[Interra Logo]
1997 Proxy Statement
NOTICE OF ANNUAL MEETING
March 31, 1997
To Our Stockholders,
You are cordially invited to attend the Annual Meeting of
Stockholders of Interra Financial Incorporated (formerly Inter-
Regional Financial Group, Inc.) The meeting will be held in the
Scandinavian Ballroom of the Radisson Plaza Hotel, 35 South 7th
Street, Minneapolis, Minnesota on Wednesday, April 30, 1997, at
3:00 p.m.
This booklet contains your official notice of the 1997 Annual
Meeting and a Proxy Statement describing the matters to be acted
upon. Whether or not you plan to attend the Annual Meeting in
person, we urge you to participate by reading the Proxy Statement
and promptly returning your signed proxy card.
Sincerely,
Irving Weiser
--------------------------
Irving Weiser
Chairman, President and Chief Executive
Officer
<PAGE>
Official Notice of 1997 Annual Meeting of Stockholders
The 1997 Annual Meeting of Stockholders of Interra Financial
Incorporated ("Interra" or the "Company") will be held in the
Scandinavian Ballroom of the Radisson Plaza Hotel, 35 South 7th
Street, Minneapolis, Minnesota at 3:00 p.m. on Wednesday, April
30, 1997, for the following purposes:
1. To elect ten directors to hold office for the ensuing year;
2. To ratify the selection of KPMG Peat Marwick LLP as the
Company's independent auditors for the fiscal year ending
December 31, 1997; and
3. To transact such other business as may properly come before
the meeting or any adjournments thereof.
Only holders of record of Interra's Common Stock at the close
of business on March 3, 1997, will be entitled to receive notice
of and to vote at the meeting. A list of such holders is
available for examination by any stockholder for any purpose
germane to the meeting at the Company's Minneapolis headquarters.
By Order of the Board of Directors
Carla J. Smith
--------------------------
Carla J. Smith
Secretary
Minneapolis, Minnesota
March 31, 1997
<PAGE>
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS WEDNESDAY, APRIL 30, 1997
This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of Interra
Financial Incorporated ("Interra" or the "Company") for use at
the 1997 Annual Meeting of Stockholders and any adjournment
thereof. This Proxy Statement and the accompanying proxy card
are being mailed on or about March 31, 1997, to holders of record
of shares of Interra's common stock, par value $.125 per share
(the "Common Stock"), as of the close of business on March 3,
1997. If the enclosed proxy card is completed, signed and
returned prior to the 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 Interra at its Minneapolis headquarters.
On March 3, 1997, Interra had outstanding 12,241,020 shares of
Common Stock. Each holder of record of such shares as of the
close of business on March 3, 1997, will be entitled to one vote
for each share 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 Interra's Common Stock by directors and
director nominees named herein, by the executive officers of
Interra named in the Summary Compensation Table and by all
directors and executive officers of Interra as a group. Except
as otherwise indicated, such information is provided as of March
3, 1997, and the named beneficial owner possesses sole voting and
investment power with respect to all shares. No person or group
is known by Interra to own beneficially five percent or more of
its Common Stock.
<TABLE>
<CAPTION>
Amount and Nature Percent
Title of of Beneficial of
Name of Beneficial Owner Class Ownership Class
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
John C. Appel................. Common 138,912 (1)(2)(3) 1.1%
J. Evans Attwell.............. Common 7,000 (1) *
Susan S. Boren................ Common 12,158 (1)(4) *
F. Gregory Fitz-Gerald........ Common 18,500 (1) *
Louis C. Fornetti............. Common 23,755 (2)(3)(5) *
William A. Johnstone.......... Common 25,000 (6) *
Walter F. Mondale............. Common 300 *
Daniel J. Reuss............... Common 22,778 (1)(2)(3) *
C.A. Rundell, Jr.............. Common 10,500 (1) *
Robert L. Ryan................ Common 11,000 (1) *
Arthur R. Schulze, Jr......... Common 22,965 (1)(4) *
J. Scott Spiker............... Common 12,402 (1)(2)(3) *
Irving Weiser................. Common 273,579 (1)(2)(3)(7) 2.2%
All directors and executive
officers as a group
(17 persons)................. Common 599,597 (1)(2)(3)(4)(5)(6)(7) 4.9%
<FN>
* Less than 1%
(1) Includes the following number of shares issuable upon
exercise of currently exercisable options granted pursuant to the
Company's 1986 Stock Option Plan or 1996 Stock Incentive Plan:
Mr. Appel, 50,250; Mr. Attwell, 2,000; Ms. Boren, 11,000; Mr.
Fitz-Gerald, 11,000; Mr. Reuss, 6,835; Mr. Rundell, 9,500; Mr.
Ryan, 9,500; Mr. Schulze, 11,000; Mr. Spiker, 3,810; Mr. Weiser,
145,650; and all directors and executive officers as a group (17
persons), 263,095.
(2) Includes the following number of shares held under the
Company's Retirement Plan and allocated to the following
individuals' accounts as of March 3, 1997: Mr. Appel, 14,741;
Mr. Fornetti, 73; Mr. Reuss, 3,787; Mr. Spiker, 267; Mr. Weiser,
17,684; and all directors and executive officers as a group (17
persons), 45,573. As of March 3, 1997, a total of 4,041,785
shares of Common Stock, or 33 percent of the outstanding, were
held in the Retirement Plan. Voting of shares held in the
Retirement Plan is passed through to the participating employees.
Participating employees are also entitled to determine, on a
confidential basis, whether shares held in the Plan for their
benefit will be tendered in a tender or exchange offer. Vested
shares held in the Retirement 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).
(3) Includes the following number of shares credited to
the account of such executive officer pursuant to the Company's
Executive Deferred Compensation Plan: Mr. Appel, 41,626; Mr.
Fornetti, 5,382; Mr. Reuss, 9,663; Mr. Spiker, 8,325; Mr. Weiser,
56,510; and all directors and executive officers as a group (17
persons), 121,506. As of March 3, 1997, 311,844 shares of Common
Stock, or 2.5 percent of the outstanding shares, were credited to
the accounts of participants in the Executive Deferred
Compensation Plan. Shares are credited to the accounts of
executives participating in the Executive Deferred Compensation
Plan annually following payment of bonuses for the preceding
year. All shares held in 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 credited to their accounts
under the Executive Deferred Compensation Plan. All shares held
in the Executive Deferred Compensation Plan are subject to the
claims of Interra'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.
(4) Includes the following number of restricted shares
received in lieu of cash compensation pursuant to the Company's
1996 Stock Incentive Plan or 1994 Restricted Stock Plan for Non-
Employee Directors: Ms. Boren 858; Mr. Schulze, 1,715; and all
directors and executive officers as a group (17 persons), 2,573.
Voting of restricted shares is passed through to the
participating directors. 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. Shares granted under the 1996 Stock
Incentive Plan become fully vested on the first anniversary of
the date of grant. Shares granted under the 1994 Restricted
Stock Plan for Non-Employee Directors become fully vested over a
four-year period with 20 percent, an additional 30 percent and
the remaining 50 percent becoming vested on each of the second,
third and fourth anniversaries, respectively, of the grant date.
(5) Includes 18,300 shares of restricted stock issued to
Mr. Fornetti upon commencement of his employment. Fifty percent
of such shares became vested on December 31, 1996 and the
remaining 50 percent of such shares vest on December 31, 1997,
subject to acceleration in certain circumstances. Mr. Fornetti
is not entitled to dispose of or pledge unvested shares, and
such shares are subject to forfeiture in certain circumstances
until fully vested. Mr. Fornetti is, however, entitled to vote
and receive distributions on all 18,300 of such shares.
(6) Shares of restricted stock issued to Mr. Johnstone upon
commencement of his employment. Twenty-five percent of such
shares became vested on December 31, 1996 and the remaining
seventy-five percent vest in equal annual increments on December
31, 1997, 1998 and 1999. Mr. Johnstone is not entitled to
dispose of or pledge unvested shares, and such shares are subject
to forfeiture in certain circumstances until fully vested. Mr.
Johnstone is, however, entitled to vote and receive distributions
on all 25,000 of such shares.
(7) Includes 4,200 shares held in trust accounts for the
benefit of Mr. Weiser's children for which Mr. Weiser has sole
voting and dispositive power and 4,000 shares held in the estate
of Mr. Weiser's deceased father for which Mr. Weiser, as co-
executor and co-trustee, has shared voting and dispositive power.
Excludes 420 shares beneficially owned by Mr. Weiser's spouse and
disclaimed by Mr. Weiser.
</TABLE>
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 directors and executive
officers and all persons who beneficially own more than 10
percent of the outstanding shares of the Company'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. Executive officers,
directors and greater-than-10-percent beneficial owners are also
required to furnish the Company with copies of all Section 16(a)
forms they file. To the Company's knowledge, based upon a review
of the copies of such reports and written representations that no
other reports were required, during the fiscal year ended
December 31, 1996, all Section 16(a) filing requirements
applicable to directors, executive officers and greater-than-10-
percent beneficial owners were satisfied.
PROPOSAL 1 - ELECTION OF DIRECTORS
NOMINEES
Ten individuals have been nominated for election to the
Company's Board of Directors at the 1997 Annual Meeting of
Stockholders to hold office until the next annual meeting of
stockholders or until their successors are duly elected and
qualified (except in the case of earlier death, resignation or
removal). Three of the nominees for election are officers of
Interra and its subsidiaries, Dain Bosworth Incorporated ("DBI")
and 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 Common Stock represented by that 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 Common Stock represented by that proxy will be considered
present at the meeting for purposes of determining a quorum and
for purposes of calculating the total number of shares voted 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 ten
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. 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 named persons in 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 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.
[PICTURE]
JOHN C. APPEL
President and
Chief Executive Officer
Dain Bosworth Incorporated
John C. Appel, 48, was named Chief Executive Officer of DBI in
February 1997. Mr. Appel has been President and Chief Operating
Officer of DBI since 1994 and an Executive Vice President of
Interra since 1990. Mr. Appel served as Chief Financial Officer
of Interra from 1986 to 1994 and as Chief Financial Officer of
DBI from 1990 to 1994. Prior to joining Interra as its Chief
Financial Officer in 1986, Mr. Appel was a partner with the
accounting firm of Deloitte Haskins & Sells (now Deloitte &
Touche). Mr. Appel has been a director of Interra since 1995.
Mr. Appel also serves as a director of Smith Breeden Associates,
a registered investment adviser.
[PICTURE]
J. EVANS ATTWELL
Of Counsel
Vinson & Elkins L.L.P.
J. Evans Attwell, 65, is Of Counsel to the Houston-based law
firm of Vinson & Elkins LLP. He was a partner in the firm from
1965 through 1995 and served as its Managing Partner from 1981
through 1991. Mr. Attwell has been a director of Interra since
1996. Mr. Attwell also serves as a director of American General
Corporation and Seagull Energy Corporation.
[PICTURE]
SUSAN S. BOREN
President
Trillium Advisors, Inc.
Susan S. Boren, 50, is President of Trillium Advisors, Inc. a
firm she founded in 1996 to advise executives and boards on the
strategic integration of leadership, governance and
organizational values. From 1981 through 1995, Ms. Boren was an
executive with Dayton Hudson Corporation in financial, human
resource and operating roles. Ms. Boren has been a director of
Interra since 1993. Ms. Boren also serves as a director of
Valspar Corporation.
[PICTURE]
F. GREGORY FITZ-GERALD
President
The ANSR Company, LLC
F. Gregory Fitz-Gerald, 55, 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. 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 Interra
since 1987.
[PICTURE]
WILLIAM A. JOHNSTONE
President
Chief Executive Officer
Rauscher Pierce Refsnes, Inc.
William Johnstone, 52, has been the President and Chief Executive
Officer of RPR, and a director of Interra, since June 1996.
Prior to that time, Mr. Johnstone was a partner in the
Minneapolis-based law firm Dorsey & Whitney, LLP, where he was a
member of the Policy and Management Committees and was the head
of the Finance and Commercial Group.
[PICTURE]
WALTER F. MONDALE
Partner
Dorsey & Whitney, LLP
Walter F. Mondale, 69, has been nominated to stand for election
as a director of Interra at the 1997 Annual Stockholders'
Meeting. Mr. Mondale currently is a partner with the
Minneapolis-based law firm of Dorsey & Whitney, LLP. From 1993
through 1996, Mr. Mondale was the U.S. Ambassador to Japan. He
was the Democratic Party's nominee for President in 1984, Vice
President of the United States from 1976 to 1980, a U.S. Senator
from 1964 to 1976, and Attorney General for the State of
Minnesota from 1960 to 1964. Mr. Mondale also serves as a
director of Northwest Airlines, the Mayo Foundation and CNA
Financial Corp.
[PICTURE]
C. A. RUNDELL, JR.
Private Investor
Financial Consultant
Rundell Enterprises
C. A. Rundell, Jr., 65, 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 Interra
since 1994. Mr. Rundell also serves as chairman of NCI Building
Systems, Inc., as chairman and interim chief executive officer of
Tyler Corporation and as a director of Tandy Brands Accessories,
Inc.
[PICTURE]
ROBERT L. RYAN
Senior Vice President
Chief Financial Officer
Medtronic, Inc.
Robert L. Ryan, 53, has been Senior Vice President and Chief
Financial Officer of Medtronic, Inc. since 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 Interra since 1994. Mr. Ryan also is
a director of TECO Energy, Inc., Tampa Electric Company, and
United HealthCare Corporation.
[PICTURE]
ARTHUR R. SCHULZE, JR.
Former Vice Chairman of the Board
General Mills, Inc.
Arthur R. Schulze, Jr., 66, retired from his position as Vice
Chairman of the Board of General Mills, Inc. in 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 Interra
since 1987. Mr. Schulze is also a director of Sealright Co.,
Inc.
[PICTURE]
IRVING WEISER
Chairman, President and Chief Executive Officer,
Interra Financial Incorporated
Chairman,
Dain Bosworth Incorporated and
Rauscher Pierce Refsnes, Inc.
Irving Weiser, 49, has been Interra's Chairman since 1995, Chief
Executive Officer since 1990 and President since 1985. Mr.
Weiser has also been Chairman of DBI since 1990, and Chairman of
RPR since 1995. From 1990 to February 1997, Mr. Weiser held
various other executive positions with each of DBI and RPR,
including serving as DBI's Chief Executive Officer and Acting
Chief Executive Officer of RPR. Prior to 1985, Mr. Weiser was a
partner in the law firm of Dorsey & Whitney, LLP. Mr. Weiser has
been a director of Interra since 1985.
BOARD OF DIRECTORS COMMITTEES AND MEETINGS
The Company's Board of Directors has an Audit Committee and a
Compensation and Organization Committee. The Audit Committee
reviews and monitors the Company's accounting policies and
control procedures, recommends the engagement of the independent
auditors, reviews the scope of the audit, and generally assists
the Board in fulfilling its fiduciary responsibilities relating
to accounting, financial and reporting policies and practices.
The Compensation and Organization Committee approves the policies
for and structure and amount of compensation of the Company's
senior executives, and consults with the Company's Chief
Executive Officer and Board of Directors concerning
organizational matters. The Compensation and Organization
Committee also administers the Company's 1986 Stock Option Plan,
1996 Stock Incentive Plan, and Executive Deferred Compensation
Plan. The Compensation and Organization Committee also acts as
the Board's nominating committee by reviewing new Board
candidates and recommending annually the slate of directors for
approval by the Board of Directors and stockholders. The
Committee will consider qualified Board nominees recommended by
stockholders. Any stockholder wishing to recommend a nominee
must submit such person's name and a summary of his or her
qualifications in writing to the Secretary of the Company at
least 30 days prior to the stockholder meeting at which such
nomination would be considered and acted upon.
The Audit Committee, on which Messrs. Fitz-Gerald (chairman),
Rundell and Attwell served, held five meetings in 1996. The
Compensation and Organization Committee, on which Messrs. Schulze
(chairman) and Ryan and Ms. Boren served, held seven meetings in
1996. The Board of Directors met five times in 1996. During
1996, no director, other than Ms. Boren, attended fewer than 75
percent of the meetings of the Board and Committees upon which
such director served. Ms. Boren attended seven of twelve total
meetings (58 percent) for the year.
COMPENSATION
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Compensation Philosophy
The Compensation and Organization Committee of the Board of
Directors (the "Committee") approves the policies for and
structure and amount of compensation of the Senior Executives,
including the Chief Executive Officer and the other executive
officers of the Company named in the accompanying Summary
Compensation Table. The Committee's goal is to establish
compensation programs that will attract and retain highly
qualified executives and provide an incentive to such executives
to focus their efforts on the Company's long-term strategic
goals by aligning their financial interests closely with long-
term stockholder interests. The Committee is composed entirely
of independent directors.
The most significant component of the Company's Senior
Executive compensation program is cash remuneration in the form
of base salaries and annual discretionary bonuses.
Bonuses are determined based upon the performance of the Company,
the individual executive, and his or her operating unit and
employing company during the fiscal year. They are awarded early
in the following year. In evaluating performance, financial,
nonfinancial and long-term strategic objectives are considered.
Base salaries generally represent a relatively small portion of
the Senior Executives' total cash compensation and are average
relative to comparable firms in the industry. Bonuses make up a
significant portion of the Senior Executives' total cash
compensation (as much as 85.7 percent for 1996). The Committee
believes that basing a substantial portion of a Senior
Executive's compensation on performance motivates the executive
to perform at the highest possible level.
As a central component of the Company's Senior Executive
compensation program, the Committee annually awards Senior
Executives options to acquire shares of the Company's Common
Stock. The Committee believes that stock options provide a
highly efficient form of compensation from both a cost and an
accounting perspective, and that such awards provide an incentive
to achieve the Company's longer-term strategic goals by aligning
the long-term financial interests of the Senior Executives with
those of the Company's stockholders.
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 to the amount of total
cash compensation approved by the Committee for such Executive.
The range of Long-Term Incentive Percentages (currently 8 to 20
percent of a Senior Executive's total cash compensation) was
established with a goal of providing long-term compensation
opportunities to the Senior Executives competitive with those of
the executives of other well-performing regional brokerage firms.
The percentages were initially approved by the Committee based
upon the recommendation of an independent firm of management
compensation consultants. They are reviewed periodically by
management and the Committee for appropriateness and
competitiveness.
An additional component of the Company's Senior Executive
compensation program is the Executive Deferred Compensation Plan
(the "Deferred Plan"). The Deferred Plan is a voluntary, non-
tax-qualified, deferred compensation plan that encourages Senior
Executives to invest their own capital in the Company's 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 earned for
that year. The deferred amount may be invested either in shares
of the Company's Common Stock or in an alternate fixed income
investment, but the participating Senior Executive will receive a
matching contribution from his or her employing company only on
amounts invested in Company Common Stock. For 1996, such
matching contribution was set at a level equal to 50 percent of
the deferred bonus amount. Participating Senior Executives vest
in 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 the
Company.
The Committee believes that the stock option and Deferred Plan
components of the Company's Senior Executive compensation program
have increased and will continue to increase over time the levels
of stock ownership of the Company's Senior Executives. This
aligns the interests of those persons with the greatest ability
to affect the Company's financial results closely with the
interests of the Company's stockholders. The Committee also
believes that significant levels of stock ownership and ownership
potential will assist the Company in retaining the services of
the Senior Executives.
Determination of 1996 Senior Executive Compensation
The Committee met three times to determine annual discretionary
bonuses and long-term incentive compensation for the Senior
Executives for 1996. In preparation for these meetings, the
Committee reviewed the overall profitability, growth and
financial performance of the Company, 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 the Company's 1996 earnings
and return on average equity; and with respect to growth, it
reviewed the three-year compounded growth rates in the Company's
revenues and stock price. The Committee then reviewed similar
information for the most recently available periods for a
selected group of comparable publicly held regional brokerage
firms. All of such firms are included in the Regional Sub-Index
of the Financial Service Analytics Brokerage Stock Price Index
used in the accompanying Comparative Stock Performance graph. In
reviewing the overall performance of the Company and its
subsidiaries relative to the performance of such other companies
the Committee gave equal weight to all four key 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 Company's financial performance
during 1996 against the objectives set by management and the
Board of Directors at the beginning of the year. Based on this
information, the Committee determined a compensation range that
it believed fairly reflected the Company'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 established for Mr. Weiser by the Board of Directors
at the beginning of the year and evaluated Mr. Weiser's
performance with respect to such objectives. The Committee also
considered Mr. Weiser's service as RPR's acting Chief Executive
Officer for the first six months of 1996.
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.
Compensation of Other Senior Executives. The Committee
approved individual bonus amounts for each Senior Executive other
than Mr. Weiser following a presentation by Mr. Weiser of his
evaluation of the Senior Executive's individual, departmental and
company performance and his bonus recommendation for such Senior
Executive. In developing his evaluations of and bonus
recommendations for the Senior Executives, Mr. Weiser obtained
advice from other appropriate individuals, including Mr. Appel
with respect to DBI Senior Executives and Mr. Johnstone with
respect to RPR Senior Executives. Mr. Weiser 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
Senior 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 and reviewed the more current
publicly available proxy statement information with respect to
certain 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 Long-Term Incentive Percentages to total cash compensation
as described above.
The Committee also reviews and approves the terms of specific
compensation arrangements being entered into by the Company
and/or its subsidiaries with certain Senior Executives from time
to time, as well as promotions and other changes in the roles and
responsibilities of Senior Executives. The terms of Mr.
Johnstone's offer of employment were among the specific
compensation arrangements approved by the Committee during 1996.
The Committee also approved Mr. Weiser's recommendation to
promote Mr. Appel to Chief Executive Officer of DBI in February
1997 and to increase his base salary from $175,000 to $200,000
for 1997 to reflect such change. The Committee believes that
such arrangements are consistent with the Company'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 during a calendar year. Regulations under
Section 162(m) permit stock options to be excluded from
compensation if certain conditions are met. Because the
Company's stock option plans satisfy these conditions, and
because of the voluntary deferrals made pursuant to the Deferred
Plan, no named Senior Executive received compensation during
calendar 1996 which exceeded $1,000,000 for purposes of Section
162(m). In determining bonus amounts for 1996 to be paid during
calendar 1997, the Committee determined it was appropriate in
order to achieve the goals of the Company's compensation program
as described in this report to authorize a bonus payment to Mr.
Weiser which, when combined with his 1997 base salary, would
result in compensation above the deductibility limitation of
Section 162(m). The Company will forego the corporate
compensation deduction for all amounts that exceed the Section
162(m) limit.
Arthur R. Schulze, Jr., Chairman
Susan S. Boren
Robert L. Ryan
Members of the Compensation and
Organization Committee
SUMMARY COMPENSATION TABLE
The following table summarizes, for each of the last three
fiscal years, the compensation paid to or earned by and awarded
to the Chief Executive Officer and each of the four other most
highly compensated executive officers of Interra serving at
December 31, 1996.
<TABLE>
<CAPTION>
Long-Term
Compensation
----------------------
Annual Compensation Awards
-------------------- ----------------------
Securities
Underlying All Other
Name & Principal Retricked Options/ Compen-
Positions Year Salary Bonus(1)(2) Stock SARs(1) sation(3)
- ----------------- ---- -------- ----------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Irving Weiser,(4) 1996 $250,000 $1,500,000 - 23,000 $248,882
Chairman, Pres. 1995 $250,000 $800,000 - 24,300 $167,338
& CEO, Interra; 1994 $250,000 $525,000 - 49,500 $105,688
Chairman, DBI
and RPR
John C. Appel,(4) 1996 $175,000 $950,000 - 11,100 $167,806
Pres. & CEO, DBI; 1995 $175,000 $625,000 - 13,900 $132,688
Exec. VP, Interra 1994 $175,000 $425,000 - 33,000 $77,457
Louis C.
Fornetti,(5) 1996 $175,000 $575,000 - 6,400 $95,750
Exec. VP & CFO, 1995 $73,580 $400,000 18,300 37,500 -
Interra; 1994 - - - - -
Pres. & CEO,
Clearing Services
J. Scott
Spiker,(6) 1996 $150,000 $400,000 - 3,600 $83,382
Pres. & CEO, 1995 $150,000 $225,000 - 4,300 $39,365
Advisory 1994 $110,000 $190,000 - 10,050 $75,000
Services
Exec. VP, Interra
Daniel J.
Reuss(7) 1996 $130,625 $300,000 - 2,300 $47,806
Sr. VP, 1995 $120,000 $238,500 - 3,300 $46,988
Controller 1994 $120,000 $180,000 - 4,050 $29,400
& Treas.,
Interra; Exec.
VP, DBI
<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 fair market value per share of
Common Stock on the date of grant. Option numbers have been
adjusted to reflect a three-for-two split of the Company's Common
Stock effected December 20, 1995.
(2) For 1996, 1995 and 1994, respectively, includes the
following amounts voluntarily deferred pursuant to the Executive
Deferred Compensation Plan: Mr. Weiser, $450,000, $240,000 and
$127,500; Mr. Appel, $285,000, $187,500 and $127,500; Mr.
Fornetti (1996 only), $172,500; Mr. Spiker (1996 and 1995 only),
$120,000 and $67,500; and Mr. Reuss, $45,000, $47,700 and
$36,000. The Executive Deferred Compensation Plan is a
voluntary, non-tax-qualified, deferred compensation plan in which
the Senior Executives of the Company and/or its subsidiaries may
participate. Under the Plan, each participating 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 the
Company's Common Stock or in an alternate fixed income
investment, but the participating Senior Executive will only
receive a matching contribution from his or her employing company
on amounts invested in shares of the Company's Common Stock. The
employer-matching contribution was equal to 50 percent of the
deferred amount for 1996 and 1995 and 33 1/3 percent of the
deferred amount for 1994. Senior Executives vest in employer-
matching contributions after four years (subject to acceleration
in certain events) and are immediately vested with respect to
deferred bonus amounts.
(3) Represents for each of 1996, 1995 and 1994,
respectively: (a) contributions in the following aggregate
amounts made during the fiscal year ended December 31 by the
Company and/or its subsidiaries pursuant to the Company's Profit
Sharing and Stock Bonus Plans (which were merged to create the
Company's Retirement Plan effective January 1, 1997) and Deferred
Compensation Plan for Excess Contributions (which was terminated
for compensation earned after December 31, 1994): Mr. Weiser,
$14,382, $47,338 and $63,230; Mr. Appel, $15,806, $38,938 and
$34,999; Mr. Spiker (1996 and 1995 only), $14,382 and $5,615; and
Mr. Reuss, $15,806, $25,414 and $17,412; and (b) matching
contributions in the following amounts made by the Company and/or
its subsidiaries pursuant to the Executive Deferred Compensation
Plan on bonus amounts earned by such executives for the fiscal
year ended December 31, but voluntarily deferred: Mr. Weiser,
$225,000, $120,000 and $42,458; Mr. Appel, $142,500, $93,750 and
$42,458; Mr. Fornetti (1996 only), $86,250; Mr. Spiker (1996 and
1995 only), $60,000 and $33,750; and Mr. Reuss, $22,500,
$23,850 and $11,988. The Retirement Plan is a broad-based plan
in which all employees of the Company and its subsidiaries may
participate (subject to certain eligibility requirements). Under
the Retirement Plan, the Company 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 the Retirement Plan, subject to a 3-percent minimum
contribution. In addition, 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 with the Company.
(4) Mr. Weiser also served as acting President and Chief
Executive Officer of RPR from October 1995 until June 1996, when
Mr. Johnstone was named to such position, and as Chief Executive
Officer of DBI until February 1997, when Mr. Appel was named to
such position.
(5) Mr. Fornetti became Executive Vice President and Chief
Financial Officer of the Company effective July 17, 1995. He was
appointed to the additional post of President and Chief Executive
Officer of Interra Clearing Services Inc. in September 1996. For
a description of the terms of Mr. Fornetti's compensation
arrangements, see "Compensation Arrangements With Named Executive
Officers" below.
(6) Mr. Spiker was appointed President and Chief Executive
Officer of Interra Advisory Services Inc. in January 1995. He
was promoted from Senior Vice President to Executive Vice
President of the Company in May 1996. For a description of the
terms of Mr. Spiker's compensation arrangements, see
"Compensation Arrangements With Named Executive Officers" below.
(7) Mr. Reuss was renamed Senior Vice President, Treasurer and
Controller of the Company in May 1996, positions he held prior to
being named Executive Vice President and Chief Financial Officer
of DBI in January, 1995. The Chief Financial Officer position
was eliminated at DBI in May 1996 as part of the shared services
strategy. Mr. Reuss continues to serve as Executive Vice
President of DBI.
Options and Stock Appreciation Rights
The following tables summarize option grants made to the
Interra executive officers named in the Summary Compensation
Table with respect to the year ended December 31, 1996, option
exercises by such persons during the year ended December 31,
1996, and the potential realizable value of the options held by
such persons at December 31, 1996. No stock appreciation rights
("SARs") have been granted to any of the named persons.
</TABLE>
<TABLE>
Option/SAR Grants With Respect to Year Ended December 31, 1996
Individual Grants
- ----------------------------------------------------------------
<CAPTION>
% of Total
Options/SARs
Number of Granted to
Securities Employees
Underlying with Exercise
Options/SARs Respect Base Price Expiration
Name Granted(1) to 1996 (per share)(1) Date
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Irving Weiser 23,000 7.6% $42.75 2/4/2007
John C. Appel 11,100 3.7% $42.75 2/4/2007
Louis C. Fornetti 6,400 2.1% $42.75 2/4/2007
J. Scott Spiker 3,600 1.2% $42.75 2/4/2007
Daniel J. Reuss 2,300 0.8% $42.75 2/4/2007
<CAPTION>
Potential Realizable Value
At Assumed Annual Rates
of Stock Price Appreciation
for Option Term (2)
--------------------------------
Name 5% ($69.64) 10% ($110.88)
- ----------------- --------------------------------
<S> <C> <C>
Irving Weiser $618.361 $1,567,047
John C. Appel $298,426 $756,271
Louis C. Fornetti $172,066 $436,048
J. Scott Spiker $96,787 $245,277
Daniel J. Reuss $61,836 $156,705
<FN>
(1) Options granted February 4, 1997, based upon 1996 total
cash compensation. See "Report of Compensation Committee on
Executive Compensation - Compensation Philosophy." All such
options become exercisable as follows: 20 percent on February 4,
1999; an additional 30 percent on February 4, 2000; and the
remaining 50 percent on February 4, 2001. Exercise price is equal
to the closing price per share of Interra's Common Stock as
reported on the New York Stock Exchange.
(2) Represents potential gains based on annual compound
stock price appreciation of 5 percent and 10 percent from the
date of grant until the expiration date. The amount in
parentheses indicates what the price would be for one share of
Interra Common Stock on the expiration date at such rates of
appreciation. The amounts given represent assumed rates of
appreciation only. Actual gains, if any, on option exercises
will depend on future performance of the Interra Common Stock and
overall stock market conditions.
</TABLE>
<TABLE>
Aggregate Option/SAR Exercises During Year Ended
December 31, 1996 and Value of Options/SARs
Held at December 31, 1996
- -----------------------------------------------------------------
<CAPTION>
Number of Unexercised
Securities Underlying
Options/SARs Held at
Shares December 31, 1996
Acquired Value (Exercisable/
Name on Exercise Realized(1) Unexercisable) (2)
- -----------------------------------------------------------------
<S> <C> <C> <C> <C>
Irving Weiser 7,000 $154,581 89,750 / 158,550
John C. Appel 6,150 $105,060 25,950 / 83,350
Louis C. Fornetti - - - / 37,500
J. Scott Spiker - - 1,200 / 13,150
Daniel J. Reuss 500 $7,125 4,075 / 11,175
<CAPTION>
Value of Unexercised
In-the-Money Options/
SARs at December 31,
1996 (Exercisable/
Name Unexercisable)(1)(2)
- ----------------- -------------------------
<S> <C> <C>
Irving Weiser $2,163,229 / $2,765,333
John C. Appel $560,416 / $1,436,519
Louis C. Fornetti - / $556,238
J. Scott Spiker $17,300 / $203,203
Daniel J. Reuss $98,257 / $182,321
<FN>
(1) "Value" has been determined based upon the difference
between the per-share option exercise price and closing price of
Interra Common Stock on the New York Stock Exchange on the date
of exercise or December 31, 1996.
(2) Does not include the number or value of unexercisable
options granted subsequent to December 31, 1996, included in the
Option Grant table above.
</TABLE>
COMPENSATION ARRANGEMENTS WITH NAMED EXECUTIVE OFFICERS
The Company has entered into written agreements with certain of
the Interra executive officers named in the Summary Compensation
table. Mr. Louis C. Fornetti was named Executive Vice President,
Treasurer and Chief Financial Officer of the Company effective
July 17, 1995. In September, 1996, he was appointed to the
additional position of Chief Executive Officer of Interra
Clearing Services Inc., formerly Regional Operations Group, Inc.
("Clearing Services"). Under the terms of his offer of
employment, Mr. Fornetti's annualized base salary was set at
$175,000. He was guaranteed a bonus of $400,000 for 1995 and a
minimum combined base and bonus of at least $500,000 for 1996,
assuming that he remained employed by the Company and performed
in a satisfactory and ethical manner. In addition, upon
commencement of his employment, Mr. Fornetti was granted 10-year,
non-qualified options to purchase 37,500 shares of the Company's
Common Stock at a purchase price of $20.417 per share and was
issued 18,300 restricted shares of the Company's Common Stock to
compensate for comparable long-term incentive payments he would
have been eligible to receive from his former employer. The
options become vested 20 percent on July 31, 1997, an additional
30 percent on July 31, 1998, and the remaining 50 percent on July
31, 1999, assuming Mr. Fornetti is still employed on such dates.
Fifty percent of Mr. Fornetti's restricted shares became vested
on December 31, 1996, and the balance will vest on December 31,
1997. Unvested restricted shares are subject to forfeiture in
the event Mr. Fornetti resigns from or abandons his position with
the Company or is terminated for misconduct. Mr. Fornetti's
vesting with respect to such unvested shares is also subject to
acceleration in the event that Mr. Fornetti dies or becomes
disabled, his employment is terminated by the Company for reasons
other than misconduct, or there is a change in control of the
Company.
Mr. Spiker joined the Company as Senior Vice President and
Director of Strategic Planning and Corporate Development on
February 1, 1994. In January 1995, he was appointed President
and Chief Executive Officer of Interra Advisory Services Inc.,
formerly IFG Asset Management Services, Inc. ("Advisory
Services"). 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,
upon commencement of his employment, Mr. Spiker was paid $75,000
pursuant to a loan agreement that provided that the Company would
forgive such amount in equal installments of $25,000 on each of
March 1, 1995, 1996, and 1997 if he was still employed by the
Company on such dates. Mr. Spiker was also granted 10-year, non-
qualified options to purchase 6,000 shares of the Company's
Common Stock at a purchase price of $20.833 per share. Such
options became vested 20 percent on February 1, 1996 and an
additional 30 percent on February 1, 1997. The remaining 50
percent becomes vested on February 1, 1998, assuming Mr. Spiker
is still employed as of such date.
COMPENSATION OF DIRECTORS
Interra's non-employee director compensation currently consists
of (a) base compensation in the amount of $15,000 per year; (b)
$1,000 for attendance at each Board of Directors or Committee
meeting; (c) an additional $1,800 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, Interra 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 1986 Stock Option Plan and 1996 Stock Incentive
Plan, each non-employee director of Interra has also been
automatically granted, upon each election or reelection to the
Board of Directors, a five-year, non-qualified option to purchase
2,000 shares of Interra's Common Stock which vests in full six
months after the date of grant. Such options are granted with an
exercise price equal to the closing price per share of Interra
Common Stock as reported on the New York Stock Exchange.
Additionally, pursuant to the 1996 Stock Incentive Plan, non-
employee directors have been offered the opportunity to elect to
receive restricted shares of Interra 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 Interra Common Stock having a
market value, based on the closing sale price per share of
Interra Common Stock on the New York Stock Exchange, equal to 110
percent of the base compensation foregone. The restricted shares
become fully vested on the first anniversary of the date of
grant. Such vesting is accelerated in the event the participating
director dies, becomes disabled or retires in accordance with
Interra's then-current Board retirement policy or upon a change
in control of Interra.
CERTAIN TRANSACTIONS
DBI and RPR are broker-dealers who extend credit from time to
time under Federal Reserve Regulation T to certain of the
Company'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 would be forgiven on each of March 1, 1995, 1996
and 1997, if Mr. Spiker were still employed on such dates. Such
loan has now been forgiven in full. See "Other Compensation
Arrangements with Named Executive Officers."
COMPARATIVE STOCK PERFORMANCE
The graph below compares the cumulative total stockholder
return on Interra's Common Stock for the last five fiscal years
with the cumulative total return on the S&P 500 Stock Index and
the Regional Sub-Index of the Financial Service Analytics Stock
Price Index (the "FSA Index") over the same period (assuming the
investment of $100 in each on December 31, 1991, and the
reinvestment of all dividends). The graph also shows the
cumulative total return determined on the same basis over such
five-year period on the Regional Sub-Index of the Lipper
Analytical Brokerage Stock Price Index (the "Lipper Index"), the
index the Company has shown in prior years' Proxy Statements.
The Company determined to change its industry index this year
based on the desire to obtain more cost-effective and responsive
service.
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
INTERRA FINANCIAL, S&P 500 INDEX, FSA REGIONAL INDEX AND
LIPPER REGIONAL INDEX
<CAPTION>
FISCAL YEAR ENDED DECEMBER
---------------------------------------
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Interra Financial $100 $108 $170 $140 $242 $344
S&P 500 Index 100 108 118 120 165 203
FSA Regional Index 100 111 145 124 183 284
Lipper Regional Index 100 112 147 124 177 295
<FN>
(1) Total return calculations on the FSA Index were
performed by Financial Service Analytics, Inc. and total return
calculations on the Lipper Index were performed by the Lipper
Analytical Securities Corporation. The FSA Index is composed of
15 publicly held regional securities firms, including Interra.
The Lipper Index is composed of 14 publicly held regional
securities firms, including Interra. Each index has been weighted
based upon the market capitalizations of such firms in accordance
with Securities and Exchange Commission rules.
(2) Total return calculations on the S&P 500 Index were
performed by Standard & Poor's Compustat Services, Inc.
</TABLE>
Proposal 2 -Ratification of Appointment of Auditors
The Board of Directors, based upon the recommendation of its
Audit Committee, has appointed KPMG Peat Marwick LLP as
independent auditors to audit the consolidated financial
statements of Interra and its subsidiaries for the current fiscal
year ending December 31, 1997, and to perform other appropriate
accounting services and recommends that the stockholders of
Interra ratify that appointment. KPMG Peat Marwick LLP has
audited Interra's financial statements for the fiscal years ended
December 31, 1989 through 1996. Representatives of KPMG Peat
Marwick LLP will be present at the 1997 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
Interra Common Stock present and entitled to vote at the 1997
Annual Meeting is required to approve Proposal 2 ratifying the
appointment of KPMG Peat Marwick LLP. Proxies will be voted in
favor of Proposal 2 unless otherwise specified. If an executed
proxy card is returned and no instruction is given, the shares of
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 Interra 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 total vote with
respect to Proposal 2, but will not be considered to have been
voted in favor of Proposal 2.
Deadline for Submission of Stockholder Proposals
Any proposal by a stockholder which may properly be presented
at the next annual meeting of Interra's stockholders must be
received at Interra's principal executive offices, Dain Bosworth
Plaza, 60 South Sixth Street, P.O. Box 1160, Minneapolis,
Minnesota 55440-1160, not later than December 1, 1997.
General
The Board of Directors does not know of any other business to
come before the 1997 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 1997 Annual
Meeting will be borne by Interra. In addition to soliciting
proxies by mail, officers, directors and other regular employees
of Interra or its subsidiaries may solicit proxies on behalf of
the Board of Directors in person or by telephone. Interra will
also request that brokers or other nominees who hold shares of
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 Interra'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
- -----------------------
Carla J. Smith
Secretary
March 31, 1997
<PAGE>
[Interra Logo]
Dain Bosworth Plaza
60 South Sixth Street
P.O. Box 1160
Minneapolis, Minnesota 55402-1160
(612) 371-7750
Upon written request, Interra Financial Incorporated 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, 1996. Requests should be
addressed to Interra Financial Incorporated, P.O. Box 1160,
Minneapolis, Minnesota 55440-1160, Attention: Carla J. Smith,
Secretary.
<PAGE>
APPENDIX A
[INTERRA LOGO] PROXY P.O. Box 1160, Minneapolis, MN 55440-1160
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Irving Weiser and Louis C.
Fornetti, and each of them, with power to appoint a
substitute, to vote all shares the undersigned is entitled
to vote at the Annual Meeting of Stockholders of Interra
Financial Incorporated to be held on April 30, 1997, 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 Directors __ For all nominees listed __ Withold Authority
below (except as marked to vote for all
to the contrary)* nominees listed
below
J.C. Appel, J.E. Attwell, S.S. Boren, F.G. Fitz-Gerald, W.A. Johnstone,
W.F. Mondale, C.A. Rundell, Jr., R.L. Ryan, A.R. Schulze, Jr., and I. Weiser
* (Instruction: To withold authority to vote for any individual nominee,
draw a line through that nominee's name.)
- ----------------------------------------------------------------------------
2. Ratification of appointment of auditors __ For __ Against __ Abstain
- ----------------------------------------------------------------------------
3. Discretionary authority to vote on any other business that may properly
come before the meeting.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy
will be voted FOR all nominees named in Item 1 and FOR Proposals 2 and 3.
Please sign exactly as name appears below: When shares are held by joint
tenants, both must sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation,
please sign in full corporate name by President or other authorized officer.
If a partnership, please sign in partnership name by authorized person.
Signature ________________________
Signature (if held jointly) ------------------------
Dated: ____________________, 1997.
