THIS DOCUMENT IS A CONFIRMING ELECTRONIC COPY OF THE PRELIMINARY PROXY
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
MARCH 15, 1996.
- ----------------------------------------------------------------------------
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)
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[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to
Section 240-14a-11(c) or Section 240.14a-12
Inter-Regional Financial Group, Inc.
------------------------------------
(Name of Registrant as Specified in its Charter)
------------------------------------
(Name of Person(s) Filing Proxy Statement if other
than the Registrant)
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<PAGE>
IFG
Inter-Regional Financial Group, Inc.
Dain Bosworth Incorporated
Rauscher Pierce Refsnes, Inc.
IFG Asset Management Services, Inc.
Regional Operations Group, Inc.
1996 Notice of Annual Meeting
and Proxy Statement
<PAGE>
March 28, 1996
To Our Stockholders,
You are cordially invited to attend the Annual Meeting of
IFG's Stockholders, which will be held at Joe C. Thompson
Amphitheater, Cityplace Conference Center, 2711 North
Haskell Avenue, Dallas, Texas, on Wednesday, May 1, 1996, at
3:00 p.m.
This booklet contains your official notice of the 1996
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 1996 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
-------------------------------------
Irving Weiser
Chairman, President and Chief
Executive Officer
<PAGE>
Official Notice of 1996 Annual Meeting of Stockholders
The 1996 Annual Meeting of Stockholders of Inter-Regional
Financial Group, Inc. ("IFG" or the "Company") will be held
at Joe C. Thompson Amphitheater, Cityplace Conference
Center, 2711 North Haskell Avenue, Dallas, Texas, on
Wednesday, May 1, 1996, at 3:00 p.m. for the following
purposes:
1. To elect eight directors to hold office for the ensuing
year;
2. To approve the IFG 1996 Stock Incentive Plan, which
would permit the issuance of up to 3,000,000 shares of IFG
Common Stock;
3. To amend IFG's Restated Certificate of Incorporation to
increase the number of authorized shares of IFG Common
Stock from 20,000,000 to 30,000,000;
4. To ratify the selection of KPMG Peat Marwick LLP as
independent auditors of IFG for the fiscal year ending
December 31, 1996; and
5. 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 13, 1996, 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
headquarters of IFG's subsidiary, Rauscher Pierce Refsnes,
Inc., Cityplace Center East, Suite 2400, 2711 North Haskell
Avenue, Dallas, Texas.
By Order of the Board of Directors
Carla J. Smith
---------------------------
Carla J. Smith
Secretary
<PAGE>
Minneapolis, Minnesota
March 28, 1996
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS WEDNESDAY, MAY 1, 1996
This Proxy Statement is bring furnished in connection with
the solicitation of proxies by the Board of Directors of
Inter-Regional Financial Group, Inc. ("IFG" or the
"Company") for use at the 1996 Annual Meeting of
Stockholders to be held on Wednesday, May 1, 1996, and at
any adjournments thereof. This Proxy Statement and the
accompanying proxy card are being mailed on or about March
28, 1996, to holders of record of shares of the Common Stock
of IFG as of the close of business on March 13, 1996. If
the enclosed proxy card is completed, signed and returned to
IFG prior to the 1996 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 13, 1996, IFG had outstanding 12,093,319 shares
of common stock, par value $.125 per share (the "Common
Stock"). Each holder of record of such shares as of the
close of business on March 13, 1996, 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 five percent of
IFG's Common Stock, by IFG's directors and director
nominees, by the current executive officers of IFG named in
the Summary Compensation Table appearing on page 8 and by
all directors and executive officers of IFG as a group.
Except as otherwise indicated, such information is provided
as of March 13, 1996, and the named beneficial owner
possesses sole voting and investment power with respect to
all shares. All share amounts have been adjusted to reflect
the three-for-two split of IFG's Common Stock effected
December 20, 1995.
<TABLE>
<CAPTION>
Amount and Nature
Name of Beneficial Title of of Beneficial
Owner of Class Class Ownership Percent
- ------------------ -------- ----------------- -------
<S> <C> <C> <C>
FMR Corp. Common 690,700 (1) 5.71%
John C. Appel Common 103,275 (2)(3)(4) *
J. Evans Attwell Common 5,000 *
Susan S. Boren Common 9,781 (2)(5) *
F. Gregory Fitz-Gerald Common 16,500 (2) *
Lawrence Perlman Common 15,300 (2) *
C.A. Rundell, Jr. Common 8,500 (2) *
Robert L. Ryan Common 9,000 (2) *
Arthur R. Schulze, Jr. Common 18,211 (2)(5) *
Irving Weiser Common 192,215 (2)(3)(4)(6) 1.59%
Louis C. Fornetti Common 18,300 (7) *
Jerry W. Hayes Common 20,383 (2)(3)(4) *
J. Scott Spiker Common 5,803 (2)(3)(4) *
All directors and
executive officers
as a group (15 persons) Common 428,775 (1)(2)(3)(4)
(5)(6)(7) 3.5%
_____________
* Less than 1%
</TABLE>
[FN]
(1) Information is based solely on a Schedule 13G
filed with the Securities and Exchange Commission by FMR
Corp. ("FMR"), 82 Devonshire Street, Boston, Massachusetts
02109, with respect to shares owned as of December 31, 1995.
FMR reports that it has (a) sole power to vote or direct the
vote of 213,450 shares, 188,850 of which are held in
institutional accounts managed by its bank subsidiary,
Fidelity Management Trust Company, and 24,600 of which are
held or controlled by its affiliate, Fidelity International
Limited, which provides investment advisory services to non-
U.S. investment companies, and (b) sole power to dispose of
or direct the disposition of 690,700 shares, 402,950 of
which are held in registered investment companies managed by
its subsidiary, Fidelity Management Research Company, a
registered investment adviser, 263,150 of which are held in
institutional accounts managed by Fidelity Management Trust
Company and 24,600 of which are held or controlled by
Fidelity International Limited.
(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,
25,950; Ms. Boren, 9,000; Mr. Fitz-Gerald, 10,500; Mr.
Perlman, 10,500; Mr. Rundell, 7,500; Mr. Ryan, 7,500; Mr.
Schulze, 10,500; Mr. Weiser, 96,750; Mr. Hayes, 5,850; Mr.
Spiker, 1,200; and all directors and executive officers as a
group (15 persons), 187,875.
(3) Includes the following number of shares held in
the IFG Stock Bonus Plan: Mr. Appel, 14,714; Mr. Weiser,
17,241; Mr. Hayes, 1,498; Mr. Spiker, 64; and all directors
and executive officers as a group (15 persons), 37,172.
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, 1995. As of February 29, 1996,
a total of 4,420,395 shares of Common Stock, or 36.6 percent
of the outstanding shares of Common Stock, 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, 32,386;
Mr. Weiser, 42,016; Mr. Hayes, 13,035; Mr. Spiker, 4,539;
and all directors and executive officers as a group (15
persons), 91,976. As of February 29, 1996, 268,378 shares
of Common Stock, or 2.2 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) Includes the following number of shares received
in lieu of cash compensation pursuant to the IFG Restricted
Stock Plan for Non-Employee Directors: Ms. Boren 481; Mr.
Schulze, 961; and all directors and executive officers as a
group (15 persons), 1,442. Voting of restricted shares held
pursuant to the Restricted Stock Plan for Non-Employee
Directors is passed through to the participating director.
Participants are not entitled to dispose of or pledge shares
held pursuant to the plan until such shares are fully
vested, and unvested shares are subject to forfeiture in
certain circumstances. Such shares become fully vested over
a five-year period with 20 percent, an additional 30 percent
and the remaining 50 percent on each of the third, fourth
and fifth anniversaries of the grant date.
(6) Includes 2,400 shares held in trust accounts for
the benefit of Mr. Weiser's children for which Mr. Weiser
has voting and dispositive power and excludes 420 shares
beneficially owned by Mr. Weiser's spouse and disclaimed by
Mr. Weiser
(7) Includes 18,300 shares of restricted stock issued
to Mr. Fornetti upon commencement of his employment. Mr.
Fornetti is not entitled to dispose of or pledge such
shares, and such shares are subject to forfeiture in certain
circumstances until such shares are fully vested. Mr.
Fornetti is, however, entitled to vote such shares and
receive distributions thereon. Such shares become vested 50
percent on each of December 31, 1996 and 1997, subject to
acceleration in certain circumstances.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), 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 IFG
and written representations that no other reports were
required, during the fiscal year ended December 31, 1995,
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
Eight individuals have been nominated for election to
IFG's Board of Directors at the 1996 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). Two of the nominees for election are officers
of IFG and its subsidiaries, Dain Bosworth Incorporated
("DBI") and/or Rauscher Pierce Refsnes, Inc. ("RPR")
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
eight 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 Exchange Act or the Investment Company
Act of 1940, as amended.
[PHOTO] JOHN C. APPEL
President and
Chief Operating Officer
Dain Bosworth Incorporated
John C. Appel, 47, 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 also serves as a director of Smith
Breeden Associates, a registered investment adviser.
[PHOTO] J. EVANS ATTWELL
Attorney at Law
Vinson & Elkins LLP
J. Evans Attwell, 64, has been nominated to stand for
election as a director of IFG at the 1996 Annual
Stockholders' Meeting. Mr. Attwell is an attorney with the
Houston-based law firm of Vinson & Elkins LLP. He has been a
partner in the firm since 1965 and served as its Managing
Partner from October 1981 through December 1991. Mr. Attwell
also serves as a director of American General Corporation
and Seagull Energy Corporation.
[PHOTO] SUSAN S. BOREN
Organizational Consultant
Susan S. Boren, 49, is currently acting as a private
organizational consultant. From 1981 through 1995, Ms. Boren
held various positions with Dayton Hudson Corporation and
its Department Store Division: from 1994 through 1995, she
was Senior Vice President, Customer Development/Direct
Response; from 1991 through 1994, she was Group Vice
President of Stores; and from 1987 through 1991, she was
Senior Vice President of Human Resources. 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
President
The ANSR Company, LLC
F. Gregory Fitz-Gerald, 54, is President of The ANSR
Company, LLC, a private company engaged in investment
research using genetic algorithms and evolutionary
computation. From 1991 to 1995, Mr. Fitz-Gerald was 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] C. A. RUNDELL, JR.
Private Investor
Financial Consultant
Rundell Enterprises
C. A. Rundell, Jr., 64, 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., and Redman Industries, Inc.
[PHOTO] ROBERT L. RYAN
Senior Vice President
Chief Financial Officer
Medtronic, Inc.
Robert L. Ryan, 52, 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., 65, 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 Co., Inc. and Sealright Co.,
Inc.
[PHOTO] IRVING WEISER
Chairman, President and Chief Executive Officer
Inter-Regional Financial Group, Inc.
Chairman and Chief
Executive Officer
Dain Bosworth Incorporated
Chairman and Acting Chief
Executive Officer
Rauscher Pierce Refsnes, Inc.
Irving Weiser, 48, has been chairman of IFG since May
1995, Chief Executive Officer of IFG since 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 1990 until 1994. Mr.
Weiser has also been Chairman of RPR since September 1995,
and acting Chief Executive Officer and President of RPR
since October 1995. Prior to 1985, Mr. Weiser was a partner
in the law firm of Dorsey & Whitney LLP. 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
administered the IFG 1986 Stock Option Plan, administers the
IFG Executive Deferred Compensation Plan and will administer
the IFG 1996 Stock Incentive Plan if it is approved by IFG's
stockholders at the 1996 Annual Meeting (see "Proposal 2 -
Approval of IFG 1996 Stock Incentive 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.
The Audit Committee, on which retiring director Lawrence
Perlman (chairman) and Messrs. Fitz-Gerald and Rundell
served, held three meetings in 1995. The Compensation and
Organization Committee, on which Messrs. Schulze (chairman)
and Ryan and Ms. Boren served, held six meetings in 1995.
The Board of Directors met five times in 1995. During 1995,
no director, other than Mr. Perlman, attended fewer than 75
percent of the meetings of the Board of Directors and
Committees upon which such director served. Mr. Perlman
attended five of eight total meetings (62.5 percent) for the
year.
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 the other executive officers of IFG named in the
accompanying tables. The Committee's mission 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 February of the following year. In evaluating
performance, both the achievement of annual financial and
nonfinancial 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 1995, constituted as much as 85
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 a central component of the IFG Long-Term Incentive
Program, the Committee annually awards to the Senior
Executives options to acquire shares of IFG's Common Stock.
Such options were previously awarded under the IFG 1986
Stock Option Plan, which terminated by its terms on February
11, 1996. Hereafter, the Committee will award options under
the IFG 1996 Stock Incentive Plan, provided such Plan is
approved by IFG's stockholders at the 1996 Annual Meeting of
Stockholders. See "Proposal 2 - Approval of IFG 1996 Stock
Incentive Plan." The Committee believes that stockholder
approval of such Plan is critical to its ability to
administer an appropriate Senior Executive compensation
program for the benefit of IFG's stockholders. 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 achieve IFG's longer-term strategic goals.
The level of options awarded to each Senior Executive is
linked to performance in that the award is generally
determined by applying a Long-Term Incentive Percentage
approved by the Committee for such Senior Executive to the
amount of total cash compensation (including discretionary
bonus compensation) approved by the Committee for such
Executive. The range of Long-Term Incentive Percentages was
initially approved by the Committee upon the recommendation
of an independent firm of management compensation
consultants. The range of Long-Term Incentive Percentages
was established 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"). 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 1995,
such matching contribution was set at a level equal to 50
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 have increased
and will continue to 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 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 1995 Senior Executive Compensation
The Committee met three times in January and February 1996
to determine annual discretionary bonuses and long-term
incentive compensation for the Senior Executives for 1995.
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 1995
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 11. 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 1995 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 nonfinancial
objectives for IFG recommended by management and approved by
the Board of Directors at the beginning of the year. The
Committee evaluated Mr. Weiser's performance with respect to
these and certain other personal, nonfinancial objectives.
After consideration of all of the above financial and
nonfinancial 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
determined to no longer grant additional stock options to
Mr. Weiser since the special grants of the last several
years had increased his level of potential ownership to the
desired level.
Compensation of Other Senior Executives. The Committee
approved individual bonus amounts for each of the Senior
Executives other than Mr. Weiser following a detailed
presentation by Mr. Weiser of his evaluation of each Senior
Executive's individual, departmental and company performance
and his recommendation of a bonus amount for each such
Senior Executive based on such evaluation. In developing his
evaluation of and bonus recommendations for the Senior
Executive, Mr. Weiser obtained advice from other appropriate
individuals, including, in particular, Mr. Appel with
respect to DBI Senior Executives. In reviewing departmental
and company financial performance for each of such Senior
Executives, Mr. Weiser 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, and similar
information available to the Company for a select group of
regional firms. Mr. Weiser also summarized for the
Committee the performance of each Senior Executive relative
to the financial and nonfinancial objectives established for
such Executive 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 Mr. Weiser and Mr. Appel, the
Committee also reviewed the more current publicly available
proxy statement information with respect to comparable
officers of the group of comparable publicly held regional
firms. After the Committee approved the Senior Executive
bonus amounts, 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 also reviews and approves the terms of
specific compensation arrangements being entered into by IFG
and/or its subsidiaries with certain individual Senior
Executives. The terms of Mr. Smith's severance agreement and
the terms of Mr. Fornetti's offer of employment, in each
case as described more fully below under "Other Executive
Officer Compensation Arrangements," were among the specific
compensation arrangements approved by the Committee during
1995. The Committee believes such arrangements are
consistent with IFG's overall compensation philosophy.
Application of Section 162(m). Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "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, and the
proposed IFG 1996 Stock Incentive Plan, if approved by IFG's
stockholders at the 1996 Annual Meeting of Stockholders,
will satisfy 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 1996 which will exceed $1,000,000 for purposes of
Section 162(m) of the Code.
Arthur R. Schulze, Jr., Chairman
Susan S. Boren
Robert L. Ryan
Members of the Compensation and
Organization Committee
OTHER EXECUTIVE OFFICER COMPENSATION ARRANGEMENTS
David A. Smith resigned as President and Chief Executive
Officer of RPR and as Executive Vice President and a member
of the Executive Committee of IFG effective September 30,
1995. Under the terms of an agreement dated September 26,
1995, between Mr. Smith and IFG, IFG agreed to pay Mr. Smith
a bonus for 1995 of $400,000. In addition, IFG agreed to
pay Mr. Smith $200,000 per year during each of 1996 and 1997
and $100,000 during 1998 in exchange for (and conditioned
upon) Mr. Smith's agreement not to compete with IFG,
directly or indirectly, through the close of business on
December 31, 1998 by (i) becoming employed or in any manner
affiliated with any of a list of specified brokerage firms
or any other firm engaging primarily in the general retail
or institutional investment banking or securities brokerage
or trading business in any state in which RPR maintains an
office (unless such firm's total revenues from all such
activities do not exceed $5 million) or (ii) assisting or
encouraging any employee or client of RPR to leave the firm
or transfer or materially reduce any investment account held
with RPR. Mr. Smith has the right to terminate his
obligations under such non-competition agreement for all or
any portion of 1998 in exchange for forfeiting a pro-rata
portion of the $100,000 otherwise due him for such year and
a payment to IFG of an additional $100,000. IFG may
terminate the agreement upon a breach or violation of any
material obligation imposed by the agreement. IFG also
agreed to accelerate the vesting dates of options Mr. Smith
then held to purchase 29,910 shares of IFG Common Stock at
prices ranging from $11.75 to $20.83 per share that
otherwise would have vested in February 1996, and options to
purchase 48,690 shares at prices ranging from $13.50 to
$20.83 per share that otherwise would have been vested in
February 1997. IFG also accelerated the expiration dates on
all outstanding options held by Mr. Smith to March 1, 1996.
Effective July 17, 1995, Louis C. Fornetti was named
Executive Vice President, Treasurer and Chief Financial
Officer of IFG. Under the terms of Mr. Fornetti's offer of
employment, Mr. Fornetti's annualized base salary was set at
$175,000. Mr. Fornetti was guaranteed a bonus of $400,000
for 1995 and a minimum combined base and bonus compensation
of $500,000 for 1996, assuming in each case that Mr.
Fornetti is employed by IFG at the time bonus payments are
made and that he has performed in a satisfactory and ethical
manner. In addition, upon commencement of his employment,
Mr. Fornetti was granted 10-year, nonqualified options to
purchase 37,500 shares of IFG Common Stock at a purchase
price of $20.417 per share under the IFG 1986 Stock Option
Plan and was issued 18,300 restricted shares of IFG Common
Stock. The options become vested 20 percent, an additional
30 percent and the remaining 50 percent on each of July 31,
of each of 1997, 1998 and 1999, respectively, assuming Mr.
Fornetti is still employed on such dates. The restricted
shares, which were granted to compensate Mr. Fornetti for
comparable long-term incentive payments he would have been
eligible to receive from his former employer, become vested
50 percent on each of December 31, 1996 and 1997. The
restricted shares are subject to forfeiture in the event Mr.
Fornetti resigns from or abandons his position with IFG or
is terminated by IFG for misconduct prior to the vesting
dates. In addition, the vesting of the restricted shares
shall be accelerated in the event Mr. Fornetti dies or
becomes disabled or his employment is terminated by IFG for
reasons other than misconduct or in the event of a change in
control of IFG prior to the applicable vesting date.
Mr. Spiker joined IFG as Senior Vice President and
Director of Strategic Planning and Corporate Development on
February 1, 1994. In January 1995, he was appointed Chief
Executive Officer and President of IFG Asset Management
Services, Inc. ("AMS") and became a member of IFG's
Executive Committee. 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 would
forgive such amount in equal installments of $25,000 on each
of March 1, 1995, 1996 and 1997 if he is still employed by
IFG on such dates. If Mr. Spiker ceases to be employed by
IFG 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
10-year, nonqualified options under the IFG 1986 Stock
Option Plan to purchase 6,000 shares of IFG Common Stock at
a purchase price of $20.833 upon commencement of his
employment. Such options become vested 20 percent, an
additional 30 percent and the remaining 50 percent on each
of February 1, 1996, 1997 and 1998, assuming Mr. Spiker is
still employed as of such dates.
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, each of
the four other most highly compensated executive officers of
IFG serving at December 31, 1995 and one former executive
officer of IFG.
<TABLE>
<CAPTION>
Long-Term
Compensation
-------------------
Annual Compensation Awards
------------------------ -------------------
Securities All
Name & Res- Underlying Other
Principal tricted Options Compensa-
Positions Year Salary Bonus(1)(2) Stock /SARs(1) tion(3)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Irving 1995 $250,000 $800,000 - 24,300 $167,338
Weiser,
Chairman,
Pres. &
CEO, IFG; 1994 250,000 525,000 - 49,500 105,688
Chairman &
CEO, DBI(4) 1993 250,000 950,000 - 60,000 173,946
John C.
Appel, 1995 $175,000 $625,000 - 13,900 $132,688
Pres. &
COO, DBI; 1994 175,000 425,000 - 33,000 77,457
Exec. VP,
IFG(4)(5) 1993 150,000 450,000 - 30,000 90,301
Louis C.
Fornetti, 1995 $73,580 $400,000 18,300 37,500 -
Exec. VP.,
Treas. 1994 - - - - -
& CFO,
IFG(6) 1993 - - - - -
Jerry W.
Hayes, 1995 $142,000 $258,000 - 4,600 $59,840
Chairman,
Pres. &
CEO, 1994 136,000 174,000 - 4,050 34,406
ROG(7) 1993 136,000 214,000 - 3,750 27,657
J. Scott
Spiker, 1995 $150,000 $225,000 - 4,300 $39,365
Pres. &
CEO, AMS; 1994 110,000 190,000 - 10,050 75,000
Sr. VP,
IFG(8) 1993 - - - - -
Former IFG Executive Officer:
David A.
Smith, 1995 $200,000 $400,000 - - $72,482
Chairman,
Pres. &
CEO, 1994 200,000 400,000 - 33,000 74,807
RPR;
Exec.VP,
IFG(9) 1993 200,000 825,000 - 45,300 169,564
</TABLE>
[FN]
(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. The number of
options shown as having been awarded in 1994 and 1993 have
been adjusted to reflect a three-for-two split of IFG's
Common Stock effected December 20, 1995.
(2) For 1995, 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, $240,000, $127,500
and $225,000; Mr. Appel, $187,500, $127,500 and $135,000;
Mr. Hayes, $77,400, $52,200 and $64,200; Mr. Spiker (1995
only), $67,500; and Mr. Smith, $85,000, $85,000 and
$247,500. 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. The employer-matching contribution was equal to 50
percent for 1995 and 33 1/3 percent for each of 1994 and
1993 of the deferred amount. For 1995, each named executive
officer participating 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.
Messrs. Fornetti and Spiker were not eligible to participate
in the IFG Executive Deferred Compensation Plan in 1995 and
1994, respectively.
(3) Represents for each of 1995, 1994 and 1993,
respectively: (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, $47,338, $63,230 and
$99,021; Mr. Appel, $38,938, $34,999 and $45,346; Mr. Hayes,
$21,140, $20,500 and $6,278; Mr. Spiker (1995 only) $5,615;
and Mr. Smith, $29,982, $46,502 and $87,146; and (b)
matching contributions in the following amounts made by IFG
and/or its subsidiaries for 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, $120,000, $42,458
and $74,925; Mr. Appel, $93,750, $42,458 and $44,955; Mr.
Hayes, $38,700, $13,906 and $21,379; Mr. Spiker (1995 only)
$33,750; and Mr. Smith, $42,500, $28,305 and $82,418.
Messrs. Fornetti and Spiker were not eligible to participate
in the IFG Profit Sharing Plan, Stock Bonus Plan, Deferred
Compensation Plan for Excess Contributions or Executive
Deferred Compensation Plan in 1995 and 1994, respectively.
Each of the IFG Profit Sharing Plan and Stock Bonus Plan
is, and the Deferred Compensation Plan for Excess
Contributions was, a broad-based plan 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 a percentage of all participants' eligible
compensation. The board of directors of each company
determines the level of such company's contribution to such
Plan, subject to a 3-percent minimum contribution
requirement. Such discretionary contributions for all IFG
companies equaled 4.6 percent, 5 percent and 8 percent of
all eligible compensation as defined for 1995, 1994 and
1993, respectively. Under the IFG Stock Bonus Plan,
participating employees receive employer-matching
contributions at a rate of 40 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
of continuous employment under the IFG Profit Sharing Plan,
Stock Bonus Plan and Deferred Compensation Plan for Excess
Contributions.
(4) Mr. Weiser also became acting President and Chief
Executive Officer of RPR effective October 1995 upon the
resignation of Mr. Smith, who formerly held such positions.
Mr. Weiser served as President and Chief Operating Officer
of DBI until February 3, 1994, when Mr. Appel was named to
such positions.
(5) 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. Appel remained an Executive Vice President
and member of the Executive Committee of IFG.
(6) Effective July 17, 1995, Mr. Fornetti was named
Executive Vice President, Treasurer and Chief Financial
Officer of IFG. For a description of certain compensation
arrangements under the terms of Mr. Fornetti's offer of
employment, including the grant of restricted shares of IFG
Common Stock, see "Other Executive Officer Compensation
Arrangements" above.
(7) Mr. Hayes was named President and Chief Executive
Officer of IFG's operations and clearing subsidiary,
Regional Operations Group, Inc. ("ROG") in May 1992. He
became a member of the Executive Committee of IFG effective
January 1, 1995.
(8) 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. ("AMS"), a subsidiary of IFG. He continues
to serve as a Senior Vice President and a member of the
Executive Committee of IFG. For a description of certain
compensation arrangements under the terms of Mr. Spiker's
offer of employment, see "Other Executive Officer
Compensation Arrangements" above.
(9) Mr. Smith resigned as President and Chief
Executive Officer of RPR and as Executive Vice President and
a member of the Executive Committee of IFG effective
September 30, 1995. For a description of certain
compensation arrangements with Mr. Smith under the terms of
his severance agreement, see "Other Executive Officer
Compensation Arrangements" above.
OPTIONS AND STOCK APPRECIATION RIGHTS
The following tables summarize option grants made to the
current executive officers and former executive officer
named in the Summary Compensation Table with respect to the
year ended December 31, 1995, option exercises by such
persons during the year ended December 31, 1995, and the
potential realizable value of the options held by such
persons at December 31, 1995. No stock appreciation rights
("SARs") have been granted to any of the named persons.
<TABLE>
Option/SAR Grants With Respect to Year Ended December 31, 1995
<CAPTION>
% of Totals
Options/SARs
Granted Potential Realizable
to Value At Assumed
Number of Emplo- Annual Rates of Stock
Securities yees Exercise Price Appreciation
Underlying With or Base for Option Term(2)
Options Respect Price Expir-
/SARs to (per ation 5% 10%
Name Granted(1) 1995 share)(1) Date ($36.45) ($58.03)
- --------------------------------------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
Irving
Weiser 24,300 12.1% $22.375 2/7/2006 $342,023 $866,417
John C.
Appel 13,900 6.9% $22.375 2/7/2006 $195,643 $495,605
Louis C.
Fornetti 37,500 18.7% $20.417 7/31/2005 $481,613 $1,220,363
Jerry W.
Hayes 4,600 2.3% $22.375 2/7/2006 $64,745 $164,013
J. Scott
Spiker 4,300 2.1% $22.375 2/7/2006 $60,523 $153,317
Former IFG Executive Officer:
David A.
Smith - - - - - -
</TABLE>
[FN]
(1) All of these options were granted on February 7,
1996, based upon 1995 performance, except for 37,500 shares
granted to Mr. Fornetti on July 31, 1995, in connection with
the commencement of his employment by IFG. See "Report of
Compensation Committee on Executive Compensation -
Compensation Philosophy" and "Other Executive Officer
Compensation Arrangements." 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. All share amounts and per-share exercise prices
shown have been adjusted to reflect the three-for-two split
of IFG's Common Stock effected December 20, 1995.
(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 7, 1996, at such rates of
appreciation. With respect to the options granted to Mr.
Fornetti on July 31, 1995, the value of one share of IFG
Common Stock at the end of such 10-year period at such
assumed rates of appreciation would be $33.26 and $52.96,
respectively. 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.
<TABLE>
Aggregate Option/SAR Exercises
In Year Ended December 31, 1995,
and Value of Options/SARs Held at
December 31, 1995
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Securities Options/
Underlying SARs at
Options/ December 31,
SARs Held at 1995
Shares December 31 1995 (Exercisable
Acquired on Value (Exercisable/ /Unexercis-
Name Exercise(1) Realized(2) Unexercisable)(3) able)(2)(3)
- ------ ----------- ----------- ----------------- ------------
<S> <C> <C> <C> <C>
Irving
Weiser 6,000 $97,500 96,750/134,250 $1,409,810/$1,109,970
John C.
Appel 5,100 $76,500 25,950/69,450 $300,916/$563,057
Louis C.
Fornetti - - - /37,500 - /$181,238
Jerry W.
Hayes - - 9,600/8,400 $132,928/$67,252
J. Scott
Spiker - - 1,200/8,850 - /$59,340
Former IFG Executive Officer:
David A.
Smith 131,250 $1,422,565 -/- -/-
</TABLE>
[FN]
(1) All share amounts have been adjusted to reflect
the three-for-two split of IFG's Common Stock effected
December 20, 1995.
(2) "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 on the date of exercise or
December 31, 1995.
(3) Does not include the number or value of
unexercisable options granted subsequent to December 31,
1995, included in the Option Grant table above.
COMPARATIVE STOCK PERFORMANCE
The graph below compares the cumulative total stockholder
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, 1990, and the
reinvestment of all dividends).
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
IFG $100.00 $337.49 $363.65 $573.54 $473.24 $815.05
Regional 100.00 263.49 294.44 386.88 327.75 467.13
S&P 500
Index 100.00 130.40 140.32 154.25 156.28 214.93
</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 composed 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 (a) base compensation in the amount of $15,000
per year; (b) $500 for attendance at each Board of Directors
or Committee meeting; (c) 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
fiscal year served (up to a maximum of ten years).
Pursuant to the now expired IFG 1986 Stock Option Plan,
each non-employee director of IFG was also automatically
granted, upon election or reelection to IFG's Board of
Directors, a five-year, nonqualified option to purchase
2,000 shares of IFG's Common Stock which vested in full six
months after the date of grant. Such options were 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. The number of shares to be
received upon exercise and the per- share exercise price of
all such options outstanding on December 20, 1995, were
adjusted in accordance with their terms to reflect the
three-for-two split of IFG's Common Stock effected on such
date. Under the terms of the IFG 1996 Stock Incentive Plan,
each non-employee director of IFG will automatically be
granted, upon each election or reelection to IFG's Board of
Directors, a five-year, nonqualified option to purchase
2,000 shares of IFG's Common Stock, which will become vested
in full six months after the date of grant. Such options
will be 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. See "Proposal 2 -
Approval of IFG 1996 Stock Incentive Plan."
Additionally, pursuant to the IFG Restricted Stock Plan
for Non-Employee Directors (the "Restricted Stock Plan")
approved by IFG's stockholders in 1994, non-employee
directors have been offered the opportunity to elect to
receive IFG Common Stock in lieu of all or 50 percent of the
$15,000 annual base compensation referred to above.
Directors who have elected to participate in the Plan
received 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; an
additional 30 percent on the fourth anniversary of such
date; and the remaining 50 percent on the fifth anniversary
of such date. Such shares also vest automatically if the
participating director dies, becomes permanently disabled or
retires in accordance with IFG's then current Board
retirement policy. Upon approval of the 1996 Stock Incentive
Plan by IFG's stockholders, the Restricted Stock Plan will
be merged into the 1996 Stock Incentive Plan. The 1996 Stock
Incentive Plan will likewise offer non-employee directors
the opportunity to elect to receive restricted shares of IFG
Common Stock in lieu of all or 50 percent of the $15,000
annual base compensation referred to above. Such shares
would also have a market value on the date of grant equal to
110 percent of the compensation foregone, however, all such
shares would become fully vested on the first anniversary of
the date of grant rather than from three to five years after
the date of grant as provided under the Restricted Stock
Plan. Such vesting would also be accelerated in the event
the participating director dies, becomes disabled or retires
in accordance with IFG's then current Board retirement
policy or upon a change in control. See "Proposal 2 -
Approval of 1996 Stock Incentive Plan."
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 collectability
or present other unfavorable features.
Under the terms of Mr. Spiker's offer of employment, he
was paid $75,000 pursuant to a loan agreement providing that
$25,000 of such amount will be forgiven on each of March 1,
1995, 1996 and 1997, if he is still employed on such dates.
See "Other Executive Officer Compensation Arrangements."
Proposal 2 - Approval of IFG 1996 Stock Incentive Plan
The Board of Directors, upon the recommendation of the
Compensation and Organization Committee, approved the
adoption of the IFG 1996 Stock Incentive Plan (the "Plan")
effective as of March 22, 1996, subject to the approval of
the Plan by IFG's stockholders at the 1996 Annual Meeting.
The following is a description of the material terms and
conditions of the Plan. Copies of the Plan may be obtained,
without charge, upon request to Carla J. Smith, the
Secretary of IFG, at IFG's principal executive offices, Dain
Bosworth Plaza, 60 South Sixth Street, P.O. Box 1160,
Minneapolis, MN 55440-1160, and will also be available for
inspection at the 1996 Annual Meeting of Stockholders.
The purpose of the Plan is to promote the interests of IFG
and its stockholders by aiding IFG in attracting and
retaining management personnel and non-employee directors
capable of providing strategic direction to, and assuring
the future success of, IFG. Awards under the Plan will offer
such personnel and directors and other employees as
determined by the Committee from time to time incentives to
put forth maximum efforts for the success of IFG's business
and an opportunity to acquire a proprietary interest in IFG,
thereby aligning their interests with the interests of IFG's
stockholders. These goals are consistent with the
principles of IFG's executive compensation program described
above in "Report of Compensation Committee on Executive
Compensation." If approved by IFG's stockholders, the Plan
will become an important component of that program. The Plan
replaces the IFG 1986 Stock Option Plan, which terminated by
its terms on February 11, 1996. As described below under
"Non-Employee Directors - Merger of Restricted Stock Plan,"
the Plan will also supersede the Restricted Stock Plan.
Administration
With the exception of the provisions applicable to non-
employee directors, which are discussed below, the Plan is
administered by the Compensation and Organization Committee
of the Board of Directors (the "Committee"). The Committee
has the authority to select the individuals to whom awards
are granted, to determine the types of awards to be granted
and the number of shares of IFG's Common Stock covered by
such awards, to set the terms and conditions of such awards,
and to determine whether the payment of any amounts received
under any award shall or may be deferred. The Committee has
the authority to establish rules for the administration of
the Plan; determinations and interpretations with respect to
the Plan are at the sole discretion of the Committee, whose
determinations and interpretations are binding on all
interested parties. The Committee may delegate its powers
and duties under the Plan to one or more officers with
respect to individuals who are not subject to Section 16 of
the Exchange Act; provided, however, that the Committee may
not delegate any of its powers and duties under the Plan in
such a manner as would fail to comply with any of the
requirements of Section 162(m) of the Code.
Eligible Participants
Any employee, officer, consultant or independent
contractor of IFG and its affiliates selected by the
Committee is eligible to receive an award under the Plan.
The Plan will be used to grant options to Senior Executives
under the IFG Long-Term Incentive Program and will become a
central component of such program. See "Report of
Compensation Committee on Executive Compensation -
Compensation Philosophy" above. The Plan is also intended to
be used to grant options to other employees of IFG and its
subsidiaries pursuant to award programs such as the IFG 1%
Club and as otherwise determined from time to time by the
Committee. The Plan will also be used to grant options
automatically to non-employee directors upon each election
or reelection to the Board and to grant restricted shares of
IFG Common Stock to non-employee director electing to
receive such shares in lieu of all or 50 percent of the base
compensation otherwise payable to such director, in each
case as described under "Non-Employee Directors" below. The
amount, type and recipients of awards under the Plan, other
than awards automatically granted to or offered to non-
employee directors, have not yet been determined.
Terms of the Plan
The Plan permits the granting of a variety of different
types of awards: (a) stock options, including incentive
stock options meeting the requirements of Section 422 of the
Code, and stock options that do not meet such requirements
(non-qualified stock options); (b) stock appreciation rights
(SARs); (c) restricted stock and restricted stock units; (d)
performance awards; (e) dividend equivalents; and (f) other
awards valued in whole or in part by reference to or
otherwise comprised of or based upon IFG's Common Stock
("other stock-based awards"). Awards may be granted alone,
in addition to, in tandem with, or in substitution for any
other award granted under the Plan or any other plan.
Awards may be granted for no cash consideration or for such
minimal cash consideration as may be required by applicable
law. Awards may provide that upon the grant or exercise
thereof the holder will receive cash, shares of Common Stock
or other securities, awards or property, or any combination
thereof, as the Committee shall determine. The exercise
price per share under any stock option, the grant price of
any SAR, and the purchase price of any security which may be
purchased under any other stock-based award under the Plan
may not be less than 100 percent of the fair market value of
IFG's Common Stock on the date of the grant of such option,
SAR or other stock-based award. Determinations of fair
market value under the Plan are made in accordance with
methods and procedures established by the Committee.
Options may be exercised by payment in full of the
exercise price, either in cash or, at the discretion of the
Committee, in whole or in part by the tendering of shares of
Common Stock or other consideration having a fair market
value on the date the option is exercised equal to the
exercise price. The Plan provides that the Committee may
grant "reload options," separately or together with another
option, and may establish the terms and conditions of such
reload options. Pursuant to a reload option, the optionee
would be granted a new option when the payment of the
exercise price of the option to which such reload option
relates is made by using shares of Common Stock owned by the
optionee. The new option granted upon such exercise would
be an option to purchase the number of shares not exceeding
the sum of (a) the number of shares of Common Stock tendered
as payment upon the exercise of the option to which such
reload option relates and (b) the number of shares of Common
Stock tendered or withheld as payment of the amount to be
withheld under applicable tax laws in connection with the
exercise of the option to which such reload option relates.
Reload options may be granted with respect to options
previously granted under the Plan or any other stock option
plan of IFG, and may be granted in connection with any
option granted under the Plan or any other such plan at the
time of such grant. Such reload options shall have a per-
share exercise price equal to the fair market value as of
the date of grant of the new option. Any such reload option
shall be subject to availability of sufficient shares for
grant under the Plan. Shares surrendered as part or all of
the exercise price of the option to which it relates that
have been owned by the optionee less than six months will
not be counted for purposes of determining the number of
shares that may be purchased pursuant to a reload option.
The holder of an SAR is entitled to receive the excess of
the fair market value (calculated as of the exercise date
or, if the Committee shall so determine, as of anytime
during a specified period before or after the exercise date)
of a specified number of shares over the grant price of the
SAR.
Shares of restricted stock and restricted stock units will
be subject to such restrictions as the Committee may impose
(including any limitations on the right to vote or the right
to receive dividends), which restrictions may lapse
separately or in combination at such time or times, in such
installments or otherwise as the Committee may determine.
Restricted stock may not be transferred by the holder until
the restrictions established by the Committee lapse.
Holders of restricted stock units have the right, subject to
any restrictions imposed by the Committee, to receive shares
of Common Stock at some future date. Upon termination of
the holder's employment during the restriction period,
restricted stock and restricted stock units are forfeited,
unless the Committee determines otherwise.
Performance awards provide the holder thereof the right to
receive payments, in whole or in part, upon the achievement
of such goals during such performance periods as the
Committee shall establish. A performance award granted
under the Plan may be denominated or payable in cash, shares
of Common Stock or restricted stock or restricted stock
units, or other securities, awards or property. Dividend
equivalents entitle the holder thereof to receive payments
(in cash, shares or otherwise, as determined by the
Committee) equivalent to the amount of cash dividends with
respect to a specified number of shares. The Committee is
also authorized to establish the terms and conditions of
other stock and stock-based awards.
Restrictions on Awards and Transfers
Under the Plan, no person who is an employee of IFG at the
time of grant may be granted any award or awards, the value
of which is or are based solely on an increase in the value
of shares of IFG Common Stock after the date of grant, of
more than 150,000 shares, in the aggregate, in any calendar
year. The foregoing annual limitation specifically includes
the grant of any awards representing "qualified performance-
based compensation" within the meaning of Section 162(m) of
the Code.
No award granted under the Plan may be assigned,
transferred, pledged or otherwise encumbered by the
individual to whom it is granted, otherwise than by will or
the laws of descent and distribution, except that the
Committee may permit the designation of a beneficiary. Each
award is exercisable, during such individual's lifetime,
only by such individual, or, if permissible under applicable
law, by such individual's guardian or legal representative.
The aggregate number of shares of IFG's Common Stock which
may be issued under all awards granted under the Plan is
3,000,000 (subject to adjustment as described below). If
any shares of Common Stock subject to any award or to which
an award relates are not purchased or are forfeited, or if
any such award terminates without the delivery of shares,
the shares previously set aside for such awards will be
available for future awards under the Plan. Notwithstanding
the foregoing, the total number of shares of Common Stock
that may be purchased upon exercise of incentive stock
options granted under the Plan may not exceed 3,000,000,
subject to adjustment as described below and in Section 422
or 424 of the Code or any successor provision. Shares
relating to awards which allow the holder to receive or
purchase shares will be counted against the aggregate number
of shares available for granting awards under the Plan.
If any dividend or other distribution, recapitalization,
stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase,
or exchange of shares of Common Stock or other securities of
IFG, issuance of warrants or other rights to purchase shares
of Common Stock or other securities of IFG, or other similar
corporate transaction or event affects the shares of Common
Stock so that an adjustment is appropriate in order to
prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan, the
Committee shall, in such manner as it deems equitable,
adjust any or all of (a) the number and type of shares (or
other securities or property) which thereafter may be made
the subject of awards, (b) the number and type of shares (or
other securities or property) subject to outstanding awards
and (c) the exercise price with respect to any award.
Termination
The Plan terminates on March 21, 2006, and no awards may
be made after that date. However, unless otherwise
expressly provided in the Plan or an applicable award
agreement, any award granted may extend beyond the end of
such period.
Amendment
The Board of Directors may amend, alter or discontinue the
Plan at any time, provided that stockholder approval must be
obtained for any such action that, absent such stockholder
approval, would (a) cause Rule 16b-3 under the Exchange Act
to become unavailable with respect to the Plan; (b) violate
the rules or regulations of the New York Stock Exchange or
any other securities exchange on which IFG's Common Stock
may then be listed, or any rules or regulations of the
National Association of Securities Dealers, Inc. or other
self-regulatory body applicable to IFG; or (c) cause IFG to
be unable, under the Code, to grant incentive stock options
under the Plan. The Committee may correct any defect,
supply any omission, or reconcile any inconsistency in the
Plan or any award agreement in the manner and to the extent
it shall deem desirable to carry the Plan into effect. The
Committee may waive any condition of or any rights of IFG
under any outstanding award, prospectively or retroactively,
but the Committee may not amend or terminate any
outstanding award, prospectively or retroactively, without
the consent of the holder or beneficiary of the award.
The closing price per share of IFG's Common Stock on March
13, 1996, as reported on the New York Stock Exchange, was
$21.
Non-employee Directors
Automatic Option Grants. If the Plan is approved by IFG's
stockholders, each non-employee director will automatically
be granted upon each election or reelection a nonqualified
option to purchase 2,000 shares of Common Stock at an
exercise price equal to 100 percent of the fair market value
per share on the date of grant. Such options shall become
vested in full six months after the date of grant and shall
terminate on the fifth anniversary of the date of grant.
Merger of Restricted Stock Plan. If the Plan is approved
by IFG's stockholders, IFG will merge the Restricted Stock
Plan into the Plan. The Restricted Stock Plan, which was
approved by IFG stockholders in 1994, permits and the Plan
will permit non-employee directors to irrevocably elect,
once per year, to receive, in lieu of 50 percent or 100
percent of the annual cash base compensation such director
would otherwise be entitled to receive for serving on IFG's
Board of Directors for the year, restricted shares of IFG's
Common Stock having a market value on the date of grant
(based upon the closing price per share as reported on the
New York Stock Exchange) equal to 110 percent of the base
compensation foregone, rounded up to the nearest whole
number of shares. Restricted shares issued pursuant to the
Restricted Stock Plan vest 20 percent , an additional 30
percent and the remaining 50 percent on each of the third,
fourth and fifth anniversaries of the date of grant.
Restricted shares issued pursuant to the Plan will vest 100
percent on the first anniversary of the date of grant. The
proposed reduction in the vesting period would enable non-
employee directors to obtain unrestricted shares after one
year, but would deny them the ability to defer the
recognition of ordinary income thereafter for subsequent
years.
Elections by non-employee directors to receive restricted
shares in lieu of fees under either the Restricted Stock
Plan or the Plan may be made annually and must be made at
least six months prior to the annual meeting of stockholders
at which such non-employee director is elected in order to
qualify for certain transaction exemptions under the federal
securities laws. Restricted shares to be issued pursuant to
irrevocable elections made by Mr. Schulze to receive
restricted shares in even lieu of 100 percent and Ms. Boren
to receive restricted shares in lieu of 50 percent of base
compensation, otherwise payable for service on IFG's Board
during 1996 will be issued pursuant to and contain the
reduced vesting provision set forth in the Plan. IFG may
either issue new shares of Common Stock or purchase shares
of Common Stock in the open market to fulfill the
requirements of the Plan.
Certificates representing shares of restricted stock
granted to participating non-employee directors will be
issued as of the date of the annual meeting of IFG's
stockholders in advance of which a deferral election has
been made in the name of each electing non-employee director
with appropriate legends concerning applicable restrictions
and will be held by IFG until such restrictions have been
satisfied or the shares have been forfeited. Restricted
stock granted to any participating non-employee director
under the Plan shall be subject to forfeiture until vested.
Except as otherwise provided in the Plan, a participating
non-employee director will have all voting, dividend,
liquidation and other rights with respect to restricted
stock issued to the participating non-employee director
under the Plan as if such participating non-employee
director were a holder of record of unrestricted shares;
provided that, if any dividend is declared and paid by IFG
in any form other than cash, such non-cash dividend shall be
subject to the same vesting schedule, forfeiture terms and
transferability restrictions as are applicable to the
restricted stock on which such dividends were paid.
Except as otherwise set forth below, the holder of
restricted stock may not sell, transfer, pledge, subject to
lien, assign or otherwise hypothecate such restricted stock
until vested. Restricted stock granted under the Plan shall
be entirely forfeited (but any cash dividends previously
paid with respect thereto shall be retained by the non-
employee director) in the event that the participating non-
employee director ceases to be a director for any reason
other than as set forth below prior to becoming fully
vested. A breach by a non-employee director of the terms and
conditions of the Plan shall cause a forfeiture of all
restricted stock which has not vested as of the date of such
breach.
All restrictions on restricted stock issued to a non-
employee director under the Plan lapse upon the earliest to
occur of the following: (i) the first anniversary of the
date of grant; (ii) the date of the holder's death or
disability; (iii) the date on which the holder retires from
the Board of Directors in accordance with IFG's then current
Board retirement policy; or (iv) the tenth day following the
date on which a "Change of Control" has occurred. "Change
of Control" events include: (a) a person or group becoming
the beneficial owners of 35 percent or more of the voting
power of all of the outstanding IFG voting securities; (b)
IFG's stockholders having approved either a merger in which
IFG is not the surviving entity, a sale of all or
substantially all of IFG's assets, or a plan of liquidation
or dissolution of IFG; (c) the directors who are
unaffiliated with an "Acquiring Person" (as defined in the
Plan) and who were members of the Board of Directors at the
time the Plan was adopted, or were nominated by such
directors (collectively, the "Continuing Directors"), are no
longer a majority of the Board, or (d) a majority of
Continuing Directors determine, in their sole discretion,
that there has been a change of control of IFG.
Upon the lapsing of the restrictions on any shares of
restricted stock, such shares will become unrestricted
shares vested in the participating non-employee director,
and any legends regarding the restrictions affixed to the
certificates representing such shares will be removed. A
participating non-employee director is entitled to request
delivery of the certificate or certificates representing
such unrestricted shares at any time after such vesting has
occurred. IFG will cause delivery of such certificate or
certificates to be made as soon as practicable after the
lapsing of all restrictions. A participating non-employee
director will be entitled to designate a beneficiary to
receive the restricted stock that has vested upon such
director's death. In the event of a participating non-
employee director's death, payment of any amounts due under
the Plan will be made to such director's legal
representatives.
Federal Tax Consequences
The following is a summary of the principal federal income
tax consequences generally applicable to awards under the
Plan.
The grant of an option or SAR is not expected to result in
any taxable income to the recipient. The holder of an
incentive stock option generally will have no taxable income
upon exercising the incentive stock option (except that a
liability may arise pursuant to the alternative minimum
tax), and IFG will not be entitled to a tax deduction when
an incentive stock option is exercised. Upon exercising a
nonqualified stock option, the optionee must recognize
ordinary income equal to the excess of the fair market value
of the shares of Common Stock acquired on the date of
exercise over the exercise price, and IFG will be entitled
at that time to a tax deduction in the same amount. Upon
exercising a SAR, the amount of any cash received and the
fair market value on the exercise date of any shares of
Common Stock received are taxable to the recipient as
ordinary income and deductible by IFG. The tax consequence
to an optionee upon a disposition of shares acquired through
the exercise of an option or SAR will depend on how long the
shares have been held and upon whether such shares were
acquired by exercising an incentive stock option or by
exercising a nonqualified stock option or SAR. Generally,
there will be no tax consequence to IFG in connection with
disposition of shares acquired under an option, except that
IFG may be entitled to a tax deduction in the case of a
disposition of shares acquired under an incentive stock
option before the applicable incentive stock option holding
periods set forth in the Code have been satisfied.
With respect to other awards granted under the Plan that
are payable either in cash or shares of Common Stock that
are either transferable or not subject to substantial risk
of forfeiture, the holder of such an award must recognize
ordinary income equal to the excess of (a) the cash or the
fair market value of the shares of Common Stock received
(determined as of the date of such receipt) over (b) the
amount (if any) paid for such shares of Common Stock by the
holder of the award, and IFG will be entitled at that time
to a deduction for the same amount. With respect to an
award that is payable in shares of Common Stock that are
restricted as to transferability and subject to substantial
risk of forfeiture, unless a special election is made
pursuant to the Code, the holder of the award must recognize
ordinary income equal to the excess of (i) the fair market
value of the shares of Common Stock received (determined as
of the first time the shares become transferable or not
subject to substantial risk of forfeiture, whichever occurs
earlier) over (ii) the amount (if any) paid for such shares
of Common Stock by the holder, and IFG will be entitled at
that time to a tax deduction in the same amount.
Special rules may apply in the case of individuals subject
to Section 16 of the Exchange Act. In particular, unless a
special election is made pursuant to the Code, shares
received pursuant to the exercise of a stock option or SAR
may be treated as restricted as to transferability and
subject to a substantial risk of forfeiture for a period up
to six months after the date of exercise. Accordingly, the
amount of any ordinary income recognized, and the amount of
IFG's tax deduction, are determined as of the end of such
period.
Under the Plan, the Committee may permit participants
(other than non-employee directors) receiving or exercising
awards, subject to the discretion of the Committee and upon
such terms and conditions as it may impose, to surrender
shares of Common Stock (either shares received upon the
receipt or exercise of the award or shares previously owned
by the optionee) or other property to IFG to satisfy federal
and state tax obligations. In addition, the Committee may
grant, subject to its discretion and such rules as it may
adopt, a bonus to a participant in order to provide funds to
pay all or a portion of federal and state taxes due as a
result of the receipt or exercise of (or lapse of
restrictions relating to) an award. The amount of any such
bonus will be taxable to the participant as ordinary income,
and IFG will have a corresponding deduction equal to such
amount (subject to the usual rules concerning reasonable
compensation).
Board Recommendation
The Board of Directors recommends a vote FOR Proposal 2 to
adopt the IFG 1996 Stock Incentive Plan. The affirmative
vote of a majority of the shares of IFG Common Stock present
and entitled to vote at the 1996 Annual Meeting is necessary
to approve Proposal 2. 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. If an executed
proxy is returned by a broker holding shares in street name
and the broker does not vote with respect to Proposal 2
because the beneficial owner of the shares represented by
such proxy has not given the broker authority to do so, such
shares will be considered present at the meeting for
purposes of determining a quorum, but will not be considered
to be represented at the meeting for purposes of calculating
the vote with respect to Proposal 2.
Proposal 3 - Approval of Amendment to Restated Certificate
of Incorporation to Increase Authorized Common Stock
The IFG Board of Directors has determined that Article
Fourth of IFG's Restated Articles of Incorporation should be
amended and has voted to submit an amendment to IFG's
stockholders for adoption. The proposed amendment to
Article Fourth would increase the number of authorized
shares of Common Stock, par value $.125, from 20,000,000 to
30,000,000 and the total number of shares of stock which IFG
has the authority to issue from 22,501,940 to 32,501,940.
As of March 13, 1996, there were 12,093,319 shares of
Common Stock outstanding, 159,000 shares reserved for future
issuance pursuant to the IFG Stock Bonus Plan, 2,198,309
shares reserved for future issuance upon exercise of options
granted under the IFG 1986 Stock Option Plan and 148,558
shares reserved for future issuance pursuant to the
Restricted Stock Plan. As of March 13, 1996, there were no
shares of any class of Preferred Stock outstanding.
The additional shares of Common Stock for which
authorization is sought would be a part of the existing
class of Common Stock and, if and when issued, would have
the same rights and privileges as the shares of Common Stock
presently outstanding. Such additional shares would not
(and the shares of Common Stock presently outstanding do
not) entitle the holders thereof to preemptive or cumulative
voting rights.
Purposes and Effects of the Amendment
The Board of Directors believes that additional authorized
shares of Common Stock will enable IFG to issue additional
shares of Common Stock pursuant to the proposed IFG 1996
Stock Incentive Plan and to take timely advantage of market
conditions and the availability of favorable financing and
acquisition opportunities without the delay and expense
associated with convening a special stockholders' meeting.
The shares of Common Stock could be used for the grant of
stock options, acquisition by IFG of businesses or
properties, equity financing, stock dividends and other
general corporate purposes.
Unless required by law or by the rules of any stock
exchange on which IFG's Common Stock may in the future be
listed, no further authorized vote by the stockholders will
be sought for any issuance of shares of Common Stock. Under
existing New York Stock Exchange, Inc. regulations, approval
by a majority of the holders of Common Stock would
nevertheless be required in connection with any transaction
or series of related transactions that would result in the
original issuance of additional shares of Common Stock,
other than in a public offering for cash, (a) if such
additional shares of Common Stock (including securities
convertible into or exercisable for Common Stock) has, or
will have upon issuance, voting power equal to or in excess
of 20 percent of the voting power outstanding before the
issuance of the Common Stock; (b) if the number of such
additional shares of Common Stock is or will be equal to or
in excess of 20 percent of the number of shares of Common
Stock outstanding before the issuance of such additional
shares; or (c) if the issuance would result in a change in
control of IFG.
Although the increase in authorized but unissued shares of
Common Stock is designed to enable IFG to grant stock
options under the IFG 1996 Stock Incentive Plan, to consider
potential acquisitions and to use for general corporate
purposes, the increase in the authorized but unissued shares
of Common Stock could make a change in control of IFG more
difficult to achieve. Under certain circumstances, such
shares of Common Stock could be used to create voting
impediments to frustrate persons seeking to effect a
takeover or otherwise gain control of IFG. Such shares
could be sold privately to purchasers who might side with
the Board of Directors in opposing a takeover bid that the
Board determines is not in the best interests of IFG and its
stockholders.
The amendment also may have the effect of discouraging an
attempt by another person or entity, through acquisition of
a substantial number of shares of Common Stock, to acquire
control of the Company with a view to effecting a merger,
sale of assets or a similar transaction, since the issuance
of new shares could be used to dilute the stock ownership of
such person or entity.
IFG's Restated Certificate of Incorporation currently
requires a two-thirds vote in order to approve certain
business combinations involving IFG and an interested
stockholder of IFG. Although the Board of Directors
presently has no intention of doing so, shares of authorized
but unissued Common Stock could be issued to a holder who
would thereby have sufficient voting power to assure that
any such business combination or amendment to the Restated
Certificate of Incorporation would not receive the two-
thirds stockholder vote required for approval thereof. See
"Security Ownership of Certain Beneficial Owners and
Management." The issuance of additional shares of Common
Stock may be used to discourage takeovers that are not
approved by the Board but in which stockholders may receive
a substantial premium above market value for some or all of
their shares at the time a tender offer is made. Thus,
stockholders who may wish to participate in such a tender
offer may be restricted in their opportunity to do so. In
addition, because the proposed amendment may enable IFG to
discourage tender offers, the amendment may make removal of
the Board of Directors or management more difficult. To the
extent that the adoption of the proposed amendment renders
less likely a merger or other transaction opposed by IFG's
incumbent Board of Directors, the effect of such adoption
may be to assist the Board of Directors and management in
retaining their current positions.
Board Recommendation
The Board of Directors recommends a vote FOR Proposal 3 to
amend the IFG Restated Certificate of Incorporation to
increase the number of authorized shares of Common Stock.
The affirmative vote of a majority of the shares of IFG
Common Stock present and entitled to vote at the 1996 Annual
Meeting is necessary to approve Proposal 3. Proxies will be
voted in favor of Proposal 3 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 3. If an executed
proxy card is returned and the stockholder has abstained
from voting on Proposal 3, 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 3,
but will not be considered to have been voted in favor of
Proposal 3. If an executed proxy is returned by a broker
holding shares in street name and the broker does not vote
with respect to Proposal 3 because the beneficial owner of
the shares represented by such proxy has not given the
broker authority to do so, such shares will be considered
present at the meeting for purposes of determining a quorum,
but will not be considered to be represented at the meeting
for purposes of calculating the vote with respect to
Proposal 3.
Proposal 4 -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, 1996, and to perform other
appropriate accounting services and recommends that the
stockholders of IFG ratify that appointment. KPMG Peat
Marwick LLP has audited IFG's financial statements for the
fiscal years ended December 31, 1989 through 1995.
Representatives of KPMG Peat Marwick LLP will be present at
the 1996 Annual Meeting, 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 1996 Annual Meeting is required to approve Proposal 4
ratifying the appointment of KPMG Peat Marwick LLP. Proxies
will be voted in favor of Proposal 4 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
4. If an executed proxy card is returned and the
stockholder has abstained from voting on Proposal 4, 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 4, but will not be considered
to have been voted in favor of Proposal 4.
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
28, 1996.
General
The Board of Directors of IFG does not know of any other
business to come before the 1996 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 1996 Annual
Meeting 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 28, 1996
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,
1995. Requests should be addressed to Inter-Regional
Financial Group, Inc., P.O. Box 1160, Minneapolis, Minnesota
55440-1160, Attention: Carla J. Smith, Secretary.
<PAGE>
APPENDIX A
PROXY This Proxy is solicited on Behalf of the Board of
P.O. Box 1160 Directors. The undersigned hereby appoints
Minneapolis, Irving Weiser and Louis C. Fornetti, and each of
Minnesota them, with power to appoint a substitute, to vote
55440-1160 all shares the undersigned is entitled to vote at
the Annual Meeting of Stockholders of Inter-
[LOGO] Regional Financial Group, Inc. to be held on
May 1, 1996, 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, J.E. Attwell, S.S. Boren, F.G. Fitz-Gerald,
C.A. Rundell, Jr., R.L. Ryan, A.R. Schulze, Jr., and I. Weiser
*(Instruction: To withhold authority to vote for any individual
nominee, draw a line through that nominee's name.)
- ----------------------------------------------------------------------
2. Approval of IFG 1996 Stock Incentive Plan __For __Against__Abstain
- ----------------------------------------------------------------------
3. Amendment of IFG's Restated Certificate of
Incorporation to increase the number of
authorized shares __For __Against__Abstain
- ----------------------------------------------------------------------
4. Ratification of appointment of auditors __For __Against__Abstain
- ----------------------------------------------------------------------
5. 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 2,3,4 and 5.
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: __________________, 1996.
<PAGE>
APPENDIX B
IFG 1996 STOCK INCENTIVE PLAN
Section 1. Purpose.
The purpose of the Plan is to promote the interests of the
Company and its stockholders by aiding the Company in attracting
and retaining management personnel and Non-Employee Directors
capable of providing strategic direction to, and assuring the
future success of, the Company, to offer such personnel and
directors and other employees as determined by the Committee from
time to time incentives to put forth maximum efforts for the
success of the Company's business and an opportunity to acquire a
proprietary interest in the Company, thereby aligning the
interests of such personnel and directors with the Company's
stockholders.
Section 2. Definitions.
As used in the Plan, the following terms shall have the
meanings set forth below:
(a) "Affiliate" shall mean (i) any entity that, directly or
indirectly through one or more intermediaries, is controlled by
the Company and (ii) any entity in which the Company has a
significant equity interest, in each case as determined by the
Committee.
(b) "Award" shall mean any Option, Stock Appreciation Right,
Restricted Stock, Restricted Stock Unit, Performance Award,
Dividend Equivalent, Other Stock Grant or Other Stock-Based Award
granted under the Plan.
(c) "Award Agreement" shall mean any written agreement,
contract or other instrument or document evidencing any Award
granted under the Plan.
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any regulations promulgated
thereunder.
(e) "Committee" shall mean a committee of the Board of
Directors of the Company designated by such Board to administer
the Plan, which shall consist of members appointed from time to
time by the Board of Directors and shall be comprised of not less
than such number of directors as shall be required to permit the
Plan to satisfy the requirements of Rule 16b-3. Each member of
the Committee shall be a "disinterested person" within the
meaning of Rule 16b-3 and an "outside director" within the
meaning of Section 162(m) of the Code.
(f) "Company" shall mean Inter-Regional Financial Group,
Inc., a Delaware corporation, and any successor corporation.
(g) "Dividend Equivalent" shall mean any right granted under
Section 6(e) of the Plan.
(h) "Eligible Person" shall mean any employee, officer,
consultant or independent contractor providing services to the
Company or any Affiliate who the Committee determines to be an
Eligible Person. A Non-Employee Director shall not be an
Eligible Person.
(i) "Exchange Act" shall mean the Securities and Exchange Act
of 1934, as amended.
(j) "Fair Market Value" shall mean, with respect to any
property (including, without limitation, any Shares or other
securities), the fair market value of such property determined by
such methods or procedures as shall be established from time to
time by the Committee. Notwithstanding the foregoing, unless
otherwise determined by the Committee, the Fair Market Value of
Shares on a given date for purposes of the Plan shall be the
average of the opening and closing sale price of the Shares as
reported on the New York Stock Exchange on such date or, if such
Exchange is not open for trading on such date, on the day closest
to such date when such Exchange is open for trading.
(k) "Incentive Stock Option" shall mean an option granted
under Section 6(a) of the Plan that is intended to meet the
requirements of Section 422 of the Code or any successor
provision.
(l) "Non-Employee Director" shall mean a director who is not
also an employee of the Company or an Affiliate.
(m) "Non-Qualified Stock Option" shall mean an option granted
under Section 6(a) of the Plan that is not intended to be an
Incentive Stock Option.
(n) "Option" shall mean an Incentive Stock Option or a Non-
Qualified Stock Option, and shall include Reload Options.
(o) "Other Stock Grant" shall mean any right granted under
Section 6(f) of the Plan.
(p) "Other Stock-Based Award" shall mean any right granted
under Section 6(g) of the Plan.
(q) "Participant" shall mean an Eligible Person designated to
be granted an Award under the Plan.
(r) "Performance Award" shall mean any right granted under
Section 6(d) of the Plan.
(s) "Person" shall mean any individual, corporation,
partnership, association or trust.
(t) "Plan" shall mean this IFG 1996 Stock Incentive Plan, as
amended from time to time.
(u) "Reload Option" shall mean any Option granted under
Section 6(a)(iv) of the Plan.
(v) "Restricted Stock" shall mean any Share granted under
Section 6(c) or Section 7(d) of the Plan.
(w) "Restricted Stock Unit" shall mean any unit granted under
Section 6(c) of the Plan evidencing the right to receive a Share
(or a cash payment equal to the Fair Market Value of a Share) at
some future date.
(x) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the
Securities and Exchange Commission under the Exchange Act or any
successor rule or regulation.
(y) "Shares" shall mean shares of Common Stock, $.125 par
value, of the Company or such other securities or property as may
become subject to Awards pursuant to an adjustment made under
Section 4(c) of the Plan.
(z) "Stock Appreciation Right" shall mean any right granted
under Section 6(b) of the Plan.
Section 3. Administration.
(a) Power and Authority of the Committee. The Plan shall be
administered by the Committee; provided, however, that Section 7
of the Plan shall not be administered by the Committee but rather
by the Board of Directors subject to the provisions and
restrictions of Section 7. Subject to the express provisions of
the Plan and to applicable law, and except with respect to
Section 7 of the Plan, the Committee shall have full power and
authority to: (i) designate Participants; (ii) determine the
type or types of Awards to be granted to each Participant under
the Plan; (iii) determine the number of Shares to be covered by
(or with respect to which payments, rights or other matters are
to be calculated in connection with) each Award; (iv) determine
the terms and conditions of any Award or Award Agreement;
(v) amend the terms and conditions of any Award or Award
Agreement and accelerate the exercisability of Options or the
lapse of restrictions relating to Restricted Stock, Restricted
Stock Units or other Awards; (vi) determine whether, to what
extent and under what circumstances Awards may be exercised in
cash, Shares, other securities, other Awards or other property,
or canceled, forfeited or suspended; (vii) determine whether, to
what extent and under what circumstances cash, Shares, other
securities, other Awards, other property and other amounts
payable with respect to an Award under the Plan shall be deferred
either automatically or at the election of the holder thereof or
the Committee; (viii) interpret and administer the Plan and any
instrument or agreement relating to, or Award made under, the
Plan; (ix) establish, amend, suspend or waive such rules and
regulations and appoint such agents as it shall deem appropriate
for the proper administration of the Plan; and (x) make any other
determination and take any other action that the Committee deems
necessary or desirable for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations and other decisions
under or with respect to the Plan or any Award shall be within
the sole discretion of the Committee, may be made at any time and
shall be final, conclusive and binding upon any Participant, any
holder or beneficiary of any Award and any employee of the
Company or any Affiliate.
(b) Delegation. The Committee may delegate its powers and
duties under the Plan to one or more officers of the Company or
any Affiliate or a committee of such officers, subject to such
terms, conditions and limitations as the Committee may establish
in its sole discretion; provided, however, that the Committee
shall not delegate its powers and duties under the Plan (i) with
regard to officers or directors of the Company or any Affiliate
who are subject to Section 16 of the Exchange Act or (ii) in such
a manner as would cause the Plan not to comply with the
requirements of Section 162(m) of the Code.
(c) Power and Authority of the Board of Directors.
Notwithstanding anything to the contrary contained herein, the
Board of Directors may, at any time and from time to time,
without any further action of the Committee, exercise the powers
and duties of the Committee under the Plan with regard to any
Person who is not an officer or director of the Company or any
Affiliate who is subject to Section 16 of the Exchange Act.
Section 4. Shares Available for Awards.
(a) Shares Available. Subject to adjustment as provided in
Section 4(c), the aggregate number of Shares which may be issued
under all Awards under the Plan shall be 3,000,000. Shares to be
issued under the Plan may be either Shares reacquired and held in
the treasury or authorized but unissued Shares. If any Shares
covered by an Award or to which an Award relates are not
purchased or are forfeited, or if an Award otherwise terminates
without delivery of any Shares, then the number of Shares counted
against the aggregate number of Shares available under the Plan
with respect to such Award, to the extent of any such forfeiture
or termination, shall again be available for granting Awards
under the Plan. Notwithstanding the foregoing, the number of
Shares available for granting Incentive Stock Options under the
Plan shall not exceed 3,000,000, subject to adjustment as
provided in the Plan and Section 422 or 424 of the Code or any
successor provision.
(b) Accounting for Awards. For purposes of this Section 4,
if an Award entitles the holder thereof to receive or purchase
Shares, the number of Shares covered by such Award or to which
such Award relates shall be counted on the date of grant of such
Award against the aggregate number of Shares available for
granting Awards under the Plan.
(c) Adjustments. In the event that the Committee shall
determine that any dividend or other distribution (whether in the
form of cash, Shares, other securities or other property),
recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Shares or other securities
of the Company, issuance of warrants or other rights to purchase
Shares or other securities of the Company or other similar
corporate transaction or event affects the Shares such that an
adjustment is determined by the Committee to be appropriate in
order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan,
then the Committee shall, in such manner as it may deem
equitable, adjust any or all of (i) the number and type of Shares
(or other securities or other property) which thereafter may be
made the subject of Awards, (ii) the number and type of Shares
(or other securities or other property) subject to outstanding
Awards and (iii) the purchase or exercise price with respect to
any Award; provided, however, that the number of Shares covered
by any Award or to which such Award relates shall always be a
whole number.
(d) Award Limitations Under the Plan. No Eligible Person may
be granted any Award or Awards under the Plan, the value of which
Awards is based solely on an increase in the value of the Shares
after the date of grant of such Awards, for more than 150,000
Shares in the aggregate in any calendar year. The foregoing
annual limitation specifically includes the grant of any Awards
representing "qualified performance-based compensation" within
the meaning of Section 162(m) of the Code.
Section 5. Eligibility.
Any Eligible Person, including any Eligible Person who is an
officer or director (but not a Non-Employee Director) of the
Company or any Affiliate, shall be eligible to be designated a
Participant. In determining which Eligible Persons shall receive
an Award and the terms of any Award, the Committee may take into
account the nature of the services rendered by the respective
Eligible Persons, their present and potential contributions to
the success of the Company or such other factors as the
Committee, in its discretion, shall deem relevant.
Notwithstanding the foregoing, an Incentive Stock Option may only
be granted to full or part-time employees (which term as used
herein includes, without limitation, officers and directors who
are also employees), and an Incentive Stock Option shall not be
granted to an employee of an Affiliate unless such Affiliate is
also a "subsidiary corporation" of the Company within the meaning
of Section 424(f) of the Code or any successor provision. Non-
Employee Directors shall be eligible to receive Awards of Non-
Qualified Stock Options under the Plan only as provided in
Section 7 of the Plan.
Section 6. Awards.
(a) Options. The Committee is hereby authorized to grant
Options to Participants with the following terms and conditions
and with such additional terms and conditions not inconsistent
with the provisions of the Plan as the Committee shall determine:
(i) Exercise Price. The purchase price per Share purchasable
under an Option shall be determined by the Committee; provided,
however, that such purchase price shall not be less than 100% of
the Fair Market Value of a Share on the date of grant of such
Option.
(ii) Option Term. The term of each Option shall be fixed by
the Committee.
(iii) Time and Method of Exercise. The Committee shall
determine the time or times at which an Option may be exercised
in whole or in part and the method or methods by which, and the
form or forms (including, without limitation, cash, Shares, other
securities, other Awards or other property, or any combination
thereof, having a Fair Market Value on the exercise date equal to
the relevant exercise price) in which, payment of the exercise
price with respect thereto may be made or deemed to have been
made.
(iv) Reload Options. The Committee may grant Reload Options,
separately or together with another Option, pursuant to which,
subject to the terms and conditions established by the Committee
and any applicable requirements of Rule 16b-3 or any other
applicable law, the Participant would be granted a new Option
when the payment of the exercise price of a previously granted
option is made by the delivery of Shares owned by the Participant
pursuant to Section 6(a)(iii) hereof or the relevant provisions
of another plan of the Company, and/or when Shares are tendered
or forfeited as payment of the amount to be withheld under
applicable income tax laws in connection with the exercise of an
Option, which new Option would be an Option to purchase the
number of Shares not exceeding the sum of (A) the number of
Shares so provided as consideration upon the exercise of the
previously granted option to which such Reload Option relates and
(B) the number of Shares, if any, tendered or withheld as payment
of the amount to be withheld under applicable tax laws in
connection with the exercise of the option to which such Reload
Option relates pursuant to the relevant provisions of the plan or
agreement relating to such option. Reload Options may be granted
with respect to Options previously granted under the Plan or any
other stock option plan of the Company, and may be granted in
connection with any Option granted under the Plan or any other
stock option plan of the Company at the time of such grant. Such
Reload Options shall have a per share exercise price equal to the
Fair Market Value as of the date of grant of the new Option. Any
Reload Option shall be subject to availability of sufficient
Shares for grant under the Plan. Shares surrendered as part or
all of the exercise price of the Option to which it relates that
have been owned by the optionee less than six months will not be
counted for purposes of determining the number of Shares that may
be purchased pursuant to a Reload Option.
(b) Stock Appreciation Rights. The Committee is hereby
authorized to grant Stock Appreciation Rights to Participants
subject to the terms of the Plan and any applicable Award
Agreement. A Stock Appreciation Right granted under the Plan
shall confer on the holder thereof a right to receive upon
exercise thereof the excess of (i) the Fair Market Value of one
Share on the date of exercise (or, if the Committee shall so
determine, at any time during a specified period before or after
the date of exercise) over (ii) the grant price of the Stock
Appreciation Right as specified by the Committee, which price
shall not be less than 100% of the Fair Market Value of one Share
on the date of grant of the Stock Appreciation Right. Subject to
the terms of the Plan and any applicable Award Agreement, the
grant price, term, methods of exercise, dates of exercise,
methods of settlement and any other terms and conditions of any
Stock Appreciation Right shall be as determined by the Committee.
The Committee may impose such conditions or restrictions on the
exercise of any Stock Appreciation Right as it may deem
appropriate.
(c) Restricted Stock and Restricted Stock Units. The
Committee is hereby authorized to grant Awards of Restricted
Stock and Restricted Stock Units to Participants with the
following terms and conditions and with such additional terms and
conditions not inconsistent with the provisions of the Plan as
the Committee shall determine:
(i) Restrictions. Shares of Restricted Stock and Restricted
Stock Units shall be subject to such restrictions as the
Committee may impose (including, without limitation, any
limitation on the right to vote a Share of Restricted Stock or
the right to receive any dividend or other right or property with
respect thereto), which restrictions may lapse separately or in
combination at such time or times, in such installments or
otherwise as the Committee may deem appropriate.
(ii) Stock Certificates. Any Restricted Stock granted under
the Plan shall be evidenced by issuance of a stock certificate or
certificates, which certificate or certificates shall be held by
the Company. Such certificate or certificates shall be
registered in the name of the Participant and shall bear an
appropriate legend referring to the terms, conditions and
restrictions applicable to such Restricted Stock. In the case of
Restricted Stock Units, no Shares shall be issued at the time
such Awards are granted.
(iii) Forfeiture; Delivery of Shares. Except as otherwise
determined by the Committee, upon termination of employment (as
determined under criteria established by the Committee) during
the applicable restriction period, all Shares of Restricted Stock
and all Restricted Stock Units at such time subject to
restriction shall be forfeited and reacquired by the Company;
provided, however, that the Committee may, when it finds that a
waiver would be in the best interest of the Company, waive in
whole or in part any or all remaining restrictions with respect
to Shares of Restricted Stock or Restricted Stock Units. Any
Share representing Restricted Stock that is no longer subject to
restrictions shall be delivered to the holder thereof promptly
after the applicable restrictions lapse or are waived. Upon the
lapse or waiver of restrictions and the restricted period
relating to Restricted Stock Units evidencing the right to
receive Shares, such Shares shall be issued and delivered to the
holders of the Restricted Stock Units.
(d) Performance Awards. The Committee is hereby authorized
to grant Performance Awards to Participants subject to the terms
of the Plan and any applicable Award Agreement. A Performance
Award granted under the Plan (i) may be denominated or payable in
cash, Shares (including, without limitation, Restricted Stock and
Restricted Stock Units), other securities, other Awards or other
property and (ii) shall confer on the holder thereof the right to
receive payments, in whole or in part, upon the achievement of
such performance goals during such performance periods as the
Committee shall establish. Subject to the terms of the Plan and
any applicable Award Agreement, the performance goals to be
achieved during any performance period, the length of any
performance period, the amount of any Performance Award granted,
the amount of any payment or transfer to be made pursuant to any
Performance Award and any other terms and conditions of any
Performance Award shall be determined by the Committee.
(e) Dividend Equivalents. The Committee is hereby authorized
to grant Dividend Equivalents to Participants under which such
Participants shall be entitled to receive payments (in cash,
Shares, other securities, other Awards or other property as
determined in the discretion of the Committee) equivalent to the
amount of cash dividends paid by the Company to holders of Shares
with respect to a number of Shares determined by the Committee.
Subject to the terms of the Plan and any applicable Award
Agreement, such Dividend Equivalents may have such terms and
conditions as the Committee shall determine.
(f) Other Stock Grants. The Committee is hereby authorized,
subject to the terms of the Plan and any applicable Award
Agreement, to grant to Participants Shares without restrictions
thereon as are deemed by the Committee to be consistent with the
purpose of the Plan; provided, however, that such grants must
comply with Rule 16b-3 and applicable law.
(g) Other Stock-Based Awards. The Committee is hereby
authorized to grant to Participants such other Awards that are
denominated or payable in, valued in whole or in part by
reference to, or otherwise based on or related to, Shares
(including, without limitation, securities convertible into
Shares), as are deemed by the Committee to be consistent with the
purpose of the Plan; provided, however, that such grants must
comply with Rule 16b-3 and applicable law. Subject to the terms
of the Plan and any applicable Award Agreement, the Committee
shall determine the terms and conditions of such Awards. Shares
or other securities delivered pursuant to a purchase right
granted under this Section 6(g) shall be purchased for such
consideration, which may be paid by such method or methods and in
such form or forms (including, without limitation, cash, Shares,
other securities, other Awards or other property or any
combination thereof), as the Committee shall determine, the value
of which consideration, as established by the Committee, shall
not be less than 100% of the Fair Market Value of such Shares or
other securities as of the date such purchase right is granted.
(h) General. Except as otherwise specified with respect to
Awards to Non-Employee Directors pursuant to Section 7 of the
Plan:
(i) No Cash Consideration for Awards. Awards shall be
granted for no cash consideration or for such minimal cash
consideration as may be required by applicable law.
(ii) Awards May Be Granted Separately or Together. Awards
may, in the discretion of the Committee, be granted either alone
or in addition to, in tandem with or in substitution for any
other Award or any award granted under any plan of the Company or
any Affiliate other than the Plan. Awards granted in addition to
or in tandem with other Awards or in addition to or in tandem
with awards granted under any such other plan of the Company or
any Affiliate may be granted either at the same time as or at a
different time from the grant of such other Awards or awards.
(iii) Forms of Payment under Awards. Subject to the terms of
the Plan and of any applicable Award Agreement, payments or
transfers to be made by the Company or an Affiliate upon the
grant, exercise or payment of an Award may be made in such form
or forms as the Committee shall determine (including, without
limitation, cash, Shares, other securities, other Awards or other
property or any combination thereof), and may be made in a single
payment or transfer, in installments or on a deferred basis, in
each case in accordance with rules and procedures established by
the Committee. Such rules and procedures may include, without
limitation, provisions for the payment or crediting of reasonable
interest on installment or deferred payments or the grant or
crediting of Dividend Equivalents with respect to installment or
deferred payments.
(iv) Limits on Transfer of Awards. No Award (other than Other
Stock Grants) and no right under any such Award shall be
transferable by a Participant otherwise than by will or by the
laws of descent and distribution; provided, however, that, if so
determined by the Committee, a Participant may, in the manner
established by the Committee, designate a beneficiary or
beneficiaries to exercise the rights of the Participant and
receive any property distributable with respect to any Award upon
the death of the Participant. Each Award or right under any
Award shall be exercisable during the Participant's lifetime only
by the Participant or, if permissible under applicable law, by
the Participant's guardian or legal representative. No Award or
right under any such Award may be pledged, alienated, attached or
otherwise encumbered, and any purported pledge, alienation,
attachment or encumbrance thereof shall be void and unenforceable
against the Company or any Affiliate.
(v) Term of Awards. The term of each Award shall be for such
period as may be determined by the Committee.
(vi) Restrictions; Securities Exchange Listing. All
certificates for Shares or other securities delivered under the
Plan pursuant to any Award or the exercise thereof shall be
subject to such stop transfer orders and other restrictions as
the Committee may deem advisable under the Plan or the rules,
regulations and other requirements of the Securities and Exchange
Commission and any applicable federal or state securities laws,
and the Committee may cause a legend or legends to be placed on
any such certificates to make appropriate reference to such
restrictions. If the Shares or other securities are traded on a
securities exchange, the Company shall not be required to deliver
any Shares or other securities covered by an Award unless and
until such Shares or other securities have been admitted for
trading on such securities exchange.
Section 7. Awards to Non-Employee Directors.
(a) Eligibility. If the Plan is approved by the stockholders
of the Company at the 1996 Annual Meeting of Stockholders,
Options shall be granted automatically under the plan to each
Non-Employee Director under the terms and conditions contained in
this Section 7. The authority of the Committee under this
Section 7 shall be limited to ministerial and non-discretionary
matters.
(b) Annual Option Grants. Each Non-Employee Director shall
be granted an Option to purchase 2,000 Shares on the date of each
Non-Employee Director's election or reelection to the Board of
Directors, commencing with the 1996 Annual Meeting of
Stockholders. The exercise price of each Option shall be equal
to 100 percent of the Fair Market Value per Share on the date of
grant. Such Options shall be Non-Qualified Stock Options, shall
become exercisable six months after the date of grant, and shall
terminate on the fifth anniversary of the date of grant, unless
previously exercised or terminated. Such Options shall be
subject to the terms and conditions of Sections 6(a) and 10 of
the Plan and to other standard terms and conditions contained in
the form of Non-Qualified Stock Option Agreement used by the
Company from time to time.
(c) Exercise of Non-Employee Director Options. Non-Qualified
Stock Options granted to Non-Employee Directors may be exercised
in whole or in part from time to time by serving written notice
of exercise on the Company at its principal executive offices, to
the attention of the Company's Secretary. The notice shall state
the number of Shares as to which the Option is being exercised
and be accompanied by payment of the purchase price. A Non-
Employee Director may, at such Director's election, pay the
purchase price by check payable to the Company, in Shares, or in
any combination thereof having a Fair Market Value on the
exercise date equal to the applicable exercise price.
(d) Deferral Election and Restricted Stock Award. The
Committee is hereby authorized to grant Restricted Stock to Non-
Employee Directors under the following terms and conditions:
(i) Deferral of Regular Cash Compensation into Restricted
Stock. Each Non-Employee Director may irrevocably elect, once
per year, to reduce either 50% or 100% of the annual cash
retainer (the "Annual Retainer") otherwise payable for services
to be rendered by him or her as a director (excluding any
additional fees payable for attending any meetings of the Board
of Directors or a committee of the Board of Directors, or for
serving on a committee of the Board of Directors) for the twelve-
month period covered by such Annual Retainer (a "Director Year")
and to receive in lieu thereof Shares of Restricted Stock. Any
such election (a "Deferral Election") shall be in writing and
must be made at least six months before the services are rendered
giving rise to such compensation. In consideration for foregoing
the Annual Retainer, the amount so deferred by a Non-Employee
Director who elects to participate (a "Participating Director")
shall be increased by 10% for purposes of determining the number
of Shares of Restricted Stock to be awarded to such Participating
Director under this Section 7(d).
(ii) Grants of Restricted Stock. If any Non-Employee Director
makes a Deferral Election for any Director Year, there shall be
awarded on the date of the annual meeting for such Director Year
(the "Award Date") to such Participating Director a number of
Shares of Restricted Stock equal to the Annual Retainer payable
for such Director Year (increased by 10% as described in the
preceding paragraph (i)) divided by the closing price per share
of the Shares on the New York Stock Exchange as reported for the
Award Date, which resulting number shall be rounded up to the
nearest whole number of Shares. Any Participating Director who
made a Deferral Election under the IFG Restricted Stock Plan for
Non-Employee Directors at least six months prior to the 1996
Annual Meeting of Stockholders, and who consents to the use of
such prior Deferral Election under this Plan, shall be entitled
to receive the number of Shares of Restricted Stock determined in
accordance with the preceding sentence for the 1996 Director Year
under the terms and conditions of this Plan.
(iii) Vesting Schedule. Restricted Stock granted under this
Section 7(d) to any Non-Employee Director for any given Deferral
Election shall be subject to forfeiture until vested and shall
vest in full on the first anniversary of the Award Date.
(iv) Transfer Restrictions and Forfeiture. Except as
otherwise set forth in Section 7(d)(v) hereof, the holder of
Restricted Stock may not sell, transfer, pledge, subject to lien,
assign or otherwise hypothecate such Restricted Stock until the
vesting period with respect to such Restricted Stock has lapsed
in accordance with the terms of Section 7(d)(v) hereof.
Restricted Stock granted hereunder shall be entirely forfeited
(but any cash dividends previously paid with respect thereto
shall be retained by the Non-Employee Director) in the event
that, during a vesting period, the Participating Director ceases
to be a director for any reason other than as set forth in
Section 7(d)(v) hereof. A breach by a Non-Employee Director of
the terms and conditions of the Plan during the vesting period
shall cause a forfeiture of all Restricted Stock which has not
vested as of the date of such breach.
(v) Lapse of Restrictions. All restrictions on Restricted
Stock issued to a Non-Employee Director shall lapse upon the
earliest to occur of the following: (A) the first anniversary of
the Award Date with respect to such Restricted Stock; (B) the
date of the holder's death or "disability" (as defined below);
(C) the date on which the holder retires from the Board of
Directors in accordance with the Company's Board retirement
policy then in effect; or (D) the tenth day following the date on
which a "Change in Control" (as defined below) has occurred. For
purposes of the Plan, "disability" shall mean long-term
disability as defined in the Company's Profit Sharing Plan or any
other plan of the Company then in effect which generally defines
disability for its participants.
For purposes of the Plan, "Change of Control" with respect to
the Company shall mean:
(i) the public announcement (which, for purposes of this
definition, shall include, without limitation, a report filed
pursuant to Section 13(d) of the Exchange Act) that any person,
entity or "group," within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act, other than the Company or any of
its subsidiaries, or the IFG Stock Bonus Plan or any other
employee benefit plan of the Company or any of its subsidiaries,
or any entity holding shares of Common Stock organized, appointed
or established for, or pursuant to the terms of, any such plan,
has become the beneficial owner (within the meaning of Rule 13d-3
of the Exchange Act) of 35% or more of the combined voting power
of the Company's then outstanding voting securities in a
transaction or series of transactions;
(ii) the Continuing Directors (as hereinafter defined) cease
to constitute a majority of the Board of Directors;
(iii) the stockholders of the Company approve (A) any
consolidation or merger of the Company in which the Company is
not the continuing or surviving corporation or pursuant to which
shares of the Company's stock would be converted into cash,
securities or other property, other than a merger of the Company
in which stockholders immediately prior to the merger have the
same proportionate ownership of stock of the surviving
corporation immediately after the merger; (B) any sale, lease,
exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets
of the Company; or (C) any plan of liquidation or dissolution of
the Company; or
(iv) the majority of the Continuing Directors determine, in
their sole and absolute discretion, that there has been a change
in control of the Company.
For purposes of this Plan, "Continuing Director" shall mean any
person who is a member of the Board of Directors, while such a
person is a member of the Board, who is not an Acquiring Person
(as hereinafter defined) or an Affiliate or Associate (as
hereinafter defined) of an Acquiring Person, or a representative
of an Acquiring Person or of any such Affiliate or Associate, and
who (i) was a member of the Board of Directors on May 1, 1996, or
(ii) subsequently becomes a member of the Board of Directors, if
such person's initial nomination for election or initial election
to the Board of Directors is recommended or approved by a
majority of the Continuing Directors.
For purposes of this Plan, "Acquiring Person" shall mean any
"person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) who or which, together with all Affiliates and
Associates of such person, is the "beneficial owner" (as defined
in Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, of securities of the Company representing 35% or more
of the combined voting power of the Company's then outstanding
securities, but shall not include the Company, any subsidiary of
the Company or any employee benefit plan of the Company or of any
subsidiary of the Company or any entity holding Shares organized,
appointed or established for, or pursuant to the terms of, any
such plan; and "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12d-2
promulgated under the Exchange Act.
(vi) Rights as a Stockholder. Restricted Stock shall be
represented by a stock certificate registered in the name of the
holder as described in Section 6(c)(ii). Except as otherwise
provided in this Plan, a Participating Director will have all
voting, dividend, liquidation and other rights with respect to
Restricted Stock issued to the Participating Director under this
Plan as if such Participating Director were a holder of record of
unrestricted Shares; provided that, if any dividend is declared
and paid by the Company in any form other than cash, such noncash
dividend shall be subject to the same vesting schedule,
forfeiture terms and transferability restrictions as are
applicable to the Restricted Stock on which such dividends were
paid.
(vii) Stock Certificates. Any Restricted Stock granted to Non-
Employee Directors under this Section 7(d) shall be subject to
all of the terms and conditions contained in Section 6(c)(ii)
hereof.
(viii) Distributions Upon Lapse of Restrictions. Upon the
lapsing of the restrictions on any Shares of Restricted Stock,
such Shares shall become unrestricted Shares vested in the
Participating Director, and any legends regarding the
restrictions affixed to the certificates representing such Shares
pursuant to this Section 7(d) shall be removed. A Participating
Director shall be entitled to request delivery of the certificate
or certificates representing such unrestricted Shares at any time
after such vesting has occurred. The Company shall cause
delivery of such certificate or certificates to be made as soon
as practicable after the lapsing (in accordance with Section
7(d)(v) hereof) of all restrictions imposed by this Plan for all
Restricted Stock issued with respect to a given Deferral
Election. An Eligible Director will be entitled to designate a
beneficiary to receive the Restricted Stock that has vested upon
such Eligible Director's death (assuming such director is a
Participating Director at his or her death), and in the event of
a Participating Director's death, payment of any amounts due
under this Plan will be made to such Participating Director's
legal representatives, heirs and legatees.
(e) Amendments to Section 7. The provisions of this Section
7 may not be amended more often than once every six months other
than to comply with changes in the Code or the rules and
regulations promulgated under the Code.
Section 8. Amendment and Termination; Adjustments.
Except to the extent prohibited by applicable law and unless
otherwise expressly provided in an Award Agreement or in the
Plan:
(a) Amendments to the Plan. The Board of Directors of the
Company may amend, alter, suspend, discontinue or terminate the
Plan; provided, however, that, notwithstanding any other
provision of the Plan or any Award Agreement, without the
approval of the stockholders of the Company, no such amendment,
alteration, suspension, discontinuation or termination shall be
made that, absent such approval:
(i) would cause Rule 16b-3 to become unavailable with respect
to the Plan;
(ii) would violate the rules or regulations of the New York
Stock Exchange, any other securities exchange or the National
Association of Securities Dealers, Inc. that are applicable to
the Company; or
(iii) would cause the Company to be unable, under the Code, to
grant Incentive Stock Options under the Plan.
(b) Amendments to Awards. The Committee may waive any
conditions of or rights of the Company under any outstanding
Award, prospectively or retroactively. The Committee may not
amend, alter, suspend, discontinue or terminate any outstanding
Award, prospectively or retroactively, without the consent of the
Participant or holder or beneficiary thereof, except as otherwise
herein provided or in the Award Agreement.
(c) Correction of Defects, Omissions and Inconsistencies.
The Committee may correct any defect, supply any omission or
reconcile any inconsistency in the Plan or any Award in the
manner and to the extent it shall deem desirable to carry the
Plan into effect.
Section 9. Income Tax Withholding; Tax Bonuses.
(a) Withholding. In order to comply with all applicable
federal or state income tax laws or regulations, the Company may
take such action as it deems appropriate to ensure that all
applicable federal or state payroll, withholding, income or other
taxes, which are the sole and absolute responsibility of a
Participant are withheld or collected from such Participant. In
order to assist a Participant in paying all or a portion of the
federal and state taxes to be withheld or collected upon exercise
or receipt of (or the lapse of restrictions relating to) an
Award, the Committee, in its discretion and subject to such
additional terms and conditions as it may adopt, may permit the
Participant to satisfy such tax obligation by (i) electing to
have the Company withhold a portion of the Shares otherwise to be
delivered upon exercise or receipt of (or the lapse of
restrictions relating to) such Award with a Fair Market Value
equal to the amount of such taxes or (ii) delivering to the
Company Shares other than Shares issuable upon exercise or
receipt of (or the lapse of restrictions relating to) such Award
with a Fair Market Value equal to the amount of such taxes. The
election, if any, must be made on or before the date that the
amount of tax to be withheld is determined.
(b) Tax Bonuses. The Committee, in its discretion, shall
have the authority, at the time of grant of any Award under this
Plan or at any time thereafter, to approve cash bonuses to
designated Participants to be paid upon their exercise or receipt
of (or the lapse of restrictions relating to) Awards in order to
provide funds to pay all or a portion of federal and state taxes
due as a result of such exercise or receipt (or the lapse of such
restrictions). The Committee shall have full authority in its
discretion to determine the amount of any such tax bonus.
Section 10. General Provisions.
(a) No Rights to Awards. No Eligible Person, Participant or
other Person shall have any claim to be granted any Award under
the Plan, and there is no obligation for uniformity of treatment
of Eligible Persons, Participants or holders or beneficiaries of
Awards under the Plan. The terms and conditions of Awards need
not be the same with respect to any Participant or with respect
to different Participants.
(b) Delegation. The Committee may delegate to one or more
officers of the Company or any Affiliate or a committee of such
officers the authority, subject to such terms and limitations as
the Committee shall determine, to grant Awards to Eligible
Persons who are not officers or directors of the Company for
purposes of Section 16 of the Exchange Act.
(c) Award Agreements. No Participant will have rights under
an Award granted to such Participant unless and until an Award
Agreement shall have been duly executed on behalf of the Company
and, if requested by the Company, signed by the Participant.
(d) No Limit on Other Compensation Arrangements. Nothing
contained in the Plan shall prevent the Company or any Affiliate
from adopting or continuing in effect other or additional
compensation arrangements, and such arrangements may be either
generally applicable or applicable only in specific cases.
(e) No Right to Employment. The grant of an Award shall not
be construed as giving a Participant or Non-Employee Director the
right to be retained in the employ of the Company or any
Affiliate, nor will it affect in any way the right of the Company
or an Affiliate to terminate such employment at any time, with or
without cause. In addition, the Company or an Affiliate may at
any time dismiss a Participant or Non-Employee Director from
employment free from any liability or any claim under the Plan,
unless otherwise expressly provided in the Plan or in any Award
Agreement.
(f) Governing Law. The validity, construction and effect of
the Plan or any Award, and any rules and regulations relating to
the Plan or any Award, shall be determined in accordance with the
laws of the State of Minnesota.
(g) Severability. If any provision of the Plan or any Award
is or becomes or is deemed to be invalid, illegal or
unenforceable in any jurisdiction or would disqualify the Plan or
any Award under any law deemed applicable by the Committee (or,
in the case of grants under Section 7 of the Plan, the Board of
Directors), such provision shall be construed or deemed amended
to conform to applicable laws, or if it cannot be so construed or
deemed amended without, in the determination of the Committee
(or, in the case of grants under Section 7 of the Plan, the Board
of Directors), materially altering the purpose or intent of the
Plan or the Award, such provision shall be stricken as to such
jurisdiction or Award, and the remainder of the Plan or any such
Award shall remain in full force and effect.
(h) No Trust or Fund Created. Neither the Plan nor any Award
shall create or be construed to create a trust or separate fund
of any kind or a fiduciary relationship between the Company or
any Affiliate and a Participant or any other Person. To the
extent that any Person acquires a right to receive payments from
the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general
creditor of the Company or any Affiliate.
(i) No Fractional Shares. No fractional Shares shall be
issued or delivered pursuant to the Plan or any Award, and the
Committee shall determine whether cash shall be paid in lieu of
any fractional Shares or whether such fractional Shares or any
rights thereto shall be canceled, terminated or otherwise
eliminated.
(j) Headings. Headings are given to the Sections and
subsections of the Plan solely as a convenience to facilitate
reference. Such headings shall not be deemed in any way material
or relevant to the construction or interpretation of the Plan or
any provision thereof.
(k) Other Benefits. No compensation or benefit awarded to or
realized by any Participant under the Plan shall be included for
the purpose of computing such Participant's compensation under
any compensation-based retirement, disability, or similar plan of
the Company unless required by law or otherwise provided by such
other plan.
Section 11. Section 16(b) Compliance.
The Plan is intended to comply in all respects with Rule 16b-
3 or any successor provision, as in effect from time to time, and
in all events the Plan shall be construed in accordance with the
requirements of Rule 16b-3. If any Plan provision does not
comply with Rule 16b-3 as hereafter amended or interpreted, the
provision shall be deemed inoperative. The Board of Directors,
in its absolute discretion, may bifurcate the Plan so as to
restrict, limit or condition the use of any provision of the Plan
to participants who are officers or directors subject to Section
16 of the Exchange Act without so restricting, limiting or
conditioning the Plan with respect to other participants.
Section 12. Effective Date of the Plan.
The Plan shall be effective as of March 21, 1996; provided,
however, that if the Company's stockholders do not approve the
Plan at the 1996 Annual Meeting of Stockholders, the Plan shall
be null and void and all Awards granted prior to the date of such
Annual Meeting shall be of no force or effect.
Section 13. Term of the Plan.
Awards shall only be granted under the Plan during a 10-year
period beginning on the effective date of the Plan. However,
unless otherwise expressly provided in the Plan or in an
applicable Award Agreement, any Award theretofore granted may
extend beyond the end of such 10-year period, and the authority
of the Committee provided for hereunder with respect to the Plan
and any Awards, and the authority of the Board of Directors of
the Company to amend the Plan, shall extend beyond the
termination of the Plan.
