising 25.7% of the total.
PAGE
REQUIRED VOTE
Approval of each matter submitted to the Shareholders of the
Company for a vote at the Annual Meeting will require the
affirmative vote of a plurality of the Common Shares voting at the
Annual Meeting in person or by proxy.
OWNERSHIP OF THE COMPANY'S COMMON SHARES
Security Ownership of Certain Beneficial Owners
The following table sets forth information as of September 27,
1996, regarding each person known to the Company to be the
beneficial owner of more than five percent of its Common Shares:
NAME AND ADDRESS AMOUNT AND NATURE
OF BENEFICIAL OF BENEFICIAL PERCENT OF CLASS(1)
OWNER OWNERSHIP
Allen B. Morgan, Jr. 2,445,943(2) 12.0%
Morgan Keegan Tower
Fifty Front Street
Memphis, Tennessee 38103
Joseph C. Weller 1,071,753(3) 5.2%
Morgan Keegan Tower
Fifty Front Street
Memphis, Tennessee 38103
____________________________
<FN>
(1) Based on 20,437,596 Common Shares outstanding at September 27,
1996.
(2) Excludes 56,097 shares owned by Mr. Morgan's spouse over which
shares Mr. Morgan has no voting power or investment power and in
which Mr. Morgan disclaims any beneficial ownership. Includes
63,915 shares held by Mr. Morgan as custodian or Trustee for his
minor children over which shares Mr. Morgan has sole voting power
and investment power.
(3) Includes 45,000 shares owned by Mr. Weller's spouse.
Security Ownership of Management
The following table sets forth the beneficial ownership of the
Company's Common Shares as of September 27, 1996 by (i) each
director, (ii) each director nominee, (iii) each executive officer
named in the Summary Compensation Table, and (iv) all directors,
nominees and Executive Officers as a group:
PAGE
>PAGE>
NAME OF AMOUNT AND NATURE
BENEFICIAL OWNER OF BENEFICIAL PERCENT OF CLASS
OWNERSHIP
Allen B. Morgan, Jr. 2,445,943(1) 12.0%
William W. Deupree, Jr. 770,708 3.8%
John W. Stokes, Jr. 747,189(2) 3.7%
Joseph C. Weller 1,071,753(3) 5.2%
Kenneth F. Clark, Jr. 49,500(4) *
Donald Ratajczak, Ph.D. 69,138(5) *
Peter S. Willmott 94,497(5) *
All Director, Nominees and
Executive Officers as a Group
(7 Persons) 5,248,728 25.7%
_______________
<FN>
(1) Excludes 56,097 shares owned by Mr. Morgan's spouse over which
shares Mr. Morgan has no voting power or investment power and
in which Mr. Morgan disclaims any beneficial ownership.
Includes 3,915 shares held by Mr. Morgan as custodian or
Trustee for his minor children over which shares Mr. Morgan
has sole voting power and investment power.
(2) Includes 22,500 shares owned of record by Mr. Stokes' spouse.
(3) Includes 45,000 shares owned of record by Mr. Weller's spouse.
(4) Includes option to purchase 45,000 shares pursuant to the
Company's 1991 Directors Stock Option Plan which have not been
exercised.
(5) Includes option to purchase 36,000 shares pursuant to the
Company's 1991 Directors Stock Option Plan which have not been
exercised.
* Represents less than one 1% of total outstanding Common Shares.
(Proposal No.1)
Election of Directors
Committees and Meetings of the Board of Directors
The business of the Company is under the general management of
its Board of Directors as provided by the Company's by-laws and the
laws of Tennessee, the Company's state of incorporation. The Board
of Directors meets quarterly during the Company's fiscal year.
There are presently seven directors. The Board of Directors held
four meetings during fiscal 1996, and each director attended at
least three of the four meetings.
The Company does not have a standing Nominating Committee or a
Compensation Committee of its Board of Directors. The Compensation
Committee of Morgan Keegan and Co., Inc., (the "Brokerage Company")
("Compensation Committee") determines the compensation for all of
the employees, including officers of the Company (see "Report of
the Brokerage Company Compensation Committee"). The entire Board
of Directors serves in the capacity of a Nominating Committee. The
Board of Directors will accept recommendations for director
nominations from shareholders, and shareholders wishing to propose
such nominees for consideration should write to Joseph C. Weller,
Secretary, at the principal executive office of the Company.
The Company has a standing Audit Committee of its Board of
Directors composed entirely of directors who are not officers or
employees of the Company or the Brokerage Company ("Independent
Directors"). During fiscal 1996, the Audit Committee consisted of
Kenneth F. Clark, Jr., Donald Ratajczak, Peter S. Willmott
(Chairman) and James E. Harwood, III. The Audit Committee's
function is to determine that the Company's assets are properly
accounted for and safeguarded and that adequate operating,
accounting and financial controls, consistent with Company policy,
regulatory requirements and accepted accounting practice are in
existence and adequately functioning. The Audit Committee also may
make recommendations to the Board of Directors concerning the
engagement of independent accountants to audit the books, records
and accounts of the Company and its subsidiaries. The Audit
Committee met four times during the past fiscal year and each Audit
Committee member attended at least three of the four meetings.
Compensation of Directors
Directors who are employees of the Company or one of its
subsidiaries do not receive additional remuneration as directors.
Independent Directors receive an annual retainer of $6,000, fees of
$1,500 for each board meeting, and $500 for each committee meeting
attended, and are annually granted options to acquire up to 9,000
Common Shares pursuant to the Company's 1991 Directors Stock Option
Plan.
PAGE
Nominees for Directors
The Company's bylaws provide for the election of all directors on
an annual basis. The Board of Directors proposes to nominate the
following seven individuals, each of whom is currently a director
of the Company, for election to serve as directors of the Company
for the ensuing fiscal year.
ALLEN B. MORGAN, JR., 54, is the Chairman of the Board and Chief
Executive Officer of the Company, positions he has held since 1983.
He has also been Chairman of the Board, Chief Executive Officer,
employee and Director of the Brokerage Company since 1969 and was
named Chief Operating Officer in 1996. Mr. Morgan is President and
a Director of Morgan Keegan Southern Capital Fund and a Director of
Catherine's Stores, Inc. (member of Compensation Committee). He
has been a Director of the Company since 1983.
Committees: None
WILLIAM W. DEUPREE, JR., 55, is an employee and Director of the
Brokerage Company, positions he has held since 1974. From 1985
through July, 1996, Mr. Deupree was President of the Company and
President and Chief Executive Officer of the Brokerage Company.
Mr. Deupree is a director of NSA International, Inc. (member of
Compensation Committee) and Equity Inns, Inc. He has been a
Director of the Company since 1983.
Committees: None
JOHN W. STOKES, JR., 59, is the Vice President of the Company, Vice
Chairman of the Brokerage Company and President of the Equity
Capital Markets Division of the Brokerage Company, positions he has
held since 1983. He has been an employee and Director of the
Brokerage Company since 1970. Mr. Stokes is a director of
O'Charley's, Inc. (member of Compensation Committee) and RFS Hotel
Investors, Inc. He has been a Director of the Company since 1983.
Committees: None
JOSEPH C. WELLER, 57, is the Secretary, Treasurer and Chief
Financial Officer of the Company, positions he has held since 1983.
He has also been an Executive Vice President and the Treasurer and
Chief Financial Officer, employee and Director of the Brokerage
Company since 1969. Mr. Weller has been a Director of the Company
since 1983.
Committees: None
PAGE
KENNETH F. CLARK, JR., 69, is a Counsel to the Memphis office of
the Louisville, Kentucky law firm of Wyatt, Tarrant & Combs, a
position held since October 1, 1995. From September 1, 1994 to
October 1, 1995, Mr. Clark was a Member in the Memphis law firm of
McDonnell Dyer, P.L.C. From July 1990 to September 1, 1994, Mr.
Clark was a partner in the Memphis law firm of McDonnell Boyd. He
was a Partner in the law firm of Boone, Wellford, Clark,
Langschmidt & Apperson for more than 10 years prior thereto. Mr.
Clark has been a Director of the Company since 1984.
Committees: Audit
DONALD RATAJCZAK, Ph. D., 54, is the Director of the Economic
Forecasting Project at Georgia State University in Atlanta, is a
Director of Morrison Restaurants Inc., Ruby Tuesday, Inc. and a
Trustee of AIM High Yield Fund, positions he has held for several
years. He has been a consulting economist to the Company and other
businesses for more than five years. Dr. Ratajczak has been a
Director of the Company since 1984.
Committees: Audit
PETER S. WILLMOTT, 60, is the Chairman and Chief Executive Officer
of Willmott Services, Inc., a retail consulting firm, positions
held since June 1989. He was Chairman of Carson Pirie Scott &
Company, a retail merchandising, food service and lodging concern,
from June 1984 until June 1989, and was President and Chief
Executive Officer of same from June 1983 to June 1989. He was
President and Chief Operating Officer of Federal Express
Corporation from September 1980 to May 1983. Mr. Willmott is a
Director of Browning-Ferris Industries, Inc., Federal Express
Corporation, International Multifoods Corporation, MacFrugal's
Bargains & Close-Outs, Inc., Maytag Corporation and Zenith
Electronics Corporation. He has been a Director of the Company
since 1991.
Committees: Audit (Chairman)
__________________________________________________________________
Unless a shareholder specifies otherwise, it is intended
that such shareholder's shares will be voted FOR the election of
the foregoing nominees to serve as directors until the next annual
meeting and until their successors are elected and qualified. If
any nominee shall become unavailable or unwilling to serve the
Company as a director for any reason, the persons named in the
Proxy Form are expected to consult with the management of the
Company in voting the shares represented by them. The Board of
Directors has no reason to doubt the availability of any of the
nominees, and each has indicated his willingness to serve as a
director of the Company if elected.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ADOPTION OF
PROPOSAL NO. 1
Business Relationships Between Company and Nominees
Mr. Clark is counsel to the law firm of Wyatt, Tarrant & Combs.
The Company and the Brokerage Company have retained McDonnell Dyer,
P.L.C. (which was dissolved effective October 1, 1995, with several
members (including Mr. Clark) joining Wyatt, Tarrant & Combs on
that date) during the past fiscal year and propose to retain Wyatt,
Tarrant & Combs during the present fiscal year as special counsel
on select matters.
The Brokerage Company has retained Dr. Ratajczak as a consulting
economist to provide consulting services to it and its customers.
Dr. Ratajczak was so retained during the past fiscal year, and the
Brokerage Company proposes to retain Dr. Ratajczak in such capacity
during the current fiscal year.
Certain Transactions with Management
During the period from August 1, 1995 through July 31, 1996,
except for indebtedness as margin account customers of the
Brokerage Company, no director or executive officer was indebted
to the Company in excess of $60,000. The indebtedness of directors
and executive officers as margin account customers was as a result
of debit balances in margin accounts. Such indebtedness was
incurred in transactions which were in the ordinary course of
business, on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable
transactions with unaffiliated customers, and did not involve more
than the normal risk of collectibility or present other unfavorable
features.
EXECUTIVE COMPENSATION
The following table sets forth the compensation for services
rendered for each of the Company's last three fiscal years, of the
Chief Executive Officer and its other most highly compensated
executive officers whose total annual salary and bonus exceeded
$100,000:
PAGE
<CAPTION)
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
ALL(7)
NAME AND RESTRICTED OTHER
PRINCIPAL YEAR SALARY BONUS(1) OTHER STOCK OPTIONS LTIP COMPEN-
POSITION ($) ($) ($) AWARDS(2) /SARs PAYOUTS SATION
($) (#) (#) ($)
Allen B. 1996 $130,000 $1,258,666 0 $48,998(3) 0 0 $1,574
Morgan, Jr., 1995 130,000 790,259 0 $45,152 0 0 1,574
CEO 1994 130,000 1,206,327 0 $48,581 0 0 1,549
William W. 1996 $110,000 $ 950,000 0 $39,996(4) 0 0 $1,574
Deupree, Jr., 1995 110,000 690,000 0 $29,700 0 0 1,574
President 1994 110,000 945,000 0 $37,700 0 0 1,549
John W. Stokes 1996 $110,000 $1,326,164 0 $45,046(5) 0 0 $1,574
Jr., Vice 1995 110,000 857,475 0 $46,307 0 0 1,574
President 1994 110,000 1,435,278 0 $49,478 0 0 1,549
Joseph C. 1996 $110,000 $ 975,000 0 $35,350(6) 0 0 $1,574
Weller, 1995 110,000 690,000 0 $29,560 0 0 1,574
Secretary 1994 110,000 945,000 0 $38,688 0 0 1,549
<FN>
(1) Includes commissions earned on brokerage business as registered
sales representatives of the Brokerage Company. See "Report of
Brokerage Company Compensation Committee."
(2) Excludes dividends paid in respect of restricted stock at the
same rate as paid in respect of all outstanding Common Shares.
Restricted Stock awards vest five years from the date of original
issuance.
(3) Mr. Morgan held 25,073 shares of restricted stock as of July
31, 1996. The total value of those shares, determined based on the
closing market price of the Common Shares as of the date of each
grant, is $212,213. Dividends will be paid on the restricted stock
granted during the 1996 fiscal year.
(4) Mr. Deupree held 17,274 shares of restricted stock as of July
31, 1996. The total value of those shares, determined based on the
closing market price of the Common Shares as of the date of each
grant, is $149,823. Dividends will be paid on the restricted stock
granted during the 1996 fiscal year.
(5) Mr. Stokes held 23,921 shares of restricted stock as of July
31, 1996. The total value of those shares, determined based on the
closing market price of the Common Shares as of the date of each
grant, is $203,310. Dividends will be paid on the restricted stock
granted during the 1996 fiscal year.
(6) Mr. Weller held 18,236 shares of restricted stock as of July
31, 1996. The total value of those shares, determined based on the
closing market price of the Common Shares as of the date of each
grant, is $154,637. Dividends will be paid on the restricted stock
granted during the 1996 fiscal year.
(7) The amounts listed in this column are the amounts of matching
contributions made by the Company to the Revised Profit Sharing and
Retirement Savings Plan on behalf of the Executive Officers.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Company has adopted a Supplemental Executive Retirement Plan
("SERP") for the benefit of executive officers and key employees of
the Company and its subsidiaries. The SERP is an unfunded, non-
qualified deferred compensation plan which provides for the payment
of supplemental retirement benefits to participants upon normal
retirement, disability retirement or death after reaching age 55
and completing at least 20 years of employment with the Company or
its subsidiaries.
Benefits under the SERP will not be paid to or will cease with
respect to (if applicable) any participant whose employment
terminates prior to the participant's attaining age 55 or 20 years
of service, if such termination is for cause, for acts of willful
malfeasance or gross negligence or for violation of the non-
competition provisions of the SERP. Benefits are payable out of
the general assets of the Company.
Participation in the SERP is determined by the Board of Directors
of the Company, and the SERP is administered by an ad hoc committee
consisting exclusively of Independent Directors. Current
participants are Messrs. Morgan, Deupree, Stokes and Weller. The
benefit payable from the SERP is a monthly benefit, payable for 120
months based on the participant's age at the date of termination of
his employment, as follows:
ATTAINED AGE
UPON MONTHLY
TERMINATION BENEFITS
62 or older $8,333
61 $7,917
60 $7,500
59 $7,083
58 $6,667
57 $6,250
56 $5,833
55 or younger $5,417
The estimated annual benefit to any participant who retires at the
normal retirement age of 65 is $100,000.
PAGE
REPORT OF THE BROKERAGE COMPANY
COMPENSATION COMMITTEE
Compensation of Officers and Employees, Generally
The Compensation Committee of the Brokerage Company determines
the compensation for all officers and employees of the Company and
its subsidiaries, including the Executive Officers. The Company
does not have a compensation committee. The following report is
given by the Brokerage Company's Compensation Committee.
The Brokerage Company strives to offer to officers and key
employees compensation packages that are not only competitive with
packages offered by other regional brokerage firms but that also
encourage a high level of individual productivity, with a view
toward retaining the highest quality personnel available. The
Compensation Committee's policy is to base a substantial portion of
each Executive Officer's annual compensation upon his individual
productivity, the performance of the Company and its subsidiaries
and such officer's contribution to the overall success of the
Company during the fiscal year. Compensation of Executive Officers
consists of the following elements:
Base Salary. The base salaries of the Company's Executive
Officers have remained the same for the more than five fiscal
years. The Compensation Committee has researched the base salaries
of executive officers in other firms in the securities brokerage
industry and believes the Company's salary levels to be very
comparable to other regional brokerage firms.
Incentive Compensation. Incentive bonuses are routinely paid to
those persons making significant contributions to the profitability
of the Company and its subsidiaries. The Brokerage Company
maintains several bonus pools which are distributed among officers
and employees by the Compensation Committee, based upon such
factors as gross commission production, contribution to the net
income of the Company, new client development, contribution to
Company management and long-range planning, management of
individual profit centers and demonstrated firm leadership.
Bonuses are distributed to a broad cross-section of employees of
the Company and its subsidiaries, with 544 employees having
received bonuses totaling approximately $31.6 million for the 1996
fiscal year. Of such bonuses for the 1996 fiscal year,
approximately $4.5 million was paid to the Executive Officers. The
higher aggregate bonus compensation to Executive Officers was in
response to the Company's outstanding 1996 fiscal year. Messrs.
Morgan, Deupree and Stokes, in addition to performing
responsibilities as Executive Officers and senior management of the
Company, maintain day-to-day client relationships and,
consequently, conduct significant levels of brokerage business on
behalf of clients of the Brokerage Company. An element of their
incentive compensation is their respective share of brokerage
commissions from their selling efforts, which for the fiscal year
ended July 31, 1996 amounted to approximately $1,500,000 or 33.3%
of the approximately $4.5 million total incentive compensation paid
to those three Executive Officers.
Restricted Stock Awards. Pursuant to the Company's 1985 and 1994
Restricted Stock and Incentive Stock Option Plans, the Company
periodically awards shares of restricted stock to officers and key
employees of the Company and its subsidiaries. Restricted stock
must be returned to the Company if the recipient forfeits such
shares by reason of termination of employment within a fixed period
established by the Compensation Committee. After the expiration of
any of any
restriction period, the recipient owns such shares free of
restrictions. The number of shares awarded to a particular
recipient is subjectively determined by the Compensation Committee,
which considers gross revenue production, contribution to the net
income of the Company, new client development, management
contribution and demonstrated leadership, among other things, in
determining the number of shares to be granted to a particular
person.
The Company believes that restricted stock awards are a key
element in the overall compensation packages of officers and key
employees because such awards recognize productivity and
profitability while at the same time giving recipients a vested
long-term interest in the success of the Company through stock
ownership. Consequently, the Company routinely grants restricted
stock to a broad cross-section of employees of the Company's
subsidiaries, with approximately 22% of such employees having
received awards during the 1996 fiscal year. Each Executive
Officer received an award of restricted stock in 1996, in the
aggregate amount of 13,417 shares, which constituted approximately
4.5% of all shares of restricted stock granted.
Compensation of Chief Executive Officer
Mr. Morgan's base salary has remained at $130,000 per year for
the last five years, consistent with the Compensation Committee's
and Board of Directors' view that the Company should continue to
place greater emphasis on incentive and production-based
compensation for Executive Officers tied to the financial and
strategic performance of the Company.
Other cash compensation paid to Mr. Morgan in 1996 consisted of
$1,258,666 of incentive compensation based on the overall
performance of the Company and his role in achieving such
performance, of which approximately 33% was attributable to Mr.
Morgan's share of commissions on brokerage business conducted by
him. In addition to the foregoing, Mr. Morgan was granted 3,881
shares of the Company's restricted stock during 1996, which shares
had a value at the time of grant of approximately $48,998.
Mr. Morgan presided over a record year for the Company. Lipper
Analytical ranks Morgan Keegan as one of the top 10 securities
firms in pre-tax operating margin, return on average equity and
pre-tax return on average assets. From July, 1991 until August
1996, shares of Morgan Keegan common stock have appreciated in
value 459%, more than triple the group average for investment
firms. The Compensation Committee determined Mr. Morgan's
incentive bonus based primarily upon the foregoing factors and his
continued high level of personal productivity and commitment to the
success of the Company. The Compensation Committee believes Mr.
Morgan's compensation to be commensurate with the compensation paid
to the chief executive officers of corporations within the
Company's peer group.
PAGE
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Company does not have a compensation committee, and the
Compensation Committee of the Brokerage Company makes all decisions
regarding executive compensation. The members of the compensation
committee of the Brokerage Company are Messrs. Morgan, Deupree,
Stokes and Weller, all of whom are Executive Officers and each of
whom during the 1996 fiscal year participated in deliberations
regarding Executive Officers' compensation.
PAGE
PERFORMANCE GRAPH
The following graph compares the Company's cumulative total
shareholder return on its Common Shares for a five year period
(August 1, 1991 to July 31, 1996) with the cumulative total return
of the Standard & Poor's 500 Stock Index and the Regional Sub-Index
of the Financial Service Analytics Stock Price Index ("FSA
Regional") over the same period (assuming the investment of $100 in
each on August 1, 1991, and the reinvestment of all dividends).
The FSA Regional is comprised of 15 publicly held regional
securities firms.
1991 1992 1993 1994 1995 1996
Morgan Keegan $100 $199 $285 $300 $455 $451
S&P 500 Stock Index $100 $112 $122 $129 $162 $189
FSA Regional $100 $141 $187 $182 $274 $284
(1) The Company's performance graph in it's 1995 Proxy Statement
compared the cumulative total shareholder return of Morgan Keegan's
Common Stock to that of the Lipper Analytical Brokerage Stock Price
Index ("Lipper Regional"). The FSA Regional is comprised of the
same 15 Firms as the Lipper Regional.
PAGE
SHAREHOLDER PROPOSALS FOR 1997
Pursuant to the Securities Exchange Act of 1934, shareholder
proposals intended to be presented at the 1997 annual meeting of
shareholders of the Company must be received by the Company at its
executive offices on or before July 15, 1997.
RELATIONSHIPS WITH INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP has served as independent auditors for the
Company and its subsidiaries for many years and will continue to so
serve until and unless changed by action of the Board of Directors.
It has not been the practice of the Company, and it is not required
by its Charter or By-Laws, to submit the Company's selection of
auditors to the shareholders for ratification.
A partner of Ernst & Young LLP is expected to be present at the
annual meeting with the opportunity to make a statement if he
desires to do so and is expected to be available to respond to
appropriate questions.
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The federal securities laws require the Company's directors and
officers, and persons who own more than 10% of a registered class
of the Company's equity securities, to file with the Securities and
Exchange Commission initial reports of ownership and reports of
changes in ownership of any securities of the Company. To the
Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and representations that no other
reports were required, during the year ended July 31, 1996, all of
the Company's officers and directors made all required filings.
OTHER MATTERS
The Board of Directors knows of no other business to be brought
before the meeting. If any other matters properly come before the
meeting, the proxies will be voted on such matters in accordance
with the judgment of the persons named as proxies therein, or their
substitutes, present and acting at the meeting.
INCORPORATION BY REFERENCE
The consolidated financial statements of the Company, included in
the Company's 1996 Annual Report which accompanies this Proxy
Statement, are hereby incorporated by reference into this Proxy
Statement as if stated verbatim herein.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Joseph C. Weller
JOSEPH C. WELLER
Secretary
October 18, 1996