<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT
OF 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a- 12
THE INTERGROUP CORPORATION
(Name of Registrant as Specified In Its Charter)
THE INTERGROUP CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: ___
(4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fees is calculated and state
how it was determined.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(3) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of
its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
THE INTERGROUP CORPORATION
2121 AVENUE OF THE STARS, SUITE 2020
LOS ANGELES, CALIFORNIA 90067
(310) 556-1999
___________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 13, 1998
To the Shareholders of
The Intergroup Corporation
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
The Intergroup Corporation (the "Corporation") will be held in the Park
Hyatt Los Angeles Hotel, 2151 Avenue of the Stars, Century City,
California, on January 13, 1998 at 2:00 P.M. for the following purposes:
(1) to elect two Class A Directors to serve until the 2000 Annual Meeting
and until their successors shall have been duly elected and qualified;
(2) to ratify the retention of Price Waterhouse LLP as independent public
accountants for the Corporation; and
(3) to transact such other business as may properly come before the meeting,
or any adjournment or adjournments thereof.
Only Shareholders of record at the close of business on November
28, 1997 are entitled to notice of and to vote at the Annual Meeting or
any adjournments thereof.
Your proxy is important whether you own a few or many shares.
Please check the appropriate boxes in the enclosed proxy and sign, date
and mail it today in the accompanying self-addressed postage-paid
envelope. Return the proxy even if you plan to attend the meeting. You
may always revoke your proxy and vote in person.
Dated: December 8, 1997
By order of the Board of Directors,
/s/ Gregory C. McPherson
Gregory C. McPherson
Assistant Secretary
<PAGE>
THE INTERGROUP CORPORATION
2121 AVENUE OF THE STARS, SUITE 2020
LOS ANGELES, CALIFORNIA 90067
(310) 556-1999
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 13, 1998
This Proxy Statement is furnished by the Board of Directors (the
"Board") of The Intergroup Corporation (the "Corporation"), a
corporation formed under the laws of the State of Delaware, in
connection with the solicitation of proxies for use at the Annual
Meeting of Shareholders (the "Annual Meeting") to be held on January 13,
1998 or at any adjournment or adjournments thereof. At such meeting,
the Shareholders will consider and act on the proposals enumerated in
the foregoing Notice of Meeting. Only Shareholders of record at the
close of business on November 28, 1997 are entitled to notice of, and to
vote, at the Annual Meeting.
Each shareholder is entitled to cast, in person or by proxy, one vote
for each share held of record at the close of business on November 28,
1997. As of October 31, 1997 there were outstanding 953,649 shares of
common stock, par value $.01 per share (the "Common Stock"), the only
outstanding voting security of the Corporation. The shares were held of
record by approximately 1,394 Shareholders as of October 31, 1997.
The Annual Meeting will address business pertaining to the fiscal year
ended June 30, 1997 (the "1997 Fiscal Year"). The proxies named in the
accompanying Form of Proxy will vote the shares represented thereby if
the proxy appears to be valid on its face, and where specification is
indicated as provided in such proxy, the shares represented will be
voted in accordance with such specification. If no specification is
made, the shares represented by proxies in the form solicited will be
voted (1) to elect two Board nominees for Class A Directors for a three-
year term expiring at the 2000 Annual Meeting of Shareholders; (2) for
the ratification of the retention of Price Waterhouse LLP as the
Corporation's independent public accountants for the fiscal year ending
June 30, 1998. A Shareholder may revoke his or her Proxy at any time
before it is exercised by filing with the Secretary of the Corporation
at its principal executive offices in Los Angeles, California a written
notice of revocation or a duly executed Proxy bearing a later date, or
by appearing in person at the Annual Meeting and expressing a desire to
vote his or her shares in person.
This Proxy Statement and the accompanying Proxy were first sent or given
to the Shareholders on or about December 8, 1997.
<PAGE>
PROPOSAL I
Election of Class A Directors
The Corporation's Certificate of Incorporation provides that the Board
of Directors shall consist of not more than nine nor less than five
members. The exact number of Directors, presently five, is fixed by the
Board prior to each year's Annual Meeting of Shareholders. As authorized
in the bylaws of the Corporation, the Board of Directors is expected to
fill the vacancy created by the resignation of Mr. Howard A. Jaffe by
electing a successor to fill the unexpired term of his office prior to
the Annual Meeting. The Board is divided into three staggered classes,
each class having not less than one nor more than three members. Each
Director is elected to serve for a three-year term, and until the
election and qualification of his or her successor. When vacancies on
the Board occur, due to resignation or otherwise, the Directors then in
office may continue to exercise the powers of the Directors and a
majority of such directors may select a new Director to fill the
vacancy. Any Director may resign at any time. Any Director may be
removed by the vote of, or written consent of, the holders of a majority
of the shares of Common Stock outstanding at a special meeting called
for the purpose of removal or to ratify the recommendation of a majority
of the Directors that such Director be removed.
The term of the Class A Directors expires at the Annual Meeting. The
Board proposes Mr. John V. Winfield and Mr. Josef A. Grunwald as Class A
Directors to serve until the 2000 Annual Meeting and until the election
and qualification of their successors. The Board of Directors has been
informed that the nominees have consented to being named as nominees and
are willing to serve as Directors if elected. However, if any nominee
should be unable, or declines to serve, it is intended that the proxies
will be voted for such other person as the proxies shall, in their
discretion, designate. Unless otherwise directed in the accompanying
Proxy, the person's name therein will vote FOR the election of this nominee.
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
Directors and Executive Officers of the Corporation:
Position with
Name the Corporation Age Term to Expire
Class A Directors
John V. Winfield Chairman of the 51 1997 Annual Meeting
(1)(4) Board, President and
Chief Executive Officer
Josef A. Grunwald Director 49 1997 Annual Meeting
(2)(3)
Class B Director (6)
William J. Nance
(1)(2)(3)(4)(5) Director and Treasurer 53 1998 Annual Meeting
Class C Director
Mildred Bond
Roxborough Director 70 1999 Annual Meeting
(1)(2)(3)(4)
Other Executive
Officer
Gregory C. McPherson Executive Vice President, 38 N/A
Assistant Secretary and
Assistant Treasurer
______________
(1) Member of the Executive Committee
(2) Member of the Administrative and Compensation Committee
(3) Member of the Audit and Finance Committee
(4) Member of the Real Estate Investment Committee
(5) Member of the Nominating Committee
(6) Mr. Howard A. Jaffe was Chief Operating Officer, Secretary of the
Company and Vice Chairman of the Board during the 1997 Fiscal Year. Mr.
Jaffe resigned in July 1997 from all offices held (see Note 12 to the
Consolidated Financial Statements on Form 10-KSB at June 30, 1997).
In July 1997, Mr. Howard A. Jaffe, then an officer and director of the
Corporation, sent a letter to the Board of Directors which purported to
detail certain alleged improprieties pertaining to the Chief Executive
Officer and the Corporation relating to its securities trading policies
and operations and its employment practices. On July 25, 1997, the
Board of Directors authorized the Audit and Finance Committee and its
Administrative and Compensation Committee (comprised of the
Corporation's directors other than Messrs. Winfield and Jaffe) to
<PAGE>
conduct a thorough independent investigation of Mr. Jaffe's allegations
and Mr. Jaffe's job performance as an officer of the Corporation. Mr.
Howard A. Jaffe resigned from the Board of Directors on July 28, 1997.
The Corporation believes that Mr. Jaffe is a disgruntled former employee
of the Corporation who has made demands for substantial payments from
the Corporation and that Mr. Jaffe's allegations of improprieties are
without merit. The Committees charged with investigating these matters
has not yet made its report to the Board of Directors.
Business Experience:
The principal occupation and business experience during the last five
years for each of the Directors and Executive Officers of the
Corporation are as follows:
John V. Winfield -- Mr. Winfield was first appointed to the Board in
1982. He currently serves as the Company's Chairman of the Board,
President and Chief Executive Officer, having first been appointed as
such in 1987. Mr. Winfield also serves as President, Chairman and Chief
Executive Officer of Santa Fe Financial Corporation and Portsmouth
Square, Inc.; Director of Healthy Planet Products, Inc., and as Director
for Orckit Communications, Ltd.
Josef Grunwald -- Mr. Grunwald is an industrial, commercial and
residential real estate developer. He serves as Chairman of PDG N.V.
(Belgium), a hotel management company, and President of I.B.E. Services
S.A. (Belgium), an international trading company. Mr. Grunwald was
first elected to the Board in 1987. Mr. Grunwald also serves as
Director of Portsmouth Square, Inc.
William J. Nance -- Mr. Nance is a certified public accountant and
private consultant to the real estate and banking industries. He also
serves as President of Century Plaza Printer, Inc. Mr. Nance was first
elected to the Board in 1984. He was appointed Treasurer, Chief
Operating Officer and Chief Financial Officer in 1987. Mr. Nance
resigned as Chief Operating Officer and Chief Financial Officer in
January 1990 but continues to serve as Treasurer. Mr. Nance is also
Vice President and Director of Santa Fe Financial Corporation and Vice
President, Secretary and Director of Portsmouth Square, Inc.
Mildred Bond Roxborough -- Ms. Roxborough has been Director of
Development and Special Programs of the National Association for the
Advancement of Colored People (NAACP) since 1986. Her responsibilities
include planning and implementing fundraising programs to support the
Association's national programs and developing and overseeing Special
Programs on national issues. She also serves as Vice Chairman of the
Board of Directors of America's Charities Federation, Chairman of its
Membership and Personnel Committees and member of its Long Range
Planning Committee; and Member of the Board of Directors of Morningside
Health and Retirement Service, Member of Personnel Committee of
<PAGE>
Morningside Heights Housing Corporation. Ms. Roxborough was first
appointed to the Company's Board in 1984 and served as Vice Chairman
from 1987 through 1994.
Gregory C. McPherson -- Mr. McPherson joined the Company in March 1993.
Mr. McPherson was a private financial and strategic advisor from January
1992 to March 1993 to companies in various industries. From July 1989
to December 1991, Mr. McPherson served as Vice President in the
Investment Banking and Corporate Finance Department of Kemper Securities
Group, Inc. From September 1987 to June 1989, Mr. McPherson attended
the Harvard Business School where he received his M.B.A. and during that
time was with Prudential Bache Capital Funding in their Mergers &
Acquisitions and Financial Restructuring Group. For the seven years
prior to attending the Harvard Business School, Mr. McPherson was a
manager at the public accounting firm of Price Waterhouse LLP. Mr.
McPherson is a Certified Public Accountant.
Committees
The Corporation has an Executive Committee which meets in lieu of the
Board upon the request of the Chairman of the Committee. Mr. Winfield
is Chairman of the Executive Committee. The Committee held five
meetings during the 1997 Fiscal Year.
Mr. Nance serves as Chairman of the Corporation's Administrative and
Compensation Committee, which administers the Phantom Stock Program
(defined below) and reviews executive salaries. This committee held one
meetings during the 1997 Fiscal Year.
The Audit and Finance Committee is chaired by Mr. Nance. It held one
meeting during the 1997 Fiscal Year. This committee meets with the
Corporation's personnel and with representatives of the Corporation's
independent public accountants to review internal auditing procedures
and matters relating to the annual audit of the Corporation's financial
statements, and recommends to the Board the appointment of the
independent certified public accountants.
The Corporation has a Real Estate Investment Committee which is chaired
by Ms. Roxborough. This committee held two meetings during the 1997
Fiscal Year. The Real Estate Investment Committee reviews potential
acquisitions and dispositions of property.
The Corporation's Nominating Committee is chaired by Mr. Nance. The
committee held one meeting during the 1997 Fiscal Year. The Nominating
Committee selects nominees for election or re-election of directors and
officers.
The Board held ten meetings during the 1997 Fiscal Year. No Director
attended (whether in person, telephonically, or by written consent) less
than 75% of all meetings held during the period of time he or she served
as Director during the 1997 Fiscal Year. No Director attended less than
75% of all meetings of committees on which he or she served.
<PAGE>
EXECUTIVE COMPENSATION
Executive Officers Compensation
The following table sets forth on an accrual basis all direct
remuneration paid by the Corporation to the Executive Officers of the
Corporation for the 1997 Fiscal Year, the 1996 Fiscal Year and the 1995
Fiscal Year, whose aggregate direct remuneration exceeded $100,000.
Estimated annual benefits upon retirement will include allocations under
the ESOP (defined below). Such benefits are not currently determinable
because the plan is voluntary and employee contributions and allocations
under the plan are discretionary. There are currently no employment
contracts with the Executive Officers. No Long-Term Compensation Awards
or Payouts were made, and no Options or Stock Appreciation Rights
("SARs") were granted, during the 1997 Fiscal Year, 1996 Fiscal Year or
1995 Fiscal Year.
Name and Principal Other Annual
Position Year Salary Bonus Compensation
John V. Winfield 1997 $102,078 (1)
Chairman, President 1996 $195,650 $36,622(2)
and Chief Executive 1995 $204,156 $56,114(2)
Officer
Gregory C. McPherson 1997 $97,082 (3)
Executive Vice 1996 $191,655
President; Assistant 1995 $172,704 $50,000
Secretary and Assistant
Treasurer
Howard A. Jaffe (4) 1997 $300,000
Vice Chairman, Chief 1996 $300,000
Operating Officer and 1995 $300,000
Secretary
___________________
(1) Mr. Winfield is the president and Chairman of the Board of Santa Fe
Financial Corporation and Portsmouth Square, Inc., and received $101,220
of compensation from those entities during the 1997 Fiscal Year.
(2) Amounts include an auto allowance and imputed interest on a note due
the Company. The amount of compensation relating to interest on the
note was approximately $24,000 for Fiscal Year 1996 and $43,000 for
Fiscal Year 1995. The note receivables in connection with the stock
options was paid in full in March 1996. The remaining amount is for the
auto allowance.
(3) Mr. McPherson is a consultant of Portsmouth Square, Inc., and
received consulting fees of $86,282 during the 1997 Fiscal Year.
(4) Mr. Jaffe resigned in July 1997.
<PAGE>
Employee Stock Ownership Plan and Trust ("ESOP")
In April 1986, the Corporation established an Employee Stock Ownership
Plan and Trust ("ESOP"), effective July 1, 1985, which enabled eligible
employees to receive an ownership interest in Common Stock. The
Corporation did not make ESOP contributions during the 1997 Fiscal Year.
Phantom Stock Program
The Corporation maintains a "phantom" stock program which provides for
the issuance of up to 40,000 units with each unit being equivalent to
one share of Common Stock. Participants in the program are credited
with the incremental value in shares of Common Stock and dividend
equivalents over a five-year period from the date of award. One-fifth
of such credits in each participant's account vest on the first
anniversary date of the award and an additional one-fifth vest on each
of the next four anniversary dates. No units were granted in the 1997
Fiscal Year and, as of June 30, 1997, no units were outstanding.
Stock Incentive Plan
In 1987, the Board approved a Stock Incentive Plan providing for the
issuance of up to 125,000 shares of Common Stock pursuant to the
exercise of stock options granted under the plan. The plan also
provides for the issuance of SARs which may be granted in connection
with or without relation to the stock options. The plan was approved by
the Corporation's Shareholders in 1988. In conjunction with the Stock
Incentive Plan, the Board approved the grant of an option to the
Corporation's president for the purchase of 125,000 shares of Common
Stock at an exercise price of $11.50. This action was also approved by
the Shareholders in 1988. No options or SARs were granted under this
plan in Fiscal 1997. As of June 30, 1997, 125,000 options had been
exercised and no options to purchase shares of Common Stock remain
outstanding.
Compensation of Directors
The Corporation's arrangements for compensation of Directors is as
follows: the Chairman of the Board of Directors is eligible to receive
$9,000 per annum; each other Director is eligible to receive a fee of
$4,000 per annum and a fee of $300 for each Board or committee meeting
attended; and each Director who is a chairman of a committee of the
Board of Directors is eligible to receive $350 for each committee
meeting which he or she chairs. The Directors who are also Executive
Officers do not receive any fee for attending either meetings of the
Board or of any Board committee.
Except for the foregoing, there are no other arrangements for
compensation of Directors and there are no employment contracts between
the Company and its Directors.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of October 31, 1997, certain
information with respect to the beneficial ownership of Common Stock
owned by: (i) those persons or groups known by the Corporation to own
more than five percent of the outstanding shares of Common Stock, (ii)
each Director, nominee for Director and Executive Officer, and (iii)
all Directors and Executive Officers as a group.
Name and Address of Amount and Nature
Beneficial Owner of Beneficial Owner(1) Percentage(2)
John V. Winfield 411,249(3) 43.1%
2121 Avenue of the Stars
Los Angeles, CA 90067
Josef A. Grunwald 32,465 3.4%
William J. Nance 17,000 1.8%
Mildred Bond Roxborough 1,045 *
Gregory C. McPherson 3,703(4) *
All Directors and
Executive Officers as a
Group (5 persons) 473,551 48.8%
______________________
* Ownership does not exceed 1%.
(1) Unless otherwise indicated and subject to applicable community
property laws, each person has sole voting and investment power with
respect to the shares beneficially owned.
(2) Percentages are calculated on the basis of 953,649 shares of Common
Stock outstanding at October 31, 1997.
(3) Includes 13,549 shares allocated to Mr. Winfield under the ESOP.
Does not include an additional 6,457 shares held by the ESOP with
respect to which Mr. Winfield, as trustee, would have the power to vote
if voting instructions are not provided by the participants on a timely
basis.
(4) Includes 1,303 shares allocated to Mr. McPherson under the ESOP.
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In March 1996, the Corporation's president paid in full the $830,173
outstanding balance of the note relating to his 1986 exercise of stock options.
In May 1996, the Corporation's president exercised an option to purchase
125,000 shares of Common Stock at a price of $11.50 per share through a
full recourse note due the Corporation on demand, but in no event later
than May 2001. The note bears interest floating at the lower of 10% or
the prime rate (8.50% at June 30, 1997) with interest payable quarterly.
During the 1997 Fiscal Year, the president of the Corporation made
interest payments of $134,170 in connection with the note relating to
his 1996 exercise of stock options. The balance of the note receivable
at June 30, 1997 was $1,437,500.
The Corporation's president directs the investment activity of the
Corporation in public and private markets pursuant to the authority
granted by the Board of Directors. The Chief Executive Officer and
members of his immediate family have at times invested in the same
companies in which the Corporation has invested. The Corporation
encourages such investments because it places personal resources of the
Chief Executive Officer and his family members at risk in connection
with investment decisions made on behalf of the Corporation. Following
allegations concerning the president made by a former officer and
director of the Corporation, the Board of Directors authorized
committees of the Board to conduct a thorough and independent review of
such matters, including the Corporation's practices in this regard.
That review has not been completed (see "Directors and Executive
Officers" and Report on Form 8-K dated August 4, 1997).
PROPOSAL II
Ratification of Appointment of Auditors
The Board has appointed Price Waterhouse LLP, Certified Public
Accountants, to continue as the Corporation's auditors and to audit the
books of account and other records of the Corporation and its
consolidated operating subsidiaries for the fiscal year ending June 30,
1998. The Board expects that representatives of Price Waterhouse LLP
will be present at the Annual Meeting to respond to appropriate questions
from Shareholders, and the Board will provide these representatives
with an opportunity to make a statement if they desire to do so.
The appointment of Price Waterhouse LLP as the Corporation's auditors
for the fiscal year ending June 30, 1998 is being submitted to the
Shareholders for ratification. The Board recommends that the
Shareholders vote FOR the ratification of the appointment of Price
Waterhouse LLP. Ratification requires the affirmative vote of a
majority of the shares represented and voted at the Annual Meeting. If
the appointment of Price Waterhouse LLP is not ratified by the
Shareholders, the Board will consider the appointment of other auditors
for the fiscal year ending June 30, 1998.
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Under the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission, Directors and Executive Officers of
the Corporation, as well as persons holding more than 10% of the
Corporation's Common Stock, are required to file reports showing their
initial ownership of the Corporation's Common Stock and any subsequent
changes in that ownership with the Securities and Exchange Commission
and all exchanges on which the Corporation's securities are registered
by certain specified due dates. Based solely on the Corporation's
review of copies of such reports furnished to the Corporation and
written representations that no other reports were required to be filed
during Fiscal 1997, all such reports that were required were filed on a
timely basis.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board does not know of any
matters to be presented at the Annual Meeting other than those set forth
in the attached Notice of Annual Meeting. If any other matters properly
come before the Annual Meeting including matters incident to the conduct
of the Annual Meeting, the holders of the proxies will vote on those
matters at their discretion.
SHAREHOLDER PROPOSALS
It is presently anticipated that the 1998 Annual Meeting of Shareholders
will be held on or around December 8, 1998. Shareholders desiring to
exercise their rights under the Proxy Rules of the Securities and
Exchange Commission to submit proposals for consideration by the
Shareholders at the 1998 Annual Meeting are advised that their proposals
must be received by the Corporation no later than June 30, 1998 in order
to be eligible for inclusion in the Corporation's Proxy Statement and
Form of Proxy relating to that meeting.
GENERAL
The Corporation will bear the entire cost of preparing, assembling,
printing and mailing this Proxy Statement and the enclosed form of
Proxy, and of soliciting Proxies. The Corporation will request banks
and brokers to solicit their customers who beneficially own shares
listed of record in names of nominees, and will reimburse those banks
and brokers for their reasonable out-of-pocket expenses in connection
with those solicitations. The original solicitation of Proxies by mail
may be supplemented by telephone, telegram and personal solicitation by
officers and other regular employees of the Corporation, but no
additional compensation will be paid to such individuals.
<PAGE>
A copy of the Corporation's Form 10-KSB for the 1997 Fiscal Year will be
furnished, upon request, to any Shareholder. A copy of the 1997 Annual
Report is being sent to the Shareholders with this Proxy Statement. The
Annual Report is not to be considered part of the soliciting material.
By Resolution of the Board of Directors
THE INTERGROUP CORPORATION
Gregory C. McPherson, Assistant Secreatary
Dated: Los Angeles, California
December 8, 1997
