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):
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[ ] 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:
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3) Filing Party:
4) Date
STIFEL FINANCIAL CORP.
501 NORTH BROADWAY
ST. LOUIS, MISSOURI 63102
(314) 342-2000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 28, 1999
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 Founders Hall,
2nd Floor, One Financial Plaza, 501 North Broadway, St Louis, Missouri,
on Wednesday, April 28, 1999, at 11:00 a.m., for the following purposes:
1. To elect three (3) Class I directors to hold office for a
term of three years or until their successors shall have
been duly elected and qualified;
2. To consider and act upon a proposal to adopt the Amended and
Restated Stifel Financial Corp. 1997 Incentive Stock Plan;
3. To consider and act upon a proposal to adopt the Stifel
Financial Corp. 1999 Executive Incentive Performance Plan;
4. To ratify the appointment of Deloitte & Touche LLP as
independent auditors for the year ending December 31, 1999;
and
5. 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, 1999 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, 1999
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.
STIFEL FINANCIAL CORP.
501 NORTH BROADWAY
ST. LOUIS, MISSOURI 63102
(314) 342-2000
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS TO BE
HELD ON WEDNESDAY, APRIL 28, 1999
APPROXIMATE DATE OF MAILING: MARCH 26, 1999
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 Wednesday, April 28, 1999, at
11:00 a.m. in the Founders Hall, 2nd Floor, One Financial Plaza, 501
North Broadway, 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, in favor of the adoption of the
Amended and Restated Stifel Financial Corp. 1997 Incentive Stock Plan
(the "Amended Incentive Plan") in Proposal II, in favor of the adoption
of the Stifel Financial Corp. 1999 Executive Incentive Performance Plan
(the "Performance Plan") in Proposal III 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, 1999, 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 adoption of the Amended
Incentive Plan, the adoption of the Performance Plan and 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; provided
that, in the case of the adoption of the Amended Incentive Plan and the
Performance 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 Amended
Incentive Plan and the Performance 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.
-1-
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The close of business on March 10, 1999 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, 1999, there were outstanding and entitled to
vote 7,045,330 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, 1999, 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:
PERCENT OF
OUTSTANDING
COMMON STOCK UNVESTED
NUMBER OF SHARES BENEFICIALLY RESTRICTED
NAME BENEFICIALLY OWNED<F1><F2><F3> OWNED<F2> STOCK UNITS<F4>
---- ------------------------------ ------------ ---------------
George H. Walker III 543,113<F5> 7.63% --
Ronald J. Kruszewski 183,980 2.57 105,859
Scott B. McCuaig 87,984 1.25 1,500
Charles R. Hartman 44,500<F6> <F7> --
Lawrence E. Somraty 37,276 <F7> 1,250
John J. Goebel 28,512<F5> <F7> --
James M. Oates 28,213 <F7> --
Charles A. Dill 18,203 <F7> --
Bruce A. Beda 17,471 <F7> --
Robert E. Lefton 14,584 <F7> --
Stuart I. Greenbaum 9,922 <F7> --
Richard F. Ford 8,438 <F7> --
Directors and Executive Officers
as a Group (13 persons) 1,014,090 13.80% 150,609
<FN>
- -------------------------
<F1> Except as otherwise indicated, each individual has sole voting and
investment power over the shares listed beside his or her name.
<F2> The number of shares beneficially owned has been adjusted to
reflect the five percent stock dividend declared by the Company on
January 27, 1999. Shares subject to options exercisable currently
or within 60 days after March 10, 1999 and restricted stock units
vested currently or within 60 days after March 10, 1999 were
deemed to be outstanding for purposes of calculating the
percentage of outstanding shares for each person holding such
options and restricted stock units and for all directors and
executive officers as a group, but were not deemed to be
outstanding for the purpose of calculating the percentage of
outstanding shares for any other person.
<F3> Includes the following shares that such persons and group have the
right to acquire within the 60 days after March 10, 1999 upon the
exercise of stock options: Mr. Walker - 71,622; Mr. Kruszewski -
64,682; Mr. Hartman - 30,718; Mr. Somraty - 11,575; Mr. McCuaig -
8,876; Mr. Goebel - 11,443; Mr. Oates - 12,211; Mr. Beda - 6,916;
Mr. Dill - 11,588; Mr. Ford - 7,033, Mr. Lefton - 9,954;
Mr. Greenbaum - 7,717; and directors and executive officers as a
group - 260,123. Also includes the following shares allocated to
such persons and group under the Stifel Financial Corp. Stock
Ownership Plan and Trust: Mr. Walker - 5,740; Mr. Kruszewski -
38; Mr. Hartman - 292; Mr. Somraty - 4,637; Mr. McCuaig - 21; and
directors and executive officers as a group - 11,357. Also
includes the following shares allocated to such persons and group
underlying restricted stock units vested currently or within 60
days after March 10, 1999: Mr. Kruszewski - 38,188; Mr. McCuaig -
6,375; Mr. Somraty - 5,313; and directors and executive officers
as a group - 49,876.
<F4> Includes shares underlying restricted stock units that such
persons or group hold but which are not subject to vesting within
the 60-day period after March 10, 1999 and, therefore, under the
rules of the Securities and Exchange Commission, are not deemed to
be "beneficially owned" as of March 10, 1999. The restricted
stock units generally will vest over a three to five-year period
after the date of grant based upon the holder's continued
employment with the Company.
-2-
<F5> Includes 11,256 shares held by the George Herbert Walker
Foundation as to which Messrs. Walker and Goebel, as co-trustees,
share voting power.
<F6> Includes 2,431 shares owned by Mr. Hartman's wife. Mr. Hartman
disclaims beneficial ownership of such shares.
<F7> Shares beneficially owned do not exceed one percent of the
outstanding shares of Common Stock.
-3-
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of March 10, 1999, the following persons were the only persons
known to the Company to be beneficial owners of more than five percent
of Common Stock:
PERCENT OF
NUMBER OF SHARES OUTSTANDING
NAME AND ADDRESS BENEFICIALLY OWNED<F1> COMMON STOCK
---------------- ---------------------- ------------
The Western and Southern Life Insurance Co. 1,019,812<F2> 14.48%
400 Broadway
Cincinnati, OH 45202
Del Mintz 735,000<F3> 10.43%
22732 Rye Road
Shaker Heights, Ohio 44122
Stifel Financial Corp. Stock Ownership Plan and Trust 543,221<F4> 7.71%
501 North Broadway
St. Louis, Missouri 63102
George H. Walker III 543,113<F5> 7.63%
501 North Broadway
St. Louis, Missouri 63102
<FN>
- -------------------------
<F1> The number of shares beneficially owned has been adjusted to
reflect the five percent stock dividend declared by the Company on
January 27, 1999.
<F2> 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.
<F3> 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,
January 20, 1998 and January 27, 1999. The information in the
Schedule 13D indicates that Mr. Mintz has the sole power to vote
and dispose of such shares.
<F4> With respect to 307,355 shares of Common Stock allocated to the
Stifel Financial Corp. 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. As of December 31, 1998, the
Company had 235,866 unallocated shares in 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.
<F5> See notes 1, 2, 3 and 4 to the preceding table.
-4-
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 nine, divided into three
classes, with the terms of office of each class ending in successive
years. The Board of Directors has nominated Bruce A. Beda, Stuart I.
Greenbaum and Ronald J. Kruszewski for election as Class I directors to
hold office until the 2002 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 I receiving the highest number of votes cast at the meeting will
be elected as directors of the Company in Class I 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.
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 CONTINUOUSLY
NAME AGE WITH THE COMPANY AND STIFEL, NICOLAUS SINCE
---- --- ------------------------------------- -----
CLASS I-NOMINEES FOR TERMS ENDING IN 2002
Bruce A. Beda 58 None 1997
Stuart I. Greenbaum 62 None 1997
Ronald J. Kruszewski 40 President and Chief Executive Officer of the Company 1997
and Stifel, Nicolaus
CLASS II-DIRECTORS WITH TERMS ENDING IN 2000
Charles A. Dill 59 None 1995
Richard F. Ford 62 None 1984
John J. Goebel 69 None 1987
CLASS III-DIRECTORS WITH TERMS ENDING IN 2001
Robert E. Lefton 67 None 1992
James M. Oates 52 None 1996
George H. Walker III 68 Chairman of the Board of the Company 1981
and Stifel, Nicolaus
-5-
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
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.
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 has been President and Chief Executive
Officer of the Company and Stifel, Nicolaus since September 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. Mr.
Kruszewski is a director of digital broadcast network corporation.
The Board of Directors recommends a vote "FOR" the election of
each of the nominees for director of the Company.
CONTINUING DIRECTORS
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 Resources and TALX
Corporation.
John J. Goebel has been an attorney at the law firm of Bryan Cave
LLP since 1957.
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
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savings bank holding company. Mr. Oates is a director of Phoenix
Financial Corporation, Phoenix Duff & Phelps Corp. and AIB Govett Funds.
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
Western and Southern Life Insurance Company, Laclede Steel Company,
Laidlaw Corporation, Macroeconomics Advisers, LLC and EAC Corporation.
He is active in various community activities. 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, 1998, 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), 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, 1998.
AUDIT COMMITTEE. Messrs. Oates (Chairman), Dill, Ford and Goebel
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, 1998.
COMPENSATION COMMITTEE. Messrs. Lefton (Chairman), Beda, Dill and
Oates 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, 1998.
FINANCE COMMITTEE. Messrs. Ford (Chairman), Beda, Greenbaum and
Oates 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, 1998.
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
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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 did not meet
during the year ended December 31, 1998.
COMPENSATION OF DIRECTORS. Non-employee directors are paid annual
compensation at a rate of $15,000 for attendance at Board of Directors
meetings and $300 for attendance at Committee meetings and are
reimbursed for expenses incurred in attending such meetings. Directors
who are employees of the Company do not receive any compensation for
service as directors, but the Company pays their expenses for attendance
at meetings of the Board of Directors. Additionally, each new outside
director typically is granted options to purchase 5,000 shares of the
Company's Common Stock at the current market price on the date such
individual first becomes a director of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the year ended December 31, 1998, the Compensation
Committee was composed of Messrs. Lefton, Dill, Beda and Oates, none of
whom served as an officer or employee of the Company or any of its
subsidiaries.
-8-
EXECUTIVE COMPENSATION
For the years ended December 31, 1998, 1997 and 1996, the
following table presents summary information concerning compensation
awarded or paid to, or earned by, the Chief Executive Officer, each of
the other four most highly compensated executive officers for the year
ended December 31, 1998 and each individual who would have been one of
the four most highly compensated executive officers had they been
serving as an executive officer at December 31, 1998, for services
rendered to the Company and its subsidiaries.
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation
------------------------------------------------------- ------------------------
Bonus<F1>
------------------- Restricted
Stock Other Annual Stock All Other
Units Compensation Awards Options Compensation
Name and Principal Position Year Salary($) Cash($) ($)<F2> ($)<F3> ($)<F4> (#)<F5> ($)<F6>
- --------------------------- ---- --------- ------- ------- ------------ ---------- ------- ------------
Ronald J. Kruszewski<F7> 1998 200,000 285,000 100,000 -- 25,000 -- 2,251
President and Chief 1997 52,308 98,496 -- -- 1,262,466<F8> 137,812 103,462
Executive Officer 1996 -- -- -- -- -- -- --
George H. Walker, III 1998 175,000 150,000 -- -- -- -- 631
Chairman of the Board 1997 172,917 277,551 -- -- -- -- 1,344
1996 150,000 283,515 -- -- -- 57,881 1,122
Charles R. Hartman 1998 175,000 195,000 -- -- -- -- 19,326
Vice President 1997 168,750 316,206 -- -- -- 17,363 20,675
and Secretary 1996 150,000 183,496 -- -- 32,500<F9> -- 21,466
Scott B. McCuaig<F10> 1998 163,782 165,000 60,000 -- 522,140<F11> 42,000 446
Vice President 1997 -- -- -- -- -- --
1996 -- -- -- -- -- --
Lawrence E. Somraty 1998 141,000 119,000 50,000 -- 12,500 -- 2,276
Vice President 1997 139,500 281,879 -- -- -- 17,363 1,344
1996 128,333 123,019 -- -- 32,500<F9> -- 1,372
<FN>
- ------------
<F1> Represents bonuses paid under the executive compensation plans
described in the section entitled "Compensation Committee Report
on Executive Compensation" of this Proxy Statement.
<F2> Pursuant to the Stifel Financial Corp. 1997 Incentive Stock Plan,
participants in the plan may elect to receive stock units
("Elected Units") in lieu of certain incentive compensation earned
by such individuals. Additionally, each individual participating
receives restricted stock units ("Matching Units") with a fair
market value equal to 25% of that portion of the incentive
compensation that such participant elected to take in Elected
Units. Elected Units and Matching Units were issued to
participants based upon the fair market value of the Common Stock
on the date of issuance. Elected Units are reported under the
"Stock Units" column, while Matching Units are reported under the
"Restricted Stock Awards" column.
<F3> The named executive officers received certain perquisites in 1998,
1997 and 1996, the amount of which did not exceed the lesser of
$50,000 or 10% of any such officer's salary and bonus.
<F4> The restricted stock and restricted stock units holdings for the
individuals named in the Summary Compensation Table and the price
per share of Common Stock have been adjusted for the 5% stock
dividend declared by the Company on January 27, 1999. The
aggregate value of restricted stock and restricted stock units
holdings for the individuals named in the Summary Compensation
Table at December 31, 1998 was $1,239,452, $52,183, $397,618 and
$52,183 for each of Messrs. Kruszewski, Hartman, McCuaig and
Somraty, respectively, based upon a per share price of $9.4671
being the last transaction price on December 31, 1998. The
aggregate number of shares of restricted stock and restricted
stock units held by the individuals named in the Summary
Compensation Table at December 31, 1998 was 130,922, 5,512, 42,000
and 5,512 for each of Messrs. Kruszewski, Hartman, McCuaig and
Somraty, respectively.
<F5> Each option has been adjusted to reflect the five percent stock
dividend declared by the Company on January 27, 1999.
<F6> For the year ended December 31, 1998, the Company contributed $250
to the Company's profit sharing plan for each named executive
officer, $1,645 to the Stifel Financial Corp. 1998 Employee Stock
Purchase Plan for each of Messrs. Kruszewski, Hartman and Somraty
and $351, $381, $381, $196 and $381 to the Company's Employee
Stock Ownership Plan for Messrs. Kruszewski, Walker, Hartman,
McCuaig and Somraty, respectively. In addition, with respect to
Mr. Hartman, the amount disclosed for 1998 also includes $15,000
forgiven by the Company with respect to a $75,000 loan from the
Company to Mr. Hartman and $2,050 of imputed interest with respect
to such loan.
-9-
<F7> 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.
<F8> Mr. Kruszewski's original compensation package included the
purchase of 125,000 restricted shares (131,250 shares as adjusted
to reflect the five percent stock dividend declared by the Company
on January 20, 1998) of Common Stock with the proceeds of a loan
of $1,479,687.50 (the "Loan") by the Company that would be
forgiven over a period of six years ending in 2003, contingent
upon Mr. Kruszewski's continued employment with the Company.
Pursuant to the terms of that certain Stock Unit Agreement dated
December 21, 1998 by and between the Company and Mr. Kruszewski
(the "Stock Unit Agreement"), Mr. Kruszewski's original
compensation package was restructured. Mr. Kruszewski repaid the
Loan by surrendering 124,688 shares of Common Stock and executing
a second promissory note in the amount of $143,237.12. In
replacement of the restricted shares surrendered, Mr. Kruszewski
was awarded 124,688 restricted stock units of the Company pursuant
to the Stock Unit Agreement. The restricted stock units awarded
to Mr. Kruszewski will vest with respect to 26,250, 26,250,
26,250, 26,250 and 19,688 units on January 1, 1999, 2000, 2001,
2002 and 2003, respectively. Except as set forth below, shares of
Common Stock shall be distributed to Mr. Kruszewski in annual
installments over a period of seven years beginning January 1,
2007. The number of shares of Common Stock in each installment
will be determined under the declining balance accounting method,
based on the number of stock units credited to Mr. Kruszewski's
stock unit account as of the beginning of each year in the
installment payment period. In addition, the restricted stock
units granted to Mr. Kruszewski will vest and/or be distributed
(a) upon the death or disability of Mr. Kruszewski, (b) in the
event of a Change of Control (as defined in the Stock Unit
Agreement) or (c) in the event of termination of employment by the
Company for a reason other than a Good Cause Event (as defined in
the Stock Unit Agreement) or by Mr. Kruszewski for Good Reason (as
defined in the Stock Unit Agreement). Mr. Kruszewski will receive
dividends on his restricted stock units to the same extent as
other holders of Common Stock. The amount shown represents the
fair market value of the 124,688 restricted stock units granted to
Mr. Kruszewski, based upon a per share price of $10.125 being the
average price on December 21, 1998.
<F9> With respect to the restricted shares awarded to Messrs. Hartman
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 also shall 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.
<F10> Mr. McCuaig has served as Vice President of the Company since
January 26, 1998. Prior thereto, Mr. McCuaig was not employed by
the Company.
<F11> Includes 1,575 restricted stock units awarded to Mr. McCuaig as
Matching Units and 42,000 restricted shares awarded to Mr. McCuaig
in connection with the commencement of his employment (each as
adjusted for the 5% stock dividend declared by the Company on
January 27, 1999). With respect to the restricted shares, the
restrictions applicable to such shares lapse as to one-fifth of
the shares subject to the award on each of February 4, 1999, 2000,
2001, 2002 and 2003, respectively. In addition, the restrictions
also will lapse as to all shares subject to the award upon the
retirement, death or permanent disability of Mr. McCuaig, or in
the event of a Change in Control of the Company. Mr. McCuaig is
entitled to vote and receive dividends on such shares to the same
extent as other holders of Common Stock.
-10-
The following presents certain information concerning stock
options granted to the named executive officers during the year ended
December 31, 1998, and year-end stock option values.
OPTION GRANTS IN LAST YEAR
The following table sets forth information concerning stock option
grants made in the year ended December 31, 1998 to the individuals named
in the Summary Compensation Table. No SARs were granted to the named
individuals in 1998.
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------------------------------------------------------- VALUE AT
PERCENT OF ASSUMED ANNUAL
NUMBER OF TOTAL RATES OF STOCK PRICE
SECURITIES OPTIONS/SARS EXERCISE OR MARKET APPRECIATION FOR
UNDERLYING GRANTED TO BASE PRICE ON OPTION TERM<F4>
OPTIONS/SARS EMPLOYEES IN PRICE<F2><F3> DATE OF EXPIRATION ---------------------
NAME GRANTED<F1><F2>(#) FISCAL YEAR ($/SH) GRANT ($) DATE<F4> 5%($) 10%($)
---- ------------------ ----------- ------ --------- -------- ----- ------
Scott B. McCuaig 42,000 25% $12.07 $12.07 02/04/08 $318,941 $808,260
<FN>
- -------------
<F1> The option will be exercisable with respect to 594, 8282, 8281,
8281, 8281 and 8281 shares on December 31, 1998, February 4, 1999,
February 4, 2000, February 4, 2001, February 4, 2002 and February
4, 2003, respectively.
<F2> Each option has been adjusted to reflect the five percent stock
dividend declared by the Company on January 27, 1999.
<F3> The exercise price may be paid in cash or, at the discretion of
the Committee, by shares of Common Stock already owned by the
participant, valued at fair market value on the date of exercise,
or a combination of cash and Common Stock.
<F4> The options terminate on the earlier of ten years after grant or,
generally, immediately on termination for reasons other than
retirement, disability or death.
<F5> The indicated 5% and 10% rates of appreciation are provided to
comply with Securities and Exchange Commission regulations and do
not necessarily reflect the views of the Company as to the likely
trend in the Common Stock price. Actual gains, if any, on stock
option exercises and Common Stock holdings will be dependent on,
among other things, the future performance of the Common Stock and
overall market conditions. There can be no assurance that the
amounts reflected above will be achieved. Additionally, these
values do not take into consideration the provisions of the
options providing for nontransferability or delayed
exercisability.
YEAR-END OPTION VALUE
SHARES FOR WHICH UNEXERCISED,
UNEXERCISED OPTIONS HELD AT IN-THE-MONEY OPTIONS HELD
SHARES DECEMBER 31, 1998<F1>(#) AT DECEMBER 31, 1998<F1>($)
ACQUIRED ON VALUE ------------------------------ ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ----------- ----------- ------------- ----------- -------------
Ronald J. Kruszewski -- -- 55,494 82,318 -- --
George H. Walker, III 21,428 111,454 52,329 19,293 236,882 85,543
Charles R. Hartman -- -- 30,718 5,788 133,493 25,039
Lawrence E. Somraty 6,933 88,883 11,575 5,788 50,073 25,039
Scott B. McCuaig -- -- 594 41,406 -- --
<FN>
- -------------
<F1> Each option has been adjusted to reflect the five percent stock
dividend declared by the Company on January 27, 1999.
-11-
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 also is eligible to participate in all
incentive compensation plans and other employee benefits provided to
senior executive officers. The term of the Agreement is through April
30, 2001 and 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 pursuant to
Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code").
"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 125,000 shares
(137,812 shares as adjusted to reflect the five percent stock dividend
declared by the Company on each of January 20, 1998 and January 27,
1999) of Common Stock at the fair market value of the shares on the date
of the grant, which will vest over a five-year period. Mr. Kruszewski
purchased 50,000 shares (55,125 shares as adjusted to reflect the five
percent stock dividend declared by the Company on each of January 20,
1998 and January 27, 1999) with personal funds 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.
-12-
Pursuant to the Employment Terms, Mr. Kruszewski also received a
loan (the "Loan") from the Company in the amount of $1,479,687.50,
payable in installments with interest with the final installment due
January 1, 2003, which principal and interest of the Loan would be
forgiven over six years if he continued to be employed by the Company.
Mr. Kruszewski purchased 125,000 shares (137,812 shares as adjusted to
reflect the five percent stock dividend declared by the Company on each
of January 20, 1998 and January 27, 1999) of Common Stock with the
proceeds of the Loan.
Pursuant to the Stock Unit Agreement dated December 21, 1998, Mr.
Kruszewski's original compensation package was restructured. Mr.
Kruszewski repaid the Loan by surrendering 124,688 shares of Common
Stock and executing a second promissory note in the amount of
$143,237.12. In replacement of the restricted shares surrendered,
Mr. Kruszewski was awarded 124,688 restricted stock units of the
Company. The restricted stock units granted to Mr. Kruszewski will
vest, and the second promissory note will be forgiven, over a period of
five years ending in 2003, contingent upon Mr. Kruszewski's continued
employment with the Company. In addition, shares of Common Stock will
be distributed to Mr. Kruszewski pursuant to the Stock Unit Agreement in
annual installments over a period of seven years beginning January 1,
2007 in satisfaction of the Restricted Stock Units. The number of
shares of Common Stock in each installment will be determined under the
declining balance accounting method, based on the number of stock units
credited to Mr. Kruszewski's stock unit account as of the beginning of
each year in the installment payment period. The restricted stock units
granted to Mr. Kruszewski will vest and shares of Common Stock may be
distributed (a) upon the death or disability of Mr. Kruszewski; (b) in
the event of a Change of Control (as defined in the Stock Unit
Agreement) or (c) in the event of termination of employment by the
Company for a reason other than a Good Cause Event (as defined in the
Stock Unit Agreement) or by Mr. Kruszewski for Good Reason (as defined
in the Stock Unit Agreement).
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 15,000 (19,143
as adjusted to reflect the five percent stock dividends distributed by
the Company since his date of hire) shares of Common Stock. As of
December 31, 1998, the outstanding principal amount of Mr. Hartman's
loan was $15,000. Mr. Hartman also is eligible to participate in all
other employee benefits of the Company provided to senior executive
officers.
Stifel Nicolaus and Scott B. McCuaig entered into an arrangement
on January 26, 1998 which provides for the employment of Mr. McCuaig at
a base salary of $175,000 per annum. Mr. McCuaig is eligible to
participate in the executive bonus pool of the Company and, for fiscal
1998, 1999 and 2000, his bonus payment was guaranteed to be no less than
$125,000 (pro rated for that portion of each year actually employed).
He also was provided a relocation allowance of $9,467, a restricted
stock award of 38,095 shares of Common Stock (42,000 shares as adjusted
for the 5% stock dividends declared by the Company on January 20, 1998
and January 27, 1999) and options to purchase 38,095 shares of Common
Stock (42,000 shares as adjusted for such stock dividends), which shares
and options will vest ratably over a five-year period. Mr. McCuaig also
is eligible to participate in all other employee benefits of the Company
provided to senior executive officers.
-13-
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the
"Compensation Committee") furnishes the following report:
COMPENSATION PHILOSOPHY
The Compensation Committee approves the policies for and structure
and amount of compensation of the senior executive officers of the
Company (the "Executive Officers"), including the Chief Executive
Officer and the other executive officers of the Company named in the
Summary Compensation Table. The Compensation Committee's goal is to
establish compensation programs that will attract and retain highly
qualified executives and provides an incentive to such executives to
focus their efforts on the Company's long-term strategic goals by
aligning their financial interests closely with long-term stockholder
interests. The Compensation Committee is composed entirely of
independent directors.
A significant component of the Company's Executive Officer
compensation program is cash remuneration in the form of base salaries
and annual incentive bonuses. Bonuses are determined based upon the
performance of the Company, the individual executive and his operating
unit during the fiscal year. In evaluating performance, financial, non-
financial and long-term strategic objectives are considered. Base
salaries generally represent a relatively small portion of the Executive
Officers' total cash compensation and are average relative to comparable
firms in the industry. Bonuses make up a significant portion of the
Executive Officers' total cash compensation (as much as 243% for 1998).
The Compensation Committee believes that basing a substantial portion of
an Executive Officer's compensation on performance motivates the
executive to perform at the highest possible level.
As another component of the Company's Executive Officer
compensation program, the Compensation Committee may award Executive
Officers options to acquire shares of Common Stock. The Compensation
Committee believes that stock options provide a highly efficient form of
compensation from both a cost and an accounting perspective, and that
such awards provide an incentive to achieve the Company's longer-term
strategic goals by aligning the long-term financial interests of the
Executive Officers with those of the Company's stockholders.
In addition, the Compensation Committee is implementing a deferred
compensation program whereby a portion of each Executive Officer's
annual bonus will be deferred, on a mandatory basis, into restricted
stock units. The Executive Officer may also defer on an elective basis
an additional portion of his annual bonus into restricted stock units.
The percentages of the mandatory and elective deferrals will be set
annually by the Compensation Committee. The mandatory and elective
deferrals are subject to a match by the Company that is also payable in
restricted stock units equal to 25% of the amount of the combined
deferral. The mandatory and matching portion of the restricted stock
unit award will vest over a three to five-year period.
-14-
The Compensation Committee believes that the stock option and
deferred compensation components of the Company's Executive Officer
compensation program over time will increase the levels of stock
ownership of the Company's Executive Officers. This aligns the
interests of those persons who have the greatest ability to affect the
Company's financial results closely with the interests of the Company's
stockholders. The Compensation Committee also believes that significant
levels of stock ownership and ownership potential will assist the
Company in retaining the services of the Executive Officers.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Kruszewski became President and Chief Executive Officer of the
Company and Stifel, Nicolaus on September 25, 1997 pursuant to the
employment terms described above under "Executive Compensation -
Employment Agreements." The Compensation Committee approved the
employment terms based upon Mr. Kruszewski's expertise and years of
experience in the industry, as well as the Compensation Committee's
review of cash and other compensation paid to the chief executive
officers of securities firms comparable to the Company. All such firms,
as well as others, are included in the Regional Sub-Index of the
Financial Service Analytics Brokerage Stock Price Index used in the
Performance Graph set forth in this Proxy Statement. Mr. Kruszewski's
base salary was not adjusted for 1998.
For 1998 bonus purposes, the Compensation Committee considered the
achievement of certain objectives set by management and the Board of
Directors at the beginning of the year. The Compensation Committee also
considered the overall profitability of the Company during 1998. Based
upon the consideration of all of the above financial and non-financial
performance factors, the Compensation Committee, in its discretion,
determined the amount of Mr. Kruszewski's annual bonus for 1998.
Approximately 26% of Mr. Kruszewski's bonus was deferred and invested in
stock units of the Company.
COMPENSATION OF OTHER SENIOR EXECUTIVES
The Compensation Committee approved individual salary levels and
bonus amounts for each Executive Officer other than Mr. Kruszewski
following a presentation by Mr. Kruszewski of his evaluation of each
Executive Officer's individual and business unit performance and his
bonus recommendation for such Executive Officer. Mr. Kruszewski also
summarized for the Compensation Committee the performance of each
Executive Officer relative to the financial and non-financial objectives
established for such Executive Officer at the beginning of the year. In
his presentation to the Compensation Committee, Mr. Kruszewski utilized
historical compensation information prepared by a third-party
organization for a group of approximately 12 regional brokerage firms,
including the group of comparable publicly held regional firms referred
to above, for background on competitive salary levels within the
industry.
The Compensation Committee also reviewed and approved the terms of
specific compensation arrangements entered into by the Company with
certain executive officers. The Compensation Committee believes that
such arrangements were evaluated and approved on a basis consistent with
the Company's overall compensation philosophy.
-15-
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.
1998 COMPENSATION COMMITTEE
Robert E. Lefton, Chairman
Charles A. Dill
James M. Oates
Bruce A. Beda
March 26, 1999
-16-
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, 1993 through December 31,
1998, 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., Freedom Securities, Inc., Kinnard Investments, Inc., Legg Mason,
Inc., Morgan Keegan, Inc., Raymond James Financial, Inc., and Southwest
Securities Group, Inc.
[GRAPH]
Cumulative Value of $100 Investment
- -----------------------------------------------------------------------------------------------
December 31,
-----------------------------------------------------------------
1993 1994 1995 1996 1997 1998
- -----------------------------------------------------------------------------------------------
Stifel Financial Corp. $100 $63 $74 $105 $216 $142
- -----------------------------------------------------------------------------------------------
S&P 500 Index $100 $101 $139 $171 $228 $294
- -----------------------------------------------------------------------------------------------
FSA Regional Index $100 $82 $126 $186 $378 $322
- -----------------------------------------------------------------------------------------------
17
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, 1998, the Company's carrying value of these investments was
approximately $628,000, with a commitment to contribute $255,324 to the
Gateway Funds. Additionally, at December 31, 1998, 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, 1998.
John J. Goebel is an attorney in the law firm Bryan Cave LLP,
which rendered legal services to the Company and its subsidiaries during
1998 and is providing legal services to the Company and its subsidiaries
during 1999.
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, 1998, except that each of Messrs. Beda, Dill, Ford, Goebel,
Greenbaum, Lefton and Oates filed one late Form 4 report during such
period.
PROPOSAL II. ADOPTION OF THE AMENDED AND RESTATED
STIFEL FINANCIAL CORP. 1997 INCENTIVE STOCK PLAN
The Stifel Financial Corp. 1997 Incentive Stock Plan (the
"Incentive Stock Plan"), approved by the stockholders of the Company in
April 1997, provides for the granting of stock options and other stock-
based awards. The Incentive Stock Plan, as proposed to be amended and
restated, seeks to advance 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, on
the one hand, and the participating employees, on the other.
The maximum number of shares of Common Stock which currently may
be issued under the Incentive Stock Plan is 661,500 shares (as adjusted
to reflect the five percent stock dividend declared by the Company on
each of January 20, 1998 and January 27, 1999), subject to adjustment in
the event of any change in the outstanding shares of such stock by
reason of a stock dividend, stock split,
-18-
recapitalization, merger, consolidation or other similar change
generally affecting stockholders of the Company.
The Board of Directors has adopted the Amended and Restated Stifel
Financial Corp. 1997 Incentive Stock Plan, subject to stockholder
approval, which adds an additional 600,000 shares of Common Stock to the
initial 600,000 shares of Common Stock reserved for issuance under the
plan. In addition to such additional 600,000 shares of Common Stock,
for each calendar year in the five year period commencing January 1,
1999, the number of shares reserved for issuance under the Amended
Incentive Plan shall automatically increase by a number equal to the
lesser of (a) 100,000 shares or (b) the number of stock units awarded
pursuant to the Amended Incentive Plan in such year in lieu of cash
compensation that would otherwise have been paid currently to the
employee, provided that the value of the shares of Common Stock
underlying such stock units, determined as to the effective date of the
award, does not exceed the amount of such cash by more than twenty-five
percent.
The Amended Incentive Plan will be administered by either the
Board of Directors or the Compensation Committee currently consisting of
four directors of the Company, each of whom is a non-employee director
of the Company (for purposes of the Amended Incentive Plan, the group
administering the Amended 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 Amended
Incentive Plan, to prescribe, amend and rescind rules and regulations
relating to the Amended 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 Amended Incentive Plan to the extent not
contrary to the express provisions of the Amended Incentive Plan.
The complete text of the Amended Incentive Plan is set forth in
Annex A to this Proxy Statement. The following summary of the Amended
Incentive Plan is subject to the provisions contained in the complete
text.
DESCRIPTION OF PLAN
Under the terms of the Amended 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"), (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") and (e) stock units ("Stock Units").
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 exercise price of the
SAR established by the Administrator at the time of grant, subject to
any limitation imposed by the Administrator in its sole discretion. 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
-19-
term of any SAR shall be established by the Administrator, but in no
event shall a SAR be exercisable after ten years from the date of grant.
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 Securities 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 Amended 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 after ten years from the
date of the grant.
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.
The Board may terminate the Amended Incentive Plan at any time and
from time to time and may amend or modify the Amended 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 Amended Incentive Plan; (b) modify the requirements as to
eligibility for benefits; or (c) reduce the amount of any existing
benefit or change the terms or conditions thereof without the
participating employee's consent.
STOCK UNITS. The Administrator may issue Stock Units representing
the right to receive shares of Common Stock at a designated time in the
future, subject to the terms and conditions as established by the
Administrator in its sole discretion. A holder of Stock Units generally
does not have the rights of a stockholder until receipt of the Common
Stock, but, in the Administrator's sole discretion, may receive payments
in cash or adjustments in the number of Stock Units equivalent to the
dividends the holder would have received if the holder had been the
owner of shares of Common Stock instead of Stock Units.
-20-
In the event of a "Change of Control" (as defined below) of the
Company, all outstanding SARs and Stock Options shall become fully
vested and exercisable and any restrictions on Restricted Stock shall
lapse. A "Change of Control" is defined as any of the following: (a)
the acquisition by any person of 15% or more of either the outstanding
Common Stock or the combined voting power of the Common Stock entitled
to vote for the election of directors; (b) the incumbent directors at
the time of approval of the Incentive Stock Plan, or any subsequent
directors whose election or nomination was approved by a majority of the
then incumbent directors, cease to constitute a majority of the Board of
Directors; (c) approval by the stockholders of a reorganization, merger
or consolidation of the Company under certain circumstances; or (d)
approval by the stockholders of a liquidation or dissolution or a sale
of substantially all of the assets of the Company under certain
circumstances.
NEW PLAN BENEFITS
There are approximately 100 employees who are eligible to
participate in the Amended Incentive Plan. The following table sets
forth the number of stock options that the Board of Directors granted
pursuant to the Amended Incentive Plan to (i) all executive officers as
a group, (ii) all directors who are not executive officers as a group
and (iii) all employees, including all current officers who are not
executive officers, as a group:
NUMBER OF OPTIONS
NAME TO BE GRANTED EXERCISE PRICE ($)
---- ------------- ------------------
Executive Group 42,000 9.46
Non-Executive Director Group -- --
Non-Executive Officer Employee Group 89,775 9.58
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,
the award of Restricted Stock or the award of Stock Units, 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. 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 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
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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 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.
An Employee will realize income as a result of an award of Stock
Units at the time shares of Common Stock are issued in an amount equal
to the fair market value of such shares at that time. The Company will
be entitled to a corresponding deduction equal to the income realized in
the year of such issuance.
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 Amended 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 Amended and Restated Stifel Financial Corp. 1997
Incentive Stock Plan.
PROPOSAL III. ADOPTION OF THE
1999 EXECUTIVE INCENTIVE PERFORMANCE PLAN
The Board of Directors has adopted, subject to the approval of the
stockholders of the Company, the 1999 Executive Incentive Performance
Plan. Under the Performance Plan, which will be administered by the
Compensation Committee of the Board of Directors, employees of the
Company who are or may be "covered employees," as defined below, will be
eligible to participate in the Performance Plan and receive performance-
based compensation in the form of cash bonuses. The Compensation
Committee will designate the participants in the Performance Plan (the
"Participants") for each fiscal year or other period as determined by
the Compensation Committee (the "Performance Period"). The Performance
Plan is intended to qualify compensation paid thereunder as "qualified
performance-based compensation" within the meaning of Section 162(m) of
the Code. It is not expected that the Performance Plan will change the
method or amount of compensation paid to any executive officer, but
stockholder approval of the Performance Plan is necessary for the
Company to claim federal income tax deductions in the event future
payments under the Performance Plan to a "covered employee" (as defined
by the Code) exceed $1,000,000 for any fiscal year.
The formula for calculating the maximum amount that may be paid to
a Participant as a bonus for each Performance Period will be determined
by the Compensation Committee based upon one or more of the following
criteria, individually or in combination, adjusted in such manner as the
Compensation Committee shall determine in its sole discretion: (a) pre-
tax or after-tax return on equity; (b) earnings per share; (c) pre-tax
or after-tax net income; (d) business unit or departmental pre-tax or
after-tax income; (e) book value per share; (f) market price per share;
(g) relative performance or peer
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group companies; (h) expense management; and (i) total return to
stockholders. The Performance Plan provides that the maximum bonus
amount payable to each Participant for the 1999 calendar year shall not
exceed $2,000,000, and thereafter the maximum bonus amount for each
subsequent Performance Period shall be increased by 10% over the maximum
bonus amount for the immediately preceding Performance Period. The
Compensation Committee will have the authority to reduce the maximum
bonus to be paid to each Participant for a Performance Period.
The Performance Plan may be amended or terminated at any time by
the Compensation Committee in its sole and absolute discretion.
While the nature of the criteria considered by the Compensation
Committee in calculating the maximum bonus to be paid a Participant in
the future cannot be predicted, if the Performance Plan had been in
place in 1998, the Compensation Committee would have named the same
persons listed in the Summary Compensation Table as Participants in the
Performance Plan and would have awarded the individual named executive
officers under the Performance Plan the same bonus amounts as are set
forth opposite their names in the Summary Compensation Table.
The complete text of the Performance Plan is set forth in the
Annex B of this Proxy Statement. The foregoing summary of the
Performance Plan is subject to the provisions contained in the complete
text.
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 Performance Plan; provided that he 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 1999 Executive Incentive Performance Plan.
PROPOSAL IV.
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, 1999. 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 recommends a vote "FOR" ratification of the
appointment of Deloitte & Touche LLP as the Company's independent
auditors for the year ending December 31, 1999. 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, 1999.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 2000
Annual Meeting of Stockholders must be received by the Company by
December 30, 1999 for inclusion in the Company's
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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,
stockholder proposals, including nominations of directors, which do not
appear in the proxy statement may be considered at a meeting of
stockholders only if they involve a matter proper for stockholder action
and written notice of the proposal is received by 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 (a) the day on which
notice of the meeting was mailed or (b) 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, address, business history,
beneficial ownership and written consent to being named of any proposed
nominee, 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,
1998 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, 1998, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION (EXCLUDING EXHIBITS), MAY BE OBTAINED BY ANY STOCKHOLDER,
WITHOUT CHARGE, UPON WRITTEN REQUEST TO JAMES M. ZEMLYAK, CHIEF
FINANCIAL OFFICER, STIFEL FINANCIAL CORP., 501 NORTH BROADWAY,
ST. LOUIS, MO 63102.
MISCELLANEOUS
The Company will bear the cost of solicitation of proxies.
Proxies will be solicited by mail. They also may 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.
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, 1999
St. Louis, Missouri
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ANNEX A
STIFEL FINANCIAL CORP.
AMENDED AND RESTATED
1997 INCENTIVE STOCK PLAN
Stifel Financial Corp. (the "Corporation") adopted the 1997 Stifel
Financial Corp. Incentive Stock Plan (the "Plan") effective as of
January, 1997. The Corporation amended and restated the Plan in 1998 to
provide for the award of Stock Units and to remove the mandatory three
year vesting requirement. The Corporation now wishes to amend the amend
the Plan further to increase the number of shares reserved for issuance
under the Plan.
This Amendment shall be effective immediately upon adoption,
subject to approval by the shareholders of the Corporation within twelve
months after such date. In the event the shareholders of the
Corporation do not approve this Amendment within such time, awards made
pursuant to the Plan that cannot be satisfied with shares reserved for
issuance under the Plan without regard to this Amendment shall be null
and void.
Pursuant to the authority reserved in Section 16 of the Plan, the
Board of Directors of the Corporation hereby amends and completely
restates the Plan to read in its entirety as follows:
1. PURPOSE. The purpose of the Stifel Financial Corp.
Incentive Stock Plan is to encourage key employees of Stifel Financial
Corp. 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 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.
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3. SHARES RESERVED UNDER THE PLAN. Subject to the provisions
of Section 11 (relating to adjustment for changes in capital stock) the
Plan initially 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. This 1999 Restatement
hereby amends the Plan by adding to the initial 600,000 shares of Common
Stock reserved for issuance under the Plan, an additional 600,000 shares
of Common Stock. In addition to such additional 600,000 shares of
Common Stock, which may be awarded pursuant to any of the types of
benefits described in Section 5, for each calendar year in the five year
period commencing January 1, 1999, the number of shares reserved for
issuance under the Plan shall automatically increase by a number equal
to the lesser of (a) 100,000 shares, or (b) the number of Stock Units
awarded pursuant to the Plan in such year in lieu of cash compensation
that would otherwise have been paid currently to the participant,
provided the value of the shares of Common Stock underlying such Stock
Units, determined as of the effective date of the award, does not
exceed the amount of such cash by more than twenty-five percent.
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 or is returned to the Corporation as
part of a restructuring of benefits granted pursuant to this Plan.
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 100,000 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"); (e) nonqualified stock
options ("NQSOs"); and (f) Stock Units, all as described below.
A-2
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.
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 shall be established by the
Administrator for any grants of Restricted Stock;
(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.
(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
A-3
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 (b) in the discretion of the Administrator, by the delivery of shares
of Common Stock of the Corporation owned by the participant for at least
six months or (c) in the discretion of the Administrator, by a
combination of any of the foregoing, in the manner provided in the
option agreement. 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.
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 (b) in the discretion of the
Administrator, by the delivery of shares of Common Stock of the
Corporation owned by the participant for at least six months or (c) in
the discretion of the Administrator, by a combination of any of the
foregoing, in the manner provided in the option agreement. NQSOs
granted after the date of shareholder approval of the Plan shall be
exercisable no later than ten years after the date they are granted.
11. STOCK UNITS. A Stock Unit represents the right to receive a
share of Common Stock from the Corporation at a designated time in the
future, subject to such terms and conditions set forth in a Stock Unit
agreement as may be established by the Administrator in its sole
discretion. The participant generally does not have the rights of a
shareholder until receipt of the Common Stock. The Administrator may in
its discretion provide for payments in cash, or adjustment in the number
of Stock Units, equivalent to the dividends the participant would have
received if the participant had been the owner of shares of Common Stock
instead of the Stock Units.
12. 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
A-4
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.
13. 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.
"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 15% 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"); provided,
however, such an acquisition of ownership of 15% or more but less
than 25% of Outstanding Corporation Common Stock or Outstanding
Corporation Voting Securities with the prior approval of the Board
of Directors of the Corporation shall not result in a Change in
Control within the meaning of this subparagraph (a);
(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,
directly or indirectly, 15% 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 (provided, however, such 15% threshold may be increased
up to 25% by the Board of Directors of the Corporation prior to
such approval by the stockholders) and (iii) at least a majority
of the members of the board of directors of
A-5
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, 15% 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 (provided, however, such 15% threshold may be increased
up to 25% by the Board of Directors of the Corporation prior to
such approval by the stockholders) 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.
14. 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 14, "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.
15. 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
A-6
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.
16. 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.
17. 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.
18. EFFECTIVE DATE. This 1999 Restatement 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.
A-7
ANNEX B
STIFEL FINANCIAL CORP.
1999 EXECUTIVE INCENTIVE
PERFORMANCE PLAN
ARTICLE I. ESTABLISHMENT AND PURPOSE
1.1 ESTABLISHMENT OF THE PLAN. Stifel Financial Corp. (the
"Company") hereby establishes the 1999 Executive Incentive Performance
Plan (the "Plan") as set forth in the Agreement.
1.2 PURPOSE. Section 162(m) of the Internal Revenue Code of
1986 limits to $1,000,000 the amount of an employer's deduction for a
fiscal year relating to compensation for certain executive officers,
with exceptions for specific types of compensation such as performance-
based compensation.
This Plan is intended to provide for the payment of
qualified performance-based compensation in the form of bonuses that is
not subject to the Section 162(m) deduction limitation.
1.3 EFFECTIVE DATE. The effective date of the Plan is January
1, 1999, subject to approval of the material terms of the Plan by the
Company's shareholders.
ARTICLE II. DEFINITIONS
2.1 DEFINITIONS. Whenever used herein, the following terms will
have the meanings set forth below, unless otherwise expressly provided.
When the defined meaning is intended, the term is capitalized.
(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 Compensation Committee of the
Board, or another committee appointed by the Board to serve as the
administrator for the Plan, which committee at all times consists of
persons who are "outside directors" as that term is defined in the
regulations promulgated under Section 162(m) of the Code.
(d) "Company" means Stifel Financial Corp.
(e) "Employer" means the Company and any entity that is a
subsidiary or affiliate of the Company.
(f) "Participant" for a Performance Period means an
officer or other key employee who is designated by the Committee as a
participant in the Plan for that Performance Period in accordance with
Article III.
B-1
(g) "Target Award" shall mean the maximum amount that may
be paid to a Participant as a bonus for a Performance Period if certain
performance criteria are achieved in the Performance Period.
(h) "Performance Period" shall mean the fiscal year of the
Company; or any other period designated as a Performance Period by the
Committee.
2.2. SEVERABILITY. In the event any provision of the Plan shall
be held illegal or invalid for any reason, the illegality or invalidity
will not affect the remaining parts of the Plan, and the Plan will be
construed and enforced as if the illegal or invalid provision had not
been included.
ARTICLE III. ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY. The Participants in this Plan for any
Performance Period shall be comprised of each employee of the Company
who is a "covered employee" for purposes of Section 162(m) of the Code,
or who may be such a covered employee as of the end of a tax year for
which the Company would claim a tax deduction in connection payment of
compensation to such employee, during such Performance Period and who is
designated individually or by class to be a Participant for such
Performance Period by the Committee at the time a Target Award is
established for such employee.
3.2 PARTICIPATION. Participation in the Plan will be determined
annually by the Committee. Employees approved for participation will be
notified of their selection as soon after approval as practicable.
3.3 TERMINATION OF APPROVAL. The Committee may withdraw
approval for a Participant's participation at any time. In the event of
such withdrawal, the Employee concerned will cease to be a Participant
as of the date of such withdrawal. The Employee will be notified of
such withdrawal as soon as practicable following the Committee's action.
A Participant who is withdrawn from participation under this Section
will not receive any award for the Performance Period under this Plan.
ARTICLE IV. PERFORMANCE CRITERIA
4.1 TARGET AWARDS. The Committee shall establish objective
performance criteria for the Target Award of each Participant for each
Performance Period in writing. Such formula shall be based upon one or
more of the following criteria, individually or in combination, as the
Compensation Committee in its discretion shall determine: (a) pre-tax or
after-tax return on equity; (b) earnings per share; (c) pre-tax or
after-tax net income, as defined by the Committee; (d) business unit or
departmental pre-tax or after-tax income; (e) book value per share; (f)
market price per share; (g) relative performance to peer group
companies; (h) expense management; and (i) total return to stockholders.
Such formula shall be sufficiently detailed and objective so that a
third party having knowledge of the relevant performance results could
calculate the bonus amount to be paid to the Participant pursuant to
such Target Award formula.
Such Target Award shall be established in writing by the
Committee no later than 90 days after the beginning of such Performance
Period (but no later than the time prescribed by Section 162(m) of the
Code or the regulations thereunder in order for the level to be
considered pre-established).
B-2
4.2 PAYMENT OF BONUS. As a condition to the right of a
Participant to receive any bonus under this Plan, the Committee shall
first be required to certify in writing, by resolution of the Committee
or other appropriate action, that the performance criteria of the Target
Award have been achieved and that the bonus amount of such Target Award
has been accurately determined in accordance with the provisions of this
Plan. For this purpose, approved minutes of a meeting of the Committee
in which the certification is made shall be treated as written
certification.
The Committee shall have the right to reduce the amount
payable pursuant to a Target Award of a Participant in its sole
discretion at any time and for any reason before the bonus is payable to
the Participant, based on such criteria as it shall determine.
Notwithstanding any contrary provision of this Plan, the Committee may
not adjust upwards the amount payable pursuant to a Target Award subject
to this Plan, nor may it waive the achievement of the performance
criteria established pursuant to this Plan for the applicable
Performance Period.
The bonus amount so determined by the Committee shall be
paid to the Participant as soon as administratively practical after the
amount of the bonus had been determined and documented as provided
above. The bonus payable under this Plan shall be the sole bonus
payable to each Participant with respect to a Performance Period.
4.3 MAXIMUM BONUS. The maximum bonus amount payable to each
Participant for the 1999 calendar year Performance Period shall be
$2,000,000. Thereafter, the maximum bonus amount for each subsequent
Performance Period shall be increased by 10% over the maximum bonus
amount for the immediately preceding Performance Period.
The Committee shall have the power to impose such other
restrictions on Target Awards and bonuses subject to this Plan as it may
deem necessary or appropriate to ensure that such bonuses satisfy all
requirements for "performance-based compensation" within the meaning of
Section 162(m) of the Code, the regulations promulgated thereunder, and
any successors thereto.
ARTICLE V. RIGHTS OF PARTICIPATION
5.1. EMPLOYMENT. Nothing in this Plan will interfere with or
limit in any way the right of the Employer to terminate a Participant's
employment at any time, nor confer upon any Participant any right to
continue in the employ of an Employer.
5.2 NONTRANSFERABILITY. No right or interest of any Participant
in this Plan will be assignable or transferable or subject to any lien
or encumbrance, whether directly or indirectly, by operation of law or
otherwise, including without limitation execution, levy, garnishment,
attachment, pledge, and bankruptcy.
5.3 NO FUNDING. Nothing contained in this Plan and no action
taken hereunder will create or be construed to create a trust of any
kind, or a fiduciary relationship between the Company and any
Participant or beneficiary or any other person. Amounts due under this
Plan at any time and from time to time will be paid from the general
funds of the Company. To the extent that any person acquires a right to
receive payments hereunder, such right shall be that of an unsecured
general creditor of the Company.
5.4 NO RIGHTS PRIOR TO AWARD APPROVAL. No Participant will have
any right to payment of a bonus pursuant to this Plan unless and until
it has been determined and approved under Section 4.2.
B-3
ARTICLE VI. ADMINISTRATION
6.1 ADMINISTRATION. This Plan will be administered by the
Committee according to any rules that it may establish from time to time
that are not inconsistent with the provisions of the Plan.
6.2 EXPENSES OF THE PLAN. The expenses of administering the
Plan will be borne by the Company.
ARTICLE VII. REQUIREMENTS OF LAW
7.1 GOVERNING LAW. The Plan will be construed in accordance
with and governed by the laws of the State of Missouri.
7.2 WITHHOLDING TAXES. The Company has the right to deduct from
all payments under this Plan any Federal, State, or local taxes required
by law to be withheld with respect to such payments.
ARTICLE VIII. AMENDMENT AND TERMINATION
8.1 AMENDMENT AND TERMINATION. The Committee, in its sole and
absolute discretion may modify or amend any or all of the provisions of
this Plan at any time and from time to time, without notice, and may
suspend or terminate it entirely.
ARTICLE IX. SHAREHOLDER APPROVAL
9.1 SHAREHOLDER APPROVAL. This Plan shall be subject to
approval by the affirmative vote of a majority of the shares cast in a
separate vote of the shareholders of the Company at the 1999 Annual
Meeting of Shareholders, and such shareholder approval shall be a
condition to the right of a Participant to receive any bonus hereunder.
B-4
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, 1999 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 2002:
Bruce A. Beda
Stuart I. Greenbaum
Ronald J. Kruszewski
2. PROPOSAL TO APPROVE THE ADOPTION OF THE 1997 AMENDED AND RESTATED
INCENTIVE STOCK PLAN:
/ / For / / Against / / Abstain
3. PROPOSAL TO APPROVE THE ADOPTION OF THE STIFEL 1999 EXECUTIVE
INCENTIVE PERFORMANCE PLAN:
/ / For / / Against / / Abstain
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 1998 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
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(Please sign exactly as name appears at left)
SIGN HERE
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Executors, administrators, trustees, etc.
should indicate when signing
DATED
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Page 17 of the printed proxy contains a Performance Graph.
The information contained in the graph is presented in the table
immediately following the graph.