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
Filed by the registrant [X]
Filed by a 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)(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.
<PAGE>
TEREX CORPORATION
500 Post Road East, Westport, Connecticut 06880
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 15, 1996
The Annual Meeting of Stockholders of Terex Corporation (hereafter the
"Company") will be held at the Westport Inn, 1595 Post Road East, Westport,
Connecticut, on Wednesday, May 15, 1996, at 10:00 a.m., local time, for the
following purposes:
1. To elect seven (7) directors to hold office for one year or until their
successors are duly elected and qualified.
2. To ratify the selection of Price Waterhouse LLP as independent accountants
of the Company for 1996.
3. To ratify the 1996 Terex Corporation Long-Term Incentive Plan and the
initial awards granted thereunder.
4. 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 April
5, 1996 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,
Marvin B. Rosenberg
Secretary
April 5, 1996
Westport, Connecticut
<PAGE>
TEREX CORPORATION
500 Post Road East
Westport, Connecticut 06880
Proxy Statement for the
Annual Meeting of Stockholders
to be held on May 15, 1996
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 May 15, 1996, at the
Westport Inn, 1595 Post Road East, Westport, Connecticut, 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 April 10, 1996, to each stockholder entitled to
vote at the Meeting. As of April 5, 1996, the record date for determining the
stockholders entitled to notice of, and to vote at, the Meeting, the Company had
outstanding 10,597,113 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 LLP as the
independent accountants of the Company, FOR the ratification of the 1996 Terex
Corporation Long-Term Incentive Plan (the "1996 Plan") and the initial awards
granted thereunder, and as determined by the Board of Directors in their
discretion with respect to 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. Abstentions and broker
non-votes will have no effect on the outcome of the election of the directors.
Ratification of the appointment of Price Waterhouse LLP as independent
accountants and ratification of the 1996 Plan and initial awards granted
thereunder requires the affirmative votes of the majority of shares present in
person at the Annual Meeting or represented by proxy and entitled to vote
thereon. Abstaining from voting on the appointment of auditors or the approval
of the 1996 Plan and initial awards granted thereunder will have the same effect
as voting against the proposals. Broker non-votes on the proposals to ratify the
appointment of the auditors or the 1996 Plan and initial awards granted
thereunder will not be included in the calculation of shares entitled to vote
for such proposals and will have no effect on the outcome.
<PAGE>
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 by the Company prior to
the Meeting.
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 February 15, 1996, 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 of Directors recommends that the stockholders vote FOR the
following nominees for director.
Positions and First Year
Name Age Offices with Company Elected Director
Ronald M. DeFeo 43 President, Chief Executive Officer, 1993
Chief Operating Officer and Director
Marvin B. Rosenberg 55 Senior Vice President, General Counsel, 1992
Secretary and Director
G. Chris Andersen 57 Director 1992
William H. Fike 59 Director 1995
Bruce I. Raben 42 Director 1992
David A. Sachs 36 Director 1992
Adam E. Wolf 81 Director 1983
<PAGE>
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, and Chief Executive Officer of the Company on March 24, 1995. Mr. DeFeo
joined the Company in May 1992 as President of the Company's Heavy Equipment
Group. A year later, he also assumed the responsibility of serving as the
President of the Company's Clark Material Handling Company ("CMHC") subsidiary.
Prior to joining the Company on May 1, 1992, Mr. DeFeo was a Senior Vice
President of J.I. Case Company, the farm and construction equipment division
formerly 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.
Marvin B. Rosenberg was appointed a director of the Company in 1992 and
was appointed a 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 is a director of Fruehauf Trailer Corporation ("Fruehauf") and served
as Secretary of Fruehauf from its organization in March 1989 until August 1993.
From 1987 through 1993, Mr. Rosenberg served as General Counsel of KCS
Industries, L.P., a Connecticut limited partnership and its predecessor KCS
Industries, Inc. ("KCS"), an entity that, until December 31, 1993, provided
administrative, financial, marketing, technical, real estate and legal services
to the Company and its subsidiaries.
G. Chris Andersen was appointed a director of the Company in 1992 and
served as a director of Fruehauf from July 1991 until August 1993. Mr. Andersen
was a Vice Chairman of PaineWebber Incorporated from March 1990 through 1995.
Mr. Andersen is currently a partner of Andersen, Weinroth & Co. L.P., serves as
a consultant to PaineWebber Incorporated and also serves as a director of AFGL
International, Inc., Sunshine Mining Company and United Waste Systems, Inc.
William H. Fike was appointed a director of the Company in April 1995.
Mr. Fike is the Vice Chairman of Magna International, Inc., an automotive parts
manufacturer based in Ontario, Canada ("Magna"). Prior to joining Magna in
September 1994, Mr. Fike was employed by Ford Motor Company from 1966 to 1994,
where he served most recently as President of Ford Europe. Mr. Fike serves as a
director to Magna and AGCO Corporation.
Bruce I. Raben was appointed a director of the Company in 1992. Mr.
Raben is a managing director of CIBC Wood Gundy. Prior to joining CIBC Wood
Gundy in February 1996, Mr. Raben was employed as an Executive Vice President of
Jefferies & Company, Inc. Mr. Raben serves as a director of Equity Marketing
Inc. and Optical Security, Inc.
David A. Sachs was appointed a director of the Company in 1992. Mr.
Sachs is a principal of Onyx Partners, Inc., a merchant banking firm. From 1990
to 1994, Mr. Sachs was employed at TMT-FW, Inc., an affiliate of Taylor & Co., a
private investment firm based in Fort Worth, Texas.
Adam E. 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 on several boards of directors, including those of a telephone
company, a bank and a hospital.
The Board met ten times in 1995 at regularly scheduled and special
meetings including telephonic meetings. All of the directors in office during
1995 attended at least 75% of the meetings which took place during their tenures
as directors. The Board has an Audit Committee, a Compensation Committee and a
Nominating Committee.
The Audit Committee of the Board of Directors consists of Messrs. Sachs
(chairperson), Raben and Wolf. The Audit Committee met once during 1995. 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.
<PAGE>
The Compensation Committee of the Board of Directors consists of
Messrs. Andersen (chairperson), Fike and Sachs. The Compensation Committee met
twice during 1995. 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.")
The Nominating Committee of the Board of Directors consists of Messrs.
Raben (chairperson), Andersen and Fike. The Nominating Committee did not meet
during 1995. The Nominating Committee recommends nominees to fill vacancies on
the Board of Directors.
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 the summary compensation table
below, and by all directors and executive officers as a group, as of February
15, 1996. 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 February 15, 1996 of the Company 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.
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
Randolph W. Lenz (1) 4,456,785 (2) 42.04%
c/o Terex Corporation
500 Post Road East
Westport, CT 06880
G. Chris Andersen 34,900 (3) *
821 West Shore Drive
Kinnelon, NJ 07405
Ronald M. DeFeo 54,732 (4) *
c/o Terex Corporation
500 Post Road East
Westport, CT 06880
William H. Fike
Magna International Inc. - 0 - *
26200 Lasher Road, Suite 300
Southfield, MI 48034
Bruce I. Raben 67,663 (5) *
CIBC Wood Gundy
1999 Avenue of the Stars
Suite 1910
Los Angeles, CA 90067
Marvin B. Rosenberg
c/o Terex Corporation 111,475 (6) 1.05%
500 Post Road East
Westport, CT 06880
David A. Sachs 32,800 (7) *
Onyx Partners
9595 Wilshire Boulevard
Suite 700
Beverly Hills, CA 90212
Adam E. Wolf 28,100 (8) *
875 East Donges Lane
Milwaukee, WI 53217
Ralph T. Brandifino 9,050 (9) *
c/o Terex Corporation
500 Post Road East
Westport, CT 06880
Brian J. Henry 5,875(10) *
c/o Terex Corporation
500 Post Road East
Westport, CT 06880
David J. Langevin 128,675(11) 1.21%
c/o Terex Corporation
500 Post Road East
Westport, CT 06880
All directors and executive officers 475,145(12) 4.44%
as a group (12 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. Pursuant to a retirement
agreement between the Company and Mr. Lenz, Mr. Lenz has agreed to vote his
shares of the Company's Common Stock in the manner recommended by the
Company's Board of Directors. (See "Certain Relationships and Related
Transactions" below.)
(2) Includes (a) 4,074,912 shares of Common Stock directly owned by Mr. Lenz,
(b) 10,750 shares of Common Stock issuable upon the exercise of options
exercisable within 60 days and held by Mr. Lenz, (c) 268,123 shares of
Common Stock indirectly owned by Mr. Lenz through four corporations that he
indirectly owns and controls, (d) 38,800 shares of Series B Cumulative
Redeemable Convertible Preferred Stock (the "Series B Preferred Stock")
convertible into 87,300 shares of Common Stock and (e) Series B Common
Stock Purchase Warrants (the "Series B Warrants") exercisable into 15,700
shares of Common Stock.
(3) Includes 10,000 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days.
(4) Includes 34,366 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days.
(5) Includes 10,000 shares owned by Mr. Raben's wife as to which Mr. Raben does
not have dispositive or voting power and disclaims beneficial ownership.
Also includes 10,000 shares of Common Stock issuable upon the exercise of
options held by Mr. Raben and which are exercisable within 60 days.
(6) Includes 5,650 shares of Common Stock issuable upon the exercise of options
exercisable within 60 days.
(7) Includes 3,300 shares of Common Stock owned by Mr. Sachs' wife. Mr. Sachs
disclaims the beneficial ownership of such shares. Also includes 10,000
shares of Common Stock issuable upon the exercise of options held by Mr.
Sachs which are exercisable within 60 days.
(8) Includes 20,000 shares of Common Stock issuable upon the exercise of
options held by Mr. Wolf which are exercisable within 60 days. Also
includes 800 shares of Common Stock held in a testamentary trust for which
Mr. Wolf has shared voting power and shared investment power and 200 shares
of Common Stock held by Mr. Wolf's wife for which he claims beneficial
ownership. (footnotes continued on following page) (footnotes continued
from preceding page)
(9) Includes 5,300 shares of Common Stock issuable upon the exercise of options
exercisable within 60 days.
(10) Includes 1,250 shares of Common Stock issuable upon the exercise of options
exercisable within 60 days.
(11) Includes 6,850 shares of Common Stock issuable upon the exercise of options
exercisable within 60 days.
(12) Includes 115,416 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days.
MANAGEMENT OF THE COMPANY
The following table sets forth, as of February 15, 1996, 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.
Name Age Positions and Offices with Company
Ronald M. DeFeo 43 President, Chief Executive Officer, Chief
Operating Officer and Director
David J. Langevin 44 Executive Vice President
Marvin B. Rosenberg 55 Senior Vice President, General Counsel,
Secretary and Director
Ralph T. Brandifino 50 Senior Vice President and Chief Financial Officer
Brian J. Henry 37 Vice President, Treasurer and Director of Investor
Relations
Joseph F. Apuzzo 40 Vice President, Corporate Controller
Steven E. Hooper 43 Vice President, Human Resources
For information regarding Messrs. 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 from March 1993 through December 1993. He had been employed as a Vice
President of KCS since 1988 until joining the Company in 1993.
Ralph T. Brandifino was appointed to the position of Senior Vice
President and Chief Financial Officer of the Company on December 6, 1993. Mr.
Brandifino was previously the Chief Financial Officer at the Long Island
Lighting Company from 1987 through 1993.
Brian J. Henry was appointed Vice President and Treasurer of the
Company on July 11, 1995. Mr. Henry also serves as the Company's Director of
Investor Relations. Mr. Henry formerly held the position of the Company's Vice
President - Corporate Development and Acquisitions and has been employed by the
Company since 1993. He was employed by KCS from 1990 until 1993.
Joseph F. Apuzzo was appointed Vice President, Corporate Controller of
the Company on October 9, 1995. Mr. Apuzzo was Vice President of Corporate
Finance at D'Arcy Masius Benton & Bowles, Inc. from September 1994 until October
1995 when he joined the Company. Mr. Apuzzo was employed by Price Waterhouse LLP
in various capacities from 1983 until September 1994.
Steven E. Hooper was appointed Vice President, Human Resources of the
Company on September 15, 1995, after serving as Director of Human Resources of
the Company since January 1994. He was previously a Human Resources Director at
Allied Signal Aerospace from October 1992 to December 1993. Prior to October
1992, Mr. Hooper was with Tenneco Inc. for eight years in various senior level
human resources positions.
<PAGE>
EXECUTIVE COMPENSATION
<TABLE>
<CAPTION>
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 four
highest paid executive officers with 1995 earned qualifying compensation in
excess of $100,000 (the "Named Executive Officers").
Summary Compensation Table
--------------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
-----------------------------------
---------------------------
Awards
---------------------------
Other Restricted Securities All Other
Annual Stock Underlying Compen-
Name and Salary Bonus Compen- Awards Options/ sation
Principal Position Year ($) ($) sation ($) SARS (#) ($)
($)
<S> <C> <C> <C> <C> <C> <C> <C>
Ronald M. DeFeo 1995 $350,000 $250,000 $ - 0 - $237,500 (1) 40,000 $ 3,080 (6)
President, Chief Executive 1994 350,000 225,000 - 0 - 84,700 (2) 30,800 3,080 (6)
Officer and Chief Operating 1993 237,500 100,000 222,693 (7) - 0 - 10,000 3,148 (6)
Officer (3)
Randolph W. Lenz 1995 384,750 - 0 - - 0 - - 0 - - 0 - - 0 -
Chairman of the Board (4)(5) 1994 486,000 243,000 - 0 - 118,250 (2) 43,000 - 0 -
` 1993 483,508 - 0 - - 0 - - 0 - - 0 - - 0 -
David J. Langevin 1995 303,600 150,000 - 0 - - 0 - 10,000 3,080 (6)
Executive Vice President 1994 303,600 150,000 - 0 - 75,350 (2) 27,400 - 0 -
(4)(8) 1993 - 0 - - 0 - - 0 - - 0 - - 0 - - 0 -
Marvin B. Rosenberg 1995 250,000 75,000 - 0 - - 0 - 5,000 - 0 -
Senior Vice President, 1994 250,000 75,000 - 0 - 62,150 (2) 22,600 - 0 -
Secretary and General 1993 - 0 - - 0 - - 0 - - 0 - - 0 - - 0 -
Counsel (4)(9)
Ralph T. Brandifino 1995 235,000 100,000 - 0 - - 0 - - 0 - 3,080 (6)
Senior Vice President 1994 235,000 100,000 - 0 - 58,300 (2) 21,200 - 0 -
and Chief Financial 1993 16,913 - 0 - - 0 - - 0 - - 0 - - 0 -
Officer (10)
Brian J. Henry 1995 165,000 33,000 - 0 - - 0 - 10,000 3,080 (6)
Vice President and 1994 150,000 33,000 - 0 - 13,750 (2) 5,000 3,080 (6)
Treasurer (11) 1993 70,000 50,000 - 0 - - 0 - - 0 - 1,500 (6)
- -----------------------------
<FN>
(1) As part of Mr. DeFeo's 1995 long term incentive compensation, on February
15, 1996, Mr. DeFeo was granted 5,000 shares of Restricted Stock (as
defined in the "Compensation Committee Report" below) under the Company's
1994 Long Term Incentive Plan (the "1994 Plan") and conditionally granted
45,000 shares of Restricted Stock under the 1996 Plan, subject to
stockholder approval. (See "Proposal 3: Approval of the 1996 Plan and
Initial Awards Granted Thereunder" below.) The value of the Restricted
Stock granted to Mr. DeFeo set forth in the table above for 1995 is based
on the closing stock price on the NYSE of Common Stock of $5.00 per share
as of February 15, 1996, the date of grant. The shares of Restricted Stock
awarded to Mr. DeFeo for 1995 become vested to the extent of one-fourth of
the shares covered thereby on each of the first four anniversaries of
February 15, 1996; however, upon the earliest to occur of a change in
control of the Company and the death or disability of Mr. DeFeo, any
unvested portion of such Restricted Stock shall vest immediately.
Dividends, if any, are paid on Restricted Stock awards at the same rate as
paid to all stockholders.
(2) As part of their 1994 long term incentive compensation, on June 23, 1994
the Named Executive Officers were granted shares of Restricted Stock under
the Company's 1994 Plan. The value of the Restricted Stock set forth in the
table above is based on the closing stock price of $5.50 per share on June
23, 1994, the date of grant. Dividends, if any, are paid on Restricted
Stock awards at the same rate as paid to all stockholders. The number and
market value, based on the closing stock price of $4.75 of the Restricted
Stock awards set forth in the table above as of December 31, 1995 for
Messrs. DeFeo, Lenz, Langevin, Rosenberg, Brandifino and Henry are: Mr.
DeFeo,15,400 shares,$73,150; Mr. Lenz, 21,500 shares, $102,125; Mr.
Langevin, 13,700 shares, $65,075; Mr. Rosenberg, 11,300 shares, $53,675;
Mr. Brandifino, 10,600 shares, $50,350; and Mr. Henry, 2,500 shares,
$11,875. The shares of Restricted Stock covered by the Restricted Stock
awards of each of the Named Executive Officers become vested to the extent
of one-fourth of the shares of covered thereby on each of the first four
anniversaries of June 23, 1994; however, upon the earliest to occur of a
change of control of the Company and the death or disability of such Named
Executive Officer, any unvested portion of such Restricted Stock will vest
immediately.
(3) Mr. DeFeo became Chief Executive Officer on March 24, 1995.
(4) In conjunction with the 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), received cash and
certain securities of the Company in 1994. Such payments are not included
as part of Messrs. Lenz's, Langevin's and Rosenberg's 1994 annual
compensation.
(5) Mr. Lenz was Chief Executive Officer of the Company from 1993 through March
24, 1995 when Mr. DeFeo was appointed CEO. Mr. Lenz retired as Chairman of
the Board and a Director of the Company as of August 28, 1995 (see
"Retirement of Randolph W. Lenz" below). Mr. Lenz was paid his salary
through the date of his retirement.
(6) Company's matching contribution to defined contribution plan account.
(7) Includes relocation payments of $214,604.
(8) Mr. Langevin was acting Chief Financial Officer of the Company from March
9, 1993 through December 5, 1993, but did not receive compensation from the
Company until he became Executive Vice President of the Company effective
January 1, 1994. Prior to 1994, Mr. Langevin was employed as an executive
officer of KCS and received compensation from KCS.
(9) Although Mr. Rosenberg has acted as Secretary and General Counsel of the
Company since 1987, he did not receive compensation from the Company until
he was appointed Senior Vice President of the Company effective January 1,
1994. Prior to 1994, Mr. Rosenberg was employed as an executive officer of
KCS and received compensation from KCS.
(10) Mr. Brandifino joined the Company on December 6, 1993.
(11) Mr. Henry joined the Company on July 1, 1993. Prior to July 1, 1993, Mr.
Henry was employed by KCS and received compensation from KCS.
</FN>
</TABLE>
Stock Option Grants in 1995
The following table sets forth information on grants of stock options
under the Company's 1988 Incentive Stock Option plan covering key management
employees (the "1988 Plan") as well as under the Company's 1994 Plan during the
Company's 1995 fiscal year to the Named Executive Officers. The number of stock
options and SARs granted to the Named Executive Officers during the Company's
1995 fiscal year is also listed in the Summary Compensation Table in the column
entitled "Securities Underlying Options/SARs." The exercise price of the options
equaled or exceeded the fair market price of the Common Stock at the time of the
grant. Options granted under the 1988 Plan vest ratably over three years from
the date of grant. Options granted under the 1994 Plan vest ratably over four
years from the date of grant.
<TABLE>
<CAPTION>
Stock Option/SAR Grants in 1995
Individual Grants
---------------------------------------------------------------------------------------------
Number of
Securities % of Total Potential Realizable Value
Underlying Options Granted Exercise or at Assumed Annual Rates of
Options to Employees in Base Price Expiration Stock Price Appreciation
Name Granted(#)(1) Fiscal Year ($/Sh) Date for Option Term
5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
Ronald M. DeFeo 40,000 12.2% $4.250 12/13/05 $106,912 $ 270,930
Randolph W. Lenz (2) - 0 - 0% - 0 - - - 0 - - 0 -
David J. Langevin 10,000 3.0% 4.250 12/13/05 26,995 68,411
Marvin B. Rosenberg 5,000 1.5% 4.250 12/13/05 13,364 33,867
Ralph T. Brandifino - 0 - 0% - 0 - - - 0 - - 0 -
Brian J. Henry 10,000 3.0% 4.875 7/10/05 30,659 77,695
- ------------------
<FN>
(1) Of the options listed above, 19,709, 4,927 and 2,464 for Messrs. DeFeo,
Langevin and Rosenberg, respectively, were granted under the 1994 Plan and
become vested to the extent of one-fourth of the shares of Common Stock
covered thereby on each of the first four anniversaries of December 13,
1995, the date of grant; and 20,291, 5,173 and 2,536 for Messrs. DeFeo,
Langevin and Rosenberg, respectively, were granted under the 1988 Plan and
become vested to the extent of one-third of the shares of Common Stock
covered thereby on each of the first three anniversaries of December 13,
1995, the date of grant. Mr. Henry's option to purchase 10,000 shares of
Common Stock was granted to him under the 1994 Plan in connection with his
promotion to Vice President and Treasurer on July 10, 1995, and becomes
vested to the extent of one-fourth of the shares of Common Stock covered
thereby on each of the first four anniversaries of July 10, 1995, the date
of grant.
(2) Mr. Lenz retired as Chairman on August 28, 1995. (See "Retirement of
Randolph W. Lenz" below.)
</FN>
</TABLE>
Aggregated Option Exercises in 1995 and Year-End Option Values
The table below summarizes options exercised during 1995 and year-end
option values of the Named Executive Officers listed in the Summary Compensation
Table.
<TABLE>
<CAPTION>
Aggregated Option Exercises in 1995 and Year-End Option Values
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Year-End (#) at Year-End ($)(1)
Shares Acquired Value Realized
Name on Exercise (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
(#)
<S> <C> <C> <C> <C>
Ronald M. DeFeo - 0 - $- 0 - 34,366/66,434 $ 0/190,000
Randolph W. Lenz (2) - 0 - - 0 - 10,750/32,250 0/0
David J. Langevin - 0 - - 0 - 6,850/30,550 0/47,500
Marvin B. Rosenberg - 0 - - 0 - 5,650/21,950 0/23,750
Ralph T. Brandifino - 0 - - 0 - 5,300/15,900 0/0
Brian J. Henry - 0 - - 0 - 1,250/13,750 0/0
- -----------------------
<FN>
(1) Based on the closing price of the Company's Common Stock on the New York
Stock Exchange ("NYSE") on December 31, 1995 of $4.75.
(2) Mr. Lenz retired as Chairman on August 28, 1995. (See "Retirement of
Randolph W. Lenz" below.)
</FN>
</TABLE>
<PAGE>
Pension Plans
The Company maintains four defined benefit pension plans covering
certain domestic employees, including, as described below, 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. DeFeo and Lenz participate in the Terex Corporation Salaried
Employees' Retirement Plan (the "Retirement Plan"). Messrs. Brandifino, Henry,
Langevin and Rosenberg do not participate because participation in the
Retirement Plan was frozen as of May 7, 1993, prior to their employment with the
Company.
Participants of the Retirement 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 Retirement Plan are equal to the product
of (i) the participant's years of service (as defined in the Retirement Plan)
and (ii) 1.02% of final average earnings (as defined in the Retirement Plan)
plus 0.71% 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 0.71% figures with 1.08% and 0.65%, respectively. For participants
born after 1954, the formula is modified by replacing the 1.02% and 0.71%
figures with 1.13% and 0.60%, respectively. Service in excess of 25 years is not
recognized. There is no offset for primary Social Security.
Participation in the Retirement Plan was frozen as of May 7, 1993, and
no participants, including Mr. DeFeo and Mr. Lenz, will be credited with service
following such date. However, participants not currently 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 Retirement Plan will be $4,503 for Mr. DeFeo
(assuming full vesting).
Compensation of Directors
The directors who are employees of the Company receive no additional
compensation by virtue of their being directors of the Company. Non-employee
directors receive an annual fee of $24,000. All directors of the Company are
reimbursed for travel, lodging and related expenses incurred in attending Board
and committee meetings.
In addition, subject to stockholder approval of the 1996 Plan, outside
directors shall, in lieu of further compensation payable under the 1994 Plan:
(i) be awarded on the date of appointment as an outside director, an
option to purchase 25,000 shares of Common Stock;
(ii) provided such outside directors are serving as of the date of
stockholder approval of the 1996 Plan, be awarded an option to purchase the
number of shares of Common Stock necessary to bring the total number of shares
of Common Stock for which the director has or had an option, granted by the
Company during his tenure as a director, to 25,000 shares, at a price of $4.25
per share;
(iii) in consideration of services to the Board during 1995 and each
year thereafter, as applicable, be awarded annually an option to purchase 7,500
shares of Common Stock five business days after the date on which the Company
files its Annual Report on Form 10-K with the Securities and Exchange Commission
("SEC"), at the closing price of a share of Common Stock on the NYSE on such
date, except that the exercise price of options granted in consideration of
services rendered during 1995 shall be $4.25 per share;
<PAGE>
(iv) in consideration of services to the Board during 1995 and each
year thereafter, as applicable, (a) if such outside directors are serving as a
chairperson of a committee to the Board of Directors five business days after
the date on which the Company files its Annual Report on Form 10-K with the SEC,
be awarded an option to purchase 5,000 shares of Common Stock at $4.25 per share
for the options granted in consideration of services rendered during 1995 and at
the closing price of a share of Common Stock on the NYSE on the date of all
other annual awards, or (b) if such outside directors are serving as a member of
a committee (and not as a chairperson of such committee) of the Board of
Directors five business days after the date on which the Company files its
Annual Report on Form 10-K with the SEC, be awarded an option to purchase 2,500
shares of Common Stock at $4.25 per share for the options granted in
consideration of services rendered during 1995 and at the closing price of
Common Stock on the NYSE on the date of all other annual awards; provided,
however, that an individual outside director shall not be awarded an option to
purchase more than 7,500 shares of Common Stock per year for service as a
committee chairperson and/or member, regardless of the number of positions held.
The outside director options described above shall have a term of five
years and the exercise price of the options shall be equal to the fair market
value of the Common Stock on the date preceding the day the grant is authorized,
unless otherwise provided. The options shall vest immediately upon approval of
the 1996 Plan. On December 13, 1995, pursuant to such provisions of the 1996
Plan, (i) each of G. Chris Andersen and Bruce I. Raben was conditionally granted
an option to purchase 32,500 shares of Common Stock; (ii) William H. Fike was
conditionally granted an option to purchase 25,000 shares of Common Stock; (iii)
David A. Sachs was conditionally granted an option to purchase 27,500 shares of
Common Stock; and (iv) Adam E. Wolf was conditionally granted an option to
purchase 17,500 shares of Common Stock, in each case at an option price of $4.25
per share. In addition, on December 13, 1995, pursuant to the provisions of the
1996 Plan; (i) G. Chris Andersen was conditionally granted an option to purchase
15,000 shares of Common Stock; (ii) William H. Fike was conditionally granted an
option to purchase 12,500 shares of Common Stock; (iii) each of Bruce I. Raben
and David A. Sachs was conditionally granted an option to purchase 15,000 shares
of Common Stock; and (iv) Adam E. Wolf was conditionally granted an option to
purchase 10,000 shares of Common Stock, in each case at a per share option price
equal to the closing price of Common Stock on the NYSE on April 8, 1996. At the
time of the Board of Directors' approval of the 1996 Plan and the initial awards
to outside directors, the Board of Directors noted the increased workload of the
outside directors during 1995 as a result of negotiations relating to Mr. Lenz's
retirement as well as the lack of a permanent Chairman since the date of Mr.
Lenz's retirement. See "Retirement of Randolph W. Lenz" below. In the event that
the 1996 Plan is approved, the outside directors shall not receive any further
consideration under the 1994 Plan. In the event that the stockholders do not
ratify the Board of Directors' approval of the 1996 Plan, the outside directors
shall receive compensation under the 1994 Plan as follows: (i) outside directors
shall be awarded an option to purchase 10,000 shares of Common Stock after
having completed two years of service as a member of the Board of Directors, and
(ii) outside directors shall be awarded an option to purchase an additional
10,000 shares of Common Stock after having completed five years of service as a
member of the Board of Directors.
Retirement of Randolph W. Lenz
On August 28, 1995, Randolph W. Lenz retired as Chairman of the Board
and a Director of the Company. Mr. Lenz remains the Company's principal
stockholder. In connection with his retirement, the Company entered into an
agreement with Mr. Lenz which provides certain benefits to Mr. Lenz and the
Company. (See "Certain Relationships and Related Transactions" below.)
Employment Contracts, Termination of Employment and Change-in-Control
Arrangements
The Company has agreed with Ronald M. DeFeo that in the event of a
change in ownership of the Company which prevents him from continuing in his
position as President and Chief Executive Officer, the Company will provide for
a continuance of his income for a period of 24 months.
<PAGE>
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board recommending compensation for
executive officers, including the Named Executive Officers, during the Company's
1995 fiscal year consisted of G. Chris Andersen, William H. Fike and David A.
Sachs. There are no compensation Committee interlocks or insider participation
with respect to such individuals.
Compensation Committee Report
Executive Compensation Philosophy
The objectives of the Company's executive compensation program are to
(i) attract and retain the executives with the skills critical to the long-term
success of the Company, (ii) to motivate and reward individual and team
performance in attaining business objectives and maximizing shareholder value,
and (iii) to grant equity-based awards over cash compensation so as to align the
interests of the executive officers with those of the stockholders. To meet this
objective, the total compensation program is designed to be competitive with the
total compensation program provided by other corporations of comparable revenue
size in industries with which the Company competes for customers and executives
and to be fair and equitable to both the employee and the Company. Consideration
is given to the employee's overall responsibilities, professional
qualifications, business experience, job performance, technical expertise,
career potential and their resultant combined value to the Company's long-term
performance and growth.
Executive Compensation Program
Each year, the Compensation Committee, which is comprised entirely of
outside directors, recommends to the Board of Directors compensation
arrangements for the Company's executive officers, including the Named Executive
Officers. Such compensation arrangements, all of which are subject to approval
by the full Board of Directors, include annual salary levels, annual and
long-term incentive plans and grants thereunder (including stock options and
grants of Common Stock subject to restrictions of transfer, conditions of
forfeitability or any other limitations or restrictions ["Restricted Stock"]),
standards of performance for new grants, plan participation and program design.
The Board of Directors approved the recommendations of the Compensation
Committee for 1995. Messrs. DeFeo and Rosenberg did not, however, participate in
the deliberations of the Compensation Committee or Board of Directors regarding
their own compensation.
The Company's executive compensation program is comprised of three
principal components: salary, annual incentive compensation and long-term
incentive compensation, each of which is described below. The Company's policies
with respect to each of the components described below are considered
separately. In addition, the Compensation Committee also considers and will
review, from time to time, the full compensation package afforded by the Company
and to executive employees.
Base Salaries
An executive officer's base salary is determined by evaluating the
responsibilities of the position held, the individual's past experience, current
performance and the competitive marketplace for executive talent. Salary ranges
for the Company's executive officers did not increase (absent a change in
responsibility) in 1995, in contrast to salary ranges of executives at
comparable sized companies as reported in data furnished to the Compensation
Committee by the Company's outside sources.
Annual Bonuses
In addition to a base salary, executive officers are eligible for an
annual bonus, which may consist of cash and/or other performance awards under
the 1988 Plan or the 1994 Plan. Bonuses are paid upon attainment of Company
operating profit and cash flow goals established annually, as well as specific
performance goals established for each executive officer at the beginning of the
fiscal year. Executive officers may earn a bonus of up to 50% (or under
circumstances for extraordinary performance, more than 50%) of their base salary
if the Company and individualized goals are attained. The Compensation Committee
believes that bonuses paid to the Named Executive Officers and reported in the
"Bonus Column" of the Summary Compensation Table reflect the level of
achievement of the Company goals and individual performance goals during 1995.
Long-Term Incentive Compensation
The purpose of long-term awards, currently in the form of stock options
and grants of Common Stock including Restricted Stock, is to align the interests
of the executive officers with the interests of the 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. The Compensation Committee favors the granting of equity-based awards
over cash compensation for such reasons and believes that the granting of stock
options and Common Stock better motivates executive officers to exert their best
efforts on behalf of the Company and the stockholders. In determining stock
option grants, the Compensation Committee bases its decision on the individual's
performance and a potential to improve stockholder value. Based on information
furnished to the Compensation Committee by the Company's outside sources, ranges
established by the Compensation Committee for Stock Option Grants enable the
Committee to make grants and awards that can produce long-term incentive
compensation opportunities closer to the 50th percentile of comparably sized
companies surveyed.
CEO Compensation
The compensation of the Chief Executive Officer ("CEO") 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 the comparable companies. As
indicated in the Summary Compensation Table, the 1995 base salary of Mr. DeFeo
was $350,000 and the 1995 annual bonus was $250,000, an increase of $25,000 from
1994. In addition, Mr. DeFeo also received an award of options to purchase an
aggregate of 40,000 shares of Common Stock under the 1988 Plan and 1994 Plan,
5,000 shares of Restricted Stock under the 1994 Plan, and a conditional award of
45,000 shares of Restricted Stock under the 1996 Plan. In determining the
overall level of Mr. DeFeo's compensation and each component thereof, the
Compensation Committee took into consideration information provided by multiple
independent, professional sources. The increase in bonus paid and award of
options to purchase common Stock and the Restricted Stock to Mr. DeFeo placed
Mr. DeFeo's total compensation package at a level which is competitive with that
of chief executive officers of comparably sized companies. The Committee
believes the increase to Mr. DeFeo's total compensation package is appropriate
even though the Company did not maintain shareholder value at or above that of
the proxy peer group in 1995 as Mr. DeFeo exceeded his objectives relative to
improvements in the Company's operating earnings and successfully completed the
$250 million refinancing of the Company's senior secured and senior subordinated
notes, the $100 million refinancing of the Company's credit facility and
acquisition of substantially all of the outstanding stock of P.P.M. S.A. and PPM
Cranes, Inc. (collectively, "PPM"). (See "Executive Compensation - Performance
Graph" below.)
Mr. Lenz served as the Company's Chairman from January 1, 1995 until
his retirement on August 28, 1995 and served as CEO from January 1, 1995 until
Mr. DeFeo assumed the position on March 24, 1995. In light of the change in Mr.
Lenz's status in 1995, the Board maintained Mr. Lenz's 1994 salary level during
his employment with the Company in 1995. Mr. Lenz did not receive any
compensation as an employee of the Company other than his salary through his
retirement date. In connection with his retirement, the Company entered into an
agreement with Mr. Lenz which provides certain benefits to Mr. Lenz and the
Company. (See "Retirement of Randolph W. Lenz" above.)
Federal Tax Implications for Executive Compensation
Section 162(m) of the Internal Revenue Code provides that no U.S.
income tax deduction is allowable to a publicly held corporation for
compensation in excess of $1 million paid to the chief executive officer or any
other employee whose compensation is required to be reported in the Summary
Compensation Table, if those individuals are employed by the corporation at year
end. No Company executive officer, including the Named Executive Officers,
received compensation in 1995 in excess of $1 million. Therefore, during 1995,
it was not necessary for the Compensation Committee to take any action to comply
with the limit. At this time, it is not anticipated that any executive officer
of the Company will receive in 1996 any such compensation in excess of this
limit. The Compensation Committee will continue to monitor this situation and
will take appropriate action if it is warranted in the future.
COMPENSATION COMMITTEE
G. CHRIS ANDERSEN
WILLIAM H. FIKE
DAVID A. SACHS
Performance Graph
The following is a stock performance graph which shows the change in
market value of $100 invested in the Company's Common Stock, Standard & Poor's
500 Stock Index and a "Peer Group" index for the period commencing December 31,
1990 through December 31, 1995. The cumulative total stockholder return assumes
dividends are reinvested. The "Peer Group" consists of the following companies,
which are in similar lines of business as the Company (manufacturing of heavy
equipment): Caterpillar, Inc., Deere & Company, Harnischfeger Industries, Inc.,
Ingersoll Rand Company, JLG Industries, Inc., The Manitowoc Company and NACCO
Industries, Inc. The Company's Peer Group in 1995 also included Clark Equipment
Company which was acquired by and merged into the Ingersoll Rand Company. The
companies in the indices are weighted by market capitalization. The stockholder
return shown on the graph below is not indicative of future performance.
Terex Corporation, S&P 500, Peer Group.
(Performance results through December 31, 1995)
The vertical axis of the line graph is scaled from $0.00 at the origin
extending upwards to $300.00, marked in increments of $50.00. The horizontal
axis begins with the year 1990 at the origin extending to the right through the
year 1995, 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.
Name 1990 1991 1992 1993 1994 1995
Terex Corporation 100.0 141.20 109.97 74.67 76.03 51.59
Standards & Poor's 500 100.0 130.55 140.72 154.91 157.39 216.42
Peer Group 100.0 112.16 122.99 192.24 203.48 256.95
Source: Value Line, Inc.
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On August 28, 1995, Randolph W. Lenz retired as Chairman of the Board
and a Director of the Company. Mr. Lenz remains the Company's principal
stockholder. As of February 15, 1996 he beneficially owned, directly or
indirectly, approximately 42% of the outstanding Common Stock of the Company. In
connection with his retirement, the Company (acting upon the recommendations of
a committee comprised of its independent directors and represented by
independent counsel) and Mr. Lenz have entered into a retirement agreement
providing certain benefits to Mr. Lenz and the Company. The agreement provides,
among other things, for a five-year consulting engagement requiring Mr. Lenz to
make himself available to the Company to provide consulting services for certain
portions of his time. Mr. Lenz, or his designee, receives a fee for consulting
services which will include payments in an amount, and a rate, equal to his 1995
base salary of $486,000 until December 31, 1996. The agreement also provided for
the (i) granting of a five-year $1.8 million loan bearing interest at 6.56% per
annum which is subject to being forgiven in increments over the five-year term
of the agreement upon certain conditions, and (ii) equity grants having a
maximum potential of 200,000 shares of the Company's Common Stock conditioned
upon the Company achieving certain financial performance objectives in the
future. In contemplation of the execution of this retirement agreement, the
Company advanced to Mr. Lenz the principal amount of the forgivable loan. Mr.
Lenz also agreed not to compete with the Company, to vote his shares of the
Company's Common Stock in the manner recommended by the Company's Board of
Directors, not to acquire any additional shares of the Company's Common Stock,
and, except under certain circumstances, not to sell his shares of the Company's
Common Stock. In addition to indebtedness pursuant to the retirement agreement,
an affiliate of Mr. Lenz is indebted to the Company in the approximate amount of
$33,450 representing shipping charges incurred by such affiliate to the Company
during 1994. The affiliate of Mr. Lenz has not paid such charges to date.
The Company, certain directors and executive officers of the Company,
and KCS, a Connecticut limited partnership principally owned by Randolph W.
Lenz, with whom the Company prior to January 1, 1994 had a management contract
to provide administrative, financial, marketing, technical, real estate and
legal services to the Company, are named parties in various legal proceedings
and government investigations. During 1995, the Company incurred $329,946.92 of
legal fees and expenses on behalf of Randolph W. Lenz, David J. Langevin and
Marvin B. Rosenberg, each as a director and executive officer of the Company and
KCS for all or part of 1995.
In 1995, the Company retained Jefferies & Company, Inc., of which Mr.
Raben was then Executive Vice President, in connection with the offering of the
Company's $250 million senior secured notes and acquisition of PPM which was
completed in May 1995. Jefferies & Company, Inc. was paid $9,238,000 as an
underwriting discount and for services rendered.
The Company intends 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 will be advised in advance of
any such proposed transaction or agreement and will utilize 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 independent 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 10%
of the Company's outstanding equity securities, to file with the SEC and the
NYSE 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 1995. Officers,
directors and greater than 10% 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.
<PAGE>
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
10% beneficial owners were complied with during the year ended December 31,
1995, except that (i) Mr. DeFeo did not file a Form 4 in a timely manner in
December 1993 relating to the grant on November 30, 1993 of an option to
purchase 10,000 shares of Common Stock; (ii) Mr. Henry did not file a Form 4 in
a timely manner in August 1995 relating to the grant of an option to purchase
10,000 shares of Common Stock; and (iii) Mr. Lenz did not file a Form 4 in a
timely manner in October 1995 relating to the sale of 57,143 shares of Common
Stock, the sale of 7,857 shares of Common Stock, and the sale of 100,000 share
of Common Stock, and also failed to file a Form 4 in a timely manner in December
1995 relating to two sales of 100,000 shares of Common Stock each.
PROPOSAL 2: INDEPENDENT ACCOUNTANTS
The firm of Price Waterhouse LLP audited the consolidated financial
statements of the Company for 1995. The Board of Directors desires to continue
the service of this firm for 1996. Accordingly, the Board of Directors
recommends to the stockholders ratification of the retention of Price Waterhouse
LLP as the Company's independent accountants for the fiscal year ending December
31, 1996. If the stockholders do not approve Price Waterhouse LLP as the
Company's independent accountants, the Board of Directors will reconsider its
selection.
Representatives of Price Waterhouse LLP 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.
The Board of Directors recommends that the stockholders vote FOR the
ratification of Price Waterhouse LLP as independent accountants for 1996.
PROPOSAL 3: APPROVAL OF THE 1996 PLAN AND
THE INITIAL AWARDS GRANTED THEREUNDER
General
The Board of Directors adopted the 1996 Terex Corporation Long-Term
Incentive Plan (the "1996 Plan") on December 13, 1995, subject to stockholder
approval as described below. The purpose of the 1996 Plan is to (a) advance the
interests of the Company and its stockholders by providing incentives and
rewards to those employees who are in a position to contribute to the long-term
growth and profitability of the Company and to outside directors, (b) assist the
Company and its subsidiaries and affiliates in attracting, retaining and
motivating highly qualified employees and outside directors for the successful
conduct of their business and (c) make the Company's compensation program
competitive with those of primary competitors.
The 1996 Plan authorizes the granting of (i) options ("Stock Option
Awards") to purchase shares of Common Stock, including Restricted Stock, (ii)
shares of Common Stock, including Restricted Stock ("Stock Awards"), and (iii)
cash bonus awards based upon a participant's job performance ("Performance
Awards"). Subject to adjustment as described below under "Adjustments," the
aggregate number of shares of Common Stock (including Restricted Stock, if any)
optioned or granted under the 1996 Plan shall not exceed 300,000 shares. The
1996 Plan provides that a committee (the "Committee") of the Board of Directors
consisting of two or more members thereof who are non-employee directors, shall
administer the 1996 Plan and has provided the Committee with the flexibility to
respond to changes in the competitive and legal environments, thereby protecting
and enhancing the Company's current and future ability to attract and retain
directors and officers and other key employees and consultants. On December 13,
1995, the Committee conditionally granted, subject to stockholder approval, to
Ronald M. DeFeo, 45,000 shares of Restricted Stock (the "Initial Executive
Restricted Stock Award").
The 1996 Plan also provides for automatic grants of Stock Option
Awards to non-employee directors in accordance with Rule 16b-3(c)(2)(ii) under
the Exchange Act. Under the 1996 Plan: (a) any individual who is appointed a
non-employee director after stockholder approval of the 1996 Plan shall be
awarded an option to purchase 25,000 shares of Common Stock; (b) any individual
who is serving as a non-employee director on January 1, 1995 shall be awarded an
option to purchase the number of shares of Common Stock necessary to bring such
non-employee director's aggregate Stock Option Awards from the Company since the
date of appointment to 25,000 shares; (c) any individual who is serving as a
non-employee director during the Company's 1995 fiscal year or any year
thereafter, as applicable, five business days following the date on which the
Company's Annual Report on Form 10-K is filed with the SEC in the applicable
year, shall be awarded an option to purchase 7,500 shares of Common Stock at the
closing price of the Common Stock on the NYSE on the date of award except that
options granted in consideration of services rendered during 1995 shall be at
$4.25 per share; (d) any individual who is serving as a non-employee director
during the Company's 1995 fiscal year or any year thereafter, as applicable five
business days following the date on which the Company's Annual Report on Form
10-K is filed with the SEC in the applicable year: (i) who also serves as a
chairperson of a committee of the Board of Directors, shall be awarded an option
to purchase 5,000 shares of Common Stock at the closing price of the Common
Stock on the NYSE on the date of award, except that options granted in
consideration of services rendered during 1995 shall be at $4.25 per share; or
(ii) who also serves as a member of a committee of the Board of Directors (and
not as chairperson of such committee) shall be awarded an option to purchase
2,500 shares of Common Stock at the closing price of the Common Stock on the
NYSE on the date of award, except that options granted in consideration of
services rendered during 1995 shall be at $4.25 per share; provided, however,
that the total number of shares awarded pursuant to clause (d) shall not exceed
an option to purchase in excess of 7,500 shares of Common Stock during a single
fiscal year.
Accordingly, pursuant to such provisions, on December 13, 1995, the
Committee conditionally granted, subject to stockholder approval to: (i) each of
G. Chris Andersen and Bruce I. Raben, a Stock Option Award to purchase 32,500
shares of Common Stock; (ii) William H. Fike, a Stock Option Award to purchase
25,000 shares of Common Stock; (iii) David A. Sachs, a Stock Option Award to
purchase 27,500 shares of Common Stock; and (iv) Adam E. Wolf, a Stock Option
Award to purchase 17,500 shares of Common Stock, all at an option price of $4.25
per share. In addition, pursuant to the aforementioned provisions, on December
13, 1995 the Committee conditionally granted, subject to stockholder approval,
to: (i) G. Chris Andersen, a Stock Option Award to purchase 15,000 shares of
Common Stock; (ii) William H. Fike, a Stock Option Award to purchase 12,500
shares of Common Stock; (iii) each of Bruce I. Raben and David A. Sachs, a Stock
Option Award to purchase 15,000 shares of Common Stock; and (iv) Adam E. Wolf, a
Stock Option Award to purchase 10,000 shares of Common Stock, in each case at a
per share option price equal to the closing price of Common Stock on the NYSE on
April 8, 1996. The Stock Option Awards described in the preceding two sentences
are collectively referred to herein as the "Initial Director Awards." The
Initial Director Awards shall vest immediately upon approval by the Company's
stockholders of the 1996 Plan and shall expire on December 13, 2000. In
approving the Initial Director Awards, the Board noted the increased workload of
the non-employee directors during 1995 as a result of negotiations relating to
Mr. Lenz's Retirement as well as the lack of a permanent Chairman since the date
of Mr. Lenz's retirement. See "Retirement of Randolph W. Lenz" above. The
Initial Executive Restricted Stock Award and the Initial Director Awards are
sometimes hereinafter referred to collectively as the "Initial Awards." In the
event that the stockholders do not ratify the Board of Directors' approval of
the 1996 Plan, the non-employee directors shall receive compensation under the
1994 Plan.
All actions taken to date by the Board of Directors and the Committee
under and with respect to the 1996 Plan, including the Initial Awards, are
conditioned upon approval by the Company's stockholders of the 1996 Plan. The
full text of the 1996 Plan is attached hereto as Exhibit A. Set forth below is a
general description of the 1996 Plan and the Initial Awards. The following
description of the 1996 Plan is qualified in its entirety by reference to
Exhibit A.
Description of the 1996 Plan and the Initial Awards
Shares Available
Subject to adjustment as described below under "Adjustments," the
aggregate number of shares of Common Stock (including Restricted Stock, if any)
optioned or granted under the 1996 Plan shall not exceed 300,000 shares. The
1996 Plan further provides that no participant may be granted, in the aggregate,
awards which would result in such participant receiving more than 20% of the
maximum number of shares available under the 1996 Plan.
<PAGE>
Eligibility
Employees (including officers of the Company as well as officers of the
Company who are also directors of the Company) serving in managerial,
administrative or professional positions with the Company or any of its
subsidiaries or affiliates participating in the 1996 Plan, may be selected by
the Committee to receive benefits under the 1996 Plan. Members of the Board of
Directors who are not employees of the Company or any of its subsidiaries or
affiliates will receive automatic grants of Stock Option Awards as described
below under "Director Options."
Stock Option Awards
The Committee may grant Stock Option Awards that entitle an optionee to
purchase shares of Common Stock at a price per share determined by the Committee
but such price shall not be less than the closing price of a share of Common
Stock on the NYSE on the trading day immediately preceding the date the award is
authorized. Notwithstanding the foregoing, (a) the Committee may specify such
other price as it deems appropriate and (b) if the participant to whom an
Incentive Stock Option (as defined below) is granted owns, at the time of the
grant, more than 10% of the combined voting power of the Company or a subsidiary
of the Company, the option price of each share of Common Stock subject to such
grant shall not be less than 110% of the closing price described in the
immediately preceding sentence. The option price is payable within ten business
days after the date of exercise (i) in cash, (ii) by the transfer to the Company
of whole shares of Common Stock that are already owned by the optionee, (iii) by
any combination of cash and such shares of Common Stock or (iv) on such other
terms and conditions as the Committee may determine.
A Stock Option Award shall be exercisable upon the earlier of: (a) such
period of time as the Committee shall determine and specify in the grant, but in
no event less than one year following the date of grant, (b) the participant's
death or disability or (c) a change of control of the Company (as defined
below). In addition, a Stock Option Award may only be exercised while the
participant is an active employee of the Company except: (i) in the case of the
participant's death or disability, (ii) during a six-month period commencing on
the date of a participant's termination of employment by the Company other than
for cause, (iii) during the three-year period commencing on the date of the
participant's termination of employment, by the participant or the Company,
after a change of control of the Company, unless such termination is for cause
or (iv) if the Committee decides that it is in the best interest of the Company
to permit individual exceptions.
No Stock Option Award may be exercised more than ten years from the
date of grant except that no Stock Option (as detailed below) granted to a
participant who, at the time of the grant, owns more than 10% of the combined
voting power of the Company, may be exercised more than five years from the date
of grant.
Under the terms of the 1996 Plan, a "change of control of the Company"
will be deemed to have occurred (i) if the direct or indirect holdings of
Randolph W. Lenz, the holder of approximately 42% of the outstanding shares of
the Company's Common Stock as of February 15, 1996, in the voting power or fair
market value of the Common Stock, fall below 20%, unless such holdings fall
below 20% as a result of the voluntary transfer by Mr. Lenz of his shares of
Common Stock, (ii) if any "person" or "group" within the meaning of Sections
13(d) and 14(d)(2) of the Exchange Act become the "beneficial owner," as defined
in Rule 13d-3 under the Exchange Act, of more of the then outstanding voting
securities of the Company than are then held either directly or indirectly by
Mr. Lenz, otherwise than through a transaction or transactions arranged by, or
consummated with the prior approval of the Company's Board of Directors and
(iii) if during any period of twelve consecutive months (not including any
period prior to the adoption of the 1996 Plan), Present Directors and/or New
Directors cease for any reason to constitute a majority of the thereof. "Present
Directors" means individuals who at the beginning of such period constituted the
members of the Board of Directors, and "New Directors" means individuals whose
election by the Board of Directors or whose nomination for election by the
stockholders of the Company was approved by a vote of at least two-thirds of the
Directors then still in office who were Present Directors or New Directors.
Stock Option Awards granted under the 1996 Plan may be options that are
intended to qualify as "incentive stock options" within the meaning of Section
422 of the Internal Revenue Code of 1988 (the "Code") ("Incentive Stock
Options") or options that are not intended to so qualify ("Non-Qualified Stock
Options").
<PAGE>
Stock Awards
A Stock Award involves the immediate transfer by the Company to a
participant of ownership of a specific number of shares of Common Stock,
including Restricted Stock, in consideration of the performance of services.
Stock Awards may be granted alone or in addition to other awards granted under
the 1996 Plan under such terms as the Compensation Committee may determine.
Restricted Stock may not be sold or transferred by the participant
until all restrictions that have been established by the Committee have lapsed;
however, the participant receiving Restricted Stock is immediately entitled to
voting, dividend and other ownership rights in the shares unless the Committee
shall otherwise determine. Upon a participant's termination of employment during
any period any restrictions are in effect, all non-vested Restricted Stock shall
be forfeited without compensation to the participant unless the Committee
decides it is in the best interest of the Company to permit individual
exceptions.
At or after the date of grant of any Stock Award, the Committee may
provide for the payment of a cash bonus intended to offset the amount of any tax
that the participant may incur in connection with the award (the "Tax-Offset
Rights").
Initial Executive Restricted Stock Award
The Initial Executive Restricted Stock Award was conditionally granted
in consideration of services theretofore rendered by Mr. DeFeo, and the shares
of Common Stock covered by such award will not be issued or transferred until
the stockholders have approved the 1996 Plan. The shares of Restricted Stock
covered by the Initial Executive Restricted Stock Award become vested to the
extent of one-fourth of the shares covered thereby on each of the first four
anniversaries of the date of grant. Certificates for the shares of Restricted
Stock covered by the Initial Executive Restricted Stock Award are to be issued
to Mr. DeFeo upon vesting.
Director Options
The 1996 Plan provides for automatic grants of Stock Option Awards
("Director Options") to individuals who are non-employee directors on or after
January 1, 1995 as follows:
(i) Upon appointment as a non-employee director after the date on
which the stockholders approved the 1996 Plan, a Director Option to purchase
25,000 shares of Common Stock; provided, however, that if the non-employee
director is in office as of the date of stockholder approval of the 1996 Plan,
such non-employee director shall be awarded a Director Option for the number of
shares of Common Stock that is the difference between 25,000 and the total
number of shares of Common Stock for which such non-employee director was
awarded a Director Option during his or her tenure as a non-employee director;
(ii) A Director Option to purchase an additional 7,500 shares of
Common Stock five business days following the date on which the Company's Annual
Report on Form 10-K is filed with the SEC at the closing price of a share of
Common Stock on the NYSE on the date of award, except that the Director Options
granted in consideration of services rendered during the Company's 1995 fiscal
year shall be a price of $4.25 per share;
(iii) A Director Option to purchase (a) an additional 5,000 shares of
Common Stock if such non-employee director is serving as chairperson of a
committee of the Board of Directors five business days following the date on
which the Company's Annual Report on Form 10-K is filed with the SEC, or (b) an
additional 2,500 shares of Common Stock if such non-employee director is serving
as a member of a committee (and not as chairperson of such committee) five
business days following the date on which the Company's Annual Report on Form
10-K is filed with the SEC; provided, however, that the sum of shares granted in
accordance with the provisions described in this clause (iii) shall not exceed
7,500 shares in any fiscal year. The price of the Director Options described in
this clause (iii) shall be the closing price of a share of Common Stock on the
NYSE on the date of award, except that the Director Options granted in
consideration of services rendered during the Company's 1995 fiscal year shall
be at a price of $4.25 per share.
<PAGE>
Director Options are subject to the terms and conditions governing
Stock Option Awards granted to other directors and employees, except that (a)
Director Options have a duration of five (5) years, and (b) except as otherwise
provided, the option price of each share of Common Stock subject to a Director
Option shall be the closing price of a share of Common Stock on the NYSE on the
trading day immediately preceding the date of the award.
Initial Director Awards
The Initial Director Awards were conditionally granted in consideration
of services theretofore rendered by the non-employee directors, subject to
stockholder approval. The Initial Director Awards shall become 100% vested
immediately upon approval by the Company's stockholders of the 1996 Plan. The
Initial Director Awards expire on December 13, 2000.
Transferability
A Stock Option Award is not transferable by a participant except by
will or the laws of descent and distribution, and during the participant's
lifetime, shall be exercisable only by the participant.
Adjustments
The number of shares of Common Stock covered by Stock Option Awards and
the option prices applicable thereto are subject to adjustment in the event of
stock splits, stock dividends, recapitalizations, mergers, consolidations,
combinations or exchanges of shares or other similar corporate changes
(including the exercise of currently existing warrants and the conversion of
currently existing preferred stock) or in the event of any special distribution
to the stockholders. The Committee may also make adjustments in the aggregate
number of shares that may be thereafter available for Stock Option Awards or
other awards, both under the 1996 Plan as a whole and with respect to
individuals.
Performance Awards
The Committee may grant, either alone or in addition to other awards
granted under the 1996 Plan, Performance Awards consisting of cash, or any other
form of property as the Committee shall determine, based upon a participant's
job performance. Performance Awards shall entitle the participant to receive
cash, or such other property, if such participant achieves the measures of
performance or other criteria established by the Committee in its absolute
discretion.
Administration and Amendments
The 1996 Plan is to be administered by a committee of not less than two
non-employee directors who are "disinterested persons" within the meaning of
Rule 16b-3 under the Exchange Act. If the Board has a Compensation Committee
(which it currently has), the Committee will be comprised of members of the
Compensation Committee who are non-employee directors. The Committee may make
grants to participants under any or a combination of all of the various
categories of awards that are authorized under the 1996 Plan.
The Board of Directors may amend the 1996 Plan, including amendments as
may be necessary or desirable as a result of changes in federal income tax or
other applicable laws, but may not, without the approval of the Terex
stockholders, (a) increase the total number of shares of Common Stock that may
be optioned or granted under the 1996 Plan or (b) amend any provision of the
1996 Plan which, with respect to directors and officers (as defined in Rule
16a-1(f) under the Exchange Act) of the Company, materially modifies the
eligibility requirements, materially increases benefits or materially increases
the number of shares issuable. In addition, the provisions relating to Director
Options may not be amended more than once in any six-month period, except to
comport with changes in the Code, the Employee Retirement Income Security Act of
1974 or the rules thereunder.
<PAGE>
The 1996 Plan also provides that to the extent that any provision
thereof or action by the Committee fails to comply with Rule 16b-3 under the
Exchange Act, such provision or act shall be null and void. Furthermore, should
the requirements of Rule 16b-3 change, the Board of Directors may amend the 1996
Plan to comply with the requirements of such Rule.
1996 Plan Benefits
Set forth in the table below are the numbers of shares of Common Stock
covered by Stock Option Awards and Stock Awards, including the Initial Awards,
that have been granted and remain outstanding under the 1996 Plan to date.
Number of Shares
Number of Shares Covered Covered by
Name and Position by Stock Option Awards Stock Awards
Ronald M. DeFeo - 0 - 45,000
President, Chief Executive
Officer and Chief Operating
Officer
Randolph W. Lenz - 0 - - 0 -
Chairman of the Board (1)
David J. Langevin - 0 - - 0 -
Executive Vice President
Marvin B. Rosenberg - 0 - - 0 -
Senior Vice President and
General Counsel
Ralph T. Brandifino - 0 - - 0 -
Senior Vice President and
Chief
Financial Officer
Brian J. Henry - 0 - - 0 -
Vice President and Treasurer
All executive officers as a group - 0 - 45,000
(6 persons)
All non-employee directors as a 202,500 - 0 -
group
(5 persons)
All employees, not including Named - 0 - - 0 -
Executive Officers, as a group
(100 persons)
----------------------------
(1) Mr. Lenz retired as Chairman on August 28, 1995. (See "Retirement of
Randolph W. Lenz" above.)
Except as described above under "Initial Restricted Stock Award" and
"Initial Director Awards," the types of awards, and the amounts and recipients
thereof, that will be granted under the 1996 Plan in the future are not
determinable at this time.
Federal Income Tax Consequences
The following is a brief summary of certain of the federal income tax
consequences of certain transactions under the 1996 Plan based on federal income
tax laws currently in effect. This summary is not intended to be exhaustive and
does not describe state, local or foreign tax consequences.
Tax Consequences to Participants
Non-Qualified Stock Options. In general: (i) no income will be
recognized by an optionee at the time a Non-Qualified Stock Option is granted;
(ii) at the time of exercise of a Non-Qualified Stock Option, ordinary income
will be recognized by the optionee in an amount equal to the difference between
the option price paid for the shares and the fair market value of the shares if
they are non-restricted on the date of exercise; and (iii) at the time of sale
of shares acquired pursuant to the exercise of a Non-Qualified Stock Option, any
appreciation (or depreciation) in the value of the shares after the date of
exercise will be treated as either short-term or long-term capital gain (or
loss) depending on how long the shares have been held.
<PAGE>
Incentive Stock Options. No income generally will be recognized by an
optionee upon the grant or exercise of an Incentive Stock Option. For purposes
of the alternative minimum tax, however, the difference between the option price
and the fair market value of the Common Stock on the date of exercise is an
adjustment in computing the optionee's alternative minimum taxable income. If
shares of Common Stock are issued to an optionee pursuant to the exercise of an
Incentive Stock Option and no disqualifying disposition of the shares is made by
the optionee within two years after the date of grant or within one year after
the transfer of the shares to the optionee, then upon the sale of the shares any
amount realized in excess of the option price will be taxed to the optionee as
long-term capital gain and any loss sustained will be a long-term capital loss.
If shares of Common Stock acquired upon the exercise of an Incentive
Stock Option are disposed of prior to the expiration of either holding period
described above, the optionee generally will recognize ordinary income in the
year of disposition in an amount equal to any excess of the fair market value of
the shares at the time of exercise (or, if less, the amount realized on the
disposition of the shares in a sale or exchange) over the option price paid for
the shares. Any further gain (or loss) realized by the optionee generally will
be taxed as short-term or long-term capital gain (or loss) depending on the
holding period.
Restricted Stock. A recipient of shares of Restricted Stock generally
will be subject to tax at ordinary income rates on the fair market value of the
shares, reduced by any amount paid by the recipient, at such time as the shares
are no longer subject to a risk of forfeiture or restrictions on transfer for
purposes of Section 83 of the Code. However, a recipient who so elects under
Section 83(b) of the Code within thirty days of the date of transfer of the
shares will recognize ordinary income on the date of transfer of the shares
equal to the excess of the fair market value of the shares (determined without
regard to the risk of forfeiture or restrictions on transfer) over any purchase
price paid for the shares. If a Section 83(b) election has not been made, any
dividends received with respect to shares of Restricted Stock that are subject
at that time to a risk of forfeiture or restrictions on transfer generally will
be treated as compensation that is taxable as ordinary income to the recipient.
A recipient of Tax-Offset Rights with respect to a Restricted Stock
award will be subject to tax at ordinary income rates on the amount of any cash
received.
Performance Awards. A recipient of a Performance Award will be subject
to tax at ordinary income rates on the amount of any cash received.
Special Rules Applicable to Directors and Officers. In limited
circumstances where the sale of stock that is received as the result of a grant
of an award could subject a director or an officer to suit under Section 16(b)
of the Exchange Act, the tax consequences to the director or officer may differ
from the tax consequences described above. In these circumstances, unless a
Section 83(b) election has been made, the principal difference usually will be
to postpone valuation and taxation of the stock received so long as the sale of
the stock received could subject the director or officer to suit under Section
16(b) of the Exchange Act, but not longer than six months.
Tax Consequences to the Company or Subsidiary
To the extent that a participant recognizes ordinary income in the
circumstances described above, the Company or subsidiary for which the
participant performs services will be entitled to a corresponding deduction
provided that, among other things, (i) such deduction is reasonable in amount,
constitutes an ordinary and necessary business expense, is not subject to the
$1,000,000 annual compensation limitation set forth in Section 162(m) of the
Code and does not constitute an "excess parachute payment" within the meaning of
Section 280G of the Code, and (ii) any applicable withholding obligations are
satisfied.
Recommendation
The Board of Directors believes that the approval of the 1996 Plan and
the Initial Awards is in the best interest of the Company and the Terex
stockholders because the 1996 Plan and the Initial Awards will enable the
Company to provide competitive equity incentives to directors and officers and
other key employees to enhance the profitability of the Company and increase
stockholder value.
<PAGE>
The Board of Directors recommends that the stockholders vote FOR
approval of the 1996 Plan and the Initial Awards.
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 1997 Annual Meeting of Stockholders must be
received at the Company's offices at 500 Post Road East, Westport, Connecticut
06880, no later than December 15, 1996.
ANNUAL REPORT TO STOCKHOLDERS
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, including financial statements, is being mailed to
stockholders of the Company with this Proxy Statement. The Annual Report does
not constitute a part of the Proxy Solicitation materials. Stockholders may,
without charge, obtain copies of the Company's Annual Report on Form 10-K filed
with the SEC. Requests for this report should also be addressed to the Company's
Secretary.
STOCKHOLDERS ARE URGED TO FORWARD THEIR PROXIES WITHOUT DELAY. A
PROMPT RESPONSE WILL BE GREATLY APPRECIATED.
By Order of the Board of Directors
Marvin B. Rosenberg
Secretary
April 5, 1996
Westport, Connecticut
<PAGE>
THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF TEREX CORPORATION
The undersigned hereby appoint Ronald M. DeFeo, Marvin B. Rosenberg, and
David J. Langevin, and any either one 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, May 15, 1996 at the
Westport Inn, 1595 Post Road East, Westport, Connecticut and any adjournment
thereof, as follows:
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, FOR THE RATIFICATION OF THE 1996
TEREX CORPORATION LONG TERM INCENTIVE PLAN AND INITIAL AWARDS GRANTED THEREUNDER
IN ITEM 3, AND IN THE DISCRETION OF THE BOARD OF DIRECTORS IN CONNECTION WITH
ITEM 4. PLEASE MARK BOX OR x .
1. ELECTION OF DIRECTORS: Ronald M. DeFeo, Marvin B. Rosenberg, G. Chris
Andersen, William H. Fike, Bruce I. Raben, David A. Sachs, Adam E. Wolf
FOR all WITHHOLD (INSTRUCTION: To withhold authority to
nominees AUTHORITY vote for an individual nominee, write
listed to vote for all that nominee's name on the space
above nominees listed above provided below.)
[ ] [ ] ___________________________________
2. RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. RATIFICATION OF 1996 TEREX CORPORATION LONG-TERM INCENTIVE PLAN AND INITIAL
AWARDS GRANTED THEREUNDER
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. Upon such other business as may Please date, sign and mail this
properly come before the meeting or card in the enclosed
any adjournments, hereby revoking any envelope.
proxy heretofore given.
__________________________
(Stockholder's Signature)
__________________________
(Stockholder's Signature)
Dated __________________, 1996
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.
1996 ANNUAL MEETING
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY.
1996 TEREX CORPORATION
LONG-TERM INCENTIVE PLAN
ARTICLE I
Purpose
The purpose of the 1996 Terex Long-Term Incentive Plan (hereinafter
referred to as the "Plan") is to (a) advance the interests of Terex Corporation
(the "Corporation") and its stockholders by providing incentives and rewards to
those employees who are in a position to contribute to the long-term growth and
profitability of the Corporation and to outside directors; (b) assist the
Corporation and its subsidiaries and affiliates in attracting, retaining, and
motivating highly qualified employees and outside directors for the successful
conduct of their business; and (c) make the Corporation's compensation program
competitive with those of other major employers.
ARTICLE II
Definitions.
2.1 A "Change in Control of the Corporation" shall be deemed to occur in
the event that any of the following circumstances have occurred:
(i) the direct and indirect holdings of Randolph W. Lenz ("RWL"), in the
voting power or fair market value of the stock of the Corporation, fall below 20
percent, provided, however, that if such holdings of RWL fall below 20 percent
as a result of the voluntary sale or other voluntary transfer by RWL of his
shares of stock of the Corporation, solely for purposes of the Plan, a Change in
Control of the Corporation shall not be deemed to occur with respect to RWL;
(ii) any "person" or "group" within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act becomes the "beneficial owner", as defined in rule
13d-3 under the Exchange Act, of more of the then outstanding voting securities
of the Corporation than are then held either directly or indirectly by Randolph
W. Lenz, otherwise than through a transaction or transactions arranged by, or
consummated with the prior approval of, the Board of Directors; or
(iii) if during any period of 12 consecutive months (not including any
period prior to the adoption of this section), Present Directors and/or New
Directors cease for any reason to constitute a majority of the Board.
For purposes of Section 2.1, the rules of Section 318(a) of the Code and
the regulations issued thereunder shall be used to determine stock ownership.
For purposes of subsection (iii) of Section 2.1, "Present Directors" shall
mean individuals who at the beginning of such consecutive 12 month period were
members of the Board of Directors and "New Directors" shall mean any director
whose election by the Board or whose nomination for election by the
Corporation's stockholders was approved by a vote of at least two-thirds of the
Directors then still in office who were Present Directors or New Directors.
2.2 "Code" means the Internal Revenue Code of 1986, as now or hereafter
amended.
2.3 "Committee" means the committee established pursuant to Article IV.
2.4 "Disability" means a Participant's inability to engage on any
substantial gainful activity because of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted,
or can be expected to last, for a continuous period of six (6) months or longer.
2.5 "Employee" means all employees of the Corporation or of a subsidiary or
affiliate of the Corporation participating in the Plan, including officers of
the Corporation, as well as officers of the Corporation who are also directors
of the Corporation. However, an individual who is a member of the Committee
shall not be an "Employee" for purposes of this Plan.
2.6 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
2.7 "Incentive Stock Option" means any stock option granted pursuant to
this Plan which is designated as such by the Committee and which complies with
Section 422 of the Code.
2.8 "Market Price" is the closing sale price of a share of Stock as
reported by the New York Stock Exchange on the last trading day immediately
prior to the date an option hereunder is exercised or such other date as the
value of a share of Stock is to be determined.
2.9 "Non-Qualified Stock Option" means any stock option granted pursuant to
this Plan which is not an Incentive Stock Option..
2.10 "Outside Director" means a member of the Board of Directors of the
Corporation who is not an Employee.
2.11 "Participant" means a Participant as defined in Article III.
2.12 "Restricted Stock" means Stock subject to restrictions on the transfer
of such Stock, conditions of forfeitability of such Stock, or any other
limitations or restrictions as determined by the Committee.
2.13 "Stock" means Stock as defined in Section 5.1.
ARTICLE III
Participation
The participants in the Plan ("Participants") shall be (a) those Employees
serving in a managerial, administrative, or professional position who are
selected to participate in the Plan by the Committee of the Board of Directors
of the Corporation named to administer the Plan pursuant to Article IV and (b)
Outside Directors.
ARTICLE IV
Administration
The Plan shall be administered and interpreted by a committee of two or
more members of the Board of Directors who are Outside Directors (hereinafter
referred to as the "Committee") appointed by the Board. If the Board has
appointed a Compensation Committee, the Committee shall be comprised of the
members of the Compensation Committee that are Outside Directors. All decisions
and acts of the Committee shall be final and binding upon all Participants. The
Committee shall: (i) determine the number and types of awards to be made under
the Plan; (ii) select the awards to be made to Participants; (iii) set the
option price, the number of options to be awarded, and the number of shares to
be awarded out of the total number of shares available for award; (iv) delegate
to the President, Executive Vice President and Chief Financial Officer (acting
as a group) of the Corporation the right to allocate awards among Employees who
are not directors or officers (as defined in Rule 16a-1(f) under the Exchange
Act) of the Corporation, such delegation to be subject to such terms and
conditions as the Committee in its discretion shall determine; (v) establish
administrative regulations to further the purpose of the Plan; and (vi) take any
other action desirable or necessary to interpret, construe or implement properly
the provisions of the Plan.
ARTICLE V
Awards
5.1 Form of Awards. Awards under this Plan may be in any of the following
forms (or a combination thereof): (i) stock option awards in accordance with
Article VI; (ii) grants of Stock, including Restricted Stock, in accordance with
Article VII; or (iii) Performance Awards in accordance with Article VIII.
"Stock" shall mean the common stock, $.01 par value, of the Corporation. All
awards (other than Performance Awards) shall be made pursuant to award
agreements between the Participant and the Corporation. The agreements shall be
in such form as the Committee approves from time to time.
5.2 Maximum Amount Available. The total number of shares of Stock
(including Restricted Stock, if any) optioned or granted under this Plan during
the term of the Plan shall not exceed 300,000 shares except as increased or
otherwise adjusted in accordance with Section 5.3. No Participant may be
granted, in the aggregate, awards which would result in the Participant
receiving more than 20% of the maximum number of shares available for award
under the Plan. Solely for the purpose of computing the total number of shares
of Stock optioned or granted under this Plan, there shall not be counted any
shares which have been forfeited if the Participant received no benefits of
ownership from the Stock and any shares covered by an option which, prior to
such computation, has terminated in accordance with its terms or has been
canceled by the Participant or the Corporation.
5.3 Adjustment in the Event of Recapitalization, Etc. In the event of any
change in the capital structure of the Corporation by reason of any stock split,
stock dividend, recapitalization, merger, consolidation, combination or exchange
of shares or other similar corporate change (including the exercise of currently
existing Warrants and the conversion of currently existing Preferred Stock) or
in the event of any special distribution to the stockholders, the Committee
shall make such equitable adjustments in the number of shares and prices per
share applicable to options then outstanding and in the number of shares which
are available thereafter for Stock Option Awards (as defined in Section 6.1) or
other awards, both under the Plan as a whole and with respect to individuals, as
the Committee determines are necessary and appropriate. Any such adjustment
shall be conclusive and binding for all purposes of the Plan.
ARTICLE VI
Stock Options
6.1 Grant of Award. The Corporation may award options to purchase Stock,
including Restricted Stock, (hereinafter referred to as "Stock Option Awards")
to such Participants (other than Outside Directors) as the Committee, or the
Chairman, President, Executive Vice President and Chief Financial Officer
(acting as a group) of the Corporation, if the Committee in its discretion
delegates the right to allocate awards pursuant to Article IV, authorizes and
under such terms as the Committee establishes. The Committee shall determine
with respect to each Stock Option Award and designate in the grant whether a
Participant is to receive an Incentive Stock Option or a Non-Qualified Stock
Option.
6.2 Awards to Outside Directors. The consideration described in this
Section 6.2 shall be in lieu of any unpaid consideration payable to Outside
Directors in accordance with the provisions of the 1994 Terex Corporation
Long-Term Incentive Plan. Any individual who is appointed as an Outside Director
after the date on which this Plan is approved by the Stockholders shall be
awarded an option to purchase 25,000 shares of Stock. Any individual who is
serving as an Outside Director on the date on which this Plan is approved by the
stockholders shall be awarded an option to purchase the number of shares of
Stock that is the difference between 25,000 and the total number of shares of
stock which such Outside Director could purchase pursuant to an option to
purchase awarded during his or her tenure as an Outside Director. Any individual
who is an Outside Director on or after January 1, 1995 shall be awarded an
option to purchase 7,500 shares of Stock five (5) business days following the
date on which the Company's Annual Report on Form 10-K is filed with the
Securities and Exchange Commission at the Market Price on the date of award,
except that Stock Option Awards granted in consideration of services rendered in
1995 shall be at a price of $4.25 per share. Finally, any individual who is an
Outside Director on or after January 1, 1995 and who is serving five (5)
business days following the date on which the Company's Annual Report on Form
10-K is filed with the Securities and Exchange Commission (i) as a chairperson
of a committee to the Board of Directors shall be awarded an option to purchase
5,000 shares of Stock, or (ii) as a member of a committee to the Board of
Directors (and not as chairperson of such committee), shall be awarded an option
to purchase 2,500 shares of Stock, in both cases, five (5) business days
following the date on which the Company's Annual Report on Form 10-K is filed
with the Securities and Exchange Commission, at the Market Price on the date of
award, except that Stock Option Awards granted in consideration of services
rendered in 1995 shall be at a price of $4.25 per share; provided, however, that
the sum of the shares of Stock which an Outside Director could purchase in
accordance with clauses (i) and (ii) above shall not exceed 7,500 shares of
Stock in any fiscal year regardless of the number of committees on which the
Outside Director serves. A Stock Option Award made pursuant to this Section 6.2
shall have a duration of five (5) years commencing on the date of the award. The
option price of each share of Stock subject to a Stock Option Award under this
Section 6.2 shall be the closing price of a share of Stock on the trading day
immediately preceding the date of the award as reported on the New York Stock
Exchange except as provided above. Years of service completed shall include all
years served whether prior to, or subsequent to, the adoption of this Plan.
Options awarded under this Section 6.2 shall be subject to the terms and
conditions of Sections 6.4, 6.5 and 6.6 except to the extent that the provisions
of such Sections are inconsistent with the provisions of this Section 6.2.
6.3 Option Price. Except as otherwise provided in Section 6.2 and this
Section 6.3, the option price of each share of Stock subject to a Stock Option
Award shall be (i) determined by the Committee but shall be no less than the
closing price of a share of Stock on the trading day immediately preceding the
date the award is authorized as reported on the New York Stock Exchange and (ii)
specified in the grant. Notwithstanding the above to the contrary, (a) the
Committee may specify such other price as it deems appropriate and (b) if the
Participant to whom an Incentive Stock Option is granted owns, at the time of
the grant, more than ten percent (10%) of the combined voting power of the
Corporation or a subsidiary of the Corporation, the option price of each share
of Stock subject to such grant shall be not less than one hundred ten percent
(110%) of the closing price described in the preceding sentence.
6.4 Terms of Option. A stock option by its terms shall not be transferable
by the Participant other than by will or the laws of descent and distribution,
and, during the Participant's lifetime, shall be exercisable only by the
Participant. A stock option by its terms also shall be of no more than ten (10)
years' duration, except that an Incentive Stock Option granted to a Participant
who, at the time of the grant, owns Stock representing more than ten percent
(10%) of the combined voting power of the Corporation shall by its terms be of
no more than five (5) years' duration. Except as otherwise provided in Section
6.2, a stock option by its terms shall be exercisable only after the earliest
of: (i) such period of time as the Committee shall determine and specify in the
grant, but in no event less than one year following the date of grant of such
award; (ii) the Participant's death or Disability; or (iii) a Change in Control
of the Corporation.
Except as otherwise provided in Section 6.2, an option is only exercisable
by a Participant while the Participant is in active employment with the
Corporation, or its subsidiary or affiliate, except (i) in the case of a
Participant's death or Disability; (ii) during a six (6)-month period commencing
on the date of a Participant's termination of employment by the Corporation
other than for cause; (iii) during the three-year period commencing on the date
of the Participant's termination of employment, by the Participant or the
Corporation, after a Change in Control of the Corporation, unless such
termination of employment is for cause; or (iv) if the Committee decides that it
is in the best interest of the Corporation to permit individual exceptions. An
option may not be exercised pursuant to this paragraph after the expiration date
of the option.
6.5 Exercise of Option. An option may be exercised with respect to part or
all of the shares subject to the option by giving written notice to the
Corporation of the exercise of the option. The option price for the shares for
which an option is exercised shall be paid on or within ten business days after
the date of exercise in cash, in whole shares of Stock owned by the Participant
prior to exercising the option, or in a combination of cash and such shares of
Stock or on such other terms and conditions as the Committee determines. The
value of any share of Stock delivered in payment of the option price shall be
its Market Price on the date the option is exercised.
6.6 Dividends on Shares Covered By Options. The Committee may, in its
discretion, grant to Participants holding stock options the right to receive
with respect to each share covered by an option payments of amounts equal to the
regular cash dividends paid to holders of Stock during the period that the
option is outstanding.
ARTICLE VII
Grants of Stock
The Committee may grant, either alone or in addition to other awards
granted under the Plan, shares of Stock (including Restricted Stock) to such
Participants as the Committee, or the Chairman, President, Executive Vice
President and Chief Financial Officer (acting as a group) of the Corporation, if
the Committee in its discretion delegates the right to allocate awards pursuant
to Section 4, authorizes and under such terms as the Committee establishes. The
Committee, in its discretion, may also make a cash payment to a Participant
granted shares of Stock under the Plan to allow such Participant to satisfy tax
obligations arising out of receipt of the Stock.
ARTICLE VIII
Performance Awards
The Committee may grant, either alone or in addition to other awards
granted under the Plan, cash bonus awards based on a Participant's job
performance ("Performance Awards") to such Participants as the Committee, or the
Chairman, President, Executive Vice President and Chief Financial Officer
(acting as a group) of the Corporation, if the Committee in its discretion
delegates the right to allocate awards pursuant to Section 4, authorizes and
under such terms as the Committee establishes. Performance Awards may be paid in
cash or any other form of property as the Committee shall determine. Performance
Awards shall entitle the Participant to receive an award if the measures of
performance or other criteria established by the Committee are met. The measures
of performance or other criteria shall be established by the Committee in its
absolute discretion. The Committee shall determine the times at which
Performance Awards are to be made and all conditions of such awards. Performance
awards shall be subject to any applicable federal, state or local withholding
tax requirements.
ARTICLE IX
Withholding
In order to enable the Corporation to meet any applicable federal, state or
local withholding tax requirements arising as a result of the exercise of a
stock option, the grant of shares of Stock, or the vesting of Restricted Stock,
a Participant shall pay to the Corporation the amount of tax to be withheld. In
the alternative, the Participant may elect to satisfy such obligation (i) by
having the Corporation withhold shares that otherwise would be delivered to the
Participant pursuant to the exercise of the option, the grant of Stock, or the
vesting of Restricted Stock for which the tax is being withheld, (ii) by
delivering to the Corporation other shares of Stock owned by the Participant
prior to exercising the option, receiving the awarded shares, or becoming vested
in the Restricted Stock or (iii) by making a payment to the Corporation
consisting of a combination of cash and such shares of Stock. Such an election
shall be subject to the following: (a) the election shall be made in such manner
as may be prescribed by the Committee; (b) the election shall be made prior to
the date to be used to determine the tax to be withheld; and (c) if the
Participant is a person subject to Section 16 of the Exchange Act, the election
shall be irrevocable and shall not be made within six months after the grant of
the option, except that this six-month limitation shall not apply in the event
the Participant delivers to the Corporation previously owned shares of Stock,
and shall be made either at least six months prior to the date to be used to
determine the tax to be withheld or during a ten-day period beginning on the
third business day following the date of release of the quarterly or annual
summary statements of sales and earnings of the Corporation and ending on the
twelfth (12th) business day following such date.
ARTICLE X
General Provisions
10.1 Any assignment or transfer of any awards without the written consent
of the Corporation shall be null and void.
10.2 Nothing contained herein shall require the Corporation to segregate
any monies from its general funds, or to create any trusts, or to make any
special deposits for any immediate or deferred amounts payable to any
Participant for any year.
10.3 Participation in this Plan shall not (i) affect the Corporation's
right to discharge a Participant or (ii) constitute an agreement of employment
between a Participant and the Corporation.
10.4 Restricted Stock may not be sold or transferred by the Participant
until any restrictions that have been established by the Committee have lapsed.
10.5 The Participant shall have, with respect to Restricted Stock, all of
the rights of a stockholder of the Corporation, including the right to vote the
shares and the right to receive any dividends, unless the Committee shall
otherwise determine.
10.6 Upon a Participant's termination of employment during the period any
restrictions are in effect, all Restricted Stock shall be forfeited without
compensation to the Participant unless the Committee decides that it is in the
best interest of the Corporation to permit individual exceptions.
ARTICLE XI
Amendment, Suspension, or Termination
11.1 General Rule. The Board of Directors may suspend, terminate, or amend
the Plan, including but not limited to such amendments as may be necessary or
desirable resulting from changes in the federal income tax laws and other
applicable laws, but may not, without approval by the holders of a majority of
all outstanding shares entitled to vote on the subject at a meeting of
stockholders of the Corporation, (a) increase the total number of shares of
Stock that may be optioned or granted under the Plan or (b) amend any provision
of the Plan which, with respect to directors and officers (as defined in Rule
16a-1(f) of the Exchange Act) of the Corporation, materially modifies the
eligibility requirements, materially increases benefits or materially increases
the number of shares issuable. However, in no event shall any provision of the
Plan applicable to Stock Option Awards to Outside Directors be amended more
often than once in any six-month period, except to comport to changes in the
Code, ERISA or the rules thereunder.
11.2 Compliance with Rule 16b-3. With respect to persons subject to Section
16 of the Exchange Act, transactions under the Plan are intended to comply with
the requirements of Rule 16b-3 under the Exchange Act, as applicable during the
term of the Plan. To the extent that any provision of the Plan or action by the
Committee or its delegates fail to so comply, it shall be deemed null and void,
to the extent permitted by law and deemed advisable by the Committee. Should the
requirements of Rule 16b-3 change, the Board of Directors may amend this Plan to
comply with the requirements of that rule or its successor provision or
provisions.
ARTICLE XII
Effective Date and Duration of the Plan
This Plan shall be effective on the date of the approval of the Plan by the
holders of a majority of the shares of Stock; provided, however, that the
adoption of the Plan is subject to such shareholder approval within twelve (12)
months before or after the date of adoption of the Plan by the Board of
Directors. The Plan shall be null and void and of no effect if the foregoing
condition is not fulfilled, and in such event each Stock Option Award and Stock
grant hereunder shall, notwithstanding any of the preceding provisions of the
Plan, be null and void and of no effect.
