<PAGE> 1
SCHEDULE 14A INFORMATION
(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
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
STIFEL FINANCIAL CORP.
- - --------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- - --------------------------------------------------------------------
(Name of Person Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
1) Title of each class of securities to which transaction applies:
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:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE> 2
STIFEL FINANCIAL CORP.
500 NORTH BROADWAY
St. LOUIS, MISSOURI 63102-2188
(314) 342-2000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD TUESDAY, APRIL 22, 1997
To the Holders of the Common Stock of
Stifel Financial Corp.
The Annual Meeting of Stockholders of Stifel Financial Corp., a Delaware
corporation (the "Company"), will be held in the Crystal Room, 3rd Floor,
Missouri Athletic Club, 405 Washington Avenue, St. Louis, Missouri, on Tuesday,
April 22, 1997 at 10:00 a.m., for the following purposes:
1. To elect three (3) Class II directors to hold office for a term
of three years or until their successors shall have been duly
elected and qualified;
2. To elect one (1) Class I director to hold office for a term of
two years or until his successor shall have been duly elected and
qualified;
3. To consider and act upon a proposal to adopt the Stifel Financial
Corp. 1997 Incentive Stock Plan;
4. To consider and act upon a proposal to adopt the Stifel Financial
Corp. 1998 Employee Stock Purchase Plan;
5. To ratify the appointment of Deloitte & Touche LLP as independent
auditors for the year ending December 31, 1997; and
6. To consider and act upon such other business as may properly come
before the meeting and any adjournment thereof.
The Company's Board of Directors has fixed the close of business on March
11, 1997 as the record date for the determination of stockholders entitled to
receive notice of and to vote at the meeting and any adjournment thereof.
By Order of the Board of Directors.
Charles R. Hartman, Secretary
March 21, 1997
St. Louis, Missouri
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN
THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER TO
ASSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF MAILED IN
THE UNITED STATES.
<PAGE> 3
STIFEL FINANCIAL CORP.
500 NORTH BROADWAY
St. LOUIS, MISSOURI 63102-2188
(314) 342-2000
PROXY STATEMENT
For Annual Meeting of Stockholders to be
Held on Tuesday, April 22, 1997
Approximate Date of Mailing: March 21, 1997
GENERAL
This Proxy Statement is furnished in connection with
the solicitation of proxies by the Board of Directors of Stifel
Financial Corp., a Delaware corporation (the "Company"), for use
at the Annual Meeting of Stockholders to be held on Tuesday,
April 22, 1997 at 10:00 a.m. in the Crystal Room, 3rd Floor,
Missouri Athletic Club, 405 Washington Avenue, St. Louis,
Missouri, and any adjournment thereof, for the purposes set forth
in the accompanying Notice of Annual Meeting of Stockholders.
All proxies will be voted in accordance with the
instructions contained in the proxy. If no choice is specified,
proxies will be voted in favor of the election of the nominees
for director proposed by the Board of Directors in Proposals I
and II, in favor of the adoption of the Stifel Financial Corp.
1997 Incentive Stock Plan (the "1997 Incentive Plan") in Proposal
III, in favor of the adoption of the Stifel Financial Corp. 1998
Employee Stock Purchase Plan (the "Stock Purchase Plan") in
Proposal IV and in favor of the ratification of the appointment
of Deloitte & Touche LLP as the Company's independent auditors
for the year ending December 31, 1997, as recommended by the
Board of Directors. A stockholder who executes a proxy may
revoke it at any time before it is exercised by delivering to the
Company another proxy bearing a later date, by submitting written
notice of such revocation to the Secretary of the Company or by
personally appearing at the Annual Meeting and casting a contrary
vote.
<PAGE> 4
A plurality of the votes cast is required for the
election of directors. Under the General Corporation Law of the
State of Delaware, an abstaining vote is not deemed to be a "vote
cast." As a result, abstentions and broker "non-votes" are not
included in the tabulation of the voting results on the election
of directors and, therefore, do not have the effect of votes in
opposition. The adoption of the 1997 Incentive Plan, the
adoption of the Stock Purchase Plan and the ratification of the
appointment of Deloitte & Touche LLP as the Company's independent
auditors each requires the affirmative vote of a majority of the
votes cast on such proposal at the meeting; provided that in the
case of the adoption of the 1997 Incentive Plan and the Stock
Purchase Plan, the number of votes cast constitutes more than 50%
of the shares entitled to vote on the proposals. Abstentions on
such matter will be counted, but broker "non-votes" will not be
counted, for the purpose of determining the number of shares
represented at the meeting for purposes of determining whether a
quorum of shares is present at the meeting. Neither abstentions
nor broker "non-votes" shall be deemed to be a vote cast in
determining whether the 50% or more requirement is met for
purposes of the adoption of the 1997 Incentive Plan and the Stock
Purchase Plan. A broker "non-vote" occurs when a nominee holding
shares for a beneficial owner does not vote a particular proposal
because the nominee does not have discretionary voting power with
respect to that item and has not received instructions from the
beneficial owner.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The close of business on March 11, 1997 has been fixed
as the record date for the determination of stockholders entitled
to notice of and to vote at the Annual Meeting. Each outstanding
share of the Company's common stock, $0.15 par value ("Common
Stock"), is entitled to one vote. On March 11, 1997, there were
outstanding and entitled to vote 4,725,747 shares of Common
Stock.
<PAGE> 5
Ownership of Directors, Nominees and Executive Officers
The following table sets forth information regarding
the amount of Common Stock beneficially owned, as of March 11,
1997, by each director of the Company, each nominee for election
as a director of the Company, the executive officers named in the
Summary Compensation Table and all directors and executive
officers of the Company as a group:
Name Beneficially Owned (1) Class (1)
- - ---------------------------------- ---------------------- ---------
George H. Walker III.............. 448,177(2)(3) 9.39%
Gregory F. Taylor................. 100,224(2)(4) 2.11%
Michael A. Murphy................. 21,043(2) (5)
Charles R. Hartman................ 20,749(2)(6) (5)
John J. Goebel.................... 17,866(2) (5)
Lawrence E. Somraty............... 16,902(2) (5)
James M. Oates.................... 8,001 (5)
Belle A. Cori..................... 7,655(2) (5)
Richard F. Ford................... 7,655(2) (5)
Robert E. Lefton.................. 7,325(2) (5)
Charles A. Dill................... 6,512(2) (5)
Bruce A. Beda..................... 1,050 (5)
Stuart I. Greenbaum............... -- --
Directors and Executive Officers
as a Group (15 persons).......... 672,554(1)(2) 13.84%
- - ----------------
(1) Shares subject to options exercisable currently or within 60
days after March 11, 1997 were deemed to be outstanding for
purposes of calculating the percentage of outstanding shares
for each person holding such options but were not deemed to
be outstanding for the purpose of calculating the percentage
of outstanding shares for any other person. All shares
subject to options held by directors and executive officers
that were exercisable currently or within 60 days after March
11, 1997 were deemed to be outstanding for purposes of calcu-
lating the percentage of outstanding shares for all directors
and executive officers as a group.
(2) Includes the following shares which such persons and group
have the right to acquire within the 60 days after March 11,
1997 upon the exercise of stock options: Mr. Walker - 49,402;
Mr. Taylor - 29,619; Mr. Murphy - 5,209; Mr. Hartman - 8,682;
Mr. Goebel - 6,380; Mr. Somraty - 6,290; Ms. Cori - 6,380;
Mr. Ford - 6,380; Mr. Lefton - 6,077; Mr. Dill - 5,512; and
directors and executive officers as a group - 133,935. Also
includes the following shares allocated to such persons and
group under the Stifel, Nicolaus Stock Ownership Plan and
Trust: Mr. Walker - 5,089; Mr. Taylor - 809; Mr. Murphy -
594; Mr. Hartman - 147; Mr. Somraty - 4,088; and directors
and executive officers as a group - 14,175.
(3) Includes 10,210 shares held by the George Herbert Walker
Foundation as to which Messrs. Walker and Goebel, as co-
trustees, share voting power.
<PAGE> 6
(4) Includes 1,531 shares owned separately by Mr. Taylor's wife
and children. Mr. Taylor disclaims beneficial ownership of
such shares.
(5) Shares beneficially owned do not exceed one percent of the
outstanding shares of Common Stock.
(6) Includes 2,205 shares owned by Mr. Hartman's wife. Mr.
Hartman disclaims beneficial ownership of such shares.
Ownership of Certain Beneficial Owners
On March 11, 1997, the following persons were the only
persons known to the Company to be beneficial owners of more than
five percent of Common Stock:
Shares Beneficially Owned
Name and Address As of March 11, 1997 Percent
AEGON USA, Inc. 1,417,716 (1) 23.08%
4333 Edgewood Road N.E.
Cedar Rapids, Iowa 52499
Del Mintz 656,775 (2) 13.90%
22732 Rye Road
Shaker Heights, Ohio 44122
Heartland Advisors, Inc. 556,792 (3) 11.78%
790 North Milwaukee Street
Milwaukee, Wisconsin 53202
George H. Walker III 448,177 (4) 9.39%
500 North Broadway
St. Louis, Missouri 63102
John Latshaw 350,852 (5) 7.42%
3 Dunford Circle
Kansas City, Missouri 64113
Stifel, Nicolaus Stock Ownership
Plan and Trust 290,686 (6) 6.15%
500 North Broadway
St. Louis, Missouri 63102
- - ----------------
(1) Five subsidiaries of AEGON USA, Inc. are the holders of
$10,000,000 aggregate principal amount of the Company's
11.25% Senior Convertible Notes Due September 1, 2000 (the
"Notes"). The shares shown are the shares issuable upon
conversion of the Notes which are convertible into shares of
Common Stock at any time prior to maturity. The conversion
price is subject to adjustment in certain events and is
currently $7.05 per share. Such shares are not currently out-
standing but were deemed to be outstanding for purposes of
calculating the percentage of outstanding shares held by
AEGON USA, Inc.
<PAGE> 7
(2) The information shown is based on a Schedule 13D (Amendment
No. 2), dated September 17, 1996, of Mr. Mintz. The number of
shares reflected on the Schedule 13D has been adjusted to
reflect the stock dividend declared by the Company on January
21, 1997. The information in the Schedule 13D indicates that
Mr. Mintz has the sole power to vote and dispose of such
shares.
(3) The information shown is based on a Schedule 13G (Amendment
No. 3), dated February 12, 1997, of Heartland Advisors, Inc.
The number of shares reflected on the Schedule 13G as of
December 31, 1996, has been adjusted to reflect the five
percent stock dividend declared by the Company on January 21,
1997. This Schedule 13G indicates that Heartland Advisors,
Inc.is an investment adviser registered under Section 203 of
the Investment Advisers Act of 1940 and has the sole power to
vote or direct the vote of 386,404 of the shares, and has the
sole power to dispose of or to direct the disposition of all
of the shares.
(4) See notes 1, 2 and 3 to the preceding table.
(5) The information shown is based on a Schedule 13D (Amendment
No. 4), dated August 11, 1995, of Mr. Latshaw and Latshaw
Enterprises, Inc. ("Laten"), a Delaware corporation of which
Mr. Latshaw is Chairman of the Board, Managing Director and
Chief Executive Officer. The number of shares reflected on
the Schedule 13D has been adjusted to reflect the stock
dividends declared by the Company on January 23, 1996 and
January 21, 1997. Amendment No. 4 to the Schedule 13D
indicates Mr. Latshaw is the beneficial owner of 69.2% of
Laten's shares. The information in such Schedule 13D
indicates that Mr. Latshaw has the sole power to vote, or to
direct the vote, and the sole power to dispose of, or to
direct the disposition of, the shares owned by him, and
shares with Laten the power to vote, or to direct the vote,
and the power to dispose of, or direct the disposition of,
the shares owned by Laten.
(6) Pursuant to the Stifel, Nicolaus Stock Ownership Plan and
Trust (the "Stock Ownership Plan"), each participant in the
Stock Ownership Plan has the right to instruct the trustee of
the Stock Ownership Plan with respect to the voting of Common
Stock in such participant's account. The trustee is
authorized to vote any shares of Common Stock with respect to
which the trustee has not received timely directions as to
the voting thereof.
PROPOSALS I & II: ELECTION OF DIRECTORS
In accordance with the by-laws of the Company, the
Board of Directors has fixed the number of directors at ten,
divided into three classes, with the terms of office of each
class ending in successive years. The Board of Directors has
nominated Charles A. Dill, Richard F. Ford and John J. Goebel for
election as Class II directors to hold office until the 2000
Annual Meeting of Stockholders and Stuart I. Greenbaum for
election as a Class I director to hold office until the 1999
<PAGE> 8
Annual Meeting of Stockholders, or, in each case, until their
respective successors are elected and qualified in the class to
which such director is assigned, or until their earlier death,
resignation or removal. There is no cumulative voting in the
election of directors; therefore, proxies cannot be voted for
more than three nominees with respect to Proposal I and one
nominee with respect to Proposal II.
Shares represented by your proxy will be voted in
accordance with your direction as to the election as directors of
the persons listed below as nominees. In the absence of
direction, the shares represented by your proxy will be voted FOR
such election. The three nominees in Class II and the one
nominee in Class I receiving the highest number of votes cast at
the meeting will be elected as directors of the Company in their
respective classes and for the respective terms of such classes.
In the event any of the persons listed as nominees becomes
unavailable as a candidate for election, it is intended that the
shares represented by your proxy will be voted for the balance of
those named.
Certain information with respect to each of the
nominees and each of the continuing directors is set forth below,
including any positions they hold with the Company and its
principal subsidiary, Stifel, Nicolaus & Company, Incorporated
("Stifel, Nicolaus").
Served as
Positions or Offices Director
with the Company Continuously
Name Age and Stifel, Nicolaus Since
---- --- -------------------- ------------
CLASS II-NOMINEES FOR TERMS ENDING IN 2000
Charles A. Dill 57 None 1995
Richard F. Ford 60 None 1984
John J. Goebel 67 None 1987
CLASS III-DIRECTORS WITH TERMS ENDING IN 1998
Robert E. Lefton 65 None 1992
James M. Oates 50 None 1996
George H. Walker III 66 Chairman of the Board of the 1981
Company and Stifel, Nicolaus
CLASS I-DIRECTORS WITH AND NOMINEE FOR TERMS ENDING IN 1999
Bruce A. Beda 56 None 1997
Belle A. Cori 59 None 1990
Stuart I. Greenbaum 60 None NA
Gregory F. Taylor 47 President and Chief Executive 1988
Officer of the Company and
Stifel, Nicolaus
The following are brief summaries of the business
experience during the past five years of each of the nominees for
election as a director of the Company and the other directors
whose terms of office as directors will continue after the Annual
Meeting, including, where applicable, information as to the other
directorships held by each of them.
<PAGE> 9
Nominees
Class II:
Charles A. Dill has been a General Partner of Gateway
Venture Partners, since November 1995. From 1991 to 1995,
Mr. Dill was the President, Chief Executive Officer and a
director of Bridge Information Systems, Inc., a company providing
online information and trading services. Mr. Dill is a director
of Zoltek Companies, Inc., Transact Technologies and Pinnacle
Automation Inc.
Richard F. Ford is a Managing General Partner of the
management companies which act as a General Partner of Gateway
Mid-America Partners, L.P., Gateway Venture Partners II, L.P.,
Gateway Venture Partners III, L.P. and Gateway Partners, L.P.,
private venture capital funds formed in 1984, 1987, 1990 and
1994, respectively. Mr. Ford is a director of CompuCom Systems,
Inc. and D&K Wholesale Drug, Inc..
John J. Goebel has been a partner in the law firm of
Bryan Cave LLP since 1966 and has been associated with that firm
since 1957.
Class I:
Stuart I. Greenbaum has been the Dean of the John M.
Olin School of Business of Washington University since July 1995.
Prior thereto, Mr. Greenbaum was a Professor and Director of the
Banking Research Center at Northwestern University from 1976 to
1995.
The Board of Directors recommends a vote "FOR" the
election of each of the nominees for director of the Company.
Continuing Directors
Bruce A. Beda has been Chief Executive Officer of Orion
Partners LLC, an investor and consulting firm, since January
1995. Prior thereto, Mr. Beda was Chief Financial Officer of
Venturedyne Ltd., a manufacturing conglomerate from 1979 to 1995.
Mr. Beda is a director of Rexworks, Inc..
Belle A. Cori has been Chairman of Eau Claire Mattress
Manufacturing Corporation, a mattress manufacturer, since 1990
and, prior thereto, she was President of such corporation.
Robert E. Lefton, Ph.D. has been President and Chief
Executive Officer of Psychological Associates, Inc., an
international training and consulting firm, since 1958.
Dr. Lefton is a director of Allied Healthcare Products, Inc.,
Greenfield Industries Inc. and Wave Technologies International,
Inc.
<PAGE> 10
James M. Oates is Managing Director of The Wydown
Group, a consulting firm that specializes in start-ups, turn-
arounds and defining growth strategies. From 1986 to 1994, Mr.
Oates was President and Chief Executive Officer of Neworld
Bancorp, Boston, Massachusetts, a stock savings bank holding
company. Mr. Oates is Chairman of IBEX Capital Markets, LLC and
is a director of Phoenix Financial Corporation, Phoenix Duff &
Phelps Corp. and Govett Funds.
Gregory F. Taylor was branch manager of Stifel,
Nicolaus' Chicago branch from October 1985 until July 1988. He
became Executive Vice President and Director of National Sales
and Marketing of Stifel, Nicolaus in July 1988, Chief Operating
Officer in November 1991 and President and Chief Executive
Officer as of October 26, 1992. He was elected a Vice President
of the Company in October 1991 and President and Chief Executive
Officer as of October 26, 1992.
George H. Walker III joined Stifel, Nicolaus in 1976,
became Chief Executive Officer of Stifel, Nicolaus in December
1978, and became Chairman of Stifel, Nicolaus in July 1982. From
the time of the organization of the Company, Mr. Walker has
served as its Chairman of the Board and, until October 26, 1992,
Mr. Walker served as its President and Chief Executive Officer.
Mr. Walker is a director of Laclede Steel Company, Laidlaw
Corporation and EAC Corporation. He is active in various
community activities and currently is Chairman of the Missouri
Historical Society. Mr. Walker is Chairman of the Advisory
Committee of Webster University Business School and on the
National Counsel of Washington University Business School.
Board of Directors and Committees
During the year ended December 31, 1996, the Board of
Directors of the Company met four times, including both regularly
scheduled and special meetings. During such year, all of the
incumbent directors attended at least 75% of all meetings held by
the Board of Directors and all committees on which they serve.
The standing committees of the Board of Directors are
the Executive Committee, Audit Committee, Compensation Committee,
Finance Committee and Nominating Committee.
Executive Committee. Messrs. Walker (Chairman),
Taylor, Goebel and Oates are the current members of the Executive
Committee. Except to the extent limited by law, the Executive
Committee has all the authority of the Board of Directors. The
Executive Committee did not meet during the year ended
December 31, 1996.
<PAGE> 11
Audit Committee. Messrs. Dill (Chairman), Ford, Goebel
and Oates are the current members of the Audit Committee. The
functions of the Audit Committee are to monitor and assess the
adequacy of systems and procedures for providing reliable
financial statements of the Company and its subsidiaries, as well
as suitable internal financial controls, to review and approve
the scope and performance of the independent external and
internal auditors' work and to make such recommendations as it
deems necessary to the Board of Directors regarding the Company's
financial statements, financial controls and related matters.
The Audit Committee met three times during the year ended
December 31, 1996.
Compensation Committee. Messrs. Lefton (Chairman) and
Oates and Ms. Cori are members of the Compensation Committee.
The functions of the Compensation Committee are to recommend
salary and bonus levels for the senior officers of the Company
and its subsidiaries and to administer the Company's employee
stock plans. The Compensation Committee met four times during
the year ended December 31, 1996.
Finance Committee. Messrs. Ford (Chairman), Dill,
Lefton and Oates and Ms. Cori are the current members of the
Finance Committee. The functions of the Finance Committee are to
review and monitor the consolidated financial condition of the
Company. The Finance Committee met four times during the year
ended December 31, 1996.
Nominating Committee. Messrs. Walker (Chairman),
Lefton and Goebel are the current members of the Nominating
Committee. The function of the Nominating Committee is to
identify, evaluate and select potential director nominees. The
Nominating Committee met once during the year ended December 31,
1996.
Compensation of Directors. Non-employee directors are
paid annual compensation at a rate of $15,000 for attendance at
Board of Directors meetings and $250 for attendance at Committee
meetings and are reimbursed for expenses incurred in attending
such meetings. Directors who are employees of the Company do not
receive any compensation for service as directors, but the
Company pays their expenses for attendance at Board meetings.
Compensation Committee Interlocks and Insider Participation
During the year ended December 31, 1996, the
Compensation Committee was composed of Mr. Lefton and Mr. Oates,
who joined the Compensation Committee in October 1996, and
Ms. Cori, none of whom served as an officer or employee of the
Company or any of its subsidiaries.
<PAGE> 12
EXECUTIVE COMPENSATION
For the years ended December 31, 1996, 1995 and 1994,
the following table presents summary information concerning
compensation awarded or paid to, or earned by, the Chief
Executive Officer, each of the other four most highly compensated
executive officers for the year ended December 31, 1996 and each
individual who would have been one of the four most highly
compensated executive officers had they been serving as an
executive officer at December 31, 1996, for services rendered to
the Company and its subsidiaries.
<TABLE>
Summary Compensation Table
<CAPTION>
Annual Compensation Long Term Compensation
------------------- ----------------------
Other Annual Restricted All Other
Bonus Compensation Stock Compensation
Name and Principal Position Year Salary ($)<F1> ($)<F2> Awards ($)<F3> Options (#) ($)<F4>
- - --------------------------- ---- ------- ------- ------------ -------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Gregory F. Taylor 1996 199,999 193,803 -- -0- 52,500 2,255
President and Chief 1995 186,458 -0- -- -0- -0- 1,113
Executive Officer 1994 175,000 -0- -- -0- -0- 1,110
George H. Walker III 1996 150,000 283,515 -- -0- 52,500 1,122
Chairman of the Board 1995 150,000 -0- -- -0- -0- -0-
1994 150,000 -0- -- -0- -0- -0-
Charles R. Hartman <F5> 1996 150,000 183,496 -- 32,500 <F6> -0- 21,466
Vice President and 1995 150,000 150,000 -- -0- -0- 41,258
Secretary 1994 82,991 81,250 -- -0- 15,750 36,276
Lawrence E. Somraty 1996 128,333 123,019 -- 32,500 <F6> -0- 1,372
Vice President 1995 124,583 61,466 -- -0- -0- 250
1994 83,750 52,756 -- -0- -0- 250
Michael A. Murphy 1996 135,000 115,076 -- 32,500 <F6> -0- 2,308
Vice President 1995 135,000 -0- -- -0- -0- 1,113
1994 102,500 -0- -- -0- -0- 1,110
- - ----------------------
<FN>
<F1>Represents bonuses paid under the executive compensation
plans described in the Compensation Committee Report on
Executive Compensation set forth elsewhere in this Proxy
Statement.
<F2>The named executive officers received certain perquisites in
1996, 1995 and 1994, the amount of which did not exceed the
lesser of $50,000 or 10% of any such officer's salary and
bonus.
<F3>The aggregate value of restricted stock holdings for the
individuals named in the Summary Compensation Table at
December 31, 1996 was $43,750 for each of Messrs. Hartman,
Somraty and Murphy, based upon a per share price of $8.333
being the last transaction price on December 31, 1996. The
aggregate number of shares of restricted stock held by the
individuals named in the Summary Compensation Table at
<PAGE> 13
December 31, 1996 was 5,250 for each of Messrs. Hartman,
Murphy and Somraty (as adjusted to reflect the five percent
stock dividend declared by the Company on January 21, 1997).
With respect to the restricted shares awarded to Messrs.
Hartman, Murphy and Somraty, the restrictions applicable to
such restricted stock holdings lapse as to one-third, two-
thirds and all of the shares subject to the award on
October 23, 1997, 1998 and 1999, respectively. In addition,
the restrictions shall also lapse as to all shares subject to
the award upon the retirement, death or permanent disability
of the executive, or in the event of a Change in Control (as
defined in the Restricted Stock Agreement) of the Company.
The holders thereof are entitled to vote and receive
dividends on their shares to the same extent as other holders
of Common Stock.
<F4>For the year ended December 31, 1996, the Company contributed
$250 to the Profit Sharing Plan for each named executive
officer (other than Mr. Walker), $1,122 to the Employee Stock
Purchase Plan for each named executive officer and $882, $993
and $935 to the Company's 1993 Employee Stock Purchase Plan
for each of Messrs. Taylor, Hartman and Murphy, respectively.
In addition, with respect to Mr. Hartman, such amount
disclosed for 1996 includes $15,000 forgiven by the Company
with respect to a $75,000 loan from the Company to Mr.
Hartman and $4,100 of imputed interest with respect to such
loan.
<F5>Mr. Hartman has served as Vice President and Secretary of the
Company since June 1994. Prior thereto, Mr. Hartman was not
employed by the Company.
<F6>Represents the dollar value of shares of restricted stock
awarded to Messrs. Hartman, Murphy and Somraty on July 23,
1996, based on a per share price of $6.19, the closing stock
price of Common Stock on July 23, 1996. The number of shares
has been adjusted to reflect the five percent stock dividend
declared by the Company on January 21, 1997.
</TABLE>
<PAGE> 14
The following presents certain information concerning
stock options granted to the named executive officers during the
year ended December 31, 1996, and year-end stock option values.
No stock options were exercised by the named executive officers
during the year ended December 31, 1996.
Option Grants In Last Year
The following table sets forth information concerning
stock option grants made in the year ended December 31, 1996 to
the individuals named in the Summary Compensation Table. No SARs
were granted to the named individuals in 1996.
<TABLE>
<CAPTION>
Individual Grants
--------------------------------------------------------- Potential Realizable
Number of Percent of Value At
Securities Total Assumed Annual
Underlying Options/SARs Exercise or Rates of Stock Price
Options/SARs Granted to Base Appreciation for
Granted Employees in Price<F3><F4> Expiration Option Term <F1>
Name <F2><F3>(#) Fiscal Year ($/Sh) Date<F5> 5%($) 10%($)
- - --------------------- ----------- ------------- ------------ --------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Gregory F. Taylor 52,500 47.26% 6.07 April 22, 2006 200,460 508,005
George H. Walker, III 52,500 47.26 6.07 April 22, 2006 200,460 508,005
- - -------------
<FN>
<F1>The indicated 5% and 10% rates of appreciation are provided
to comply with Securities and Exchange Commission regulations
and do not necessarily reflect the views of the Company as to
the likely trend in the Common Stock price. The effect of 5%
and 10% rates of appreciation on Common Stock held for ten
years are demonstrated by the following: a share of Common
Stock purchased on April 23, 1996 at a price per share of
$6.07 and held until April 22, 2006 would have a value of
$9.89 at a 5% rate of appreciation, and a value of $15.75 at
a 10% rate of appreciation. Actual gains, if any, on stock
option exercises and Common Stock holdings will be dependent
on, among other things, the future performance of the Common
Stock and overall market conditions. There can be no
assurance that the amounts reflected herein will be achieved.
Additionally, these values do not take into consideration the
provisions of the options providing for nontransferability or
delayed exercisability.
<F2>Each option will become exercisable with respect to 25%, 50%,
75% and 100% of the total number of shares subject to the
option on each of the first, second, third and fourth
anniversaries, respectively, of the date of grant.
<F3>Each option has been adjusted to reflect the five percent
stock dividend declared on January 21, 1997.
<F4>The exercise price may be paid in cash or, at the discretion
of the Committee, by shares of Common Stock already owned or
to be issued pursuant to the exercise, valued at fair market
value on the date of exercise, or a combination of cash and
Common Stock.
<F5>The options terminate on the earlier of ten years after grant
or, generally, immediately on termination for reasons other
than retirement, disability or death.
</TABLE>
<PAGE> 15
<TABLE>
Year-End Option Value
<CAPTION>
Total Number of Shares for
Which Unexercised Options Total Value of Unexercised,
No. of Shares held at In-the-Money Options held at
Acquired on Value December 31, 1996 December 31, 1996<F1>
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- - --------------------- ------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gregory F. Taylor 0 0 31,619 35,000 $ 83,638 $ 79,182
George H. Walker, III 0 0 49,402 35,000 143,275 79,182
Charles R. Hartman 0 0 8,682 8,683 18,912 18,914
Lawrence E. Somraty 0 0 6,290 0 22,853 0
Michael A. Murphy 0 0 5,209 1,736 0 0
- - ------------------
<FN>
<F1> Based on the Company's Common Stock closing price on
December 31, 1996 of $8.333 ($8.75 before adjustment for the
five percent stock dividend declared on January 21, 1997).
</TABLE>
Employment Agreements
The Company and George H. Walker III entered into an
Employment Agreement as of August 21, 1987 and a First Amendment
to Employment Agreement as of December 2, 1991, which provides
for the employment of Mr. Walker by the Company at a base salary
as established from time to time by the Board of Directors, but
not less than $150,000 per annum. Mr. Walker is also eligible to
participate in all incentive compensation plans and other
employee benefits provided to senior executive officers.
The Agreement automatically renews for an additional
one year at each year end unless prior to December 31 of any year
the Board of Directors determines not to extend the Agreement.
The current term of the Agreement is through December 31, 1998
subject to additional extensions as set forth in the preceding
sentence. The Agreement, as amended, also provides that
Mr. Walker will provide consulting and advisory services to the
Company for a period of two years following the termination date
of his employment for a fee of $75,000 per annum and contains a
one year non-competition covenant following the end of his
consulting period.
<PAGE> 16
The obligations of the Company under Mr. Walker's
Agreement will terminate upon the death or (except as described
below) resignation of Mr. Walker, except that, if his employment
is terminated by reason of death or disability, payments will
continue in accordance with the Company's regular policies. If
Mr. Walker's employment is terminated by the Company for any
other reason (other than a "Good Cause Event" defined in the
Agreement) or if he resigns within one year after a Change of
Control (as defined below), the Company will: (a) continue his
insurance benefits; and (b) pay him a lump sum payment equal to
the total of the present value of monthly payments equaling 1/12
of his current compensation (including bonus and incentive
compensation payments) at the date of termination payable over
the remaining term of the Agreement, but not less than one year,
or three years in the event of his resignation, or a termination
by the Company in breach of the Agreement, after a Change of
Control. Such payments are subject to reduction to the extent
they exceed the amounts deductible by the Company for federal
income tax purposes because of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code").
"Change of Control" is defined in Mr. Walker's
Agreement as (a) the acquisition, in one or a series of
transactions by a person or group of persons acting in concert,
of beneficial ownership in more than 25% of the outstanding
voting stock of the Company, (b) the receipt of proxies for the
election of directors in opposition to management's nominees
which aggregate more than 40% of the outstanding voting stock or
(c) the sale or issuance of such number of shares of voting stock
of the Company for consideration other than cash in any
transaction or series of related transactions which constitutes
more than 25% of the outstanding voting power of the Company
after giving effect to such issuance or sale.
The Company and Gregory F. Taylor entered into an
Employment Agreement as of July 26, 1993 which provides for the
employment of Mr. Taylor by the Company at a base salary as
established from time to time by the Board of Directors, but not
less than $175,000 per annum. Mr. Taylor is also eligible to
participate in all incentive compensation plans and other
employee benefits provided to senior executive officers.
<PAGE> 17
The term of employment in Mr. Taylor's Agreement is to
July 31, 1997; provided, however, the obligations of the Company
under the Agreement will terminate upon the death or (except as
described below) resignation of Mr. Taylor, except that, if his
employment is terminated by reason of death or disability,
payments will continue in accordance with the Company's regular
policies. If Mr. Taylor's employment is terminated by the
Company for any other reason (other than a "Good Cause Event"
defined in the Agreement) or if he resigns within one year after
a Change of Control (as defined below), the Company will: (a)
continue his insurance benefits; and (b) pay him a lump sum
payment equal to the total of the present value of monthly
payments equaling 1/12 of his current compensation (including
bonus and incentive compensation payments) at the date of
termination payable over the remaining term of the Agreement, but
not less than one year. Such payments are subject to reduction
to the extent they exceed the amounts deductible by the Company
for federal income tax purposes because of Section 280G of the
Code.
"Change of Control" is defined in Mr. Taylor's
Agreement as (a) the acquisition, in one or a series of
transactions by a person or group of persons acting in concert,
of beneficial ownership in more than 25% of the outstanding
voting stock of the Company, (b) the receipt of proxies for the
election of directors in opposition to management's nominees
which aggregate more than 40% of the outstanding voting stock,
(c) the sale or issuance of such number of shares of voting stock
of the Company for consideration other than cash in any
transaction or series of related transactions which constitutes
more than 25% of the outstanding voting power of the Company
after giving effect to such issuance or sale, (d) the sale or
other transfer of 50% or more of the capital stock of Stifel,
Nicolaus or (e) the sale or other transfer of all or
substantially all of the assets of the Company or Stifel,
Nicolaus.
Stifel, Nicolaus and Charles R. Hartman entered into a
letter agreement on May 23, 1994 which provides for the
employment of Mr. Hartman at a base salary of $150,000 per annum.
Mr. Hartman is eligible to participate in the executive bonus
pool and, for fiscal 1996 and 1997, his bonus payment has been
guaranteed to be no less than $150,000 (pro rated for that
portion of each year actually employed). He was also provided a
relocation allowance of $36,276, a $50,000 interest-bearing line
of credit due June 30, 1995, a $75,000 loan which is forgivable
over a five-year period if he continues employment with Stifel,
Nicolaus, and options to purchase 17,365 shares of Common Stock.
Mr. Hartman is also eligible to participate in all other employee
benefits provided to senior executive officers.
<PAGE> 18
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors
has furnished the following report on executive compensation for
the year ended December 31, 1996:
Executive Officer Compensation Policies and 1996 Results
The Compensation Committee of the Board of Directors
administers the Company's executive officer compensation
programs, consisting primarily of base salary and
performance-based annual bonuses. In addition, the Committee has
the discretion to grant restricted stock awards and stock
options. The Committee believes it has established compensation
policies for the Company's executive officers that will attract
and retain talented individuals and reward productivity and
profitability.
Salaries and salary adjustments for executive officers
are based on the responsibilities, performance and experience of
each executive. Traditionally, the Company has paid modest
salaries relative to comparable executive positions at other
publicly-held companies and relied on an annual bonus program to
fairly compensate and motivate executives. At several meetings
during 1996, the Compensation Committee reviewed compensation
levels of executive officers of publicly-held regional brokerage
firms in connection with its evaluation of the Company's overall
compensation programs. The Compensation Committee has made such
review a regular process of its responsibilities.
All listed executive officers participate in the
administrative bonus program. Over the last several years, the
Compensation Committee has modified this annual bonus program by
introducing a formula based approach and eliminating the
discretion related to annual bonuses. Under the administrative
bonus program, bonuses were paid based on pre-tax income of the
Company. Individual percentages with respect to this
administrative bonus program are determined by the Compensation
Committee of the Board of Directors. In addition to the
administrative bonus program, Mr. Walker received finder's fees
related to investment banking transactions. In connection with
Mr. Hartman's recruitment as an executive officer of the Company,
the Company agreed to guarantee his 1996 and 1997 bonus payments
at the greater of his share of the administrative bonus program
or $150,000.
In addition, Mr. Taylor has an employment agreement and
Mr. Hartman has a letter agreement. The principal terms of such
agreements have also been described above under "Executive
Compensation-Employment Agreements." The employment agreement
with Mr. Taylor and the letter agreement with Mr. Hartman were
each approved by the entire Board of Directors.
<PAGE> 19
While the Committee believes that the Company's various
annual bonus programs and employment agreements will reinforce
the importance of long-term values for the Company's
stockholders, the Committee also seeks to promote the identity of
long-term interests between the Company's executive officers and
its stockholders with occasional grants of restricted stock and
stock options.
Chief Executive Officer
On October 26, 1992, Mr. Taylor was named Chief
Executive Officer of the Company succeeding Mr. Walker, who
remains as Chairman of the Board of Directors. Mr. Taylor
previously served as Vice President of the Company and Executive
Vice President and Chief Operating Officer of Stifel, Nicolaus.
On July 26, 1993, the Company and Mr. Taylor entered into an
employment agreement which is described above under "Executive
Compensation - Employment Agreements."
1996 Compensation Committee
Robert E. Lefton, Chairman
Belle A. Cori
James M. Oates
March 21, 1997
<PAGE> 20
PERFORMANCE GRAPH
The following graph sets forth a comparison of the
Company's cumulative total stockholder return (assuming
investment of $100 and reinvestment of dividends) from
December 1991 through December 31, 1996, with the cumulative
total return for the same period measured by the Standard &
Poor's 500 Composite Index and, for peer groups, the Financial
Services Analytics, Inc. Regional Index (the "FSA Regional
Index"), an index of publicly traded regional brokerage firms.
[PERFORMANCE GRAPH]
Cumulative Value of $100 Investment
December 31,
-----------------------------------
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
Stifel Financial Corp. $100 $103 $150 $ 94 $112 $158
S&P 500 Index 100 108 118 120 165 203
FSA Regional Index 100 111 145 124 183 284
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain officers, directors and nominees for director
of the Company maintain margin accounts with Stifel, Nicolaus
pursuant to which Stifel, Nicolaus may make loans for the
purchase of securities. All margin loans are made in the
ordinary course of business on substantially the same terms,
including interest rates and collateral, as those prevailing at
the time for comparable transactions with other persons, and do
not involve more than normal risk of collectability or present
other unfavorable features.
Richard F. Ford is a General Partner of the management
companies which act as the General Partner of Gateway Venture
Funds. The Company and Stifel Venture Corp., a subsidiary of the
Company, are also General Partners of the management companies.
At December 31, 1996, the Company's carrying value of these
investments was approximately $663,000 with a commitment to
contribute $1,851 to the Gateway Funds. Additionally, at
December 31, 1996, the Company had a receivable of $335,000 which
was advanced for organizational costs of Gateway Partners, L.P.
Mr. Ford also provided consulting services to the Company during
the year ended December 31, 1996.
John J. Goebel is a partner in the law firm Bryan Cave
LLP, which rendered legal services to the Company and its
subsidiaries during 1996 and is providing legal services to the
Company and its subsidiaries during 1997.
Robert E. Lefton, Ph.D. is the President and Chief
Executive Officer of Psychological Associates, Inc., an
international training and consulting firm, which rendered
services for the Company and its subsidiaries during 1996 and is
providing services to the Company and its subsidiaries during
1997.
<PAGE> 21
James M. Oates rendered consulting services to the
Company prior to becoming a director in October 1996.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), requires that the Company's
officers and directors, and persons who own more than ten percent
of the Company's outstanding stock, file reports of ownership and
changes in ownership with the Securities and Exchange Commission
and the New York Stock Exchange. To the knowledge of the
Company, all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten percent beneficial
owners were complied with during the year ended December 31,
1996.
PROPOSAL III. ADOPTION OF THE STIFEL FINANCIAL CORP.
1997 INCENTIVE STOCK PLAN
The Board of Directors has adopted, subject to approval
by the stockholders of the Company, the Stifel Financial Corp.
1997 Incentive Stock Plan (the "1997 Incentive Plan"), which
provides for the granting of stock options and other stock-based
awards. This 1997 Incentive Plan replaces the Stifel Financial
Corp. 1987 Non-Qualified Stock Option Plan which expired in
February 1997. The total number of shares of Common Stock to be
issuable under the 1997 Incentive Plan is not to exceed 600,000
shares, subject to adjustment in the event of any change in the
outstanding shares of such stock by reason of a stock dividend,
stock split, recapitalization, merger, consolidation or other
similar change generally affecting stockholders of the Company.
The complete text of the 1997 Incentive Plan is set forth in
Appendix A to this Proxy Statement.
The Board of Directors believes that the 1997 Incentive
Plan advances the interests of the Company and its stockholders
by encouraging key employees of the Company and its subsidiaries
to acquire Common Stock or to receive monetary payments based on
the value of Common Stock upon the achievement of certain goals
that are mutually advantageous to the Company and its
stockholders (such as increases in share price and/or growth rate
in earnings per share), on the one hand, and the participating
employees, on the other. The Board believes that the 1997
Incentive Plan will provide additional incentives toward the
continuation of superior performance by its employees in the
success of the Company and will enable the Company and its
subsidiaries to attract and retain the services of its key
employees. In order to allow the continuation of stock-based
incentive programs at the Company, the Board of Directors
recommends that the stockholders approve the 1997 Incentive Plan.
<PAGE> 22
The 1997 Incentive Plan is administered by either the
Board of Directors or the Compensation Committee of the Board of
Directors currently consisting of three directors of the Company,
each of whom is a non-employee director of the Company (for
purposes of the 1997 Incentive Plan, the group administering the
1997 Incentive Plan is referred to as the "Administrator"). The
Administrator, by majority action thereof, is authorized in its
sole discretion to determine the individuals to whom the benefits
will be granted, the type and amount of such benefits and the
terms of the benefit grants, as well as to interpret the 1997
Incentive Plan, to prescribe, amend and rescind rules and
regulations relating to the 1997 Incentive Plan, to provide for
conditions and assurances deemed necessary or advisable to
protect the interests of the Company, and to make all other
determinations necessary or advisable for the administration of
the 1997 Incentive Plan to the extent not contrary to the express
provisions of the 1997 Incentive Plan.
Description of Plan
Under the terms of the 1997 Incentive Plan, key
employees of the Company and its subsidiaries as determined in
the sole discretion of the Administrator will be eligible to
receive (a) stock appreciation rights ("SARs"), (b) restricted
shares of Common Stock ("Restricted Stock"), (c) performance
awards ("Performance Awards") and (d) stock options ("Stock
Options") exercisable into shares of Common Stock which may or
may not qualify as incentive stock options within the meaning of
Section 422 of the Code (options so qualifying are hereinafter
referred to as "Incentive Stock Options").
Stock Appreciation Rights. The Administrator may grant
SARs giving the holder thereof a right to receive, at the time of
surrender, a payment equal to the difference between the fair
market value of such stock on the date of surrender of the SAR
and the "Base Price" established by the Administrator at the time
of grant, subject to any limitation imposed by the Administrator
on appreciation. The "Base Price" shall not be less than the
fair market value of Common Stock on the date of grant of the
SAR. In the Administrator's discretion, the value of a SAR may be
paid in cash or Common Stock, or a combination thereof. A SAR
may be granted either independent of, or in conjunction with, any
Stock Option. If granted in conjunction with a Stock Option, at
the discretion of the Administrator, a SAR may either be
surrendered (a) in lieu of the exercise of such Stock Option, (b)
in conjunction with the exercise of such Stock Option or (c) upon
expiration of such Stock Option. The term of any SAR shall be
established by the Administrator, but in no event shall a SAR be
exercisable earlier than six months nor later than ten years from
the date of grant.
<PAGE> 23
Restricted Stock. The Administrator may issue shares
of Common Stock either as a stock bonus or at a purchase price of
less than fair market value, subject to the restrictions or
conditions specified by the Administrator at the time of grant.
In addition to any other restrictions or conditions that may be
imposed on the Restricted Stock, shares of Restricted Stock may
not be sold or disposed of for a period of six months after the
date of grant. During the period of restriction, holders of
Restricted Stock shall be entitled to receive all dividends and
other distributions made in respect of such stock and to vote
such stock without limitation.
Performance Awards. The Administrator may grant
Performance Awards consisting of shares of Common Stock, monetary
units payable in cash or a combination thereof. These grants
would result in the issuance, without payment therefor, of Common
Stock or the payment of cash upon the achievement of certain pre-
established performance criteria (such as return on average total
capital employed, earnings per share or increases in share price)
during a specified performance period not to exceed five years.
The participating employee will have no right to receive
dividends on or to vote any shares subject to Performance Awards
until the award is actually earned and the shares are issued. In
the event that a person who is required to file reports under
Section 16 of the Exchange Act receives a Performance Award that
includes shares of Common Stock, such shares received may not be
disposed of by such person until six months following the date of
issuance.
Stock Options. Stock Options granted under the 1997
Incentive Plan shall entitle the holder to purchase Common Stock
at a purchase price established by the Administrator, which price
shall not be less than the fair market value of Common Stock on
the date of grant in the case of Incentive Stock Options and at
any price determined by the Administrator in the case of all
other options. The Administrator shall determine the term of
such Stock Options and the times at, and conditions under which,
such Stock Options will become exercisable. Stock Options will
generally not be exercisable earlier than six months nor later
than ten years from the date of the grant, except that Stock
Options will become immediately exercisable at any time after
grant if more than 30% of the Common Stock, business or assets
are acquired by a person or affiliated group of persons without
the approval of the Board of Directors.
There is no maximum or minimum number of shares for
which a Stock Option may be granted; however, for any employee,
the aggregate fair market value of Common Stock subject to
qualifying incentive Stock Options that are exercisable for the
first time in any calendar year may not exceed $100,000.
<PAGE> 24
The 1997 Incentive Plan is to remain in effect until
(a) all Common Stock reserved under the 1997 Incentive Plan shall
have been purchased or acquired, (b) the Board terminates the
1997 Incentive Plan or (c) January 21, 2007, whichever shall
first occur. The Board may terminate the 1997 Incentive Plan at
any time and from time to time may amend or modify the 1997
Incentive Plan; provided, however, that no such action of the
Board may, without the approval of the stockholders of the
Company: (a) increase the total amount of stock or the amount or
type of benefit that may be issued under the 1997 Incentive Plan;
(b) change the provisions of the 1997 Incentive Plan regarding
the minimum purchase price of awards; or (c) modify the
requirements as to eligibility for benefits. No amendment,
modification or termination of the 1997 Incentive Plan shall in
any manner adversely affect any award theretofore granted under
the 1997 Incentive Plan, without the consent of the participant
affected thereby.
New Plan Benefits
As of December 31, 1996, there were approximately 697
employees who were eligible to participate in the 1997 Incentive
Plan. The following table sets forth the number of stock options
that the Board of Directors currently anticipates granting
pursuant to the 1997 Incentive Plan, the individuals who are to
receive such stock option grants and the exercise price thereof:
New Plan Benefits
Number of
Options
to be Exercise
Name Granted Price ($)
---------------- --------- ---------
Charles R. Hartman 15,000 $6.50
Lawrence E. Somraty 15,000 6.50
Michael A. Murphy 15,000 6.50
Executive Group 75,000 6.50
Non-Executive Director Group -- --
Non-Executive Officer Employee Group 34,500 7.25 - 8.75
Federal Income Tax Consequences
No income will be realized by a participating officer
or employee on the grant of an incentive Stock Option or a Stock
Option which is not an incentive stock option ("non-qualified
option"), the grant of a SAR or upon the award of Restricted
Stock, and the Company will not be entitled to a deduction at
such time. If a holder exercises an incentive Stock Option and
does not dispose of the shares acquired within two years from the
date of the grant, or within one year from the date of exercise
of the option, no income will be realized by the holder at the
time of exercise. The Company will not be entitled to a
deduction by reason of the exercise.
<PAGE> 25
If a holder disposes of the shares acquired pursuant to
an incentive Stock Option within two years from the date of grant
of the option or within one year from the date of exercise of the
option, the holder will realize ordinary income at the time of
disposition which will equal the excess, if any, of the lesser of
(a) the amount realized on the disposition or (b) the fair market
value of the shares on the date of exercise, over the holder's
basis in the shares. The Company generally will be entitled to a
deduction in an amount equal to such income in the year of the
disqualifying disposition.
Upon the exercise of a non-qualified Stock Option or
the surrender of a SAR, the excess, if any, of the fair market
value of the stock on the date of exercise over the purchase
price or Base Price, as the case may be, is ordinary income to
the holder as of the date of exercise. The Company generally
will be entitled to a deduction equal to such excess amount in
the year of exercise.
Subject to a voluntary election by the holder under
Section 83(b) of the Code, a holder will realize income as a
result of the award of Restricted Stock at the time the
restrictions expire on such shares. An election pursuant to
Section 83(b) of the Code would have the effect of causing the
holder to realize income in the year in which such award was
granted. The amount of income realized will be the difference
between the fair market value of the shares on the date such
restrictions expire (or on the date of issuance of the shares, in
the event of a Section 83(b) election) over the purchase price,
if any, of such shares. The Company generally will be entitled
to a deduction equal to the income realized in the year in which
the holder is required to report such income.
An officer or employee will realize income as a result
of a Performance Award at the time the award is issued or paid.
The amount of income realized by the participant will be equal to
the fair market value of the shares on the date of issuance, in
the case of a stock award, and to the amount of the cash paid, in
the event of a cash award. The Company will be entitled to a
corresponding deduction equal to the income realized in the year
of such issuance or payment.
Recommendation of the Board of Directors
The affirmative vote of a majority of the votes cast,
present or represented by proxy at the meeting, will constitute
approval of the adoption of the 1997 Incentive Plan; provided
that the number of votes cast constitutes more than 50% of the
shares entitled to vote on the proposal. The Board of Directors
recommends a vote "FOR" the approval of the Stifel Financial
Corp. 1997 Incentive Stock Plan.
<PAGE> 26
PROPOSAL IV. ADOPTION OF THE
STIFEL FINANCIAL CORP. 1998 EMPLOYEE
STOCK PURCHASE PLAN
The Stifel Financial Corp. 1998 Employee Stock Purchase
Plan (the "Stock Purchase Plan") was adopted by the Executive
Committee of the Board of Directors of the Company as of
March 18, 1997, subject to approval by the stockholders of the
Company within 12 months thereafter. The Stock Purchase Plan is
intended to replace the Stifel Financial Corp. 1993 Employee
Stock Purchase Plan (the "1993 Plan"), which terminates on July
31, 1998, and the terms of the Stock Purchase Plan are
substantially similar to the terms of the 1993 Plan. The purpose
of the Stock Purchase Plan is to provide eligible employees of
the Company and its subsidiaries an opportunity to acquire a
proprietary interest in the Company through the purchase of
Common Stock. The Stock Purchase Plan is not subject to any of
the provisions of the Employee Retirement Income Security Act of
1974 ("ERISA").
A copy of the Stock Purchase Plan is attached as
Appendix B to this Proxy Statement. The following summary of the
terms of the Stock Purchase Plan is qualified in its entirety by
reference thereto. Stockholders are urged to refer to the Stock
Purchase Plan document and to read it carefully for a complete
statement of the provisions summarized herein.
Eligibility
Eligible employees of the Company and each of its
subsidiaries may participate in the Stock Purchase Plan. As of
December 31, 1996, there were approximately 696 employees
eligible to participate in the Stock Purchase Plan. An employee
is eligible to participate in the Stock Purchase Plan if the
employee is employed for more than 20 hours per week and more
than five months in any calendar year by the Company or any
subsidiary, except that no employee may participate (1) if
immediately after the grant the employee would own 5% or more of
the total combined voting power of all classes of stock of the
Company, or (2) if participation would permit the employee to
purchase shares under all employee stock purchase plans of the
Company and its subsidiaries at a rate which exceeds $25,000 of
fair market value for any calendar year in which an offering is
made.
Offerings Under the Plan
It is contemplated that, in a series of annual
offerings under the Stock Purchase Plan, aggregating 750,000
shares of Common Stock, the Company will offer to all eligible
employees the right to purchase under each annual offering an
aggregate of 150,000 shares of Common Stock. The Stock Purchase
Plan provides that each offering will commence on an "Offering
Date," will continue for one year, and will end on a "Termination
Date." The period during which an offering is in effect is an
"Offering Period." Under the Stock Purchase Plan, however, the
Company is not required to make any offerings or, if it makes one
or more offerings, to make any further offering or offerings.
<PAGE> 27
Each eligible employee on an Offering Date who desires
to participate in any offering must file a written notice with
the Company to that effect no later than 15 days before the
Offering Date of the offering in which the employee desires to
participate. Such notice must be on a form provided by the
Company and will direct the Company or subsidiary to withhold
from the employee's salary, commission and other forms of direct
remuneration and/or bonuses throughout the Offering Period a
specified percentage of the employee's compensation in 1%
increments not to exceed 10%. The participant may also specify a
maximum dollar amount to be withheld.
Each participant will be granted the opportunity to
purchase up to 1,000 shares of Common Stock at a price equal to
the lower 85% of the fair market value of the Common Stock on the
Offering Date or 85% of the fair market value of the Common Stock
on the Termination Date ("Purchase Price"). As soon as
practicable after the Termination Date, the shares will be
purchased for the full number of shares of Common Stock that may
be purchased with the aggregate payroll deductions held by the
Company on the participant's behalf. Prior to the Offering
Period, the Committee, in its sole discretion, may designate that
all or any portion of the "employer subsidized shares" (as
defined in the Stock Purchase Plan) purchased for a participant
for such Offering Period be held by the Company until the second
anniversary of such Termination Date. The balance of the shares
purchased for a participant will be delivered to a participant as
soon as practicable after such purchase.
Not more than 150,000 shares of Common Stock will be
available for purchase during any one Offering Period. If the
total number of shares for which options are to granted on any
date exceeds the number of shares then available under the Stock
Purchase Plan, the Company will make a pro rata allocation of the
shares remaining available in as nearly a uniform manner as shall
be practicable, and the excess payroll deductions which have been
made will be refunded, together with simple interest determined
as follows. The Company will select a money market fund as a
measure of determining simple interest earned on payroll
deductions, and the amount of interest paid will be an amount
equal to one-half of the average monthly rates earned by such
money market fund during the period in which the participant was
contributing through payroll deductions during the Offering
Period. The Company will give written notice of such allocation
to each participant affected.
A participant may withdraw from any offering being made
under the Stock Purchase Plan and receive a return of payroll
deductions for such offering at any time prior to the Termination
Date of the offering in which the participant is then
participating. If a participant does elect to withdraw, the
participant may not thereafter participate in the offering then
in effect. A participant may also cease payroll deductions for
future payroll periods and not withdraw amounts already credited.
Withdrawal from any offering does not affect the right of an
employee to participate in a later offering.
<PAGE> 28
If a participant terminates employment for any reason,
including retirement, during an Offering Period, the participant
is no longer eligible to participate in the Stock Purchase Plan.
If a participant terminates employment during an Offering Period
for any reason other than death or retirement on or after age 60,
the participant will be repaid the total amounts which have been
withheld in respect of such Offering Period. If a participant
terminates employment during an Offering Period by reason of
death or retirement on or after age 60, the participant or the
participant's beneficiary will be paid the amounts held by the
Company on the participant's behalf through payroll deductions,
together with simple interest determined in the manner described
above.
Administration of the Stock Purchase Plan
The Stock Purchase Plan is administered by a committee
selected by the Board of Directors of the Company (the
"Committee"). The Committee is vested with full power and
authority to make, administer and interpret such rules and
regulations as it deems necessary to administer the Stock
Purchase Plan.
Changes in Capitalization
In the event of any reorganization, recapitalization,
stock split, stock dividend, combination of shares, offering of
rights or any other change in the structure of the Common Stock,
the Committee may make such adjustment, if any, as it may deem
appropriate in the number, kind and purchase price of shares
available for purchase under the Stock Purchase Plan and in the
number of shares which any employee is entitled to purchase.
Amendment or Termination
The Board may at any time amend or terminate the Stock
Purchase Plan. No such termination may affect options previously
granted, nor may an amendment make any change in any option
previously granted which would adversely affect the rights of any
participant. An amendment which would increase the number of
shares covered by the Stock Purchase Plan may not be made without
approval of the stockholders of the Company. The Stock Purchase
Plan will terminate in any event on December 31, 2002.
<PAGE> 29
Federal Income Tax Consequences
The amount which an employee contributes to the Stock
Purchase Plan through payroll deductions is currently taxed as
ordinary income. The employee does not recognize income on
either the Offering Date or the Termination Date. However, if
the employee disposes of shares of Common Stock acquired pursuant
to the Stock Purchase Plan (other than by death) within two years
from the related Offering Date, the employee will recognize
ordinary income equal to the excess of the fair market value of
such shares on the related Termination Date over the Purchase
Price. The employee's basis in any shares disposed of, for
purposes of computing gain or loss upon the disposition, will be
the fair market value of the shares on the related Termination
Date. The Company will be entitled to a deduction in an amount
equal to the amount includible as ordinary income of the
employee. The Company's deduction will be taken in its taxable
year which ends within the taxable year of the employee in which
the employee recognizes the income.
If the employee disposes of the stock two or more years
after the related Offering Date, or if the employee dies without
having disposed of the Common Stock, the employee will recognize
ordinary income in an amount equal to the lessor of (a) the
excess of the fair market value of the Common Stock on the
related Offering Date over the Purchase Price, or (b) the excess
(if any) of the fair market value of the stock on the date of
disposition or death, over the Purchase Price. The basis of the
shares to the employee will be the sum of the Purchase Price and
the amount of any such recognized income; the basis of the shares
to the estate of a deceased employee will be the fair market
value of the shares at the employee's death.
Any interest on the employee's funds held by the
Company that is paid to the employee is ordinary income to the
employee. Ordinary income of an individual is currently subject
to a federal income tax at a maximum tax rate of 39.6%. An
individual's long-term capital gain is subject to federal income
tax at a maximum rate of 28% while any capital loss can be offset
only against other capital gains plus $3,000 of other income in
any tax year.
Recommendation of the Board of Directors
The Board of Directors recommends a vote "FOR" approval
of the adoption of the Stock Purchase Plan. The affirmative vote
of a majority of the votes cast, present or represented by proxy
at the meeting, will constitute approval of the adoption of the
Stock Purchase Plan; provided that the number of votes cast
constitutes more than 50% of the shares entitled to vote on the
proposal.
<PAGE> 30
PROPOSAL V.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors, upon the recommendation of its
Audit Committee, has appointed Deloitte & Touche LLP as the
Company's independent auditors for the year ending December 31,
1997. A resolution will be presented at the meeting to ratify
the appointment of Deloitte & Touche LLP.
The Company has been advised that a representative of
Deloitte & Touche LLP will be present at the meeting with an
opportunity to make a statement if such representative desires
and will be available to respond to questions of the
stockholders.
The Board of Directors, upon the recommendation of its
Audit Committee, replaced Coopers & Lybrand L.L.P. as its
independent auditors for the year ended December 31, 1996
effective October 29, 1996. The report of Coopers & Lybrand
L.L.P. on the audited consolidated financial statements of the
Company as of and for the two years ended December 31, 1995 did
not contain an adverse opinion or a disclaimer of opinion, and
was not qualified or modified as to uncertainty, audit scope or
accounting principles.
In connection with its audit of the Company's financial
statements as of December 31, 1995 and for the year then ended,
Coopers & Lybrand L.L.P. recommended that the Company record
certain adjustments that had the effect of changing previously
reported unaudited results of operations for the year ended 1995.
The Company engaged in numerous discussions with Coopers &
Lybrand L.L.P. regarding the basis of and the rationale for the
adjustments. Following these discussions, the Company agreed
with the recommendations of Coopers & Lybrand L.L.P. and recorded
the recommended adjustments. These adjustments included the
write-down of fixed assets, employee compensation and benefits
and the valuation of investments. After giving effect to all
adjustments recommended by Coopers & Lybrand L.L.P., previously
reported unaudited net income was reduced by $222,000 for the
year ended December 31, 1995.
The details concerning these adjustments and their
impact on the Company's financial statements were previously
reported to the Securities and Exchange Commission. The 1995
quarterly results, as adjusted, are presented in the Company's
Annual Report to Stockholders for the year ended December 31,
1995 (the "1995 Annual Report"), which was incorporated in the
Company's Annual Report on Form 10-K for the year ended December
31, 1995. Coopers & Lybrand L.L.P. discussed the subject matter
of the adjustments with the Company's Audit Committee on April
22, 1996. In connection with that discussion, Coopers & Lybrand
L.L.P. reported to the Audit Committee in writing on such date
that, in connection with the audit of the financial statements
for the year ended December 31, 1995, there were no disagreements
with Coopers & Lybrand L.L.P. by management regarding audited
financial statements or other accounting matters.
<PAGE> 31
Coopers & Lybrand L.L.P. advised the Company that the
adjustments described above, which were made by the Company at
the recommendation of Coopers & Lybrand L.L.P., constitute
disagreements between personnel of the Company responsible for
the presentation of its financial statements and personnel of
Coopers & Lybrand L.L.P. responsible for rendering its report on
any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure which, if not
resolved to the satisfaction of Coopers & Lybrand L.L.P., would
have caused it to make reference to the subject matter thereof in
connection with its report.
On December 9, 1996, the Board of Directors of the
Company, upon recommendation of its Audit Committee, engaged
Deloitte & Touche LLP as the Company's independent auditors for
the year ended December 31, 1996. The Company has authorized
Coopers & Lybrand L.L.P. to respond fully to any inquires of
Deloitte & Touche LLP concerning the subject matter of each of
the adjustments. During the two years ended December 31, 1995
and through the date of the appointment, Deloitte & Touche LLP
was not engaged by the Company for any auditing or consulting
work on any matter.
The Board of Directors recommends a vote "FOR"
ratification of the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the year ending December 31,
1997. A majority of the votes cast, present or represented by
proxy at the meeting, will constitute ratification of the
appointment of Deloitte & Touche LLP as the Company's independent
auditors for the year ending December 31, 1997.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at
the 1997 Annual Meeting of Stockholders must be received by the
Company by November 22, 1997, for inclusion in the Company's
Proxy Statement and proxy relating to that meeting. Upon receipt
of any such proposal, the Company will determine whether or not
to include such proposal in the Proxy Statement and proxy in
accordance with regulations governing the solicitation of
proxies.
MISCELLANEOUS
The Company will bear the cost of solicitation of
proxies. Proxies will be solicited by mail. They may also be
solicited by officers and regular employees of the Company and
its subsidiaries personally or by telephone, but such persons
will not be specifically compensated for such services.
Brokerage houses, custodians, nominees and fiduciaries will be
requested to forward the soliciting material to the beneficial
owners of stock held of record by such persons and will be
reimbursed for their reasonable expenses incurred in connection
therewith.
<PAGE> 32
Management knows of no business to be brought before
the Annual Meeting of Stockholders other than that set forth
herein. However, if any other matters properly come before the
meeting, it is the intention of the persons named in the proxy to
vote such proxy in accordance with their judgment on such
matters. Even if you plan to attend the meeting in person,
please execute, date and return the enclosed proxy promptly.
Should you attend the meeting, you may revoke the proxy by voting
in person. A postage-paid, return-addressed envelope is enclosed
for your convenience. Your cooperation in giving this your
prompt attention will be appreciated.
By Order of the Board of Directors,
CHARLES R. HARTMAN, Secretary
March 21, 1997
St. Louis, Missouri
<PAGE> A-1
Appendix A
STIFEL FINANCIAL CORP.
1997 INCENTIVE STOCK PLAN
1. Purpose. The purpose of the Stifel Financial
Corp. Incentive Stock Plan ("Plan") is to encourage key employees
of Stifel Financial Corp. ("Corporation") and such subsidiaries
of the Corporation as the Administrator designates, to acquire
Common Stock of the Corporation or to receive monetary payments
based on the value of such stock or based upon achieving certain
goals on a basis mutually advantageous to such employees and the
Corporation and thus provide an incentive for employees to
contribute to the success of the Corporation and align the
interests of key employees with the interests of the shareholders
of the Corporation.
2. Administration. The Plan shall be administered by
the Board of Directors of the Corporation or the Compensation
Committee of the Board of Directors (the "Administrator").
The authority to select persons eligible to participate
in the Plan, to grant benefits in accordance with the Plan, and
to establish the timing, pricing, amount and other terms and
conditions of such grants (which need not be uniform with respect
to the various participants or with respect to different grants
to the same participant), may be exercised by the Administrator
in its sole discretion, or by any member of the Compensation
Committee of the Board of Directors upon a specific
recommendation from the Executive Committee of Stifel, Nicolaus &
Company.
Subject to the provisions of the Plan, the
Administrator shall have exclusive authority to interpret and
administer the Plan, to establish appropriate rules relating to
the Plan, to delegate some or all of its authority under the Plan
and to take all such steps and make all such determinations in
connection with the Plan and the benefits granted pursuant to the
Plan as it may deem necessary or advisable.
The Board of Directors in its discretion may delegate
and assign specified duties and authority of the Administrator to
a any other committee and retain the other duties and authority
of the Administrator to itself. Also, the Board of Directors in
its discretion may appoint a separate committee of outside
directors to make awards that satisfy the requirements of Section
162(m) of the Internal Revenue Code.
<PAGE> A-2
3. Shares Reserved Under the Plan. Subject to the
provisions of Section 11 (relating to adjustment for changes in
capital stock) there is hereby reserved for issuance under the
Plan an aggregate of 600,000 shares of Common Stock of the
Corporation, which may be authorized but unissued or treasury
shares. As used in this Section 3, the term "Plan Maximum"
shall refer to the number of shares of Common Stock of the
Corporation that are available for grant of awards pursuant to
the Plan. Stock underlying outstanding options, stock
appreciation rights, or performance awards will reduce the Plan
Maximum while such options, stock appreciation rights or
performance awards are outstanding. Shares underlying expired,
canceled or forfeited options, stock appreciation rights or
performance awards shall be added back to the Plan Maximum. When
the exercise price of stock options is paid by delivery of shares
of Common Stock of the Corporation, or if the Administrator
approves the withholding of shares from a distribution in payment
of the exercise price, the Plan Maximum shall be reduced by the
net (rather than the gross) number of shares issued pursuant to
such exercise, regardless of the number of shares surrendered or
withheld in payment. If the Administrator approves the payment
of cash to an optionee equal to the difference between the fair
market value and the exercise price of stock subject to an
option, or if a stock appreciation right is exercised for cash or
a performance award is paid in cash the Plan Maximum shall be
increased by the number of shares with respect to which such
payment is applicable. Restricted stock issued pursuant to the
Plan will reduce the Plan Maximum while outstanding even while
subject to restrictions. Shares of restricted stock shall be
added back to the Plan Maximum if such restricted stock is
forfeited.
Notwithstanding the above, the maximum number of shares
subject to stock options that may be awarded in any calendar year
to any individual shall not exceed 50,000 shares (as adjusted in
accordance with Section 11).
4. Participants. Participants will consist of such
officers and key employees of the Corporation or any designated
subsidiary as the Administrator in its sole discretion shall
determine. Designation of a participant in any year shall not
require the Administrator to designate such person to receive a
benefit in any other year or to receive the same type or amount
of benefit as granted to the participant in any other year or as
granted to any other participant in any year. The Administrator
shall consider such factors as it deems pertinent in selecting
participants and in determining the type and amount of their
respective benefits.
5. Types of Benefits. The following benefits may be
granted under the Plan: (a) stock appreciation rights ("SARs");
(b) restricted stock ("Restricted Stock"); (c) performance awards
("Performance Awards"); (d) incentive stock options ("ISOs"); and
(e) nonqualified stock options ("NQSOs"), all as described below.
<PAGE> A-3
6. Stock Appreciation Rights. A SAR is the right to
receive all or a portion of the difference between the fair
market value of a share of Common Stock at the time of exercise
of the SAR and the exercise price of the SAR established by the
Administrator, subject to such terms and conditions set forth in
a SAR agreement as may be established by the Administrator in its
sole discretion. At the discretion of the Administrator, SARs
may be exercised (a) in lieu of exercise of an option, (b) in
conjunction with the exercise of an option, (c) upon lapse of an
option, (d) independent of an option or (e) each of the above in
connection with a previously awarded option under the Plan. If
the option referred to in (a), (b) or (c) above qualified as an
ISO pursuant to Section 422 of the Internal Revenue Code of 1986
("Code"), the related SAR shall comply with the applicable
provisions of the Code and the regulations issued thereunder. At
the time of grant, the Administrator may establish, in its sole
discretion, a maximum amount per share which will be payable upon
exercise of a SAR, and may impose conditions on exercise of a
SAR. At the discretion of the Administrator, payment for SARs
may be made in cash or shares of Common Stock of the Corporation,
or in a combination thereof. SARs will be exercisable not later
than ten years after the date they are granted and will expire in
accordance with the terms established by the Administrator;
provided that SARs shall be exercisable no earlier than three
years after the date they are granted.
7. Restricted Stock. Restricted Stock is Common
Stock of the Corporation issued or transferred under the Plan
(other than upon exercise of stock options or as Performance
Awards) at any purchase price less than the fair market value
thereof on the date of issuance or transfer, or as a bonus,
subject to such terms and conditions set forth in a Restricted
Stock agreement as may be established by the Administrator in its
sole discretion. In the case of any Restricted Stock:
(a) The purchase price, if any, will be
determined by the Administrator.
(b) The period of restriction established by the
Administrator for any grants of Restricted Stock after approval
of the Plan by the shareholders of the Corporation shall not be
less than three years;
(c) Restricted Stock may be subject to (i)
restrictions on the sale or other disposition thereof; (ii)
rights of the Corporation to reacquire such Restricted Stock at
the purchase price, if any, originally paid therefor upon
termination of the employee's employment within specified
periods; (iii) representation by the employee that he or she
intends to acquire Restricted Stock for investment and not for
resale; and (iv) such other restrictions, conditions and terms as
the Administrator deems appropriate.
(d) The participant shall be entitled to all
dividends paid with respect to Restricted Stock during the period
of restriction and shall not be required to return any such
dividends to the Corporation in the event of the forfeiture of
the Restricted Stock.
<PAGE> A-4
(e) The participant shall be entitled to vote the
Restricted Stock during the period of restriction.
(f) The Administrator shall determine whether
Restricted Stock is to be delivered to the participant with an
appropriate legend imprinted on the certificate or if the shares
are to be issued in the name of a nominee or deposited in escrow
pending removal of the restrictions.
8. Performance Awards. Performance Awards are Common
Stock of the Corporation, monetary units or some combination
thereof, to be issued without any payment therefor, in the event
that certain performance goals established by the Administrator
are achieved over a period of time designated by the
Administrator, but not in any event more than five years. The
goals established by the Administrator may include return on
average total capital employed, earnings per share, increases in
share price or such other goals as may be established by the
Administrator. In the event the minimum corporate goal is not
achieved at the conclusion of the period, no payment shall be
made to the participant. Actual payment of the award earned
shall be in cash or in Common Stock of the Corporation or in a
combination of both, as the Administrator in its sole discretion
determines. If Common Stock of the Corporation is used, the
participant shall not have the right to vote and receive
dividends until the goals are achieved and the actual shares are
issued.
9. Incentive Stock Options. ISOs are stock options
to purchase shares of Common Stock at not less than 100% of the
fair market value of the shares on the date the option is
granted, subject to such terms and conditions set forth in an
option agreement as may be established by the Administrator in
its sole discretion that conform to the requirements of Section
422 of the Code. Said purchase price may be paid (a) by check
or, in the discretion of the Administrator, either (b) by the
delivery of shares of Common Stock of the Corporation then owned
by the participant or (c) by directing the Company to withhold
from the number of shares of Common Stock otherwise issuable upon
exercise of the option that whole number of shares of Common
Stock having an aggregate fair market value on the date of
exercise at least equal to the exercise price for all of the
shares of Common Stock subject to such exercise, or (d) by a
combination of any of the foregoing, in the manner provided in
the option agreement. In lieu of exercising an option and
subject to the approval of the Administrator, the optionee may
request that the Company pay in cash the difference between the
fair market value of part or all of the stock which is the
subject of the option and the exercise price thereof. ISOs shall
be exercisable no earlier than three years after the date they
are granted and not later than ten years after the date they are
granted. The aggregate fair market value (determined as of the
time an option is granted) of the stock with respect to which
ISOs are exercisable for the first time by an optionee during any
calendar year (under all option plans of the Corporation and its
subsidiary corporations) shall not exceed $100,000.
<PAGE> A-5
10. Nonqualified Stock Options. NQSOs are
nonqualified stock options to purchase shares of Common Stock at
purchase prices established by the Administrator on the date the
options are granted, subject to such terms and conditions set
forth in an option agreement as may be established by the
Administrator in its sole discretion. The purchase price may be
paid (a) by check or, in the discretion of the Administrator,
either (b) by the delivery of shares of Common Stock of the
Corporation then owned by the participant or (c) by directing the
Company to withhold from the number of shares of Common Stock
otherwise issuable upon exercise of the option that whole number
of shares of Common Stock having an aggregate fair market value
on the date of exercise at least equal to the exercise price for
all of the shares of Common Stock subject to such exercise, or
(d) by a combination of any of the foregoing, in the manner
provided in the option agreement. In lieu of exercising an
option and subject to the approval of the Administrator, the
optionee may request that the Corporation pay in cash the
difference between the fair market value of part or all of the
stock which is the subject of the option and the exercise price
thereof. NQSOs granted after the date of shareholder approval of
the Plan shall be exercisable no earlier than three years after
the date they are granted and not later than ten years after the
date they are granted.
11. Adjustment Provisions.
(a) If the Corporation shall at any time change
the number of issued shares of Common Stock without new
consideration to the Corporation (such as by stock dividends or
stock splits), the total number of shares reserved for issuance
under this Plan and the number of shares covered by each
outstanding benefit shall be adjusted so that the aggregate
consideration payable to the Corporation, if any, and the value
of each such benefit shall not be changed. Benefits may also
contain provisions for their continuation or for other equitable
adjustments after changes in the Common Stock resulting from
reorganization, sale, merger, consolidation, issuance of stock
rights or warrants, or similar occurrence.
(b) Notwithstanding any other provision of this
Plan, and without affecting the number of shares reserved or
available hereunder, the Board of Directors may authorize the
issuance or assumption of benefits in connection with any merger,
consolidation, acquisition of property or stock, or
reorganization upon such terms and conditions as it may deem
appropriate.
12. Change in Control. Notwithstanding any other
provision of the Plan to the contrary, in the event of a Change
in Control of the Corporation, as defined below, all outstanding
SARs, ISOs and NQSOs shall be immediately fully vested and
exercisable and any restrictions on Restricted Stock issued under
the Plan shall lapse.
<PAGE> A-6
"Change in Control" means:
(a) The acquisition by any individual, entity or
group, or a Person (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) of
ownership of 30% or more of either (i) the then
outstanding shares of Common Stock of the
Corporation ("Outstanding Corporation Common
Stock") or (ii) the combined voting power of the
then outstanding voting securities of the
Corporation entitled to vote generally in the
election of directors ("Outstanding Corporation
Voting Securities"); or
(b) Individuals who, as of the date of approval
of the Plan by the Board of Directors of the
Corporation, constitute the Board of Directors of
the Corporation ("Incumbent Board") cease for any
reason to constitute at least a majority of the
Board; provided, however, that any individual
becoming a director subsequent to the date hereof
whose election, or nomination for election by the
Corporation's stockholders, was approved by a vote
of at least a majority of the directors then
comprising the Incumbent Board shall be considered
as though such individual were a member of the
Incumbent Board, but excluding, as a member of the
Incumbent Board, any such individual whose initial
assumption of office occurs as a result of either
an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than
the Board; or
(c) Approval by the stockholders of the
Corporation of a reorganization, merger or
consolidation, in each case, unless, following
such reorganization, merger or consolidation, (i)
more than 50% of, respectively, the then
outstanding shares of common stock of the
corporation resulting from such reorganization,
merger or consolidation and the combined voting
power of the then outstanding voting securities of
such corporation entitled to vote generally in the
election of directors is then beneficially owned,
directly or indirectly, by all or substantially
all of the individuals and entities who were the
beneficial owners, respectively, of the
Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities
immediately prior to such reorganization, merger
or consolidation, in substantially the same
proportions as their ownership, immediately prior
to such reorganization, merger or consolidation of
the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities, as the
case may be, (ii) no Person beneficially owns,
<PAGE> A-7
directly or indirectly, 30% or more of,
respectively, the then outstanding shares of
common stock of the corporation resulting from
such reorganization, merger or consolidation or
the combined voting power of the then outstanding
voting securities of such corporation, entitled to
vote generally in the election of directors and
(iii) at least a majority of the members of the
board of directors of the corporation resulting
from such reorganization, merger or consolidation
were members of the Incumbent Board at the time of
the execution of the initial agreement providing
for such reorganization, merger or consolidation;
or
(d) Approval by the stockholders of the
Corporation of (i) a complete liquidation or
dissolution of the Corporation or (ii) the sale or
other disposition of all or substantially all of
the assets of the Corporation, other than to a
corporation, with respect to which following such
sale or other disposition, (1) more than 50% of,
respectively, the then outstanding shares of
common stock of such corporation and the combined
voting power of the then outstanding voting
securities of such corporation entitled to vote
generally in the election for directors is then
beneficially owned, directly or indirectly, by all
or substantially all of the individuals and
entities who were the beneficial owners,
respectively, of the Outstanding Corporation
Common Stock and Outstanding Corporation Voting
Securities immediately prior to such sale or other
disposition in substantially the same proportion
as their ownership, immediately prior to such sale
or other disposition, of the Outstanding
Corporation Common Stock and Outstanding
Corporation Voting Securities, as the case may be,
(2) no person beneficially owns, directly or
indirectly, 30% or more of, respectively, the then
outstanding shares of common stock of such
corporation and the combined voting power of the
then outstanding voting securities of such
corporation entitled to vote generally in the
election of directors and (3) at least a majority
of the members of the board of directors of such
corporation were members of the Incumbent Board at
the time of the execution of the initial agreement
or action of the Board providing for such sale or
other disposition of assets of the Corporation.
<PAGE> A-8
13. Nontransferability. Each benefit granted under
the Plan to an employee shall not be transferable otherwise than
by will or the laws of descent and distribution; provided,
however, NQSOs granted under the Plan may be transferred, without
consideration, to a Permitted Transferee (as defined below).
Benefits granted under the Plan shall be exercisable, during the
participant's lifetime, only by the participant or a Permitted
Transferee. In the event of the death of a participant, exercise
or payment shall be made only:
(a) By or to the Permitted Transferee, executor
or administrator of the estate of the deceased participant or the
person or persons to whom the deceased participant's rights under
the benefit shall pass by will or the laws of descent and
distribution; and
(b) To the extent that the deceased participant
or the Permitted Transferee, as the case may be, was entitled
thereto at the date of his death.
For purposes of this Section 13, "Permitted Transferee" shall
include (i) one or more members of the participant's family, (ii)
one or more trusts for the benefit of the participant and/or one
or more members of the participant's family, or (iii) one or more
partnerships (general or limited), corporations, limited
liability companies or other entities in which the aggregate
interests of the participant and members of the participant's
family exceed 80% of all interests. For this purpose, the
participant's family shall include only the participant's spouse,
children and grandchildren.
14. Taxes. The Corporation shall be entitled to
withhold the amount of any tax attributable to any amounts
payable or shares deliverable under the Plan after giving the
person entitled to receive such payment or delivery notice as far
in advance as practicable, and the Corporation may defer making
payment or delivery as to any benefit if any such tax is payable
until indemnified to its satisfaction. The person entitled to
any such delivery may, by notice to the Corporation at the time
the requirement for such delivery is first established, elect to
have such withholding satisfied by a reduction of the number of
shares otherwise so deliverable, such reduction to be calculated
based on a closing market price on the date of such notice.
15. Tenure. A participant's right, if any, to
continue to serve the Corporation and its subsidiaries as an
officer, employee, or otherwise, shall not be enlarged or
otherwise affected by his or her designation as a participant
under the Plan.
<PAGE> A-9
16. Duration, Interpretation, Amendment and
Termination. No benefit shall be granted more than ten years
after the date of adoption of this Plan; provided, however, that
the terms and conditions applicable to any benefit granted within
such period may thereafter be amended or modified by mutual
agreement between the Corporation and the participant or such
other person as may then have an interest therein. Also, by
mutual agreement between the Corporation and a participant
hereunder, stock options or other benefits may be granted to such
participant in substitution and exchange for, and in cancellation
of, any benefits previously granted such participant under this
Plan. To the extent that any stock options or other benefits
which may be granted within the terms of the Plan would qualify
under present or future laws for tax treatment that is beneficial
to a recipient, then any such beneficial treatment shall be
considered within the intent, purpose and operational purview of
the Plan and the discretion of the Administrator, and to the
extent that any such stock options or other benefits would so
qualify within the terms of the Plan, the Administrator shall
have full and complete authority to grant stock options or other
benefits that so qualify (including the authority to grant,
simultaneously or otherwise, stock options or other benefits
which do not so qualify) and to prescribe the terms and
conditions (which need not be identical as among recipients) in
respect to the grant or exercise of any such stock option or
other benefits under the Plan. The Board of Directors may amend
the Plan from time to time or terminate the Plan at any time.
However, no action authorized by this paragraph shall reduce the
amount of any existing benefit or change the terms and conditions
thereof without the participant's consent. No amendment of the
Plan shall, without approval of the stockholders of the
Corporation, (a) increase the total number of shares which may be
issued under the Plan or increase the amount or type of benefits
that may be granted under the Plan; or (b) modify the
requirements as to eligibility for benefits under the Plan.
17. Effective Date. The Plan shall become effective
as of the date it is adopted by the Board of Directors of the
Corporation subject only to approval by the holders of a majority
of the outstanding voting stock of the Corporation within twelve
months before or after the adoption of the Plan by the Board of
Directors.
<PAGE> B-1
Appendix B
STIFEL FINANCIAL CORP.
1998 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE. The purpose of this Stifel Financial Corp. 1998
Employee Stock Purchase Plan is to provide eligible
employees of Stifel Financial Corp. and its subsidiaries the
opportunity to acquire a proprietary interest in the Company
through the purchase of Common Stock. It is intended that
this Plan shall qualify as an Employee Stock Purchase Plan
within the meaning of Section 423 of the Internal Revenue
Code of 1986, as amended.
2. DEFINITIONS. As used in this Plan, the following terms have
the following meanings:
(a) "Board" means the Board of Directors of the
Company.
(b) "Code" means the Internal Revenue Code of 1986, as
amended.
(c) "Committee" means the Committee described in
paragraph 12.
(d) "Common Stock" means shares of common stock par
value fifteen cents ($.15) per share of the Company,
either authorized but unissued, or stock that has been
issued previously but is held in the treasury of the
Company.
(e) "Company" means Stifel Financial Corp., a Delaware
corporation.
(f) "Compensation" means all wages, salaries, bonuses
and other forms of direct remuneration received by an
Employee.
(g) "Employee" means an employee of the Company who is
customarily employed for more than twenty hour per week
and more than five months in the calendar year by the
Company or a Subsidiary.
(h) "Fair Market Value" means the fair market value of
one share of Common Stock as of a particular day, which
shall generally be the mean between the high and the
low price per share of Common Stock on the New York
Stock Exchange, or such other valuation method
determined by the Committee.
(i) "Fiscal Year" means the fiscal year of the
Company.
(j) "Money Market Fund" means that money market fund
determined from time to time by the Committee as a
measure of determining simple interest under the Plan.
<PAGE> B-2
(k) "Offering Date" means the first business day of an
Offering Period.
(l) "Offering Period" means the period during which an
offer to purchase Common Stock is in effect under this
Plan.
(m) "Plan" means the Stifel Financial Corp. 1998
Employee Stock Purchase Plan.
(n) "Subsidiary" means any corporation, other than the
Company in an unbroken chain of corporations beginning
with the Company, if each of the corporations other
than the last corporation in the unbroken chain, owns
stock possessing fifty percent ("50%") or more of the
total combined voting power of all classes of stock in
one of the other corporations in such chain.
(o) Termination Date" means the last business day of a
Fiscal Year, or such other date specified in paragraph
15.
3. ELIGIBILITY. Each Employee shall be eligible to participate
in offerings under the Plan subject to the limitations
imposed by Section 423 of the Code and the limitations
herein contained.
Any provision of the Plan to the contrary notwithstanding,
no Employee shall be granted an option:
(i) if, immediately after the grant, such Employee would own
shares of stock, possessing five percent (5%) or more of the
total combined voting power of all classes of stock of the
Company or of any Subsidiary; or
(ii) which permits such Employee's rights to purchase shares
under all employee stock purchase plans of the Company and
its Subsidiaries to accrue at a rate which exceeds $25,000
of Fair Market Value of the shares (determined at the time
such option is granted) for each calendar year in which such
stock option is outstanding at any time.
For purposes of this paragraph, the rules of Section 424(d)
of the Code shall apply in determining the stock ownership
of an individual.
All Employees granted options shall have the same rights and
privileges as required by Section 423(b)(5) of the Code.
4. OFFERING DATES. It is contemplated that the Plan will be
implemented by annual offerings which shall be numbered
consecutively. Each offering shall be authorized by the
Committee and shall commence on an Offering Date and shall
end on a Termination Date. Only one offering may be in
effect as to any individual at any one time. Participation
in any offering under the Plan shall neither limit nor
require participation in any other offering.
<PAGE> B-3
5. PARTICIPATION IN THE PLAN.
(a) All Employees shall be given notice of each
offering within a reasonable time after determination
to make such offering has been made by the Committee.
(b) Participation in the Plan shall be limited to
eligible Employees. An eligible Employee may become a
participant by filing a written notice of his or her
election to participate on the form provided by the
Committee with the Human Resources Department of the
Company no later than 15 days prior to the applicable
Offering Date and such notice shall become effective on
such Offering Date.
(c) A participant may discontinue his or her
participation in the Plan as provided in paragraph 10
hereof or reduce his or her participation as provided
under paragraph 8(b), but no other change can be made
during an Offering Period.
6. PAYROLL DEDUCTIONS.
(a) At the time a participant files his or her notice
of election to participate in the Plan the participant
shall authorize the Company and/or Subsidiary by whom
the participant is employed to withhold from his or her
Compensation throughout the Offering Period the amount
specified in the participant's election form. Payroll
deductions when authorized for a participant shall
commence on the date when his or her authorization for
payroll deduction becomes effective and shall end on
the Termination Date of the Offering Period, unless
sooner terminated by the participant as provided under
paragraph 10 hereof.
(b) Each such authorization shall direct the Company
and/or the Subsidiary to withhold amounts through
payroll deductions pursuant to the terms of the Plan.
The amount to be withheld shall be a percentage of the
participant's Compensation in 1% increments not to
exceed 10% of Compensation; provided, that the
participant may, if he or she desires, elect a maximum
dollar limitation on the amount he or she contributes.
Such authorization also may specify that the designated
amount shall be withheld (a) solely from bonuses, or
(b) solely from Compensation other than bonuses. If no
such specific designation is made, the percentage
designated shall be withheld from all Compensation,
including bonuses.
(c) Funds accumulated under the Plan may be returned
only pursuant to the terms of the Plan.
<PAGE> B-4
7. GRANTING OF OPTION.
(a) On the date when a participant's notice of
election to participate in the Plan becomes effective,
the participant shall be granted an option to purchase
up to 1,000 shares of Common Stock, subject to
paragraph 11.
(b) The option price of shares in any offering to be
made hereunder shall be the lower of:
(i) 85% of the Fair Market Value of the
Common Stock on the Offering Date for such
offering; or
(ii) 85% of the Fair Market Value on the
Termination Date for such offering.
8. EXERCISE OF OPTION.
(a) Unless a participant gives written notice to the
Company as hereinafter provided, the participant's
option for the purchase of shares of Common Stock made
during any offering will be exercised automatically on
the Termination Date for the purchase of the number of
full shares the option price of which is covered by the
funds accumulated for the participant with respect to
the Offering Period.
(b) By written notice to the Company prior to the
close of business on the Termination Date, a
participant may cease his or her payroll deduction for
future payroll periods. The amounts withheld on the
participant's behalf shall be used to purchase shares
of Common Stock on the Termination Date.
(c) No option under the Plan shall be exercised prior
to the close of business on the Termination Date of the
offering with respect to which such option was granted.
9. PAYMENT AND DELIVERY. As soon as practicable after the
Termination Date of each offering, the Company will purchase
for each participant that number of shares of Common Stock
for which the participant has a sufficient amount from
payroll deductions to fund the option price, based upon the
formula price and limitations set forth in paragraphs 3 and
7. Cash will be distributed in lieu of fractional shares.
<PAGE> B-5
Prior to an Offering Period, the Committee, in its sole
discretion, may designate that all or any portion of the
"employer subsidized shares" purchased for a participant for
such Offering Period shall be held by the Company until the
second anniversary of such Termination Date. For this
purpose, the "employer subsidized shares" mean the shares
purchased for a participant as of a Termination Date in
excess of that number of shares that are equal in value to
the option price of all shares purchased for the participant
as of such Termination Date. The shares so held by the
Company shall be delivered to the participant as soon as
practicable after such second anniversary date, or, if
earlier, upon termination of employment of the employee.
Subject to the restrictions of paragraph 14, the balance of
the shares purchased for a participant shall be delivered to
the participant as soon as practicable after such purchase.
In the event the amount withheld through payroll deductions
on behalf of a participant with respect to an Offering
Period exceeds the option price of the shares available for
purchase for such participant for that Offering Period, the
excess of the amount so withheld over the option price of
the shares so purchased for the participant shall be
returned to such participant.
10. WITHDRAWAL.
(a) A participant may withdraw his or her notice of
election to participate and may also withdraw payroll
deductions credited under the Plan at any time prior to
the close of business on the Termination Date by giving
written notice to the Company. All of the
participant's payroll deductions withheld under the
Plan will be paid to the participant as soon as
practicable after receipt of notice of withdrawal, and
no further payroll deductions will be made, and the
participant may not thereafter participate in the
offering then in effect.
(b) A participant's withdrawal will not have any
effect upon the participant's eligibility to
participate in succeeding offerings or in any similar
plan which may hereafter be adopted by the Company.
<PAGE> B-6
11. STOCK.
(a) The shares to be sold to participants under the
Plan may, at the election of the Company, be either
treasury shares or shares to be originally issued for
such purpose. Notwithstanding anything in the Plan to
the contrary, the maximum number of shares which shall
be made available for sale under the Plan shall be
750,000 shares and not more than 150,000 shares will be
available for sale during any one offering (subject to
adjustment upon changes in capitalization of the
Company as provided in paragraph 15 hereof). If the
total number of shares for which options are to be
granted on any date in accordance with paragraph 7
exceeds the number of shares then available under the
Plan (after deduction of all shares for which options
have been exercised or are then outstanding), the
Company shall make a pro rata allocation of the shares
remaining available in as nearly a uniform manner as
shall be practicable and the excess payroll deductions
which have been made pursuant to the authorization
therefor shall be returned to the respective
participants, together with simple interest on such
amounts. The amount of such simple interest to be paid
to the participant shall be one-half of the average
monthly rates earned by the Money Market Fund during
the period in which the participant was contributing
through payroll deductions during the offering.
(b) No participant shall have any interest in shares
covered by an option until such option has been
exercised, the shares have been fully paid for, and
shall have been issued by the Company.
(c) Shares to be delivered to a participant under the
Plan will be registered in the name of the participant.
(d) In no event shall any certificates for fractional
shares be issued under the Plan.
12. ADMINISTRATION.
(a) The Plan shall be administrated by a Committee
(the "Committee"). The Committee shall be appointed by
the Board of Directors, which may, from time to time,
remove members from, or add members to, the Committee.
(b) A majority of the Committee shall constitute a
quorum. All determinations of the Committee shall be
made by a majority of its members. Any decision or
determination reduced to writing and signed by a
majority of the members shall be fully as effective as
if it had been made by a majority vote at a meeting
duly called and held.
<PAGE> B-7
(c) The Committee shall have full authority to make,
administer, and interpret such rules and regulations
and to promulgate such forms as it deems necessary to
administer the Plan, and any determination, decision,
or action of the Committee in connection with the
construction, interpretation, administration or
application of the Plan shall be final and conclusive,
and binding upon all participants and any and all
persons claiming under or through any participant.
13. DESIGNATION OF BENEFICIARY. A participant may file a
written designation of a beneficiary who is to receive any
shares, cash, or cash and shares, to the participant's
credit under the Plan in the event of such participant's
death prior to delivery to him or her of such shares or
cash. Such designation of beneficiary may be changed by the
participant at any time by written notice. Upon the death of
the participant and upon receipt by the Company of proof of
the identity and existence of a beneficiary validly
designated by the participant under the Plan, the Company
shall deliver such shares or cash to such beneficiary in
accordance with paragraph 16(b) hereof. Unless the
participant files a different beneficiary designation form,
the beneficiary entitled to receive life insurance proceeds
on account of the participant's death under the Company's
group term life insurance plan, shall be the designated
beneficiary under this Plan. In the event of the death of a
participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such
participant's death, the Company shall deliver such shares
or cash to the legates or legatees of the participant under
the participant's last will or to the participant's personal
representatives or distributees.
14. RESTRICTIONS ON TRANSFERABILITY. Except as provided in
paragraph 13, neither payroll deductions to a participant's
credit under the Plan, nor any rights with regard to the
exercise of an option to receive shares under the Plan, nor
shares held by the Company pursuant to paragraph 9 may be
assigned, transferred, pledged, or otherwise disposed of in
any way by the participant other than by will or the laws of
descent and distribution. Any such attempted assignment,
transfer, pledge or other disposition shall be without
effect. A participant's rights and all options granted
under the Plan shall only be exercisable during his or her
lifetime by such participant.
15. CHANGES IN CAPITALIZATION AND CHANGE IN CONTROL.
(a) In the event of reorganization, recapitalization,
stock split, stock dividend, combination of shares,
offerings of rights or any other change in the
structure of the Common Stock of the Company, the
Committee may make such adjustment, if any, as it may
deem appropriate in the number, kind, and the
subscription price of shares available for purchase
under the Plan, and in the number of shares which an
Employee is entitled to purchase.
<PAGE> B-8
(b) Subject to paragraph 19, a Termination Date shall
occur as to any offering then in effect on a date of a
Change in Control. For this purpose, a Change in
Control shall mean:
(1) The acquisition by any individual,
entity or group, or a Person (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange
Act) of ownership of 30% or more of either (i) the
then outstanding shares of Common Stock of the
Company ("Outstanding Company Common Stock") or
(ii) the combined voting power of the then
outstanding voting securities of the Company
entitled to vote generally in the election of
directors ("Outstanding Company Voting
Securities"); or
(2) Individuals who, as of the date of
approval of the Plan by the Board of Directors of
the Company, constitute the Board of Directors of
the Company ("Incumbent Board") cease for any
reason to constitute at least a majority of the
Board; provided, however, that any individual
becoming a director subsequent to the date hereof
whose election, or nomination for election by the
Company's stockholders, was approved by a vote of
at least a majority of the directors then
comprising the Incumbent Board shall be considered
as though such individual were a member of the
Incumbent Board, but excluding, as a member of the
Incumbent Board, any such individual whose initial
assumption of office occurs as a result of either
an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than
the Board; or
(3) Approval by the stockholders of the
Company of a reorganization, merger or
consolidation, in each case, unless, following
such reorganization, merger or consolidation, (i)
more than 50% of, respectively, the then
outstanding shares of common stock of the Company
resulting from such reorganization, merger or
consolidation and the combined voting power of the
then outstanding voting securities of such Company
entitled to vote generally in the election of
directors is then beneficially owned, directly or
indirectly, by all or substantially all of the
individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting
Securities immediately prior to such
reorganization, merger or consolidation, in
substantially the same proportions as their
ownership, immediately prior to such
reorganization, merger or consolidation of the
<PAGE> B-9
Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be,
(ii) no Person beneficially owns, directly or
indirectly, 30% or more of, respectively, the then
outstanding shares of common stock of the Company
resulting from such reorganization, merger or
consolidation or the combined voting power of the
then outstanding voting securities of such
Company, entitled to vote generally in the
election of directors and (iii) at least a
majority of the members of the board of directors
of the Company resulting from such reorganization,
merger or consolidation were members of the
Incumbent Board at the time of the execution of
the initial agreement providing for such
reorganization, merger or consolidation; or
(4) Approval by the stockholders of the
Company of (i) a complete liquidation or
dissolution of the Company or (ii) the sale or
other disposition of all or substantially all of
the assets of the Company, other than to a
Company, with respect to which following such sale
or other disposition, (1) more than 50% of,
respectively, the then outstanding shares of
common stock of such Company and the combined
voting power of the then outstanding voting
securities of such Company entitled to vote
generally in the election for directors is then
beneficially owned, directly or indirectly, by all
or substantially all of the individuals and
entities who were the beneficial owners,
respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities
immediately prior to such sale or other
disposition in substantially the same proportion
as their ownership, immediately prior to such sale
or other disposition, of the Outstanding Company
Common Stock and Outstanding Company Voting
Securities, as the case may be, (2) no person
beneficially owns, directly or indirectly, 30% or
more of, respectively, the then outstanding shares
of common stock of such Company and the combined
voting power of the then outstanding voting
securities of such Company entitled to vote
generally in the election of directors and (3) at
least a majority of the members of the board of
directors of such Company were members of the
Incumbent Board at the time of the execution of
the initial agreement or action of the Board
providing for such sale or other disposition of
assets of the Company.
<PAGE> B-10
16. TERMINATION OF EMPLOYEE'S RIGHTS OF PARTICIPATION.
(a) Except as provided herein, an Employee's right to
participate in the Plan shall terminate upon the
termination of such Employee's employment by the
Company or a Subsidiary of the Company for any reason
including retirement.
(b) If a participant terminates employment for any
reason other than death, or retirement on or after age
60, during an Offering Period, the participant shall be
repaid the total amounts which have been withheld in
respect of such Offering Period pursuant to paragraph
6. If a participant terminates employment by reason of
death, or retirement on or after age 60, during an
Offering Period, the participant or the participant's
designated beneficiary (or other person designated in
paragraph 13) shall be paid the amounts accumulated on
the participant's behalf through payroll deductions
together with simple interest on such amounts. The
amount of such simple interest to be paid shall be one-
half of the average monthly rates earned by the Money
Market Fund during the period in which the participant
was contributing during the offering. If a participant
dies on or after a Termination Date but prior to the
payment to the participant of shares purchased on the
participant's behalf on such Termination Date, the
shares shall be paid to the participant's designated
beneficiary (or other person designated in paragraph
13).
17. AMENDMENT OR TERMINATION. The Board may at any time
terminate, withdraw, suspend, modify or amend the Plan. No
such termination may affect options previously granted, nor
may an amendment make any change in any option theretofore
granted which would adversely affect the rights of any
participant, nor may an amendment be made without the prior
approval of the stockholders of the Company if such
amendment requires the sale of more shares than are
authorized under paragraph 11 of the Plan. The Plan will
terminate in any event on December 31, 2002, and no offer
hereunder will be commenced thereafter. Although it is
presently contemplated that offerings will be made under the
Plan each year during the term of the Plan, the Company
shall not be obligated to any Employee or other person
whatsoever to make any offering under the Plan, or having
made any offering or offerings, to make any further offering
or offerings under the Plan.
18. NOTICES. All notices or communications by a participant to
the Company under or in connection with the Plan shall be
deemed to have been duly given when received by the Human
Resources Department of the Company or when received in the
form specified by the Company at the location, or by the
person designated by the Company for the receipt thereof.
<PAGE> B-11
19. STOCKHOLDER APPROVAL. The Plan has been adopted by the
Executive Committee of the Board of Directors of the Company
as of March 18, 1997 and is subject to the approval of the
holders of the Common Stock of the Company within twelve
months after its adoption by the Board of Directors. No
offering under the Plan shall be made until and unless such
stockholder approval is obtained.
20. APPLICATION OF FUNDS. All proceeds received by the Company
from the sale of Common Stock under the Plan will be used
for general corporate purposes.
21. GOVERNING LAW. This Plan and all agreements entered into
under the Plan shall be construed in accordance with and
shall be governed by applicable provisions of federal law
and by the substantive laws of the State of Missouri, other
than conflicts of law principles.
<PAGE> C-1
PROXY CARD
[FRONT OF CARD]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby nominates, constitutes and appoints
George H. Walker III and Charles R. Hartman (or such other person
as is designated by the Board of Directors of Stifel Financial
Corp. ("Stifel")) (the "Proxies"), or either of them (with full
power to act alone), true and lawful attorney(s), with full power
of substitution, for the undersigned and in the name, place and
stead of the undersigned to vote as designated below all of the
shares of Common Stock, $0.15 par value, of Stifel entitled to be
voted by the undersigned at the Annual Meeting of Stockholders to
be held on April 22, 1997 and at any adjournments or
postponements thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING:
1. ELECTION OF DIRECTORS:
[ ] FOR all nominees listed below (except as marked below)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.
For term expiring in 1999:
Stuart I. Greenbaum
For terms expiring in 2000:
Charles A. Dill, Richard F. Ford, John J. Goebel
2. PROPOSAL TO APPROVE THE ADOPTION OF THE STIFEL 1997 INCENTIVE STOCK PLAN:
[ ] For [ ] Against [ ] Abstain
3. PROPOSAL TO APPROVE THE ADOPTION OF THE STIFEL 1998 EMPLOYEE
STOCK PURCHASE PLAN:
[ ] For [ ] Against [ ] Abstain
[BACK OF CARD]
4. PROPOSAL TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP,
as independent public auditors of the Company:
[ ] For [ ] Against [ ] Abstain
5. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting
and any adjournment thereof.
This proxy when properly executed will be voted in the
manner directed herein by the undersigned stockholder. If no
direction is made, this proxy will be voted FOR all the named
nominees for director and for Proposals 2, 3 and 4.
The undersigned acknowledges receipt of the 1996 Annual
Report to Stockholders and the Notice of the Annual Meeting and
the Proxy Statement. Please mark, sign, date and return the
proxy card promptly using the enclosed envelope.
[ ] PLEASE CHECK THIS BOX IF YOU PLAN TO ATTEND THE
MEETING IN PERSON.
SIGN HERE ___________________________________________
(Please sign exactly as name appears at left)
SIGN HERE ___________________________________________
Executors, administrators, trustees, etc.
should so indicate when signing
DATED ___________________________________________
