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
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under ss. 240.14a-12
TEREX CORPORATION
(Name of Registrant as Specified in Its Charter)
..................................................
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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[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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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[ ] Fee paid previously by written preliminary materials.
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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:
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TEREX CORPORATION
500 Post Road East, Westport, Connecticut 06880
--------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 15, 2001
--------------------
The Annual Meeting of Stockholders of Terex Corporation (hereafter, the
"Company") will be held at the corporate offices of Terex Corporation, 500 Post
Road East, Suite 320, Westport, Connecticut, on Tuesday, May 15, 2001, at 10:00
a.m., local time, for the following purposes:
1. To elect seven (7) directors to hold office for one year or until
their successors are duly elected and qualified.
2. To ratify the selection of PricewaterhouseCoopers LLP as independent
accountants of the Company for 2001.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are described more fully in the Proxy Statement
accompanying this Notice.
The Board of Directors of the Company has fixed the close of business on March
28, 2001 as the record date for determining the stockholders entitled to notice
of, and to vote at, the meeting.
EVERY STOCKHOLDER'S VOTE IS IMPORTANT. While all stockholders are invited to
attend the Annual Meeting, we urge you to vote whether or not you will be
present at the Annual Meeting. You may vote by telephone, via the Internet or by
completing, dating and signing the accompanying proxy card and returning it in
the envelope provided. No postage is required if the proxy card is mailed in the
United States. You may withdraw your proxy or change your vote at any time
before your proxy is voted, either by voting in person at the Annual Meeting, by
proxy, by telephone or by the Internet. Please vote promptly in order to avoid
the additional expense of further solicitation.
By order of the Board of Directors,
Eric I Cohen
Secretary
April 2, 2001
Westport, Connecticut
TEREX CORPORATION
500 Post Road East
Westport, Connecticut 06880
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Proxy Statement for the
Annual Meeting of Stockholders
to be held on May 15, 2001
---------------------
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 at 10:00 a.m. on May
15, 2001, at the corporate offices of Terex Corporation, 500 Post Road East,
Suite 320, Westport, Connecticut, 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 11, 2001 to each stockholder entitled to vote
at the Meeting. As of March 28, 2001, the record date for determining the
stockholders entitled to notice of, and to vote at, the Meeting, the Company had
outstanding 26,813,653 shares of common stock, $.01 par value per share (the
"Common Stock").
Proxies that are properly executed, returned to the Company and not revoked
will be voted in accordance with the specifications made. Where no
specifications are given, such Proxies will be voted as the management of the
Company may propose. If any matter not described in this Proxy Statement is
properly presented for action at the meeting, the persons named in the enclosed
form of Proxy will have discretionary authority to vote according to their best
judgment.
Each share of Common Stock is entitled to one vote per share for each
matter to be voted on at the Meeting. The affirmative vote of a majority of the
shares of Common Stock present in person or represented by proxy is required for
the approval of any matters voted upon at the Meeting, other than the election
of directors. The election of directors will require the affirmative vote of a
plurality of the shares of Common Stock present in person or represented by
proxy. A quorum of stockholders is constituted by the presence, in person or by
proxy, of holders of record of Common Stock representing a majority of the
aggregate number of votes entitled to be cast. Abstentions and broker non-votes
will be considered present for purposes of determining the presence of a quorum.
With respect to the election of directors, abstentions and broker non-votes will
not be considered in determining whether nominees have received the vote of a
plurality. With respect to the other matters to be voted upon at the Meeting,
abstentions will have the effect of a negative vote and broker non-votes will
have no effect on the outcome of the vote.
Proxy solicitations will be made primarily by mail, but solicitations may
also be made by telephone, via the Internet or by 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.
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).
Any stockholder also has the right to revoke the Proxy at any time by executing
a later-dated Proxy, by telephone or via the Internet or by written revocation
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 at or prior to the Meeting, will be voted at the
Meeting.
In order that your shares of Common Stock may be represented at the
Meeting, you are requested to select one of the following methods:
Voting by Mail
o indicate your instructions on the Proxy;
o date and sign the Proxy;
o mail the Proxy promptly in the enclosed envelope; and
o allow sufficient time for the Proxy to be received by the Company
prior to the Meeting.
Voting by Telephone
o use the toll-free number provided in the Proxy; and
o follow the specific instructions provided.
Voting via the Internet
o log onto the Company's voting website (www.voteproxy.com) provided in
the Proxy; and
o follow the specific instructions provided.
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. THE
DELIVERY OF THIS PROXY STATEMENT SHALL, UNDER NO CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE OF THIS PROXY STATEMENT.
PROPOSAL 1: ELECTION OF DIRECTORS
At the Meeting, seven directors of the Company are to be elected to hold
office until the Company's next Annual Meeting of Stockholders or until their
respective successors are duly elected and qualified. Directors shall be elected
by a plurality of the votes of shares of Common Stock represented at the Meeting
in person or by proxy. Unless marked to the contrary, the Proxies received by
the Company will be voted FOR the election of the seven nominees listed below,
all of whom are presently members of the Board. Each nominee has consented to
being named in this Proxy Statement and to serve as a director if elected.
However, should any of the nominees for director decline or become unable to
accept nomination if elected, it is intended that the Board will vote for the
election of such other person as director as it shall designate. The Company has
no reason to believe that any nominee will decline or be unable to serve if
elected.
The information set forth below has been furnished to the Company by the
nominees and sets forth for each nominee, as of March 1, 2001, 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."
2
The Board of Directors recommends that the stockholders vote FOR the following
nominees for director.
First Year
Positions and As Company
Name Age Offices with Company Director
Ronald M. DeFeo 48 Chairman of the Board, President, Chief Executive 1993
Officer, Chief Operating Officer and Director
G. Chris Andersen 62 Director 1992
Don DeFosset 52 Director 1999
William H. Fike 64 Director 1995
Dr. Donald P. Jacobs 73 Director 1998
Marvin B. Rosenberg 60 Director 1992
David A. Sachs 41 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
former Clark Material Handling Company 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.
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., a private merchant banking firm, and also serves as a
director of Headway Corporate Resources, Inc. and GP Strategies Corporation and
as Chairman of the Board of Millenium Cell Inc.
Don DeFosset has served since November 2, 2000 as President and CEO of
Walter Industries, Inc., a diversified company with principal operating
businesses in homebuilding and home financing, water transmission products,
energy services, and specialty aluminum products. Previously, he was Executive
Vice President and Chief Operating Officer of Dura Automotive Systems, Inc., a
global supplier of engineered systems, from October 1999 through June 2000.
Before joining Dura, Mr. DeFosset served as a Corporate Executive Vice
President, President of the Truck Group and a member of the Office of Chief
Executive Officer of Navistar International Corporation from October 1996 to
August 1999. From 1992 to 1996, Mr. DeFosset worked for Allied Signal Inc. in
various positions of increasing responsibility, the last being President of its
Safety Restraint Systems division. Prior to 1992, Mr. DeFosset spent two years
at Mack Trucks and 18 years with Rockwell International Corporation in various
operational assignments in both North America and Europe. Mr. DeFosset serves as
a director of Walter Industries, Inc.
3
William H. Fike is currently President of Fike & Associates, a consulting
firm. Mr. Fike retired as the Vice Chairman and Executive Vice President of
Magna International Inc., an automotive parts manufacturer based in Ontario,
Canada, in February 1999. Prior to joining Magna in August 1994, Mr. Fike was
employed by Ford Motor Company from 1966 to 1994, where he served most recently
as a Corporate Vice President and as President of Ford Europe. Mr. Fike
currently serves as a director of Magna and Millenium Cell Inc.
Dr. Donald P. Jacobs is Dean of the J.L. Kellogg Graduate School of
Management at Northwestern University. In addition to serving as director of
Hartmarx Corporation, ProLogis Trust (formerly Security Capital Industrial
Trust), CDW Computer Centers, Inc. (Computer Discount Warehouse), and GP
Strategies Corporation, Dr. Jacobs previously served as Chairman of the Public
Review Board of Arthur Andersen & Co. and Chairman of the Board of Amtrak.
Marvin B. Rosenberg retired as Senior Vice President, Secretary and General
Counsel of the Company on December 31, 1997. Mr. Rosenberg served as Senior Vice
President of the Company from January 1, 1994 until his retirement. He also
served as Secretary and General Counsel of the Company from 1987 until his
retirement. 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. (collectively, "KCS"), an entity that, until December 31,
1993, provided administrative, financial, marketing, technical, real estate and
legal services to the Company and its subsidiaries.
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 Evercom, Inc.
The Board met five times in 2000 at regularly scheduled and special
meetings, including telephonic meetings. All of the directors in office during
2000 attended all of the meetings which took place during their tenure as
directors, except for Mr. Jacobs, who attended at least 75% of the meetings
which took place during his tenure as director. 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), DeFosset and Jacobs. The Audit Committee met three times during
2000. The Audit Committee assists the Board in fulfilling its oversight
responsibilities by meeting regularly with the Company's independent accountants
and operating and financial management personnel. The Audit Committee reviews
the audit performed by the Company's independent accountants and reports the
results of such audit to the Board. The Audit Committee reviews the Company's
annual financial statements and all material financial reports provided to the
stockholders and reviews the Company's internal auditing, accounting and
financial controls. The Audit Committee also reviews related party transactions.
All of the members of the Audit Committee are independent directors as
determined pursuant to the listing standards of the New York Stock Exchange
("NYSE"). In addition, the Audit Committee operates under a written charter
adopted by the Board of Directors and intended to comply with the applicable
requirements of the Securities and Exchange Commission ("SEC") and the NYSE. See
"Audit Committee Report."
The Compensation Committee of the Board of Directors consists of Messrs.
Andersen (chairperson), Fike and Sachs. The Compensation Committee met seven
times during 2000. 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. Fike
(chairperson), Andersen and Jacobs. The Nominating Committee met two times
during 2000. The Nominating Committee recommends nominees to fill vacancies on
4
the Board of Directors. The Nominating Committee will consider nominees for
election as director who are recommended by the Company's stockholders. For
details on how stockholders may submit nominations for director, see
"Stockholder Proposals."
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,
2001 (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, 2001, pursuant to an exercise of options
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
Wellington Management Company, LLP 2,597,600 (1), (2) 9.5%
75 State Street
Boston, MA 02109
Hartford Capital Appreciation HLS Fund, Inc. 2,000,000 (1), (2) 7.3%
200 Hopmeadow Road
Simsbury, CT 06089
ICM Asset Management, Inc. 2,463,425 (3) 9.0%
W. 601 Main Avenue, Suite 600
Spokane, WA 99201
Janus Capital Corporation 1,800,500 (4) 6.6%
100 Fillmore Street
Denver, Colorado 80206-4923
FMR Corp. 1,770,494 (5) 6.5%
82 Devonshire Street
Boston, MA 02109
G. Chris Andersen 148,193 (6) *
c/o Andersen, Weinroth & Co., L.P.
1330 Avenue of the Americas, 36th Floor
New York, NY 10019
Ronald M. DeFeo 447,296 (7) 1.6%
c/o Terex Corporation
500 Post Road East
Westport, CT 06880
5
Amount and Nature of Percent
Name and Address of Beneficial Owner Beneficial Ownership of Class
Don DeFosset 9,727 (8) *
c/o Walter Industries
1500 North Dale Mabry Hwy.
Tampa, FL 33607
William H. Fike 60,244 (9) *
15630 Queensferry Drive
Fort Myers, FL 33912
Dr. Donald P. Jacobs 10,886 *
c/o J.L. Kellogg Graduate School
of Management
Northwestern University
2001 Sheridan Road
Evanston, IL 60208
Marvin B. Rosenberg 30,682 *
3228 Pignatelli Crescent
Mt. Pleasant, SC 29466
David A. Sachs 148,692 (10) *
c/o Ares Management, L.P.
1999 Avenue of the Stars, Suite 1900
Los Angeles, CA 90067
Filip Filipov 195,793 (11) *
100 East Huron Street, Unit 4703
Chicago, IL 60611
Ernest R. Verebelyi 65,708 (12) *
c/o Terex Corporation
500 Post Road East
Westport, CT 06880
Eric I Cohen 50,971 (13) *
c/o Terex Corporation
500 Post Road East
Westport, CT 06880
Joseph F. Apuzzo 73,734 (14) *
c/o Terex Corporation
500 Post Road East
Westport, CT 06880
Brian J. Henry 80,815 (15) *
c/o Terex Corporation
500 Post Road East
Westport, CT 06880
All directors and executive officers 1,365,170 (16) 4.9%
as a group (14 persons)
* Amount owned does not exceed one percent (1%) of the class so owned.
(footnotes continued on following page)
6
(footnotes continued from preceding page)
(1) Wellington Management Company, LLP ("WMC") filed a Schedule 13G (a
"Schedule 13G"), dated February 13, 2001, pursuant to Section 13(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
reflecting the beneficial ownership of 2,597,600 shares of Common Stock.
This amount includes all of the shares beneficially owned by Hartford
Capital Appreciation HLS Fund, Inc., an investment advisory client of WMC,
as described below.
(2) Hartford Capital Appreciation HLS Fund, Inc. ("Hartford") filed a Schedule
13G, dated February 14, 2001, reflecting the beneficial ownership of
2,000,000 shares of Common Stock. This amount also is included in the
shares beneficially owned by WMC, an investment advisor of Hartford, as
described above.
(3) ICM Asset Management, Inc. ("ICM") filed a Schedule 13G dated February 13,
2001 reflecting the beneficial ownership of 2,463,425 shares of Common
Stock. James M. Simmons, President of ICM, may be deemed to exercise
control over ICM and thus may be deemed to be a beneficial owner of such
shares.
(4) Janus Capital Corporation ("Janus Capital") filed a Schedule 13G dated
February 15, 2001 reflecting the beneficial ownership of 1,800,500 shares
of Common Stock. This includes 1,718,465 shares of Common Stock owned by
the Janus Strategic Value Fund, one of the funds of which Janus Capital
serves as investment advisor. Thomas H. Bailey, President and Chairman of
the Board of Janus Capital and a significant shareholder of Janus Capital,
may be deemed to exercise control over Janus Capital through such positions
and thus may be deemed to be a beneficial owner of the shares beneficially
owned by Janus Capital.
(5) FMR Corp. ("FMR") filed a Schedule 13G dated February 14, 2001 reflecting
the beneficial ownership of 1,770,494 shares of Common Stock. Edward C.
Johnson 3d, Chairman of FMR, and Abigail P. Johnson, a director of FMR,
through their ownership of FMR stock and as a result of certain voting
arrangements among owners of FMR stock, may be deemed to form a controlling
group with respect to FMR and thus may be deemed to be beneficial owners of
the shares beneficially owned by FMR.
(6) Includes 69,561 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days.
(7) Includes 147,497 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days.
(8) Includes 2,523 shares of Common Stock issuable upon the exercise of options
exercisable within 60 days.
(9) Includes 39,681 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days.
(10) Includes 3,800 shares of Common Stock owned by Mr. Sachs' wife. Mr. Sachs
disclaims the beneficial ownership of such shares. Also includes 69,889
shares of Common Stock issuable upon the exercise of options exercisable
within 60 days. This includes 15,000 shares of Common Stock issuable upon
the exercise of options exercisable within 60 days held by certain trusts
for Mr. Sachs' children, the beneficial ownership of which Mr. Sachs
disclaims.
(11) Includes 80,000 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days.
(12) Includes 5,000 shares of Common Stock issuable upon the exercise of options
exercisable within 60 days.
(13) Includes 11,250 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days.
(14) Includes 27,000 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days.
(15) Includes 17,000 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days.
(16) Includes 475,651 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days.
7
EXECUTIVE OFFICERS
The following table sets forth, as of March 1, 2001, 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 48 Chairman of the Board, President, Chief
Executive Officer, Chief Operating Officer
and Director
Filip Filipov 54 President, Terex Lifting
Ernest R. Verebelyi 53 President, Terex Earthmoving
Eric I Cohen 42 Senior Vice President, Secretary and
General Counsel
Joseph F. Apuzzo 45 Chief Financial Officer
Brian J. Henry 42 Vice President, Finance and Business
Development
Jack Lascar 46 Vice President, Investor Relations and
Corporate Communications
Kevin Barr 41 Vice President, Human Resources
For information regarding Mr. DeFeo, refer to the table listing nominees in
the prior section "Proposal 1: Election of Directors."
Filip Filipov was named President of Terex Lifting on November 1, 1998, and
has served as President and CEO of Terex Cranes since March 1995. Mr. Filipov
served as President and CEO of the Company's Koehring division from 1993 to
1995, and was managing director of Clark Material Handling Company in Germany.
Prior to joining the Company, Mr. Filipov served as divisional president of
Tenneco, Inc., and was Vice President, Construction Equipment Europe at J.I.
Case Co. from 1988 to 1992.
Ernest R. Verebelyi became President of Terex Earthmoving on October 22,
1998. Before joining the Company, Mr. Verebelyi served as Executive Vice
President, Operations of General Signal Corporation. From 1991 to 1996, Mr.
Verebelyi worked for Emerson Electric Company in St. Louis in various
capacities, the last being Executive Vice President. Prior to 1991, Mr.
Verebelyi spent six years with Hussmann Corporation and 14 years with General
Electric in various positions of responsibility.
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 New York City law firm of Robinson Silverman Pearce Aronsohn &
Berman LLP since January 1992 and an associate attorney with that firm from 1983
to 1992.
8
Joseph F. Apuzzo was appointed Chief Financial Officer of the Company on
October 21, 1999. Mr. Apuzzo previously held the positions of Vice
President-Corporate Finance, Vice President-Finance and Controller, and 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 Business
Development on June 1, 1998. Mr. Henry previously held the positions of Vice
President-Finance and Treasurer, and Vice President-Corporate Development and
Acquisitions. Mr. Henry also served as the Company's Director of Investor
Relations. Mr. Henry has been employed by the Company since 1993. He was
employed by KCS from 1990 until 1993.
Jack Lascar became Vice President, Investor Relations and Corporate
Communications of the Company on May 18, 1998. Prior to joining the Company, Mr.
Lascar was employed at Tenneco, Inc. for 17 years in various positions in the
areas of investor relations and business development. Mr. Lascar served as
Tenneco's Vice President of Investor Relations from June 1994 to September 1997
and most recently served as Tenneco's Vice President of Business Development for
Central and Eastern Europe.
Kevin Barr was named Vice President, Human Resources of the Company on
September 25, 2000. Prior to joining the Company, Mr. Barr served as Vice
President-Human Resources at DBT Online since 1998. From 1995 to 1998, Mr. Barr
was at Nabisco, Inc. as Vice President-Human Resources, Asia/Pacific. Prior to
that, Mr. Barr served as Vice President-Human Resources, Asia/Pacific and Latin
America with Dun and Bradstreet Corporation from 1990 to 1995, and in various
human resources executive positions at the Chase Manhattan Bank, N.A. from 1981
to 1990.
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 five other
highest paid executive officers who had 2000 earned qualifying compensation in
excess of $100,000 (the "Named Executive Officers").
Summary Compensation Table
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Annual Compensation Long-Term Compensation
-------------------------------------
--------------------------
Awards
--------------------------
Other Restricted Securities All Other
Annual Stock Underlying Compen-
Name and Salary Bonus Compen- Awards Options/ sation
Principal Position Year ($) ($) sation ($)(1) ($)(2) SARS (#) ($)(3)
------------------ ---- ------- ------------ -------------- ----------- ----------- -----------
Ronald M. DeFeo 2000 $630,000 $1,000,000 $ 25,000 -0- -0- $11,859
Chairman, President, Chief 1999 600,000 1,200,000 81,000 -0- 100,000 11,612
Executive Officer and 1998 481,249 918,750 34,800 -0- 25,000 18,361
Chief Operating Officer
Filip Filipov 2000 375,000 400,000 (4) 115,760 (5) -0- - 0 - 279,712 (6)
President, 1999 360,000 375,000 (7) 79,125 1,130,000 - 0 - 93,444
Terex Lifting 1998 314,583 490,000 42,100 140,000 (8) 50,000 131,658
Ernest R. Verebelyi 2000 365,000 325,000 13,688 -0- - 0 - 15,013
President, 1999 323,750 475,000 26,353 988,750 - 0 - 22,006
Terex Earthmoving (9) 1998 60,948 75,000 - 0 - 147,500 (10) 30,000 557
Eric I Cohen 2000 242,000 175,000 -0- -0- - 0 - 6,676
Senior Vice President, 1999 230,000 200,000 5,000 706,250 20,000 6,552
Secretary and General 1998 210,000 145,000 600 232,188 (11) - 0 - 203,178
Counsel
Joseph F. Apuzzo 2000 240,000 175,000 45,685 (12) -0- - 0 - 6,844
Chief Financial Officer 1999 220,000 175,000 3,750 706,250 - 0 - 6,575
1998 175,999 150,000 8,250 282,750 (13) 24,000 8,183
Brian J. Henry 2000 210,000 175,000 10,000 -0- - 0 - 8,089
Vice President, 1999 200,000 200,000 6,187 706,250 - 0 - 7,260
Finance and 1998 184,999 165,000 8,437 247,750 (13) 24,000 7,367
Business Development
----------------------
(1) Other Annual Compensation represents the Company's matching contribution to
a deferred compensation plan, which matching contribution is made in Common
Stock.
(2) On September 9, 1999, grants of Restricted Stock were made under the Terex
Corporation 1996 Long-Term Incentive Plan (the "1996 Plan") to Mr. Filipov
(40,000 shares), Mr. Verebelyi (35,000 shares), and Messrs. Cohen, Apuzzo
and Henry (25,000 shares each). The value of the Restricted Stock granted
to such Named Executive Officers set forth in
(footnotes continued on following page)
10
(footnotes continued from preceding page)
the table above for 1999 is based on the closing stock price on the NYSE of
the Common Stock of $28.25 per share on September 9, 1999. The value of
such Restricted Stock as of December 31, 2000, based on a closing stock
price on the NYSE of Common Stock of $16.1875 per share, was $647,500 for
Mr. Filipov, $566,563 for Mr. Verebelyi, and $404,688 for each of Messrs.
Cohen, Apuzzo and Henry.
With respect to each grant of Restricted Stock made to Named Executive
Officers on September 9, 1999, vesting is as follows: one half of the
shares of Restricted Stock awarded in each such grant vests in equal
quarterly increments on each of the first four anniversaries of September
9, 1999; one quarter of the shares of Restricted Stock awarded in each such
grant vests if and when the closing stock price on the NYSE of the Common
Stock equals or exceeds $45.00; and one quarter of the shares of Restricted
Stock awarded in each such grant vests if and when the closing stock price
on the NYSE of the Common Stock equals or exceeds $50.00; provided, that if
the $45.00 and $50.00 vesting events both occur in the same calendar year,
only one grant will vest at such time and the other grant will vest on
January 1 of the following year. Upon the earliest to occur of a change in
control of the Company or the death or disability of the recipient of the
grant, any unvested portion of such Restricted Stock grant shall vest
immediately. Dividends, if any, are paid on Restricted Stock awards at the
same rate as paid to all stockholders.
(3) The amounts shown for 2000 include:
(a) Company matching contributions to a defined contribution plan ($4,800
for each of Mr. DeFeo, Mr. Filipov, Mr. Verebelyi, Mr. Cohen, Mr.
Apuzzo and Mr. Henry);
(b) Company contributions to an employee stock purchase plan ($1,849 for
Mr. DeFeo, $226 for Mr. Filipov, $2,674 for Mr. Verebelyi, $364 for
Mr. Cohen, $379 for Mr. Apuzzo and $1,099 for Mr. Henry); and
(c) Premiums paid by the Company with respect to term life insurance for
the benefit of the Named Executive Officers ($5,210 for Mr. DeFeo,
$7,284 for Mr. Filipov, $7,539 for Mr. Verebelyi, $1,512 for Mr.
Cohen, $1,665 for Mr. Apuzzo and $2,190 for Mr. Henry).
(4) Includes a special assignment bonus of $100,000 for Mr. Filipov's efforts
in connection with the integration of Cedarapids, Inc. into the Company.
(5) In addition to a $15,000 matching contribution to a deferred compensation
plan as described in footnote (1), the amount shown for 2000 for Mr.
Filipov also includes:
(a) $66,000 for certain expenses related to an office maintained by Mr.
Filipov in Chicago; and
(b) $34,760 for certain travel expenses incurred by Mr. Filipov's wife.
(6) In addition to the amounts described in footnote (3), the amount shown for
2000 for Mr. Filipov also includes:
(a) a $60,000 contribution by the Company to a deferred compensation plan;
(b) a $30,000 contribution by the Company to an employee pension plan; and
(c) $189,712 paid to Mr. Filipov in connection with relocation of his
residence pursuant to the Company's executive relocation program.
(7) Includes a special assignment bonus of $50,000 for Mr. Filipov's efforts in
connection with the integration of Cedarapids, Inc. into the Company.
(8) As part of Mr. Filipov's long-term incentive compensation, on October 8,
1998, Mr. Filipov was granted 10,000 shares of Restricted Stock under the
Company's 1996 Plan. The value of the Restricted Stock granted to Mr.
Filipov set forth in the table above for 1998 is based on the closing stock
price on the NYSE of Common Stock of $14.00 per share as of October 8,
1998, the date of the grant. The value of such Restricted Stock as of
December 31, 2000, based on a closing stock price on the NYSE of Common
Stock of $16.1875 per share is $161,875. The shares of stock awarded to Mr.
Filipov for 1998 become vested to the extent of one-fourth of the shares
covered thereby on each of the first four anniversaries of October 8, 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 paid to all stockholders.
(9) Mr. Verebelyi commenced employment with the Company on October 22, 1998.
(10) As part of Mr. Verebelyi's long-term incentive compensation, on October 14,
1998, Mr. Verebelyi was granted 10,000 shares of Restricted Stock under the
Company's 1996 Plan. The value of the Restricted Stock granted to Mr.
Verebelyi
(footnotes continued on following page)
11
(footnotes continued from preceding page)
set forth in the table above for 1998 is based on the closing stock price
on the NYSE of the Common Stock of $14.75 per share on October 14, 1998.
The value of such Restricted Stock as of December 31, 2000, based on a
closing stock price on the NYSE of Common Stock of $16.1875 per share is
$161,875. The shares of Restricted Stock awarded to Mr. Verebelyi for 1998
become vested to the extent of one-fourth of the shares covered thereby on
each of the first four anniversaries of October 14, 1998. However, upon the
earliest to occur of a change in control of the Company or the death or
disability of Mr. Verebelyi, 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.
(11) As part of Mr. Cohen's long-term incentive compensation, on January 1,
1998, Mr. Cohen was granted 7,500 shares of Restricted Stock, and on
October 8, 1998, Mr. Cohen was granted 5,000 shares of Restricted Stock,
both under the Company's 1996 Plan. The value of the Restricted Stock
granted on January 1, 1998 is based on the closing stock price on the NYSE
of the Common Stock of $21.625 as of January 2, 1998. The value of the
Restricted Stock granted on October 8, 1998 is based on the closing stock
price on the NYSE of the Common Stock of $14.00 as of October 8, 1998. The
value of such Restricted Stock as of December 31, 2000, based on a closing
stock price on the NYSE of Common Stock of $16.1875 per share is $202,344.
The shares of Restricted Stock awarded to Mr. Cohen for 1998 become vested
to the extent of one-fourth of the shares covered thereby on each of the
first four anniversaries of January 1, 1998 and October 8, 1998,
respectively. However, upon the earliest to occur of a change in control of
the Company or the death or disability of Mr. Cohen, 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 dues and related expenses of $35,923 related to a country club
membership for Mr. Apuzzo.
(13) As part of the long-term incentive compensation of Mr. Apuzzo and Mr.
Henry, on May 8, 1998, Mr. Apuzzo and Mr. Henry were each granted 6,000
shares of Restricted Stock, and on October 8, 1998, Mr. Apuzzo was granted
7,500 shares of Restricted Stock and Mr. Henry was granted 5,000 shares of
Restricted Stock, all under the Company's 1996 Plan. The value of the
Restricted Stock granted to Mr. Apuzzo and Mr. Henry set forth in the table
above for 1998 is based on the closing stock price on the NYSE of the
Common Stock of $29.625 and $14.00 per share on May 8, 1998 and October 8,
1998, respectively. The value of such Restricted Stock as of December 31,
2000, based on a closing stock price on the NYSE of Common Stock of
$16.1875 per share is $218,531 for Mr. Apuzzo and $178,063 for Mr. Henry.
The shares of Restricted Stock awarded to Mr. Apuzzo and Mr. Henry for 1998
become vested to the extent of one-fourth of the shares covered thereby on
each of the first four anniversaries of May 8, 1998 and October 8, 1998,
respectively. However, upon the earliest to occur of a change in control of
the Company or the death or disability of Mr. Apuzzo or Mr. Henry, any
unvested portion of such Restricted Stock shall vest immediately.
Dividends, if any, are paid on Restricted Stock awards at the same rate as
paid to all stockholders.
Stock Option Grants in 2000
No grants of stock options were made during 2000 to the Named Executive
Officers listed in the Summary Compensation Table.
12
Aggregated Option Exercises in 2000 and Year-End Option Values
No exercises of options were made during 2000 by the Named Executive
Officers listed in the Summary Compensation Table. The table below summarizes
year-end option values of the Named Executive Officers listed in the Summary
Compensation Table.
Aggregated Option Exercises in 2000 and Year-End Option Values
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Year-End (#) at Year-End ($)(1)
Shares ------------------------- -------------------------
Acquired on Value Realized
Name Exercise (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
---- -------------- -------------- ------------------------- -------------------------
Ronald M. DeFeo - 0 - - 0 - 116,497/117,250 $599,808/26,172
Filip Filipov - 0 - - 0 - 80,000/25,000 $590,106/27,344
Ernest R. Verebelyi - 0 - - 0 - 5,000/10,000 $7,188/14,375
Eric I Cohen - 0 - - 0 - 10,000/10,000 $16,406/16,406
Joseph F. Apuzzo - 0 - - 0 - 59,500/13,250 $136,484/21,641
Brian J. Henry - 0 - - 0 - 15,750/13,250 $32,109/21,641
----------------------
(1) Based on the closing price of the Company's Common Stock on the NYSE on
December 29, 2000 of $16.1875.
Long-Term Incentive Plan Awards in 2000
No long-term compensation awards were made during 2000 under the Terex
Corporation 2000 Long-Term Incentive Plan ("LTIP") or otherwise to the Named
Executive Officers listed in the Summary Compensation Table.
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,
certain of the Company's foreign subsidiaries maintain defined benefit pension
plans for their employees and/or executives.
Mr. DeFeo and Mr. Filipov participate in the Terex Corporation Salaried
Employees' Retirement Plan, which was merged into the Terex Corporation
Retirement Program for Salaried Employees on June 30, 2000 (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 in the Retirement Plan with five or more years of eligible
service are fully vested and entitled to annual pension benefits beginning at
age 65. Retirement benefits under the Retirement Plan are equal to the product
of (i) the participant's years of service (as defined in the Retirement Plan)
and (ii) 1.02% of final average earnings (as defined in the Retirement Plan)
plus 0.71% of such compensation in excess of amounts shown on the applicable
Social Security Integration Table for participants born prior to 1938. For
participants born during 1938-1954, the formula is modified by replacing the
1.02% and 0.71% figures with 1.08% and 0.65%, respectively. For participants
born after 1954, the formula is modified by replacing the 1.02% and 0.71%
figures with 1.13% and 0.60%, respectively. Service in excess of 25 years is not
recognized. There is no offset for primary Social Security. Participation in the
Retirement Plan was frozen as of May 7, 1993, and no participants, including Mr.
DeFeo and Mr. Filipov, will be credited with service following such date.
13
However, participants not currently fully vested 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 $254 for Mr. Filipov.
Mr. Filipov also participates in a pension plan maintained by PPM S.A.S.,
one of the Company's foreign subsidiaries, 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 this pension. At December 31,
2000, the aggregate amount in Mr. Filipov's PPM S.A.S. pension was $141,059.
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, nonemployee directors receive an annual retainer, as described below.
All directors of the Company are reimbursed for travel, lodging and related
expenses incurred in attending Board and committee meetings.
The compensation program for outside directors is designed primarily to
encourage outside directors to receive the annual retainer for Board service in
Common Stock or in options for Common Stock, or both, to enable directors to
defer receipt of their fees and to satisfy the Company's Common Stock ownership
objective for outside directors.
Under the program, outside directors receive annually the equivalent of
$50,000 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 this fee in (i) shares of Common
Stock currently, (ii) options to purchase shares of Common Stock currently,
(iii) shares of Common Stock on a deferred basis, (iv) cash to be contributed to
the Company's Deferred Compensation Plan, or (v) any combination of the four
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 7,500 (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). If a director elects to
receive shares of Common Stock currently, then 40% of this annual retainer (or
$20,000) is paid in cash to offset the tax liability related to such election.
If a director elects to receive cash, this cash must be contributed into the
Common Stock account of the Company's Deferred Compensation Plan, unless the
director has already satisfied the Company's Common Stock ownership objective
described below, in which case the funds may be invested in an interest-bearing
account in the Company's Deferred Compensation Plan.
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
closing price on the NYSE on the payment or grant date (the first trading day of
any year or any other applicable date). 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 2001 the options were valued at 25% of fair market value of Common
Stock on the date of grant. Options vest immediately upon grant and have a
five-year term.
In addition, 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.
14
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 account. Any Board or committee
retainers that are deferred into the Common Stock account receive a matching 25%
contribution from the Company. Board retainers and committee retainers (or
portions of either) that a director elects to defer in cash are credited to an
interest-bearing account under the Company's Deferred Compensation Plan and earn
interest, which is compounded annually. The current rate of interest is
approximately 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 Company's director compensation program also establishes a Common Stock
ownership objective for outside directors. Each director is expected to
accumulate, over the three-year period commencing January 1, 2000, or, if later,
the first three years of Board service beginning on or after January 1, 2000,
the number of shares of Common Stock that is equal in market value to three
times the annual retainer for Board service ($150,000). 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.
Employment Contracts, Termination of Employment and Change-in-Control
Arrangements
The Company and Ronald M. DeFeo entered into an Amended and Restated
Employment and Compensation Agreement as of April 1, 2000 (the "DeFeo
Agreement"). Pursuant to the DeFeo Agreement, Mr. DeFeo's term of employment
with the Company as Chief Executive Officer, reporting to the Board, extends
through December 31, 2001. In the event of a Change in Control (as such term is
defined in the DeFeo Agreement) on or prior to December 31, 2001, Mr. DeFeo's
term of employment would continue for 36 months after such Change in Control.
Under the DeFeo Agreement, Mr. DeFeo is to receive an initial annual base
salary of $600,000, subject to increase by the Board, as well as annual bonuses
and long-term incentive compensation during his term of employment in accordance
with any plan or plans established by the Company. The Company also agrees to
use its best efforts to have Mr. DeFeo elected as a member and Chairman of the
Board during the term of the DeFeo Agreement.
If Mr. DeFeo's employment with the Company is terminated by the Company
without Cause or by Mr. DeFeo for Good Reason (each as defined in the DeFeo
Agreement), or if the Company elects not to extend the DeFeo Agreement at the
end of its term, Mr. DeFeo is to receive, in addition to his salary, bonus and
other compensation earned through the time of such termination, (i) two times
his base salary, (ii) two times the average of his annual bonuses for the two
calendar years preceding termination, (iii) continuing insurance coverage for up
to two years from termination, (iv) immediate vesting of unvested stock options
and stock grants with a period of one year following termination to exercise his
options, and (v) continuation of all other benefits in effect at the time of
termination for up to two years from termination. The cash portion of this
payment is spread over a 13-month period following the date of termination,
except if such termination occurs within 24 months following a Change in
Control, in which event the cash portion is to be paid in a lump sum. In
addition, if Mr. DeFeo's employment is terminated by the Company without Cause
or by Mr. DeFeo for Good Reason within 24 months following a Change in Control,
Mr. DeFeo is entitled to immediate vesting of any unvested performance stock
options, stock grants, LTIP awards and other similar awards. The DeFeo Agreement
also provides for additional payments to Mr. DeFeo in the event that any
payments under the DeFeo Agreement are subject to excise tax under the Internal
Revenue Code of 1986, as amended (the "Code"), such that Mr. DeFeo retains an
amount of such additional payments equal to the amount of such excise tax.
15
If Mr. DeFeo's employment with the Company is terminated for any reason,
including for Cause, due to Mr. DeFeo's death or disability, or by Mr. DeFeo
voluntarily, or if Mr. DeFeo elects not to extend the DeFeo Agreement at the end
of its term, Mr. DeFeo or his beneficiary is to receive, in addition to his
salary, bonus and other compensation earned through the time of such
termination, (i) a prorated portion of his bonus for the fiscal year during
which such termination occurs, (ii) any deferred compensation then in effect,
(iii) any other compensation or benefits that have vested through the date of
termination or to which Mr. DeFeo may then be entitled, including LTIP, stock
and stock option awards, and (iv) reimbursement of expenses incurred by Mr.
DeFeo through the date of termination but not yet reimbursed.
The DeFeo Agreement requires Mr. DeFeo to keep certain information of the
Company confidential during his employment and thereafter. The DeFeo Agreement
also contains an agreement by Mr. DeFeo not to compete with the business of the
Company during his term of employment with the Company and for a period of 18
months thereafter (24 months thereafter, if the date of Mr. DeFeo's termination
is within 24 months following a Change in Control).
The Company and Filip Filipov entered into a Contract of Employment as of
September 1, 1999, which was supplemented as of April 1, 2000 (the "Filipov
Agreement"). The term of the Filipov Agreement runs through August 31, 2004.
Pursuant to the Filipov Agreement, Mr. Filipov agrees to continue managing the
Company's lifting business and to take on other special assignments from time to
time. The Filipov Agreement provides for an annual salary of $360,000 for Mr.
Filipov, eligibility for stock option grants and restricted stock awards and a
performance bonus scheme with a target of 75% of base compensation. As part of
the Filipov Agreement, Mr. Filipov agrees not to compete with the business of
the Company through August 31, 2004. The Filipov Agreement contains certain
provisions requiring Mr. Filipov to keep certain information of the Company
confidential during his employment and thereafter.
Mr. Filipov or the Company may terminate the Filipov Agreement on two
years' notice, and Mr. Filipov also may be terminated by the Company at any time
for cause. In addition, Mr. Filipov has the right under the Filipov Agreement to
continue his service to the Company on a part-time consulting basis for a period
of 36 months following notice to the Company. Mr. Filipov would receive 60% of
his base salary as consideration for such services and would be allowed to
receive and contribute to certain Company benefits.
If Mr. Filipov's employment with the Company is terminated within 24 months
following a Change in Control, other than for Cause, by reason of death or
Permanent Disability, or by Mr. Filipov without Good Reason (each as defined in
the Filipov Agreement), Mr. Filipov is to receive (i) two times his base salary,
(ii) two times his annual bonus for the last calendar year preceding
termination, (iii) any accrued vacation pay, (iv) his annual bonus for the most
recently completed fiscal year, to the extent such bonus has not yet been paid,
(v) a prorated portion of his bonus for the fiscal year during which such
termination occurs, and (vi) any other amounts earned by Mr. Filipov prior to
such termination but not previously paid. The cash portion of this payment is to
be paid in a lump sum simultaneously with Mr. Filipov's termination following a
Change in Control. The Filipov Agreement also provides for additional payments
to Mr. Filipov in the event that any payments under the Filipov Agreement are
subject to excise tax under the Code, such that Mr. Filipov retains an amount of
such additional payments equal to the amount of such excise tax.
In addition, if Mr. Filipov is so terminated within 24 months following a
Change in Control, Mr. Filipov also will receive (a) immediate vesting of
unvested stock options and stock grants with a period of six months following
termination to exercise his options, (b) immediate vesting of all unvested units
16
granted under the LTIP, (c) continuing insurance coverage for up to 24 months
from termination, and (d) continuation of all other benefits in effect at the
time of termination for up to 24 months from termination. In the event Mr.
Filipov is terminated following a Change in Control, Mr. Filipov agrees not to
compete with the Company for a period of 24 months from the date of his
termination and to keep confidential certain information of the Company.
The provisions of the Filipov Agreement dealing with a Change in Control
remain in effect until the earliest of: (i) the termination of Mr. Filipov's
employment prior to a Change in Control by the Company for Cause, by Mr. Filipov
for any reason other than Good Reason or by reason of Mr. Filipov's death or
Permanent Disability; (ii) the termination of Mr. Filipov's employment with the
Company following a Change in Control by reason of death or Permanent
Disability, by the Company for Cause or by Mr. Filipov for any reason other than
Good Reason; or (iii) three years after the date of a Change in Control;
however, the provisions of the Filipov Agreement dealing with a Change in
Control terminate two years after their effective date if Mr. Filipov is still
in the employ of the Company at such time and a Change in Control has not yet
occurred and is not reasonably expected to occur within six months thereafter.
The Company and each of Ernest R. Verebelyi, Eric I Cohen, Joseph F. Apuzzo
and Brian J. Henry (each an "Executive") entered into a Change in Control and
Severance Agreement as of April 1, 2000 (the "Executive Agreements").
If an Executive's employment with the Company is terminated within 24
months following a Change in Control, other than for Cause, by reason of death
or Permanent Disability, or by the Executive without Good Reason (each as
defined in the Executive Agreements), the Executive is to receive (i) two times
his base salary, (ii) two times his annual bonus for the last calendar year
preceding termination, and (iii) any accrued vacation pay. The cash portion of
this payment is to be paid in a lump sum simultaneously with the Executive's
termination following a Change in Control. The Executive Agreements also provide
for additional payments to the Executives in the event that any payments under
the Executive Agreements are subject to excise tax under the Code, such that the
Executive retains an amount of such additional payments equal to the amount of
such excise tax.
In addition, if an Executive is so terminated within 24 months following a
Change in Control, the Executive also will receive (a) immediate vesting of
unvested stock options and stock grants with a period of six months following
termination to exercise his options, (b) immediate vesting of all unvested units
granted under the LTIP, (c) continuing insurance coverage for up to 24 months
from termination, and (d) continuation of all other benefits in effect at the
time of termination for up to 24 months from termination.
In the event an Executive's employment with the Company is terminated by
the Company without Cause or by the Executive for Good Reason (other than in
connection with a Change in Control), the Company is to pay the Executive (i)
two times his base salary, (ii) two times his annual bonus for the last calendar
year preceding termination and (iii) any accrued vacation pay in 24 equal
monthly payments. In such event, the Executive would also have the right to
exercise any stock options, LTIP awards or similar awards for at least six
months following termination, and would continue to vest in options and stock
awards granted under the Company's incentive plans for 24 months from the date
of termination. In addition, the Company would also provide continuing insurance
coverage and continuation of all other benefits in effect at the time of
termination for up to 24 months from termination.
As part of the Executive Agreements, the Executives agree to keep
confidential certain Company information and to not disparage the Company. Each
Executive Agreement remains in effect until the earliest of: (i) the termination
of the Executive's employment prior to a Change in Control by the Company for
Cause, by the Executive for any reason other than Good Reason or by reason of
17
the Executive's death or Permanent Disability; (ii) the termination of the
Executive's employment with the Company following a Change in Control by reason
of death or Permanent Disability, by the Company for Cause or by the Executive
for any reason other than Good Reason; or (iii) three years after the date of a
Change in Control; however, each Executive Agreement terminates two years after
its effective date if the Executive is still in the employ of the Company at
such time and a Change in Control has not yet occurred and is not reasonably
expected to occur within six months thereafter.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board, recommending compensation for
executive officers, including the Named Executive Officers, during 2000
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 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.
Annual Bonus
In addition to salary, each executive officer is eligible for an annual
bonus under the Company's general executive bonus plan. As discussed below, the
bonus of the Chief Executive Officer (the "CEO") is determined under a different
plan. Bonuses are paid for attainment of (i) Company operating profit and cash
18
flow goals established annually and (ii) specific performance goals established
for each executive officer at the beginning of each year. The Committee believes
that bonuses paid to these individuals, including those whose compensation is
reported in the Summary Compensation Table, reflect the level of achievement of
Company goals and individual performance goals during 2000.
Long-Term Incentive Compensation
The purpose of long-term awards, currently in the form of stock options,
grants of Common Stock including Restricted Stock, and grants under the LTIP, 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, Common Stock
and LTIP grants, the Committee bases its decision on the individual's
performance and potential to improve stockholder value and on the relationship
of equity and objective performance goals to the other components of the
individual's compensation.
CEO Compensation
The compensation of the 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. In order to determine an appropriate overall
level of compensation for Mr. DeFeo for 2000, the Committee retained an outside
consultant and also considered information relating to comparable companies.
In appraising the CEO's performance during 2000, the Committee noted that
the Company's net sales for the year increased by 11.4%, gross profit increased
by 14.8%, operating profit increased by 11.2% and that substantial progress was
made throughout the Company's business. The Company generated $200 million of
cash flow from operations in 2000 and improved its asset utilization by reducing
working capital and freeing in excess of $120 million of cash. At the same time,
the CEO significantly advanced the goal of improving the Company's capital
structure and financial flexibility by overseeing the reduction of approximately
$302 million in net debt and the repurchase of more than 1.3 million shares of
Common Stock pursuant to the Company's stock buyback program during 2000, with
the result being a decrease in the Company's net debt to book capital ratio from
70.3% at the start of 2000 to 61.5% at year end.
The Committee noted that the CEO oversaw the Company's disposition of a
number of operations during 2000, including the sale of its truck-mounted
forklift business, made up of Moffett Engineering Limited, Kooi B.V. and the
Company's Princeton division, for $144 million. The Company also acquired Fermec
Holdings Limited in the United Kingdom, Franna Cranes in Australia and Coleman
Engineering in the United States during 2000.
The Committee also considered that, during 2000: the Company created
EarthKing as an independent company to enter into the e-commerce marketplace for
the construction and mining equipment industry; integrated its surface mining
truck and hydraulic shovel businesses with resulting cost savings and improved
customer service; secured a number of significant new contracts, including a
second multi-year supply contract with Rio Tinto for hydraulic mining shovels
and a major licensing agreement with Compact Truck AG for all-terrain cranes;
expanded and improved its product support program for its lifting customers in
North America and Europe; continued its integration of the Powerscreen and
Cedarapids businesses acquired during 1999; and introduced a number of new
products designed to penetrate markets and broaden the Company's customer base.
The Committee also recognized that, since becoming CEO in 1994, Mr. DeFeo has
been the principal architect in successfully transforming Terex and positioning
the Company for the future.
19
Under the 1998 annual incentive compensation plan, which was approved by
stockholders in 1998, Mr. DeFeo earned a formula bonus for 2000, based on his
achievement of quantitative and qualitative predetermined performance goals, in
the total amount of $1,000,000.
Deductibility of Executive Compensation
Section 162(m) of the 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.
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 any year, the Company's 1998 annual
incentive compensation plan and LTIP were submitted to and approved by
stockholders at the Company's 1998 meeting and 1999 meeting, respectively, so
that amounts earned thereunder by certain employees will qualify as
performance-based.
COMPENSATION COMMITTEE
G. CHRIS ANDERSEN
WILLIAM H. FIKE
DAVID A. SACHS
20
Performance Graph
The following stock performance graph is intended to show the Company's
stock performance compared with that of comparable companies. The stock
performance graph shows the change in market value of $100 invested in the
Company's Common Stock, the Standard & Poor's 500 Stock Index and the Standard &
Poor's Diversified Machinery Index (the "Index") for the period commencing
December 31, 1995 through December 31, 2000. The cumulative total stockholder
return assumes dividends are reinvested. The stockholder return shown on the
graph below is not indicative of future performance.
The Index consists of the following companies, which are in similar lines
of business as the Company: Caterpillar, Inc., Deere & Company, Dover
Corporation, Ingersoll-Rand Company and The Timken Company. The companies in the
Index are weighted by market capitalization.
[Graphic - Graph illustrating Cumulative Total Return using the data below:
Source Georgeson Shareholder Communications Inc.]
------------------- -------- -------- -------- -------- --------- --------
Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Dec-00
------------------- -------- -------- -------- -------- --------- --------
Terex Corp. $100 $213 $495 $601 $584 $341
------------------- -------- -------- -------- -------- --------- --------
S&P 500(R) $100 $123 $164 $211 $255 $232
------------------- -------- -------- -------- -------- --------- --------
S&P(R) Machinery $100 $125 $165 $137 $162 $156
(Diversified) Index
------------------- -------- -------- -------- -------- --------- --------
Source: Georgeson Shareholder Communications Inc.
21
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On March 2, 2000, Terex made a loan to Ronald M. DeFeo, the Chairman, Chief
Executive Officer, President and Chief Operating Officer of the Company, in the
amount of $3 million. The loan bears interest at 9% per annum and matures on
March 31, 2005. Mr. DeFeo prepaid $950,000 of the loan amount in October 2000.
The loan is fully recourse to Mr. DeFeo and is secured by shares of Common Stock
owned by Mr. DeFeo and by payment of amounts earned by Mr. DeFeo under the LTIP.
The terms of the loan require prepayment by Mr. DeFeo of some or all of the
loan's outstanding balance upon the occurrence of certain events, including Mr.
DeFeo's ceasing to be employed by the Company for any reason (including death or
disability), Mr. DeFeo's failing to pay any amounts due under the loan, the
attainment of certain Common Stock price targets and the payment to Mr. DeFeo of
amounts under the LTIP.
Certain former executive officers and directors of the Company and Marvin
B. Rosenberg, a current director and former executive officer of the Company,
are named along with the Company in an ongoing private litigation initiated by
the End of the Road Trust, the successor to certain of the assets of the
bankruptcy estate of Fruehauf Trailer Corporation, a former subsidiary of the
Company. The Company expended approximately $494,000 for legal fees and expenses
in 2000 with respect to this matter, which included the defense of Mr. Rosenberg
and the former executive officers and directors of the Company. The Company is
unable to separately determine the portion of these fees and expenses allocable
to Mr. Rosenberg individually.
In July and August 1999, the Company entered in a $500 million bank credit
facility (the "1999 facility") with a syndicate of lenders. Ares Leveraged
Investment Fund L.P. ("Ares") and Ares Leveraged Investment Fund II, L.P. ("Ares
II"), affiliates of David A. Sachs, a director of the Company, participated as
lenders under the 1999 facility for the amount of $14 million. Ares and Ares II
also received a fee of $24,536 for participating as lenders under the 1999
facility. On March 6, 1998, the Company entered in a $500 million bank credit
facility (the "1998 facility") with a syndicate of lenders. Ares participated as
a lender under the 1998 facility for the amount of $15 million and received a
fee of $18,750 for such participation. Ares, Ares II, Ares III CLO Ltd. and Ares
IV CLO Ltd., other affiliates of Mr. Sachs (collectively, the "Ares Funds"),
currently hold approximately $38 million of the Company's debt under the 1999
facility and the 1998 facility. Participation by Ares and Ares II as lenders
under the 1999 facility and by Ares under the 1998 facility, and purchases of
debt by all of the Ares Funds from time-to-time, have been in the ordinary
course of business of the Ares Funds and on the same terms as all other lenders
and purchasers of debt under the Company's 1999 and 1998 facilities.
The Ares Funds also purchased $10 million principal amount of the Company's
8-7/8% Series C Senior Subordinated Notes issued on March 6, 1999 and $5 million
principal amount of the Company's 10-3/8% Senior Subordinated Notes issued on
March 29, 2001. The purchase by the Ares Funds of the 8-7/8% Series C Senior
Subordinated Notes and the 10-3/8% Senior Subordinated Notes were made in the
ordinary course of Ares' business and on the same terms as all other purchasers
of such Notes.
The Company intends that all transactions with affiliates are to be 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.
See "Audit Committee Report." All of the transactions with affiliates described
above have been reviewed and approved by the Board and/or the Audit Committee.
22
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 2000. 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, 2000.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board has reviewed and discussed the Company's
audited financial statements with the management of the Company and the
Company's independent accountants, PricewaterhouseCoopers LLP. The Audit
Committee has discussed with PricewaterhouseCoopers LLP the matters required to
be discussed by Statement on Auditing Standards 61 (Codification of Statements
on Auditing Standards, Communication with Audit Committees). The Audit Committee
also has received the written disclosures and the letter from the independent
accountants required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees) and has discussed with
PricewaterhouseCoopers LLP the independence of such independent accounting firm.
The Audit Committee also has considered whether PricewaterhouseCoopers LLP's
provision of non-audit services to the Company is compatible with the auditors'
independence.
Based on its review and discussions referred to in the preceding paragraph,
the Audit Committee recommended to the Board that the audited financial
statements for the Company's fiscal year ended December 31, 2000 be included in
the Company's Annual Report on Form 10-K for the Company's fiscal year ended
December 31, 2000 for filing with the SEC.
AUDIT COMMITTEE
DAVID A. SACHS
DON DEFOSSET
DR. DONALD P. JACOBS
PROPOSAL 2: INDEPENDENT ACCOUNTANTS
The firm of PricewaterhouseCoopers LLP has audited the consolidated
financial statements of the Company for 2000. The Board of Directors, at the
recommendation of the Audit Committee, desires to continue the service of this
firm for 2001. Accordingly, the Board of Directors recommends to the
stockholders ratification of the retention of PricewaterhouseCoopers LLP as the
Company's independent accountants for the fiscal year ending December 31, 2001.
If the stockholders do not approve PricewaterhouseCoopers LLP as the Company's
independent accountants, the Board of Directors and the Audit Committee will
reconsider this selection.
23
Representatives of PricewaterhouseCoopers 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.
Audit Fees
During the fiscal year ended December 31, 2000, PricewaterhouseCoopers LLP
charged the Company $1,455,400 for professional services rendered by such firm
for the audit of the Company's annual financial statements and review of the
Company's financial statements included in the Company's quarterly reports on
Form 10-Q for that fiscal year.
Financial Information Systems Design and Implementation Fees
During the fiscal year ended December 31, 2000, PricewaterhouseCoopers LLP
did not provide the Company with professional services of this nature.
All Other Fees
During the fiscal year ended December 31, 2000, PricewaterhouseCoopers LLP
charged the Company $1,789,800 for all other services rendered by such firm
other than those described in "Audit Fees" above.
The Board of Directors recommends that the stockholders vote FOR the
ratification of PricewaterhouseCoopers LLP as independent accountants for 2001.
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 2002 Annual Meeting of Stockholders must be
received at the Company's offices at 500 Post Road East, Westport, Connecticut
06880, no later than December 4, 2001. All proposals must meet the requirements
set forth in the rules and regulations of the SEC in order to be eligible for
inclusion in the proxy statement for that meeting.
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. Accordingly, to nominate a candidate for election as a director at the
Company's 2002 annual meeting or to propose business for consideration at such
meeting, notice must be given between February 14, 2002 and March 16, 2002. 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.
24
ANNUAL REPORT TO STOCKHOLDERS
The Company's 2000 Annual Report, which includes the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2000 as filed with
the SEC and the Company's financial statements for that fiscal year, 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 be addressed to
the Company's Secretary.
STOCKHOLDERS ARE URGED TO VOTE THEIR PROXIES WITHOUT DELAY. A PROMPT RESPONSE
WILL BE GREATLY APPRECIATED.
By Order of the Board of Directors
Eric I Cohen
Secretary
April 2, 2001
Westport, Connecticut
25
THIS IS YOUR PROXY. YOUR VOTE IS IMPORTANT.
Whether or not you plan to attend the Annual Meeting of Stockholders,
you can ensure that your shares are represented at the meeting by completing,
signing and returning your proxy card below.
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
TEREX CORPORATION
May 15, 2001
TO VOTE BY MAIL
---------------
Please date, sign and mail your proxy card in the envelope provided as soon as
possible.
TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY)
--------------------------------------------
Please call toll-free 1-800-PROXIES and follow the instructions. Have your
control number and the proxy card available when you call.
TO VOTE BY INTERNET
-------------------
Please access the web page at www.voteproxy.com and follow the on-screen
instructions. Have your control number available when you access the web page.
YOUR CONTROL NUMBER IS------------->[__________________]
1
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF TEREX CORPORATION
2001 ANNUAL MEETING
The undersigned hereby appoints Ronald M. DeFeo and Eric I Cohen, and
either one of them, proxies with power of substitution to act, by unanimous
vote, or if only one votes or acts then by that one, to vote for the undersigned
at the Annual Stockholders' Meeting of Terex Corporation, to be held at 10:00
A.M., local time, on May 15, 2001, at the offices of Terex Corporation, 500 Post
Road East, Suite 320, Westport, Connecticut, and any adjournment or postponement
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, AND IN THE DISCRETION OF THE BOARD OF
DIRECTORS IN CONNECTION WITH ITEM 3.
Please mark your votes as in this example. [X] .
The Board of Directors recommends a vote FOR the election as directors of
the named nominees and FOR Item 2.
1. ELECTION OF DIRECTORS: NOMINEES: Ronald M. DeFeo, G. Chris Andersen,
Don DeFosset, William H. Fike,
Dr. Donald P. Jacobs, Marvin B. Rosenberg,
David A. Sachs
FOR all WITHHOLD (INSTRUCTION: To withhold authority to
nominees AUTHORITY vote for an individual nominee, write
listed at right to vote for all that nominee's name on the space provided
nominees listed below.)
at right
[ ] [ ] ___________________________________
2. RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY.
3. Upon such other business
as may properly come before
the meeting or any adjournments
or postponements, hereby revoking
any proxy heretofore given.
-----------------------------------------
(Stockholder's Signature)
-----------------------------------------
(Stockholder's Signature)
Dated ____________________________, 2001
Please sign exactly as your
name appears above and
date. When signing as
attorney, executor,
administrator, trustee,
guardian or as an officer
signing for a corporation,
please give your full
title. If stock is held
jointly, each owner must
sign.
2