As filed with the Securities and Exchange Commission on November 6, 1997.
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Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-3
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TEREX CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 3537 34-1531521
(State or other jurisdiction (Primary standard industrial (I.R.S. Employer
incorporation or organization)classification code number) Identification No.)
500 Post Road East
Westport, Connecticut 06880
(203) 222-7170
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
-----------------------
Marvin B. Rosenberg, Esq.
TEREX CORPORATION
500 Post Road East
Westport, Connecticut 06880
(203) 222-7170
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies To:
Robinson Silverman Pearce Aronsohn & Berman LLP
1290 Avenue of the Americas
New York, New York 10104
Attention: Stuart A. Gordon, Esq.
Eric I Cohen, Esq.
-----------------------
Approximate date of commencement of proposed sale to public:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]___________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]___________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]______
CALCULATION OF REGISTRATION FEE
Proposed
Maximum Proposed Amount
Title of Offering Maximum of
Each Class of Amount Price Aggregate Registra-
Securities to to be Per Offering tion
be Registered Registered Share(1) Price Fee
Common Stock,
par value $.01(1) $16,000,000(2) $16,000,000(2) $16,000,000(2) $4,848.48(3)
(1) Subject to note (2) below, there is being registered hereunder an
indeterminate number of shares of Common Stock of the Registrant.
(2) In no event will the aggregate maximum offering price of all securities
issued pursuant to this Registration Statement exceed $16,000,000.
(3) Estimated solely for purposes of calculating the registration fee pursuant
to the provisions of Rule 457(c) under the Securities Act of 1933, as
amended.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED NOVEMBER 6, 1997
$16,000,000
TEREX CORPORATION
Common Stock
_______________________________
This Prospectus relates to the offer and sale by the holders thereof (the
"Selling Stockholders") of the shares of common stock, par value $.01 per share
("Common Stock"), of Terex Corporation, a Delaware Corporation ("Terex" or the
"Company"), issued by the Company to the Selling Stockholders in exchange for
all of the outstanding shares of Series A Redeemable Exchangeable Preferred
Stock, par value $.01 per share, of Terex Cranes, Inc., a subsidiary of the
Company, in connection with the merger of Terex Cranes, Inc. with and into the
Company.
The Common Stock is listed on the NYSE under the trading symbol "TEX." On
November 4, 1997, the closing price of the Common Stock on the NYSE was $21-
3/16 per share.
The shares of Common Stock offered hereby may be sold by the Selling
Stockholders to purchasers directly, or through underwriters, dealers or agents
who may receive compensation in the form of underwriting discounts, concessions
or commissions from the Selling Stockholders and/or the purchasers of such
shares of Common Stock for whom they may act as agents. The Selling
Stockholders and any such underwriters, dealers or agents that participate in
the distribution of such shares of Common Stock may be deemed to be
underwriters under the Securities Act of 1933, as amended (the "Securities
Act"), and any profit on the sale of such shares of Common Stock by them and
any discounts, commissions or concessions received by them may be deemed to be
underwriting discounts and commissions under the Securities Act. The shares of
Common Stock offered hereby may be sold in one or more transactions at a fixed
offering price, which may be changed, or at varying prices determined at the
time of sale or at negotiated prices. The distribution of the shares of Common
Stock by the Selling Stockholders may be effected in one or more transactions
that may take place on the New York Stock Exchange (the "NYSE"), including
ordinary brokers' transactions, privately-negotiated transactions or through
sales to one or more broker-dealers for resale of such shares as principals, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Usual and customary or
specifically negotiated brokerage fees, discounts and commissions may be paid
by the Selling Stockholders in connection with such sales of securities. In
order to comply with certain states securities laws, if applicable, the shares
of Common Stock will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In certain states the shares of Common Stock may
not be sold unless the shares of Common Stock have been registered or qualified
for sale in such state, or unless an exemption from registration or
qualification is available and is obtained. See "Plan of Distribution." The
Company will not receive any cash proceeds from the sale by the Selling
Stockholders of the shares of Common Stock offered hereby.
_____________________________________
FOR A DISCUSSION OF CERTAIN MATTERS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE
INVESTORS, SEE "RISK FACTORS," ON PAGE 4.
_____________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
_____________________________________
The date of this Prospectus is ______________, 1997.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith is required to file reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information can be inspected and copied at the
public reference facilities maintained by the Commission at its offices at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at
the regional offices of the Commission located at Seven World Trade Center,
13th Floor, New York, New York 10048 and at Northwestern Atrium Center, 500
West Madison Street, suite 1400, Chicago, Illinois 60661. Copies of such
materials can also be obtained by mail from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates. Additionally, the Commission maintains a Web site
containing reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. The
address for such Web site is http://www.sec.gov.
In addition, the Common Stock is listed on the NYSE under the symbol "TEX"
and reports, proxy statements and other information concerning the Company may
also be inspected at the offices of the NYSE, 20 Broad Street, New York, New
York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with all amendments, exhibits, schedules, and supplements
thereto, the "Registration Statement") under the Securities Act with respect to
the Common Stock offered hereby. This Prospectus, which constitutes a part of
the Registration Statement, does not contain all of the information set forth
in the Registration Statement and the exhibits and schedules thereto, as
permitted by the rules and regulations of the Commission. Statements contained
in this Prospectus as to the contents of any contract or other document which
is filed as an exhibit to the Registration Statement are not necessarily
complete, and each statement is qualified in its entirety by reference to the
full text of such contract or document. For further information with respect
to the Company and the Common Stock offered hereby, reference is hereby made to
the Registration Statement, including the exhibits thereto and the financial
statements, notes and schedules filed as a part thereof, which may be inspected
and copied at the public reference facilities of the Commission referred to
above.
The Company furnishes stockholders with annual reports containing audited
financial statements. The Company also furnishes its common stockholders with
proxy material for its annual meetings complying with the proxy requirements of
the Exchange Act.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents which have been filed by the Company with the
Commission are incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-K for the year ended December
31, 1996.
2. The Company's Notice of Annual Meeting of Stockholders and Proxy
Statement dated April 4, 1997.
3. The Company's Current Report on Form 8-K dated April 21, 1997, as
amended on Form 8-K/A dated May 22, 1997.
4. The Company's Current Report on Form 8-K dated February 26, 1997.
5. The Company's Current Report on Form 8-K dated July 22, 1997.
6. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997 and June 30, 1997.
7. The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A dated February 22, 1991.
8. All other reports filed by the Company pursuant to Section 13(a) or
15(d) of the Exchange Act since December 31, 1996.
All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing
of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in and to be a part of
this Prospectus from the date of filing of such reports and documents.
Any statement contained herein or in a document which is incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement in any subsequently filed
document that is also deemed to be incorporated by reference herein modifies or
supersedes such prior statement. Any statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
This Prospectus incorporates documents by reference which are not
presented or delivered herewith. These documents (other than exhibits to such
documents) are available upon written or oral request from the Company, without
charge, to each person to whom a copy of this Prospectus has been delivered,
including a copy of its most recent Annual Report to Stockholders. Requests
should be directed to Terex Corporation, Attention: Secretary, 500 Post Road
East, Westport, Connecticut 06880 (telephone (203) 222-7170).
<PAGE>
RISK FACTORS
In addition to other matters described in this Prospectus, the following
should be carefully considered in connection with an investment in Common
Stock:
Significant Leverage
The Company is highly leveraged. The ratio of the Company's indebtedness
to total capitalization was 124%, 106% and 87% at December 31, 1995,
December 31, 1996 and September 30, 1997, respectively. The significant
decrease from December 31, 1996 to September 30, 1997 was caused by the
issuance of 5,700,000 shares of Common Stock in the third quarter of 1997,
which resulted in the Company receiving proceeds of $104.6 million, net of
underwriting discounts, commissions and other expenses. A portion of the
proceeds from the stock offering were used to redeem $83.3 million of senior
secured notes. Net cash flows for the Company were ($65.3) million for the
nine months ended September 30, 1997, $65.0 million for the year ended
December 31, 1996 and ($1.2) million for the year ended December 31, 1995.
This substantial leverage has several important consequences, including
the following: (i) a substantial portion of the Company's net cash provided by
operating activities, will be dedicated to servicing its indebtedness and
(ii) the Company's ability to withstand competitive pressures, adverse economic
conditions and adverse changes in governmental regulations, to make
acquisitions, and to take advantage of significant business opportunities that
may arise, may be negatively affected. The Company's ability to meet its debt
service obligations and to reduce its total indebtedness will be dependent upon
future performance, which will be subject to general economic conditions, its
ability to achieve cost savings and other financial, business and other factors
affecting the operations of the Company, many of which are beyond its control.
If the Company is unable to generate sufficient operating cash flow in the
future to service its debt, it may be required to refinance all or a portion of
such debt or to obtain additional financing. There can be no assurance,
however, that any refinancing would be possible or that any additional
financing could be obtained.
Restrictions Imposed by the Terms of the Company's Indebtedness
The Indenture governing the Company's Senior Secured Notes (as defined
herein) and the New Credit Facility (as defined herein) impose upon the Company
certain financial and operating covenants, including, among others,
restrictions on the ability of the Company to incur debt, pay dividends, or
take certain other corporate actions. In addition, the New Credit Facility
requires that the Company maintain a certain financial ratio and provides for
limitations on capital expenditures. The foregoing covenants may restrict the
Company's ability to borrow additional funds, dispose of assets, or otherwise
pursue its business strategies, and may impair the Company's ability to obtain
additional financing to fund future working capital requirements, capital
expenditures, acquisitions, and other general corporate purposes. See "--
Acquisition Strategy; Integration of Acquired Businesses." Changes in economic
or business conditions, results of operations or other factors could in the
future cause a violation of one or more covenants in the Company's debt
instruments.
Industry Cyclicality and Substantial Competition
Sales of products manufactured and sold by the Company have historically
been subject to substantial cyclical variation extending over a number of years
based on general economic conditions. Downward cycles result in reductions in
product sales which adversely impact the Company's results of operations. The
Company recognizes the potential adverse impact of cyclical variations in sales
of products and has taken a number of steps to reduce its fixed costs to
decrease the impact of cyclicality.
The markets in which the Company competes are highly competitive. To
successfully compete, the Company must remain competitive in the areas of
quality, price, product line, ease of use, safety, comfort and customer
service. Many of the Company's competitors have greater financial resources
than the Company.
Acquisition Strategy; Integration of Acquired Businesses
The Company expects to continue a strategy of identifying and acquiring
businesses with complementary products and services which could be expected to
enhance the Company's operations and profitability. In particular, the Company
has publicly stated that it is weighing its strategic alternatives to expand
its crane business and strengthen its Unit Rig high capacity surface mining
trucks division. Options under consideration for its Unit Rig Division include
disposition or acquisition of, or joint venture with, strategic partners. From
time to time, the Company has engaged and continues to engage in preliminary
discussions concerning one or more of the foregoing transactions.
Future acquisitions may be financed by internally generated funds, bank
borrowings, public offerings or private placements of equity or debt
securities, or a combination of any one or more of the foregoing. There can be
no assurance, however that the Company will continue to identify suitable new
acquisition candidates, obtain financing necessary to complete such
acquisitions or acquire businesses on satisfactory terms, or that any business
acquired by the Company will be integrated successfully into the Company's
operations or prove to be profitable. Moreover, the Company's ability to
obtain financing adequate to enable the completion of suitable acquisitions may
be limited by its current debt structure and leverage. See "--Significant
Leverage" and "--Restrictions Imposed by the Terms of the Company's
Indebtedness." Successful integration of businesses acquired, including the
Simon Access Companies and the Square Shooter Business (as defined herein),
will depend, in part, on the Company's ability to manage these additional
businesses and eliminate redundancies and excess costs. Material failure or
substantial delay in accomplishing such integration could have a material
adverse effect on the Company's results of operations and financial condition.
Tax Audit Issues
The Internal Revenue Service (the "IRS") is currently examining the
Company's Federal tax returns for the years 1987 through 1989. In December
1994, the Company received an examination report from the IRS proposing a
substantial tax deficiency. The examination report raised a variety of issues,
including the Company's substantiation for certain deductions taken during this
period, the Company's utilization of certain net operating loss carryovers
("NOLs") and the availability of such NOLs to offset future taxable income.
The Company filed an administrative appeal to the examination report in April
1995. As a result of a meeting with the Manhattan division of the IRS in July
1995, in June 1996 the Company was advised that the matter was being referred
back to the Milwaukee audit division of the IRS. The Milwaukee audit division
of the IRS is currently reviewing information provided by the Company over the
past 18 months. The ultimate outcome of this matter is subject to the
resolution of significant legal and factual issues. Given the stage of the
audit, and the number and complexity of the legal and administrative
proceedings involved in reaching a resolution of this matter, it is unlikely
that the ultimate outcome, if unfavorable to the Company, will be determined
for at least several years. If the IRS were to prevail on all the issues
raised, the amount of the tax assessment would be approximately $56 million
plus penalties of approximately $12.8 million and interest through June 30,
1997 of approximately $85.7 million. The penalties asserted by the IRS are
calculated as 20% of the amount of the tax assessed for fiscal year 1987 and
25% of the tax assessed for each of fiscal years 1988 and 1989. Interest on
the amount of tax assessed and penalties is currently accruing at a rate of 11%
per annum. The applicable annual rate of interest has historically varied from
7% to 12%.
If the Company were required to pay a significant portion of the
assessment with related interest and penalties, such payment would exceed the
Company's resources. In such event, the viability of the Company would be
placed in jeopardy, and it is uncertain that the Company could, through
financing or otherwise, obtain the funds required to pay such assessment,
interest, and applicable penalties. Management believes, however, that the
Company will be able to provide adequate documentation for a substantial
portion of the deductions questioned by the IRS and that there is substantial
support for the Company's past and future utilization of the NOLs. Based upon
consultation with its tax advisors, management believes that the Company's
position will prevail on the most significant issues. Accordingly, management
believes that the outcome of the examination will not have a material adverse
effect on its financial condition or results of operations, but may result in
some reduction in the amount of the NOLs available to the Company. No
additional accruals have been made for any amounts which might be due as a
result of this matter because the possible loss ranges from zero to $56 million
plus interest and penalties, and the ultimate outcome cannot be determined or
estimated at this time. No reserves are being expensed to cover the potential
liability.
Under the terms of the Company's Revolving Credit Agreement, dated as of
April 7, 1997, with The First National Bank of Boston, as Agent, and the other
lending institutions party thereto (the "New Credit Facility"), an event of
default will occur if the Company incurs any liability for federal income taxes
which results in an expenditure of cash of more than $15 million in excess of
the amounts shown as owed on tax returns filed by the Company prior to April 7,
1997. If this were to occur, the maturity of the New Credit Facility may be
accelerated and recourse may be taken against the accounts receivable and
inventory securing advances under the New Credit Facility. In such event, the
Company would seek to refinance the indebtedness outstanding under the New
Credit Facility. There can be no assurance, however, that any refinancing
would be obtainable or, if obtainable, that the terms of such refinancing would
be acceptable to the Company.
Significant Stockholder
As of September 30, 1997, Randolph W. Lenz is the beneficial owner of
approximately 10% of the outstanding Common Stock. Mr. Lenz retired as the
Chairman of the Board and as a Director of the Company on August 28, 1995, and
currently serves as a consultant to the Company. In connection with his
retirement, Mr. Lenz entered into an agreement with the Company pursuant to
which, among other things, he agreed that he will not compete with the Company
until November 2000, and will vote his shares of Common Stock in the manner
recommended by the Board of Directors and will not acquire any additional
shares of Common Stock other than pursuant to the retirement agreement until
November 1998. In addition, the agreement also provided for the granting by
the Company to Mr. Lenz of a five-year $1.8 million forgivable loan bearing
interest at a rate of 6.56% per annum.
The Company has entered into an agreement, dated June 27, 1997 (the
"Standstill Agreement"), with Mr. Lenz and certain of his affiliates which
places certain limitations on the ability of Mr. Lenz and such affiliates to
acquire, sell or otherwise dispose of shares of the Company's capital stock.
See "--Shares Eligible for Future Sale." However, Mr. Lenz and one or more of
such affiliates currently pledge, and, subject to the terms of the Standstill
Agreement, may in the future pledge, shares of Common Stock owned by them as
collateral for loans. If Mr. Lenz or such affiliates default under such loans,
the pledgee may have the right to sell the shares of Common Stock pledged to it
in satisfaction of such obligations. The sale or other disposition of a
substantial amount of such shares of Common Stock in the public market could
adversely affect the prevailing market price for the Common Stock. The sale or
disposition of a substantial amount of such shares of Common Stock owned by
Mr. Lenz and his affiliates could also result in an Ownership Change (as
defined below). See "--Continuation of Net Operating Loss Carryovers."
Continuation of Net Operating Loss Carryovers
The Company currently has federal NOLs of approximately $188.6 million.
The Company would be subject to an annual limitation (described below) on its
ability to utilize its NOLs to offset future taxable income if the Company
undergoes an ownership change (an "Ownership Change") within the meaning of
Section 382 of the Internal Revenue Code of 1986, as amended ("Section 382").
Generally, an Ownership Change is deemed to occur if the aggregate cumulative
increase in the percentage ownership of the capital stock of the Company (which
generally includes for this purpose, but is not limited to, the Common Stock
and certain options and warrants) by persons owning five percent or more of
such capital stock and certain public groups (within the meaning of Section
382) is more than 50 percentage points in any three-year testing period. In
the event of an Ownership Change, the Company's utilization of its NOLs would
be limited to an annual amount (without extending the applicable 15-year
carryforward period for NOLs) equal to the product of the fair market value of
the Company immediately before such Ownership Change (as determined pursuant to
Section 382, which may provide for certain reductions in value) multiplied by
the long-term tax-exempt rate, which is an interest-indexed rate that is
published monthly by the IRS and which is approximately 5.27% as of the date of
this Prospectus. NOLs arising after the date that any Ownership Change occurs
will be unaffected by such Ownership Change.
It is impossible for the Company to ensure that an Ownership Change will
not occur in the future, in part because the Company has no ability to restrict
the acquisition or disposition of the Company's capital stock by persons whose
ownership could cause an Ownership Change. If Mr. Lenz and/or his affiliates
(see "--Significant Stockholder") were to sell all or substantially all of
their remaining shares of the Company's capital stock prior to November 1998 in
a manner other than as contemplated by the Standstill Agreement, there would be
a substantial likelihood that an Ownership Change would occur. As a result, as
set forth more fully under "--Shares Eligible for Future Sale," the Company has
entered into the Standstill Agreement with Mr. Lenz and certain of his
affiliates which, among other things, reduces the likelihood that future sales
of the Company's capital stock by Mr. Lenz or his affiliates will, by
themselves, cause an Ownership Change. However, there can be no assurance that
the Standstill Agreement will in fact prevent an Ownership Change from
occurring. In addition, the Company may in the future take certain actions
which, alone or coupled with other events, could give rise to an Ownership
Change, if in the exercise of the business judgment of the Company such actions
(which may include future issuances of equity securities) are necessary or
desirable. If an Ownership Change were to occur, the NOL annual limitation
under Section 382 could substantially reduce the Company's future after-tax
earnings and cash flow.
Reliance on Key Management
The success of the Company's business is dependent upon the management and
leadership skills of Ronald M. DeFeo, the Company's President and Chief
Executive Officer. The Company does not have an employment agreement with
Mr. DeFeo and the loss of his services could have a material adverse effect on
the Company.
SEC Investigation
In March 1994, the Securities and Exchange Commission (the "Commission")
initiated a private investigation, which included the Company and certain of
its affiliates, to determine whether violations of certain aspects of the
Federal securities laws had occurred. To date, the inquiry of the Commission
has primarily focused on accounting treatment and reporting matters relating to
various transactions which took place in the late 1980s and early 1990s. The
Company is cooperating with the Commission in its investigation and it is not
possible at this time to determine the outcome of the Commission's
investigation.
Environmental and Related Matters
The Company generates hazardous and nonhazardous wastes in the normal
course of its manufacturing operations. As a result, the Company is subject to
a wide range of federal, state, local and foreign environmental laws and
regulations, including the Comprehensive Environmental Response, Compensation
and Liability Act ("CERCLA"), that (i) govern activities or operations that may
have adverse environmental effects, such as discharges to air and water, as
well as handling and disposal practices for hazardous and nonhazardous wastes,
and (ii) impose liability for the costs of cleaning up, and certain damages
resulting from, sites of past spills, disposals or other releases of hazardous
substances. Compliance with such laws and regulations has, and will, require
expenditures by the Company on a continuing basis. The Company does not expect
that these expenditures will have a material adverse effect on its financial
condition or results of operations.
Foreign Currencies and Interest Rate Risk
The Company's products are sold in over 50 countries around the world and,
accordingly, revenues of the Company are generated in foreign currencies, while
the costs associated with those revenues are only partly incurred in the same
currencies. The major foreign currencies, among others, in which the Company
does business are the Pound Sterling and the French Franc. Costs of the
Company are primarily incurred in the same currencies and in percentages which
are not materially different from the revenue percentages. Since the Company's
financial statements are denominated in U.S. dollars, changes in exchange rates
between the dollar and other currencies have had and will have an impact on the
reported results of the Company. To date, this impact has not been material.
The Company may, from time to time, hedge specifically identified committed
transactions in foreign currencies using forward currency sale or purchase
contracts. The Company has not engaged in any speculative or profit motivated
hedging activities. Although revenues and costs of the Company may be
partially hedged, currency fluctuations will impact the Company's financial
performance in the future. In addition, international operations are subject
to a number of potential risks, including, among others, currency exchange
controls, transfer restrictions and rate fluctuations, trade barriers, the
effects of income and withholding tax, and governmental expropriation.
The Company's borrowings are at both fixed and floating rates of interest.
For the floating rate portion of the borrowings, the Company is at risk for
fluctuations in interest rates. The Company does not currently hedge any
interest rate risk.
Restrictions on Dividends
Contractual restrictions exist under the Company's 13.25% Senior Secured
Notes due May 15, 2002 (the "Senior Secured Notes") and the New Credit Facility
which limit the Company's ability to pay dividends on its capital stock. The
terms of the Company's Series B Cumulative Redeemable Convertible Preferred
Stock (the "Series B Preferred Stock") also limit the Company's ability to pay
cash dividends on any class of capital stock of the Company junior to or on a
parity with the Series B Preferred Stock. See "Description of
Securities-Preferred Stock." In addition, under Delaware law the Company's
ability to pay dividends is subject to the statutory limitation that such
payment be made either (i) out of its surplus (the excess of its net assets
over its total liabilities plus stated capital) or (ii) in the event that there
is no surplus, out of its net profits for the fiscal year in which the dividend
is declared and/or the preceding fiscal year. The Company intends generally to
retain earnings, if any, to repay indebtedness and to fund the development and
growth of its business. The Company does not plan on paying dividends on the
Common Stock in the foreseeable future. Any future payments of cash dividends
will depend upon the financial condition, capital requirements and earnings of
the Company, as well as other factors that the Board of Directors may deem
relevant.
Shares Eligible for Future Sale
As of October 31, 1997, 19,722,022 shares of Common Stock were
outstanding. As of October 31, 1997, there were also (a) up to an aggregate of
1,592,065 shares of Common Stock reserved for issuance under the Company's
incentive and other benefit plans; (b) an aggregate of 159,908 shares of Common
Stock reserved for issuance upon exercise of Series A Warrants (as described
under "Description of Securities--Common Stock Purchase Warrants"); (c) an
aggregate of 87,300 shares of Common Stock reserved for issuance upon
conversion of Series B Preferred Stock (as described under "Description of
Securities--Preferred Stock"); and (d) 676,096 shares of Common Stock issuable
under the Company's outstanding common stock appreciation rights ("Equity
Rights") assuming all holders exercised their Equity Rights on September 30,
1997 and the Company elected to issue shares of Common Stock to satisfy its
obligations thereunder.
The effect, if any, that future market sales of shares of Common Stock or
the availability of shares for sale will have on the market price prevailing
from time to time cannot be predicted. Nevertheless, sales of substantial
additional amounts of Common Stock in the public market, or the perception that
such sales could occur, could adversely affect the prevailing market price for
the Common Stock.
USE OF PROCEEDS
The Company will not receive any cash proceeds from the sale of the Common
Stock by the Selling Stockholders.
THE COMPANY
Terex is a global manufacturer of a broad range of construction and mining
related capital equipment. The Company strives to manufacture machines which
are low cost, simple to use and easy to maintain. The Company's principal
products include telescopic mobile cranes, aerial work platforms, utility
aerial devices, telescopic material handlers, truck mounted cranes, rigid and
articulated off-highway trucks and high capacity surface mining trucks and
related components and replacement parts. The Company's products are
manufactured at 12 plants in the United States and Europe and are sold
primarily through a worldwide network of dealers in over 750 locations to the
global construction, infrastructure and surface mining markets. The Company's
operations began in 1983 with the purchase of Northwest Engineering Company,
the Company's original business and name. Since 1983, management has expanded
and changed the Company's business through a series of acquisitions and
dispositions. In 1988, Northwest Engineering Company merged into a subsidiary
acquired in 1986 named Terex Corporation, with Terex Corporation as the
surviving entity. As a result of the completion of the PPM Acquisition (as
defined below) in May 1995, the Company's operations were divided into three
principal segments: Material Handling, Heavy Equipment and Mobile Cranes. On
November 27, 1996, the Company completed the sale of its worldwide material
handling segment, which was originally acquired in July 1992, and currently
operates two business segments: Terex Cranes and Terex Trucks. Terex Cranes
manufactures telescopic mobile cranes (including rough terrain, truck and all
terrain mobile cranes), aerial work platforms (including scissor, articulated
boom and straight telescoping boom aerial work platforms), utility aerial
devices (including digger derricks and articulated aerial devices), telescopic
material handlers (including container stackers, scrap handlers and telescopic
rough terrain boom forklifts), truck mounted cranes (boom trucks) and related
components and replacement parts. These products are primarily used by
construction and industrial customers and utility companies. Terex Cranes is
comprised of a number of divisions and subsidiaries, and is headquartered in
Conway, South Carolina. Terex Trucks manufactures articulated and rigid
off-highway trucks and high capacity surface mining trucks and related
components and replacement parts. These products are used primarily by
construction, mining and government customers. Terex Trucks is headquartered
in Motherwell, Scotland and is comprised of TEL, located in Motherwell,
Scotland, and Unit Rig, located in Tulsa, Oklahoma. The principal executive
offices of the Company are located at 500 Post Road East, Westport, Connecticut
06880 and its telephone number is (203) 222-7170.
Terex Cranes was established as a separate business segment as a result of
the acquisition (the "PPM Acquisition") in May 1995 of substantially all of the
shares of P.P.M. S.A. and certain of its subsidiaries, including P.P.M. SpA,
Brimont Agraire S.A., a specialized trailer manufacturer in France, PPM Krane
GmbH, a sales organization in Germany, and Baulift Baumaschinen Und Krane
Handels GmbH, a parts distributor in Germany from Potain S.A., and all of the
capital stock of Legris Industries, Inc., which owned 92.4% of the capital
stock of PPM Cranes, Inc. from Legris Industries, S.A. Concurrently with the
completion of the PPM Acquisition, the Company contributed the assets (subject
to liabilities) of its Koehring Cranes and Excavators and Mark Industries
division to Terex Cranes, Inc., a wholly-owned subsidiary of the Company. The
former division now operates as Koehring Cranes, Inc., a wholly owned
subsidiary of Terex Cranes, Inc.
During 1997, the Company completed two acquisitions to augment its Terex
Cranes segment. On April 7, 1997, the Company completed the acquisition of
substantially all of the capital stock of certain of the former subsidiaries of
Simon Engineering plc (the "Simon Access Companies") for $90 million (subject
to adjustment under certain circumstances). The Simon Access Companies consist
principally of business units in the United States and Europe engaged in the
manufacture, sale and worldwide distribution of access equipment designed to
position people and materials to work at heights. The Simon Access Companies'
products include utility aerial devices, aerial work platforms and truck
mounted cranes (boom trucks) which are sold to customers in the industrial and
construction markets, as well as utility companies. Specifically, the Company
acquired 100% of the outstanding common stock of (i) Simon Telelect, Inc. (now
named Terex Telelect Inc.), a Delaware corporation, (ii) Simon Aerials, Inc.
(now named Terex Aerials, Inc.), a Wisconsin corporation and parent company of
Terex RO, (iii) Sim-Tech Management Limited, a private limited company
incorporated under the laws of Hong Kong, (iv) Simon Cella, S.r.1., a company
incorporated under the laws of Italy, and (v) Simon Aerials Limited (now named
Terex Aerials Limited), a company incorporated under the laws of Ireland; and
60% of the outstanding common stock of Simon-Tomen Engineering Company Limited,
a limited liability stock company organized under the laws of Japan. On
April 14, 1997, the Company completed the acquisition of all of the capital
stock of Baraga Products, Inc. and M&M Enterprises of Baraga, Inc.
(collectively, the "Square Shooter Business"). The Square Shooter Business
manufactures the Square Shooter, a rough terrain telescopic lift truck designed
to lift materials to heights where they are used in construction.
1997 THIRD QUARTER RESULTS
The Company's 1997 third quarter income from continuing operations less
preferred stock accretion increased to $8.3 million, or $0.43 per share, up
$14.0 million over 1996's third quarter net loss from continuing operations
less preferred stock accretion of $5.7 million, or a $0.40 per share loss. Net
sales for the third quarter of 1997 were $214.1 million, up $48.4 million or
29% over the third quarter of 1996. The Company also recorded a $12.2 million
extraordinary charge related to the redemption of $83.3 million of its 13.25%
Senior Secured Notes due 2002. After this charge, the net loss applicable to
Common Stock for the third quarter of 1997 was $3.9 million.
Three Months Nine Months
Ended Ended
September 30, September 30,
--------------- ---------------
1997 1996 1997 1996
------ ------ ------ ------
Net sales . . . . . . . . . . . . . . . $214.1 $165.7 $622.6 $521.7
Income from operations. . . . . . . . . 19.2 8.9 51.7 26.8
Interest and other income
(expense), net . . . . . . . . . . . . (10.5) (12.3) (31.4) (34.6)
Income from discontinued
operations . . . . . . . . . . . . . . --- 4.8 --- 14.2
Income before extraordinary
items. . . . . . . . . . . . . . . . . 8.7 1.4 20.3 6.4
Extraordinary loss on
retirement of debt . . . . . . . . . . (12.2) --- (14.8) ---
Net income (loss) . . . . . . . . . . . (3.5) 1.4 5.5 6.4
Less preferred stock accretion. . . . . (0.4) (2.3) (1.2) (6.0)
Income (loss) applicable
to common stock. . . . . . . . . . . . (3.9) (0.9) 4.3 0.4
Per Common and Common Equivalent Share:
Income (loss) from continuing
operations . . . . . . . . . . . . . $0.43 $(0.40) $1.16 $(1.06)
Income from discontinued
operations . . . . . . . . . . . . . --- 0.34 --- 1.09
Income (loss) before
extraordinary items. . . . . . . . . 0.43 (0.06) 1.16 0.03
Extraordinary loss on
retirement of debt . . . . . . . . . (0.63) --- (0.90) ---
Net Income (loss) . . . . . . . . . . (0.20) (0.06) 0.26 0.03
Average Number of Common and
Common Equivalent Shares
Outstanding in Per Share
Calculation. . . . . . . . . . . . . . 19.4 14.2 16.4 13.0
For the first nine months of 1997, income from continuing operations less
preferred stock accretion before extraordinary charges was $19.1 million, or
$1.16 per share, an increase of $32.9 million over the loss from continuing
operations less preferred stock accretion of $13.8 million for the first nine
months of 1996. Net sales for the first nine months of 1997 were $622.6
million, an increase of $100.9 million over $521.7 million for the first nine
months of 1996.
Weighted average shares outstanding increased to 19.4 million for the
third quarter of 1997 and 16.4 million for the first nine months of 1997,
compared to 15.2 million for the second quarter of 1997, due to the sale of 5.7
million shares of stock in the third quarter of 1997, and the effect of a
higher stock price on the amount of shares assumed to be issued on the
conversion of common stock equivalents.
<PAGE>
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The Common Stock is listed on the NYSE under the symbol "TEX." The
following table sets forth, for the quarters indicated, the high and low sales
prices of the Common Stock as reported on the NYSE Composite Tape.
Price Range
-------------
Low High
--- ----
1995
First Quarter ended March 31, 1995. . . . . . . $ 5 7/8 $ 7 1/2
Second Quarter ended June 30, 1995. . . . . . . 4 1/2 6 3/4
Third Quarter ended September 20, 1995. . . . . 3 1/8 5 3/4
Fourth Quarter ended December 31, 1995. . . . . 4 5 1/2
1996
First Quarter ended March 31, 1996. . . . . . . $ 4 1/8 $ 7 1/8
Second Quarter ended June 30, 1996. . . . . . . 6 3/8 9 1/4
Third Quarter ended September 30, 1996. . . . . 6 1/2 9 1/4
Fourth Quarter ended December 31, 1996. . . . . 6 5/8 10 1/8
1997
First Quarter ended March 31, 1997. . . . . . . $ 9 1/2 $13 1/2
Second Quarter ended June 30, 1997. . . . . . . 13 1/8 19 1/2
Third Quarter September 30, 1997. . . . . . . . 18 3/4 24 1/2
Fourth Quarter (through November 4, 1997) . . . 19 1/2 25 1/2
The last reported sale price of the Common Stock on the NYSE Composite
Tape on November 4, 1997 was $21-3/16 per share. As of October 31, 1997,
there were 688 record holders of Common Stock.
No dividends were declared or paid in 1995 or 1996. Certain of the
Company's debt agreements contain restrictions as to the payment of cash
dividends. The terms of the Company's outstanding Series B Preferred Stock
also restrict the Company's ability to pay cash dividends on the Common Stock.
In addition, payment of dividends is limited by Delaware law. The Company
intends generally to retain earnings, if any, to repay indebtedness and to fund
the development and growth of its business. The Company does not plan on
paying dividends on the Common Stock in the foreseeable future. Any future
payments of cash dividends will depend upon the financial condition, capital
requirements and earnings of the Company, as well as other factors that the
Board of Directors may deem relevant.
<PAGE>
DESCRIPTION OF SECURITIES
The Company's authorized capital stock consists of 40,000,000 shares of
capital stock, $.01 par value, consisting of 30,000,000 shares of Common Stock
and 10,000,000 shares of preferred stock. As of October 31, 1997, 19,722,022
shares of Common Stock and 38,800 shares of Series B Preferred Stock were
issued and outstanding.
Common Stock
Each outstanding share of Common Stock entitles the holder to one vote,
either in person or by proxy, on all matters submitted to a vote of
stockholders, including the election of directors. There is no cumulative
voting in the election of directors, which means that the holders of a majority
of the outstanding shares of Common Stock can elect all of the directors then
standing for election. Subject to preferences which may be applicable to any
outstanding shares of preferred stock, holders of Common Stock have equal
ratable rights to such dividends as may be declared from time to time by the
Board of Directors out of funds legally available therefor.
Holders of Common Stock have no conversion, redemption or preemptive
rights to subscribe to any securities of the Company. All outstanding shares
of Common Stock are fully paid and nonassessable. In the event of any
liquidation, dissolution or winding-up of the affairs of the Company, holders
of Common Stock will be entitled to share ratably in the assets of the Company
remaining after provision for payment of liabilities to creditors and
preferences applicable to outstanding shares of preferred stock. The rights,
preferences and privileges of holders of Common Stock are subject to the rights
of the holders of any outstanding shares of preferred stock.
The Restated Certificate of Incorporation provides that directors of the
Company shall not be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duties as a director except to the
extent otherwise required by Delaware law. The Restated By-laws of the Company
provide for indemnification of the officers and directors of the Company to the
fullest extent permitted by Delaware law.
The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company, 40 Wall Street, New York, New York 10005.
Terex Preferred Stock
The Board of Directors of the Company is authorized to issue up to
10,000,000 shares of preferred stock, par value $.01 per share, in one or more
series, with such designations, powers, preferences and rights of such series
and the qualifications, limitations or restrictions thereon, including, but not
limited to, the fixing of dividend rights, dividend rates, conversion rights,
voting rights, rights and terms of redemption (including sinking fund
provisions), the redemption price or prices, and the liquidation preferences,
in each case, if any, as the Board of Directors of the Company may by
resolution determine, without any further vote or action by the Company's
stockholders.
Series B Cumulative Redeemable Convertible Preferred Stock. By resolution
adopted January 24, 1994, the Board of Directors of the Company authorized the
issuance of a series of preferred stock consisting of 89,800 shares of Series B
Preferred Stock in connection with the termination of a management contract
with KCS Industries, L.P. (of which 38,800 shares are issued and outstanding as
of the date of this Prospectus), and fixed the terms of such Series B Preferred
Stock. The following summary of the terms and provisions of the Series B
Preferred Stock does not purport to be complete and is qualified in its
entirety by reference to the relevant sections of the Company's Certificate of
Designation of Preferences and Equity Rights of the Series B Preferred Stock.
Liquidation Preference. In the event of the liquidation of the Company,
before any distribution or payment shall be made to the holders of Common Stock
or any other stock ranking junior to the Series B Preferred Stock, the holders
of the Series B Preferred Stock are entitled to be paid, out of the assets of
the Company available for distribution to its stockholders, a liquidation
preference (the "Series B Liquidation Preference"), equal to $25.00 per share,
plus all accrued and unpaid dividends thereon to such date, in cash. In
addition, the Series B Liquidation Preference accretes and accrues daily at the
rate of 13% per annum from December 9, 1994 through December 9, 1999 and 18%
per annum thereafter through the date (the "Series B Accretion Termination
Date") on which the Company is required to pay current dividends on the
Series B Preferred Stock in accordance with its terms, which date is based
primarily upon the terms of the Company's debt instruments.
Dividends. Subject to the prior preferences and rights of any stock
ranking senior to the Series B Preferred Stock, holders of shares of the
Series B Preferred Stock are entitled to receive, when and as declared by the
Board of Directors, out of funds legally available for the payment of
dividends, cumulative cash dividends that will accrue from the Series B
Accretion Termination Date at the rate of (a) 13% per annum from the Series B
Accretion Termination Date through December 9, 1999 and (b) 18% per annum
thereafter. So long as any shares of Series B Preferred Stock shall be
outstanding, the Company shall not declare or pay any dividend whatsoever,
whether in cash, property or otherwise (other than dividends payable in shares
of the class or series upon which such dividends are declared or paid) on,
purchase or redeem any stock ranking junior to the Series B Preferred Stock in
respect of the right to receive dividends. In addition, the Company cannot pay
dividends on the Common Stock during any 12 month period exceeding 4% of the
Current Market Price (as defined) per share of the Common Stock on the trading
day immediately prior to the declaration of any cash dividend until the
expiration of specified periods.
Redemption. The Series B Preferred Stock may be redeemed by the Company
in cash at any time in whole or from time to time, in part, at the option of
the Company, at a per share redemption price equal to the Series B Liquidation
Preference per share on the date of redemption plus all accrued but unpaid
dividends thereon to and including the date of redemption. The Company is
required to redeem all of the then outstanding shares of Series B Preferred
Stock on or prior to December 31, 2001.
Voting. Except for certain matters affecting the preferences, rights,
privileges, powers or benefits of the Series B Preferred Stock or as otherwise
required by law, the holders of the issued and outstanding shares of Series B
Preferred Stock shall have no voting rights.
Conversion Right. Each holder of shares of Series B Preferred Stock has
the right, at such holder's option, at any time or from time to time, to
convert any of such shares of Series B Preferred Stock into the number of fully
paid and nonassessable shares of Common Stock determined by dividing (i) $25.00
by (ii) the conversion price, initially $11.11 and subject to adjustment in
certain circumstances, in effect on the date of conversion. At November 1,
1997, an aggregate of 87,300 shares of Common Stock were issuable upon
conversion in full of the Series B Preferred Stock.
Common Stock Purchase Warrants
In connection with a private placement of shares of Series A Preferred
Stock, which were subsequently redeemed, the Company issued 1,300,000 Common
Stock purchase warrants (the "Series A Warrants") of which 66,352 warrants were
outstanding at October 31, 1997. Each Series A Warrant may be exercised, in
whole or in part, at the option of the holder at any time before December 31,
2000 and is redeemable by the Company under certain circumstances. As of
October 31, 1997, upon the exercise or redemption of a Series A Warrant, the
holder thereof was entitled to receive 2.41 shares of Common Stock. The
exercise price for the Series A Warrants is $.01 for each share of Common
Stock. The number of shares of Common Stock issuable upon exercise or
redemption of the Series A Warrants is subject to adjustment in certain
circumstances. At October 31, 1997, an aggregate of 159,908 shares of Common
Stock were issuable upon exercise in full of the outstanding Series A Warrants.
Equity Rights
Concurrently with the issuance of the Company's Senior Secured Notes, the
Company also issued 1,000,000 Equity Rights pursuant to a Common Stock
Appreciation Rights Agreement between the Company and the United States Trust
Company of New York, as agent. The Equity Rights are traded separately from
the Senior Secured Notes.
All of the Equity Rights are currently outstanding. Each Equity Right
entitles the holder thereof, upon exercise at any time on or prior to May 15,
2002, to receive cash or, at the election of the Company, Common Stock in an
amount equal to the average closing sale price per share of the Common Stock
for the 60 consecutive trading days prior to the date of the exercise (the
"Current Price"), less $7.288 per share, subject to adjustment in certain
circumstances. Changes in the Current Price do not affect the net income or
loss reported by the Company; however, changes in the Current Price vary the
amount of cash that the Company would have to pay or the number of shares of
Common Stock that would have to be issued in the event holders exercise the
Equity Rights. As of September 30, 1997, the Current Price of the Common Stock
was $21.317, which would have required the Company to issue 676,096 shares of
Common Stock in the event the holders had exercised the Equity Rights and the
Company elected to issue shares of Common Stock to satisfy its obligations
thereunder. Each Equity Right not exercised on or prior to 5:00 p.m., New York
City time, on May 15, 2002 will become void. Equity Rights may be exercised by
the holder thereof in whole or in part.
The holders of Equity Rights have no rights to vote on matters submitted
to the stockholders of the Company and have no rights to receive dividends.
The holders of Equity Rights are not entitled to share in the assets of the
Company in the event of the liquidation or dissolution of the Company or the
winding up of the Company's affairs.
<PAGE>
SELLING STOCKHOLDERS
The Selling Stockholders listed below may sell such shares of Common Stock
set forth opposite their respective names to purchasers directly, or through
underwriters, dealers or agents who may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling
Stockholders and/or the purchasers of the shares of Common Stock for whom they
may act as agents. See "Plan of Distribution."
Beneficial Beneficial
Ownership Ownership
Prior to Offering After Offering
---------------------- ------------------
Name Number(1) Percent(2) Number(3) Percent
- ---- --------- ---------- --------- -------
Legris Industries, S.A. . 392,496 1.9% 0 0%
Potain, S.A.. . . . . . . 261,664 1.3% 0 0%
(1) Estimated.
(2) Based on 19,722,022 shares of Common Stock outstanding on October 31,
1997.
(3) Assumes the sale by the Selling Stockholders of all of the shares of
Common Stock offered hereby.
The Selling Stockholders were the holders of all of the outstanding shares
of Series A Redeemable Exchangeable Preferred Stock of Terex Cranes, Inc., a
subsidiary of the Company. The Selling Stockholders received the Common Stock
offered hereby in exchange for all of the outstanding shares of Series A
Redeemable Exchangeable Preferred Stock of Terex Cranes, Inc. in connection
with the merger of Terex Cranes, Inc. with and into the Company. Pursuant to
the terms of an agreement relating to the merger of Terex Cranes, Inc. with and
into the Company, the Company agreed to file the Registration Statement of
which this Prospectus forms a part with the Commission.
PLAN OF DISTRIBUTION
This Prospectus, as appropriately amended or supplemented if required, may
be used from time to time by the Selling Stockholders, or their transferees,
who wish to offer and sell the shares of Common Stock offered hereby. The
shares of Common Stock may be sold by the Selling Stockholders to purchasers
directly, or through underwriters, dealers or agents who may receive
compensation in the form of underwriting discounts, concessions or commissions
from the Selling Stockholders and/or the purchasers of the shares of Common
Stock for whom they may act as agents. The Selling Stockholders and any such
underwriters, dealers or agents that participate in the distribution of the
shares of Common Stock may be deemed to be underwriters under the Securities
Act, and any profit on the sale of the shares of Common Stock by them and any
discounts, commissions or concessions received by them may be deemed to be
underwriting discounts and commissions under the Securities Act. The shares of
Common Stock offered hereby may be sold in one or more transactions at a fixed
offering price, which may be changed, or at varying prices determined at the
time of sale or at negotiated prices. The distribution of the shares of Common
Stock by the Selling Stockholders may be effected in one or more transactions
that may take place on NYSE, including ordinary brokers' transactions,
privately-negotiated transactions or through sales to one or more broker-
dealers for resale of such shares as principals, at market prices prevailing at
the time of sale, at prices related to such prevailing market prices or at
negotiated prices. Usual and customary or specifically negotiated brokerage
fees, discounts and commissions may be paid by the Selling Stockholders in
connection with such sales of securities. The Company will pay substantially
all the expenses incident to the offering of the Common Stock by the Selling
Stockholders to the public other than brokerage fees, commissions and discounts
of underwriters, dealers or agents.
In order to comply with certain states securities laws, if applicable, the
shares of Common Stock will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In certain states the shares of
Common Stock may not be sold unless the shares of Common Stock have been
registered or qualified for sale in such state, or unless an exemption from
registration or qualification is available and is obtained.
In addition to sales pursuant to the Registration Statement of which this
Prospectus forms a part, the shares of Common Stock may be sold in accordance
with Rule 144, if eligible. Selling Stockholders may also offer shares of
Common Stock by means of prospectuses under other available registration
statements or pursuant to exemptions from the registration requirements of the
Securities Act and Selling Stockholders should seek the advice of their own
counsel with respect to the legal requirements for such sales.
Upon the Company's being notified by the Selling Stockholder that a
particular offer to sell the Common Stock is made, a material arrangement has
been entered into with a broker-dealer for the sale of shares through a block
trade, special offering, exchange distribution, or secondary distribution, or
any block trade has taken place, to the extent required, a supplement to this
Prospectus will be delivered together with this Prospectus and filed pursuant
to Rule 424(b) under the Securities Act setting forth with respect to such
offer or trade the terms of the offer or trade; including (i) the name of each
Selling Stockholder, (ii) the number of shares of Common Stock involved, (iii)
the price at which the shares of Common Stock were sold, (iv) any participating
brokers, dealers, agents or member firm involved, (v) any discounts,
commissions and other items paid as compensation from, and the resulting net
proceeds to, the Selling Stockholder, (vi) that such broker-dealers did not
conduct any investigation to verify the information set out in this Prospectus,
and (vii) other facts material to the transaction. Unless otherwise indicated
in a supplement to this Prospectus, any such agent will be acting on a best
efforts basis for the period of its appointment.
LEGAL MATTERS
Certain legal matters in connection with the Common Stock offered hereby
will be passed upon for the Company by Robinson Silverman Pearce Aronsohn &
Berman LLP, 1290 Avenue of the Americas, New York, New York 10104.
EXPERTS
The consolidated financial statements of the Company incorporated in this
Prospectus by reference to the Company's Annual Report on Form 10-K for the
year ended December 31, 1996 have been so incorporated in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
The combined financial statements of Simon Access Companies as of
December 31, 1996 and for the year then ended, incorporated in this Prospectus
by reference to the Company's Current Report on Form 8-K/A dated May 22, 1997
have been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The consolidated financial statements of PPM Cranes, Inc. as of
December 31, 1996 and 1995 and for the year and eight months ended December 31,
1996 and 1995, respectively, incorporated in this Prospectus by reference to
the Company's Annual Report on Form 10-K for the year ended December 31, 1996
have been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The consolidated statements of operations, shareholders' equity and cash
flows for the year ended December 31, 1994 of PPM Cranes, Inc., incorporated by
reference in this Prospectus and Registration Statement have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
incorporated by reference elsewhere herein, which is based in part on the
report of Price Waterhouse (Australia), independent accountants. The financial
statements referred to above are incorporated by reference in reliance upon
such reports given upon the authority of such firms as experts in accounting
and auditing.
<PAGE>
===============================================================================
No dealer, salesman or other person has been authorized to give any
information or to make representations other than those contained in this
Prospectus, and if given or made, such information or representations must not
be relied upon as having been authorized by the Company. Neither the delivery
of this Prospectus nor any sale made hereunder shall, under any circumstances,
create an implication that the information herein is correct as of any time
subsequent to its date. This Prospectus does not constitute an offer or
solicitation by anyone in any jurisdiction in which such offer or solicitation
is not authorized or in which the person making such offer of solicitation is
not qualified to do so or to anyone to whom it is unlawful to make such offer
or solicitation.
___________________________________
Page
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Documents Incorporated by
Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1997 Third Quarter Results. . . . . . . . . . . . . . . . . . . . . . . . . .11
Price Range of Common Stock and
Dividend Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Description of Securities . . . . . . . . . . . . . . . . . . . . . . . . . .13
Selling Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
===============================================================================
<PAGE>
$16,000,000
of
TEREX CORPORATION
Common Stock
----------
PROSPECTUS
----------
___________, 1997
===============================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table itemizes the expenses incurred by the Company in
connection with the offering of the Common Stock being registered. All the
amounts shown are estimates except the Securities and Exchange Commission (the
"Commission") registration fee and the NYSE Listing Fee.
Item Amount
---- ------
SEC Registration Fee . . . . . . . . . . $4,848.48
NYSE Listing Fee . . . . . . . . . . . . 3,500.00
Legal Fees and Expenses. . . . . . . . . 20,000.00
Accounting Fees and Expenses . . . . . . 15,000.00
Miscellaneous Expenses . . . . . . . . . 5,000.00
----------
TOTAL . . . . . . . . . . . . . $48,348.48
----------
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law ("DGCL") and Article
IX of the Company's Restated By-laws provide for the indemnification of the
Company's directors and officers in a variety of circumstances, which may
include liabilities under the Securities Act of 1933, as amended (the
"Securities Act").
Article IX of the Company's Restated By-laws generally requires the
Company to indemnify its officers and directors against all liabilities
(including judgments, settlements, fines and penalties) and reasonable expenses
incurred in connection with the investigation, defense, settlement or appeal of
certain actions, whether instituted by a third party or a stockholder (either
directly or indirectly) and including specifically, but without limitation,
actions brought under the Securities Act and/or the Exchange Act; except that
no such indemnification will be permitted if such director or officer was not
successful in defending against any such action and it is determined that the
director or officer breached or failed to perform his or her duties to the
Company, and such breach or failure constitutes (i) a willful breach of his or
her "duty of loyalty", (ii) acts or omissions not in good faith or involving
intentional misconduct or a knowing violation of the law, (iii) a violation of
Section 174 of the DGCL, relating to prohibited dividends or distributions or
the repurchase or redemption of stock, or (iv) a transaction where such
individual derived an improper financial profit (unless it is deemed that such
profit is immaterial in light of all of the circumstances) (collectively,
"Breach of Duty"). Notwithstanding the foregoing, subject to certain
exceptions, the Restated By-laws provide that directors or officers initiating
an action are not entitled to indemnification.
The Restated By-laws also establish certain procedures by which (i) a
director or officer may request an advance on his or her reasonable expenses
prior to the final disposition of an action, (ii) the Company may withhold an
indemnification payment from a director or officer, (iii) a director or officer
may be entitled to partial indemnification and (iv) a director or officer may
challenge the Company's denial to furnish him or her with requested
indemnification. Additionally, the Restated By-laws provide that the adverse
termination of an action against an officer or director is not in and of itself
sufficient to create a presumption that a director or officer engaged in
conduct constituting a Breach of Duty.
Finally, the Company's Restated Certificate of Incorporation, as amended,
contains a provision which eliminates the personal liability of a director to
the Company and its stockholders for certain breaches of his or her fiduciary
duty of care as a director. This provision does not, however, eliminate or
limit the personal liability of a director (i) for any breach of such
director's "duty of loyalty" (as further defined therein) to the Company or its
stockholders, (ii) for acts or omissions not in "good faith" (as further
defined therein) or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the DGCL, relating in general to the willful
or negligent payment of an illegal dividend or the authorization of an unlawful
stock repurchase or redemption, or (iv) for any transaction from which the
director derived an improper personal profit to the extent of such profit.
This provision of the Restated Certificate of Incorporation offers persons who
serve on the Board of Directors of the Company protection against awards of
monetary damages resulting from negligent (except as indicated above) and
"grossly" negligent actions taken in the performance of their duty of care,
including grossly negligent business decisions made in connection with takeover
proposals for the Company. As a result of this provision, the ability of the
Company or a stockholder thereof to successfully prosecute an action against a
director for a breach of his duty of care has been limited. However, the
provision does not affect the availability of equitable remedies such as an
injunction or rescission based upon a director's breach of his duty of care.
The Commission has taken the position that the foregoing provisions will
have no effect on claims arising under the Federal securities laws.
The Company maintains a directors' and officers' insurance policy which
insures the officers and directors of the Company from any claim arising out of
an alleged wrongful act by such persons in their respective capacities as
officers and directors of the Company.
<PAGE>
Item 16. Exhibits
5.1 Opinion of Robinson Silverman Pearce Aronsohn & Berman LLP as to the
legality of securities being registered.
23.1 Consent of Robinson Silverman Pearce Aronsohn & Berman LLP (included as
part of Exhibit 5.1).
23.2 Independent Accountants' consent of Price Waterhouse LLP.
23.3 Consent of Ernst & Young LLP Independent Auditors.
23.4 Independent Accountants' consent of Price Waterhouse -- Melbourne,
Australia.
24.1 Power of attorney (included on signature pages).
Item 17. Undertakings
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the low or high
and of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The Company hereby further undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's Annual Report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Westport, State of Connecticut, on November 5,
1997.
TEREX CORPORATION
By: /s/ Ronald M. DeFeo
---------------------------
Ronald M. DeFeo, President,
Chief Executive Officer and
Chief Operating Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below hereby constitutes and appoints Ronald M. DeFeo and David J.
Langevin as his true and lawful attorneys-in-fact and agents with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all documents to be filed with the
Securities and Exchange Commission during the period from the date of this
document to December 31, 1998, and to file the same with all exhibits thereto,
and all documents in connection therewith, with the Securities and Exchange
Commission, granting said attorney-in-fact and agent, and each of them, full
power and authority to do and perform each and every act and thing requisite
and necessary to be done, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents, or any of them or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof during the period from the
date of this document to December 31, 1998.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the date indicated.
Name Title Date
---- ----- ----
/s/ Ronald M. DeFeo President, Chief Executive November 5, 1997
- ------------------------- Officer, Chief Operating
(Ronald M. DeFeo) Officer and Director
(Principal Executive Officer)
/s/ David J. Langevin Executive Vice President, November 5, 1997
- ------------------------ (Acting Principal Financial
(David J. Langevin) Officer)
/s/ Joseph F. Apuzzo Vice President Finance November 5, 1997
- ------------------------ and Controller
(Joseph F. Apuzzo) (Principal Accounting Officer)
/s/ Marvin B. Rosenberg Senior Vice President, November 5, 1997
- ------------------------ Secretary, General
(Marvin B. Rosenberg) Counsel and Director
Director
- ------------------------
(G. Chris Andersen)
/s/ William H. Fike Director November 5, 1997
- ------------------------
(William H. Fike)
/s/ Bruce I. Raben Director November 5, 1997
- ------------------------
(Bruce I. Raben)
/s/ David A. Sachs Director November 5, 1997
- ------------------------
(David A. Sachs)
/s/ Adam E. Wolf Director November 5, 1997
- ------------------------
(Adam E. Wolf)
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page
5.1 Opinion of Robinson Silverman Pearce Aronsohn & Berman LLP
as to the legality of securities being registered.
23.1 Consent of Robinson Silverman Pearce Aronsohn & Berman LLP
(included as part of Exhibit 5.1).
23.2 Independent Accountants' consent of Price Waterhouse LLP.
23.3 Consent of Ernst & Young LLP Independent Auditors.
23.4 Independent Accountants' consent of Price Waterhouse --
Melbourne, Australia.
24.1 Power of attorney (included on signature pages).
[Letterhead of Robinson Silverman Pearce Aronsohn & Berman LLP]
Exhibit 5.1
November 5, 1997
Terex Corporation
500 Post Road East
Westport, Connecticut 06880
Re: Terex Corporation
Registration Statement on Form S-3
Gentlemen:
We are rendering this opinion in connection with the registration
under the Securities Act of 1933, as amended, by Terex Corporation, a Delaware
corporation (the "Company"), of the shares of its common stock, par value $.01
per share (the "Common Stock"), offered pursuant to the above captioned
Registration Statement (the "Registration Statement").
We have examined a copy of the Registration Statement; the Restated
Certificate of Incorporation of the Company and all amendments thereto,
certified by the Secretary of State of Delaware; the Agreement and Plan of
Merger, dated October 31, 1997 (the "Merger Agreement"), between the Company
and Terex Cranes, Inc. relating to the merger of Terex Cranes, Inc. with and
into the Company; and are familiar with the records of the Company's corporate
proceedings as reflected on its minute books.
Based on the foregoing, and upon such further investigation as we
deemed relevant, we are of the opinion that the shares of Common Stock offered
pursuant to the Registration Statement have been duly and validly authorized
and, when issued in accordance with the Merger Agreement, will be duly and
validly issued, fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement relating to the Common Stock and to the use of our name
wherever appearing in the Registration Statement, including the Prospectus
constituting a part thereof, and any amendment thereto.
Very truly yours,
ROBINSON SILVERMAN PEARCE
ARONSOHN & BERMAN LLP
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our reports
dated March 6, 1997 appearing on pages F-2 and F-34 of Terex Corporation's
Annual Report on Form 10-K for the year ended December 31, 1996.
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of Terex
Corporation of our report dated May 22, 1997 relating to the combined financial
statements of Simon Telelect, Inc. and subsidiaries, Simon Aerials Inc. and
subsidiaries, Simon-Cella, S.r.1, Sim-Tech Management Limited, Simon Aerials
Limited and Simon-Tomen Engineering Company Limited (collectively, "Simon
Access"), which appears in the Current Report on Form 8-K/A of Terex
Corporation dated May 22, 1997.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
PRICE WATERHOUSE LLP
Stamford, Connecticut
November 3, 1997
EXHIBIT 23.3
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated August 22, 1995, with respect to the consolidated
statements of operations, shareholders' equity and cash flows for the year
ended December 31, 1994 of PPM Cranes, Inc. incorporated by reference in the
Registration Statement (Form S-3) and related Prospectus of Terex Corporation
dated November 5, 1997.
Ernst & Young LLP
Greenville, South Carolina
November 5, 1997
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of Terex
Corporation of our report dated 30 January 1995 relating to the financial
statements of PPM of Australia Pty Ltd as at 31 December 1994. We also consent
to the reference to the Australian Firm of Price Waterhouse under the heading
"Experts" in the context as experts in accounting and auditing in such
Prospectus.
Price Waterhouse
Melbourne, Australia
3 November 1997
