-----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, Io1rDqAMw922A3G0t44bclQ43lcKivAVfguLh8GRw9Di8yX8i0T12FiCwZJHL89b yHuJD8+s/8y9s3BAjBmYSA== 0000950134-03-012488.txt : 20030905 0000950134-03-012488.hdr.sgml : 20030905 20030905160038 ACCESSION NUMBER: 0000950134-03-012488 CONFORMED SUBMISSION TYPE: SC TO-I PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 20030905 SUBJECT COMPANY: 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: SC TO-I SEC ACT: 1934 Act SEC FILE NUMBER: 005-35338 FILM NUMBER: 03883888 BUSINESS ADDRESS: STREET 1: ATTN: JAMES G. LASCHOBER STREET 2: 501 N. BROADWAY CITY: ST. LOUIS STATE: MO ZIP: 63102-2102 BUSINESS PHONE: 314-342-2000 MAIL ADDRESS: STREET 1: ATTN: JAMES G. LASCHOBER STREET 2: 501 N. BROADWAY CITY: ST. LOUIS STATE: MO ZIP: 63102-2102 FILED BY: 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: SC TO-I BUSINESS ADDRESS: STREET 1: ATTN: JAMES G. LASCHOBER STREET 2: 501 N. BROADWAY CITY: ST. LOUIS STATE: MO ZIP: 63102-2102 BUSINESS PHONE: 314-342-2000 MAIL ADDRESS: STREET 1: ATTN: JAMES G. LASCHOBER STREET 2: 501 N. BROADWAY CITY: ST. LOUIS STATE: MO ZIP: 63102-2102 SC TO-I 1 c79358sctovi.txt SCHEDULE TO - ISSUER UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE TO TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) or 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 STIFEL FINANCIAL CORP. (Name of Subject Company (issuer) and Filing Person (offeror)) Common Stock, Par Value $0.15 Per Share, and associated Preferred Stock Purchase Rights (Title of Class of Securities) 860630102 (CUSIP Number of Class of Securities) Thomas A. Prince, Esq. Senior Vice President and General Counsel Stifel Financial Corp. 501 North Broadway St. Louis, Missouri 63102 (314) 342-2000 Fax: (314) 342-2850 (Name,address and telephone number of person authorized to receive notices and communications on behalf of filing persons) with a copy to: Thomas C. Erb, Esq. Lewis, Rice & Fingersh, L.C. 500 North Broadway Suite 2000 St. Louis, Missouri 63102 (314) 444-7600 Fax: (314) 612-7613 Calculation of Filing Fee Transaction valuation:(1) Amount of filing fee: - ---------------------- --------------------- $11,262,500 $911.14 (1) Calculated solely for purposes of determining the filing fee, based on the purchase of 850,000 shares of common stock of Stifel Financial Corp. at the tender offer purchase price of $13.25 per share. [ ] Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number or the Form or Schedule and the date of its filing. Amount Previously Paid: N/A Filing Party: N/A Form or Registration Number: N/A Date Filed: N/A [ ] Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: [ ] third party tender offer subject to Rule 14d-1. [X] issuer tender offer subject to Rule 13e-4. [ ] going private transaction subject to Rule 13e-3. [ ] amendment to Schedule 13D under Rule 13d-2. Check the following box if the filing is a final amendment reporting the results of a tender offer: [ ] This Tender Offer Statement on Schedule TO relates to the commencement by Stifel Financial Corp., a Delaware corporation ("Purchaser"), of its offer to purchase up to 850,000 shares ("Shares") of common stock, par value $0.15 per share, of Purchaser at a price of $13.25 per Share, net to the seller in cash, without interest. The tender offer is being made upon and subject to the terms and conditions set forth in the Offer to Purchase, dated September 5, 2003 (the "Offer to Purchase"), and the related Letter of Transmittal (the "Letter of Transmittal"), which together, as each may be amended or supplemented from time to time, constitute the "Offer." This Tender Offer Statement on Schedule TO is intended to satisfy the reporting requirements of Rule 13e-4 under the Securities Exchange Act of 1934, as amended. The information contained in the Offer to Purchase and the Letter of Transmittal, copies of which are attached to this Schedule TO as Exhibits (a)(1)(i) and (a)(1)(ii), respectively, is incorporated herein by reference in response to all of the items of this Schedule TO as more particularly described below. Capitalized terms used herein but not otherwise defined have the meaning ascribed to such terms in the Offer to Purchase. ITEM 1. SUMMARY TERM SHEET The information set forth in the Offer to Purchase under the caption "Questions and Answers About the Offer" is incorporated herein by reference. ITEM 2. SUBJECT COMPANY INFORMATION (a) Name and Address. The name of the issuer is Stifel Financial Corp., a Delaware corporation. The Purchaser's principal executive offices are located at 501 North Broadway, St. Louis, Missouri 63102. The telephone number of the Purchaser is (314) 342-2000. (b) Securities. The equity securities that are the subject of the tender offer are shares of common stock, par value $0.15 per share and the associated preferred stock purchase rights. As of August 15, 2003, there were 7,085,226 shares of common stock issued and outstanding. (c) Trading Market and Price. The equity securities that are the subject of the Offer are traded on the New York Stock Exchange. The high and low sales price for the securities for each quarter during the past two years is incorporated herein by reference from the Offer to Purchase under the caption "8. Price Range of Shares; Dividends." ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON (a) Name and Address. Stifel Financial Corp. is the subject company and the filing person. The Purchaser's principal executive offices are located at 501 North Broadway, St. Louis, Missouri 63102. The telephone number of the Purchaser is (314) 342-2000. The information set forth in the Offer to Purchase under the caption "11. Interest of Directors, Executive Officers and Certain Other Persons; Transactions and Arrangements Concerning Shares" is incorporated herein by reference. ITEM 4. TERMS OF THE TRANSACTION (a) Material Terms. The information set forth in the Offer to Purchase under the captions "1. Number of Shares; Proration"; "3. Certain Effects of the Offer"; "4. Procedures For Tendering Shares"; "5. Withdrawal Rights"; "6. Purchase of Shares and Payment of Purchase Price"; "7. Conditions of the Tender Offer"; "13. Certain United States Federal Income Tax Consequences"; "14. Extension of the Tender Offer; Termination; Amendment" and in the Letter of Transmittal is incorporated herein by reference. (b) Purchases. The Purchaser has been advised that none of its directors or executive officers plan to participate in the Offer. ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS (e) Agreements involving the subject company's securities. The information set forth in the Offer to Purchase under the caption "11. Interest of Directors, Executive Officers and Certain Other Persons; Transactions and Arrangements Concerning Shares" is incorporated herein by reference. ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS (a) Purposes. The information set forth in the Offer to Purchase under the caption "2. Purpose of the Offer" is incorporated herein by reference. (b) Use of Securities Acquired. The information set forth in the Offer to Purchase under the caption "2. Purpose of the Offer" is incorporated herein by reference. (c) Plans. The information set forth in the Offer to Purchase under the captions "2. Purpose of the Offer" and "11. Interest of Directors, Executive Officers and Certain Other Persons; Transactions and Arrangements Concerning Shares" is incorporated herein by reference. Except as otherwise disclosed in the Offer to Purchase, neither Stifel nor, to the best of Stifel's knowledge, any of its affiliates, directors or executive officers has any plans, proposals or negotiations that relate to or would result in: (1) any extraordinary transaction, such as a merger, reorganization or liquidation, involving Stifel or any of its subsidiaries; (2) any purchase, sale or transfer of a material amount of assets of Stifel or any of its subsidiaries; (3) any material change in Stifel's present dividend rate or policy, or indebtedness or capitalization; (4) any change in Stifel's present board of directors or management, including, but not limited to, any plans or proposals to change the number or the term of directors or to fill any existing vacancies on the board of directors or to change any material term of the employment contract of any executive officer; (5) any other material change in Stifel's corporate structure or business; (6) the common securities of Stifel being delisted from the NYSE; (7) any class of Stifel's equity securities becoming eligible for termination of registration under Section 12(g)(4) of the Exchange Act; (8) the suspension of Stifel's obligation to file reports under Section 15(d) of the Exchange Act; (9) the acquisition by any person of additional securities of Stifel or the disposition of securities of Stifel; or (10) any change in Stifel's restated certificate of incorporation, amended by-laws or other governing instruments or other actions which could impede the acquisition of control of Stifel. ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION (a) Source of Funds. The information set forth in the Offer to Purchase under the caption "9. Source and Amount of Funds" is incorporated herein by reference. (b) Conditions. Not applicable. (d) Borrowed Funds. Not applicable. ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY (a) Securities Ownership. The information set forth in the Offer to Purchase under the subcaptions "Beneficial Ownership of Directors and Executive Officers" and "Beneficial Ownership of Certain Other Persons" under the caption "11. Interest of Directors, Executive Officers and Certain Other Persons; Transactions and Arrangements Concerning Shares" is incorporated herein by reference. 2 (b) Securities Transactions. The information set forth in the Offer to Purchase under the subcaption "Transactions in Our Common Stock" under the caption "11. Interest of Directors, Executive Officers and Certain Other Persons; Transactions and Arrangements Concerning Shares" is incorporated herein by reference. ITEM 9. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED (a) Solicitation or Recommendation. Not applicable. ITEM 10. FINANCIAL STATEMENTS (a) Financial Information and (b) Pro Forma Information. Purchaser's financial statements are not deemed material to the Offer because this is a cash-only issuer tender offer without a financing condition by a public issuer. However, Purchaser's financial statements are incorporated by reference from Item 8 of Purchaser's Annual Report on Form 10-K for the year ended December 31, 2002 and from Part I, Item 1 of Purchaser's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2003. These materials are also incorporated by reference under the subcaption "Incorporation by Reference" under the caption "10. Information About Us" in the Offer to Purchase. ITEM 11. ADDITIONAL INFORMATION (a) Agreements, Regulatory Requirements and Legal Proceedings. The information related to applicable regulatory requirements which must be complied with and approvals which must be obtained in connection with the tender offer set forth in the Offer to Purchase under the captions "3. Certain Effects of the Offer"; and "12. Certain Legal Matters; Regulatory Approvals" is incorporated herein by reference. The information set forth in the Offer to Purchase under the subcaptions "Other Agreements" and "Employment Agreements and Other Compensation Arrangements" under the caption "11. Interest of Directors, Executive Officers and Certain Other Persons; Transactions and Arrangements Concerning Shares" is incorporated herein by reference. (b) Other Material Information. The information set forth in the Offer to Purchase and the related Letter of Transmittal is incorporated herein by reference. ITEM 12. EXHIBITS (a)(1)(A) Offer to Purchase, dated September 5, 2003. (a)(1)(B) Letter of Transmittal. (a)(1)(C) Notice of Guaranteed Delivery. (a)(1)(D) Letter to brokers, dealers, commercial banks, trust companies and other nominees, dated September 5, 2003. (a)(1)(E) Letter to clients for use by brokers, dealers, commercial banks, trust companies and other nominees, dated September 5, 2003. (a)(1)(F) Letter to Participants in the Stifel, Nicolaus Profit Sharing 401(k) Plan, dated September 5, 2003 (a)(1)(G) Trustee Direction Form. (a)(2) Not applicable. 3 (a)(3) Not applicable. (a)(4) Not applicable. (a)(5)(A) Letter to stockholders from the Chairman and Chief Executive Officer of Stifel Financial Corp., dated September 5, 2003. (a)(5)(B) Press Release dated September 5, 2003 announcing the commencement of the Offer. (b) Not applicable. (d)(1) Amended and Restated Stifel Financial Corp. 2001 Incentive Stock Plan, incorporated herein by reference to Appendix A to Stifel Financial Corp.'s Proxy Statement on Schedule 14A filed April 11, 2002. (d)(2) Form of Indemnification Agreement with directors dated as of June 30, 1987, incorporated herein by reference to Exhibit 10.2 to Stifel Financial Corp.'s Current Report on Form 8-K (date of earliest event reported - June 22, 1987) filed July 14, 1987. (d)(3) Employment Letter with Ronald J. Kruszewski, incorporated herein by reference to Exhibit 10(l) to Stifel Financial Corp.'s Annual Report on Form 10-K (File No. 1-9305) for the year ended December 31, 1997. (d)(4) Stock Unit Agreement with Ronald J. Kruszewski, incorporated herein by reference to Exhibit 10(j)(2) to Stifel Financial Corp.'s Annual Report on Form 10-K (File No. 1-9305) for the year ended December 31, 1998. (d)(5) Promissory Note dated August 1, 1999, from Tom Prince payable to Stifel, Nicolaus & Company, Incorporated, incorporated herein by reference to Stifel Financial Corp.'s Annual Report on Form 10-K (File No. 001-9305) for the year ended December 31, 2001, filed on March 27, 2002. (d)(6) Promissory Note dated March 5, 2002, from Tom Prince payable to Stifel, Nicolaus & Company, Incorporated, incorporated herein by reference to Stifel Financial Corp.'s Annual Report on Form 10-K (File No. 001-9305) for the year ended December 31, 2001, filed on March 27, 2002. (d)(7) Stock Unit Agreement with James M. Zemlyak dated January 11, 2000, incorporated herein by reference to Exhibit 10(s) to Stifel Financial Corp.'s Annual Report on Form 10-K/A Amendment No. 1 (File No. 1-9305) for the year ended December 31, 2001, filed on April 9, 2002. (d)(8) Stock Unit Agreement with Scott B. McCuaig dated December 20, 1998, incorporated herein by reference to Exhibit 10(t) to Stifel Financial Corp.'s Annual Report on Form 10-K/A Amendment No. 1 (File No. 1-9305) for the year ended December 31, 2001, filed on April 9, 2002. (d)(9) Amended and Restated Promissory Note dated December 21, 1998, from Ronald J. Kruszewski payable to Stifel Financial Corp., incorporated herein by reference to Exhibit 10.(u) to Stifel Financial Corp.'s Annual Report on Form 10-K/A Amendment No. 1 (File No. 1-9305) for the year ended December 31, 2001, filed on April 9, 2002. (g) Transcript of Statements to be made to Stockholders by Officer/Employees of Stifel Financial Corp. Regarding Self-Tender Offer. 4 (h) Not applicable. ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3 Not applicable. SIGNATURES After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: September 5, 2003 By: /s/ RONALD J. KRUSZEWSKI -------------------------------- Ronald J. Kruszewski Chairman and Chief Executive Officer 5 EX-99.(A)(1)(A) 3 c79358exv99wxayx1yxay.txt OFFER TO PURCHASE EXHIBIT (a)(1)(A) STIFEL FINANCIAL CORP. (STIFEL LOGO) OFFER TO PURCHASE FOR CASH 850,000 SHARES OF COMMON STOCK (INCLUDING ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) AT A PURCHASE PRICE OF $13.25 PER SHARE THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, OCTOBER 10, 2003, UNLESS THE OFFER IS EXTENDED. Stifel Financial Corp. hereby invites you to tender shares of its common stock, par value $0.15 per share, and associated preferred stock purchase rights, to Stifel, upon the terms and conditions set forth in this offer to purchase and the related letter of transmittal, which together, as they may be amended and supplemented from time to time, constitute "the offer." Upon the terms and subject to the conditions of the offer, we will pay $13.25 per share for shares validly tendered and not properly withdrawn in the offer. All shares tendered and purchased will include the associated preferred stock purchase rights issued pursuant to the Rights Agreement dated as of July 30, 1996 between us and UMB Bank, n.a., successor to Boatmen's Trust Company, as rights agent, and, unless the context requires, all references to the shares include these preferred stock purchase rights. All shares properly tendered and not properly withdrawn will be purchased at the purchase price, on the terms and subject to the conditions of the offer, including the "odd lot" priority and proration provisions. We reserve the right, in our sole discretion, to purchase more than 850,000 shares in the offer, subject to applicable law. See Section 14. We will not purchase in the offer any shares excluded under the proration provisions if more shares are tendered than we agreed to purchase in the offer. We will return to the tendering stockholders at our expense all shares not purchased in the offer promptly after the expiration of the offer. See Section 1. THE OFFER IS NOT CONDITIONED ON THE TENDER OF ANY MINIMUM NUMBER OF SHARES. THE OFFER IS, HOWEVER, SUBJECT TO OTHER CONDITIONS. SEE SECTION 7. The shares are listed and traded on the New York Stock Exchange and the Chicago Stock Exchange under the trading symbol "SF." On September 4, 2003, the last trading day prior to the commencement of the offer, the closing price per share reported on the New York Stock Exchange was $12.54. We encourage you to obtain current market quotations for the shares before deciding whether to tender your shares. See Section 8. You may direct questions and requests for assistance to Thomas A. Prince, our Senior Vice President and General Counsel, at the address and telephone number set forth on the back cover page of this offer to purchase. Requests for additional copies of this offer to purchase, the related letter of transmittal or the notice of guaranteed delivery may also be directed to Mr. Prince. OUR BOARD OF DIRECTORS HAS APPROVED THE OFFER. NEITHER STIFEL NOR ANY MEMBER OF OUR BOARD OF DIRECTORS, HOWEVER, MAKES ANY RECOMMENDATION TO YOU AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR SHARES. YOU MUST MAKE YOUR OWN DECISION AS TO WHETHER TO TENDER YOUR SHARES AND, IF SO, HOW MANY SHARES TO TENDER. IN DOING SO, YOU SHOULD READ CAREFULLY THE INFORMATION IN THIS OFFER TO PURCHASE AND IN THE RELATED LETTER OF TRANSMITTAL, INCLUDING OUR REASONS FOR MAKING THE OFFER. SEE SECTION 2. WE SUGGEST YOU DISCUSS WHETHER TO TENDER YOUR SHARES WITH YOUR BROKER OR OTHER FINANCIAL OR TAX ADVISORS. The Dealer Manager for the offer is STIFEL, NICOLAUS & COMPANY, INCORPORATED September 5, 2003 IMPORTANT If you wish to tender all or any part of your shares, you must do one of the following before the offer expires at 5:00 p.m., New York City time, on Friday, October 10, 2003, unless the offer is extended: (1) (a) complete and sign the letter of transmittal, or a facsimile of it, according to the instructions in the related letter of transmittal and mail or deliver it, together with any required signature guarantee and any other required documents, to UMB Bank, n.a., the depositary for the offer, and mail or deliver the certificates for the shares to the depositary together with any other documents required by the letter of transmittal; or (b) tender the shares according to the procedure for book-entry transfer described in Section 4; or (2) request a broker, dealer, commercial bank, trust company or other nominee to effect the transaction for you. If you are a participant in the Stifel, Nicolaus Profit Sharing 401(k) Plan, which we refer to as our 401(k) Plan, and want to tender all or part of your equivalent shares held in your 401(k) Plan account, you must follow the separate instructions and procedures described in Section 4 including returning the trustee direction form to Stifel, Nicolaus & Company, Incorporated at least three business days prior to the expiration date of the offer, which, unless the offer is extended, will require you to return the trustee direction form no later than 5:00 p.m., New York City time, on Tuesday, October 7, 2003. Your equivalent shares are equal to the total market value of your Stifel stock account divided by the closing market price per share of our common stock. If the trustee has not received your completed trustee direction form at least three business days prior to the expiration date of the offer, the trustee will not tender any shares held on your behalf. If your shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you should contact that person if you desire to tender your shares. If you desire to tender your shares and: (1) your certificates for the shares are not immediately available or cannot be delivered to the depositary; or (2) you cannot comply with the procedure for book-entry transfer; or (3) your other required documents cannot be delivered to the depositary by the expiration of the offer, you must tender your shares according to the guaranteed delivery procedure described in Section 4. TO TENDER SHARES PROPERLY, YOU MUST PROPERLY COMPLETE AND DULY EXECUTE THE RELATED LETTER OF TRANSMITTAL. We are not making the offer to, and will not accept any tendered shares from, stockholders in any jurisdiction where it would be illegal to do so. We may, however, at our discretion, take any actions necessary for us to make the offer to stockholders in any such jurisdiction. WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR SHARES IN THE OFFER. WE HAVE NOT AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED LETTER OF TRANSMITTAL. IF GIVEN OR MADE, ANY RECOMMENDATION OR ANY SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY US. OUR DELIVERY OF THIS OFFER TO PURCHASE WILL NOT BE DEEMED UNDER ANY CIRCUMSTANCE TO CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED IN THIS OFFER TO PURCHASE IS CORRECT AS OF ANY TIME AFTER THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION INCLUDED OR INCORPORATED BY REFERENCE HEREIN OR IN OUR AFFAIRS OR ANY OF OUR SUBSIDIARIES OR AFFILIATES SINCE THE DATE HEREOF. TABLE OF CONTENTS
SECTION PAGE - ------- ---- QUESTIONS AND ANSWERS ABOUT THE OFFER....................... 1 FORWARD-LOOKING STATEMENTS.................................. 5 THE OFFER................................................... 5 1. NUMBER OF SHARES; PRORATION........................ 5 2. PURPOSE OF THE OFFER............................... 7 3. CERTAIN EFFECTS OF THE OFFER....................... 8 4. PROCEDURES FOR TENDERING SHARES.................... 8 5. WITHDRAWAL RIGHTS.................................. 13 6. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE... 14 7. CONDITIONS OF THE OFFER............................ 15 8. PRICE RANGE OF SHARES; DIVIDENDS................... 17 9. SOURCE AND AMOUNT OF FUNDS......................... 18 10. INFORMATION ABOUT US............................... 18 11. INTEREST OF DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN OTHER PERSONS; TRANSACTIONS AND ARRANGEMENTS CONCERNING SHARES..................... 19 12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS........ 23 13. MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.......................................... 23 14. EXTENSION OF THE OFFER; TERMINATION; AMENDMENT..... 26 15. FEES AND EXPENSES.................................. 27 16. MISCELLANEOUS...................................... 27
i QUESTIONS AND ANSWERS ABOUT THE OFFER We are providing the following questions and answers about the offer for your convenience. Although we highlight material information in this offer to purchase, you should realize that we have not described all of the details of the offer to the same extent described in this offer to purchase. We urge you to read the entire offer to purchase and the related letter of transmittal because they contain the full details of the offer. We have included references to the Sections of this offer to purchase where you will find a more complete discussion. WHO IS OFFERING TO PURCHASE MY SHARES?....................... We are Stifel Financial Corp., the issuer of the shares. WHAT WILL THE PURCHASE PRICE FOR THE SHARES BE AND WHAT WILL BE THE FORM OF PAYMENT?...................... The purchase price for the offer is $13.25 per share. We will pay this purchase price in cash, without interest, promptly after the expiration of the offer. See Section 1 beginning on page 5. HOW MANY SHARES WILL YOU PURCHASE?..................... We will purchase 850,000 shares of our common stock in the offer, or such lesser number of shares as are properly tendered. If more than 850,000 shares are tendered, we will purchase all shares tendered on a pro rata basis, except for tendering stockholders who beneficially own less than 100 shares and who tender all of their shares, whose shares will be purchased on a priority basis. We expressly reserve the right to purchase additional shares of up to 2% of the outstanding shares of our common stock and could also decide to purchase more shares subject to applicable legal requirements. The offer is not conditioned on any minimum number of shares being tendered. See Section 7 beginning on page 15. HOW WILL YOU PAY FOR THE SHARES?....................... We expect to fund the purchase of shares under the offer and the payment of related fees and expenses from available cash. The offer is not subject to the receipt of any additional financing. See Section 9 beginning on page 18. HOW LONG DO I HAVE TO TENDER MY SHARES?.................... You may tender your shares until the offer expires. The offer will expire on Friday, October 10, 2003, at 5:00 p.m., New York City time, unless we extend it. See Section 1 beginning on page 5. CAN THE OFFER BE EXTENDED, AMENDED OR TERMINATED, AND UNDER WHAT CIRCUMSTANCES?..... We can extend or amend the offer in our sole discretion. If we extend the offer, we will delay the acceptance of any shares that have been tendered. We cannot assure you, however, that we will extend the offer or, if we extend it, for how long. We can terminate the offer under certain circumstances. See Section 7 beginning on page 15 and Section 14 beginning on page 26. HOW WILL I BE NOTIFIED IF YOU EXTEND THE OFFER?............. We will issue a press release by 9:00 a.m., New York City time, on or prior to the business day after the previously scheduled expiration date if we decide to extend the offer. See Section 14 beginning on page 26. 1 ARE THERE ANY CONDITIONS TO THE OFFER?.................... Yes. The offer is subject to conditions such as the absence of court and governmental action prohibiting the offer and changes in general market conditions or our business that is or may be materially adverse to us. See Section 7 beginning on page 15. HOW DO I TENDER MY SHARES?.... To tender your shares, prior to 5:00 p.m., New York City time, on Friday, October 10, 2003, unless the offer is extended: - you must deliver your share certificate(s) and a properly completed and duly executed letter of transmittal to the depositary at the address appearing on the back cover page of this offer to purchase; or - the depositary must receive a confirmation of receipt of your shares by book-entry transfer and a properly completed and duly executed letter of transmittal; or - you must comply with the guaranteed delivery procedure. If you are a participant in our 401(k) Plan and want to tender all or part of your equivalent shares held in your 401(k) Plan account, you must follow the separate instructions and procedures described in Section 4 including returning the trustee direction form to Stifel, Nicolaus & Company, Incorporated at least three business days prior to the expiration date of the offer, which, unless the offer is extended, will require you to return the trustee direction form no later than 5:00 p.m., New York City time, on Tuesday, October 7, 2003. Your equivalent shares are equal to the total market value of your Stifel stock account divided by the closing market price per share of our common stock. If the trustee has not received your completed trustee direction form at least three business days prior to the expiration date of the offer, the trustee will not tender any shares held on your behalf. For assistance, contact Thomas A. Prince, our Senior Vice President and General Counsel, at the address and telephone number set forth on the back cover page of this offer to purchase, or your broker or other financial or tax advisors. See Section 4 beginning on page 8 and the instructions to the letter of transmittal. ONCE I HAVE TENDERED SHARES IN THE OFFER, CAN I WITHDRAW MY TENDER?....................... Yes. You may withdraw any shares you have tendered at any time before 5:00 p.m., New York City time, on Friday, October 10, 2003, unless we extend the offer, in which case you can withdraw your shares until the expiration of the offer as extended. If we have not accepted for payment the shares you have tendered to us, you may also withdraw your shares at any time after 12:00 midnight, New York City time, on Monday, November 3, 2003. See Section 5 beginning on page 13. HOW DO I WITHDRAW SHARES I PREVIOUSLY TENDERED?.......... You must deliver on a timely basis a written, telegraphic or facsimile notice of your withdrawal to the depositary at the address appearing on the back cover page of this offer to 2 purchase. Your notice of withdrawal must specify your name, the number of shares to be withdrawn and the name of the registered holder of such shares. Some additional requirements apply if the certificates for shares to be withdrawn have been delivered to the depositary or if your shares have been tendered under the procedure for book-entry transfer set forth in Section 4 beginning on page 11. Participants in our 401(k) Plan who wish to withdraw their shares must follow the instructions found in the letter to participants in our 401(k) Plan sent to them separately. See Section 5 beginning on page 13. WHAT HAPPENS IF MORE THAN 850,000 SHARES ARE TENDERED? IN WHAT ORDER WILL YOU PURCHASE THE TENDERED SHARES? WILL TENDERED SHARES BE PRORATED?..................... If more than 850,000 shares are properly tendered and not properly withdrawn, first we will purchase shares from all holders of "odd lots" of less than 100 shares, not including any equivalent shares held in our 401(k) Plan, who validly tender all of their shares. There will be no proration of shares tendered by any shareholder owning beneficially fewer than 100 shares who validly tenders all of those shares prior to the expiration date and who checks the "Odd Lots" box in the letter of transmittal. See Section 1 beginning on page 5. After purchasing all shares from the "odd lot" holders, we will purchase shares from all other shareholders who properly tender shares, including participants in our 401(k) Plan, on a pro rata basis, if necessary. IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?....................... If you do not tender your shares, upon the completion of the offer, you will realize a proportionate increase in your relative equity interest in us and thus in our future earnings and assets, subject to the issuance by us of additional shares of common stock and other equity securities in the future. FOLLOWING THE OFFER, WILL YOU CONTINUE AS A PUBLIC COMPANY?...................... Yes. Our shares will continue to be traded on the New York Stock Exchange and the Chicago Stock Exchange and we will continue to be subject to the periodic reporting requirements of the Securities Exchange Act. See Section 2 beginning on page 7 and Section 7 beginning on page 15. WHEN AND HOW WILL YOU PAY FOR THE SHARES I TENDER?.......... We will pay the purchase price, net in cash, without interest, for the shares we purchase promptly after the expiration of the offer. We will pay for the shares accepted for purchase by depositing the aggregate purchase price with the depositary, UMB Bank, n.a., promptly after the expiration date of the offer. The depositary will act as your agent and will transmit to you the payment for all of your shares accepted for purchase in the offer. See Section 6 beginning on page 14. 3 WHAT IS THE RECENT MARKET PRICE OF MY SHARES?........... On September 4, 2003, the last trading day prior to the commencement of the offer, the closing price per share reported on the New York Stock Exchange was $12.54. You should obtain current market quotations for the shares before you decide whether to tender your shares. WILL I HAVE TO PAY BROKERAGE COMMISSIONS IF I TENDER MY SHARES?....................... If you are a registered stockholder and you tender your shares directly to the depositary, you will not incur any brokerage commissions. If you hold shares through a broker or bank, you should consult your broker or bank to determine whether transaction costs are applicable. See Section 2 beginning on page 7. WHAT ARE THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES IF I TENDER MY SHARES?....................... Generally, you will be subject to United States federal income taxation when you receive cash from us in exchange for the shares you tender. In addition, receipt of cash for your tendered shares will generally be treated for United States federal income tax purposes either as (1) a sale or exchange eligible for capital gain or loss treatment or (2) a dividend subject to ordinary income tax rates. Non-United States holders are urged to consult their tax advisors regarding the application of United States federal income tax withholding and backup withholding, including eligibility for a withholding tax reduction or exemption, and the refund procedure. See Section 13 beginning on page 23. WILL I HAVE TO PAY STOCK TRANSFER TAX IF I TENDER MY SHARES?....................... No. If you instruct the depositary in the related letter of transmittal to make the payment for the shares to the registered holder, you will not incur any stock transfer tax. See Section 6 beginning on page 14. HAVE YOU OR YOUR BOARD OF DIRECTORS ADOPTED A POSITION ON THE OFFER?................. Our board of directors has approved the offer. Neither we nor our board of directors, however, makes any recommendation to you as to whether you should tender or refrain from tendering your shares. You must make your own decision as to whether to tender your shares and, if so, how many shares to tender. See Section 11 beginning on page 19. WHO CAN I TALK TO IF I HAVE QUESTIONS?.................... For additional information or assistance you may contact: Thomas A. Prince Senior Vice President and General Counsel Stifel Financial Corp. 501 North Broadway St. Louis, Missouri 63102 Tel: (314) 342-2000 4 FORWARD-LOOKING STATEMENTS This offer to purchase and the information incorporated by reference in this offer to purchase contain certain forward-looking statements that are based upon our current expectations and projections about current events. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we are including this statement for purposes of these safe harbor provisions. You can identify these statements from our use of the words "may," "will," "should," "could," "would," "plan," "potential," "estimate," "project," "believe," "intend," "anticipate," "expect," and similar expressions. These forward-looking statements include statements relating to: - Our goals, intentions, and expectations; - Our business plans and growth strategies; and - Estimates of our risks and future costs and benefits. These forward-looking statements are subject to significant risks, assumptions, and uncertainties, including, among other things, changes in general economic and business conditions and the risks and other factors set forth in this offer to purchase and the information incorporated by reference in this offer to purchase. Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. In addition, our past results of operations do not necessarily indicate our future results. You should not place undue reliance on any forward-looking statements, which speak only as of the date they were made. We will not update these forward-looking statements, even though our situation may change in the future, unless we are obligated to do so under federal securities laws. We qualify all of our forward-looking statements by these cautionary statements. THE OFFER 1. NUMBER OF SHARES; PRORATION. General. Upon the terms and subject to the conditions of the offer, we will purchase 850,000 shares, or such lesser number of shares as are properly tendered and not properly withdrawn in accordance with Section 5, before the scheduled expiration date of the offer at a price of $13.25 per share, net to the seller in cash, without interest. The 850,000 shares we are offering to purchase under the offer represents approximately 12.00% of our outstanding shares of common stock as of August 15, 2003. The term "expiration date" means 5:00 p.m., New York City time, on Friday, October 10, 2003, unless and until we, in our sole discretion, extend the period of time during which the offer will remain open, in which event the term "expiration date" will refer to the latest time and date at which the offer, as so extended by us, expires. See Section 14 for a description of our right to extend, delay, terminate or amend the offer. In accordance with the rules of the Securities and Exchange Commission, we may, and we expressly reserve the right to, purchase under the offer an additional amount of shares not to exceed 2% of the outstanding shares of common stock without amending or extending the offer. See Section 14. In the event of an over-subscription of the offer as described below, shares tendered will be subject to proration, except for odd lots as explained below. The proration period and withdrawal rights expire on the expiration date. If we increase the price to be paid for shares above or decrease the price to be paid for shares below $13.25 per share, or if we increase the number of shares being sought in the offer and such increase in the number of shares being sought exceeds 2% of the outstanding shares of our common stock, or we decrease the number of shares being sought and, in any such event, the offer is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the date that notice of any such increase or decrease is first published, sent or given in the manner specified in Section 14, then we will extend the offer until the expiration of such period of ten business days. As used 5 in this offer to purchase, a "business day" means any day other than a Saturday, Sunday or United States federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time. THE OFFER IS NOT CONDITIONED ON THE TENDER OF ANY MINIMUM NUMBER OF SHARES. THE OFFER IS, HOWEVER, SUBJECT TO OTHER CONDITIONS. SEE SECTION 7. Shares properly tendered under the offer and not properly withdrawn will be purchased at the same purchase price, upon the terms and subject to the conditions of the offer, including the proration provisions. Because of the proration provisions of the offer, we will not purchase all of the shares tendered if more than the number of shares we seek are properly tendered. We will return shares not purchased in the offer to the tendering stockholders at our expense promptly after the expiration date. By following the instructions to the letter of transmittal, you may specify the order in which your shares will be purchased in the event that, as a result of the proration provisions or otherwise, some but not all of the shares you tendered are purchased pursuant to the offer. In the event you do not designate the order and fewer than all shares are purchased due to proration, the depositary will select the order of shares purchased. If the number of shares properly tendered and not properly withdrawn prior to the expiration date is less than or equal to 850,000 shares, or such greater number of shares as we may elect to purchase, subject to applicable law, we will, upon the terms and subject to the conditions of the offer, purchase all shares so tendered at the purchase price. Priority of Purchases. Upon the terms and subject to the conditions of the offer, if more than 850,000 shares have been validly tendered and not properly withdrawn prior to the expiration date, we will purchase validly tendered shares in the following order of priority: (a) first, all shares validly tendered and not properly withdrawn prior to the expiration date by any shareholder who beneficially owns fewer than 100 shares, and who: (1) tenders all shares that the shareholder owns, beneficially or of record (tenders of less than all shares owned by the shareholder will not qualify for this preference); and (2) completes the box captioned "Odd Lots" on the letter of transmittal and, if applicable, on the notice of guaranteed delivery; and (b) second, after purchase of all of the foregoing shares in item (a) above, all other shares tendered properly, including those of participants in our 401(k) Plan and not properly withdrawn prior to the expiration date, on a pro rata basis (with appropriate adjustments to avoid purchases of fractional shares) as described below. Odd Lots. For purposes of this offer, the term "odd lots" means all shares validly tendered prior to the expiration date and not properly withdrawn by any person who owns, beneficially or of record, an aggregate of fewer than 100 shares, not including any shares held in our 401(k) Plan, and so certifies in the appropriate place on the letter of transmittal and, if applicable, on the notice of guaranteed delivery. In order to qualify for this preference, a qualifying shareholder must tender all applicable shares in accordance with the procedures described in Section 4. Odd lots will be accepted for payment before proration, if any, of the purchase of other tendered shares. This preference is not available to partial tenders. Any shareholder wishing to tender all of the shareholder's shares pursuant to this preference for odd lots should complete the box captioned "Odd Lots" on the letter of transmittal and, if applicable, on the notice of guaranteed delivery. See Instruction 17 to the letter of transmittal. We also reserve the right, but will not be obligated, to purchase all shares validly tendered by any shareholder, including any participant in our 401(k) Plan, who tenders all shares owned, beneficially or of record, and who, as a result of proration, would then own, beneficially or of record, an aggregate of fewer than 100 shares. If we exercise this right, we will increase the number of shares that we are offering to purchase by the number of shares purchased through the exercise of this right. 6 Proration. If proration of tendered shares is required, we will determine the proration factor promptly after the expiration date. Proration for each stockholder tendering shares, other than those qualifying for the preference for odd lots, will be based on the ratio of the number of shares properly tendered and not properly withdrawn by such stockholder to the total number of shares properly tendered and not properly withdrawn by all stockholders. Because of the difficulty in determining the number of shares properly tendered, including shares tendered by guaranteed delivery procedures, as described in Section 4, and not properly withdrawn, we may not be able to announce the final proration factor or commence payment for any shares purchased under the offer until approximately five business days after the expiration date. We will announce the preliminary results of any proration by press release promptly after the expiration date. After the expiration date, you may obtain preliminary proration information from Thomas A. Prince, our Senior Vice President and General Counsel, at the telephone number and address set forth on the back cover of this offer to purchase, and you may be able to obtain such information from your broker. As described in Section 13, the number of shares that we will purchase from you under the offer may affect your United States federal income tax consequences and, therefore, may be relevant to your decision whether or not to tender your shares. If the shares you tender are registered in your name and will be tendered directly to the depositary, you have the opportunity in the letter of transmittal to designate the order of priority in which shares tendered are to be purchased in the event of proration. This offer to purchase and the related letter of transmittal is being mailed to record holders of shares and will be furnished to brokers, dealers, commercial banks and trust companies whose names, or the names of whose nominees, appear on our stockholder list or, if applicable, who are listed as participants in a clearing agency's security position listing for subsequent transmittal to beneficial owners of shares. 2. PURPOSE OF THE OFFER. The offer is consistent with our historical commitment to repurchase shares from time to time as a means of increasing stockholder value. We have had a longstanding policy of repurchasing our shares in order to avoid dilution from stock options or other stock issuances and as a means of increasing stockholder value. Between January 2000 and June 2003, we repurchased in the open market and in private transactions approximately 892,552 shares of common stock for an aggregate of approximately $10,321,810 pursuant to our stock repurchase program. Over the past year, we have repurchased in the open market fewer shares than we wanted to purchase. The offer provides stockholders who are considering a sale of all or a portion of their shares the opportunity to sell their shares for cash without the usual transaction costs associated with open market sales and, thereby, receive a return of capital if they so elect. This format of repurchase provides a method for stockholders not participating to increase their relative percentage interest in us and our future operations at no additional cost. As a result, we believe that investing in our own shares in this manner is an attractive use of capital and an efficient means to provide value to our stockholders. In determining whether to tender shares under the offer, you should consider the possibility that you may be able to sell your shares in the future on the New York Stock Exchange, or otherwise, at a price higher than the purchase price. We give no assurance, however, as to the price or prices at which you may be able to sell your shares in the future. Our board of directors has approved the offer. Neither we nor any member of our board of directors, however, makes any recommendation to you as to whether you should tender or refrain from tendering your shares. You must make your own decision as to whether to tender your shares and, if so, how many shares to tender. Shares we acquire under the offer will be held in our treasury and will be available for us to issue for general corporate purposes including, but not limited to, the satisfaction of obligations under our existing or future employee equity incentive plans without further stockholder action, except as required by applicable law or the rules applicable to companies with shares traded on the New York Stock Exchange 7 or any other securities exchange on which the shares may be listed. Except for the use of the treasury shares to satisfy our obligations under existing employee equity incentive plans, we have no current plans for the issuance of our shares repurchased under the offer by us. Our board of directors established a stock repurchase program through which we are authorized to repurchase shares of our common stock from time to time in open market and private transactions. As of August 15, 2003, 781,972 shares are authorized for future repurchases under the program. This offer is not considered to be part of the program. We may in the future purchase additional shares of common stock on the open market, in private transactions, through offers or otherwise. Any additional purchases may be on the same terms or on terms that are more or less favorable to stockholders than the terms of the offer. We and our affiliates are prohibited, however under Rule 13e-4 under the Securities Exchange Act from purchasing any of our shares, other than in the offer, until at least ten business days after the expiration date of the offer, except for various limited exceptions provided in Rule 14e-5 under the Securities Exchange Act. 3. CERTAIN EFFECTS OF THE OFFER. We expect to have sufficient cash flow and access to other funding to meet our cash needs for normal operations and anticipated capital expenditures after the completion of the offer. Our actual experience, however, may differ from our expectations and we cannot assure you that our action in utilizing a portion of our capital in this manner will not adversely affect our ability to operate profitably or absorb possible losses in future periods or to continue our stock repurchase program. Future events may materially adversely affect our business, expenses or prospects and could affect our available cash or the availability or cost of external financial resources. See "Forward-Looking Statements." Upon the completion of the offer, non-tendering stockholders will realize a proportionate increase in their relative ownership interest in us and thus in our future earnings and assets, subject to our right to issue additional shares of common stock and other equity securities in the future and to the issuance of additional shares upon exchange or conversion of presently outstanding securities. The purchase of shares in the offer will reduce the number of our shares that might otherwise trade publicly and is likely to reduce the number of our stockholders. This may reduce the volume of trading in our shares and make it more difficult to buy or sell significant amounts of our shares without materially affecting the market price. Nonetheless, we anticipate that a sufficient number of our shares will be outstanding and publicly traded following consummation of the offer to ensure a continued trading market for our shares. Based upon published guidelines of the New York Stock Exchange and the Chicago Stock Exchange, we do not believe that the purchase of our shares under the offer will cause our remaining outstanding shares to be delisted from the New York Stock Exchange or the Chicago Stock Exchange. Our shares are now "margin securities" under the rules of the Federal Reserve Board. This has the effect, among other things, of allowing brokers to extend credit to their customers using our shares as collateral. We believe that, following the purchase of shares under the offer, our shares will continue to be "margin securities" for purposes of the Federal Reserve Board's margin rules and regulations. Our shares are registered under the Securities Exchange Act, which requires, among other things, that we furnish certain information to our stockholders and to the Securities and Exchange Commission and comply with the Securities and Exchange Commission's proxy rules in connection with meetings of our stockholders. The purchase of our shares under the offer will not result in our shares being deregistered under the Securities Exchange Act. 4. PROCEDURES FOR TENDERING SHARES. Proper Tender of Shares. For shares to be tendered properly under the offer: - the certificates for such shares, or confirmation of receipt of such shares under the procedure for book-entry transfer set forth below, together with a properly completed and duly executed letter of transmittal, or a manually signed facsimile thereof, including any required signature guarantees, or 8 an "agent's message" as described below, and any other documents required by the letter of transmittal, must be received before 5:00 p.m., New York City time, on the expiration date by the depositary at its address set forth on the back cover page of this offer to purchase; or - the tendering stockholder must comply with the guaranteed delivery procedure set forth below. Odd lot holders who tender all of their shares must also complete the section captioned "Odd Lots" in the letter of transmittal and, if applicable, in the notice of guaranteed delivery, to qualify for the preferential treatment that is available to odd lot holders. IF YOU HOLD YOUR SHARES THROUGH BROKERS, DEALERS, BANKS OR OTHER NOMINEES, YOU ARE URGED TO CONSULT THE NOMINEE TO DETERMINE WHETHER TRANSACTION COSTS ARE APPLICABLE IF YOU TENDER YOUR SHARES THROUGH THE NOMINEE AND NOT DIRECTLY TO THE DEPOSITARY. Procedures for Participants in our 401(k) Plan. If you are a participant in our 401(k) Plan, you may instruct the Trustee of the plan to tender some or all of the equivalent shares allocated to your account by completing a trustee direction form in accordance with the instructions in the letter to participants in our 401(k) Plan furnished separately and returning it to Stifel, Nicolaus & Company, Incorporated in accordance with those instructions. Your equivalent shares are equal to the total market value of your Stifel stock account divided by the closing market price per share of our common stock. All documents furnished to stockholders generally in connection with the offer will be made available to participants whose plan accounts are credited with shares. Participants in the 401(k) Plan cannot use the letter of transmittal to direct the tender of equivalent shares held under our 401(k) Plan, but must use the trustee direction form included in the separate instruction letter sent to them. Participants in our 401(k) Plan who also hold shares outside of the 401(k) Plan, however, must use the letter of transmittal to tender shares held outside of the 401(k) Plan and must complete the trustee direction form according to the instructions in the letter to participants in our 401(k) Plan for equivalent shares held under the 401(k) Plan. Our 401(k) Plan is prohibited from selling equivalent shares to us for a price that is less than the prevailing market price. Accordingly, if the purchase price is lower than the prevailing market price of our common stock at the expiration of the offer, such equivalent shares will not be purchased in the offer. Delivery of a letter of transmittal by a participant in the 401(k) Plan does not constitute proper tender of his or her equivalent shares held under the 401(k) Plan. Proper tender of equivalent shares held in the 401(k) Plan can only be made by a trustee direction form in accordance with the instructions in the letter to participants in our 401(k) Plan, instructing the trustee, which is the record owner of the shares held in the 401(k) Plan, to tender the equivalent shares allocated to your account by completing a letter of transmittal and returning it to the depositary. We have been advised that if the trustee has not received a participant's instructions at least three business days prior to the expiration date, the trustee will not be able to tender any equivalent shares held on behalf of a participant in the 401(k) Plan. Therefore the trustee direction form must be received by the trustee at least three business days in advance of the expiration of the offer. The offer is scheduled to expire on Friday, October 10, 2003, thus, it is anticipated that the trustee direction forms must be received by the trustee no later than 5:00 p.m., New York City time, on Tuesday, October 7, 2003, unless the offer is extended. The proceeds received by the 401(k) Plan from any tender of equivalent shares from a participant's plan account will be deposited in the participant's 401(k) Plan and invested in the 401(k) Plan's guaranteed income fund until the participant allocates the purchase price among the various investment funds under the 401(k) Plan in the usual manner. Participants in our 401(k) Plan are urged to read the separate instruction letter and related materials carefully. Signature Guarantees and Method of Delivery. No signature guarantee is required if: - the letter of transmittal is signed by the registered holder of the shares, whose name appears on a security position listing as the owner of the shares tendered therewith and such holder has not 9 completed either the box on the letter of transmittal captioned "Special Delivery Instructions" or the box captioned "Special Payment Instructions" (the term "registered holder" for purposes of this Section 4, includes any participant in the "book-entry transfer facility"); or - shares are tendered for the account of a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Agents Medallion Program or a bank, broker, dealer, credit union, savings association or other entity which is an "eligible guarantor institution," as such term is defined in Rule 17Ad-15 under the Securities Exchange Act. See Instruction 1 of the letter of transmittal. If a certificate for shares is registered in the name of a person other than the person executing a letter of transmittal, or if payment is to be made to a person other than the registered holder, then the certificate must be endorsed or accompanied by an appropriate stock power, in either case signed exactly as the name of the registered holder appears on the certificate, with the signature guaranteed by an eligible guarantor institution. In all cases, payment for shares tendered and accepted for payment under the offer will be made only after timely receipt by the depositary of certificates for such shares or a timely confirmation of the book-entry transfer of such shares into the depositary's account at the book-entry transfer facility as described above, a properly completed and duly executed letter of transmittal or a manually signed facsimile thereof, or an agent's message in the case of a book-entry transfer, and any other documents required by the letter of transmittal. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES, THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE TIMELY DELIVERY. Book-Entry Delivery. The depositary will establish an account with respect to the shares for purposes of the offer at the book-entry transfer facility within two business days after the date of this offer to purchase, and any financial institution that is a participant in the book-entry transfer facility's system may make book-entry delivery of the shares by causing the book-entry transfer facility to transfer shares into the depositary's account in accordance with the book-entry transfer facility's procedures for transfer. Although delivery of shares may be effected through a book-entry transfer into the depositary's account at the book-entry transfer facility, either: - a properly completed and duly executed letter of transmittal or a manually signed facsimile thereof with any required signature guarantees, or an agent's message, and any other required documents must, in any case, be transmitted to and received by the depositary at its address set forth on the back cover page of this offer to purchase before the expiration date; or - the guaranteed delivery procedure described below must be followed. DELIVERY OF THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. The term "agent's message" means a message transmitted by the book-entry transfer facility to, and received by, the depositary and forming a part of a book-entry transfer confirmation, which states that the book-entry transfer facility has received an express acknowledgment from the participant in the book-entry transfer facility tendering the shares that such participant has received and agrees to be bound by the terms of the letter of transmittal and that we may enforce such agreement against such participant. Federal Backup Withholding Tax. Under the United States federal backup withholding tax rules, 28% of the gross proceeds payable to you or your designated payee under the offer must be withheld and remitted to the United States Treasury, unless you or the other payee provide your or such other payee's, as the case may be, taxpayer identification number (employer identification number or social security number) to the depositary and certify under penalties of perjury that such number is correct or otherwise establishes an exemption. If the depositary is not provided with the correct taxpayer identification number 10 or another adequate basis for exemption, you or such other payee, as the case may be, may be subject to certain penalties imposed by the Internal Revenue Service. Therefore, if you want to tender shares, you should complete and sign the Substitute Form W-9 included as part of the letter of transmittal in order to provide the information and certification necessary to avoid backup withholding, unless you otherwise establish to the satisfaction of the depositary that you are not subject to backup withholding. Specified stockholders including, among others, all corporations and certain foreign stockholders, are not subject to these backup withholding and reporting requirement rules. In order for a foreign stockholder to qualify as an exempt recipient, that stockholder must submit an Internal Revenue Service Form W-8 or a Substitute Form W-8, signed under penalties of perjury, attesting to that stockholder's exempt status. The applicable form can be obtained from Thomas A. Prince, our Senior Vice President and General Counsel, at the address and telephone number set forth on the back cover page of this offer to purchase. See Instructions 9 and 16 of the related letter of transmittal. TO PREVENT FEDERAL BACKUP WITHHOLDING TAX EQUAL TO 28% OF THE GROSS PAYMENTS MADE TO YOU FOR YOUR SHARES PURCHASED UNDER THE OFFER, YOU MUST PROVIDE THE DEPOSITARY WITH YOUR CORRECT TAXPAYER IDENTIFICATION NUMBER AND PROVIDE OTHER INFORMATION BY COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED WITH THE LETTER OF TRANSMITTAL OR OTHERWISE ESTABLISH AN EXEMPTION FROM SUCH WITHHOLDING. See Section 13 for a discussion of United States federal income tax consequences to tendering stockholders. Federal Income Tax Withholding on Foreign Stockholders. Even if a foreign stockholder has provided the required certification as described in the preceding paragraph to avoid backup withholding, the depositary will withhold United States federal income taxes at a rate of 30% of the gross payment payable to a foreign stockholder or his or her agent unless the depositary determines that an exemption from, or a reduced rate of, withholding tax is available under a tax treaty or that an exemption from withholding is applicable because such gross proceeds are effectively connected with the conduct of a trade or business of the foreign stockholder within the United States. For this purpose, a foreign stockholder is any stockholder that is not a "United States holder," as defined in Section 13. In order to obtain a reduced rate of withholding under a tax treaty, a foreign stockholder must deliver to the depositary before the payment a properly completed and executed Internal Revenue Service Form W-8BEN. In order to obtain an exemption from withholding on the grounds that the gross proceeds paid under the offer are effectively connected with the conduct of a trade or business within the United States, a foreign stockholder must deliver to the depositary a properly completed and executed Internal Revenue Service Form W-8ECI. A foreign stockholder may be eligible to obtain a refund of all or a portion of any tax withheld if such stockholder satisfies one of the "Section 302 tests" for capital gain treatment described in Section 13 or is otherwise able to establish that no withholding or a reduced amount of withholding is due. Federal backup withholding generally will not apply to amounts subject to the 30% or a treaty-reduced rate of federal income tax withholding. FOREIGN STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE APPLICATION OF UNITED STATES FEDERAL INCOME TAX WITHHOLDING, INCLUDING ELIGIBILITY FOR A REDUCTION OF OR AN EXEMPTION FROM WITHHOLDING TAX, AND THE REFUND PROCEDURE. SEE INSTRUCTIONS 9 AND 16 OF THE LETTER OF TRANSMITTAL. Guaranteed Delivery. If you desire to tender your shares under the offer and your share certificates are not immediately available or cannot be delivered to the depositary before the expiration date, or the procedure for book-entry transfer cannot be completed on a timely basis, or if time will not permit all required documents to reach the depositary before the expiration date, your shares may nevertheless be tendered, provided that all of the following conditions are satisfied: - the tender is made by or through an eligible guarantor institution; - the depositary receives by hand, mail, overnight courier, telegram or facsimile transmission, before the expiration date, a properly completed and duly executed notice of guaranteed delivery in the form we have provided with this offer to purchase, specifying the price at which shares are being 11 tendered, including, where required, a signature guarantee by an eligible guarantor institution in the form set forth in such notice of guaranteed delivery; and - the certificates for all tendered shares, in proper form for transfer, or confirmation of book-entry transfer of such shares into the depositary's account at the book-entry transfer facility, together with a properly completed and duly executed letter of transmittal, or a manually signed facsimile thereof, and any required signature guarantees, or an agent's message, or other documents required by the letter of transmittal, are received by the depositary within three New York Stock Exchange trading days after the date of receipt by the depositary of the notice of guaranteed delivery. Return of Unpurchased Shares. If any of the shares you tender are not purchased under the offer or you properly withdraw them before the expiration date, or if less than all shares evidenced by your stock certificates are tendered by you, certificates for your unpurchased shares will be returned to you promptly after the expiration or termination of the offer or your proper withdrawal of your shares, as applicable. If your shares are tendered by book-entry transfer at the book-entry transfer facility, your shares will be credited to the appropriate account maintained by you or on your behalf at the book-entry transfer facility, in each case without expense to you. Stifel Options. We are not offering to purchase as part of the offer any outstanding stock options and tenders of stock options. If you are a holder of options and wish to participate in the offer, you may exercise your options and purchase shares of common stock and then tender the shares under the offer, provided that your exercise of your option and tender of shares is in accordance with the terms of the applicable plan and option agreements. You should not deliver any options to the depositary in connection with a tender of shares hereunder. You should note that an exercise of an option cannot be revoked even if all or a portion of the shares received upon your exercise and tendered in the offer are not purchased in the offer for any reason. Determination of Validity; Rejection of Shares; Waiver of Defects; No Obligation to Give Notice of Defects. We will determine, in our sole discretion, all questions as to the number of shares to be accepted and the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of shares, and our determination will be final and binding on all parties. We reserve the absolute right to reject any or all tenders of any shares that we determine are not in proper form or the acceptance for payment of or payment for which we determine may be unlawful. We reserve the absolute right to waive any of the conditions of the offer, and any such waiver will apply to all properly tendered shares. We also reserve the right to waive any defect or irregularity in any tender with respect to any particular shares or any particular stockholder. Our interpretation of the terms of the offer will be final and binding on all parties. Your tender of shares will not be deemed to have been properly made until all defects or irregularities are cured. We will not be liable for failure to waive any condition of the offer, or any defect or irregularity in any tender of shares. Neither we, the depositary nor any other person will be under any duty to give notification of any defects or irregularities in any tender or incur any liability for failure to give any such notification. Tendering Stockholder's Representation and Warranty; Our Acceptance Constitutes an Agreement. A tender of shares pursuant to any of the procedures described above will constitute your acceptance of the terms and conditions of the offer, as well as your representation and warranty to us that: - you have a net long position in the shares being tendered within the meaning of Rule 14e-4 of the Securities Exchange Act; and - your tender of the shares complies with Rule 14e-4 of the Securities Exchange Act. 12 It is a violation of Rule 14e-4 for you, directly or indirectly, to tender shares for your own account unless, at the time of tender and at the end of the proration period, including any extensions, you: - have a net long position equal to or greater than the amount of: - shares tendered; or - other securities convertible into or exchangeable or exercisable for the shares tendered and will acquire the shares for tender by conversion, exchange or exercise; and - will deliver or cause to be delivered the shares in accordance with the terms of the offer. Rule 14e-4 of the Securities Exchange Act provides a similar restriction applicable to the tender or guarantee of a tender on behalf of another person. Our acceptance for payment of shares tendered pursuant to the offer will constitute a binding agreement between you and us upon the terms and conditions of the offer. Lost or Destroyed Certificates. If the certificates for part or all of your shares have been lost, stolen, misplaced or destroyed, you may contact UMB Bank, n.a., the depositary for our shares, at (800) 884-4225, for instructions as to obtaining a replacement certificate. You must submit any replacement certificate you receive, together with the letter of transmittal, in order to receive payment for your shares that are tendered and accepted for payment. You may be required to post a bond to secure against the risk that the certificates you replaced may be subsequently recirculated. You must follow the procedures for replacing lost or destroyed certificates before the letter of transmittal and related documents can be processed. You should contact UMB Bank, n.a. immediately in order to permit timely processing of this documentation. You must deliver certificates for shares, together with a properly completed and duly executed letter of transmittal or facsimile thereof, or an agent's message, and any other documents required by the letter of transmittal to the depositary and not to us. ANY DOCUMENTS DELIVERED TO US WILL NOT BE FORWARDED TO THE DEPOSITARY AND THEREFORE WILL NOT BE DEEMED TO BE PROPERLY TENDERED. The trustee direction form required to tender shares held under our 401(k) Plan must be delivered to Stifel, Nicolaus & Company, Incorporated, the trustee designee, not us or the depositary. ANY TRUSTEE DIRECTION FORMS DELIVERED TO US OR THE DEPOSITARY WILL NOT BE FORWARDED TO THE TRUSTEE, AND THIS COULD RESULT IN YOUR EQUIVALENT SHARES NOT BEING TENDERED. 5. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 5, your tenders of shares pursuant to the offer are irrevocable. Shares you tender pursuant to the offer may be withdrawn by you at any time before the expiration date and, unless theretofore accepted for payment by us under the offer, also may be withdrawn by you at any time after 12:00 midnight, New York City time, on Monday, November 3, 2003. For your withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by the depositary at its address set forth on the back cover page of this offer to purchase. Any such notice of withdrawal must specify the name of the tendering stockholder, the number of shares to be withdrawn and the name of the registered holder of such shares. If the certificates for shares to be withdrawn have been delivered or otherwise identified to the depositary, then, before the release of such certificates, the serial numbers shown on such certificates must be submitted to the depositary and the signature(s) on the notice of withdrawal must be guaranteed by an eligible guarantor institution, unless such shares have been tendered for the account of an eligible guarantor institution. If shares have been tendered under the procedure for book-entry transfer set forth in Section 4, any notice of withdrawal also must specify the name and the number of the account at the book-entry transfer facility to be credited with the withdrawn shares and must otherwise comply with such book-entry transfer facility's procedures. 13 All questions as to the form and validity, including the time of receipt, of any notice of withdrawal will be determined by us, in our sole discretion, which determination will be final and binding. Neither the depositary nor any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. Participants in our 401(k) Plan who wish to withdraw their equivalent shares must follow the instructions found in the letter to participants in our 401(k) Plan sent to them separately. Withdrawals may not be rescinded and any shares properly withdrawn will thereafter be deemed not properly tendered for purposes of the offer unless the withdrawn shares are properly re-tendered before the expiration date by following one of the procedures described in Section 4. If we extend the offer, are delayed in our purchase of shares or are unable to purchase shares under the offer for any reason, then, without prejudice to our rights under the offer, the depositary may, subject to applicable law, retain tendered shares on our behalf, and such shares may not be withdrawn except to the extent tendering stockholders are entitled to withdrawal rights as described in this Section 5. 6. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE. Upon the terms and subject to the conditions of the offer, promptly following the expiration date, we will accept for payment and pay for, and thereby purchase, up to 850,000 shares, subject to increase or decrease as provided in Section 14, properly tendered and not properly withdrawn before the expiration date. For purposes of the offer, we will be deemed to have accepted for payment and therefore purchased shares that are properly tendered and not properly withdrawn, subject to the "odd lot" priority and proration provisions of the offer, only when, as and if we give oral or written notice to the depositary of our acceptance of the shares for payment under the offer. Upon the terms and subject to the conditions of the offer, promptly after the expiration date, we will accept for payment 850,000 shares, subject to increase or decrease as provided in Section 14, if properly tendered and not properly withdrawn, or such lesser number of shares as are properly tendered and not properly withdrawn as permitted in Section 5, at a price of $13.25 per share. In all cases, payment for shares tendered and accepted for payment pursuant to the offer will be made promptly following the consummation of the offer, subject to possible delay due to proration, but only after timely receipt by the depositary of: - certificates for shares or a timely book-entry confirmation of shares into the depositary's account at the book-entry transfer facility; - a properly completed and duly executed letter of transmittal, or an agent's message in the case of book-entry transfer; and - any other required documents. We will pay for shares purchased under the offer by depositing the aggregate purchase price for such shares with the depositary, which will act as agent for tendering stockholders for the purpose of receiving payment from us and transmitting payment to the tendering stockholders. In the event of proration, we will determine the proration factor and pay for those tendered shares accepted for payment promptly after the expiration date; however, we may not be able to announce the final results of any proration and commence payment for shares purchased until approximately five business days after the expiration date. Certificates for all shares tendered and not purchased, including shares not purchased due to proration, will be returned to the tendering stockholder, or, in the case of shares tendered by book-entry transfer, will be credited to the account maintained with the book-entry transfer facility by the participant therein who so delivered the shares, at our expense promptly after the expiration date or termination of the offer without expense to the tendering stockholders. UNDER NO CIRCUMSTANCES WILL WE PAY INTEREST ON THE PURCHASE PRICE REGARDLESS OF ANY DELAY IN MAKING SUCH PAYMENT. 14 In addition, if certain events occur, we may not be obligated to purchase shares under the offer. See Sections 7 and 14. We will pay all stock transfer taxes, if any, payable on the transfer to us of shares purchased under the offer. If, however, payment of the purchase price is to be made to, or, in the circumstances permitted by the offer, if unpurchased shares are to be registered in the name of, any person other than the registered holder, or if tendered certificates are registered in the name of any person other than the person signing the letter of transmittal, the amount of all stock transfer taxes, if any, whether imposed on the registered holder or the other person, payable on account of the transfer to the person will be deducted from the purchase price unless satisfactory evidence of the payment of the stock transfer taxes, or exemption therefrom, is submitted. See Instruction 6 of the letter of transmittal. ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY, SIGN AND RETURN TO THE DEPOSITARY THE SUBSTITUTE FORM W-9 INCLUDED WITH THE LETTER OF TRANSMITTAL MAY BE SUBJECT TO UNITED STATES FEDERAL INCOME TAX BACKUP WITHHOLDING OF 28% OF THE GROSS PROCEEDS PAID TO THE STOCKHOLDER OR OTHER PAYEE UNDER THE OFFER. SEE SECTION 4. ALSO SEE SECTION 13 REGARDING UNITED STATES FEDERAL INCOME TAX CONSEQUENCES FOR FOREIGN STOCKHOLDERS. 7. CONDITIONS OF THE OFFER. Notwithstanding any other provision of the offer, we will not be required to accept for payment, purchase or pay for any shares tendered, and may terminate or amend the offer or may postpone the acceptance for payment of, or the purchase of and the payment for shares tendered, subject to Rule 13e-4(f) under the Securities Exchange Act, if at any time on or after September 5, 2003 and before the expiration date any of the following events occur, or are reasonably determined by us to have occurred, that, in our judgment and regardless of the circumstances giving rise to the event or events, including any action or omission to act by us, makes it inadvisable to proceed with the offer or with acceptance for payment: (a) there is threatened, instituted or pending any action, suit or proceeding by any government or governmental, regulatory or administrative agency, authority or tribunal or any other person, domestic or foreign, before any court, authority, agency or tribunal that directly or indirectly: (1) challenges or seeks to make illegal, or to delay or otherwise directly or indirectly to restrain, prohibit or otherwise affect the consummation of the offer, the acquisition of some or all of the shares under the offer or otherwise relates in any manner to the offer; or (2) in our reasonable judgment, could materially and adversely affect the business, condition (financial or other), income, operations or prospects of us and our subsidiaries, taken as a whole, or otherwise materially impair in any way the contemplated future conduct of our business or any of our subsidiaries or materially impair the contemplated benefits of the offer to us; (b) there is any action threatened, pending or taken, or approval withheld, or any statute, rule, regulation, judgment, order or injunction threatened, invoked, proposed, sought, promulgated, enacted, entered, amended, enforced or deemed to be applicable to the offer or us or any of our subsidiaries, by any court, government or governmental regulatory or administrative authority, agency or tribunal, domestic or foreign, that, in our reasonable judgment, could, directly or indirectly: (1) make the acceptance for payment of, or payment for, some or all of the shares illegal or otherwise restrict or prohibit completion of the offer; (2) delay or restrict our ability, or render us unable, to accept for payment or pay for some or all of the shares; 15 (3) materially impair the contemplated benefits of the offer to us; or (4) materially and adversely affect the business, condition (financial or other), income, operations or prospects of us and our subsidiaries, taken as a whole, or otherwise materially impair in any way the contemplated future conduct of our or any of our subsidiaries' business; (c) there is: (1) any general suspension of trading in, or limitation on prices for, securities on any United States national securities exchange or in the over-the-counter market; (2) the declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, whether or not mandatory; (3) the occurrence, commencement or escalation of a war, armed hostilities or other calamity, whether occurring within or outside the United States, including, but not limited to, an act of terrorism; (4) any limitation (whether or not mandatory) by any governmental, regulatory or administrative agency or authority on, or any event that, in our reasonable judgment, could affect, the extension of credit by banks or other lending institutions in the United States; (5) any decrease of 10% or more in the market price of our shares or a 10% or greater decrease in the New York Stock Exchange Index, the NASDAQ Composite Index, the Dow Jones Industrial Average or the S&P 500 Composite Index, between the close of business on September 4, 2003, the last trading day prior to the commencement of the offer, and the close of trading on the last trading day prior to the expiration of the offer; (6) any change in the general political, market, economic or financial conditions in the United States or abroad that could, in our reasonable judgment, have a material adverse effect on the business, condition (financial or other), income, operations or prospects of us and our subsidiaries or on the benefits of the offer to us; or (7) in the case of any of the foregoing existing at the time of the commencement of the offer, a material acceleration or worsening thereof; (d) an offer or exchange offer for any or all of our shares (other than this offer), or any merger, acquisition, business combination or other similar transaction with or involving us or any of our subsidiaries, is proposed, announced or made by any person or is publicly disclosed; (e) (1) any entity, "group" (as that term is used in Section 13(d)(3) of the Securities Exchange Act) or person acquires or proposes to acquire beneficial ownership of: (A) more than 5% of the outstanding shares of our common stock (other than and to the extent disclosed in a Schedule 13D or Schedule 13G with the Securities and Exchange Commission on or before September 4, 2003); or (B) shares of our common stock representing 5% or more of the voting power of our common stock, whether through the acquisition of stock, the formation of a group, the grant of any option or right or otherwise (other than and to the extent disclosed in a Schedule 13D or Schedule 13G with the Securities and Exchange Commission on or before September 4, 2003); (2) any entity, group or person who has filed a Schedule 13D or Schedule 13G with the Securities and Exchange Commission on or before September 4, 2003 acquires or proposes to acquire, whether through the acquisition of stock, the formation of a group, 16 the grant of any option or right or otherwise (other than by virtue of the offer made hereby), beneficial ownership of: (A) an additional 2% or more of the outstanding shares of our common stock; or (B) shares of our common stock representing 2% or more of the voting power of our common stock; or (3) any person, entity or group files a Notification and Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, reflecting an intent to acquire us or any of our shares of common stock, or makes a public announcement reflecting an intent to acquire us or any of our subsidiaries or any of our or their respective assets or securities; (f) any change or changes occur or are threatened in our or any of our subsidiaries' business, condition (financial or other), income, operations, prospects or stock ownership that, in our reasonable judgment, has or could have a material adverse effect on us or our subsidiaries or on the benefits of the offer to us; or (g) the consummation of the offer and the purchase of the shares may cause the shares to be delisted from the New York Stock Exchange or to be eligible for deregistration under the Securities Exchange Act. The foregoing conditions are for our sole benefit and may be asserted by us prior to the expiration of the offer regardless of the circumstances giving rise to any such condition, and may be waived by us, in whole or in part, at any time prior to the expiration of the offer, in our sole discretion and to the extent permitted by applicable law; all conditions must be satisfied or waived prior to the expiration of the offer. Our failure at any time to exercise any of the foregoing rights prior to the expiration of the offer will not be deemed a waiver of any such right, and each such right will be deemed an ongoing right which may be asserted by us at any time and from time to time prior to the expiration of the offer. Any determination or judgment by us concerning the events described above will be final and binding on all parties. 8. PRICE RANGE OF SHARES; DIVIDENDS. Our shares are traded on the New York Stock Exchange and the Chicago Stock Exchange under the trading symbol "SF." The following table sets forth, for the fiscal quarters indicated, the high and low sales prices per share as reported on the New York Stock Exchange Consolidated Transactions Reporting System, as applicable, and the dividends paid by us during such periods. On May 9, 2002, we announced that we would discontinue paying dividends on our common stock.
CASH HIGH LOW DIVIDEND ------ ------ -------- Year 2003: First Quarter......................................... $12.23 $10.95 $ -- Second Quarter........................................ 13.03 11.40 -- Third Quarter (through September 4, 2003)............. 12.89 11.90 -- Year 2002: First Quarter......................................... $13.20 $10.40 $0.03 Second Quarter........................................ 14.65 12.45 0.03 Third Quarter......................................... 13.30 11.65 -- Fourth Quarter........................................ 12.70 10.95 -- Year 2001: First Quarter......................................... $14.00 $10.69 $0.03 Second Quarter........................................ 14.00 11.40 0.03 Third Quarter......................................... 12.65 10.00 0.03 Fourth Quarter........................................ 10.95 10.05 0.03
17 On September 4, 2003, the last trading day prior to the commencement of the offer, the closing price per share reported on the New York Stock Exchange was $12.54. YOU ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. 9. SOURCE AND AMOUNT OF FUNDS. Assuming that the maximum 850,000 shares are tendered in the offer at a price of $13.25 per share, the aggregate purchase price that we will pay for our shares will be $11,262,500. We expect that our fees and expenses for the offer will be approximately $50,000. We intend to use available cash to fund the purchase of shares tendered in the offer and to pay related fees and expenses. The offer is not conditioned upon the receipt of any financing. 10. INFORMATION ABOUT US. General. Stifel Financial Corp. is a holding company for Stifel, Nicolaus & Company, Incorporated and other subsidiaries and was organized in 1983. We offer securities-related financial services through our wholly owned operating subsidiaries, Stifel Nicolaus and Century Securities Associates, Inc. These subsidiaries provide brokerage, trading, investment banking, investment advisory, and related financial services primarily to customers throughout the United States from 83 locations in 15 states, primarily in the Midwest. Additional Information. We are subject to the information requirements of the Securities Exchange Act and, accordingly, we are obligated to file periodic reports, proxy statements and other information relating to our business, financial condition and other matters. We are required to disclose in such proxy statements certain information, as of particular dates, concerning our directors and executive officers, their compensation, stock options granted to them, the principal holders of our securities and any material interest of such persons in transactions with us. We also have filed an Issuer Offer Statement on Schedule TO with the Securities and Exchange Commission which includes additional information relating to the offer. These reports, statements and other information are available at the Securities and Exchange Commission's website at http://www.sec.gov and you may also read and copy any document we file at the public reference facilities maintained by the Securities and Exchange Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. Incorporation by Reference. The rules of the Securities and Exchange Commission allow us to "incorporate by reference" information into this document, which means that we can disclose important information to you by referring you to another document separately filed with the Securities and Exchange Commission. This offer incorporates by reference the following documents that we have filed previously with the Securities and Exchange Commission: - Our annual report on Form 10-K for the year ended December 31, 2002, including the historical consolidated financial statements and the notes thereto contained in that report. - Our quarterly reports on Form 10-Q for the quarters ended March 31, 2003 and June 30, 2003, including the historical consolidated financial statements and the notes thereto contained in those reports. - Our current reports on Form 8-K dated as of May 14, 2003, August 11, 2003 and August 20, 2003. These documents contain other important information about us. We may file an amendment to the Schedule TO to incorporate by reference into this offer to purchase any documents we subsequently file with the Securities and Exchange Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act after the date hereof and prior to the expiration date of the offer. Any statement contained in a document incorporated by reference herein, or contained in this offer to purchase, will be deemed to be modified or superseded for purposes of this offer to purchase to the extent that a statement contained herein or in any subsequently filed document that is incorporated herein modifies or supersedes that statement. Any modified or superseded statement will not 18 be deemed to constitute a part of this offer to purchase, except as so modified or superseded. Copies of any of the documents incorporated by reference herein may be obtained by a request addressed to Stifel Financial Corp., Attn: Thomas A. Prince, 501 North Broadway, St. Louis, Missouri 63102. Our telephone number is (314) 342-2000. We also will send you any exhibits that are specifically incorporated by reference in a document that you request. 11. INTEREST OF DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN OTHER PERSONS; TRANSACTIONS AND ARRANGEMENTS CONCERNING SHARES. As of August 15, 2003, we had issued and outstanding 7,085,226 shares of our common stock and held 590,555 shares of our common stock in treasury. The 850,000 shares we are offering to purchase under the offer represent approximately 12.00% of our outstanding shares of common stock as of August 15, 2003. Beneficial Ownership of Directors and Executive Officers. As of August 15, 2003, our directors and executive officers as a group (13 persons) beneficially owned an aggregate of 1,633,465 shares of our common stock, representing approximately 20.76% of the outstanding shares of our common stock. Although our directors and executive officers are entitled to participate in the offer on the same basis as all other stockholders, we have been advised that none of our directors and executive officers plan to participate in the offer. The nominating committee of our board of directors is in the process of interviewing candidates for positions on the board. This process may or may not result in the board filling existing vacancies on the board. The following table sets forth, as to each of our directors and executive officers (i) number of shares and percentage beneficially owned as of August 15, 2003 (including shares under exercisable options) and (ii) assuming we purchase 850,000 shares of our common stock and that no director or executive officer tenders any shares under the offer, the percentage beneficially owned after consummation of the offer.
PERCENTAGE OWNERSHIP AFTER SHARES OF STIFEL COMMON STOCK OFFER (ASSUMING STIFEL BENEFICIALLY OWNED PURCHASES 850,000 SHARES ------------------------------------------------- OF COMMON STOCK NAME AND ADDRESS NUMBER OF SHARES PERCENT OF OUTSTANDING AND NO DIRECTOR OR OF BENEFICIAL OWNER* BENEFICIALLY OWNED(1)(2) COMMON STOCK(3) EXECUTIVE OFFICER TENDERS)(4) - -------------------- ------------------------ ---------------------- ----------------------------- George H. Walker, III........ 551,806(5) 7.72% 8.76% Ronald J. Kruszewski......... 468,792 6.28% 7.09% Scott B. McCuaig............. 233,899 3.23% 3.66% James M. Zemlyak............. 175,588 2.44% 2.76% James M. Oates............... 58,620 (6) (6) Walter F. Imhoff............. 40,269 (6) (6) Charles A. Dill.............. 25,577 (6) (6) Bruce A. Beda................ 24,376 (6) (6) Robert E. Lefton............. 18,676 (6) (6) David D. Sliney.............. 16,751 (6) (6) Richard F. Ford.............. 7,881 (6) (6) Thomas A. Prince............. 6,617 (6) (6) Robert J. Baer............... 4,613 (6) (6) Directors and Executive Officers as a Group(13 persons)................... 1,633,465 20.76% 23.27%
- --------------- * The address of the directors and executive officers of Stifel is 501 North Broadway, St. Louis, Missouri 63102. (1) Except as otherwise indicated, each individual has sole voting and investment power over the shares listed beside his name. 19 (2) Includes the following shares that such persons and group have the right to acquire currently or within 60 days following August 15, 2003 upon the exercise of stock options: Mr. Walker -- 61,031; Mr. Kruszewski -- 187,079; Mr. McCuaig -- 70,934; Mr. Zemlyak -- 53,600; Mr. Oates -- 6,712; Mr. Imhoff -- 4,800; Mr. Dill -- 12,788; Mr. Beda -- 8,116; Mr. Lefton -- 4,455; Mr. Sliney -- 11,150; Mr. Ford -- 1,200; Mr. Prince -- 3,200; Mr. Baer -- 1,000; and directors and executive officers as a group 426,065. Also includes the following shares allocated to such persons and group under the Stifel Financial Corp. Stock Ownership Plan and Trust: Mr. Walker -- 5,542; Mr. Kruszewski -- 222; Mr. McCuaig -- 205; Mr. Zemlyak -- 155; Mr. Imhoff -- 98; Mr. Sliney -- 329; Mr. Prince -- 130; and directors and executive officers as a group -- 6,681. Also includes the following shares allocated to such persons and group underlying stock units vested currently or within 60 days following August 15, 2003: Mr. Kruszewski -- 186,666; Mr. McCuaig -- 80,525; Mr. Zemlyak -- 63,968; Mr. Oates -- 6,208; Mr. Dill -- 6,174; Mr. Beda -- 6,205; Mr. Lefton -- 2,674; Mr. Sliney -- 3,370; Mr. Prince -- 455; Mr. Baer -- 2,613; and directors and executive officers as a group -- 358,858. Also includes the following shares allocated to such persons and group under the Stifel, Nicolaus & Company, Incorporated Profit Sharing 401(k) Plan: Mr. Walker -- 5,657; Mr. Zemlyak -- 1,157; Mr. Imhoff -- 7; and directors and officers as a group -- 6,821. (3) Based upon 7,085,226 shares of common stock issued and outstanding as of August 15, 2003 and, for each director or officer of the group, the number of shares subject to options or stock units which the director or officer or the group has the right to acquire currently or within 60 days following August 15, 2003. (4) Includes shares underlying stock units that such persons or group hold but which are not convertible to our common stock within the 60-day period after August 15, 2003 and, therefore, under the rules of the Securities and Exchange Commission, are not deemed to be "beneficially owned" as of August 15, 2003. The stock units generally will be transferred into common stock at the end of a three-to five-year period after the date of grant contingent upon the holder's continued employment with us. (5) Includes 11,256 shares held by the George Herbert Walker Foundation as to which Mr. Walker, as a co-trustee, shares voting power. (6) Shares beneficially owned do not or will not exceed 1 percent of the outstanding shares of our common stock. Beneficial Ownership of Certain Other Persons. The following table sets forth, as to each person or entity known to us to be beneficial owners of more than five percent of our common stock, (i) the number of shares and percentage beneficially owned as of August 15, 2003 and (ii) assuming we purchase 850,000 shares of our common stock and none of these persons or entities tenders any shares under the offer, the percentage beneficially owned after consummation of the offer: 20
PERCENTAGE OWNERSHIP AFTER OFFER (ASSUMING STIFEL PURCHASES 850,000 SHARES OF PERCENT OF COMMON STOCK AND NAME AND ADDRESS NUMBER OF SHARES OUTSTANDING NO BENEFICIAL OWNER OF OF BENEFICIAL OWNER BENEFICIALLY OWNED COMMON STOCK(1) 5 PERCENT TENDERS)(1) - ------------------- ------------------ --------------- ---------------------- Western and Southern Life Insurance 1,019,812(2) 14.36% 16.36% Co................................... 400 Broadway Cincinnati, Ohio 45202 George H. Walker III................... 551,806(3) 7.72% 8.76% 501 North Broadway St. Louis, Missouri 63102 Ronald J. Kruszewski................... 468,792(4) 6.28% 7.09% 501 North Broadway St. Louis, Missouri 63102 Stifel Financial Corp. Stock Ownership 402,221(5) 5.68% 6.45% Plan and Trust....................... 501 North Broadway St. Louis, Missouri 63102 Dimensional Fund Advisors Inc.......... 358,210(6) 5.04% 5.74% 1299 Ocean Avenue, 11th Floor Santa Monica, California 90401
- --------------- (1) Based upon 7,085,226 shares of common stock issued and outstanding as of August 15, 2003 and, for Messrs. Walker and Kruszewski, the number of shares subject to options or stock units which the director or officer or the group has the right to acquire currently or within 60 days following August 15, 2003. (2) The information shown is based on a Schedule 13G, dated January 8, 1998, of Western and Southern Life Insurance Company. The number of shares beneficially owned has been adjusted to reflect the 5 percent stock dividends declared by us on each of January 20, 1998 and January 27, 1999. The information in the Schedule 13G indicates that Western and Southern has the sole power to vote and dispose of such shares. (3) See notes 1, 2 and 5 to the table under the subcaption "Beneficial Ownership of Directors and Executive Officers" above. (4) See notes 1 and 2 to the table under the subcaption "Beneficial Ownership of Directors and Executive Officers" above. (5) With respect to 231,412 allocated shares of our common stock of the Stifel Financial Corp. Stock Ownership Plan and Trust, each participant in the plan has the right to instruct the trustee of the plan with respect to the voting of the common stock in the 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 August 15, 2003, we had 170,809 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 us 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 the trustee has received timely directions from the participants. (6) The information shown is based on a Schedule 13G, dated February 17, 2003, of Dimensional Fund Advisors Inc. The information in the Schedule 13G indicates that Dimensional Fund Advisors Inc. has the sole power to vote and dispose of such shares. Transactions in Our Common Stock. In the ordinary course of business, we grant stock units to our directors in lieu of monthly retainers, committee and board meeting fees, and other cash incentives. Other than grants of these units in the normal course and routine purchases for the accounts of executive officers under the 401(k) Plan, the only transaction in our common stock by our directors and executive officers 21 within the past 60 days was the open market purchase of 700 shares of common stock on August 13, 2003 by James M. Oates, one of our directors. The purchase price was approximately $12.50 per share. Other than stock options being exercised and stock units converting to common stock in the ordinary course for a total of 75,330 shares, our only transactions in our common stock within the past 60 days were open market purchases of 14,243 shares on the New York Stock Exchange pursuant to our stock repurchase program and are reflected in the following table.
TRANSACTION DATE NUMBER OF SHARES PRICE PER SHARE - ---------------- ---------------- --------------- July 10, 2003.......................................... 100 $12.07 July 11, 2003.......................................... 500 12.50 July 16, 2003.......................................... 100 12.31 July 24, 2003.......................................... 400 12.25 July 30, 2003.......................................... 660 12.00 August 1, 2003......................................... 500 12.00 August 11, 2003........................................ 5,000 12.30 August 15, 2003........................................ 100 12.60 August 21, 2003........................................ 600 12.75 August 21, 2003........................................ 5,000 12.25 August 26, 2003........................................ 1,283 12.31
Other Agreements. Except for (a) outstanding options or other awards pursuant to our benefit plans to purchase shares of common stock as described in Note H to our Consolidated Financial Statements in our Form 10-K for the year ended December 31, 2002 and (b) as otherwise described in this offer to purchase, neither we nor, to the best of our knowledge, any of our directors, executive officers, or affiliates, is a party to any contract, arrangement, understanding or relationship with any other person relating, directly or indirectly, to the offer or with respect to any of our securities, including but not limited to any contract, arrangement, understanding or relationship concerning the transfer or the voting of our securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guaranties against loss or the giving or withholding of proxies, consents or authorizations. Employment Agreements and Other Compensation Arrangements. We entered into an employment letter with our Chairman and Chief Executive Officer, Ronald J. Kruszewski, as of September 25, 1997. Under the employment letter, Mr. Kruszewski receives an annual salary of at least $200,000 and he is eligible to participate in the executive bonus pool and in all other employee benefits we provide to senior executive officers. In connection with an outstanding loan from us, Mr. Kruszewski delivered to us a promissory note in the amount of $143,237 in December 1998. The promissory note is being forgiven ratably over a period of five years ending in 2003. We entered into an arrangement with our Senior Vice President, Scott B. McCuaig, 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 our executive bonus pool and in all other employee benefits provided to our senior executive officers. We entered into an arrangement with our Senior Vice President, Chief Financial Officer and Treasurer, James M. Zemlyak, on February 1, 1999 which provides for the employment of Mr. Zemlyak at a base salary of $175,000 per annum. Mr. Zemlyak is eligible to participate in all other employee benefits provided to our senior executive officers. In connection with a loan from us to our Senior Vice President and General Counsel, Thomas A. Prince, Mr. Prince delivered a promissory note to us in June 1999 in the principal amount of $100,000. The promissory note will be forgiven in equal annual installments commencing August 1, 2000 and ending August 1, 2004, or in certain other specified circumstances, contingent in any event upon Mr. Prince's continued employment us. Additionally, on March 5, 2002, Mr. Prince executed a promissory note to us in 22 the principal amount of $110,000 to cover relocation expenses. The note bears interest at 3 percent per annum, and is payable without recourse in specified amounts ranging from $15,000 to $30,000 per year from annual bonuses paid by us to Mr. Prince during the years 2003 through 2007. 12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS. We are not aware of any antitrust regulation, margin requirement, license or regulatory permit that appears to be material to our business that might be adversely affected by our acquisition of shares as contemplated herein or of any approval or other action by any government or governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for our acquisition or ownership of shares contemplated herein. Should any approval or other action be required, we presently intend to seek the required approval or take the required action. We cannot predict whether any such action would delay payments pursuant to the offer. We cannot guarantee that any required approval or other action would be obtained or would be obtained without substantial cost or conditions or that the failure to obtain the approval or other action might not result in adverse consequences to our business. Our obligations under the offer to accept for payment and pay for shares are subject to conditions. See Section 7. 13. MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES. The following summary describes certain material United States federal income tax consequences relating to the offer. This summary is based upon the Internal Revenue Code of 1986, as amended, Treasury regulations promulgated thereunder, administrative pronouncements and court decisions, all as in effect as of the date hereof and all of which are subject to change, possibly with retroactive effect. Subsequent changes may cause the tax consequences to vary from those described below. Furthermore, the authorities are subject to various interpretations, and it is, therefore, possible that the federal income tax consequences of the offer may differ from the treatment described below. No assurance can be given that the Internal Revenue Service will not take contrary positions or will not challenge, successfully or otherwise, the conclusions expressed herein. This summary addresses only shares that are held as capital assets within the meaning of Section 1221 of the Internal Revenue Code and does not address all of the tax consequences that may be relevant to stockholders in light of their particular circumstances or to certain types of stockholders subject to special treatment under the Internal Revenue Code, including, without limitation, certain financial institutions, dealers in securities or commodities, traders in securities who elect to apply a mark-to-market method of accounting, insurance companies, tax-exempt organizations, persons who hold shares as a position in a "straddle" or as a part of a "hedging," "conversion" or "constructive sale" transaction for United States federal income tax purposes or persons who received their shares through the exercise of employee stock options or otherwise as compensation. In addition, except as otherwise specifically noted, this discussion applies only to "United States holders" whose shares are tendered and accepted for payment pursuant to the offer. This summary also does not address the state, local or foreign tax consequences of participating in the offer. For purposes of this discussion, a "United States holder" means: - an individual citizen or resident of the United States; - a corporation or other entity taxable as a corporation for United States federal income tax purposes created or organized in or under the laws of the United States or of any political subdivision thereof; - an estate, the income of which is includible in gross income for United States federal income tax purposes regardless of its source; or - a trust whose administration is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority to control all of its substantial decisions. 23 If a partnership holds shares, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. The "Section 302 test", described below, will apply at the partnership level. Partners of partnerships holding shares should consult their tax advisors. Holders of shares who are not United States holders should consult their tax advisors regarding the United States federal income tax consequences and any applicable foreign tax consequences of the offer and should also see Section 4 for a discussion of the applicable United States withholding rules and the potential for obtaining a refund of all or a portion of any tax withheld. STOCKHOLDERS ARE URGED TO CONSULT WITH, AND RELY EXCLUSIVELY UPON, THEIR TAX ADVISOR TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO THEM OF PARTICIPATING IN THE OFFER. Characterization of the Purchase. The purchase of a United States holder's shares by us under the offer will be a taxable transaction for United States federal income tax purposes. As a consequence of the purchase, a United States holder will, depending on the United States holder's particular circumstances, be treated either as having sold the United States holder's shares or as having received a distribution in respect of stock from us. Under Section 302 of the Internal Revenue Code, a United States holder whose shares are purchased by us under the offer will be treated as having sold its shares, and thus will recognize capital gain or loss if the purchase either: - results in a "complete termination" of the United States holder's equity interest in us; - results in a "substantially disproportionate" redemption with respect to the United States holder; or - is "not essentially equivalent to a dividend" with respect to the United States holder. Each of these tests, referred to as the "Section 302 tests," is explained in more detail below. If a United States holder satisfies any of the Section 302 tests explained below, the United States holder will be treated as if it sold us its shares, and will recognize capital gain or loss in an amount equal to the difference between the cash received under the offer and the United States holder's adjusted tax basis in the shares surrendered in exchange therefor. This gain or loss will be long-term capital gain or loss if the United States holder's holding period for the shares that were sold exceeds one year as of the date of purchase by us under the offer. Specified limitations apply to the deductibility of capital losses by United States holders. Gain or loss must be determined separately for each block of shares (that is, shares acquired at the same cost in a single transaction) purchased by us from a United States holder under the offer. A United States holder may be able to designate, generally through its broker, which blocks of shares it wishes to tender under the offer if less than all of its shares are tendered under the offer, and the order in which different blocks will be purchased by us in the event of proration under the offer. United States holders should consult their tax advisors concerning the mechanics and desirability of such a designation. If a United States holder does not satisfy any of the Section 302 tests explained below, the purchase of a United States holder's shares by us under the offer will not be treated as a sale or exchange under Section 302 of the Internal Revenue Code with respect to the United States holder. Instead, the entire amount received by a United States holder with respect to the purchase of its shares by us under the offer will be treated as a dividend distribution to the United States holder with respect to its shares, taxable at applicable ordinary income tax rates. To the extent that a purchase of a United States holder's shares by us under the offer is treated as the receipt by the United States holder of a dividend, the United States holder's adjusted tax basis in the purchased shares will be added to any shares retained by the United States holder. Tax Rate Changes. The recently enacted Jobs and Growth Tax Relief Reconciliation Act of 2003, effective for tax years beginning after December 31, 2002, reduces the individual tax rates on both capital gains and dividend income. The top individual rate on adjusted capital gains is generally reduced from 20 percent to 15 percent (5 percent for taxpayers in the lower brackets) and on dividend income from 38.6 percent to 15 percent. The reduced rate on capital gains applies to sales and exchanges (and 24 payments received) on or after May 6, 2003 and the reduced rates on dividend income to dividends received after December 31, 2002. A United States holder who is an individual or subject to individual income tax rates should consult with his tax advisor regarding the different tax consequences to him of sale and dividend treatment. Constructive Ownership of Stock and Other Issues. In applying each of the Section 302 tests explained below, United States holders must take into account not only shares that they actually own but also shares they are treated as owning under the constructive ownership rules of Section 318 of the Internal Revenue Code. Under the constructive ownership rules, a United States holder is treated as owning any shares that are owned, actually and in some cases constructively, by certain related individuals and entities as well as shares that the United States holder has the right to acquire by exercise of an option or by conversion or exchange of a security. Due to the factual nature of the Section 302 tests explained below, United States holders should consult their tax advisors to determine whether they are deemed to constructively own any of our shares and whether the purchase of their shares under the offer qualifies for sale treatment in their particular circumstances. We cannot predict whether or the extent to which the offer will be oversubscribed. If the offer is oversubscribed, proration of tenders under the offer will cause us to accept fewer shares than are tendered. Therefore, no assurance can be given that we will purchase a sufficient number of a United States holder's shares under the offer to ensure that the United States holder receives sale treatment, rather than dividend treatment, for United States federal income tax purposes under the rules discussed below. If we are unable to purchase a sufficient number of a United States holder's shares under the offer, such United States holder may wish to consult his tax advisor regarding the ability to satisfy the Section 302 tests and obtain sale treatment through a sale or other disposition of additional shares contemporaneous with the offer. Section 302 Tests. One of the following tests must be satisfied in order for the purchase of shares by us under the offer to be treated as a sale for federal income tax purposes: - COMPLETE TERMINATION TEST. The purchase of a United States holder's shares by us under the offer will result in a "complete termination" of the United States holder's equity interest in Stifel if all of the shares that are actually owned by the United States holder are sold under the offer and all of the shares that are constructively owned by the United States holder, if any, are sold under the offer or, with respect to shares owned by certain individuals related to the United States holder, the United States holder effectively waives, in accordance with Section 302(c) of the Internal Revenue Code, attribution of shares which otherwise would be considered as constructively owned by the United States holder. United States holders wishing to satisfy the "complete termination" test through waiver of the constructive ownership rules should consult their tax advisors. - SUBSTANTIALLY DISPROPORTIONATE TEST. Our purchase of a United States holder's shares under the offer will result in a "substantially disproportionate" redemption with respect to the United States holder if, among other things, the percentage of the then outstanding voting stock actually and constructively owned by the United States holder immediately after the purchase is less than 80% of the percentage of the voting stock actually and constructively owned by the United States holder immediately before the purchase, treating as outstanding all shares purchased under the offer. - NOT ESSENTIALLY EQUIVALENT TO A DIVIDEND TEST. Our purchase of a United States holder's shares under the offer will be treated as "not essentially equivalent to a dividend" if the reduction in the United States holder's proportionate interest in Stifel, taking into account all shares actually and constructively owned by the United States holder, as a result of the purchase constitutes a "meaningful reduction" given the United States holder's particular circumstances. Whether the receipt of cash by a United States holder who sells shares under the offer will be "not essentially equivalent to a dividend" will depend upon the United States holder's particular facts and circumstances. The Internal Revenue Service has indicated in a published revenue ruling that even a small reduction in the percentage interest of a stockholder whose relative stock interest in a publicly held corporation is minimal, for example, an interest of less than 1%, and who exercises no 25 control over corporate affairs should constitute a "meaningful reduction." United States holders should consult their tax advisors as to the application of this test in their particular circumstances. Corporate Stockholder Dividend Treatment. In the case of a corporate United States holder, to the extent that any amounts received under the offer are treated as a dividend, such holder may be eligible for the dividends-received deduction. The dividends-received deduction is subject to certain limitations. In addition, any amount received by a corporate United States holder pursuant to the offer that is treated as a dividend may constitute an "extraordinary dividend" under Section 1059 of the Internal Revenue Code. Corporate United States holders should consult their own tax advisors as to the application of Section 1059 of the Internal Revenue Code to the offer, and to the tax consequences of dividend treatment in their particular circumstances. Foreign Stockholders. Generally, the depositary will withhold United States federal income tax at a rate of 30% from the gross proceeds paid under the offer to a foreign stockholder (as defined in Section 4) or his agent, unless the depositary determines that an exemption from, or a reduced rate of, withholding tax is available under a tax treaty or that an exemption from withholding otherwise applies. See Section 4 for a discussion of the applicable United States withholding rules and the potential for a foreign stockholder being subject to reduced withholding and for obtaining a refund of all or a portion of any tax withheld. Stockholders Who do Not Receive Cash Under the Offer. Stockholders whose shares are not purchased by Stifel under the offer will not incur any tax liability as a result of the completion of the offer. Backup Withholding. See Section 4 with respect to the application of United States federal backup withholding tax. THE DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY. STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISOR TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE OFFER, INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS. 14. EXTENSION OF THE OFFER; TERMINATION; AMENDMENT. We expressly reserve the right, in our sole discretion, at any time and from time to time, and regardless of whether or not any of the events set forth in Section 7 have occurred or are deemed by us to have occurred, to extend the period of time during which the offer is open and thereby delay acceptance for payment of, and payment for, any shares by giving oral or written notice of such extension to the depositary and making a public announcement of such extension. We also expressly reserve the right, in our sole discretion, to terminate the offer and not accept for payment or pay for any shares not theretofore accepted for payment or paid for or, subject to applicable law, to postpone payment for shares upon the occurrence of any of the conditions specified in Section 7 by giving oral or written notice of such termination or postponement to the depositary and making a public announcement of such termination or postponement. Our reservation of the right to delay payment for shares which we have accepted for payment is limited by Rule 13e-4(f)(5) promulgated under the Securities Exchange Act, which requires us to pay the consideration offered or return the shares tendered promptly after termination or withdrawal of the offer. Subject to compliance with applicable law, we further reserve the right, in our sole discretion, and regardless of whether any of the events set forth in Section 7 have occurred or are deemed by us to have occurred, to amend the offer in any respect, including, without limitation, by decreasing or increasing the consideration offered in the offer to holders of shares or by decreasing or increasing the number of shares being sought in the offer. We may amend the offer at any time and from time to time by giving public announcement of any such amendment. Our announcement, in the case of an extension, will be issued no later than 9:00 a.m., New York City time, on the next business day after the last previously scheduled or announced expiration date. We will promptly make any public announcement under the offer in a manner reasonably designed to inform stockholders of any change to the offer. Without limiting the manner in which we may choose to make a public announcement, except as required by applicable law, we will have no obligation to publish, 26 advertise or otherwise communicate any such public announcement other than by making a release through Business Wire or comparable service. If we materially change the terms of the offer or the information concerning the offer, we will extend the offer to the extent required by Rules 13e-4(d)(2), 13e-4(e)(2) and 13e-4(f)(1) under the Securities Exchange Act. These rules and certain related releases and interpretations of the Securities and Exchange Commission provide that the minimum period during which an offer must remain open following material changes in the terms of the offer or information concerning the offer (other than a change in price or a change in percentage of securities sought) will depend on the facts and circumstances, including the relative materiality of such terms or information. If we increase or decrease the price to be paid for our shares or increase or decrease the number of shares being sought in the offer and, if an increase in the number of shares being sought, such increase exceeds 2% of the outstanding shares of common stock, and the offer is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the date that such notice of an increase or decrease is first published, sent or given to security holders in the manner specified in this Section 14, we will extend the offer until the expiration of such period of ten business days. 15. FEES AND EXPENSES. We have retained UMB Bank, n.a., to act as depositary in connection with the offer. The depositary will receive reasonable and customary compensation for its services, will be reimbursed by us for specified reasonable out-of-pocket expenses and will be indemnified against certain liabilities in connection with the offer, including certain liabilities under the federal securities laws. We will not pay fees or commissions to brokers, dealers, commercial banks or trust companies for soliciting tenders of shares under the offer. If you hold shares through brokers or banks, you are urged to consult the brokers or banks to determine whether transaction costs are applicable if you tender shares through such brokers or banks and not directly to the depositary. Upon request, we will reimburse brokers, dealers, commercial banks and trust companies for customary mailing and handling expenses incurred by them in forwarding the offer and related materials to the beneficial owners of shares held by them as a nominee or in a fiduciary capacity. No broker, dealer, commercial bank or trust company has been authorized to act as our agent or the depositary's agent for purposes of the offer. We will pay or cause to be paid all stock transfer taxes, if any, on our purchase of shares except as otherwise provided in this offer to purchase and Instruction 6 in the related letter of transmittal. 16. MISCELLANEOUS. We are not aware of any jurisdiction where the making of the offer is not in compliance with applicable law. If we become aware of any jurisdiction where the making of the offer or the acceptance of shares in the offer is not in compliance with applicable law, we will make a good faith effort to comply with the applicable law. If, after such good faith effort, we cannot comply with the applicable law, the offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of shares in any such jurisdiction. In any jurisdiction where the securities, blue sky or other laws require the offer to be made by a licensed broker or dealer, the offer shall be deemed to be made on behalf of Stifel by one or more registered brokers or dealers licensed under the laws of that jurisdiction. Pursuant to Rule 13e-4 under the Exchange Act, we have filed with the Securities and Exchange Commission an Issuer Offer Statement on Schedule TO which contains additional information with respect to the offer. The Schedule TO, including the exhibits and any amendments and supplements thereto, may be examined, and copies may be obtained, at the same places and in the same manner as is set forth in Section 10 with respect to information concerning us. 27 YOU SHOULD READ ONLY THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON BEHALF OF US AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR SHARES IN THE OFFER. WE HAVE NOT AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED LETTER OF TRANSMITTAL. IF GIVEN OR MADE, ANY RECOMMENDATION OR ANY SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY US. STIFEL FINANCIAL CORP. September 5, 2003 28 Facsimile copies of the letter of transmittal will be accepted from eligible guarantor institutions. The letter of transmittal and certificates for shares and any other required documents should be sent or delivered by each stockholder or such stockholder's broker, dealer, commercial bank, trust company or other nominee to the depositary at one of its addresses set forth below. The depositary for the offer is: UMB BANK, N.A. (800) 884-4225 BY OVERNIGHT EXPRESS OR BY MAIL BY HAND DELIVERY EXPRESS MAIL: UMB Bank, n.a. UMB Bank, n.a. UMB Bank, n.a. Securities Transfer Division Securities Transfer Division Securities Transfer Division P.O. Box 410064 928 Grand Boulevard 928 Grand Boulevard Kansas City, Missouri 64141 13th Floor 13th Floor Kansas City, Missouri 64106 Kansas City, Missouri 64106
Facsimile (for eligible institutions only): (816) 860-3963 Confirm facsimile by telephone: (816) 860-7782 Any questions or requests for assistance may be directed to Thomas A. Prince, our Senior Vice President and General Counsel, at the telephone number and address set forth below. Requests for additional copies of this offer to purchase, the related letter of transmittal or the notice of guaranteed delivery may also be directed to Mr. Prince at the telephone number and address set forth below. Stockholders may also contact their broker, dealer, commercial bank, trust company or nominee for assistance concerning the offer. To confirm delivery of shares, stockholders are directed to contact the depositary. Thomas A. Prince Senior Vice President and General Counsel Stifel Financial Corp. 501 North Broadway, St. Louis, Missouri 63102 Tel: (314) 342-2000 EX-99.(A)(1)(B) 4 c79358exv99wxayx1yxby.txt LETTER OF TRANSMITTAL EXHIBIT (a)(1)(B) LETTER OF TRANSMITTAL TO TENDER SHARES OF COMMON STOCK OF STIFEL FINANCIAL CORP. PURSUANT TO THE OFFER TO PURCHASE FOR CASH UP TO 850,000 SHARES OF COMMON STOCK OF STIFEL (INCLUDING ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) DATED SEPTEMBER 5, 2003 To: UMB Bank, n.a. ("Depositary") (800) 884-4225 By Mail: By Hand: By Overnight: UMB Bank, n.a. UMB Bank, n.a. UMB Bank, n.a. Securities Transfer Division Securities Transfer Division Securities Transfer Division P.O. Box 410064 928 Grand Blvd. 13th Floor 928 Grand Blvd. 13th Floor Kansas City, Missouri 64141 Kansas City, Missouri 64106 Kansas City, Missouri 64106
Facsimile (for Eligible Institutions only): (816) 860-3963 Confirm facsimile by telephone: (816) 860-7782
PLEASE READ CAREFULLY THE ENTIRE LETTER, INCLUDING THE ACCOMPANYING INSTRUCTIONS, BEFORE CHECKING ANY BOX BELOW. This Letter of Transmittal is for use in connection with the Offer to Purchase for Cash up to 850,000 shares of Common Stock of Stifel Financial Corp. (and associated preferred stock purchase rights) dated September 5, 2003 (the "Offer") subject to the terms and conditions of the Offer to Purchase. Capitalized terms used but not defined herein have the meanings ascribed to them in the Offer to Purchase. Delivery of this Letter of Transmittal and all other documents to an address, or transmission of instructions to a facsimile number, other than as set forth above does not constitute a valid delivery. This Letter of Transmittal is to be used only if certificates are to be forwarded herewith or if delivery of shares is to be made by book-entry transfer to the Depositary's account at the book-entry transfer facility pursuant to the procedures set forth in the Offer to Purchase. This Letter of Transmittal may not be used for directing the exercise of options through Stifel Financial Corp.'s various stock option and incentive stock award plans ("Stock Option Plans"). This Offer is not being made to, and the tender of shares will not be accepted from or on behalf of, stockholders in any jurisdiction wherein the making or acceptance of the Offer would not be in compliance with the laws of such jurisdiction. Stockholders that wish to be eligible to receive the Offer consideration pursuant to the Offer to Purchase must validly tender and not withdraw their shares to the Depositary prior to 5:00 P.M., New York City time, on the Expiration Date.
- ------------------------------------------------------------------------------------------ DESCRIPTION OF SHARES TENDERED (SEE INSTRUCTIONS 3 AND 4) - ------------------------------------------------------------------------------------------ NAME AND ADDRESS OF REGISTERED HOLDER CERTIFICATE NUMBER(S)(1) NUMBER OF SHARES(2) - ------------------------------------------------------------------------------------------ --------------------------------- ------------------------ ----------------------- --------------------------------- ------------------------ ----------------------- --------------------------------- ------------------------ ----------------------- --------------------------------- ------------------------ ----------------------- --------------------------------- ------------------------ ----------------------- --------------------------------- ------------------------ ----------------------- Total shares tendered: ----------------------- - ------------------------------------------------------------------------------------------
Indicate below the order (by certificate number) in which your shares are to be purchased.(3) (Attach an additional signed list(s) if necessary). See Instruction 3. 1st: __________________ 2nd: __________________ 3rd: __________________ 4th: __________________ [ ] CHECK HERE IF ANY CERTIFICATES REPRESENTING SHARES TENDERED HEREBY HAVE BEEN LOST, STOLEN, DESTROYED, OR MUTILATED. YOU MUST COMPLETE AN AFFIDAVIT OF LOSS AND RETURN IT WITH YOUR LETTER OF TRANSMITTAL. THE HOLDER MAY BE REQUIRED TO POST A BOND TO SECURE AGAINST THE RISK THAT THE CERTIFICATES MAY BE SUBSEQUENTLY RECIRCULATED. PLEASE CALL UMB BANK, N.A., AS THE DEPOSITARY FOR THE SHARES, AT (800) 884-4225, TO OBTAIN AN AFFIDAVIT OF LOSS AND FOR FURTHER INSTRUCTIONS AND AS TO THE DETERMINATION OF THE REQUIREMENT FOR POSTING OF A BOND. SEE INSTRUCTION 14. PLEASE READ CAREFULLY THE ACCOMPANYING INSTRUCTIONS This Letter of Transmittal is to be used only if (a) certificates for shares are to be forwarded herewith, or such certificates will be delivered under a Notice of Guaranteed Delivery previously sent to the Depositary, or (b) a tender of shares is being made concurrently by book-entry transfer to the account maintained by the Depositary at the book-entry transfer facility pursuant to Section 4 of the Offer to Purchase. See Instruction 2. Holders who desire to tender shares under the Offer to Purchase and who cannot deliver the certificates for their shares, or who are unable to comply with the procedures for book-entry transfer before the Expiration Date (as defined in Section 1 of the Offer to Purchase), and who cannot deliver all other documents required by this Letter of Transmittal to the Depositary before the Expiration Date may tender their shares according to the guaranteed delivery procedures set forth in Section 4 of the Offer to Purchase. See Instruction 2. Delivery of documents to the book-entry transfer facility does not constitute delivery to the Depositary. - --------------- (1) Need not be completed if you are tendering your shares by book-entry transfer. (2) Unless otherwise indicated, it will be assumed that all shares represented by each certificate delivered to the Depositary are being tendered hereby. 3 If you do not designate an order, then in the event less than all shares tendered are purchased pursuant to the Offer to Purchase, your shares tendered herewith will be selected for purchase in the order determined by the Depositary. 2 TENDER OF SHARES [ ] Check here if certificates for tendered shares are enclosed herewith. [ ] Check here if tendered shares are being delivered by book-entry transfer to the Depositary's account at the book-entry transfer facility and complete the following (for use by Eligible Institutions only): Name of Tendering Institution: - -------------------------------------------------------------------------------- (PLEASE PRINT) Book-Entry Transfer Facility Account No.: ------------------------------------------------------------------------------- Transaction Code No.: - -------------------------------------------------------------------------------- [ ] Check here if tendered shares are being delivered pursuant to a Notice of Guaranteed Delivery previously sent to the Depositary and complete the following (for use by Eligible Institutions only): Name(s) of Registered Holder(s): - -------------------------------------------------------------------------------- (PLEASE PRINT) Date of Execution of Notice of Guaranteed Delivery: -------------------------------------------------------------------- Name of Institution that Guaranteed Delivery: --------------------------------------------------------------------------- Book-Entry Transfer Facility Account No.: ------------------------------------------------------------------------------- Transaction Code No.: - -------------------------------------------------------------------------------- 3 ODD LOTS (SEE INSTRUCTION 17) To be completed only if shares are being tendered by or on behalf of a person owning, beneficially or of record, as of the close of business on September 5, 2003, and who continues to own, beneficially or of record, as of the Expiration Date, an aggregate of fewer than 100 shares. The undersigned either (check only one box): [ ] is the beneficial or record owner of an aggregate of fewer than 100 shares (not including any shares held in Stifel's 401(k) Plan) and is tendering all such shares; or [ ] is a broker, dealer, commercial bank, trust company, or other nominee that: (a) is tendering, for the beneficial owner(s) thereof, shares with respect to which it is the record owner; and (b) believes, based upon representations made to it by such beneficial owner(s), that each such person is the beneficial owner of an aggregate of fewer than 100 shares and is tendering all such shares. SIGNATURES MUST BE PROVIDED ON PAGE 6. PLEASE READ THE INSTRUCTIONS CAREFULLY. TENDER, PROXY, AND POWER OF ATTORNEY To Stifel Financial Corp.: The undersigned, the registered holder of shares of common stock of Stifel Financial Corp. ("Stifel") as described in the Offer to Purchase, or the legal representative of the registered holder, hereby accepts, with respect to the shares tendered as set forth on page 2 of this Letter of Transmittal at the price of $13.25, the Offer of Stifel, receipt of which is hereby acknowledged, to acquire the shares upon the terms and subject to the conditions of the Offer to Purchase. Accordingly, subject to and effective upon the acquisition by Stifel (pursuant to the Offer to Purchase) of the shares tendered herewith, the undersigned hereby sells, assigns, and transfers to or upon the order of Stifel such shares, including any and all declared but unpaid dividends and other distributions on such shares, or hereby orders the registration of such shares tendered by book-entry transfer that are purchased pursuant to the Offer to Purchase to or upon the order of Stifel, and hereby irrevocably constitutes and appoints UMB Bank, n.a. (the "Depositary") the true and lawful agent and attorney-in-fact of the undersigned with respect to such shares with full power of substitution (such power of attorney is deemed to be an irrevocable power coupled with an interest) to: (i) deliver the shares, together with any and all evidences of transfer and authenticity which may be required by the Depositary, to or upon the order of Stifel upon receipt by the Depositary, as the undersigned's agent, of the shares of Stifel's common stock as set forth in the Offer to Purchase; (ii) do all things necessary and appropriate for the transfer of such shares on Stifel's books; (iii) exercise all rights of legal and beneficial ownership of such shares to which the undersigned would be entitled by virtue of the ownership of such shares, in accordance with the terms of the Offer to Purchase; and (iv) receive all dividends and other distributions due or rights issued in respect to the shares to which the undersigned would be entitled by virtue of the ownership of such shares, all in accordance with the terms of the Offer to Purchase. Upon such acceptance for acquisition, all prior proxies and powers of attorney given by the undersigned with respect to such shares will, without further action, be revoked and no subsequent proxies or powers of attorney may be given and, if given, will not be deemed effective. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, exchange, assign, and transfer the shares and that Stifel will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges, voting agreements, and encumbrances and not subject to any adverse claim. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or Stifel to be necessary or desirable to complete the sale, assignment, and transfer of the shares. 4 All authority herein conferred or agreed to be conferred survives the death or incapacity of the undersigned and any obligations of the undersigned hereunder are binding upon the heirs, personal representatives, successors, and assigns of the undersigned. Subject to the undersigned's right to withdraw as set forth in the Offer to Purchase, this tender is irrevocable. The undersigned understands that a tender of shares pursuant to any one of the procedures described herein constitutes the undersigned's acceptance of the terms and conditions of the Offer to Purchase, including the undersigned's representation and warranty that: (i) the undersigned has a net long position in the shares or equivalent securities the undersigned is tendering herewith within the meaning of Rule 14e-4 promulgated under the 1934 Act; and (ii) the undersigned's tender of such shares complies with such Rule 14e-4. The undersigned understands that acceptance of the Offer contained in the Offer to Purchase constitutes an agreement between the undersigned and Stifel, in accordance with the terms and conditions precedent of the Offer to Purchase, only when a duly executed and properly completed copy of this Letter of Transmittal, together with any other required documents (including, but not limited to, the shares), are received by the Depositary. The undersigned further acknowledges receipt and has read the contents of the Offer to Purchase and recognizes the various conditions to the Offer that are set forth in the Offer to Purchase. Stifel will return all shares not purchased immediately at its own expense. The undersigned recognizes that, under certain circumstances set forth in the Offer to Purchase, Stifel may terminate or amend the Offer or may postpone the acceptance for payment of, or the payment for shares tendered, or may not be required to purchase any of the shares that the undersigned is tendering hereby, or may accept for payment fewer than all of the shares the undersigned is tendering hereby. Unless otherwise indicated herein under "Special Payment Instructions," please issue the check for the purchase price and any shares of Stifel's common stock to be returned to the undersigned as set forth in the Offer to Purchase in the name of the undersigned. Similarly, please mail such check and shares, unless otherwise indicated herein under "Special Delivery Instructions," and/or send any appropriate documents if a share is not purchased, to the undersigned at the address shown below the undersigned's signature. The undersigned recognizes that Stifel has no obligation to transfer any shares from the name of the registered holder thereof if Stifel does not acquire such shares pursuant to the Offer. 5 SIGN HERE - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (SIGNATURE(S) OF OWNER(S)) Dated: -------------------------------------------------------------- , 2003 (Must be signed by registered holder(s) exactly as name(s) appear(s) under "Description of Shares" above. If signature is by a person acting in fiduciary capacity or as the registered owner's legal representative, please set forth full title. See Instruction 5.) Name(s) - -------------------------------------------------------------------------------- (PLEASE PRINT) - -------------------------------------------------------------------------------- (ADDRESS) - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) Phone Number: (---) ------------------------------------------- Taxpayer Identification or Social Security Number: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SPECIAL PAYMENT INSTRUCTIONS To be completed ONLY if the check for cash is to be issued in the name of someone other than the registered owner. See Instruction 7. Name - -------------------------------------------------------------------------------- Address: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) - -------------------------------------------------------------------------------- TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER SPECIAL DELIVERY INSTRUCTIONS To be completed ONLY if returned shares of Stifel's common stock and/or the check for the payment of the purchase price is to be sent to someone other than the registered owner at any address other than that shown under "Description of Shares" above. See Instruction 7. Name: - -------------------------------------------------------------------------------- Address: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) - -------------------------------------------------------------------------------- TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER GUARANTEE OF SIGNATURES (SEE INSTRUCTIONS 1 AND 5) Name of Firm: - -------------------------------------------------------------------------------- Authorized Signature: - -------------------------------------------------------------------------------- Name: - -------------------------------------------------------------------------------- (PLEASE PRINT) Title: - -------------------------------------------------------------------------------- Address: - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) Area Code(s) and Telephone Number(s): - -------------------------------------------------------------------------------- Dated: -------------------- , 2003 6 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER TO PURCHASE 1. SIGNATURE GUARANTEE. No signature guarantee is required if this Letter of Transmittal is signed by the registered owner of the shares tendered with this Letter of Transmittal and delivery is to be made directly to such registered owner. If such registered owner has completed either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" on the previous page, all signatures on this Letter of Transmittal must be guaranteed by a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member of a recognized signature guarantee medallion program within the meaning of Rule 17Ad-15 under the 1934 Act (an "Eligible Institution"). 2. DELIVERY. A. GENERAL. This Letter of Transmittal is to be used either if you are forwarding share certificates herewith or if you are delivering shares by book-entry transfer pursuant to the procedures set forth in the Offer to Purchase. The Depositary must receive, prior to the Expiration Date, a properly completed and duly executed Letter of Transmittal or a facsimile thereof in accordance with the instructions to the Letter of Transmittal, including any required signature guarantees, share certificates to be tendered, and any other documents required by the Letter of Transmittal at one of its addresses set forth on the back cover of the Offer to Purchase. Such shares may be delivered pursuant to the procedures for book-entry transfer described in the Offer to Purchase (and a confirmation of such delivery received by the Depositary, including an Agent's Message if the tendering stockholder has not delivered a Letter of Transmittal), or such shares may be validly tendered through the Depository Trust Company's ("DTC") Automated Offer to Purchase Program ("ATOP"). The term "Agent's Message" means a message, transmitted by the book-entry transfer facility to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, which states that the book-entry transfer facility has received an express acknowledgment from the participant in the book-entry transfer facility tendering the shares that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that Stifel may enforce such agreement against the participant. If certificates are forwarded to the Depositary in multiple deliveries, a properly completed and duly executed Letter of Transmittal must accompany each such delivery. Participants in the DTC may tender their shares in accordance with ATOP, to the extent it is available to such participants for the shares they wish to tender. If you are tendering through ATOP, you must expressly acknowledge that you have received and agreed to be bound by the Letter of Transmittal and that the Letter of Transmittal may be enforced against you. B. GUARANTEED DELIVERY PROCEDURES. If your share certificates are not immediately available, you cannot deliver your shares and all other required documents to the Depositary, or you cannot complete the procedure for delivery by book-entry transfer prior to the Expiration Date, you may tender your shares pursuant to the guaranteed delivery procedure set forth in the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery substantially in the form provided by Stifel (with any required signature guarantees) must be received by the Depositary prior to the Expiration Date; and (iii) the certificates for all physically delivered shares in proper form for transfer by delivery, or a confirmation of a book-entry transfer into the Depositary's account at the book-entry transfer facility of all shares delivered electronically, in each case together with a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof) with any required signature guarantees (or, in the case of a book-entry transfer, and Agent's Message, or, in the case of a tender through ATOP, the specified acknowledgement) and any other documents required by this Letter of Transmittal, must be received by the Depositary within three New York Stock Exchange trading days after the date the Depositary receives such Notice of Guaranteed Delivery, all as provided in the Offer to Purchase. C. METHOD OF DELIVERY. The method of delivery of all documents, including share certificates, the Letter of Transmittal, and any other required documents, is at the election and risk of the tendering stockholder, and the delivery will be deemed made only when actually received by the Depositary. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery. Except as specifically permitted by the Offer to Purchase, no alternative or contingent tenders 7 will be accepted. By executing this Letter of Transmittal (or facsimile thereof), you waive any right to receive any notice of the acceptance for payment of the shares. 3. INADEQUATE SPACE. If the space provided herein is inadequate, the certificate numbers or the number of shares should be listed on a separate signed schedule and attached to this Letter of Transmittal. 4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY TRANSFER). If you wish to tender fewer than all the shares represented by any certificate delivered to the Depositary, fill in the number of shares that are to be tendered in the section entitled "Description of Shares Tendered." In such case, a new certificate for the remainder of the shares represented by the old certificate will be sent to you, unless otherwise provided in the "Special Payment Instructions" or "Special Delivery Instructions" boxes on this Letter of Transmittal, as promptly as practicable following the expiration or termination of the Offer. All shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. Partial shares will not be accepted if the stockholder is tendering the shares by book-entry transfer to the Depositary's account at the book-entry transfer facility. 5. SIGNATURE ON LETTER OF TRANSMITTAL. If this Letter of Transmittal is signed by the registered stockholder(s) of the shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the certificates without alternation, enlargement, or any change whatsoever. If any of the shares tendered hereby are held of record by two or more persons, all such persons must sign this Letter of Transmittal. If any of the shares tendered hereby are registered in different names on different certificates, it will be necessary to complete, sign, and submit as many separate Letters of Transmittal (or facsimiles thereof) as there are different registrations of certificates. If this Letter of Transmittal is signed by the registered holder(s) of the shares tendered hereby, no endorsements of certificates or separate stock powers are required unless payment of the purchase price is to be made to, or shares not tendered or not purchased are to be registered in the name of, any person other than the registered stockholder(s), in which case the certificate(s) evidencing the shares tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on such certificates. Signatures on any such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the shares tendered hereby, certificates evidencing the shares tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered holder(s) appear(s) on such certificate(s). Signature(s) on any such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. If this Letter of Transmittal or any certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to Stifel of the authority of such person so to act must be submitted. 6. TRANSFER TAXES. Stifel will pay or cause to be paid any stock transfer taxes with respect to the sale and transfer of any shares to it or its order pursuant to the Offer. If, however, payment of the aggregate purchase price is to be made to, or shares not tendered or not purchased are to be registered in the name of, any person other than the registered stockholder(s), or if tendered shares are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person or otherwise) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted. Except as provided in this Instruction 6, it will not be necessary to affix transfer tax stamps to the certificates representing shares tendered hereby. 7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase price of any shares tendered hereby is to be issued in the name of, or any shares not tendered or not purchased are to be returned to, a person other than the person(s) signing this Letter of Transmittal, or if the check or any certificates for shares not tendered or not purchased are to be mailed to someone other than the person(s) signing this Letter of Transmittal or to an address other than that shown above in the section captioned "Description of Shares Tendered," then the boxes captioned "Special Payment Instructions" or "Special Delivery Instructions" in this Letter of Transmittal should be completed. Stockholders tendering shares by book-entry transfer will have any shares not accepted for payment returned by crediting the account maintained by such stockholder at the book-entry transfer facility. 8 8. TAXPAYER IDENTIFICATION NUMBER, SUBSTITUTE FORM W-9. The tendering holder of a share is required to provide the Depositary with his correct Taxpayer Identification Number ("TIN") on Substitute Form W-9 on the page following the last page of these instructions. Failure to provide the information on the form may subject the tendering holder to 28% withholding on the payment of the purchase price. If such holder is an individual, the taxpayer identification number is his social security number. The section in Part 3 of the form may be completed if the tendering holder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future. If the section in Part 3 is completed and the Depositary is not provided with a TIN within 60 days, the Depositary will withhold 28% on all payments of the purchase price thereafter until a TIN is provided to the Depositary, and the holder may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, payments that are made to such holder with respect to a purchased share pursuant to the Offer may be subject to backup withholding. If the backup withholding applies, the Depositary is required to withhold 28% of any payments made to the stockholder of a share. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained. 9. IRS FORM W-8. Certain stockholders (including, among others, all corporations and certain foreign individuals) are not subject to backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, the stockholder must submit an IRS Form W-8 or an IRS Form W-8 BEN signed under penalties of perjury, attesting to that individual's exempt status. A Form W-8 or Form W-8 BEN can be obtained from the Depositary. Foreign stockholders are urged to consult their tax advisors regarding the application of U.S. federal income tax withholding, including eligibility for a withholding tax reduction or exemption and refund procedures. 10. REQUEST FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests for assistance or for additional copies of the Offer to Purchase, this Letter of Transmittal or other Offer to Purchase materials may be directed to Thomas A. Prince, Senior Vice President and General Counsel, Stifel Financial Corp., 501 North Broadway, St. Louis, Missouri 63102-2102, (telephone number (314) 342-2000), and such copies will be furnished promptly at Stifel's expense. Stockholders may also contact their local broker, dealer, commercial bank, or trust company for documents relating to, or assistance concerning, the Offer to Purchase. 11. IRREGULARITIES. All questions as to the number of shares to be accepted, the validity, form, eligibility (including time of receipt), and acceptance for payment of any tender of shares will be determined by Stifel, in its sole discretion, which determination is final and binding on all parties. Stifel reserves the absolute right to reject any or all tenders it determines not to be in proper form or the acceptance of or payment for which may, in the opinion of Stifel's counsel, be unlawful. Stifel also reserves the absolute right to waive any defect or irregularity in the tender of any particular shares or any particular stockholder. No tender of shares will be deemed to be validly made until all defects or irregularities have been cured or waived. None of Stifel, the Depositary, or any other person is or will be obligated to give notice of any defects or irregularities in tenders, and none of them will incur any liability for failure to give any such notice. 12. STOCK OPTION PLANS. Holders of options to purchase shares through the Stock Option Plans may not use this Letter of Transmittal to direct the exercise of options and the tender of shares issuable upon exercise of such options. If you are a holder of options and wish to participate in the Offer, you may exercise your options and purchase shares of common stock and then tender the shares under the Offer, provided that your exercise of your option and tender of shares is in accordance with the terms of the applicable plan and option agreements. 13. ORDER OF PURCHASE IN EVENT OF PRORATION. As described in the Offer to Purchase, you may designate the order in which your shares are to be purchased in the event of proration. The order of purchase may affect whether any capital gain or loss recognized on the shares purchased is long-term or short-term (depending on the holding period for the shares purchased) and the amount of gain or loss recognized for federal income tax purposes. (You should consult your own tax advisor regarding these matters.) 14. LOST, STOLEN, OR DESTROYED CERTIFICATES. If your certificate(s) representing shares have been lost, stolen, or destroyed, so indicate. The Depositary will send you additional documentation that will need to be completed to effectively surrender such lost, stolen, or destroyed certificates. 9 15. WAIVER OF CONDITIONS. The conditions set forth in this Letter of Transmittal are for the sole benefit of Stifel and may be asserted on or before the Expiration Date by Stifel regardless of the circumstances giving rise to any such conditions or may be waived at any one time and from time to time on or before the Expiration Date in Stifel's sole discretion. 16. WITHHOLDING ON FOREIGN STOCKHOLDER. The following discussion applies to any stockholder that, for United States federal income tax purposes, is a non-resident alien individual, a foreign corporation, a foreign partnership, a foreign estate, or a foreign trust (a "Foreign Stockholder"). A Foreign Stockholder who has provided the necessary certification to the Depositary will not be subject to backup withholding. However, Foreign Stockholders generally are subject to withholding under Internal Revenue Code sections 1441 or 1442 at a rate of 30% of the gross payments. If a stockholder's address is outside the United States, and if the Depositary has not received a Substitute Form W-9, or other appropriate certification of non-foreign status from that stockholder, under current Treasury Regulations, the Depositary will assume that the stockholder is a Foreign Stockholder. The general 30% withholding rate may be reduced under a tax treaty, if appropriate certification is furnished to the Depositary. A Foreign Stockholder may also obtain exemption from withholding by delivering to the Depositary appropriate certification that the gross proceeds are effectively connected with the conduct of a trade or business within the United States. A Foreign Stockholder may be eligible to obtain a refund of all or a portion of any tax withheld if such stockholder meets those tests described in Section 13 of the Offer to Purchase that would characterize the exchange as a sale (as opposed to a dividend) or is otherwise able to establish that no tax or a reduced amount of tax is due. FOREIGN STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE APPLICATION OF UNITED STATES FEDERAL INCOME TAX WITHHOLDING, INCLUDING ELIGIBILITY FOR A WITHHOLDING TAX REDUCTION OR EXEMPTION, AND THE REFUND PROCEDURE. 17. ODD LOTS. As described in Section 1 of the Offer to Purchase, if Stifel is to purchase fewer than all shares tendered before the Expiration Date and not properly withdrawn, the shares purchased first will consist of all shares tendered by any stockholder who owns, beneficially or of record, an aggregate of fewer than 100 shares (not including any shares held in Stifel's 401(k) Plan) and who tenders all of such stockholder's shares at or below the purchase price. This preference will not be available unless the section captioned "Odd Lots" is completed. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE THEREOF) TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, OR THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, PRIOR TO THE EXPIRATION DATE. 10 IMPORTANT TAX INFORMATION Under the Federal income tax law, a stockholder whose tendered shares are accepted for payment is required by law to provide the Depositary (as payer) with such stockholder's correct TIN on Substitute Form W-9 below. If such stockholder is an individual, the TIN is such stockholder's social security number. If the Depositary is not provided with the correct TIN, the stockholder may be subject to a $50 penalty imposed by the Internal Revenue Service and payments that are made to such stockholder with respect to shares purchased pursuant to the Offer may be subject to backup withholding of 28%. Certain stockholders including, among others, certain corporations and certain foreign individuals, are not subject to these backup withholding and reporting requirements. In order for a Foreign Stockholder to qualify as an exempt recipient, such stockholder must submit an appropriate Form W-8, signed under penalties of perjury, attesting to such stockholder's exempt status. The appropriate Form W-8 can be obtained from the Depositary. Exempt stockholders should furnish their TIN, write "Exempt" on the face of the Substitute Form W-9, and sign, date, and return the Substitute Form W-9 to the information agent. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. A stockholder should consult his or her tax advisor as to such stockholder's qualification for an exemption from backup withholding and the procedure for obtaining such exemption. If backup withholding applies, the Depositary is required to withhold 28% of any payments made to the stockholder. Backup withholding is not an additional tax. Rather, the Federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. Purpose of Substitute Form W-9 To prevent backup withholding on payments that are made to a stockholder with respect to shares purchased pursuant to the Offer, the stockholder is required to notify the Depositary of such stockholder's correct TIN by completing the form below certifying that (a) the TIN provided on Substitute Form W-9 is correct (or that such stockholder is awaiting a TIN) and (b) that (i) such stockholder has not been notified by the Internal Revenue Service that such stockholder is subject to backup withholding as a result of a failure to report all interest or dividends or (ii) the Internal Revenue Service has notified such stockholder that such stockholder is no longer subject to backup withholding. What Number to Give the Depositary The stockholder is required to give the Depositary the social security number or employer identification number of the record holder of the shares tendered hereby. If the shares are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report. If the tendering stockholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future, the stockholder should write "Applied for" in the space provided for the TIN in Part I, and sign and date the Substitute Form W-9 and the Certificate of Awaiting Taxpayer Identification Number. If "Applied For" is written in Part I and the Depositary is not provided with a TIN within 60 days, the Depositary will withhold 28% of all payments of the Purchase price to such stockholder. 11
- ------------------------------------------------------------------------------------------------------------------ ALL TENDERING STOCKHOLDERS MUST COMPLETE THE FOLLOWING: STIFEL FINANCIAL CORP. - ------------------------------------------------------------------------------------------------------------------ SUBSTITUTE PART 1 -- TAXPAYER IDENTIFICATION NUMBER FORM W-9 --------------------------------------- For all accounts, enter your taxpayer Social Security Number identification number on the appropriate line Or to the right. (For most individuals, this is --------------------------------------- your social security number. If you do not Employer Identification Number have a number, see Obtaining a Number in the (If awaiting TIN write "Applied For") enclosed Guidelines and complete as instructed.) Certify by signing and dating below. Note: If the account is in more than one name, see the chart in the enclosed Guidelines to determine which number to give the payor. --------------------------------------------------------------------------------------
DEPARTMENT OF THE TREASURY PART II -- For Payees exempt from backup PART III -- CERTIFICATION -- Under INTERNAL REVENUE SERVICE withholding, see the enclosed Guidelines and penalties of perjury, I certify that: PAYER'S REQUEST FOR complete as instructed therein. (1) The number shown on this form is my TAXPAYER correct Taxpayer Identification IDENTIFICATION NUMBER Number (or I am waiting for a ("TIN") number to be issued to me); and (2) I am not subject to backup withholding either because I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or the IRS has notified me that I am no longer subject to backup withholding. -------------------------------------------------------------------------------------- CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of under reporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out such item (2). (Also see instructions in the enclosed Guidelines.) Signature ------------------------------------------ Date ---------------------- - -------------------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 28% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THIS OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE CERTIFICATION APPEARING ON THE FOLLOWING PAGE IF YOU ARE AWAITING (OR WILL SOON APPLY FOR) A TAXPAYER IDENTIFICATION NUMBER. 12 CERTIFICATION OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that, notwithstanding the information I provided in Part I of the Substitute Form W-9 (and the fact that I have completed this Certificate of Awaiting Taxpayer Identification Number), if I do not provide a correct taxpayer identification number to the Depositary within sixty (60) days, 28% of all reportable payments made to me thereafter may be withheld. Signature ------------------------------ Date ------------------------- . 13 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER. -- Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the payer.
- --------------------------------------------------------------- GIVE THE SOCIAL SECURITY FOR THIS TYPE OF ACCOUNT: NUMBER OF: - --------------------------------------------------------------- 1. An individual's account The individual 2. Two or more individuals The actual owner of the (joint account). account or, if combined funds, any one of the individuals(1) 3. Husband and wife (joint The actual owner of the account) account or, if joint funds, either person(1) 4. Custodian account of a minor The minor(2) (Uniform Gift to Minors Act) 5. Adult and minor (joint The adult or, if the minor account) is the only contributor, the minor(1) 6. Account in the name of The ward, minor, or guardian or committee for a incompetent person(3) designated ward, minor, or incompetent person 7. a. The usual revocable The grantor-trustee(1) savings trust account (grantor is also trustee) b. So-called trust account The actual owner(1) that is not a legal or valid trust under State law 8. Sole proprietorship account The owner (4) - ---------------------------------------------------------------
------------------------------------------------------------------------------- GIVE THE EMPLOYER IDENTIFICATION FOR THIS TYPE OF ACCOUNT: NUMBER OF: ------------------------------------------------------------------------------- 9. A valid trust, estate, or pension The legal entity (Do not furnish trust the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)(5) 10. Corporate account The corporation 11. Religious, charitable, or The organization educational organization account 12. Partnership account held in the The partnership name of the business 13. Association, club, or other tax- The organization exempt organization 14. A broker or registered nominee The broker or nominee 15. Account with the Department of The public entity Agriculture in the name of a public entity (such as a State or local government, school, district, or prison) that receives agricultural program payments - ---------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Circle the ward's, minor's, or incompetent person's name and furnish such person's social security number. (4) Show the name of the owner. (5) List first and circled the name of the legal trust, estate, or pension trust. NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. 14 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER OF SUBSTITUTE FORM W-9 PAGE 2 OBTAINING A NUMBER If you don't have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding on ALL payments include the following: - A corporation. - A financial institution. - An organization exempt from tax under section 501(a), or an individual retirement plan, or a custodial account under section 403(6)(7). - The United States or any agency or instrumentality thereof. - A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. - A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof. - An international organization or any agency, or instrumentality thereof. - A registered dealer in securities or commodities registered in the U.S. or a possession of the U.S. - A real estate investment trust. - A common trust fund operated by a bank under section 584(a) - An exempt charitable remainder trust under section 664, or a non-exempt trust described in section 4947. - An entity registered at all times under the Investment Company Act of 1940. - A foreign central bank of issue. - A middleman known in the investment community as a nominee or listed in the most recent publication of the American Society of Corporate Secretaries, Inc. Nominee List. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: - Payments to nonresident aliens subject to withholding under section 1441. - Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner. - Payments of patronage dividends where the amount received is not paid in money. - Payments made by certain foreign organizations. Payments of interest not generally subject to backup withholding include the following: - Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. - Payments of tax-exempt interest (including exempt-in-interest dividends under section 852). - Payments described in section 6049(b)(5) to non-resident aliens. - Payments on tax-free covenant bonds under section 1451. - Payments made by certain foreign organizations. - Mortgage interest paid to the payer. Exempt payees described above should file Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM. Certain payments other than interest, dividends, and patronage dividends, that are not subject to information reporting are also not subject to backup withholding. For details see section 6041, 6041A, 6042, 6044, 6045, 6049, 6050A, and 6050N and their regulations. PRIVACY ACT NOTICE. -- Section 6109 requires most recipients of dividend, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. IRS uses the numbers for identification purposes and to help verify the accuracy of your return. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 28% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. 15 EX-99.(A)(1)(C) 5 c79358exv99wxayx1yxcy.txt NOTICE OF GUARANTEED DELIVERY EXHIBIT (a)(1)(C) NOTICE OF GUARANTEED DELIVERY (NOT TO BE USED FOR SIGNATURE GUARANTEES) PURSUANT TO THE OFFER TO PURCHASE FOR CASH MADE BY STIFEL FINANCIAL CORP. FOR 850,000 SHARES OF ITS COMMON STOCK (INCLUDING ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) This form has been prepared in connection with Stifel Financial Corp.'s ("Stifel") Offer to Purchase for Cash 850,000 shares of Stifel's common stock (and associated preferred stock purchase rights) dated September 5, 2003 (the "Offer to Purchase"). Capitalized terms used but not defined herein have the meanings ascribed to them in the Offer to Purchase. This form, or a form substantially equivalent to this form, must be used to accept the Offer if: (i) certificates for the shares are not immediately available; (ii) the procedure for book-entry transfer cannot be completed on a timely basis; or (iii) time will not permit all other documents required by the Letter of Transmittal to be delivered to the Depositary prior to the Expiration Date. This form may be delivered by hand or transmitted by mail or overnight carrier or, for Eligible Institutions, by facsimile transmission to the Depositary. The Depositary for the Offer is: UMB Bank, n.a. ("Depositary") (800) 884-4225 By Mail: By Hand: By Overnight: UMB Bank, n.a. UMB Bank, n.a. UMB Bank, n.a. Securities Transfer Division Securities Transfer Division Securities Transfer Division P.O. Box 410064 928 Grand Blvd. 13th Floor 928 Grand Blvd. 13th Floor Kansas City, Missouri 64141 Kansas City, Missouri 64106 Kansas City, Missouri 64106
Facsimile (for Eligible Institutions only): (816) 860-3963 Confirm facsimile by telephone: (816) 860-7782 Delivery of this instrument to an address, or transmission of instructions via a facsimile number, other than as set forth above will not constitute a valid delivery. This form is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an Eligible Institution under the instructions to the Letter of Transmittal, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. Ladies and Gentlemen: You hereby tender to Stifel, upon the terms and subject to the conditions set forth in the Offer to Purchase, receipt of which is hereby acknowledged, the number of shares of common stock of Stifel (and associated preferred stock purchase rights) listed below, pursuant to the guaranteed delivery procedure set forth in the Offer to Purchase. ODD LOTS (SEE INSTRUCTION 17 OF THE LETTER OF TRANSMITTAL) To be completed only if shares are being tendered by or on behalf of a person owning, beneficially or of record, as of the close of business on September 5, 2003, and who continues to own, beneficially or of record, as of the Expiration Date, an aggregate of fewer than 100 shares. The undersigned either (check only one box): [ ] is the beneficial or record owner of an aggregate of fewer than 100 shares (not including shares held in Stifel's 401(k) Plan) and is tendering all such shares; or [ ] is a broker, dealer, commercial bank, trust company, or other nominee that: (a) is tendering, for the beneficial owner(s) thereof, shares with respect to which it is the record owner; and (b) believes, based upon representations made to it by such beneficial owner(s), that each such person is the beneficial owner of an aggregate of fewer than 100 shares and is tendering all such shares. Number of shares tendered: - -------------------------------------------------------------------------------- Certificate Numbers (if available): - -------------------------------------------------------------------------------- Name(s) of Stockholder: - -------------------------------------------------------------------------------- Telephone Number(s): - -------------------------------------------------------------------------------- Address: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- STOCKHOLDER'S SIGNATURE - -------------------------------------------------------------------------------- STOCKHOLDER'S SIGNATURE (IF SHARES ARE HELD IN MORE THAN ONE NAME) Dated: , 2003 ---------------- If shares will be tendered by book-entry transfer, enter account number: ------------------------------------------------ Enter book-entry transfer facility name: - -------------------------------------------------------------------------------- The method of delivery of this document is at the election and risk of the tendering stockholders. If delivery is by mail, registered mail with return receipt requested is recommended. In all cases, sufficient time should be allowed to assure delivery. 2 GUARANTEE (Not to be Used for Signature Guarantee) (See Instruction 2 of the Letter of Transmittal) The undersigned, an Eligible Institution, hereby guarantees: (i) that the above-named person(s) has a net long position in the shares being tendered within the meaning of Rule 14e-4 promulgated under the 1934 Act; (ii) that such tender of shares complies with Rule 14e-4; and (iii) the delivery to the Depositary, at one of its addresses set forth above, of certificate(s) for the shares tendered hereby, in proper form for transfer, or a confirmation of the book-entry transfer of the shares tendered hereby into the Depositary's account at the book-entry transfer facility, in each case together with a properly completed and duly executed Letter(s) of Transmittal (or a facsimile(s) thereof), with any required signature guarantee(s), and any other required documents, all within three New York Stock Exchange trading days after the date of receipt of this Notice of Guaranteed Delivery by the Depositary. The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal and certificates for shares to the Depositary within the time set forth above. Failure to do so could result in a financial loss to such Eligible Institution. --------------------------------------- NAME OF FIRM Address: --------------------------------------- --------------------------------------- --------------------------------------- --------------------------------------- Telephone No.: --------------------------------------- --------------------------------------- AUTHORIZED SIGNATURE --------------------------------------- NAME (PLEASE PRINT) --------------------------------------- TITLE Dated: , 2003 ---------------- NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS FORM. YOUR SHARE CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL. 3 EX-99.(A)(1)(D) 6 c79358exv99wxayx1yxdy.txt LETTER TO BROKERS, DEALERS, AND OTHER NOMINEES EXHIBIT (a)(1)(D) (STIFEL FINANCIAL CORP. LETTERHEAD) September 5, 2003 Offer to Purchase for Cash made by Stifel Financial Corp. for 850,000 shares of its Common Stock (including associated Preferred Stock Purchase Rights) THE OFFER, PRORATION PERIOD, AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, OCTOBER 10, 2003, UNLESS THE OFFER IS EXTENDED. To Brokers, Dealers, Commercial Banks, Trust Companies, and Other Nominees: We are enclosing the material listed below related to our Offer to Purchase 850,000 shares of Stifel Financial Corp.'s ("Stifel") common stock (and associated preferred stock purchase rights) dated September 5, 2003 (the "Offer") at a price of $13.25 per share, to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase. Capitalized terms used but not defined herein have the meanings ascribed to them in the Offer to Purchase. We reserve the right, in our sole discretion, to purchase more than 850,000 shares under the Offer, subject to applicable law. For your information and for forwarding to your clients, we are enclosing the following: 1. The Offer to Purchase. 2. The Letter of Transmittal for your use and for the information of your clients. 3. A letter to Stifel's stockholders from the Chairman and Chief Executive Officer of Stifel. 4. A Notice of Guaranteed Delivery to be used if the shares and all other required documents cannot be delivered to the Depositary by the Expiration Date. 5. A letter that may be sent to your clients for whose accounts you hold shares registered in your name or in the name of your nominee with space for obtaining such clients' instructions with regard to the Offer. Please contact your clients for whom you hold shares registered in your name (or in the name of your nominee) or who hold shares registered in their own names. We urge you to contact your clients as promptly as possible. The Offer, proration period, and withdrawal rights expire at 5:00 p.m., New York City time, on Friday, October 10, 2003, unless the Offer is extended. We will not pay any fees or commissions to any broker, dealer, or other person for soliciting tenders of shares pursuant to the Offer. We will, upon written request, reimburse brokers, dealers, commercial banks, and trust companies for reasonable and customary handling and mailing expenses incurred by them in forwarding materials related to the Offer to their customers. We will pay all stock transfer taxes applicable to our purchase of shares pursuant to the Offer, subject to Instruction 6 of the Letter of Transmittal. As described in the Offer to Purchase, if more than 850,000 shares have been validly tendered and not withdrawn prior to the Expiration Date, we will purchase shares in the following order of priority: First, from all stockholders who own beneficially or of record, an aggregate of fewer than 100 shares (not including any shares held in Stifel's 401(k) Plan) who properly tender all their shares and do not withdraw them before the Expiration Date; and second, all shares tendered properly and not withdrawn prior to the Expiration Date, on a pro rata basis if necessary. Our Board of Directors has approved the Offer. However, stockholders must make their own decisions whether to tender shares and, if so, how many shares to tender. Neither we nor our Board of Directors makes any recommendation to any stockholder as to whether to tender or refrain from tendering shares. Any questions or requests for assistance or additional copies of the enclosed materials may be directed to: Thomas A. Prince Senior Vice President and General Counsel Stifel Financial Corp. Telephone: (314) 342-2000 Thank you for your consideration. Sincerely, /s/ Ronald J. Kruszewski Ronald J. Kruszewski Chairman and Chief Executive Officer - -------------------------------------------------------------------------------- Nothing contained herein or in the enclosed documents constitutes you or any person as agent of Stifel or the Depositary, or authorizes you or any other person to use any document or make any statement on behalf of any of them in connection with the Offer, other than the documents enclosed herewith and the statements contained herein. 2 EX-99.(A)(1)(E) 7 c79358exv99wxayx1yxey.txt LETTER TO CLIENTS EXHIBIT (a)(1)(E) OFFER TO PURCHASE FOR CASH MADE BY STIFEL FINANCIAL CORP. FOR 850,000 SHARES OF ITS COMMON STOCK (AND ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) THE OFFER, PRORATION PERIOD, AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, OCTOBER 10, 2003, UNLESS THE OFFER IS EXTENDED. To Our Clients: Enclosed for your consideration is the Offer to Purchase for Cash, dated September 5, 2003 (the "Offer to Purchase") setting forth the Offer by Stifel Financial Corp. ("Stifel"), a Delaware corporation, to purchase 850,000 shares common stock (and associated preferred stock purchase rights) at a price of $13.25 per share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase. Also enclosed herewith is certain other material related to the offer, including a letter to stockholders from Ronald J. Kruszewski, Chairman and Chief Executive Officer of Stifel. Capitalized terms used and not defined herein have the meanings ascribed to them in the Offer to Purchase. Stifel reserves the right, in its sole discretion, to purchase more than 850,000 shares under the Offer, subject to applicable law. As described in the Offer to Purchase, if more than 850,000 shares have been validly tendered and not withdrawn prior to the Expiration Date, we will purchase shares in the following order of priority: First, from all stockholders who own beneficially or of record, an aggregate of fewer than 100 shares (not including shares held in Stifel's 401(k) Plan) who properly tender all their shares and do not withdraw them before the Expiration Date; and second, all shares tendered properly and not withdrawn prior to the Expiration Date, on a pro rata basis if necessary. We are the holder of record of shares held for your account. As such, a tender of such shares can be made only by us as the holder of record and pursuant to your instructions. The Letter of Transmittal is furnished to you for your information only and cannot be used by you to tender shares held by us for your account. Please instruct us as to whether you wish us to tender any or all of the shares held by us for your account, upon the terms and subject to the conditions set forth in the Offer to Purchase and the Letter of Transmittal. Your attention is directed to the following: 1. The Offer is for 850,000 shares. Upon the terms and subject to the conditions of the Offer, Stifel may purchase, pursuant to the Offer, an additional amount not exceeding 2% of the outstanding shares of Stifel common stock without amending or extending the Offer, subject to applicable law. 2. You may tender your shares at prices of $13.25 per share, net to you in cash, without interest. 3. The Offer is not conditioned upon any minimum number of shares being tendered. The Offer is, however, subject to certain other conditions set forth in Section 7 of the Offer to Purchase. 4. The Offer, proration period, and withdrawal rights will expire at 5:00 p.m., New York City time, on Friday, October 10, 2003, unless the Offer is extended. Your instructions to us should be forwarded to us in ample time to permit us to submit a tender on your behalf. 5. Tendering stockholders will not be obligated to pay any brokerage commissions or solicitation fees on Stifel's purchase of shares in the Offer. Stockholders, however, may incur fees associated with the tendering of shares held in custodial or other beneficiary accounts. Any stock transfer taxes applicable to the purchase of shares by Stifel pursuant to the offer will be paid by Stifel, except as otherwise provided in Instruction 6 of the Letter of Transmittal. 6. If you own beneficially or of record an aggregate of fewer than 100 shares (not including shares held in Stifel's 401(k) Plan), and you instruct us to tender on your behalf all such shares before the Expiration Date and check the box captioned "Odd Lots" in the attached Instruction Form, Stifel, upon the terms and subject to the conditions of the Offer, will accept all such shares for purchase before proration, if any, of the purchase of other shares properly tendered and not properly withdrawn. 7. Stifel's Board of Directors has approved the offer. However, you must make your own decision whether to tender shares and, if so, how many shares to tender. Neither Stifel nor its Board of Directors makes any recommendation to any stockholder as to whether to tender or refrain from tendering shares. See the Offer to Purchase for information regarding the intentions of Stifel's directors and executive officers with respect to tendering shares pursuant to the offer. If you wish to have us tender any or all of your shares held by us for your account upon the terms and subject to the conditions set forth in the Offer to Purchase, please so instruct us by completing, executing, and returning to us the attached Instruction Form. An envelope to return your instructions to us is enclosed. If you authorize tender of your shares, all such shares will be tendered unless otherwise specified on the Instruction Form. Your instructions should be forwarded to us in ample time to permit us to submit a tender on your behalf prior to the expiration of the offer. The Offer is being made to all stockholders of Stifel. Stifel is not aware of any jurisdiction where the making of the Offer is not in compliance with applicable law. If Stifel becomes aware of any jurisdiction where the making of the Offer is not in compliance with any valid applicable law, Stifel will make a good faith effort to comply with such law. If, after such good faith effort, Stifel cannot comply with such law, the offer will neither be made to (nor will tenders be accepted from or on behalf of) the stockholders of shares residing in such jurisdiction. In any jurisdiction in which the securities or blue sky laws require the Offer to be made by a licensed broker or dealer, the Offer is being made on Stifel's behalf by one or more registered brokers or dealers licensed under the laws of such jurisdiction. 2 INSTRUCTION FORM Offer to Purchase for Cash made by Stifel Financial Corp. ("Stifel") for 850,000 shares of its Common Stock (and associated Preferred Stock Purchase Rights) The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase for Cash, dated September 5, 2003 (the "Offer to Purchase") setting forth the Offer by Stifel, a Delaware corporation, to purchase 850,000 shares of common stock (and associated preferred stock purchase rights) at a price of $13.25 per share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase. This will instruct you to tender to Stifel the number of shares indicated below (or, if no number is indicated below, all shares) that are held by you for the account of the undersigned at $13.25 per share, upon the terms and subject to the conditions of the Offer. SHARES TENDERED [ ] If fewer than all shares are to be tendered, please check this box and indicate below the aggregate number of shares to be tendered by us. ------------------------- shares Unless otherwise indicated, it will be assumed that all shares held by us for your account are to be tendered. ODD LOTS (SEE INSTRUCTION 17 OF THE LETTER OF TRANSMITTAL) To be completed only if shares are being tendered by or on behalf of a person owning, beneficially or of record, as of the close of business on September 5, 2003, and who continues to own, beneficially or of record, as of the Expiration Date, an aggregate of fewer than 100 shares. [ ] The undersigned is the beneficial owner of an aggregate of fewer than 100 shares (not including shares held in Stifel's 401(k) Plan) and is tendering all such shares. 3 THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDERS. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY. SIGN HERE --------------------------------------- SIGNATURE --------------------------------------- (ADDITIONAL SIGNATURE IF MORE THAN ONE OWNER) --------------------------------------- NAME (PLEASE PRINT) --------------------------------------- (TAXPAYER IDENTIFICATION NUMBER OR SOCIAL SECURITY NUMBER, AS APPLICABLE) Address: ------------------------------- ------------------------------- ------------------------------- Telephone Number: ---------------------- Date: - --------------------- , 2003 4 EX-99.(A)(1)(F) 8 c79358exv99wxayx1yxfy.txt LETTER TO PARTICIPANTS IN THE PROFIT SHARING PLAN EXHIBIT (a)(1)(F) OFFER TO PURCHASE FOR CASH BY STIFEL FINANCIAL CORP. OF UP TO 850,000 SHARES OF ITS COMMON STOCK AT A PURCHASE PRICE OF $13.25 PER SHARE To the Participants in the Stifel, Nicolaus Profit Sharing 401(k) Plan: Stifel Financial Corp. ("Stifel") recently announced our plan to conduct a tender offer in which it would purchase for cash up to 850,000 shares of its common stock at a price of $13.25 per share. Enclosed for your consideration are the Offer to Purchase dated September 5, 2003 (the "Offer to Purchase"), and the related Letter of Transmittal (the "Letter of Transmittal") which, as amended or supplemented from time to time, together constitute the Offer. Capitalized terms used herein and not defined herein shall have the meanings given to them in the Offer to Purchase. As a participant in the Stifel Nicolaus Profit Sharing 401(k) Plan (the "401(k) Plan") a portion of your 401(k) Plan account may be invested in Stifel common stock. Stifel will pay $13.25 per share for shares properly tendered and not properly withdrawn in the Offer, subject to proration provisions. All shares acquired in the Offer will be acquired at the same purchase price. Stifel reserves the right, in its sole discretion, to purchase more than 850,000 shares in the Offer, subject to applicable law. Shares not purchased because of proration provisions will be returned to the tendering stockholders or the 401(k) Plan, as applicable, at Stifel's expense. See Section 1 and Section 4 of the Offer to Purchase. IN ORDER TO TENDER YOUR EQUIVALENT SHARES HELD IN YOUR 401(K) ACCOUNT IN THE OFFER, YOU MUST RETURN THE ENCLOSED TRUSTEE DIRECTION FORM TO STIFEL, NICOLAUS & COMPANY, INCORPORATED BY 5:00 P.M. NEW YORK CITY TIME, ON TUESDAY, OCTOBER 7, 2003 IN ORDER FOR THE TRUSTEE TO HAVE SUFFICIENT TIME TO PROCESS YOUR DIRECTION AND TO TENDER YOUR EQUIVALENT SHARES. THE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, OCTOBER 10, 2003. If the number of shares properly tendered is less than or equal to 850,000 shares (or such greater number of shares as Stifel may elect to purchase, not to exceed 2% of our outstanding shares and subject to applicable SEC rules), Stifel, on the terms and subject to the conditions of the Offer, will purchase at the purchase price all shares so tendered. If at the expiration of the Offer more than 850,000 shares (or any such greater number of shares as Stifel may elect to purchase, not to exceed 2% of our outstanding shares and subject to applicable SEC rules) are properly tendered Stifel will buy shares first, from all holders of "odd lots" of less than 100 shares (not including any shares held in the 401(k) Plan) who properly tender all of their shares and do not properly withdraw them before the expiration date; and second, after purchasing the shares from the "odd lot" holders, from all other stockholders who properly tender shares (including participants in the 401(k) Plan), on a pro rata basis. THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 7 OF THE OFFER TO PURCHASE. Stifel's directors and executive officers do not intend to tender any shares in the Offer. See Section 11 of the Offer to Purchase. Enclosed with the Offer materials is a Trustee Direction Form that requires your immediate attention. These materials describe the Offer and its terms in more detail. As described below, you have the right to instruct CIGNA Bank and Trust Company, FSB as trustee of the 401(k) Plan (the "Trustee") whether to tender equivalent shares of Stifel common stock credited to your individual account under the 401(k) Plan. Your equivalent shares are equal to the total market value of your Stifel stock account divided by the closing market price per share of our common stock. If you do not wish to direct the tender of any portion of the equivalent shares in your 401(k) Plan account, you do not need to take any action. If you would like to direct the tender of some or all of the equivalent shares held on your behalf in your 401(k) Plan account in response to this Offer, detailed instructions on how to tender those equivalent shares are set forth below. The Trustee will receive each participant's tender directions and will then tender equivalent shares on behalf of all participants in the 401(k) Plan who elected to tender shares. The remainder of this letter summarizes your rights under the 401(k) Plan and the procedures for completing the Trustee Direction Form. You should also review the more detailed explanation of the Offer provided in the Offer to Purchase, which is enclosed with this letter. You must carefully follow the instructions below if you want to direct the Trustee to tender some or all of the equivalent shares held on your behalf in your 401(k) Plan account. Failure to follow these instructions properly may make you ineligible to direct the Trustee to tender equivalent shares held in your 401(k) Plan account in the Offer. Equivalent shares held on your behalf in your 401(k) Plan account can be tendered only by following these instructions and by properly completing and returning the Trustee Direction Form. If you tender equivalent shares, the tender proceeds will be deposited into your 401(k) Plan account and invested in the 401(k) Plan's Guaranteed Income Fund. Because the terms and conditions of the Letter of Transmittal will govern the tender of the equivalent shares held in your 401(k) Plan account, you should read the Letter of Transmittal carefully. The Letter of Transmittal, however, is furnished to you for your information only and cannot be used by you to tender equivalent shares that are held on your behalf in your 401(k) plan account. The Letter of Transmittal may only be used to tender shares held outside of the 401(k) Plan. If you hold shares outside of the 401(k) Plan and wish to tender those shares as well as equivalent shares held in your 401(k) Plan account, you must comply with the procedures described in the Letter of Transmittal and the Offer to Purchase for your shares outside of the 401(k) Plan, and submit a Trustee Direction Form for equivalent shares you hold in your 401(k) Plan account. You should also read the Offer to Purchase carefully before making any decision regarding the Offer. The Offer is being made solely pursuant to the Offer to Purchase and the related Letter of Transmittal and is being made to all holders of shares of common stock of Stifel. The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of shares of common stock of Stifel residing in any jurisdiction in which the making of the Offer or acceptance of the Offer would not be in compliance with the securities laws of that jurisdiction. To instruct the Trustee to tender any or all of the equivalent shares held on your behalf in your 401(k) Plan account, you must complete the enclosed Trustee Direction Form and return it to: Stifel, Nicolaus & Company, Incorporated Attn: Corporate Accounting/TO 501 North Broadway St. Louis, Missouri 63102 in the enclosed return envelope so that it is RECEIVED by 5:00 p.m., New York City time, on Tuesday, October 7, 2003, unless the Offer is extended, in which case, if administratively feasible, the deadline for receipt of your Trustee Direction Form will be 5:00 p.m., New York City time, on the third business day prior to the expiration of the Offer, as extended. IF YOU DO NOT COMPLETE THE ENCLOSED TRUSTEE DIRECTION FORM AND RETURN IT TO THE TRUSTEE ON A TIMELY BASIS, YOU WILL BE DEEMED TO HAVE ELECTED NOT TO PARTICIPATE IN THE OFFER AND NO EQUIVALENT SHARES CREDITED TO YOUR 401(K) PLAN ACCOUNT WILL BE TENDERED IN THE OFFER. Please note that the number of equivalent shares in your 401(k) Plan account may change during the Offer period as a result of additional 401(k) and matching contributions being made, as well as by any investment direction changes you may make. The number of equivalent shares that may be considered for the Offer may be determined by dividing the total market value of your Stifel stock account by the closing market price per share of our common stock. You may not tender more equivalent shares than are held in your 401(k) Plan account at the close of business on Friday, October 10, 2003 or, if the Offer is extended, the deadline for returning the Trustee Direction Form. If you direct the Trustee to tender more equivalent shares than are held in your 401(k) Plan account at the close of business on Friday, October 10, 2003 or, if the Offer is extended, on the date of the deadline for submitting the Trustee Direction Form, then the Trustee will tender all of the equivalent shares held in your 401(k) Plan account. If you desire to tender equivalent shares from your 401(k) Plan account you must specify on the Trustee Direction Form whether or not you wish to tender all equivalent shares held in your 401(k) Plan account, or just some equivalent shares. If you specify that you only wish to tender a certain number of equivalent shares, then the Trustee will only tender that specified number if your 401(k) Plan account contains at least that number of equivalent shares. If your 401(k) Plan account contains less than the 2 number of equivalent shares you specified to tender, the Trustee will tender all equivalent shares in your 401(k) Plan account. If you select to tender a portion of your equivalent shares, they will be tendered from your account's sources in the following order: Employee Pre-Tax Account; Company Match Account; Employee Rollover Account; Employee Catch-Up Account; Company Discretionary Account; and ESOP Account. When considering whether or not to participate in the Offer, it is important that you note the following: 1. Stifel has been advised that if the Trustee does not receive your Trustee Direction Form by 5:00 p.m., New York City time, on Tuesday, October 7, 2003, then the Trustee will not have sufficient time to process your direction. In such case, the Trustee will not tender any equivalent shares held on your behalf in the 401(k) Plan. The Offer, proration period and, other than with respect to 401(k) Plan participants, withdrawal rights will expire at 5:00 p.m., New York City time, on Friday, October 10, 2003, unless the Offer is extended (see paragraph 7 below for information relating to the withdrawal rights of 401(k) Plan participants). Consequently, your Trustee Direction Form must be received by the Trustee no later than 5:00 p.m., New York City time, on Tuesday, October 7, 2003, unless the Offer is extended. 2. The 401(k) Plan is prohibited from selling equivalent shares to Stifel for a price that is less than the prevailing market price. Accordingly, if you elect to tender equivalent shares and the purchase price is lower than the prevailing price of Stifel's common stock on The New York Stock Exchange at the expiration of the Offer, your equivalent shares will not be purchased in the Offer. 3. The Offer is not conditioned on any minimum number of shares being tendered. The Offer is, however, subject to other conditions described in the Offer to Purchase. See Section 7 of the Offer to Purchase. 4. The Offer is for up to 850,000 shares, constituting approximately 12% of Stifel's shares outstanding as of August 15, 2003. 5. Neither Stifel nor any member of its Board of Directors, the Dealer Manager, the Depositary, the Trustee or any other fiduciary of the 401(k) Plan makes any recommendation to you as to whether you should tender or refrain from tendering your equivalent shares. You must make your own decision as to whether to tender your equivalent shares and, if so, how many equivalent shares to tender. Stifel's directors and executive officers have indicated that they do not intend to tender any shares in the Offer. See Section 11 of the Offer to Purchase. 6. Tendering participants will not be obligated to pay any brokerage fees or commission or solicitation fees to the Dealer Manager, Depositary, or Stifel or, except as described in the Letter of Transmittal, stock transfer taxes on the transfer of shares pursuant to the Offer. 7. As more fully described in the Offer to Purchase, tenders will be deemed irrevocable unless timely withdrawn. If you instruct the Trustee to tender equivalent shares held on your behalf in your 401(k) Plan account, and you subsequently decide to change your instructions or withdraw your tender of equivalent shares, you may do so by submitting a new Trustee Direction Form. However, the new Trustee Direction Form will be effective only if it is received by the Trustee on or before 5:00 p.m., New York City time, on Tuesday, October 7, 2003, which is three business days before the scheduled expiration of the Offer at 5:00 p.m., New York City time, on Friday, October 10, 2003. Upon receipt of a timely submitted new Trustee Direction Form, your previous instructions to tender the equivalent shares will be deemed canceled. If your new Trustee Direction Form directed the Trustee to withdraw from tender the equivalent shares held on your behalf in your 401(k) Plan account by indicating that zero (0) equivalent shares are to be tendered, you may later re-tender those equivalent shares by submitting another Trustee Direction Form to the Trustee at the above address so long as it is received by the Trustee on or before the day that is three business days before the expiration of the Offer (currently 5:00 p.m., New York City time, on Tuesday, October 7, 2003). Additional Trustee Direction Forms may be obtained by calling Thomas A. Prince, our Senior Vice President and General Counsel at (314) 342-2000. 8. While you will not recognize any immediate tax gain or loss as a result of the Offer, the tax treatment of future withdrawals by you or distributions to you from the 401(k) Plan may be adversely affected by a tender and sale of equivalent shares within the 401(k) Plan. Specifically, under current federal income tax rules, if you receive a lump sum distribution from a 401(k) Plan including Stifel equivalent shares that have increased in value while they were held by the 401(k) Plan, under certain circumstances you may have the option of not paying tax on this increase in value, which is called "net unrealized appreciation," until you sell the equivalent shares. When the equivalent shares are sold, any gain up to the amount of the untaxed net unrealized appreciation is taxed as long-term capital gain. If equivalent shares credited to your individual 401(k) Plan account are purchased by Stifel in the Offer, you will no longer be able to take advantage of this tax benefit. 3 9. If you have any questions regarding your participation in the Offer, please contact Thomas A. Prince, our Senior Vice President and General Counsel at (314) 342-2000. Unless you direct the Trustee on the enclosed Trustee Direction Form to tender the equivalent shares held on your behalf in your 401(k) Plan account, no equivalent shares will be tendered. IN ORDER TO TENDER EQUIVALENT SHARES IN YOUR 401(K) PLAN ACCOUNT YOU WILL NEED TO COMPLETE THE ENCLOSED TRUSTEE DIRECTION FORM AND RETURN IT TO: STIFEL, NICOLAUS & COMPANY, INCORPORATED ATTN: CORPORATE ACCOUNTING/TO 501 NORTH BROADWAY ST. LOUIS, MISSOURI 63102 IN THE ENCLOSED RETURN ENVELOPE SO THAT IT IS RECEIVED BY 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, OCTOBER 7, 2003, UNLESS THE OFFER IS EXTENDED, IN WHICH CASE, IF ADMINISTRATIVELY FEASIBLE, THE DEADLINE FOR RECEIPT OF YOUR TRUSTEE DIRECTION FORM WILL BE 5:00 P.M., NEW YORK CITY TIME, ON THE THIRD BUSINESS DAY PRIOR TO THE EXPIRATION OF THE OFFER, AS EXTENDED. 4 EX-99.(A)(1)(G) 9 c79358exv99wxayx1yxgy.txt TRUSTEE DIRECTION FORM EXHIBIT (a)(1)(G) STIFEL FINANCIAL CORP. TRUSTEE DIRECTION FORM FOR TENDER OF UP TO 850,000 SHARES OF ITS COMMON STOCK AT A PURCHASE PRICE OF $13.25 PER SHARE TO: CIGNA BANK AND TRUST COMPANY, FSB, TRUSTEE The undersigned acknowledges receipt of the accompanying Letter to the Participants in the Stifel Nicolaus Profit Sharing 401(k) Plan (the "401(k) Plan"), the enclosed Offer to Purchase, dated September 5, 2003 (the "Offer to Purchase"), and the Letter of Transmittal in connection with the offer by Stifel Financial Corp., a Delaware corporation ("Stifel"), to purchase up to 850,000 shares of its common stock (the "Offer"). These instructions will instruct CIGNA Bank and Trust Company, FSB, as trustee for the 401(k) Plan (the "Trustee") to tender equivalent shares held by the Trustee for the undersigned's 401(k) Plan account upon the terms and subject to the conditions set forth in the Offer to Purchase. EQUIVALENT SHARES ALLOCATED TO PARTICIPANT 401(K) PLAN ACCOUNTS FOR WHICH THE TRUSTEE DOES NOT RECEIVE DIRECTIONS WILL NOT BE TENDERED. NUMBER OF SHARES TENDERED (CHECK ONE BOX) [ ] I direct the Trustee to tender ALL of the equivalent shares in my 401(k) Plan account. [ ] I direct the Trustee to tender ____________ equivalent shares in my 401(k) Plan account. IN ORDER TO TENDER YOUR EQUIVALENT SHARES HELD IN YOUR 401(K) ACCOUNT IN THE OFFER, YOU MUST RETURN THIS TRUSTEE DIRECTION FORM TO STIFEL, NICOLAUS & COMPANY, INCORPORATED BY 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, OCTOBER 7, 2003 IN ORDER FOR THE TRUSTEE TO HAVE SUFFICIENT TIME TO PROCESS YOUR DIRECTION AND TENDER YOUR EQUIVALENT SHARES. THE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, OCTOBER 10, 2003. THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE ELECTION AND RISK OF THE 401(K) PLAN PARTICIPANT. IF DELIVERY IS BY MAIL, THEN REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. THE ADDRESS TO MAIL THIS FORM TO IS: STIFEL, NICOLAUS & COMPANY, INCORPORATED ATTN: CORPORATE ACCOUNTING/TO 501 NORTH BROADWAY ST. LOUIS, MISSOURI 63102 STIFEL'S BOARD OF DIRECTORS HAS APPROVED THE OFFER. HOWEVER, NEITHER STIFEL NOR ANY MEMBER OF ITS BOARD OF DIRECTORS, THE DEALER MANAGER (AS IDENTIFIED IN THE OFFER TO PURCHASE) OR THE DEPOSITARY (AS DEFINED IN THE OFFER TO PURCHASE) MAKES ANY RECOMMENDATION TO STOCKHOLDERS AS TO WHETHER THEY SHOULD TENDER OR REFRAIN FROM TENDERING THEIR EQUIVALENT SHARES. STOCKHOLDERS MUST MAKE THEIR OWN DECISION AS TO WHETHER TO TENDER THEIR EQUIVALENT SHARES AND, IF SO, HOW MANY EQUIVALENT SHARES TO TENDER. IN DOING SO, STOCKHOLDERS SHOULD READ CAREFULLY THE INFORMATION IN THE OFFER TO PURCHASE AND IN THE RELATED LETTER OF TRANSMITTAL, INCLUDING STIFEL'S REASONS FOR MAKING THE OFFER. SEE SECTION 2 OF THE OFFER TO PURCHASE. STOCKHOLDERS SHOULD DISCUSS WHETHER TO TENDER THEIR EQUIVALENT SHARES WITH THEIR FINANCIAL OR TAX ADVISORS. Signature: - --------------------------------------- Name: - --------------------------------------- (PLEASE PRINT) Taxpayer Identification or Social Security Number: - ----------------------------------------------------------------------------- Address: - --------------------------------------- -------------------------------- (INCLUDING ZIP CODE) Area Code and Telephone Number: - --------------------------------------- Date: - --------------------------------------- 2 EX-99.(A)(5)(A) 10 c79358exv99wxayx5yxay.txt LETTER TO STOCKHOLDERS FROM CHAIRMAN AND CEO EXHIBIT (a)(5)A) (STIFEL FINANCIAL CORP. LETTERHEAD) September 5, 2003 To our Stockholders: Stifel Financial Corp. ("Stifel") is offering to purchase 850,000 shares, or such lesser number of shares as are properly tendered, of our common stock (and associated preferred stock purchase rights) from existing stockholders. The price paid by Stifel will be $13.25 per share, to the seller in cash, without interest. You may tender all or only a portion of your shares upon the terms and subject to the conditions of the tender offer, including the proration provisions. All shares which you tender but which we do not purchase will be returned to you, at our expense, promptly after the expiration of the tender offer. Any stockholder whose shares are properly tendered directly to UMB Bank, n.a., the depositary of the tender offer, and purchased under the tender offer will receive the purchase price in cash, without interest, promptly after the expiration of the tender offer. The terms and conditions of the tender offer are explained in detail in the enclosed Offer to Purchase and the related Letter of Transmittal. I encourage you to read these materials carefully before making any decision with respect to the tender offer. The instructions on how to tender shares are also explained in detail in the accompanying materials. The description of the tender offer in this letter is only a summary and is qualified by all of the terms and conditions of the tender offer set forth in the Offer to Purchase and Letter of Transmittal. Our Board of Directors has approved the tender offer. However, neither we nor the Board of Directors make any recommendation to you as to whether you should tender or refrain from tendering your shares. You must make your own decision as to whether to tender your shares and, if so, how many shares to tender. The tender offer will expire at 5:00 p.m., New York City time, on Friday, October 10, 2003, unless we extend the offer. If you have any questions regarding the tender offer or need assistance in tendering your shares, please contact Thomas A. Prince, Senior Vice President and General Counsel, Stifel Financial Corp., at (314) 342-2000. The tender offer documents are also available at the website of the Securities and Exchange Commission at www.sec.gov. Sincerely, /s/ Ronald J. Kruszewski Ronald J. Kruszewski Chairman and Chief Executive Officer EX-99.(A)(5)(B) 11 c79358exv99wxayx5yxby.txt PRESS RELEASE ANNOUNCING COMMENCEMENT OF THE OFFER . . . EXHIBIT (a)(5)(B) FOR IMMEDIATE RELEASE: Contact: Thomas A. Prince General Counsel (314) 342-2000
STIFEL FINANCIAL CORP. ANNOUNCES SELF-TENDER OFFER FOR UP TO 850,000 SHARES OF COMMON STOCK St. Louis, Missouri, September 5, 2003 -- Stifel Financial Corp. (NYSE: SF) announced today that its board of directors authorized a tender offer to purchase up to 850,000 shares, or approximately 12%, of its outstanding common stock at a price of $13.25 per share. The tender offer is expected to commence on September 5, 2003, and to expire at 5:00 p.m., Eastern Time on October 10, 2003, unless extended. On September 4, 2003, the last trading day prior to the commencement of the offer, the closing price per share reported on the New York Stock Exchange was $12.54. The tender offer is intended to provide stockholders who are considering a sale of all or a portion of their shares the opportunity to sell their shares for cash without the usual transaction costs associated with open market sales. Stifel believes that investing in its own shares in this manner is an attractive use of capital and an efficient means to provide value to its stockholders. If more than the maximum number of shares sought is tendered, Stifel will first purchase shares tendered by those stockholders who beneficially own less than 100 shares, and then purchase, on a pro rata basis, shares tendered by other stockholders. All shares purchased in the tender offer will be purchased at the same price. Stockholders whose shares are purchased in the offer will be paid the purchase price in cash, without interest, promptly after the expiration of the offer period. Shares not purchased due to proration will be returned to tendering stockholders. The offer is subject to the terms and conditions described in offering materials being mailed to Stifel's stockholders. Stifel's board of directors has approved the tender offer but neither Stifel nor its board of directors is making any recommendation to stockholders as to whether to tender or refrain from tendering their shares. Stockholders must make their own decision as to whether to tender their shares. All inquiries regarding the procedures of the offer should be directed to Thomas A. Prince, Stifel's Senior Vice President and General Counsel, at 314-342-2000. Copies of the Offer to Purchase, the Letter of Transmittal and other tender offer documents can also be obtained for free by calling Mr. Prince or visiting the SEC's website at www.sec.gov. Stifel Financial Corp. is a financial services holding company whose subsidiaries are engaged in general securities brokerage, investment banking and money management from 83 locations in 15 states, primarily in the Midwest. To learn more about Stifel, please visit the Company's web site at www.stifel.com. Forward-looking Information Statements in this news release contain forward-looking statements within the meaning of federal securities laws. Actual results are subject to risks and uncertainties, including both those specific to Stifel and those specific to the industry, which could cause results to differ materially from those contemplated. The risks and uncertainties include, but are not limited to, general economic conditions, actions of competitors, regulatory actions, changes in legislation, and technology changes. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date of this news release. Stifel does not undertake any obligation to publicly update any forward-looking statements. THIS PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY, AND IS NOT AN OFFER TO BUYER OR THE SOLICITATION OF AN OFFER TO SELL ANY SHARES OF STIFEL'S COMMON STOCK. THE SOLICITATION OF OFFERS TO BUY STIFEL'S COMMON STOCK IS ONLY BEING MADE PURSUANT TO THE TENDER OFFER DOCUMENTS, INCLUDING THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL, THAT STIFEL IS SENDING OUT TO ITS STOCKHOLDERS AND FILING WITH THE SECURITIES AND EXCHANGE COMMISSION. STOCKHOLDERS SHOULD READ CAREFULLY THE OFFER TO PURCHASE AND RELATED MATERIALS BECAUSE THEY CONTAIN IMPORTANT INFORMATION, INCLUDING THE VARIOUS TERMS AND CONDITIONS OF THE OFFER. STOCKHOLDERS MAY OBTAIN A FREE COPY OF THE OFFER TO PURCHASE AND OTHER DOCUMENTS FILED BY STIFEL WITH THE SECURITIES AND EXCHANGE COMMISSION AT THE SECURITIES AND EXCHANGE COMMISSION'S WEB SITE AT WWW.SEC.GOV OR FROM STIFEL FINANCIAL CORP., 501 NORTH BROADWAY, ST. LOUIS, MISSOURI 63102, ATTENTION: THOMAS A. PRINCE, SENIOR VICE PRESIDENT AND GENERAL COUNSEL (TELEPHONE 314-342-2000). STOCKHOLDERS ARE URGED TO READ THESE MATERIALS CAREFULLY BEFORE MAKING ANY DECISION WITH RESPECT TO THE TENDER OFFER. 2 EX-99.(G) 12 c79358exv99wxgy.txt TRANSCRIPT OF STATEMENTS BY OFFICER/EMPLOYEES EXHIBIT (g) TRANSCRIPT OF STATEMENTS TO BE MADE TO STOCKHOLDERS BY OFFICERS/EMPLOYEES OF STIFEL FINANCIAL CORP. REGARDING SELF-TENDER OFFER I am [Name of officer/employee], [title] of Stifel Financial Corp. On September 5, 2003 Stifel Financial Corp. commenced a tender offer for up to 850,000 shares of our common stock for $13.25 per share. By now, you should have received the materials in the mail regarding this offer. We note, that as of yesterday, the depositary, UMB Bank, has not yet received your letter of transmittal noting your election to participate in the offer and tender your shares. While we make no recommendation as to whether you should tender your shares, I would like to point out that the price being offered, $13.25 per share represents a premium over the pre-commencement market price of our stock. In addition, our stock typically trades in low volumes in the open market. This tender offer presents the opportunity to sell your shares, at a pre-determined price without incurring the usual transaction costs associated with open market sales. If you decide to tender your shares, you must follow the instructions contained in the offer to purchase and the accompanying letter of transmittal that were mailed to you and send the appropriate materials to UMB Bank at the address indicated on the back cover of the offer to purchase. We suggest you consult your investment and tax advisers before deciding to tender your shares. If you have questions concerning the offer, please read the offer to purchase or call Thomas A. Prince, our Senior Vice President and General Counsel at 314-342-2000. Thank you for your time. -----END PRIVACY-ENHANCED MESSAGE-----