SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)
Filed by the Registrant [X]
Filed by a Party other than Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to
Section 240-14a-11(c) or Section 240.14a-12
Inter-Regional Financial Group, Inc.
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(Name of Registrant as Specified in its Charter)
------------------------------------
(Name of Person(s) Filing Proxy Statement if other
than the Registrant)
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[X] $125 per Exchange Act Rules 0-11(c)(1)(ii),
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Exchange Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rule 14a
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<PAGE>
IFG
Inter-Regional Financial Group, Inc.
1995 NOTICE OF
ANNUAL MEETING &
PROXY STATEMENT
Dain Bosworth Incorporated
Rauscher Pierce Refsnes, Inc.
IFG Asset Management Services, Inc.
Regional Operations Group, Inc.
<PAGE>
March 23, 1995
To Our Stockholders,
You are cordially invited to attend the Annual Meeting of IFG's
Stockholders, which will be held in the Windows on Minnesota
Room, 50th Floor, IDS Center, 80 South Eighth Street,
Minneapolis, Minnesota, on Tuesday, May 2, 1995, at 3:00 p.m.
This booklet contains your official notice of the 1995 Annual
Meeting and a Proxy Statement which includes information about
the matters to be acted upon. Members of the management and Board
of Directors of IFG will be on hand at the meeting to answer
questions and to discuss any matters relating to IFG that may
properly arise.
Whether or not you plan to attend the 1995 Annual Meeting in
person, we urge you to participate by reading the Proxy Statement
and completing and returning your proxy card as promptly as
possible. This will ensure that your vote is recorded on the
matters brought before the meeting.
Sincerely,
Irving Weiser
President and Chief Executive Officer
<PAGE>
Official Notice of 1995 Annual Meeting of Stockholders
The 1995 Annual Meeting of Stockholders of Inter-Regional
Financial Group, Inc. ("IFG") will be held in the Windows on
Minnesota Room, 50th Floor, IDS Center, 80 South Eighth Street,
Minneapolis, Minnesota, on Tuesday, May 2, 1995, at 3:00 p.m.,
for the following purposes:
1. To elect nine directors to hold office for the ensuing year;
2. To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of IFG for the fiscal year ending December
31, 1995; and
3. To transact such other business as may properly come before
the meeting or any adjournments thereof.
Only holders of record of IFG's Common Stock at the close of
business on March 10, 1995, will be entitled to receive notice of
and to vote at the meeting. A list of such holders will be
available for examination by any stockholder for any purpose
germane to the meeting during ordinary business hours for ten
days prior to the meeting at the Company's headquarters, Dain
Bosworth Plaza, 60 South Sixth Street, Minneapolis, Minnesota.
By Order of the Board of Directors
Carla J. Smith
Secretary
Minneapolis, Minnesota
March 23, 1995
<PAGE>
Proxy Statement
ANNUAL MEETING OF STOCKHOLDERS TUESDAY, MAY 2, 1995
This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of Inter-
Regional Financial Group, Inc. ("IFG") for use at the 1995 Annual
Meeting of Stockholders to be held on Tuesday, May 2, 1995, and
at any adjournments thereof. This Proxy Statement and the
accompanying proxy card are being mailed on or about March 23,
1995, to holders of record of shares of the Common Stock of IFG
as of the close of business on March 10, 1995. If the enclosed
proxy card is completed, signed and returned to IFG prior to the
1995 Annual Meeting, it will be voted as specified. Any
stockholder who signs and returns a proxy may revoke it at any
time before it is voted by giving written notice to the Secretary
of IFG.
On March 10, 1995, IFG had outstanding 8,070,158 shares of Common
Stock. Each holder of record of such shares as of the close of
business on March 10, 1995, will be entitled to one vote for each
share of Common Stock held on such date on all matters being
presented at the meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning the
beneficial ownership of IFG's Common Stock by all persons known
by IFG to beneficially own more than 5 percent of IFG's Common
Stock, by the directors and director nominees, by the executive
officers of IFG named in the Summary Compensation Table appearing
on page 7 and by all directors and executive officers of IFG as a
group. Except as otherwise indicated, such information is
provided as of March 10, 1995, and the named beneficial owner
possesses sole voting and investment power with respect to all
shares.
<TABLE>
<CAPTION>
Amount and Nature
Name of Beneficial Title of of Beneficial Percent
Owner Class Ownership of Class
- -----------------------------------------------------------------
<S> <C> <C> <C>
Granahan Investment
Management Inc. Common 430,600 (1) 5.34%
John C. Appel Common 49,853 (2)(3)(4) *
Susan S. Boren Common 4,200 (2) *
F. Gregory Fitz-Gerald Common 9,000 (2) *
Richard D. McFarland Common 103,670 (3) 1.29%
Lawrence Perlman Common 8,200 (2) *
C. A. Rundell, Jr. Common 3,000 (2) *
Robert L. Ryan Common 4,000 (2) *
Arthur R. Schulze, Jr. Common 9,500 (2) *
David A. Smith Common 94,401 (2)(3)(4) 1.16%
Irving Weiser Common 92,444 (2)(3)(4)(5)(6) 1.14%
Daniel J. Reuss Common 13,995 (2)(3)(4)(5) *
J. Scott Spiker Common _ _
All directors and
executive officers as
a group (16 persons) Common 406,693 (2)(3)(4)(5)(6) 4.96%
* Less than 1%.
</TABLE>
(1) Information is based solely on a Schedule 13G filed with the
Securities and Exchange Commission by Granahan Investment
Management Inc. ("Granahan"), a registered investment adviser,
with respect to shares held as of December 31, 1994. The Schedule
13G states that Granahan has sole power to vote and direct the
disposition of the shares. Granahan's address is 303 Wyman
Street, Waltham, MA 02154.
(2) Includes the following number of shares issuable upon
exercise of currently exercisable options granted pursuant to
IFG's 1986 Stock Option Plan: Mr. Appel, 14,570; Ms. Boren,
4,000; Mr. Fitz-Gerald, 6,000; Mr. Perlman, 6,000; Mr. Rundell,
3,000; Mr. Ryan, 3,000; Mr. Schulze, 6,000; Mr. Smith, 35,100;
Mr. Weiser, 42,800; Mr. Reuss, 3,720; and all directors and
executive officers as a group (16 persons), 128,050.
(3) Includes the following number of shares held in the IFG Stock
Bonus Plan: Mr. Appel, 9,668; Mr. McFarland, 11,620; Mr. Smith,
19,925; Mr. Weiser, 11,060; Mr. Reuss, 6,018; and all directors
and executive officers as a group (16 persons), 61,086. Shares
held in the Stock Bonus Plan are allocated to the accounts of
participating employees at the end of each fiscal quarter. As a
result, ownership amounts for shares held by participating
employees in the Stock Bonus Plan are provided as of December 31,
1994. As of February 28, 1995, a total of 3,162,920 shares of
Common Stock, or 39.19 percent of the outstanding, were held in
the Stock Bonus Plan. Voting of shares held in the Stock Bonus
Plan is passed through to the participating employees.
Participating employees are also entitled to determine, on a
confidential basis, whether shares held in the Stock Bonus Plan
for their benefit will be tendered in a tender or exchange offer.
Vested shares held in the Stock Bonus Plan for participating
employees may be distributed subject to in-service loan and
distribution rules or after certain events of maturity
(separation from service, death or disability).
(4) Includes the following number of shares held for the account
of such executive officer pursuant to the IFG Executive Deferred
Compensation Plan: Mr. Appel, 12,965; Mr. Smith, 15,621; Mr.
Weiser, 16,953; Mr. Reuss, 3,257; and all directors and executive
officers as a group (16 persons), 55,571. As of February 28,
1995, 133,825 shares of Common Stock, or 1.66 percent of the
outstanding shares, were held in the Executive Deferred
Compensation Plan. Shares held in the Executive Deferred
Compensation Plan are credited to the accounts of the respective
participating employees annually following payment of bonuses for
the preceding year. All shares held for the accounts of
participants under the Executive Deferred Compensation Plan will
be voted by the trustee of the related trust in its sole
discretion on all matters. Participants are not entitled to
encumber or borrow against shares held for their accounts under
the Executive Deferred Compensation Plan, and all such shares are
subject to the claims of IFG's general unsecured creditors in the
event of its insolvency or bankruptcy. Each participating senior
executive must elect prior to the beginning of each year in which
a bonus is earned whether the shares purchased with the deferred
portion of such bonus and the vested portion of any related
employer-matching contributions will be distributed during
employment or following retirement. Participants may change their
investment election with respect to a year's deferred bonus
amount and the vested portion of any related employer-matching
contribution from IFG Common Stock to an alternate fixed income
investment, but any such change would result in the forfeiture of
the unvested portion of any related employer-matching
contribution.
(5) Excludes the following number of shares beneficially owned by
the spouse of such executive officer and disclaimed by such
executive officer: Mr. Weiser, 280; Mr. Reuss, 75; and all
directors and executive officers as a group (16 persons), 355.
(6) Includes the following number of shares held in trust
accounts for the benefit of such executive officer's children and
for which such executive officer has voting and disposition
power: Mr. Weiser, 600; and all directors and executive officers
as a group (16 persons), 600.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires IFG's directors and executive officers and all persons
who beneficially own more than 10 percent of the outstanding
shares of IFG's Common Stock to file with the Securities and
Exchange Commission and the New York Stock Exchange initial
reports of ownership and reports of changes in ownership of such
Common Stock. Officers, directors and greater-than-10-percent
beneficial owners are also required to furnish IFG with copies of
all Section 16(a) forms they file. To IFG's knowledge, based upon
a review of the copies of such reports furnished to the Company
and written representations that no other reports were required,
during the fiscal year ended December 31, 1994, all Section 16(a)
filing requirements applicable to IFG's directors, executive
officers and greater-than-10-percent beneficial owners were
satisfied.
Proposal 1 - Election of Directors
NOMINEES
Nine individuals have been nominated for election to IFG's Board
of Directors at the 1995 Annual Meeting of Stockholders to hold
office until the next annual meeting of stockholders or until
their successors are duly elected and qualified (except in the
case of earlier death, resignation or removal). Three of the
nominees for election are officers of IFG and/or Dain Bosworth
Incorporated ("DBI") or Rauscher Pierce Refsnes, Inc. ("RPR"),
subsidiaries of IFG.
The accompanying proxy is intended to be voted FOR the election
of the nominees named below, unless authority to vote for one or
more of such nominees is withheld as specified in the proxy card.
If an executed proxy card is returned and no instruction is
given, the shares of IFG Common Stock represented by such proxy
will be voted in favor of such election. If an executed proxy
card is returned and authority to vote with respect to any or all
of the nominees is withheld as specified in the proxy card, the
shares of IFG Common Stock represented by such proxy will be
considered present at the meeting for purposes of determining a
quorum and for purposes of calculating the vote with respect to
such nominee or nominees, but will not be considered to have been
voted in favor of such nominee or nominees.
The accompanying proxy may not be voted for more than nine
directors. The affirmative vote of a majority of the shares of
Common Stock represented at the meeting and entitled to vote is
required for the election of each director, and cumulative voting
is not permitted. In the event that any nominee becomes unable or
unwilling to serve as a director for any reason, the accompanying
proxy will be voted by the persons named therein in accordance
with their best judgment. The Board of Directors has no reason to
believe that any nominee will be unable or unwilling to serve as
a director if elected.
Each nominee has furnished the following information to IFG with
respect to his or her principal occupations or employment during
the last five years and his or her directorships of other
companies subject to the reporting requirements of the Securities
Exchange Act of 1934 or the Investment Company Act of 1940.
[PHOTO] JOHN C. APPEL
President and
Chief Operating Officer
Dain Bosworth Incorporated
John C. Appel, 46, was named President and Chief Operating
Officer of DBI in February 1994. Prior to that time, Mr. Appel
had served as Chief Financial Officer of IFG since 1986 and of
DBI since 1990. Mr. Appel has also been an Executive Vice
President of IFG since 1990. Prior to joining IFG in 1986, Mr.
Appel was a partner with the accounting firm of Deloitte Haskins
& Sells (now Deloitte & Touche). Mr. Appel is a new nominee to
serve on IFG's Board of Directors. Mr. Appel also serves as a
director of Smith Breeden Associates, a registered investment
adviser.
[PHOTO] SUSAN S. BOREN
Senior Vice President,
Customer Development/Direct
Response, of the Department
Store Division of Dayton Hudson
Corporation
Susan S. Boren, 48, has been Senior Vice President, Customer
Development/Direct Response, of the Department Store Division of
Dayton Hudson Corporation since 1994. She was Group Vice
President of Stores from 1991 to 1994 and Senior Vice President
of Human Resources from 1987 to 1991 for the Department Store
Division. From 1981 to 1987, Ms. Boren held various other
positions with Dayton Hudson Corporation. Ms. Boren has been a
director of IFG since February 1993. She is also a director of
The Valspar Corporation.
[PHOTO] F. GREGORY FITZ-GERALD
Private Investor and
Financial Consultant
F. Gregory Fitz-Gerald, 53, is a private investor and financial
consultant. From 1989 to 1991, Mr. Fitz-Gerald was a Principal of
Ocean Capital Corporation, a private investment banking firm
headquartered in New York City. Previously, he held senior
executive positions with Commercial Credit Company and Primerica
Corporation, American Express Company, American Express Credit
Corporation, and Merrill Lynch & Co., Inc. Mr. Fitz-Gerald has
been a director of IFG since 1987.
[PHOTO] LAWRENCE PERLMAN
President and
Chief Executive Officer
Ceridian Corporation
Lawrence Perlman, 56, has been President and Chief Executive
Officer since 1990 and Chairman since 1992 of Ceridian
Corporation. Mr. Perlman was previously Chief Operating Officer
and Executive Vice President of Ceridian's predecessor, Control
Data Corporation, and President of Imprimis Corporation, Control
Data Corporation's data storage products business. Mr. Perlman
has been a director of IFG since 1984. Mr. Perlman is also a
director of Bio-Vascular, Inc., Computer Network Technology Corp-
oration, Ceridian Corporation, Seagate Technology, Inc. and The
Valspar Corporation.
[PHOTO] C. A. RUNDELL, JR.
Private Investor
Financial Consultant
Rundell Enterprises
C. A. Rundell, Jr., 63, has been a private investor and financial
consultant, doing business as Rundell Enterprises, since he
retired as the Chairman of the Board, President and Chief
Executive Officer of Cronus Industries in 1988, positions that he
had held since 1977. Mr. Rundell has been a director of IFG since
February 1994. Mr. Rundell also serves as chairman of NCI
Building Systems, Inc. and as a director of Tyler Corporation,
Tandy Brands Accessories, Inc., Eljer Industries, Inc., Bollinger
Industries, Inc. and Redman Industries, Inc.
[PHOTO] ROBERT L. RYAN
Senior Vice President
Chief Financial Officer
Medtronic, Inc.
Robert L. Ryan, 51, has been Senior Vice President and Chief
Financial Officer of Medtronic, Inc. since April 1993. Prior to
joining Medtronic, he had been Vice President, Finance, and Chief
Financial Officer of Union Texas Petroleum Corp. since 1984. Mr.
Ryan has been a director of IFG since February 1994. Mr. Ryan
also is a director of Riverwood International Corporation, TECO
Energy, Inc. and Tampa Electric Company.
[PHOTO] ARTHUR R. SCHULZE, JR.
Former Vice Chairman of the Board
General Mills, Inc.
Arthur R. Schulze, Jr., 64, retired from his position as Vice
Chairman of the Board of General Mills, Inc., in January 1993, a
position he had held since 1989. He previously served as
Executive Vice President of General Mills, Inc. and President of
its Grocery Products Food Group. Mr. Schulze has been a director
of IFG since 1987. Mr. Schulze is also a director of Tennant
Company and Sealright Co., Inc.
[PHOTO] DAVID A. SMITH
Chairman
President and
Chief Executive Officer
Rauscher Pierce Refsnes, Inc.
David A. Smith, 48, has been Chairman of the Board of RPR since
January 1990, President of RPR since 1985 and Chief Executive
Officer of RPR since 1983. Since May 1991, Mr. Smith has also
been Executive Vice President of IFG. Mr. Smith has been a
director of IFG since 1985.
[PHOTO] IRVING WEISER
President and
Chief Executive Officer
Inter-Regional Financial Group, Inc.
Chairman and
Chief Executive Officer
Dain Bosworth Incorporated
Irving Weiser, 47, has been Chief Executive Officer of IFG since
January 1990 and President of IFG since 1985. Mr. Weiser has also
been Chairman and Chief Executive Officer of DBI since April 1990
and was President of DBI from April 1990 until February 1994.
Prior to 1985, Mr. Weiser was a partner in the law firm of Dorsey
& Whitney Mr. Weiser has been a director of IFG since 1985.
BOARD OF DIRECTORS COMMITTEES AND MEETINGS
IFG has an Audit Committee and a Compensation and Organization
Committee. The Audit Committee reviews and monitors accounting
policies and control procedures of IFG, including recommending
the engagement of the independent auditors and reviewing the
scope of the audit, and generally assists the Board of Directors
in fulfilling its fiduciary responsibilities relating to
accounting, financial and reporting policies and practices. The
Compensation and Organization Committee determines the policies
for and structure and amount of compensation for members of the
executive managements of IFG and its operating subsidiaries. The
Compensation and Organization Committee also administers the IFG
1986 Stock Option Plan and IFG Executive Deferred Compensation
Plan.
The Compensation and Organization Committee also acts as a
nominating committee by reviewing candidates for election as
director and by annually recommending a slate of directors for
approval by the Board of Directors and election by the
stockholders. The Compensation and Organization Committee will
consider qualified nominees recommended by stockholders. Any
stockholder wishing to recommend a nominee must submit the name
of such nominee in writing to the Secretary of IFG, together with
a statement of the nominee's qualifications. Such information
should be received no later than November 24, 1995, with respect
to nominations for election at the 1996 Annual Meeting of
Stockholders.
The Audit Committee, on which Messrs. Perlman (chairman), Fitz-
Gerald, Schulze (until April 27, 1994) and Rundell (beginning
April 27, 1994) served, held five meetings in 1994. The
Compensation and Organization Committee, on which Messrs. Schulze
(chairman), Perlman (until April 27, 1994) and Ryan (beginning
April 27, 1994) and Ms. Boren served, held five meetings in 1994.
The Board of Directors met five times in 1994. During 1994, no
director other than Mr. Ryan attended fewer than 75 percent of
the meetings of the Board of Directors and Committees upon which
such director served. Mr. Ryan attended five of his seven total
meetings (71 percent) for the year, but was unable to attend the
Board and Committees meetings held on December 14, 1994.
Compensation
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Compensation Philosophy
The Compensation and Organization Committee (the "Committee")
determines the policies for and structure and amount of
compensation for the members of the executive managements of IFG
and its subsidiaries (collectively, the "Senior Executives"),
including the Chief Executive Officer and four other most highly
compensated executive officers of IFG named in the accompanying
tables. The Committee's goal is to establish compensation
policies and programs that will attract and retain highly
qualified executives and will provide an incentive to such
executives to focus their efforts on long-term strategic goals by
aligning their financial interests closely with long-term
stockholder interests. The Committee is composed entirely of
independent directors who are not employees of IFG or any of its
subsidiaries.
The most significant component of IFG's Senior Executive
compensation is cash remuneration in the form of base salary and
annual discretionary bonuses. Bonuses are determined based upon
the performance of IFG, the individual executive, his or her
department or areas of responsibility and his or her employing
company during the fiscal year and are awarded in late January or
early February of the following year. In evaluating performance,
both the achievement of annual financial and non-financial
objectives and progress toward long-term strategic objectives are
considered. Base salaries generally represent a relatively small
portion of total cash remuneration capable of being earned and
are average relative to comparable firms in the industry. Bonuses
make up a significant portion of the Senior Executives' total
cash compensation and, in 1994, constituted as much as 81 percent
of a Senior Executive's total cash compensation. The Committee
believes that basing a substantial portion of a Senior
Executive's compensation on individual, departmental and company
performance contributes to the executive's motivation to perform
at the highest possible level and is consistent with the building
of long-term stockholder value.
As the central component of the IFG Long-Term Incentive Program,
the Committee also annually awards to the Senior Executives
options to acquire shares of IFG's Common Stock under the IFG
1986 Stock Option Plan. The Committee believes that stock options
provide a highly efficient form of compensation from both a cost
and accounting perspective, and that such awards align the long-
term financial interests of the Senior Executives with the
interests of IFG's stockholders, thus providing the kind of
incentives necessary to achieving IFG's longer-term strategic
goals. The level of options to be awarded each Senior Executive
is also linked to performance in that the award is generally
determined by applying a Long-Term Incentive Percentage
determined by the Committee for such Senior Executive to the
amount of total cash compensation (including discretionary bonus
compensation) determined by the Committee for such Executive. The
Long-Term Incentive Percentages were initially set by the
Committee in consultation with an independent firm of management
compensation consultants with a goal of providing long-term
compensation opportunities to IFG's Senior Executives competitive
with those of the executives of other well-performing regional
brokerage firms. These percentages are reviewed periodically by
the Committee for appropriateness and competitiveness and
currently range from 8 to 20 percent of total cash compensation.
An additional component of the IFG Long-Term Incentive Program is
the IFG Executive Deferred Compensation Plan (the "Deferred
Plan"), which was approved by IFG's stockholders in 1993. The
Deferred Plan is a voluntary, non-tax-qualified, deferred
compensation plan that encourages IFG's Senior Executives to
invest their own capital in IFG Common Stock. Under the Deferred
Plan, each Senior Executive may elect, prior to the beginning of
a fiscal year, to defer up to 30 percent of his or her
discretionary bonus compensation for that year. The deferred
amount may be invested either in IFG Common Stock or in an
alternate fixed income investment, but the participating Senior
Executive will receive an employer-matching contribution only on
amounts invested in IFG Common Stock. For 1994, such matching
contribution was set at a level equal to 33-1/3 percent of the
deferred bonus amount. Participating Senior Executives vest in
these employer-matching contributions after four years of
continued service, subject to acceleration upon death, permanent
disability, retirement under certain conditions or a change in
control of IFG.
The Committee believes that the two components of IFG's Long-Term
Incentive Program described above will increase over time the
levels of stock ownership of IFG's Senior Executives, thus
aligning the interests of those persons who have the greatest
ability to affect IFG's financial results more closely with the
interests of IFG's stockholders. The Committee also believes that
significant levels of stock ownership and ownership potential
will assist IFG in retaining the services of such Senior
Executives.
Determination of 1994 Senior Executive Compensation
The Committee met twice in January 1995 to determine annual
discretionary bonuses and long-term incentive compensation for
the Senior Executives for 1994. In preparation for these
meetings, the Committee reviewed the overall profitability,
growth and financial performance of IFG, its subsidiaries and
their various business lines.
Chief Executive Officer Compensation.
In determining Mr. Weiser's bonus, the Committee reviewed four
key factors it had identified to measure profitability and
growth. With respect to profitability, the Committee reviewed
IFG's 1994 earnings and return on average equity; and with
respect to growth, it reviewed the three-year compounded growth
rates in IFG's revenues and stock price. The Committee then
reviewed similar information for the most recently available
periods for a selected group of publicly held regional brokerage
firms believed by the Committee and management of IFG to be
comparable with IFG and its significant subsidiaries. All of such
firms are included in the Regional Sub-Index of the Lipper
Analytical Brokerage Stock Price Index used in the Comparative
Stock Performance graph appearing on page 10. The Committee
reviewed the overall performance of IFG and its subsidiaries
relative to the performance of such other companies giving equal
weight to all four of such factors.
The Committee also reviewed data from the most recent publicly
available proxy statements for certain of such comparable firms
in order to determine competitive compensation levels for other
chief executive and chief operating officers within the industry.
The Committee compared this information to the relative
performance of such firms based on the factors referred to above.
The Committee also compared the financial performance of IFG
during 1994 against the objectives set by the Board of Directors
and management at the beginning of the year. Based on this
information, the Committee determined a compensation range that
it believed fairly reflected IFG's overall and relative financial
performance and was reasonably competitive with other comparable
firms in the industry.
The Committee then reviewed the specific non-financial objectives
established for IFG by the Board of Directors and management at
the beginning of the year. The Committee evaluated Mr. Weiser's
performance with respect to these and certain other personal,
non-financial objectives.
After consideration of all of the above financial and non-
financial performance factors, the Committee, in its discretion,
determined the amount of Mr. Weiser's annual bonus. After
approval of the bonus, the Committee determined Mr. Weiser's
stock option award level based on the application of his Long-
Term Incentive Percentage to his total cash compensation as
described above. The Committee, in its discretion, also approved
the grant of additional stock options to Mr. Weiser in order to
increase his level of potential ownership.
Compensation of Other Senior Executives.
The Committee approved individual bonus amounts for each of the
Senior Executives other than Mr. Weiser based upon
recommendations presented to the Committee by Mr. Weiser. Mr.
Weiser's recommendations were based upon his evaluation of each
Senior Executive's individual, departmental and company
performance and upon advice from other appropriate individuals,
including, in particular, Mr. Smith, the President and Chief
Executive Officer of RPR, with respect to that firm's Senior
Executives, and Mr. Appel, the President and Chief Operating
Officer of DBI, with respect to that firm's Senior Executives. In
reviewing departmental and company financial performance for each
of such Senior Executives, Mr. Weiser also looked to the key
components of profitability and growth identified by the
Committee. He reviewed with the Committee information concerning
the revenues, contributions and profit margins of each of the
business lines over the prior three years. Mr. Weiser also
summarized for the Committee the performance of certain Senior
Executives relative to the objectives, both financial and non-
financial, established for such Executives at the beginning of
the year. The Committee was also provided historical compensation
information prepared by a third-party organization for a group of
15 to 20 regional brokerage firms, including the group of
comparable publicly held regional firms referred to above, for
background on competitive salary levels within the industry. With
respect to Messrs. Smith and Appel, the Committee also reviewed
the more current publicly available proxy statement information
with respect to the chief executive and chief operating officers
of the group of comparable publicly held regional firms referred
to above.
After approval of the bonus amounts by the Committee, stock
option award levels were determined by application of the
applicable Long-Term Incentive Percentage to each Senior
Executive's total cash compensation as described above. The
Committee, in its discretion, also approved the grant of
additional stock options to certain of such Senior Executives,
including Messrs. Smith and Appel, in order to increase these key
Senior Executives' levels of potential ownership.
Application of Section 162(m).
Section 162(m) of the Internal Revenue Code generally limits
corporate deductions to $1,000,000 for compensation paid to each
named Senior Executive. Regulations under Section 162(m) permit
stock options to be excluded from compensation if certain
conditions are met. Because IFG's 1986 Stock Option Plan
satisfies these conditions, and because of the voluntary
deferrals made pursuant to the IFG Executive Deferred
Compensation Plan, the Company does not anticipate that any named
Senior Executive will receive compensation during calendar 1995
which will exceed $1,000,000 for purposes of Section 162(m).
Arthur R. Schulze, Jr., Chairman
Susan S. Boren
Robert L. Ryan
Members of the Compensation and
Organization Committee
SUMMARY COMPENSATION TABLE
The following table summarizes, for each of the last three fiscal
years of IFG, the compensation paid to or earned by and awarded
to the Chief Executive Officer of IFG and each of the four other
most highly compensated executive officers of IFG:
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Annual Compensation Awards
------------------- ----------
Securities All
Name & Underlying Other
Principal Options/ Compensa-
Position Year Salary Bonus(1)(2) SARs(1) tion (3)
- -----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Irving Weiser, 1994 $250,000 $525,000 33,000 $105,688
Pres. & CEO,
IFG; Chairman, 1993 250,000 950,000 40,000 173,946
Pres. & CEO,
DBI (4) 1992 250,000 765,000 49,000 77,244
David A. Smith, 1994 $200,000 $400,000 22,000 $74,807
Chairman, Pres.
& CEO, 1993 200,000 825,000 30,200 169,564
RPR; Exec. VP,
IFG 1992 160,000 690,000 38,000 58,035
John C. Appel, 1994 $175,000 $425,000 22,000 $77,457
Pres. & COO, DBI; 1993 150,000 450,000 20,000 90,301
Exec. VP, IFG (4) 1992 150,000 300,000 16,600 38,455
Daniel J. Reuss, 1994 $120,000 $180,000 2,700 $29,400
Sr. VP,
Treasurer,
Controller 1993 80,000 145,000 2,500 27,681
and acting CFO,
IFG (5) 1992 80,000 100,000 1,100 15,083
J. Scott Spiker, 1994 $110,000 $190,000 6,700 $75,000(6)
Sr. VP, IFG (6) 1992 _ _ _ _
1991 _ _ _ _
</TABLE>
(1) Awarded with respect to such year in January or February of
the following year. See "Report of Compensation Committee on
Executive Compensation -- Compensation Philosophy." All options
are 10-year options, vesting over four years, having an exercise
price equal to the closing price per share of IFG Common Stock on
the date of grant as reported on the New York Stock Exchange.
(2) For 1994 and 1993, respectively, includes the following
amounts voluntarily deferred by the following named executive
officers pursuant to the IFG Executive Deferred Compensation
Plan: Mr. Weiser, $127,500 and $225,000; Mr. Smith, $85,000 and
$247,500; Mr. Appel, $127,500 and $135,000; and Mr. Reuss,
$36,000 and $29,000. The IFG Executive Deferred Compensation Plan
is a voluntary non-tax-qualified, deferred compensation plan in
which the executive officers of IFG and certain other managerial
or highly compensated employees of IFG or its subsidiaries (the
"Senior Executives") may participate. Under the IFG Executive
Deferred Compensation Plan, each Senior Executive may elect,
prior to the beginning of a fiscal year, to defer up to 30
percent of his or her discretionary bonus for that year. The
deferred amounts may be invested either in shares of IFG Common
Stock or in an alternate fixed income investment, but the
participating Senior Executive will only receive an employer
matching contribution on amounts invested in shares of IFG Common
Stock. For 1994 and 1993, the employer matching contribution was
equal to 331/3 percent of the deferred amount. Each participating
named executive officer has elected to have all deferred amounts
invested in shares of IFG Common Stock. Participants vest in
employer matching contributions after four years and are
immediately vested with respect to deferred amounts. Mr. Spiker
was not eligible to participate in the IFG Executive Deferred
Compensation Plan in 1994.
(3) For 1994 and 1993, respectively, represents: (a)
contributions in the following aggregate amounts made during the
fiscal year ended December 31 by IFG and/or its subsidiaries
pursuant to the IFG Profit Sharing Plan, Stock Bonus Plan and
Deferred Compensation Plan for Excess Contributions: Mr. Weiser,
$63,230 and $99,021; Mr. Smith, $46,502 and $87,146; Mr. Appel,
$34,999 and $45,346; and Mr. Reuss, $17,412 and $18,024; and (b)
matching contributions in the following amounts made by IFG
and/or its subsidiaries for certain of such executives pursuant
to the IFG Executive Deferred Compensation Plan on bonus amounts
earned by such executives for the fiscal year ended December 31,
but voluntarily deferred: Mr. Weiser, $42,458 and $74,925; Mr.
Smith, $28,305 and $82,418; Mr. Appel, $42,458 and $44,955; and
Mr. Reuss, $11,988 and $9,657. Mr. Spiker was not eligible to
participate in the IFG Profit Sharing Plan, Stock Bonus Plan and
Deferred Compensation Plan for Excess Contributions in 1994. For
1992, the entire amount represents contributions made during the
fiscal year ended December 31 by IFG and/or its subsidiaries for
such executives pursuant to the IFG Profit Sharing Plan, Stock
Bonus Plan and Deferred Compensation Plan for Excess
Contributions.
The IFG Profit Sharing Plan, Stock Bonus Plan and Deferred
Compensation Plan for Excess Contributions are broad-based plans
in which all employees of IFG and its subsidiaries may
participate (subject to certain eligibility requirements). Under
the IFG Profit Sharing Plan, IFG and each participating
subsidiary annually contributes 3 percent of all participants'
eligible compensation. In addition, the board of directors of
each company may elect to make an additional discretionary
contribution to such Plan. Such discretionary contributions for
all IFG companies equaled 2.44 percent of all eligible
compensation in 1994 and 5 percent of all eligible compensation
in each of 1993 and 1992 . Any contributions to which a
participant would otherwise have been entitled under the IFG
Profit Sharing Plan but that exceeded federal tax law limitations
were instead credited to an account established for such
participant pursuant to the IFG Deferred Compensation Plan for
Excess Contributions and earned interest at a crediting rate
established in accordance with such Plan. The IFG Deferred
Compensation Plan for Excess Contributions has been terminated
for compensation earned subsequent to December 31, 1994. Under
the IFG Stock Bonus Plan, participating employees receive
employer matching contributions at a rate of 50 percent on
voluntary, before-tax contributions of up to 5 percent of their
eligible compensation (subject to federal tax law limitations)
made by such employees to their accounts under the Plan.
Participants vest in employer contributions after five years
under the IFG Profit Sharing Plan, Stock Bonus Plan and Deferred
Compensation Plan for Excess Contributions.
(4) Effective February 3, 1994, Mr. Appel was named President and
Chief Operating Officer of DBI and resigned his former positions
as Chief Financial Officer of each of IFG and DBI. Mr. Weiser
resigned as President of DBI at the same time.
(5) Effective January 1, 1995, Mr. Reuss was named Executive Vice
President and Chief Financial Officer of DBI. He continues to
serve as acting Chief Financial Officer of IFG on an interim
basis.
(6) Mr. Spiker joined IFG as Senior Vice President and Director
of Strategic Planning & Corporate Development on February 1,
1994. In January 1995, he was appointed Chief Executive Officer
and President of IFG Asset Management Services, Inc. (formerly
Insight Investment Management, Inc.). He continues to serve as a
Senior Vice President of IFG. Under the terms of Mr. Spiker's
offer of employment, he was guaranteed a total cash compensation
for 1994 of $300,000 assuming that certain conditions were
satisfied. In addition, Mr. Spiker was paid $75,000 pursuant to a
loan agreement that provides that IFG will forgive such amount in
equal installments of $25,000 on each of March 1, 1995, 1996 and
1997 if he is still employed by the Company on such dates. If Mr.
Spiker ceases to be employed by the Company prior to March 1,
1997, the remaining principal balance of the loan, together with
interest thereon, will become immediately due and payable. Mr.
Spiker was also granted options to purchase 4,000 shares of IFG
Common Stock upon commencement of his employment.
OPTIONS AND STOCK APPRECIATION RIGHTS
The following tables summarize option grants made to the
executive officers named in the Summary Compensation Table with
respect to the year ended December 31, 1994, option exercises by
such named executive officers during the year ended December 31,
1994, and the potential realizable value of the options held by
such persons at December 31, 1994. No stock appreciation rights
("SARs") have been granted to any of the named executive
officers.
<TABLE>
Option/SAR Grants With Respect to Year Ended December 31, 1994
<CAPTION>
Individual Grants
- -----------------------------------------
% of Total
Options
/SARs
Granted
Number of to Exercise Potential Realizable
Securities Emplo- or Value At Assumed
Underlying yees Base Annual Rates of Stock
Options with Price Price Appreciation
/SARs Respect (per Expir- for Option Term (2)
Granted to share) ation -----------------------
Name (1) 1994 (1) Date 5%($38.69) 10%($61.60)
- -----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Irving
Weiser 33,000 16.4% $23.75 2/1/2005 $493,020 $1,249,050
David A.
Smith 22,000 10.9% $23.75 2/1/2005 $328,680 $832,700
John C.
Appel 22,000 10.9% $23.75 2/1/2005 $328,680 $832,700
Daniel J.
Reuss 2,700 1.3% $23.75 2/1/2005 $40,338 $102,195
J. Scott
Spiker 4,000 2.0% $31.25 2/1/2004 $78,600(3) $199,200(3)
2,700 1.3% $23.75 2/1/2005 40,338 102,195
----- --- -------- ----------
6,700 3.3% $118,938 $301,395
</TABLE>
(1) All of these options were granted on February 1, 1995, based
upon 1994 performance, except for 4,000 shares granted to Mr.
Spiker on February 1, 1994, in connection with the commencement
of his employment by the Company. See "Report of Compensation
Committee on Executive Compensation _ Compensation Philosophy"
and Note (6) to the Summary Compensation table. All such options
become exercisable as follows: 20 percent of such option shares
on the second anniversary of the date of grant; an additional 30
percent of such option shares on the third anniversary of the
date of grant; and the remaining 50 percent of such option shares
on the fourth anniversary of the date of grant. All options were
granted with an exercise price equal to the closing price per
share of IFG's Common Stock on the date of grant as reported on
the New York Stock Exchange.
(2) The "potential realizable value" shown represents the
potential gains based on annual compound stock price appreciation
of 5 percent and 10 percent from the date of grant through the
full 10-year option term. The amount in parentheses indicates
what the price would be for one share of IFG Common Stock at the
end of such 10-year period for the options granted February 1,
1995, at such rates of appreciation. The amounts given represent
assumed rates of appreciation only. Actual gains, if any, on
option exercises will depend on future performance of the IFG
Common Stock and overall stock market conditions. There can be no
assurance that the amounts reflected in this table will be
achieved.
(3) Based on assumed stock values of $50.90 and $81.05 at assumed
annual appreciation rates of 5% and 10%, respectively.
<TABLE>
Aggregate Option/SAR Exercises In Year Ended December 31, 1994,
and Value of Options/SARs Held at December 31, 1994
- -----------------------------------------------------------------
<CAPTION>
Value of
Number of Unexercised
Unexercised In-The-Money
Securities Options/
Underlying Options/ SARs at
SARs Held at December 31,
Shares December 31, 1994 1994
Acquired (Exercisable/ (Exercisable/
on Value Unexercisable) Unexercisable)
Name Exercise Realized(1) (2) (1)(2)
- -----------------------------------------------------------------
<S> <C> <C> <C> <C>
Irving
Weiser 4,000 $94,000 28,200/96,800 $424,725/$180,525
David A.
Smith 4,000 $91,500 23,500/74,700 $353,938/$144,063
John C.
Appel 3,200 $60,625 9,250/39,850 $138,219/$66,631
Daniel J.
Reuss 1,000 $23,750 2,700/4,900 $39,788/$14,188
J. Scott
Spiker _ _ 0/4,000 $0/$0
</TABLE>
(1) "Value" has been determined based upon the difference between
the per-share option exercise price and the closing price per
share of IFG Common Stock as reported on the New York Stock
Exchange at the date of exercise or December 31, 1994.
(2) Does not include the number or value of unexercisable options
granted subsequent to December 31, 1994, included in the Option
Grant table above.
COMPARATIVE STOCK PERFORMANCE
The graph below compares the cumulative total shareholder return
on IFG's Common Stock for the last five fiscal years with the
cumulative total return on the S&P 500 Index and the Regional
Sub-Index of the Lipper Analytical Brokerage Stock Price Index
over the same period (assuming the investment of $100 in each on
December 31, 1989, and the reinvestment of all dividends).
The following is a tabular depiction of the stock performance
line graph presented in the paper format on the Company's filing:
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
IFG $100.00 $58.83 $198.53 $213.93 $337.40 $278.76
Regional 100.00 81.81 215.56 240.88 316.51 268.14
S&P 500
Index 100.00 96.89 126.35 135.96 149.46 151.42
</TABLE>
(1) Total return calculations on the S&P 500 Index were performed
by Standard & Poor's Compustat Services, Inc.
(2) Total return calculations on the Regional Sub-Index of the
Lipper Analytical Brokerage Stock Price Index were performed by
Lipper Analytical Securities Corporation. This index is comprised
of 15 publicly held regional securities firms, including IFG, and
has been weighted based upon the market capitalizations of such
firms in accordance with Securities and Exchange Commission
rules.
COMPENSATION OF DIRECTORS
IFG's non-employee director compensation currently consists of
(i) base compensation in the amount of $15,000 per year; (ii)
$500 for attendance at each Board of Directors or Committee
meeting; (iii) an additional $1,500 per year for each of the
chairman of the Audit Committee and the chairman of the
Compensation and Organization Committee; and (iv) per diem
compensation of $500 per half day or $1,000 per whole day for
significant additional time spent on Company matters beyond the
scope of normal preparation for and attendance at Board and
Committee meetings. In addition, in order to provide additional
incentive for its non-employee directors to serve for significant
periods, IFG has entered into retirement agreements with each of
such directors. Such agreements provide that, upon retirement
from the Board after at least five years of service as a
director, a non-employee director will be paid an annual retainer
fee for the number of years served (up to a maximum of ten
years). The amount of the retainer is determined by multiplying
the annual base compensation rate in effect at the time of
retirement by a percentage equal to 10 percent for each year
served (up to a maximum of ten years). Each non-employee director
of IFG is also automatically granted upon election or reelection
to IFG's Board of Directors a five-year, non-qualified option to
purchase 2,000 shares of IFG's Common Stock which is first
exercisable six months after the date of grant. Such options are
granted with an exercise price equal to the closing price per
share of IFG Common Stock as reported on the New York Stock
Exchange on the date of grant. Additionally, pursuant to the IFG
Restricted Stock Plan for Non-Employee Directors approved by
IFG's stockholders in 1994, non-employee directors are offered
the opportunity, effective for the Board year beginning with the
1995 Annual Meeting, to elect to receive IFG Common Stock in lieu
of all or 50 percent of the $15,000 annual base compensation
referred to above. Under the Plan, electing directors are
entitled to receive restricted shares of IFG Common Stock having
a market value, based on the closing sale price per share of IFG
Common Stock on the New York Stock Exchange on the date of grant,
equal to 110 percent of the base compensation foregone. The
Restricted Stock Plan provides for vesting of such restricted
shares over a five-year period, as follows: 20 percent on the
third anniversary of the annual meeting with respect to which the
director has made the election; 30 percent on the fourth
anniversary of such date; and the remaining 50 percent on the
fifth anniversary of such date.
CERTAIN TRANSACTIONS
DBI and RPR are broker-dealers who extend credit from time to
time under Federal Reserve Regulation T to certain of IFG's
directors and executive officers and members of their immediate
families. All such loans are made in the ordinary course of
business and on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for
comparable transactions with other persons and do not involve
more than normal risk of collectibility or present other
unfavorable features.
Proposal 2 -- Ratification of Appointment of Auditors
The Board of Directors, based upon the recommendation of its
Audit Committee, has appointed KPMG Peat Marwick LLP as
independent auditors to audit the consolidated financial
statements of IFG and its subsidiaries for the current fiscal
year ending December 31, 1995, and to perform other appropriate
accounting services and recommends that the stockholders of IFG
ratify that appointment. KPMG Peat Marwick LLP audited IFG's
financial statements for the fiscal years ended December 31, 1992
through 1994. Representatives of KPMG Peat Marwick LLP will be
present at the 1995 Annual Meeting of Stockholders, will have an
opportunity to make a statement if they desire to do so and will
be available to respond to appropriate questions from
stockholders.
The affirmative vote of a majority of the outstanding shares of
IFG Common Stock present and entitled to vote at the 1995 Annual
Meeting is required to approve Proposal 2 ratifying the
appointment of KPMG Peat Marwick LLP. Proxies will be voted in
favor of Proposal 2 unless otherwise specified. If an executed
proxy card is returned and no instruction is given, the shares of
IFG Common Stock represented by such proxy will be voted in favor
of Proposal 2. If an executed proxy card is returned and the
stockholder has abstained from voting on Proposal 2, the shares
of IFG Common Stock represented by such proxy will be considered
present at the meeting for purposes of determining a quorum and
for purposes of calculating the vote with respect to Proposal 2,
but will not be considered to have been voted in favor of
Proposal 2.
Deadline for Submission of Stockholder Proposals
Any proposal by a stockholder which may properly be presented at
the next annual meeting of IFG's stockholders must be received at
IFG's principal executive offices, Dain Bosworth Plaza, 60 South
Sixth Street, P.O. Box 1160, Minneapolis, Minnesota 55440-1160,
not later than November 24, 1995.
General
The Board of Directors of IFG does not know of any other business
to come before the 1995 Annual Meeting of Stockholders. If any
other matters are properly brought before the meeting, however,
the persons named in the accompanying form of proxy will vote
such proxy in accordance with their best judgment.
The entire cost of soliciting proxies for the 1995 Annual Meeting
of Stockholders will be borne by IFG. In addition to soliciting
proxies by mail, officers, directors and other regular employees
of IFG or its subsidiaries may solicit proxies on behalf of the
Board of Directors of IFG in person or by telephone. IFG will
also request that brokers or other nominees who hold shares of
IFG Common Stock in their names for the benefit of other persons
forward proxy materials to, and obtain voting instructions from,
the beneficial owners of such stock at IFG's expense.
Your cooperation in giving this matter your immediate attention
and in returning your proxy promptly will be appreciated.
By Order of the Board of Directors
Carla J. Smith
Secretary
March 23, 1995
<PAGE>
Inter-Regional Financial Group, Inc.
Dain Bosworth Plaza
60 South Sixth Street
P.O. Box 1160
Minneapolis, Minnesota 55420-1160
(612) 371-7750
Upon written request, Inter-Regional Financial Group, Inc., will
furnish, without charge, to persons solicited by this Proxy
Statement a copy of its Annual Report on Form 10-K (excluding
exhibits) filed with the Securities and Exchange Commission for
its fiscal year ended December 31, 1994. Requests should be
addressed to Inter-Regional Financial Group, Inc., P.O. Box 1160,
Minneapolis, Minnesota 55440-1160, Attention: Carla J. Smith,
Secretary.
APPENDIX A
PROXY This Proxy is solicited on Behalf of the Board of
P.O. Box 160 Directors. The undersigned hereby appoints
Minneapolis, Richard D. McFarland and Irving Weiser, and each
Minnesota of them, with power to appoint a substitute, to
55440-1160 vote all shares the undersigned is entitled to vote
at the Annual Meeting of Stockholders of Inter-Regional
[LOGO] Financial Group, Inc. to be held on May 2, 1995,
and at all adjournments thereof, as specified
below on the matters referred to and in their
discretion upon any other matters which may be brought
before the meeting.
- ------------------------------------------------------------------
1. Election of __ For all nominees __ Withhold Authority
Directors listed below (except to vote for all
as marked to the nominees listed
contrary)* below
J.C. Appel, S.S. Boren, F.G. Fitz-Gerald, L. Perlman,
C.A. Rundell, Jr., R.L. Ryan, A.R. Schulze, Jr., D.A. Smith
and I. Weiser
*(Instruction: To withhold authority to vote for any individual
nominee, draw a line through that nominee's name.)
- -----------------------------------------------------------------
2. Ratification of appointment
of auditors __ For __ Against __ Abstain
- -----------------------------------------------------------------
3. Discretionary authority to vote on any other business that may
properly come before the meeting.
- -----------------------------------------------------------------
This proxy, where properly executed, will be voted in the manner
directed herein by the undersigned stockholder. If no direction
is made, this proxy will be voted FOR all nominees named in
Item 1 and FOR Proposals 2 and 3.
Please sign exactly as name appears below: When shares are held
by joint tenants, both must sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as
such. If a corporation, please sign in full corporate name by President
or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
Signature
Signature (if held jointly)
Dated: __________________, 1995.
