NOTE 20 – EMPLOYEE BENEFIT PLANS

Our profit sharing plan and employee stock ownership plan (“ESOP”) provide certain death, disability or retirement benefits for all employees who meet certain service requirements. The plans are noncontributory. Our contributions, if any, are determined annually by our Board of Directors on a discretionary basis and are recognized as compensation cost throughout the year. Benefits become fully vested after six years of qualified service.

All shares owned by the ESOP are included in earnings per share calculations. Cash dividends paid to the ESOP are reflected as a reduction of retained earnings. The number of shares of our common stock held by the ESOP at September 30, 2011 and 2010 was approximately 6,279,000 and 5,982,000, respectively. The market value of our common stock held by the ESOP at September 30, 2011 was approximately $163 million, of which approximately $2.3 million is unearned (not yet vested) by ESOP plan participants. In August 2011, the Board of Directors authorized the pre-funding to the ESOP plan of up to $7.5 million of our expected annual contribution for fiscal year 2011 for the purpose of the ESOP plan purchasing our common stock.

We also offer a plan pursuant to section 401(k) of the Internal Revenue Code, which provides for us to match 100% of the first $500 and 50% of the next $500 of compensation deferred by each participant annually.

Our Long Term Incentive Plan (“LTIP”) is a non-qualified deferred compensation plan that provides benefits to employees who meet certain compensation or production requirements. We have purchased and hold life insurance on the lives of certain current and former employee participants to earn a competitive rate of return for participants and to provide a source of funds available to satisfy our obligations under this plan. Contributions to the qualified plans and the LTIP contribution for management are made in amounts approved annually by the Board of Directors.

Compensation expense includes aggregate contributions to these plans of $54.1 million, $45.4 million and $34.8 million for fiscal years 2011, 2010 and 2009, respectively.

Share-based compensation plans

At September 30, 2011, we had multiple share-based employee compensation plans, which are described below. We have issued new shares under all plans approved by shareholders but are permitted to reissue our treasury shares. In addition, we recognize the resulting realized tax benefit or deficit that exceeds or is less than the previously recognized deferred tax asset for share-based awards (the excess tax benefit) as additional paid-in capital.

Fixed stock option plans

We have one qualified and two non-qualified fixed stock option plans available for grants to employees and members of our Board of Directors. Under the 2002 Incentive Stock Option Plan, our qualified plan, we may grant options to our management personnel for up to 9,000,000 shares of common stock. Options are granted to key administrative employees and RJ&A financial advisors who achieve certain gross commission levels. Options granted before August 21, 2008 are exercisable in the 36th to 72nd months following the date of grant and only in the event that the grantee is an employee of ours at that time, disabled, deceased or recently retired. Options granted on or after August 21, 2008 are exercisable in the 36th to 72nd months following the date of grant and only in the event that the grantee is an employee of ours or has terminated within 45 days, disabled, deceased or recently retired.

Under one of our two non-qualified plans, we may grant up to 854,298 shares of common stock to our outside directors. Options vest over a three year period from grant date provided that the director is still serving on our Board. Prior to February 2011, non-employee directors were granted options for shares annually. Starting in February 2011, restricted stock units are being issued annually to our outside directors in lieu of stock options. Under our other non-qualified stock option plan, we may grant up to 2,531,250 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 anniversary of the grant date. Under all fixed stock option plans, the exercise price of each option equals the market price of our stock on the date of grant.

Expense and income tax benefits related to our three fixed stock option plans available for grants to employees and members of our Board of Directors are presented below:

	Year ended September 30,
	2011		2010		2009
	(in thousands)

Total share-based expense	$	7,319	$	8,460	$	6,000
Income tax benefits related to share-based expense		319		310		247

These amounts may not be representative of future share-based compensation expense since the estimated fair value of stock options is amortized over the requisite service period using the straight-line method and additional options may be granted in future years. The fair value of each fixed option grant for these plans is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for stock option grants in fiscal years 2011, 2010, and 2009:

	Year ended September 30,
	2011	2010	2009

Dividend yield	1.80%	1.81%	2.55%
Expected volatility	43.74%	54.44%	46.99%
Risk-free interest rate	1.41%	2.57%	1.57%
Expected lives	4.9 yrs	5.0 yrs	5.4 yrs

The dividend yield assumption is based on our current declared dividend as a percentage of the stock price. The expected volatility assumption is based on our historical stock price and is a weighted average combining (1) the volatility of the most recent year, (2) the volatility of the most recent time period equal to the expected lives assumption, and (3) the annualized volatility of the price of our stock since the late 1980s. The risk-free interest rate assumption is based on the U.S. Treasury yield curve in effect at the time of grant of the options. The expected lives assumption is based on the average of (1) the assumption that all outstanding options will be exercised at the midpoint between their vesting date and full contractual term and (2) the assumption that all outstanding options will be exercised at their full contractual term.

A summary of option activity of our three fixed stock option plans available for grants to employees and members of our Board of Directors for the fiscal year ended September 30, 2011 is presented below:

	Options for shares			Weighted- average exercise price ($)		Weighted- average remaining contractual term (years)		Aggregate intrinsic value ($)

Outstanding at October 1, 2010		4,646,015		$	26.32
Granted		262,305			28.71
Exercised		(1,249,847	)		24.70
Forfeited		(85,226	)		26.14
Expired		(15,411	)		28.67
Outstanding at September 30, 2011		3,557,836		$	27.06	$	2.72	$	3,344,000

Exercisable at September 30, 2011		717,555		$	29.27	$	1.25	$	178,000

As of September 30, 2011, there was $12.8 million of total unrecognized pre-tax compensation cost, net of estimated forfeitures, related to stock options for these plans. These costs are expected to be recognized over a weighted-average period of approximately 2.89 years.

The following activity occurred under our three fixed stock option plans available for grants to employees and members of our Board of Directors:

	Year ended September 30,
	2011		2010		2009
	(in thousands, except per option amounts)

Weighted-average grant date fair value per option	$	9.62	$	10.83	$	6.22
Total intrinsic value of stock options exercised		10,553		2,323		3,211
Total grant date fair value of stock options vested		9,206		2,784		7,512

Cash received from stock option exercises for these plans for the fiscal year ended September 30, 2011 was $35.8 million. There was approximately $250,000 of excess benefits realized during the fiscal year ended September 30, 2011 resulting from the exercise of option awards during the fiscal year.

Restricted stock plan

Under the 2005 Restricted Stock Plan we are authorized to issue up to 10,425,000 restricted stock units or restricted shares of common stock to employees and independent contractors. Restricted stock grants under the 2005 plan are limited to 2,000,000 shares per fiscal year. The 2005 plan was established to replace, on substantially the same terms and conditions, the 1999 plan.

Through our Canadian subsidiary, we established a trust fund which is associated with the 2005 plan. This trust fund was established and funded to enable the trust fund to acquire our common stock in the open market to be used to settle restricted stock units granted as a retention vehicle for certain employees of the Canadian subsidiary (see Note 9 for discussion of our consolidation of this trust fund, which is a VIE). Additionally, during the three months ended December 31, 2010, our Board of Directors approved the granting of restricted stock unit awards rather than restricted stock awards in connection with the 2005 Restricted Stock Plan after reviewing certain income tax consequences to retirement eligible participants associated with restricted stock awards. Our intention is to issue restricted stock units rather than restricted stock awards under this plan in the future. At our Annual Meeting of Shareholders held on February 24, 2011, our shareholders approved amendments to the 2005 Restricted Stock Plan, which added our non-employee directors and non-employee directors of our subsidiaries as eligible participants under this plan.

We may grant awards under this plan in connection with initial employment or under various retention programs for individuals who are responsible for a contribution to the management, growth, and/or profitability. Under the plan, the awards are generally restricted for a five year period, during which time the awards are forfeitable in the event of termination other than for death, disability or retirement. The following employee related activity occurred during the fiscal year ended September 30, 2011:

	Shares/Units			Weighted- average grant date fair value ($)

Non-vested at October 1, 2010		2,964,063		$	25.58
Granted		946,299			30.76
Vested		(612,027	)		24.23
Forfeited		(131,193	)		25.92
Non-vested at September 30, 2011		3,167,142		$	27.38

Expense and income tax benefits related to our Restricted Stock Plan is presented below:

	Year ended September 30,
	2011		2010		2009
	(in thousands)

Total share-based expense	$	19,522	$	20,354	$	18,707
Income tax benefits related to share-based expense		7,418		7,643		7,025

As of September 30, 2011, there was $42.5 million of total unrecognized pre-tax compensation cost, net of estimated forfeitures, related to grants under our Restricted Stock Plan. These costs are expected to be recognized over a weighted-average period of approximately 3.44 years. The total fair value of shares and unit awards vested under this plan during the fiscal year ended September 30, 2011 was $15 million.

Employee stock purchase plan

Under the 2003 Employee Stock Purchase Plan, we are authorized to issue up to 7,375,000 shares of common stock to our full-time employees, nearly all of whom are eligible to participate. Under the terms of the plan, employees can choose each year to have up to 20% of their annual compensation specified to purchase our common stock. Share purchases in any calendar year are limited to the lesser of 1,000 shares or shares with a fair market value of $25,000. The purchase price of the stock is 85% of the market price on the day prior to the purchase date. Under the plan we sold approximately 337,000, 382,000 and 532,000 shares to employees during the years ended September 30, 2011, September 30, 2010 and September 30, 2009, respectively. The compensation cost is calculated as the value of the 15% discount from market value and was $1.6 million, $1.5 million and $1.3 million during the fiscal years ended September 30, 2011, 2010 and 2009 respectively.

Stock bonus plan

Our 2007 Stock Bonus Plan authorizes us to issue up to 3,000,000 restricted stock units or restricted shares of common stock to officers and certain other employees in lieu of cash for 10% to 50% of annual bonus amounts in excess of $250,000. Restricted stock grants under the 2007 plan are limited to 750,000 shares per fiscal year. The 2007 plan was established to replace, on substantially the same terms and conditions, the 1999 plan. During the three months ended December 31, 2010, our Board of Directors approved the granting of restricted stock unit awards rather than restricted stock awards in connection with the 2007 Stock Bonus Plan after reviewing certain income tax consequences to retirement eligible participants associated with restricted stock awards. Our intention is to issue restricted stock units rather than restricted stock awards under this plan in the future. The determination of the number of units or shares to be granted is determined as defined in the plan and approved by the compensation committee of the Board of Directors. Under the plan the awards are generally restricted for a three year period, during which time the awards are forfeitable upon termination of employment for any reason other than for death, disability or retirement. The following activity occurred during the fiscal year ended September 30, 2011:

	Shares/Units			Weighted- average grant date fair value ($)

Non-vested at October 1, 2010		1,154,387		$	24.68
Granted		407,141			31.53
Vested		(355,158	)		33.23
Forfeited		(18,038	)		25.42
Non-vested at September 30, 2011		1,188,332		$	24.46

Expense and income tax benefits related to our Stock Bonus Plan is presented below:

	Year ended September 30,
	2011		2010		2009
	(in thousands)

Total share-based expense	$	10,657	$	8,805	$	10,621
Income tax benefits related to share-based expense		4,050		3,306		3,988

As of September 30, 2011, there was $8.9 million of total unrecognized pre-tax compensation cost, net of estimated forfeitures, related to grants under our Stock Bonus Plan. These costs are expected to be recognized over a weighted-average period of approximately 1.87 years. The total fair value of shares vested under this plan during the fiscal year ended September 30, 2011 was $11.8 million.

Employee investment funds

Certain key employees participate in the EIF Funds, which are limited partnerships that invest in certain of our merchant banking and venture capital activities and other unaffiliated venture capital limited partnerships (see Notes 1 and 9 for further information on our consolidation of the EIF Funds, which are VIEs). We made non-recourse loans to these key employees for two-thirds of the purchase price per unit. All of these loans have been repaid.