<PAGE>
As filed with the Securities and Exchange Commission on July 22, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
----------------------------
TERRA INDUSTRIES INC.
(Exact name of Registrant as specified in its charter)
----------------------------
<TABLE>
<S> <C>
Maryland 52-1145429
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
Terra Centre
600 Fourth Street, P.O. Box 6000
Sioux City, Iowa 51102-6000
(712) 277-1340
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
----------------------------
George H. Valentine
Senior Vice President, General Counsel and Corporate Secretary
Terra Centre
600 Fourth Street, P.O. Box 6000
Sioux City, Iowa 51102-6000
(712) 277-1340
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-----------------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Title of Each Class of Amount to be Proposed maximum Proposed maximum Amount of
Securities To Be Registered registered offering price per aggregate offering registration fee(2)
share(1) price(1)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares, no par value 959,479 shares $ 11.25 $ 10,794,139 $ 3,271
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated in accordance with Rule 457(c), solely for purposes of
calculating the registration fee.
(2) Calculated on the basis of 1/33rd of 1% of the proposed maximum aggregate
offering price.
-----------------------------
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED JULY 22, 1997
------------------------------------------
PROSPECTUS _______ , 1997
959,479
Terra Industries Inc.
[LOGO]
Common Shares
______________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COM-
MISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
______________________________
The persons named as selling stockholders (the "Selling Stockholders") under the
caption in this Prospectus titled "Selling Stockholders" propose to sell an
aggregate of 959,479 common shares, no par value (the "Common Shares"), of Terra
Industries Inc. ("Terra" or the "Company"): (i) in one or more transactions at a
price or prices related to the then current market price of the Common Shares on
the New York Stock Exchange, with any commission to be paid by the Selling
Stockholders to brokers utilized by the Selling Stockholders as shall be agreed
upon by them; or (ii) by the Selling Stockholders to a broker (for resale by
such broker as principal) at a price or prices related to the then current
market price of the Common Shares, less such discount as shall be agreed upon by
the Selling Stockholders and the broker; or (iii) in other transactions as
described in greater detail below under "Plan of Distribution." The Company
will not receive any of the proceeds from the sale of these Common Shares.
The Common Shares are listed on the New York Stock Exchange and the Toronto
Stock Exchange under the symbol "TRA". On July 16, 1997 the last reported sale
price of the Common Shares as reported on the New York Stock Exchange Composite
Tape was $11.25 per share.
See "Investment Considerations" on pages 4-6 for a discussion of certain factors
that should be considered by prospective investors in the Common Shares offered
hereby.
<PAGE>
AVAILABLE INFORMATION
The Company has filed this Prospectus as part of a Registration Statement
on Form S-3 filed with the Securities and Exchange Commission (the "Commission")
pursuant to the 1933 Act, and the rules and regulations promulgated thereunder.
This Prospectus does not contain all the information set forth in the
Registration Statement. For further information with respect to the Company and
the Common Shares, reference is made to the Registration Statement. Statements
made in this Prospectus as to the contents of any contract, agreement or other
document referred to are not necessarily complete. With respect to each such
contract, agreement or other document filed as an exhibit to the Registration
Statement, reference is made to the exhibit for a more complete description of
the document or matter involved, and each such statement shall be deemed
qualified in its entirety by such reference.
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith is required to
file periodic reports and other information with the Commission. Reports, proxy
statements and other information filed by the Company as well as the
Registration Statement, including the exhibits thereto, can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Regional
Offices of the Commission at 75 Park Place, New York, New York 10007 and at
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. The Commission also maintains a Web site that contains reports,
proxy and information statements and other information regarding registrants,
like the Company, that file electronically with the Commission (site address
http://www.sec.gov). In addition, reports, proxy statements and other
information may be inspected, with respect to the Company, at the offices of the
New York Stock Exchange, 20 Broad Street, New York, New York 10005 and at the
offices of the Toronto Stock Exchange, Exchange Tower, 2 First Canadian Place,
Toronto, Ontario M5X1J2 Canada, upon which the Common Shares are listed.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 1-8520) are
incorporated herein by reference: (i) the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996; (ii) the Company's Quarterly
Reports on Form 10-Q for the fiscal quarters ended March 31, 1997 and June 30,
1997; (iii) the Company's Current Reports on Form 8-K dated February 27, 1997
and April 14, 1997; and (iv) the description of the Common Shares set forth in
the Registration Statement on Form 8-A dated May 2, 1988.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Common Shares offered hereby shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the documents incorporated herein by reference (other than
exhibits, unless such exhibits are specifically incorporated by reference in
such documents). Written requests for such copies should be directed to George
H. Valentine, Senior Vice President, General Counsel and Corporate Secretary,
Terra Industries Inc., Terra Centre, 600 Fourth Street, P.O. Box 6000, Sioux
City, Iowa 51102-6000, telephone: (712) 277-1340.
2
<PAGE>
SUMMARY
The following is a summary only and should be read in light of the more
detailed financial and other information incorporated by reference or included
elsewhere in this Prospectus. References to the "Company" or "Terra" shall mean
Terra Industries Inc., including, where the context so requires, its direct and
indirect subsidiaries.
The Company
The Company is a leader in each of its three business segments: (i) the
distribution of crop production inputs and services, (ii) the manufacture of
nitrogen products and (iii) the manufacture of methanol. The Company owns and
operates the largest independent farm service center network in North America
and is the second largest supplier of crop production inputs in the United
States. The Company is also the third largest producer of anhydrous ammonia and
the largest producer of nitrogen solutions in the United States and Canada. In
addition, the Company is one of the largest U.S. manufacturers and marketers of
methanol. In 1996, the Company generated revenues and operating income of $2.3
billion and $295.2 million, respectively.
Terra's Common Shares are traded on the NYSE and the Toronto Stock Exchange
under the symbol "TRA." As of May 30, 1997, Minorco, an international natural
resources company with operations in gold, base metals, industrial minerals,
paper and packaging and agribusiness ("Minorco"), owned through its wholly owned
subsidiaries 56.8% of Terra's outstanding common shares. As of May 30, 1997,
five of the Company's nine directors were also officers and/or directors of
Minorco or its affiliates.
The Offering
Common Shares Offered
by Selling Stockholders.............................959,479
Common Shares Outstanding
(As of May 30, 1997).............................74,878,811
NYSE symbol...............................................TRA
Recent Acquisition--Selling Stockholders
In May 1997, the Company acquired Huntting Elevator Company
("Huntting"). Huntting's 18 farm service centers sell fertilizers, crop
protection products and services, and livestock feed products and services.
These locations also merchandise grain and are located in or near southern
Minnesota. The Selling Stockholders received the Common Shares offered hereby
in connection with the sale of Huntting to Terra. The Common Shares have been
registered pursuant to registration rights granted to such Selling Stockholders
in the acquisition.
3
<PAGE>
INVESTMENT CONSIDERATIONS
Prospective investors should consider carefully the following factors in
addition to the other information in this Prospectus.
Holding Company Structure and TNCLP
The Company's assets consist primarily of investments in its subsidiaries.
As a result, the Company's rights to participate in the distribution of assets
of any subsidiary upon such subsidiary's liquidation or reorganization will be
subject to the prior claims of such subsidiary's creditors (including trade
creditors), except to the extent that the Company is itself recognized as a
creditor of such subsidiary, in which case the claims of the Company would still
be subject to the claims of any secured creditor of such subsidiary and of any
holder of indebtedness of such subsidiary senior to that held by the Company. In
addition, TNCLP's assets (including cash generated by its business) are subject
to the rights of the TNCLP partners under the terms of TNCLP's limited
partnership agreement.
TNCLP's limited partnership agreement requires the quarterly distribution
to the partners of TNCLP of all "Available Cash," which is generally defined to
mean all cash receipts from all sources, less the sum of all cash disbursements,
adjusted for changes in certain reserves established as TNC (as general partner
of TNCLP) determines to be necessary or appropriate in its reasonable discretion
to provide for the proper conduct of the business of TNCLP or TNLP (including
reserves for future capital expenditures) or to provide funds for distributions
with respect to any of the next four calendar quarters.
The nature of the businesses of the Company and TNCLP may give rise to
conflicts of interest between the two. Conflicts could arise, for example, with
respect to transactions involving purchases, sales and transportation of
fertilizer and natural gas and potential acquisitions of businesses or
properties.
Voting Control by Principal Stockholder
As of May 30, 1997, Minorco and its affiliates owned 56.8% of the
outstanding Common Shares of the Company. Since the Company became publicly-
owned in 1983, Minorco and its affiliates have owned a majority of the Company's
outstanding equity securities. As a result of its beneficial ownership of
Common Shares of the Company, Minorco and its affiliates are able to control the
election of the Company's directors and the management and policies of the
Company. As of May 30, 1997, five of the Company's nine directors are also
officers and/or directors of Minorco or its affiliates.
Dependence on Natural Gas; Industry Considerations
The principal raw material used to produce manufactured nitrogen products
and methanol is natural gas. Natural gas costs, including transportation and
forward pricing activities, comprised about 45% of the total costs and expenses
associated with the Company's Nitrogen Products segment in 1996. Natural gas
costs represented about 61% of the total costs and expenses associated with its
Methanol segment in 1996. A significant increase in the price of natural gas
that could not be recovered through an increase in nitrogen fertilizer or
methanol prices could have a material adverse effect on the Company's
profitability and cash flow. The Company's natural gas procurement policy is to
effectively fix or cap the price of between 40% and 80% of its natural gas
requirements for a one-year period and up to 50% of its natural gas requirements
for the subsequent two-year period through various supply contracts, financial
derivatives and other forward-pricing techniques.
The Company's future operating results are also subject to other external
factors which are beyond the Company's control, including the number of planted
acres; the types of crops planted; the effects of general weather patterns on
the timing and duration of field work for crop planting and harvesting; the
supply of crop inputs; the relative balance of worldwide supply and demand for
nitrogen fertilizers and methanol; the U.S. and other governments' agricultural
policy; and market prices of methanol.
4
<PAGE>
Cyclical Markets for Products
The markets for and profitability of the Company's products have been, and
are likely to continue to be, cyclical. Periods of high demand, high capacity
utilization and increasing operating margins tend to result in new plant
investment and increased production until supply exceeds demand, followed by
periods of declining prices and declining capacity utilization until the cycle
is repeated. In addition, markets for the Company's products are affected by
general economic conditions. The cyclicality of the Company's products or a
downturn in the economy could materially adversely affect the Company, including
its ability to service its debt obligations.
Seasonality and Volatility
The agricultural products business is seasonal, based upon the planting,
growing and harvesting cycles. Inventories must be accumulated in the first few
months of the calendar year to be available for seasonal sales, requiring
significant storage capacity. Inventory accumulations are financed by suppliers
or short-term borrowings, which are retired with the proceeds of the sales of
such inventory. In times of lower demand, the Company can reduce purchases,
thereby decreasing inventory carrying costs. In the past, over half of the
Company's sales generally occurred during the second quarter of each year. This
seasonality also generally results in higher fertilizer prices during peak
periods, with prices typically reaching their highest point in the spring,
dropping in the summer, increasing in the fall (as depleted inventories are
restored) and through the spring.
The agricultural products business can also be volatile as a result of a
number of other factors, the most important of which, for U.S. markets, are
weather patterns and field conditions (particularly during periods of
traditionally high fertilizer consumption), quantities of fertilizers imported
to and exported from North America and current and projected grain inventories
and prices, which are heavily influenced by U.S. exports and world-wide grain
markets. U.S. governmental policies may directly or indirectly influence the
number of acres planted, the level of grain inventories, the mix of crops
planted and crop prices. The Federal Agriculture Improvement and Reform Act of
1996 put an end to acreage reduction and production control measures, allowing
farmers more flexibility in planting. Because of factors which are outside of
the Company's control, including the production capacity of competitors, there
can be no assurance that the relatively high nitrogen fertilizer price levels
recently achieved will continue. Nitrogen fertilizer is a global commodity and
its price can be volatile.
As with any commodity chemical, the price of methanol is volatile. During
1994, increased world demand for methanol combined with a large number of plant
shutdowns and maintenance turnarounds in the industry and the phase-in of U.S.
federally mandated standards for oxygenated gasoline resulted in a tight market
and uncharacteristically high prices. Demand for methanol also increased due to
increased demand for wood building products in the construction industry. In
1995, however, methanol prices returned to historically "normal" levels. Prices
have risen slightly in early 1997 due to certain production outages, delayed
startup of foreign plants and increased worldwide demand.
Competition
The market for the fertilizer, crop protection products and seed
distributed by the Company is highly competitive. In 1996, sales attributable to
the Company's farm service centers accounted for roughly 5% of total crop
production products sold in the U.S. Within the specific market areas served by
its farm service centers, however, the Company's share of the market was
substantially higher in most instances. The Company's competitors include
cooperatives, divisions of diversified agribusiness companies, regional
distributors and independent dealers, some of which have substantially greater
financial and other resources than the Company.
Nitrogen fertilizer is a global commodity, and customers, including end-
users, dealers and other fertilizer producers and distributors, base their
purchasing decisions principally on the delivered price and availability of the
product. The Company competes with a number of U.S. producers, and producers in
other countries, including state-owned and government-subsidized entities. Some
of the Company's principal competitors may have greater total resources and may
be less dependent on earnings from nitrogen fertilizer sales than the Company.
Some foreign
5
<PAGE>
competitors may have access to lower cost or government-subsidized natural gas
supplies. Furthermore, as a consequence of recent favorable market conditions
for nitrogen producers, additional nitrogen fertilizer production capacity is
expected within the next year.
The methanol industry, like the fertilizer industry, is highly competitive,
and such competition is based largely on price, reliability and deliverability.
The relative cost and availability of natural gas and the efficiency of
production facilities are important competitive factors. Significant
determinants of a plant's competitive position are the natural gas acquisition
and transportation contracts that a plant negotiates with its major suppliers.
Domestic competitors for methanol include a number of large integrated
petrochemical producers, many of which are better capitalized than the Company.
In addition, the production and trade of methanol has become increasingly
global, and a number of foreign competitors produce methanol primarily for the
export market.
Damage to Facilities; Natural Hazards
The operations of the Company may be subject to significant interruption if
one or more of its facilities were to experience a major accident or were
damaged by severe weather or other natural disaster. However, the Company
currently maintains, and expects that it will, to the extent economically
feasible, continue to maintain, insurance (including business interruption
insurance) in an amount which the Company believes is sufficient to allow the
Company to withstand major damage to any of its facilities.
The Company's nitrogen fertilizer plant in Iowa (the "Port Neal Facility")
was the site of a major explosion on December 13, 1994. An investigative
committee formed by the Company, which included independent experts, determined
that the principal cause of the explosion was a defect in the design of the
nitric acid sparger in the neutralizer vessel of the ammonium nitrate plant at
the Port Neal Facility. The Company has repaired the facility.
Environmental Regulation
The Company's business activities are subject to stringent U.S. and foreign
environmental regulations. The Company is also involved in the manufacture,
handling, transportation, storage and disposal of materials that are or may be
classified as hazardous or toxic by applicable laws and regulations. If such
materials have been or are disposed of at sites that are targeted for
investigation and remediation by regulatory authorities, the Company or
subsidiaries thereof, as applicable, may be among those responsible under such
laws for all or part of the costs of such cleanup. The Company has been
designated as a potentially responsible party under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, and
analogous state laws with respect to a number of sites. Under such laws, certain
classes of persons, including generators of hazardous substances, are subject to
claims for response costs, regardless of fault or the legality of original
disposal. Such persons may be held jointly and severally liable for such claims.
In addition, there can be no assurance that existing environmental regulations
will not be revised or that new regulations will not be adopted or become
applicable so as to have a material adverse effect on the Company's business or
financial condition.
The Company endeavors to comply (and has incurred substantial costs in
connection with such compliance) in all material respects with applicable
environmental, safety and health regulations. The Company does not expect its
continued operation in compliance with such regulations to have a material
adverse effect on its results of operations, financial position, net cash flows
or competitive position.
6
<PAGE>
THE COMPANY
The Company is a leader in each of its three business segments: (i) the
distribution of crop production inputs and services, (ii) the manufacture of
nitrogen products and (iii) the manufacture of methanol. The Company owns and
operates the largest independent farm service center network in North America
and is the second largest supplier of crop production inputs in the United
States. The Company is also the third largest producer of anhydrous ammonia and
the largest producer of nitrogen solutions in the United States and Canada. In
addition, the Company is one of the largest U.S. manufacturers and marketers of
methanol. In 1996, the Company generated revenues and operating income of $2.3
billion and $295.2 million, respectively.
The Company's distribution network for fertilizer, crop protection products
and seed has grown over the last several years to 421 farm service centers and
about 780 affiliated dealer locations serving the United States and the eastern
region of Canada, as of May 30, 1997. This growth generally has been the result
of a healthy farm economy, acquisitions, additional facilities and aggressive
marketing. The Company's distribution network is supplied by both independent
sources and the Company's own production facilities, which presently include one
crop protection chemical dry flowable and liquid formulation plant and seven
other liquid chemical formulation facilities in addition to its nitrogen
production facilities. In 1996, distribution revenues and operating income
constituted approximately 67% and 9% of the Company's total revenues and
operating income, respectively.
Nitrogen fertilizer is a basic crop nutrient which is applied seasonally by
farmers to improve crop yield and quality. Nitrogen fertilizer is produced by
combining gaseous nitrogen with hydrogen to form anhydrous ammonia, the simplest
form of nitrogen fertilizer, which can be further processed or upgraded into
other fertilizer products such as urea and nitrogen solutions. The Company
presently owns five nitrogen fertilizer facilities with total annual gross
production capacity of 2.7 million tons of ammonia. In 1996, approximately 11%
of the Company's fertilizer production tonnage was supplied to its farm service
center locations for sale to growers, while the rest was sold to other
customers. The Company believes that it is among the lowest cost providers of
nitrogen fertilizer in the markets it serves, benefiting from favorable
transportation logistics and other operating synergies. The Company suffered a
major explosion in December 1994 at the Port Neal Facility, for which it was
insured. The Company began producing ammonia again at the facility in late
December 1995, and the urea and nitrogen solution upgrading facilities became
operational in May 1996. In 1996, nitrogen products revenues (including
intercompany sales) and operating income constituted approximately 28% and 85%
of the Company's total revenues and operating income, respectively.
Methanol is used primarily as a feedstock in the production of other
chemical products such as formaldehyde, acetic acid, adhesives and plastics.
Methanol is also used as a feedstock in the production of MTBE, an oxygenate and
octane enhancer used as an additive in reformulated gasoline to provide cleaner
burning fuels. The Company's methanol production capacity is approximately 320
million gallons per year, representing approximately 13% of the total United
States rated capacity. The Beaumont Facility is the second largest such facility
in the U.S. In 1996, methanol revenues and operating income constituted
approximately 5% and 6% of the Company's total revenues and operating income,
respectively.
The Company's long-term strategy for growth is to: (i) acquire and upgrade
production and distribution facilities, (ii) increase distribution volumes by
expanding sales from Company-operated locations and its affiliated dealer
network, (iii) change its product mix to include more profitable value-added
products and (iv) continue to build customer loyalty by providing value-added
services. As part of this strategy, in April 1993, the Company acquired a
fertilizer manufacturing facility and 32 farm service centers in Canada; in
December 1993, the Company acquired 12 farm service centers in Florida; in
September 1994, the Company acquired a minority interest in a 100 location
distributor of crop input and protection products in the mid-Atlantic region; in
October 1994, the Company acquired AMCI, which provided the Company two
fertilizer plants and 1.4 million tons of annual gross production capacity of
ammonia as well as the Beaumont Facility; in July 1996, the Company completed a
construction project at its Courtright Facility enabling the upgrade of 65,000
tons of ammonia annually into urea and UAN; and in May 1997, the Company
acquired 18 farm service centers which include grain operations and are located
in or near southern Minnesota. In addition, certain other distribution location
acquisitions and manufacturing upgrade projects have been completed during the
past few years. The Company will, at an appropriate price, consider a sale or
joint venture involving its methanol business.
The Company's principal executive offices are located at Terra Centre, 600
Fourth Street, P. O. Box 6000, Sioux City, Iowa 51102-6000 and its telephone
number is (712) 277-1340.
7
<PAGE>
SELLING STOCKHOLDERS
The following table shows, based on information reported to the Company (i)
the beneficial ownership of Common Shares by each Selling Stockholder as of July
1, 1997 and (ii) the number of Common Shares being offered by each Selling
Stockholder.
<TABLE>
<CAPTION>
Number of Common Number of Common Shares
Name and Address Shares Owned* Offered to be Sold*
- ------------------ ------------- -------------------
<S> <C> <C>
James G. Huntting, Jr. 239,660 153,403
2300 Ninth Avenue, SW
Austin, Minnesota 55912
Joanne Huntting 160,931 103,010
2300 Ninth Avenue, SW
Austin, Minnesota 55912
Ann Yonamine 156,955 100,465
11900 Waterford Road
Eden Prairie, Minnesota 55344
Lisa Huntting Dunn 156,955 100,465
15540 Wing Lake Drive
Minnetonka, Minnesota 55343
Julie Grandgeorge 156,955 100,465
22 Second Avenue
Goffstown, New Hampshire 03045
Ann G. Heimark as Trustee of the 66,778 42,744
Ann Heimark Trust
36 Hanten Drive
Mankato, Minnesota 56001
Craig Heimark 154,323 98,780
58 West Heath Road
London, England NW37UJ
Libby Heimark 2,169 1,388
58 West Heath Road
London, England NW37UJ
James G. Huntting as Trustee of the 46,975 30,068
Craig Heimark Trust
2300 Ninth Avenue, SW
Austin, Minnesota 55912
Craig Heimark as Custodian for 6,685 4,279
Jacob Heimark under Minnesota
UTMA until age 21
58 West Heath Road
London, England NW37UJ
Craig Heimark as Custodian for 6,685 4,279
Erick Heimark under Minnesota
UTMA until age 21
58 West Heath Road
London, England NW37UJ
Craig Heimark as Custodian for 6,685 4,279
Julia Heimark under Minnesota
UTMA until age 21
58 West Heath Road
London, England NW37UJ
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Number of Common Number of Common Shares
Name and Address Shares Owned* Offered to be Sold*
- ---------------- ------------- -------------------
<S> <C> <C>
Laura Kennedy 97,517 62,419
77 East Linden Avenue
Lake Forest, Illinois 60045
Stephen Kennedy 2,169 1,388
770 East Linden Avenue
Lake Forest, Illinois 60045
James G. Huntting, Jr. as Trustee of 46,975 30,068
Laura Kennedy Trust
2300 Ninth Avenue, SW
Austin, Minnesota 55912
Laura Kennedy, as Custodian for 4,337 2,776
Kathleen Kennedy under Illinois
UTMA until age 21
770 East Linden Avenue
Lake Forest, Illinois 60045
Laura Kennedy, as Custodian for 6,685 4,279
Ryan Kennedy under Illinois
UTMA until age 21
770 East Linden Avenue
Lake Forest, Illinois 60045
James Heimark 97,517 62,419
601 Sixth Avenue, SW
Austin, Minnesota 55912
Jayna Heimark 2,169 1,388
601 Sixth Avenue, SW
Austin, Minnesota 55912
James G. Huntting, as Trustee of the 46,975 30,068
James Heimark Trust
2300 Ninth Avenue, SW
Austin, Minnesota 55912
James G. Heimark, as Trustee of the 6,685 4,279
Helen Heimark Trust
601 Sixth Avenue, SW
Austin, Minnesota 55912
Ann Yonamine, as Custodian for 5,240 3,354
Laura Yonamine under Minnesota
UTMA until age 21
11900 Waterford Road
Eden Prairie, Minnesota 55344
Ann Yonamine, as Custodian for 5,240 3,354
Justin Yonamine under Minnesota
UTMA until age 21
11900 Waterford Road
Eden Prairie, Minnesota 55344
James G. Huntting, Jr. as Trustee of 5,240 3,354
the Trevor Huntting Dunn Trust
UAD April 17, 1992
15540 Wing Lake Drive
Minnetonka, Minnesota 55343
</TABLE>
9
<PAGE>
<TABLE>
Number of Common Number of Common Shares
Name and Address Shares Owned* Offered to be Sold*
- ---------------- ------------- -------------------
<S> <C> <C>
Julie Grandgeorge as Trustee of the 5,240 3,354
Madeline Huntting Grandgeorge
Trust, UAD April 17, 1997
22 Second Avenue
Goffstown, New Hampshire 03045
Julie Grandgeorge as Trustee of the 5,240 3,354
Samual Huntting Grandgeorge
Trust, UAD April 17, 1997
22 Second Avenue
Goffstown, New Hampshire 03045
</TABLE>
______________
* Less then 1% of the Company's outstanding Common Shares are owned by each
Selling Stockholder.
Relationships of Certain Selling Stockholders with the Company
The following Selling Stockholders were executive officers or directors of
Huntting within the past three years prior to its acquisition by the Company:
James G. Huntting, Craig Heimark, James Heimark and Lisa Huntting Dunn. None of
the Selling Stockholders has had any other position, office or material
relationship with the Company within the past three years, except James Heimark
is currently an employee of the Company.
PLAN OF DISTRIBUTION
The Company will not receive any of the proceeds from the sale of the
Common Shares offered hereby. The Selling Stockholders have advised the Company
that the Common Shares may be offered, from time to time, as determined by
market conditions, by any of the following means, or any combination thereof:
(i) ordinary brokerage transactions on the New York Stock Exchange and
transactions in which a broker, dealer or agent of the Selling Stockholders
solicits purchasers; (ii) block trades in accordance with the rules of the New
York Stock Exchange in which a broker, dealer or agent of the Selling
Stockholders may attempt to sell the Common Shares as agent but may position and
resell all or a portion of the block as principal to facilitate the
transactions; (iii) "off-board" secondary distributions, exchange distributions
or special offerings in accordance with the rules of the New York Stock Exchange
in which a broker, dealer or agent of the Selling Stockholders may act as
principal or agent; (iv) sales to a broker, dealer or agent of the Selling
Stockholders in which such broker, dealer or agent of the Selling Stockholders
purchases the Common Shares as principal and resells the Common Shares for its
own account pursuant to a prospectus supplement; (v) sales "at the market" to or
through a market maker or into an existing trading market, on an exchange or
otherwise, for the Common Shares; and (vi) sales in other ways not involving
market makers or established trading markets, including direct sales to
institutions or individual purchasers. The Common Shares are expected to be sold
at prices prevailing at the time of sale, and it is anticipated that the
offering prices will not exceed the last reported sale price for the Common
Shares of the Company on the New York Stock Exchange immediately prior to the
determination thereof. Any brokerage commissions or other compensation paid by
the Selling Stockholders are not expected to exceed those customary in the types
of transactions involved. A broker, dealer or agent of the Selling Stockholders
may also receive compensation from purchasers of the Common Shares which is not
expected to exceed that customary in the types of transactions involved.
In connection with the sale of the Common Shares offered hereby, any
participating broker, dealer or agent of the Selling Stockholders may be deemed
to be an underwriter within the meaning of the Securities Act, in which event
the brokerage commissions or discounts received by any such person may be deemed
to be underwriting compensation. To the extent required by the Securities Act,
additional information relating to the specific shares offered, the price at
which such shares are offered and the particular selling arrangements, if any,
made with any
10
<PAGE>
broker, dealer or agent in connection therewith (including any applicable
commissions or discounts) will be set forth in an accompanying prospectus
supplement or, if appropriate, a post-effective amendment to the Registration
Statement of which this Prospectus is a part.
EXPERTS
The consolidated financial statements and related financial statement
schedules of the Company as of December 31, 1996 and 1995 and for the three
years ended December 31 1996, which are incorporated by reference in the
Registration Statement, have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their reports, incorporated by reference in the
Registration Statement (which reports express an unqualified opinion and include
an explanatory paragraph referring to the Company's change in its method of
accounting for major maintenance turnarounds and post-employment benefits
effective January 1, 1994), and have been so included in reliance upon the
reports of such firm given upon their authority as experts in accounting and
auditing.
LEGAL MATTERS
Certain legal matters regarding the issuance of the Common Shares have been
passed upon for the Company by George H. Valentine, Senior Vice President,
General Counsel and Corporate Secretary of the Company.
11
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
The registrant estimates that expenses in connection with the offering
described in this Registration Statement will be as follows:
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission registration fee............. $ 3,271
Printing expenses............................................... 10,000
Accountants' fees and expenses.................................. 5,000
Legal fees and expenses......................................... 4,000
New York Stock Exchange and Toronto Stock Exchange listing fee.. 4,000
Miscellaneous................................................... 3,729
-------
Total................................................. $30,000
=======
</TABLE>
Item 14. Indemnification of Directors and Officers
As permitted by the Maryland General Corporation Law ("MGCL"), Article
SEVENTH, Paragraph (8) of the Registrant's Charter provides for indemnification
of directors and officers of the Registrant as follows:
The Corporation shall indemnify (a) its directors to the full extent
provided by the general laws of the State of Maryland now or hereafter in
force, including the advance of expenses under the procedures provided by
such laws; (b) its officers to the same extent it shall indemnify its
directors; and (c) its officers who are not directors to such further
extent as shall be authorized by the Board of Directors and be consistent
with law. The foregoing shall not limit the authority of the Corporation to
indemnify other employees and agents consistent with law.
The MGCL permits a corporation to indemnify its directors and officers,
among others, against judgments, penalties, fines, settlements and reasonable
expenses actually incurred by them in connection with any proceeding to which
they may be made a party by reason of their service in those or other
capacities, unless it is established that (a) the act or omission of the
directors or officer was material to the matter giving rise to such proceeding
and (i) was committed in bad faith or (ii) was the result of active and
deliberate dishonesty, (b) the director or officer actually received an improper
personal benefit in money, property or services, or (c) in the case of any
criminal proceeding, the director or officer had reasonable cause to believe
that the action or omission was unlawful. The Registrant also maintains
directors and officers liability insurance.
The MGCL permits the charter of a Maryland corporation to include a
provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages, except to the extent that
(i) the person actually received an improper benefit or profit in money,
property or services or (ii) a judgment or other final adjudication is entered
in a proceeding based on a finding that the person's action, or failure to act,
was the result of active and deliberate dishonesty and was material to the cause
of action adjudicated in the proceeding. The Registrant's Charter contains a
provision providing for elimination of the liability of its directors or
officers to the Registrant or its stockholders for money damages to the fullest
extent permitted by Maryland law.
Item 15. Recent Sales of Unregistered Securities.
On March 7, 1996, the Registrant acquired the stock of Anderson Oil & Ag
Service, Inc. ("Anderson") in exchange for 218,550 shares of the Registrant's
common stock, no par value per share, issued to the sole stockholder of
Anderson, representing approximately $2.8 million in market value upon issuance.
On May 16, 1997, the Registrant acquired the stock of Huntting Elevator
Company ("Huntting") in exchange for, among other things, 1,498,985 shares of
the Registrant's common stock, no par value per share, issued to stockholders of
Huntting, representing approximately $19.4 million in market value upon
issuance.
These transactions were exempt from registration by virtue of Rule 506
and/or Section 4(2) under the Securities Act of 1933, since no public offering
had been involved.
II-1
<PAGE>
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
3.1.1 Articles of Restatement of Terra Industries filed with the State of
Maryland on September 11, 1990, filed as Exhibit 3.1 to Terra
Industries' Form 10-K for the year ended December 31, 1990, is
incorporated herein by reference.
3.1.2 Articles of Amendment of Terra Industries filed with the State of
Maryland on May 6, 1992, filed as Exhibit 3.1.2 to Terra Industries'
Form 10-K for the year ended December 31, 1992, is incorporated herein
by reference.
3.1.3 Articles Supplementary of Terra Industries filed with the State of
Maryland on October 13, 1994, filed as Exhibit 4.1.3 to Terra
Industries' Form 8-K/A dated November 3, 1994, is incorporated herein
by reference.
3.2 By-Laws of Terra Industries, as amended through August 7, 1991, filed
as Exhibit 3 to Terra Industries' Form 8-K dated September 30, 1991, is
incorporated herein by reference.
4.1 Indenture dated as of October 15, 1993 among Terra Industries (as
successor by merger to Agricultural Minerals and Chemicals Inc.) and
Society National Bank, including form of Senior Note, filed as Exhibit
99.2 to Terra Industries' Registration Statement on Form S-3, as
amended, (File No. 33-52493), is incorporated herein by reference.
4.2 Indenture, dated as of June 22, 1995 between the Company and First
Trust National Association, as trustee, including form of Exchange
Note, filed as Exhibit 4.1 to Terra Industries' Registration Statement
on Form S-4, as amended (File No. 33-60853), is incorporated herein by
reference.
4.3 Amended and Restated Credit Agreement dated as of December 14, 1995
(the "1995 Credit Agreement") among Terra Industries Inc., Terra
Capital, Inc., Terra Nitrogen, Limited Partnership, Certain Guarantors,
Certain Lenders, Certain Issuing Banks and Citibank, N.A. without
exhibits or schedules, filed as Exhibit 4.3 to Terra Industries' Form
10-K for the year ended December 31, 1995, is incorporated herein by
reference.
4.4 Consent and Amendment No. 1 dated as of June 4, 1996 to the 1995 Credit
Agreement filed as Exhibit 4.4 to Terra Industries' Form 10-Q for the
quarter ended September 30, 1996, is incorporated herein by reference.
4.5 Consent and Amendment No. 2 dated as of July 31, 1996 to the 1995
Credit Agreement filed as Exhibit 4.5 to Terra Industries' Form 10-Q
for the quarter ended September 30, 1996, is incorporated herein by
reference.
4.6 Consent, Waiver and Amendment No. 3 dated as of November 22, 1996 to
the 1995 Credit Agreement filed as Exhibit 4.6 to Terra Industries'
Form 10-K for the year ended December 31, 1996, is incorporated herein
by reference.
4.7 Amendment No. 4 dated as of March 13, 1997 to the 1995 Credit Agreement
filed as Exhibit 4.7 to Terra Industries' Form 10-Q for the quarter
ended March 31, 1997, is incorporated herein by reference.
4.8 Amendment No. 5 dated as of May 27, 1997 to be the 1995 Credit
Agreement.
Other instruments defining the rights of holders of long-term debt of
Terra Industries and its subsidiaries are not being filed because the
total amount of securities authorized under any such instrument does
not exceed 10 percent of the total assets of Terra Industries and its
subsidiaries on a consolidated basis. Terra Industries agrees to
furnish a copy of any such instrument to the Securities and Exchange
Commission upon request.
5 Opinion of George H. Valentine, Esq.
23.1 Consent of Deloitte & Touche LLP.
II-2
<PAGE>
23.2 Consent of George H. Valentine, Esq. (included in Exhibit 5)
24 Powers of Attorney.
(b) Financial Statement Schedules
The following information included in Item 14 of the registrant's annual
report on Form 10-K for the year ended December 31, 1996 and Deloitte & Touche
LLP's opinion thereon are hereby incorporated by reference herein:
Schedule No.
- -----------
I Condensed Financial Information of Registrant
II Valuation and Qualifying Accounts:
Years Ended December 31, 1996, 1995 and 1994
All other financial statement schedules have been omitted because they are
not applicable or the required information is not significant or is shown in the
consolidated financial statements or the notes thereto.
Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the Registration Statement is on Form S-3, and the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such
II-3
<PAGE>
indemnification is against public policy as expressed in the Securities Act of
1933, as amended, and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933, as amended, and will be governed by the final
adjudication of such issue.
(c) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, as amended, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act of 1933, as amended, shall
be deemed to be part of this Registration Statement as of the time it was
declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, as amended, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Sioux City, State of Iowa, on July
22, 1997
TERRA INDUSTRIES INC.
By: /s/ GEORGE H. VALENTINE
-----------------------
GEORGE H. VALENTINE
Its: Senior Vice President, General Counsel
and Corporate Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title
- ------------------------- ----------------------------------
<S> <C>
William R. Loomis, Jr.* Chairman of the Board
Chief Executive Officer, President
and Director (Principal
Burton M. Joyce* Executive Officer)
Senior Vice President and Chief
Financial Officer (Principal
Francis G. Meyer* Financial Officer)
Vice President, Controller
Robert E. Thompson* (Principal Accounting Officer)
Edward G. Beimfohr* Director
Carol L. Brookins* Director
Edward M. Carson* Director
David E. Fisher* Director
Anthony W. Lea* Director
John R. Norton III* Director
Henry R. Slack* Director
</TABLE>
Dated: July 22, 1997
/s/ George H. Valentine
----------------------------------
George H. Valentine
*Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
------------
Exhibit Numbered
- ------- --------
Number Description Page
- ------ ------------------------------------------------------------ ----
<S> <C> <C>
4.8 Amendment No. 5 dated as of May 27, 1997 to the 1995 Credit 19
Agreement
5 Opinion of George H. Valentine, Esq. 30
23.1 Consent of Deloitte & Touche LLP. 32
23.2 Consent of George H. Valentine, Esq. (included in Exhibit 5)
24 Powers of Attorney. 33
</TABLE>
<PAGE>
EXHIBIT 4.8
CONFORMED COPY
AMENDMENT NO. 5
AMENDMENT NO. 5 (this "Agreement") dated as of May 27, 1997 among:
TERRA CAPITAL, INC., a Delaware corporation (the "Company"); TERRA NITROGEN,
LIMITED PARTNERSHIP, a Delaware limited partnership ("TNLP" and, together with
the Company, the "Borrowers); each of the entities listed on the signature pages
hereof under the caption "GUARANTORS" (each such entity, and each of the
Borrowers, an "Obligor" and, collectively, the "Obligors"); each of the lenders
(the "Lenders") and issuing banks (the "Issuing Banks") listed on the signature
pages hereof; and CITIBANK, N.A., as agent for the Lenders and Issuing Banks
under the Credit Agreement referred to below (in such capacity, the "Agent").
The Obligors, the Lenders, the Issuing Banks and the Agent are parties
to an Amended and Restated Credit Agreement dated as of December 14, 1995 (as
from time to time amended, the "Credit Agreement"). The Company has requested
the Lenders to amend the Credit Agreement in certain respects, and the Lenders
are willing to so amend the Credit Agreement, all on the terms and conditions
set forth herein. Accordingly, the parties hereto hereby agree as follows:
Section 1. Definitions. Except as otherwise defined in this
Amendment No. 5, terms defined in the Credit Agreement are used herein as
defined therein.
Section 2. Amendments. Subject to the Agent's receipt of this
Agreement, duly executed by each of the Obligors, the Required Lenders and the
Agent, but effective as of the date hereof, the Credit Agreement shall be
amended as follows:
A. General. References in the Credit Agreement to "this Agreement"
(including indirect references such as "hereunder", "hereby", "herein" and
"hereof") shall be deemed to be references to the Credit Agreement as amended
hereby.
B. Definitions. Section 1.01 of the Credit Agreement is amended by
inserting the following definitions (or, in the case of any definition for a
term that is defined in the Credit Agreement before giving effect to this
Amendment No. 5, by amending and restating such definition to read as set forth
below):
Amendment No. 5
---------------
<PAGE>
- 2 -
"Acquired Debt" means, without duplication:
(a) Debt of Subsidiaries of Terra acquired by Terra or any of
its Subsidiaries after the Restatement Date;
(b) Debt assumed by Terra (whether by operation of law or
contract or otherwise) in connection with mergers by Terra after the
Restatement Date consummated in accordance with Section
5.02(d)(ii)(y); and
(c) assumptions or Guarantees of other Acquired Debt by Terra or
one of its Subsidiaries.
"Blytheville Assets" means TI's Blytheville, Arkansas facility and
related assets having (in the reasonable judgment of TI's Board of
Directors) an aggregate fair market value not exceeding $5,000,000.
"Farmland JV" means a joint venture (which may be structured as a
partnership, limited liability company, corporation or other business form)
between TI and Farmland Industries, Inc. (or one of its Affiliates), in
which joint venture TI has at least a 50% ownership interest.
"Guarantee" by any Person means any arrangement by which such Person
incurs Debt of the types referred to in clauses (i) and (j) of the
definition of "Debt" in respect of such Person.
"Outside Subsidiary" means any Subsidiary of Terra (other than Terra
Capital Holdings or any of its Subsidiaries).
"Permitted JV" means Britz LLC and Farmland JV.
"Specified Acquisitions" means Investments (including, without
limitation, Investments arising by reason of any merger or consolidation
permitted under Sections 5.02(d)(i)(y) and 5.02(d)(ii)(y), but excluding
(1) Investments contemplated by the Port Neal Transaction, (2) Terra Stock
Repurchases, (3) the purchase, redemption or other acquisition of Senior
Preference Units pursuant to the SPU Redemption and (4) capital
contributions to Subsidiaries of Terra) consisting of acquisitions of
ownership interests in one or more entities engaged in the same or allied
line or lines of business as Terra and its Subsidiaries, taken as a whole.
For purposes hereof, the amount of Specified Acquisitions made during any
period shall include, without duplication, the aggregate amount of
Investments in
Amendment No. 5
---------------
<PAGE>
- 3 -
Permitted JVs (other than Investments referred to in clauses (xvi) and
(xviii)(y) of Section 5.02(f)) made during such period and the aggregate
amount of payments made during such period by Terra and its Subsidiaries in
respect of the Obligations referred to in clauses (xv), (xvi), (xvii) and
(xviii) of Section 5.02(b).
"Specified Call Option" means a cash-settled call option with respect
to a U.S. Stock Index, which call option (a) has an expiration date not
later than March 31, 1998, (b) is entered into with a counterparty (or
designated guarantor) having (at the time of acquisition thereof) senior,
unsecured long-term debt rated at least BBB by Standard & Poor's and Baa2
by Moody's and (c) is documented under an agreement that permits close-out
and netting of all call options thereunder.
"U.S. Stock Index" means a nationally-recognized diversified index of
equity securities (which may relate to a single industry) of companies that
are predominantly domiciled or doing business in the United States.
C. TNLP Advances. Section 2.01(b)(iv) of the Credit Agreement shall
be amended to read as follows:
"(iv) The proceeds of the TNLP Advances shall be used solely (A) for
general corporate purposes of TNLP, including, without limitation, to
finance its ongoing working capital needs and to refinance outstanding Debt
and (B) to finance all or a portion of the SPU Redemption."
D. Disposition Prepayment. Section 2.05(b)(i)(z) of the Credit
Agreement shall be amended to read as follows:
"(z) neither the transfer of the Blytheville Assets in accordance with
Section 5.02(e)(xi) nor the Beaumont Disposition shall be deemed to be a
Disposition for purposes of this clause (i)."
E. Transactions with Affiliates. Section 5.01(m)(vii) of the Credit
Agreement shall be amended to read as follows:
"(vii) Investments in Permitted JVs to the extent permitted hereunder
and general and administrative and purchasing services for Permitted JVs
(including inventory purchasing arrangements, whether for inventory
manufactured and/or produced by Terra or any of its Subsidiaries or
purchased from third parties, vendors or suppliers and including leasing
and subleasing of furnishings, fixtures and equipment)."
Amendment No. 5
---------------
<PAGE>
- 4 -
F. Debt. Section 5.02(b) of the Credit Agreement shall be amended:
(1) by amending clause (xi) thereof to read as follows:
"(xi) Acquired Debt in an aggregate principal amount not
exceeding $50,000,000 at any one time outstanding;" and
(2) by deleting the "and" at the end of clause (xvi) thereof, by
substituting a semicolon for the period at the end of clause (xvii) thereof
and by adding the following new clause (xviii) thereto:
"(xviii) Debt of Terra to former shareholders of Huntting
Elevator Company in an aggregate principal amount not exceeding
$7,000,000."
G. Mergers, Etc. Section 5.02(d) of the Credit Agreement shall be
amended by redesignating clauses (ii) and (iii) as clauses (iii) and (iv),
respectively, and by adding the following new clause (ii) thereto:
"(ii) if no Default or Event of Default shall have occurred and be
continuing or would result therefrom, (x) any Outside Subsidiary may be
merged or consolidated with or into Terra (provided, that Terra shall be
the continuing or surviving corporation) or any other wholly owned Outside
Subsidiary of Terra and (y) Terra or any of its Outside Subsidiaries may
merge or consolidate with any other Person (other than Terra Capital
Holdings or any of its Subsidiaries); provided, that (1) in the case of a
merger or consolidation of Terra, Terra is the continuing or surviving
corporation, and (2) in any other case, the continuing or surviving
corporation is a wholly owned Outside Subsidiary of Terra;"
H. Sales, Etc., of Assets. Section 5.02(e) of the Credit Agreement
shall be amended by deleting the "and" at the end of clause (viii) thereof, by
substituting a semicolon for the period at the end of clause (ix) thereof and by
adding the following new clauses (x) and (xi) thereto:
"(x) transfers of assets by Terra or one of the Outside
Subsidiaries, directly or indirectly, to a wholly owned Subsidiary of Terra
(a "Recipient") to the extent the consideration paid by such Recipient (if
any) for all such assets does not exceed the fair market value of such
property; and
Amendment No. 5
---------------
<PAGE>
- 5 -
(xi) transfers by TI of the Blytheville Assets to Farmland JV in
accordance with Section 5.02(f)(xviii)(x)."
I. Investments. Section 5.02(f) of the Credit Agreement shall be
amended:
(1) by amending clause (iv) thereof to read as follows:
"(iv) Investments arising solely by reason of any merger or
consolidation expressly permitted by Section 5.02(d)(i)(x) or
5.02(d)(ii)(x);" and
(2) by deleting the "and" at the end of clause (xv) thereof, by
substituting a semicolon for the period at the end of clause (xvi) thereof
and by adding the following new clauses (xvii) and (xviii) thereto:
"(xvii) the purchase and sale by Terra of one or more Specified
Call Options (each relating to the same U.S. Stock Index and entered
into with the same counterparty) having an aggregate net cost to Terra
and its Subsidiaries of not more than $20,000,000, which purchases and
sales when taken together are (in the reasonable determination of
Terra) reasonably prudent investments to be made for an appropriate
business purpose; and
(xviii) Investments by TI in Farmland JV constituting (x) the
acquisition of not less than 50% of the ownership interests of
Farmland JV in exchange for the contribution of the Blytheville Assets
to Farmland JV; and (y) loans and net capital contributions made by
Terra or one or more of its Subsidiaries to Farmland JV from time to
time, in an aggregate principal amount not to exceed $10,000,000 at
any one time outstanding, to finance working capital needs of Farmland
JV and the purchase by Farmland JV of furnishings, fixtures and
equipment, real estate and/or equity interests in entities engaged in
the same or allied lines of business."
Section 3. Representations and Warranties. The Company hereby
represents and warrants to the Agent and the Lenders that:
(a) the representations and warranties contained in each Loan
Document are correct on and as of the date hereof, as though made on and
as of such date (or, if any such
Amendment No. 5
---------------
<PAGE>
- 6 -
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date); and
(b) no event has occurred and is continuing that constitutes a
Default or an Event of Default.
Section 4. Miscellaneous. Except as herein provided, the Credit
Agreement and each of the other Loan Documents shall remain unchanged and in
full force and effect. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart. This Agreement shall be governed by, and construed in
accordance with, the law of the State of New York.
Amendment No. 5
---------------
<PAGE>
- 7 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
THE BORROWERS
-------------
TERRA CAPITAL, INC.
By /s/ F. G. Meyer
--------------------------------
Title: Vice President
TERRA NITROGEN, LIMITED PARTNERSHIP
By Terra Nitrogen Corporation, its General
Partner
By /s/ Robert E. Thompson
---------------------------
Title: Vice President
GUARANTORS
----------
TERRA INDUSTRIES INC.
By /s/ F. G. Meyer
--------------------------------
Title: Senior Vice President
and C.F.O.
TERRA NITROGEN CORPORATION
By /s/ Robert E. Thompson
--------------------------------
Title: Vice President
Amendment No. 5
---------------
<PAGE>
- 8 -
BEAUMONT METHANOL, LIMITED
PARTNERSHIP
By Terra Methanol Corporation,
its General Partner
By /s/ G. H. Valentine
---------------------------
Title: Vice President
TERRA METHANOL CORPORATION
By /s/ G. H. Valentine
--------------------------------
Title: Vice President
BMC HOLDINGS, INC.
By /s/ G. H. Valentine
--------------------------------
Title: Vice President
TERRA CAPITAL HOLDINGS, INC.
By /s/ F. G. Meyer
--------------------------------
Title: Vice President
THE AGENT
---------
CITIBANK, N.A.
By /s/ Judith Fishlow Minter
--------------------------------
Title: Attorney-in-Fact
Amendment No. 5
---------------
<PAGE>
- 9 -
COMMITMENTS THE LENDERS
----------- -----------
Terra Commitment CITIBANK, N.A.
- ----------------
$26,980,000.00
TNLP Commitment
- ---------------
$ 1,900,000.00 By /s/ Judith Fishlow Minter
--------------------------------
Title:Attorney-in-Fact
Terra Commitment THE CHASE MANHATTAN BANK
- ----------------
$26,980,000.00
TNLP Commitment
- ---------------
$ 1,900,000.00 By /s/ Peter M. Ling
---------------------------------
Title: Vice President
Terra Commitment ARAB BANKING CORPORATION
- ----------------
$15,620,000.00
TNLP Commitment
- ---------------
$ 1,100,000.00 By /s/ Sheldon Tilney
---------------------------------
Title: Deputy General Manager
Terra Commitment BANK OF AMERICA ILLINOIS
- ----------------
$26,980,000.00
TNLP Commitment
- ---------------
$ 1,900,000.00 By /s/ M. H. Claggett
---------------------------------
Title: Vice President
Terra Commitment THE BANK OF NOVA SCOTIA
- ----------------
$26,980,000.00
TNLP Commitment
- ---------------
$ 1,900,000.00 By /s/ F. C. H. Ashby
--------------------------------
Title: Senior Manager Loan
Operations
Terra Commitment CAISSE NATIONAL DE CREDIT AGRICOLE
- ----------------
$26,980,000.00
TNLP Commitment
- ---------------
$ 1,900,000.00 By /s/ W. Leroy Startz
---------------------------------
Title: First Vice President
Amendment No. 5
---------------
<PAGE>
- 10 -
Terra Commitment COOPERATIEVE CENTRALE RAIFFEISEN-
- ---------------- BOERENLEEBANK, B.A. "RABOBANK
$14,980,000.00 NEDERLAND", NEW YORK BRANCH
TNLP Commitment
- ---------------
$ 1,054,929.57
By /s/ Dana W. Hemenway
---------------------------------
Title: Vice President
By /s/ Ian Reece
---------------------------------
Title: Senior Credit Officer
Terra Commitment CREDIT LYONNAIS CHICAGO BRANCH
- ----------------
$26,980,000.00
TNLP Commitment
- ---------------
$ 1,900,000.00 By /s/ Julie T. Kanak
---------------------------------
Title: Vice President
CREDIT LYONNAIS CAYMAN ISLAND
BRANCH
By /s/ Julie T. Kanak
---------------------------------
Title: Authorized Signature
Terra Commitment DRESDNER BANK AG, CHICAGO AND GRAND
- ---------------- CAYMAN BRANCHES
$26,980,000.00
TNLP Commitment
- ---------------
$ 1,900,000.00 By /s/ Andrew P. Nesi
---------------------------------
Title: Vice President
By /s/ Felix K. Camacho
---------------------------------
Title: Assistant Treasurer
Terra Commitment FIRST BANK NATIONAL ASSOCIATION
- ----------------
$26,980,000.00
TNLP Commitment
- ---------------
$ 1,900,000.00 By /s/ John E. Besse
---------------------------------
Title: Senior Vice President
Amendment No. 5
---------------
<PAGE>
- 11 -
Terra Commitment THE FUJI BANK, LIMITED
- ----------------
$26,980,000.00
TNLP Commitment
- ---------------
$ 1,900,000.00 By /s/ Peter L. Chinnici
---------------------------------
Title: Joint General Manager
Terra Commitment MELLON BANK, N.A.
- ----------------
$26,980,000.00
TNLP Commitment
- ---------------
$ 1,900,000.00 By /s/ John K. Walsh
--------------------------------
Title: Vice President
Terra Commitment NATIONSBANK OF TEXAS, N.A.
- ----------------
$26,980,000.00
TNLP Commitment
- ---------------
$ 1,900,000.00 By /s/ Barry P. Sullivan
---------------------------------
Title: Vice President
Terra Commitment UNION BANK OF SWITZERLAND, NEW YORK
- ---------------- BRANCH
$15,620,000.00
TNLP Commitment
- ---------------
$ 1,100,000.00 By /s/ Douglas Edwards
---------------------------------
Title: Vice President
By /s/ Mary V. Turnbach
---------------------------------
Title: Assistant Treasurer
Terra Commitment BOATMEN'S NATIONAL BANK
- ----------------
$ 7,000,000.00
TNLP Commitment
- ---------------
$ 492,957.75 By /s/ Barry P. Sullivan
---------------------------------
Title: Vice President
Terra Commitment BANQUE NATIONALE DE PARIS
- ----------------
$ 5,000,000.00
TNLP Commitment
- ---------------
$ 352,112.68 By /s/ Arnaud Collin du Bocage
---------------------------------
Title: Executive Vice President
and General Manager
Amendment No. 5
---------------
<PAGE>
Exhibit 5
[On Terra Industries Inc. Letterhead]
July 22, 1997
Terra Industries Inc.
600 Fourth Street
P.O. Box 6000
Sioux City, IA 51102-6000
Re: Registration Statement on Form S-3
Relating to 959,479 Shares of Common Stock, No Par Value
--------------------------------------------------------
Ladies and Gentlemen:
In my capacity as General Counsel of Terra Industries Inc., a Maryland
corporation (the "Company"), I have represented the Company in connection with
the above referenced registration statement on Form S-3 (the "Registration
Statement"), filed under the Securities Act of 1933, as amended (the "Act"), for
the purpose of registering under the Act 959,479 shares of common stock of the
Company, no par value, which selling shareholders may offer from time to time.
In this connection, I have examined originals, or copies certified or otherwise
identified to my satisfaction of such documents, corporate and other records,
certificates and other papers as I have deemed it necessary to examine for the
purpose of this opinion.
Based on such examination, it is my opinion that the 959,479 shares of common
stock have been duly and validly authorized and constitute legally issued, fully
paid and non-assessable shares of the Company.
<PAGE>
Terra Industries Inc.
July 22, 1997
Page 2
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to me under the heading "Legal Matters" in the
Prospectus included in the Registration Statement. In giving this consent, I do
not admit that I am within the category of persons whose consent is required by
Section 7 of the Act or the rules and regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
/s/ GEORGE H. VALENTINE
George H. Valentine
Senior Vice President, General Counsel
and Corporate Secretary
<PAGE>
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Terra Industries Inc. on Form S-3 of our report dated February 3, 1997 (which
report expresses an unqualified opinion and includes an explanatory paragraph
referring to the Company's change in its method of accounting for major
maintenance turnarounds and post-employment benefits effective January 1, 1994)
and our report dated February 3, 1997 relating to the financial statement
schedules appearing in and incorporated by reference in the Annual Report on
Form 10-K of Terra Industries Inc. for the year ended December 31, 1996 and to
the reference to us under the heading "Experts" in the Prospectus, which is part
of this Registration Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Omaha, Nebraska
July 21, 1997
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Burton M. Joyce, Francis G. Meyer and George H.
Valentine and each of them, his or her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him or her and
in his or her name, place and stead, in any and all capacities (including his or
her capacity as a director and/or officer of Terra Industries Inc.), to sign a
registration statement on Form S-3 in connection with the company's registration
of common shares for selling shareholders and any or all amendments (including
post-effective amendments) to such registration statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this power of
attorney has been signed on the date or dates indicated, by the following
persons in the capacities indicated:
<TABLE>
<CAPTION>
Signature Title Date(s)
- -------------------------- --------------------------------- ------------
<S> <C> <C>
/s/ William R. Loomis, Jr.
- --------------------------
William R. Loomis, Jr. Chairman of the Board June 3, 1997
/s/ Burton M. Joyce Chief Executive Officer, President
- ------------------- and Director (Principal Executive
Burton M. Joyce Officer) June 4, 1997
/s/ Francis G. Meyer Senior Vice President and Chief
- -------------------- Financial Officer (Principal
Francis G. Meyer Financial Officer) June 9, 1997
/s/ Robert E. Thompson Vice President, Controller
- ---------------------- (Principal Accounting Officer) June 2, 1997
Robert E. Thompson
/s/ Edward G. Beimfohr
- ----------------------
Edward G. Beimfohr Director June 5, 1997
/s/ Carol L. Brookins
- ---------------------
Carol L. Brookins Director June 4, 1997
</TABLE>
<PAGE>
/s/ Edward M. Carson
- --------------------
Edward M. Carson Director June 9, 1997
/s/ David E. Fisher
- -------------------
David E. Fisher Director June 4, 1997
/s/ Anthony W. Lea
- ------------------
Anthony W. Lea Director June 4, 1997
/s/ John R. Norton III
- ----------------------
John R. Norton III Director June 9, 1997
/s/ Henry R. Slack
- ------------------
Henry R. Slack Director June 4, 1997
