<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
TERRA INDUSTRIES INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $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 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) 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:
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(4) Date Filed:
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Notes:
<PAGE>
March 31, 1995
[TERRA LOGO APPEARS HERE]
Dear Stockholder:
It is a pleasure for us to extend to you a cordial invitation to attend the
Annual Meeting of Stockholders of the Corporation to be held at 9:00 a.m. on
Tuesday, May 2, 1995 at the Sioux City Convention Center, 801 Fourth Street,
Sioux City, Iowa.
The accompanying Notice of Meeting and Proxy Statement describe the matters
to be considered and voted upon at the Meeting. In addition to consideration of
these matters, there will be a report to stockholders on the affairs of the
Corporation, and stockholders will have an opportunity to discuss matters of
interest concerning the Corporation.
We hope all stockholders of the Corporation will be able to attend this
Meeting. If you plan to attend, please check the appropriate box on your proxy
card.
Whether or not you plan to attend the Meeting personally, it is important
that you be represented. To ensure that your vote will be received and counted,
please promptly complete, date and return your proxy card in the enclosed return
envelope.
On behalf of the Board of Directors and management, we would like to
express our appreciation for your support during 1994. We look forward to
seeing you at the Meeting.
/s/ BURTON M. JOYCE /s/ REUBEN F. RICHARDS
Burton M. Joyce Reuben F. Richards
President and Chief Executive Officer Chairman of the Board
<PAGE>
[TERRA LOGO APPEARS HERE]
NOTICE OF 1995 ANNUAL MEETING OF STOCKHOLDERS
---------------------------------------------
To the Stockholders:
The Annual Meeting of Stockholders of Terra Industries Inc. (the
"Corporation") will be held at the Sioux City Convention Center, 801 Fourth
Street, Sioux City, Iowa, on Tuesday, May 2, 1995, at 9:00 a.m., central
daylight time, for the following purposes:
(a) to elect directors of the Corporation;
(b) to consider and vote upon the following proposal described in the
attached Proxy Statement:
(1) Proposal 1 to ratify the selection by the Board of Directors of
the firm of Deloitte & Touche LLP as independent accountants for
the Corporation for 1995.
(c) to transact such other business as may properly come before the
Meeting.
Only stockholders of record of the Corporation's Common Shares at the close
of business on March 10, 1995 are entitled to notice of, and to vote at, the
Meeting.
/s/ GEORGE H. VALENTINE
George H. Valentine
Vice President, General Counsel
and Corporate Secretary
March 31, 1995
<PAGE>
PROXY STATEMENT
GENERAL
The Annual Meeting of Stockholders of Terra Industries Inc. (the
"Corporation") will be held at the Sioux City Convention Center, 801 Fourth
Street, Sioux City, Iowa, on Tuesday, May 2, 1995, at 9:00 a.m., central
daylight time.
The mailing address of the principal executive offices of the Corporation
is Terra Centre, 600 Fourth Street, P.O. Box 6000, Sioux City, Iowa, 51102-6000.
This Proxy Statement and the accompanying proxy are first being sent or given to
stockholders on or about March 31, 1995.
The accompanying proxy is solicited by the Board of Directors of the
Corporation. It may be revoked by written notice given to the Corporate
Secretary of the Corporation at any time before being voted. Proxies in this
form, properly executed, duly returned to the Corporation and not revoked, will
be voted for the election of directors (except to the extent that authority
therefor is withheld), and on the Proposal described in this Proxy Statement, in
accordance with the instructions in the proxy. The Board of Directors is not
aware on the date hereof of any matter proposed to be presented at the Meeting
other than the election of directors and Proposal 1. If any other matter is
properly presented, the persons named in the accompanying form of proxy will
have discretionary authority to vote thereon according to their best judgment.
Presence at the Meeting does not of itself revoke the proxy.
SECURITIES ENTITLED TO VOTE
The only securities entitled to be voted at the Meeting are the
Corporation's Common Shares, and only holders of record on the close of business
on March 10, 1995 (the "record date"), are entitled to vote. The Common Shares
are each entitled to one vote per share, all voting together as a single class.
On March 10, 1995, there were 81,013,152 Common Shares issued and
outstanding.
VOTE REQUIRED
In the election of directors, the holders of Common Shares are entitled to
one vote for each Share held on the record date for each director being elected
(with no cumulative voting permitted), and on all other matters to one vote for
each Share held. Under Maryland law and the Corporation's Restated Articles of
Incorporation and Bylaws, the affirmative vote of a plurality of the combined
votes cast by the holders of the Common Shares is necessary to elect a director.
On other matters, the aggregate number of votes cast, i.e., those stockholders
voting "for" or "against" the matter, but not those abstaining from voting, will
be counted for purposes of determining the minimum number of affirmative votes
required for approval of the matter, and the total number of votes cast "for"
will be counted for purposes of determining whether sufficient affirmative votes
have been cast to approve the matter. An abstention from voting on the matter
by a stockholder at the Annual Meeting, as well as broker non-votes will be
considered for purposes of determining the number of Common Shares present at
the Meeting; however, such abstentions and broker non-votes will not be
considered a vote "for" or "against" the matter, and will therefore not be
considered in determining whether or not the proposal passed.
Minorco (U.S.A.) Inc. ("Minorco USA"), the Corporation's 45.9% stockholder,
and Taurus Investments S.A. ("Taurus"), the Corporation's 6.7% stockholder, have
advised the Corporation that they intend to vote their respective Common Shares
for the election of each of the directors set forth in this Proxy Statement and
for Proposal 1 set forth herein, thereby ensuring the election of each of the
directors and the approval of the Proposal.
-2-
<PAGE>
ELECTION OF DIRECTORS
NOMINEES
The Board of Directors consists of ten members who are elected to hold
office until the next Annual Meeting or until their successors are duly elected
and qualified. The affirmative vote of a plurality of the combined votes cast
by the holders of Common Shares voting thereon is necessary to elect a director.
If no contrary indication is made, proxies in the accompanying form are to be
voted for the nominees named below or, in the event any such nominee is not a
candidate or is unable to serve as a director at the time of the election (which
is not now expected), for any nominee who shall be designated by the Board of
Directors to fill such vacancy. All nominees named below are incumbent members
of the Board of Directors. Set forth below opposite the name and age of each
nominee are his or her present positions and offices with the Corporation, his
or her principal occupations during the past five years, and the year in which
he or she was first elected a director of the Corporation.
<TABLE>
<CAPTION>
Present positions and
offices with the
Corporation and principal Year first
occupations and positions elected
Name and Age during the past five years Director
------------ -------------------------- ----------
<S> <C> <C>
Edward G. Beimfohr (62) Partner, Lane & Mittendorf 1994
(a New York law firm)
since prior to 1990.
Carol L. Brookins (51) Founder, Chairman and 1993
Chief Executive Officer of
World Perspectives,
Incorporated (an
information, analysis and
consulting firm
specializing in
agricultural policies,
markets and issues) since
1980.
Edward M. Carson (65) Chairman of the Board and 1983
Chief Executive Officer of
First Interstate Bancorp
since June 1990 and
President thereof from
January 1985 to May 1990.
David E. Fisher (52) Finance Director of 1993
Minorco (an international
natural resources company)
since January 1990.
Basil T. A. Hone (68) Retired; Vice President, 1986
Metals Division of Union
Carbide Corporation (a
chemical, industrial gases
and specialty products
business) until 1984.
Burton M. Joyce (53) President and Chief 1986
Executive Officer of the
Corporation since May
1991; Executive Vice
President and Chief
Operating Officer thereof
from February 1988 to May
1991.
Anthony W. Lea (46) Executive Director and 1994
member of Executive
Committee of Minorco since
prior to 1990; Joint
Managing Director thereof
from January 1990 to
December 1992.
John R. Norton III (65) Chairman and Chief 1993
Executive Officer of J. R.
Norton Company (an
agricultural production
company) since 1972.
Between May 1985 and
February 1986, Mr. Norton
served as a U.S. Deputy
Secretary of Agriculture
and was not an officer of
J. R. Norton Company
during that period.
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
Present positions and
offices with the
Corporation and principal Year first
occupations and positions elected
Name and Age during the past five years Director
------------ -------------------------- ----------
<S> <C> <C>
Reuben F. Richards (65) Chairman of the Board of 1982
the Corporation since
December 1982; Chief
Executive Officer thereof
from December 1982 to May
1991 and President thereof
from July 1983 to May
1991; Director of
Engelhard Corporation
since prior to 1990 and
Chairman of the Board
thereof from May 1985 to
December 1994; Chairman of
the Board of Minorco USA
since May 1990 and Chief
Executive Officer and
President thereof since
February 1994.
Henry R. Slack (45) Chief Executive of Minorco 1983
since December 1992 and
President thereof since
September 1985.
</TABLE>
In addition, several directors of the Corporation are also directors of
other companies that are subject to the reporting requirements of the U.S.
federal securities laws. Mr. Carson is a director of Aztar Corporation and
First Interstate Bancorp; Mr. Joyce is a director of Terra Nitrogen Company,
L.P. and IPSCO Inc.; Mr. Lea is a director of Engelhard Corporation; Mr. Norton
is a director of Aztar Corporation, Suncor, Inc., Pinnacle West Capital
Corporation and Arizona Public Service Company; Mr. Richards is a director of
Ecolab Inc., Engelhard Corporation, Santa Fe Energy Resources, Inc. and Potlatch
Corporation; and Mr. Slack is a director of Engelhard Corporation.
BOARD OF DIRECTORS AND COMMITTEES
During the Corporation's last fiscal year, its Board of Directors held six
meetings. Each member attended at least 75% of the aggregate of all meetings of
the Board of Directors and of all meetings of committees of the Board of
Directors of which he or she was a member, except that Mr. Carson did not attend
two meetings of the Board of Directors and one meeting of the Personnel
Committee.
The Board of Directors of the Corporation has an Audit Committee, an
Executive Committee and a Personnel Committee. The Board of Directors does not
have a nominating committee. The Audit Committee, which met three times in
1994, is currently comprised of Ms. Brookins, Mr. Hone and Mr. Norton. The
Audit Committee's functions include reviewing the Corporation's procedures for
reporting financial information to the public, recommending annually to the
Board of Directors a firm of independent accountants to audit and review the
Corporation's books and records and approving the scope of such firm's audit,
reviewing reports and recommendations and fees of the Corporation's independent
accountants, reviewing the scope of all internal audits and reports and
recommendations in connection therewith and reviewing non-audit services
provided by the Corporation's independent accountants.
The Executive Committee, which met one time last year, consists of Messrs.
Carson, Joyce, Richards and Slack. The Executive Committee is authorized to
exercise, to the extent permitted by law, all the power and authority of the
Board of Directors in the management of the Corporation between meetings of the
Board.
The Personnel Committee, which met three times last year, is currently
comprised of Messrs. Beimfohr, Carson, Hone and Slack. Its functions include
administering certain employee benefit plans, recommending to the Board of
Directors the appointment of executive officers of the Corporation, establishing
the compensation to be paid to such individuals and establishing compensation
administration guidelines generally for the Corporation and its subsidiaries,
and, in consultation with management, establishing and administering significant
personnel policies of the Corporation.
The Board of Directors of the Corporation establishes from time to time
Special Committees of the Board, whose functions are specifically delegated at
the time of establishment.
-4-
<PAGE>
EQUITY SECURITY OWNERSHIP
Principal Stockholders. The following table shows, based on information
reported to the Corporation by or on behalf of such persons, the ownership, as
of January 31, 1995, of the Corporation's securities by the only persons known
to the Corporation to be the beneficial owners of more than five percent of any
class of the Corporation's voting securities.
<TABLE>
<CAPTION>
Amount and
nature of
Name and address of beneficial Percentage of
beneficial owner Title of class ownership class
==============================================================================
<S> <C> <C> <C>
Minorco (U.S.A.) Inc. Common Shares 37,160,725 sole 45.9%
5251 DTC Parkway voting and
Suite 700 investment power
Englewood, Colorado 80111
Taurus Investments S.A. Common Shares 5,400,000 sole 6.7%
9 rue Sainte Zithe voting and
L-2763 Luxembourg City investment power
Grand Duchy of Luxembourg
==============================================================================
</TABLE>
Minorco USA is involved in mining and natural resource-related activities in
North America. Minorco USA is indirectly wholly owned by Minorco. Taurus
Investments S.A. is a company incorporated under the laws of Luxembourg as a
societe anonyme and is wholly owned by Minorco. Minorco is a company
incorporated under the laws of Luxembourg as a societe anonyme and is an
international natural resources company with operations in gold, base metals,
industrial minerals, paper and packaging and agribusiness. Minorco's address is
9 rue Sainte Zithe, L-2763 Luxembourg City, Grand Duchy of Luxembourg. The
capital stock of Minorco is owned in part as follows: approximately 43%,
directly or through subsidiaries, by Anglo American Corporation of South Africa
Limited ("Anglo American"), a publicly held mining and finance company,
approximately 23%, directly or through subsidiaries, by De Beers Centenary AG
("Centenary"), a publicly held Swiss diamond mining and investment company, and
approximately 3% by Anglo American Gold Investment Company Limited ("Amgold"), a
publicly held investment company. Approximately 39% of the capital stock of
Anglo American is owned, directly or through subsidiaries, by De Beers
Consolidated Mines Limited ("De Beers"), a publicly held diamond mining and
investment company. Approximately 29% of the capital stock of Centenary and
approximately 33% of the capital stock of De Beers is owned, directly or through
subsidiaries, by Anglo American. De Beers owns approximately 9% of Centenary.
Approximately 50% of the capital stock of Amgold is owned, directly or through
subsidiaries, by Anglo American.
Mr. Nicholas F. Oppenheimer, Deputy Chairman and a director of Anglo
American, Centenary, De Beers, Chairman and a director of Amgold, and a director
of Minorco, and Mr. Slack, a director of the Corporation and Minorco USA, Chief
Executive, President and a director of Minorco and a director of Anglo American,
have indirect partial interests in approximately 7% of the outstanding shares of
Minorco, approximately 8% of the outstanding shares of Anglo American and less
than one percent of the outstanding shares of Amgold. Also, Messrs. Hone and
Richards beneficially own respectively 3,350 and 1,000 Minorco Ordinary Shares,
and Mr. Hone beneficially owns 1,000 Anglo American Ordinary Shares, each
constituting less than one percent of the outstanding shares of the respective
issuers. Mr. Richards is Chairman of the Board, Chief Executive Officer and
President of Minorco USA and a director of Minorco. Mr. Beimfohr, Mr. Fisher
and Mr. Lea are directors of Minorco USA and Minorco. Mr. Lea is also a
director of Anglo American. Mr. Joyce is a Vice President of Minorco USA.
Minorco USA is engaged in certain transactions with the Corporation described
under the caption "Certain Relationships and Related Transactions" below.
-5-
<PAGE>
Directors and Officers. The following table shows the equity securities of
the Corporation and its subsidiaries that were beneficially owned by each of the
following individuals as of December 31, 1994: directors and nominees
individually, the chief executive officer (who is also a director), the four
other most highly compensated executive officers, and the directors and
executive officers of the Corporation as a group.
<TABLE>
<CAPTION>
Number of Common Shares
Name Beneficially Owned/1/
---- -----------------------
<S> <C>
E.G. Beimfohr.....................................................5,000
C.L. Brookins.....................................................- 0 -
E.M. Carson.......................................................1,000
D.E. Fisher.........................................................250
B.T.A. Hone.......................................................2,000
B.M. Joyce......................................................541,430/2/
A.W. Lea............................................................250
F.G. Meyer.......................................................72,555/2/
J.R. Norton III...................................................1,000
R.F. Richards...................................................459,013/2/
H.R. Slack..........................................................250
W.M. Rosenbury..................................................152,728/2/
G.H. Valentine...................................................37,716/2/
Directors and all executive officers as a group (17 persons) 1,390,940/2/
</TABLE>
______________
/1/Except as described in footnote three below, each director, nominee or
executive officer had sole voting and investment power over the shares shown
as beneficially owned. Each director, nominee and executive officer
individually beneficially owned less than one percent, and the directors and
executive officers as a group owned approximately 2% of the total issued and
outstanding Common Shares of the Corporation.
/2/The number of Common Shares shown as beneficially owned by Messrs.
Joyce, Richards, Rosenbury and Meyer and by all directors and executive
officers as a group, include 450,000, 400,000, 81,000, 37,700, and 968,700
Common Shares, respectively, as to which such person or group had the right
to acquire beneficial ownership pursuant to the exercise, on or before
April 30, 1995, of employee stock options. No other individual listed held
any employee stock options. The number of Common Shares shown also reflect
the ownership of certain restricted Common Shares subject to certain
performance related vesting conditions and Common Shares under the
Corporation's Employees' Savings and Investment Plan as of December 31, 1994.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's executive officers, directors and greater than ten percent
beneficial owners to file initial reports of ownership and reports of changes in
beneficial ownership with the Securities and Exchange Commission ("SEC") and the
New York Stock Exchange. Executive officers and directors are required by SEC
regulations to furnish the Corporation with copies of all Section 16(a) forms
they file. Based solely on a review of the copies of such forms furnished to
the Corporation and written representations from the Corporation's executive
officers and directors, all of the Corporation's officers, directors and greater
than ten percent beneficial owners made all required filings, except Mr. John S.
Burchfield, an executive officer of the Corporation, who reported one
transaction late on a subsequently filed Form 4.
-6-
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning
compensation paid or accrued by the Corporation and its subsidiaries, to or on
behalf of the Corporation's Chief Executive Officer, and each of the four other
most highly compensated executive officers of the Corporation (determined as of
the end of the last fiscal year), (hereafter referred to as the "named executive
officers"), for the fiscal years ended December 31, 1992, 1993 and 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
================================================================================================================================
Awards Payouts
================================================================================================================================
Other
Name and Annual Restricted All Other
Principal Compen- Stock LTIP Compen-
Position Year Salary/1/ Bonus/2/ sation/3/ Award(s)/4/ Options Payouts sation/5/
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Burton M. Joyce 1994 $444,691 $450,000 $ 5,458 -- 250,000/6/ -- $4,500
President and 1993 417,924 356,000 2,731 -- -- -- 9,285
Chief Executive 1992 380,012 190,000 5,071 -- 300,000/7/ -- 7,966
Officer
W. Mark Rosenbury 1994 254,800 212,450 3,451 $336,000/8/ -- -- 4,500
Executive Vice President 1993 188,977 104,694 3,559 -- -- -- 4,497
1992 175,255 65,000 3,487 150,000/9/ -- -- 6,955
Francis G. Meyer 1994 164,372 157,956 1,943 252,000/8/ -- -- 4,500
Vice President and 1993 127,105 65,427 1,733 -- -- -- 3,813
Chief Financial Officer 1992 118,320 28,800 1,683 50,000/9/ -- -- 3,550
George H. Valentine/10/ 1994 151,000 121,319 -- 210,000/8/ -- -- 4,349
Vice President, General 1993 26,955 30,113 -- 110,000/10/ -- -- 363
Counsel and Corporate 1992 -- -- -- -- -- -- --
Secretary
Reuben F. Richards 1994 259,846/11/ -- 25,435 -- -- -- 4,500
Chairman of the 1993 342,240/11/ -- 25,003 -- -- -- 4,497
Board 1992 342,000/11/ -- 25,675 -- -- -- 8,139
================================================================================================================================
</TABLE>
/1/ "Salary" includes amounts deferred at the election of the named executive
officer under the Corporation's Employees' Savings and Investment Plan and
Supplemental Deferred Compensation Plan.
/2/ "Bonus" includes amounts awarded under the Corporation's Incentive Award
Program for Key Executives.
/3/ "Other Annual Compensation" includes tax reimbursements or "gross-ups"
provided to the named executive officers. While the named executive
officers enjoy certain other perquisites, such perquisites do not exceed
the lesser of $50,000 or 10% of such officer's salary and bonus.
/4/ The number of restricted Common Shares held, and the value thereof (shown
in parenthesis), at December 31, 1994 by each of the named executive
officers is: Burton M. Joyce: 13,334 ($138,340); W. Mark Rosenbury: 32,000
($332,000); Francis G. Meyer: 24,000 ($249,000); and George H. Valentine:
20,000 ($207,500). Mr. Richards did not hold any restricted Common Shares
at December 31, 1994.
/5/ For 1992, "All Other Compensation" includes amounts (i) attributable to
premium payments by the Corporation on behalf of the named executive
officers to continue term life insurance coverage not otherwise available
under the Corporation's standard life insurance plan, and (ii) contributed,
allocated or accrued for the named executive officers under the
Corporation's Employees' Savings and Investment
-7-
<PAGE>
Plan (the "401(K) Plan"). For 1993 and 1994, such amounts include only
amounts contributed, allocated or accrued for the named executive officers
under the 401(K) Plan.
/6/ Mr. Joyce was awarded options to purchase 250,000 Common Shares
during 1994. The exercise price is equal to the closing price of the
Common Shares on the New York Stock Exchange on the date of grant,
November 2, 1994, ($10.50). These options vest in the manner described in
footnote one to the table entitled "Option Grants in Last Fiscal Year".
/7/ The options granted to Mr. Joyce in September 1992 vested in the same
manner as the Performance Shares described in footnote nine below.
/8/ On November 2, 1994, the Personnel Committee of the Corporation's Board
of Directors approved the grant of 32,000, 24,000 and 20,000 restricted
Common Shares ("Performance Shares") of the Corporation under its 1992
Stock Incentive Plan to each of Messrs. Rosenbury, Meyer and Valentine,
respectively. The restricted period terminates with respect to all but 50%
of the Performance Shares on the business day following any period of
thirty (30) consecutive business days during which the average closing
price of the Common Shares on the New York Stock Exchange is at least
$14.00 per share, and thereafter with respect to an additional 25% of the
Performance Shares following any period of thirty (30) consecutive business
days during which the average closing price of the Common Shares on the New
York Stock Exchange is a least $15.875 per share and with respect to the
remaining 25% following any period of thirty (30) consecutive business days
during which the average price is at least $17.625 per share. Unvested
Performance Shares automatically vest beginning on the day that any such
officer's employment with the Corporation is terminated involuntarily or
his respective responsibilities or compensation are substantially reduced,
if such termination or reduction occurs prior to February 28, 2001, and
within twelve months of the date on which any person or group of persons
acting in concert (other than Minorco USA) acquires beneficial ownership of
the outstanding securities of the Corporation in an amount having, or
convertible into securities having, 50% or more of the ordinary voting
power for the election of directors of the Corporation.
During the restricted period, Messrs. Rosenbury, Meyer and Valentine are
entitled to all benefits incidental to ownership of the Common Shares,
including voting the Common Shares and receiving such dividends as from
time to time may be declared by the Board of Directors of the Corporation.
/9/ On September 25, 1992, the Personnel Committee of the Corporation's Board
of Directors approved the grant of 30,000 and 10,000 Performance Shares to
each of Messrs. Rosenbury and Meyer, respectively. The restricted period
terminated with respect to all of the Performance Shares in 1994. The
restrictions lapsed with respect to 50%, 25% and 25% of the Performance
Shares after periods of thirty (30) consecutive business days during which
the average closing price of the Common Shares on the New York Stock
Exchange was at least $7.50, $8.75 and $10.00 per share, respectively.
/10/ Mr. Valentine joined the Corporation as Vice President, General Counsel and
Corporate Secretary in November 1993. On November 3, 1993, the Personnel
Committee of the Board of Directors approved the grant of 20,000
Performance Shares to Mr. Valentine. The restrictions lapsed with respect
to such Performance Shares in the same manner as the Performance Shares
described in footnote nine above.
/11/ In 1992, 1993 and 1994, Mr. Richards performed services for Minorco USA as
well as the Corporation, and Minorco USA reimburses the Corporation for
one-half of the compensation paid to, or accrued on behalf of, Mr.
Richards. The amounts shown in the table are net of any reimbursement by
Minorco USA. The Corporation is a party to a deferred compensation
agreement with Mr. Richards described under the caption "Employee Contracts
and Termination of Employment Arrangements" pursuant to which Mr. Richards
accrues certain deferred compensation, reported in the table for the
periods indicated.
-8-
<PAGE>
STOCK OPTIONS
The following table contains information concerning the grant of options to
purchase the Corporation's Common Shares granted in 1994 under the Corporation's
1992 Stock Incentive Plan to the named executive officers. No stock
appreciation rights were granted under the Plan during fiscal year 1994.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
==============================================================================================================================
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation for
Individual Grants Option Term /2/
==============================================================================================================================
% of Total
Number of Options
Options Granted to Exercise or
Granted in Employees in Base Price
Name 1994 1994 per Share Expiration Date 5% 10%
---- ---------- ------------ ----------- --------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Burton M. Joyce 125,000/1/ 43.3% $10.50 11-02-04 $825,424 $2,091,787
62,500/1/ 21.6% 10.50 11-02-04 412,712 1,045,894
62,500/1/ 21.6% 10.50 11-02-04 412,712 1,045,894
==============================================================================================================================
</TABLE>
/1/ The options with respect to 125,000 Common Shares vest on the business
day following any period of thirty (30) consecutive business days during
which the average closing price of the Common Shares on the New York Stock
Exchange is at least $14.00 per share, and thereafter with respect to
62,500 Common Shares following any period of thirty (30) consecutive
business days during which the average price is at least $15.875 per share
and with respect to the remaining 62,500 Common Shares following any period
of thirty (30) consecutive business days during which the average price is
at least $17.625 per share. The options shall be exercisable with respect
to all of the Common Shares set forth above beginning on the day that Mr.
Joyce's employment with the Corporation is terminated involuntarily or his
responsibilities or compensation are substantially reduced, if such
termination or reduction occurs prior to February 28, 2001, and within
twelve months of the date on which any person or group of persons acting in
concert (other than Minorco USA) acquires beneficial ownership of the
outstanding securities of the Corporation in an amount having, or
convertible into securities having, 50% or more of the ordinary voting
power for the election of directors of the Corporation. The options vest
in any event in February 2001 if he remains an employee of the Corporation
through such date.
/2/ The amounts reflected in the table represent assumed rates of appreciation
only. Actual gains, if any, on stock option exercises by Mr. Joyce depend
on the future performance of the Corporation's Common Shares, overall
market conditions as well as Mr. Joyce's continued employment.
OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table provides information concerning the unexercised options
to purchase the Corporation's Common Shares granted under the 1983 Stock Option
Plan, and the 1987 and 1992 Stock Incentive Plans of the Corporation.
-9-
<PAGE>
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND DECEMBER 31, 1994 OPTION VALUES
========================================================================================================
Value of Unexercised
Number of Number of Unexercised in-the-Money
shares Value Options at Options at
Name acquired Realized December 31, 1994 December 31, 1994/1/
on exercise =======================================================
in 1994 Exercisable Unexercisable Exercisable Unexercisable
========================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Burton M. Joyce 105,000 $463,125 450,000 250,000 $2,155,000 -0-
Reuben F. Richards 46,000 77,625 400,000 -0- 1,667,060 -0-
W. Mark Rosenbury -0- -0- 81,000 -0- 378,375 -0-
Francis G. Meyer -0- -0- 37,700 -0- 186,825 -0-
========================================================================================================
</TABLE>
/1/ Based on the closing price on the New York Stock Exchange--Composite
Transactions of the Corporation's Common Shares on December 31, 1994
($10.375).
PENSION PLAN TABLES
The following table shows the estimated annual retirement benefit payable
on a straight life annuity basis under the Employees' Retirement Plan of the
Corporation (the "Retirement Plan") and the Corporation's Excess Benefit Plan
(the "Excess Benefit Plan"), on a non-contributory basis, which covers some of
the named executive officers and certain other employees, at various levels of
accrued service and compensation.
<TABLE>
<CAPTION>
Years of Credited Service
================================================
Remuneration 10 15 20 25 30
================================================================
<S> <C> <C> <C> <C> <C>
$150,000 $ 24,695 $ 37,042 $ 49,390 $ 61,737 $ 74,084
250,000 42,195 63,292 84,390 105,487 126,584
500,000 85,945 128,917 171,890 214,862 257,834
750,000 129,695 194,542 259,390 324,237 389,084
================================================================
</TABLE>
"Compensation" under the Retirement Plan includes all salaries and wages
paid to a participant, including bonuses, overtime, commissions and amounts the
participant elects to defer under the Corporation's Employees' Savings and
Investment Plan and Supplemental Deferred Compensation Plan. Covered earnings
are limited by Section 401(a)(17) of the Internal Revenue Code ("Code") to
$150,000 in 1994. The above benefits are subject to the limitations of Section
415 of the Code, which, in 1994, provided for a maximum annual payment of
approximately $118,800. Under the Excess Benefit Plan, however, the Corporation
will supplement those benefits so that the amount the participant will receive
will be equal to the amount that would have been received under the Retirement
Plan but for such limitations. Covered compensation for the following named
executive officers as of the end of the last calendar year is: Burton M. Joyce:
$800,691; Reuben F. Richards: $612,941; and W. Mark Rosenbury: $359,494. The
estimated years of service for each such officer is as follows: Burton M.
Joyce: 8; Reuben F. Richards: 12; and W. Mark Rosenbury: 8.
-10-
<PAGE>
Certain executive officers of the Corporation and certain other employees
of the Corporation's subsidiaries are entitled to the estimated annual
retirement benefit under the Retirement Plan of Terra International, Inc. and
Excess Benefit Plan of Terra International, Inc. as set forth in the following
table:
<TABLE>
<CAPTION>
Years of Credited Service
================================================
Remuneration 10 15 20 25 30
================================================================
<S> <C> <C> <C> <C> <C>
$150,000 $ 21,695 $ 32,542 $ 43,390 $ 54,237 $ 65,084
250,000 37,195 55,792 74,390 92,987 111,584
500,000 75,945 113,917 151,890 189,862 227,834
750,000 114,695 172,042 229,390 286,737 344,084
================================================================
</TABLE>
Covered compensation for each of George H. Valentine and Francis G. Meyer
as of the end of the last calendar year is $171,113 and $229,749, respectively.
The estimated years of service for Mr. Valentine is 1 and for Mr. Meyer is 12.
Covered compensation for each of the named executive officers includes the
salary paid in 1994 to each of the named executive officers plus the bonus paid
in 1994 to such executive officers for service to the Corporation and its
subsidiaries in 1994. Amounts reported in the table entitled "Summary
Compensation Table" for 1994 include the salary paid to each of the named
executive officers in 1994 plus the bonus paid to such executive officers in
1995 for service to the Corporation and its subsidiaries in 1994. Covered
compensation for Mr. Richards includes amounts paid by the Corporation subject
to reimbursement by Minorco USA, as more particularly described under the
caption "Certain Relationships and Related Transactions" below.
EMPLOYEE CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
The Corporation is a party to a deferred compensation agreement with Reuben
F. Richards. Pursuant to the agreement, from April 1, 1983, to March 31, 1991,
the Corporation credited an account for Mr. Richards with phantom stock units
equal to the number of whole Common Shares that could have been acquired with
$50,000 at the market price on the last business day of such quarter. In no
event may the value of the phantom stock unit account on any date be less than
$1.6 million (the "minimum amount"). As of December 31, 1994, the account
consisted of 264,731 phantom stock units. Beginning April 1, 1991 and ending
August 15, 1994 (when Mr. Richards attained age 65), as of the end of each
fiscal quarter the Corporation credited a cash account for Mr. Richards with
$50,000 per fiscal quarter, except that a prorated amount of $25,000 was
credited for the quarter ending September 1994 resulting in an aggregate balance
of $675,000. Mr. Richards became fully vested in phantom stock units credited
to his phantom stock unit account and cash balances credited to his cash account
upon attainment of age 65. Mr. Richards has no right to payments under the
agreement while employed; thereafter, the phantom stock units credited to his
account are to be valued at the greater of (i) the minimum amount or (ii) the
product of the number of his phantom stock units and the market price of the
Common Shares. The Corporation may pay any amount due to Mr. Richards, his
designated beneficiary or his estate under the terms of the agreement, in cash
either as soon as practicable after his termination of employment or over a
period of ten or fewer years, in equal quarterly installments (with interest).
Effective May 1, 1991, Mr. Richards commenced performing services for Minorco
USA as well as the Corporation, and Minorco USA is obligated to reimburse the
Corporation for one-half of the deferred compensation accrued on behalf of Mr.
Richards under the terms of the agreement.
As described in footnotes six through nine to the table entitled "Summary
Compensation Table," the vesting or exercisability of certain awards granted to
the named executive officers is accelerated in the event of certain corporate
transactions including a change in control of the Corporation.
-11-
<PAGE>
DIRECTOR COMPENSATION
Each director who is not an officer or employee of the Corporation or of
one of its subsidiaries receives an annual retainer of $18,000 for services as a
director. In addition, such directors receive a fee of $1,000 for each Board
meeting attended and a fee of $800 for each Committee meeting attended (a
chairperson receives a fee of $2,000 for each Board or Committee meeting
attended) and are reimbursed for their expenses of attending such meetings.
PERFORMANCE GRAPH
The SEC requires that the Corporation include in this Proxy Statement a
line-graph presentation comparing cumulative, five-year shareholder returns on
an indexed basis with the S&P 500 Stock Index and either a nationally recognized
industry standard or an index of peer companies selected by the Corporation.
The graph appearing below assumes the investment at the market close on the
last trading day in 1989, of $100 in Common Shares of the Corporation, the S & P
500 Stock Index and an industry peer group. The "Industry Peer Group" consists
of the following agribusiness companies: Ag Services of America Inc.;
BioTechnica International, Inc.; DEKALB Genetics Corporation; First Mississippi
Corporation; Freeport-McMoRan Resource Partners, Limited Partnership; IMC
Fertilizer Group, Inc.; LESCO, Inc.; Potash Corporation of Saskatchewan Inc.;
Terra Nitrogen Company, L.P. (formerly Agricultural Minerals Company, L.P.) and
The Vigoro Corporation. The Corporation selected the Industry Peer Group to
reflect its business as a producer and distributor of crop production and
professional products and services to farm and other non-agribusiness customers.
[FIVE-YEAR STOCK PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
-----------------------------------------------------------
1990 1991 1992 1993 1994 1995
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Terra Industries Inc. 100 61 82 80 128 176
-----------------------------------------------------------
Industry Peer Group 100 103 147 129 157 167
-----------------------------------------------------------
S & P 500 Stock Index 100 97 126 136 150 152
-----------------------------------------------------------
</TABLE>
-12-
<PAGE>
Although the companies included in the Industry Peer Group were selected
because of similar industry characteristics, they are not representative of the
Corporation's business during the entire period indicated. The Corporation
began a major restructuring of its operations in late 1990 to focus on
agribusiness and moved its corporate headquarters from New York to Sioux City,
Iowa. Prior to the restructuring, the Corporation's financial results were
substantially affected by the performance of its non-agribusiness operations,
including coal, base metals and gold mining operations. The comparison of the
Corporation's performance to the performance of the Industry Peer Group
following the restructuring should be more meaningful, and is reflected in the
graph appearing below, which assumes the investment at the market close on the
last trading day in 1990, of $100 in Common Shares of the Corporation, the
Industry Peer Group and the S & P 500 Stock Index.
<TABLE>
<CAPTION>
-----------------------------------------------------
1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------
Terra Industries Inc. 100 134 131 211 290
-----------------------------------------------------
Industry Peer Group 100 142 125 152 161
-----------------------------------------------------
S & P 500 Stock Index 100 130 140 155 157
-----------------------------------------------------
</TABLE>
The graphs appearing above shall not be deemed incorporated by reference by
any general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent the Corporation specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
13
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Slack, a director and member of the Personnel Committee of the Board of
Directors of the Corporation, is an executive officer and director of Minorco.
Mr. Richards, an executive officer and director of the Corporation, is a
director of Minorco. Mr. Richards is also on the compensation committee of the
board of directors of Minorco USA, while Mr. Joyce, an executive officer and
director of the Corporation, is an executive officer of Minorco USA.
Minorco USA, indirectly wholly owned by Minorco, paid to the Corporation or
was billed by the Corporation one-half of the salary, benefits, office services
and related overhead paid to, or incurred on behalf of, Mr. Richards. In
addition to his positions with the Corporation and Minorco, Mr. Richards is the
Chairman of the Board, Chief Executive Officer and President of Minorco USA. The
Corporation and Minorco USA engage in various other transactions discussed more
fully under the caption "Certain Relationships and Related Transactions" below.
REPORT ON EXECUTIVE COMPENSATION
GENERAL POLICY
The foundation of the Corporation's compensation policy is to retain and
motivate executive officers who are capable of leading the Corporation in
achieving its business objectives and in creating stockholder value. The
compensation of executive officers is reviewed and approved annually by the
Personnel Committee of the Board of Directors of the Corporation (the
"Committee"), which is comprised entirely of non-employee directors. The
Corporation's executive compensation program is designed to be (i) competitive,
(ii) tied to performance and (iii) aligned with stockholder interests. The
three general elements in the Corporation's executive compensation program
consist of base salary, annual incentive awards under the Corporation's
Incentive Award Program for Key Executives (the "Key Executive Plan"), and long-
term incentive compensation in the form of stock options, restricted stock or
other award opportunities offered under the Corporation's 1992 Stock Incentive
Plan approved by stockholders in May 1992 (the "Long-Term Plan"). As an
executive officer's level of responsibility increases, a greater portion of his
or her total compensation is based on annual and long-term incentive
compensation and less on base salary. Since the total compensation, exclusive
of stockholder approved stock option grants and existing deferral plans, for any
executive has thus far been below the $1 million threshold at which tax
deductions are limited under the Internal Revenue Code, the Committee has not
had to address issues relative thereto. To the extent that total compensation
to any executive officer may exceed such threshold in the future, the Committee
may require deferral of a portion of the bonus to a time when payment may be
deductible by the Corporation.
BASE SALARY
Annual base salaries paid to the Corporation's executive officers are fixed
at levels generally competitive with amounts paid to executive officers with
comparable experience and responsibilities at other companies engaged in a
similar business as the Corporation and with other companies of similar size or
market capitalization ("Performance Peer Group"). There is little or no
correlation between the composition of the Performance Peer Group and the
composition of the Industry Peer Group used for purposes of calculating the
comparative shareholder returns set forth in the Performance Graphs appearing
above. To attract, retain and motivate executive officers, the Corporation
competes with a broader spectrum of companies (many of which are non-public)
than those included in the Industry Peer Group.
Changes in the base salaries of executive officers (other than Burton M.
Joyce, the Corporation's President and Chief Executive Officer) are reviewed by
the Committee annually with Mr. Joyce and the Vice President-Human Resources and
are largely based on the individual's performance and contribution to the
Corporation. In addition, the Committee periodically obtains advice from an
independent compensation consultant concerning salary competitiveness. The
salary survey and other information provided by the compensation consultant is
then considered along with factors relating to the executive officer's
performance to determine appropriate increases to base salaries.
14
<PAGE>
The base salaries of the executive officers of the Corporation in 1994 were
generally fixed at levels below the midpoint of the Performance Peer Group.
ANNUAL INCENTIVE AWARDS
Under the Key Executive Plan, which is reviewed and approved by the
Committee in the first quarter of each year, an incentive award pool is
established based on a target percentage of executive officers' salaries and the
achievement of certain financial goals proposed by management to the Committee
(the "Targeted Goals"). The incentive award pool is then increased or reduced
based on the Corporation's performance measured against the Targeted Goals.
Annual incentive payments for individual executive officers are based on their
target percentage, which generally increases as the executive officer's level of
responsibility increases. Awards are then increased or reduced based on the
individual executive officer's achievement of specified objectives established
at the beginning of each fiscal year, individual job performance and the size of
the incentive award pool.
For awards to participants in 1994 under the Key Executive Plan regarding
service to the Corporation in 1993 (the "1993 Plan"), the Targeted Goals were
based on net income and return-on-equity, with net income receiving a 60% weight
and return-on-equity receiving the remaining 40%. Incentive compensation
awarded in 1994 under the 1993 Plan to the named executive officers reflected
the Corporation's attainment of 106% of the net income goal and 103% of the
return-on-equity goal, or 105% overall achievement under the 1993 Plan.
Incentive compensation awarded in 1995 under the Key Executive Plan
regarding service to the Corporation in 1994 (the "1994 Plan") was calculated in
the same manner as the 1993 Plan. Incentive compensation awarded in 1995
reflected the Corporation's attainment of 182% of the net income goal and 180%
of the return-on-equity goal, or 181% overall achievement under the 1994 Plan.
LONG TERM AWARDS
Long-term incentive awards under the Long-Term Plan are designed to provide
an incentive to executive officers in increasing stockholder value on a
sustained basis. Acting on the recommendations of an independent consultant,
the Committee issues from time to time incentive stock options and non-qualified
stock options and restricted stock ("Performance Shares").
Performance Shares are grants of restricted Common Shares of the
Corporation that vest if the Corporation's Common Shares achieve certain
sustained levels of appreciation in the six years following their issuance. As
of the date of the award, participants have all the rights of a stockholder
other than the right to sell the Performance Shares. The Committee believes
that this encourages participants, including executive officers, to view
themselves as long-term stockholders, thus serving the interests of all
stockholders by focusing their efforts on building stockholder value.
Performance Shares are subject to forfeiture if the performance threshold is not
attained or if a participant terminates employment for any reason prior to
vesting.
The Committee issued, in November 1994, stock options to Mr. Joyce and
certain other key employees of the Corporation and Performance Shares to other
key employees, including executive officers. In determining the specific grants
of Performance Shares to executive officers in November 1994, the Committee
reviewed with the Vice President--Human Resources of the Corporation the
recommended individual awards, taking into account the respective scope of
accountability, strategic and operational goals and contribution of each
executive officer, as well as taking into account the fact that prior awards had
fully vested upon the attainment of all performance thresholds and the fact that
no grants were awarded to executive officers of the Corporation since 1992,
except in one instance for an executive officer who joined the Corporation in
1993.
In deciding to grant long-term incentive awards to the Corporation's
executive officers that vest on the basis of appreciation of the market price of
the Corporation's Common Shares, the Committee noted that the value of the
awards will not be immediately realized and will be dependent on building
profitability and stockholder value well
15
<PAGE>
after the date of grant and will provide a continuing incentive to executive
officers long after the award has actually been earned.
CEO COMPENSATION
Base Salary. In determining the base salary of Mr. Joyce for 1994, the
Committee considered his then current salary relative to the competitively
determined salary range for a comparable position in companies within the
Performance Peer Group, as well as Mr. Joyce's continued success in improving
the Corporation's operating results and stockholder value. No specific weight
was assigned to these factors in determining Mr. Joyce's base salary increase
for 1994.
Based on the foregoing, Mr. Joyce's salary was increased, effective
March 1, 1994, by $21,235 to $450,000. Mr. Joyce's previous salary of $425,000,
which was effective March 1, 1993, had been increased by $3,765, effective
January 1, 1994 to reflect the value of certain employee benefits previously
provided by the Corporation which were discontinued. Mr. Joyce's 1994 base
salary was fixed at a level below the midpoint of the Performance Peer Group.
Annual Incentive Awards. Mr. Joyce's target percentage for purposes of
calculating his annual incentive award under the 1993 Plan was 50% based on the
Corporation's results and an additional 25% based on other business objectives.
Based on Mr. Joyce's annual salary at December 31, 1993, and taking into
consideration the fact that the Corporation exceeded the Targeted Goals for 1993
(as discussed above) and achieved the other business objectives, his incentive
award in 1994 under the 1993 Plan was $356,000. Mr. Joyce's target percentage
for the 1994 Plan was 50%. Based on Mr. Joyce's annual salary at December 31,
1994, and taking into consideration the fact that the Corporation substantially
exceeded the Targeted Goals for 1994 (as discussed above), his incentive award
in 1995 under the 1994 Plan was $450,000. This award also reflected his
leadership in successfully completing the acquisition of Agricultural Minerals
and Chemicals Inc. in October 1994.
Long Term Awards. The award of employee stock options to Mr. Joyce in
November 1994 was fixed separately from awards to other executive officers under
the Long-Term Plan and was based on, among other factors, the Committee's
determination that Mr. Joyce's awards should be at greater risk than awards to
executive officers generally, so that his awards would have less value if the
stockholders do not enjoy sustained appreciation in their investments. On the
basis of an analysis of the relative value of stock options and Performance
Shares as determined by the Corporation's independent compensation consultant,
the Committee determined that the number of stock options granted to Mr. Joyce
should be larger than the number of Performance Shares that would otherwise be
granted to Mr. Joyce under the Long-Term Plan but provide the same long term
opportunity as a grant of Performance Shares. Based on that determination,
among other factors, including consideration of the ratio between the value of
incentive awards typically given chief executive officers of companies within
the Performance Peer Group, the Committee concluded that a grant to Mr. Joyce of
options to purchase 250,000 of the Corporation's Common Shares was appropriate.
Similar to the Performance Shares granted to the other executive officers of the
Corporation, the options granted to Mr. Joyce vest if the Corporation's Common
Shares achieve certain sustained levels of appreciation in the six years
following their issuance. His options vest in any event in February 2001 if he
remains an employee of the Corporation through such date.
E.G. Beimfohr E. M. Carson B.T.A. Hone H. R. Slack
16
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
From time to time, a subsidiary of Minorco USA engaged in certain
metals trading and inventory financing activities with a corporation wholly
owned by the Corporation. In certain instances, the obligations of such
corporation to the subsidiary of Minorco USA were guaranteed by the Corporation.
On or about August 26, 1994, the subsidiary of the Corporation was sold and the
obligation was paid in full, aggregating approximately $2.4 million.
The Corporation and Minorco USA and its affiliates also engage in
various transactions in the ordinary course of business incident to the conduct
of their respective operations. Minorco USA and its affiliates paid or were
billed an aggregate of approximately $4.6 million in connection with such
transactions, including, among other things, (i) the provision of office space,
(ii) one-half of the salary, benefits, office services and related overhead paid
to, or incurred on behalf of, Reuben F. Richards, the Chairman of the Board of
Directors of the Corporation, (iii) the purchase or allocation of insurance and
the provision of related risk management services (approximately $3.7 million)
and (iv) other miscellaneous charges. The terms of each transaction are based
on arms-length negotiations and are principally on a cost-reimbursement or
contractual basis, or, in the case of insurance, by reference to the cost to
each company of purchasing separate policies.
The Corporation and Minorco USA entered into a put option agreement,
dated August 8, 1994, under which the Corporation had the right to require
Minorco USA to purchase up to 13,333,333 Common Shares at a price of $7.50 per
share in order to finance a portion of the acquisition price for Agricultural
Minerals and Chemicals Inc. In lieu of exercising the put option, the
Corporation publicly offered and sold 9,700,000 Common Shares and Taurus
Investments S.A., an affiliate of Minorco USA, purchased from the underwriters
5,400,000 Common Shares at a price equal to the offering price to the public,
less the underwriting discount received by the underwriters.
17
<PAGE>
PROPOSAL 1
----------
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors recommends that the stockholders ratify its selection
of Deloitte & Touche LLP as independent accountants for the Corporation for the
fiscal year 1995. Deloitte & Touche LLP serves as independent accountants for
Minorco and various subsidiaries of Minorco, including Minorco USA.
The Board of Directors intends to introduce at the Annual Meeting the
following resolution:
RESOLVED, that selection by the Board of Directors of the Corporation of
Deloitte & Touche LLP as independent accountants for the Corporation for the
year 1995 be, and it hereby is, ratified.
It is expected that members of Deloitte & Touche LLP will attend the Annual
Meeting to make a statement if they desire to do so and to respond to any
appropriate questions that may be asked by stockholders.
The affirmative vote of a majority of the votes cast by the holders of Common
Shares voting thereon is necessary for adoption of Proposal 1.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR PROPOSAL 1.
SUBMISSION OF STOCKHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Proposals of stockholders intended to be submitted at the 1996 Annual Meeting
of Stockholders must be received by the Corporation at its principal executive
offices on or before December 1, 1995 to be eligible for inclusion in the
Corporation's proxy statement and accompanying proxy for such meeting.
MISCELLANEOUS
The cost of the solicitation of proxies will be borne by the Corporation. In
addition to the use of the mails, proxies may be solicited personally, by
telephone or by telegraph or by a few regular employees of the Corporation
without additional compensation. The Corporation does not expect to pay any
compensation for the solicitation of proxies but will reimburse brokers and
other persons holding stock in their names, or in the names of nominees, at
approved rates, for their expenses for sending proxy material to principals and
obtaining their proxies.
A COPY OF THE CORPORATION'S 1994 ANNUAL REPORT ON FORM 10-K FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION (WITHOUT EXHIBITS) WILL BE MADE AVAILABLE TO
STOCKHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST TO THE CORPORATE RELATIONS
DEPARTMENT, TERRA INDUSTRIES INC., TERRA CENTRE, 600 FOURTH STREET, P.O. BOX
6000, SIOUX CITY, IOWA 51102-6000.
March 31, 1995
18
<PAGE>
TERRA INDUSTRIES INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints REUBEN F. RICHARDS, BURTON M. JOYCE
P and FRANCIS G. MEYER, jointly and severally, as proxies, with power
of substitution, to vote at the Annual Meeting of Stockholders
R (including adjournments) of TERRA INDUSTRIES INC. to be held May 2,
1995, with all powers the undersigned would possess if personally
O present, on the election of directors, on the Proposal described in
the Proxy Statement and, in accordance with their discretion, on any
X other business that may come before the meeting.
Y Election of Directors, Nominees: (Comments or Change of Address)
E.G. BEIMFOHR, C.L. BROOKINS, -------------------------------
E.M. CARSON, D.E. FISHER, -------------------------------
B.T.A. HONE, B.M. JOYCE, -------------------------------
A.W. LEA, J.R. NORTON III, -------------------------------
R.F. RICHARDS and H.R. SLACK
(If you have written in the
above space, please mark the
corresponding box on the
reverse side of this card)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE
APPROPRIATE BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY
BOXES IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF
DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR SHARES
UNLESS YOU SIGN AND RETURN THIS CARD.
---------------
SEE REVERSE
SIDE
---------------
<PAGE>
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ELECTION OF DIRECTORS AND FOR PROPOSAL 1.
-------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.
-------------------------------------------------------------------------------
FOR WITHHELD FOR AGAINST ABSTAIN
Election of l. Approval of
Directors. [ ] [ ] independent [ ] [ ] [ ]
(see reverse) accountants
For, except vote withheld from the following nominee(s):
-------------------------------------------------------
Change of Address
or Comments [ ]
(on reverse).
I will attend the Annual Meeting [ ]
The signer hereby revokes all proxies heretofore given by
the signer to vote at said meeting or any adjournment thereof.
SIGNATURE(S) ____________________________________ DATE _______________
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee, or guardian,
please also give your full title. If a corporation, please sign in full
corporate name by an authorized officer. If a partnership, please sign in
full partnership name by an authorized person.
