<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
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:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
<PAGE>
[LOGO]
March 27, 1996
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, April 30, 1996 at the Sioux City Hilton, 707 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 1995. 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>
NOTICE OF 1996 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 Hilton, 707 Fourth Street, Sioux
City, Iowa, on Tuesday, April 30, 1996, 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 1996.
(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 8, 1996 are entitled to notice of, and to vote at, the
Meeting.
/s/ George H. Valentine
George H. Valentine
Senior Vice President, General Counsel
and Corporate Secretary
March 27, 1996
<PAGE>
PROXY STATEMENT
GENERAL
The Annual Meeting of Stockholders of Terra Industries Inc. (the
"Corporation") will be held at the Sioux City Hilton, 707 Fourth Street, Sioux
City, Iowa, on Tuesday, April 30, 1996, 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 27, 1996.
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 8, 1996 (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 8, 1996, there were 81,431,984 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") and Taurus Investments S.A.
("Taurus"), the Corporation's 46% and 7% stockholders as of January 31, 1996,
respectively, are subsidiaries of Minorco, a company incorporated under the laws
of Luxembourg as a societe anonyme. Each of Minorco USA, Taurus and Minorco
have advised the Corporation that they intend to vote the Common Shares
registered in the name of Minorco USA and Taurus 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 currently consists of eleven members who are elected
to hold office until the next Annual Meeting or until their successors are duly
elected and qualified or their earlier resignation or removal. Mr. Reuben F.
Richards, Chairman of the Board of the Corporation since December 1982, has
advised the Board of Directors that he wishes to retire, effective at the
conclusion of this year's Annual Meeting. The Board of Directors has determined
to reduce the size of the Board of Directors from eleven to ten for the purpose
of Stockholders electing directors at the Annual Meeting. 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>
Year first
Present positions and offices with the Corporation and elected
Name and Age principal occupations and positions during the past five years Director
------------ -------------------------------------------------------------- ----------
<S> <C> <C>
Edward G. Beimfohr (63) Partner, Lane & Mittendorf (a New York law firm) since prior to 1994
1990.
Carol L. Brookins (52) Founder, Chairman and Chief Executive Officer of World 1993
Perspectives, Incorporated (an information, analysis and
consulting firm specializing in agricultural policies, markets and
issues) since 1980.
Edward M. Carson (66) Retired; Chairman of the Board and Chief Executive Officer of 1983
First Interstate Bancorp from June 1990 to May 1995 and
President thereof from January 1985 to May 1990.
David E. Fisher (53) Finance Director of Minorco (an international natural resources 1993
company) since January 1990.
Basil T. A. Hone (69) Retired; Vice President, Metals Division of Union Carbide 1986
Corporation (a chemical, industrial gases and specialty products
business) until 1984.
Burton M. Joyce (54) President and Chief Executive Officer of the Corporation since 1986
May 1991; Executive Vice President and Chief Operating Officer
thereof from February 1988 to May 1991.
Anthony W. Lea (47) Executive Director and member of Executive Committee of 1994
Minorco since prior to 1990; Joint Managing Director thereof from
January 1990 to December 1992; Director of Anglo American
Corporation of South Africa Limited since November 1993.
William R. Loomis, Jr. (47) Managing Director of Lazard Freres & Co. LLC since June 1995; 1996
General Partner in the Banking Group of Lazard Freres & Co. from
1984 to June 1995.
- - --------------------------------------------------------------------------------------------------------------
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
Year first
Present positions and offices with the Corporation and elected
Name and Age principal occupations and positions during the past five years Director
------------ -------------------------------------------------------------- --------
<S> <C> <C>
John R. Norton III (66) Chairman and Chief Executive Officer of J. R. Norton Company 1993
(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.
Henry R. Slack (46) Chief Executive of Minorco since December 1992; President 1983
thereof since September 1985 and Director thereof since 1981.
</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, Castle &
Cooke, Inc., and First Interstate Bancorp; Mr. Joyce is a director of IPSCO
Inc.; Mr. Lea is a director of Engelhard Corporation; Mr. Norton is a director
of Arizona Public Service Company, Aztar Corporation, Pinnacle West Capital
Corporation and Suncor, Inc.; 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 committees of the Board of Directors of which he or
she was a member.
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
1995, 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 did not meet last year, is currently
comprised 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, 1996, 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
Name and address of of beneficial Percentage
beneficial owner Title of class ownership of class
===============================================================================
<S> <C> <C> <C>
Minorco (U.S.A.) Inc. Common Shares 37,160,725 sole 45.78%
30 Rockefeller Plaza, Ste 4212 voting and
New York, NY 10112 investment power
- - -------------------------------------------------------------------------------
Taurus Investments S.A. Common Shares 5,400,000 sole 6.65%
9 rue Sainte Zithe voting and
L-2763 Luxembourg City investment power
Grand Duchy of Luxembourg
- - -------------------------------------------------------------------------------
Minorco Common Shares 42,560,725 sole 52.43%
9 rue Sainte Zithe voting and
L-2763 Luxembourg City investment power
Grand Duchy of Luxembourg through its
subsidiaries
Minorco (U.S.A.)
and Taurus
Investments S.A.
===============================================================================
</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 46%,
directly or through subsidiaries, by Anglo American Corporation of South Africa
Limited ("Anglo American"), a publicly held mining and finance company, and
approximately 22%, directly or through subsidiaries, by De Beers Centenary AG
("Centenary"), a publicly held Swiss diamond mining and investment company.
Approximately 38% 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.
Mr. Nicholas F. Oppenheimer, Deputy Chairman and a director of Anglo
American, Centenary, De Beers, and 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. 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 a director of Minorco. Mr. Loomis is 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, 1995: 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
M.L. Bennett................................................... 45,318
C.L. Brookins.................................................. - 0 -
E.M. Carson.................................................... 1,000
D.E. Fisher.................................................... 250
B.T.A. Hone.................................................... 2,000
B.M. Joyce..................................................... 543,113-/2/
A.W. Lea....................................................... 250
W.R. Loomis, Jr................................................ 25,000-/3/
F.G. Meyer..................................................... 84,142-/2/
J.R. Norton III................................................ 1,005
R.F. Richards.................................................. 459,742-/2/
H.R. Slack..................................................... 250
W.M. Rosenbury................................................. 152,723-/2/
G.H. Valentine ............................................... 50,273-/2/
Directors and all executive officers as a group (18 persons)... 1,415,667-/2/
</TABLE>
______________
/1/ Each director, nominee or executive officer has 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, 340,000, 81,000, 37,700, and 908,700 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, 1996, 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,
1995.
/3/ As of December 31, 1995, Mr. Loomis beneficially owned no Common Shares.
The 25,000 shares reported as owned by Mr. Loomis were acquired, however,
prior to his appointment as a director of the Corporation in February 1996.
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.
-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, 1995, 1994 and 1993.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
=============================================================================================================================
Long-Term Compensation
--------------------------------------
Annual 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 1995 $485,257 $375,000 $3,513 -- -- -- $21,985
President and 1994 444,691 450,000 5,458 -- 250,000/6/ -- 4,500
Chief Executive 1993 417,924 356,000 2,731 -- -- -- 9,285
Officer
W. Mark Rosenbury 1995 263,308 89,998 -- -- -- -- 11,224
Vice President of Business 1994 254,800 212,450 3,451 $ 336,000/7/ -- -- 4,500
Development and Strategic 1993 188,977 104,694 3,559 -- -- -- 4,497
Planning
Francis G. Meyer 1995 186,330 94,172 1,664 -- -- -- 8,385
Sr. Vice President and 1994 164,372 157,956 1,943 252,000/7/ -- -- 4,500
Chief Financial Officer 1993 127,105 65,427 1,733 -- -- -- 3,813
Michael L. Bennett 1995 171,442 109,633 1,943 -- -- -- 7,714
Sr. Vice President and 1994 125,252 99,642 -- 252,000/7/ -- -- 3,683
President, Terra 1993 94,129 48,452 -- -- -- -- 2,914
Distribution Division
George H. Valentine/8/ 1995 165,782 104,520 1,943 -- -- -- 7,459
Sr. Vice President, 1994 151,000 121,319 -- 210,000/7/ -- -- 4,349
General Counsel and 1993 26,955 30,113 -- 110,000/8/ -- -- 363
Corporate Secretary
=============================================================================================================================
</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, 1995 by each of the named executive
officers is: Burton M. Joyce: 6,667 ($94,171); W. Mark Rosenbury: 32,000
($452,000); Francis G. Meyer: 24,000 ($339,000); Michael L. Bennett: 24,000
($339,000); and George H. Valentine: 20,000 ($282,500).
/5/ "All Other Compensation" includes amounts contributed, allocated or accrued
for the named executive officers under the Corporation's Employees' Savings
and Investment Plan and Supplemental Deferred Compensation Plan.
-7-
<PAGE>
/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). 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.
/7/ On November 2, 1994, the Personnel Committee of the Corporation's Board
of Directors approved the grant of 32,000, 24,000, 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, Bennett
and Valentine, respectively. The closing price of the Common Shares on the
New York Stock Exchange on the date of grant was $10.50. 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, Bennett 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.
/8/ 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 and the Performance Shares vested 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.
-8-
<PAGE>
OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table provides information concerning 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. None of the named
executive officers exercised any stock options during 1995.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND DECEMBER 31, 1995 OPTION VALUES
=============================================================================
Value of Unexercised
Number of Unexercised in-the-Money
Options at Options at
Name December 31, 1995 December 31, 1995/1//
------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
- - -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Burton M. Joyce 450,000 250,000 $3,842,500 $906,250
W. Mark Rosenbury 81,000 -0- 682,125 -0-
Francis G. Meyer 37,700 -0- 328,200 -0-
Michael L. Bennett -0- -0- -0- -0-
George H. Valentine -0- -0- -0- -0-
=============================================================================
</TABLE>
/1// Based on the closing price on the New York Stock Exchange--Composite
Transactions of the Corporation's Common Shares on December 29, 1995
($14.125).
PENSION PLAN TABLES
The following table shows for employees retiring in 1995 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 5 10 15 20 25 30
- - -------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 150,000 $12,347 $ 24,695 $ 37,042 $ 49,390 $ 61,737 $ 74,084
250,000 21,097 42,195 63,292 84,390 105,487 126,584
500,000 42,972 85,945 128,917 171,890 214,862 257,834
750,000 64,847 129,695 194,542 259,390 324,237 389,084
1,000,000 86,722 173,445 260,167 346,890 433,612 520,334
=========================================================================
</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. Covered earnings are limited by Section 401(a)(17) of the
Internal Revenue Code ("Code") to $150,000 in 1995. The above benefits are
subject to the limitations of Section 415 of the Code, which, in 1995, provided
for a maximum annual payment of approximately $120,000. 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. "Compensation"
under the Excess Benefit Plan also includes amounts deferred under the
Supplemental Deferred Compensation Plan. Eligible compensation for the
-9-
<PAGE>
following named executive officers as of the end of the last calendar year is:
Burton M. Joyce: $935,257 and W. Mark Rosenbury: $475,758. The estimated years
of service for each such officer is as follows: Burton M. Joyce: 9 and W. Mark
Rosenbury: 9.
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 and Excess Benefit Plan as set
forth in the following table:
<TABLE>
<CAPTION>
==========================================================================
Years of Credited Service
----------------------------------------------------------
Remuneration 5 10 15 20 25 30
- - --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 150,000 $10,847 $ 21,695 $ 32,542 $ 43,390 $ 54,237 $ 65,084
250,000 18,597 37,195 55,792 74,390 92,987 111,584
500,000 37,972 75,945 113,917 151,890 189,862 227,834
750,000 57,347 114,695 172,042 229,390 286,737 344,084
1,000,000 76,722 153,445 230,167 306,890 383,612 460,334
==========================================================================
</TABLE>
Eligible compensation for the following named executive officers as of the
end of the last calendar year is: Francis G. Meyer: $344,286; Michael L.
Bennett: $271,084; and George H. Valentine: $287,101. The estimated years of
service for each such officer is as follows: Francis G. Meyer: 13; Michael L.
Bennett: 22 and George H. Valentine: 2.
Eligible compensation for each of the named executive officers includes the
salary paid in 1995 to each of the named executive officers plus the bonus paid
in 1995 to such executive officers for service to the Corporation and its
subsidiaries in 1994. Amounts reported in the table entitled "Summary
Compensation Table" for 1995 include the salary paid to each of the named
executive officers in 1995 plus the bonus paid to such executive officers in
1996 for service to the Corporation and its subsidiaries in 1995.
EMPLOYEE CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
As described in footnotes six and seven 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.
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 in the role of chairperson) 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.
-10-
<PAGE>
The graph appearing below assumes the investment at the market close on the
last trading day in 1990, of $100 in Common Shares of the Corporation, the S & P
500 Stock Index and two industry peer groups. The peer group designated "Former
Industry Peer Group" consists of the following agribusiness companies selected
by the Corporation in 1994: 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 peer group designated "Current Industry Peer Group" consists of
the companies included in the Former Industry Peer Group (with the exception of
BioTechnica International, Inc., which has been excluded due to, among other
reasons, its significantly smaller market capitalization) as well as the
addition of Agrium Inc. and Mississippi Chemical Corporation. The Corporation
selected the Current Industry Peer Group to reflect its business as a producer
of nitrogen fertilizer, crop production products, seed and services for
agricultural, turf, ornamental and other growers (as well as a producer of
nitrogen products and methanol for industrial customers).
Five-Year Stock Performance Graph
[PERFORMANCE GRAPH APPEARS HERE]
[PLOT POINTS TO COME]
<TABLE>
<CAPTION>
--------------------------------------------
December 31,
- - ---------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995
- - ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Terra Industries Inc. 100 134.48 131.03 211.11 289.79 397.82
- - ---------------------------------------------------------------------------
S & P 500 Stock Index 100 130.47 140.41 154.56 156.60 215.45
- - ---------------------------------------------------------------------------
Current Industry Peer Group 100 143.14 125.79 153.33 162.35 297.04
- - ---------------------------------------------------------------------------
Former Industry Peer Group 100 142.88 126.20 154.73 168.13 305.16
- - ---------------------------------------------------------------------------
</TABLE>
-11-
<PAGE>
The graph 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.
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 was also on the compensation committee of the
board of directors of Minorco USA until March 1996, 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 75% 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 was the Chairman of
the Board, Chief Executive Officer and President of Minorco USA until March
1996. 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.
Compensation opportunities for the Corporation's executive officers are
intended to be fixed at levels generally competitive with amounts paid to
executive officers with comparable experience and responsibilities at other
companies engaged in similar business as the Corporation and with other
companies of similar size or market capitalization ("Performance Peer Group").
As revised in 1995 with the assistance of an independent compensation
consultant, the Performance Peer Group includes virtually all of the companies
in the Industry Peer Group, supplemented with companies from the chemical and
distribution industries to reflect the Corporation's diversified operations,
larger revenue base than typical among the Industry Peer Group companies, and
competition for executive officers from companies other than those included in
the Industry Peer Group. The Committee periodically obtains advice from an
independent consultant concerning total compensation competitiveness against the
Performance Peer Group, including salary, annual incentives, and long-term
awards. In addition, competitive information is obtained at least annually from
various sources on salary and annual incentive levels for comparable executive
positions among companies covering a wide variety of industry segments,
including non-durable goods manufacturers, chemical companies, and distribution
and other non-manufacturing companies.
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
-12-
<PAGE>
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 in the Performance 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 adjustments to base salaries. The base
salaries of the executive officers of the Corporation in 1995 were generally
fixed at levels closer to (but still below) the midpoint of the Performance Peer
Group for comparable positions, resulting in an increase of approximately 10% to
15% in the case of most executive officers.
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 1995 under the Key Executive Plan regarding
service to the Corporation in 1994 (the "1994 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 1995 under the 1994 Plan to the named executive officers 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.
Incentive compensation awarded in 1996 under the Key Executive Plan
regarding service to the Corporation in 1995 (the "1995 Plan") was calculated in
a manner similar to the 1994 Plan, but each of the net income and return-on-
equity goals were weighted 50% under the 1995 Plan. Incentive compensation
awarded in 1996 reflected the Corporation's attainment of 101% of the net income
goal and 101% of the return-on-equity goal, or 101% overall achievement under
the 1995 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. Based on various factors, including 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 within a specified period 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
-13-
<PAGE>
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. Existing grants of Performance Shares will
either vest or be forfeited within a period of approximately six years from the
date of the grant.
No options or Performance Shares were issued by the Committee in 1995 to
any of the named executive officers since long term awards were provided to such
persons in late 1994. 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 recognizes that the value of the
awards will not be immediately realized and will be dependent on building
profitability and stockholder value well 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 1995, the
Committee (with the advice of an independent compensation consultant) 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 1995.
Based on the foregoing, Mr. Joyce's salary was increased, effective March
1, 1995, by $50,000 to $500,000. Mr. Joyce's 1995 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 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.
Consistent with the Corporation's objectives of tying pay to performance and
being competitive, Mr. Joyce's target percentage for the 1995 Plan was increased
to 60%. Based on Mr. Joyce's annual salary at December 31, 1995, and taking into
consideration the relative achievement of the Targeted Goals for 1995 (as
discussed above) and other factors, his incentive award in 1996 under the 1995
Plan was $375,000.
Long Term Awards. No long term awards were provided to Mr. Joyce in 1995
since a long term award was provided to him in late 1994. 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.
-14-
<PAGE>
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. These 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
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Corporation and Minorco USA and its affiliates 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 in
1995 an aggregate of approximately $4.6 million in connection with such
transactions, including, among other things, (i) the provision of office space,
(ii) 75% 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 $3.6 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.
From time to time the Corporation utilizes one or more investment banking
firms to advise on potential transactions. Despite the absence of any written
engagement letter, one such firm, Lazard Freres & Co. LLC, has in the last year
provided certain advisory services of a very preliminary nature to the
Corporation in connection with a possible joint venture or other transaction.
William R. Loomis, Jr., a director of the Corporation, is a Managing Director of
Lazard Freres & Co. LLC.
The Corporation provided a home equity bridge loan in the amount of
approximately $110,000 to Lawrence S. Hlobik, an executive officer of the
Corporation, during 1995 in connection with his relocation to Tulsa, Oklahoma.
The loan carried a 9% interest rate component and was repaid in full in 1995.
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 1996. 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 1996 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.
-15-
<PAGE>
SUBMISSION OF STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Proposals of stockholders intended to be submitted at the 1997 Annual
Meeting of Stockholders must be received by the Corporation at its principal
executive offices on or before November 29, 1996 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 ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1995 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 27, 1996
-16-
<PAGE>
<TABLE>
<CAPTION>
----- Please mark your | 1796
| X | votes as in this |______
----- example.
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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 -------- -------- 1. 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 hereunder given by
the signer to vote at said meeting or any adjournments 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.
___________________________________________________________________________________________________________________________________
FOLD AND DETACH HERE
[TERRA LOGO]
TERRA INDUSTRIES INC.
Annual Meeting of Stockholders
DATE: Tuesday, April 30, 1996
TIME: 9:00 A.M.
PLACE: Sioux City Hilton
2nd Floor
707 Fourth Street
Sioux City, Iowa 51101
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
TERRA INDUSTRIES INC.
Proxy Solicited on Behalf of the Board of Directors
<S> <C> <C>
The undersigned hereby appoints REUBEN F. RICHARDS, BURTON M. JOYCE and FRANCIS G.
MEYER, jointly and severally, as proxies, with power of substitution, to vote at
the Annual Meeting of Stockholders (including adjournments) of TERRA INDUSTRIES INC.
to be held April 30, 1996, with all powers the undersigned would possess if personally
present, on the election of directors, on the Proposal described in the Proxy
Statement and, in accordance with their discretion, on any other business that may
come before the meeting.
Election of Directors, Nominees: (Comments or Change of Address)
P E.G. BEIMFOHR, C.L. BROOKINS, E.M. CARSON,
R D.E. FISHER, B.T.A. HONE, B.M. JOYCE,
O A.W. LEA, W.R. LOOMIS, JR., J.R. NORTON III
X and H.R. SLACK
Y
(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
-------------
------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
CALL 1-800-758-5804
(Terra Industries Inc. Code--437906)
Terra Industries Inc. offers a toll-free number you can use to
obtain company announcements. This service, available 24 hours
a day, is a quick way to receive quarterly earnings reports and
other company news.
Our goal is to provide you and other interested investors with
timely information, efficiently and cost effectively.
[LOGO Terra]
------------------------------------------------------------------------------------------------------
</TABLE>
