McDonald & Co Investments Inc – ‘DEF 14A’ for 8/7/96

As of:  Thursday, 6/27/96   ·   For:  8/7/96   ·   Accession #:  950152-96-3170   ·   File #:  1-08526

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Definitive Proxy Solicitation Material   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     McDonald & Company Definitive Proxy                   27    130K 

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DEF 14A
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT 
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934 

Filed by the registrant  /X/                                                    

Filed by a party other than the registrant  / /                                 

Check the appropriate box:                                                      
/ /  Preliminary proxy statement                                                
/X/  Definitive proxy statement                                                 
/ /  Definitive additional materials                                            
/ /  Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12              
/ /  Confidential, for Use of the Commission Only (as permitted by Rule         
14a-6(e)(2))                                                          

MCDONALD & COMPANY INVESTMENTS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

MCDONALD & COMPANY INVESTMENTS, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT)

Payment of filing fee (Check the appropriate box):                              
/X/  $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or  
Item 22(a)(2) of Schedule 14A.                                        
/ /  $500 per each party to the controversy pursuant to Exchange Act Rule       
14a-6(i)(3).                                                          
/ /  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.   

     (1) Title of each class of securities to which transaction applies:________

     (2) Aggregate number of securities to which transaction applies:___________

(3) Per unit price or other underlying value of transaction computed  
      pursuant to Exchange Act Rule 0-11(Set forth the amount on which the
         filing fee is calculated and state how it was determined):_____________

     (4) Proposed maximum aggregate value of transaction:_______________________

     (5) Total fee paid:________________________________________________________

/ /  Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid        
previously. Identify the previous filing by registration statement number, or   
the form or schedule and the date of its filing.                                

     (1) Amount previously paid:________________________________________________

     (2) Form, schedule or registration statement no.:__________________________

     (3) Filing party:__________________________________________________________

     (4) Date filed:____________________________________________________________

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                                        MCDONALD & COMPANY
                                       INVESTMENTS, INC.
                                        McDonald Investment Center
                                       800 SUPERIOR AVENUE
                                        CLEVELAND, OH 44114 - 216/443-2300

                                                                   June 27, 1996

To the Stockholders of McDonald & Company Investments, Inc.:                    

     This year's Annual Meeting of Stockholders will be held at 9:30 A.M. (EDT),
on Wednesday, August 7, 1996, at The National City Auditorium, Fourth Floor,    
Annex Building, 1900 East Ninth Street, Cleveland, Ohio.                        

We will be reporting on your Company's activities and you will have an
opportunity to ask questions about our operations.                              

    We hope that you are planning to attend the Annual Meeting personally, and
we look forward to seeing you. Whether or not you expect to attend in person,   
the return of the enclosed Proxy as soon as possible would be greatly           
appreciated and will ensure that your shares will be represented at the Annual  
Meeting. If you do attend the Annual Meeting, you may, of course, withdraw your 
Proxy should you wish to vote in person.                                        

  On behalf of the Board of Directors and management of McDonald & Company
Investments, Inc., we would like to thank you for your continued support and    
confidence.                                                                     

Sincerely yours,                                                                

/s/ Thomas M. O'Donnell                    /s/ William B. Summers, Jr.          

THOMAS M. O'DONNELL                        WILLIAM B. SUMMERS, JR.              
Chairman                                   President and Chief Executive Officer

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MCDONALD & COMPANY
INVESTMENTS, INC. 
McDonald Investment Center
800 SUPERIOR AVENUE 
CLEVELAND, OH 44114 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD AUGUST 7, 1996 

    NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of McDonald
& Company Investments, Inc. (the "Company") will be held at The National City   
Auditorium, Fourth Floor, Annex Building, 1900 East Ninth Street, Cleveland,    
Ohio, on Wednesday, August 7, 1996 at 9:30 A.M. (EDT), for the following        
purposes:                                                                       

          1. To nominate and elect three individuals as Directors of the Company
     for a three-year term ending at the Annual Meeting of Stockholders in 1999;

   2. To consider and act upon a proposal to approve and adopt the
Company's 1995 Stock Option Plan for Non-Officer Directors; and       

      3. To transact such other business as may properly come before the
Annual Meeting and any adjournments thereof.                          

   Holders of Common Stock of record as of the close of business on June 10,
1996 are entitled to receive notice of and vote at the Annual Meeting.          

    It is important that your shares be represented at the Annual Meeting. For
that reason we ask that you promptly sign, date and mail the enclosed Proxy card
in the return envelope provided. Stockholders who attend the Annual Meeting may 
revoke their Proxies and vote in person.                                        

                                          By order of the Board of Directors

                       THOMAS F. MCKEE
                 Secretary
Cleveland, Ohio                                                                 
June 27, 1996                                                                   

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MCDONALD & COMPANY
INVESTMENTS, INC. 

PROXY STATEMENT 

MAILED ON JUNE 27, 1996 

ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON AUGUST 7, 1996 

------------------

GENERAL INFORMATION 

  This Proxy Statement is furnished in connection with the solicitation of
Proxies by the Board of Directors of McDonald & Company Investments, Inc. (the  
"Company") to be used at the Annual Meeting of Stockholders of the Company to be
held on August 7, 1996, and any adjournments thereof. The time, place and       
purposes of the Annual Meeting are stated in the Notice of Annual Meeting of    
Stockholders which accompanies this Proxy Statement.                            

The accompanying Proxy is solicited by the Board of Directors of the  
Company and will be voted in accordance with the instructions contained thereon,
if it is returned duly executed and is not revoked. If no choice is specified on
the Proxy, it will be voted FOR the election of all of the individuals nominated
by the Board of Directors and FOR the proposal to approve and adopt the         
Company's 1995 Stock Option Plan for Non-Officer Directors. A stockholder may   
revoke a Proxy at any time before it is exercised by delivery of written notice 
to the Secretary of the Company or by a duly executed Proxy bearing a later     
date.                                                                           

   The record date for determination of stockholders entitled to vote at the
Annual Meeting was the close of business on June 10, 1996. On that date, there  
were outstanding and entitled to vote 8,953,642 shares of Common Stock of the   
Company. Each share of Common Stock is entitled to one vote. The Company's      
Certificate of Incorporation does not provide for cumulative voting rights.     

The costs of soliciting Proxies will be borne by the Company. Brokers,
custodians and fiduciaries will be requested to forward proxy soliciting        
material to the owners of stock held in their name and the Company will         
reimburse them for their out-of-pocket expenses in connection therewith. In     
addition to solicitation by mail, the Company's Directors, officers and         
employees, without additional compensation, may solicit proxies by telephone,   
mail and personal interview.                                                    

    At the Annual Meeting, in accordance with the Delaware General Corporation
Law and the Company's Certificate of Incorporation, the inspectors of election  
appointed by the Board of Directors for the Annual Meeting will determine the   
presence of a quorum and will tabulate the results of stockholder voting.       
Pursuant to the Company's By-Laws, at the Annual Meeting the holders of a       
majority of the outstanding shares of the Company's Common Stock entitled to    
vote at the meeting, present in person or by proxy, will constitute a quorum.   
The shares represented at the Annual Meeting by proxies which are marked, with  
respect to the election of Directors, as "withheld" or, with respect to any     
other proposals, "abstain," will be counted as shares present for purposes of   
determining whether a quorum is present.                                        

    Under the rules of the New York Stock Exchange, brokers who hold shares in
street name for beneficial owners have the authority to vote on certain items   
when they have not received instructions from such beneficial owners. Under     
applicable Delaware law, if a broker returns a proxy and has not voted on a     
certain proposal, such broker non-votes will count for purposes of determining a
quorum.                                                                         

  Pursuant to the Company's By-Laws, at the Annual Meeting, a plurality of
the votes cast is sufficient to elect a nominee as a Director. In the election  
of Directors, votes may be cast in favor                                        

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or withheld; votes that are withheld or broker non-votes will have no effect on 
the outcome of the election of Directors.                                       

    Pursuant to the Company's By-Laws, all other questions and matters brought
before the meeting will be decided by the vote of the holders of a majority of  
the outstanding shares entitled to vote thereon present in person or by proxy at
the meeting, unless otherwise provided by law or by the Certificate of          
Incorporation. In voting for such other matters, votes may be cast in favor,    
against or abstained. Abstentions will count as present for purposes of the     
proposal on which the abstention is noted and will have the effect of a vote    
against the proposal. Broker non-votes, however, are not counted as present and 
entitled to vote for purposes of determining whether a proposal has been        
approved and will have no effect on the outcome of such proposal.               

THE COMPANY                                                                     

McDonald & Company Investments, Inc. is a holding company which was   
incorporated under the laws of the State of Delaware on May 20, 1983, and       
through its principal subsidiary, McDonald & Company Securities, Inc. ("McDonald
Securities"), operates a regional investment banking, investment advisory, and  
brokerage business. As used in this Proxy Statement, the "Company" refers,      
unless the context requires otherwise, to McDonald & Company Investments, Inc.  
and its subsidiaries. The Company succeeded to the business of McDonald &       
Company, a partnership (the "Partnership") on July 20, 1983.                    

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STOCK OWNERSHIP OF PRINCIPAL HOLDERS AND MANAGEMENT 

The following table sets forth, as of June 10, 1996, the beneficial   
ownership of Common Stock of (i) each person who is known to the Company to own 
beneficially more than 5% of the Company's Common Stock, (ii) each Director of  
the Company, (iii) each of the executive officers named in the Summary          
Compensation Table included elsewhere herein, and (iv) all Directors and        
executive officers as a group as of June 10, 1996, and the percentage of the    
outstanding shares represented thereby:                                         

                                                        [Enlarge/Download Table]

   NAME OF BENEFICIAL OWNER, DIRECTOR, EXECUTIVE         AMOUNT AND NATURE OF        PERCENT 
       OFFICER OR NUMBER OF PERSONS IN GROUP            BENEFICIAL OWNERSHIP(1)     OF CLASS 
----------------------------------------------------    -----------------------     ---------
                                                                                             
Peter R. Kellogg (2)                                                                         
  120 Broadway                                                                               
  New York, New York 10271..........................             600,000               6.61% 
Daniel F. Austin(3).................................              56,242(8)(9)            *  
Rena J. Blumberg(4).................................               6,000(8)               *  
Jeanette Grasselli Brown(4).........................                 500                  *  
Willard E. Carmel(6)................................             204,628(10)           2.25  
Robert T. Clutterbuck(3)(5).........................             136,808(8)(9)(11)     1.51  
David W. Ellis III(3)...............................              68,006(9)(12)           *  
Edward Fruchtenbaum(4)..............................               1,000                  *  
James A. Karman(4)..................................               6,000(8)               *  
David W. Knall(3)...................................             136,590               1.50  
Frederick R. Nance(4)...............................               4,890(8)               *  
Thomas M. O'Donnell(7)..............................             152,596(9)            1.68  
William B. Summers, Jr.(7)..........................             182,598(8)(9)         2.01  
Donald E. Weston(7).................................             283,430(9)            3.12  
All Directors and executive officers                                                         
  as a group (25 persons)...........................           1,679,427(8)(9)        18.50  

---------------                                                                              
<FN>                                                                                         
* Less than one percent.                                                                     

 (1) Does not include vested beneficial interests in certain of the Company's                
     employee benefit plans. See "Compensation of Executive Officers."                       

 (2) Based solely upon information contained in a Schedule 13D filed with the                
     Securities and Exchange Commission.                                                     

 (3) Executive officer of the Company.                                                       

 (4) Director of the Company.                                                                

 (5) Nominee for election as a Director of the Company.                                      

 (6) Director of the Company and Chairman of the Board (Retired) of McDonald                 
     Securities.                                                                             

 (7) Director and executive officer of the Company.                                          

 (8) Includes the following number of shares of Common Stock which such                      
     individual or group had the right to acquire within 60 days of the date of              
     the mailing of this Proxy Statement through the exercise of stock options:              
     11,280 shares (Mr. Austin); 4,800 shares (Ms. Blumberg); 7,200 shares (Mr.              
     Clutterbuck); 4,800 shares (Mr. Karman); 3,840 shares (Mr. Nance); 18,000               
     shares (Mr. Summers); and 85,080 shares (all Directors and executive                    
     officers as a group). These individuals directly own the balance of their               
     shares. For purposes of calculating the percentage of outstanding shares                
     beneficially owned by such individual or group, the shares which such                   
     individual or group had the right to acquire during that period by exercise             
     of stock options are deemed to be outstanding.                                          

 (9) Includes shares of Common Stock owned under the Company's 1995 Stock Bonus              
     Plan and the Company's 1993 Stock Bonus Plan.                                           

(10) Includes 60,000 shares of Common Stock owned by Mr. Carmel's spouse and                 
     40,000 shares of Common Stock owned by a partnership, of which Mr. Carmel               
     is a partner.                                                                           

(11) Includes 20,122 shares of Common Stock owned by Mr. Clutterbuck's spouse                
     and 84 shares of Common Stock owned by Mr. Clutterbuck as custodian for his             
     minor children.                                                                         

(12) Includes 2,102 shares of Common Stock beneficially owned by Mr. Ellis                   
     through a trust.                                                                        

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ELECTION OF DIRECTORS 

The members of the Company's Board of Directors are divided into three
classes with the term of office of one class expiring each year. At the Annual  
Meeting, three Directors will be elected to serve a three-year term until the   
Annual Meeting in 1999 and until their successors have been elected and         
qualified. At its May 1, 1996 meeting, the Board of Directors nominated James A.
Karman, Rena J. Blumberg and Robert T. Clutterbuck to stand for election as     
Directors at the Annual Meeting. Mr. Karman and Ms. Blumberg are presently      
Directors of the Company. Mr. Clutterbuck is currently Treasurer of the Company 
and President and Chief Operating Officer of McDonald Securities. After many    
years of dedicated service, Willard E. Carmel, the Company's retired Chairman of
the Board, advised the Board of his decision not to stand for election to       
another term as a Director.                                                     

     Unless otherwise directed, the persons named in the accompanying Proxy will
vote for the election of the three nominees set forth in the table below as     
Directors of the Company for a three-year term. In the event of the death of or 
inability to act of any of the nominees, the Proxies will be voted for the      
election as a Director of such other person as the Board of Directors may       
recommend. The Board of Directors has no reason, however, to anticipate that    
this will occur. In no event will the accompanying Proxy be voted for more than 
three nominees or for persons other than those named below and any such         
substitute nominee for any of them.                                             

   The following table lists the nominees for election at the Annual Meeting
and those Directors who will continue in office subsequent to the Annual        
Meeting, and certain other information with respect to each individual,         
including the year certain individuals were partners in the Partnership, the    
predecessor to the Company's business.                                          

NOMINEES FOR ELECTION 

                                                        [Enlarge/Download Table]

                                                        PRINCIPAL OCCUPATION                
               NAME                 AGE                 AND DIRECTORSHIPS(1)                
----------------------------------- ---  ---------------------------------------------------
                                                                                            
James A. Karman (2)(6)(7)(8)        59   Director of the Company since May 1, 1990;         
                                           President and Chief Operating Officer for more   
                                           than five years of RPM, Inc., Medina, Ohio, a    
                                           diversified manufacturer of products for the     
                                           waterproofing, corrosion control and general     
                                           maintenance markets, and products for the        
                                           do-it-yourself homeowner and hobby markets.      
Rena J. Blumberg (2)(6)(7)          61   Director of the Company since July 31, 1990; Chief 
                                           Executive Officer of Rainmaker, Inc. since       
                                           January 1, 1992, a corporate advisory organiza-  
                                           tion; Community Relations Director for more than 
                                           five years for WRMR-AM/WDOK-FM radio stations,   
                                           Cleveland, Ohio; Community Consultant since 1988 
                                           for Sun Newspapers, Inc., Cleveland, Ohio, a pub-
                                           lisher of suburban newspapers. Ms. Blumberg also 
                                           serves as a Director of Blue Cross/Blue Shield of
                                           Ohio, Inc., as a Trustee of Brandeis University, 
                                           and as a director of various other civic and     
                                           charitable organizations.                        

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                                                        [Enlarge/Download Table]

                                                         PRINCIPAL OCCUPATION                
               NAME                 AGE                  AND DIRECTORSHIPS(1)                
----------------------------------- ---   ---------------------------------------------------
                                                                                             
Robert T. Clutterbuck (3)           45    Treasurer of the Company since January 1, 1994;    
                                            President and Chief Operating Officer of McDonald
                                            Securities since June 1, 1995; Chief Financial   
                                            Officer of McDonald Securities from January 1,   
                                            1994 to June 14, 1996; Executive Managing        
                                            Director at McDonald Securities from January 1,  
                                            1994 to June 1, 1995; Senior Managing Director   
                                            (Municipal Bond Trading and Underwriting) from   
                                            June 1, 1992 to December 31, 1993; Managing      
                                            Director from May 1, 1987 to May 31, 1992; Senior
                                            Vice President from May 1, 1984 to April 30,     
                                            1987; First Vice President from June 7, 1983 to  
                                            April 30, 1984; Partner from 1978 to 1990.       

                         DIRECTORS CONTINUING IN OFFICE                                      

Thomas M. O'Donnell (4)(8)(9)       60    Director of the Company since June 7, 1983; Chair- 
                                            man of the Board of the Company since April 1,   
                                            1989; Chairman of McDonald Securities from April 
                                            1, 1989 to June 1, 1995; Chief Executive Officer 
                                            of the Company and McDonald Securities from April
                                            1, 1989 to January 1, 1994; President of the     
                                            Company and McDonald Securities from July 23,    
                                            1984 to April 1, 1989; Secretary of the Company  
                                            from June 7, 1983 to July 23, 1984; Managing     
                                            Director (Corporate Finance and Special Products)
                                            and Secretary of McDonald Securities from June 7,
                                            1983 to July 23, 1984; Partner from 1968 to 1990 
                                            and Managing Partner from 1989 to 1990.          
Donald E. Weston (4)                61    Director of the Company since October 4, 1991;     
                                            Chairman and Chief Executive Officer of the      
                                            Gradison Division of McDonald Securities since   
                                            October 4, 1991; Chairman of the Board and Chief 
                                            Executive Officer of Gradison & Company          
                                            Incorporated from January, 1982 to October 4,    
                                            1991; Trustee and Chairman of the Board of the   
                                            Gradison-McDonald U.S. Government Trust from     
                                            January, 1982 to September 27, 1993, of the      
                                            Gradison Growth Trust since August, 1983, of the 
                                            Gradison-McDonald Government Income Fund since   
                                            September, 1987 and of the Gradison-McDonald     
                                            Municipal Custodian Trust since September, 1992. 
Edward Fruchtenbaum (4)(6)          48    Director of the Company since November 25, 1995;   
                                            President and Chief Operating Officer of American
                                            Greetings Corporation since March 1, 1992; Presi-
                                            dent, U.S. Greeting Card Division of American    
                                            Greetings Corporation from January 1, 1990 to    
                                            February 29, 1992.                               

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                                                        PRINCIPAL OCCUPATION                
               NAME                 AGE                 AND DIRECTORSHIPS(1)                
----------------------------------- ---  ---------------------------------------------------
                                                                                            
William B. Summers, Jr. (5)(9)      46   Director of the Company since June 7, 1983; Chief  
                                           Executive Officer of the Company and McDonald    
                                           Securities since January 1, 1994; President of   
                                           the Company since April 1, 1989; President of    
                                           McDonald Securities from April 1, 1989 to June 1,
                                           1995; Executive Vice President of the Company and
                                           McDonald Securities from November 1, 1988 to     
                                           April 1, 1989; Managing Director (Fixed Income   
                                           Institutional Sales) of McDonald Securities from 
                                           June 7, 1983 to November 1, 1988; Partner from   
                                           1975 to 1990.                                    
Frederick R. Nance (5)(7)           42   Director of the Company since July 28, 1992;       
                                           Partner since 1987 and member of the Management  
                                           Committee of Squire, Sanders & Dempsey,          
                                           Attorneys-at-Law, Cleveland, Ohio. Mr. Nance also
                                           serves on the board of various civic and         
                                           charitable organizations, including St. Ignatius 
                                           High School, Ohio State Legal Services           
                                           Association, Parmadale and the Cleveland State   
                                           University Foundation.                           
Jeanette Grasselli Brown (5)(6)(8)  67   Director of the Company since January 31, 1996;    
                                           Retired Director of Corporate Research, Environ- 
                                           mental and Analytical Sciences, BP America, Inc. 
                                           since January 1989; Distinguished Visiting       
                                           Professor and Director, Research Enhancement,    
                                           Ohio State University from 1989 to 1995; past    
                                           Chair of the Board of Trustees of Ohio           
                                           University; Member, Ohio Board of Regents, Board 
                                           of Trustees of the Cleveland Playhouse, Holden   
                                           Arboretum and the Musical Arts Association, White
                                           House Joint High Level Advisory Panel on US/Japan
                                           Science and Technology Agreements; Chair of the  
                                           Board of Trustees of the Cleveland Scholarship   
                                           Programs, Inc.                                   

---------------                                                                 

(1) The following Directors of the Company also serve as directors for the      
publicly-held corporations listed opposite their names below:           

                                                                [Download Table]
                                                                 
Jeanette Grasselli Brown           AGA Gas, Inc.                 
                                   BDM International, Inc.       
                                   USX Corp.                     
                                   B. F. Goodrich Company        
Edward Fruchtenbaum                American Greetings Corporation
James A. Karman                    RPM, Inc.                     
                                   A. Schulman, Inc.             
                                   Sudbury, Inc.                 
                                   Shiloh Industries, Inc.       
Thomas M. O'Donnell                Seaway Food Town, Inc.        

(2) Term as Director expires in 1996. Nominee for election to three-year term to
expire in 1999.                                                         

(3) Nominee for election to three-year term to expire in 1999.                  

(4) Term as Director expires in 1997.                                           

(5) Term as Director expires in 1998.                                           

(6) Member of the Audit Review Committee.                                       

(7) Member of the Compensation Committee.                                       

(8) Member of the Nominating Committee.                                         

(9) Member of the Management Committee.                                         

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The Company pays its Directors who are not officers of the Company an 
annual retainer of $16,000 plus $1,500 for each Board of Directors meeting      
attended. Each Director who is not an officer of the Company receives $1,000 for
each Committee meeting attended. The Chairperson of each Committee receives     
$1,500 for each committee meeting attended. The Board of Directors generally    
meets quarterly.                                                                

COMMITTEES OF THE BOARD OF DIRECTORS                                            

The Board of Directors has a Management Committee, an Audit Review    
Committee, a Compensation Committee and a Nominating Committee, the members of  
each of which are indicated in the foregoing table.                             

    The Management Committee exercises the power and authority of the Board of
Directors in the interim period between Board meetings. The Management Committee
did not meet during the last fiscal year. The Audit Review Committee reviews the
activities of the Company's internal auditors and independent public            
accountants, as well as various Company policies and practices. The Audit Review
Committee met twice during the last fiscal year. The Compensation Committee is  
responsible for the determination of compensation payable to the executive      
officers of the Company and McDonald Securities. The Compensation Committee is  
also responsible for the administration of the Company's 1995 Stock Bonus Plan  
and the 1995 Key Employees Stock Option Plan and has the authority, under both  
Plans, to determine to whom shares are granted, the number of shares granted and
the time the shares are granted, all subject to the provisions of the Plans. The
Compensation Committee met three times during the last fiscal year. The         
Nominating Committee reviews potential candidates for election as Directors of  
the Company and makes recommendations to the Board of Directors as to nominees  
for election. Although the Nominating Committee did not formally meet during the
last fiscal year, a number of informal discussions were held among the members  
of this Committee concerning potential Director nominees. Stockholders of the   
Company desiring to submit names of potential candidates for consideration by   
the Nominating Committee for election as Directors of the Company may do so by  
writing to the Chairman of the Nominating Committee, at the address of the      
Company's principal executive offices, McDonald Investment Center, 800 Superior 
Avenue, Cleveland, Ohio 44114.                                                  

The Company's Board of Directors met four times during the last fiscal
year. No Director attended fewer than 75% of the aggregate number of meetings of
the Board of Directors and the committees on which he or she served during the  
period for which he or she was a member of the Board.                           

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION                     

  The Compensation Committee of the Board of Directors includes Willard E.
Carmel, the Chairman of the Board (Retired) of the Company and an Investment    
Broker of McDonald Securities.                                                  

    Frederick R. Nance, a member of the Compensation Committee of the Board of
Directors, is a partner in the law firm of Squire, Sanders & Dempsey, which     
rendered legal services to the Company during fiscal 1996.                      

CERTAIN TRANSACTIONS                                                            

 In the ordinary course of its business McDonald Securities has extended
credit to employees, including Directors and officers, under Regulation T, which
regulates credit in cash and margin accounts. Such extensions of credit are     
performing and are made on the same terms as for customers.                     

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UNTIMELY BENEFICIAL OWNERSHIP REPORTS                                           

   Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's executive officers and Directors, and persons who own    
more than ten percent of the Company's Common Stock, to file reports of         
ownership and changes in ownership with the Securities and Exchange Commission  
and the New York Stock Exchange. Executive officers, Directors and greater than 
ten-percent shareholders are required by SEC regulations to furnish the Company 
with copies of all Section 16(a) forms they file.                               

Based solely on review of the copies of such forms furnished to the   
Company, or written representations that no Forms 5 were required, the Company  
believes that during the fiscal year ended March 29, 1996 all Section 16(a)     
filing requirements applicable to its executive officers, Directors and greater 
than ten-percent beneficial owners were complied with.                          

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COMPENSATION OF EXECUTIVE OFFICERS

The following table sets forth information concerning the annual and  
long-term compensation for services in all capacities to the Company for each of
the fiscal years ended March 29, 1996, March 31, 1995 and March 25, 1994 of     
those persons who were (i) the chief executive officer during the fiscal year   
ended March 29, 1996 and (ii) the other four most highly compensated executive  
officers of the Company for the fiscal year ended March 29, 1996 (the "Named    
Executive Officers"):                                                           

SUMMARY COMPENSATION TABLE

                                                        [Enlarge/Download Table]

                                                                                           LONG-TERM                        
                                                                                         COMPENSATION                       
                                             ANNUAL COMPENSATION                    -----------------------                 
                           -------------------------------------------------------  RESTRICTED   NUMBER OF                  
                                                                      OTHER ANNUAL    STOCK      SECURITIES     ALL OTHER   
   NAME AND PRINCIPAL                                                   COMPEN-      AWARDS      UNDERLYING      COMPEN-    
         POSITION          YEAR     SALARY       BONUS                 SATION(4)     (1)(3)      OPTIONS(7)     SATION(5)   
-------------------------  ----    --------    ----------             ------------  ---------    ----------  ---------------
                                                                                                                            
William B. Summers, Jr.,   1996    $200,000    $  820,000               $  4,500    $211,786           --        $ 2,504    
President and Chief        1995     200,000       757,371(1)(2)            3,000          --           --          1,738    
Executive Officer          1994     162,500       836,207(1)(2)            6,745          --       30,000          6,328    
of the Company,                                                                                                             
Chief Executive Officer                                                                                                     
  of McDonald Securities                                                                                                    

David W. Knall,            1996           0     1,953,338(6)                   0          --           --              0    
Senior Managing Director,  1995           0     1,764,659(6)               3,000          --           --              0    
Investment Consultant and  1994           0     1,985,181(6)               6,745          --           --              0    
Co-Resident Manager                                                                                                         
(Indianapolis, IN) of                                                                                                       
McDonald Securities                                                                                                         

David W. Ellis III,                                                                                                         
 C.P.A.,                   1996       5,000     1,230,786(1)(2)(6)         4,500          --           --          2,404    
Managing Director/         1995      16,250     1,048,457(1)(2)(6)         3,000          --           --          2,404    
Portfolio Manager,         1994      35,000     1,098,080(1)(2)(6)         6,745          --           --          1,803    
Gradison-McDonald Asset                                                                                                     
Management                                                                                                                  
Division of McDonald                                                                                                        
Securities                                                                                                                  

Robert T. Clutterbuck,     1996     150,000       740,000                  4,500     188,258           --          5,131    
Treasurer of the           1995     143,333       757,371(1)(2)            3,000          --           --          4,096    
Company, President and     1994     110,000       641,164(1)(2)            6,745          --       12,000          5,155    
Chief Operating Officer                                                                                                     
  of McDonald Securities                                                                                                    

Daniel F. Austin,          1996     120,000       620,000                  4,500     152,969           --          6,652    
Vice Chairman of           1995     118,333       509,938(1)(2)            3,000          --           --          7,182    
McDonald Securities        1994     110,000       615,846(1)(2)            6,745          --       16,800          4,844    

---------------                                                                 

     No Named Executive Officer received personal benefits or perquisites during
fiscal 1996 in excess of the lesser of $50,000 or 10% of his aggregate salary   
and bonus.                                                                      

(1) Includes the value of awards of shares of Common Stock under the Company's  
   stock bonus plans. The Company's 1995 Stock Bonus Plan and 1993 Stock Bonus
    Plan provide for issuance of shares of the Company's Common Stock in lieu of
    a portion of the cash bonus that participants in the Plan would otherwise be
  entitled to receive. For fiscal year 1996 under the 1995 Stock Bonus Plan,
  participants may elect to receive shares of Common Stock which are subject
 to forfeiture for a period of three years from the June 1st following the
   end of the plan year with respect to which such shares are awarded. If such
an election is not made, the shares of Common Stock issued to the       
 participant may not be sold or transferred for a period of two years from
  the June 1st following the end of the plan year with respect to which such
   shares are awarded. Shares issued under the 1995 Stock Bonus Plan which are
subject to forfeiture for three years are issued at an Adjusted Purchase
 Price equal to 85% of the Market Value of the Common Stock, as determined
under the provisions of the Plan. Shares issued under the Plan which are
   subject to restriction from sale or transfer for two years are issued at an
Adjusted Purchase Price equal to 95% of the Market Value of the Common  
    Stock, as determined under the provisions of the Plan. For fiscal years 1995
and 1994 under the 1993 Stock Bonus Plan, shares are restricted from    
 transfer for a period of two years from the date of grant. Dividends were
    paid on the shares issued pursuant to the 1995 Stock Bonus Plan and the 1993
Stock Bonus Plan.                                                       

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(2) For fiscal 1996, the bonus amount reported for Mr. Ellis includes (i)       
 commissions, (ii) cash bonus awards and (iii) $66,290, the value of 3,417
    shares granted under the Company's 1995 Stock Bonus Plan. Under the terms of
 the 1995 Stock Bonus Plan, Mr. Ellis elected to receive shares which were
   subject to restriction from sale or transfer for a period of two years from
   the June 1 following the date of grant. For fiscal 1995 and 1994, the bonus
   amount reported for Messrs. Summers, Ellis, Clutterbuck and Austin includes
(i) cash bonus awards and (ii) the value of shares granted under the    
Company's 1993 Stock Bonus Plan. Under the 1993 Stock Bonus Plan, shares
   were issued subject to a two year restriction from sale or transfer. Shares
were valued based on the Market Value of the Company's Common Stock, as 
 determined under the provisions of the Plan. The number of shares and the
value of the shares of Common Stock granted to each of these individuals
during fiscal 1995 and 1994, respectively, was as follows: 9,182 shares 
valued at $147,371, and 11,893 shares valued at $163,807 (Mr. Summers); 
6,508 shares valued at $87,370, and 2,837 shares valued at $45,037 (Mr. 
    Ellis); 9,182 shares valued at $147,371, and 8,990 shares valued at $123,163
(Mr. Clutterbuck); and 6,002 shares valued at $95,812, and 8,584 shares 
valued at $117,896 (Mr. Austin).                                        

(3) For fiscal 1996, Messrs. Summers, Clutterbuck and Austin elected to receive 
    Shares of Common Stock under the 1995 Stock Bonus Plan which were subject to
   forfeiture for three years. Shares were valued based on the Market Value of
   the Company's Common Stock, as determined under the provisions of the Plan.
 The number of shares of Common Stock granted to each of these individuals
    during fiscal 1996 was as follows: 10,975 shares (Mr. Summers), 9,770 shares
(Mr. Clutterbuck) and 7,953 shares (Mr. Austin).                        

(4) Represents amounts contributed to the McDonald & Company Securities, Inc.   
Retirement Savings Trust and Plan.                                      

(5) Includes the compensation value of Split Dollar Life Insurance premiums and 
Executive Supplemental Life Insurance premiums for each of the Named    
Executive Officers.                                                     

(6) Bonuses for Messrs. Knall and Ellis include (i) sales commissions,          
  representing a percentage of gross commissions on sales and (ii) incentive
 bonuses, based on a formula relating to gross commissions on sales. Sales
  commissions for Messrs. Knall and Ellis, respectively, for the 1996 fiscal
  year equalled $1,739,501 and $1,091,535; for the 1995 fiscal year equalled
 $1,556,917 and $918,421; and for the 1994 fiscal year equalled $1,747,155
   and $966,745. Incentive bonuses for Messrs. Knall, and Ellis, respectively,
for the 1996 fiscal year were $213,837 and $139,251; for the 1995 fiscal
   year were $207,742 and $130,036; and for the 1994 fiscal year were $192,813
and $131,335. In addition, the bonus amount for Mr. Knall for the 1994  
 fiscal year included $45,213, as a branch manager's bonus, representing a
discretionary bonus earned as a resident manager.                       

(7) Options were awarded under the Company's Stock Option Plan, vest in equal   
  amounts over five years after the date of grant and expire ten years after
the date of grant.                                                      

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OPTION EXERCISES AND FISCAL YEAR-END VALUES                                     

Shown below is information with respect to the exercise of options to 
purchase the Company's Common Stock by the Named Executive Officers and         
unexercised options to purchase the Company's Common Stock for the Named        
Executive Officers.                                                             

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR,
AND MARCH 29, 1996 OPTION VALUE 

                                                        [Enlarge/Download Table]

                                                      NUMBER OF SECURITIES                                 
                                                     UNDERLYING UNEXERCISED        VALUE OF UNEXERCISED    
                           NUMBER OF                       OPTIONS AT              IN-THE-MONEY OPTIONS    
                            SHARES                       FISCAL YEAR-END           AT FISCAL YEAR-END(1)   
                          ACQUIRED ON    VALUE     ---------------------------  ---------------------------
          NAME             EXERCISE     REALIZED   EXERCISABLE   UNEXERCISABLE  EXERCISABLE   UNEXERCISABLE
------------------------  -----------   --------   -----------   -------------  -----------   -------------
                                                                                                           
William B. Summers, Jr.         --         $0         18,000         12,000      $ 117,756       $78,504   
David W. Knall                  --          0              0              0              0             0   
David W. Ellis III              --          0              0              0              0             0   
Robert T. Clutterbuck           --          0          7,200          4,800         47,851        31,901   
Daniel F. Austin                --          0         12,720         10,080        114,789        66,992   

---------------                                                                                            
<FN>                                                                                                       
(1) Based on the difference between the exercise price of the options and the                              
    closing price of the Common Stock on the New York Stock Exchange on March                              
    29, 1996.                                                                                              

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION 

GENERAL                                                                         

    The Compensation Committee of the Board of Directors reviews the Company's
existing and proposed executive compensation plans and makes recommendations to 
the Board of Directors regarding such plans and the awards to be made           
thereunder. All members of the Committee, with the exception of Willard E.      
Carmel, are non-employee Directors.                                             

COMPENSATION PHILOSOPHY                                                         

The Company seeks to provide executives with compensation that rewards
individual performance during the year and provides incentives to executives to 
improve the long-term performance of the Company. The Company has traditionally 
paid relatively modest base salaries to its salaried officers and has           
supplemented these salaries with performance-based bonuses. A portion of these  
bonuses are paid in shares of Common Stock.                                     

In 1993, Congress adopted Section 162(m) of the Internal Revenue Code.
Section 162(m) limits the ability of public companies to deduct compensation in 
excess of $1,000,000 paid to certain executive officers, unless such            
compensation is "performance based" within the meaning of Section 162(m). While 
the Committee believes it is essential that there be a correlation between the  
Company's performance and the compensation of its executive officers, it        
believes that the criteria under Section 162(m) necessary for items of          
compensation to qualify as "performance based" unduly limits the Committee's    
flexibility in determining compensation arrangements and in administering       
compensation programs. Therefore, the Committee has determined not to make      
changes to the Company's compensation programs or to the composition of the     
Committee in response to the adoption of Section 162(m). However, the Committee 
has determined to require that all compensation subject to 162(m) in excess of  
$1,000,000 which may be paid to an executive subject to Section 162(m) must be  
deferred to subsequent periods pursuant to a deferred compensation program.     

FISCAL 1996 COMPENSATION DECISIONS                                              

Salaries.  Investment brokers generally receive minimal or no base    
salaries, and are compensated primarily or exclusively on a commission basis. In
making decisions on base salaries, the Committee evaluated the performance of   
each individual considered during the                                           

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prior year, the Company's results of operations and the responsibilities of the 
executive officers. In keeping with its desire to base much of the compensation 
of the Company's executives on performance during the year, the Committee       
generally determined to only make changes in the base salaries of certain       
executives due to their new positions and increased responsibilities, and to    
maintain salaries for most other executive officers at the same level as the    
prior year.                                                                     

   Bonuses.  The bonuses paid to the Company's executive officers for fiscal
1996 were awarded under its incentive bonus program. Participants in this       
program have an opportunity to earn significant cash bonuses based on the       
Company's financial performance, as compared to certain other regional          
investment firms, and the participant's performance during the fiscal year.     

    The amount allocated to the incentive bonus plan for fiscal 1996 was based
on the Committee's assessment of the Company's financial performance as compared
to prior years and to the performance of five other regional investment banking 
firms. Certain companies used for comparative purposes are included in the      
Lipper Regional Brokerage Firm Index, and were chosen because their mix of      
business was deemed comparable to that of the Company. In measuring the         
Company's comparative performance the Committee considered various financial    
ratios, including pre-tax return on revenues and average equity, net revenues   
per employee, pre-tax earnings per employee, compensation as a percent of net   
revenues, pre-tax earnings gain, common stock performance, increase in equity   
capital and profit margin improvement. Compared to the five other regional      
investment banking firms, the Company ranked in the top third with respect to   
each of these measures of financial performance, except for pre-tax return on   
average equity and increase in equity capital. The incentive bonuses paid to    
individual executives were based primarily upon the Committee's assessment of   
their individual performance. An executive's individual performance is measured 
primarily by reference to the volume of business generated by or under the      
direction of the executive during the fiscal year. In determining the overall   
levels of compensation payable to each of the Company's executive officers, the 
Committee also considered the results of an independent survey of compensation  
paid by other securities firms to persons serving in similar capacities. The    
firms included in the independent survey included a broader range of securities 
firms than those included in the Lipper Regional Brokerage Firm Index.          

     Stock Options and Bonuses.  The Company has established a stock bonus plan,
which provides for participants to receive a portion of their annual incentive  
bonus, which would otherwise be paid in cash, in shares of the Company's Common 
Stock. In general, the portion of an incentive bonus that is payable in Common  
Stock increases with the size of a participant's incentive bonus in accordance  
with a formula set forth in the Stock Bonus Plan. The amount of awards to each  
executive officer of the Company who participated in the Stock Bonus Plan were  
determined by reference to this formula. Participation in the Stock Bonus Plan  
was not optional for the participants, except for certain age and stock         
ownership limitations. The Committee did not grant any stock options during the 
1996 fiscal year.                                                               

COMPENSATION OF CHIEF EXECUTIVE OFFICER                                         

 William B. Summers, Jr. has been Chief Executive Officer of the Company
since January 1, 1994.                                                          

    Consistent with the Committee's desire to base much of the compensation of
the Company's executives on performance during the year, the Committee          
determined not to make any adjustments to Mr. Summers' base salary for fiscal   
1996. Mr. Summers' salary was last adjusted in January 1994, when he assumed the
responsibilities of Chief Executive Officer.                                    

    Mr. Summers participates in the incentive bonus program and, as with other
participants, the Committee's decisions concerning his bonus are based primarily
upon its assessment of his individual performance. In determining the amount of 
Mr. Summers' bonus, the Committee                                               

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considered the fact that as Chief Executive Officer, Mr. Summers has            
responsibility for managing the Company's operations and has direct             
responsibility for its financial performance. Therefore, the Committee primarily
measures his performance by reference to the Company's overall financial        
performance and its assessment of his contributions to achieving strategic      
objectives during the year. In assessing Mr. Summers' contribution to the       
Company's financial performance, the Committee took into account the fact that  
the Company achieved its highest level of revenues and second highest level of  
net income and earnings per share during fiscal 1996. In assessing Mr. Summers' 
contribution to achieving the Company's strategic objectives, the Committee     
considered the fact that during the year, the Company further expanded the range
of services that it was able to provide to customers, increased the number of   
its sales personnel, continued its cost containment efforts and made certain    
enhancements to its operations.                                                 

  After considering the foregoing factors, the Committee determined to pay
Mr. Summers total compensation, including salary and bonus, $1,200,000 for      
fiscal 1996.                                                                    

                                  THE COMPENSATION COMMITTEE
                                   James A. Karman, Chairman
                          Rena J. Blumberg
                           Willard E. Carmel
                            Frederick R. Nance

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PERFORMANCE GRAPH 

Set forth below is a line graph comparing the percentage change in the
cumulative total stockholder return on the Company's Common Stock against the   
cumulative total return of the S&P Composite-500 Stock Index and the Lipper     
Regional Brokerage Firm Index for the period from March 31, 1991 to March 31,   
1996. The companies comprising the Lipper Regional Brokerage Firm Index are: The
Advest Group, Inc.; Alex. Brown Incorporated; First Albany Companies Inc.;      
InterRegional Financial Group, Inc.; Interstate/Johnson Lane, Inc.; Kinnard     
Investments, Inc.; Legg Mason, Inc.; Morgan Keegan & Company, Inc.; Piper       
Jaffray Companies Inc.; Raymond James Financial, Inc.; Rodman & Renshaw Capital 
Group, Inc.; Scott & Stringfellow Financial, Inc.; Southwest Securities Group,  
Inc.; Stifel Financial Corp.; and the Company. The graph assumes that the value 
of the investment in the Company's Common Stock and each index was $100 at March
31, 1991 and that all dividends, if any, were reinvested.                       

COMPARISON OF THE COMPANY'S COMMON STOCK, 
S&P 500 INDEX AND THE LIPPER REGIONAL BROKERAGE FIRM INDEX

[GRAPHIC] 

                                                                [Download Table]

                                                              LIPPER RE- 
  MEASUREMENT PERIOD          MCDONALD &                      GIONAL FIRM
(FISCAL YEAR COVERED)        COMPANY (MDD)   S&P 500 (S&P)    INDEX (LRI)
                                                                         
     3/31/91                      100             100             100    
     3/31/92                      163             111             187    
     3/31/93                      235             128             208    
     3/31/94                      251             130             228    
     3/31/95                      241             150             249    
     3/31/96                      324             198             341    

ADOPTION OF 1995 STOCK OPTION PLAN FOR NON-OFFICER DIRECTORS

BACKGROUND                                                                      

The stockholders will be asked at the meeting to vote on a proposal to
approve and adopt the McDonald & Company Investments, Inc. 1995 Stock Option    
Plan for Non-Officer Directors (the "1995 Directors Plan" or "Plan").           

The Company's Board of Directors adopted the 1995 Directors Plan on   
November 1, 1995, subject to stockholder approval. The purpose of the Plan is to
provide the Company's current non-officer Directors with additional incentives  
to continue in the service of the Company and to assist in attracting and       
retaining qualified Directors.                                                  

The Company currently maintains the 1990 Stock Option Plan for Outside
Directors (the "1990 Directors Plan"), which provides for each outside Director 
to receive a one-time award of options to purchase 4,000 shares of the Company's
Common Stock at the time such Director joins the Board. After adjustment for a  
20% share dividend declared by the Company in                                   

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July 1993, Messrs. Karman and Nance and Ms. Blumberg have options to purchase an
aggregate of 14,400 shares of Common Stock under the 1990 Directors Plan. All   
options awarded under the 1990 Directors Plan were awarded at exercise prices   
equal to the fair market value of a share of Common Stock on the date of grant, 
have a term of 10 years, and vest in equal increments over a five year period   
beginning on the first anniversary of the date of grant.                        

 The 1995 Directors Plan is intended to replace the 1990 Directors Plan.
While each Director who was awarded options under the 1990 Outside Directors    
Plan will continue to have the right to exercise such options in accordance with
the terms thereof, if the Plan is approved by stockholders, no new awards under 
the 1990 Directors Plan will be made.                                           

     The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock entitled to vote, present in person or by proxy at the meeting, 
is required for the adoption of the 1995 Directors Plan. Broker non-votes,      
however, are not counted as present and entitled to vote for determining whether
this proposal has been approved and have no effect on its outcome.              

THE BOARD RECOMMENDS A VOTE FOR THE ADOPTION OF THE MCDONALD & COMPANY
INVESTMENTS, INC. 1995 STOCK OPTION PLAN FOR NON-OFFICER DIRECTORS.             

   The following is a summary of the material features of the 1995 Directors
Plan and is qualified in its entirety by reference to it. A copy of the 1995    
Directors Plan is attached hereto as Appendix A.                                

GENERAL                                                                         

    The 1995 Directors Plan provides for the issuance of options to purchase a
maximum of an aggregate of 50,000 shares of the Company's Common Stock to       
Directors of the Company who are not officers of the Company or any subsidiary  
(the "Non-Officer Directors"). There are presently five eligible Non-Officer    
Directors, Rena J. Blumberg, Jeanette Grasselli Brown, Edward Fruchtenbaum,     
James A. Karman and Frederick R. Nance. The 1995 Directors Plan will terminate  
on November 1, 2005, unless earlier terminated by resolution of the Board of    
Directors.                                                                      

GRANTS OF OPTIONS                                                               

     If the Plan is approved by the stockholders, each Non-Officer Director will
automatically be granted a non-qualified stock option to purchase 1,000 shares  
of Common Stock on the first business day of the Company's fiscal year, in      
addition to grants already made to the Non-Officer Directors. Upon the          
appointment of a Non-Officer to the Board of Directors, such individual will    
receive an option to purchase 1,000 shares of Common Stock. The exercise price  
of all such options will be the closing price of the Common Stock on the New    
York Stock Exchange on the date of grant.                                       

     Options to purchase an aggregate of 10,000 shares of Common Stock have been
granted to the Non-Officer Directors, subject to stockholder approval of the    
Plan. Each of Messrs. Karman and Nance and Ms. Blumberg have been granted an    
option to purchase 1,000 shares of Common Stock as of November 1, 1995, the date
of adoption of the Plan by the Board of Directors. Mr. Fruchtenbaum was granted 
an option to purchase 1,000 shares of Common Stock as of November 25, 1995, the 
effective date of Mr. Fruchtenbaum's appointment to the Board of Directors of   
the Company. Ms. Brown was granted an option to purchase 1,000 shares of Common 
Stock as of January 31, 1996, the effective date of Ms. Brown's appointment to  
the Board of Directors of the Company. In accordance with the terms of the Plan,
Messrs. Karman, Nance and Fruchtenbaum and Ms. Blumberg and Ms. Brown were each 
granted an option to purchase 1,000 shares of Common Stock as of April 1, 1996, 
the first business day of the 1997 fiscal year. All such options were granted at
the closing price of the Common Stock on the New York Stock Exchange on the date
of grant and are subject to approval of the Plan by the stockholders of the     
Company.                                                                        

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    The table below sets forth the option grants which have been awarded under
the 1995 Directors Plan, subject to stockholder approval.                       

NEW PLAN BENEFITS 

1995 STOCK OPTION PLAN FOR NON-OFFICER DIRECTORS

                                                                [Download Table]

                                                              NUMBER OF SHARES 
                      NAME OR POSITION                       UNDERLYING OPTIONS
-------------------------------------------------------------------------------
                                                                               
William B. Summers, Jr.                                                 0      
David W. Knall                                                          0      
David W. Ellis III, C.P.A.                                              0      
Robert T. Clutterbuck                                                   0      
Daniel F. Austin                                                        0      
All executive officers (20 persons)                                     0      
Non-officer Directors (5 persons)                                  10,000      
Non executive officer employees (1,162 persons)                         0      

EXERCISE OF OPTIONS                                                             

    Each option granted under the 1995 Directors Plan will expire on the tenth
anniversary of the date the option was granted. Each option granted under the   
Plan will become fully vested and exercisable on the first anniversary of the   
date of grant. In the event of a Change in Control, as defined in the 1995      
Non-Officer Directors Plan, a Non-Officer Director may exercise his or her      
option with respect to all shares of Common Stock which are covered by the      
option, notwithstanding vesting requirements. In the event of a Non-Officer     
Director's death, only the Non-Officer Director's Personal Representative may   
exercise vested options. Upon satisfaction of all conditions, the option may be 
exercised in whole or in part at any time until expiration of the right to      
exercise the option, but this right of exercise is limited to whole shares.     
Options may be exercised by the Non-Officer Director giving written notice to   
the Company of the exercise of the option accompanied by full payment of the    
purchase price either in cash or in other consideration (including shares of    
Common Stock) having a fair market value, as defined in the 1995 Non-Officer    
Directors Plan, on the date the option is exercised equal to that portion of the
purchase price for which payment in cash is not made.                           

SECURITIES SUBJECT TO THE 1995 NON-OFFICER DIRECTORS PLAN                       

  Not more than 50,000 shares of Common Stock of the Company may be issued
pursuant to the 1995 Non-Officer Directors Plan in the aggregate, except that in
the event of stock splits, stock dividends, combinations, exchanges of shares or
similar capital adjustments, an appropriate adjustment in the stock subject to  
the 1995 Non-Officer Directors Plan will be made. If any option expires without 
having been fully exercised, the shares with respect to which such option has   
not been exercised will not be available for further options.                   

TERMINATION OF DIRECTORSHIP                                                     

     If a Non-Officer Director ceases to be a Director of the Company because of
death or disability, the option may be exercised until the earlier to occur of  
either (i) three months after the Non-Officer Director's termination of         
directorship or (ii) the expiration of the option, but only to the extent the   
option was exercisable at the date of the Non-Officer Director's termination of 
directorship. If any option is exercisable following the Non-Officer Director's 
death, then that option may be exercisable by the Non-Officer Director's estate,
or the person designated in the Non-Officer Director's Last Will and Testament, 
or the person to whom the option was transferred by the applicable laws of      
descent and distribution.                                                       

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INCOME TAX TREATMENT                                                            

   The Company has been advised that under current law certain of the income
tax consequences under the laws of the United States to Non-Officer Directors   
and the Company of options granted under the 1995 Non-Officer Directors Plan    
generally should be as set forth in the following summary. The summary only     
addresses income tax consequences for Non-Officer Directors and the Company.    

The options granted under the 1995 Non-Officer Directors Plan will be 
non-qualified options for federal income tax purposes. A Non-Officer Director to
whom an option is granted will not recognize income at the time of grant of such
option. When such Non-Officer Director exercises such non-qualified option, the 
Non-Officer Director will recognize ordinary compensation income equal to the   
difference, if any, between the option price paid and the fair market value, as 
of the date of option exercise, of the shares the Non-Officer Director receives.
The tax basis of such shares to such Non-Officer Director will be equal to the  
option price paid, and the Non-Officer Director's holding period for such shares
will commence on the day on which the Non-Officer Director recognized taxable   
income in respect of such shares. Subject to applicable provisions of the       
Internal Revenue Code and regulations thereunder, the Company generally will be 
entitled to a federal income tax deduction in respect of non-qualified options  
in an amount equal to the ordinary compensation income recognized by the        
Non-Officer Director.                                                           

   The discussion set forth above does not purport to be a complete analysis
of all potential tax consequences relevant to recipients of options or the      
Company or to describe tax consequences based on particular circumstances. It is
based on United States federal income tax law and interpretational authorities  
as of the date of this Proxy Statement, which are subject to change at anytime. 
The discussion does not address state or local income tax consequences or income
tax consequences for taxpayers who are not subject to taxation in the United    
States.                                                                         

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OTHER MATTERS 

     The Board of Directors is not aware of any matter to come before the Annual
Meeting other than those set forth in the Notice of Annual Meeting of           
Stockholders. If other matters, however, properly come before the Annual        
Meeting, it is the intention of the persons named in the accompanying Proxy to  
vote in accordance with their best judgment on such matters insofar as the      
Proxies are not limited to the contrary.                                        

A representative of the firm of Ernst & Young LLP, the Company's      
independent auditors, will be present at the Annual Meeting and will have an    
opportunity to make a statement if so desired and to respond to appropriate     
questions from stockholders.                                                    

    Any stockholder who wishes to submit a proposal for inclusion in the proxy
materials to be distributed by the Company in connection with its Annual Meeting
of Stockholders to be held in 1997 must do so no later than February 27, 1997.  
To be eligible for inclusion in the 1997 proxy materials of the Company,        
proposals must conform to the requirements set forth in Regulation 14A under the
Exchange Act.                                                                   

 Upon the receipt of a written request from any stockholder, the Company
will mail, at no charge to the stockholder, a copy of the Company's Annual      
Report on Form 10-K, including the financial statements and schedules required  
to be filed with the Securities and Exchange Commission pursuant to Rule 13a-1  
under the Exchange Act, for the Company's most recent fiscal year. Written      
requests for such Report should be directed to:                                 

Mr. Robert T. Clutterbuck   
Treasurer                   
        McDonald & Company Investments, Inc.
McDonald Investment Center  
800 Superior Avenue         
Cleveland, Ohio 44114       

     You are urged to sign and return your Proxy promptly in the enclosed return
envelope to make certain your shares will be voted at the Annual Meeting.       

                                          By order of the Board of Directors

                       THOMAS F. MCKEE
                 Secretary
June 27, 1996                                                                   

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                                                                      APPENDIX A

1995 STOCK OPTION PLAN FOR NON-OFFICER DIRECTORS

McDonald & Company Investments, Inc., hereinafter referred to as the  
"Company," hereby adopts a stock option plan for eligible Directors of the      
Company (hereinafter referred to sometimes as "Optionees") pursuant to the      
following terms and provisions:                                                 

   1. PURPOSE OF THE PLAN. The purpose of this plan, hereinafter referred to
as the "Plan," is to provide additional incentive to those Directors of the     
Company who are not officers of the Company or any of its subsidiaries or       
affiliates by encouraging them to acquire a new or an additional share ownership
in the Company, thus increasing their proprietary interest in the Company's     
business and providing them with an increased personal interest in the Company's
continued success and progress. These objectives will be promoted through the   
grant of options to acquire Common Stock, par value $1.00 per share (the "Common
Stock"), of the Company pursuant to the terms of the Plan. Only those Directors 
who meet the qualifications stated above are eligible for and shall receive     
options under this Plan.                                                        

 2. EFFECTIVE DATE OF THE PLAN. The Plan shall become effective upon the
date the Plan is adopted by the Board of Directors, subject to the approval of  
the Plan by holders of a majority of the outstanding shares of voting capital   
stock of the Company present and entitled to vote thereon at a meeting or       
otherwise. If the Company's stockholders have not approved the Plan within      
twelve (12) months after the date the Plan is adopted by the Board of Directors,
the Plan and the options granted hereunder shall be null and void.              

     3. SHARES SUBJECT TO THE PLAN. The shares to be issued upon the exercise of
the options granted under the Plan shall be shares of Common Stock of the       
Company. Either treasury or authorized and unissued shares of Common Stock, or  
both, as the Board of Directors shall from time to time determine, may be so    
issued. No shares of Common Stock which are subject of any lapsed, expired or   
terminated options may be made available for reoffering under the Plan. If an   
option granted under this Plan is exercised pursuant to the terms and conditions
of subsection 5(b), any shares of Common Stock which are the subject thereof    
shall not thereafter be available for reoffering under the Plan.                

    Subject to the provisions of the next succeeding paragraph of this Section
3, the aggregate number of shares of Common Stock for which options may be      
granted under the Plan shall be Fifty Thousand (50,000) shares of Common Stock. 

    In the event that subsequent to the date of effectiveness of the Plan, the
Common Stock should, as a result of a stock split, stock dividend, combination  
or exchange of shares, exchange for other securities, reclassification,         
reorganization, redesignation, merger, consolidation, recapitalization or other 
such change, be increased or decreased or changed into or exchanged for a       
different number or kind of shares of stock or other securities of the Company  
or of another corporation, then (i) there shall automatically be substituted for
each share of Common Stock subject to an unexercised option (in whole or in     
part) granted under the Plan, each share of Common Stock available for          
additional grants of options under the Plan and each share of Common Stock made 
available for grant to each eligible Director pursuant to Section 4 hereof, the 
number and kind of shares of stock or other securities into which each          
outstanding share of Common Stock shall be changed or for which each such share 
of Common Stock shall be exchanged, (ii) the option price per share of Common   
Stock or unit of securities shall be increased or decreased proportionately so  
that the aggregate purchase price for the securities subject to the option shall
remain the same as immediately prior to such event and (iii) the Board shall    
make such other adjustments as may be appropriate and equitable to prevent      
enlargement or dilution of option rights. Any such adjustment may provide for   
the elimination of fractional shares.                                           

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4. GRANT OF OPTIONS.                                                  

   (a) Automatic Grants. Subject to the terms of the Plan (including without
limitation the receipt of shareholder approval contemplated by Section 2        
hereof), each eligible Director shall be granted a non-qualified stock option   
for 1,000 shares of Common Stock on the later of (1) the date of the Plan's     
adoption by the Board of Directors or (2) the effective date of such Director's 
initial election as a member of the Board of Directors. In addition, subject to 
the terms of the Plan, each Director shall be granted a non-qualified stock     
option for 1,000 shares of Common Stock on the first day of each fiscal year of 
the Company commencing with the fiscal year beginning in 1996. Such grant shall 
occur automatically without any further action by the Board of Directors.       

(b) Option Price. The price at which each share of Common Stock may be
purchased pursuant to an option granted under the Plan shall be equal to the    
"fair market value" (as determined pursuant to Section 7) for each such share as
of the date on which the option is granted (the "Date of Grant"), but in no     
event shall such price be less than the par value of such shares of Common      
Stock. Anything contained in this subsection (b) to the contrary                
notwithstanding, in the event that the number of shares of Common Stock subject 
to any option is adjusted pursuant to Section 3, a corresponding adjustment     
shall be made in the price at which the shares of Common Stock subject to such  
option may thereafter be purchased.                                             

  (c) Duration of Options. Each option granted under the Plan shall expire
and all rights to purchase shares of Common Stock pursuant thereto shall cease  
on the date (the "Expiration Date") which shall be the tenth anniversary of the 
Date of Grant of such option.                                                   

 (d) Vesting of Options. Each option granted under the Plan shall become
fully vested and exercisable on the first anniversary of the Date of Grant.     

5. OPTION PROVISIONS.                                                 

  (a) Limitation on Exercise and Transfer of Options. Only the Director to
whom the option is granted may exercise the same except where a guardian or     
other legal representative has been duly appointed for such Director and except 
as otherwise provided in the case of such Director's death. No option granted   
hereunder shall be transferable otherwise than by the Last Will and Testament of
the Director to whom it is granted or, if the Director dies intestate, by the   
applicable laws of descent and distribution. No option granted hereunder may be 
pledged or hypothecated, nor shall any such option be subject to execution,     
attachment or similar process.                                                  

   (b) Exercise of Option. Each option granted hereunder may be exercised in
whole or in part (to the maximum extent then exercisable) from time to time     
during the option period, but this right of exercise shall be limited to whole  
shares. Options shall be exercised by the Optionee (i) giving written notice to 
the Secretary of the Company at its principal business office, by certified     
mail, return receipt requested, of intention to exercise the same and the number
of shares with respect to which the Option is being exercised (the "Notice of   
Exercise of Option") accompanied by full payment of the purchase price in cash  
or, with the consent of the Board, in whole or in part in shares of Common Stock
having a fair market value on the date the option is exercised equal to that    
portion of the purchase price for which payment in cash is not made and (ii)    
making appropriate arrangements with the Company with respect to income tax     
withholding, as required, which arrangements may include, in lieu of other      
withholding arrangements, (a) the Company withholding from issuance to the      
Optionee such number of shares of Common Stock otherwise issuable upon exercise 
of the option as the Company and the Optionee may agree; provided that such     
Optionee has had on file with the Board of Directors, for at least six (6)      
months prior thereto, an effective standing election to satisfy said Optionee's 
tax withholding obligations in such a fashion, which election form by its terms 
shall not be revocable or amendable for at least six (6) months or (b) with the 
consent of the Board of Directors, the Optionee's delivery to the Company of all
of Common Stock having a fair market value on the date the option is exercised  
equal to that portion of the withholding obligation for which                   

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payment in cash is not made. Such Notice of Exercise of Option shall be deemed  
delivered upon deposit into the mails.                                          

     (c) Termination of Directorship. If the Optionee ceases to be a Director of
the Company, his or her option shall terminate three (3) months after the       
effective date of termination of his or her directorship and neither he or she  
nor any other person shall have any right after such date to exercise all or any
part of such option. If the termination of the directorship is due to death,    
then the option may be exercised within three (3) months after the Optionee's   
death by the Optionee's estate or by the person designated in the Optionee's    
Last Will and Testament or to whom transferred by the applicable laws of descent
and distribution (the "Personal Representative"). Notwithstanding the foregoing,
in no event shall any option be exercisable after the expiration of the option  
period and not to any greater extent than the Optionee would have been entitled 
to exercise the option at the time of death.                                    

    (d) Acceleration of Exercise of Options in Certain Events. Notwithstanding
anything in the foregoing to the contrary, in the event of a "change in control"
the eligible Director shall have the immediate right and option (notwithstanding
the provisions of Section 4) to exercise the option with respect to all shares  
of Common Stock covered by the option, which exercise, if made, shall be        
irrevocable. The term "change in control" shall include, but not be limited to: 
(i) the first purchase of shares pursuant to a tender offer or exchange (other  
than a tender offer or exchange by the Company) for all or part of the Company's
shares of any class of common stock or any securities convertible into such     
common stock; (ii) the receipt by the Company of a Schedule 13D or other advice 
indicating that a person is the "beneficial owner" (as that term is defined in  
Rule 13d-3 under the Securities Exchange Act of 1934) of twenty percent (20%) or
more of the Company's shares of capital stock calculated as provided in         
paragraph (d) of said Rule 13d-3; (iii) the date of approval by stockholders of 
the Company of an agreement providing for any consolidation or merger of the    
Company in which the Company will not be the continuing or surviving corporation
or pursuant to which shares of capital stock, of any class or any securities    
convertible into such capital stock, of the Company would be converted into     
cash, securities, or other property, other than a merger of the Company in which
the holders of shares of all classes of the Company's capital stock immediately 
prior to the merger would have the same proportion of ownership of common stock 
of the surviving corporation immediately after the merger; (iv) the date of the 
approval by stockholders of the Company of any sale, lease, exchange, or other  
transfer (in one transaction or a series of related transactions) of all or     
substantially all the assets of the Company; or (v) the adoption of any plan or 
proposal for the liquidation (but not a partial liquidation) or dissolution of  
the Company.                                                                    

   (e) Option Agreements. Options granted under the Plan shall be subject to
the further terms and provisions of an Option Agreement, a copy of which is     
attached hereto as Exhibit A, the execution of which by each Optionee shall be a
condition to the receipt of an option.                                          

6. INVESTMENT REPRESENTATION; APPROVALS AND LISTING. The options to be
granted hereunder shall be further conditioned upon receipt of the following    
investment representation from the Optionee:                                    

"I further agree that any shares of Common Stock of McDonald & Company
 Investments, Inc. which I may acquire by virtue of this option shall be
   acquired for investment purposes only and not with a view to distribution
or resale; provided, however, that this restriction shall become      
  inoperative in the event the said shares of Common Stock subject to this
     option shall be registered under the Securities Act of 1933, as amended, or
  in the event McDonald & Company Investments, Inc. is otherwise satisfied
     that the offer or sale of the shares of Common Stock subject to this option
may be lawfully made without registration of the said shares of Common
Stock under the Securities Act of 1933, as amended."                  

The Company shall not be required to issue any certificate or certificates for  
shares of Common Stock upon the exercise of an option granted under the Plan    
prior to (i) the obtaining of any                                               

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approval from any governmental agency which the Company shall, in its sole      
discretion, determine to be necessary or advisable, (ii) the admission of such  
shares of Common Stock to listing on any national securities exchange on which  
the Common Stock may be listed, (iii) the completion of any registration or     
other qualification of the shares of Common Stock under any state or federal law
or ruling or regulations of any governmental body which the Company shall, in   
its sole discretion, determine to be necessary or advisable or the determination
by the Company, in its sole discretion, that any registration or other          
qualification of the shares of Common Stock is not necessary or advisable and   
(iv) the obtaining of an investment representation from the Optionee in the form
stated above or in such other form as the Company, in its sole discretion, shall
determine to be adequate.                                                       

    7. GENERAL PROVISIONS. For all purposes of this Plan the fair market value
of a share of Common Stock shall be determined as follows: so long as the Common
Stock of the Company is listed upon an established stock exchange or exchanges  
such fair market value shall be determined to be the highest closing price of a 
share of such Common Stock on such stock exchange or exchanges on the day the   
option is granted (or the date the shares of Common Stock are tendered as       
payment, in the case of determining fair market value for that purpose) or if no
sale of such Common Stock shall have been made on any stock exchange on that    
day, then on the closest preceding day on which there was a sale of such Common 
Stock; and during any period of time as such Common Stock is not listed upon an 
established stock exchange the fair market value per share shall be the mean    
between dealer "Bid" and "Ask" prices of such Common Stock in the               
over-the-counter market on the day the option is granted (or the day the shares 
of Common Stock are tendered as payment, in the case of determining fair market 
value for that purpose), as reported by the National Association of Securities  
Dealers, Inc.                                                                   

    The liability of the Company under the Plan and any distribution of Common
Stock made hereunder is limited to the obligations set forth herein with respect
to such distribution and no term or provision of the Plan shall be construed to 
impose any liability on the Company in favor of any person with respect to any  
loss, cost or expense which the person may incur in connection with or arising  
out of any transaction in connection with the Plan, including, but not limited  
to, any liability to any federal, state, or local tax authority and/or any      
securities regulatory authority.                                                

Nothing in the Plan or in any option agreement shall confer upon any  
Optionee any right to continue as a Director of the Company, or to be entitled  
to any remuneration or benefits not set forth in the Plan or such option.       

     Nothing contained in the Plan or in any option agreement shall be construed
as entitling any Optionee to any rights of a stockholder as a result of the     
grant of an option until such time as shares of Common Stock are actually issued
to such Optionee pursuant to the exercise of an option.                         

The Plan may be assumed by the successors and assigns of the Company. 

  The Plan shall not be amended more than once every six (6) months, other
than to comport with changes in the Internal Revenue Code, the Employee         
Retirement Income Security Act, or the rules thereunder.                        

     The cash proceeds received by the Company from the issuance of Common Stock
pursuant to the Plan will be used for general corporate purposes or in such     
other manner as the Board of Directors deems appropriate.                       

The expense of administering the Plan shall be borne by the Company.  

     The captions and section numbers appearing in the Plan are inserted only as
a matter of convenience. They do not define, limit, construe or describe the    
scope or intent of the provisions of the Plan.                                  

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  8. TERMINATION OF THE PLAN. The Plan shall terminate ten (10) years from
the date of its adoption by the Board of Directors of the Company and thereafter
no options shall be granted hereunder. All options outstanding at the time of   
termination of the Plan shall continue in full force and effect in accordance   
with and subject to their terms and the terms and conditions of the Plan.       

     9. TAXES. Appropriate provisions shall be made for all taxes required to be
withheld and/or paid in connection with the options or the exercise thereof, and
the transfer of shares of Common Stock pursuant thereto, under the applicable   
laws or other regulations of any governmental authority, whether federal, state,
or local and whether domestic or foreign.                                       

10. GOVERNING LAW. The Plan shall be governed by and construed in     
accordance with the laws of the State of Delaware and any applicable federal    
law.                                                                            

     11. VENUE. The venue of any claim brought hereunder by an eligible Director
shall be Cleveland, Ohio.                                                       

  12. CHANGES IN GOVERNING RULES AND REGULATIONS. All references herein to
the Internal Revenue Code, or sections thereof, or to rules and regulations of  
the Department of Treasury or of the Securities and Exchange Commission, shall  
mean and include the Code sections thereof and such rules and regulations as are
now in effect or as they may be subsequently amended, modified, substituted or  
superseded.                                                                     

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MCDONALD & COMPANY INVESTMENTS, INC.
PROXY 
ANNUAL MEETING OF STOCKHOLDERS -- AUGUST 7, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS 

    The undersigned hereby (i) appoints THOMAS M. O'DONNELL, WILLIAM B. SUMMERS,
JR. and THOMAS F. MCKEE, and each of them, as Proxy holders and attorneys, with 
full power of substitution, to appear and vote all of the shares of Common Stock
of McDonald & Company Investments, Inc. which the undersigned shall be entitled 
to vote at the Annual Meeting of Stockholders of the Company, to be held at The 
National City Bank Auditorium, Fourth Floor, Annex Building, 1900 East Ninth    
Street, Cleveland, Ohio, on Wednesday, August 7, 1996, at 9:30 A.M. (EDT), and  
at any adjournments thereof, hereby revoking any and all proxies heretofore     
given, and (ii) authorizes and directs said Proxy holders to vote all of the    
shares of Common Stock of the Company represented by this Proxy as follows, WITH
THE UNDERSTANDING THAT IF NO DIRECTIONS ARE GIVEN BELOW, SAID SHARES WILL BE    
VOTED "FOR" THE ELECTION OF THE THREE DIRECTORS NOMINATED BY THE BOARD OF       
DIRECTORS AND "FOR" THE PROPOSAL TO APROVE AND ADOPT THE COMPANY'S 1995 STOCK   
OPTION PLAN FOR NON-OFFICER DIRECTORS.                                          

(1) ELECTION OF DIRECTORS                                               

                                                                [Download Table]
                                                                             
/ / FOR all nominees listed                 / / WITHHOLD AUTHORITY           
  (except as marked to the contrary below)    to vote for all nominees listed

JAMES A. KARMAN, RENA J. BLUMBERG and ROBERT T. CLUTTERBUCK 

(INSTRUCTION: To withhold authority to vote for any individual nominee, 
    write that nominee's name on the following line)
     ---------------------------------------------------------------------------
                                      (Continued and to be signed on other side)

PROXY NO.                                                                 SHARES
(Proxy -- continued from other side)

  (2) PROPOSAL to approve and adopt the Company's 1995 Stock Option Plan for
Non-Officer Directors.                                          

/ /  FOR the Proposal  / /  AGAINST the Proposal  / /  ABSTAIN

(3) In their discretion to act on any other matter or matters which may 
properly come before the Annual Meeting.                        

                                                    Please date, sign and return
                                                    promptly in the accompanying
                                 envelope.

                                                    Dated:............... , 1996

                                                    ............................

                                                    Your signature to this Proxy
                                                  form should be exactly the
                                                  same as the name imprinted
                                                  hereon. Persons signing as
                                                  executors, administrators,
                                              trustees or in similar
                                            capacities should so
                                           indicate. For joint
                                                  accounts, the name of each
                                                   joint owner must be signed.

THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR THE NOMINEES AND THE PROPOSAL
LISTED ABOVE

Dates Referenced Herein   and   Documents Incorporated by Reference

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