RAYMOND JAMES FINANCIAL, INC.
880 Carillon Parkway
St. Petersburg, Florida 33716
(727) 567-1000


NOTICE OF ANNUAL MEETING OF SHAREHOLDERS


February 12, 200417, 2005


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 12, 200417, 2005 at 4:30 p.m. for the following purposes:


1.

To elect ten nominees to the Board of Directors of the Company.

2.

To approve the Senior Management Incentive Compensation CriteriaPlan for certain of the Company's executive officers.

3.

To ratify the appointment of KPMG LLP as the Company's independent auditors by the Audit Committee of the Board of Directors.

Directors as the Company's independent auditors.

4.

To transact any other business that may properly come beforeapprove amendment of the meeting.

Company's Articles of Incorporation to increase the authorized shares of common stock to 180 million shares, $.01 par value.
5.To approve the 2005 Restricted Stock Plan.


     Shareholders of record as of the close of business on December 15, 200321, 2004 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.


By order of the Board of Directors,

/s/ BARRY AUGENBRAUN

Barry Augenbraun, Secretary

January 5, 2004

7, 2005


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.






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 12, 200417, 2005 at 4:30 p.m., or any adjournment thereof.

     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 the right to vote in person should the shareholder attend the meeting. The shareholder may revokeHowever, 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 any time prior to the voting thereof.

meeting. Otherwise, your shares will be voted in the manner in which you instructed the record holder of your shares.

     The affirmative vote of a majority of the shares of common stock represented at the meeting, either in person or by proxy, will be required for the election of any nominee, or the ratification or approval of any proposal or other business that may properly come before the meeting.

meeting, except for action on item 4, which will require approval of the holders of a majority of the outstanding shares of common stock.

     A copy of the Company's Annual Report is being furnished to each shareholder together with this proxy statement. The cost of all proxy solicitation will be paid by the Company.


Internet Voting

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.


Electronic Access to Proxy Materials and Annual Report

     This notice of Annual Meeting and Proxy Statement and the 20032004 Annual Report are available on our Internet site at http://www.raymondjames.com. 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 and vote your shares over the Internet. Opting to receive your proxy materials online saves us the cost of producing and mailing these materials to your home or office and gives you an automatic link to the proxy voting site.


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TABLE OF CONTENTS

Page

Proxy Statement

1

i

Internet Voting

1

i

Electronic Access to Proxy Materials and Annual Report

1

i

Shareholders Entitled to Vote and Principal Shareholders

2

1

Proposal 1: Election of Directors

2

Information Regarding Board Structure

4

Outside Director Stock Options

5

Section 16(a) Beneficial Ownership Reporting Compliance

5

Report of the Audit Committee of the Board of Directors

6

5

Corporate Governance, Nominating and Compensation Committee Report on
  Executive Compensation

7

Proposal 2: To Approve the Senior Management Incentive Compensation Criteria for Certain ofPlan For the
 Company’s Executive Officers

8

9

Summary Compensation Table

10

11

Incentive Stock Options

11

12

Comparative Stock Performance

11

13

Transactions with Management and Directors

12

13

Equity Compensation Plan Information

12

14

Proposal 3: To Ratify the Appointment of KPMG LLP as the Company’s
  Independent Auditors by the Audit Committee of the Board of Directors

of KPMG LLP as the Company’s Independent Auditors

13

15

Principal Auditing Firm Fees

Paid to Independent Auditors

14

16

PROPOSAL 4: To ApproveAmendment of the Company's Articles Of Incorporation to Increase the Authorized Shares of Common Stock to 180 Million Shares, $.01 Par Value.

16
PROPOSAL 5: To Approve2005 Restricted Stock Plan17
Other Matters

17
Exhibit A: Senior Management Incentive Plan18
Exhibit B: 2005 Restricted Stock Plan23


15 ii



SHAREHOLDERS ENTITLED TO VOTE
AND
PRINCIPAL SHAREHOLDERS


     Shareholders of record at the close of business on December 15, 200321, 2004 will be entitled to notice of, and to vote at, the Annual Meeting. As of December 15, 2003,21, 2004, there were 48,546,82474,285,530 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 information with respect to the common stock ownership of each person known by the Company to own beneficially more than 5% of the shares of the Company's common stock, and of all Executive Officers and Directors as a group as of December 15, 2003:

21, 2004:
    
Beneficially
  
Percent 
Name
 
Address
 
Owned Shares
  
of Class 
        
Thomas A. James 880 Carillon Parkway 10,050,127(1) (2) 13.5%
  St. Petersburg,     
  Florida 33716     
        
Private Capital Management, L.P. 
8889 Pelican Bay Blvd.
Suite 500
Naples, Florida 34108
 7,060,331(3) 9.5%
        
Robert A. James Trust 1201 Pacific Ave, 5,044,020  6.8%
  Suite 150     
  Tacoma, WA 98702     
        
All Executive Officers       
and Directors as a Group - 11,690,772(1) 15.7%
(22 Persons)       

Beneficially

Percent 

Name
Address

Owned Shares

of Class 

Thomas A. James

880 Carillon Parkway

6,454,154  (1) (2)

13.3%  

St. Petersburg,

Florida  33716

Private Capital Management, L.P.

8889 Pelican Bay Blvd.
Suite 500
Naples, Florida  34108

4,367,493      (3)

9.0%  

Robert A. James Trust

1201 Pacific Ave,

3,362,680         

6.9%  

Suite 150

Tacoma, WA  98702

All Executive Officers

and Directors as a Group

7,950,279      (1)

16.4%  

(22 Persons)


(1)  Includes shares credited to Employee Stock Ownership Plan accounts and shares which can be acquired within sixty days of record date through the exercise of stock options.

(2)  Includes 323,508377,262 shares owned by the Robert A. and Helen James' Children’s 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: 3,362,6805,044,020 shares owned by the Robert A. James Trust and 133,909169,759 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.


(3)  Based on information contained in Form 13F-HR filed with the SEC on September 30, 2003.November 15, 2004. Private Capital Management, L.P. is the beneficial owner of these shares of common stock held in accounts managed for clients.


1


PROPOSAL 1:ELECTION OF DIRECTORS


     The Company's Board of Directors presently consists of sixseven 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 Harvard Hill, who is retiring from the Board of Directors.

     The ten directors to be elected are to hold office until the Annual Meeting of Shareholders in 20052006 and until their respective successors shall have been elected.beenelected. All of the nominees, with the exception of Mr. Habermeyer and Mr. SimmonsMs. Adelaide Sink, were elected by the shareholders on February 13, 2003,12, 2004, to serve as Directors of the Company until the Annual Meeting of Shareholders in 2004; Mr. Habermeyer and Mr. Simmons were2005; Ms. Sink was elected as Directorsa Director by the Board of Directors on May 29, 2003.

October 12, 2004.

     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:

Principal Occupation (1),

Directorships and

Director

Nominee

Age

Security Ownership

Since

Angela M. Biever

50

President, Intel New Business Corp. since 2000; 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, beginning as Senior Vice
President, Finance and Planning and culminating as
Executive Vice President, Integrated Services Division;
Vice President, American Express Company from 1987
to 1991.  Member of Audit Committee.

1997

Common shares owned 6,066  (.01%):

Jonathan A. Bulkley

69

Bulkley Consulting LLC since 1999; Managing Director,
Barents Group LLC (emerging markets/capital markets
development consulting) from 1992 to 1999; President
and CEO, Charterhouse Media Group (investment banking)
from 1988 to 1992; President and CEO Jesup & Lamont
Securities Group, Inc. (securities broker-dealer) from
1987 to 1988; Prior to 1986, President and CEO of
Moseley, Hallgarten, Estabrook & Weeden Inc. (securities
broker-dealer).  Director of Raymond James International
Holdings, Inc., Lead Director and Chairman of Audit
Committee and Audit Committee Financial Expert.

1986

Common shares owned: 22,718  (.05%)

Francis S. Godbold

60

Vice Chairman of Raymond James Financial, Inc. ("RJF");
Director and Officer of various affiliated entities.  Executive
Vice President of Raymond James & Associates, Inc.* ("RJA").

1977

Common shares owned: 514,094 (1.06%) (2)

H. William Habermeyer, Jr

61

President and CEO, Progress Energy Florida since 2000;
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.
Common shares owned: 1,000 (0.00%)

2003

Chet Helck

51

President and Chief Operating Officer of RJF since 2002;
Executive Vice President of Raymond James Financial
Services, Inc.* ("RJFS") from 1999 to 2002; Senior Vice
President, RJFS from 1997 to 1999.  Director of RJFS,
RJA and Raymond James Investment Services, Ltd.*

2003

Common shares owned: 35,850 (.07%) (2)

Harvard H. Hill, Jr., CFP

67

Managing General Partner of Houston Partners (venture capital)
  since 1985; Prior to 1985, President and CEO of Criterion
Investments; President and COO of Rotan Mosle; and Vice
President of Dean Witter & Co. Member of Corporate
Governance, Nominating and Compensation Committee.

1986

Common shares owned: 1,750  (.00%)

Thomas A. James

61

Chairman of the Board and Chief Executive Officer of RJF;
Chairman of the Board of RJA.  Director and Officer of
various affiliated entities. Past Chairman of the Securities
Industry Association. Director of Outback Steakhouse, Inc.

1965

Common shares beneficially owned: 6,454,154 (13.29%) (2) (3)

Dr. Paul W. Marshall

61

The MBA Class of 1960 Professor of Management Practice
at Harvard Graduate School of Business Administration
since 1996; Chairman and CEO of Rochester Shoe Tree Co.,
Inc. from 1992 to 1997;  Chairman of Corporate Governance,
Nominating and Compensation Committee.

1993

Common shares owned: 7,875  (.02%)

Kenneth A. Shields

55

President and Chief Executive Officer of Raymond James Ltd.*
("RJ Ltd.") (formerly Goepel McDermid Inc.) and predecessor
Company since 1996 (a Canadian brokerage firm). Past
Chairman of the Investment Dealers Association of Canada;
Director of TimberWest Forest Corp.; Trustee, Mercer
International Inc.; Member of the Canadian Accounting
Standards Oversight Council; Director of the Council for
Business and the Arts in Canada.
Common shares owned: 47,675 (.10%) Exchangeable
shares owned: 56,663 (.12%)(2) (4)

2001

Hardwick Simmons

63

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. Member of Corporate Governance,
Nominating and Compensation Committee.

2003

Common shares owned: 10,000  (.02%)


*             A wholly‑owned subsidiary or an affiliate of the Company.
(1)           Unless otherwise noted, the nominee has had the same principal occupation and employment during the last five years.
(2)           Includes shares credited to their Employee Stock Ownership Plan accounts including estimated fiscal 2003 ESOP allocations, and shares which can
                 be acquired within sixty days of record date through the exercise of stock options.
(3)           See footnotes under the Principal Shareholders' Ownership table.
(4)           Exchangeable shares issued January 2, 2001 in connection with the acquisition of Goepel McDermid, Inc.  They are exchangeable into shares of RJF
                 common stock on a one-for-one basis.

    
Principal Occupation (1),
   
    
Directorships and
  
Director
Nominee
 
Age
 
Security Ownership
  
Since
        
Angela M. Biever* 51 General Manager, Intel New Business Corp. since 2000; 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, beginning as Senior Vice President, Finance and Planning and culminating as Executive Vice President, Integrated Services Division; Vice President, American Express Company from 1987 to 1991. Chairperson of the Audit Committee.  1997
    Common shares owned 10,224  (.01%):   
        
Jonathan A. Bulkley* 70 Bulkley Consulting LLC since 1999; Managing Director, Barents Group LLC (emerging markets/capital markets development consulting) from 1992 to 1999; President and CEO, Charterhouse Media Group (investment banking) from 1988 to 1992; President and CEO Jesup & Lamont Securities Group, Inc. (securities broker-dealer) from 1987 to 1988; Prior to 1986, President and CEO of Moseley, Hallgarten, Estabrook & Weeden Inc. (securities broker-dealer). Director of Raymond James International Holdings, Inc., a wholly owned subsidiary of the Company.Lead Director andmember of the Audit Committee and Audit Committee Financial Expert.  1986
    Common shares owned: 25,827  (.03%)   

2


        
Francis S. Godbold 61 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.  1977
    Common shares owned: 557,467 (.75%) (2)   
        
H. William Habermeyer, Jr.* 62 
President and CEO, Progress Energy Florida since 2000; 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.
Common shares owned: 1,700 (0.00%)
  2003
        
Chet Helck 52 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 Investment Services, Ltd., an affiliate of the Company.  2003
    Common shares owned: 65,263 (.09%) (2)   
        
Thomas A. James 62 Chairman of the Board and Chief Executive Officer of RJF; Chairman of the Board of RJA. Director and Officer of various affiliated entities. Past Chairman of the Securities Industry Association. Director of Outback Steakhouse, Inc.  1965
   Common shares beneficially owned: 10,050,127 (13.5%) (2) (3)   
        
Dr. Paul W. Marshall* 62 The MBA Class of 1960 Professor of Management Practice at Harvard Graduate School of Business Administration since 1996; Chairman and CEO of Rochester Shoe Tree Co., Inc. from 1992 to 1997; Chairman of Corporate Governance, Nominating and Compensation Committee.  1993
    Common shares owned: 14,062  (.02%)   
        
Kenneth A. Shields 56 
Chairman and Chief Executive Officer of Raymond James Ltd. ("RJ Ltd."), a wholly owned subsidiary of the Company (formerly Goepel McDermid Inc.) and predecessor Company since 1996 (a Canadian brokerage firm). Past Chairman of the Investment Dealers Association of Canada; Director of TimberWest Forest Corp.; Trustee, Mercer International Inc.; Member of the Canadian Accounting Standards Oversight Council; Director of the Council for Business and the Arts in Canada.
Common shares owned: 81,170 (.11%) Exchangeable shares owned: 84,994 (.11%)(2) (4)
  2001

3


        
Hardwick Simmons* 64 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. Member of Corporate Governance, Nominating and Compensation Committee.  2003
    Common shares owned: 15,000  (.02%)   
        
Adelaide Sink* 56 
President, Bank of America, Florida Banking Division from 1993 to 1997 and 1998 to 2000; Director, Republic Bankshares from 2002 to 2004; Director, First Advantage Corp. St. Petersburg, FL from 2003 to present. Member of the Corporate Governance, Nominating and Compensation Committee.
Common shares owned: 7,000  (.01%)
  2004

*Determined to be independent directors under New York Stock Exchange standards; see "Information Regarding Board Structure" below.
(1)Unless otherwise noted, the nominee has had the same principal occupation and employment during the last five years.
(2)Includes shares credited to their Employee Stock Ownership Plan accounts, including estimated fiscal 2004 ESOP allocations, and shares which can be acquired within sixty days of the record date through the exercise of stock options.
(3)See footnotes under the Principal Shareholders' Ownership table.
(4)Exchangeable shares 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.

Information Regarding Board Structure

     The Board of Directors held four regular meetings and two telephone meetings during fiscal 2003.  Each2004. All directors attended at least 75% of the directors attended all of the regular meetings held during his/her tenure during the year except for Angela Biever and Bo Godbold, who each missed one meeting.

year.

     The current standing Committees of the Board of Directors are the Audit Committee, and the Corporate Governance, Nominating and Compensation Committee. The Corporate Governance, Nominating and Compensation Committee met threefour times and held twoone telephone meetingsmeeting during the fiscal year ended September 26, 2003.year. Each member of this Committee participated in all of the meetings held during his/her tenure during the year. The Audit Committee met four times and held four telephone meetings during the fiscal year ended September 26, 2003.  Each member of thisyear. All Committee participated in allmembers attended at least 75% of the meetings held during his/her tenure during the year except for Angela Biever, who missed one meeting.year. The activities of the Committees are set out in their reports below.

     The Company has a Nominating Committee comprised of three independent Directors (as(four directors since the election of Ms. Sink to the Committee on October 12, 2004) as determined under New York Stock Exchange rules),rules, which also serves as the Corporate Governance and Compensation Committee. 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 doeshas not paypaid any third party a fee to assist in the process of identifying and evaluating candidates. The CharterChart er of the Committee is available at the Company's website:www.raymondjames.com/corporate_governance.htm.

corporate_governance.htm.


4


     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.

    The Nominating Committee has determined that the Directors identified as Independent Directors have no business relationship with the Company that would impair their independence. In that connection, the Committee considered that the Company purchases its electric power needs from Progress Energy Florida, of which William Habermeyer, Jr. is President and CEO, and determined that the nature of this business relationship did not constitute any impairment of independence.
     Shareholders may communicate with directors of the Company 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 Secretary of the Company and directed to them for their consideration.

     It is the Company's policy that directors attend the Annual Meeting of Shareholders; at the Annual Meeting of Shareholders on February 13, 2003,12, 2004, all of the Company's Directors at that date were present.

     Independent Directors Marshall, Hill, Bulkley, Biever, Simmons and Habermeyer receive an $18,000 annual retainer, a $2,500 attendance fee for each regular meeting, $250 for each telephone meeting and a $500 attendance fee for Committee service.

The Lead Director and the Audit Committee Chair each receive a $22,000 annual retainer, and the Chairman of the Corporate Governance, Nominating and Compensation Committee receives a $20,000 annual retainer.


Outside Director Stock Options

     There is a non-qualified stock option plan for the Company's outside Directors covering 380,000569,532 shares of the Company's common stock. These options, 27,75050,624 of which were outstanding at September 26, 2003,24, 2004, are exercisable at prices ranging from $18.44$12.29 to $36.94$25.60 at various times through February 2008.2009. Outside directors are generally granted 1,500 options each per year.


Section 16(a) Beneficial Ownership Reporting Compliance

     William Habermeyer, a Director, was late in filing a Form 4 Report with respect to the purchase of 500 shares of RJF common stock on June 12, 2003.  Richard Riess,

     Tim Eitel, an officer of RJF, was late in filing a Form 4 Report with respect to the sale of 5,000 shares of RJF common stock on July 24, 2003. Jeffrey Trocin, an officer of RJF, filed an amended Form 5 regarding a gift of 100 shares on July 24, 2003.  Tom James, CEOexecutive of the Company, filed an amended Form 45 on AprilJanuary 23, 2003 regarding2004 reflecting a delinquent filing for the sale of 1,0008,000 shares of the Company's common stock on December 26, 2002, and was late in filing a Form 4 regarding the sale of 17,200 shares of stock between November 4, 2003 and November 7, 2003; both transactions occurred in a Trust which he is required to treat as beneficially owned by him pursuant to Rule 16a-1(a)(1). Mr. James disclaims any beneficial interest in the Trust or these shares, and was not notified of the sales on a timely basis.

March 2003.


REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS


     The Audit Committee of the Board of Directors consists of Angela Biever (Chairperson), Jonathan A. Bulkley (Chairman), Angela Biever and H. William Habermeyer. This committeeCommittee conducts its activities pursuant to a written charter approved by the Board of Directors, a copywhich was last revised by the Board of which is an appendix to this Proxy Statement.Directors on November 29, 2004. The committeeCommittee 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 auditors, 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 auditors and must approve in advance any non-audit work to be performed by the independent auditors. 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 auditors. During fiscal 2004, the fiscal year ended September 26, 2003,Committee approved a total of $12,000 for services performed by the committee approvedCompany's independent auditors, KPMG LLP, under the "de minimis" exception to Section 202 of the Sarbanes Oxley Act three tax engagements performed by the Company's independent auditors, KPMG LLP,, representing less than 5%1% of the total fees paid to them.

     In addition to four regularly scheduled meetings during the course of the year, members of the Audit Committee held four telephone 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 committeeCommittee have reviewed and discussed with management and with representatives of KPMG LLP the audit of the consolidated financial statements for fiscal 20032004 contained in the Company's Annual Report on Form 10-K with management and representatives of KPMG LLP.10-K. In addition, the committee discussedCommittee reviewed with the independent auditors the matters required to be discussed by

5

Statement on Auditing Standards No. 61, Communication with Audit Committees, as amended. The committeeCommittee also discussed with themKPMG LLP their independence from the Company and its management, including the matters in the written disclosures required by Independence Standard Board Standard No. 1, Independence Discussionsaccordance with Audit Committees,applicable regulatory requirements, 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 other materialcertain written communications between KPMG LLP and the management of the Company.

     In May, 2004 the chief accountant of the Securities and Exchange Commission advised the American Institute of Certified Public Accountants ("AICPA") that he did not concur with the treatment of certain contingent fee engagements which the AICPA had considered to be consistent with its standards for auditor independence. The Company's auditors had been relying on the AICPA interpretation in advising the Company that their independence was not impaired by the performance of a contingent fee engagement relating to certain state tax services during fiscal 2003 and 2004 (see "Principal Auditing Firm Fees" below). Following a meeting with the staff of the SEC by representatives of the major accounting firms, KPMG advised the Audit Committee that it proposed to restructure the compensation rela ting to this engagement to eliminate any contingent aspect, and to establish a fixed fee for the remainder of the engagement. The Committee approved the restructuring of the fee for this engagement and concurred with KPMG's assessment that, because they had relied in good faith on an interpretation of the AICPA that was generally recognized in the accounting profession, there had been no impairment of KPMG's independence with respect to the conduct of these engagements.
     Based on the reviews and discussions referred to above, and in reliance on the representations of management and the independent auditors' report with respect to the financial statements, the committeeCommittee recommended to the Board of Directors that the audited financial statements be included in the Company's Annual Report on Form 10-K for the year ended September 26, 2003fiscal 2004 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 auditors are responsible for performing an independent audit of the Company's consolidated financial statements in accordance with auditingthe standards generally accepted inof the United States of AmericaPublic Company Accounting Oversight Board and issuing a report on the financial statements.

     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 auditors. The Audit Committee serves a board-level oversight role, in which it provides advice, counsel and direction to management and the auditors on the basis of the information it receives, discussions with management and the auditors, and the experience of the Audit Committee's members in business, financial and accounting matters. In its oversight role, the committeeCommittee 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 auditors, who, in their report, express an opinion on the conformity of theth e Company's annual financial statements with accounting principles generally accepted in the United States of America.


Angela M. Biever, Chairperson

Jonathan A. Bulkley Chairman and   Audit Committee Financial Expert

Angela M. Biever

H. William Habermeyer, Jr.

December 19, 2003

6, 2004



6

CORPORATE GOVERNANCE, NOMINATING AND COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION


Overview and Philosophy

     The Corporate Governance, Nominating and Compensation Committee reviews corporate compensation and benefit plan policies, as well as the structure and amount of all compensation for executive officers of the Company. This committeeCommittee consists of Dr. Paul W. Marshall (Chairman), Harvard H. Hill, Jr., Hardwick Simmons and, Hardwick Simmons.

since October 12, 2004, Adelaide Sink.

     The committee'sCommittee'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 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.

     For senior management of the Company, the cash and restricted stock compensation components (base salary and annual bonus) are heavily weighted toward annual bonus. These bonuses are generally based on formulas related to the profits of an individual subsidiary/department or the profits of the Company as a whole.whole (see Proposal 2 below). A portion of these bonuses is awarded subjectivelycan be withheld based on ansubjective performance evaluation by the Committee. In certain instances, the Committee may award additional discretionary amounts provided that such awards, if any, will not affect federal income tax deductibility under Section 162 (m) of performance.the Internal Revenue Code. The emphasis on profit-based compensation serves two functions: it encourages executives to be conscious of the "bottom line" and it keeps theth e Company's base salary structure at a modest level, which is advantageous to the firm given the cyclical nature of the securities industry. The Company issues restricted shares of Company stock in lieu of cash for 10% to 20% of bonus amounts in excess of $250,000. These shares arewere issued at a 20% discount from market value at the date of grant andthrough calendar year 2004. Future shares will be issued at market value at the date of grant. The shares are restricted from sale during a three year vesting period.

     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 special awards may be granted when a special situation exists, as inducements when employees are hired, or if job performance or a change in job duties 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. During the past five years the number of outstanding options has represented between 5% and 8% of the Company's outstanding shares.

     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 all full-time employeesemploye es who meet the length of service requirements (six months for the 401(k) plan and one year for the other two plans). The Company also maintains a non-qualified long term incentive plan.plan for executive officers. Eligibility of executive officers is restricted to those who meet certain compensation levels set annually by the committeeCommittee and approved by the Board of Directors. The vesting schedule of this plan is designed to encourage long-term employment with the firm. Contributions to this plan on behalf of executive

7

officers 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. Finally, certain key employees of the Company have participated in limited partnership arrangements in which the Company makes non-recourse loans to these employees for two thirds of the purchase price per unit. The loans, plus interest, are intended to be paid back from the earnings of the partnership.partnerships. The partnerships, Raymond James Employee Investment Fund I, L.P. and Raymond James Employee Investment Fund II, L.P., are invested in several affiliated and unaffiliated private equity limited partnerships.partnerships . (See "Transactions with Management and Directors" below).


Compensation of the Chief Executive Officer

     In keeping with the general compensation philosophy outlined above Mr. James' base salary for calendar 20042005 will be $273,000,$285,000, a 3%4.4% increase over his 20032004 compensation of $265,000.$273,000. Mr. James' salary is subject to an annual review, as is true of all employees. It was last adjusted in November 2002,2003, effective January 1, 2003.

2004.

     In determining the bonus offered to Mr. James for fiscal 20032004 the committeeCommittee considered many factors, including the following:


*

Given the business environment:

- The Company’s performance relative to its peer group.

group;

- The Company’s performance relative to its budgetbudget; and

- The Company’s performance relative to its long-term objectives.

*

The compensation of the chief executive officers of other similar brokerage firms, as of their most recent proxy statement.

firms.

Dr. Paul W. Marshall, Chairman

Harvard H. Hill, Jr.

Hardwick Simmons

December 4, 2003

November 29, 2004



8


PROPOSAL 2:TOAPPROVE THE SENIOR MANAGEMENT INCENTIVE COMPENSATION CRITERIAPLAN FOR CERTAIN OF THE COMPANY'S
EXECUTIVE OFFICERSOFFICERS.

            In consideration


Since the Internal Revenue Code was amended to set limitations on compensation to executives, the Company has submitted to shareholders for approval each year the performance criteria for compensation of the limitations on tax deductibility imposed underCompany's executive officers in accordance with Section 162(m) of the Internal Revenue Code of 1986, as amended, the Company has adopted a policy of formalizing incentive compensation calculations for executive officers.   Section 162(m) limits deductions for compensation by a public corporation in excess of $1 million per year to any one of its executive officers unless certain criteria are met.  This rule requires that the incentive compensation be based on attainment of one or more performance goals and that the Company's shareholders approve both the performance goals and the formula used to calculate the payment amount.

            The intention ofCode. In November, 2004, the Corporate Governance, Nominating and Compensation Committee remainsdecided to submit to shareholders for approval a plan that would authorize the Compensation Committee to set these criteria each year. The Committee believes that this approach is consistent with the most widely followed practice at other public companies.

Under the Plan, the Committee will establish performance goals for awards for each senior executive, including the Company's chief executive officer. The Committee anticipates that the executive officerspractice they will follow with respect to establishing performance goals, and the nature of those goals, will be compensated on a basis consistent with the practice followed in prior years; i.e., for obtainingyears, and will be based on contributions to pre-tax profits. However, the Committee does have the authority under the Plan to consider other criteria, such as total shareholder return, total shareholder return compared to peers, other financial returns, attainment of cost reduction targets, success in recruitment of financial advisors, customer growth and employee satisfaction. The formulas adopted by the Committee may include or e xclude certain performance goals.  It isitems such as losses from discontinued operations, extraordinary gains or losses, and foreign currency impact. The Committee has the Company's practice thatdiscretion to reduce or withhold a portion of the amount of any formula-driven bonusaward as determined under the compensation formula.
The maximum amount can be withheld based on a subjective performance evaluation.  The committee considers the bonus formulas for executive officers each year.  For purposes of determining incentive compensation for the executive officers for fiscal 2004, the committee has approved the executive bonus formulas described below.  Discretionary amounts above those resulting from the formulas belowthat may be awarded by the committee.  The bonus amounts for fiscal 2003 awardedpaid to Mr. Shields and Mr. Averitt exceeded the bonus amounts generated by the bonus formulas that appearedany executive will not exceed $5,000,000 in theany given year.
As has been true in prior year’s proxy and were approved at the annual meeting of the shareholders on February 13, 2003, by amounts that did not affect the tax deductibility.  Should this occur for fiscal 2004, it will be disclosed in this section of the proxy statement in the following year.  Ten percent ofyears, bonus awards betweenthat exceed $250,000 and $500,000 are paid inwill contain a component of restricted stock valued at 80% of market value on the bonus payment date, 15% of awards between $500,000 and $1,000,000 are paid in restricted stock, and 20% of all awards in excess of $1,000,000 are paid in restricted stock.  Restrictedas follows:

Amount of AwardPercentage to be Paid in Stock
$250,000 - $500,00010% of the amount in excess of $250,000.
$500,000 - $1,000,00015%. of the amount in excess of $500,000.
$1,000,000 or more20% of the amount in excess of $1,000,000.

These shares must be held for three years before they vest.

Under the Plan, these shares will be valued at market value on the date of the bonus payment instead of 80% of market value as had been the Company's prior practice. The Committee may increase or decrease the portions of awards to be made in shares of the Company's stock.
While approval of the Plan will eliminate the need for an annual vote of shareholders with respect to proposed compensation criteria, the Committee will continue to provide an explanation of the criteria to be used for the five highest compensated executive officers in the Company's proxy statements. The criteria approved by the Committee for fiscal 2005 are set out in the following table and will be implemented by the Committee if the plan is approved.
The Board of Directors can amend the provisions of the Plan from time to time, except for changes to the material terms of the Plan, consisting of the business criteria for awards, the maximum amount payable under the Plan, and the eligible employees under the Plan, which must be approved by the Company's shareholders.
A copy of the Plan is annexed to this proxy statement as Exhibit A.
An affirmative vote of the majority of those shareholders present and voting by proxy will be required for approval of the Plan.

9


The Board of Directors Recommends a Vote for the Approval of the Plan.

Recommended Bonus Formulas for Executive Officers as Approved by the Compensation Committee

Percent for Calculation

Executive Officer

Basis

of Bonus

Executive Officer
Basis
Of Bonus

Thomas A. James

Total companyCompany pre-tax profits

1.10%

1.1%

Chairman and Chief Executive Officer - RJF

Chet Helck
President and Chief Operating Officer –- RJF

Total retailPCG pre-tax profits per PCG Contribution Report*.
Subjective portion related to other corporate responsibilities

1.10%

1.1%

Richard G. Averitt, III
Chairman and Chief Executive Officer –- RJFS

Pre-tax profits of RJFS per PCG Contribution Report *

1.00%

1.1%

Richard K. Riess
Executive Vice President –- RJF

Pre-tax profits of Eagle Asset Management, Inc.

4.25% 

Pre-tax profits of Heritage Asset Management, Inc., RJA's Asset Management Services division and Awad Asset Management

3.00%

3.0%

Jeffrey E. Trocin
Executive Vice President,
Equity Capital Markets Group - RJA

Pre-tax profits of RJA's Equity Capital Markets, including international institutional equity sales:

      First $16 million

      Profits exceeding $16 million




8.00%

6.00%

8.0%
6.0%

Van C. Sayler
Senior Vice President,
Fixed Income - RJA

Pre-tax profits of RJA's Fixed Income department:

      First $20 million

      Profits exceeding $20 million



7.00%

5.00%

7.0%
5.0%
Dennis W. Zank
President RJA
Pre-tax profits of RJA
per PCG contribution report*
2.7%


*     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, a portion of mutual fund revenues and expenses, credit for

10

correspondent clearing, insurance agency and certain asset management profits, accruals for benefit expenses, profits generated by certain private client support operations and other adjustments as approved by the Compensation Committee. 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 Board Of Directors Recommends A Vote For The Approval Of These Formulas By Shareholders.


SUMMARY COMPENSATION TABLE


     The following table sets forth certain information with respect to the remuneration earned during the last three fiscal years by the Chief Executive Officer and each of the four other most highly compensated executive officers of the Company.

Long-Term

Annual Compensation

Restricted Stock (3)

Stock Option

All Other

Name

Year

Salary

Cash Bonus

Commissions

Shares

$

Awards

Compensation (2)

Thomas A. James

2003

$263,250

$1,300,013

(1)

$243,886

6,693

$249,984

-

$38,810

Chairman and CEO

2002

258,000

   900,000

323,522

3,937

125,000

-

30,136

2001

254,750

1,100,014

368,740

5,417

187,482

-

34,775

Van C. Sayler

2003

$146,000

$1,540,014

(1)

$    1,199

8,701

$324,982

-

$33,720

Senior Vice President,

2002

146,000

1,700,001

       598

11,811

374,999

10,000

30,586

Fixed Income - RJA

2001

144,500

  1,140,019

     100

5,778

199,977

-

35,530

Chet Helck

2003

$250,000

$   760,613

(1)

$       330

2,523

$  94,234

50,000

$61,712

President and COO

2002

150,000

   602,502

      427

1,870

  59,373

6,000

55,544

2001

146,875

   475,025

         295

902

31,128

-

40,361

Richard K. Riess

2003

$216,250

$   691,774

(1)

-

2,116

$  79,033

-

$33,763

President and CEO of Eagle

2002

190,000

   687,516

-

2,460

  78,105

10,000

30,629

Executive VP of RJF

2001

187,500

   738,510

-

2,582

  89,363

-

35,525

Managing Director,

Asset Management

Richard G. Averitt, III

2003

$225,000

$   645,021

(4)

$      820

1,840

$  68,724

25,000

$40,152

President and CEO of RJFS

2002

175,308

   538,754

   1,217

1,427

  45,307

6,000

28,274

2001

143,125

   452,517

         819

812

28,103

-

37,955


      
Long-Term
 
 
Annual Compensation
Restricted Stock (3)
Stock Option
All Other
Name
Year
Salary
Cash Bonus (1)
 
Commissions
Shares
$
Awards
Compen-
sation (2)
Thomas A. James2004$271,000$1,900,000 $214,06314,400$437,472-$58,343
Chairman and CEO2003263,2501,300,013 243,88610,040249,984-38,810
 2002258,000900,000 323,5225,906125,000-30,136
          
Jeffrey E. Trocin2004$228,750$2,580,000 $4721,395$649,98012,000$58,643
Executive VP, - Equity -2003214,250531,100 341,75243,625-33,720
Capital markets Group - RJF2002182,000958,790 357,726205,86715,00017,008
          
Chet Helck2004$253,750$1,180,000 3776,994$212,47812,000$58,578
President and COO2003250,000760,613 3303,78594,23475,00061,712
 2002150,000602,502 4272,80559,3739,00055,544
          
Richard K. Riess2004$228,750$1,110,000 -6,171$187,47512,000$58,707
President and CEO of Eagle2003216,250691,774 -3,17479,033-33,763
Executive VP of RJF2002190,000687,516 -3,69078,10515,00030,629
Managing Director,         
Asset Management         
          
Richard G. Averitt, III2004$229,524$920,000 $5894,320$131,24212,000$58,685
President and CEO of RJFS2003225,000645,021(4)8202,76068,72437,50040,152
 2002175,308538,754  1,2172,14145,3079,00028,274
          
(1) In accordance with the bonus formulas approved at the annual meetings of the shareholders on February 12, 2004, February 13, 2003 and February 14, 2002, and February 8, 2001. 

except as noted in (4).

(2) This column includes the amount of the Company's contributions to its 401(k) Plan, Profit Sharing Plan, Employee Stock Ownership Plan, Long Term Incentive Plan and other miscellaneous taxable income as reported on the employees W-2.

(3) Beginning with fiscal 2000, the Company began granting restricted stock as part of the annual bonus to highly compensated employees. Under this Stock Bonus Plan, 309,316547,031 shares have been granted related to fiscal years 2004, 2003 2002 and 2001.2002. Dividends are paid to the holders of the stock. The shares vest three years from the date of grant. Under this plan, 1) Mr. James holds 16,04730,345 shares, 2) Mr. SaylerTrocin holds 26,290,32,873, 3) Mr. Helck holds 5,29513,583 shares, 4) Mr. Riess holds 7,15813,035, and 5) Mr. Averitt holds 4,0799,220 shares. Because the shares of restricted stock are valued at full market value in this table, rather than the 80% of market value when awarded, the total of cash bonus and restricted stock may exceed the bonus award computed under the formula.


11


(4) Amount exceeds the bonus amount generated by the bonus formula approved at the annual meeting of the shareholders on February 13, 2003 by approximately $50,000.


Incentive Stock Options

     The following tables contain information concerning options granted to, and exercised by, the executive officers included in the Summary Compensation Table during the fiscal year.


Option Grants in Last Fiscal Year

Potential Realizable

Value at Assumed

% of Total

Annual Rates

Options

Options

Exercise

of Stock Appreciation

Granted

Granted in

Price

Expiration

for Option Term (2)

Name

(#)(1)

Fiscal Year

($/share)

Date

5%

10%

Chet Helck

50,000

10.29%

$31.55

2/10/2008

$435,834

$963,080

Richard G. Averitt, III

25,000

5.15%

$31.55

2/10/2008

$217,917

$481,540

(1)  All of these options were granted on December 10, 2002.  The options vest 60% after three years, an additional 20% after four years and the remaining 20% after five years.

(2)  Potential realized values represent the future value, net of exercise price, of the options granted if the Company's stock price were to appreciate by 5% and 10% during each year of the awards' five-year life.


NameGranted in% of Total Options GrantedExercise PriceExpiration
Potential Realizable Value at Assumed Annual Rates of Stock Appreciation for Option Term (2)
 Fiscal Year(#)(1)($/share)Date5%10%
Richard G. Averitt, III12,0000.78%$25.202/4/2009$83,548$184,618
Chester B. Helck12,0000.78%$25.202/4/2009$83,548$184,618
Richard K. Riess12,0000.78%$25.202/4/2009$83,548$184,618
Jeffrey E. Trocin12,0000.78%$25.202/4/2009$83,548$184,618

(1)  All of these options were granted on December 4, 2003. The options vest 60% after three years, an additional 20% after four years and the remaining 20% after five years.
(2)  Potential realized values represent the future value, net of exercise price, of the options granted if the Company's stock price were to appreciate by 5% and 10% during each year of the awards' five-year life.

12


Aggregate Option Exercises During

Last Fiscal Year and Year-end Value

Value of

Number of

Unexercised

Unexercised

In-the-Money

Options at

Options at

Shares

Sept. 26, 2003

Sept. 26, 2003

Acquired

Value

(Exercisable/

(Exercisable/

Name

on Exercise

Realized

Unexercisable)

Unexercisable)

Van C. Sayler

9,000

$40,170

1,800/14,200

$27,567/$103,723

Chet Helck

6,000

$25,940

3,000/58,000

$45,945/$273,770

Richard K. Riess

9,000

$88,500

1,800/14,700

$27,567/$111,381

Richard Averitt, III

6,000

$49,100

2,400/32,600

$36,756/$157,894

Comparative Stock Performance

     The graph below compares the cumulative total shareholder return for the common shares of the Company for the last five fiscal years with the cumulative total return on the Standard & Poor's 500 Index ("S&P 500"), the stock price index for peer group of regional investment brokerage firms and for the Dow Jones US securities brokers over the same period (assuming an investment of $100 in each on October 1, 19981999 and the reinvestment of all dividends).

     In previous years, the performance graph included a comparison with a different, proprietary index.  The Company has elected to change to a comparison to a widely available index.

Name

1998

1999

2000

2001

2002

2003

Raymond James Financial, Inc.

100.00

96.24

161.21

134.52

135.65

184.24

Standard & Poor's

100.00

127.81

144.78

106.24

84.48

105.09

Dow Jones US Securities Brokers

100.00

181.95

334.56

184.98

152.82

215.61

Peer Group

100.00

109.05

218.03

125.66

118.47

164.53



Name199920002001200220032004
Raymond James Financial, Inc.100.00167.51139.78140.95191.43192.60
Standard & Poor's100.00113.2883.1366.1082.2293.63
Dow Jones US Securities Brokers100.00183.87101.6783.99118.50122.81

TRANSACTIONS WITH MANAGEMENT AND DIRECTORS


     As described in the Report on Executive Compensation, the Company has extended non-recourse loans to approximately 84 employees for investments in the Raymond James Employee Investment Fund I, L.P., including the following executive officers: Richard G. Averitt, Thomas S. Franke, Jeffrey P. Julien, Richard K. Riess, Van C. Sayler, Robert F. Shuck, Jeffrey E. Trocin and Dennis W. Zank. Committed loan amounts to these individuals range from $40,000 to $160,000 plus interest per person, with outstanding balances ranging from $27,680$23,560 to $110,720$94,230 at September 26, 2003.

24, 2004.

     In addition, the Company has extended non-recourse loans to approximately 75 employees for investments in Raymond James Employee Investment Fund II, L.P; including Barry Augenbraun, 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 $200,000 plus interest per person, with outstanding balances of $36,029$25,761 to $54,043$77,280 at September 26, 2003.

24, 2004.

     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

13

and directors who are affiliated with one of the Company's broker-dealers, as permitted under the Sarbanes-Oxley Act of 2002. 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 thirdthir d parties.

     Thomas A. James permits the Company to display over 1,5501,650 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 20032004 was approximately $135,000.    

$196,000.

     Under the Company's By-Laws, Directors and Officers of the Company are entitled to indemnification against certain claims. In August, 2004 the Board of Directors approved a form of indemnification agreement for Directors (including those who are officers of the Company) which provides specific procedures for implementation of these indemnification rights, and most of the Company's directors have executed these agreements.
     H. William Habermeyer is the chief executive officer of Progress Energy Florida, from whom the Company purchases its electric power service for its St. Petersburg campus and certain branch locations; during fiscal 2004 the company's energy bill was approximately $2.4 million.
     Huntington James and Courtland James, the sons of Thomas James, are employed in non-executive positions by the Company, as is the son-in-law of Francis S. Godbold.

EQUITY COMPENSATION PLAN INFORMATION


     The following table includes stock options and restricted stock that can be issued pursuant to one of the Company's nineeight 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

Number of securities to be
issued upon exercise of outstanding options, warrants
and rights

Weighted-average
exercise price of
outstanding options, warrants and rights

Number of securities
remaining available for future
issuance under equity compensation plans

Equity compensation plans approved by shareholders (1)

1,905,760

$27.92

3,692,800

Equity compensation plans not approved by shareholders (2)

1,202,600

$28.08

2,944,513

Total

3,108,360

$27.98

6,637,313

It does not include the 2005 Restricted Stock Plan to be considered by shareholders at this meeting.


Plan CategoryNumber of securities to be issued upon exercise of outstanding options, warrants and rightsWeighted-average exercise price of outstanding options, warrants and rightsNumber of securities remaining available for future issuance under equity compensation plans
Equity compensation plans approved by shareholders (1)3,582,357$20.856,282,649
Equity compensation plans not approved by shareholders (2)1,846,248$21.143,319,741
Total5,428,605$20.959,602,390

(1) The Company has three plans that were approved by shareholders, the 1992 and 2002 Incentive Stock Option Plans, and the 2003 Employee Stock Purchase Plans.


14


(2) The Company has five plans that were not approved by shareholders, three non-qualified option plans and two restricted stock plans.


The material features of the Company's equity compensation plans which have not been approved by security holders 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 26, 2003.

24, 2004.

Under one of the Company's non-qualified stock option plans, the Company may grant up to 2,278,1253,417,188 shares of common stock to independent contractor Financial Advisors. Options are exercisable five years after grant date provided that the Financial Advisors are still associated with the Company. Under the Company's second non-qualified stock option plan, the Company may grant up to 379,688569,532 shares of common stock to the Company's outside directors. Options vest over a five-year period from grant date provided that the director is still serving on the Board of the Company. Under the Company's third non-qualified stock option plan, the Company may grant up to 1,125,0001,687,500 shares of common stock to key management personnel. Option terms are specified in individual agreements and expire on a date no later than the tenth anniversaryanni versary 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 and an option's maximum term is 10 years.

Neither the Company's restricted stock nor stock bonus plan were approved by shareholders. Under the 1999 Restricted Stock Plan the Company is authorized to issue up to 1,000,0001,500,000 restricted shares of common stock to employees and independent contractors. Awards under this plan may be granted by various departments of the Company in connection with initial employment or under various retention plans for individuals who are responsible for a contribution to the management, growth and/or profitability of the Company. These shares are forfeitable in the event of voluntary termination. The compensation cost is recognized over the vesting period of the shares and is calculated as the market value of the shares on the date of grant.

If the 2005 Restricted Stock Plan is approved by shareholders at this meeting, the 1999 Res tricted Stock Plan will be terminated.

The Company's 1999 Stock Bonus Plan authorizes the Company to issue up to 1,000,0001,500,000 restricted shares to officers and certain other employees in lieu of cash for 10% to 20% of annual bonus amounts in excess of $250,000. Under the plan the restricted stock iswas granted at a 20% discount in determining the number of shares to be granted andthrough calendar year 2004. Future grants will be at market value at the day of grant. 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 3:TO RATIFY THE APPOINTMENT BY THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF KPMG LLP AS THE COMPANY'S INDEPENDENT AUDITORS

PROPOSAL 3:     TO RATIFY THE APPOINTMENT OF KPMG LLP AS THE COMPANY'S INDEPENDENT
AUDITORS BY THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

The Audit Committee of the Board of Directors has selected KPMG LLP as the Company's independent auditors for the fiscal year ending September 24, 2004,30, 2005, and the Board of Directors has directed that management submit the appointment of independent auditors for ratification by the shareholders at the annual meeting. KPMG LLP has served as the Company's independent auditors since 2001. A representativeRepresentatives of KPMG LLP isare expected to be present at the annual meeting. He or sheThey 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 BylawsBy-Laws nor other governing documents or law require shareholder ratification of appointment of KPMG LLP as the Company's independent auditors. 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

15

appointment of different independent auditors at any time if it determines that such a change would be in the best interests of the Company and its shareholders.

     The affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote at the annual meeting will be required to ratify the appointment of KPMG LLP.  Abstentions will be counted toward the tabulation of votes cast on proposals presented

FEES PAID TO INDEPENDENT AUDITORS

     The following table shows information about fees paid by Raymond James Financial, Inc. to the shareholders and will have the same effect as negative votes.  Broker non-votes will be counted towards a quorum, but will not be counted for any purpose in determining whether the appointment of KPMG LLP as the Company's independent auditors has been ratified.

PRINCIPAL AUDITING FIRM FEES

The aggregate fees billed by the Company's principal accounting firm, KPMG LLP, for professional services rendered for the audit of the annual consolidated and other subsidiaries' financial statements and review of financial statements included in the Company's quarterly reports on Form 10-Q for the years ended September 26, 2003 and September 27, 2002 were $725,322 and $631,778, respectively.

Audit Related Fees

The Company's principal accounting firm is providing ongoing services related to the review of the Company's documentation of internal controls pursuant to Section 404 of the Sarbanes-Oxley Act.  The Audit Committee approved fees of $84,000, of which $15,000 were paid in fiscal 2003.  KPMG LLP performed the audits for four qualified benefit plans for which theLLP. All fees were $23,571.  In addition, the Company's principal accounting firm has been engaged to review a proposed amalgamation (merger) of three Canadian subsidiaries.  The approved fees were $16,500, none of which were paid in fiscal 2003.

Tax

During fiscal 2003 and 2002, KPMG LLP undertook the following tax engagements for the Company, for which they billed the amounts indicated.

Fiscal Year Ended

 

 

2003

2002

 

 

US federal tax advice

$          -

$  23,000

State tax services

129,682

*

610,085

*

Canadian tax advice

28,494

88,026

Canadian entity tax returns

18,466

12,197

US tax reporting

6,000

6,000

*   Of these amounts $129,682 and $600,000 represent fees paid for a state income tax review project, pursuant to which the Company has filed for approximately $3.9 million in refunds and received $3.5 million to date.  The total fee for this project will be based on the amount of refunds ultimately received by the Company and sustained against challenge, if any.  The Company engaged KPMG LLP to perform this project in January 2002, prior to the passage of Sarbanes Oxley.

Other Fees

During fiscal 2003 KPMG LLP reviewed other compensation plans for fees totaling $7,200.

KPMG LLP did not provide services related to financial information systems design or implementation in 2003.

The Company's Audit Committee Charter requires that the Committee approve the engagement of the principal auditing firm prior to the rendering of any audit or non-audit services.  During fiscal 2003, 100% of the audit related and other fees and 75% of the tax fees were pre-approved by the Audit Committee; the other tax fees were subsequently approved under the "de minimis" standardCommittee (see discussion in Report of the Sarbanes-Oxley Act.

Audit Committee).


 2004 2003
Audit fees$947,757 $725,332
Audit - related fees(a)
87,877 38,751
Tax fees(b)
157,756 182,642
All other fees4,663 7,200

(a)  Audit related fees include services related to the review of the Company's documentation of internal controls pursuant to Section 404 of the Sarbanes-Oxley Act and attest services related to specific items.
(b)  Tax fees include fees related to the preparation of Canadian tax returns, consultation on tax matters, and the final payment of $64,000 in 2004 and $129,682 in 2003 related to the state income tax review project discussed in the Report of the Audit Committee.

The Board Of Directors Recommends A Vote For This Proposal


PROPOSAL 4:TOAPPROVE AMENDMENT OF THE COMPANY'S ARTICLES OF INCORPORATION TO INCREASE THE AUTHORIZED SHARES OF COMMON STOCK TO 180 MILLION SHARES, $.01 PAR VALUE.

     At December 21, 2004 the Company had outstanding shares of 74,285,530, of a total authorized shares of 100 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 180 million shares, $.01 par value.
     These 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. During the past 10 years, the Board of Directors has approved four three-for-two stock splits, which has resulted in 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.

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PROPOSAL 5:TO APPROVE THE 2005 RESTRICTED STOCK PLAN

     Under the Company's 1999 Restricted Stock Plan, the Company is authorized to issue up to 1.5 million restricted shares of common stock to employees and independent contractor financial advisors. At December 21, 2004, approximately 1,121,541 shares had been awarded under this plan. Awards are made in connection with the initial employment of individuals or, under retention plans, for individuals who are determined by management to be responsible for a significant contribution to the growth and/or profitability of the Company.
     The Board of Directors has determined that the growth of the Company and the need to continue to attract employees and provide for retention of valuable employees warrants the increase in the number of shares available to 1.5 million. Accordingly, the Board of Directors has proposed that shareholders approve the 2005 Restricted Stock Plan, which will replace the existing 1999 Plan, which will be terminated and the remaining 378,459 shares available for issuance will be eliminated.
     The 2005 Restricted Stock Plan will have substantially the same terms as the 1999 Plan. Awards of restricted stock under the Plan will be determined by the Compensation Committee based upon recommendations from management. The shares of restricted stock will be valued at the market price on the date of the award. The restrictions regarding disposition of shares will be governed by the terms of the award and may vary for each participant; generally, however, shares awarded under the Plan will not vest until three years after the date of the award, except in the event of death or disability. Upon Retirement of a participant, a portion of the award may vest based upon the years of service of the participant.

     A copy of the Plan is annexed as Exhibit B to this proxy statement.
     While the benefits that will be awarded under the Plan are not determinable at this time, a total of 172,149 shares were granted under the 1999 Restricted Stock Plan during fiscal 2004, of which none were granted to the Company's executive officers. During fiscal 2004 restricted shares were granted to certain executive officers under a separate Stock Bonus Plan.
Approval of the Plan will require the affirmative vote of the holders of a majority of shares present and voting by proxy.

The Board of Directors Recommends a Vote For This Proposal.

OTHER MATTERS


     Proposals which shareholders intend to present at the 20052006 Annual Meeting of Shareholders must be received by the Company no later than September 1, 20042005 to be eligible for inclusion in the proxy material for that 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/ Barry Augenbraun, Secretary
January 5, 2004

Appendix

7, 2005


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Exhibit A

RAYMOND JAMES FINANCIAL, INC.

SENIOR MANAGEMENT INCENTIVE PLAN

ARTICLE I

Purpose of the Plan

As approved1.1The purpose of the Senior Management Incentive Plan (the "Plan") of Raymond James Financial, Inc. (the "Company") is to advance the interests of the Company by providing senior management and other key executives of the Company and its Subsidiaries (defined below) with additional incentive to promote the success of the business, increase their vested interest in the success of the Company, and encourage them to remain employees, through the making of certain incentive cash and stock bonus awards ("awards") linked to performance goals. The Plan is intended to comply with the requirements of Section 162(m) of the Internal Revenue Code, as amended.

ARTICLE II

Administration of the Plan

2.1The Plan shall be administered and interpreted by the Board of Directors on December 4, 2003

CHARTER OF THE AUDIT COMMITTEE OF THE

BOARD OF DIRECTORS

1.  Mission Statement

     The AuditCompensation Committee serves as the principal agent of the Board of Directors (the "Committee"). Members of the Committee shall not be eligible to participate in fulfilling the Board's oversightPlan.


2.2The Committee shall have full authority to make or withhold awards, to construe and interpret the terms and provisions of the Plan and any award made hereunder, to adopt, alter and repeal such administrative rules, guidelines and practices governing this Plan and perform all acts, including the delegation of its administrative responsibilities, as it shall, from time to time, deem advisable, and to otherwise supervise the administration of this Plan.

2.3The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan, or in any award made hereunder, in the manner and to the extent it shall deem necessary to carry the Plan into effect.

2.4Any decision, interpretation or other action made or taken in good faith by or at the direction of the Board or the Committee arising out of or in connection with the Plan shall be within the absolute discretion of all and each of them, as the case may be, and shall be final, binding and conclusive on the Company and all employees and Participants and their respective heirs, executors, administrators, successors and assigns.

2.5No member of the Board of Directors (the "Board"), no employee of the Company and no member of the Committee (nor the Committee itself) shall be liable for any act or action hereunder, whether of omission or commission, by any other member or employee or by any agent to whom duties in connection with the administration of the Plan have been delegated or, except in circumstances involving his bad faith, gross negligence or fraud, for anything done or omitted to be done by himself. The Company or the Committee may consult with legal counsel, who may be internal counsel for the Company or other counsel, with respect to its obligations or duties here under, or with respect to any action or proceeding or any question of law, and shall not be liable with respect to any action taken or omitted by it in

18

good faith pursuant to the advice of such counsel.

2.6For purposes of this Plan, "Subsidiaries" shall mean such subsidiaries of the Company, 80 percent or more of the voting capital stock of which is owned, directly or indirectly, by the Company.

ARTICLE III

Eligibility

3.1Eligible employees include employees of the Company and the Subsidiaries who are members of senior management and other executive officers and other key employees. "Participants" shall mean all such eligible employees designated by the Committee.

3.2A Participant who ceases to be employed by the Company or a Subsidiary by reason of:

(i) death,
(ii) disability, or
(iii) retirement,

shall be eligible for an award (or portion thereof) for the fiscal year in which the death, disability, or retirement occurs, only if and to the extent the goals determined in accordance with Article IV have been met and if the Committee shall decide, in its sole discretion, to make such an award;provided, however, that the award shall be for the portion of the year the Participant was employed, determined by multiplying the final award by a fraction, the numerator of which is the number of months the Participant was employed and the denominator of which is 12.

For purposes of this Agreement, the term "disability" shall mean a medically determinable physical or mental impairment which can be expected to result in death, or which has lasted, or can be expected to last, for a continuous period of not less than 12 months and renders the Participant unable to engage in any substantial gainful activity.
For Purposes of this Agreement, "retirement" shall refer to termination of employment by a Participant:

(i) at age 65, or
(ii) at age 60 with at least five years of service, or
(iii) at age 55 with sufficient years of service so that age plus years of service equals at least 75.

3.3A Participant who ceases to be employed by the Company or a subsidiary for any reason other than those set forth in Section 3.2 above shall not be eligible for an award with respect to the Company'sfiscal year in which employment was terminated. For the purposes of this Section, it shall not be considered a termination of employment when a Participant is transferred from the Company or a Subsidiary to another Subsidiary or to the Company or to any affiliate as defined in Section 414 of the Internal Revenue Code of 1986, as amended.

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ARTICLE IV

Awards Under the Plan

4.1For each fiscal year, the Committee shall establish a performance threshold based on one or more of the performance goals set forth in Section 4.3 which must be attained in order for any awards to be paid.

4.2No later than 90 days after the commencement of each fiscal year, the Committee shall establish individual incentive targets for awards under the Plan and shall establish performance goals relating to (a) financial reporting,performance based on one or more of the performance goals set forth in Section 4.3, and (b) individual performance during that fiscal year.

4.3For purposes of Sections 4.1 and 4.2, the performance goals shall be primarily based on the pre-tax income of the business unit for which the employee is responsible (which, in the case of the Chief Executive Officer, shall be the Company); however the Committee may also consider such factors as total shareholder return, total shareholder return relative to peers, financial returns (including without limitation, return on assets, return on equity and return on investment), cost reduction targets, success in recruitment of financial advisors, customer growth and employee satisfaction. The formula for any such award may include or exclude items to measure the specific objectives, such as losses from discontinued operations, extraordinary, unusual or nonrecurring gains and losses, the cumulative effect of accounting changes, acquisitions or divestitures, core process redesigns, structural changes/outsourcing or foreign currency impact.

4.4Promptly after the end of a fiscal year, the Committee shall determine the extent to which performance goals for that fiscal year have been achieved and shall determine the allocation of individual awards to Participants, with the amount determined under Section 4.2 above; a portion of such amount may be reduced or withheld by the Committee in its discretion.

4.5The Committee shall review and, in its discretion, shall certify the achievement of the applicable financial performance goals and the individual performance goals of each executive officer of the Company who is a Participant, including the Chief Executive Officer of the Company.

4.6Bonus awards that exceed the amounts set forth below shall be paid, in part, in the form of shares of the Company's systemscommon stock, $.01 par value, as follows:

Amount of Bonus AwardPercentage to be Paid in Stock
$250,000.00 - $499,999.0010% of the amount in excess of $250,000.
$500,000.00 - $999,999.0015% of the amount in excess of $500,000.
$1 million or more20% of the amount in excess of $1 million.

The Committee may from time to time increase or decrease the percentage of internal controlsthe awards to be paid in shares of the Company's common stock.

Shares issued pursuant to this Plan shall be valued at the closing price of the Company's common stock on the Composite Tape of the New York Stock Exchange on the date of the award, and shall be subject to the restrictions set forth in Section 5 (c) of the Raymond James Stock Bonus Plan effective October 1, 1999 as it may be amended from time to time..

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4.7The Committee may, but need not, pay out the full amount of the incentive pool for any fiscal year. Any reduction of any award to an executive officer will not result in an increase in the amount payable to another executive officer.

4.8Each award made under the Plan shall be paid or allocated no later than two and one-half months following the close of the fiscal year, except as provided in Article V. However, a Participant may defer payment of his award pursuant to any Company earnings deferral plan.

4.9In the event of the death of a Participant after the making of the award, and if eligible for payment under the Company's policies, payment shall be made to such beneficiary or beneficiaries as the Participant shall have previously designated in writing. Such designation shall not be effective unless filed with the Company. If there is no effective designation of a beneficiary at the time of the Participant's death, or in the event that the designated person or persons shall predecease such Participant, any such award payable shall be made to the Participant's estate.

4.10The amount paid to any employee with respect to any award shall not exceed $5,000,000.

ARTICLE V

Amendment or Termination of the Plan

5.1Subject to the provisions of Section 6.10 below, the Board may at any time, and from time to time, amend, in whole or in part, any or all of the provisions of the Plan, or suspend or terminate it entirely, retroactively or otherwise; provided, however, that any such amendment, suspension or termination may not, without a Participant's consent, adversely affect any award previously made to him/her under the Plan.

ARTICLE VI

Miscellaneous

6.1No person shall have any claim or right to be made an award under the Plan, and neither this Plan, the establishment of any goals or standards nor the making of an award under this Plan shall give any Participant or other employee any right with respect to continuance of employment by the Company or any subsidiary, nor shall there be a limitation in any way on the right of the Company or any subsidiary by which an employee is employed to terminate his employment at any time.

6.2Except by will or the laws of descent and distribution, no right or interest in any award made under this Plan shall be assignable or transferable, and no right or interest of any Participant hereunder shall be subject to any lien, obligation or liability of such Participant.

6.3The Company will bear all expenses incurred in administering this Plan.

6.4This Plan and the Company's proceduresobligations of the Company hereunder shall be subject to all applicable Federal and state laws, rules and regulations and to such approvals by any governmental or regulatory agency as may from time to time be required. The Board may make such changes in this Plan as may be necessary or desirable, in the opinion of the Board, to comply with the laws, rules and regulations of any governmental or regulatory authority, or to be eligible for establishing compliancetax benefits under the Code, or any other laws or regulations of any Federal, state, local or foreign government.

21


6.5The Company shall have the right to deduct from any payment to be made pursuant to this Plan, or to otherwise require prior to the payment of any amount hereunder, payment by the Participant of, any Federal, state or local taxes required by law to be withheld.

6.6No assets shall be segregated or earmarked in respect of any award hereunder and no Participant shall have any right to assign, transfer, pledge or hypothecate his interest, or any portion thereof, in his award. The Plan and the making of awards hereunder shall not constitute a trust.

6.7This Plan and actions taken in connection herewith shall be governed and construed in accordance with regulatory requirements.

the laws of the State of Florida (regardless of the law that might otherwise govern under applicable Florida principles of conflict of laws).


2.  Responsibilities6.8Wherever any words are used in this Plan in the masculine gender they shall be construed as though they were also used in the feminine gender in all cases where they would so apply, and Duties

wherever any words are used herein in the singular form they shall be construed as though they were also used in the plural form in all cases where they would so apply. The Committee's responsibility is oversight,rifles to Articles of this Plan are intended solely as a convenience and it recognizes thatshall not be used as an aid in construction of any provisions thereof.


6.9This Plan shall be known as "Senior Management Incentive Plan."

6.10The material terms of the Plan, consisting of the business criteria, maximum amount, and eligible employees, shall be subject to the approval of the Company's managementstockholders before payments may be made.


22


Exhibit B

2005
RAYMOND JAMES FINANCIAL, INC.
RESTRICTED STOCK PLAN


SECTION 1
PURPOSE OF THE PLAN

The name of this plan is responsibleTHE 2005 RAYMOND JAMES FINANCIAL, INC RESTRICTED STOCK PLAN (the "Plan"). The purpose of the Plan is to enable RAYMOND JAMES FINANCIAL, INC. (the "Company") and its Subsidiaries to attract, retain and motivate employees and independent contractors associated with the Company, to compensate them for preparingtheir contributions or anticipated contributions to the growth and profits of the Company and to encourage ownership of stock in the Company on the part of such personnel. The Plan provides incentives to employees and independent contractors associated with the Company or to be associated with the Company, which are linke d directly to increases in stockholder value and will therefore inure to the benefit of all stockholders of the Company.

SECTION 2
DEFINITIONS

For purposes of the Plan, the following terms shall be defined as set forth below:

(a)"Board" means the Board of Directors of the Company.If one or more Committees have been appointed by the Board to administer the Plan, "Board" shall refer to such Committee, except where the context otherwise requires or the terms hereof provide for authority to be exercised or decisions made by the Board in direct relation to the Committee.

(b)"Cause" means termination by the Company or a Subsidiary of a Participant's employment or association with the Company upon (i) the willful and continued failure by such Participant to substantially perform his duties with the Company or a Subsidiary (other than any such failure resulting from incapacity due to physical or mental illness), or (ii) the willful engaging by a Participant in conduct which is demonstrably and materially injurious to the Company or a Subsidiary, monetarily or otherwise. For purposes of this Subsection, no act, or failure to act, on a Participant's part shall be deemed "willful" unless done, or omitted to be done, by such Participant not in good faith and without reasonable belief that his action or omission was in the best interest of the Company or a Subsidiary.

(c)"Code" means the Internal Revenue Code of 1986, as amended from time to time.

(d)"Committee" means the Compensation Committee of the Board, appointed by the Board from among its members and shall consist of not less than three members thereof who are and shall remain Committee members only so long as they remain "disinterested persons" as defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the "1934 Act").

(e)"Disability" means permanent and total disability as determined under the Company's financial statements.  Additionally,long-term disability plan.

23


(f)"Eligible Person" means an employee or a potential employee of the Committee recognizes that financial management (including the internal audit staff),Company or any Subsidiary as well as the independent accountants, have more knowledge of accounting and auditing requirements and more detailed information aboutcontractors associated with or to be associated with the Company than door its Subsidiaries as described inSection 3.

(g)"Participant" means an Eligible Person selected or ratified for selection by the membersCommittee, pursuant to the Committee's authority inSection 6, to receive an award of Restricted Stock.

(h)"Restricted Period" means the period during which the restrictions on the Restricted Stock are in effect.

(i)"Restricted Stock" means an award of shares of Stock that is subject to the restrictions set forth inSection 5.

(j)"Retirement" means a Participant's separation of service from the Company or any Subsidiary after attainment of age 65.

(k)"Section 16(a) Person" means any officer or director of the Committee; consequently, in carrying out its oversight responsibilities the CommitteeCompany or any Subsidiary who is not providing any expert or special assurance assubject to the Company's financial statementsreporting requirements of Section 16(a) of the 1934 Act.

(l)"Stock" means the common stock of the Company, $.01 par value.

(m)"Subsidiary" means any corporation (other than the Company) 50% or any professional certificationmore of the total combined voting power of all classes of stock of which is owned, directly or indirectly, by the Company.

SECTION 3
ELIGIBILITY AND PARTICIPATION

Employees of the Company and its Subsidiaries and/or persons being recruited for employment, as well as independent contractors associated with and/or being recruited for association with the Company or its Subsidiaries, who are or will be responsible for or contribute to the independent accountants' work.

3.  Membership

     The Audit Committee (the Committee)management, growth and/or profitability of the Company or its Subsidiaries shall be comprised of at least three independent directors (in accordance witheligible to participate in the independence standards adoptedPlan. The Participants under the Plan shall be selected from time to time by the NYSE and SEC).  Committee, in its sole discretion, from among Eligible Persons.


SECTION 4
AMOUNT AND FORM OF AWARDS

(a)The membersCommittee, in its sole discretion, shall determine the awards of Restricted Stock to be granted under the Plan. Awards under this Plan may be granted by various departments of the Company in connection with the initial association of an individual who upon association will qualify as an Eligible Person. The Committee may in its sole discretion initially grant or ratify awards under the Plan. A Participant will receive such awards in Restricted Stock.

(b)The maximum number of shares of Stock which may be issued under the Plan as Restricted Stock shall be appointednot more than 1,500,000 shares of Stock, subject to adjustment as provided in Section 7, and such shares may be authorized but unissued shares, or previously issued shares reacquired by the Board of Directors uponCompany, or both. In the recommendation of the Corporate Governance Committee and shall be persons who are financially literate, in the judgment of the Board of Directors.  At least one of the members of the Committee shall be a person who, in the judgment of the Board of Directors,  has accounting or financial management expertise.  At least one of the members of the Committee shall be a person who, in the judgment of the Board of Directors,event Restricted Stock is qualified to serve as an audit committee financial expert under NYSE and SEC rules.

4.  Meetings

     Generally, the Audit Committee shall hold formal meetings prior to each quarterly meeting of the Board of Directors and telephone meetings with the Company's Chief Financial Officer and the independent accountantsforfeited prior to the releaseend of quarterly financial results.  Additional meetings, eitherthe Restricted Period, the shares of Stock so forfeited shall immediately become available for future awards.


24


SECTION 5
RESTRICTED STOCK

(a)The number of shares of Restricted Stock awarded to a Participant under the Plan will be determined in personaccordance with Section 4(a). For purposes of this Plan, the fair market value of Stock for an award will be the Stock's closing price on the Composite Tape of the New York Stock Exchange on the date of the award. In the event the Committee provides for alternative methods for grants of awards, the Committee, in its sole discretion, may provide for alternative methods of determining the fair market value of Stock for such awards, and may also provide for alternative forfeiture provisions, so long as t he alternative methods or by telephone, mayprovisions do not (i) materially increase the benefits, (ii) materially increase the number of shares of Restricted Stock issued or (iii) materially modify the eligibility requirements applicable to Section 16(a) Persons.

(b)A "book entry" (i.e., a computerized or manual entry) shall be made in the records of the Company to evidence an award of shares of Restricted Stock to a Participant. All shares of Restricted Stock shall be held from timein an individual account for each Participant until the Restricted Period (as defined inSection 5(c)) has expired. Such Company records shall, absent manifest error, be binding on the Participants.

(c)The shares of Restricted Stock awarded pursuant to timethis Section 5 shall be subject to the restrictions and conditions set forth in the underlying contracts with the Participants and/or as determined byset forth in the Chairdocumented grant of any award pursuant to this Plan to the Committee.  In addition, members of the Audit Committee are free to contact members of management including financial managers, compliance managers, the Director of Internal Audit, the Senior Vice President for Risk Management, the Company's internal and outside counsel and the Company's independent accountants whenever they consider appropriate;Participants.

(d)Unless the Committee may request reports or presentations at Committee Meetings from any of these individuals.

5.  Financial Reporting Oversight; Relationship with Company's

Independent Accountants

     a.  The Company's independent accountants are ultimately accountable to the Board of Directors, as representative of the Company's shareholders.  The Audit Committee exercises the responsibility of the Board of Directors in that oversight role.

     b.  The Audit Committee shall be directly responsible for the appointment, compensation and oversight of the work of the independent accountants employed by the Company (including resolution of disagreements between management and the auditors regarding financial reporting) for the purpose of preparing or issuing an audit report or related work.  In that connection, the independent accountants shall report directly to the Audit Committee and the Committeeits sole discretion shall determine appropriate funding for payment of compensationotherwise at or prior to the Company's independent accountants.. 

c.  In connection with the appointment and reappointment of the independent accountants, the Committee shall review their independence and obtain written disclosures from them regarding all relationships with the Company that could affect their independence.  In that connection at least annually the Committee shall obtain and review a report by the independent accountants describing: the firm's internal quality-control procedures; any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; and (to assess their independence) all relationships between the independent accountants and the company.

     d.  The Audit Committee shall approve in advance any audit and non-audit services, including tax services, to be performed for the Company by its independent accountants, except for services that were not recognized at the time of the engagementgrant of any award, the Participant shall have the right to direct the vote of his shares of Restricted Stock during the Restricted Period. The Participant shall have the right to receive any regular dividends on such shares of Restricted Stock. The Committee shall in its sole discretion determine the Participant's rights with respect to extraordinary dividends on the shares of Restricted Stock.


(e)Shares of Restricted Stock shall be delivered to the Participant in accordance withSection 9(a) promptly after, and only after, the Restricted Period shall expire (or such earlier time as the restrictions may lapse in accordance withSection 5(c)) wi thout forfeiture in respect of such shares of Restricted Stock.

(f)Subject to the provisions ofSection 5(c), the following provisions shall apply to a Participant's shares of Restricted Stock prior to the end of the Restricted Period (including extensions):

(i)Upon the death or Disability of a Participant, the restrictions on his or her Restricted Stock shall immediately lapse. Upon the death of a Participant, such Participant's Restricted Stock shall transfer to the Participant's beneficiary as such beneficiary is designated on a form provided by the Company, or if no beneficiary is so designated, by will or the laws of descent and distribution.

(ii)Upon the Retirement of a Participant, and after satisfaction of a non-compete provision as set forth below, any unvested Restricted Stock shall vest on a pro-rated basis, comparing completed years of service since the date of initial award to the vesting schedule. (A) For purposes of this subparagraph (f)(ii), a Participant shall be deemed to have not satisfied the non-compete provision if the Participant, within one year after the date of retirement:

25


(1)  discloses the list of the Company's or a Subsidiary’s customers or any part thereof to any person, firm, corporation, association, or other entity for any reason or purpose whatsoever; or

(2)  discloses to any person, firm, corporation, association, or other entity any information regarding the Company's or a Subsidiary’s general business practices or procedures, methods of sale, list of products, personnel information and any other valuable confidential business or professional information unique to the Company's or a Related Employer's business; or

(3)  owns more than five per cent (5%) of, manages, operates, controls, is employed by, acts as an agent for, participates in or is connected in any manner with the ownership, management, operation or control of any business which is engaged in businesses which are competitive to the business of the Company or a Related Employer; and are located within a radius of 100 miles of any location where participant was employed or which was under the supervision, management or control of the participant.; or

(4)  solicits or calls either for himself/herself or any other person or firm, any of the customers of the Company or a Subsidiary on whom the Participant called, with whom the Participant became acquainted, or of whom the Participant learned of during his employment; or

(5)  solicits any of the employees or agents of the Company or a Subsidiary to terminate their employment or relationship with the Company or a Subsidiary.

(ii)It is the intention of the Company and its Subsidiaries that this paragraph (c) be given the broadest protection allowed by law with regard to the restrictions herein contained. Each restriction set forth in this paragraph (c) shall be construed as a condition separate and apart from any other restriction or condition. To the extent that any restriction contained in this paragraph (c) is determined by any court of competent jurisdiction to be non-audit servicesunenforceable by reason of it being extended for too great a period of time, or as encompassing too large a geogra phic area, or over too great a range of activity, or any combination of these elements, then such restriction shall be interpreted to extend only over the maximum period of time, geographic area, and range of activities which said court deems reasonable and enforceable.

(iii)If a Participant voluntarily terminates employment, or if a Participant is involuntarily terminated for Cause, such Participant shall forfeit his or her Restricted Stock for which the compensation doesRestricted Period has not exceed 5% ofexpired on the total revenues paid todate that the independent accountantsParticipant voluntarily terminates employment or is involuntarily terminated for Cause.

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SECTION 6
ADMINISTRATION

The Plan shall be administered by the Company during the fiscal year; provided, however, that such "de minimis" services are approved by the Audit Committee or one or more members to whom authority has been granted to make such approval prior to completion of the audit.In that connection, the Committee shall receive from the independent accountants, at least annually, a written statement setting out all relationships between them and the Company and the fees paid for those services. Committee.

     e.  The Committee shall meet with the independent accountants on a regular basis, as it determines appropriate.  At least once a year, the Committee shall meet with representatives of the independent accountants without the presence of management representatives.

     f.   The Committee, or one of its members, shall meet with the representatives of the independent accountants prior to commencement of the annual audit in order to review the audit scope and  approach, and any specific areas of risk that the auditors propose to focus on.

     g.  Following conclusion of the year-end audit, but prior to release of the financial statements, the Committee, or one of its members, shall discuss with representatives of the independent accountants the financial statements and the results of the audit, including any disagreements with management regarding audit scope or accounting presentation.

     h.  Prior to release of the financial results for each quarter, the Committee, or one of its members, shall review them with management and representatives of the independent accountants.

i.   At least annually, the Committee shall review with representatives of the independent accountants their judgments concerning the quality of the Company's accounting principles as reflected in its financial reporting, whether those principles are consistent with industry standards or represent minority positions, and the clarity of disclosure of information.  The Committee shall also review with the independent accountants their views regarding any significant estimates made by management which are reflected in the financial statements. 

     In that connection, the Audit Committee shall review with the independent accountants:

     (1) all critical accounting policies and practices to be used;

     (2) all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management officials of the Company, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent accountants; and

     (3) other material written communications between the independent accountants and the management of the Company, such as any management letter or schedule of unadjusted differences.

Based on the review and discussions described above, the Committee shall recommend to the Board of Directors whether the financial statements should be included in the Annual Report on Form 10-K.

     j.   At least annually, the Committee shall receive from the independent accountants a report of their recommendations to improve the Company's internal control structure and operational efficiency.  The Committee shall obtain and review management's response to these recommendations.

     k.  The Committee shall approve in advance any proposed hiring by the Company of an employee or former employee of the Company's independent accountants.


6.  Oversight of the Internal Audit Department, Internal Controls and Risk Management

     a.  The Committee shall have oversight responsibility with respectthe power and authority to grant Restricted Stock to Participants, pursuant to the Company's Internal Audit Department.  terms of the Plan.


In that connection,particular, the Committee shall maintain regular contacthave the authority:

(i)to select or ratify the selection of Eligible Persons;

(ii)to determine whether and to what extent Restricted Stock is to be granted to Participants hereunder or ratify the grant thereof;

(iii)to determine the number of shares of Stock to be covered by such award granted hereunder or ratify the grant thereof;

(iv)to determine the terms and conditions, not inconsistent with the Directorterms of Internal Audit and meet with her/him at least once a year without the presencePlan, of management representatives.

     b.  The Committee shall receive and review reports from the Internal Audit Department with respectany award granted hereunder (including, but not limited to, the resultsRestricted Period and the other conditions of audits undertakenfull vesting of the Restricted Stock) or to ratify the grant thereof; and management's response


(v)to recommendations fromdetermine or ratify the Department.  determination of the terms and conditions, not inconsistent with the terms of the Plan, which shall govern all written instructions evidencing the Restricted Stock.

The Committee shall have the authority to directadopt, alter and repeal such administrative rules, guidelines and practices governing the Internal Audit DepartmentPlan as it shall, from time to undertake specific projects, including review of specific departmentstime, deem advisable; to interpret the terms and provisions of the Company.

     c.  Plan and any award issued under the Plan; and to otherwise supervise the administration of the Plan. All decisions made by the Committee pursuant to the provisions of the Plan shall be final and binding on all persons, including the Company and the Participants.


The Committee shall receive regular reports frommay delegate the Senior Vice President for Risk Managementadministrative details and review periodicallymanagement of the Plan to members of the Company's policiesmanagement and staff. No such delegation shall affect their right to make final decisions with respect to risk assessmentany matter arising under the Plan.

SECTION 7
ADJUSTMENTS UPON A CHANGE IN COMMON STOCK

In the event of any change in the outstanding Stock of the Company by reason of any stock split, stock dividend, recapitalization, merger, consolidation, reorganization, combination or exchange of shares or other similar event that may equitably require an adjustment in the number or kind of shares that may be issued under the Plan pursuant toSection 4(b), such adjustment shall be made by the Committee in accordance with its sole discretion and risk management.

     d.  shall be conclusive and binding for all purposes of the Plan.


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SECTION 8
AMENDMENT AND TERMINATION

The director of internal auditPlan may be amended or terminated at any time and Senior Vice President for Risk Management shall have accessfrom time to time by the Committee, subject to shareholder approval where required by federal or state law. Neither an amendment to the Plan nor the termination of the Plan shall adversely affect any right of any Participant with respect to any Restricted Stock theretofore granted without such Participant's written consent.

SECTION 9
GENERAL PROVISIONS

(a)All shares of Restricted Stock delivered under the Plan after the Restricted Period has expired shall be distributed in accordance with the instructions of each Participant. Such shares of Stock shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Stock is then listed, and any applicable federal or state securities law.

(b)Nothing contained in the Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to stockholder approval if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases. The adoption of the Plan shall not confer upon any employee of the Company or any Subsidiary nor any independent contractors associated with the Company or its Subsidiaries any right to continued employment or association with the Company or a Subsidiary, as the case may be, nor shall it interfere in any way with the right of the Compa ny or a Subsidiary to terminate the employment of any of its employees or terminate the association of any independent contractors associated with the Company or its Subsidiaries at any time.

(c)No member of the Board or the Committee, nor any officer or employee of the Company acting on behalf of the Board or the Committee, shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the Plan, and all members of the AuditBoard or the Committee on a direct basis as necessary, and shall attend meetingseach and any officer or employee of the CommitteeCompany acting on their behalf shall, to the extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, determination or interpretation.

(d)During the Restricted Period, a Participant's rights and interest under the Plan may not be sold, assigned or transferred in whole or in part either directly or by operation of law or otherwise (except in the event of a Participant's death) including, but not by way of limitation, execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner and no such right or interest of any Participant in the Plan shall be subject to any obligation or liability of such Participant.

(e)The Company and its Subsidiaries shall have the right to deduct from any payment made under the Plan any federal, state or local income or other taxes required by law to be withheld with respect to such payment. It shall be a condition to the obligation of the Company to issue shares of Stock upon the lapse of restrictions on Restricted Stock that the Participant pay to the Company, upon its demand, (i) such amount as may be requested by the Committee.

7.  OversightCompany for the purpose of satisfying any liability to withhold federal, state or local income or other taxes and (ii) a copy of the Compliance Departmentselection, if required, under S ection 83 of Major Subsidiariesthe Code, or any amendment thereto (the "Section 83 Election") as filed with the Internal Revenue Service. If the amount requested is not paid and Divisions

     Thethe copy of the Section 83 Election, if required, is not provided, the Company may refuse to issue shares of Stock until such time as the Participant so complies. Unless the Committee shall receive reportsin its sole discretion determine otherwise, payment for taxes required to be withheld may be


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made in whole or in part by an election by a Participant, in accordance with rules adopted by the Committee from time to time, to have the Senior Vice PresidentCompany withhold shares of Stock otherwise issuable pursuant to the Plan having a fair market value equal to such tax liability, to be determined in such reasonable manner as may be provided for Risk Management regarding activitiesfrom time to time by the Committee or as may be required in order to comply with or to conform to the requirements of any applicable or relevant laws or regulations.

(f)The Plan is intended to comply with all applicable conditions of Rule 16b-3 of the compliance directors1934 Act or any successor statute, rule or regulation. All transactions involving any Section 16(a) Person shall be subject to the conditions set forth in Rule 16b-3, regardless of whether such conditions are expressly set forth in the Plan. Any provision of the broker-dealers and major subsidiaries and divisionsPlan that is contrary to Rule 16b-3 shall not apply to Section 16(a) Persons.


SECTION 10
EFFECTIVE DATE OF PLAN

The Plan shall be effective as of the Company.  At least once a year,date of approval of the compliance directors shall submit reports to the Committee on activities undertaken during the year, any regulatory problems encountered and regulatory issues that may affect the Company in the future.

8.  Other Responsibilities

a.  The Committee shall establish and review procedures for:

   (1)        the receipt, retention and treatment of complaints receivedPlan by the Company regarding accounting, internal accounting controls, or auditing matters; and

   (2) the confidential, anonymous submission by employeesshareholders of the Company of concerns regarding questionable accounting or auditing matters.

     b.  At least annually,such other date as the Committee shall receive reports from Senior Financial Officersshareholders of the Company regarding their compliance with the code of ethics for Senior Financial Officers.  The Committee shall report material violations of the Code of Ethics that are brought to their attention to the Board of Directors with a recommendation for appropriate action.

     c.  From time to time, the Committee shall review with the Company's Chief Executive Officer and Chief Financial Officer the certifications they sign in SEC reports regarding the Company's disclosure controls, the design and operation of the Company's internal controls and any material weaknesses they have identified, or any fraud involving management or other employees they have identified during the course of their review of the Company's controls.

9.  Generalso determine.

     a.  In exercising its oversight responsibility, the Committee shall have access to members of management and may inquire into any issues that it considers to be of material concern to the Committee or the Board of Directors.

     b.  The Committee shall have authority to conduct or authorize investigations into any matters within its scope of responsibilities and to retain advisers, including counsel and other professionals, to assist in the conduct of any investigation and determine their compensation.

     c.  The Committee shall report regularly to the Board of Directors with respect to its activities.

     d.  The Committee shall review this charter annually and make changes as it considers appropriate.






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