-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EgpRbslTuKig5TqYtnCSNyl1gxcTY9BSk20r6SmNyElz1xkUilmGcLbkz7sMH3jK ta5mvUB2fbxBrBdK5FSyow== 0000950134-02-003468.txt : 20020416 0000950134-02-003468.hdr.sgml : 20020416 ACCESSION NUMBER: 0000950134-02-003468 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020409 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STIFEL FINANCIAL CORP CENTRAL INDEX KEY: 0000720672 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 431273600 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-09305 FILM NUMBER: 02605242 BUSINESS ADDRESS: STREET 1: ONE FINANCIAL PLAZA STREET 2: 501 N BROADWAY CITY: ST. LOUIS STATE: MO ZIP: 63102-2102 BUSINESS PHONE: 314-342-2000 MAIL ADDRESS: STREET 1: ONE FINANCIAL PLAZA STREET 2: 501 N BROADWAY CITY: ST. LOUIS STATE: MO ZIP: 63102-2102 10-K/A 1 c68372a1e10-ka.txt AMENDMENT NO. 1 TO FORM 10-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 AMENDMENT NO. 1 ON FORM 10-K/A (Mark One) [X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2001 [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______________ to ______________. Commission file number 1-9305 STIFEL FINANCIAL CORP. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 43-1273600 - --------------------------------------- ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 501 North Broadway St. Louis, Missouri 63102-2102 - ---------------------------------------- ------------------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 314-342-2000 ---------------------------- Securities registered pursuant to Section 12(b) of the Act: Name of Each Exchange Title of Each Class On Which Registered - ---------------------------------------- ------------------------------------ Common Stock, Par Value $.15 per share New York Stock Exchange Chicago Stock Exchange Preferred Stock Purchase Rights New York Stock Exchange Chicago Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such report) and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K, or any amendment to this Form 10-K [X] Aggregate market value of voting stock held by non-affiliates of the registrant at March 13, 2002, was $71,657,078. Shares of Common Stock outstanding at March 13, 2002: 7,367,885 shares, par value $.15 per share. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Company's Proxy Statement filed with the SEC in connection with the Company's Annual Meeting of Stockholders to be held May 9, 2002, are incorporated by reference in Part III hereof. Exhibit Index located on pages 4 and 5. 1 EXPLANATORY NOTE This Amendment No. 1 on Form 10-K/A is being filed solely to file certain additional exhibits. The remaining portions of the original Form 10-K are not being amended. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) (3) Exhibits: See Exhibit Index on pages 4 and 5 hereof. 2 SIGNATURES Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Louis, State of Missouri, on the 8th day of April 2002. STIFEL FINANCIAL CORP. (Registrant) By /s/ Ronald J. Kruszewski ------------------------ Ronald J. Kruszewski Chairman of the Board, President, Chief Executive Officer, and Director 3 EXHIBIT INDEX STIFEL FINANCIAL CORP. AND SUBSIDIARIES ANNUAL REPORT ON FORM 10-K YEAR ENDED DECEMBER 31, 2001 EXHIBIT NUMBER DESCRIPTION 3. (a) Restated Certificate of Incorporation and as amended of Financial filed with the Secretary of State of Delaware on May 31, 2001, incorporated herein by reference to Exhibit 3.(a) to Financial's Quarterly Report on Form 10-Q (File No. 001-9305) for the quarterly period ended June 30, 2001. (b) Amended and Restated By-Laws of Financial, incorporated herein by reference to Exhibit 3.(b)(1) to Financial's Annual Report on Form 10-K (File No. 1-9305) for fiscal year ended July 30, 1993. 4. (a) Preferred Stock Purchase Rights of Financial, incorporated herein by reference to Financial's Registration Statement on Form 8-A (File No. 1-9305) filed July 30, 1996. 10.(a)(1) Employment Agreement with George H. Walker III dated August 21, 1987, incorporated herein by reference to Exhibit 10.(c) to Financial's Annual Report on Form 10-K (File No. 1-9305) for the fiscal year ended July 31, 1987.* (a)(2) First Amendment to Employment Agreement with George H. Walker III, incorporated herein by reference to Exhibit 10.(a)(2) to Financial's Annual Report on Form 10-K (File No. 1-9305) for the fiscal year ended July 31, 1992.* (b) Form of Indemnification Agreement with directors dated as of June 30, 1987, incorporated herein by reference to Exhibit 10.2 to Financial's Current Report on Form 8-K (date of earliest event reported - June 22, 1987) filed July 14, 1987. (c) 1983 Incentive Stock Option Plan of Financial, incorporated herein by reference to Exhibit 4.(a) to Financial's Registration Statement on Form S-8 (Registration File No. 2-94326) filed November 14, 1984.* (d) 1985 Incentive Stock Option Plan of Financial, incorporated herein by reference to Exhibit 28C to Financial's Registration Statement on Form S-8, as amended (Registration File No. 33-10030) filed November 7, 1986.* (e) 1987 Non-qualified Stock Option Plan of Financial, incorporated herein by reference to Exhibit 10.(h) to Financial's Annual Report on Form 10-K (File No. 1-9305) for the fiscal year ended July 31, 1987.* (f) Amendment to 1983 Incentive Stock Option Plan, 1985 Incentive Stock Option Plan, and 1987 Non-Qualified Stock Option Plan, incorporated herein by reference to Exhibit 10.(f) to Financial's Annual Report on Form 10-K (File No. 1-9305) for the fiscal year ended July 28, 1989.* (g) Dividend Reinvestment and Stock Purchase Plan of Financial, incorporated herein by reference to Financial's Registration Statement on Form S-3 (Registration File No. 33-53699) filed May 18, 1994. (h) Amended and Restated 1997 Incentive Plan of Financial, incorporated herein by reference to Financial's Registration Statement on Form S-8 (Registration File No. 333-84717) filed on August 6, 1999.* (i) 1998 Employee Stock Purchase Plan of Financial, incorporated herein by reference to Financial's Registration Statement on Form S-8 (Registration File No. 333-37807) filed October 14, 1997.* (j)(1) Employment Letter with Ronald J. Kruszewski, incorporated herein by reference to Exhibit 10.(l) to Financial's Annual Report on Form 10-K (File No. 1-9305) for the year ended December 31, 1997.* 4 (j)(2) Stock Unit Agreement with Ronald J. Kruszewski, incorporated herein by reference to Exhibit 10.(j)(2) to Financial's Annual Report on Form 10-K (File No. 1-9305) for the year ended December 31, 1998.* (k) Loan Agreement with Western & Southern Life Insurance Company dated February 24, 1999, including amendments thereto, incorporated herein by reference to Exhibit 10.(a) to Financial's Quarterly Report on Form 10-Q (File No. 001-9305) for the quarterly period ended June 30, 2001. (l) 1999 Executive Incentive Performance Plan of Financial, incorporated herein by reference to Annex B of Financial's Proxy Statement for the 1999 Annual Meeting of Stockholders filed March 26, 1999.* (m) Equity Incentive Plan for Non-Employee Directors of Financial, incorporated herein by reference to Financial's Registration Statement on Form S-8 (Registration File No. 333-52694) filed December 22, 2000.* (n) Stifel, Nicolaus & Company, Incorporated Wealth Accumulation Plan, incorporated herein by reference to Financial's Registration Statement on Form S-8 (Registration File No. 333-60506) filed May 9, 2001.* (o) Stifel Nicolaus Profit Sharing 401(k) Plan, incorporated herein by reference to Financial's Registration Statement on Form S-8 (Registration File No. 333-60516) filed May 9, 2001.* (p) Stifel Financial Corp. 2001 Incentive Plan, incorporated herein by reference to Financial's Registration Statement on Form S-8 (Registration File No. 333-82328) filed February 7, 2002.* (q) Promissory Note dated August 1, 1999 from Tom Prince payable to Stifel, Nicolaus & Company, Incorporated, incorporated herein by reference to Financial's Annual Report on Form 10-K (File No. 001-9305) for the year ended December 31, 2001 filed on March 27, 2002.* (r) Promissory Note dated March 5, 2002 from Tom Prince payable to Stifel, Nicolaus & Company, Incorporated, incorporated herein by reference to Financial's Annual Report on Form 10-K (File No. 001-9305) for the year ended December 31, 2001 filed on March 27, 2002.* (s) Stock Unit Agreement with James M. Zemlyak dated January 11, 2000.* (t) Stock Unit Agreement with Scott B. McCuaig dated December 20, 1998.* (u) Amended and Restated Promissory Note dated December 21, 1998 from Ronald J. Kruszewski payable to Financial.* (v) Third Amendment to Lease by and among EBS Building, L.L.C., Stifel Financial Corp. and Stifel, Nicolaus & Company, Incorporated, dated September 1, 1999, incorporated herein by reference to EBS Building, L.L.C.'s Annual Report on Form 10-K (File No. 000-24167) for the year ended December 31, 2001. (w) Fourth Amendment to Lease by and among EBS Building, L.L.C., Stifel Financial Corp. and Stifel, Nicolaus & Company, Incorporated, dated November 1, 1999, incorporated herein by reference to EBS Building, L.L.C.'s Annual Report on Form 10-K (File No. 000-24167) for the year ended December 31, 2001. (x) Fifth Amendment to Lease by and among EBS Building, L.L.C., Stifel Financial Corp. and Stifel, Nicolaus & Company, Incorporated dated June 11, 2001, incorporated herein by reference to EBS Building, L.L.C.'s Annual Report on Form 10-K (File No. 000-24167) for the year ended December 31, 2001. 21. List of Subsidiaries of Financial, incorporated herein by reference to Financial's Annual Report on Form 10-K (File No. 001-9305) for the year ended December 31, 2001 filed on March 27, 2002. 23. Consent of Independent Auditors, incorporated herein by reference to Financial's Annual Report on Form 10-K (File No. 001-9305) for the year ended December 31, 2001 filed on March 27, 2002. * Management contract or compensatory plan or arrangement. 5 EX-10.(S) 3 c68372a1ex10-s.txt STOCK UNIT AGREEMENT WITH JAMES M. ZEMLYAK STIFEL FINANCIAL CORP. STOCK UNIT AGREEMENT Stifel Financial Corp., a Delaware Corporation ("Company") and James M. Zemlyak ("Executive") hereby agree as follows: WHEREAS, the Company established the Stifel Financial Corp. 1997 Incentive Stock Plan (the "Plan") pursuant to which options, stock appreciation rights and restricted stock covering an aggregate of 600,000 shares of the Stock of the Company may be granted to key employees of the Company and its subsidiaries; and WHEREAS, the Board of Directors of the Company has amended the Plan to permit the grant of Stock Units; NOW, THEREFORE, in consideration of services rendered and the mutual covenants herein contained, the parties agree as follows: SECTION 1. DEFINITIONS As used in this Agreement, the following terms shall have the following meanings: A. "Award" means the award provided for in Section 2. B. "Board of Directors" means the Board of Directors of the Company. C. "Change in Control" means: (i) 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 (a) the then outstanding shares of Stock of the Company (the "Outstanding Company Stock"); or (b) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company 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 Company shall not result in a Change in Control within the meaning of this subparagraph; or (ii) Individuals who, as the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, as a member of the Incumbent Stifel Financial Corp. Stock Unit Agreement James M. Zemlyak - -------------------------------------------------------------------------------- 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 (iii) Approval by the stockholders of the Company of a reorganization, merger or consolidation, in each case, unless, following such reorganization, merger or consolidation, (a) more than 50% of, respectively, the then outstanding shares of 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 Company Stock and Outstanding Company Voting Securities immediately prior to such reorganization, merger or consolidation in substantially the same proportions as their ownership, immediately prior to such reorganization, merger or consolidation, of the Outstanding Company Stock and Outstanding Company Voting Securities, as the case may be, (b) no Person beneficially owns, directly or indirectly, 15% or more of, respectively, the then outstanding shares of 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 Company prior to such approval by the stockholders), and (3) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation; or (iv) Approval by the stockholders of the Company of (a) a complete liquidation or dissolution of the Company; or (b) the sale or other disposition of all or substantially all of the assets of the Company, 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 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 is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Stock and Outstanding Company Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding Company Stock and Outstanding Company 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 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 Company 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 -2- Stifel Financial Corp. Stock Unit Agreement James M. Zemlyak - -------------------------------------------------------------------------------- at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of the Company. D. "Date of Award" means February 1, 1999. E. "Permanent Disability" means total inability of Executive, because of bodily injury or disease, to carry out his duties as an employee of the Company's Subsidiary, Stifel, Nicolaus & Company, Incorporated, for a period of at least six consecutive months. F. "Retirement" means termination of employment with the Company and its Subsidiaries after attaining the age of 65. G. "Stock" means the common stock of the Company, par value fifteen cents ($0.15) per share. H. "Subsidiary" means any corporation, other than the Company, in an unbroken chain of corporations beginning with the Company if, at the relevant date, each of the corporations, other than the last corporation in the unbroken chain, owns stock possessing fifty percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. SECTION 2. AWARD Subject to the terms of this Agreement, the Company hereby awards to Executive 42,000 Stock Units, effective as of the Date of Award. Each Stock Unit represents the obligation of the Company to transfer one share of Stock to Executive at the time provided in Section 5 of this Agreement, provided such Stock Unit is vested at such time. SECTION 3. BOOKKEEPING ACCOUNT The Company shall record the number of Stock Units granted hereunder to a bookkeeping account for Executive (the "Stock Unit Account"). Executive's Stock Unit Account shall be debited by the number of Stock Units, if any, forfeited in accordance with Section 4 and by the number of shares of Stock transferred to Executive in accordance with Section 5 with respect to such Stock Units. Executive's Stock Unit Account also shall be adjusted from time to time for stock dividends, stock splits and other such transactions in accordance with Section 10. -3- Stifel Financial Corp. Stock Unit Agreement James M. Zemlyak - -------------------------------------------------------------------------------- SECTION 4. VESTING Subject to the accelerated vesting provisions provided below, if Executive remains employed by the Company through the applicable date, the Stock Units shall vest at the times provided in the following schedule:
- -------------------------------------------------------------------------------- Stock Units Becoming Aggregated Stock Vesting Date Vested On Such Date Units Vested - -------------------------------------------------------------------------------- February 1, 2000 8,400 8,400 - -------------------------------------------------------------------------------- February 1, 2001 8,400 16,800 - -------------------------------------------------------------------------------- February 1, 2002 8,400 25,200 - -------------------------------------------------------------------------------- February 1, 2003 8,400 33,600 - -------------------------------------------------------------------------------- February 1, 2004 8,400 42,000 - --------------------------------------------------------------------------------
In the event Executive dies while employed, or terminates employment on account of his Permanent Disability, before February 1, 2004, an additional number of Stock Units shall vest. The additional number shall be the number of Stock Units that would have vested had Executive remained employed by the Company as of the February 1 next following the year in which such death or disability occurred, multiplied by a fraction the numerator of which is the number of days that have elapsed during the calendar year in which such death or disability occurred and the denominator of which is 365. All of the Stock Units granted pursuant to Section 2 shall be fully vested immediately upon a Change in Control. In addition, all of the Stock Units granted pursuant to Section 2 shall be fully vested (a) in the event of termination of Executive's employment by the Company for a reason other than a Good Cause Event (as defined below), or (b) Executive's resignation for Good Reason (as defined below). The term "Good Cause Event" shall mean (a) a good faith determination by the Board of Directors, after notice to Executive and opportunity by Executive to be heard, that Executive committed a fraud, misappropriation, embezzlement or theft against or from the Company or any of its subsidiaries, (b) conviction of Executive of a felony or (c) a good faith determination by the Board of Directors, after a ninety day warning and the opportunity to cure and to be heard by the Board of Directors, on substantial evidence that Executive was grossly negligent in carrying out, or unreasonably refused to serve or carry out, the duties and responsibilities of Executive's employment with the Company. The term "Good Reason" shall mean the occurrence of any of the following without Executive's consent: (a) the assignment to Executive of any duties inconsistent in any material respect with his positions as President and Chief Executive Officer of the Company (including -4- Stifel Financial Corp. Stock Unit Agreement James M. Zemlyak - -------------------------------------------------------------------------------- status, offices, titles and reporting requirements), authority, duties or responsibilities as of the commencement of Executive's employment with the Company, or any action by the Company that results in material diminution in such positions, authority, duties or responsibilities, excluding, for this purpose, any isolated, insubstantial and inadvertent action not taken in bad faith and that is remedied by the Company promptly after receipt of written notice thereof given by Executive; or (b) any failure by the Company to provide the compensation and benefits to which Executive is entitled under any agreement with the Company or any compensation or benefit plan or practice generally applicable to senior executives of the Company, other than any isolated, insubstantial and inadvertent failure not occurring in bad faith and that is remedied by the Company promptly after receipt of written notice given by Executive; or (c) the Company requiring Executive to be based at a location that is more than fifty miles from St. Louis, MO. In the event of the termination of employment of Executive with the Company for any other reason, all Stock Units that are not vested at the time of such termination of employment shall be forfeited. SECTION 5. DISTRIBUTION OF SHARES Subject to the provisions below, so long as Executive shall remain employed by the Company, the Company shall transfer shares of Stock to Executive in annual installments over a period of five years beginning February 1, 2004. The number of shares of Stock in each installment shall be determined under the straight line accounting method. For example, shares of Stock equal to one-fifth (1/5th) of the Stock Units granted on the Date of Award, or 8,400 shares of Stock, shall be transferred to Executive as soon as administratively practical after February 1, 2004; one-fifth (1/5th) of the Stock Units granted on the Date of Award, or 8,400 shares of Stock, shall be transferred to Executive as soon as administratively practical after February 1, 2005; and so on, with the balance distributed in the fifth year of the payout period. Executive may elect to defer the date of transfer of Stock to a specified later date while Executive is still employed. Such an election shall be delivered in writing to the Company at least six months before the date of transfer specified above, and shall be irrevocable after such election deadline. In the event of the termination of the employment of Executive with the Company before the payment dates as scheduled above, the Company shall transfer, as soon as practical after such a termination of employment, shares of Stock to Executive equal in number to the Stock Units credited to Executive's Stock Unit Account at the time of such termination of employment (regardless of any election to defer the transfer). Notwithstanding any other provision of this Agreement to the contrary, no shares of Stock shall be transferred to Executive prior to the earliest date on which the Company's federal income tax deduction for such payment is not precluded by Section 162(m) of the Internal Revenue Code. -5- Stifel Financial Corp. Stock Unit Agreement James M. Zemlyak - -------------------------------------------------------------------------------- In the event any payment is delayed solely as a result of the preceding restriction, such payment shall be made as soon as administratively feasible following the first date as of which Section 162(m) of the Internal Revenue Code no longer precludes the deduction by the Company of such payment. SECTION 6. SHAREHOLDER RIGHTS Executive shall not have any of the rights of a shareholder of the Company with respect to Stock Units, such as the right to vote. SECTION 7. DIVIDEND EQUIVALENTS The Company shall pay Executive as soon as practical after the Company pays a cash dividend to shareholders of Stock an amount in cash equal to the amount per share of such cash dividend multiplied by the number of Stock Units credited to the Stock Unit Account of Executive as of the record date of such dividend. The Company may withhold from such payment any applicable federal, state or local income or payroll tax. SECTION 8. DEATH BENEFITS In the event of the death of Executive, as soon as practical after the death of Executive, the Company shall transfer shares equal in number to the vested Stock Units, if any, credited to Executive's Stock Unit Account to Executive's Beneficiary or Beneficiaries. Executive may designate a Beneficiary or Beneficiaries (contingently, consecutively, or successively) of such death benefit and, from time to time, may change his or her designated Beneficiary. A Beneficiary may be a trust. A beneficiary designation shall be made in writing in a form prescribed by the Company and delivered to the Company while the Participant is alive. If there is no designated Beneficiary surviving at the death of a Participant, payment of any death benefit of the Participant shall be made to the persons and in the proportions which any death benefit under the Stifle Financial Corp. Employee Stock Ownership Plan is or would be payable. SECTION 9. UNITS NON-TRANSFERABLE Stock Units awarded hereunder shall not be transferable by Executive. Except as may be required by the federal income tax withholding provisions of the Code or by the tax laws of any State, the interests of Executive and his Beneficiaries under this Agreement are not subject to the claims of their creditors and may not be voluntarily or involuntarily sold, transferred, alienated, assigned, pledged, anticipated, or encumbered. Any attempt by Executive or a Beneficiary to sell, transfer, alienate, assign, pledge, anticipate, encumber, charge or otherwise dispose of any right to benefits payable hereunder shall be void. -6- Stifel Financial Corp. Stock Unit Agreement James M. Zemlyak - -------------------------------------------------------------------------------- Section 10. Adjustment in Certain Events If there is any change in the Stock by reason of stock dividends, split-ups, mergers, consolidations, reorganizations, combinations or exchanges of shares or the like, the number of Stock Units credited to Executive's Stock Unit Account shall be adjusted appropriately so that the number of Stock Units credited to Executive's Stock Unit Account after such an event shall equal the number of shares of Stock a shareholder would own after such an event if the shareholder, at the time such an event occurred, had owned shares of Stock equal to the number of Stock Units credited to Executive's Stock Unit Account immediately before such an event. Section 11. Tax Withholding The Company shall not be obligated to transfer any shares of Stock until Executive pays to the Company or a Subsidiary in cash, or any other form of property, including Stock, acceptable to the Company, the amount required to be withheld from the wages of Executive with respect to such shares. Executive may elect to have such withholding satisfied by a reduction of the number of shares otherwise transferable under this Agreement at such time, such reduction to be calculated based on the closing market price of the Stock on the day Executive gives written notice of such election to the Company. Section 12. Source of Payment Shares of Stock transferable to Executive, or his Beneficiary, under this Agreement may be either Treasury shares, authorized but unissued shares, or any combination of such stock. The Company shall have no duties to segregate or set aside any assets to secure Executive's right to receive shares of Stock under this Agreement. Executive shall not have any rights with respect to transfer of shares of Stock under this Agreement other than the unsecured right to receive shares of Stock from the Company. Section 13. Amendment This Agreement may be amended by mutual consent of the parties hereto by written agreement. Section 14. Governing Law This Agreement shall be construed and administered in accordance with the laws of the State of Missouri. -7- Stifel Financial Corp. Stock Unit Agreement James M. Zemlyak - ------------------------------------------------------------------------------- IN WITNESS WHEREOF, the Company and Executive have caused this Agreement to be executed on this 11th day of January, 2000. STIFEL FINANCIAL CORP. By: /s/ Ronald J. Kruszewski ----------------------------- Title: President & CEO -------------------------- "Company" By: /s/ James M. Zemlyak ----------------------------- James M. Zemlyak "Executive" -8- EX-10.(T) 4 c68372a1ex10-t.txt STOCK UNIT AGREEMENT WITH SCOTT B. MCCUAIG Exhibit 10(t) STIFEL FINANCIAL CORP. STOCK UNIT AGREEMENT Stifel Financial Corp., a Delaware Corporation ("Company") and Scott B. McCuaig ("Executive") hereby agree as follows: WHEREAS, the Company established the Stifel Financial Corp. 1997 Incentive Stock Plan (the "Plan") pursuant to which options, stock appreciation rights and restricted stock covering an aggregate of 600,000 shares of the Stock of the Company may be granted to key employees of the Company and its subsidiaries; and WHEREAS, the Board of Directors of the Company has amended the Plan to permit the grant of Stock Units; and WHEREAS, Executive previously received an award of 38,095 restricted shares of Stock; and WHEREAS, the Board of Directors of the Company declared a 5% stock dividend effective February 12, 1998; and another 5% stock dividend effective February 25, 1999; and as a result of such stock dividends, such number of shares now totals 41,988; and WHEREAS, 8,400 of such shares vested on February 4, 1999, and the remaining 33,598 of such shares remain subject to restrictions and are subject to substantial risk of forfeiture; and WHEREAS, Executive has agreed to exchange the unvested 33,598 restricted shares of Stock in return for an award of 33,598 Stock Units in replacement of such restricted stock; and WHEREAS, the Compensation Committee of the Board of Directors of the Company, as Administrator of the Plan, wishes to cause the Company to redeem such 33,598 unvested restricted shares and to grant Executive 33,598 Stock Units to replace the shares of Stock surrendered by Executive; NOW, THEREFORE, in consideration of services rendered and the mutual covenants herein contained, the parties agree as follows: SECTION 1. DEFINITIONS As used in this Agreement, the following terms shall have the following meanings: A. "Award" means the award provided for in Section 2. B. "Board of Directors" means the Board of Directors of the Company. C. "Change in Control" means: (i) 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 (a) the then outstanding shares of Stock of the Company (the "Outstanding Company Stock") or (b) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company 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 Company shall not result in a Change in Control within the meaning of this subparagraph; or (ii) Individuals who, as the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, as a member of the Incumbent Board, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (iii) Approval by the stockholders of the Company of a reorganization, merger or consolidation, in each case, unless, following such reorganization, merger or consolidation, (a) more than 50% of, respectively, the then outstanding shares of 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 Company Stock and Outstanding Company Voting Securities immediately prior to such reorganization, merger or consolidation in substantially the same proportions as their ownership, immediately prior to such reorganization, merger or consolidation, of the Outstanding Company Stock and Outstanding Company Voting Securities, as the case may be, (b) no Person beneficially owns, directly or indirectly, 15% or more of, respectively, the then outstanding shares of 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 Company prior to such approval by the stockholders) and (c) at least a majority of the members of the board of directors of the corporation resulting from such -2- 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 (iv) Approval by the stockholders of the Company of (a) a complete liquidation or dissolution of the Company or (b) the sale or other disposition of all or substantially all of the assets of the Company, 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 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 is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Stock and Outstanding Company Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding Company Stock and Outstanding Company 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 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 Company 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 Company. D. "Date of Award" means December 31, 1999. E. "Permanent Disability" means total inability of Executive, because of bodily injury or disease, to carry out his duties as an employee of the Company's Subsidiary, Stifel, Nicolaus & Company, Incorporated, for a period of at least six consecutive months. F. "Retirement" means termination of employment with the Company and its Subsidiaries after attaining the age of 65. G. "Stock" means the common stock of the Company, par value fifteen cents ($0.15) per share. H. "Subsidiary" means any corporation, other than the Company, in an unbroken chain of corporations beginning with the Company if, at the relevant date, each of the corporations, other than the last corporation in the unbroken chain, owns stock possessing fifty percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. -3- SECTION 2. AWARD Subject to the terms of this Agreement, in exchange for the 33,598 shares of unvested restricted Stock previously awarded to Executive, the Company hereby awards to Executive 33,598 Stock Units, effective as of the Date of Award. Each Stock Unit represents the obligation of the Company to transfer one share of Stock to Executive at the time provided in Section 5 of this Agreement, provided such Stock Unit is vested at such time. SECTION 3. BOOKKEEPING ACCOUNT The Company shall record the number of Stock Units granted hereunder to a bookkeeping account for Executive (the "Stock Unit Account"). Executive's Stock Unit Account shall be debited by the number of Stock Units, if any, forfeited in accordance with Section 4 and by the number of shares of Stock transferred to Executive in accordance with Section 5 with respect to such Stock Units. Executive's Stock Unit Account also shall be adjusted from time to time for stock dividends, stock splits and other such transactions in accordance with Section 10. SECTION 4. VOTING Subject to the accelerated vesting provisions provided below, if Executive remains employed by the Company through the applicable date, the Stock Units shall vest at the times provided in the following schedule:
STOCK UNITS BECOMING VESTED AGGREGATED STOCK UNITS VESTING DATE ON SUCH DATE VESTED - ---------------- --------------------------- ---------------------- February 4, 2000 8,400 8,400 February 4, 2001 8,400 16,800 February 4, 2002 8,399 25,199 February 4, 2003 8,399 33,598
In the event Executive dies while employed, or terminates employment on account of his Permanent Disability, before February 4, 2003, an additional number of Stock Units shall vest. The additional number shall be the number of Stock Units that would have vested had Executive remained employed by the Company as of the February 4 next following the year in which such death or disability occurred, multiplied by a fraction the numerator of which is the number of days that have elapsed during the calendar year in which such death or disability occurred and the denominator of which is 365. All of the Stock Units granted pursuant to Section 2 shall be fully vested immediately upon a Change in Control. -4- In addition, all of the Stock Units granted pursuant to Section 2 shall be fully vested (a) in the event of termination of Executive's employment by the Company for a reason other than a Good Cause Event (as defined below), or (b) Executive's resignation for Good Reason (as defined below). The term "Good Cause Event" shall mean (a) a good faith determination by the Board of Directors, after notice to Executive and opportunity by Executive to be heard, that Executive committed a fraud, misappropriation, embezzlement or theft against or from the Company or any of its subsidiaries, (b) conviction of Executive of a felony or (c) a good faith determination by the Board of Directors, after a ninety day warning and the opportunity to cure and to be heard by the Board of Directors, on substantial evidence that Executive was grossly negligent in carrying out, or unreasonably refused to serve or carry out, the duties and responsibilities of Executive's employment with the Company. The term "Good Reason" shall mean the occurrence of any of the following without the Executive's consent: (a) the assignment to the Executive of any duties inconsistent in any material respect with his positions as President and Chief Executive Officer of the Company (including status, offices, titles and reporting requirements), authority, duties or responsibilities as of the commencement of Executive's employment with the Company, or any action by the Company that results in material diminution in such positions, authority, duties or responsibilities, excluding, for this purpose, any isolated, insubstantial and inadvertent action not taken in bad faith and that is remedied by the Company promptly after receipt of written notice thereof given by the Executive; or (b) any failure by the Company to provide the compensation and benefits to which the Executive is entitled under any agreement with the Company or any compensation or benefit plan or practice generally applicable to senior executives of the Company, other than any isolated, insubstantial and inadvertent failure not occurring in bad faith and that is remedied by the Company promptly after receipt of written notice given by the Executive; or (c) the Company requiring Executive to be based at a location that is more than fifty miles for St. Louis, MO. In the event of the termination of employment of the Executive with the Company for any other reason, all Stock Units that are not vested at the time of such termination of employment shall be forfeited. SECTION 5. DISTRIBUTION OF SHARES Subject to the provisions below, so long as Executive shall remain employed by the Company, the Company shall transfer shares of Stock to Executive in annual installments over a period of seven years beginning January 1, 2007. The number of shares of Stock in each installment shall be determined under the declining balance accounting method, based on the number of Stock Units credited to Executive's Stock Unit Account as of the beginning of each year in the installment payment period. For example, shares of Stock equal to 1/7 of the Stock Units credited to Executive's Stock Unit Account as of January 1, 2007 shall be transferred to Executive -5- as soon as administratively practical in 2007; 1/6 of the Stock Units credited to Executive's Stock Unit Account as of January 1, 2008 shall be transferred to Executive as soon as administratively practical in 2008; and so on, with the balance distributed in the seventh year of the payout period. Executive may elect to defer the date of transfer of Stock to a specified later date while Executive is still employed. Such an election shall be delivered in writing to the Company at least six months before the date of transfer specified above, and shall be irrevocable after such election deadline. In the event of the termination of the employment of Executive with the Company before the payment dates as scheduled above, the Company shall transfer, as soon as practical after such a termination of employment, shares of Stock to Executive equal in number to the Stock Units credited to Executive's Stock Unit Account at the time of such termination of employment (regardless of any election to defer the transfer). Notwithstanding any other provision of this Agreement to the contrary, no shares of Stock shall be transferred to Executive prior to the earliest date on which the Company's federal income tax deduction for such payment is not precluded by Section 162(m) of the Internal Revenue Code. In the event any payment is delayed solely as a result of the preceding restriction, such payment shall be made as soon as administratively feasible following the first date as of which Section 162(m) of the Internal Revenue Code no longer precludes the deduction by the Company of such payment. SECTION 6. SHAREHOLDER RIGHTS Executive shall not have any of the rights of a shareholder of the Company with respect to Stock Units, such as the right to vote. SECTION 7. DIVIDEND EQUIVALENTS The Company shall pay Executive as soon as practical after the Company pays a cash dividend to shareholders of Stock an amount in cash equal to the amount per share of such cash dividend multiplied by the number of Stock Units credited to the Stock Unit Account of Executive as of the record date of such dividend. The Company may withhold from such payment any applicable federal, state or local income or payroll tax. SECTION 8. DEATH BENEFITS In the event of the death of Executive, as soon as practical after the death of Executive, the Company shall transfer shares equal in number to the vested Stock Units, if any, credited to Executive's Stock Unit Account to Executive's Beneficiary or Beneficiaries. -6- Executive may designate a Beneficiary or Beneficiaries (contingently, consecutively, or successively) of such death benefit and, from time to time, may change his or her designated Beneficiary. A Beneficiary may be a trust. A beneficiary designation shall be made in writing in a form prescribed by the Company and delivered to the Company while the Participant is alive. If there is no designated Beneficiary surviving at the death of a Participant, payment of any death benefit of the Participant shall be made to the persons and in the proportions which any death benefit under the Stifle Financial Corp. Employee Stock Ownership Plan is or would be payable. SECTION 9. UNITS NON-TRANSFERABLE Stock Units awarded hereunder shall not be transferable by Executive. Except as may be required by the federal income tax withholding provisions of the Code or by the tax laws of any State, the interests of Executive and his Beneficiaries under this Agreement are not subject to the claims of their creditors and may not be voluntarily or involuntarily sold, transferred, alienated, assigned, pledged, anticipated, or encumbered. Any attempt by Executive or a Beneficiary to sell, transfer, alienate, assign, pledge, anticipate, encumber, charge or otherwise dispose of any right to benefits payable hereunder shall be void. SECTION 10. ADJUSTMENT IN CERTAIN EVENTS If there is any change in the Stock by reason of stock dividends, split-ups, mergers, consolidations, reorganizations, combinations or exchanges of shares or the like, the number of Stock Units credited to Executive's Stock Unit Account shall be adjusted appropriately so that the number of Stock Units credited to Executive's Stock Unit Account after such an event shall equal the number of shares of Stock a shareholder would own after such an event if the shareholder, at the time such an event occurred, had owned shares of Stock equal to the number of Stock Units credited to Executive's Stock Unit Account immediately before such an event. SECTION 11. TAX WITHHOLDING The Company shall not be obligated to transfer any shares of Stock until Executive pays to the Company or a Subsidiary in cash, or any other form of property, including Stock, acceptable to the Company, the amount required to be withheld from the wages of Executive with respect to such shares. Executive may elect to have such withholding satisfied by a reduction of the number of shares otherwise transferable under this Agreement at such time, such reduction to be calculated based on the closing market price of the Stock on the day Executive gives written notice of such election to the Company. SECTION 12. SOURCE OF PAYMENT Shares of Stock transferable to Executive, or his Beneficiary, under this Agreement may be either Treasury shares, authorized but unissued shares, or any combination of such stock. The Company shall have no duties to segregate or set aside any assets to secure Executive's right to -7- receive shares of Stock under this Agreement. Executive shall not have any rights with respect to transfer of shares of Stock under this Agreement other than the unsecured right to receive shares of Stock from the Company. SECTION 13. AMENDMENT This Agreement may be amended by mutual consent of the parties hereto by written agreement. SECTION 14. GOVERNING LAW This Agreement shall be construed and administered in accordance with the laws of the State of Missouri. IN WITNESS WHEREOF, the Company and Executive have caused this Agreement to be executed on this 30th day of December 1999. STIFEL FINANCIAL CORP. By: /s/ Charles R. Hartman ------------------------------ Title: Secretary ------------------------------ By: /s/ Scott B. McCuaig ------------------------------ Scott B. McCuaig Executive -8- EX-10.(U) 5 c68372a1ex10-u.txt AMENDED/RESTATED PROMISSORY NOTE Exhibit 10(u) AMENDED AND RESTATED PROMISSORY NOTE $143,237.12 St. Louis, Missouri December 21, 1998 FOR VALUE RECEIVED, the undersigned, Ronald J. Kruszewski ("Borrower") promises to pay to the order of Stifel Financial Corp. or its assigns ("Company") in lawful money of the United States of America in immediately available funds, at its office located at 500 North Broadway, St. Louis, Missouri 63102, or at any other place designated by the Company, the principal amount of One Hundred Forty-Three Thousand Two Hundred Thirty-Seven and 12/100 Dollars ($143,237.12) (the "Principal Amount"), together with interest thereon from the date hereof until maturity on the whole of the Principal Amount remaining from time to time unpaid at the rate set forth below, payable as follows: 1. PAYMENT OF PRINCIPAL AND INTEREST. 1.1 Principal. The Principal Amount shall be paid in five (5) installments with the first due March 31, 1999, the second installment due on January 1, 2000, the third installment due on January 1, 2001, the fourth installment due on January 1, 2002 and the fifth installment due on January 1, 2003 (such installment due dates hereinafter referred to as an "Installment Date"). The respective portions of the Principal Amount payable on each Installment Date shall be as follows: $30,155.18 on March 31, 1999; $30,155.18 on each January 1 of 2000 through 2002; and $22,616.40 on January 1, 2003. 1.2 Interest. Interest on the unpaid Principal Amount shall be paid on each Installment Date at the annual rate of six and thirty-four one hundredths percent (6-34/100%) calculated on the basis of the actual number of days elapsed over a year of three hundred sixty-five (365) days. After maturity, whether by acceleration or otherwise, interest shall accrue at the rate of six and thirty-four one hundredths percent (6-34/100%) until all sums due hereunder are paid. 1.3 Optional Prepayment. The Principal Amount may be prepaid by Borrower in whole or in part at any time, and from time to time without premium or penalty. Any prepayment of the Principal Amount shall be accompanied by payment of interest accrued and unpaid on the amount of such prepayment to the date of prepayment. Any partial prepayment shall be first applied to any accrued but unpaid interest and next to installments of principal in the inverse order of maturity. The Borrower shall not be entitled to reborrow any Principal Amount which is prepaid. 1.4 Forgiveness of Principal and Interest. If Borrower remains employed by the Company on March 31, 1999, $30,155.18 of the Principal Amount and all interest accrued to that date shall be forgiven. If Borrower remains employed by the Company on each January 1, thereafter from January 1, 2000 through January 1, 2002, an additional $30,155.18 of the Principal Amount and all interest accrued to that date shall be forgiven as of each such January 1. If Borrower remains employed by the Company on January 1, 2003, $22,616.40 of the Principal Amount and all interest accrued to that date shall be forgiven. If Borrower dies while employed by the Company or becomes disabled while employed by the Company (as determined by the Board of Directors of the Company ("Board of Directors")) prior to January 1, 2003, an additional portion of the Principal Amount and all interest accrued to that date shall be forgiven. The additional portion so forgiven shall be the amount which would have been forgiven had Borrower remained employed by the Company as of the January 1 immediately following the year in which such death or disability occurred, multiplied by a fraction, the numerator of which is the number of days which have elapsed during the calendar year in which such death or disability occurred and the denominator of which is the number of days in such calendar year. In addition, the entire unpaid Principal Amount and accrued interest shall be forgiven in the event of (a) a Change in Control (as defined in the Stifel Financial Corp. 1997 Incentive Stock Plan), (b) termination of Borrower's employment by the Company for a reason other than a Good Cause Event (as hereinafter defined), or (c) Borrower's resignation for Good Reason (as hereinafter defined). The term "Good Cause Event" shall mean (a) a good faith determination by the Board of Directors, after notice to Borrower and opportunity by Borrower to be heard, that Borrower committed a fraud, misappropriation, embezzlement or theft against or from the Company or any of its subsidiaries, (b) conviction of Borrower of a felony or (c) a good faith determination by the Board of Directors, after a ninety (90) day warning and the opportunity to cure and to be heard by the Board of Directors, on substantial evidence that Borrower was grossly negligent in carrying out, or unreasonably refused to serve or carry out, the duties and responsibilities of Borrower's employment with the Company. The term "Good Reason" shall mean the occurrence of any of the following without the Borrower's consent: (a) the assignment to the Borrower of any duties inconsistent in any material respect with his positions as President and Chief Executive Officer of the Company (including status, offices, titles and reporting requirements), authority, duties or responsibilities as of the commencement of Borrower's employment with the Company, or any action by the Company which results in material diminution in such positions, authority, duties or responsibilities, excluding, for this purpose, any isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of written notice thereof given by the Borrower; or (b) any failure by the Company to provide the compensation and benefits to which the Borrower is entitled under any agreement with the Company or any compensation or benefit plan or practice generally applicable to senior executives of the Company, other than any isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of written notice given by the Borrower; (c) the Company requiring the Borrower to be based at a location which is more than fifty (50) miles from St. Louis, Missouri. 2. METHOD OF PAYMENT. All payments hereunder shall be made on the days when due as set forth above. Whenever any Installment Date falls on a Saturday, Sunday or public holiday (any other day being a "Business Day") such payment due shall be made on the succeeding Business Day. 3. GOVERNING LAW. This Promissory Note shall be governed by and construed in accordance with the laws of the State of Missouri. -2- 4. WAIVER. Borrower, and all others who shall become parties primarily or secondarily liable on this Promissory Note, whether as endorsers, guarantors or otherwise, hereby waive presentment for payment, demand, notice of demand, notice of nonpayment or dishonor, protest and notice of protest of this Promissory Note, and all other notices in connection with the delivery, acceptance, performance, default or enforcement of the payment of this Promissory Note. All such parties agree the liability hereunder shall be unconditional without regard to the liability of any other party, and shall not be affected in any manner by any indulgence, extension of time, renewal, waiver or modification granted or consented to by the Company. All such parties hereby agree that failure of the Company to exercise any of its rights hereunder in any instance shall not constitute a waiver thereof in that or any other instance. 5. PAYMENT OF COSTS. In additional to the principal and interest payments payable hereunder, Borrower agrees to pay upon demand all reasonable costs and expenses (including attorneys fees) incurred by the Company in enforcing payment of any or all amounts payable hereunder. 6. CANCELLATION OF ORIGINAL NOTE. This Note is an amendment, restatement and continuation in part of that certain Promissory Note of Borrower dated November 30, 1997 (and any amendments thereto), and payable to the order of Company in the principal amount of $1,479,687.50, which shall be deemed to be cancelled upon Borrower's (i) execution and delivery of this Note and (ii) transfer to the Company of 124,688 shares of common stock of the Company. All interest evidenced by the November 30, 1997 Note being restated under this Note shall continue to be due and payable until paid. IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Promissory Note on the date first above written. /s/ Ronald J. Kruszewski ---------------------------------------- Ronald J. Kruszewski -3- -----END PRIVACY-ENHANCED MESSAGE-----