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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
JMC GROUP, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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Notes:
[LOGO OF JMCG, INC.]
JMC GROUP, INC.
9710 Scranton Road, Suite 100, San Diego, CA 92121
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 5, 1997
To the Stockholders of JMC Group, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders (the "Annual
Meeting") of JMC Group, Inc., a Delaware corporation (the "Company"), will be
held at The Inn at Rancho Santa Fe, 5951 Linea Del Cielo, Rancho Santa Fe,
California 92067 on Monday, May 5, 1997, at 2:00 p.m., Pacific Daylight
Savings Time, for the following purposes:
1. To elect three Directors of the Company to serve for three years or until
their successors shall be duly appointed or elected; and
2. To transact such other business as may properly come before the Annual
Meeting or any adjournment(s) or postponement(s) thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on March 10, 1997 will
be entitled to notice of, and to vote at, the Annual Meeting and at any
adjournment thereof.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, whether or not you plan to attend in person, to assure your
representation at the Annual Meeting, you are urged to mark, sign, date, and
return the enclosed Proxy as promptly as possible in the postage-prepaid
envelope provided for that purpose. Any stockholder attending the meeting may
vote in person even if such stockholder returned a completed Proxy.
Requests for additional copies of proxy materials and other information
should be addressed to Investor Relations at the executive offices of the
Company, 9710 Scranton Road, Suite 100, San Diego, California 92121.
By Order of the Board of Directors
of JMC Group, Inc.
/s/ JAMES K. MITCHELL
-----------------------------------
James K. Mitchell
Chairman, President & Chief
Executive Officer
San Diego, California
March 31, 1997
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[LOGO OF JMCG, INC.]
JMC GROUP, INC.
9710 Scranton Road, Suite 100, San Diego, CA 92121
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 5, 1997
GENERAL
The enclosed Proxy is solicited by the Board of Directors on behalf of JMC
Group, Inc., a Delaware corporation (the "Company"), for use at the Annual
Meeting of Stockholders (the "Annual Meeting") to be held on May 5, 1997 at
2:00 p.m., Pacific Daylight Savings Time, or at any adjournment(s) or
postponement(s) thereof, for the purposes set forth herein and in the
accompanying Notice of Annual Meeting of Stockholders. The Annual Meeting will
be held at The Inn at Rancho Santa Fe, 5951 Linea Del Cielo, Rancho Santa Fe,
California 92067.
The Company's principal executive offices are located at 9710 Scranton Road,
Suite 100, San Diego, California 92121, and the Company's telephone number is
(619) 450-0055. These proxy solicitation materials were first mailed on or
about March 31, 1997 to all stockholders entitled to vote at the Annual
Meeting.
INFORMATION CONCERNING VOTING, SOLICITATION AND PROXIES
RECORD DATE AND SHARES OUTSTANDING
Stockholders of record at the close of business on March 10, 1997 (the
"Record Date") are entitled to notice of, and to vote at, the Annual Meeting.
On the Record Date, the Company had issued and outstanding approximately
6,024,351 shares of common stock, $0.01 par value (the "Common Stock"), and no
shares of preferred stock.
VOTING AND SOLICITATION
Each stockholder is entitled to one vote for each share of Common Stock held
by him.
Shares of Common Stock represented by properly executed proxies will, unless
such proxies have been previously revoked, be voted in accordance with the
instructions indicated thereon. In the absence of specific instructions to the
contrary, properly executed proxies will be voted FOR the election of each
person nominated by the Board of Directors for election as a Director. The
effect of an abstention or a broker nonvote on a proposal is the same as that
of a vote against such proposal. No business other than that set forth in the
accompanying Notice of Annual Meeting of Stockholders is expected to come
before the Annual Meeting. Should any other matter requiring a vote of
stockholders properly arise, the persons named in the enclosed form of proxy
(the "Proxy Holders") will have discretionary authority to vote such proxy in
accordance with their best judgment on such matter.
Directors are elected by a plurality vote.
The cost of this proxy solicitation will be paid by the Company. The Company
will reimburse brokerage firms and other persons representing beneficial
owners of shares for their expenses in forwarding soliciting materials to such
beneficial owners. Proxies may be solicited by certain of the Company's
Directors, officers, and regular employees, without additional compensation,
personally or by telephone or telegram.
1
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company a written
notice of revocation or a duly executed proxy bearing a later date or by
attending the Annual Meeting and voting in person. Attending the Annual
Meeting in and of itself will not constitute a revocation of a proxy.
DEADLINES FOR RECEIPT OF STOCKHOLDER NOMINATIONS, PROPOSALS AND PROPOSALS FOR
INCLUSION IN THE PROXY STATEMENT FOR THE 1998 ANNUAL MEETING
Section 2.5 of the Company's Bylaws provides that nominations may be made by
the Board of Directors or by any stockholder entitled to vote in the election
of Directors generally, provided that all stockholders intending to nominate
Director candidates for election must deliver written notice thereof to the
Secretary of the Company, which notice must be received not less than sixty
nor more than ninety days prior to the meeting or, if less than seventy days'
notice or prior public disclosure of the date of the meeting is given or made
to stockholders, within ten days after the date on which notice of such
meeting is first given to stockholders. Such notice must set forth certain
information concerning such stockholder and his or her nominee(s), including
their names and addresses, such other information as would be required to be
in the proxy statement soliciting proxies for the election of the nominees of
such stockholder and the consent of each nominee to serve as a Director of the
Company if so elected. The chairman of the Annual Meeting will refuse to
acknowledge the nomination of any person not made in compliance with the
foregoing procedure.
The Company's Bylaws also require that stockholders give advance notice and
follow certain other procedures with regard to business they wish to bring
before an annual meeting of stockholders. Section 2.6 of the Company's Bylaws
provides that all stockholders intending to bring business before the meeting
deliver written notice thereof to the Secretary of the Company in the same
manner and within the same periods as required for stockholder nominees for
the Board of Directors, as described in the preceding paragraph. Such notice
shall set forth certain information concerning such stockholder and the
proposed business, including any material interest of the stockholder in such
business. The chairman of the Annual Meeting will refuse to permit business to
be brought before the Annual Meeting if notice is not given in compliance with
the foregoing procedure.
The Company intends to hold its next Annual Meeting of Stockholders on or
about May 5, 1998. Stockholders seeking to include a proposal in the Proxy
Statement for the Company's 1998 Annual Meeting must ensure that such proposal
is received at the executive offices of the Company on or before March 7,
1998. Inclusion of any such proposal is subject to certain other requirements.
2
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth names and certain other information
concerning the Company's Directors and executive officers, as of March 10,
1997:
TERM OF
OFFICE AS
DIRECTOR
NAME AGE POSITION EXPIRES
---- --- -------- ---------
James K. Mitchell....... 58 Chairman, President and Chief Executive 1998
Officer and Director
D. Mark Carlson......... 37 Senior Vice President, Chief Financial Officer --
William L. Webster...... 49 Senior Vice President, Chief Administrative Officer --
Daniel M. Harkins....... 47 Senior Vice President, General Counsel --
Stanley J. Mensing...... 45 Senior Vice President, Chief Marketing Officer --
Edward J. Baran......... 60 Director 1997
Barton Beek............. 73 Director 1999
Charles H. Black........ 70 Director 1997
Herbert G. Kawahara..... 68 Director 1999
Robert G. Sharp......... 61 Director 1998
Donald E. Weeden........ 66 Director 1997
Information with respect to the principal occupation during the past five
years of each nominee, each current Director and each executive officer is set
forth below. There are no family relationships among Directors or executive
officers of the Company.
James K. Mitchell became a Director in October 1988 and became Chairman and
Chief Executive Officer of the Company on January 1, 1993 and assumed the
responsibilities of President of the Company as well on January 1, 1997. Mr.
Mitchell is the founder of the Company's principal subsidiary, James Mitchell
& Co. In 1973, Mr. Mitchell was a founding officer of Security First Group
(now The Holden Group), a financial services firm which pioneered the concept
of marketing insurance and annuity products through stock brokerage firms.
Before joining that firm, Mr. Mitchell served as Vice President of Marketing
for the Variable Annuity Life Insurance Company of Houston, Texas. He attended
Portland State University and is a registered Principal with the National
Association of Securities Dealers, Inc. (the "NASD").
D. Mark Carlson became Senior Vice President of the Company on January 10,
1994. Mr. Carlson joined James Mitchell & Co. in 1990 as Assistant Vice
President--Accounting and became Chief Financial Officer of James Mitchell &
Co. in January 1991. He became Vice President and Chief Financial Officer of
the Company on May 1, 1993. Prior to joining James Mitchell & Co., Mr. Carlson
was an audit manager with Steres, Alpert & Carne, a San Diego-based accounting
firm, which he joined in 1988 after serving as an audit supervisor with the
accounting firm of Ernst & Young LLP (formerly Arthur Young & Company). Mr.
Carlson is a graduate of California Lutheran University, is a certified public
accountant and is a registered Financial and Operations Principal with the
NASD.
William L. Webster became Senior Vice President and Chief Administrative
Officer of the Company on January 10, 1994. Mr. Webster joined James Mitchell
& Co. in June 1993 as Vice President of Operations. Prior to that time, he was
Vice President of New Business Administration and Vice President of
Information Systems for The Holden Group. In such capacities, Mr. Webster was
responsible for the administration of the company's annuity sales business
which consisted of over 250,000 accounts representing approximately $4 billion
in assets. Prior to joining The Holden Group, Mr. Webster was an
Administrative Services Manager with Arthur Andersen & Co. Mr. Webster
received his undergraduate degrees from Lehigh University.
3
Daniel M. Harkins became Senior Vice President and General Counsel of the
Company on October 7, 1996. He joined the Company's subsidiary, James Mitchell
& Co., June 1, 1996, bringing 17 years experience as in-house general counsel
and 5 years as outside counsel to both private and publicly held companies.
Prior to his employment at JMC, Mr. Harkins was a founding Partner of two law
firms in Southern California; Vice President, Secretary, and General Counsel
of The Geneva Companies, a Chemical Bank owned business broker; General
Counsel for RNC Capital Management, a registered investment advisor; General
Counsel and Director of Jefferies & Company, Inc., an international securities
broker-dealer. Mr. Harkins holds a Bachelors of Arts degree and Doctorate of
Law from the University of Kansas. He is licensed to practice law in
California, Missouri, and Kansas.
Stanley J. Mensing became Senior Vice President and Chief Marketing Officer
on January 1, 1997. Mr. Mensing began his career with the Company's
subsidiary, James Mitchell & Co. in 1988 as a Regional Vice President in
Arizona. In 1989, he was promoted to Divisional Vice President of the Arizona
Division, encompassing both Arizona and Nevada. Mr. Mensing relocated to
Florida in 1991 to open JMC's Tampa divisional office in central Florida
serving the Barnett Banks Program. Mr. Mensing assumed the position as First
Vice President Business Development, responsible for the Eastern United
States, in November, 1995. Prior to joining JMC, Mr. Mensing held national
sales and marketing positions in the retail industry and began his financial
services career with Country Companies, the second largest property & casualty
organization in the state of Illinois. He holds a Bachelor of Science degree
in Marketing with a specialization in Business Administration from Southern
Illinois University. He is a registered NASD Principal and holds a Series 6
license, as well as Life & Health and Variable Annuity Insurance licenses.
Edward J. Baran became a Director in August 1992. Mr. Baran, who has spent
more than thirty years in the insurance business, is currently Chairman and
Chief Executive Officer of BCS Financial Corporation, a financial services
holding company. Prior to joining BCS in November 1987, Mr. Baran was Vice
Chairman, President and Chief Executive Officer of Capitol Life Insurance
Company of Denver, Colorado. He is a graduate of Georgetown University and a
member of the Audit Committee of the Board of Directors.
Barton Beek became a Director in January 1984. Mr. Beek is a senior partner
of O'Melveny & Myers, a law firm which he joined in 1955, with offices
worldwide. Mr. Beek is a graduate of the California Institute of Technology,
the Stanford University Graduate School of Business and Loyola College of Law.
Mr. Beek is a director of Wynns International, Inc. He is a member of the
Compensation Committee of the Board of Directors.
Charles H. Black became a Director in June, 1993. Mr. Black is currently a
private investor, having most recently served as Vice Chairman of Pertron
Controls Corporation. From 1982 to 1985, Mr. Black served as Executive Vice
President, Director and Chief Financial Officer of Kaiser Steel Corporation.
He served as Executive Vice President and Chief Financial Officer of Great
Western Financial Corporation and Great Western Savings and Loan from 1980 to
1982 after having spent over 20 years in various financial and management
positions with Litton Industries, Inc., the most recent being Corporate Vice
President and Treasurer. Mr. Black is a member of the Board of Governors of
the Pacific Stock Exchange and serves as a director of Investment Company of
America, AMCAP Fund, Inc., Fundamental Investors, Inc., and the American
Variable Insurance Trust, all mutual funds. He also serves as a director of
several privately-held corporations. Mr. Black is a graduate of the University
of Southern California. He is Chairman of the Audit Committee of the Board of
Directors.
Herbert G. Kawahara became a Director in June 1989. Mr. Kawahara is the
former President of the Pacific Stock Exchange, having served in that capacity
from January 1988 to May 1989. Previously, Mr. Kawahara had a 29-year career
with E.F. Hutton and Company Inc., starting as trainee in 1958 and filling
various positions in the retail system. From 1982 to 1987, he served as an
Executive Vice President and was the firm's top executive in Southern
California. Mr. Kawahara was also a member of the Board of Directors of E.F.
Hutton and Company, Inc. from 1982 to 1987. He is a graduate of the University
of California at Los Angeles. Mr. Kawahara is Chairman of the Compensation
Committee of the Board of Directors.
4
Robert G. Sharp became a Director in May 1995. Mr. Sharp retired from his
position as President and Chief Executive Officer of Keyport Life Insurance
Company in February 1992 after having served in that position since 1979. Mr.
Sharp is the past chairman of the National Association for Variable Annuities
and a former director of the National Association of Life Companies. Mr. Sharp
is a graduate of the California State University at Sacramento and is a
registered Principal with the NASD. Mr. Sharp is a member of the Audit
Committee of the Board of Directors.
Donald E. Weeden became a Director in February 1987. Since January 1986, Mr.
Weeden has been the Chief Executive Officer of Weeden & Co., L.P. Weeden &
Co., L.P. makes a market in the Company's Common Stock on the NASDAQ National
Market System. Prior to that time, he was Vice President of Moseley,
Hallgarten, Estabrook & Weeden Inc. Mr. Weeden is a director of National
Semiconductor, Inc. Mr. Weeden is a member of the Compensation Committee of
the Board of Directors.
BOARD MEETINGS AND COMMITTEES
The business affairs of the Company are managed by or under the direction of
the Board of Directors, although it is not involved in day-to-day operations.
During the year ended December 31, 1996, the Board of Directors met seven
times.
The Board of Directors of the Company has standing Audit, Compensation and
Nominating Committees.
Audit Committee. The Audit Committee recommends to the Board of Directors
the appointment of the firm selected to be independent public accountants for
the Company and monitors and evaluates the performance of such firm; reviews
and approves the scope of the annual audit and evaluates with the independent
public accountants the Company's annual audit and annual consolidated
financial statements; reviews the Company's financial reporting policies and
practices; reviews with management the status of internal audit and control
procedures, adequacies of financial staff and other matters and makes such
recommendations to the Board of Directors as may be appropriate; evaluates
matters having a potential financial impact on the Company which may be
brought to its attention by management, the independent public accountants or
the Board of Directors; and reviews all public financial reporting documents
of the Company. The current members of the Audit Committee are Messrs. Baran,
Black and Sharp. Mr. Black is the Chairman. The Audit Committee held two
meetings during fiscal 1996.
Compensation Committee. The Compensation Committee reviews and makes
recommendations to the full Board of Directors with respect to the specific
compensation to be paid or provided to executive officers and also administers
the Company's 1993 Executive Stock Option Plan. The current members of the
Compensation Committee are Messrs. Beek, Kawahara and Weeden. Mr. Kawahara is
the Chairman. The Compensation Committee held two meetings during fiscal 1996.
Nominating Committee. The Nominating Committee recommends and nominates
those who will stand for election or reelection during the Annual Meeting of
Shareholders. The current members of the Nominating Committee are Messrs.
Sharp, Beek and Black. The Nominating Committee held one meeting during fiscal
1996.
During the fiscal year ended December 31, 1996, each of the Directors of the
Company attended all of the aggregate of (1) the total number of meetings of
the Board of Directors and (2) the total number of meetings of the
committee(s) of the Board on which he served during the period he served in
such capacities.
5
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding compensation
paid during each of the Company's last three fiscal years to the Company's
Chief Executive Officer and the three highest paid executive officers of the
Company (the "named executive officers")(1):
LONG-TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
--------------------- UNDERLYING
NAME AND PRINCIPAL OPTIONS/ ALL OTHER
POSITION YEAR SALARY($) BONUS($)(2) SARs(#)(3) COMPENSATION($)
------------------ ---- --------- ----------- ------------ ---------------
James K. Mitchell, Chairman and 1996 291,627 -- -- 9,329
Chief Executive Officer(4) 1995 248,664 -- -- 9,449
1994 280,500 42,075 75,000 8,740
Brian J. Finneran, 1996 276,969 -- -- 8,422
President and 1995 217,692 -- -- 8,542
Chief Operating Officer(5) 1994 240,000 36,000 30,000 7,970
D. Mark Carlson, 1996 136,388 -- -- 4,092(6)
Senior Vice President and 1995 127,699 -- 20,000 3,600(6)
Chief Financial Officer 1994 130,000 19,500 15,000 3,600(6)
William L. Webster, 1996 127,462 -- -- 3,823(6)
Senior Vice President and 1995 112,880 -- 20,000 3,694(6)
Chief Administrative Officer 1994 117,589 17,250 10,000 1,779(6)
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(1) Although SEC regulations require four highest paid executive officers in
the classification of the "named executive officers," no other officer of
the company qualifies for this specification under Regulation S-K, Item
402a(3).
(2) Reflects bonuses earned for the respective fiscal year, which in some
instances all or a portion of which was paid during the subsequent fiscal
year.
(3) The Company does not have any outstanding Stock Appreciation Rights
("SARs").
(4) Amounts reported for Mr. Mitchell in the "All Other Compensation" column
include $4,500, $4,620, and $4,620, respectively, for 1996, 1995 and 1994,
representing the Company's contributions to its 401(k) Savings Plan on his
behalf and $4,829 for 1996, $4,829 for 1995 and $4,120 for 1994,
representing life insurance premiums advanced by the Company pursuant to a
split dollar insurance agreement.
(5) Mr. Finneran resigned from his positions with the Company and its
subsidiaries effective December 31, 1996. Amounts reported for Mr.
Finneran in the "All Other Compensation" column include $4,500, $4,620,
and $4,620, representing the Company's contributions to its 401(k) Savings
Plan on his behalf for 1996, 1995 and 1994, respectively, and $3,922,
$3,922 and $3,350 for 1996, 1995, and 1994, respectively, representing
life insurance premiums advanced by the Company pursuant to a split dollar
insurance agreement.
(6) Represents the Company's contributions to its 401(k) Savings Plan on
behalf of the named executive officer.
OPTION GRANTS
No options were granted to the named executive officers during fiscal 1996.
6
OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table provides information related to options exercised by the
named executive officers during the 1996 fiscal year and the number and value
of options held at fiscal year-end.
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT IN-THE-MONEY OPTIONS/
FY-END(#)(1) SARS AT FY-END($)(1)(2)
SHARES ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ----------- ----------- ------------- ----------- -------------
James K. Mitchell....... 0 0 50,000 25,000 0 0
Brian J. Finneran....... 0 0 50,000 0 0 0
D. Mark Carlson......... 0 0 45,000 5,000 0 0
William L. Webster...... 0 0 26,667 3,333 0 0
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(1) The Company does not have any outstanding SARs.
(2) The closing price for the Common Stock on December 29, 1996, as reported
by the NASDAQ National Market System, was $0.969. All of the named
executive officers' outstanding options were exercisable for a price
greater than $0.969 at fiscal year end.
COMPENSATION OF DIRECTORS
The members of the Board of Directors who are not full-time employees of the
Company are entitled to receive reimbursement for out-of-pocket expenses they
incur in attending Board meetings and otherwise performing their duties and
receive fees of $1,000 for each meeting of the Board of Directors which they
attend. Members of committees additionally receive $500 per committee meeting
held on the same day as a Board of Directors' meeting, or $1,000 per committee
meeting if held on a different day. Committee chairpersons receive an
additional $500 per committee meeting. Non-employee Directors receive formula
grants of non-qualified stock options under the Company's 1993 Executive Stock
Option Plan. Options to acquire 12,000 shares of Common Stock are to be
granted within six months after an individual takes office as a Director and
options to acquire an additional 12,000 shares are to be granted within six
months after every third anniversary of such Director's taking office.
Officers of the Company are not compensated for their services as Directors or
committee members.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee of the Board of Directors served as
an officer or employee of the Company or its subsidiaries. No executive
officers of the Company served during fiscal 1996 on the board of directors of
any company which had a representative on the Company's Board of Directors. No
member of the Company's Board of Directors served during 1996 as an executive
officer of a company whose board of directors had a representative from the
Company or the Company's Board of Directors.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's Compensation Committee (the "Committee") is composed entirely
of independent members of the Board of Directors. During fiscal year 1996,
this Committee met two times, February 12, and May 10,1996. The Committee also
met on February 10, 1997. The Committee recommends executive compensation
policy and practice to the Board of Directors and administers the Company's
1993 Executive Stock Option Plan. The Board of Directors did not modify or
reject in any material way any action or recommendation of the Committee
during fiscal year 1996.
The Committee's compensation policy with regards to the Company's executive
officers has been to provide these officers, in aggregate, with salary and
incentive compensation competitive with the marketplace. Compensation has
primarily consisted of salaries, stock options and cash bonuses based upon the
Company's pre-tax earnings. No executive is currently a party to an employment
contract.
7
During the first month of 1996, the Chief Executive Officer and the
President were being paid in accordance with a voluntary decrease of 20% of
their former salaries, as was the case for most of 1995. As reported in the
Committee Report in the 1996 Proxy Statement, the Committee did reinstate the
salaries of the Chief Executive Officer and the President, to the annual
salary rates earned prior to the 1995 salary reductions as of February 1,
1996. However, the Chief Executive Officer of the Company notified the
Committee during the February 10, 1997 meeting that he would again voluntarily
reduce his salary 20% to $225,000 per year, effective April 1, 1997.
The Committee, at its February 10, 1997 meeting, considered the operating
results for 1996 and although the Committee felt that management during the
year had acted appropriately in a very difficult environment and was
continuing to maintain energy and creativity in its search for new sources of
revenue for the Company, it decided not to award any cash bonuses to the Chief
Executive Officer or the other executive officers.
While there is no established policy with respect to the frequency or amount
of option grants, the Committee desires that the executive officers own
Company stock to both provide incentive compensation based on performance
factors deemed important to the Company's stockholders and to provide an
element of downside risk to more closely align the interests of executives
with the interests of the stockholders. The Committee considers the granting
of stock options annually and, in reviewing the Chief Executive Officer's
recommendation, considers the individual executive officer's contributions to
the Company and the amount and terms of existing options. No grants were made
to executive officers of the Company under the 1993 Executive Stock Option
Plan during 1996. However, at the February 10, 1997 meeting, upon the
recommendation of the Chief Executive Officer, and in recognition of the fact
that they would not be getting salary increases or bonuses, the Compensation
Committee unanimously decided to grant options to three Senior Vice Presidents
of the Company totaling 75,000 shares at a purchase price of $1.25 per share,
the fair market value of the Company's common stock at the closing on February
10, 1997. Likewise, the Committee decided to grant the Chief Executive Officer
options to purchase 100,000 shares of common stock at a price of $1.375 per
share (The higher exercise price was in accordance with the 1993 Executive
Stock Option Plan which requires grants to owners of more than 10% of the
outstanding common stock to pay a price of 10% above the fair market value on
the date of grant.). The options granted to the three Senior Vice Presidents
and the Chief Executive Officer represented less than three percent of the
outstanding Common Stock.
James K. Mitchell, who became Chief Executive Officer of the Company
effective January 1, 1993, received a total of $291,627 in salary for fiscal
1996. This compares to a $248,664 salary in 1995. This also compares to
$280,500 salary and $42,075 bonus for a total of $302,575 in 1994. All salary
totals are exclusive of standard benefits. At the close of 1996, Mr. Mitchell
was the largest stockholder of the Company with a total of 710,055 shares
beneficially owned and vested options to purchase 50,000 shares of common
stock at a price of $4.00 per share.
The report of the Committee shall not be deemed incorporated by reference by
any general statement incorporating by reference this Proxy Statement into
filing under the Securities Act of 1993 or under the Securities Exchange Act
of 1934, except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
Herbert G. Kawahara, Chairman of the Compensation Committee
Barton Beek
Donald E. Weeden
8
PERFORMANCE GRAPH
The following chart compares the yearly percentage change in the cumulative
total stockholder return on the Common Stock during the five fiscal years ended
December 31, 1996 with the cumulative total return on the S&P 500 Index and the
NASDAQ Financial Stocks Industry Index.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG JMC GROUP INC., S&P 500 INDEX AND JMCG
PERFORMANCE GRAPH APPEARS HERE
Assumes $100 invested on Dec. 31, 1991
in JMC Group, Inc., S&P 500 Index and
NASDAQ Financial Stock Industry Index.
Measurement Period S&P
(Fiscal Year Covered) NASDAQ 500 INDEX JMCG
- ------------------- ------ --------- -----
Measurement Pt- 1991 $100 $100 $100
FYE 1992 $143.02 $104.464 $185.185
FYE 1993 $166.23 $111.834 $255.556
FYE 1994 $166.62 $110.113 $ 46.311
FYE 1995 $242.61 $146.673 $ 26.844
FYE 1996 $311.09 $188.487 $ 28.711
The foregoing information shall not be deemed incorporated by reference by
any general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
9
SECURITY OWNERSHIP
Unless otherwise noted below, the following table presents certain
information with respect to the ownership of the Common Stock as of March 10,
1997 by each person known by the Company to own beneficially more than 5% of
the Common Stock, by each person who is a Director or nominee for Director of
the Company, by each named executive officer and by all executive officers and
Directors of the Company as a group:
SHARES OF COMMON
STOCK BENEFICIALLY
OWNED AS OF
MARCH 10, 1997(1)
------------------
NAME NUMBER(2)(3) %
---- ------------ -----
James K. Mitchell........................................ 760,055 12.11
JMC Group, Inc.
9710 Scranton Road, Suite 100
San Diego, CA 92121
Thomas W. Smith(4)....................................... 345,000 5.50
Thomas N. Tryforos
323 Railroad Avenue
Greenwich, CT 06830
Brian J. Finneran........................................ 60,780 *
D. Mark Carlson.......................................... 65,455 1.04
William L. Webster....................................... 31,344 *
Edward J. Baran.......................................... 16,000 *
Charles H. Black(5)...................................... 261,031 4.16
Barton Beek.............................................. 44,000 *
Herbert G. Kawahara...................................... 16,000 *
Robert G. Sharp.......................................... 8,000 *
Donald E. Weeden(6)...................................... 26,938 *
All Executive Officers and Directors as a group (10
persons)................................................ 1,289,603 20.55
Total outstanding shares(7)............................ 6,276,018
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* Less than 1%
(1) All ownership figures include options to purchase shares of Common Stock
exercisable within 60 days of March 10, 1997, as set forth below. Except
as otherwise noted below, each individual, directly or indirectly, has
sole or shared voting and investment power with respect to the shares
listed.
(2) Includes 10,829, 10,780, 8,455, 4,677 and 42,707 vested shares of Common
Stock contributed by the Company to the Company's 401(k) Savings Plan for
Messrs. Mitchell, Finneran, Carlson, Webster and for all executive
officers and Directors as a group, respectively.
(3) Includes options to purchase 50,000, 50,000, 45,000, 26,667, 16,000,
20,000, 12,000, 16,000, 8,000, 8,000, and 251,667 shares of Common Stock
for Messrs. Mitchell, Finneran, Carlson, Webster, Baran, Beek, Black,
Kawahara, Sharp, Weeden and for all executive officers and Directors as a
group, respectively.
(4) As of March 10, 1997, each of Messrs. Smith and Tryforos beneficially
owned the shares shown in their capacity as investment manager for three
private investment limited partnerships of which they are a general
partner. On March 20, 1997, Messrs. Smith and Tryforos liquidated their
holding and as of such date own no shares of the Company's stock.
(5) Includes 22,800 shares held by the Charles H. Black Pension Trust and
14,000 shares held by Mr. Black as trustee for the benefit of Richard S.
Black, Charles H. Black, Jr., and Mr. Black in which Mr. Black has a 1/3
beneficial ownership interest. Also includes 36,200 shares owned
individually by Mr. Black's wife as to which he disclaims beneficial
ownership.
(6) Includes 3,000 shares held by Weeden & Co., L.P., of which Mr. Weeden is
Chief Executive Officer.
(7) Includes 251,667 shares issuable upon exercise of stock options.
10
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and executive officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file with the
Securities and Exchange Commission, NASDAQ and the Pacific Stock Exchange
initial reports of ownership and reports of changes in ownership of Common
Stock and other equity securities of the Company. Executive officers,
Directors and greater than 10% stockholders are required by Securities and
Exchange Commission regulations to furnish the Company with copies of all
Section 16(a) reports they file.
Specific due dates for these reports have been established and the Company
is required to identify those persons who failed to timely file these reports.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1996, all
Section 16(a) filing requirements applicable to its executive officers,
Directors and greater than 10% beneficial owners were complied with, except
for one filing made two days late, as previously disclosed in the 1996 Proxy
Statement.
ELECTION OF DIRECTORS
NOMINEES
Three of the Company's total of seven Directors are to be elected at the
Annual Meeting. The Board of Directors of the Company has authorized the
nomination at the Annual Meeting of the persons named below as candidates.
Unless otherwise directed, the Proxy Holders will vote the proxies received by
them for the three nominees named below. In the event that any such nominee is
unable or declines to serve as a Director at the time of the Annual Meeting,
the proxies will be voted for any nominee who shall be designated by the
existing Board of Directors to fill the vacancy. It is not expected that any
nominee will be unable or will decline to serve as a Director.
Information with respect to the nominees to the Board of Directors is set
forth above in "Directors and Executive Officers." The names of the nominees
are as follows:
Edward J. Baran
Charles H. Black
Donald E. Weeden
The Directors elected at this Annual Meeting will serve a three-year term,
until the annual meeting of stockholders in 2000, or until their successors
are duly elected.
REQUIRED VOTE
The affirmative vote of a plurality of the shares of Common Stock present in
person or represented by proxy and entitled to vote is required for the
election of each Director nominee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH PERSON
NOMINATED FOR ELECTION AS A DIRECTOR.
INDEPENDENT AUDITORS
Deloitte & Touche LLP has audited the financial statements of the Company
and its subsidiaries for fiscal year 1996 and will audit the financial
statements for fiscal 1997. Representatives of Deloitte & Touche LLP are
expected to be present at the Annual Meeting with the opportunity to make a
statement, if they desire to do so, and will be available to respond to
appropriate questions.
11
OTHER MATTERS
The Board of Directors knows of no other business which will be presented at
the Annual Meeting. If any other business is properly brought before the
Annual Meeting, it is intended that proxies in the enclosed form will be voted
in respect thereof in accordance with the judgments of the persons voting the
proxies. It is important that your shares be represented at the meeting,
regardless of the number of shares which you hold. WHETHER OR NOT YOU INTEND
TO BE PRESENT AT THE ANNUAL MEETING, YOU ARE URGED TO COMPLETE, SIGN, AND
RETURN YOUR PROXY PROMPTLY.
By Order of the Board of Directors
of JMC Group, Inc.
/s/ JAMES K. MITCHELL
-----------------------------------
James K. Mitchell
Chairman, President & Chief
Executive Officer
Dated: March 31, 1997
12
PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
JMC GROUP, INC.
Form of Proxy For Annual Meeting of Stockholders, May 5, 1997
The undersigned hereby appoints James K. Mitchell, Daniel M. Harkins and D.
Mark Carlson, and each of them, as his agents and proxies with full power of
substitution to vote any and all shares of Common Stock of JMC GROUP, INC.
which the undersigned is entitled to vote at the Annual Meeting of Stockhold-
ers of said Company to be held May 5, 1997, or any adjournment or postponement
thereof, as specified below (with reference to the Notice of Annual Meeting of
Stockholders and the accompanying Proxy Statement for further information re-
garding each item).
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
Please mark
your votes as
indicated in
this example
X
FOR WITHHELD
FOR ALL
1. Election of the following nominees as directors:
Edward J. Baran, Charles H. Black and Donald E. Weeden [_] [_]
WITHHELD FOR: (Write that nominee's name in the space provided below).
- -------------------------------------------------------------------------------
2. As they shall in their sole judgment determine on any other matter that may
properly come before the Annual Meeting or any adjournment or postponement
thereof.
This proxy will be voted as you specify. UNLESS OTHERWISE MARKED, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF ALL OF THE PERSONS NAMED IN PROPOSAL 1, ALL
OF WHOM WILL BE NOMINATED BY THE BOARD OF DIRECTORS OF JMC GROUP, INC. FOR
ELECTION AS DIRECTORS.
Signature(s) __________________________ Date _______________________________
NOTE: Sign exactly as name appears hereon. Give your full title if signing in
other than an individual capacity. All joint owners should sign.
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE