SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 2)
File by the registrant (x)
Filed by party other than the registrant ( )
Check the appropriate box:
( ) Preliminary proxy statement
(x) Definitive proxy statement
( ) Definitive additional materials
( ) Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
______________________________Terex Corporation______________________________
(Name of Registrant as Specified in Its Charter)
______________________________Terex Corporation______________________________
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
(x) $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
( ) $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11: *
(4) Proposed maximum aggregate value of transaction:
( ) 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:
* Set forth the amount on which the filing fee is calculated and state how
it was determined.
- - -----------------------------------------------------------------------------
TEREX CORPORATION
500 Post Road East, Westport, Connecticut 06880
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 29, 1994
The Annual Meeting of Stockholders of Terex Corporation (hereafter the
"Company") will be held at the offices of the Company's subsidiary, Clark
Material Handling Company, at 610 West 2nd Street, Lexington, Kentucky, on
Friday, July 29, 1994, at 10:00 a.m., local time, for the following purposes:
1. To elect seven directors to hold office for one year or until their
successors are duly elected and qualified.
2. To ratify the selection of Price Waterhouse as independent accountants of
the Company for 1994.
3. To transact such other business as may properly come before the meeting or
any adjournment thereof.
The foregoing items of business are described more fully in the Proxy Statement
accompanying this Notice.
The Board of Directors of the Company has fixed the close of business on June
20, 1994 as the record date for determining the stockholders entitled to notice
of, and to vote at, the meeting.
YOUR VOTE IS IMPORTANT. STOCKHOLDERS ARE URGED TO COMPLETE, DATE AND SIGN THE
ACCOMPANYING PROXY CARD AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED,
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING. NO POSTAGE IS REQUIRED IF THE
PROXY CARD IS MAILED IN THE UNITED STATES. STOCKHOLDERS WHO ARE PRESENT AT THE
MEETING MAY WITHDRAW THEIR PROXY AND VOTE IN PERSON IF THEY SO DESIRE. IT IS
IMPORTANT THAT YOUR PROXY CARD BE RETURNED PROMPTLY IN ORDER TO AVOID THE
ADDITIONAL EXPENSE OF FURTHER SOLICITATION.
By order of the Board of Directors,
M. B. Rosenberg
Secretary
June 25, 1994
Westport, Connecticut
TEREX CORPORATION
500 Post Road East
Westport, Connecticut 06880
__________________________________
Proxy Statement for the
Annual Meeting of Stockholders
to be held on July 29, 1994
__________________________________
This Proxy Statement is furnished to stockholders of Terex Corporation ("Terex"
or the "Company") in connection with the solicitation of proxies by and on
behalf of the Company's Board of Directors (the "Board") for use at the Annual
Meeting of Stockholders of the Company to be held on July 29, 1994, at the
offices of the Company's subsidiary, Clark Material Handling Company ("CMHC"),
at 610 West 2nd Street, Lexington, Kentucky, and any adjournments or
postponements thereof (collectively, the "Meeting"), for the purposes set forth
in the accompanying Notice of Annual Meeting of Stockholders (the "Notice").
The Notice and proxy card (the "Proxy") accompany this Proxy Statement. This
Proxy Statement and the accompanying Notice, Proxy and related materials are
being mailed on or about June 25, 1994, to each stockholder entitled to vote at
the Meeting. As of June 20, 1994, the record date for determining the
stockholders entitled to notice of, and to vote at, the Meeting, the Company
had outstanding 10,303,067 shares of common stock, $.01 par value per share
(the "Common Stock"). Each share of Common Stock is entitled to one vote on
all matters to be voted on at the Meeting.
A majority of the outstanding shares of Common Stock must be represented at the
Meeting in person or by proxy to constitute a quorum for the transaction of
business at the Meeting. All matters other than the election of directors will
be decided by the affirmative vote of the holders of a majority of the shares
of Common Stock represented at the Meeting in person or by proxy. Directors
shall be elected by a plurality of the votes of shares of Common Stock
represented at the Meeting in person or by proxy.
Proxy solicitations will be made primarily by mail, but solicitations may also
be made by telephone, telegraph or personal interviews conducted by officers or
employees of the Company. All costs of solicitations, including (a) printing
and mailing of this Proxy Statement and accompanying material, (b) the
reimbursement of brokerage firms and others for their expenses in forwarding
solicitation material to the beneficial owners of the Company's stock and (c)
supplementary solicitations to submit Proxies, if any, will be borne by the
Company.
If the enclosed Proxy is properly executed and returned in time to be voted at
the Meeting, the shares of Common Stock represented thereby will be voted in
accordance with the instructions marked on the Proxy. If no instructions are
marked on the Proxy, the Proxy will be voted FOR election of the nominees for
Director, FOR the selection of Price Waterhouse as the independent accountants
of the Company and FOR any other matters that may properly come before the
Meeting and that are deemed appropriate. Management does not presently know of
any other matters which may come before the Meeting.
Any stockholder giving a Proxy has the right to attend the Meeting to vote his
or her shares of Common Stock in person (thereby revoking any prior Proxy) and
also has the right to revoke the Proxy at any time by written notice received
by the Secretary of the Company prior to the time the Proxy is voted. All
properly executed and unrevoked Proxies delivered pursuant to this
solicitation, if received in time, will be voted at the Meeting.
In order that your shares of Common Stock may be represented at the Meeting,
you are requested to:
-- indicate your instructions on the Proxy;
-- date and sign the Proxy;
-- mail the Proxy promptly in the enclosed envelope; and
-- allow sufficient time for the Proxy to be received on or before
10:00 a.m. on July 29, 1994.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION
OTHER THAN THOSE CONTAINED IN THIS PROXY STATEMENT, AND, IF GIVEN OR MADE, SUCH
INFORMATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED AND THE DELIVERY
OF THIS PROXY STATEMENT SHALL, UNDER NO CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE OF
THIS PROXY STATEMENT.
PROPOSAL 1: ELECTION OF DIRECTORS
At the Meeting, seven directors of the Company are to be elected to hold office
until the Company's next Annual Meeting of Stockholders or until their
respective successors are duly elected and qualified. Directors shall be
elected by a plurality of the votes of shares of Common Stock represented at
the Meeting in person or by proxy. Unless marked to the contrary, the Proxies
received by the Company will be voted for the election of the seven nominees
listed below, all of whom are presently members of the Board. Each nominee has
consented to being named in this Proxy Statement and to serve as a director if
elected. However, should any of the nominees for director decline or become
unable to accept nomination if elected, it is intended that the Board will vote
for the election of such other person as director as it shall designate. The
Company has no reason to believe that any nominee will decline or be unable to
serve if elected.
The information set forth below has been furnished to the Company by the
nominees and sets forth for each nominee, as of April 25, 1994, such nominee's
name, business experience during the past five years, other directorships held
and age. There is no family relationship between any nominee and any other
nominee or executive officer of the Company. For information regarding the
beneficial ownership of the Common Stock by the current directors of the
Company, see "Security Ownership of Management and Certain Beneficial Owners"
below.
The Board recommends that the Stockholders vote FOR the following nominees
for director.
Positions and First Year
Name Age Offices with Company Elected Director
_____ ___ _____________________ _________________
Randolph W. Lenz 47 Chairman of the Board, 1983
Chief Executive Officer
and Director
Ronald M. DeFeo 42 President, 1993
Chief Operating Officer
and Director
Marvin B. Rosenberg 53 Senior Vice President, 1992
General Counsel,
Secretary and Director
G. Chris Andersen 56 Director 1992
Bruce I. Raben 40 Director 1992
David A. Sachs 34 Director 1992
Adam E. Wolf 80 Director 1983
Mr. Lenz has been the Company's Chairman of the Board and a director of the
Company since 1983, when he joined Terex's predecessor, Northwest Engineering.
Mr. Lenz also served as Chairman of the Board and a director of Fruehauf
Trailer Corporation ("Fruehauf") from its acquisition by the Company in 1989
until August 1993. In addition, Mr. Lenz has also been the Chairman of the
Board and a director of CBC Bancorp, Inc., a bank holding company, since 1992.
Ronald M. DeFeo became a director of the Company in 1993 and was appointed
President and Chief Operating Officer of the Company on October 4, 1993. He
has also served as the President of CMHC and certain affiliated companies
(together with CMHC, "Clark") since May 1993. Prior to joining Terex on May 1,
1992 and serving as President of Terex's Heavy Equipment Segment, Mr. DeFeo was
a Senior Vice President of J.I. Case Company, the farm and construction
equipment division of Tenneco Inc., and also served as a Managing Director of
Case Construction Equipment throughout Europe. While at J.I. Case, Mr. DeFeo
was also a Vice President of North American Construction Equipment Sales and
General Manager of Retail Operations.
Mr. Rosenberg was appointed a director of the Company in 1992 and was appointed
as Senior Vice President of the Company effective January 1, 1994. He has
served as Secretary and General Counsel of the Company since 1987. Mr.
Rosenberg was also appointed a director of Fruehauf in 1992 and served as
Secretary of Fruehauf from its organization in March 1989 until August 1993.
Since 1987, he has also been General Counsel of KCS Industries, L.P., a
Connecticut limited partnership ("KCS"), an entity that, until December 31,
1993, provided administrative, financial, marketing, technical, real estate and
legal services to the Company and its subsidiaries. Previously, for 15 years,
he had been General Counsel for, and a partner of, Cambridge Research and
Development Group, a company engaged in the commercialization of new technology
and the acquisition and operation of industrial companies.
Mr. Andersen was appointed director of the Company in 1992 and served as a
director of Fruehauf from July 1991 until August 1993. Mr. Andersen has been
Vice Chairman of PaineWebber Incorporated ("PaineWebber") since March 1990.
Prior to joining PaineWebber, Mr. Andersen was Managing Director for nine years
of Drexel Burnham Lambert Incorporated ("Drexel Burnham"), an investment
banking firm which filed for protection under Chapter 11 of the United States
Bankruptcy Code in 1990. Mr. Andersen is a director of Sunshine Mining
Company.
Mr. Raben was appointed director of the Company in 1992. Since 1990, Mr. Raben
has been an Executive Vice President and Co-Head of the Corporate Finance
Department at Jefferies & Company, Inc. ("Jefferies"). Mr. Raben was employed
by Drexel Burnham from 1978 to 1990, where he served in various capacities,
including Managing Director.
Mr. Sachs was appointed director of the Company in 1992 and served as a
director of Fruehauf from November 1992 to March 1993. Mr. Sachs is employed
at TMT-FW, Inc., an affiliate of Taylor & Co., a private investment firm based
in Fort Worth, Texas. TMT-FW, Inc. is one of two general partners of EBD,
L.P., which is the sole general partner of The Airlie Group L.P. ("Airlie").
At TMT-FW, Inc., Mr. Sachs is engaged in the investment activities of both
Airlie and Taylor & Co. Prior to joining TMT-FW, Inc. in 1990, Mr. Sachs was
employed by Columbia Savings and Loan Association from 1984 to 1990, where he
served in various capacities, including Executive Vice President.
Mr. Wolf became a director of the Company in 1983. Mr. Wolf has been
principally self-employed as an attorney throughout his career. He has
previously served as a director of Universal Telephone Company, Continental
Bank and Trust Company and DePaul Rehabilitation Hospital.
The Board met 15 times in 1993 at regularly scheduled and special meetings
including telephonic meetings. All of the directors in office during 1993
attended at least 75% of the meetings which took place during their tenures as
directors. The Board has an Audit Committee and a Compensation Committee. The
Board does not have a Nominating Committee.
The Audit Committee of the Board of Directors consists of Messrs. Andersen,
Raben, Sachs and Wolf. The Audit Committee met three times during 1993. The
Audit Committee recommends the engagement of the independent accountants and
makes other recommendations to the Board based on its review of all of the
financial matters of the Company. The Audit Committee also reviews related
party transactions.
The Compensation Committee of the Board of Directors consists of Messrs.
Andersen and Wolf. The Compensation Committee met four times during 1993. The
Compensation Committee recommends to the Board compensation arrangements for
executive officers and for certain other key management personnel. See
"Executive Compensation -- Compensation Committee Report."
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock by each person known by the Company to own
beneficially more than 5% of the Company's Common Stock, by each director, by
each executive officer of the Company named in "Management of the Company"
below, and by all directors and executive officers as a group, as of April 25,
1994. Each person named in the following table has sole voting and investment
power with respect to all shares of Common Stock shown as beneficially owned by
such person, except as otherwise set forth in the notes to the table. Shares
of Common Stock that any person has a right to acquire within 60 days after
April 25, 1994 pursuant to an exercise of options, warrants or other rights or
conversion of preferred stock or otherwise are deemed to be outstanding for the
purpose of computing the percentage ownership of such person, but are not
deemed to be outstanding for computing the percentage ownership of any other
person shown in the table.
Amount Percent
Name and Address Beneficially of
of Beneficial Owner Owned Class
Randolph W. Lenz(1) 4,914,237 (3) 47.70%
c/o Terex Corporation
500 Post Road East
Westport, CT 06880
The Airlie Group L.P.(2) 965,000 (4) 9.29%
201 Main Street
Fort Worth, TX 76102
Dort A. Cameron, III(2) 971,000 (4) 9.34%
c/o The Airlie Group, L.P.
201 Main Street
Fort Worth, TX 76102
Thomas M. Taylor(2) 1,270,500 (4) 12.22%
c/o The Airlie Group, L.P.
201 Main Street
Fort Worth, TX 76102
EBD L.P. (2) 965,000 (4) 9.29%
c/o The Airlie Group, L.P.
201 Main Street
Forth Worth, TX 76102
TMT-FW, Inc. (2) 965,000 (4) 9.29%
c/o The Airlie Group, L.P.
201 Main Street
Forth Worth, TX 76102
The Prudential Insurance Company 556,964 (4) 5.41%
of America (5)
Prudential Plaza
Newark, NJ 07102-3777
KeyCorp (6) 600,445 (4) 5.79%
127 Public Square
Cleveland, OH 44114-1306
G. Chris Andersen 0 *
1285 Avenue of the Americas
New York, NY 10019
Ronald M. DeFeo 9,667 (7) *
c/o Terex Corporation
500 Post Road East
Westport, CT 06880
Bruce I. Raben 11,000 *
11100 Santa Monica Boulevard
Suite 1000
Los Angeles, CA 90025
Marvin B. Rosenberg 0 *
c/o Terex Corporation
500 Post Road East
Westport, CT 06880
David A. Sachs 10,000 (8) *
201 Main Street
Suite 3200
Fort Worth, TX 76102
Adam E. Wolf 7,400 *
875 East Donges Lane
Milwaukee, WI 53217
David J. Langevin 5,400 *
c/o Terex Corporation
500 Post Road East
Westport, CT 06880
Ralph T. Brandifino 0 *
c/o Terex Corporation
500 Post Road East
Westport, CT 06880
Richard E. Clemens 0 *
c/o Clark Material Handling Company
333 West Vine Street, Suite 1700
Lexington, KY 40507
All directors and officers 4,957,704 (7) (8) 48.12%
as a group (10 persons)
* Amount owned does not exceed one percent (1%) of the class so owned.
(1) Mr. Lenz currently pledges, and intends to pledge in the future, shares of
the Common Stock owned by him as collateral for loans. If Mr. Lenz does not
pay such loans when due, the pledgee may have the right to sell the shares of
the Common Stock pledged to it in satisfaction of Mr. Lenz's obligations. The
sale of a significant amount of such pledged shares could result in a change of
control of the Company and may require the Company to make an offer to purchase
certain of its outstanding debt instruments.
(2) Dort A. Cameron, III and TMT-FW, Inc., a Texas corporation, are general
partners of EBD L.P., a Delaware limited partnership which is the sole general
partner of Airlie. Thomas M. Taylor is the President, sole director and sole
stockholder of TMT-FW, Inc. By reason of such relationships, Messrs. Cameron
and Taylor may each be deemed the beneficial owner of the shares deemed
beneficially owned by Airlie. On December 22, 1993, each of the indicated
individuals, together with certain other persons, filed Amendment No. 9 to a
Schedule 13D Statement filed pursuant to Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), reflecting the ownership
of an aggregate of 1,255,5000 shares of Common Stock, 40,000 shares of the
Company's Series A Cumulative Redeemable Convertible Preferred Stock (the
"Preferred Stock") and 40,000 of the Company's Common Stock Purchase Warrants
(the "Warrants"), or approximately 13.7% to 14.4% of all outstanding Common
Stock, assuming the conversion of such shares of Preferred Stock and the
exercise of such Warrants at their minimum and maximum exercise ratios,
respectively (but not the conversion of any Preferred Stock or the
exercise of any Warrants by any other holder). Except as otherwise reflected
in this table or the footnotes thereto, each of the indicated individuals
disclaims the beneficial ownership of any shares held by any other party to
such Schedule 13D filing.
(3) Mr. Lenz is the direct owner of 4,837,037 shares of Common Stock,
representing approximately 46.95% of the outstanding Common Stock. In
addition, Mr. Lenz is the indirect beneficial owner of 77,200 shares of Common
Stock through a corporation that he indirectly owns and controls.
(4) For each of Airlie, Dort A. Cameron, III, Thomas M. Taylor, EBD L.P.,
TMT-TW, Inc., The Prudential Insurance Company of America ("Prudential") and
KeyCorp, the amount shown assumes the conversion of the shares of Preferred
Stock owned by such beneficial owner (but not by any other holder of Preferred
Stock), but does not assume the exercise of any Warrants owned by such
beneficial owner, since the Warrants are not currently exercisable.
(5) Prudential filed a Schedule 13G Statement, dated January 31, 1994,
pursuant to Section 13(g) of the Exchange Act, reflecting the ownership of an
aggregate of 554,500 shares of Common Stock and 14,149 Warrants, or
approximately 5.52% to 5.79% of all outstanding Common Stock, assuming the
exercise of such Warrants (but not the exercise of any Warrants by any other
holder). Such securities are held for the benefit of Prudential's clients by
Prudential's registered investment companies and its subsidiary Prudential
Securities Incorporated, and Prudential disclaims the beneficial ownership of
such shares. Prudential has subsequently informed the Company that its
ownership of Common Stock has increased to 556,964 shares.
(6) KeyCorp has informed the Company that, as of December 31, 1993, it owned
532,945 shares of Common Stock, 30,000 shares of Preferred Stock and 30,000
Warrants. KeyCorp disclaims the beneficial ownership of such shares. Society
Corporation ("Society"), a predecessor of KeyCorp, filed a Schedule 13G
Statement, dated February 8, 1994, pursuant to Section 13(g) of the Exchange
Act, reflecting the ownership of an aggregate of 531,695 shares of Common Stock
by its subsidiaries Society National Bank and Schaenen Wood & Associates.
Persons other than Society have the right to receive or the power to direct the
receipt of dividends or the proceeds from the sale of these securities.
Society disclaims the beneficial ownership of such shares.
(7) Includes 6,667 shares of Common Stock issuable upon the exercise of
currently exercisable options held by Mr. DeFeo. See "Executive Compensation."
(8) Includes 3,000 shares of Common Stock owned by Mr. Sachs' wife. Mr.
Sachs disclaims the beneficial ownership of such shares.
MANAGEMENT OF THE COMPANY
The following table sets forth, as of April 25, 1994, the respective names and
ages of the Company's executive officers, indicating all positions and offices
held by each such person. Each officer is elected by the Board to hold office
for one year or until his successor is duly elected and qualified.
Positions and
Name Age Offices with Company
____ ___ _____________________
Randolph W. Lenz 47 Chairman of the Board,
Chief Executive Officer and
Director
Ronald M. DeFeo 42 President,
Chief Operating Officer and
Director
David J. Langevin 43 Executive Vice President
Marvin B. Rosenberg 53 Senior Vice President,
General Counsel, Secretary and
Director
Ralph T. Brandifino 49 Senior Vice President and
Chief Financial Officer
Richard E. Clemens 44 President and
Chief Executive Officer, CMHC
For information regarding Messrs. Lenz, DeFeo and Rosenberg, refer to the table
listing nominees in the prior section "Proposal 1: Election of Directors."
David J. Langevin became Executive Vice President of the Company effective
January 1, 1994 and served as Acting Chief Financial Officer of the Company
during 1993. He has been employed as a Vice President of KCS since 1988.
Prior to KCS, Mr. Langevin was an employee of Ernst & Whinney (currently Ernst
& Young) where he became a partner in 1986.
Ralph T. Brandifino was appointed to the position of Senior Vice President and
Chief Financial Officer on December 6, 1993. Mr. Brandifino was previously the
Chief Financial Officer at the Long Island Lighting Company from 1987 through
1993, previous to which he served as Chief Financial Officer at Chicago
Pneumatic Tool Company, a capital goods manufacturer.
Richard E. Clemens was named President and chief Executive Officer of CMHC on
March 14, 1994. Prior to that, Mr. Clemens was employed at the BMY division of
Harsco Corporation since 1985 in a number of capacities, including President.
Mr. Clemens has also been employed previously by Allis Chalmers, Massey
Ferguson and John Deere.
EXECUTIVE COMPENSATION
Summary Compensation Table
The Summary Compensation Table below shows the compensation for the past three
fiscal years of the Company's Chief Executive Officer and its executive
officers with 1993 earned qualifying compensation in excess of $100,000.
Long-Term
Annual Compensation Compensation
Name and Securities All Other
Principal Year Salary Bonus Other Underlying Compensation
Position ($) ($) ($) Options/SARS (#) ($)
Randolph W. 1993 483,508 -- -- -- --
Lenz, 1992 486,000 -- -- -- --
Chairman of 1991 473,262 -- -- -- --
the Board
and Chief
Executive
Officer(1)
Ronald M. 1993 237,500 60,000 222,693(4) 10,000 3,148(5)
DeFeo, 1992 135,385 66,666 -- 20,000 --
President 1991 -- -- -- -- --
and Chief
Operating
Officer (2)
Gary D. Bello,
President,
CMHC (3) 1993 125,000 -- -- -- 284,664(6)
1992 122,500 125,100 -- -- 710(5)
1991 -- -- -- -- --
___________________
(1) In conjunction with the proposed termination of the Company's management
agreement with KCS, Mr. Lenz, together with Messrs. Langevin and Rosenberg (who
became employees of the Company on January 1, 1994), will receive certain
securities of the Company, subject to the approval of the Company's
stockholders. See "Certain Relationships and Related Transactions."
(2) Mr. DeFeo joined Terex on May 1, 1992.
(3) Mr. Bello joined Terex as an executive officer on July 31, 1992 when the
Company completed the acquisition of Clark. Mr. Bello terminated his service
with the Company effective May 7, 1993. See "-- Employment Contracts,
Termination of Employment and Change-in-Control Arrangements."
(4) Includes relocation payments of $214,604.
(5) Company's matching contribution to defined contribution plan account.
(6) Includes $281,538 termination payment (net of certain reimbursements to
the Company) and $3,126 Company's matching contributions to defined
contribution plan account.
Mr. Brandifino joined the Company on December 6, 1993, Messrs. Langevin and
Rosenberg became employees of the Company as of January 1, 1994 in connection
with the termination of the Company's contract with KCS (see "Certain
Relationships and Related Transactions"), and Mr. Clemens joined the Company on
March 14, 1994. Each of these individuals presently earns qualifying
compensation at an annual rate in excess of $100,000, although none of them
earned such compensation from the Company during 1993.
Option Grants in 1993
The table below summarizes options granted during 1993 to the named executive
officers listed in the Summary Compensation Table.
Individual Grants
Potential Realizable Value at Assumed Annual Rates of Stock Price
Appreciation for Option Term
Number of
Securities % of Total
Underlying Options Exercise
Options Granted to Price Expiration
Name Granted (#) Employees ($/SH) Date 5%($) 10%($)
Randolph W.
Lenz -- -- -- -- -- --
Ronald M.
DeFeo (1) 10,000 42% $8.375 11/30/03 52,670 133,476
Gary D.
Bello -- -- -- -- -- --
___________________
(1) The options are exercisable for 3,334 shares of Common Stock on or after
November 30, 1994, 3,333 additional shares of Common Stock on or after November
30, 1995 and 3,333 shares of Common Stock on or after November 30, 1996.
In May 1986, the stockholders approved an incentive stock option plan covering
key management employees. As further amended by action of the stockholders and
the Board, 395,354 shares of the Company's Common Stock were available for
purchase pursuant to options granted or to be granted under the plan. The
exercise price approximates the current market price at the time of the grant.
Employees vest in options granted ratably over three years from the date of
grant.
Aggregated Option Exercises in 1993 and Year-End Option Values
The table below summarizes options exercised during 1993 and year-end option
values of the named executive officers listed in the Summary Compensation
Table.
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options
Options at at Year-end
Year-end (#) ($)
Shares
Acquired on Value Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable
Randolph W.
Lenz -- -- -- --
Ronald M.
DeFeo -- -- 6,667/23,333 -- / --
Gary D.
Bello -- -- -- --
Pension Plans
The Company maintains numerous defined benefit pension plans covering most
domestic employees, including certain officers of the Company. Retirement
benefits for the plans covering the salaried employees are based primarily on
years of service and employees' qualifying compensation during the final years
of employment.
Messrs. Lenz and DeFeo participate in the Terex Corporation Salaried Employees'
Retirement Plan (the "Plan"). Mr. Brandifino does not participate because
participation in the Plan was frozen as of May 7, 1993, prior to Mr.
Brandifino's employment with the Company. Mr. Bello, as an employee of Clark,
a subsidiary of the Company, was not a participant in the Plan nor is any other
employee of Clark. Clark employees do not participate in a defined benefit
retirement plan.
Participants of the Plan with five or more years of eligible service are fully
vested and entitled to annual pension benefits beginning at age 65. Retirement
benefits under the Plan are determined based on 1.02% of final average earnings
plus .71% of such compensation in excess of amounts shown on the applicable
Social Security Integration Table for participants born prior to 1938. For
participants born during 1938-1954, the formula is modified by replacing the
1.02% and .71% figures with 1.08% and .65%, respectively. For participants
born after 1954, the formula is modified by replacing the 1.02% and .71%
figures with 1.13% and .60%, respectively. Service in excess of 25 years is
not recognized. There is no offset for primary Social Security.
Participation in the Plan was frozen as of May 7, 1993, and no participants,
including Mr. Lenz and Mr. DeFeo, will be credited with service following such
date, except that participants not fully vested, including Mr. DeFeo, will be
credited with service for purposes of determining vesting only. Mr. Lenz is
already fully vested. The annual retirement benefits payable at normal
retirement age under the Plan will be $31,530 for Mr. Lenz and $4,503 for Mr.
DeFeo (assuming full vesting).
Compensation of Directors
The directors who are officers of the Company receive no additional
compensation by virtue of their being directors of the Company. Non-officer
directors receive an annual fee of $24,000. No additional compensation is paid
for participation in special or committee meetings of the Board. All directors
of the Company are reimbursed for travel, lodging and related expenses incurred
in attending Board and committee meetings.
Employment Contracts, Termination of Employment and Change-in-Control
Arrangements
Mr. DeFeo has an agreement which provides that in the event of a change in
ownership of the Company which prevents him from continuing in his position as
President and Chief Operating Officer, the Company will provide for a
continuance of his income for a period of twenty-four months.
Mr. Clemens has an agreement with the Company which provides that in the event
of a change in ownership of CMHC within two years from his date of employment
with the Company which prevents him from continuing in his position as CMHC
President and Chief Executive Officer, the Company will provide for a
continuance of his income for a period not to exceed twelve months.
CMHC and Mr. Bello entered into a termination agreement which provided for a
lump sum termination payment to Mr. Bello by CMHC of $300,000 and which
provided Mr. Bello with certain benefits, including medical benefits, life
insurance coverage, use of an automobile and outplacement services, through May
7, 1994.
Compensation Committee Interlocks and Insider Participation
G. Chris Andersen, a member of the Board's Compensation Committee, is an
executive with PaineWebber. During 1993, Fruehauf retained PaineWebber as a
financial advisor to explore opportunities to maximize stockholder value in
Fruehauf.
Compensation Committee Report
The Compensation Committee of the Board is responsible for reviewing
compensation levels for all executive officers of the Company, for any employee
with an employment or severance contract, and to make recommendations to the
Board with respect to such contracts and compensation. Its objective is to
provide compensation that is fair and equitable to both the employee and the
Company. Consideration is given to the employee's overall responsibilities,
professional qualifications, business experience, technical expertise and their
resultant combined value to the Company's long-term performance and growth.
The Company's executive officer compensation program is based upon the
following guiding principles:
1. Competitive compensation and benefits that allow the Company to attract
and retain people with the skills critical to the long-term success of the
Company.
2. Compensation for performance to motivate and reward individual and team
performance in attaining business objectives and maximizing stockholder value.
The Compensation Committee reviews the Company's executive compensation program
each year. This review includes a comparison of the Company's executive
compensation, corporate performance, share appreciation and total return to
stockholders with that of similar companies.
The key elements of the Company's executive compensation package consist of
base salary, annual bonus and stock options. The Company's policies with
respect to each of these elements are discussed below. In addition, while the
elements of compensation described below are considered separately, the Board
also considers and will review from time to time the full compensation package
afforded by the Company to individuals.
Base Salaries. An executive officer's base salary is determined by evaluating
the responsibilities of the position held, the individual's experience and the
competitive marketplace for executive talent. The base salary is intended to
be competitive with base salaries paid to executive offers with comparable
qualifications, experience and responsibilities at similar companies.
Annual Bonuses. In addition to base salary, each executive officer is eligible
for an annual cash bonus. Bonuses are based upon objective criteria, such as
annual net earnings of the Company, as well as criteria established for each
executive officer at the beginning of the fiscal year. Executive officers may
earn a bonus of up to 50% of their base salary if certain individualized goals
are attained. In addition, such bonus may be increased or decreased based upon
the overall performance of the Company in comparison to pre-established
targets.
Stock Options. The purpose of long-term awards, currently in the form of stock
options, is to align the interests of the executive officers with the interests
of the Company's stockholders. Additionally, long-term awards offer executive
officers an incentive for the achievement of superior performance over time and
foster the retention of key management personnel. In determining stock option
grants, the Board bases its decision on the individual's performance and a
potential to improve stockholder value.
Compensation of Chief Executive Officer. The Chief Executive Officer's ("CEO")
compensation is determined pursuant to the principles noted above. Specific
consideration is given to the CEO's responsibilities and experience in the
industry and the compensation package awarded to chief executive officers of
other comparable companies.
The CEO was not awarded a bonus for the years ended 1992 or 1993 and he has not
been granted any options under the Company's Incentive Stock Option Plan nor
any other incentive options.
Federal Tax Implications for Executive Compensation. It is the responsibility
of the Compensation Committee of the Board to address the issues raised by the
recent change in Federal tax law which makes certain non-performance-based
compensation to executives of public companies, including the Company, in
excess of $1,000,000 non-deductible beginning in 1994. In this regard, the
Compensation Committee is obligated to determine whether any actions with
respect to this new limit need to be taken by the Company. At the present
time, it is not anticipated that any executive officer of the Company will
receive any compensation in excess of this amount.
G. Chris Andersen
Adam E. Wolf
Performance Graph
The following table compares the cumulative total stockholder return on the
Company's Common Stock, based on the market price of the Common Stock and
assuming reinvestment of dividends, for the period commencing December 31, 1988
through December 31, 1993, with the cumulative total return of companies on the
Standard & Poor's 500 Stock Index and the peer/industry index set forth below
(the "Peer Group") over the same period. The stockholder return shown on the
graph below is not indicative of future performance.
(DESCRIPTION OF GRAPHICAL MATERIAL)
Located herein in the Company's paper format copy of this document is a line
graph titled:
COMPARATIVE FIVE-YEAR TOTAL RETURNS
Terex Corporation, S&P 500, Peer Group.
(Performance results through December 31, 1993)
The vertical axis of the line graph is scaled from $0.00 at the origin
extending upwards to $200.00, marked in increments of $50.00. The horizontal
axis begins with the year 1988 at the origin extending to the right through the
year 1993, marked in one year increments. The value of an assumed initial
investment of $100.00; in the Company's stock, in the S&P 500, and in the Peer
Group is plotted for each year on the horizontal axis using the data listed
below:
1988 1989 1990 1991 1992 1993
Terex 100.00 173.10 91.16 128.80 100.32 68.12
S&P 500
Index 100.00 131.49 127.32 166.18 179.11 197.00
Peer Group100.00 115.23 91.48 101.93 110.97 176.64
Assumes $100 invested at the close of trading on the last trading day preceding
the first day of the fifth preceding fiscal year in Terex Common Stock, S&P
500, and Peer Group.
* Cumulative total return assumes reinvestment of dividends.
The Peer Group consists of the following companies, which are in similar lines
of business as the Company (manufacturing of heavy equipment):
Caterpillar, Inc., Clark Equipment Company, Deere & Company, Harnischfeger
Industries, Inc., Ingersoll Rand, JLG Industries, The Manitowoc Company, and
NACCO Industries.
Source: Frank Russell Company
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Under a contract dated July 1, 1987, as amended, KCS, principally owned by
Randolph W. Lenz, Chairman of the Board and Chief Executive Officer of the
Company, provided administrative, financial, marketing, technical, real estate
and legal services to the Company and its subsidiaries until December 31, 1993.
KCS also provided assistance in the evaluation, negotiation and consummation of
potential acquisitions of other companies, products and processes, as well as
the development of new areas of business for the Company.
For the services of KCS, the Company paid KCS an annual fee plus the
reimbursement for all out-of-pocket expenses incurred by KCS in fulfilling the
contract, including travel and similar expenses and fees for professional and
other services provided by third parties. Each year the contract was in
effect, the annual fee increased by the greater of 10% or the increase in the
Consumer Price Index, subject to limitations imposed by the Company's debt
agreements. During 1993, the Company made payments to KCS for fees and
out-of-pocket expenses of $2.9 million and $0.1 million respectively. On
January 25, 1993, Terex entered into an agreement whereby KCS borrowed $1.7
million from Terex (the "KCS/Terex Note"). The KCS/Terex Note bore interest at
prime. The loan represented by the KCS/Terex Note may have constituted a
default under the Company's Senior Secured Notes due 1996 (the "Secured
Notes"), the Company's Senior Subordinated Notes due 1997 (the "Subordinated
Notes") and the Company's previous lending agreement with a commercial bank
(the "Bank Lending Agreement"). The entire balance was repaid to Terex on
February 1, 1993, six days after the initial borrowing, thereby curing any
default which may have occurred.
During 1993, the Board concluded that it would be in the Company's best
interest to terminate the Company's contract with KCS and integrate the
management services of KCS directly into the Company. Pursuant to an agreement
between the Company and KCS, the contract between the Company and KCS was
suspended as of the close of business on December 31, 1993, with the contract
to be terminated upon the consent of the Company's stockholders to a proposed
issuance of securities to certain executives of KCS, as discussed below. David
J. Langevin and Marvin B. Rosenberg, employees of KCS, became salaried
employees of the Company effective January 1, 1994, with the titles of
Executive Vice President and Senior Vice President, respectively. In addition,
in consideration of the proposed termination of the contract, the Company has
agreed, subject to the approval of the stockholders of the Company, to issue
89,800 shares of the Company's Series B Cumulative Redeemable Convertible
Preferred Stock and 89,800 common stock purchase warrants to certain executives
of KCS, the terms of which will be substantially similar to the terms of the
Company's outstanding Preferred Stock and Warrants, respectively. Of such
amounts, Messrs. Langevin and Rosenberg would each receive 25,500 shares of
preferred stock and warrants and Mr. Lenz would receive 38,800 shares of
preferred stock and warrants. Upon stockholder approval, the contract will
terminate and such securities will be issued to Messrs. Langevin, Rosenberg and
Lenz. Absent such stockholder approval, the suspension will terminate and the
contract will be restored in full force and effect, although the Company will
continue to endeavor to achieve an alternate agreement with KCS to terminate
the contract at a date prior to the date it would be cancellable under its
terms.
The Company, certain directors and executives of the Company, and KCS are named
parties in various legal proceedings. During 1993, the Company incurred $0.4
million of legal fees and expenses on behalf of the Company, directors and
executives of the Company, and KCS named in the lawsuits.
David A. Sachs, a director of the Company, is affiliated with Airlie, a limited
partnership which owns approximately 9.29% of the Company's Common Stock
(including Common Stock issuable upon conversion of Preferred Stock) and 40,000
Warrants. Mr. Sachs is an employee of TMT-FW, Inc. which is one of two general
partners of the general partner of Airlie. Airlie receives the director fees
to which Mr. Sachs is entitled by reason of his service as a director of the
Company ($24,000 in 1993). On December 20, 1993, Airlie purchased 40,000
Warrants and 40,000 shares of Preferred Stock from the Company as part of the
Company's private placement.
Prior to 1992, the Company charged Fruehauf, a subsidiary of the Company in
which the Company currently owns an approximate 19.1% equity interest, for
management services and for interest on amounts owed to Terex. As of January
1, 1992, the Company ceased accruing such charges to Fruehauf for management
expenses and interest on amounts due the Company. However, the Company and
Fruehauf continued to charge one another for payments made on each other's
behalf in the normal course of business. The outstanding balance owed by
Fruehauf to the Company was $12.9 million at December 31, 1992 and $10.2
million at December 31, 1991. The Company accepted in December 1993 2,251,167
shares of Fruehauf common stock in payment of approximately $13.5 million of
intercompany indebtedness which Fruehauf owed to the Company.
On August 20, 1993, Fruehauf entered into agreements with its existing lenders,
a new lender and a number of investors which resulted in a restructuring of
existing debts, and provided for a new $25.0 million credit facility and $20.5
million of new equity (the "Fruehauf Restructuring"). As part of the Fruehauf
Restructuring, the Company agreed to vote its shares of Fruehauf common stock
in favor of, or consent to, an amendment to Fruehauf's Certificate of
Incorporation to authorize additional shares of Fruehauf capital stock and the
issuance of a portion of such stock to purchasers of Fruehauf's convertible
subordinated notes and to the Company, in satisfaction of Fruehauf's
indebtedness to the Company. The Company also agreed, for a period of 18
months beginning July 26, 1993, generally to vote its shares of Fruehauf
common stock in any other matter in such proportion as the other stockholders
of Fruehauf entitled to vote on such matter shall vote their shares of Fruehauf
common stock. In addition, at the time of the Fruehauf Restructuring, the
Company entered into an agreement with IBJ Schroder Bank & Trust Company ("IBJ
Schroder"), on behalf of a group of commercial bank lenders, pursuant to which
the Company is obligated to pay a fee of $1,000,000 on or before December 31,
1994 in consideration of the assistance of the banks in evaluating the
feasibility of Fruehauf's proposed turnaround plan and to induce the banks to
consent to certain requests by the Company. Mr. Lenz pledged certain of his
shares of Common Stock to IBJ Schroder, as agent for such lenders, as security
for the payment of such amount by the Company.
In 1992, the Board approved a program to consolidate Fruehauf's parts
warehousing and administration functions with the Company. During the fourth
quarter of 1992, Fruehauf announced its intention to close its parts warehouse
in Westerville, Ohio and transfer its replacement parts inventory to the Terex
distribution center in Southaven, Mississippi. In contemplation of the
Fruehauf Restructuring, the proposed arrangement was not effectuated. In
November 1992, in contemplation of this agreement, Terex had transferred $2.0
million to Fruehauf. The $2.0 million transfer constituted a default
("November Default") under the Secured Notes, the Subordinated Notes and the
Bank Lending Agreement. Subsequently, in May 1993, Terex entered into an
agreement with an operating unit of Fruehauf, whereby such operating unit will
provide products and manufacturing services to Terex. This agreement required
Terex to make a $2.0 million payment to such operating unit, which Terex
effected on May 11, 1993 by instructing Fruehauf to transfer the $2.0 million
Fruehauf owed to Terex directly to such operating unit. This transfer also
satisfied Fruehauf's $2.0 million obligation to Terex so that the events which
gave rise to the November Default no longer exist. The Company is in
discussions with Fruehauf concerning the satisfaction of Fruehauf's obligations
under the May 1993 agreement.
In conjunction with the acquisition of Clark, the Company financed the
acquisition and refinanced a major component of its previously outstanding bank
debt through a private placement of Secured Notes and Common Stock Appreciation
Rights ("SAR's"), and the establishment of a revolving credit facility with a
commercial bank. Mr. Raben, a director of the Company, is an employee and
officer of Jefferies, the investment banking firm which acted as an exclusive
placement agent for the Company in the offering of the Secured Notes and SAR's.
Jefferies was paid fees of $6.5 million in 1992 for services performed as
placement agent. Jefferies was also the Company's placement agent for the
December 1993 sale of the Preferred Stock and Warrants for which Jefferies
received fees totaling $2.5 million in 1993. Jefferies was also the agent for
the Company for certain sales by the Company of its common stock of Fruehauf in
1993. Jefferies purchased 250,000 Warrants and 180,000 shares of Preferred
Stock from the Company in connection with the Company's private placement on
December 20, 1993.
During 1993, Fruehauf retained PaineWebber as a financial advisor to explore
opportunities to maximize stockholder value in Fruehauf. G. Chris Andersen, a
member of the Board, is an executive with PaineWebber.
The Company requires that all transactions with affiliates are on terms no less
favorable to the Company than could be obtained in comparable transactions with
an unrelated person. The Board is advised in advance of any such proposed
transaction or agreement and utilizes such procedures in evaluating their terms
and provisions as are appropriate in light of the Board's fiduciary duties
under Delaware law. In addition, the Company has an Audit Committee consisting
solely of outside directors. One of the responsibilities of the Audit
Committee is to review related party transactions.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and each person who is the beneficial owner of more than
ten percent of the Company's outstanding equity securities, to file with the
Securities and Exchange Commission ("SEC") and the New York Stock Exchange
initial reports of ownership and changes in ownership of equity securities of
the Company. Specific due dates for these reports have been established by the
SEC and the Company is required to disclose in this Proxy Statement any failure
to file such reports by the prescribed dates during 1993. Officers, directors
and greater than ten percent beneficial owners are required by SEC regulation
to furnish the Company with copies of all reports filed with the SEC pursuant
to Section 16(a) of the Exchange Act.
To the Company's knowledge, based solely on review of the copies of reports
furnished to the Company and written representations that no other reports were
required, all filings required pursuant to Section 16(a) of the Exchange Act
applicable to the Company's officers, directors and greater than ten percent
beneficial owners were complied with during the year ended December 31, 1993,
except that in 1993 a Form 4 was filed late by Mr. DeFeo with regard to one
transaction and Mr. Lenz failed to file two Forms 4 with regard to 22
transactions, but did report the transactions in his Form 5, which was timely
filed.
PROPOSAL 2: INDEPENDENT ACCOUNTANTS
At a meeting held on March 17, 1994, the Board approved the selection of Price
Waterhouse as the Company's independent accountants for the fiscal year ended
December 31, 1994. Price Waterhouse was the Company's independent accountants
for the fiscal year ended December 31, 1993 and have been the independent
accountants of the Company since 1992.
The Board recommends that the Stockholders vote FOR the ratification of Price
Waterhouse as independent accountants for 1994.
Representatives of Price Waterhouse are expected to be present at the Meeting
with the opportunity to make a statement if they desire to do so, and they are
expected to be available to respond to appropriate questions.
OTHER BUSINESS
The Board does not know of any other business to be brought before the Meeting.
In the event any such matters are brought before the Meeting, the persons named
in the enclosed Proxy will vote the Proxies received by them as they deem best
with respect to all such matters.
STOCKHOLDER PROPOSALS
All proposals of stockholders intended to be included in the proxy statement to
be presented at the 1995 Annual Meeting of Stockholders must be received at the
Company's offices at 500 Post Road East, Westport, Connecticut, 06880 no later
than February 1, 1995.
ANNUAL REPORT TO STOCKHOLDERS
The Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1993, including financial statements, is being provided to all stockholders
together with this Proxy Statement. The Annual Report does not constitute a
part of the Proxy solicitation materials.
Stockholders are urged to forward their Proxies without delay. A prompt
response will be greatly appreciated.
By Order of the Board of Directors
M. B. Rosenberg
Secretary
June 25, 1994
Westport, Connecticut
THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF TEREX CORPORATION
The undersigned hereby appoint Randolph W. Lenz, Ronald M. DeFeo and
Marvin B. Rosenberg, and any one or more of them, proxies with power of
substitution to act, by unanimous vote, or if only one votes or acts then by
that one to vote for the undersigned at the Annual Stockholders' Meeting of
Terex Corporation, to be held at 10:00 A.M. local time, July 29, 1994 at the
offices of Clark Material Handling Company, 610 West 2nd Street, Lexington,
Kentucky, and any adjournment thereof, as follows:
(Please date and sign on reverse side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE DIRECTORS NOMINATED IN ITEM 1, FOR THE RATIFICATION OF SELECTION
OF INDEPENDENT ACCOUNTANTS IN ITEM 2, AND IN THE DISCRETION OF THE BOARD OF
DIRECTORS IN CONNECTION WITH ITEM 3. PLEASE MARK BOX | | OR |x|.
1. ELECTION OF DIRECTORS: Randolph W. Lenz, Ronald M. DeFeo,
Marvin B. Rosenberg, G. Chris Andersen,
Bruce I. Raben, David A. Sachs, Adam E. Wolf
FOR all WITHHOLD (INSTRUCTION: To withhold authority to
nominees AUTHORITY vote for any individual nominee, write that
listed to vote for all nominee's name on the space provided
above nominees below.)
listed above
| | | | _____________________________________
2. RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS:
FOR AGAINST ABSTAIN
| | | | | |
Please date, sign and mail this card in
the enclosed envelope.
3. Upon such other business as
may properly come before
the meeting or any _______________________________
adjournments, hereby (Stockholder's Signature)
revoking any proxy heretofore
given.
_______________________________
(Stockholder's Signature)
Dated _________________, 1994
Please sign exactly as name appears above.
When signing as attorney, executor,
administrator, trustee, etc., use full
title. If stock is held jointly, each
owner must sign.
1994 ANNUAL MEETING
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY.
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