Long-Term Incentive Plan



 Exhibit 10.49 
  

  
 FCSTONE GROUP, INC. 
  
 Long-Term Incentive Plan 
  
 Progress Report 
  
 September 30, 2003

  
 Riley, Dettmann & Kelsey,
LLC 
 11900 Wayzata Boulevard – Suite 104 
 Minnetonka, MN 55305 
  









	
	EXECUTIVE SUMMARY

  
 Objective

  
 To address the Board’s concern regarding the disposition of the
Plan in the event of a termination of the Plan prior to the conclusion of the Plan Life Cycle of five years. 
  
 Remedy 
  

	 	•	Provide specific wording in the Plan Document under Plan Termination to include the following: 

  

	 	    	“If the plan is terminated before the completion of the Plan Life Cycle (5 years), an award will be made immediately succeeding the plan termination. The award will be
calculated on a pro-rated basis using the level of performance attained at the time of the termination and the time the plan was in effect.” 

  


	 	•	Include in the plan award schedules covering a plan termination after years 1, 2, 3, 4, and 5 (see Pages 2-6). 

  

 - 1 - 









	
	 LONG-TERM INCENTIVE PLAN
  

AWARD SCHEDULE YEAR 1


  

													
	 	  	 	Beginning Equity = $34,500,000	 	 	 	Total Payroll = $940,200	 
					
	 	  	 1-Year
 End Class A Equity

	  	 Award Percentage
 of Base Salary

	 	 	 Total
 Award

	  	 % of Increase
 in Equity

	 
	 11% ROE Threshold
	  	$	38,300,000	  	10.0	%	 	$	94,020	  	2.5	%
	 	  	$	38,368,000	  	11.2	%	 	$	105,302	  	2.7	%
	 	  	$	38,436,000	  	12.4	%	 	$	116,585	  	3.0	%
	 	  	$	38,504,000	  	13.6	%	 	$	127,867	  	3.2	%
	 	  	$	38,572,000	  	14.8	%	 	$	139,150	  	3.4	%
	 	  	$	38,640,000	  	16.0	%	 	$	150,432	  	3.6	%
	 	  	$	38,708,000	  	17.2	%	 	$	161,714	  	3.8	%
	 	  	$	38,776,000	  	18.4	%	 	$	172,997	  	4.0	%
	 	  	$	38,844,000	  	19.6	%	 	$	184,279	  	4.2	%
	 	  	$	38,912,000	  	20.8	%	 	$	195,562	  	4.4	%
	 	  	$	38,980,000	  	22.0	%	 	$	206,844	  	4.6	%
	 	  	$	39,048,000	  	23.2	%	 	$	218,126	  	4.8	%
	 	  	$	39,116,000	  	24.4	%	 	$	229,409	  	5.0	%
	 	  	$	39,184,000	  	25.6	%	 	$	240,691	  	5.1	%
	 	  	$	39,252,000	  	26.8	%	 	$	251,974	  	5.3	%
	 	  	$	39,320,000	  	28.0	%	 	$	263,256	  	5.5	%
	 	  	$	39,388,000	  	29.2	%	 	$	274,538	  	5.6	%
	 	  	$	39,456,0000	  	30.4	%	 	$	285,821	  	5.8	%
	 	  	$	39,524,000	  	31.6	%	 	$	297,103	  	5.9	%
	 	  	$	39,592,000	  	32.8	%	 	$	308,386	  	6.1	%
	 	  	$	39,660,000	  	34.0	%	 	$	319,668	  	6.2	%
	 	  	$	39,728,000	  	35.2	%	 	$	330,950	  	6.3	%
	 	  	$	39,796,000	  	36.4/	%	 	$	342,233	  	6.5	%
	 	  	$	39,864,000	  	37.6	%	 	$	353,515	  	6.6	%
	 	  	$	39,932,000	  	38.8	%	 	$	364,798	  	6.7	%
	 16% ROE Goal
	  	$	40,000,000	  	40.0	%	 	$	376,080	  	6.8	%

  

 - 2 - 









	
	 LONG-TERM INCENTIVE PLAN
  

AWARD SCHEDULE YEAR 2


  

													
	 	  	 	Beginning Equity = $34,500,000	 	 	 	Total Payroll = $940,200	 
					
	 	  	 2-Year
 End Class A Equity

	  	 Award Percentage
 of Base Salary

	 	 	 Total
 Award

	  	 % of Increase
 in Equity

	 
	 11% ROE Threshold
	  	$	42,500,000	  	20.0	%	 	$	188,040	  	2.4	%
	 	  	$	42,656,000	  	22.4	%	 	$	210,605	  	2.6	%
	 	  	$	42,812,000	  	24.8	%	 	$	233,170	  	2.8	%
	 	  	$	42,968,000	  	27.2	%	 	$	255,734	  	3.0	%
	 	  	$	43,124,000	  	29.6	%	 	$	278,299	  	3.2	%
	 	  	$	43,280,000	  	32.0	%	 	$	300,864	  	3.4	%
	 	  	$	43,436,000	  	34.4	%	 	$	323,429	  	3.6	%
	 	  	$	43,592,000	  	36.8	%	 	$	345,994	  	3.8	%
	 	  	$	43,748,000	  	39.2	%	 	$	368,558	  	4.0	%
	 	  	$	43,904,000	  	41.6	%	 	$	391,123	  	4.2	%
	 	  	$	44,060,000	  	44.0	%	 	$	413,688	  	4.3	%
	 	  	$	44,216,000	  	46.4	%	 	$	436,253	  	4.5	%
	 	  	$	44,372,000	  	48.8	%	 	$	458,818	  	4.6	%
	 	  	$	44,528,000	  	51.2	%	 	$	481,382	  	4.8	%
	 	  	$	44,684,000	  	53.6	%	 	$	503,947	  	4.9	%
	 	  	$	44,840,000	  	56.0	%	 	$	526,512	  	5.1	%
	 	  	$	44,996,000	  	58.4	%	 	$	549,077	  	5.2	%
	 	  	$	45,152,000	  	60.8	%	 	$	571,642	  	5.4	%
	 	  	$	45,308,000	  	63.2	%	 	$	594,206	  	5.5	%
	 	  	$	45,464,000	  	65.6	%	 	$	616,771	  	5.6	%
	 	  	$	45,620,000	  	68.0	%	 	$	639,336	  	5.7	%
	 	  	$	45,776,000	  	70.4	%	 	$	661,901	  	5.9	%
	 	  	$	45,932,000	  	72.8	%	 	$	684,466	  	6.0	%
	 	  	$	46,088,000	  	75.2	%	 	$	707,030	  	6.1	%
	 	  	$	46,244,000	  	77.6	%	 	$	729,595	  	6.2	%
	 16% ROE Goal
	  	$	46,400,000	  	80.0	%	 	$	752,160	  	6.3	%

  

 - 3 - 









	
	 LONG-TERM INCENTIVE PLAN
 AWARD SCHEDULE YEAR 3


  

													
	 	  	 	Beginning Equity = $34,500,000	 	 	 	Total Payroll = $940,200	 
					
	 	  	 3-Year
 End Class A Equity

	  	 Award Percentage
 of Base Salary

	 	 	 Total
 Award

	  	 % of Increase
 in Equity

	 
	 11% ROE Threshold
	  	$	47,200,000	  	30.0	%	 	$	282,060	  	2.2	%
	 	  	$	47,468,000	  	33.6	%	 	$	315.907	  	2.4	%
	 	  	$	47,736,000	  	37.2	%	 	$	349,754	  	2.6	%
	 	  	$	48,004,000	  	40.8	%	 	$	383,602	  	2.8	%
	 	  	$	48,272,000	  	44.4	%	 	$	417,449	  	3.0	%
	 	  	$	48,540,000	  	48.0	%	 	$	451,296	  	3.2	%
	 	  	$	48,808,000	  	51.6	%	 	$	485,143	  	3.4	%
	 	  	$	49,076,000	  	55.2	%	 	$	518,990	  	3.6	%
	 	  	$	49,344,000	  	58.8	%	 	$	552,838	  	3.7	%
	 	  	$	49,612,000	  	62.4	%	 	$	586,685	  	3.9	%
	 	  	$	49,880,000	  	66.0	%	 	$	620,532	  	4.0	%
	 	  	$	50,148,000	  	69.6	%	 	$	654,379	  	4.2	%
	 	  	$	50,416,000	  	73.2	%	 	$	688,226	  	4.3	%
	 	  	$	50,684,000	  	76.8	%	 	$	722,074	  	4.5	%
	 	  	$	50,952,000	  	80.4	%	 	$	755,921	  	4.6	%
	 	  	$	51,220,000	  	84.0	%	 	$	789,768	  	4.7	%
	 	  	$	51,488,000	  	87.6	%	 	$	823,615	  	4.8	%
	 	  	$	51,756,000	  	91.2	%	 	$	857,462	  	5.0	%
	 	  	$	52,024,000	  	94.8	%	 	$	891,310	  	5.1	%
	 	  	$	52,292,000	  	98.4	%	 	$	925,157	  	5.2	%
	 	  	$	52,560,000	  	102.0	%	 	$	959,004	  	5.3	%
	 	  	$	52,828,000	  	105.6	%	 	$	992,851	  	5.4	%
	 	  	$	53,096,000	  	109.2	%	 	$	1,026,698	  	5.5	%
	 	  	$	53,364,000	  	112.8	%	 	$	1,060,546	  	5.6	%
	 	  	$	53,632,000	  	116.4	%	 	$	1,094,393	  	5.7	%
	 16% ROE Goal
	  	$	53,900,000	  	120.0	%	 	$	1,128,240	  	5.8	%

  

 - 4 - 









	
	 LONG-TERM INCENTIVE PLAN
  

AWARD SCHEDULE YEAR 4


  

													
	 	  	 	Beginning Equity = $34,500,000	 	 	 	Total Payroll = $940,200	 
					
	 	  	 4-Year
 End Class A Equity

	  	 Award Percentage
 of Base Salary

	 	 	 Total
 Award

	  	 % of Increase
 in Equity

	 
	 11% ROE Threshold
	  	$	52,400,000	  	40.0	%	 	$	376,080	  	2.1	%
	 	  	$	52,804,000	  	44.8	%	 	$	421,210	  	2.3	%
	 	  	$	53,208,000	  	49.6	%	 	$	466,339	  	2.5	%
	 	  	$	53,612,000	  	54.4	%	 	$	511,469	  	2.7	%
	 	  	$	54,016,000	  	59.2	%	 	$	556,598	  	2.9	%
	 	  	$	54,420,000	  	64.0	%	 	$	601,728	  	3.0	%
	 	  	$	54,824,000	  	68.8	%	 	$	646,858	  	3.2	%
	 	  	$	55,228,000	  	73.6	%	 	$	691,987	  	3.3	%
	 	  	$	55,632,000	  	78.4	%	 	$	737,117	  	3.5	%
	 	  	$	56,036,000	  	83.2	%	 	$	782,246	  	3.6	%
	 	  	$	56,440,000	  	88.0	%	 	$	827,376	  	3.8	%
	 	  	$	56,844,000	  	92.8	%	 	$	872,506	  	3.9	%
	 	  	$	57,248,000	  	97.6	%	 	$	917,635	  	4.0	%
	 	  	$	57,652,000	  	102.4	%	 	$	962,765	  	4.2	%
	 	  	$	58,056,000	  	107.2	%	 	$	1,007,894	  	4.3	%
	 	  	$	58,460,000	  	112.0	%	 	$	1,053,024	  	4.4	%
	 	  	$	58,864,000	  	116.8	%	 	$	1,098,154	  	4.5	%
	 	  	$	59,268,000	  	121.6	%	 	$	1,143,283	  	4.6	%
	 	  	$	59,672,000	  	126.4	%	 	$	1,188,413	  	4.7	%
	 	  	$	60,076,000	  	131.2	%	 	$	1,233,542	  	4.8	%
	 	  	$	60,480,000	  	136.0	%	 	$	1,278,672	  	4.9	%
	 	  	$	60,884,000	  	140.8	%	 	$	1,323,802	  	5.0	%
	 	  	$	61,288,000	  	145.6	%	 	$	1,368,931	  	5.1	%
	 	  	$	61,692,000	  	150.4	%	 	$	1,414,061	  	5.2	%
	 	  	$	62,096,000	  	155.2	%	 	$	1,459,190	  	5.3	%
	 16% ROE Goal
	  	$	62,500,000	  	160.0	%	 	$	1,504,320	  	5.4	%

  

 - 5 - 









	
	 LONG-TERM INCENTIVE PLAN
  

AWARD SCHEDULE YEAR 5


  

													
	 	  	 	Beginning Equity = $34,500,000	 	 	 	Total Payroll = $940,200	 
					
	 	  	 5-Year
 End Class A Equity

	  	 Award Percentage
 of Base Salary

	 	 	 Total
 Award

	  	 % of Increase
 in Equity

	 
	 11% ROE Threshold
	  	$	58,200,000	  	50.0	%	 	$	470,100	  	2.0	%
	 	  	$	58,772,000	  	56.0	%	 	$	526,512	  	2.2	%
	 	  	$	59,344,000	  	62.0	%	 	$	582,924	  	2.3	%
	 	  	$	59,916,000	  	68.0	%	 	$	639,336	  	2.5	%
	 	  	$	60,488,000	  	74.0	%	 	$	695,748	  	2.7	%
	 	  	$	61,060,000	  	80.0	%	 	$	752,160	  	2.8	%
	 	  	$	61,632,000	  	86.0	%	 	$	808,572	  	3.0	%
	 	  	$	62,204,000	  	92.0	%	 	$	864,984	  	3.1	%
	 	  	$	62,776,000	  	98.0	%	 	$	921,396	  	3.3	%
	 	  	$	63,348,000	  	104.0	%	 	$	977,808	  	3.4	%
	 	  	$	63,920,000	  	110.0	%	 	$	1,034,220	  	3.5	%
	 	  	$	64,492,000	  	116.0	%	 	$	1,090,632	  	3.6	%
	 	  	$	65,064,000	  	122.0	%	 	$	1,147,044	  	3.8	%
	 	  	$	65,636,000	  	128.0	%	 	$	1,203,456	  	3.9	%
	 	  	$	66,208,000	  	134.0	%	 	$	1,259,868	  	4.0	%
	 	  	$	66,780,000	  	140.0	%	 	$	1,316,280	  	4.1	%
	 	  	$	67,352,000	  	146.0	%	 	$	1,372,692	  	4.2	%
	 	  	$	67,924,000	  	152.0	%	 	$	1,429,104	  	4.3	%
	 	  	$	68,496,000	  	158.0	%	 	$	1,485,516	  	4.4	%
	 	  	$	69,068,000	  	164.0	%	 	$	1541,928	  	4.5	%
	 	  	$	69,640,000	  	170.0	%	 	$	1,598,340	  	4.5	%
	 	  	$	70,212,000	  	176.0	%	 	$	1,654,752	  	4.6	%
	 	  	$	70,784,000	  	182.0	%	 	$	1,711,164	  	4.7	%
	 	  	$	71,356,000	  	188.0	%	 	$	1,767,576	  	4.8	%
	 	  	$	71,928,000	  	194.0	%	 	$	1,823,988	  	4.9	%
	 16% ROE Goal
	  	$	72,500.00	  	200.0	%	 	$	1,880,400	  	4.9	%

  

 - 6 - 









	
	 LONG-TERM INCENTIVE PLAN
  

PLAN DESIGN


  
 Participation

  

	 	•	President 

  

	 	•	Chief Operating Officer 

  

	 	•	Chief Financial Officer 

  

	 	•	President – FGDI 

  

	 	•	Chief Operations Officer – Stone Division 

  
 Performance Measure 
  

	 	•	Increase in Class A Equity (plus common/preferred stock redemption) (after patronage distribution, tax and accrual for award) 

  
 Plan Life Cycle 
  

	 	•	5 years 

  

	 	•	New plan begins after 5 years 

  
 Base Salary 
  

	 	•	Participant’s base salary in effect at the beginning of the Plan Life Cycle 

  
 Target Award at Goal 
  

	 	•	200% of participant’s base salary 

  

 - 7- 









	
	 LONG-TERM INCENTIVE PLAN
  

PLAN SCHEMATIC


  
 Beginning Class A
Equity - $34.5M 
  

							
	 	  	 5-Year
 Total Class A Equity

	  	Award Percentage
of Base Salary

	 
	 Threshold
	  	$	58.2M	  	50	%
			
	 Goal
	  	$	72.5M	  	200	%

  

	 	•	Threshold represents a compounded 11% ROE. 

  

	 	•	Total increase in equity $23.7M or 69% over beginning equity $34.5M 

  

	 	•	Goal represents a compounded 16% ROE. 

  

	 	•	Total increase in equity $38.0M or 110% over beginning equity $34.5M 

  

	 	•	Threshold must be attained to activate the plan and for participants to be eligible for awards. 

  

	 	•	Performance beyond Threshold will be interpolated along the award scale. 

  

	 	•	Awards at Goal represent 4.9% of the total increase in Class A Equity at Goal. 

  


 - 8 - 









	
	 LONG-TERM INCENTIVE PLAN
  

AWARD SCHEDULE PER PLAN PARTICIPANT


  

										
	 Position

	  	 Base
 Salary

	  	 Threshold
Award
 (50%)

	  	 Goal
 Award
 (200%)


	 President/CEO
	  	$	320,000	  	$	160,000	  	$	640,000
	 Chief Operating Officer
	  	$	160,000	  	$	80,000	  	$	320,000
	 Executive Vice President/CFO
	  	$	135,200	  	$	67,600	  	$	270,400
	 President – FGDI
	  	$	175,000	  	$	87,500	  	$	350,000
	 Chief Operating Officer – Stone Division
	  	$	150,000	  	$	75,000	  	$	300,000
	 	  	
	
	  	
	
	  	
	

	 Totals
	  	$	940,200	  	$	470,100	  	$	1,880,400

  

 - 9 - 









	
	 LONG-TERM INCENTIVE PLAN
  

PLAN ADMINISTRATION OUTLINE


  

	1.	Purpose of the Plan 

  

	2.	Definition of the Plan Terms (i.e., “base salary” in effect at the start of the Plan Life Cycle) 

  

	3.	Plan Life Cycle (5 consecutive fiscal years) 

  

	4.	Effective Date – September 1, 2003 

  

	5.	Plan Administrator (Chairman of the Board) 

  

	6.	Plan Administration (follows plans guidelines, but free to interpret including issues where the plan is silent) 

  

	7.	Eligibility (to be determined by the Plan Administrator) 

  

	8.	Termination of Employment (either by executive or FCStone all rights are forfeited) 

  

	9.	Special Termination – If a Plan Participant terminates their employment or retires after three years with FCStone’s consent, the Plan Administrator will authorize a
pro-rated award based on performance up to that event. The actual payment will be made after the conclusion of the Plan Life Cycle (5 years). 

  

	10.	Amendment/Termination of the Plan (at the Plan Administrator’s discretion) 

  

	11.	Employment (Plan is not a contract) 

  

	12.	Death, Disability or Retirement (pro-rated award) 

  

	13.	Legal Requirements (in accordance with Federal, state and local statutory requirements) 

  
 Note: Plan Administration will be complete in the final document, as was the case with the Short-Term
Incentive plan. 
  

 - 10 -