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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
<PAGE>
TEREX CORPORATION
500 Post Road East, Westport, Connecticut 06880
_______________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 19, 1998
The Annual Meeting of Stockholders of Terex Corporation (hereafter, the
"Company") will be held at the St. Regis Hotel, 2 East 55th Street, New York,
New York, on Tuesday, May 19, 1998, at 11:00 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 1998.
3. To amend the Company's Restated Certificate of Incorporation to
increase the number of shares of Common Stock, par value $.01 per share, the
Company is authorized to issue to 150,000,000 shares.
4. To amend the Company's Restated Certificate of Incorporation to
increase the number of shares of Preferred Stock the Company is authorized to
issue to 50,000,000 shares.
5. To approve the Terex Corporation Annual Incentive Compensation Plan.
6. To approve an amendment to the 1996 Terex Corporation Long-Term
Incentive Plan to increase the number of shares of the Company's Common Stock
available for issuance.
7. 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
6, 1998, 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,
Eric I Cohen
Secretary
April 8, 1998
Westport, Connecticut
<PAGE>
2
TEREX CORPORATION
500 Post Road East
Westport, Connecticut 06880
________________________________
Proxy Statement for the
Annual Meeting of Stockholders
to be held on May 19, 1998
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 19, 1998, at the
St. Regis Hotel, 2 East 55th Street, New York, New York and at 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 13, 1998, to each stockholder entitled to
vote at the Meeting. As of April 6, 1998, the record date for determining the
stockholders entitled to notice of, and to vote at, the Meeting, the Company had
outstanding 20,648,399 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 approval of the proposed amendments
to the Company's Restated Certificate of Incorporation, FOR the approval of the
Terex Corporation Annual Incentive Compensation Plan (the "1998 Annual Plan"),
FOR approval of the proposed amendment to the 1996 Terex Corporation Long Term
Incentive Plan (the "1996 Plan") 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, approval of the proposed amendments to the Company's Restated
Certificate of Incorporation, approval of the 1998 Annual Plan and approval of
the proposed amendment to the 1996 Plan require 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 approval of the proposed amendments to the Company's Restated
Certificate of Incorporation, approval of the 1998 Annual Plan and approval of
<PAGE>
3
the proposed amendment to the 1996 Plan will have the same effect as voting
against the proposals. Broker non-votes on the proposals to ratify the
appointment of the auditors, approval of the proposed amendments to the
Company's Restated Certificate of Incorporation, approval of the 1998 Annual
Plan and approval of the proposed amendment to the 1996 Plan will not be
included in the calculation of shares entitled to vote for such proposals and
will have no effect on the outcome.
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 (except Dr. Donald P. Jacobs) 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 March 1, 1998, 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.
First Year
Positions and Elected
Name Age Offices with Company Director
Ronald M. DeFeo 45 Chairman of the Board, President, 1993
Chief Executive Officer, Chief
Operating Officer and Director
<PAGE>
4
First Year
Positions and Elected
Name Age Offices with Company Director
G. Chris Andersen 59 Director 1992
William H. Fike 61 Director 1995
Dr. Donald P. Jacobs 70 Director N/A
Bruce I. Raben 44 Director 1992
Marvin B. Rosenberg 57 Director 1992
David A. Sachs 38 Director 1992
Ronald M. DeFeo was appointed President and Chief Operating Officer of
the Company on October 4, 1993, Chief Executive Officer of the Company on March
24, 1995 and Chairman of the Board on March 4, 1998. Mr. DeFeo joined the
Company in May 1992 as President of the Company's then 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 former Tenneco farm and construction equipment division,
and also served as a Managing Director of Case Construction Equipment throughout
Europe. While at J.I. Case, Mr. DeFeo was also a Vice President of North
American Construction Equipment Sales and General Manager of Retail Operations.
Mr. DeFeo serves as a director of United Rentals, Inc.
Marvin B. Rosenberg retired as a Senior Vice President of the Company,
a position he held since January 1, 1994, on December 31, 1997. He served as
Secretary and General Counsel of the Company since 1987 with his retirement from
the Company on December 31, 1997. 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 a Vice Chairman of PaineWebber Incorporated from
March 1990 through 1995. Mr. Andersen is currently a partner of Andersen,
Weinroth & Co. L.P. and also serves as a director of Sunshine Mining & Refining
Company, All Star Systems, Inc., Headway Corp. Services and Compost America.
William H. Fike is the Vice Chairman of Magna International, Inc., an
automotive parts manufacturer based in Ontario, Canada ("Magna"). Prior to
joining Magna in August 1994, Mr. Fike was President of Fike & Associates, a
consulting firm and prior to February 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 of Magna and AGCO Corporation.
Dr. Donald P. Jacobs, who has been nominated to serve as a director of
the Company for the first time, is Dean of the J. L. Kellogg Graduate School of
Management at Northwestern University. In addition to serving as director of
First National Bank of Chicago, Hartmarx Corporation, Security Capital
Industrial Trust, Unicom Corporation/Commonwealth Edison Company, Unocal
Corporation and Whitman Corporation, Dr. Jacobs is Chairman of the Public Review
Board of Arthur Andersen & Co. and previously served as Chairman of the Board of
Amtrak.
<PAGE>
5
Bruce I. Raben is a managing director of CIBC Oppenheimer Corp. Prior
to joining CIBC Oppenheimer Corp. in January 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 is a Managing Director of Ares Management, L.P., an
investment management firm and 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.
Mr. Sachs serves as a director of Talton Holdings, Inc.
The Board met eight times in 1997 at regularly scheduled and special
meetings, including telephonic meetings. All of the directors in office during
1997 attended at least 75% of the meetings which took place during their tenure
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. (Mr. Adam Wolf, who has served as a member of the
Board of Directors since 1983, is retiring as a member of the Board of Directors
in May 1998). The Audit Committee met three times during 1997. The Audit
Committee recommends the engagement of the independent accountants and makes
other recommendations to the Board based on its review of all of the financial
matters of the Company. The Audit Committee also reviews related party
transactions.
The Compensation Committee of the Board of Directors consists of
Messrs. Andersen (chairperson), Fike and Sachs. The Compensation Committee met
twice during 1997. The Compensation Committee establishes 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 1997. 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 March 1,
1998 (unless otherwise indicated below). 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 March 1, 1998, pursuant to an exercise of options,
warrants or other rights or conversion of preferred stock or otherwise, are
deemed to be outstanding for the purpose of computing the percentage ownership
of such person, but are not deemed to be outstanding for computing the
percentage ownership of any other person shown in the table.
Amount and Nature of Percent
Name and Address of Beneficial Owner Beneficial Ownership of Class
Randolph W. Lenz (1) 2,144,453 (2) 10.4 %
c/o Equity Merchant Banking
2419 E. Commercial Blvd., Ste. 304
Fort Lauderdale, FL 33308
<PAGE>
6
Amount and Nature of Percent
Name and Address of Beneficial Owner Beneficial Ownership of Class
Schaenen Fox Capital Management, LLC 1,055,044 (3) 5.13 %
200 Park Avenue
Suite 3900
New York, NY 10166
Nicholas-Applegate Capital Management 1,047,900 (4) 5.09 %
600 West Broadway, 29th Floor
San Diego, CA 92101
Morgan Stanley, Dean Witter, Discover & Co. 1,193,360 (5) 5.80 %
1585 Broadway
New York, NY 10036
G. Chris Andersen 104,900 (6) *
821 West Shore Drive
Kinnelon, NJ 07405
Ronald M. DeFeo 209,557 (7) *
c/o Terex Corporation
500 Post Road East
Westport, CT 06880
William H. Fike 50,000 (8) *
c/o Magna International Inc.
26200 Lasher Road, Suite 300
Southfield, MI 48034
Fil Filipov 86,250 (9) *
c/o Terex Cranes, Inc.
Hwy 501 East, P.O. Box 260002
Conway, SC 29526-2602
Brian J. Henry 18,445 (10) *
c/o Terex Corporation
500 Post Road East
Westport, CT 06880
David J. Langevin 164,321 *
c/o Terex Corporation
500 Post Road East
Westport, CT 06880
Bruce I. Raben 157,663 (11) *
c/o CIBC Wood Gundy
1999 Avenue of the Stars
Suite 2340
Los Angeles, CA 90067
Marvin B. Rosenberg 148,553 *
189 So. Compo Road
Westport, CT 06880
David A. Sachs 95,300 (12) *
c/o Ares Management, L.P.
1999 Avenue of the Stars
Suite 1900
Los Angeles, CA 90067
<PAGE>
7
Amount and Nature of Percent
Name and Address of Beneficial Owner Beneficial Ownership of Class
Adam E. Wolf 32,000 (13) *
875 East Donges Lane
Milwaukee, WI 53217
All directors and executive officers 1,187,708 (14) 5.67%
as a group (13 persons
_________________________________
* Amount owned does not exceed one percent (1%) of the class so owned.
(1) 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) 1,644,828 shares of Common Stock directly owned by Mr.
Lenz, (b) 32,250 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days and held by Mr. Lenz, and (c)
467,375 shares of Common Stock indirectly owned by Mr. Lenz through
four corporations that he indirectly owns and controls.
(3) Ownership information is as of January 23, 1998.
(4) Ownership information is as of February 3, 1998.
(5) Ownership information is as of February 13, 1998
(6) Includes 55,000 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days.
(7) Includes 37,941 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days.
(8) Includes 50,000 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days.
(9) Includes 33,750 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days.
(10) Includes 5,000 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days.
(11) 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 70,000 shares of Common Stock issuable upon
the exercise of options held by Mr. Raben and which are exercisable
within 60 days.
(12) Includes 3,300 shares of Common Stock owned by Mr. Sachs' wife. Mr.
Sachs disclaims the beneficial ownership of such shares. Also includes
67,500 shares of Common Stock issuable upon the exercise of options
held by Mr. Sachs which are exercisable within 60 days.
(13) Includes 25,000 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.
(14) Includes 387,816 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days.
<PAGE>
8
MANAGEMENT OF THE COMPANY
The following table sets forth, as of March 1, 1998, 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 45 Chairman of the Board, President, Chief
Executive Officer and Chief Operating Officer
and Director
David J. Langevin 46 Executive Vice President
Eric I Cohen 39 Senior Vice President, General Counsel and
Secretary
Joseph F. Apuzzo 42 Vice President-Finance and Controller
Brian J. Henry 39 Vice President-Finance, Treasurer and Director
of Investor Relations
Steven E. Hooper 44 Vice President, Human Resources
For information regarding Mr. DeFeo, 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.
Eric I Cohen became Senior Vice President, Secretary and General
Counsel of the Company on January 1, 1998. Prior to joining the Company, Mr.
Cohen was a partner with the law firm of Robinson Silverman Pearce Aronsohn &
Berman LLP since January 1992.
Joseph F. Apuzzo was appointed Vice President-Finance and Controller of
the Company on May 15, 1996. Mr. Apuzzo previously held the position of Vice
President, Corporate Controller since joining 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. Mr. Apuzzo was employed by
Price Waterhouse LLP in various capacities from 1983 until September 1994.
Brian J. Henry was appointed Vice President-Finance 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.
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
AlliedSignal 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>
9
EXECUTIVE COMPENSATION
Summary Compensation Table
The Summary Compensation Table below shows the compensation for the
past three fiscal years of the Company's Chief Executive Officer and its four
highest paid executive officers who had 1997 earned qualifying compensation in
excess of $100,000 (the "Named Executive Officers"). The Company has included
the president of its Terex Lifting segment, Mr. Fil Filipov, in lieu of less
highly compensated executive officers of the Company.
<TABLE>
<CAPTION>
Summary Compensation Table
----------------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
----------------------------------- --------------------------
Awards
--------------------------
Other Restricted Securities All Other
Annual Stock Underlying Compen-
Name and Salary Bonus Compen- Awards Options/ sation
Principal Position Year ($) ($) sation ($) ($) SARS (#) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
Ronald M. DeFeo 1997 $418,750 $637,500 $- 0.- $ - 0 - 25,000 $ 8,025 (4)
Chairman, President, 1996 393,941 360,000 - 0 - 1,312,500 (2) 25,000 4,500 (5)
Chief Executive Officer 1995 350,000 250,000 - 0 - 237,500 (3) 40,000 3,080 (5)
and Chief Operating
Officer (1)
David J. Langevin 1997 303,600 325,000 - 0 - - 0 - - 0 - 4,750 (5)
Executive Vice President 1996 303,600 250,000 - 0 - 121,875 (6) 12,500 4,500 (5)
1995 303,600 150,000 - 0 - - 0 - 10,000 3,080 (5)
Marvin B. Rosenberg 1997 250,000 125,000 115,625 (8) - 0 - - 0 - 3,656 (5)
Senior Vice President, 1996 250,000 125,000 - 0 - - 0 - - 0 - 3,600 (5)
Secretary and General 1995 250,000 75,000 - 0 - - 0 - 5,000 - 0 -
Counsel (7)
Brian J. Henry 1997 166,667 135,000 - 0 - - 0 - - 0 - 3,360 (5)
Vice President- 1996 165,000 75,000 - 0 - 80,000 (9) 5,800 4,500 (5)
Finance and 1995 165,000 33,000 - 0 - - 0 - 10,000 3,080 (5)
Treasurer
Fil Filipov 1997 300,000 350,000 - 0 - - 0 - - 0 - 28,300 (12)
Terex Lifting 1996 227,083 506,205 (10) - 0 - 500,000 (11) - 0 - 4,500 (5)
President 1995 216,667 450,281 (10) - 0 - - 0 - 40,000 3,080 (5)
</TABLE>
- ----------------------
(1) Mr. DeFeo became Chief Executive Officer on March 24, 1995, and was
named Chairman on March 4, 1998.
(footnotes continued on following page)
<PAGE>
10
(footnotes continued from preceding page)
(2) As part of Mr. DeFeo's 1996 long term incentive compensation, on March
31, 1997, Mr. DeFeo was conditionally granted 100,000 shares of
Restricted Stock (as defined in the "Compensation Committee Report"
below) under the 1996 Plan. The value of the Restricted Stock granted
to Mr. DeFeo set forth in the table above for 1996 is based on the
closing stock price on the New York Stock Exchange ("NYSE") of Common
Stock of $13.125 per share as of March 31, 1997, the date of grant. The
value of Mr. DeFeo's Restricted Stock as of December 31, 1997, based on
a closing stock price on the NYSE of Common Stock of $23.50 per share,
is $2,350,000. The shares of Restricted Stock awarded to Mr. DeFeo
become vested within three years upon the attainment of certain
performance objectives in four categories: share price, operating
profit percentage, peer group operating profit percentage and executive
development. Specifically: (i) 30,000 of the 100,000 shares vested on
March 20, 1998, when the average closing stock price on the NYSE of the
Common Stock during a 30 consecutive trading day period was $24.00 per
share; (ii) 16,500 of the 100,000 shares vested on December 31, 1997,
when operating profit of the Company reached 8.00% for 1997; (iii)
8,500 of the 100,000 shares will vest if the Company's operating profit
percentage reaches 8.75% for 1998 or 1999; (iv) 8,250 of the 100,000
shares vested on December 31, 1998, when the Company's operating profit
percentage reached 70% of the average operating profit percentage of
the Company's peer group of companies (the "Peer Group Average
Operating Profit"); (v) 8,250 of the 100,000 shares will vest if the
Company's operating profit percentage reaches 80% of the Peer Group
Average Operating Profit; (vi) 8,500 of the 100,000 shares will vest if
the Company's operating profit percentage reaches 90% of the Peer Group
Average Operating Profit; (vii) 6,600 of the 100,000 shares vested on
January 1, 1998, upon the promotion of an existing employee or the
hiring of two new employees to an executive position comprising one (1)
of the Company's 10 most senior executive positions (each change, an
"Executive Change"); (viii) 6,600 of the 100,000 shares will vest when
four Executive Changes have occurred; and 6,800 of the 100,000 shares
will vest when five Executive Changes have occurred. Accordingly, as of
April 1, 1998, 61,350 of the 100,000 shares of Restricted Stock have
vested. Upon the earliest to occur of a change of control of the
Company or 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 paid to all
stockholders.
(3) 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
45,000 shares of Restricted Stock under the 1996 Plan. 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 value
of such Restricted Stock as of December 31, 1997, based on a closing
stock price on the NYSE of Common Stock of $23.50 per share, is
$1,175,000. Of the 50,000 shares of Restricted Stock granted to Mr.
DeFeo, 25,000 have vested and the 12,500 shares become vested on
February 15, 1999 and the final 12,500 become vested on February 15,
2000; however, upon the earliest to occur of a change in control of the
Company or 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.
(4) The amount listed above for Mr. DeFeo constitutes $4,800 of the
Company's matching contribution to a defined contribution plan account
and $3,225 of the Company's contribution to an employee stock purchase
plan.
(5) Company's matching contribution to defined contribution plan account.
(6) As part of Mr. Langevin's 1996 long term incentive compensation, on
February 27, 1997, Mr. Langevin was granted 12,500 shares of Restricted
Stock under the Company's 1994 Plan. The value of the Restricted Stock
granted to Mr. Langevin set forth in the table above for 1996 is based
on the closing stock price on the NYSE of Common Stock of $12.00 per
share as of February 27, 1997, the date of grant. The value of such
Restricted Stock as of December 31, 1997, based on a closing stock
price on the NYSE of Common stock of $23.50 per share, is $295,750.
(footnotes continued on following page)
<PAGE>
11
(footnotes continued from preceding page)
The shares of Restricted Stock awarded to Mr.Langevin for 1996 become
vested to the extent of one-fourth of the shares covered thereby on
each of the first four anniversaries of February 27, 1997 and
accordingly, 3,125 shares became vested on February 27, 1998; however,
upon the earliest to occur of a change in control of the Company or the
death or disability of Mr. Langevin, 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.
(7) Mr. Rosenberg retired as an executive officer and employee of the
Company on December 31, 1997.
(8) In consideration for his years of service to the Company, Mr. Rosenberg
received an award of 5,000 shares of Common Stock upon his retirement
from the Company on December 31, 1997. The value of the Common Stock
awarded to Mr. Rosenberg set forth in the table above for 1997 is based
on the closing stock price on the NYSE of Common Stock of $23.50 per
share as of January 2, 1998, the date of the award.
(9) As part of Mr. Henry's long-term incentive compensation, on February
27, 1997, Mr. Henry was granted 5,000 shares of Restricted Stock under
the Company's 1994 Plan. The value of the Restricted Stock granted to
Mr. Henry set forth in the table above for 1997 is based on the closing
stock price on the NYSE of Common Stock of $12.00 per share as of
February 27, 1997, the date of the grant. The value of the Restricted
Stock as of December 31, 1997, based on the closing stock price on the
NYSE of Common Stock of $23.50 per share, is $117,500. The shares of
Restricted Stock awarded to Mr. Henry for 1996 become vested to the
extent of one-fourth of the shares covered thereby on each of the first
four anniversaries of February 27, 1997, and, accordingly, 1,250 shares
became vested on February 27, 1998; however, upon the earliest to occur
of a change in control of the Company or the death or disability of Mr.
Henry, 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.
(10) Pursuant to the terms of compensation arrangements with the Company,
Mr. Filipov's annual bonus is equal to a percentage of net income
(after certain adjustments) of the Company division or subsidiary for
which he has responsibility. From May 1995 through 1996, Mr. Filipov's
bonus was equal to 4% of the Company's net income (after certain
adjustments) from its P.P.M. S.A. and PPM Crane, Inc., subsidiaries.
From January 1994 through April 1995, Mr. Filipov's bonus was equal to
7.5% of the Company's net income (after certain adjustments) from its
Koehring Cranes, Inc., subsidiary.
(11) As part of Mr. Filipov's 1996 long term incentive compensation, on
January 2, 1997, Mr. Filipov was granted 50,000 shares of Restricted
Stock under the Company's 1994 Plan. The value of the Restricted Stock
so granted to Mr. Filipov is based on the closing stock price on the
NYSE of the Company's Common Stock of $10.00 per share as of January 2,
1997, the date of grant. The value of such Restricted Stock as of
December 31, 1997, based on a closing stock price on the NYSE of Common
Stock of $23.50 per share, is $1,175,000. The shares of Restricted
Stock awarded to Mr. Filipov for 1995 become vested to the extent of
one-fourth of the shares covered thereby on each of the first four
anniversaries of January 2, 1997 and accordingly, 12,500 of the shares
awarded became vested on January 2, 1998; however, upon the earliest to
occur of a change in control of the Company or the death or disability
of Mr. Filipov, 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.
(12) Includes $23,500 paid by P.P.M. S.A., a wholly owned subsidiary of the
Company on behalf of Mr. Filipov under his P.P.M. S.A. pension fund and
$4,800 constituting the Company's matching contribution to defined
contribution plan account. The amounts paid by P.P.M. S.A. listed above
as "All Other Compensation" paid to Mr. Filipov were computed by using
the exchange rate of .595 to convert the French francs paid into US
dollars.
<PAGE>
12
Stock Option Grants in 1997
The following table sets forth information on grants of stock options
under the Company's 1988 Incentive Stock Option plan covering key management
employees (the "1988 Plan"), as well as under the Company's 1994 Plan and the
Company's 1996 Plan during the Company's 1997 fiscal year to the Named Executive
Officers. The number of stock options and SARs granted to the Named Executive
Officers during the Company's 1997 fiscal year is also listed in the Summary
Compensation Table in the column entitled "Securities Underlying Options/SARs."
The exercise price of the options equaled or exceeded the fair market price of
the Common Stock at the time of the grant. Options granted under the 1988 Plan
vest ratably over three years from the date of grant. Options granted under the
1994 Plan and under the 1996 Plan vest ratably over four years from the date of
grant.
<TABLE>
<CAPTION>
Stock Option/SAR Grants in 1997
Individual Grants
---------------------------------------------------------------------------------------------
Number of
Securities % of Total Potential Realizable Value
Underlying Options Granted Exercise or at Assumed Annual Rates of
Options to Employees in Base Price Expiration Stock Price Appreciation
Name Granted(#)(1) Fiscal Year ($/Sh) Date Term
5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
Ronald M. DeFeo 25,000 12% $22.75 3/03/08 $357,684 $906,441
David J. Langevin - 0 - - 0 - - - - 0 - - 0 -
Marvin B. Rosenberg - 0 - - 0 - - - - 0 - - 0 -
Brian J. Henry 5,000 2% 12.00 2/27/07 37,733 95,625
Filip Filipov - 0 - - 0 - - - - 0 - - 0 -
</TABLE>
- ------------------
(1) The options listed above for Messrs. DeFeo and Henry, respectively,
were granted under the 1996 Plan and 1994 Plan, respectively, and
become vested to the extent of one-fourth of the shares of Common Stock
covered thereby on each of the first four anniversaries of March 4,
1998, and February 27, 1997, respectively, the dates of grant.
Aggregated Option Exercises in 1997 and Year-End Option Values
The table below summarizes options exercised during 1997 and year-end
option values of the Named Executive Officers listed in the Summary Compensation
Table.
<TABLE>
<CAPTION>
Aggregated Option Exercises in 1997 and Year-End Option Values
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Year-End (#) at Year-End ($)
Shares Value
Name Acquired on Realized Exercisable/Unexercisable Exercisable/Unexercisable
Exercise (#) ($)
<S> <C> <C> <C> <C>
Ronald M. DeFeo 44,792 $674,492 31,691/49,317 $ 465,414/$745,977
David J. Langevin 26,396 $434,576 0/23,504 $ 0/$347,014.50
Marvin B. Rosenberg 27,600 $492,657 0/0 $0/$0
Brian J. Henry 3,000 $ 17,055 5,750/11,250 $104,750/$173,125
Filip Filipov - 0 - - 0 - 33,750/21,250 $589,325/$375,625
</TABLE>
- -----------------------
(1) Based on the closing price of the Company's Common Stock on the NYSE on
December 31, 1997 of $23.50.
<PAGE>
13
Pension Plans
The Company maintains four defined benefit pension plans covering
certain domestic employees, including, as described below, certain officers of
the Company or its subsidiaries. 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. In addition, TEL
maintains a pension scheme for its salaried employees.
Mr. DeFeo and Mr. Filipov participate in the Terex Corporation Salaried
Employees' Retirement Plan (the "Retirement Plan"). None of the other Named
Executive Officers participate in the Retirement Plan. Participation in the
Retirement Plan was frozen as of May 7, 1993.
Participants 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, 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. The annual retirement benefits payable at normal
retirement age under the Retirement Plan will be $4,503 for Mr. DeFeo and
$259.28 for Mr. Filipov (assuming full vesting).
Mr. Filipov also participates in the P.P.M S.A. pension plan, which
provides a pension benefit to employee participants based primarily on amounts
contributed. To receive a benefit, employees must participate a minimum of eight
years. Commencing on the later of November 2004 or Mr. Filipov's retirement, Mr.
Filipov will be entitled to withdraw either annually or quarterly from his
pension, which in the aggregate is currently $65,000.
Compensation of Directors
Directors who are employees of the Company receive no additional
compensation by virtue of their being directors of the Company. For their
service in 1997 nonemployee directors received a cash retainer of $24,000. All
directors of the Company are reimbursed for travel, lodging and related expenses
incurred in attending Board and committee meetings.
In 1997 each outside director also received an option to purchase 7,500
shares of Common Stock. In addition, an outside director who served as
chairperson of a committee of the Board of Directors in 1997 received an option
to purchase 5,000 shares of Common Stock, and an outside director who served as
a member of a committee (but not as a chairperson of such committee) received an
option to purchase 2,500 shares of Common Stock. However, irrespective of the
number of positions held, no outside director received options to purchase more
then 7,500 shares of Common Stock for service as a committee chairperson or
member or as both.
Outside director options granted in 1997 have a term of five years. The
grants were made five business days after the date on which the Company filed
its Annual Report on Form 10-K with the Securities and Exchange Commission. The
exercise price is the closing price on the NYSE of the Common Stock on such
date. The options vested upon grant.
Effective January 1, 1998, the compensation program for outside
directors was revised, primarily to make the annual retainer for Board service
payable in Common Stock or in options for Common Stock or both, in the
proportion elected by each director, to enable directors to defer receipt of
their fees and to establish a Common Stock ownership objective for outside
directors.
<PAGE>
14
Under the new program, outside directors receive annually the equity
equivalent of $35,000 for service as a Board member (or a prorated amount if a
director's service begins other than on the first day of the year). Each
director elects annually, for the particular year, to receive (i) shares of
Common Stock currently, (ii) options to purchase shares of Common Stock
currently, (iii) shares of Common Stock on a deferred basis or (iv) any
combination of the three preceding alternatives. The total for any year of the
(i) number of shares paid, (ii) the number of shares covered by options granted,
and (iii) the number of shares deferred may not exceed 5,000 (as such number may
be adjusted to take into account any change in the capital structure of the
Company by reason of any stock split, stock dividend or recapitalization).
For purposes of calculating the number of shares of Common Stock or
number of options into which the fixed sum translates, Common Stock is valued at
its opening price on the NYSE on the payment or grant date (the first trading
day of any year or any other applicable date). A director who elects to receive
shares of Common Stock currently receives 60% of their dollar value in shares
and the other 40% in cash toward the tax liability on the payment, as an
incentive to hold the shares paid.
In respect of options that a director elects to receive, the price of
the Common Stock, determined as above, is adjusted to reflect year-to-year
volatility in the market price of the Common Stock. This adjusted price is the
value of the underlying option at the time of grant. For 1998 the adjustment for
option valuation purposes values the grant-date price of the Common Stock at
25%. Options vest immediately upon grant and have a five-year term.
Also under the new program, each director who serves as chairperson of
a committee of the Board receives an annual retainer of $2,500, payable in cash,
and each director who serves as a member of a committee (including any committee
that the director chairs) receives an annual retainer of $2,500, payable in
cash. For a director whose service begins other than on the first day of the
year, any retainer is prorated. Directors may elect to defer receipt of
retainers for committee service in Common Stock or cash or a combination of
both.
Board retainers and committee retainers (or portions of either) that a
director elects to defer in Common Stock under the Company's Deferred
Compensation Plan are credited to a Common Stock index account, which fluctuates
in value with the market value of the Common Stock. Committee retainers (or
portions thereof) that a director elects to defer in cash are credited to an
interest-bearing account and earn interest, which is compounded annually. The
current rate of interest is 8% per annum. Payment of any deferral (whether in
Common Stock or cash) is deferred until the director's termination of service or
such earlier date as the director specifies when electing the applicable
deferral.
The new program also establishes a Common Stock ownership objective for
outside directors. Each director is expected to accumulate, over the first three
years of Board service beginning on or after January 1, 1998, the number of
shares of Common Stock that is equal in market value to three times the annual
retainer for Board service ($105,000). Once this ownership objective is
achieved, the director is expected to maintain such minimum ownership level.
The intent is to encourage acquisition and retention of Common Stock by
directors, evidencing the alignment of their interests with the interests of
stockholders. To this end, each new director will receive an award of 1,000
shares of Common Stock and, as an incentive to retention, a cash payment equal
to 40% of the market value of the shares, to defray the income tax liability
related to such award. As set forth above, the Board retainer is payable in
Common Stock or options, and committee retainers may be deferred in Common
Stock.
In addition to compensation under the 1996 Plan, two directors, Mr.
Andersen and Mr. Raben, received an award of 10,000 shares of Common Stock for
their special services in facilitating the completion of the successful
negotiations of a Standstill Agreement with Mr. Randolph W. Lenz, an
approximately 10% stockholder of the Company, in connection with the public
offering by the Company of 5,700,000 shares of Common Stock on July 28, 1997.
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 Chairman, President and Chief Executive Officer or in the event of
<PAGE>
15
a termination of his employment without cause, the Company will provide for a
continuance of his income for a period of 24 months.
The Company has entered into an employment agreement with Mr. Fil
Filipov pursuant to which Mr. Filipov is to be paid a base salary of a minimum
of $300,000 and is to participate in a bonus scheme with a target of 75% of his
salary, based on performance as determined in the discretion of management. The
contract is of indefinite duration; however, in the event that either party
desires to terminate the contract for other than cause, a one (1) year notice
period must be provided; provided, further, however, that Mr. Filipov has the
right at any time, upon thirty (30) days' notice to the Company, to change his
employment status from that of an employee of the Company to consultant, and if
he chooses to exercise such an option, the Company has agreed to pay Mr. Filipov
an amount equal to 60% of his salary in effect immediately prior to his change
in status for a 36-month period.
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
1997 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) motivate and reward individual and team performance
in attaining business objectives and maximizing stockholder value and (iii) link
a significant portion of compensation to appreciation in the price of the
Company's stock, so as to align the interests of the executive officers with
those of the stockholders.
To meet these objectives, the total compensation program is designed to
be competitive with the programs of 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 and
career potential and the combined value of these factors to the Company's
long-term performance and growth.
Executive Compensation Program
Each year the Compensation Committee (the "Committee"), which is
comprised entirely of outside directors, determines the compensation
arrangements for the Company's executive officers, including the individuals
whose compensation is detailed in this proxy statement. The executive
compensation program has three principal components: salary, short-term
incentive compensation (annual bonus) and long-term incentive compensation, each
of which is described below. While the components of compensation are considered
separately, the Committee takes into account the full compensation package
afforded by the Company to the individual executive.
Salary
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 compare to salary ranges of executives at companies of similar size, as
reported in data available to the Committee.
<PAGE>
16
Annual Bonus
In addition to salary, each executive officer is eligible for an annual
bonus, payable under the 1988 Plan, the 1994 Plan or the 1996 Plan. Bonuses are
paid for attainment of (i) Company operating profit and cash flow goals
established annually and (ii) specific performance goals established for each
executive officer at the beginning of the fiscal year. The bonus opportunity is
up to 50% (or, for extraordinary performance, more than 50%) of salary if
Company and individual goals are attained. As stated in footnote (12) to the
Summary Compensation Table with respect to Mr. Filipov, bonuses may be based on
the profitability or other specific performance goals of the particular division
or subsidiary for which an executive officer has responsibility. The Committee
believes that bonuses paid to the individuals whose compensation is reported in
the Summary Compensation Table reflect the level of achievement of Company goals
and individual performance goals during 1997.
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. In determining stock option and Common Stock grants, the Committee
bases its decision on the individual's performance and potential to improve
stockholder value and on the relationship of equity to the other components of
the individual's compensation.
CEO Compensation
The compensation of the Chief Executive Officer ("CEO") is determined
pursuant to the principles stated above. Specific consideration is given to the
CEO's responsibilities and experience in the industry and the compensation
package of chief executive officers of comparable companies. Based on these
factors and on the Company's financial performance in 1996, the Committee set
the CEO's salary for 1997 at $418,750. In order to determine an appropriate
overall level of compensation for Mr. DeFeo for the year, the Committee retained
an outside consultant and also considered information relating to comparable
companies.
In appraising the CEO's performance during 1997, the Committee noted
that the Company's sales for the year increased by 24%, operating profit doubled
and substantial progress was made in all segments of the business. At the same
time, the CEO significantly advanced the goal of improving the Company's capital
structure through a public offering of 5.7 million shares of Common Stock and
negotiation of refinancing of the Company's high-cost debt to provide greater
liquidity, financial flexibility and estimated savings of approximately $25
million per year. Also, an important acquisition, of O&K Mining GmbH, negotiated
in 1997, should promote near-term cost savings through consolidation of
facilities as well as long-term opportunities for growth.
The Committee recognized that, since becoming CEO in 1994, Mr. DeFeo
has been the driving force in successfully transforming Terex and positioning
the Company for the future. For all of the foregoing reasons, the Committee
awarded Mr. DeFeo a bonus of $637,500 for 1997. Two-thirds of this amount, or
$425,000, was based on achievement of the Company's financial goals for the
year; one-third of the amount, or $212,500, reflected his special achievements,
including restructuring the Company. In further recognition of Mr. DeFeo's
performance, the Committee granted him an option for the purchase of 25,000
shares of Common Stock.
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code ("Code") limits to $1
million a year the deduction that a publicly held corporation may take for
compensation paid to each of its chief executive officer and four other most
highly compensated employees unless the compensation is "performance-based."
Performance-based compensation must be based on the achievement of
preestablished, objective performance goals under a plan approved by
stockholders. The Committee believes that circumstances in 1997 warrant the
nondeductibility of the small portion of Mr. DeFeo's compensation for the year
that exceeds $1 million.
<PAGE>
17
In order to reduce or eliminate the amount of compensation that would
not qualify for a tax deduction, should the compensation of the CEO or any other
executive officer exceed $1 million in 1998 or a subsequent year, the Board of
Directors is recommending that stockholders approve a new annual incentive
compensation plan, so that amounts earned thereunder by certain employees will
qualify as performance-based. This plan is described under the heading below,
"Proposal 5: Approval of the Annual Incentive Compensation Plan."
COMPENSATION COMMITTEE
G. CHRIS ANDERSEN
WILLIAM H. FIKE
DAVID A. SACHS
<PAGE>
18
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,
1992 through December 31, 1997. 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
telescopic mobile cranes, aerial work platforms, utility aerial devices,
off-highway trucks and high capacity surface mining trucks): Caterpillar, Inc.,
Deere & Company, Harnischfeger Industries, Inc., Ingersoll Rand Company, JLG
Industries, Inc., The Manitowoc Company and NACCO Industries, Inc. The companies
in the indices are weighted by market capitalization. The stockholder return
shown on the graph below is not indicative of future performance.
The vertical axis of the line graph is scaled from $0.00 at the origin
extending upwards to $400.00, marked in incredments of $50.00. The horizonta
axis begins with the year 1992 at the origin extending to the right through the
year 1997, 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.
Source: Value Line, Inc.
- ----------------------- -------- -------- --------- --------- -------- --------
Name 1992 1993 1994 1995 1996 1997
- ----------------------- -------- -------- --------- --------- -------- --------
- ----------------------- -------- -------- --------- --------- -------- --------
Terex Corporation 100.00 67.90 69.14 46.91 100.00 232.10
- ----------------------- -------- -------- --------- --------- -------- --------
- ----------------------- -------- -------- --------- --------- -------- --------
Standard & Poor's 500 100.00 110.09 111.85 153.80 189.56 252.82
- ----------------------- -------- -------- --------- --------- -------- --------
- ----------------------- -------- -------- --------- --------- -------- --------
Peer Group 100.00 156.30 165.45 208.92 266.22 354.32
- ----------------------- -------- -------- --------- --------- -------- --------
<PAGE>
19
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 March 1, 1998, he beneficially owned, directly or indirectly,
approximately 10% 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 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, received a fee for consulting services which included
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. Mr. Lenz received 33,333
shares of the Company's Common Stock on January 24, 1997, April 30, 1997, and
May 19, 1997, and 50,000 shares on August 20, 1997, all pursuant to the
agreement. 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 and not to acquire any additional shares of the Company's
Common Stock.
On May 16, 1995, the U.S. Department of Labor (hereinafter, the "DOL")
wrote a letter to Randolph W. Lenz in which it alleged that at the time he was a
fiduciary of the Company's retirement plans, Mr. Lenz violated various
provisions of the Employee Retirement Income Security Act of 1974, as amended
(hereinafter, "ERISA") in making certain investments which may have been
imprudent and by possibly engaging in prohibited transactions under ERISA. As of
January 31, 1997, the DOL and Mr. Lenz entered into a settlement agreement which
obligated Mr. Lenz to pay certain amounts to the Terex Corporation Master
Retirement Plan Trust and to the DOL. During 1997, In connection with the DOL
investigation and settlement, the Company incurred expenses (including legal
fees) of $178,865.
On December 31, 1997, Marvin B. Rosenberg retired as Senior Vice
President, Secretary and General Counsel of the Company. In connection with his
retirement, the Company and Mr. Rosenberg entered into an agreement providing
certain benefits to Mr. Rosenberg and the Company. Pursuant to the agreement,
Mr. Rosenberg received an award of 5,000 shares of Common Stock in consideration
of his years of service to the Company and will receive a consulting fee equal
to his base salary in 1997 of $250,000 for services provided in 1998 and
$125,000 for services provided in 1999. The agreement also provides for a
two-year consulting engagement requiring Mr. Rosenberg to make himself available
to the Company to provide consulting services for a certain portion of his time.
In 1997, the Company invested $100,000 in Monon Tractor Corp.
("Monon"), a company which was reorganizing after declaring bankruptcy.
Subsequent to the initial investment, the Company was required to make a
investment in Monon. As a result, the Company elected not to continue its
investment in Monon and not to make the additional required investment. G. Chris
Andersen, a director of the Company and another partner of Andersen Weinroth &
Co., L.P., an affiliate of Mr. Andersen, acquired the Company's investment in
Monon for the amount invested by the Company and assumed the Company's
obligations to make additional investments in Monon.
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 a private investigation
initiated by the Securities and Exchange Commission. During 1997, the Company
incurred $199,141 of legal fees and expenses on behalf of the Company, Randolph
W. Lenz, David J. Langevin and Marvin B. Rosenberg.
<PAGE>
20
The Company has previously publicly announced that it entered in a new
$500 million bank credit facility (the "New Bank Credit Facility") on March 6,
1998 with a syndicate of lenders. Ares Leverage Investment Fund L.P. ("Ares"),
an affiliate of David A. Sachs, a director of the Company, participated as a
lender under the New Bank Credit Facility for the amount of $15 million. Ares
also received a fee of $18,750 for participating as a lender under the New Bank
Credit Facility. Participation by Ares as a lender under the New Bank Credit
Facility was made in the ordinary course of Ares' business and on the same terms
as all other lenders under the New Bank Credit Facility.
Canadian Imperial Bank of Commerce, an affiliate of CIBC Oppenheimer
Corp. of which Bruce I Raben, a director of the Company, is a managing director,
is a lender with a commitment of up to $37.5 million and a Co-Documentation
Agent under the New Bank Credit Facility. Canadian Imperial Bank of Commerce
received a fee of $675,000 for acting a Co-Documentation Agent under the New
Bank Credit Facility. Participation by Canadian Imperial Bank of Commerce as a
lender under the New Bank Credit Facility was made in the ordinary course of its
business and on the same terms as all other lenders under the New Bank Credit
Facility. In addition, CIBC Oppenheimer Corp. was retained by the Company in
connection with the offering of the Company's $150 million Senior Subordinated
Notes on March 31, 1998. CIBC was paid $500,000 as an underwriting discount.
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 1997. 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.
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,
1997, except that the Company has been orally advised that Mr. Lenz filed a Form
4 due for February 1997 on May 6, 1997, a Form 4 due for April 1997 on June 5,
1997 and a Form 4 due for May 1997 on July 11, 1997.
PROPOSAL 2: INDEPENDENT ACCOUNTANTS
The firm of Price Waterhouse LLP audited the consolidated financial
statements of the Company for 1997. The Board of Directors desires to continue
the service of this firm for 1998. 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, 1998. 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 1998.
<PAGE>
21
PROPOSALS 3 AND 4: APPROVAL OF AMENDMENTS TO THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF SHARES
OF COMMON STOCK THE COMPANY IS AUTHORIZED TO ISSUE TO 150,000,000
AND TO INCREASE THE NUMBER OF SHARES OF PREFERRED STOCK
THE COMPANY IS AUTHORIZED TO ISSUE TO 50,000,000 SHARES
Proposed Amendments
The Company's stockholders are being requested to approve an amendment
to the Company's Restated Certificate of Incorporation (the "Certificate"), the
full text of which is set forth in Exhibit A to this Proxy Statement, (i)
increasing the number of authorized shares of Common Stock from 30,000,000 to
150,000,000 ("Proposal 3") and (ii) increasing the number of authorized shares
of Preferred Stock from 10,000,000 to 50,000,000 ("Proposal 4"). The Company's
stockholders may separately vote for, against or abstain with respect to
Proposals 3 and 4. If Proposals 3 and 4 are approved, the Company's authorized
capital stock will consist of 150,000,000 shares of Common Stock and 50,000,000
shares of Preferred Stock. The Company has no present intention to issue any of
the shares of Common stock or Preferred Stock being authorized hereby.
As of April 6, 1998, the Company has available only approximately
9,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock
authorized for issuance, and, accordingly, management and the Board of Directors
believe an increase in the number of shares of both common Stock and Preferred
Stock authorized to be issued is prudent. The shares of Common Stock and
Preferred Stock to be authorized pursuant to the amendment would be available
for possible future public offerings of equity, stock dividends or splits,
financing and acquisition transactions, management incentives and employee
benefit plans and other corporate purposes. The additional shares available for
issuance would give the Company greater flexibility and allow shares of Common
Stock and Preferred Stock to be issued without the delay of a special
stockholders' meeting. The shares of Common Stock and Preferred Stock would be
available for issuance without further action of the stockholders unless such
action is required by applicable law or the rules of any stock exchange on which
the Company securities may be listed.
Effect of the Amendments
The proposed amendment to the Company's Restated Certificate of
Incorporation to increase the number of authorized shares of Common Stock and
Preferred Stock may be viewed as having the possible effect of diluting the
stock ownership of current stockholders, as well as discouraging, under certain
circumstances, an unsolicited attempt by another person or entity to acquire
control of the Company. Although the Board of Directors has no present intention
of doing so, the Company's authorized but unissued Common Stock and Preferred
Stock could be issued in one or more transactions which would make a takeover of
the Company more difficult or costly, and less likely. Moreover, authorized
share of Common Stock and Preferred Stock can be implemented to allow for the
issuance of rights to purchase such shares, with such rights having terms
designated to encourage potential acquirers of the Company to negotiate with the
Company's Board of Directors. Such issuances could also enhance the ability of
officers and directors to retain their positions. The amendment is not being
proposed in response to any effort of which the Company is aware to obtain
control of the Company, nor is the Board of Directors currently proposing to the
stockholders any anti-takeover measures.
The Board of Directors recommends that the stockholders vote FOR approval of the
proposed amendments to increase the number of shares of Common Stock the Company
is authorized to issue to 150,000,000 shares and FOR approval of the proposed
amendment to increase the number of shares of Preferred Stock the Company is
authorized to issue to 50,000,000 shares.
PROPOSAL 5: APPROVAL OF THE ANNUAL INCENTIVE COMPENSATION PLAN
The Board of Directors submits to the stockholders for approval the
Terex Corporation Annual Incentive Compensation Plan (the "Annual Plan"). The
Board of Directors believes that it is in the best interest of the Company
<PAGE>
22
and the stockholders to adopt a plan that provides for incentive compensation in
the form of an annual bonus to key executives responsible for the success of the
Company and that can help to attract and retain outstanding executives.
Compensation payable under the Annual Plan is based on annual corporate
performance.
The Company is seeking stockholder approval of the Annual Plan in order
to comply with the requirements of Section 162(m) of the Code, so that certain
compensation paid under the Annual Plan will be Company and the stockholders to
adopt a plan that provides for incentive compensation in the form of an annual
bonus to key executives responsible for the success of the Company and that can
help to attract and retain outstanding executives. Compensation payable under
the Annual Plan is based on annual corporate performance. deductible by the
Company irrespective of the statutory $1 million limit. The Annual Plan is
designed so that all compensation payable thereunder will be fully deductible.
The Annual Plan is intended to be effective as of January 1, 1998, and is
subject to stockholder approval. In the event that the Annual Plan is not
approved by stockholders, the Company's existing annual bonus plan will continue
in effect.
The following summary of the material features of the Annual Plan is
qualified in its entirety by the terms of the Annual Plan as filed with the
Securities and Exchange Commission.
Eligibility
Participation in the Annual Plan will be limited to key employees of
the Company designated by the Compensation Committee of the Board (the
"Committee"). Currently, the Chief Executive Officer has been designated by the
Committee to participate in the Annual Plan. Employees who are not designated to
participate in the Annual Plan may be entitled to incentive compensation in the
discretion of the Committee.
Plan Administration
The Annual Plan will be administered by the Committee, which has full
power and authority to determine which key employees of the Company will receive
awards under the Annual Plan, to set performance goals and bonus targets as of
the commencement of any fiscal year, to interpret and construe the terms of the
Annual Plan and to make all determinations it deems necessary in the
administration of the Annual Plan, including any determination with respect to
the achievement of performance goals and the application of such achievement to
the bonus targets.
Bonus Formula
The Annual Plan is designed to pay an annual bonus equal to a
percentage of certain bonus targets, based on the degree of achievement of
predetermined performance goals with respect to specific business criteria. The
Annual Plan sets out quantitative and qualitative categories of business
criteria upon which performance goals will be based. The business criteria
measures within each category are assigned weightings based upon their relative
degree of importance as determined by the Committee.
In the quantitative category, one or more of the following business
criteria may be used as performance measures: (i) net sales, (ii) operating
earnings, (iii) income before any extraordinary items, (iv) net income, (v)
earnings per share (fully diluted), (vi) working capital, (vii) return on
capital and (viii) return on equity. Quantitative criteria used to measure the
performance of a participant employed in a business unit (i.e., subsidiary or
division) of the Company may be based in whole or in part on results for the
fiscal year of such business unit. In the qualitative category, the business
criteria relate to individual performance, taking into account individual goals
and objectives. Compensation paid under the Annual Plan that is intended to
qualify as performance-based compensation within the meaning of Section 162(m)
of the Code will be based solely on quantitative criteria.
The performance goals with respect to each category of business
criteria are established by the Committee at the commencement of each fiscal
year. No annual bonus for any fiscal year will be paid unless the Company's
Earnings (as defined below) equal at least 85% of budgeted Earnings for that
year, as set by the Board of Directors or a committee thereof responsible for
setting the Company's budget. Earnings, with respect to any fiscal year,
<PAGE>
23
means the Company's income before taxes and extraordinary items, determined in
accordance with generally accepted accounting principles, as reported in the
Company's audited consolidated financial statements for such fiscal year.
Bonus Targets
Annual bonus targets are expressed as a percentage of current salary
with respect to each category of business criteria applied. The Committee
determines the target percentages annually for each individual participating in
the Annual Plan at the commencement of the fiscal year.
Bonus Payments
At the end of any fiscal year for which a bonus may be earned, the
Committee determines each participant's level of achievement of the performance
goals. The percentage of achievement is then applied to the bonus targets to
determine the amount of bonus for each participant. However, the maximum bonus
that any individual may receive for any fiscal year is an amount equal to 200%
of his or her bonus target for the year.
The Annual Plan allows participants to defer receipt of bonuses when
the Committee chooses to offer a deferral option. When deferral is available,
each participant must choose the amount to be deferred prior to the year in
which the bonus may be earned. Deferred amounts are paid when a participant
terminates employment with the Company, either in a lump sum or in a series of
up to 15 installments, as he or she elects. Deferred amounts represent a general
unfunded obligation of the Company and will be credited with interest at a rate
determined by the Committee from time to time.
Termination and Amendment
The Committee may amend or terminate the Annual Plan at any time,
provided that no amendment will be effective prior to approval by the Company's
stockholders to the extent such approval is required to preserve deductibility
of compensation paid pursuant to the Annual Plan under Section 162(m) of the
Code or otherwise required by law.
New Plan Benefits
Because the payment of a bonus under the Annual Plan for any fiscal
year is contingent on the achievement of performance goals as of the end of the
fiscal year, the Company cannot determine the amounts that will be payable or
allocable for fiscal year 1998 or in the future.
If the Annual Plan and the Committee's designated performance goals and
bonus target for Mr. DeFeo for 1998 had been in place during 1997, and if he had
achieved 110% of these goals, Mr. DeFeo would have earned a bonus of $450,000.
The Board of Directors recommends that the stockholders vote FOR approval of the
Terex Corporation Annual Incentive Compensation Plan.
PROPOSAL 6: APPROVAL OF AN AMENDMENT TO THE 1996 PLAN TO INCREASE THE NUMBER OF
SHARES OF THE COMPANY'S COMMON STOCK AVAILABLE FOR ISSUANCE
General
The Board of Directors adopted the 1996 Terex Corporation Long-Term
Incentive Plan (the "1996 Plan") on December 13, 1995, and the stockholders
ratified the 1996 Plan on May 15, 1996. 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
<PAGE>
24
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, (ii) shares of Common Stock, including Restricted Stock ("Stock Awards"),
and (iii) bonus awards, included Restricted Stock, 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 which may
currently be optioned or granted under the 1996 Plan may not exceed 1,000,000
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.
Since Ronald M. DeFeo joined the Company in 1992, Mr. DeFeo has
recruited several new senior executives, and under the direction of this
management team, the Company has successfully implemented a series of strategic
initiatives which have significantly improved the operating profit and capital
structure of the Company, which have transformed the Company and significantly
increased stockholder value. The achievements of the management of the Company
are also recognized in the industry. Accordingly, in order to retain existing
management, as well as attract additional quality management and be able to
compensate executions of businesses that may be acquired, the Board of Directors
of the Company is in the process of considering a management incentive program
for 1998 and subsequent years which will provide management with long-term
motivation to remain in the employ of the Company and continue to increase
stockholder value, thereby aligning management's interests with those of the
stockholders of the Company. While this new incentive program is currently in
the formulation stage and the terms of this program have not been determined,
there is a high likelihood that it will include the granting of Stock Awards
and/or Stock Option Awards. To ensure that there are sufficient shares available
under the 1996 Plan to enable the Company to achieve the objectives set forth
above, the Company proposes to increase the aggregate number of shares of Common
Stock available to be optioned or granted under the 1996 Plan from 1,000,000 to
2,000,000.
Description of the Proposed Amendment to the 1996 Plan
Shares Available
To ensure that there are sufficient shares available under the 1996
Plan to enable the Company to achieve the objectives of the 1996 Plan, the
Company has proposed that Section 5.2 of the 1996 Plan be amended to provide
that the current aggregate number of shares of Common Stock (including
Restricted Stock, if any) available to be optioned or granted shall be increased
from 1,000,000 shares to 2,000,000 shares.
The Board of Directors recommends that the stockholders vote FOR approval of the
proposed amendment to the 1996 Plan.
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 1999 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, 1998.
<PAGE>
25
In addition, the Bylaws of the Company provide that in order for a
stockholder to nominate a candidate for election as a director at an annual
meeting of stockholders or propose business for consideration at such a meeting,
notice must be given to the Secretary of the Company no more than 90 days nor
less than 60 days prior to the first anniversary of the preceding year's annual
meeting. The fact that the Company may not insist upon compliance with these
requirements should not be construed as a waiver by the Company of its right to
do so at any time in the future.
ANNUAL REPORT TO STOCKHOLDERS
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, 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
Eric I Cohen
Secretary
April 8, 1998
Westport, Connecticut
<PAGE>
26
EXHIBIT A
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
The proposed amendment to the Restated Certificate of Incorporation of
the Company (the "Certificate") replaces Section 4(a) of the Certificate with a
new Section 4(a) which shall read as follows:
ARTICLE IV
(a) The aggregate number of shares which the corporation shall have the
authority to issue is 200,000,000 consisting of (i) 150,000,000 shares
designated as Common Stock, par value $.01 per share ("Common Stock"), and (iii)
50,000,000 shares designated as Preferred Stock, par value $.01 per share
("Preferred Stock").
<PAGE>
1
THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF TEREX CORPORATION
The undersigned hereby appoint Ronald M. DeFeo, Eric I Cohen, 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 11:00 A.M. local time, The St. Regis Hotel, 2 East 55th Street, New
York, New York, 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 APPROVAL OF AN AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK,
PAR VALUE $.01 PER SHARE, THE COMPANY IS AUTHORIZED TO ISSUE TO 150,000,000
SHARES IN ITEM 3, FOR APPROVAL OF AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF SHARES OF PREFERRED STOCK THE COMPANY IS
AUTHORIZED TO ISSUE TO 50,000,000 IN ITEM 4, FOR APPROVAL OF THE 1998 TEREX
CORPORATION ANNUAL INCENTIVE COMPENSATION PLAN IN ITEM 5, FOR APPROVAL OF AN
AMENDMENT TO THE 1996 TEREX CORPORATION LONG-TERM INCENTIVE PLAN IN ITEM 6 AND
IN THE DISCRETION OF THE BOARD OF DIRECTORS IN CONNECTION WITH ITEM 7. PLEASE
MARK BOX [X] or [ ].
1. ELECTION OF DIRECTORS: Ronald M. DeFeo, G. Chris Andersen,
William H. Fike, Dr. Donald P. Jacobs,
Bruce I. Raben, Marvin B. Rosenberg, David A. Sachs
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 provided
above nominees listed above below.)
[ ] [ ] ___________________________________
2. RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. APPROVAL OF AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF SHARES OF COMMON STOCK THE COMPANY IS AUTHORIZED TO ISSUE
TO 150,000,000 SHARES:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. APPROVAL OF AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF SHARES OF PREFERRED STOCK THE COMPANY IS AUTHORIZED TO
ISSUE TO 50,000,000 SHARES:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
<PAGE>
2
5. APPROVAL OF THE 1998 TEREX CORPORATION ANNUAL INCENTIVE COMPENSATION PLAN:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
6. APPROVAL OF AN AMENDMENT TO THE 1996 TEREX CORPORATION LONG-TERM INCENTIVE
PLAN TO INCREASE THE NUMBER OF SHARES OF THE COMPANY'S COMMON STOCK AVAILABLE
FOR ISSUANCE:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Please date, sign and mail this
card in the enclosed envelope.
7. Upon such other business as
may properly come before the meeting
or any adjournments, hereby revoking
any proxy heretofore given.
------------------------------
(Stockholder's Signature)
------------------------------
(Stockholder's Signature)
Dated ___________________, 1998
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.
1998 ANNUAL MEETING
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY.
