<DOCUMENT>
<TYPE>10-K405/A
<SEQUENCE>1
<FILENAME>e10-k405a.txt
<DESCRIPTION>FORM 10-K405/A
<TEXT>
<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-8186
DAIN RAUSCHER CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 41-1228350
(State or other jurisdiction of (IRS Employer
incorporation of organization) Identification Number)
DAIN RAUSCHER PLAZA, 60 SOUTH SIXTH STREET
MINNEAPOLIS, MINNESOTA 55402-4422
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (612) 371-2711
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
Common Stock, par value $.125 per share New York Stock Exchange, Inc.
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]
As of March 2, 2000, 12,798,598 shares of common stock were outstanding,
and the aggregate market value of the common shares (based upon the closing
price at March 2, 2000, on the New York Stock Exchange) of Dain Rauscher
Corporation held by non-affiliates was approximately $744,718,421.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement of Registrant to be filed within 120 days
of December 31, 1999 are incorporated in Part III of this report.
================================================================================
<PAGE> 2
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K:
(a) Documents filed as part of this Report:
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. Financial statements:
Reference is made to the table of contents to
financial statements and financial statement schedule hereinafter
contained................................................................... 40*
2. Financial statement schedules:
Reference is made to the table of
contents to financial statements and financial statement schedule
hereinafter contained for all other financial statement
schedules................................................................... 40*
</TABLE>
*Refers to page number in original Form 10-K filing for the year ended December
31, 1999.
2
<PAGE> 3
3. Exhibits:
<TABLE>
<CAPTION>
ITEM NO. ITEM METHOD OF FILING
-------- ---- ----------------
<S> <C> <C>
2.1 Agreement and Plan of Merger, dated February 8, 1998 Filed as Exhibit 2.1 to the Company's Report on
among Dain Rauscher Corporation, Dain Rauscher Form 8-K dated March 31, 1998.
Incorporated and Wessels, Arnold & Henderson Group,
L.L.C. and Wessels, Arnold & Henderson, L.L.C.
3.1 Restated Certificate of Incorporation of the Company. Incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-8 dated
May 13, 1997, File No. 333-26947.
3.3 Amended and Restate Bylaws of the Company. Incorporated by reference to Exhibit 3.1 to the
Company's Quarterly Report on Form 10-Q dated March
31, 1999.
4.6 Credit Agreement dated May 31, 1999. Incorporated by reference to Exhibit 4.7 to the
Company's Quarterly Report on Form 10-Q dated June
30, 1999.
4.7 Credit Agreement dated November 3, 1999. Incorporated by reference to Exhibit 4.7 to the
Company's Quarterly Report on Form 10-Q dated
September 30, 1999.
10.2 Form of Indemnity Agreement with Directors and Officers Incorporated by reference to Exhibit 10(c) to the
of the Company. Company's Annual Report on Form 10-K for the year
ended December 31, 1990.
10.3* Form of Non-Employee Director Retirement Compensation Incorporated by reference to Exhibit 10(g) to the
Agreement. Company's Annual Report on Form 10-K for the year
ended December 31, 1992.
10.4* IFG Executive Deferred Compensation Plan dated March Incorporated by reference to Exhibit 10(a) to the
31, 1993. Company's Current Report on Form 8-K dated July 15,
1993.
10.5 Trust Agreement for IFG Executive Deferred Compensation Incorporated by reference to Exhibit 10.5 to the
Plan dated February 11, 1994. Company's Annual Report on Form 10-K dated December
31, 1994.
10.7* 1996 Stock Incentive Plan.
10.10* Employment Agreements between the Company and Kenneth Incorporated by reference to Exhibit 10 to the
J. Wessels dated March 31, 1998. Company's Quarterly Report on Form 10-Q dated March
31, 1996.
10.11* Revised Employment Agreement between the Company and Incorporated by reference to Exhibit 10.10 to the
Kenneth J. Wessels dated March 4, 1999. Company's Quarterly Report on Form 10-Q/A dated
March 31, 1998.
10.12* Dain Rauscher 1996 Stock Incentive Plan, as amended Incorporated by reference to Exhibit 10.11 to the
through April 27, 1999. Company's Annual Report on Form 10-K dated March 31,
1999.
10.13* Dain Rauscher Deferred Compensation Plan for Non- Incorporated by reference to Exhibit 10.12 to the
Employee Directors, as amended through April 27, 1999. Company's Quarterly Report on Form 10-Q dated March
31, 1999.
10.14* Revised Employment Agreement between the Company and Incorporated by reference to Exhibit 10.13 to the
Kenneth J. Wessels dated December 15, 1999. Company's Quarterly Report on Form 10-Q dated March
31, 1999.
10.15* Dain Rauscher Management Deferred Compensation Plan, Filed herewith.**
as amended through December 1, 1999.
10.16* Dain Rauscher Wealth Accumulation Plan, as amended Filed herewith.**
through December 1, 1999.
10.17* Special Stock Option Agreement between the Company Filed herewith.**
and Irving Weiser dated April 5, 1999.
10.18* Stock Option Agreement between the Company and Filed herewith.**
Irving Weiser, dated April 5, 1999
</TABLE>
3
<PAGE> 4
<TABLE>
<S> <C> <C>
10.19* Change in Control Agreement between the Company and Filed herewith.**
Irving Weiser dated July 10, 1999.
10.20* Cancellation of Non-Plan Stock Option Agreement Filed herewith.**
between the Company and Irving Weiser dated April 5,
1999.
10.21* Stock Option Agreement between the Company and Irving Filed herewith.**
Weiser dated January 4, 2000.
10.22* Revised Employment Agreement between the Company and Filed herewith.**
Kenneth J. Wessels dated February 10, 2000.
11 Computation of net earnings per share. Filed herewith.**
21 List of subsidiaries. Filed herewith.**
23 Independent Auditors' consent. Filed herewith.**
24 Power of Attorney. Filed herewith.**
27 Financial Data Schedule. Filed herewith.**
99 Cautionary Statements for Purposes of the "Safe Harbor" Filed herewith.**
Provision of the Private Securities Litigation Reform
act 1995.
</TABLE>
* Management contract or compensatory plan or arrangement required to be
filed as an exhibit pursuant to Item 14(c) of this report.
** Refers to original Form 10-K filing for year ended December 31, 1999.
(b) Two reports on Form 8-K were filed during the fourth quarter of 1999.
(1) Item Reported
Exhibit 99 - Press release announcing registrant's promotion of David
J. Parrin to Chief Financial Officer.
Date of earliest event reported - November 18, 1999.
Financial Statements Filed - None
(2) Item Reported
Exhibit 99.1 - Press release announcing arbitration decision and
related charge.
Date of earliest event reported - December 10, 1999.
Financial Statements Filed - None
4
<PAGE> 5
REPORT FOR EMPLOYEE STOCK PURCHASE PLAN:
The financial statements required by Form 11-K with respect to our
Retirement Plan are hereby furnished as permitted by Rule 15d-21.
Schedules included:
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report............................................................................................6
Statement of net assets available for plan benefits as of December 31, 1999 and 1998....................................7
Statement of changes in net assets available for plan benefits for the years ended December 31, 1999 and 1998...........8
Notes to financial statements...........................................................................................9
Schedule 1 - Schedule of assets held for investment purposes...........................................................18
Exhibit 23 - Independent auditors' consent............................................................................21
Exhibit 24 - Power of Attorney........................................................................................22
</TABLE>
5
<PAGE> 6
DAIN RAUSCHER RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements
December 31, 1999 and 1998
INDEPENDENT AUDITORS' REPORT
Dain Rauscher Benefits Committee
Dain Rauscher Corporation:
We have audited the accompanying statements of net assets available for plan
benefits of the Dain Rauscher Retirement Plan (the Plan) as of December 31, 1999
and 1998, and the related statements of changes in net assets available for plan
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Dain
Rauscher Retirement Plan as of December 31, 1999 and 1998, and the changes in
net assets available for plan benefits for the years then ended in conformity
with accounting principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This supplemental schedule is the responsibility of the Plan's management.
This supplemental schedule has been subjected to the auditing procedures applied
in our audit of the financial statements and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.
June 2, 2000
6
<PAGE> 7
DAIN RAUSCHER RETIREMENT PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
---------------- -----------
<S> <C> <C>
Investments, stated at current market value:
Cash and cash equivalents $ 3,475,986 3,440,485
Dain Rauscher Corporation common stock 147,997,354 98,572,392
Mutual funds:
MFS Emerging Growth Fund 75,201,326 47,035,665
Fidelity Advisor Growth Opportunities Fund 46,899,956 48,477,493
Norwest Stable Return Fund 40,281,612 38,580,221
Templeton Foreign Fund 36,845,275 28,053,083
American Balanced Fund 30,946,752 39,015,586
Putnam Fund for Growth and Income 29,944,148 33,709,213
PIMCO Small Cap Value Fund 11,723,800 --
Bond Fund of America 6,128,103 8,132,890
Seligman Frontier Fund 2,503,313 --
Participant loans 7,348,928 7,224,473
---------------- -----------
Total assets held by Plan Trustee 439,296,553 352,241,501
---------------- -----------
Contributions receivable:
Employer profit sharing 12,200,236 6,503,042
Employer match 122,702 591,083
Employee 314,244 177,871
Pending trades receivable (payable) (123,251) 20,900,504
---------------- -----------
Net assets available for plan benefits $ 451,810,484 380,414,001
================ ===========
</TABLE>
See accompanying notes to financial statements.
7
<PAGE> 8
DAIN RAUSCHER RETIREMENT PLAN
Statements of Changes in Net Assets Available for Plan Benefits
Years ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
------------- -----------
<S> <C> <C>
Net assets available for plan benefits, beginning of year $ 380,414,001 521,464,025
------------- -----------
Investment income:
Interest and dividend income 14,625,038 15,887,478
Net realized and unrealized gains (losses) on mutual funds 27,690,134 13,117,405
Net realized and unrealized gains (losses) on Dain Rauscher
Incorporated common stock 59,041,884 (135,989,060)
Contributions:
Employee 17,581,405 16,001,091
Employer profit sharing (net of forfeitures) 9,484,478 4,514,712
Employer match (net of forfeitures) 3,681,885 4,540,256
Rollovers 3,142,813 1,070,776
------------- -----------
Total additions (subtractions) 135,247,637 (80,857,342)
------------- -----------
Deductions:
Distributions to participants 63,233,605 59,666,741
Trustee and manager fees 617,549 525,941
------------- -----------
Total deductions 63,851,154 60,192,682
------------- -----------
Increase (decrease) in net assets
available for plan benefits 71,396,483 (141,050,024)
------------- -----------
Net assets available for plan benefits, end of year $ 451,810,484 380,414,001
============= ===========
</TABLE>
See accompanying notes to financial statements.
8
<PAGE> 9
DAIN RAUSCHER RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements
December 31, 1999 and 1998
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
On January 2, 1998, we changed our name to Dain Rauscher Corporation from
Interra Financial Incorporated and renamed the Interra Retirement Plan the
Dain Rauscher Retirement Plan. On January 1, 2000, we renamed the Dain
Rauscher Retirement Plan the Dain Rauscher Retirement and Savings Plan
("the Plan").
Contributions
We record employee contributions when payroll deductions are made for Plan
participants.
Distributions
We record amounts payable to participants who have withdrawn from the Plan
when the funds are paid.
Investments
Norwest Bank Minnesota, N.A. (the Trustee) holds the investments of the
plan and determines current market values. The Trustee records purchases
and sales of securities on a trade-date basis and accrues dividend and
interest income as earned.
Expenses
Mutual fund fees are paid as incurred by each individual fund. The Plan
pays administrative costs and expenses. We have negotiated a rebate of some
mutual fund fees and use these to pay Plan expenses. If any rebate dollars
remain after expenses, these are credited to Plan participants based on the
participant's account balance as a percent of Plan Assets.
Use of Estimates
We make estimates and assumptions in preparing these financial statements.
These estimates and assumptions affect the net assets and changes in net
assets available for Plan benefits and contingent assets and liabilities
reported in these financial statements. Actual results could differ
significantly from these estimates.
9
<PAGE> 10
DAIN RAUSCHER RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements
December 31, 1999 and 1998
2. PLAN DESCRIPTION
Eligibility
The Plan is a defined contribution plan providing retirement benefits to
eligible participants. Participants may make pre-tax contributions to the
Plan upon hire. Participants are eligible for company ("our") contributions
beginning the January 1 or July 1 following one year of service consisting
of at least 1,000 hours. Prior to January 1, 2000, participants also needed
to be 21 to be eligible.
Contributions
For the year ended December 31, 1999, participants could contribute 1-12%
of recognized compensation (as defined below) to the Plan. We paid a
matching contribution to each participant's Dain Rauscher Stock Fund equal
to 40% of their pre-tax contributions up to the lesser of 5% of recognized
compensation or $3,000. In addition to the matching contribution, we could
make an annual profit sharing contribution of at least 3% of recognized
compensation to eligible employees. Our Board of Directors determined if,
and at what level, any additional profit sharing contribution would be
made. Eligible employees need not be making pre-tax contributions to share
in our profit sharing contribution. Once eligible, employees only needed to
be credited with at least 1,000 hours of service for the plan year (or a
ratable portion of 1,000 hours of service if a former participant was
rehired during the same plan year) and be an employee on the last day of
the Plan year.
On January 1, 2000, we changed certain components of the Plan. Participants
may now contribute 1-15% of recognized compensation to the Plan. Once
eligible for company contributions participants are eligible for two forms
of matching contributions. First, we make a dollar-for-dollar matching
contribution for each participant's pretax contributions, on a maximum 3%
of pay. We make this contribution to each participant's Dain Rauscher Stock
Fund. Second, we may pay a variable matching contribution as determined
annually by our Board of Directors. This variable matching contribution may
be up to two dollars for each dollar of participant's pre-tax contributions
on a maximum 3% of pay. Participants may direct how the variable matching
contribution will be invested.
Recognized compensation is defined in the Plan and generally consists of
salary, commissions and other regular compensation paid to a participant
during the Plan year, subject to certain aggregate limitations under
federal regulations. Employee and employer contributions are limited to the
extent necessary to comply with sections 401 and 415 of the Internal
Revenue Code.
10
<PAGE> 11
DAIN RAUSCHER RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements
December 31, 1999 and 1998
Vesting
Participant contributions are always fully vested. Participants vest 100%
in our contributions after five years of service. Special rules apply for
rehired employees. Our contributions will also become fully vested if,
while employed, the participant dies, reaches age 55, or retires because of
total and permanent disability. In addition, our contributions will become
fully vested if the Plan is terminated; there is a "change in control" as
defined in the Plan, or if there is a complete discontinuance of
contributions to the Plan.
Loans
Participants may borrow up to 50 percent, not to exceed $50,000, of certain
account balances for any reason. Participants may elect a loan term of
between one year and five years for all loans other than home purchase for
which a 10 or 15-year term may be elected. Participants pay an interest
rate equal to the prime rate plus one percent on the first working day of
the quarter in which the loan was originated. Participants repay loans
through payroll deductions.
Investments
Participants may invest their contributions in any of ten available
options. These include the Dain Rauscher Stock Fund, three domestic equity
funds, an international equity fund, two small cap equity funds, a balanced
fund, an intermediate bond fund, and a stable return fund. Two of the
investment options were replaced on January 1, 1999. The IAI Regional Fund
and Pioneer Capital Growth Fund were replaced with the PIMCO Small Cap
Value Fund and the Seligman Frontier Fund. At December 31, 1998,
$20,791,374 was due from the IAI Regional Fund and the Pioneer Capital
Growth Fund as a result of the January 1, 1999 replacement. Effective March
20, 2000, three investment options were replaced. The Fidelity Advisor
Growth Opportunities Fund, Templeton Foreign Fund and Seligman Frontier
Fund were replaced with the S&P 500 Index Fund, the American Funds
EuroPacific Growth Fund and the MFS New Discovery Fund respectively.
Diversifications
For the year ended December 31, 1999, eligible participants could elect to
sell their holdings in the Dain Rauscher Stock Fund and transfer the
proceeds to any of the other Plan options. Beginning on January 1, 2000,
participants may sell their holdings in the Dain Rauscher Stock Fund
purchased with post-1999 pre-tax contributions and transfer the proceeds to
any of the other Plan options.
Distributions
Generally, participants may request distribution of their vested account
balances after separation of service. Participants may also request
in-service distributions for financial hardship purposes as defined in the
Plan. Distributions are limited to the vested balances of certain accounts
within the Plan. In addition, eligible participants may request a special
distribution of certain accounts from the Plan between age 50 and 60,
subject to minimum service requirements. Any participant age 60 or over may
request a full or partial distribution from the Plan. All distributions
from the Plan are made in cash, except for the Dain Rauscher Stock Fund,
which is paid in shares of Dain Rauscher common stock, plus cash for any
fractional shares.
11
<PAGE> 12
DAIN RAUSCHER RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements
December 31, 1999 and 1998
Dividend Pass-through
The Dain Rauscher Stock Fund is an Employee Stock Ownership Plan, which has
elected dividend pass-through to participants. Any dividends received by
the Plan on shares of Dain Rauscher Corporation common stock are
distributed to participants as ordinary income.
3. CONTRIBUTIONS
We made contributions to the Plan of $15,170,038 and $9,054,968 for the
years ended December 31, 1999 and 1998. Plan participants contributed
$17,581,405 and $16,001,091 for the same periods.
Our 1999 and 1998 contributions included a match of $4,185,560 and
$4,540,256 on participant pre-tax contributions to the Plan and profit
sharing contributions of $10,984,478 and $4,514,712. Our matching
contributions were reduced by forfeitures of $620,755 and $544,430 for the
years ended December 31, 1999 and 1998. Our profit sharing contributions
were reduced by forfeitures of $1,501,983 and $2,025,601 for the years
ending December 31, 1999 and 1998.
Any forfeited employer contributions are utilized to reduce our future
contributions unless the participant returns to employment before a
specified date as defined by the Plan.
12
<PAGE> 13
DAIN RAUSCHER RETIREMENT PLAN
Notes to Financial Statements
December 31, 1999 and 1998
4. NET ASSETS AVAILABLE FOR PLAN BENEFITS BY FUND
<TABLE>
<CAPTION>
FIDELITY
NORWEST PUTNAM ADVISOR
STABLE BOND AMERICAN FUND FOR GROWTH
RETURN FUND OF BALANCED GROWTH AND OPPORTUNITIES
DECEMBER 31, 1999 FUND AMERICA FUND INCOME FUND
----------- ---------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Cash equivalents $ 120,334 17,792 92,268 88,330 137,930
Dain Rauscher common stock -- -- -- -- --
Mutual funds 40,281,612 6,128,103 30,946,752 29,944,148 46,899,956
Participant loans -- -- -- -- --
----------- ---------- ---------- ----------- -------------
40,401,946 6,145,895 31,039,020 30,032,478 47,037,886
----------- ---------- ---------- ----------- -------------
Employer contribution receivable 748,514 127,114 1,158,946 919,345 1,442,350
Employee contribution receivable 22,660 5,591 38,057 29,209 47,754
Accrued interest and dividends
receivable -- -- -- -- --
Receivable/payable from/to
mutual funds 775,916 39,782 (29,043) (23,966) (34,225)
----------- ---------- ---------- ----------- -------------
1,547,090 172,487 1,167,960 924,588 1,455,879
----------- ---------- ---------- ----------- -------------
Net assets available
for plan benefits,
end of year $41,949,036 6,318,382 32,206,980 30,957,066 48,493,765
=========== ========== ========== =========== =============
<CAPTION>
MFS
TEMPLETON EMERGING PIMCO SELIGMAN DAIN
FOREIGN GROWTH SMALL CAP FRONTIER RAUSCHER
DECEMBER 31, 1999 FUND FUND VALUE FUND FUND STOCK FUND*
---------- ---------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C>
Cash equivalents 107,502 219,626 33,043 6,927 2,726,766
Dain Rauscher common stock -- -- -- -- 147,997,354
Mutual funds 36,845,275 75,201,326 11,723,800 2,503,313 --
Participant loans -- -- -- -- --
---------- ---------- ----------- --------- -----------
36,952,777 75,420,952 11,756,843 2,510,240 150,724,120
---------- ---------- ----------- --------- -----------
Employer contribution receivable 1,258,229 2,194,213 518,014 605,808 3,350,405
Employee contribution receivable 18,126 52,131 11,574 2,459 86,683
Accrued interest and dividends
receivable -- -- -- -- --
Receivable/payable from/to
mutual funds (181,716) (330,900) (258,259) (99,567) 18,727
---------- ---------- ----------- --------- -----------
1,094,639 1,915,444 271,329 508,700 3,455,815
---------- ---------- ----------- --------- -----------
Net assets available
for plan benefits,
end of year 38,047,416 77,336,396 12,028,172 3,018,940 154,179,935
========== ========== =========== ========= ===========
<CAPTION>
DECEMBER 31, 1999 LOAN FUND TOTAL
--------- -----------
<S> <C> <C>
Cash equivalents (74,532) 3,475,986
Dain Rauscher common stock -- 147,997,354
Mutual funds -- 280,474,285
Participant loans 7,348,928 7,348,928
--------- -----------
7,274,396 439,296,553
--------- -----------
Employer contribution receivable -- 12,322,938
Employee contribution receivable -- 314,244
Accrued interest and dividends
receivable -- --
Receivable/payable from/to
mutual funds -- (123,251)
--------- -----------
-- 12,513,931
--------- -----------
Net assets available
for plan benefits,
end of year 7,274,396 451,810,484
========= ===========
</TABLE>
*A portion of this investment option is not participant directed.
(Continued)
13
<PAGE> 14
DAIN RAUSCHER RETIREMENT PLAN
Notes to Financial Statements
December 31, 1999 and 1998
4. NET ASSETS AVAILABLE FOR PLAN BENEFITS BY FUND
<TABLE>
<CAPTION>
FIDELITY
NORWEST PUTNAM ADVISOR
STABLE BOND AMERICAN FUND FOR GROWTH
RETURN FUND OF BALANCED GROWTH AND OPPORTUNITIES
DECEMBER 31, 1998 FUND AMERICA FUND INCOME FUND
------------ --------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Cash equivalents $ 107,892 24,173 113,777 95,859 137,438
Dain Rauscher common stock -- -- -- -- --
Mutual funds 38,580,221 8,132,890 39,015,586 33,709,213 48,477,493
Participant loans -- -- -- -- --
------------ --------- ---------- ---------- -------------
38,688,113 8,157,063 39,129,363 33,805,072 48,614,931
------------ --------- ---------- ---------- -------------
Employer contribution receivable 390,027 102,081 956,570 582,116 872,636
Employee contribution receivable 6,572 4,000 27,404 26,552 38,491
Accrued interest and dividends
receivable -- -- -- -- --
Receivable/payable from/to
mutual funds 211,116 45,701 (6,230) 1,456 (66,103)
------------ --------- ---------- ---------- -------------
607,715 151,782 977,744 610,124 845,024
------------ --------- ---------- ---------- -------------
Net assets available
for plan benefits,
end of year $ 39,295,828 8,308,845 40,107,107 34,415,196 49,459,955
============ ========= ========== ========== =============
<CAPTION>
MFS PIONEER
TEMPLETON IAI EMERGING CAPITAL DAIN
FOREIGN REGIONAL GROWTH GROWTH RAUSCHER
DECEMBER 31, 1998 FUND FUND FUND FUND STOCK FUND*
---------- --------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Cash equivalents 86,493 20,221 143,604 43,183 2,659,961
Dain Rauscher common stock -- -- -- -- 98,572,392
Mutual funds 28,053,083 -- 47,035,665 -- --
Participant loans -- -- -- -- --
---------- --------- ---------- ---------- ------------
28,139,576 20,221 47,179,269 43,183 101,232,353
---------- --------- ---------- ---------- ------------
Employer contribution receivable 555,976 165,952 956,349 165,952 2,346,466
Employee contribution receivable 18,105 14 40,528 12,682 105,470
Accrued interest and dividends
receivable -- -- -- -- --
Receivable/payable from/to
mutual funds (3,297) 7,060,787 320,097 13,322,583 14,394
---------- --------- ---------- ---------- ------------
570,784 7,226,753 1,316,974 13,501,217 2,466,330
---------- --------- ---------- ---------- ------------
Net assets available
for plan benefits,
end of year 28,710,360 7,246,974 48,496,243 13,544,400 103,698,683
---------- --------- ---------- ---------- ------------
<CAPTION>
DECEMBER 31, 1998 LOAN FUND TOTAL
--------- -----------
<S> <C> <C>
Cash equivalents 7,884 3,440,485
Dain Rauscher common stock -- 98,572,392
Mutual funds -- 243,004,151
Participant loans 7,224,473 7,224,473
--------- -----------
7,232,357 352,241,501
--------- -----------
Employer contribution receivable -- 7,094,125
Employee contribution receivable (101,947) 177,871
Accrued interest and dividends
receivable -- --
Receivable/payable from/to
mutual funds -- 20,900,504
--------- -----------
(101,947) 28,172,500
--------- -----------
Net assets available
for plan benefits,
end of year 7,130,410 380,414,001
--------- -----------
</TABLE>
*A portion of this investment option is not participant directed.
(Continued)
14
<PAGE> 15
DAIN RAUSCHER RETIREMENT PLAN
Notes to Financial Statements
December 31, 1999 and 1998
4. CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS BY FUND
<TABLE>
<CAPTION>
FIDELITY
NORWEST PUTNAM ADVISOR
STABLE BOND AMERICAN FUND FOR GROWTH
RETURN FUND OF BALANCED GROWTH AND OPPORTUNITIES
DECEMBER 31, 1999 FUND AMERICA FUND INCOME FUND
------------ --------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Net assets available for plan
benefits--beginning of year $ 39,295,828 8,308,845 40,107,107 34,415,196 49,459,955
------------ --------- ---------- ---------- -------------
Investment income:
Interest and dividend income -- 544,543 3,908,703 3,048,381 4,881,407
Net realized and unrealized
gain (loss) on securities 2,670,156 (183,197) (2,567,449) (2,401,291) (2,860,532)
Contributions:
Employee 873,484 255,696 1,431,995 1,782,313 2,867,634
Employer profit sharing 468,704 111,192 470,434 722,621 1,151,581
Employer match -- -- -- -- --
Rollovers 435,205 48,598 257,161 598,895 631,504
Loan repayments 274,439 31,975 255,657 174,881 268,818
------------ --------- ---------- ---------- -------------
Total additions
(subtractions) 4,721,988 808,807 3,756,501 3,925,800 6,940,412
------------ --------- ---------- ---------- -------------
Deductions:
Distributions to participants 18,713,589 959,236 6,889,910 3,572,648 5,009,695
Trustee and management fees 254,366 8,948 47,048 45,049 70,322
New loans 226,214 33,425 225,476 278,796 417,380
------------ --------- ---------- ---------- -------------
Total deductions 19,194,169 1,001,609 7,162,434 3,896,493 5,497,397
------------ --------- ---------- ---------- -------------
Diversification and transfers 17,125,389 (1,797,661) (4,494,194) (3,487,437) (2,409,205)
------------ --------- ---------- ---------- -------------
Net assets available for plan
benefits--end of year $ 41,949,036 6,318,382 32,206,980 30,957,066 48,493,765
============ ========= ========== ========== =============
<CAPTION>
MFS PIONEER
TEMPLETON IAI EMERGING CAPITAL PIMCO
FOREIGN REGIONAL GROWTH GROWTH SMALL CAP
DECEMBER 31, 1999 FUND FUND FUND FUND VALUE FUND
---------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net assets available for plan
benefits--beginning of year 28,710,360 7,246,974 48,496,243 13,544,400 --
---------- --------- ---------- ---------- ----------
Investment income:
Interest and dividend income 1,247,149 -- 345,584 -- --
Net realized and unrealized
gain (loss) on securities 9,269,609 (64,962) 24,507,006 (60,597) (1,092,489)
Contributions:
Employee 1,497,068 (14) 3,068,899 (10,860) 970,374
Employer profit sharing 1,103,376 (165,952) 1,833,715 (165,952) 724,412
Employer match -- -- -- --
Rollovers 230,512 -- 604,336 -- 146,616
Loan repayments 278,084 -- 382,557 (1,822) 136,658
---------- --------- ---------- ---------- ----------
Total additions
(subtractions) 13,625,798 (230,929) 30,742,097 (239,231) 885,571
---------- --------- ---------- ---------- ----------
Deductions:
Distributions to participants 3,276,298 -- 6,494,894 -- 1,438,925
Trustee and management fees 54,366 -- 111,330 -- 16,937
New loans 278,333 -- 455,393 -- 105,765
---------- --------- ---------- ---------- ----------
Total deductions 3,608,997 -- 7,061,617 -- 1,561,627
---------- --------- ---------- ---------- ----------
Diversification and transfers (679,745) (7,016,045) 5,159,673 (13,305,169) 12,704,228
---------- --------- ---------- ---------- ----------
Net assets available for plan
benefits--end of year 38,047,416 -- 77,336,396 -- 12,028,172
========== ========= ========== ========== ==========
<CAPTION>
SELIGMAN DAIN
FRONTIER RAUSCHER
DECEMBER 31, 1999 FUND STOCK FUND* LOAN FUND TOTAL
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Net assets available for plan
benefits--beginning of year -- 103,698,683 7,130,410 380,414,001
Investment income:
Interest and dividend income -- -- 649,271 14,625,038
Net realized and unrealized
gain (loss) on securities 473,882 59,041,884 -- 86,732,018
Contributions:
Employee 86,774 4,726,274 31,768 17,581,405
Employer profit sharing 623,058 2,607,289 -- 9,484,478
Employer match -- 3,681,885 -- 3,681,885
Rollovers 189,986 -- -- 3,142,813
Loan repayments 2,885 1,856,022 (3,660,154) --
--------- ----------- --------- -----------
Total additions
(subtractions) 1,376,585 71,913,354 (2,979,115) 135,247,637
--------- ----------- --------- -----------
Deductions:
Distributions to participants 19,892 16,447,533 410,985 63,233,605
Trustee and management fees 3,480 5,703 -- 617,549
New loans 33,517 1,479,788 (3,534,087) --
--------- ----------- --------- -----------
Total deductions 56,889 17,933,024 (3,123,102) 63,851,154
--------- ----------- --------- -----------
Diversification and transfers 1,699,244 (3,499,078) -- --
--------- ----------- --------- -----------
Net assets available for plan
benefits--end of year 3,018,940 154,179,935 7,274,397 451,810,484
--------- ----------- --------- -----------
</TABLE>
*A portion of this investment option is not participant directed.
(Continued)
15
<PAGE> 16
DAIN RAUSCHER RETIREMENT PLAN
Notes to Financial Statements
December 31, 1999 and 1998
4. CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS BY FUND
<TABLE>
<CAPTION>
FIDELITY
NORWEST PUTNAM ADVISOR
STABLE BOND AMERICAN FUND FOR GROWTH
RETURN FUND OF BALANCED GROWTH AND OPPORTUNITIES
DECEMBER 31, 1998 FUND AMERICA FUND INCOME FUND
------------- --------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Net assets available for plan
benefits--beginning of year $ 32,625,458 6,769,238 41,953,813 32,560,415 36,145,282
Investment income:
Interest and dividend income 52,805 583,854 3,877,445 3,042,323 1,949,874
Net realized and unrealized
gain (loss) on securities 2,791,603 (287,229) 428,253 1,286,075 6,972,927
Contributions:
Employee 763,567 276,389 1,796,426 1,652,031 2,016,955
Employer profit sharing 228,373 95,673 307,160 402,918 861,566
Employer match -- -- -- -- --
Rollovers 120,824 39,509 44,511 164,684 238,623
Loan repayments 179,893 83,404 269,455 166,547 209,043
------------- --------- ---------- ---------- -------------
Total additions
(subtractions) 4,137,065 791,600 6,723,250 6,714,578 12,248,988
------------- --------- ---------- ---------- -------------
Deductions:
Distributions to participants 11,354,617 1,213,891 4,688,497 4,472,097 4,294,703
Trustee and management fees 210,170 11,190 54,799 46,426 65,933
New loans 254,022 85,403 221,849 134,535 256,380
------------- --------- ---------- ---------- -------------
Total deductions 11,818,809 1,310,484 4,965,145 4,653,058 4,617,016
------------- --------- ---------- ---------- -------------
Diversification and transfers 14,352,114 2,058,491 (3,604,811) (206,739) 5,682,701
------------- --------- ---------- ---------- -------------
Net assets available for plan
benefits--end of year $ 39,295,828 8,308,845 40,107,107 34,415,196 49,459,955
============= ========= ========== ========== =============
<CAPTION>
MFS PIONEER
TEMPLETON IAI EMERGING CAPITAL
FOREIGN REGIONAL GROWTH GROWTH
DECEMBER 31, 1998 FUND FUND FUND FUND
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net assets available for plan
benefits--beginning of year 39,079,258 11,327,303 40,418,542 17,533,508
---------- ---------- ---------- ----------
Investment income:
Interest and dividend income 3,274,769 1,272,708 472,481 667,568
Net realized and unrealized
gain (loss) on securities (4,965,397) (1,222,395) 9,445,035 (1,331,467)
Contributions:
Employee 1,960,627 408,260 2,580,032 1,037,874
Employer profit sharing 476,206 159,791 780,311 130,696
Employer match -- -- -- --
Rollovers 52,615 59,443 216,847 133,720
Loan repayments 283,565 51,821 296,734 116,301
---------- ---------- ---------- ----------
Total additions
(subtractions) 1,082,385 729,628 13,791,440 754,692
---------- ---------- ---------- ----------
Deductions:
Distributions to participants 3,369,465 668,250 5,092,438 1,684,429
Trustee and management fees 39,550 9,636 64,770 18,662
New loans 182,480 35,908 330,910 68,900
---------- ---------- ---------- ----------
Total deductions 3,591,495 713,794 5,488,118 1,771,991
---------- ---------- ---------- ----------
Diversification and transfers (7,859,788) (4,096,163) (225,621) (2,971,809)
---------- ---------- ---------- ----------
Net assets available for plan
benefits--end of year 28,710,360 7,246,974 48,496,243 13,544,400
---------- ---------- ---------- ----------
<CAPTION>
DAIN
RAUSCHER
DECEMBER 31, 1998 STOCK FUND* LOAN FUND TOTAL
----------- --------- -----------
<S> <C> <C> <C>
Net assets available for plan
benefits--beginning of year 254,508,405 8,542,803 521,464,025
----------- --------- -----------
Investment income:
Interest and dividend income -- 693,651 15,887,478
Net realized and unrealized
gain (loss) on securities (135,989,060) -- (122,871,655)
Contributions:
Employee 3,852,422 (343,492) 16,001,091
Employer profit sharing 1,072,018 -- 4,514,712
Employer match 4,540,256 -- 4,540,256
Rollovers -- -- 1,070,776
Loan repayments 1,999,821 (3,656,584) --
----------- --------- -----------
Total additions
(subtractions) (124,524,543) (3,306,425) (80,857,342)
----------- --------- -----------
Deductions:
Distributions to participants 21,969,320 859,034 59,666,741
Trustee and management fees 4,805 -- 525,941
New loans 1,182,679 (2,753,066) --
----------- --------- -----------
Total deductions 23,156,804 (1,894,032) 60,192,682
----------- --------- -----------
Diversification and transfers (3,128,375) -- --
----------- --------- -----------
Net assets available for plan
benefits--end of year 103,698,683 7,130,410 380,414,001
=========== ========= ===========
</TABLE>
*A portion of this investment option is not participant directed.
(Continued)
16
<PAGE> 17
5. ADMINISTRATION
For the Plan year ended December 31, 1999, the Plan was administered by a
seven-member committee appointed by our Board of Directors, all of whom are
employees of Dain Rauscher or our participating subsidiaries.
6. INVESTMENTS
The following investments, stated at fair value, represent 5 percent or
more of the Plan's net assets available for plan benefits at December 31,
1999 and 1998 (in thousands):
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Dain Rauscher Corporation common stock $ 147,997 98,572
MFS Emerging Growth Fund 75,201 47,036
Fidelity Advisor Growth Opportunities Fund 46,900 48,477
Norwest Stable Return Fund 40,282 38,580
Templeton Foreign Fund 36,845 28,053
American Balanced Fund 30,947 39,016
Putnam Fund for Growth and Income 29,944 33,709
</TABLE>
7. FEDERAL INCOME TAX STATUS
The Plan administrator received a favorable determination letter dated
April 5, 1999, from the United States Treasury Department stating that the
Plan constitutes a qualified plan under Section 401(a) and the 4975(e)(7)
of the Internal Revenue Code (the Code) and that the trust created under
the Plan is therefore exempt from federal income taxes under the provisions
of Section 501(a).
The Plan administrator believes that the Plan and its related trust
continue to qualify under the provisions of Section 401(a), 4975(e)(7), and
501(a) of the Code and are exempt from federal income taxes.
Participants are not taxed currently on their pretax contributions, on our
contributions to the Plan, or on income earned by the Plan. Dividends paid
to participants on Dain Rauscher common stock allocated to their Dain
Rauscher Stock Fund are subject to tax in the year received. Distributions
are generally subject to federal income tax at the time of distribution if
they are not rolled to an Individual Retirement Account or other qualified
plan.
8. PARTY-IN-INTEREST TRANSACTIONS
Norwest Bank Minnesota, N.A. is a party-in-interest with respect to the
Plan. In the opinion of the Plan administrator, transactions between the
Plan and the aforementioned party-in-interest are exempt from being
considered as "prohibited transactions" under ERISA Section 408(b).
17
<PAGE> 18
SCHEDULE 1
DAIN RAUSCHER RETIREMENT PLAN
Item 27(a)--Schedule of Assets Held for Investment Purposes
December 31, 1999
<TABLE>
<CAPTION>
MARKET
DESCRIPTION UNITS VALUE
--------------------------------------------------------------- ------------- ----------------
<S> <C> <C>
Cash and cash equivalents:
Norwest Advantage Short Term Investment Fund* 3,475,986 $ 3,475,986
----------------
Total cash and cash equivalents 3,475,986
----------------
Dain Rauscher Corporation common stock
(cost: $43,627,238) 3,182,741 147,997,354
----------------
Mutual Funds:
MFS Emerging Growth Fund Class A 1,129,295 75,201,326
Fidelity Advisor Growth Opportunities Fund Class T 1,005,736 46,899,956
Norwest Stable Return Fund* 1,417,664 40,281,612
Templeton Foreign Fund 3,283,776 36,845,275
American Balanced Fund 2,146,091 30,946,752
Putnam Fund for Growth and Income Class A 1,597,016 29,944,148
PIMCO Small Cap Value Fund 844,737 11,723,800
Bond Fund of America 472,129 6,128,103
Seligman Frontier Fund 149,384 2,503,313
----------------
Total mutual funds 280,474,285
----------------
431,947,625
----------------
Participant Loans (interest rates of 7% to 11%) 7,348,928
----------------
Total investments $ 439,296,553
================
</TABLE>
The data in this schedule is based upon information which has been certified as
complete and accurate by Norwest Bank, Minnesota N.A.
* Known to be a party-in-interest
See accompanying independent auditors' report.
18
<PAGE> 19
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED:
DAIN RAUSCHER CORPORATION
Registrant
Date: June 30, 2000 By Daniel J. Collins
--------------------- ----------------------------------
Daniel J Collins
Senior Vice President
and Controller
(Principal Accounting Officer)
By David J. Parrin
----------------------------------
David J Parrin
Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)
19
<PAGE> 20
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT
HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT IN
THE CAPACITIES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
Irving Weiser Chairman of the Board, President, Chief Executive Officer
----------------------------- (Principal Executive Officer)
Irving Weiser and Director
John C. Appel Vice Chairman
------------------------------
John C. Appel and Director
David J. Parrin Executive Vice President and Chief Financial Officer
------------------------------ (Principal Financial and Accounting Officer)
David J. Parrin
J. Evans Attwell Director
------------------------------
J. Evans Attwell
Susan S. Boren Director
------------------------------
Susan S. Boren
F. Gregory Fitz-Gerald Director
------------------------------
F. Gregory Fitz-Gerald
Walter F. Mondale Director
------------------------------
Walter F. Mondale
C.A. Rundell, Jr. Director
------------------------------
C.A. Rundell, Jr.
Robert L. Ryan Director
------------------------------
Robert L. Ryan
Arthur R. Schulze, Jr. Director
------------------------------
Arthur R. Schulze, Jr.
Kenneth J. Wessels Chairman, Dain Rauscher Wessels
------------------------------ and Director
Kenneth J. Wessels
</TABLE>
20
</TEXT>
</DOCUMENT>