<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
<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 APRIL 28, 1998
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 28, 1998, at 10:00 a.m., for the following purposes:
1. To elect three (3) Class III directors to hold office for a
term of three years or until their successors shall have
been duly elected and qualified;
2. To ratify the appointment of Deloitte & Touche LLP as
independent auditors for the year ending December 31, 1998; and
3. 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
10, 1998 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 26, 1998
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 28, 1998
Approximate Date of Mailing: March 26, 1998
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 28, 1998, 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 Proposal I 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, 1998, 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.
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 ratification of the appointment of Deloitte & Touche LLP as
the Company's independent auditors requires the affirmative vote of a
majority of the votes cast on such proposal at the meeting. 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.
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.
<PAGE> 4
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The close of business on March 10, 1998 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 10, 1998,
there were outstanding and entitled to vote 6,677,432 shares of Common Stock.
Ownership of Directors, Nominees and Executive Officers
The following table sets forth information regarding the amount of Common
Stock beneficially owned, as of March 10, 1998, 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)(2) Class (1)
- --------------------------------- ------------------------- ---------
George H. Walker III............. 499,239 (3) 7.40%
Ronald J. Kruszewski............. 229,251 3.42%
Gregory F. Taylor................ 91,163 (4) 1.37%
Michael A. Murphy................ 30,614 (5)
Charles R. Hartman............... 30,197 (6) (5)
Lawrence E. Somraty.............. 23,342 (5)
John J. Goebel................... 22,956 (3) (5)
James M. Oates................... 20,031 (5)
Bruce A. Beda.................... 16,641 (5)
Belle A. Cori.................... 13,812 (5)
Charles A. Dill.................. 11,837 (5)
Richard F. Ford.................. 8,037 (5)
Robert E. Lefton................. 9,790 (5)
Stuart I. Greenbaum.............. 7,350 (5)
Directors and Executive Officers
as a Group (15 persons)......... 932,711 13.53%
- -------------------------
(1) The number of shares beneficially owned has been adjusted to reflect the
five percent stock dividend declared by the Company on January 20, 1998.
Shares subject to options exercisable currently or within 60 days after
March 10, 1998 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 10, 1998 were deemed to be
outstanding for purposes of calculating 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 10, 1998 upon the exercise of
stock options: Mr. Walker - 70,246; Mr. Kruszewski - 35,000;
Mr. Murphy - 12,804; Mr. Hartman - 19,186; Mr. Goebel - 6,699;
Mr. Somraty - 12,116; Ms. Cori - 11,949; Mr. Ford - 6,699;
Mr. Lefton - 6,380; Mr. Dill - 5,787; Mr. Oates - 6,380;
Mr. Beda - 6,588; Mr. Greenbaum - 5,250; and directors and executive
officers as a group - 216,109. Also includes the following shares
allocated to such persons and group under the Stifel, Nicolaus Stock
Ownership Plan and Trust: Mr. Walker - 5,428; Mr. Murphy - 708;
Mr. Hartman - 239; Mr. Somraty - 4,378; and directors and executive
officers as a group - 14,542.
<PAGE> 5
(3) Includes 10,720 shares held by the George Herbert Walker Foundation as
to which Messrs. Walker and Goebel, as co-trustees, share voting power.
(4) Includes 1,602 shares owned 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 2,315 shares owned by Mr. Hartman's wife. Mr. Hartman
disclaims beneficial ownership of such shares.
Ownership of Certain Beneficial Owners
As of March 10, 1998, 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 10, 1998(1) Percent
The Western and Southern Life Insurance Co....... 971,250 (2) 14.55%
400 Broadway
Cincinnati, OH 45202
Del Mintz........................................ 689,614 (3) 10.33%
22732 Rye Road
Shaker Heights, Ohio 44122
Stifel, Nicolaus Stock Ownership Plan and Trust.. 519,768 (4) 7.78%
500 North Broadway
St. Louis, Missouri 63102
George H. Walker III............................. 480,864 (5) 7.15%
500 North Broadway
St. Louis, Missouri 63102
FMR Corp......................................... 360,780 (6) 5.40%
82 Devonshire Street
Boston, Massachusetts 02109
_________________________________________________________________
(1) The number of shares beneficially owned has been adjusted to reflect the
five percent stock dividend declared by the Company on January 20, 1998.
(2) The information shown is based on a Schedule 13G dated January 8, 1998
of The Western and Southern Life Insurance Company("Western and
Southern").The information in the Schedule 13G indicates that Western and
Southern has the sole power to vote and dispose of such shares.
(3) 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 dividends declared
by the Company on January 21, 1997 and January 20, 1998. The information
in the Schedule 13D indicates that Mr. Mintz has the sole power to vote
and dispose of such shares.
<PAGE> 6
(4) With respect to 283,518 shares of Common Stock allocated 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. In 1997, the Company
purchased 236,250 additional shares and contributed these shares to the
Stock Ownership Plan. These unallocated shares will be released for
allocation to the participants based upon employer contributions to fund
an internal loan between the Company and the Stock Ownership Plan. The
trustee is authorized to vote these unallocated Shares in the same
proportion as the trustee votes those shares for which he has received
timely directions from the participants.
(5) See notes 1, 2 and 3 to the preceding table.
(6) The information shown is based on a Schedule 13G dated February 14, 1998
of FMR Corp., Edward C. Johnson 3d, Abigail P. Johnson and Fidelity
Management and Research Company (collectively, "Fidelity Stockholders").
The information in the Schedule 13G indicates that the Fidelity
Stockholders have the sole power to vote 152,300 of such shares and sole
power to dispose of all such shares.
PROPOSAL I: 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 Robert E. Lefton, James M. Oates and George H.
Walker III for election as Class III directors to hold office until the 2001
Annual Meeting of Stockholders or until their respective successors are
elected and qualified 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.
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 III receiving
the highest number of votes cast at the meeting will be elected as directors
of the Company in Class III for the term of such class. 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.
<PAGE> 7
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
Director
Positions or Offices with Continuously
Name Age the Company and Stifel, Nicolaus Since
---- --- ------------------------------- -----------
CLASS III-NOMINEES FOR TERMS ENDING IN 2001
Robert E. Lefton 66 None 1992
James M. Oates 51 None 1996
George H. Walker III 67 Chairman of the Board of the 1981
Company and Stifel, Nicolaus
CLASS I-DIRECTORS WITH TERMS ENDING IN 1999
Bruce A. Beda 57 None 1997
Belle A. Cori 60 None 1990
Stuart I. Greenbaum 61 None 1997
Ronald J. Kruszewski 39 President and Chief Executive 1997
Officer of the Company and
Stifel, Nicolaus
CLASS II-DIRECTORS WITH TERMS ENDING IN 2000
Charles A. Dill 58 None 1995
Richard F. Ford 61 None 1984
John J. Goebel 68 None 1987
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.
Nominees
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. and Wave Technologies International, Inc.
James M. Oates has been Chairman of IBEX Capital Markets, LLC, a
financial service company, since 1996 and he has been Managing Director of The
Wydown Group, a consulting firm that specializes in start-ups, turn-arounds
and defining growth strategies, since 1994. 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 a director
of Phoenix Financial Corporation, Phoenix Duff & Phelps Corp. and AIB Govett
Funds.
<PAGE> 8
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, Macroeconomics Advisers, LLC 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.
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, a
private investment and consulting company, since February 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 ECC
International Corporation.
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.
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, D.T. Industries 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 1995, respectively. Mr. Ford is a director of CompuCom
Systems, Inc., D&K Wholesale Drug, Inc. and TALX Corporation.
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.
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. Mr. Greenbaum is a director of
First Oakbrook Bancshares and RGA Reinsurance Group of America.
Ronald J. Kruszewski was appointed President and Chief Executive Officer
of the Company and Stifel, Nicolaus on September 25, 1997. Prior thereto,
Mr. Kruszewski served as Managing Director and Chief Financial Officer of
Baird Financial Corporation and Managing Director of Robert W. Baird & Co.,
Incorporated ("Baird") from 1993 to September 1997. From 1992 to 1993, Mr.
Kruszewski served as Regional Director of the Private Client Group of Baird.
<PAGE> 9
Board of Directors and Committees
During the year ended December 31, 1997, the Board of Directors of the
Company met six 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), Goebel, Kruszewski 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, 1997.
Audit Committee. Messrs. Oates (Chairman), Beda, Dill, Ford, Goebel and
Greenbaum 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 four times during the
year ended December 31, 1997.
Compensation Committee. Messrs. Lefton (Chairman), Beda and Oates and
Ms. Cori are the current 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, 1997.
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, 1997.
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 Committee will consider nominees recommended by stockholders.
Any stockholder wishing to nominate a candidate for director at a
stockholders meeting must provide advance notice and certain information
about the proposed nominee as described under "Stockholder Proposals" below.
The Nominating Committee met once during the year ended December 31, 1997.
<PAGE> 10
Compensation of Directors. Non-employee directors are paid annual
compensation at a rate of $15,000 for attendance at Board of Directors
meetings and $250 for attendance at Committee meetings and are reimbursed for
expenses incurred in attending such meetings. Directors who are employees of
the Company do not receive any compensation for service as directors, but the
Company pays their expenses for attendance at Board meetings. Additionally,
each new outside director typically is granted options to purchase 5,000
shares of the Company's Common Stock at the current market price on the date
such individual first becomes a director of the Company.
Compensation Committee Interlocks and Insider Participation
During the year ended December 31, 1997, the Compensation Committee was
composed of Messrs. Lefton, Beda and Oates and Ms. Cori, none of whom served
as an officer or employee of the Company or any of its subsidiaries.
EXECUTIVE COMPENSATION
For the years ended December 31, 1997, 1996 and 1995, the following table
presents summary information concerning compensation awarded or paid to, or
earned by, the Chief Executive Officer, each of the other four most highly
compensated executive officers for the year ended December 31, 1997 and each
individual who would have been one of the four most highly compensated
executive officers had they been serving as an executive officer at December
31, 1997, for services rendered to the Company and its subsidiaries.
<PAGE> 11
<TABLE>
Summary Compensation Table
<CAPTION>
Annual Compensation Long Term Compensation
----------------------------------- -------------------------
Other Annual Restricted All Other
Bonus Compensation Stock Options Compensation
Name and Principal Position Year Salary($)($)<F2> ($)<F3> Awards ($) (#)<F5> ($)<F6>
- --------------------------- ---- ------ ------- ----------- ---------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ronald J. Kruszewski <F1> 1997 52,308 98,496 - 17,500<F4> 131,250 103,462
President and Chief 1996 - - - - - -
Executive Officer 1995 - - - - - -
Gregory F. Taylor 1997 129,167 - - - - 254,257
Former President and 1996 199,999 193,803 - - 52,500 2,255
Chief Executive Officer 1995 186,458 - - - - 1,113
George H. Walker, III 1997 172,917 277,551 - - - 1,344
Chairman of the Board 1996 150,000 283,515 - - 52,500 1,122
1995 150,000 - - - - -
Charles R. Hartman 1997 168,750 316,206 - - 16,537 20,675
Vice President 1996 150,000 183,496 - 32,500 - 21,466
and Secretary 1995 150,000 150,000 - - - 41,258
Lawrence E. Somraty 1997 139,500 281,879 - - 16,537 1,344
Vice President 1996 128,333 123,019 - 32,500 - 1,372
1995 124,583 61,466 - - - 250
Michael A. Murphy 1997 139,500 231,879 - - 16,537 2,600
Vice President 1996 135,000 115,076 - 32,500 - 2,308
1995 135,000 - - - - 1,113
<FN>
<F1>Mr. Kruszewski has served as President and Chief Executive Officer of the
Company since September 25, 1997. Prior thereto, Mr. Kruszewski was not
employed by the Company.
<F2>Represents bonuses paid under the executive compensation plans described in
the section entitled "Compensation Committee Report on Executive
Compensation" of this Proxy Statement.
<F3>The named executive officers received certain perquisites in 1997, 1996 and
1995, the amount of which did not exceed the lesser of $50,000 or 10% of
any such officer's salary and bonus.
<F4>The amount shown represents the dollar value of the difference between the
price paid by Mr. Kruszewski for his restricted stock and the fair market
value of the restricted stock at the date of purchase, or $0.10 per share.
The aggregate value of restricted stock holdings for Mr. Kruszewski at
December 31, 1997 was $2,952,862.50, based upon a per share price of
$16.07, which was the last transaction price on that date (as adjusted to
reflect the five percent stock dividend declared by the Company on
January 20, 1998). These restricted shares are fully vested and
Mr. Kruszewski is entitled to vote and receive dividends on the shares to
the same extent as other holders of Common Stock.
<PAGE> 12
<F5>Each option has been adjusted to reflect the five percent stock dividend
declared by the Company on January 20, 1998.
<F6>For the year ended December 31, 1997, the Company contributed $250 to the
Profit Sharing Plan for each named executive officer (other than Mr.
Kruszewski), $1,094 to the Employee Stock Ownership Plan for each named
executive officer (other than Messrs. Kruszewski and Taylor) and $1,256 to
the Company's 1993 Employee Stock Purchase Plan for each of Messrs. Hartman
and Murphy. In addition, with respect to Mr. Hartman, such amount
disclosed for 1997 includes $15,000 forgiven by the Company with respect to
a $75,000 loan from the Company to Mr. Hartman and $3,075 of imputed
interest with respect to such loan. With respect to Mr. Kruszewski, such
amount disclosed includes $73,985 forgiven with respect to a $1,479,687.50
loan from the Company to Mr. Kruszewski and $25,277 of imputed interest
with respect to such loan, as well as $4,200 in apartment rental expenses
paid by the Company on behalf of Mr. Kruszewski. With respect to
Mr. Taylor, the amount disclosed also includes $93,750 in salary equivalent
payments and a $160,257 bonus pursuant to a Severance Agreement and Release
between the Company and Mr. Taylor described under "Employment Agreements"
below.
</TABLE>
The following presents certain information concerning stock options granted
to the named executive officers during the year ended December 31, 1997, and
year-end stock option values. No stock options were exercised by the named
executive officers during the year ended December 31, 1997, except Mr. Taylor
as set forth below.
Option Grants In Last Year
The following table sets forth information concerning stock option
grants made in the year ended December 31, 1997 to the individuals named in
the Summary Compensation Table. No SARs were granted to the named individuals
in 1997.
<PAGE> 13
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------------------------ Potential Realizable
Percent of Value At
Number of Total Assumed Annual
Securities Options/SARs Exercise or Market Rates of Stock Price
Underlying Granted to Base Price on Appreciation for
Options/SARs Employees in Price<F2><F3> Date of Expiration Option Term <F5>
Name Granted<F1>(#) Fiscal Year ($/Sh) Grant($) Date<F4> 0%($) 5%($) 10%($)
---- ------------- ------------ ----------- --------- -------------- ------ ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Charles R. Hartman 16,537 4.37 5.90 7.50 April 22, 2007 26,539 104,539 224,206
Ronald J. Kruszewski 131,250<F6> 34.71 11.37 11.37 Sept. 25, 2007 0 438,425 2,378,153
Michael A. Murphy 16,537 4.37 5.90 7.50 April 22, 2007 26,539 104,539 224,206
Lawrence E. Somraty 16,537 4.37 5.90 7.50 April 22, 2007 25,539 104,539 224,206
<FN>
<F1>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 award.
<F2>Each option has been adjusted to reflect the five percent stock dividend
declared by the Company on January 20, 1998.
<F3>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.
<F4>The options terminate on the earlier of ten years after grant or,
generally, immediately on termination for reasons other than retirement,
disability or death.
<F5>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. 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 above will be achieved. Additionally,
these values do not take into consideration the provisions of the options
providing for nontransferability or delayed exercisability.
<F6>Of these shares of Common Stock, 78,750 shares are subject to non-qualified
stock options. These non-qualified stock options will become exercisable
with respect to 33%, 23% , 23% and 21% of such shares on December 31, 1997
and on December 31 of each succeeding year, respectively. The remaining
52,500 shares are subject to incentive stock options. With respect to
these shares, 8,750 incentive stock options will become exercisable on
each of March 25, 1998, January 1, 1999 and January 1 of each of the next
four years.
</TABLE>
<PAGE> 14
<TABLE>
Year-End Option Value
<CAPTION>
Shares for Which Unexercised
Shares Unexercised Options held at In-the-Money Options held
Acquired on Value December 31, 1997(#) at December 31,1997($)<F1>
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Charles R. Hartman -- -- 19,186 15,583 195,696 158,727
Ronald J. Kruszewski -- -- 26,250 105,000 123,438 493,752
Michael A. Murphy -- -- 12,804 11,025 114,045 112,193
Lawrence E. Somraty -- -- 12,116 11,025 132,666 112,193
Gregory F. Taylor 69,949 376,480 -- -- -- --
George H. Walker, III -- -- 51,871 36,750 565,235 378,139
<FN>
<F1>Based on the Company's Common Stock closing price on December 31, 1997
of $16.071 ($16.875 before adjustment for the five percent stock dividend
declared by the Company on January 20, 1998).
</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 (collectively, the "Agreement"), 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.
On January 21, 1997 the Board of Directors approved a $25,000 per annum
increase in Mr. Walker's salary to $175,000. 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, 1999 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.
The obligations of the Company under the 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 good
cause, 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").
<PAGE> 15
"Change of Control" is defined in the 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 that 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 that constitutes more than 25%
of the outstanding voting power of the Company after giving effect to such
issuance or sale.
The Company and Ronald J. Kruszewski entered into an Employment Letter, a
Promissory Note, a Restricted Stock Agreement, an Incentive Stock Option
Agreement and a Nonqualified Stock Option Agreement, each as of September 25,
1997, and an amended Incentive Stock Option Agreement and Nonqualified Stock
Option Agreement, each as of December 1, 1997 (collectively, the "Employment
Terms"). Under the Employment Terms, Mr. Kruszewski's annual salary shall be
not less than $200,000 and he is eligible to participate in the executive bonus
pool and in all other employee benefits of the Company provided to senior
executive officers. Mr. Kruszewski was granted options to purchase 131,250
shares of Common Stock. Mr. Kruszewski also received a loan from the Company in
the amount of $1,479,687.50, payable in installments with interest with the
final installment due September 25, 2002, which will be forgiven over five years
if he continues to be employed by the Company. As of December 31, 1997, the
principal amount outstanding on this loan was $1,405,703. Mr. Kruszewski used
all of the loan proceeds and personal funds of $591,875 to purchase 175,000
shares of Common Stock (183,750 shares as adjusted to reflect the five percent
stock dividend declared by the Company on January 20, 1998) at a price equal to
$11.8375, a $0.10 discount to the market price of the Common Stock on the date
of grant, pursuant to the terms of the Restricted Stock Agreement. The shares
of Common Stock purchased under the Restricted Stock Agreement are restricted as
to resale only for a period of three years from the date of purchase. The
Company will reimburse Mr. Kruszewski for relocation expenses and the premiums
he pays on life insurance policies during his employment, and it will pay
initiation fees for his membership in a country club.
If Mr. Kruszewski's employment is terminated by the Company without cause
or there is a Change in Control (defined below) of the Company, or if Mr.
Kruszewski resigns for certain enumerated reasons, such as a reduction in
executive duties, a decrease in compensation or benefits or he is required to
relocate outside the metropolitan St. Louis, Missouri area ("Good Reason"), the
outstanding principal amount of and accrued interest on Mr. Kruszewski's loan
will be forgiven and all outstanding options held by Mr. Kruszewski will become
fully vested. A "Change in Control" is defined as (a) the acquisition by any
person of 30% or more of either (i) the outstanding Common Stock of the Company
or (ii) the combined voting power of the Common Stock entitled to vote for the
election of directors; or (b) the incumbent directors as of January 21, 1997,
or any subsequent directors whose nominations were approved by a majority of
the those directors, cease to constitute a majority of the Board; or (c)
approval by the stockholders of a reorganization, merger or consolidation of the
Company under certain circumstances.
<PAGE> 16
Stifel, Nicolaus and Charles R. Hartman entered into a letter agreement on
May 23, 1994 which provided 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 of the Company and, for fiscal 1996 and 1997, his bonus payment was
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. As of
December 31, 1997, the outstanding principal amount of Mr. Hartman's loan was
$30,000. Mr. Hartman is also eligible to participate in all other employee
benefits of the Company provided to senior executive officers.
On July 2, 1997, the Company and Stifel, Nicolaus entered into a Severance
Agreement and Release ("Severance Agreement") with Mr. Gregory F. Taylor, the
former President and Chief Executive Officer of the Company. Under the
Severance Agreement, the Company agreed to pay Mr. Taylor salary equivalent
payments in the amount of $225,000, to be paid in equal monthly installments
for one year, plus the cost of extending insurance benefits to Mr. Taylor, his
spouse and dependants for one year from the effective date of his resignation.
Under the Severance Agreement, the Company also agreed to pay Mr. Taylor a bonus
for the six months ended June 30, 1997 in an amount to be determined by the
Compensation Committee, and the Company accelerated the vesting of certain
options previously granted to Mr. Taylor. Mr. Taylor agreed to provide up to 20
hours of consulting services per month through September 30, 1997 and ten hours
per month thereafter for a period that ended on December 31, 1997. The Company
also agreed to continue to indemnify Mr. Taylor against any expenses and amounts
payable in a certain arbitration to which Stifel, Nicolaus is a party, provided
Mr. Taylor acted in good faith in the matter that is the subject of the
arbitration.
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, 1997:
Executive Officer Compensation Policies and 1997 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 more
fully compensate and motivate executives. During 1997, 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.
<PAGE> 17
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 certain investment banking transactions. In connection with
Mr. Hartman's recruitment as an executive officer of the Company, the Company
agreed to guarantee his 1997 bonus payment at the greater of his share of the
administrative bonus program or $150,000. In addition, Messrs. Hartman and
Kruszewski each have a letter agreement. The principal terms of such agreements
have been described above under "Executive Compensation - Employment
Agreements." The letter agreements with these individuals were approved by the
Compensation Committee of the Board of Directors.
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 Compensation
Mr. Kruszewski became President and CEO of the Company and Stifel, Nicolaus
on September 25, 1997 pursuant to the Employment Terms described above under
"Executive Compensation - Employment Agreements." Mr. Kruszewski previously
served as Managing Director and Chief Financial Officer of Baird Financial
Corp. and Managing Director of Baird from 1993 to 1997. The Committee approved
the Employment Terms based upon Mr. Kruszewski's expertise in the industry and
years of experience, as well as the Committee's review of salaries paid to CEOs
of securities firms comparable to the Company. For 1997, Mr. Kruszewski
received a salary of $52,308 and a bonus of $98,496. Mr. Kruszewski received
options to purchase 131,250 shares of Common Stock at $11.37, the fair market
value on the date of grant. Mr. Kruszewski also received a loan from the
Company in the amount of $1,479,687.50, which will be forgiven if he remains
with the Company for five years. Mr. Kruszewski used the loan proceeds and
personal funds of $591,875 to purchase 175,000 shares of Common Stock (183,750
shares as adjusted to reflect the five percent stock dividend declared by the
Company on January 20, 1998) at a price equal to $11.8375 pursuant to the terms
of the Restricted Stock Agreement at a $0.10 discount to the market price of
the Common Stock on the date of grant. The Committee believes that Mr.
Kruszewski's stock option grants and stock ownership will align his
compensation more directly with the interests of the Company's stockholders.
<PAGE> 18
Effective July 31, 1997, Mr. Gregory Taylor resigned as President and
Chief Executive Officer of the Company and Stifel, Nicolaus in order to
explore other endeavors. During the interim period, the Company's Operating
Committee managed the affairs of the Company with Mr. Taylor continuing to
serve the Company in a consulting relationship. On July 2, 1997, the Company
and Mr. Taylor entered into the Severance Agreement described above under
"Executive Compensation - Employment Agreements." In view of the significant
contributions Mr. Taylor made to the growth of management of the Company, the
Committee believed that it was in the best interests of the Company and its
stockholders to make arrangements to ensure that Mr. Taylor would be available
to provide continued advice and counsel to the Company in the future. At its
meeting on July 2, 1997, the Compensation Committee unanimously approved the
terms of the Severance Agreement and the acceleration of the right to exercise
all outstanding options previously granted to Mr. Taylor. Under the Severance
Agreement, Mr. Taylor agreed to serve as a consultant to the Company for a
period that ended on December 31, 1997. During 1997, Mr. Taylor received a
salary of $129,167 prior to his resignation and salary equivalent payments of
$93,750 and a bonus of $160,257 under the terms of the Severance Agreement.
Mr. Taylor will continue to receive additional salary equivalent payments in
the aggregate amount of $131,250 through July 31, 1998 and he will be entitled
to receive major medical health insurance for his family, with coverage and
deductible limits as are generally available to employees of the Company in
comparable positions. The Committee believed that these benefits were
reasonable in light of Mr. Taylor's years of service and his position with
the Company.
Conclusion
Through the program described above, a significant portion of the Company's
executive compensation is linked directly to individual and corporate
performance and stock price appreciation. The Committee intends to continue
the policy of linking executive compensation to individual and corporate
performance and returns to stockholders, recognizing that the business cycle
from time to time may result in an imbalance for a particular period.
1997 Compensation Committee
Robert E. Lefton, Chairman
Belle A. Cori
James M. Oates
Bruce A. Beda
March 26, 1998
<PAGE> 19
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 31, 1992 through December 31, 1997, with the
cumulative total return for the same period measured by the Standard & Poor's
500 Composite Stock Price Index (the "S&P 500 Index") and, for peer groups, the
Financial Services Analytics, Inc. Regional Index (the "FSA Regional Index"), an
index of publicly traded regional brokerage firms, consisting of: The Advest
Group,Inc., Dain Rauscher Corporation, Everen Capital Corporation, First Albany
Companies Inc., Interstate Johnson Lane, Inc., Kinnard Investments, Inc.,
Legg Mason, Inc., McDonald & Company Investments, Inc., Morgan Keegan, Inc.,
Raymond James Financial, Inc., Scott Stringfellow Financial, Inc., and
Southwest Securities Group, Inc.
[PERFORMANCE GRAPH]
Cumulative Value of $100 Investment
December 31,
---------------------------------------------------
1992 1993 1994 1995 1996 1997
------ ------ ------ ------ ------ ------
Stifel Financial Corp. $100.00 $145.83 $ 92.15 $108.96 $153.98 $315.77
S&P 500 Index $100.00 $110.06 $111.50 $153.36 $188.54 $251.42
FSA Regional Index $100.00 $131.12 $111.86 $165.31 $257.06 $560.92
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 and Charles A. Dill are General Partners of the management
companies that 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, 1997, the Company's carrying value
of these investments was approximately $507,000, with a commitment to contribute
$256,418 to the Gateway Funds. Additionally, at December 31, 1997, 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, 1997.
John J. Goebel is a partner in the law firm Bryan Cave LLP, which rendered
legal services to the Company and its subsidiaries during 1997 and is providing
legal services to the Company and its subsidiaries during 1998.
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 1997 and is
providing services to the Company and its subsidiaries during 1998.
<PAGE> 20
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, 1997.
PROPOSAL II.
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, 1998. 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.
<PAGE> 21
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.
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 year period 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, 1998. 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, 1998.
<PAGE> 22
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 1999 Annual
Meeting of Stockholders must be received by the Company by November 27, 1998,
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. Under the Company's
By-Laws, advance notice to the Company must be given by any shareholder seeking
to bring a proposal before the stockholders or to nominate any person for
election as a director at any stockholders' meeting. Notice must be given in
writing to the Secretary of the Company not less than 60 days nor more than 90
days prior to the meeting; provided that if less than 70 days' notice or prior
public disclosure of the date of a stockholders' meeting is given by the
Company, notice must be timely received not later than the close of business
on the tenth day following the earlier of: (1) the day on which notice of the
meeting was mailed; or (2) the day on which public disclosure was made. The
notice must contain the name and address and beneficial ownership of the
stockholder, a brief description of the proposal to be brought or the name,
age, business history, address and written consent to being named of any
proposed nominee, and any material interest of the stockholder in the proposal
or any arrangement or understanding between the stockholder and the proposed
nominee required to be disclosed under the proxy regulations, and the number
of shares known by such stockholder to be supporting the proposal on the date
notice is given.
ANNUAL REPORT
The annual report of the Company for the year ended December 31, 1997 has
simultaneously been mailed to the stockholders of the Company.
A copy of the Company's Annual Report on Form 10-K for the year ended
December 31, 1997, as filed with the Securities and Exchange Commission
(excluding exhibits), may be obtained by any stockholder, without charge, upon
written request to Stephen J. Bushmann, Chief Financial Officer, Stifel
Financial Corp., 500 North Broadway, St. Louis, MO 63102-2188.
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> 23
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 26, 1998
St. Louis, Missouri
<PAGE> A-1
[PROXY CARD]
(FRONT OF CARD)
STIFEL FINANCIAL CORP
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 28, 1998 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 2001:
Robert E. Lefton
James M. Oates
George H. Walker III
2. PROPOSAL TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP, as independent
public auditors of the Company:
[ ] For [ ] Against [ ] Abstain
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting and any adjournment
thereof.
(BACK OF CARD)
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 Proposal 2.
The undersigned acknowledges receipt of the 1997 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 indicate when signing
DATED ,1998
---------------------------------------------
