As filed with the Securities and Exchange Commission on May 22, 2001.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------------------------
TEREX CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 3550 34-1531521
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
500 Post Road East
Westport, Connecticut 06880
(203) 222-7170
(Address, including zip code, and telephone
number, including area code, of Registrant's
principal executive offices)
----------------------------------------
TEREX CRANES, INC.
(Exact name of Co-Registrant as specified in its charter)
Delaware 3530 06-1513089
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
c/o Terex Corporation
500 Post Road East
Westport, Connecticut 06880
(203) 222-7170
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive office)
----------------------------------------
PPM CRANES, INC.
(Exact name of Co-Registrant as specified in its charter)
Delaware 3550 39-1611683
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
Atlantic Center for Business and Industry
Highway 501 East
Conway, South Carolina 29526
(803) 349-6900
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive offices)
----------------------------------------
KOEHRING CRANES, INC.
(Exact name of Co-Registrant as specified in its charter)
Delaware 3550 06-1423888
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
106 12th Street S.E.
Waverly, Iowa 50677
(319) 352-3920
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive offices)
----------------------------------------
TEREX-TELELECT, INC.
(Exact name of Co-Registrant as specified in its charter)
Delaware 3530 41-1603748
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
600 Oakwood Road
Watertown, South Dakota 57201
(605) 882-4000
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive offices)
----------------------------------------
TEREX-RO CORPORATION
(Exact name of Co-Registrant as specified in its charter)
Kansas 3530 44-0565380
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
550 Old Highway 56
Olathe, Kansas 66061
(913) 782-1200
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive offices)
----------------------------------------
TEREX MINING EQUIPMENT, INC.
(Exact name of Co-Registrant as specified in its charter)
Delaware 3530 06-1503634
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
c/o Terex Corporation
500 Post Road East
Westport, Connecticut 06880
(203) 222-7170
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive offices)
----------------------------------------
PAYHAULER CORP.
(Exact name of Co-Registrant as specified in its charter)
Illinois 3530 36-3195008
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
5400 South 49th Street
Tulsa, Oklahoma 74107
(918) 446-5881
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive offices)
----------------------------------------
THE AMERICAN CRANE CORPORATION
(Exact name of Co-Registrant as specified in its charter)
North Carolina 3530 56-1570091
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
202 Raleigh Street
Wilmington, North Carolina 28412
(910) 395-8500
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive offices)
----------------------------------------
AMIDA INDUSTRIES, INC.
(Exact name of Co-Registrant as specified in its charter)
South Carolina 3530 57-0531930
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
590 Huey Road
Rock Hill, South Carolina 29730
(803) 324-3011
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive offices)
----------------------------------------
O&K ORENSTEIN & KOPPEL, INC.
(Exact name of Co-Registrant as specified in its charter)
Delaware 3530 58-2084520
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
5400 South 49th Street
Tulsa, Oklahoma 74107
(918) 446-5881
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive offices)
----------------------------------------
CEDARAPIDS, INC.
(Exact name of Co-Registrant as specified in its charter)
Iowa 3550 42-0332910
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
909 17th Street NE
Cedar Rapids, Iowa 52402
(319) 363-3511
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive offices)
----------------------------------------
STANDARD HAVENS, INC.
(Exact name of Co-Registrant as specified in its charter)
Delaware 3550 43-0913249
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
909 17th Street NE
Cedar Rapids, Iowa 52402
(319) 363-3511
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive offices)
----------------------------------------
STANDARD HAVENS PRODUCTS, INC.
(Exact name of Co-Registrant as specified in its charter)
Delaware 3550 43-1435208
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
909 17th Street NE
Cedar Rapids, Iowa 52402
(319) 363-3511
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive offices)
----------------------------------------
BL PEGSON USA, INC.
(Exact name of Co-Registrant as specified in its charter)
Connecticut 3550 31-1629830
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
c/o Terex Corporation
500 Post Road East
Westport, Connecticut 06880
(203) 222-7170
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive offices)
----------------------------------------
BENFORD AMERICA, INC.
(Exact name of Co-Registrant as specified in its charter)
Delaware 3550 76-0522879
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
590 Huey Road
Rock Hill, South Carolina 29730
(803) 324-3011
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive offices)
----------------------------------------
COLEMAN ENGINEERING, INC.
(Exact name of Co-Registrant as specified in its charter)
Tennessee 3550 62-0949893
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
835 Highway 178 East
Holly Springs, Mississippi 38634
(662) 252-5252
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive offices)
----------------------------------------
FINLAY HYDRASCREEN USA, INC.
(Exact name of Co-Registrant as specified in its charter)
New Jersey 3550 22-2776883
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
c/o Terex Corporation
500 Post Road East
Westport, Connecticut 06880
(203) 222-7170
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive offices)
----------------------------------------
EARTHKING, INC.
(Exact name of Co-Registrant as specified in its charter)
Delaware 5080 06-1572433
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
500 Post Road East, Suite 240
Westport, Connecticut 06880
(203) 221-4380
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive office)
----------------------------------------
POWERSCREEN HOLDINGS USA INC.
(Exact name of Co-Registrant as specified in its charter)
Delaware 3530 61-1265609
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
c/o Terex Corporation
500 Post Road East
Westport, Connecticut 06880
(203) 222-7170
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive office)
----------------------------------------
POWERSCREEN INTERNATIONAL LLC
(Exact name of Co-Registrant as specified in its charter)
Delaware 3530 61-1340898
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
c/o Terex Corporation
500 Post Road East
Westport, Connecticut 06880
(203) 222-7170
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive office)
----------------------------------------
POWERSCREEN NORTH AMERICA INC.
(Exact name of Co-Registrant as specified in its charter)
Delaware 3530 61-1340891
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
c/o Terex Corporation
500 Post Road East
Westport, Connecticut 06880
(203) 222-7170
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive office)
----------------------------------------
POWERSCREEN USA LLC
(Exact name of Co-Registrant as specified in its charter)
Kentucky 3530 31-1515625
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
11001 Electron Drive
Louisville, Kentucky 40299
(502) 267-2314
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive office)
----------------------------------------
ROYER INDUSTRIES, INC.
(Exact name of Co-Registrant as specified in its charter)
Pennsylvania 3550 24-0708630
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
341 King Street
Myerstown, Pennsylvania 17067
(717) 866-2357
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive office)
----------------------------------------
TEREX BARTELL, INC.
(Exact name of Co-Registrant as specified in its charter)
Delaware 3530 34-1325948
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification no.)
590 Huey Road
Rock Hill, South Carolina 29730
(803) 324-3011
(Address, including zip code, and telephone
number, including area code, of Co-Registrant's
principal executive office)
----------------------------------------
Eric I Cohen, Esq.
Terex Corporation
500 Post Road East
Westport, Connecticut 06880
(203) 222-7170
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------------------------------
Approximate date of commencement of proposed sale to
public: As soon as practicable after the
Registration Statement becomes effective.
If the securities being registered on this form are being
offered in connection with the formation of a holding company
and there is compliance with General Instruction G, check the
following box: |_|
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_|
CALCULATION OF REGISTRATION FEE
============================================================================================================================
Proposed Proposed
Title of Each Class of Maximum Maximum Amount of
Securities to be Amount to be Offering Price Aggregate Registration
Registered Registered per Unit(1) Offering Price(1) Fee
----------------------------------------------------------------------------------------------------------------------------
$300,000,000
10-3/8% Senior Subordinated Notes due 2011 aggregate 100% $300,000,000 $75,000.00
principal amount
----------------------------------------------------------------------------------------------------------------------------
Guarantees of the 10-3/8% Senior Subordinated
Notes due 2011 (2) (2) (2) (2)
============================================================================================================================
(1) Estimated solely for purposes of calculation of the registration fee
pursuant to Rule 457(f).
(2) Pursuant to Rule 457(n) no separate registration fee is payable.
The Registrant and the Co-Registrants hereby amend this Registration
Statement on such date or dates as may be necessary to delay its effective date
until the Registrant and the Co-Registrants shall file a further amendment which
specifically states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933 or until
the Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
========================================================================
The information in this Prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities Exchange Commission is effective. This Prospectus is not an offer to
sell securities and is not soliciting an offer to buy securities in any state
where the offer of sale is not permitted.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED MAY 22, 2001
OFFER TO EXCHANGE
all outstanding
10-3/8% Senior Subordinated Notes due 2011
($300,000,000 principal amount outstanding)
for
10-3/8% Series B Senior Subordinated Notes due 2011
Which Have Been Registered Under the Securities Act of 1933
of
TEREX CORPORATION
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON , 2001, UNLESS EXTENDED
We are offering you the opportunity to exchange your 10-3/8% Senior Subordinated
Notes due 2011 for our new 10-3/8% Series B Senior Subordinated Notes due 2011
that are registered under the Securities Act of 1933 in the Exchange Offer. Your
Old Notes are not registered under the Securities Act of 1933. Exchanging your
Old Notes for New Notes will provide you with notes that may be easier to sell
and transfer.
Material terms of the exchange offer are:
o EXPIRATION. The exchange offer will expire at 5:00 p.m., New York City
time, on _________, 2001, unless we extend it.
o EXCHANGE. We will exchange all outstanding Old Notes that are validly
tendered and not validly withdrawn before the exchange offer expires.
o TERMS OF THE NOTES. The terms of the New Notes are substantially identical
to the Old Notes, except that the New Notes are registered under the
Securities Act of 1933. Certain transfer restrictions and registration
rights relating to the Old Notes do not apply to the New Notes.
o REPRESENTATIONS OF HOLDERS. You will be required to make various
representations including that (1) any New Notes received by you will be
acquired in the ordinary course of business, (2) you are not participating
in the distribution of the New Notes, (3) you are not an affiliate of
Terex, and (4) you are not a broker-dealer, and if you are a broker-dealer
that you will receive the New Notes for your own account, you will deliver
a prospectus on resale of your New Notes and that you acquired your Old
Notes as a result of market making activities or other trading activities.
o WITHDRAWAL RIGHTS. You may withdraw tenders of Old Notes at any time before
the exchange offer expires.
o TAX CONSEQUENCES. We believe that the exchange of notes will not be a
taxable event for U. S. federal income tax purposes, but you should see
"Certain United States Federal Income Tax Consequences" on page ___ for
more information.
o USE OF PROCEEDS. We will not receive any proceeds from the exchange offer.
o TRADING. There is no existing market for the New Notes and we will not
apply to list them on any securities exchange.
See "Risk Factors" beginning on page 9 for a discussion of certain risks that
should be considered by holders who tender their Old Notes in connection with
this the exchange offer.
These securities have not been approved or disapproved by the Securities and
Exchange Commission or any state securities commission nor has the Securities
and Exchange Commission or any state securities commission passed upon the
accuracy of adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is __________, 2001
You should rely only on information contained in this document or to
which we have referred you. We have not authorized anyone to provide you with
information that is different. This document may only be used where it is legal
to sell these securities. The information in this document may only be accurate
on the date of this document.
TABLE OF CONTENTS
Page
FORWARD-LOOKING STATEMENTS .................................................. ii
PROSPECTUS SUMMARY........................................................... 1
RISK FACTORS................................................................. 9
THE COMPANY.................................................................. 14
THE EXCHANGE OFFER........................................................... 16
USE OF PROCEEDS.............................................................. 24
CAPITALIZATION............................................................... 25
SELECTED CONSOLIDATED FINANCIAL DATA......................................... 26
BUSINESS..................................................................... 29
DESCRIPTION OF CERTAIN INDEBTEDNESS.......................................... 40
DESCRIPTION OF THE NEW NOTES................................................. 42
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES........................ 80
PLAN OF DISTRIBUTION......................................................... 81
LEGAL MATTERS................................................................ 81
EXPERTS...................................................................... 81
WHERE YOU CAN FIND MORE INFORMATION.......................................... 82
INCORPORATION OF DOCUMENTS BY REFERENCE...................................... 82
i
FORWARD-LOOKING STATEMENTS
This Prospectus and the documents incorporated by reference in this
Prospectus contain and refer to forward-looking statements. In some cases, you
can identify forward-looking statements by terminology such as "may," "will,"
"should," "expects," "intends," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential," "continue," or the negative of these terms or other
comparable terminology. These statements relate to future events or our future
financial performance, and involve known and unknown risks, uncertainties, and
other factors that may cause our actual results, levels of activity, performance
or achievements to differ materially from any future results, levels of
activity, performance or achievements expressed or implied by these forward
looking statements. In evaluating these statements, you should specifically
consider various risks, uncertainties and other factors including, among other
things, those listed under "Risk Factors" and elsewhere in this Prospectus. Some
of the risks which could affect our future results and could cause results to
differ materially from those in our expressed forward-looking statements
include:
o the impact of changes in interest rates on construction and mining
activity;
o downward economic cycles and general economic conditions which affect the
sales of our products;
o the success of integration of acquired businesses;
o the retention of key management;
o impact of the very competitive industries in which our businesses compete
and the effect of pricing, product and other actions taken by our
competitors;
o changes in government spending;
o the effect of changes in laws and regulations;
o the international nature of the manufacturing and sales of our products and
the effect of changes in exchange rates between currencies, as well as
international politics;
o our ability to manufacture and deliver our products to customers on a
timely basis;
o the ability of our suppliers to supply us with parts and components at
competitive prices on a timely basis;
o our continued use of net operating loss carryovers;
o our significant amount of debt and the restrictive covenants contained in
our debt agreements; and
o our being subject to various environmental laws and regulations.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. We are under no duty to update
any of the forward-looking statements after the date of this Prospectus.
ii
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this
Prospectus. This summary is not complete and may not contain all of the
information that you should consider before investing in the New Notes. You
should read the entire Prospectus carefully, including the "Risk Factors"
section and the financial statements and notes to those statements located in
this Prospectus or in Terex's filings with the Securities and Exchange
Commission. All references in this Prospectus to "we," "us," "our," "Terex" or
the "Company" are generally meant to refer to Terex Corporation and its
subsidiaries, unless indicated otherwise.
The Company
We are a diversified global manufacturer of a broad range of equipment
for the construction, infrastructure and mining industries. We are building a
strong franchise under the Terex brand name by delivering reliable,
cost-effective products designed to improve our customers' return on invested
capital. We are primarily organized into two business segments: Terex Lifting
and Terex Earthmoving. Our products are manufactured at 39 plants in the United
States, Europe, Australia and Asia, and are sold primarily through a worldwide
distribution network with over 1,000 locations to the global construction,
infrastructure and surface mining markets.
Over the past several years, we have grown sales significantly, both internally
and through acquisitions, while improving our profitability:
o From 1995 to 2000, we increased our sales from $501.4 million to $2,068.7
million, representing a compound annual growth rate of approximately 32.8%.
o We improved our EBITDA margin from 4.7% in 1995 to 12.1% in 2000.
o We have successfully acquired and integrated over 20 companies since 1995.
Terex Lifting
Terex Lifting manufactures and sells telescopic mobile cranes
(including rough terrain, truck and all terrain mobile cranes), tower cranes,
lattice boom cranes, utility aerial devices (including digger derricks and
articulated aerial devices), telescopic boom material handlers (including
container stackers and rough terrain), truck-mounted cranes (boom trucks),
aerial work platforms (including scissor, articulated boom and straight
telescoping aerial work platforms), and related components and replacement
parts. Construction and industrial customers, as well as utility companies, are
the primary users of these products. Customers use these products to lift
equipment, material or workers to various heights. We believe Terex Lifting is
the leading manufacturer of commercial hydraulic mobile cranes in the United
States, France, Italy and Spain. We also believe Terex Lifting has the second
largest market share of utility aerial devices in the United States and has the
third largest market share of tower cranes worldwide.
Terex Earthmoving
Terex Earthmoving manufactures and sells large hydraulic mining
shovels, loader backhoes, articulated and rigid off-highway trucks, high
capacity surface mining trucks, scrapers, mobile crushing and screening
equipment, asphalt pavers, asphalt mixing plants, and related components and
replacement parts. These products are used primarily by construction, mining,
quarrying and government customers. Customers use hydraulic mining shovels to
load coal, copper ore, iron ore, other mineral-bearing materials or rocks into
high capacity trucks. We believe Terex Earthmoving is the leading manufacturer
of high capacity surface mining trucks and large hydraulic mining shovels with
machine weights in excess of 200 tons worldwide. Customers use mobile crushing
and screening equipment to break down and sort rock into various sizes. We
believe Terex Earthmoving has the second largest market share of mobile crushing
and screening equipment worldwide.
1
Other
Terex Light Construction manufactures and sells portable floodlighting
systems, concrete power trowels, concrete placement systems, concrete finishing
systems, concrete mixers, generators, traffic control products, and related
components and replacement parts. These products are typically used for rental
and construction applications.
In January 2001, we announced the launching of an Internet site by our
subsidiary EarthKing, Inc. In 2001, EarthKing is introducing its e-commerce
capabilities as an independent and unbiased Internet marketplace for the
construction and mining equipment industry. EarthKing's goal is to use the
Internet and technology to provide savings to users of construction and mining
equipment in the selection, acquisition, management and disposition of their
equipment and parts.
Our principal executive offices are located at 500 Post Road East,
Suite 320, Westport, Connecticut 06880, and our telephone number is (203)
222-7170.
Business Strategy
Over the past several years, we have implemented a series of
interrelated operational and strategic initiatives designed to create a
competitive advantage in the marketplace and maximize our financial performance.
These initiatives include: (i) providing our customers with lower cost products
to increase their return on invested capital; (ii) reducing fixed costs to less
than 15% of total costs; (iii) reducing selling expense and eliminating
non-value-added functions throughout the organization; and (iv) increasing our
product and geographic diversity through internal development and acquisitions.
Increase Sales and Market Share Through Best Value Strategy---We have
increased our sales and gained market share in both our Lifting and Earthmoving
business segments by pursuing our best value strategy of providing comparable or
superior products at lower prices:
o We produce reliable and easy to maintain products designed to provide our
customers with a lower total cost of ownership and higher returns on
invested capital as compared to our competitors.
o We typically price our products 10% to 25% below our competition while
providing the same level of functionality.
Examples of our best value strategy include:
o Terex Lifting's primary customers are equipment rental companies which base
rental rates solely on lifting capacity. We believe our lower-cost,
easy-to-use products provide these customers with enhanced returns on
invested capital. As a result, we believe our position in the U.S.
commercial hydraulic mobile crane market has grown from number four in 1994
to the leading market position in 2000.
o We believe our diesel-electric drive surface mining trucks are more
reliable and cost efficient than mechanical drive alternatives offered by
competitors. As a result, we believe we have more than tripled our global
market share from 1997 to 2000, and have the leading global market position
in surface mining trucks.
o In our opinion, Terex articulated off-highway trucks offer comparable or
superior performance at a total cost of up to 20% lower than our
competitors. As a result, we believe our global market share in off-highway
trucks more than doubled from 1997 to 2000.
o We believe our hydraulic mining shovels offer higher mobility and greater
operating time at a lower initial investment than comparably sized
alternatives sold by competitors, and as a result, we believe we are the
global market leader in hydraulic mining shovels over 200 tons.
2
Reduce Costs and Improve Manufacturing Efficiency---Our best value
strategy is supported by ongoing efforts to reduce costs and improve
manufacturing efficiency. Over the past few years, we have initiated several
programs to consolidate manufacturing operations, minimize selling costs,
outsource non-critical manufacturing processes and rationalize product lines in
order to increase profitability and reduce fixed costs. We believe our focus on
reducing costs and improving manufacturing efficiency has yielded significantly
more efficient and flexible operations than our competitors as measured by our:
o Comparatively low selling, general and administrative expense to sales
ratio;
o significantly higher sales per employee; and
o greater capital efficiency (based on the ratio of capital expenditures to
sales).
Some recent examples of our cost reduction initiatives include:
o Since our acquisition of O&K Mining GmbH in March 1998, the number of
employees at O&K Mining has been reduced by approximately 250. Overall, we
estimate cost reduction initiatives have reduced annual operating expenses
by over $13.5 million.
o Since our acquisition of Powerscreen International plc in July 1999, the
number of employees at Powerscreen has been reduced by approximately 250,
and since our acquisition of Cedarapids, Inc. in August 1999, the number of
employees at Cedarapids has been reduced by approximately 525. Overall, we
estimate cost reduction initiatives have reduced annual operating expenses
by over $22.5 million in the aggregate.
Focus on Geographic, Product and End-Market Diversification---Over the
past several years we have focused on growing and improving the operations of
our core Lifting and Earthmoving business segments. We have also expanded the
size and scope of our core businesses both through acquisitions and through
development of new products in order to increase our market share. Management
believes that these initiatives have helped to reduce the effect of potential
cyclical changes in any one product category or geographic market. These
initiatives have also expanded our product lines within our core businesses,
added new technology and improved our distribution network.
o We have developed a geographically diverse revenue base with approximately
49% of revenues in 2000 derived outside the United States.
o We have built a diverse product portfolio addressing a range of
end-markets.
Terex Lifting
2000 Net Sales - $924 million
Product Percent of Net Sales
------- --------------------
Hydraulic Mobile Cranes 33%
Material Handlers 18%
Utility Aerial Devices 17%
Aerial Work Platforms 8%
Tower Cranes 7%
Lattice Boom Cranes 6%
Container Stackers 6%
Boom Trucks 5%
3
Terex Earthmoving
2000 Net Sales - $1.1 billion
Product Percent of Net Sales
------- --------------------
Crushing, Screening and
Paving Equipment 38%
Off-Highway Trucks 34%
Surface Mining Trucks 15%
Hydraulic Shovels 13%
Grow through Acquisitions---During the past several years, we have
invested approximately $1 billion to strengthen our core Lifting and Earthmoving
business segments and complementary businesses through over 20 strategic
acquisitions. We expect that acquisitions will continue to be an important
component of our growth strategy and we are continually reviewing opportunities
to make additional acquisitions, some of which, individually or in the
aggregate, could be material. As with our previous acquisitions, we will
continue to pursue strategic acquisitions which accomplish the following goals:
o complement our core operations
o offer cost reduction opportunities as well as distribution and purchasing
synergies
o provide product diversification
o provide geographic diversification
Company Outlook
We believe long-term industry trends remain favorable to us. The
growing focus by major customers on return on invested capital favors our low
cost, best value strategy, and we believe the continuing development of global
infrastructure and natural resources will require increasing numbers of lifting
and earthmoving equipment. However, in the near-term, we expect weaker
conditions in many of our end markets, particularly during the first half of
2001. Our lifting and construction truck businesses in North America are
expected to experience softening demand primarily due to economic uncertainty in
the United States and higher interest rates during all of 2000. We believe these
conditions will be partially offset by relatively strong demand for
infrastructure equipment by governmental authorities and, ultimately, by lower
interest rates. We believe higher forecast coal and copper prices for 2001 and
an expected increase in capital expenditures by some of our mining customers
should improve performance in our mining business. While we expect a relatively
flat European environment, we believe that demand for our products from energy
producing regions such as Canada and Central and South America should increase
modestly, primarily driven by stronger construction activity resulting from
higher energy prices. We believe our geographic and product diversity, coupled
with our variable cost structure, leave us well positioned to react quickly as
market conditions change.
Summary of Terms of the Exchange Offer
The Exchange Offer............We are offering to exchange up to $300,000,000
aggregate principal amount of our new 10-3/8%
Series B Senior Subordinated Notes due 2011, or
New Notes, which have been registered under the
Securities Act of 1933, for a like amount of our
outstanding 10-3/8% Senior Subordinated Notes due
2011, or Old Notes, which we issued on March 29,
2001 in a private offering. To exchange your Old
Notes, you must properly tender them by following
the procedures under the heading "The Exchange
Offer" and we must accept them.
4
Expiration Date...............The exchange offer expires at 5:00 p.m., New
York City time, on ______________, 2001, unless
we extend it.
Withdrawal Rights.............You may withdraw the tender of your Old Notes at
any time before 5:00 p.m., New York City time, on
the expiration date. If we decide for any reason
not to accept any Old Notes for exchange, we will
return your Old Notes without expense to you
promptly after the expiration or termination of
the exchange offer.
Conditions to the
Exchange Offer............The exchange offer is subject to customary
conditions, some of which we may waive. We reserve
the right to terminate and amend the exchange
offer at any time if any such condition occurs
before the expiration date.
Interest Payments.............The New Notes will bear interest from the date
issued. If we accept your Old Notes for exchange,
then you will waive all interest accrued but not
paid on such Old Notes from the date the New Notes
are issued.
Procedures for Tendering
Old Notes..................If you are a holder of Old Notes who wishes to
accept the exchange offer for New Notes:
o you must complete, sign and date the
accompanying Letter of Transmittal, or a
facsimile thereof and mail or otherwise
deliver it, together with your Old
Notes, to the exchange agent at the
address set forth under "The Exchange
Offer--Exchange Agent;" or
o arrange for The Depository Trust Company
to transmit certain required information
to the exchange agent in connection with
a book-entry transfer.
Do not send Letters of Transmittal and
certificates representing Old Notes to us.
By tendering your Old Notes in this manner, you
will be representing, among other things, that:
o the New Notes you acquire pursuant to
the exchange offer are being acquired in
the ordinary course of your business;
o you are not participating, do not intend
to participate, and have no arrangement
or understanding with any person to
participate, in the distribution of the
New Notes issued to you in the exchange
offer;
o you are not an "affiliate" of ours; and
o you are not a broker-dealer, and if you
are a broker-dealer that you will
receive the New Notes for your own
account, you will deliver a prospectus
on resale of your New Notes and that you
acquired your Old Notes as a result of
market making activities or other
trading activities.
Special Procedures for
Beneficial Owners..........If you are a beneficial owner whose Old Notes are
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee
5
and wish to tender your Old Notes in the exchange
offer, please contact the registered owner as soon
as possible and instruct it to tender on your
behalf. If you wish to tender on your own behalf,
you must, prior to completing and executing the
Letter of Transmittal and delivering your Old
Notes, either arrange to have your Old Notes
registered in your name or obtain a properly
completed bond power from the registered holder.
The transfer of registered ownership may take
considerable time.
Guaranteed Delivery
Procedures.................If you wish to tender your Old Notes and time will
not permit your required documents to reach the
exchange agent by the expiration date, or the
procedure for book-entry transfer cannot be
completed on time, you may tender your Old Notes
according to the guaranteed delivery procedures
set forth in "The Exchange Offer--Procedures for
Tendering."
Appraisal or Dissenters'
Rights.....................Owners of Old Notes do not have any appraisal or
dissenters' rights in the exchange offer.
Consequences of Not Exchanging Old Notes.......If
you do not tender your Old Notes or we reject your
tender, you will not be entitled to any further
registration rights or exchange rights, except
under limited circumstances, and your Old Notes
will continue to be subject to certain
restrictions on transfer. However, your Old Notes
will remain outstanding and entitled to the
benefits of the indenture governing the New Notes.
Resales.......................We believe that you can offer for resale, resell
or otherwise transfer the New Notes without
complying with further registration and prospectus
delivery requirements of the Securities Act if you
make the representations described above under
"Procedures for Tendering Old Notes."
We base our belief on interpretations by the
Securities and Exchange Commission staff in
no-action letters issued to other issuers in
exchange offers like ours. We cannot guarantee
that the Securities and Exchange Commission would
make a similar decision about our exchange offer.
If our belief is wrong, you could incur
liabilities under the Securities Act. We will not
protect you against any loss incurred as a result
of this liability under the Securities Act.
If you are unable to make any of such
representations and you transfer any New Notes
without delivering a proper prospectus or without
qualifying for a registration exemption, you may
incur liability under the Securities Act and
applicable state securities laws. We will not
assume or indemnify you against such liability.
Federal Tax Consequences......Your exchange of Old Notes for New Notes pursuant
to the exchange offer generally will not result in
any gain or loss to you for United States federal
income tax purposes. For more information, see
"Certain United States Federal Income Tax
Consequences."
Use of Proceeds...............We will receive no proceeds from the exchange
offer. We will pay all of our expenses related to
the exchange offer.
Exchange Agent................United States Trust Company of New York.
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Summary Terms of the New Notes
The Exchange Offer relates to the exchange of up to $300,000,000
aggregate principal amount of the Old Notes for an equal aggregate principal
amount of New Notes. The form and terms of the New Notes will be the same as the
form and terms of the Old Notes, except that the New Notes will be registered
under the Securities Act and, therefore, will not bear legends restricting the
transfer thereof. The New Notes will evidence the same debt as the Old Notes and
will be entitled to the benefits of the Indenture. See "Description of the New
Notes" for a more complete description of the New Notes.
Issuer........................Terex Corporation.
Securities Offered............$300,000,000 aggregate principal amount of 10-3/8%
Series B Senior Subordinated Notes due 2011.
Maturity......................April 1, 2011.
Interest Payment Dates........We will pay interest on the New Notes
semi-annually on April 1 and October 1 of each
year, beginning October 1, 2001.
Ranking.......................The New Notes will be our senior subordinated
unsecured obligations. They will rank senior in
right of payment to any of our future subordinated
indebtedness, equal in right of payment with any
of our existing and future senior subordinated
indebtedness, and subordinated in right of payment
to any of our existing and future senior
indebtedness. The New Notes will be effectively
subordinated to indebtedness and other liabilities
of our subsidiaries which are not guarantors. As
of March 31, 2001, we had approximately $461
million of senior indebtedness and approximately
$545 million of senior subordinated indebtedness,
our subsidiaries which are guarantors had
approximately $15 million of senior indebtedness,
and our subsidiaries which are not guarantors had
approximately $33 million of indebtedness.
Guarantees....................Substantially all of our domestic subsidiaries
will guarantee the New Notes with unconditional
guarantees of payment that will effectively rank
below their senior debt, but will rank equal to
their other senior subordinated debt, in right of
payment.
Optional Redemption by Us.....Except in the case of certain equity offerings by
us, we cannot choose to redeem the New Notes until
April 1, 2006. At any time after that date (which
may be more than once), we can choose to redeem
some or all of the New Notes at certain specified
prices plus accrued interest.
Optional Redemption after
Equity Offerings...........At any time (which may be more than once) before
April 1, 2004, we can choose to redeem up to 33.3%
of the outstanding New Notes with money that we
raise in one or more public equity offerings, as
long as we pay 110.375% of the principal amount of
the New Notes plus accrued interest and at least
65% of the New Notes originally issued remain
outstanding afterwards. See "Description of the
New Notes--Optional Redemption."
Change of Control.............Upon the occurrence of certain change of control
events, each holder may require us to repurchase
all or a portion of the New Notes at a purchase
price of 101% of their principal amount plus
accrued interest, if any, to the date of purchase.
See "Description of the New Notes--Change of
Control."
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Covenants.....................The indenture will contain covenants that limit
what we (and most or all of our subsidiaries) may
do. The indenture will limit our ability to:
o incur additional indebtedness;
o pay dividends and make distributions;
o make certain investments;
o permit payment or dividend restrictions
on certain of our subsidiaries;
o transfer and sell assets;
o create certain liens;
o engage in certain transactions with
affiliates;
o issue stock of subsidiaries; and
o consolidate or merge or sell all or
substantially all of our assets and the
assets of our subsidiaries.
In addition, we will be obligated to offer to
repurchase the New Notes at a price of 100% of
their principal amount plus accrued interest to
the date of repurchase in the event of certain
asset sales.
These restrictions and prohibitions are subject to
a number of important qualifications and
exceptions. See "Description of the New
Notes--Certain Covenants."
For more complete information about the New Notes, see the "Description of
the New Notes" section of this Prospectus.
Risk Factors
Your investments in the New Notes will involve certain risks. You should
carefully consider the discussion of risks beginning on page 9 and the other
information included in this Prospectus prior to making an investment in the New
Notes.
8
RISK FACTORS
You should carefully consider the following risk factors in connection with the
Exchange Offer and your decision to exchange your Old Notes for New Notes. You
should also consider the other information contained or incorporated by
reference in this Prospectus.
This Prospectus also contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those anticipated
in these forward-looking statements as a result of certain factors, including
the risks faced by us described below and elsewhere in this Prospectus.
Risks Relating to the Exchange Offer
You are responsible for compliance with exchange offer procedures; You will not
receive notice from the Exchange Agent or us of defects or irregularities in
your tender your Old Notes
Issuance of the New Notes in exchange for your Old Notes pursuant to
this Exchange Offer will be made only after a timely receipt by Terex of your
Old Notes, a properly completed and signed Letter of Transmittal and all other
required documents. Therefore, if you desire to tender your Old Notes in
exchange for New Notes you should allow sufficient time to ensure timely
delivery. Neither the Exchange Agent nor Terex is under any duty to give
notification of defects or irregularities in the tender of your Old Notes for
exchange. Old Notes that are not tendered or are tendered but not accepted for
exchange will, following the completion of this Exchange Offer, continue to be
subject to the existing restrictions on transfer of the Old Notes and, upon
completion of this Exchange Offer, our obligation to register your Old Notes
will terminate.
There may be consequences if you do not exchange your Old Notes for New Notes
If you do not exchange your Old Notes for the New Notes pursuant to the
Exchange Offer, you will continue to be subject to the restrictions on transfer
of your Old Notes described in the legend on your Old Notes. In general, you may
only offer or sell the Old Notes if they are registered under the Securities Act
and applicable state securities laws, or offered and sold pursuant to an
exemption from such requirements. We do not intend to register the Old Notes
under any law. In addition, if you exchange your Old Notes in the Exchange Offer
for the purpose of participating in a distribution of the New Notes, you may be
deemed to have received restricted securities and, if so, will be required to
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction. To the extent Old
Notes are tendered and accepted in the Exchange Offer, the trading market, if
any, for the Old Notes would be damaged. For more information on the
consequences of not exchanging your Old Notes, see "The Exchange Offer --
Consequences of Failure to Exchange."
Risks Related to the Offering of the New Notes
Our significant debt levels may limit our future ability to obtain additional
financing and to pursue business opportunities.
As of March 31, 2001, we had total debt of approximately $1,006
million, which represented approximately 70.5% of our total capitalization.
There are several important consequences of having debt, including the
following:
o a substantial portion of our cash from operating activities will be
used to pay principal and interest on our debt;
o competitive pressures and adverse economic conditions are more likely
to have a negative effect on our business; and
9
o our ability to make acquisitions and to take advantage of significant
business opportunities may be negatively affected.
Our ability to pay the required interest and principal payments on our debt
depends on the future performance of our business. The performance of our
business is subject to general economic conditions and other financial and
business factors. Many of these factors are beyond our control. If we do not
have enough cash flow in the future to pay the required interest or principal
payments on our debt, we may be required to refinance all or a part of our debt
or borrow additional amounts. We do not know if refinancing our debt will be
possible at that time or if we will be able to find someone who will lend us
more money.
In addition, because part of our debt bears interest at floating rates, an
increase in interest rates could adversely affect our ability to make the
required interest and principal payments on our debt. We have entered into
agreements covering part of our floating rate debt which place a cap on the
applicable interest rates.
Our inability to comply with the restrictive debt covenants contained in the
Indenture for the New Notes could lead to an acceleration of our debt under our
debt agreements and possibly bankruptcy.
The indenture for the New Notes and our other existing debt agreements
contain a number of significant covenants. These covenants limit our ability to,
among other things, borrow additional money, make capital expenditures, pay
dividends, dispose of assets and acquire new businesses. These covenants also
require us to meet certain financial tests. Changes in economic or business
conditions, results of operations or other factors could cause us to default
under our debt agreements. If we are unable to comply with these covenants,
there would be a default under our debt agreements. A default, if not waived by
our lenders, could result in acceleration of our debt and possibly bankruptcy.
Since the New Notes are subordinated senior debt, there may not be sufficient
assets to pay amounts owed on the New Notes if a default occurs.
The New Notes will be subordinated to the prior payment in full of all
existing and future senior indebtedness and equal in right of payment with all
other existing and future senior subordinated indebtedness. The guarantees of
our subsidiaries will be subordinated to the prior payment in full of all senior
indebtedness of each subsidiary that is a guarantor of the New Notes, including
obligations under our bank credit facility, and equal in right of payment with
all other existing and future senior subordinated indebtedness of each such
subsidiary. Because of the subordination provisions of the New Notes, in the
event of our bankruptcy, liquidation or reorganization, our assets and the
assets of any of our subsidiaries that are guarantors of the New Notes would be
available to pay obligations on the New Notes only after all payments have been
made on our senior indebtedness and the senior indebtedness of such subsidiary
guarantors.
We cannot assure you that there will be sufficient assets remaining
after all payments have been made to pay amounts due on the New Notes then
outstanding. As of March 31, 2001, we had (i) approximately $461 million of
senior indebtedness outstanding (excluding unused commitments), (ii)
approximately $545 million of senior subordinated indebtedness outstanding and
(iii) approximately $1,006 million of total indebtedness outstanding, and the
subsidiary guarantors had approximately $15 million of indebtedness outstanding,
all of which is senior indebtedness. In addition, certain events of default
under our senior indebtedness would prohibit us from making any payments on the
New Notes, including payments on interest when due. The term "senior
indebtedness" is defined in the "Description of the New Notes" section of this
Prospectus. We are permitted to incur substantial additional indebtedness, some
or all of which may be senior indebtedness.
Some but not all of our subsidiaries will guarantee the New Notes.
Claims of creditors of any subsidiaries which do not guarantee the New Notes,
including trade creditors, secured creditors and creditors holding indebtedness
and guarantees issued by such subsidiaries, will generally have priority with
respect to the assets and earnings of such subsidiaries over our claims or those
of our creditors, including holders of the New Notes, even if the obligations of
those subsidiaries do not constitute senior indebtedness. As of March 31, 2001,
our subsidiaries that are not guarantors had approximately $33 million of
indebtedness outstanding.
10
In addition to being subordinated to all of our senior indebtedness,
the New Notes will not be secured by any of our assets or the assets of the
subsidiaries that are guarantors of the New Notes. Our obligations and the
obligations of the subsidiary guarantors under our bank credit facilities are
secured by a security interest in substantially all of our property and such
subsidiary guarantors, including inventory, equipment, receivables and
intangible assets such as licenses, trademarks and customer lists. If we become
insolvent or are liquidated, or if payment under our bank credit facilities is
accelerated, lenders under the bank credit facilities would be entitled to
exercise the remedies available to a secured lender. Therefore, our bank lenders
will have a claim on such assets before the holders of the New Notes. See
"Description of Certain Indebtedness." We cannot assure you that the liquidation
value of our assets would be sufficient to repay in full the indebtedness under
the bank credit facilities and our other indebtedness, including the New Notes.
As a result of fraudulent conveyance laws, a court could void a guarantee of a
subsidiary, in which event noteholders would cease to have a claim against such
subsidiary guarantor.
Although laws differ among various jurisdictions, in general, under
fraudulent conveyance laws, a court could subordinate or avoid any guarantee and
require noteholders to return payments received from guarantors if it found that
the guarantee was incurred with actual intent to hinder, delay or defraud
creditors or the guarantor did not receive fair consideration or reasonably
equivalent value for the guarantee and the guarantor was any of the following:
o insolvent or was rendered insolvent because of the guarantee,
o engaged or about to engage in a business or transaction for which its
remaining assets constituted unreasonably small capital, or
o intended to incur, or believed or reasonably should have believed that
it would incur, debts beyond its ability to pay at maturity.
If a court avoided a guarantee as a result of fraudulent conveyance, or
held it unenforceable for any other reason, noteholders would cease to have a
claim is against this guarantor and would be solely creditors of the Company.
It may not be possible for us to purchase notes on the occurrence of a change of
control.
Upon the occurrence of a change in control, you may require us to
purchase all or a portion of your New Notes, and the holders of our currently
outstanding $250 million 8-7/8% Senior Subordinated Notes due 2008 may require
us to repurchase all or any portion of their notes. If a change in control were
to occur, we may not have enough funds to pay the purchase price for all
tendered notes. Any future credit agreements or other agreements relating to our
indebtedness may contain provisions that prohibit the purchase of the New Notes
and the currently outstanding senior subordinated notes upon a change in control
or may provide that a change in control constitutes an event of default under
that agreement. If a change in control occurs at a time when we are prohibited
from purchasing the New Notes and the currently outstanding senior subordinated
notes, we could seek the consent of our lenders to purchase the New Notes and
the currently outstanding senior subordinated notes or could attempt to
refinance this debt. If we do not obtain a consent, we could not purchase the
New Notes and the currently outstanding senior subordinated notes. Our failure
to purchase tendered notes and the currently outstanding senior subordinated
notes would constitute an event of default under the indenture, which might
constitute a default under the terms of our other debt. In such circumstances,
or if a change in control would constitute an event of default under our senior
indebtedness, the subordination provisions of the indenture would restrict
payments to you. The term "change in control" is limited to certain specified
transactions and may not include other events that may harm our financial
condition. Our obligation to offer to purchase the New Notes upon a change in
control would not necessarily afford you protection in the event of a highly
leveraged transaction, reorganization, merger or similar transaction involving
us. The term "change of control" is defined in the "Description of the New
Notes---Certain Definitions" section.
11
You cannot be sure that an active trading market will develop for the New Notes
The New Notes are being offered to the holders of the Old Notes. The
Old Notes were issued on March 29, 2001 to a small number of institutional
investors and overseas investors and are eligible for trading in the Private
Offering, Resale and Trading through Automated Linkages (PORTAL) Market, the
National Association of Securities Dealers' screenbased, automated market for
trading of securities eligible for resale under Rule 144A. To the extent that
Old Notes are tendered and accepted in the Exchange Offer, the trading market
for the remaining untendered Old Notes could be adversely affected. There is no
existing trading market for the New Notes. We do not intend to apply for listing
or quotation of the New Notes on any exchange. Therefore, we do not know the
extent to which investor interest will lead to the development of a trading
market or how liquid that market might be, nor can we make any assurances
regarding the ability of New Note holders to sell their New Notes or the price
at which the New Notes might be sold. Although the initial purchasers of the Old
Notes (the "Initial Purchasers") have informed us that they currently intend to
make a market in the New Notes, they are not obligated to do so, and any such
market-making may be discontinued at any time without notice. As a result, the
market price of the New Notes could be adversely affected. Historically, the
market for non-investment grade debt, such as the New Notes, has been subject to
disruptions that have caused substantial volatility in the prices of such
securities. Any such disruptions may have an adverse effect on holders of the
New Notes.
Risks Related to Our Business
We may face limitations on our ability to integrate acquired businesses.
We expect to continue our strategy of identifying and acquiring
businesses with complementary products and services which we believe will
enhance our operations and profitability. We may pay for future acquisitions
from internally generated funds, bank borrowings, public offerings, private
sales of stock or bonds, or some combination of these methods. However, we
cannot give any assurance that we will be able to continue to find suitable
businesses to purchase or that we will be able to raise the money necessary to
complete future acquisitions.
In addition, we cannot guarantee that we will be able to successfully
integrate any business we purchase into our existing business or that any
acquired businesses will be profitable. The successful integration of new
businesses depends on our ability to manage these new businesses and cut excess
costs. If we are unable to complete the integration of new businesses in a
timely manner, it could have a materially adverse effect on our results of
operations and financial condition.
Our business is highly cyclical.
The demand for our products depends upon the general economic
conditions of the markets in which we compete. Downward economic cycles result
in reductions in sales of our products, which may reduce our profits. It is
generally expected that general economic conditions will be down in 2001 as
compared to 2000. As a result, we expect continuing soft activity in the North
American construction markets during 2001, which should affect both our lifting
and construction truck businesses. We anticipate weaker conditions in many of
our end markets in the near-term, particularly during the first half of 2001. We
have taken a number of steps to reduce our fixed costs and diversify our
operations to decrease the negative impact of these cycles.
We operate in a highly competitive industry.
We compete in a highly competitive industry. To compete successfully,
our products must excel in terms of quality, price, product line, ease of use,
safety and comfort, and we must also provide excellent customer service. The
greater financial resources of certain of our competitors may put us at a
competitive disadvantage.
12
Our ability to use net operating loss carryovers may be limited.
As of December 31, 2000, we had federal net operating loss carryovers,
or NOLs, of approximately $110 million. Currently there is no annual limitation
on our ability to use NOLs to reduce future income taxes. However, if an
ownership change as defined in Section 382 of the Internal Revenue Code of 1986,
as amended, occurs with respect to our capital stock, our ability to use NOLs
would be limited to specific annual amounts. Generally, an ownership change
occurs if certain persons or groups increase their aggregate ownership by more
than 50 percentage points of our total capital stock in any three-year period.
If an ownership change occurs, our ability to use NOLs to reduce income
taxes is limited to an annual amount based on our fair market value immediately
prior to the ownership change multiplied by the long-term tax-exempt interest
rate. The long-term tax-exempt interest rate is published monthly by the
Internal Revenue Service. As of the date of this Prospectus, the rate is
approximately 4.89%. The 15-year period to use NOLs is not affected by the
ownership change limitations. Our use of new NOLs arising after the date of an
ownership change would not be affected.
It is impossible for us to ensure that an ownership change will not
occur in the future. We do not have the ability to restrict the purchase or sale
of our capital stock so as to prevent an ownership change. At any time, the
actions of one or more persons or groups under certain circumstances could by
themselves cause an ownership change and result in a limitation on our ability
to use NOLs. We cannot prevent an ownership change from occurring. In addition,
we may decide in the future that it is necessary or in our interest to take
certain actions which result in an ownership change. If an ownership change
occurs, our future after-tax earnings per share and cash flow will be reduced.
We rely on key management.
We rely on the management and leadership skills of Ronald M. DeFeo,
Chairman of the Board, President and Chief Executive Officer. Mr. DeFeo has an
employment agreement with us which expires on December 31, 2001, unless extended
by mutual agreement. The loss of his services could have a significant, negative
impact on our business.
We are subject to currency fluctuations and other risks from our international
operations.
Our products are sold in over 100 countries around the world. Thus, our
revenues are generated in foreign currencies, including the Euro, the British
Pound Sterling, the French Franc, the German Mark, the Italian Lira, the Irish
Punt, the Dutch Gilder and the Australian Dollar, while costs incurred to
generate those revenues are only partly incurred in the same currencies. Since
our financial statements are denominated in U.S. Dollars, changes in currency
exchange rates between the U.S. Dollar and other currencies have had, and will
continue to have, an impact on our earnings. To date, this impact has not been
material on our earnings. To reduce this currency exchange risk, we may buy
protecting or offsetting positions (known as "hedges") in certain currencies to
reduce the risk of an adverse currency exchange movement. We have not engaged in
any speculative or profit motivated hedging activities. Although we partially
hedge our revenues and costs, currency fluctuations will impact our financial
performance in the future.
Our international operations are also subject to a number of potential
risks. Such risks include, among others, currency exchange controls, labor
unrest, regional economic uncertainty, political instability, restrictions on
the transfer of funds into or out of a country, export duties and quotas,
domestic and foreign customs and tariffs, current and changing regulatory
environments, difficulty in obtaining distribution support and potentially
adverse tax consequences. These factors may have an adverse effect on our
international operations in the future.
13
Compliance with environmental and other governmental regulations could be costly
and require us to make significant expenditures.
We generate hazardous and nonhazardous wastes in the normal course of
our manufacturing operations. As a result, we are subject to a wide range of
federal, state, local and foreign environmental laws and regulations. These laws
and regulations govern actions that may have adverse environmental effects and
also require compliance with certain practices when handling and disposing of
hazardous and nonhazardous wastes. These laws and regulations also impose
liability for the costs of, and damages resulting from, cleaning up sites, past
spills, disposals and other releases of hazardous substances.
Compliance with these laws and regulations requires us to make
expenditures. We do not expect that these expenditures will have a material
adverse effect on its business or profitability.
THE COMPANY
We are a diversified global manufacturer of a broad range of equipment
for the construction, infrastructure and mining industries. We are building a
strong franchise under the Terex brand name by delivering reliable,
cost-effective products designed to improve our customers' return on invested
capital. Our products are manufactured at 39 plants in the United States,
Europe, Australia and Asia, and are sold primarily through a worldwide
distribution network with over 1,000 locations to the global construction,
infrastructure and surface mining markets.
Our operations began in 1983 with the purchase of Northwest Engineering
Company, our original business and name. Since 1983, we have expanded and
changed our business through a series of acquisitions and dispositions. We are
organized primarily into two business segments: Terex Lifting and Terex
Earthmoving.
Terex Lifting
Terex Lifting manufactures and sells telescopic mobile cranes
(including rough terrain, truck and all terrain mobile cranes), tower cranes,
lattice boom cranes, utility aerial devices (including digger derricks and
articulated aerial devices), telescopic boom material handlers (including
container stackers and rough terrain), truck-mounted cranes (boom trucks),
aerial work platforms (including scissor, articulated boom and straight
telescoping aerial work platforms) and related components and replacement parts.
Construction and industrial customers, as well as utility companies, are the
primary users of these products. Customers use these products to lift equipment,
material or workers to various heights.
Terex Lifting was established as a separate business segment as a
result of the acquisition (the "PPM Acquisition") in 1995 of substantially all
of the shares of P.P.M. S.A. and certain of its subsidiaries (collectively, "PPM
Europe"), from Potain S.A., and all of the capital stock of Legris Industries,
Inc., which owned 92.4% of the capital stock of PPM Cranes, Inc. ("Terex
Lifting---Conway Operations;" PPM Europe and Terex Lifting---Conway Operations
are collectively referred to herein as "PPM") from Legris Industries, S.A.
Concurrently with the completion of the PPM Acquisition, we contributed the
assets (subject to liabilities) of our Koehring Cranes and Excavators and Mark
Industries division to Terex Cranes, Inc., our wholly-owned subsidiary. The
former division now operates as Koehring Cranes, Inc., a wholly-owned subsidiary
of Terex Cranes, Inc.
During 1997, we completed two acquisitions to augment the Terex Lifting
segment. On April 7, 1997, we completed the acquisition of substantially all of
the capital stock of certain of the former subsidiaries of Simon Engineering plc
(the "Simon Access Companies") for $90 million. The Simon Access Companies
consist principally of business units in the United States and Europe engaged in
the manufacture, sale and worldwide distribution of access equipment designed to
position people and materials to work at heights. The Simon Access Companies'
products include utility aerial devices, aerial work platforms and truck mounted
cranes (boom trucks) which are sold to customers in the industrial and
construction markets, as well as utility companies. On April 14, 1997, we
completed the acquisition of all of the capital stock of Baraga Products, Inc.
and M&M Enterprises of Baraga, Inc. (together, the "Square Shooter Business"),
14
which manufacture the Square Shooter, a rough terrain telescopic lift truck
designed to lift materials to heights where they are used in construction.
Since January 1, 1998, we have completed eight additional acquisitions
to augment our Terex Lifting segment. On May 4, 1998, we purchased all of the
outstanding shares of Holland Lift International B.V. ("Holland Lift"). Holland
Lift, which is headquartered just outside Amsterdam, The Netherlands,
manufactures and sells self-propelled scissor lifts (commonly referred to as
aerial work platforms). On July 31, 1998, we purchased all of the outstanding
shares of American Crane Corporation ("American Crane"). American Crane, which
is based in Wilmington, North Carolina, manufactures and sells lattice boom
cranes. On November 3, 1998, we purchased all of the outstanding shares of
Italmacchine, SpA ("Italmacchine"). Italmacchine, which is based near Perugia,
Italy, manufactures and sells telescopic material handlers. On November 13,
1998, we purchased from Noell Service und Maschinentechnik GmbH the assets of
its division, Peiner HTS ("Peiner"). Peiner, which is based in Trier, Germany,
manufactures and sells tower cranes. On December 18, 1998, we purchased all of
the outstanding shares of Gru Comedil SpA ("Comedil"). Comedil, based in
Fontanafredda, Italy, manufactures and sells tower cranes.
In July 1999, as part of the acquisition of Powerscreen International
plc, we acquired the material handling operations of Matbro Limited (now Terex
Lifting U.K.) and Moffett Engineering Limited ("Moffett"). Moffett, located in
Dundalk, Ireland, manufactures truck-mounted forklifts. On November 3, 1999, we
completed the acquisition of the Material Handling Division of Teledyne, Inc.,
which included substantially all of the assets comprising the Princeton business
and all of the capital stock of Teledyne GmbH, the owner of Kooi B.V.
(collectively, "Princeton/Kooi"). Princeton/Kooi manufacture and market
truck-mounted forklifts at facilities in Canal Winchester, Ohio and
Vrouwenparochie, The Netherlands. On December 1, 1999, we completed the purchase
of Terex Lifting Australia, formerly known as Franna Cranes Pty. Ltd., a
manufacturer of all-terrain "pick and carry" cranes in Australia.
On September 30, 2000, we completed the sale of our truck-mounted
forklift businesses, consisting of Moffett and Princeton/Kooi, to various
subsidiaries of Partek Corporation of Finland for $144 million in cash, subject
to adjustment.
Terex Earthmoving
Terex Earthmoving manufactures and sells large hydraulic mining
shovels, loader backhoes, articulated and rigid off-highway trucks, high
capacity surface mining trucks, scrapers, mobile crushing and screening
equipment, asphalt pavers, asphalt mixing plants, and related components and
replacement parts. These products are used primarily by construction, mining,
quarrying and government customers. We believe Terex Earthmoving is the leading
manufacturer of high capacity surface mining trucks and large hydraulic mining
shovels with machine weights in excess of 200 tons worldwide. Customers use
mobile crushing and screening equipment to break down and sort rock into various
sizes. We believe Terex Earthmoving has the second largest market share of
mobile crushing and screening equipment worldwide.
Since January 1, 1998, we have completed seven additional acquisitions
to augment our Terex Earthmoving segment. On January 5, 1998, we acquired
Payhauler Corp. ("Payhauler"), which manufactures and markets 30 and 50 ton all
wheel drive rigid frame trucks designed to move material in more severe
operating conditions than a standard rear wheel drive rigid frame truck. On
March 31, 1998, we purchased all of the outstanding shares of O&K Mining GmbH
("O&K Mining") from Orenstein & Koppel AG. O&K Mining is engaged in the
manufacture, sale and worldwide distribution of heavy duty hydraulic excavators
primarily used to load coal, copper ore, iron ore, other mineral-bearing
materials or rocks into high-capacity trucks. These products are used by mining
equipment contractors, mining and quarrying companies and large construction
companies involved in infrastructure projects worldwide. On July 27, 1999, we
acquired Powerscreen International plc ("Powerscreen"), headquartered in
Dungannon, Northern Ireland. Powerscreen is a manufacturer and marketer of
screening and crushing equipment for the quarrying, construction and demolition
industries. On August 26, 1999, we acquired Cedarapids, Inc. ("Cedarapids").
Cedarapids, headquartered in Cedar Rapids, Iowa, is a manufacturer and marketer
of mobile crushing and screening equipment, asphalt pavers and asphalt material
mixing plants. On September 29, 1999, we completed the acquisition of certain
assets and liabilities of Enviroquip Systems, Inc., a manufacturer and marketer
15
of trommels, conveyors, and picking stations located in Pennsylvania, including
the Re-Tech division ("Re-Tech"). On December 28, 2000, the Company acquired
Fermec from CNH Global N.V., adding the loader backhoe product line to Terex
Earthmoving's offerings. In January 2001, Terex acquired Jaques, Canica-Jaques,
Jaques Malaysia and Jaques Thailand, (collectively, "Jaques Group")
manufacturers of crushing and screening equipment in Australia, Asia and North
America.
Terex Earthmoving is comprised of Terex Equipment Limited ("TEL"),
located in Motherwell, Scotland, Unit Rig ("Unit Rig") and Payhauler , located
in Tulsa, Oklahoma, O&K Mining, located in Dortmund, Germany, Powerscreen,
headquartered in Dungannon, Northern Ireland, Cedarapids, located in Cedar
Rapids, Iowa, Re-Tech, located in Pennsylvania, Fermec, located in Manchester,
England, and Jaques Group, headquartered in Melbourne, Australia.
Other
Terex Light Construction manufactures and sells portable floodlighting
systems, concrete power trowels, concrete placement systems, concrete finishing
systems, concrete mixers, generators, traffic control products, and related
components and replacement parts. These products are typically used for rental
and construction applications.
The light equipment concept was established in April 1999 with the
acquisition of Amida Industries, Inc., located in Rock Hill, South Carolina,
which manufactures and sells portable floodlighting systems, concrete power
trowels, concrete placement systems, concrete finishing systems, concrete mixers
and traffic control products. We have broadened our product line through (i) the
addition of the Benford line of compaction equipment as part of the July 1999
acquisition of Powerscreen referred to above, (ii) the acquisition in September
1999 of certain assets of Bartell Industries, Inc. located in Brampton, Ontario,
Canada which manufactures and sells concrete power trowels and concrete
finishing systems, and (iii) the acquisition in October 2000 of Coleman
Engineering, Inc. located in Holly Springs, Mississippi which manufactures and
sells portable floodlighting systems and generators.
In January 2001, we announced the launching of an Internet site by our
subsidiary EarthKing, Inc. ("EarthKing"). In 2001, EarthKing is introducing its
e-commerce capabilities as an independent and unbiased Internet marketplace for
the construction and mining equipment industry. EarthKing's goal is to use the
Internet and technology to provide savings to users of construction and mining
equipment in the selection, acquisition, management and disposition of their
equipment and parts. EarthKing has developed agreements with several strategic
partners to participate within the EarthKing alliance to provide reliable
delivery of cost-effective services to its customers.
THE EXCHANGE OFFER
Purpose and Effect of the Exchange Offer
The Old Notes were sold by Terex on March 29, 2001 to the Initial
Purchasers with further distribution permitted only to (i) qualified
institutional buyers under Rule 144A under the Securities Act and (ii) persons
in offshore transactions in reliance on Regulation S under the Securities Act.
In connection with the sale of the Old Notes, Terex and the Initial Purchasers
entered into the Registration Rights Agreement which requires Terex to file with
the Securities and Exchange Commission the registration statement of which this
Prospectus is a part within 60 days of the date of the issuance of the Old Notes
(the "Issuance Date") with respect to a registered offer to exchange the Old
Notes for New Notes, identical in all material respects to the Old Notes, and to
use its best efforts to cause such registration statement to become effective
under the Securities Act within 150 days of the Issuance Date. Terex will keep
the Exchange Offer open for not less than 30 days after the date notice of the
Exchange Offer is mailed to the holders. A copy of the Registration Rights
Agreement has been filed as an exhibit to the Registration Statement of which
this Prospectus is a part. The Exchange Offer is being made pursuant to the
Registration Rights Agreement to satisfy Terex's obligations thereunder.
16
Resale of New Notes
We believe that, except as described below, the New Notes issued
pursuant to the Exchange Offer in exchange for Old Notes may be offered for
resale, resold and otherwise transferred by any holder of the New Notes (other
than any holder which is a broker-dealer or an "affiliate" of Terex within the
meaning of Rule 405 under the Securities Act) without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that:
(i) you acquired such New Notes in the ordinary course of your business;
(ii) you have no arrangement or understanding with any person to
participate in the distribution of such New Notes; and
(iii) you are not engaged in, and do not intend to engage in, a
distribution of such New Notes.
By tendering Old Notes for New Notes, you will represent to Terex, that:
(i) the New Notes issued in the Exchange Offer are being acquired in the
ordinary course of business of the person receiving the New Notes,
whether or not such person is the holder;
(ii) neither you nor any such other person is engaging in or intends to
engage in a distribution of such New Notes;
(iii) neither you nor any such other person has an arrangement or
understanding with any person to participate in the distribution of
such New Notes within the meaning of the Securities Act; and
(iv) neither you nor any such other person is an affiliate of Terex.
In the event that you cannot make the requisite representations to
Terex, you cannot rely on such interpretation by the staff of the Securities and
Exchange Commission and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with a secondary
resale transaction. Unless an exemption from registration is otherwise
available, any such resale transaction should be covered by an effective
registration statement containing the selling security holders information
required by Item 507 of Regulation S-K under the Securities Act. This Prospectus
may be used for an offer to resell, resale or other retransfer of New Notes only
as specifically set forth herein.
We base our belief on interpretations by the Securities and Exchange
Commission staff in no-action letters issued to other issuers in exchange offers
like ours. We have not, however, asked the Securities and Exchange Commission to
consider this particular exchange offer in the context of a no-action letter.
Therefore, you cannot be sure that the Securities and Exchange Commission will
treat this exchange offer in the same way it has treated other exchange offers
in the past. If our belief is wrong, you could incur liabilities under the
Securities Act. We will not protect you against any loss incurred as a result of
this liability under the Securities Act.
Each broker-dealer that receives New Notes for its own account in
exchange for Old Notes, where such Old Notes were acquired by such broker-dealer
as a result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus in connection with any resale of
such New Notes, and that it has not entered into any arrangement or
understanding with Terex or any affiliate of Terex to distribute New Notes in
connection with any resale of such New Notes. See "Plan of Distribution."
17
Terms of the Exchange Offer
Upon the terms and subject to the conditions set forth in this
Prospectus and in the Letter of Transmittal, Terex will accept for exchange any
and all Old Notes properly tendered and not withdrawn prior to 5:00 p.m., New
York City time, on the Expiration Date. Terex will issue $1,000 principal amount
of New Notes in exchange for each $1,000 principal amount of outstanding Old
Notes surrendered pursuant to the Exchange Offer. Old Notes may be tendered only
in integral multiples of $1,000.
The form and terms of the New Notes will be the same as the form and
terms of the Old Notes except the New Notes will be registered under the
Securities Act and hence will not bear legends restricting the transfer thereof.
The New Notes will evidence the same debt as the Old Notes. The New Notes will
be issued under and entitled to the benefits of the Indenture, which also
authorized the issuance of the Old Notes, such that both series will be treated
as a single class of debt securities under the Indenture.
As of the date of this Prospectus, $300 million aggregate principal
amount of the Old Notes are outstanding. This Prospectus, together with the
Letter of Transmittal, is being sent to all registered holders of Old Notes.
There will be no fixed record date for determining registered holders of Old
Notes entitled to participate in the Exchange Offer. The Exchange Offer is not
conditioned with any minimum principal amount of Old Notes being tendered for
exchange. However, the obligation to accept Old Notes for exchange pursuant to
the Exchange Offer is subject to certain conditions, as described under "--
Conditions."
Terex intends to conduct the Exchange Offer in accordance with the
provisions of the Registration Rights Agreement and the applicable requirements
of the Exchange Act, and the rules and regulations of the Commission thereunder.
Old Notes which are not tendered for exchange in the Exchange Offer will remain
outstanding and continue to accrue interest and will be entitled to the rights
and benefits such holders have under the Indenture and the Registration Rights
Agreement.
Terex will be deemed to have accepted for exchange properly tendered
Old Notes when, as and if Terex has given oral or written notice thereof to the
Exchange Agent and complied with the provisions of the Indenture. The Exchange
Agent will act as agent for the tendering holders for the purposes of receiving
the New Notes from Terex.
If you tender Old Notes in the Exchange Offer you will not be required
to pay brokerage commissions or fees or, subject to the instructions in the
Letter of Transmittal, transfer taxes with respect to the exchange of Old Notes
pursuant to the Exchange Offer. Terex will pay all charges and expenses, other
than certain applicable taxes described below, in connection with the Exchange
Offer. See "-- Fees and Expenses."
Expiration Date; Extensions; Amendments
The term "Expiration Date" shall mean 5:00 p.m., New York City time on
____________, 2001, unless Terex, in its sole discretion, extends the Exchange
Offer, in which case the term "Expiration Date" shall mean the latest date to
which the Exchange Offer is extended. If the Exchange Offer is not completed by
August 27, 2001, the interest rate on the Old Notes shall be increased by
one-half of one percent (0.5%) per year until the Exchange Offer is completed.
In order to extend the Exchange Offer, Terex will notify the Exchange
Agent of any extension by oral or written notice and will mail to the holders an
announcement thereof, prior to 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date.
Terex reserves the right, in its sole discretion, (i) to delay
accepting any Old Notes, to extend the Exchange Offer or to terminate the
Exchange Offer and not permit acceptance of Old Notes not previously accepted,
if any of the conditions set forth below under "-- Conditions" have not been
satisfied, by giving oral or written notice of the delay, extension or
termination to the Exchange Agent or (ii) to amend the terms of the Exchange
Offer in any manner which, in its good faith judgment, is advantageous to the
holders of the Old Notes, whether before or after any tender of the New Notes.
Any delay in acceptance, extension, termination or amendment will be followed as
promptly as practicable by oral or written notice thereof to the holders. If the
Exchange Offer is amended in a manner determined by Terex to constitute a
18
material change, Terex will promptly notify holders of the amendment by means of
a prospectus supplement that will be distributed to the registered holders, if
required by law, and Terex will extend the Exchange Offer for a period of five
to ten business days, depending upon the significance of the amendment and the
manner of disclosure to the registered holders, if the Exchange Offer would
otherwise expire during such five to ten business day period.
Without limiting the manner in which Terex may choose to make a public
announcement of any delay, extension, termination or amendment of the Exchange
Offer, Terex will have no obligation to publish, advertise, or otherwise
communicate any such public announcement, other than by making a timely release
to the Dow Jones news service.
Interest on the New Notes
The New Notes will bear interest at 10-3/8% per annum from the date of
original issue. Interest on the New Notes will be payable semi-annually, in
arrears, on April 1 and October 1 of each year, commencing on October 1, 2001.
Holders of New Notes will receive interest on October 1, 2001 from the date of
initial issuance of the New Notes, plus an amount equal to the accrued interest
on the Old Notes from the most recent date to which interest has been paid to
the date of exchange for New Notes. Interest on the Old Notes accepted for
exchange will cease to accrue upon issuance of the New Notes.
Conditions
Terex will not be required to accept for exchange, or exchange any New
Notes for, any Old Notes, and may terminate the Exchange Offer before the
acceptance of any Old Notes for exchange, if:
(a) any action or proceeding is instituted or threatened in any court
or by or before any governmental agency with respect to the Exchange Offer
which, in Terex's sole judgment, might materially impair the ability of Terex to
proceed with the Exchange Offer, or
(b) any law, statute, rule or regulation is proposed, adopted or
enacted, or any existing law, statute, rule or regulation is interpreted by the
staff of the Commission, which, in Terex's sole judgment, might materially
impair the ability of Terex to proceed with the Exchange Offer, or
(c) any governmental approval has not been obtained, which approval
Terex shall, in its sole discretion, deem necessary for the consummation of the
Exchange Offer as contemplated hereby.
If Terex determines in its sole discretion that any of these conditions
are not satisfied, Terex may (i) refuse to accept any Old Notes and return all
tendered Old Notes to the tendering holders, (ii) extend the Exchange Offer and
retain all Old Notes tendered prior to the expiration of the Exchange Offer,
subject, however, to the rights of holders who tendered such Old Notes to
withdraw their tendered Old Notes, or (iii) waive such unsatisfied conditions
with respect to the Exchange Offer and accept all properly tendered Old Notes
which have not been withdrawn.
The foregoing conditions are for the sole benefit of Terex and may be
asserted by Terex regardless of the circumstances giving rise to any such
condition or may be waived by Terex in whole or in part at any time and from
time to time in its sole discretion. The failure by Terex at any time to
exercise any of our rights shall not be deemed a waiver of any such right, and
each such right, will be deemed an ongoing right which may be asserted at any
time and from time to time.
Procedures for Tendering
Only a holder of Old Notes may tender such Old Notes in the Exchange
Offer. To tender in the Exchange Offer, you must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal, and mail or otherwise
deliver the Letter of Transmittal or such facsimile, together with the Old Notes
and any other required documents, to the Exchange Agent prior to 5:00 p.m., New
York City time, on the Expiration Date. In addition, either (i) Old Notes must
be received by the Exchange Agent along with the Letter of Transmittal, or (ii)
19
a timely confirmation of book-entry transfer (a "Book-Entry Confirmation") of
such Old Notes, if such procedure is available, into the Exchange Agent's
account at the Depository Trust Company (the "Book-Entry Transfer Facility")
pursuant to the procedure for book-entry transfer described below must be
received by the Exchange Agent prior to the Expiration Date, or (iii) you must
comply with the guaranteed delivery procedures described below. To be tendered
effectively, the Old Notes, Letter of Transmittal and other required documents
must be received by the Exchange Agent at the address set forth below under "--
Exchange Agent".
The tender by a holder which is not withdrawn prior to the Expiration
Date will constitute an agreement between such holder and Terex in accordance
with the terms and subject to the conditions set forth herein and in the Letter
of Transmittal.
The method of delivery of Old Notes, the letter of transmittal and all
other required documents to the Exchange Agent is at the election and risk of
the holders. If such delivery is by mail, it is recommended that registered
mail, properly insured, with return receipt requested, be used. In all cases,
sufficient time should be allowed to assure delivery to the Exchange Agent
before the expiration date. No letter of transmittal or Old Notes should be sent
to Terex. Holders may request their respective brokers, dealers, commercial
banks, trust companies or nominees to effect the above transactions for and on
behalf of such holders.
Any beneficial owner whose Old Notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender such Old Notes should contact the registered holder promptly and
instruct such holder to tender on such beneficial owner's behalf. If such
beneficial owner wishes to tender on its own behalf, such owner must, prior to
completing and executing the Letter of Transmittal and delivering its Old Notes,
either make appropriate arrangements to register ownership of the Old Notes in
its name or obtain a properly completed bond power from the registered holder.
The transfer of registered ownership may take considerable time and may not be
able to be completed prior to the Expiration Date.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by any Eligible Institution (as defined below)
unless the Old Notes tendered pursuant thereto are tendered (i) by a holder who
has not completed the box entitled "Special Issuance Instructions" or "Special
Delivery Instructions" on the Letter of Transmittal or (ii) for the account of
an Eligible Institution. In the event that signatures on a Letter of Transmittal
or a notice of withdrawal, as the case may be, are required to be guaranteed,
such guarantor must be a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15
under the Exchange Act which is a member of one of the recognized signature
guarantee programs identified in the Letter of Transmittal (each, an "Eligible
Institution").
If the Letter of Transmittal is signed by a person other than the
holder of any Old Notes listed therein, the Old Notes must be endorsed or
accompanied by a properly completed bond power, in satisfactory form as
determined by Terex in its sole discretion, signed by the holder as the holder's
name appears on the Old Notes with the signature thereon guaranteed by an
Eligible Institution.
If the Letter of Transmittal or any Old Notes or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity,
these persons should so indicate when signing, and unless waived by Terex,
evidence satisfactory to Terex of their authority to so act must be submitted
with the Letter of Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Old Notes and withdrawal of tendered Old Notes
will be determined by Terex in its sole discretion, which determination will be
final and binding. Terex reserves the absolute right to reject any and all Old
Notes not properly tendered or any Old Notes Terex's acceptance of which would,
in the opinion of counsel for Terex, be unlawful. Terex also reserves the right
to waive any defects, irregularities or conditions of tender as to particular
Old Notes. Terex's interpretation of the terms and conditions of the Exchange
Offer (including the instructions in the Letter of Transmittal) will be final
and binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Old Notes must be cured within such time as Terex
20
shall determine. Although Terex intends to notify holders of defects or
irregularities with respect to tenders of Old Notes, neither Terex, the Exchange
Agent nor any other person will incur any liability for failure to give such
notification. Tenders of Old Notes will not be deemed to have been made until
the defects or irregularities have been cured or waived. Any Old Notes received
by the Exchange Agent that are not properly tendered and as to which the defects
or irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering holders, unless otherwise provided in the Letter of
Transmittal, as soon as practicable following the Expiration Date.
While Terex has no present plan to acquire any Old Notes that are not
tendered in the Exchange Offer, Terex reserves the right in its sole discretion
to (i) purchase or make offers for any Old Notes that remain outstanding
subsequent to the Expiration Date, (ii) as set forth above under "--
Conditions," to terminate the Exchange Offer, or (iii) redeem the Old Notes as a
whole or in part at any time and from time to time, as set forth under
"Description of Notes--Optional Redemption," or (iv) to the extent permitted by
applicable law, purchase Old Notes in the open market, in privately negotiated
transactions or otherwise. The terms of any such purchases or offers could
differ from the terms of the Exchange Offer.
In all cases, issuance of New Notes for Old Notes that are accepted for
exchange pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of certificates for such Old Notes or a timely Book-Entry
confirmation of such Old Notes into the Exchange Agent's account at the
Book-Entry Transfer Facility, a properly completed and duly executed Letter of
Transmittal and all other required documents. If any tendered Old Notes are not
accepted for exchange for any reason set forth in the terms and conditions of
the Exchange Offer, or if Old Notes are submitted for a greater principal amount
than the holder desires to exchange, the unaccepted or non-exchanged Old Notes
will be returned without expense to the tendering holder thereof (or, in the
case of Old Notes tendered by book-entry transfer into the Exchange Agent's
account at the Book-Entry Transfer Facility pursuant to the book-entry transfer
procedures described below, the non-exchanged Old Notes will be credited to an
account maintained with such Book-Entry Transfer Facility) as promptly as
practicable after the expiration or termination of the Exchange Offer.
Book Entry Transfer
The Exchange Agent will make a request to establish an account with
respect to the Old Notes at the Book-Entry Transfer Facility for purposes of the
Exchange Offer within two business days after the date of this Prospectus, and
any financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of Old Notes by causing the
Book-Entry Transfer Facility to transfer such Old Notes into the Exchange
Agent's account at the Book-Entry Transfer Facility in accordance with such
Book-Entry Transfer Facility's procedures for transfer. However, although
delivery of Old Notes may be effected through book-entry transfer at the
Book-Entry Transfer Facility, the Letter of Transmittal or facsimile thereof,
with any required signature guarantees and any other required documents, must,
in any case, be transmitted to and received by the Exchange Agent at the address
set forth below under "-- Exchange Agent" on or prior to the Expiration Date or,
if the guaranteed delivery procedures described below are to be complied with,
within the time period provided under such procedures. Delivery of documents to
the Book-Entry Transfer Facility does not constitute delivery to the Exchange
Agent.
Guaranteed Delivery Procedures
If you wish to tender your Old Notes and (i) your Old Notes are not
immediately available or (ii) you cannot deliver your Old Notes, the Letter of
Transmittal or any other required documents to the Exchange Agent prior to the
Expiration Date, you may effect a tender if:
(a) The tender is made through an Eligible Institution;
(b) Prior to the Expiration Date, the Exchange Agent receives from an
Eligible Institution a properly completed and duly signed Letter of Transmittal
and the Notice of Guaranteed Delivery, substantially in the form provided by
Terex (by facsimile transmission, mail or hand delivery) setting forth your name
and address, the registered number(s) of the Old Notes and the principal amount
of Old Notes tendered, stating that the tender is being made by guaranteed
21
delivery and guaranteeing that, within three New York Stock Exchange trading
days after the Expiration Date, the Letter of Transmittal (or facsimile thereof)
together with the Old Notes or a Book-Entry Confirmation, as the case may be,
and any other documents required by the Letter of Transmittal will be deposited
by the Eligible Institution with the Exchange Agent; and
(c) Properly completed and signed Letter of Transmittal (or facsimile
thereof), as well as all tendered Old Notes in proper form for transfer or a
Book-Entry Confirmation, and all other documents required by the Letter of
Transmittal, are received by the Exchange Agent within five New York Stock
Exchange trading days after the Expiration Date. Upon request of the Exchange
Agent, a Notice of Guaranteed Delivery will be sent to holders who wish to
tender their Old Notes according to the guaranteed delivery procedures set forth
above.
Withdrawal of Tender
Except as otherwise provided herein, you may withdraw tenders of Old
Notes at any time prior to 5:00 p.m., New York City time, on the Expiration
Date.
To withdraw a tender of Old Notes in the Exchange Offer, a written or
facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to 5:00 p.m., New York City time, on
the Expiration Date. Any such notice of withdrawal must:
(i) specify the name of the person having deposited the Old Notes to be
withdrawn (the "Depositor");
(ii) identify the Old Notes to be withdrawn (including the principal
amount of the Old Notes and, in the case certificates representing
the Old Notes have been tendered, registered number or numbers and
or, in the case of Old Notes transferred by book-entry transfer, the
name and number of the account at the Book-Entry Transfer Facility
to be credited);
(iii) be signed by the holder in the same manner as the original signature
on the Letter of Transmittal by which the Old Notes were tendered
(including any required signature guarantees) or be accompanied by
documents of transfer sufficient to have United States Trust Company
of New York, the trustee with respect to the Old Notes, register the
transfer of such Old Notes into the name of the person withdrawing
the tender; and
(iv) specify the name in which any such Old Notes are to be registered,
if different from that of the Depositor.
All questions as to the validity, form and eligibility (including time of
receipt) of such notices will be determined by Terex, whose determination will
be final and binding on all parties. Any Old Notes so withdrawn will be deemed
not to have been validly tendered for purposes of the Exchange Offer and no New
Notes will be issued with respect thereto unless the Old Notes so withdrawn are
validly re-tendered. Any Old Notes which have been tendered but which are not
accepted for payment will be returned to the holder thereof without cost to the
holder (or, is the case of Old Notes tendered by book-entry transfer into the
Exchange Agent's account at the Book-Entry Transfer Facility pursuant to the
book-entry transfer procedures described above, such Old Notes will be credited
to an account maintained with such Book-Entry Transfer Facility) as soon as
practicable after withdrawal, rejection of tender or termination of the Exchange
Offer. Properly withdrawn Old Notes may be retendered by following one of the
procedures described above under "-- Procedures for Tendering" and "--
Book-Entry Transfer" at any time prior to the Expiration Date.
Exchange Agent
United States Trust Company of New York has been appointed as Exchange
Agent of the Exchange Offer. Questions and requests for assistance, requests for
additional copies of this Prospectus or of the Letter of Transmittal and
requests for Notices of Guaranteed Delivery should be directed to the Exchange
Agent addressed as follows:
22
By Overnight Courier or
By Registered or Certified Mail: By Hand, After 4:30pm:
United States Trust Company of New York United States Trust Company of New York
P.O. Box 844, Cooper Station 770 Broadway, 13th floor
New York, New York 10276-0844 New York, New York 10003
Attention: Corporate Trust Services Attention: Corporate Trust Services
By Hand Prior to 4:30 pm: By Facsimile:
United States Trust Company of New York (212) 780-0592
111 Broadway, Lower Level Attention: Corporate Trust Services
New York, New York 10006
Attention: Corporate Trust Services Confirm by telephone:
(800) 548-6565
Fees and Expenses
The expenses of soliciting tenders will be paid by Terex. The principal
solicitation is being made by mail; however, additional solicitation may be made
by telegraph, telephone, facsimile, or in person by officers and regular
employees of Terex and its affiliates.
Terex has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or others
soliciting acceptances of the Exchange Offer. Terex, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
it for its reasonable out-of-pocket expenses in connection therewith. Terex may
also pay brokerage houses and other custodians, nominees and fiduciaries the
reasonable out-of-pocket expenses incurred by them in forwarding copies of the
Prospectus and related documents to the beneficial owners of the Old Notes and
in handling or forwarding tenders for exchange.
The cash expenses to be incurred in connection with the Exchange Offer
will be paid by Terex and are estimated in the aggregate to be approximately
$125,000. Such expenses include fees and expenses of the Exchange Agent and
Trustee, accounting and legal fees and printing costs, among others.
Terex will pay all transfer taxes, if any, applicable to the exchange
of Old Notes pursuant to the Exchange Offer. If, however, New Notes or Old Notes
for principal amounts not tendered or accepted for exchange are to be delivered
to, or are to be issued in the name of, any person other than the holder of the
Old Notes tendered, or if tendered Old Notes are registered in the name of any
person other than the person signing the Letter of Transmittal, or if a transfer
tax is imposed for any reason other than the exchange of Old Notes pursuant to
the Exchange Offer, then the amount of any transfer taxes (whether imposed on
the holder or any other persons) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
23
Consequences of Failure to Exchange
Holders of Old Notes who do not exchange their Old Notes for New Notes
pursuant to the Exchange Offer will continue to be subject to the restrictions
on transfer of such Old Notes as set forth in the legend on the Old Notes and in
the Indenture as a result of the issuance of the Old Notes pursuant to
exemptions from, or in transactions not subject to, the registration
requirements of the Securities Act and applicable state securities law.
Accordingly, the Old Notes may be resold only (i) to Terex (upon redemption
thereof or otherwise), (ii) pursuant to an effective registration statement
under the Securities Act, (iii) so long as the Old Notes are eligible for resale
pursuant to Rule 144A, to a qualified institutional buyer within the meaning of
Rule 144A under the Securities Act in a transaction meeting the requirements of
Rule 144A, or (iv) pursuant to another available exemption from the registration
requirements of the Securities Act, in each case in accordance with any
applicable securities laws of any state of the United States. Terex does not
currently anticipate that it will register under the Securities Act the resale
of any Old Notes that remain outstanding after consummation of the Exchange
Offer. However, generally, (i) if any Initial Purchaser so requests with respect
to Old Notes not eligible to be exchanged for Exchange Notes in the Exchange
Offer and held by it following consummation of the Exchange Offer or (ii) if any
holder of Old Notes is not eligible to participate in the Exchange Offer or, in
the case of any holder of Old Notes that participates in the Exchange Offer,
does not receive freely tradeable Exchange Notes in exchange for Old Notes,
Terex is obligated to file a registration statement on the appropriate form
under the Securities Act relating to the Old Notes held by such persons.
Accounting Treatment
The New Notes will be recorded at the same carrying value as the Old
Notes as reflected in Terex's accounting records on the date of the exchange.
Accordingly, no gain or loss for accounting purposes will be recognized by
Terex. The expenses of the Exchange Offer will be amortized over the term of the
New Notes.
USE OF PROCEEDS
Terex will not receive any cash proceeds from the issuance of the New
Notes offered hereby. In consideration for issuing the New Notes as contemplated
in this Prospectus, Terex will receive in exchange Old Notes in like principal
amount, the forms and terms of which are identical, in all material respects, to
the New Notes. The Old Notes surrendered in exchange for New Notes will be
retired and canceled and cannot be reissued. Accordingly, issuance of the New
Notes will not result in any increase in the indebtedness of Terex. Proceeds
from the sale of the privately placed Old Notes were used to repay indebtedness
and for general corporate purposes.
24
CAPITALIZATION
The following table shows our consolidated capitalization as of March
31, 2001. You should read this table together with the historical consolidated
financial statements and related notes incorporated by reference in this
offering circular.
As of March
31, 2001
(dollars in
millions)
--------------
Cash and cash equivalents $ 236.3
==============
Notes payable and current portion of long-term debt.............. $ 23.8
Long-term debt, less current portion(1).......................... 982.4
Stockholders' equity:
Equity rights................................................... 0.7
Common stock, $0.01 par value---authorized 150 million
shares; issued 27.9 million shares.......................... 0.3
Additional paid-in capital...................................... 358.9
Retained earnings............................................... 197.2
Accumulated other comprehensive income.......................... (118.8)
Less cost of shares of common stock in treasury
(1.1 million shares)........................................ (17.0)
--------------
Total stockholders' equity..................................... 421.3
--------------
Total capitalization........................................... $ 1,427.5
==============
--------------
(1) Includes $300.0 million principal amount of Old Notes. See "Description of
the New Notes".
25
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in millions, except per share amounts)
The following table sets forth our selected financial data as of and
for the five years ended December 31, 2000 and for the three-month periods ended
March 31, 2000 and 2001. The financial data for each of the five years in the
period ended December 31, 2000 has been derived from our audited consolidated
financial statements and the related notes thereto incorporated by reference in
this Prospectus. The selected historical financial data as of and for the
three-month periods ended March 31, 2000 and 2001 have been derived from our
unaudited interim financial statements and the related notes thereto
incorporated by reference in this Prospectus. The selected financial data is not
necessarily indicative of our future results.
Three Months Ended
Year Ended December 31, March 31,
-------------------------- ---------------------------- -------------------
1996 1997 1998 1999 2000 2000 2001
---- ---- ---- ---- ---- ---- ----
Income Statement Data:
Net Sales......................................... $678.5 $842.3 $1,233.2 $1,856.6 $2,068.7 $553.5 $477.4
Cost of goods sold................................ 609.3(2) 702.7 1,007.4 1,539.9(13) 1,705.1(16) 456.8 398.8
----- ----- ------- ------- -------- ----- -----
Gross Profit...................................... 69.2(2) 139.6 225.8 316.7 363.6 96.7 78.6
Selling, general and administrative expenses...... 64.1(3) 68.5 103.8 138.4(14) 165.3(17) 41.7 40.6
----- ----- ------- ------- -------- ----- -----
Income (loss) from operations..................... 5.1(4) 71.1 122.0 178.3(15) 198.3(18) 55.0 38.0
Interest income................................... 1.2 0.9 2.7 5.3 5.5 1.1 2.0
Interest expense.................................. (44.8)(5) (39.4) (47.2) (82.8) (99.8) (26.0) (21.0)
Amortization of debt issuance costs............... (2.6) (2.6) (2.1) (2.6) (3.5) (0.9) (0.6)
Gain on sale of businesses........................ --- --- --- --- 57.2 --- ---
Other income (expense), net....................... (1.1) 1.0 (0.9) 0.2 1.9 0.3 (0.2)
----- ----- ------- ------- -------- ----- -----
Income (loss) from continuing operations before
income taxes and extraordinary items.......... (42.2) 31.0 74.5 98.4 159.6 29.5 18.2
Provision for income taxes........................ (12.1)(6) (0.7) (1.7) 74.5 (55.7) (9.4) (5.8)
----- ----- ------- ------- -------- ----- -----
Income (loss) from continuing operations
before extraordinary items.................... (54.3) 30.3 72.8 172.9 103.9 20.1 12.4
Income (loss) from discontinued operations........ 102.0(7) --- --- --- (7.3) --- ---
----- ----- ------- ------- -------- ----- -----
Income (loss) before extraordinary items.......... 47.7 30.3 72.8 172.9 96.6 20.1 12.4
Extraordinary loss on retirement of debt.......... --- (14.8)(9) (38.3)(11) --- (1.5) --- (2.3)
----- ----- ------- ------- -------- ----- -----
Net income (loss)................................. 47.7 15.5 34.5 172.9 95.1 20.1 10.1
Less preferred stock accretion.................... (22.9)(8) (4.8)(10) --- --- --- --- ---
----- ----- ------ ------- -------- ----- -----
Income (loss) applicable to common stock.......... $24.8 $10.7 $34.5 $172.9 $95.1 $20.1 $10.1
===== ===== ======= ======= ======== ===== =====
Per common and common equivalent share:
Basic
Income (loss) from continuing operations...... $(6.54) $1.57 $3.52 $7.14 $3.82 $0.73 $0.46
Income (loss) from discontinued operations.... 8.64 --- --- --- (0.27) --- ---
----- ----- ------ ------- -------- ------ ------
Income (loss) before extraordinary items...... 2.10 1.57 3.52 7.14 3.55 0.73 0.46
Extraordinary loss on retirement of debt...... --- (0.91) (1.85) --- (0.05) --- (0.09)
----- ----- ------ ------- -------- ------ ------
Net income (loss)............................. $2.10 $0.66 $1.67 $7.14 $3.50 $0.73 $0.37
===== ===== ===== ===== ===== ===== =====
Diluted
Income (loss) from continuing operations...... $(5.81) $1.44 $3.25 $6.75 $3.72 $0.71 $0.45
Income (loss) from discontinued operations.... 7.67 --- --- --- (0.26) --- (0.08)
----- ----- ------ ------- -------- ------ ------
Income (loss) before extraordinary items...... 1.86 1.44 3.25 6.75 3.46 0.71 0.37
Extraordinary loss on retirement of debt...... --- (0.84) (1.71) --- (0.05) --- ---
----- ----- ------ ------- -------- ------ ------
Net income (loss)............................. $1.86 $0.60 $1.54 $6.75 $3.41 $0.71 $0.37
===== ===== ===== ===== ===== ===== =====
Average Number of Common and Common
Equivalent Shares Outstanding in Per Share
Calculation (in millions)
Basic....................................... 11.8 16.2 20.7 24.2 27.2 27.5 26.8
Diluted..................................... 13.3 17.7 22.4 25.6 27.9 28.4 27.4
Other Data (unaudited):
Gross margin...................................... 10.2% 16.6% 18.3% 17.1% 17.6% 17.5% 16.5%
EBITDA (1)........................................ $46.2 $82.8 $138.3 $220.2 $249.8 $65.3 $47.2
Ratio of EBITDA to interest expense, net.......... 1.1x 2.2x 3.1x 2.8x 2.6x 2.6x 2.5x
Ratio of net debt to EBITDA....................... 4.5x 3.3x 4.4x 4.6x 2.9x NA NA
Ratio of earnings to fixed charges (12)........... --- 1.6x 2.4x 2.1x 2.5x 2.1x 1.8x
Backlog of period end............................. $120.6 $216.8 $418.2 $326.5 $219.8 $392.2 $191.5
Balance Sheet Data (at end of period):
Working capital................................... $195.2 $190.4 $346.2 $735.8 $666.8 $743.8 $740.8
Total assets...................................... $471.2 $588.5 $1,151.2 $2,177.5 $1,983.7 $2,166.4 $2,066.6
Total debt........................................ $281.3 $300.1 $631.3 $1,156.4 $902.5 $1,132.1 $1,006.2
Stockholders' equity (deficit).................... $(71.7) $59.6 $98.1 $432.8 $451.5 $436.5 $421.3
(footnotes on following page)
26
(1) The term "EBITDA" means income (loss) from operations before nonrecurring
charges, plus depreciation and amortization charged to operations. We have
included information concerning EBITDA because we understand that this
information is used by certain investors as a measure of our historical
ability to service our debt. EBITDA should not be considered as
alternative to, or more meaningful than, earnings from operations or other
traditional measures of our operating performance determined under
generally accepted accounting principles. Our definition of EBITDA may be
different than that used by other companies.
(2) Cost of goods sold includes $27.1 million in nonrecurring charges.
Excluding these charges, gross profit would have been $96.3 million or
14.2% of net sales.
(3) Engineering, selling and administrative expenses includes $2.8 million in
nonrecurring charges. Excluding these charges, engineering, selling and
administrative expenses would have been $61.3 million.
(4) Includes the effect of the nonrecurring charges set forth in (2) and (3)
above. Excluding these charges, income from operations would have been
$35.1 million.
(5) On November 27, 1996, Terex sold its former subsidiary Clark Material
Handling Company and certain affiliated companies (the "Clark Material
Handling Segment"). As a result, the Clark Material Handling Segment was
accounted for as a discontinued operation for the year ended December 31,
1996. Generally accepted accounting principles permit, but do not require,
the allocation of interest expense between continuing operations and
discontinued operations. We did not allocate interest expense to
discontinued operations. This allocation, although permitted, would not
necessarily have reflected the use of proceeds from the sale of the Clark
Material Handling Segment and the effect on interest expense of our
continuing operations. As a result, loss from our continuing operations
includes most of Terex's interest expense, and income from our
discontinued operations does not include any material interest expense.
(6) This charge primarily reflects the utilization of acquired net operating
losses by P.P.M. S.A.
(7) Represents income from operations of $17.5 million of the Clark Material
Handling Segment, and the gain on its sale of $84.5 million.
(8) Includes:
o annual accretion on Terex's Series A Cumulative Redeemable
Convertible Preferred Stock of $7.7 million, which was irrevocably
called for redemption in December 1996;
o annual accretion on Terex's Series B Cumulative Redeemable
Convertible Preferred Stock of $0.1 million, which was converted in
December 1997 into 87,300 shares of our Common Stock;
o annual accretion of redeemable preferred stock of one of our
subsidiaries of $0.6 million, which was exchanged in December 1997
for 705,969 shares of our Common Stock; and
o a $14.5 million nonrecurring charge as a result of the redemption of
Terex's Series A Cumulative Redeemable Convertible Preferred Stock.
(9) Represents the effect of:
o the 9.46% redemption premium and the pro rata write-off of debt
origination costs and original issue discount on the redemption of a
portion of our then existing senior secured notes; and
o the early termination fee and the write-off of debt origination
costs on the termination of the then existing domestic credit
facility in April 1997.
(10) Includes a $3.2 million nonrecurring charge as a result of the redemption
of the redeemable preferred stock of one of our subsidiaries.
(11) Represents the effect of:
o the premium and the write-off of debt origination fees and original
issue discount on the purchase of all of our then outstanding senior
secured notes; and
o the fees and expenses and the write-off of debt origination costs on
the early termination of certain of our then existing credit
facilities.
(12) In calculating the ratio of earnings to fixed charges, earnings consist
of income (loss) from continuing operations before income taxes and
extraordinary items plus fixed charges. Fixed charges consist of
interest expense, preferred stock accretion, amortization of debt
27
issuance costs, and rental expense representative of the interest
factor. Earnings were insufficient to cover fixed charges by $42.2
million in 1996.
(13) Cost of goods sold includes $12.9 million in nonrecurring charges related
to the operations and closure of the Milwaukee facility in the fourth
quarter of 1999.
(14) Selling, general and administrative expenses include ($0.6) in
nonrecurring charges related to headcount reductions at O&K Germany offset
by a favorable legal settlement.
(15) Includes the effect of the nonrecurring charges set forth in (13) and (14)
above. Excluding these charges, income from operations would have been
$190.6 million.
(16) Cost of goods sold includes $9.9 million of nonrecurring charges related
to the closing of the Terex distribution facility in the United Kingdom,
an aggregate customer filing bankruptcy and the further integration of
Terex's mining businesses.
(17) Selling, general and administrative expenses include $3.4 million in
nonrecurring charges related to the closing of the Terex distribution
facility in the United Kingdom, headcount reductions in the Company's
mining business and due diligence costs associated with a large potential
acquisition which did not come to fruition, offset partially by a
curtailment gain related to one of Terex's pension plans.
(18) Includes the effect of the nonrecurring charges set forth in (16) and (17)
above. Excluding these charges, income from operations would have been
$211.6 million.
28
BUSINESS
General
We are a diversified global manufacturer of a broad range of equipment
for the construction, infrastructure and mining industries. We are building a
strong franchise under the Terex brand name by delivering reliable,
cost-effective products designed to improve our customers' return on invested
capital. We are primarily organized into two business segments: Terex Lifting
and Terex Earthmoving. Our products are manufactured at 39 plants in the United
States, Europe, Australia and Asia, and are sold primarily through a worldwide
distribution network with over 1,000 locations to the global construction,
infrastructure and surface-mining markets.
Products
Telescopic Mobile Cranes
Telescopic mobile cranes are used primarily for industrial
applications, in commercial and public works construction and in maintenance
applications, to lift equipment or material to heights in excess of 50 feet.
Terex Lifting manufactures the following types of telescopic mobile cranes:
Rough Terrain Cranes---are designed to lift materials and equipment on
rough or uneven terrain. Rough terrain cranes are most often located on
a single construction or work site such as a building site, a highway
or a utility project for long periods of time. Rough terrain cranes
cannot be driven on highways and accordingly must be transported by
truck to the work site. Rough terrain cranes manufactured by Terex
Lifting have maximum lifting capacities of up to 100 tons and maximum
tip heights of up to 225 feet. Terex Lifting manufactures its rough
terrain cranes at its facilities located at Waverly, Iowa, Conway,
South Carolina and Crespellano, Italy under the brand names TEREX,
LORAIN, P&H, PPM and BENDINI.
Truck Cranes---have two cabs and can travel rapidly from job site to
job site at highway speeds. In contrast to rough terrain cranes, which
are often located for extended periods at a single work site, truck
cranes are often used for multiple local jobs, primarily in urban or
suburban areas. Truck cranes manufactured by Terex Lifting have maximum
lifting capacities of up to 75 tons and maximum tip heights of up to
193 feet. Terex Lifting manufactures truck cranes at its Waverly, Iowa
and Conway, South Carolina facilities under the brand names TEREX, P&H
and LORAIN.
All Terrain Cranes---were developed in Europe as a cross between rough
terrain and truck cranes in that they are designed to travel across
both rough terrain and highways. All terrain cranes have two cabs and
are versatile and highly maneuverable. All terrain cranes manufactured
by Terex Lifting have lifting capacities of up to 130 tons and maximum
tip heights of up to 246 feet. Terex Lifting manufactures its all
terrain cranes at its Montceau-les-Mines, France and Brisbane,
Australia facilities under the brand names TEREX, PPM and FRANNA.
Tower Cranes
Tower cranes lift construction material to heights and place the
material at the point where it is being used. They include a stationary vertical
tower near the top of which is a horizontal jib with a counterweight. On the jib
is a trolley through which runs a load carrying cable and which moves the load
along the jib length. On larger cranes, the operator is located above the work
site where the tower and jib meet, providing superior visibility. The jib also
rotates 360 degrees, creating a large working area equal to twice the jib
length. Luffing jib tower cranes have an angled jib with no trolley, and operate
like a traditional lattice boom crane mounted on a tower. Luffing jib tower
cranes are often used in urban areas where space is constrained. Tower cranes
are currently produced by us under the PEINER, COMEDIL and TEREX brand names. We
produce the following types of tower cranes:
29
Self-Erecting Tower Cranes---are trailer mounted and unfold from four
sections (two for the tower and two for the jib); certain larger models
have a telescopic tower and folding jib. These cranes can be assembled
on site in a few hours. Applications include residential and small
commercial construction. Crane heights range from 50-75 feet and jib
lengths from 60-100 feet.
Hammerhead Tower Cranes---have a tower and a horizontal jib assembled
from sections. The tower extends above the jib to which suspension
cables supporting the jib are attached. These cranes are assembled
on-site in one to three days depending on height, and can increase in
height with the project; they have a maximum free-standing height of
200 feet and a maximum jib length of 240 feet.
Flat Top Tower Cranes---have a tower and a horizontal jib assembled
from sections. There is no tower extension above the jib, which reduces
cost and facilitates assembly; the jib is self-supporting and consists
of reinforced jib sections. These cranes are assembled on site in one
to two days, and can increase in height with the project; they have a
maximum freestanding height of 305 feet and a maximum jib length of 280
feet.
Luffing Jib Tower Cranes---have a tower and an angled jib assembled
from sections. The tower extends above the jib to which suspension
cables supporting the jib are attached. Unlike other tower cranes,
there is no trolley to control lateral movement of the load, which is
accomplished by changing the jib angle. These cranes are assembled on
site in two to three days, and can increase in height with the project;
they have a maximum freestanding height of 185 feet and a maximum jib
length of 200 feet.
Lattice Boom Cranes
Terex Lifting produces crawler and truck mounted lattice boom cranes.
Crawler-mounted lattice boom cranes are designed to lift material on
rough terrain and can maneuver while bearing a load. Truck mounted lattice boom
cranes are used on-roads, typically in urban areas. Both types consist of a boom
made of tubular steel sections, which are transported to and erected, together
with the base unit, at a construction site. Terex Lifting manufactures crawler
and truck mounted lattice boom crawler cranes at its Wilmington, North Carolina
facilities under the TEREX and AMERICAN brand names. These lattice boom crawler
cranes have lifting capacities from 125 to 450 tons, and lattice boom truck
cranes have lifting capacities up to 300 tons.
Utility Aerial Devices
Utility aerial devices are used to set utility poles and move workers
and materials to work areas at the top of utility poles and towers. Utility
aerial devices are mounted on commercial truck chassis, which include separately
installed steel cabinets for tool and material storage.
Articulated Aerial Devices---are used to elevate workers to work areas
at the top of utility poles or in trees and include one or two man
baskets. Articulated aerial devices available from Terex Lifting
include telescopic, non-overcenter and overcenter models and range in
working heights from 32 to 103 feet. Articulated aerial devices are
manufactured by Terex Lifting at its Watertown, South Dakota facility
under the brand names TELELECT and HI-RANGER.
Digger Derricks---are used to set telephone poles. The digger derricks
include a telescopic boom with an auger mounted at the tip, which digs
a hole, and a device to grasp, manipulate and set the pole. Digger
derricks available from Terex Lifting have sheave heights exceeding 95
feet and lifting capacities up to 48,000 pounds. Digger derricks are
manufactured by Terex Lifting at its Watertown, South Dakota facility
under the brand name TELELECT.
30
Telescopic Material Handlers
Telescopic material handlers are used to lift containers or other
material from one location to another at the same job site.
Telescopic Container Stackers---are used to pick up and stack
containers at dock and terminal facilities. At the end of a telescopic
container stacker's boom is a spreader which enables it to attach to
containers of varying lengths and weights and to rotate the container
up to 360 degrees. Telescopic container stackers are particularly
effective in storage areas where containers are continually added and
removed, and where the efficient manipulation of, and access to,
specific containers is required. Telescopic container stackers
manufactured by Terex Lifting have lifting capacities up to 49.5 tons,
can stack up to six full or nine empty containers and are able to
maneuver through very narrow areas. Terex Lifting manufactures its
telescopic container stackers under the brand names PPM, TEREX and P&H
SUPERSTACKERS at its Montceau-les-Mines, France facility.
Rough Terrain Telescopic Boom Material Handlers---serve a similar
function as smaller size rough terrain telescopic mobile cranes and are
used to move and place materials on new residential and commercial job
sites. Terex Lifting manufactures rough terrain telescopic boom
material handlers with load capacities of up to 10,000 pounds and with
a maximum extended reach of up to 40 feet and lift capabilities of up
to 56 feet. Terex Lifting manufactures rough terrain telescopic boom
material handlers at its facilities in Baraga, Michigan and Perugia,
Italy under the brand names SQUARE SHOOTER, TEREX and ITALMACCHINE.
Truck Mounted Cranes (Boom Trucks)
Terex Lifting manufactures telescopic boom cranes for mounting on
commercial truck chassis. Truck mounted cranes are used primarily in the
construction industry to lift equipment or materials to various heights. Boom
trucks are generally lighter and have a lower lifting capacity than truck
cranes, and are used for many of the same applications when lower lifting
capabilities are required. An advantage of a boom truck is that the equipment or
material to be lifted by the crane can be transported by the truck, which can
travel at highway speeds. Applications include the installation of air
conditioners and other roof equipment. The Terex Lifting segment manufactures
the following type of crane for installation on truck chassis:
Telescopic Boom Truck Mounted Cranes---enable an operator to reach
heights of up to 166 feet and have a maximum lifting capacity of up to
30 tons. Terex Lifting manufactures its telescopic boom truck mounted
cranes at its Olathe, Kansas facility under the brand name RO-STINGER.
Aerial Work Platforms
Aerial work platforms are self-propelled devices which position workers
and materials easily and quickly to elevated work areas. These products have
developed over the past 20 years as alternatives to scaffolding and ladders. The
work platform is mounted on either a telescoping and/or articulating boom or on
a vertical lifting scissor mechanism. Terex Lifting manufactures the following
types of aerial work platforms:
Scissor Lifts---are used in open areas in indoor or outdoor
applications in a variety of construction, industrial and commercial
settings. Scissor lifts manufactured by Terex Lifting have maximum
working heights of up to 110 feet and maximum load capacities of up to
2,000 pounds. Terex Lifting manufactures scissor aerial work platforms
at its Waverly, Iowa, and Hoorn, The Netherlands facilities under the
brand names TEREX AERIALS and HOLLAND LIFT.
Straight Telescopic Boom Lifts---are used primarily outdoors in
residential, commercial and industrial new construction and maintenance
projects. Straight telescopic boom lifts manufactured by Terex Lifting
have maximum working heights of up to 116 feet and maximum load
capacities of up to 650 pounds. Terex Lifting manufactures its straight
telescopic aerial work platforms at its Waverly, Iowa facility under
the brand name TEREX AERIALS.
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Articulating Telescopic Boom Lifts---are generally used in industrial
environments where the articulation allows the user to access elevated
areas over machines or structural obstacles which prevent access with a
scissor lift or straight boom. Articulating lifts available from Terex
Lifting have maximum working heights of up to 86 feet and maximum load
capacities of up to 500 pounds. Terex Lifting manufactures its
articulating telescopic boom lifts at its Cork, Ireland facility under
the brand name TEREX AERIALS.
Rigid and Articulated Off-Highway Trucks
Terex Earthmoving manufactures two distinct types of off-highway trucks
with hauling capacities from 25 to 100 tons: articulated and rigid frame.
Articulated Off-Highway Trucks---are three axle, six-wheel drive
machines with a capacity range of 25 to 40 tons. Their differentiating
feature is an oscillating connection between the cab and body, which
allows the cab and body to move independently. This enables all six
tires to maintain ground contact for improved traction on rough
terrain. This also allows the truck to move effectively through
extremely rough or muddy off-road conditions. Articulated off-highway
trucks are typically used together with an excavator or wheel loader to
move dirt in connection with road, tunnel or other infrastructure
construction and commercial, industrial or major residential
construction projects. Terex's articulated trucks are manufactured in
Motherwell, Scotland, under the brand name TEREX.
Rigid Off-Highway Trucks---are two axle machines which generally have
larger capacities than articulated trucks, but can operate only on
improved or graded surfaces. The capacities of rigid off-highway trucks
range from 35 to 100 tons, and off-highway trucks have applications in
large construction or infrastructure projects, aggregates and smaller
surface mines. Terex Earthmoving's rigid trucks are manufactured in
Motherwell, Scotland, under the TEREX brand name and in Tulsa,
Oklahoma, under the PAYHAULER brand name.
High Capacity Surface Mining Trucks---Terex Earthmoving manufactures
high capacity surface mining trucks, which are off road dump trucks
with capacities in excess of 120 tons used primarily for surface
mining. Terex Earthmoving's high capacity surface mining trucks are
powered by a diesel engine driving an electric generator that provides
power to individual electric motors in each of the rear wheels. Unit
Rig's current LECTRA HAUL product line consists of a series of rear
dump trucks with payload capabilities ranging from 120 to 340 tons, and
bottom dump trucks with capacities ranging from 180 to 270 tons. Terex
Earthmoving's high capacity surface mining trucks are manufactured at
Unit Rig, located in Tulsa, Oklahoma, under the UNIT RIG, LECTRA HAUL
and TEREX brand names.
Large Hydraulic Excavators
Terex Earthmoving sells hydraulic excavators, which are shovels
primarily used to load coal, copper ore, iron ore, diamonds, other
mineral-bearing materials, or rocks into trucks. These products are primarily
utilized for quarrying construction materials or digging in surface mines.
Additional applications include large construction projects with difficult
working conditions where large amounts of solid material and rock are to be
moved.
Terex Earthmoving offers a complete range of large hydraulic
excavators, with operating weights from 58 to 800 tons. O&K Mining produces the
RH 400, available in both electric and diesel drive, the world's largest
hydraulic excavator with an 800 ton machine weight and 80 ton bucket capacity.
The inclusion of the RH 400 in Terex Earthmoving's product line enables it to
compete with the most popular electric rope shovel size class. Most hydraulic
excavators sold by Terex Earthmoving are manufactured under the O&K brand name
by O&K Mining in Dortmund, Germany.
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Loader Backhoes
Loader backhoes---incorporate a front-end loader and rear excavator
arm. They are used for loading, excavating and lifting in many
construction and agricultural related applications. Terex Earthmoving's
loader backhoes are manufactured under the FERMEC brand name in
Manchester, England.
Crushing and Screening Equipment
Terex Earthmoving's crushing and screening equipment is used in the
aggregate processing and recycling industries. Crushing and screening products
include crushers, screens, trommels, feeders and conveyors, which are used when
processing raw aggregate materials. Typical crushing and screening operations
utilize a combination of components in reducing virgin aggregate materials to
required product sizes for final usage in road building and related construction
applications. Crushing and screening plants can be either stationary or
portable. Portable crushing and screening plants are configured with a variety
of components to provide easy site-to-site mobility, application versatility,
flexible on-demand finished product and reduced set-up time.
Crushing Equipment
Terex Earthmoving manufactures crushing equipment under the PEGSON,
CEDARAPIDS, JAQUES and CANICA-JAQUES brand names in Coalville, England, Cedar
Rapids, Iowa, Melbourne, Australia, Subang Jaya, Malaysia and Vancouver,
Washington. Terex Earthmoving produces the following types of crushing
equipment:
Jaw Crushers---are primary crushers with reduction ratios of 6 to 1 for
crushing larger rock. Applications include hard rock, sand and gravel
and recycled materials. Models offered yield a range of production
capacities: up to 265 tons per hour for the smallest unit, and up to
1,700 tons per hour for the largest.
Horizontal Shaft Impactors---are secondary crushers which utilize rotor
impact bars and breaker plates to achieve high production tonnages and
improved aggregate particle shape. The rugged durability and easy
maintenance of horizontal shaft impactors ensure less downtime and
reduced wear costs for the owner. They are typically applied to reduce
soft to medium hard materials.
Vertical Shaft Impactors---are tertiary crushers which reduce material
utilizing various rotor configurations and are highly adaptable to any
application. Vertical shaft impactors can be customized to material
conditions and desired product size/shape. A full range of models
provides customers with increased tonnages, better circuit balance and
screen efficiency.
Cone Crushers---are used in secondary and tertiary applications to
reduce a number of materials, including quarry rock and riverbed
gravel. High production, low maintenance and enhanced final material
cubical shape are the principal features of these compression-type
roller bearing crushers.
Screening Equipment
Terex Earthmoving manufactures screening equipment at its facilities in
Dungannon, Northern Ireland, Kilbeggan, Ireland, Omagh, Northern Ireland,
Durand, Michigan, Cedar Rapids, Iowa, Lebanon, Pennsylvania, Melbourne,
Australia, Subang Jaya, Malaysia and Chomburi, Thailand under the brand names
POWERSCREEN, FINLAY, SIMPLICITY, CEDARAPIDS, ROYER, RE-TECH and JAQUES.
Heavy Duty Inclined Screens and Feeders---are found in high tonnage
applications. These units are typically custom designed to meet the
needs of each customer. Although primarily found in stationary
installations, Terex Earthmoving supplies a variety of screens and
feeders for use on heavy duty portable crushing and screening spreads.
Inclined Screens---are used in all phases of plant design from handling
quarried material to fine screening. Capable of handling much larger
capacity than a flat screen, inclined screens are most commonly found
33
in large stationary installations where maximum output is required.
This requires the ability to custom design and manufacture units that
meet both the engineering and application requirements of the end user.
Feeders---are generally situated at the primary end of the processing
facility, requiring rugged design in order to handle the impact of the
material being fed from front end loaders, excavators, etc. The feeder
moves material to the crushing and screening equipment in a controlled
fashion. Some feeders manufactured by Terex Earthmoving remove smaller
sized materials through a short scalping area before reaching the
crusher, significantly reducing the wear in the crusher chamber.
Flat Screens---combine the high efficiency of a horizontal screen with
the capacity, bearing life and low maintenance of an inclined screen.
They are adaptable for heavy scalping, standard duty and fine screening
applications and are engineered for durability and user friendliness.
Dry Screening---is used to process materials such as sand, gravel,
quarry rock, coal, construction and demolition waste, soil, compost and
wood chips.
Washing Screens---are used to separate, wash, scrub, dewater and
stockpile sand and gravel. Products manufactured by Terex Earthmoving
include a completely mobile single chassis washing plant incorporating
separation, washing, dewatering and stockpiling, mobile and stationary
screening rinsers, bucket-wheel dewaterers, scrubbing devices for
aggregate, a mobile cyclone for maximum retention of sand particles,
silt extraction systems, stockpiling conveyors and a sand screw system
as an alternative option to the bucket-wheel dewaterers.
Trommels---are used in the recycling of construction and demolition
waste material, as well as soil, compost and wood chips. Trommels
incorporate conveyors and variable speed fingertip control of the belts
and rotating drum to separate the various materials. Terex Earthmoving
manufactures a range of trommel and soil shredding equipment. Terex
Earthmoving also designs, sources, installs, commissions and provides
aftersales support for turnkey recycling systems. These systems are
used to process construction and demolition waste, as well as decasing,
segmenting and processing empty bottles. The soil shredding units are
mainly used by landscape contractors and provide a high specification
end product. Trommels are produced by Terex Earthmoving at its
facilities in Lebanon, Pennsylvania under the brand names RE-TECH,
ROYER and TEREX.
Asphalt Equipment
Terex Earthmoving manufactures asphalt mixing plants and asphalt pavers
at its facilities in Cedar Rapids, Iowa, and Glasgow, Missouri.
Asphalt Pavers---Terex Earthmoving sells asphalt pavers with maximum
widths from 18 feet to 30 feet. Pavers are available in rubber tire and
steel or rubber track designs. The smaller units have a maximum paving
width of 18 feet and are used for commercial work such as parking lots,
development streets and construction overlay projects. Mid-sized pavers
are used for mainline and commercial projects and have maximum paving
widths ranging from 24 to 28 feet. High production pavers are
engineered and built for heavy-duty, mainline paving and are capable of
30 foot maximum paving widths. All of the above feature direct
hydrostatic drive for maximum uptime, patented frame raise for
maneuverability and three-point suspension for smooth, uniform mats.
Terex Earthmoving's asphalt pavers are manufactured under the
CEDARAPIDS and GRAYHOUND brand names in Cedar Rapids, Iowa.
Asphalt Mixing Plants---are used by road construction companies to
produce hot mix asphalt. The mixing plants are available in portable,
relocatable and stationary configurations. Associated plant components
and control systems are manufactured to offer customers a wide variety
of equipment to meet individual production requirements. The asphalt
mixing plants are manufactured under the CEDARAPIDS/STANDARD HAVENS
brand name in Glasgow, Missouri.
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Light Construction Equipment
Light construction equipment produced by us includes mobile and
portable floodlighting systems, concrete power trowels, concrete placement
systems, concrete finishing systems, generators and traffic control products.
Light Towers---are used primarily to light work areas for night
construction activity. They are towed to the work-site where the
telescopic tower is extended and outriggers are deployed for stability.
They are diesel powered and provide adequate light for construction
activity for a radius of approximately 300 feet from the tower. Light
towers are manufactured under the AMIDA, COLEMAN ENGINEERING and TEREX
brand names.
Power Trowels---are used to provide a smooth finish on concrete
surfaces. They are used on soft cement as the concrete hardens. The
power trowels are manufactured as walk-behind and ride-on models.
Trowels are typically used in conjunction with other products
manufactured by Terex Light Construction including light towers, power
buggies, screed, and material spreaders. Power trowels are manufactured
under the BARTELL brand name in Brampton, Ontario, Canada.
Power Buggies---are used primarily to transport concrete from the mixer
to the pouring site. Terex Amida power buggies include dump capacities
from 10 to 21 cubic feet with both walk-behind and ride-on models.
Power buggies are manufactured under the AMIDA, MORRISON and TEREX
brand names in Rock Hill, South Carolina.
Generators---are used to provide electric power on construction sites
and other remote locations.
Directional Arrowboards---are used to direct traffic around road
construction sites. They are primarily solar powered, with solar panels
continuously recharging batteries which provide power during night
hours. Terex Amida arrowboards include 15 and 25 light configurations.
Directional arrowboards are manufactured under the TEREX and AMIDA
brands names in Rock Hill, South Carolina.
Backlog
Our backlog as of December 31, 1999 and 2000 and March 31, 2000 and
2001 was as follows:
December 31, March 31,
------------ ---------
1999 2000 2000 2001
---- ---- ---- ----
(in millions)
Terex Lifting $167.0 $111.7 $181.8 $112.8
Terex Earthmoving 158.3 102.3 209.5 71.4
Other 1.2 5.8 0.9 7.3
--------- --------- --------- ---------
Total $326.5 $219.8 $392.2 $191.5
========= ========= ========= =========
Substantially all of our backlog orders are expected to be filled
within one year, although there can be no assurance that all such backlog orders
will be filled within that time period. Our backlog orders represent primarily
new equipment orders. Parts orders are generally filled on an as-ordered basis.
Terex Lifting's backlog at December 31, 2000 decreased $55.3 million to
$111.7 million as compared to $167.0 million at December 31, 1999. The decrease
in backlog was due to the continued slowdown in the mobile crane segment and the
effect of the sale of our truck-mounted forklift businesses in September 2000.
The backlog at Terex Earthmoving decreased to $102.3 million at December 31,
2000 from $158.3 million at December 31, 1999, principally due to slowdowns in
the mining business and improvements in delivery performance and lead-times
within our crushing and screening business. Included in Other backlog are
backlog orders of Terex Light Construction.
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Terex Lifting's backlog at March 31, 2001 decreased $69.0 million to
$112.8 million as compared to $181.8 million at March 31, 2000. The decrease in
backlog is consistent with the weak performance in the material handler and
aerial work platform businesses and was also impacted by the divestiture of our
Truck-mounted Forklift Business in September 2000. The backlog at Terex
Earthmoving decreased to $71.4 million at March 31, 2001 from $209.5 million at
March 31, 2000, principally due to the decline in the mining and articulated and
rigid truck businesses and improvements in delivery performance and lead times
within our crushing and screening business.
Distribution
Terex Lifting distributes its products primarily through a global
network of dealers and national accounts in over 1,000 different locations.
Terex Lifting's telescopic mobile cranes are marketed in the great majority of
the United States under the TEREX brand name. Terex Lifting's European
telescopic mobile cranes distribution is carried out primarily under three brand
names, TEREX, PPM and BENDINI, through a distribution network comprised of both
distributors and a direct sales force. Terex Lifting sells its lattice boom
cranes through a distribution network under the TEREX and AMERICAN brand names.
Terex Lifting distributes its mobile cranes in Australia under the FRANNA and
TEREX brand names. Telescopic boom truck mounted cranes are distributed by Terex
Lifting under the RO-STINGER brand name. Terex Lifting sells its utility aerial
devices under the TEREX TELELECT and RO-STINGER brands names principally through
a network of North American distributors. Terex Lifting sells its aerial work
platform products through a distribution network throughout the world, but
principally in North America and Europe. Terex Lifting's aerial work platform
products are sold under the brand names TEREX AERIALS and HOLLAND LIFT. Terex
Lifting sells its tower cranes through a distribution network under the PEINER,
COMEDIL and TEREX brand names. Terex Lifting's material and container handlers
products are sold through a distribution network under the brand names of TEREX,
SQUARE SHOOTER, PPM, P&H and ITALMACCHINE.
With respect to Terex Earthmoving products, TEL markets trucks and
replacement parts primarily through worldwide dealership networks. TEL's truck
dealers are independent businesses, which generally serve the construction,
mining, timber and/or scrap industries. Although these dealers carry products of
a variety of manufacturers, and may or may not carry more than one of our
products, each dealer generally carries only one manufacturer's "brand" of each
particular type of product. We employ sales representatives who service these
dealers from offices located throughout the world. Payhauler distributes its
products primarily through a dealership network. Unit Rig distributes its
products and services directly to customers primarily through its own
distribution system. O&K Mining sells its hydraulic excavators and after-market
parts and services primarily through its export sales department in Dortmund,
Germany, through O&K Mining's global network of wholly-owned foreign
subsidiaries and through dealership networks. Fermec sells its loader backhoes
through a network of independent dealers and distributors throughout the world.
Powerscreen distributes all screening products through a global network
of dealers in more than 80 locations. The American dealers are supported by a
distribution center located in Louisville, Kentucky. Most dealers are single
line Powerscreen dealers. B.L. Pegson sells their entire range of crushers,
screens and feeders worldwide through distributors under the PEGSON brand name.
In total there are approximately 50 dealers, half of which are located in the
United States and served by the distribution center in Louisville, Kentucky.
Finlay distributes all products worldwide through a network of independent
dealers. In total there are approximately 35 distributors located across five
continents. Simplicity sells products through dealers, mainly located in the
United States, as well as direct to original equipment manufactures. Most of
Royer/Re-Tech's business is in the United States and their products are sold by
distributors. Benford sell its products primarily through dealers and
distributors.
Cedarapids crushing and screening equipment and asphalt pavers (and
aftermarket support parts for both of these lines) are sold principally through
a worldwide network of distributors under the CEDARAPIDS brand name. There are
approximately 40 domestic and 25 international dealers, many of which have
multiple branch offices. Asphalt mixing plants are sold direct to end user
customers under the CEDARAPIDS/STANDARD HAVENS brand name. Jaques,
36
Canica---Jaques, Jaques Malaysia and Jaques Thailand distribute their crushing
and screening equipment primarily through a worldwide network of independent
distributors and dealers.
Terex Light Construction distributes its products through a global
network of dealers and national accounts. We employ sales representatives who
service these dealers throughout the world. Worldwide distribution is conducted
under the AMIDA, BARTELL, MORRISON, BENFORD, MULLER, COLEMAN ENGINEERING and
TEREX brand names.
Research and Development
We maintain engineering staffs at several of our locations who design
new products and improvements in existing product lines. Our engineering
expenses are primarily incurred in connection with the improvements of existing
products, efforts to reduce costs of existing products and, in certain cases,
the development of products which may have additional applications or represent
extensions of the existing product line. Such costs incurred in the development
of new products or significant improvements to existing products of continuing
operations amounted to $9.1, $9.1 and $8.2 million in 2000, 1999 and 1998,
respectively.
Materials
The principal materials we use in various manufacturing processes
include steel, castings, engines, tires, hydraulic cylinders, drive trains,
electric controls and motors, and a variety of other fabricated or manufactured
items. In the absence of labor strikes or other unusual circumstances,
substantially all materials are normally available from multiple suppliers.
Current and potential suppliers are evaluated on a regular basis on their
ability to meet our requirements and standards. Electric wheel motors and
controls used in most of the Unit Rig product line are currently supplied
exclusively by General Electric Company. We seek to develop alternative sources
and have entered into a contract with General Atomics, a former defense
contractor, who has developed electric wheel motors for the largest Unit Rig
trucks. If we are unable to develop alternative sources, or if there is
disruption or termination of our relationship with General Electric Company
(which is not governed by a written contract), it could have a material adverse
effect on Unit Rig's operations.
Competition
Telescopic Mobile Cranes---The domestic telescopic mobile crane
industry is comprised primarily of three manufacturers. We believe that
Terex Lifting is the second largest domestic manufacturer. We believe
that the number one domestic manufacturer is Grove Worldwide, and the
number three domestic manufacturer is Link-Belt, a subsidiary of
Sumitomo Corp. Our principal markets in Europe are in France, Italy and
Spain, where we believe we have the largest market shares. In Europe,
Terex Lifting's primary competitors are Grove Cranes Ltd, Liebherr and
Mannesmann Dematic.
Truck Mounted Cranes (Boom Trucks)---The United States boom truck
industry is dominated by four manufacturers, of which we believe
Terex-RO Corporation, a subsidiary of Terex, is the second largest
behind Grove National.
Tower Cranes---The tower crane industry includes two principal
competitors, Liebherr and Potain, who combined represent well over half
of the worldwide market. Terex and Wolf are the only other competitors
with a multi-national presence; other manufacturers are small and
regional.
Lattice Boom Cranes---The lattice boom crane industry includes
Manitowoc, Link-Belt, Mannesmann Dematic, Liebherr, and Hitachi.
Manitowoc is the world leader in lifting capacities over 125 tons, and
represents over half of the United States lattice boom crane market.
Utility Aerial Devices---The utility aerial device industry is
comprised primarily of three manufacturers. We believe that we are the
second largest manufacturer in the United States of utility aerial
devices behind Altec.
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Telescopic Container Stackers---We believe that four manufacturers
account for a majority of the global market for telescopic container
stackers. We believe that we are the second largest manufacturer behind
Kalmar. Other manufacturers include Valmet Belloti and Taylor.
Rough Terrain Telescopic Boom Material Handlers---OmniQuip (Textron),
Caterpillar and Gradall (JLG) are the largest manufacturers of rough
terrain telescopic material handlers. We believe that we are the fourth
largest manufacturer of rough terrain telescopic material handlers.
Aerial Work Platforms---The aerial work platform industry in North
America is fragmented, with seven major competitors. We believe that we
are the fifth largest manufacturer of aerial work platforms in North
America, behind JLG, Genie, UpRight and OmniQuip. We believe that our
market share in boom lifts is greater than our market share in scissor
lifts.
Off-Highway Trucks---North America and Europe account for a majority of
the global market. Four manufacturers dominate the global market. We
believe that we are the third largest of these manufacturers (behind
Volvo and Caterpillar).
High Capacity Surface Mining Trucks---The high capacity surface mining
truck industry includes three principal manufacturers: Caterpillar,
Komatsu-Dresser and Terex. We believe that we have had the leading
market share since 1999.
Large Hydraulic Excavators---The large hydraulic excavator industry is
comprised of primarily seven manufacturers, the largest of which are
Hitachi, Komatsu-DeMag, Liebherr and Caterpillar. We believe we are the
largest manufacturer of hydraulic excavators having machine weights in
excess of 200 tons. The largest hydraulic excavators also compete
against electric mining shovels (rope excavators) from competitors such
as Harnischfeger Corporation and Bucyrus International, Inc. and, for
some applications, against bucket wheel loaders from competitors such
as Caterpillar, Volvo and Komatsu-Dresser.
Loader Backhoes---The loader backhoe industry is a competitive market
reflecting a large number of competitors. The largest competitors are
Caterpillar, CNH (including both its Case and New Holland brands), JCB,
Fiat-Hitachi and John Deere. We believe that we are the fifth largest
of these manufacturers in Europe and in the United States.
Crushing and Screening Equipment---The crushing industry is a
competitive market reflecting a large number of competitors. The two
largest competitors are Nordberg, a subsidiary of Metso Corporation,
and Svedala Industri A.B. We believe that we are the third largest
manufacturer. The screening industry includes six principal
manufacturers: Extec (U.K.), Nordberg (Metso Corporation) (Finland),
Astec Industries (U.S.), Svedala (Sweden), Ohio Screen (U.S.), and
Parker Plant (U.K.). We believe that we are the market leader in the
mobile screening industry.
Asphalt Pavers---The asphalt paver industry includes four principal
manufacturers: Blaw-Knox (Ingersoll-Rand), Barber Greene (Caterpillar),
Roadtec (Astec Industries) and us. We believe that we are the third
largest manufacturer.
Asphalt Mixing Plants---The asphalt mixing plant industry includes
three principal manufacturers: Astec Industries, CMI Corporation, and
Gencor Corporation. We believe that we are the fourth largest
manufacturer.
Light Towers---The United States light tower market is dominated by
three manufacturers. We believe that we are the largest manufacturer
followed by Allmand Bros. and Ingersoll-Rand.
38
Light Concrete Equipment---The light concrete equipment market is
fragmented with numerous small manufacturers. We believe that Allen
Engineering, Multiquip, and Wacker are the primary extended line
competitors. We believe that we are the third largest extended line
manufacturer in this category.
Employees
As of December 31, 2000, we had approximately 6,150 employees. We
consider relations with our personnel to be good. Approximately 34% of our
employees are represented by labor unions which have entered into or are in the
process of entering into various separate collective bargaining agreements with
us. We experienced a labor strike at our Terex Lifting manufacturing facility in
Waverly, Iowa during December 1999 and January 2000 which was settled in January
2000. The strike at Waverly had no material affect on the conduct of business or
financial results of the Terex Lifting segment as a whole.
Patents, Licenses and Trademarks
Several of our trademarks and trade names, in particular the TEREX,
LORAIN, UNIT RIG, MARKLIFT P&H, PPM, TELELECT, SQUARE SHOOTER, PAYHAULER, O&K,
HOLLAND LIFT, AMERICAN, ITALMACCHINE, PEINER, COMEDIL, FRANNA, POWERSCREEN,
CEDARAPIDS, FINLAY, SIMPLICITY, B.L. PEGSON, MATBRO, BENFORD, MULLER, RE-TECH,
JAQUES, CANICA-JAQUES, AMIDA, MORRISON, BRIMONT, EARTHKING, FERMEC, COLEMAN
ENGINEERING and BARTELL trademarks, are important to our business. We own and
maintain trademark registrations and patents in countries where we conduct
business, and monitor the status of our trademark registrations and patents to
maintain them in force and renews them as required. We also protect our
trademark, trade name and patent rights when circumstances warrant such action,
including the initiation of legal proceedings, if necessary. P&H is a registered
trademark of Harnischfeger Corporation which we have the right to use for
certain products pursuant to a license agreement until 2011. We also have the
right to use the O&K and Orenstein & Koppel names (which are registered
trademarks of Orenstein & Koppel) for most applications in the mining business
for an unlimited period of time. All other trademarks and trade names referred
to in this offering circular are either our registered trademarks or those of
our subsidiaries.
Environmental Considerations
We generate hazardous and non-hazardous wastes in the normal course of
its operations. As a result, we are subject to a wide range of federal, state,
local and foreign environmental laws and regulations, including the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),
that (i) govern activities or operations that may have adverse environmental
effects, such as discharges to air and water, as well as handling and disposal
practices for hazardous and non-hazardous wastes, and (ii) impose liability for
the costs of cleaning up, and certain damages resulting from, sites of past
spills, disposals or other releases of hazardous substances. Compliance with
such laws and regulations has, and will, require expenditures by us on a
continuing basis. However, we have not incurred, and do not expect to incur in
the future, any material capital expenditures for environmental control
facilities.
Seasonal Factors
We market a large portion of our products in North America and Europe,
and our sales of trucks, asphalt mixing plants, mobile crushing and screening
equipment, cranes and light construction equipment during the fourth quarter of
each year to the construction industry are usually lower than sales of such
equipment during each of the first three quarters of the year because of the
normal winter slowdown of construction activity. However, sales of trucks and
excavators to the mining industry are generally less affected by such seasonal
factors.
39
DESCRIPTION OF CERTAIN INDEBTEDNESS
Existing Notes
On March 9, 1999, we issued and sold in a private placement $100.0
million in aggregate principal amount of 8-7/8% Senior Subordinated Notes due
2008 (the "1999 Senior Subordinated Notes"). Subsequently, these notes were
exchanged pursuant to a registered exchange offer for registered notes identical
in all material respects (other than with respect to transfer restrictions) to
the 1999 Senior Subordinated Notes (the "1999 Existing Notes"). The 1999
Existing Notes are jointly and severally guaranteed by certain domestic
subsidiaries. The net proceeds from the offering were used to repay a portion of
the outstanding indebtedness under our credit facilities and for acquisitions.
On March 31, 1998, we issued and sold in a private placement $150.0
million in aggregate principal amount of 8-7/8% Senior Subordinated Notes due
2008 (the "1998 Senior Subordinated Notes"). Subsequently, these notes were
exchanged pursuant to a registered exchange offer for registered notes identical
in all material respects (other than with respect to transfer restrictions) to
the 1998 Senior Subordinated Notes (the "1998 Existing Notes," and together with
the 1999 Existing Notes, the "Existing Notes"). The 1998 Existing Notes are
jointly and severally guaranteed by certain domestic subsidiaries. The net
proceeds from the offering were used to fund a portion of the aggregate
consideration for the acquisition of O&K Mining.
Ranking
The Existing Notes are our general unsecured obligations, subordinate
in right of payment to all our Senior Indebtedness (as defined in the indentures
governing the Existing Notes), whether outstanding on the date of the note
indenture or thereafter incurred, and senior in right of payment to or pari
passu with all of our other indebtedness. For more information, see
"Capitalization." The Existing Notes will rank equal to the New Notes.
Optional Redemption
Except as noted below, the Existing Notes are not redeemable at our
option before April 1, 2003. Thereafter, the Existing Notes will be subject to
redemption at any time at our option, in whole or in part, at specified
redemption prices plus accrued and unpaid interest, if any, thereon to the
applicable redemption date. In addition, at any time prior to April 1, 2001, we
may on any one or more occasions redeem up to 33.3% of the original aggregate
principal amount of either the 1999 Existing Notes or the 1998 Existing Notes or
both at a redemption price of 108.875% of the principal amount thereof, plus
accrued and unpaid interest, if any, thereon to the date of redemption, with the
net proceeds of one or more offerings of our common equity. However, at least
65% of the original aggregate principal amount of each of the 1999 Existing
Notes and the 1998 Existing Notes must remain outstanding immediately after each
occurrence of redemption.
Certain Covenants
The indentures governing the Existing Notes contain certain covenants
that, among other things, significantly limit our ability and the ability of our
subsidiaries to (a) incur additional indebtedness, (b) issue preferred stock,
(c) pay dividends, (d) make certain other restricted payments, (e) create
certain liens, (f) enter into certain transactions with affiliates, (g) sell our
assets or the assets of our subsidiaries, (h) issue or sell equity interests of
the subsidiaries or (i) enter into certain mergers and consolidations. In
addition, under certain circumstances, we will be required to offer to purchase
the 1999 Existing Notes and the 1998 Existing Notes at a price equal to 100.0%
of the principal amount thereof, plus accrued and unpaid interest, if any, to
the date of purchase with the proceeds of certain asset sales.
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Change of Control
After the occurrence of a change of control (as defined in the
indentures for the Existing Notes), we will be required to make an offer to
repurchase the 1999 Existing Notes and the 1998 Existing Notes at a price equal
to 101% of their principal amount, plus accrued and unpaid interest, if any, to
the date of purchase.
Existing Bank Credit Facilities
On March 29, 2001, we entered into an amended and restated bank credit
facility with several financial institutions. This bank credit facility
currently consists of a secured global revolving credit facility (described
below) aggregating up to $125.0 million (described below) and a term loan
facility with an outstanding principal amount of $122.9 million as of the date
of this Prospectus. The revolving credit facility is used for working capital
and general corporate purposes, including acquisitions. With limited exceptions,
our obligations under this credit facility are secured by (i) a pledge of all of
the capital stock of our domestic subsidiaries, (ii) a pledge of 65% of the
stock of our foreign subsidiaries and (iii) a first priority security interest
in, and mortgages on, substantially all of our assets and those of our domestic
subsidiaries. This bank credit facility contains covenants limiting our
activities, including, without limitation, limitations on dividends and other
payments, liens, investments, incurrence of indebtedness, mergers and asset
sales, related party transactions and capital expenditures. This bank credit
facility also contains certain financial and operating covenants, including a
maximum leverage ratio, a minimum interest coverage ratio and a minimum fixed
charge coverage ratio.
The outstanding principal amount of the term loan currently bears
interest, at our option, at a rate of 2.75% per annum in excess of the adjusted
eurodollar rate or, with respect to U.S. Dollar denominated alternate base rate
loans, 1.75% in excess of the prime rate. The term loan amortizes in an annual
percentage of 1% during each of year of the term of the loan and the balance in
the last year of the term of the loan. The term loan is subject to mandatory
prepayment in certain circumstances and are voluntarily prepayable without
payment of a premium (subject to reimbursement of the lenders' costs in case of
prepayment of eurodollar loans other than on the last day of an interest
period.)
The outstanding principal amount of loans under the revolving credit
facility bears interest, at our option, at an all-in drawn cost of 1.375% per
annum in excess of the adjusted eurocurrency rate or, with respect to U.S.
Dollar denominated alternate base rate loans, at an all-in drawn cost of 0.375%
per annumin excess of the prime rate. The revolving credit facility will
terminate on March 6, 2004.
On March 29, 2001, we entered into an amended and restated Tranche C
credit agreement. This bank credit facility currently consists of a secured
global revolving credit facility (described below) aggregating up to $175.0
million (described below) and a term loan facility with an outstanding principal
amount of $289.2 million as of the date of this Prospectus. The term loans under
this facility mature in March 2006 and bear interest, at our option, at a rate
of 3.0% per annum in excess of the adjusted Eurodollar rate or 2.0% in excess of
the prime rate.
The outstanding principal amount of loans under the Tranche C revolving
credit facility bears interest, at our option, at an all-in drawn cost of 1.375%
per annum in excess of the adjusted eurocurrency rate or, with respect to U.S.
Dollar denominated alternate base rate loans, at an all-in drawn cost of 0.375%
per annum in excess of the prime rate. The revolving credit facility will
terminate on March 6, 2005.
If for any reason we are unable to comply with the terms of the bank
credit facilities, including the covenants included therein, such noncompliance
could result in an event of default under our bank credit facilities and could
result in acceleration of the payment of the indebtedness outstanding under our
bank credit facilities.
The Letter of Credit Facility
In addition to the bank credit facilities, we received also have a
separate $50 million letter of credit facility. Letters of credit issued under
this facility do not decrease availability under the revolving credit facility.
41
DESCRIPTION OF THE NEW NOTES
Terex will issue the New Notes under an Indenture dated as of March 29,
2001 (the "Indenture"), among us, the Subsidiary Guarantors and United States
Trust Company of New York, as trustee.
The following is a summary of certain provisions of the Indenture and
the New Notes. The following summary of certain provisions of the Indenture and
the New Notes does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of the Indenture
and the New Notes, including the definitions of certain terms therein and those
terms made a part thereof by the Trust Indenture Act. We urge you to read the
Indenture and form of notes because they, not this description, define your
rights as holders of these notes. You may request copies of these documents at
our address set forth under the heading "Where You can Find More Information."
In this section, entitled "Description of the New Notes," when we refer
to "Terex," "we," "our" or "us," we are referring to Terex Corporation and not
its subsidiaries.
We will consider the Old Notes and New Notes collectively to be a
single class for all purposes under the Indenture, including waivers,
amendments, redemptions and offers to purchase.
General
Principal of, premium, if any, and interest on the New Notes will be
payable, and the New Notes may be exchanged or transferred, at the office or
agency of Terex in the Borough of Manhattan, the City of New York (which
initially shall be the corporate trust office of the trustee, at 111 Broadway,
Lower Level, Corporate Trust Window, New York, New York 10005), except that, at
the option of Terex, payment of interest may be made by check mailed to the
address of the holders as such address appears in the Note register.
The New Notes will be issued only in fully registered form, without
coupons, in denominations of $1,000 and any integral multiple of $1,000. See "--
Book-Entry, Delivery and Form." No service charge shall be made for any
registration or exchange of notes, but Terex may require payment of a sum
sufficient to cover any transfer tax or other similar governmental charge
payable in connection therewith.
Terms of the New Notes
The New Notes:
will be unsecured senior subordinated obligations of Terex
maturing on April 1, 2011;
will be subordinate in right of payment to certain other debt
obligations of Terex; and
will bear interest at 10-3/8% per annum from their date of
original issuance, or from the most recent date to which interest
has been paid or provided for which we will pay semiannually.
Subject to compliance with the covenant described under "Certain
Covenants---Limitation on Indebtedness," we may issue additional notes under the
Indenture in a principal amount not to exceed $300 million in the aggregate (the
"additional notes"). The New Notes will be subordinate in right of payment to
certain of our other debt obligations. The New Notes will be payable
semiannually to holders of record at the close of business on the March 15 or
September 15 immediately preceding the interest payment date on April 1 and
October 1 of each year, commencing October 1, 2001. We will pay interest on
overdue principal at 1% per annum in excess of such rate, and will pay interest
on overdue installments of interest at such higher rate to the extent lawful.
Interest on the New Notes will be computed on the basis of a 360-day year of
twelve 30-day months.
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Optional Redemption
Except as set forth in the following paragraph, we will not be entitled
to redeem the New Notes at our option prior to April 1, 2006. Thereafter, we
will be entitled at our option to redeem all or a portion of the New Notes, in
whole or in part, at any time or from time to time, upon not less than 30 nor
more than 60 days prior notice mailed by first-class mail to each holder's
registered address, at the following redemption prices (expressed in percentages
of principal amount), plus accrued interest to the redemption date (subject to
the right of holders of record on the relevant record date to receive interest
due on the relevant interest payment date), if redeemed during the 12-month
period commencing on April 1 of the years set forth below:
Redemption
Period Price
2006 105.188%
2007 103.458%
2008 101.729%
2009 and thereafter 100.000%
In addition, before April 1, 2004, we may at our option on one or more
occasions redeem in the aggregate up to 33.3% of the original principal amount
of the New Notes (including the original principal amount of any additional
notes) with the proceeds of one or more Public Equity Offerings, at a redemption
price (expressed as a percentage of principal amount) of 110.375% plus accrued
interest to the redemption date (subject to the right of holders of record on
the relevant record date to receive interest due on the relevant interest
payment date); provided, however, that at least 65% of the aggregate principal
amount of the New Notes originally outstanding remains outstanding (including
the original principal amount of any additional notes) after each such
redemption.
In the case of any partial redemption, we will select the New Notes for
redemption in accordance with the requirements of the principal national
securities exchange, if any, on which the New Notes are listed or, if the New
Notes are not listed on a securities exchange, the trustee will select the New
Notes on a pro rata basis, by lot or by such other method as the trustee in its
sole discretion shall deem to be fair and appropriate, although no note in
original principal amount of $1,000 or less shall be redeemed in part. If any
note is to be redeemed in part only, the notice of redemption relating to such
note shall state the portion of the principal amount thereof to be redeemed. A
new note in principal amount equal to the unredeemed portion thereof will be
issued in the name of the holder thereof upon cancellation of the original note.
The New Notes will not have the benefit of a sinking fund.
Subsidiary Guarantees
Our obligations pursuant to the New Notes, including the repurchase
obligation resulting from a Change of Control, will be unconditionally
guaranteed, jointly and severally, on a senior subordinated basis, by each of
the Subsidiary Guarantors. Each Subsidiary Guarantee will not exceed the maximum
amount that can be guaranteed by the applicable Subsidiary Guarantor without
rendering the Subsidiary Guarantee, as it relates to such Subsidiary Guarantor,
voidable under applicable law relating to fraudulent conveyance or fraudulent
transfer or similar laws affecting the rights of creditors generally. If a
Subsidiary Guarantee were to be rendered voidable, a court could deem it
unenforceable or subordinate it to all other indebtedness (including guarantees
and other contingent liabilities) of the applicable Subsidiary Guarantor, and,
depending on the amount of such indebtedness, a Subsidiary Guarantor's liability
on its Subsidiary Guarantee could be reduced to zero. See "Risk Factors---Since
the New Notes are subordinated senior debt, there may not be sufficient assets
to pay amounts owed on the New Notes if a default occurs."
Pursuant to the Indenture, a Subsidiary Guarantor may consolidate with,
merge with or into, or transfer all or substantially all its assets to any other
Person to the extent described below under "---Certain Covenants---Merger and
Consolidation;" provided, however, that if such other Person is not Terex or
another Subsidiary Guarantor, such Subsidiary Guarantor's obligations under its
43
Subsidiary Guarantee must be expressly assumed by such other Person. However,
generally upon the sale or other disposition (including by way of consolidation
or merger) of a Subsidiary Guarantor or the sale or disposition of all or
substantially all the assets of a Subsidiary Guarantor (in each case other than
to us or any of our Affiliates) permitted by the Indenture (including pursuant
to the exercise of remedies in respect of any Lien on the capital stock of a
Subsidiary Guarantor, which Lien secures outstanding Bank Indebtedness), such
Subsidiary Guarantor will be released and relieved from all its obligations
under its Subsidiary Guarantee.
Subordination
The indebtedness evidenced by the New Notes will be our senior
subordinated obligations. The payment of the principal of, premium (if any), and
interest, on the New Notes is contractually subordinated in right of payment as
set forth in the Indenture, to the prior payment in full of all of our Senior
Indebtedness.
The obligations of a Subsidiary Guarantor under its Subsidiary
Guarantee will be a senior subordinated obligation of such Subsidiary Guarantor.
As such, the rights of noteholders to receive payment by a Subsidiary Guarantor
pursuant to its Subsidiary Guarantee will be contractually subordinated in right
of payment to the rights of holders of Senior Indebtedness of such Subsidiary
Guarantor. The terms of the subordination provisions described herein with
respect to our obligations under the New Notes apply equally to a Subsidiary
Guarantor and the obligations of such Subsidiary Guarantor under its Subsidiary
Guarantee.
Our indebtedness and indebtedness of the Subsidiary Guarantors that
constitutes Senior Indebtedness will rank senior to the New Notes and the
relevant Subsidiary Guarantee in accordance with the provisions of the
Indenture. The New Notes will in all respects rank pari passu with all of our
other Senior Subordinated Indebtedness and the Subsidiary Guarantees will in all
respects rank pari passu with all other Senior Subordinated Indebtedness of the
Subsidiary Guarantors. Furthermore, the New Notes will rank senior to all of our
other Subordinated Obligations and the Subsidiary Guarantees will rank senior to
all other Subordinated Obligations of the Subsidiary Guarantors. See
"---Subsidiary Guarantees," "Risk Factors-Since the New Notes are subordinated
senior debt, there may not be sufficient assets to pay amounts owed on the New
Notes if a default occurs" and "Risk Factors---As a result of fraudulent
conveyance laws, a court could void a guarantee of a subsidiary, in which event
noteholders would cease to have a claim against such subsidiary guarantor."
As of December 31, 2000, (i) the Senior Indebtedness of Terex and the
Subsidiary Guarantors, to which the New Notes are contractually subordinated,
was approximately $429 million, consisting principally of $413 million of
Indebtedness Incurred under the Credit Facility, (ii) there was approximately
$245 million of Senior Subordinated Indebtedness of Terex or the Subsidiary
Guarantors ranking pari passu with the New Notes or the Subsidiary Guarantees,
consisting of the Old Notes and the subsidiary guarantees thereof, and (iii)
there were no Subordinated Obligations ranking junior to the New Notes or the
Subsidiary Guarantees.
In addition, claims of creditors of our subsidiaries, including trade
creditors, secured creditors and creditors holding indebtedness and guarantees
issued by such subsidiaries, and claims of preferred stockholders (if any) of
such subsidiaries, generally will have priority with respect to the assets and
earnings of such subsidiaries over the claims of our creditors, including the
holders of the New Notes, even if such obligations do not constitute Senior
Indebtedness. The New Notes therefore will be effectively subordinated to
existing and future liabilities of our subsidiaries, except to the extent that
the Subsidiary Guarantees may be enforceable by holders of the New Notes against
the Subsidiary Guarantors.
We and the Subsidiary Guarantors have agreed in the Indenture that none
of us will Incur, directly or indirectly, any Indebtedness that is subordinate
or junior in ranking in right of payment to its Senior Indebtedness unless such
Indebtedness is, among other things, Senior Subordinated Indebtedness or is
expressly subordinated in right of payment to Senior Subordinated Indebtedness.
Unsecured Indebtedness is not deemed to be subordinated or junior to Secured
Indebtedness merely because it is unsecured.
We may not pay principal of, premium (if any) or interest on, the New
Notes or make any deposit pursuant to the provisions described under
"Defeasance" below and may not repurchase, redeem or otherwise retire any notes
44
(collectively, "pay the New Notes") if (i) any amount of principal, interest or
other payments due under the Designated Senior Indebtedness has not been paid
when due and remains outstanding or (ii) any other default on Designated Senior
Indebtedness occurs and the maturity of such Designated Senior Indebtedness is
accelerated in accordance with its terms unless, in either case, the default has
been cured or waived and any such acceleration has been rescinded or such
Designated Senior Indebtedness has been paid in full. However, we may pay the
New Notes without regard to the foregoing if we and the trustee receive written
notice approving such payment from the Representative of the Designated Senior
Indebtedness with respect to which either of the events set forth in clause (i)
or (ii) of the immediately preceding sentence has occurred and is continuing.
During the continuance of any default (other than a default described in clause
(i) or (ii) of the second preceding sentence) with respect to any Designated
Senior Indebtedness pursuant to which the maturity thereof may be accelerated
either immediately without further notice (except such notice as may be required
to effect such acceleration) or upon the expiration of any applicable grace
periods, we may not pay the New Notes for a period (a "Payment Blockage Period")
(a) commencing upon the receipt by the trustee (with a copy to us) of written
notice (a "Blockage Notice") of such default from the Representative of the
holders of such Designated Senior Indebtedness specifying an election to effect
a Payment Blockage Period and (b) ending 179 days thereafter (or earlier if such
Payment Blockage Period is terminated (i) by written notice to the trustee and
Terex from the Person or Persons who gave such Blockage Notice, (ii) because the
default giving rise to such Blockage Notice is no longer continuing (solely as
evidenced by written notice to the trustee by the Representative of such
Designated Senior Indebtedness which notice shall be promptly delivered) or
(iii) because such Designated Senior Indebtedness has been repaid in full).
Notwithstanding the provisions described in the immediately preceding sentence
(but subject to the provisions described in the first sentence of this
paragraph), unless the holders of such Designated Senior Indebtedness or the
Representative of such holders have accelerated the maturity of such Designated
Senior Indebtedness, we may resume payments on the New Notes after the end of
such Payment Blockage Period. The New Notes will not be subject to more than one
Payment Blockage Period in any consecutive 360-day period, irrespective of the
number of defaults with respect to Designated Senior Indebtedness during such
period.
Upon any payment or distribution of the assets of either us or any
Subsidiary Guarantor upon a total or partial liquidation or dissolution or
reorganization of or similar proceeding, or any bankruptcy, insolvency,
receivership or similar proceeding, relating to either us or any Subsidiary
Guarantor or its property or an assignment for the benefit of creditors or
marshalling of assets and liabilities of ours or any Subsidiary Guarantor: (i)
the holders of Senior Indebtedness will be entitled to receive payment in full
of such Senior Indebtedness before the noteholders are entitled to receive any
payment, and (ii) until the Senior Indebtedness is paid in full, any payment or
distribution to which noteholders would be entitled but for the subordination
provisions of the Indenture will be made to holders of such Senior Indebtedness
as their interests may appear. If a payment or distribution is made to
noteholders that, due to the subordination provisions, should not have been made
to them, such noteholders are required to hold it in trust for the holders of
Senior Indebtedness and pay it over to them as their interests may appear.
If payment of the New Notes is accelerated because of an Event of
Default, we or the trustee will promptly notify the holders of Designated Senior
Indebtedness or the Representative of such holders of the acceleration.
Under the terms of the Indenture, in the event of insolvency: (i) our
creditors or the creditors of a Subsidiary Guarantor who are holders of Senior
Indebtedness of Terex or such Subsidiary Guarantor, as the case may be, may
recover more, ratably, than the noteholders, and (ii) our creditors or the
creditors of such Subsidiary Guarantor who are not holders of Senior
Indebtedness may recover less, ratably, than holders of Senior Indebtedness and
may recover more, ratably, than the noteholders.
The terms of the subordination provisions described above will not
apply to payments from money or the proceeds of U.S. Government Obligations held
in trust by the trustee for the payment of principal of and interest on the New
Notes pursuant to the provisions described under "---Defeasance."
45
Change of Control
If we undergo a Change of Control, each holder shall have the right to
require us to repurchase all or any part of such holder's notes at a purchase
price in cash equal to 101% of the principal amount thereof plus accrued and
unpaid interest, if any, to the date of purchase (subject to the right of
holders of record on the relevant record date to receive interest due on the
relevant interest payment date).
Within 15 Business Days following any Change of Control, we will mail a
notice to the trustee and to each holder stating, among other things:
(1) that a Change of Control has occurred and that such holder has the
right to require us to purchase such holder's notes at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued and unpaid interest,
if any, to the date of purchase (subject to the right of holders of record on
the relevant record date to receive interest on the relevant interest payment
date);
(2) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical income, cash
flow and capitalization after giving effect to such Change of Control);
(3) the repurchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(4) the instructions determined by us, consistent with the covenant
described hereunder, that a holder must follow in order to have its notes
purchased.
We will comply in all material respects, to the extent applicable, with
the requirements of Section 14(e) of the Securities Exchange Act of 1934, as
amended, and any other securities laws or regulations in connection with the
repurchase of notes as a result of a Change in Control. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
the covenant described hereunder, we will comply with the applicable securities
laws and regulations and shall not be deemed to have breached our obligations
under the covenant described hereunder by virtue of our compliance with such
securities laws or regulations.
Subject to the limitations discussed below, we could, in the future,
enter into certain transactions, including acquisitions, refinancings or other
recapitalizations, that would not constitute a Change of Control under the
Indenture, but that could increase the amount of Indebtedness outstanding at
such time or otherwise affect our capital structure or credit ratings.
Restrictions on our ability to Incur additional Indebtedness are contained in
the covenants described under "---Certain Covenants---Limitation on
Indebtedness" and "---Limitation on Indebtedness and Preferred Stock of
Restricted Subsidiaries." Such restrictions can only be waived with the consent
of the holders of a majority in principal amount of the New Notes then
outstanding. Except for the limitations contained in such covenants, however,
the Indenture will not contain any covenants or provisions that may afford
holders protection in the event of a highly leveraged transaction.
If a Change of Control offer is made, we can not assure the holders
that we will have available funds sufficient to pay the purchase price for all
of the New Notes that might be delivered by holders seeking to accept the Change
of Control offer. Our failure to make or consummate the Change of Control offer
or pay the purchase price when due will give the trustee and the holders the
rights described under "---Events of Default."
The existence of a holder's right to require us to offer to repurchase
such holder's notes upon a Change of Control may deter a third party from
acquiring Terex in a transaction which constitutes a Change of Control.
The Credit Facility, under certain circumstances, prohibits us from
purchasing any New Notes prior to its expiration, and will also provide that the
occurrence of certain change of control events with respect to Terex would
constitute a default thereunder. In the event a Change of Control occurs at a
time when we are prohibited from purchasing notes, we may (but are not required
to) seek the consent of our lenders to the purchase of notes or may (but are not
required to) attempt to refinance the borrowings that contain such prohibition.
46
If we do not obtain such a consent or repay such borrowings, we will remain
prohibited from purchasing notes. In such case, our failure to purchase tendered
notes would constitute an Event of Default under the Indenture which would, in
turn, constitute a default under the Credit Facility. In such circumstances, the
subordination provisions in the Indenture would likely restrict payment to the
holders of notes.
Future Indebtedness that we may Incur may contain prohibitions on the
occurrence of certain events that would constitute a Change of Control or
require such Indebtedness to be repaid or repurchased upon a Change of Control.
Moreover, the exercise by the holders of their right to require us to repurchase
the New Notes could cause a default under such Indebtedness, even if the Change
of Control itself does not, due to the financial effect of such repurchase on
us. Finally, our ability to pay cash to the holders following the occurrence of
a Change of Control may be limited by our then existing financial resources. We
can not assure the holders that sufficient funds will be available when
necessary to make any required repurchases.
The provisions under the Indenture relating to our obligation to make
an offer to repurchase the New Notes as a result of a Change of Control may be
waived or modified with the written consent of each holder of notes then
outstanding.
Certain Covenants
The Indenture contains covenants including, among others, the
following:
Limitation on Indebtedness
(a) Terex will not Incur, directly or indirectly, any Indebtedness
(including Acquired Indebtedness) unless, on the date of such Incurrence, and
after giving pro forma effect thereto, (i) no Default or Event of Default shall
have occurred and be continuing or would occur and (ii) the Consolidated Cash
Flow Coverage Ratio at the date of such issuance exceeds 2.0 to 1.0.
(b) Notwithstanding paragraph (a), Terex may Incur the following
Indebtedness:
(1) Indebtedness Incurred pursuant to the Credit Facility,
together with all Indebtedness then outstanding and Incurred pursuant
to clause (1) of "---Limitation on Indebtedness and Preferred Stock of
Restricted Subsidiaries" below, not to exceed in outstanding principal
amount the greater of (1) $950 million at any time outstanding and (2)
the sum of (x) 80% of the consolidated book value of the net accounts
receivable of Terex and (y) 50% of the consolidated book value of the
inventory of Terex, in each case determined in accordance with GAAP;
(2) Indebtedness owed to and held by a Restricted Subsidiary;
provided, however, that any subsequent issuance or transfer of any
Capital Stock that results in such Subsidiary ceasing to be a
Restricted Subsidiary, or any transfer of such Indebtedness (other
than to a Restricted Subsidiary) shall be deemed, in each case, to
constitute the Incurrence of such Indebtedness by Terex;
(3) the Old Notes and the New Notes (other than additional
notes);
(4) Indebtedness (other than Indebtedness described in clause
(1), (2), or (3) above) outstanding on March 29, 2001 (including the
Existing Notes);
(5) any Refinancing Indebtedness in respect of Indebtedness
Incurred pursuant to paragraph (a) or pursuant to clause (3), (4) or
(8) or this clause (5) or pursuant to clause (5) of the covenant
described under "---Limitation on Indebtedness and Preferred Stock of
Restricted Subsidiaries" below;
(6) obligations of Terex pursuant to (A) Interest Rate Protection
Agreements in respect of Indebtedness of Terex that is permitted by
the terms of the Indenture to be outstanding to the extent the
notional principal amount of such obligation does not exceed the
aggregate principal amount of the Indebtedness to which such Interest
47
Rate Protection Agreements relate, (B) Currency Agreement Obligations
in respect of foreign exchange exposures Incurred by Terex in the
ordinary course of its business and (C) commodity agreements of Terex
to the extent entered into in the ordinary course of business to
protect Terex from fluctuations in the prices of raw materials used in
its business;
(7) Indebtedness of Terex consisting of obligations in respect of
purchase price adjustments in connection with the acquisition or
disposition of assets by Terex or any Restricted Subsidiary permitted
under the Indenture;
(8) Capital Lease Obligations, Purchase Money Indebtedness and
Acquired Indebtedness (to the extent not Incurred in connection with,
or in anticipation or contemplation of, the relevant transaction) in
an aggregate principal amount, together with the principal amount of
Indebtedness Incurred pursuant to clause (9) of "---Limitation on
Indebtedness and Preferred Stock of Restricted Subsidiaries," not
exceeding $15 million at any one given time outstanding;
(9) performance bonds, surety bonds, insurance obligations or
bonds and other similar bonds or obligations incurred by Terex in the
ordinary course of business consistent with past practice;
(10) Floor Plan Guarantees;
(11) Indebtedness Incurred pursuant to the terms of the
outstanding Common Stock Appreciation Rights, as such terms are in
effect on March 29, 2001; and
(12) Indebtedness in an aggregate principal amount which,
together with all other Indebtedness of Terex then outstanding (other
than Indebtedness permitted by paragraph (a) or clauses (1) through
(11) of this paragraph (b)) does not exceed $5 million (less the
amount of any Subsidiary Indebtedness and Preferred Stock then
outstanding and Incurred pursuant to clause (12) of "---Limitation on
Indebtedness and Preferred Stock of Restricted Subsidiaries").
(c) Except to the extent that such Indebtedness is permitted to be
Incurred pursuant to paragraphs (a) and (b) above and the provisions of
"---Limitation on Indebtedness and Preferred Stock of Restricted Subsidiaries,"
Terex will not, and will not permit any Restricted Subsidiary to, Incur any
Indebtedness if the proceeds thereof are used, directly or indirectly, to repay,
prepay, redeem, defease, retire, refund or refinance any Subordinated
Obligations unless such Indebtedness shall be subordinated to the New Notes or
the relevant Subsidiary Guarantee, as applicable, to at least the same extent as
such Subordinated Obligations.
(d) For purposes of determining compliance with the covenants entitled
"---Limitation on Indebtedness" and "---Limitation on Indebtedness and Preferred
Stock of Restricted Subsidiaries," in the event that an item of Indebtedness
meets the criteria of more than one of the types of Indebtedness described
above, Terex, in its sole discretion, will classify such item of Indebtedness
and only be required to include the amount and type of such Indebtedness in one
of the above clauses.
(e) For purposes of determining amounts of Indebtedness under the
covenants entitled "---Limitation on Indebtedness" and "---Limitation on
Indebtedness and Preferred Stock of Restricted Subsidiaries," Indebtedness
resulting from security interests granted with respect to Indebtedness otherwise
included in the determination of Indebtedness, and Guarantees (and security
interests with respect thereof) of, or obligations with respect to letters of
credit supporting, Indebtedness otherwise included in the determination of
Indebtedness shall not be included in the determination of Indebtedness.
(f) Indebtedness of any Person which is outstanding at the time such
Person becomes a Restricted Subsidiary of Terex (including upon designation of
any subsidiary or other person as a Restricted Subsidiary) or is merged with or
into or consolidated with Terex or a Restricted Subsidiary of Terex shall be
deemed to have been Incurred at the time such Person becomes such a Restricted
Subsidiary of Terex or merged with or into or consolidated with Terex or a
Restricted Subsidiary of Terex, as applicable.
48
Limitation on Indebtedness and Preferred Stock of Restricted Subsidiaries
Terex will not permit any Restricted Subsidiary to Incur, directly or
indirectly, any Indebtedness or Preferred Stock (except that a Subsidiary
Guarantor shall be permitted to issue Preferred Stock) except for the following:
(1) Indebtedness Incurred pursuant to the Credit Facility, together
with the aggregate amount of all Indebtedness then outstanding and issued
pursuant to clause (b)(1) of "Limitation on Indebtedness" above, not to exceed
in outstanding principal amount the greater of (1) $950 million at any time
outstanding and (2) the sum of (x) 80% of the consolidated book value of the net
accounts receivable of Terex and (y) 50% of the consolidated book value of the
inventory of Terex, in each case determined in accordance with GAAP;
(2) Indebtedness or Preferred Stock issued to and held by Terex or a
Restricted Subsidiary; provided, however, that (A) any subsequent issuance or
transfer of any Capital Stock that results in any such Subsidiary ceasing to be
a Restricted Subsidiary or (B) any subsequent transfer of such Indebtedness or
Preferred Stock (other than to Terex or a Restricted Subsidiary) shall be
deemed, in each case, to constitute the Incurrence of such Indebtedness or
Preferred Stock by the issuer thereof;
(3) Acquired Indebtedness (to the extent not Incurred in connection
with, or in anticipation or contemplation of, the relevant transaction) of such
Restricted Subsidiary; provided that after giving effect to the Incurrence of
such Acquired Indebtedness, Terex could incur $1.00 of Indebtedness pursuant to
paragraph (a) under "---Limitation on Indebtedness";
(4) Indebtedness or Preferred Stock (other than any described in clause
(1), (2) or (3)) outstanding on March 29, 2001 (including Guarantees in respect
of the Existing Notes);
(5) Refinancing indebtedness Incurred in respect of Indebtedness or
Preferred Stock referred to in clause (3), (4) or (10) or this clause (5);
provided, however, that to the extent such Refinancing Indebtedness Refinances
Acquired Indebtedness or Preferred Stock of a Restricted Subsidiary that is not
a Wholly Owned Subsidiary, such Refinancing Indebtedness shall be Incurred only
by such Restricted Subsidiary;
(6) Obligations of a Restricted Subsidiary pursuant to (A) Interest
Rate Protection Agreements in respect of Indebtedness of the Restricted
Subsidiary that is permitted by the terms of the Indenture to be outstanding to
the extent the notional principal amount of such obligation does not exceed the
aggregate principal amount of the Indebtedness to which such Interest Rate
Protection Agreements relate, (B) Currency Agreement Obligations in respect of
foreign exchange exposures Incurred by the Restricted Subsidiary in the ordinary
course of its business and (C) commodity agreements of the Restricted Subsidiary
to the extent entered into in the ordinary course of business to protect the
Restricted Subsidiary from fluctuations in the prices of raw materials used in
its business;
(7) Indebtedness consisting of the Subsidiary Guarantees (other than in
respect of additional notes);
(8) Indebtedness of any Restricted Subsidiary consisting of Obligations
in respect of purchase price adjustments in connection with the acquisition or
disposition of assets by any Restricted Subsidiary permitted under the
Indenture;
(9) Capital Lease Obligations, Purchase Money Indebtedness and Acquired
Indebtedness (to the extent not Incurred in connection with, or in anticipation
or contemplation of, the relevant transaction) in an aggregate principal amount
not exceeding, together with the principal amount of Indebtedness Incurred
pursuant to clause (b)(8) of "---Limitation on Indebtedness," $15 million at any
one given time outstanding;
(10) performance bonds, surety bonds, insurance obligations or bonds
and other similar bonds or obligations incurred by a Restricted Subsidiary in
the ordinary course of business consistent with past practice;
49
(11) Floor Plan Guarantees; and
(12) Indebtedness and Preferred Stock in an aggregate principal amount
which, together with any other Indebtedness or Preferred Stock of Restricted
Subsidiaries then outstanding (other than Indebtedness or Preferred Stock
permitted by clauses (1) through (11) of this Section) does not exceed $5
million (less the amount of any Indebtedness then outstanding and Incurred
pursuant to clause (b)(12) of "---Limitation on Indebtedness").
Limitation on Liens Securing Subordinated Indebtedness
Terex will not, and will not permit any Restricted Subsidiary to,
create, Incur, assume or suffer to exist any Liens of any kind (other than
Permitted Liens) upon any of their respective assets or properties now owned or
acquired after the date of the Indenture or any income or profits therefrom
securing either:
(1) any Indebtedness of Terex or a Restricted Subsidiary which is
expressly by its terms subordinate or junior in right of payment to any other
Indebtedness of Terex or such Restricted Subsidiary, as the case may be, unless
the New Notes or the relevant Subsidiary Guarantee, as the case may be, are
equally and ratably secured for so long as such Indebtedness is so secured;
provided that, if such Indebtedness which is expressly by its terms subordinate
or junior in right of payment to any other Indebtedness of Terex or a Restricted
Subsidiary is expressly subordinate or junior to the New Notes or the relevant
Subsidiary Guarantee, as the case may be, then the Lien securing such
subordinated or junior Indebtedness shall be subordinate and junior to the Lien
securing the New Notes or the relevant Subsidiary Guarantee, as the case may be,
with the same relative priority as such subordinated or junior Indebtedness
shall have with respect to the New Notes or the relevant Subsidiary Guarantee,
as the case may be, or
(2) any assumption, guarantee or other liability of Terex or any
Restricted Subsidiary in respect of any Indebtedness of Terex or a Restricted
Subsidiary which is expressly by its terms subordinate or junior in right of
payment to any other Indebtedness of Terex or such Restricted Subsidiary, unless
the New Notes or the relevant Subsidiary Guarantee, as the case may be, are
equally and ratably secured for so long as such assumption, guaranty or other
liability is so secured; provided that, if such subordinated Indebtedness which
is expressly by its terms subordinate or junior in right of payment to any other
Indebtedness of Terex or a Restricted Subsidiary is expressly by its terms
subordinate or junior to the New Notes or the relevant Subsidiary Guarantee, as
the case may be, then the Lien securing the assumption, guarantee or other
liability of such Subsidiary shall be subordinate and junior to the Lien
securing the New Notes or the relevant Subsidiary Guarantee, as the case may be,
with the same relative priority as such subordinated or junior Indebtedness
shall have with respect to the New Notes or the relevant Subsidiary Guarantee,
as the case may be.
Limitation on Other Senior Subordinated Indebtedness
Terex will not, and will not permit any Restricted Subsidiary to,
create, Incur, assume, guarantee or in any other manner become liable with
respect to any Indebtedness that is subordinate in right of payment to any
Senior Indebtedness of Terex or any such Restricted Subsidiary, unless such
Indebtedness (a) is in the form of additional notes, in which case this covenant
will not apply, or (b) (i) has a maturity date subsequent to the Stated Maturity
of the New Notes and an Average Life longer than that of the New Notes and (ii)
is also pari passu with, or subordinate in right of payment to, the New Notes or
the relevant Subsidiary Guarantee, as the case may be.
Limitation on Restricted Payments
(a) Terex will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, (i) declare or pay any dividend or make any distribution
on or in respect of its Capital Stock (including any payment in connection with
any merger or consolidation involving Terex) or to the direct or indirect
holders of its Capital Stock in their capacities as such (except dividends or
distributions payable solely in Capital Stock (other than Disqualified Stock) or
in options, warrants or other rights to purchase its Capital Stock (other than
Disqualified Stock) and except dividends or distributions payable to Terex or
any Restricted Subsidiary (and, if the Restricted Subsidiary making such
50
dividends or distributions has any stockholders other than Terex or another
Restricted Subsidiary, to such stockholders on no more than a pro rata basis,
measured by value)), (ii) purchase, redeem or otherwise acquire or retire for
value any Capital Stock of Terex, any Restricted Subsidiary or any other
Affiliate of Terex, (iii) purchase, repurchase, redeem, defease or otherwise
acquire or retire for value, prior to scheduled maturity, scheduled repayment or
scheduled sinking fund payment, any Subordinated Obligations or (iv) make any
Restricted Investment (any such dividend, distribution, purchase, redemption,
repurchase, defeasance, other acquisition, retirement or Restricted Investment
being herein referred to as a "Restricted Payment") if at the time Terex or such
Restricted Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would
result therefrom); or
(2) Terex would not be permitted to issue an additional $1.00 of
Indebtedness pursuant to paragraph (a) under "---Limitation on
Indebtedness" after giving pro forma effect to such Restricted
Payment; or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments since March 31, 1998 would exceed the sum of:
(A) 50% of the Consolidated Net Income accrued during
the period (treated as one accounting period) from the
beginning of the first full fiscal quarter commencing after
March 31, 1998 to the end of the most recent fiscal quarter
for which financial statements are available (or, in case such
Consolidated Net Income shall be a deficit, minus 100% of such
deficit) plus
(B) the aggregate Net Cash Proceeds received by Terex
from (x) the issue or sale of its Capital Stock (other than
Disqualified Stock) subsequent to March 31, 1998 (other than
an issuance or sale to a Subsidiary or an employee stock
ownership plan or similar trust in the benefit of employees)
and (y) the issue or sale (other than an issuance or sale to a
Subsidiary or an employee stock ownership plan or similar
trust in the benefit of employees) after March 31, 1998 of
Disqualified Stock or debt securities that have been converted
or exchanged in accordance with their terms for Capital Stock
of Terex (other than Disqualified Stock), in each case to the
extent such proceeds are not used to redeem, repurchase,
retire or otherwise acquire Capital Stock or any Indebtedness
of Terex or any Restricted Subsidiary or to make any
Investment pursuant to clause (8) of the definition of
"Permitted Investment."
(b) The provisions of clauses (2) and (3) of paragraph (a) shall not
prohibit:
(1) any purchase or redemption of Capital Stock or
Subordinated Obligations of Terex made by exchange for, or out of the
proceeds of the substantially concurrent sale or issuance of, Capital
Stock of Terex (other than Disqualified Stock and other than Capital
Stock issued or sold to a Subsidiary or an employee stock ownership
plan); provided, however, that the Net Cash Proceeds from such sale
shall be excluded from clause (3)(B) of paragraph (a);
(2) dividends paid within 60 days after the date of
declaration if at such date of declaration such dividend would have
complied with this provision; provided, however, that such dividend
shall be deducted in the calculation of the amount of Restricted
Payments available to be made referred to in clause (3) of paragraph
(a) above;
(3) the repurchase of shares of, or options to purchase shares
of, Capital Stock of Terex or any of its Subsidiaries from employees,
former employees, directors or former directors of Terex or any of its
Subsidiaries (or permitted transferees of such employees, former
employees, directors or former directors), pursuant to the terms of the
agreements (including employment agreements) or plans (or amendments
thereto) approved by the Board of Directors under which such
individuals purchase or sell or are granted the option to purchase or
sell, shares of such common stock; provided, however, that the
aggregate amount of any repurchases pursuant to this clause (3) and any
purchases pursuant to clause (4) below shall not exceed $500,000 per
year or $3.5 million in the aggregate on or after March 31, 1998;
51
(4) provided that no Default or Event of Default shall have
occurred or be continuing at the time of such payment or after giving
effect thereto, the purchase by Terex of shares of its common stock
(for not more than fair market value) in connection with the delivery
of such stock to grantees under any stock option plan (upon the
exercise by such grantees of their stock options) or any other deferred
compensation plan of Terex approved by the Board of Directors;
provided, however, that the aggregate amount of any purchases pursuant
to this clause (4) and any repurchases pursuant to clause (3) above
shall not exceed $500,000 per year or $3.5 million in the aggregate on
or after March 31, 1998;
(5) the redemption, purchase, retirement or other payoff of
any Subordinated Obligations with the proceeds of any Refinancing
Indebtedness permitted to be incurred pursuant to the terms of clause
(b)(5) of "-Certain Covenants---Limitation on Indebtedness" and clause
(5) of "-Limitation on Indebtedness and Preferred Stock of Restricted
Subsidiaries"; and
(6) provided that no Default or Event of Default shall have
occurred or be continuing at the time of such payment or after giving
effect thereto, other Restricted Payments in an aggregate amount not to
exceed $10 million; provided, however, that such payment shall be
deducted in the calculation of the amount of Restricted Payments
available to be made referred to in clause (3) of paragraph (a) above.
Limitation on Restrictions on Distributions from Restricted Subsidiaries
Terex will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, create or permit to exist or become effective any
encumbrance or restriction on the ability of any Restricted Subsidiary to (a)
pay dividends or make any other distributions on its Capital Stock or with
respect to any other interest or participation in, or measured by, its profits
to Terex or a Restricted Subsidiary or pay any Indebtedness or other obligation
owed to Terex or a Restricted Subsidiary, (b) make any loans or advances to
Terex or any other Restricted Subsidiary or (c) transfer any of its property or
assets to Terex or any other Restricted Subsidiary, except for such encumbrances
or restrictions existing under or by reason of:
(1) the Credit Facility as in effect on March 29, 2001, and
any amendments, restatements, renewals, replacements or refinancings
thereof; provided, however, that such amendments, restatements,
renewals, replacements or refinancings are no more restrictive with
respect to such dividend and other payment restrictions than those
contained in the Credit Facility (or, if more restrictive, than those
contained in the Indenture) immediately prior to any such amendment,
restatement, renewal, replacement or refinancing,
(2) applicable law,
(3) any instrument governing Indebtedness or Capital Stock of
an Acquired Person acquired by Terex or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except to
the extent such Indebtedness was incurred in connection with or in
contemplation of such acquisition); provided, however, that (A) such
restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Acquired Person, and (B) the
consolidated net income of an Acquired Person for any period prior to
such acquisition shall not be taken into account in determining whether
such acquisition was permitted by the terms of the Indenture,
(4) by reason of customary non-assignment provisions in leases
or other agreements entered into the ordinary course of business and
consistent with past practices,
(5) Purchase Money Indebtedness for property acquired in the
ordinary course of business that only impose restrictions on the
property so acquired,
(6) an agreement for the sale or disposition of the Capital
Stock or assets of such Restricted Subsidiary; provided, however, that
such restriction is only applicable to such Restricted Subsidiary or
52
assets, as applicable, and such sale or disposition otherwise is
permitted under "---Limitation on Sales of Assets and Subsidiary Stock"
below; provided, further, however, that such restriction or encumbrance
shall be effective only for a period from the execution and delivery of
such agreement through a termination date not later than 270 days after
such execution and delivery, or
(7) Refinancing Indebtedness permitted under the Indenture;
provided, however, that the restrictions contained in the agreements
governing such Refinancing Indebtedness are no more restrictive in the
aggregate than those contained in the agreements governing the
Indebtedness being refinanced immediately prior to such refinancing.
Notwithstanding the foregoing, neither (a) customary provisions
restricting subletting or assignment of any lease entered into in the ordinary
course of business, consistent with past practice, nor (b) Liens permitted under
the Indenture, shall in and of themselves be considered a restriction on the
ability of the applicable Restricted Subsidiary to transfer such agreements or
assets, as the case may be.
Limitation on Sales of Assets and Subsidiary Stock
(a) Terex will not, and will not permit any Restricted Subsidiary to, make
any Asset Disposition unless:
(1) Terex or such Restricted Subsidiary receives consideration
at the time of such Asset Disposition at least equal to the fair market
value, as determined in good faith by the Board of Directors (including
as to the value of all non-cash consideration), of the shares and
assets subject to such Asset Disposition and at least 75% of the
consideration thereof received by Terex or such Restricted Subsidiary,
as the case may be, is in the form of cash or Cash Equivalents, and
(2) an amount equal to 100% of the Net Available Cash from
such Asset Disposition is applied by Terex (or such Restricted
Subsidiary, as the case may be):
(A) first, (x) to the extent Terex elects (or is
required by the terms of any Senior Indebtedness), to prepay,
repay or purchase Senior Indebtedness of Terex within 360 days
of such Asset Disposition, (y) at Terex's election to the
investment by Terex or any Wholly Owned Subsidiary or such
Restricted Subsidiary in long-term assets to replace the
assets that were the subject of such Asset Disposition or a
long-term asset that (as determined in good faith by the Board
of Directors) is directly related to the business of Terex and
the Restricted Subsidiaries existing on March 29, 2001, in
each case within 360 days from the date of such Asset
Disposition, or (z) a combination of the foregoing purposes
within such 360-day period;
(B) second, to the extent of the balance of such Net
Available Cash after application in accordance with clause
(A), to make a pro rata offer to purchase notes at par (and,
to the extent required by the instrument governing such
Indebtedness, any other Senior Subordinated Indebtedness
designated by Terex, at a price no greater than par) plus
accrued and unpaid interest, and
(C) third, to the extent of the balance of such Net
Available Cash after application in accordance with clauses
(A) and (B), for general corporate purposes otherwise
permitted under the Indenture; provided, however, that in
connection with any prepayment, repayment or purchase of
Indebtedness pursuant to clause (A) or (B) above, Terex or
such Subsidiary shall retire such Indebtedness and cause the
related loan commitment (if any) to be permanently reduced in
an amount equal to the principal amount so prepaid, repaid or
purchased. Notwithstanding the foregoing provisions of this
Section, Terex and its Restricted Subsidiaries shall not be
required to apply any Net Available Cash in accordance with
this Section except to the extent that the aggregate Net
Available Cash from all Asset Dispositions (including any
Asset Dispositions made since March 29, 2001) which are not
applied in accordance with this Section exceeds $10 million.
53
Pending application of Net Available Cash pursuant to this
Section, such Net Available Cash shall be used to temporarily
reduce Senior Indebtedness or invested in Cash Equivalents.
For the purposes of this covenant, the following is deemed to be cash
or Cash Equivalents: the express assumption of Indebtedness (other than any
Indebtedness that is by its terms subordinated to the New Notes) of Terex or any
Restricted Subsidiary, but only to the extent that such assumption is effected
on a basis under which there is no further recourse to Terex or any of the
Restricted Subsidiaries with respect to such liabilities.
(b) In the event of an Asset Disposition that requires the purchase of
the New Notes (and other Senior Subordinated Indebtedness) pursuant to clause
(a)(2)(B) above, Terex will purchase notes tendered pursuant to an offer by
Terex for the New Notes (and, to the extent required, other Senior Subordinated
Indebtedness) at a purchase price of 100% of their principal amount (without
premium) plus accrued but unpaid interest (or, in respect of such other Senior
Subordinated Indebtedness, such lesser price, if any, as may be provided for by
the terms of such Senior Subordinated Indebtedness) in accordance with the
procedures (including prorating in the event of oversubscription) set forth in
the Indenture which will include, among other things, that the offer shall
remain open for 20 Business Days following its commencement. If the aggregate
purchase price of notes (and, to the extent required, any other Senior
Subordinated Indebtedness) tendered pursuant to such offer is less than the Net
Available Cash allotted to the purchase thereof, Terex will be required to apply
the remaining Net Available Cash in accordance with clause (a)(2)(C) above.
Terex will not be required to make such an offer to purchase notes (and other
Senior Subordinated Indebtedness) pursuant to this covenant if the Net Available
Cash available therefor is less than $10 million (which lesser amount shall be
carried forward for purposes of determining whether such an offer is required
with respect to any subsequent Asset Disposition).
(c) Terex will comply, to the extent applicable, with the requirements
of Section 14(e) of the Exchange Act and any other securities laws or
regulations in connection with the repurchase of notes pursuant to this
covenant. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this covenant, Terex will comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this clause by virtue thereof.
Limitation on Affiliate Transactions
(a) Terex will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, conduct any business or enter into any transaction or
series of similar transactions (including the purchase, sale, lease or exchange
of any asset or property or the rendering of any service) with any Affiliate of
Terex (other than any employee stock ownership plan for the benefit of Terex's
or a Restricted Subsidiary's employees) unless the terms of such business,
transaction or series of transactions are:
(1) set forth in writing;
(2) as favorable to Terex or such Restricted Subsidiary as
terms that would be obtainable at the time for a comparable transaction
or series of similar transactions in arms length dealings with an
unrelated third Person; and
(3) a majority of the disinterested members of the Board of
Directors have, by resolution, determined in good faith that such
business or transaction or series of transactions meets the criteria
set forth in (2) above;
provided, however, that if such transaction involves an amount in excess of $10
million, Terex shall also obtain from a nationally recognized independent
investment banking firm, accounting firm or appraisal firm with experience in
evaluating the terms and conditions of such type of business or transactions an
opinion that such transaction is fair from a financial point of view to Terex or
its Restricted Subsidiary, as the case may be; provided, further, however, that
the provisions of both clause (3) above and the preceding proviso shall not
apply with respect to any such business, transaction or series of transactions
between Terex or any Subsidiary Guarantor, on the one hand, and any Restricted
54
Subsidiary, on the other hand, which business, transaction or series of
transactions is entered into in the ordinary course of business.
(b) The provisions of the foregoing paragraph (a) will not prohibit:
(1) any Restricted Payment permitted to be made pursuant to the
covenant described under "---Limitation on Restricted Payments," or
any payment or transaction specifically excepted from the definition
of Restricted Payment;
(2) any issuance of securities, or other payments, awards or
grants in cash, securities or otherwise pursuant to, or the funding
of, employment arrangements, stock options and stock ownership plans
entered into in the ordinary course of business and approved by a
majority of the entire Board of Directors or by a majority of the
disinterested members of the Board of Directors or a majority of the
entire board of directors or a majority of the disinterested members
of the board of directors of the relevant Restricted Subsidiary;
(3) the grant of stock options or similar rights to employees and
directors pursuant to plans approved by a majority of the entire Board
of Directors or by a majority of the disinterested members of the
Board of Directors or a majority of the entire board of directors or a
majority of the disinterested members of the board of directors of the
relevant Restricted Subsidiary;
(4) loans or advances to officers, directors or employees in the
ordinary course of business;
(5) the payment of reasonable fees to directors of Terex and its
Restricted Subsidiaries who are not employees of Terex or its
Restricted Subsidiaries;
(6) any Affiliate transaction between Terex and a Subsidiary
Guarantor, between Subsidiary Guarantors, or between Restricted
Subsidiaries (neither of which is a Subsidiary Guarantor);
(7) indemnification or insurance provided to officers or
directors of Terex or any Subsidiary approved in good faith by the
Board of Directors;
(8) payment of compensation and benefits to directors, officers
and employees of Terex and its Subsidiaries approved in good faith by
the Board of Directors; and
(9) the purchase of or the payment of Indebtedness of or monies
owed by Terex or any of its Restricted Subsidiaries for goods or
materials purchased, or services received, in the ordinary course of
business.
Limitation on the Sale or Issuance of Capital Stock of Restricted Subsidiaries
Terex will not sell or otherwise dispose of any Capital Stock of a
Restricted Subsidiary, and will not permit any Restricted Subsidiary, directly
or indirectly, to issue or sell or otherwise dispose of any of its Capital Stock
except (1) to Terex or a Wholly Owned Subsidiary, (2) if, immediately after
giving effect to such issuance, sale or other disposition, neither Terex nor any
of its Subsidiaries own any Capital Stock of such Restricted Subsidiary, (3)
Preferred Stock of a Subsidiary Guarantor, or (4) directors qualifying shares.
Merger and Consolidation
Terex will not, in a single transaction or a series of related
transactions, consolidate with or merge with or into, or convey, transfer or
lease all or substantially all its assets (computed on a consolidated basis) to,
any Person or group of affiliated Persons, unless:
55
(1) the resulting, surviving or transferee Person shall be Terex or, if
not Terex, shall be a corporation organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia (the
"Successor Company"), and such Successor Company shall expressly assume, by an
indenture supplemental to the Indenture, executed and delivered to the trustee,
all the obligations of Terex under the New Notes and this Indenture (and the
Subsidiary Guarantees shall be confirmed as applying to such Person's
obligations);
(2) at the time of and immediately after giving effect to such
transaction or transactions on a pro forma basis (and treating any Indebtedness
which becomes an obligation of the resulting, surviving or transferee Person or
any Subsidiary as a result of such transaction as having been Incurred by such
Person or such Subsidiary at the time of such transaction), no Default or Event
of Default shall have occurred and be continuing;
(3) immediately after giving effect to such transaction, the resulting,
surviving or transferee Person would be able to Incur at least $1.00 of
Indebtedness pursuant to paragraph (a) of the "---Limitation on Indebtedness";
and
(4) Terex shall have delivered to the trustee an Officers Certificate
and if a supplemental indenture is required, an Opinion of Counsel, each stating
that such consolidation, merger or transfer and such supplemental indenture (if
any) comply with the Indenture.
The Successor Company will be the successor to Terex and shall succeed
to, and be substituted for, and may exercise every right and power of, Terex
under the Indenture, and the predecessor company, in the case of a conveyance,
transfer or lease, shall be released from the obligation to pay the principal of
and interest on the New Notes.
For purposes of the foregoing, the transfer (by lease, assignment, sale
or otherwise) of all or substantially all of the properties and assets of one or
more Subsidiaries, Terex's interest in which constitutes all or substantially
all of the properties and assets of Terex will be deemed to be the transfer of
all or substantially all of the properties and assets of Terex.
Terex will not permit any Subsidiary Guarantor to consolidate with or
merge with or into, or convey, transfer or lease, in one transaction or a series
of transactions, all or substantially all of its assets to, any Person unless:
(1) the resulting, surviving or transferee Person shall be Terex or a
Subsidiary Guarantor or, if not Terex or such a Subsidiary Guarantor, shall be a
corporation organized and existing under the laws of the jurisdiction under
which such Subsidiary was organized or under the laws of the United States of
America, or any State thereof or the District of Columbia, and such Person shall
expressly assume, by executing a Subsidiary Guarantee, all the obligations of
such Subsidiary, if any, under its Subsidiary Guarantee;
(2) immediately after giving effect to such transaction or transactions
on a pro forma basis (and treating any Indebtedness which becomes an obligation
of the resulting, surviving or transferee Person as a result of such transaction
as having been issued by such Person at the time of such transaction), no
Default or Event of Default shall have occurred and be continuing;
(3) immediately after giving effect to such transaction, Terex would be
able to Incur at least $1.00 of Indebtedness pursuant to the "---Limitation on
Indebtedness"; and
(4) Terex delivers to the trustee an Officers Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer and
such Subsidiary Guarantee, if any. complies with the Indenture.
The provisions of clauses (1), (2) and (3) above shall not apply to any
one or more transactions which constitute (a) an Asset Disposition subject to
the applicable provisions of the covenant described under "---Limitation on
Sales of Assets and Subsidiary Stock" above or (b) the grant of any Lien on the
56
assets of a Restricted Subsidiary to secure outstanding Bank Indebtedness, which
Lien is otherwise permitted by the terms of the Indenture, or any conveyance or
transfer of such assets resulting from an exercise of remedies in respect of any
such Lien.
Notwithstanding the foregoing, Terex may merge with or into, or convey,
transfer or lease all or substantially all of its assets to, any Subsidiary
Guarantor, and a Subsidiary Guarantor may merge with or into, or convey,
transfer or lease all or substantially all of its assets to, any other
Subsidiary Guarantor.
The phrase "all or substantially all" of the assets of Terex or a
Subsidiary Guarantor will likely be interpreted under applicable state law and
will be dependent upon particular facts and circumstances. As a result, there
may be a degree of uncertainty in ascertaining whether a sale or transfer of
"all or substantially all" of the assets of Terex or a Subsidiary Guarantor has
occurred.
Future Subsidiary Guarantors
The Indenture provides that Terex and each Subsidiary Guarantor will
cause each Restricted Subsidiary of Terex organized or existing under the laws
of the United States, any state thereof or the District of Columbia of Terex
which, after March 29, 2001 (if not then a Subsidiary Guarantor), becomes a
Restricted Subsidiary to execute and deliver an indenture supplemental to the
Indenture and thereby become a Subsidiary Guarantor which shall be bound by the
Subsidiary Guarantee of the New Notes in the form set forth in the Indenture
(without such future Subsidiary Guarantor being required to execute and deliver
the Subsidiary Guarantee endorsed on the New Notes). In addition, the Indenture
will provide that Terex will not permit any Restricted Subsidiary that is not a
Subsidiary Guarantor to Guarantee any other Indebtedness of Terex or any
Subsidiary Guarantor unless such Restricted Subsidiary simultaneously executes a
supplemental indenture to the Indenture providing for the Guarantee of the
payment of the New Notes by such Restricted Subsidiary, which Guarantee of the
payment of the New Notes shall be subordinated to the Guarantee of such other
Indebtedness to the same extent as the New Notes or the Subsidiary Guarantees,
as applicable, are subordinated to such other Indebtedness; provided, however,
that such Restricted Subsidiary shall not be required to so Guarantee the
payment of the New Notes to the extent that such other Indebtedness does not
exceed $1 million individually or, together with any other Indebtedness of Terex
or any Subsidiary Guarantor Guaranteed by such Restricted Subsidiary, $3 million
in the aggregate. Such Restricted Subsidiary shall be deemed released from its
obligations under the Guarantee of the payment of the New Notes at any such time
that such Restricted Subsidiary is released from all of its obligations under
its Guarantee of such other Indebtedness unless such release results from the
payment under such Guarantee of other Indebtedness.
Limitation on Lines of Business
The Indenture provides that neither Terex nor any of its Subsidiaries
or Unrestricted Subsidiaries shall directly or indirectly engage to any
substantial extent in any line or lines of business activity other than that
which, in the reasonable good faith judgment of the Board of Directors, is a
Related Business.
Limitation on Designations of Unrestricted Subsidiaries
The Indenture provides that Terex may designate any Subsidiary of Terex
(other than a Subsidiary Guarantor) as an "Unrestricted Subsidiary" under the
Indenture (a "Designation") only if:
(1) no Default shall have occurred and be continuing at the time of or
after giving effect to such Designation; and
(2) either (x) Terex's Investment in such Subsidiary does not exceed $1,000
or (y) Terex would be permitted under the Indenture to make an Investment at the
time of Designation (assuming the effectiveness of such Designation) in an
amount (the "Designation Amount") equal to the fair market value of Terex's
Investment in such Subsidiary on such date.
In the event of any such Designation, Terex shall be deemed to have
made an Investment constituting a Restricted Payment pursuant to the covenant
described under "---Limitation on Restricted Payments" for all purposes of the
57
Indenture in the Designation Amount. The Indenture will further provide that
Terex will not, and will not permit any Restricted Subsidiary to, at any time:
(1) provide credit support for, or a guarantee of, any Indebtedness of any
Unrestricted Subsidiary (including any undertaking, agreement or instrument
evidencing such Indebtedness);
(2) be directly or indirectly liable for any Indebtedness of any
Unrestricted Subsidiary; or
(3) be directly or indirectly liable for any Indebtedness which provides
that the holder thereof may (upon notice, lapse of time or both) declare a
default thereon or cause the payment thereof to be accelerated or payable prior
to its final scheduled maturity upon the occurrence of a default with respect to
any Indebtedness of any Unrestricted Subsidiary (including any right to take
enforcement action against such Unrestricted Subsidiary), except to the extent
permitted under the covenant described under "---Limitation on Restricted
Payments."
The Indenture further provides that Terex may revoke any Designation of
a Subsidiary as an Unrestricted Subsidiary (a "Revocation") if:
(1) no Default shall have occurred and be continuing at the time of and
after giving effect to such Revocation; and
(2) all Liens and Indebtedness of such Unrestricted Subsidiary outstanding
immediately following such Revocation would, if Incurred at such time, have been
permitted to be Incurred for all purposes of the Indenture and for all purposes
of the Indenture shall be deemed to have been Incurred at such time.
All Designations and Revocations must be evidenced by an Officers
Certificate delivered to the trustee attaching a certified copy of the
resolutions of the Board of Directors giving effect to such Designation or
Revocation, as applicable, and certifying compliance with the foregoing
provisions.
Notwithstanding the foregoing, no Subsidiary that was a Subsidiary
Guarantor as of March 29, 2001 shall be permitted to become an Unrestricted
Subsidiary.
SEC Reports
Notwithstanding that Terex may not be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, Terex will file with
the SEC and provide within 15 days to the trustee and noteholders such annual
reports and such information, documents and other reports as are specified in
Sections 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation
subject to such Sections, such information, documents and other reports to be so
filed and provided at the times specified for the filing of such information,
documents and reports under such Sections.
Defaults
An "Event of Default" is defined in the Indenture as the following:
(1) a default in the payment of interest on the New Notes when due,
continued for 30 days (whether or not prohibited by the subordination provisions
of the Indenture);
(2) a default in the payment of principal of any Note when due at its
Stated Maturity, upon optional redemption, upon required repurchase, upon
declaration or otherwise (whether or not prohibited by the subordination
provisions of the Indenture);
(3) the failure by Terex to comply with its obligations under "---Certain
Covenants---Merger and Consolidation" above;
58
(4) the failure by Terex to comply for 30 days after notice with any of its
obligations in the covenants described above under "Change of Control" (other
than a failure to purchase notes) or under "---Certain Covenants---Limitation on
Indebtedness," "---Limitation on Indebtedness and Preferred Stock of Restricted
Subsidiaries," "---Limitation on Liens Securing Subordinated Indebtedness,"
"---Limitation on Other Senior Subordinated Indebtedness," "---Limitation on
Restricted Payments," "---Limitation on Restrictions on Distributions from
Restricted Subsidiaries," "---Limitation on Sales of Assets and Subsidiary
Stock" (other than a failure to purchase the New Notes), "---Limitation on
Affiliate Transactions," "---Limitation on the Sale or Issuance of Capital Stock
of Restricted Subsidiaries," "---Future Subsidiary Guarantors," "---Limitation
on Designations of Unrestricted Subsidiaries," or "---SEC Reports;"
(5) the failure by Terex to comply for 60 days after notice with its other
covenants, obligations, warranties or agreements contained in the Indenture;
(6) Indebtedness of Terex or any Significant Subsidiary is not paid within
any applicable grace period after final maturity or is accelerated by the
holders thereof because of a default and the total amount of such Indebtedness
unpaid or accelerated exceeds $10 million (the "cross acceleration provision");
(7) certain events of bankruptcy, insolvency or reorganization of Terex or
any Significant Subsidiary (the "bankruptcy provisions");
(8) any judgment or decree for the payment of money, the portion of which
is not covered by insurance is in excess of $10 million, which is rendered
against Terex or any Subsidiary and is not discharged and either (A) an
enforcement proceeding has been commenced by any creditor upon such judgment or
decree or (B) there is a period of 60 days following such judgment during which
such judgment or decree is not discharged, waived or the execution thereof
stayed (including pending appeal); or
(9) any Subsidiary Guarantee by a Significant Subsidiary ceases to be in
full force and effect or becomes unenforceable or invalid or is declared null
and void (other than in accordance with the terms of the Subsidiary Guarantee or
the Indenture) or any Subsidiary Guarantor that is a Significant Subsidiary
denies or disaffirms its obligations under its Subsidiary Guarantee.
However, a default under clause (4), (5) or (8) will not constitute an
Event of Default until the trustee or the holders of 25% in principal amount of
the outstanding notes notify Terex of the default and Terex does not cure such
default within the time specified after receipt of such notice.
If an Event of Default (other than the bankruptcy provisions relating
to Terex) occurs and is continuing, the trustee or the holders of at least 25%
in principal amount of the outstanding notes may declare the principal of and
accrued but unpaid interest on all the New Notes to be due and payable. Upon
such a declaration, such principal and interest shall be due and payable
immediately; provided, however, that for so long as the Credit Facility remains
in effect, such declaration shall not become effective until the earlier of (1)
five Business Days following delivery of notice to the Representative of such
creditors of the intention to accelerate the New Notes or (2) the acceleration
of any Indebtedness under the Credit Facility. If an Event of Default relating
to the bankruptcy provisions relating to Terex occurs and is continuing, the
principal of and interest on all the New Notes will ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the trustee or any holders. Under certain circumstances, the holders of a
majority in principal amount of the outstanding notes may rescind any such
acceleration with respect to the New Notes and its consequences.
Subject to the provisions of the Indenture relating to the duties of
the trustee, in case an Event of Default occurs and is continuing, the trustee
will be under no obligation to exercise any of the rights or powers under the
Indenture at the request or direction of any of the holders unless such holders
have offered to the trustee reasonable indemnity or security against any loss,
liability or expense. Except to enforce the right to receive payment of
principal, premium (if any) or interest when due, no holder of a Note may pursue
any remedy with respect to the Indenture or the New Notes unless:
59
(1) such holder has previously given the trustee notice that an Event of
Default is continuing;
(2) holders of at least 25% in principal amount of the outstanding notes
have requested the trustee to pursue the remedy;
(3) such holders have offered the trustee reasonable security or indemnity
against any loss, liability or expense;
(4) the trustee has not complied with such request within 60 days after the
receipt thereof and the offer of security or indemnity; and
(5) the holders of a majority in principal amount of the outstanding notes
have not given the trustee a direction inconsistent with such request within
such 60-day period.
Subject to certain restrictions, the holders of a majority in principal
amount of the outstanding notes are given the right to direct the time, method
and place of conducting any proceeding for any remedy available to the trustee
or of exercising any trust or power conferred on the trustee. The trustee,
however, may refuse to follow any direction that conflicts with law or the
Indenture or that the trustee reasonably determines is unduly prejudicial to the
rights of any other holder or that would involve the trustee in personal
liability.
The Indenture provides that if a Default occurs and is continuing and
is known to the trustee, the trustee must mail to each holder notice of the
Default within 90 days after it occurs. Except in the case of a Default in the
payment of principal of or interest on any Note, the trustee may withhold notice
if and so long as the Board of Directors, the executive committee or a committee
of its trust officers reasonably determines that withholding notice is in the
best interest of the holders. In addition, Terex is required to deliver to the
trustee, within 120 days after the end of each fiscal year, a certificate
regarding knowledge of Terex's compliance with all covenants and conditions
under the Indenture. Terex also is required to deliver to the trustee, within 30
days after the occurrence thereof, written notice of any event which would
constitute certain Defaults, their status and what action Terex is taking or
proposes to take in respect thereof.
Amendments and Waivers
Subject to certain exceptions, the Indenture may be amended with the
consent of the holders of a majority in principal amount of the New Notes then
outstanding (including consents obtained in connection with a tender offer or
exchange for the New Notes) and, subject to certain exceptions, any past default
or compliance with any provisions may also be waived with the consent of the
holders of a majority in principal amount of the New Notes then outstanding.
Without the consent of each holder of an outstanding Note affected
thereby, no amendment may:
(1) reduce the amount of notes whose holders must consent to an
amendment or waiver;
(2) reduce the rate of or extend the time for payment of interest on
any Note;
(3) reduce the principal of or extend the Stated Maturity of any Note;
(4) reduce the premium payable upon the redemption of any Note or
change the time at which any Note may be redeemed as described under
"---Optional Redemption" above or alter the provisions (including
definitions) set forth under "Change of Control" above in a manner adverse
to the holders;
(5) make any Note payable in money or payable in a place other than
that stated in the Note;
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(6) impair the right of any holder to receive payment of principal of
and interest on such holder's notes on or after the due dates therefor or
to institute suit for the enforcement of any payment on or with respect to
such holder's notes;
(7) make any change in the amendment provisions which require each
holder's consent or in the waiver provisions;
(8) make any change to the subordination provisions (including
definitions) of the Indenture that would adversely affect the holders; or
(9) make any change in any Subsidiary Guarantee that would adversely
affect the holders.
Notwithstanding the preceding, without the consent of any holder, Terex
and the trustee may amend the Indenture:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to provide for the assumption by a successor corporation of the
obligations of Terex under the Indenture;
(3) to provide for uncertificated notes in addition to or in place of
certificated notes (provided that the uncertificated notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner
such that the uncertificated notes are described in Section 163(f)(2)(B) of
the Code);
(4) to add guarantees with respect to the New Notes, to secure the New
Notes;
(5) to add to the covenants of Terex for the benefit of the holders or
to surrender any right or power conferred upon Terex;
(6) to make any change that does not adversely affect the rights of
any holder; or
(7) to comply with any requirement of the SEC in connection with the
qualification of the Indenture under the Trust Indenture Act.
However, no amendment may be made to the subordination provisions of
the Indenture that adversely affects the rights of any holder of Senior
Indebtedness of Terex or any Restricted Subsidiary then outstanding unless the
holders of such Senior Indebtedness (or their Representative) consent to such
change.
The consent of the holders is not necessary under the Indenture to
approve the particular form of any proposed amendment. It is sufficient if such
consent approves the substance of the proposed amendment.
After an amendment under the Indenture becomes effective, Terex is
required to mail to holders a notice briefly describing such amendment. However,
the failure to give such notice to all holders, or any defect therein, will not
impair or affect the validity of the amendment.
Transfer
The registered holder of a Note will be treated as the owner of it for
all purposes. The New Notes will be issued in registered form and will be
transferable only upon the surrender of the New Notes being transferred for
registration of transfer. Terex may require payment of a sum sufficient to cover
any tax, assessment or other governmental charge payable in connection with
certain transfers and exchanges.
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Defeasance
Terex at its option at any time may terminate all of its obligations
under the New Notes and the Indenture ("legal defeasance"), except for certain
obligations, including, but not limited to, those respecting the defeasance
trust and obligations to register the transfer or exchange of the New Notes, to
replace mutilated, destroyed, lost or stolen notes and to maintain a registrar
and paying agent in respect of the New Notes.
In addition, Terex at its option at any time may terminate its
obligations under "Change of Control" and under the covenants described under
"---Certain Covenants" (other than the covenant described under "---Merger and
Consolidation") (and any omission to comply with such obligations shall not
constitute a Default or Event of Default with respect to the New Notes), and the
limitations contained in clause (3) of the first paragraph under "---Certain
Covenants---Merger and Consolidation" above ("covenant defeasance"). In the
event that a covenant defeasance occurs, certain events (not including
non-payment, bankruptcy and insolvency events) described under "---Defaults"
will no longer constitute Events of Default with respect to the New Notes.
Terex may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option. If Terex exercises its legal
defeasance option, payment of the New Notes may not be accelerated because of an
Event of Default with respect thereto.
In order to exercise either defeasance option, Terex must irrevocably
deposit in trust (the "defeasance trust") with the trustee money or U.S.
Government Obligations in such amounts as will be sufficient, in the report of a
nationally recognized firm of independent public accountants or a nationally
recognized investment banking firm, to pay and discharge the principal of,
premium, if any, and interest on the outstanding notes to redemption or
maturity, as the case may be, and must comply with certain other conditions,
including delivery to the trustee of an Opinion of Counsel to the effect that
holders will not recognize income, gain or loss for Federal income tax purposes
as a result of such deposit and defeasance and will be subject to Federal income
tax on the same amount and in the same manner and at the same times as would
have been the case if such deposit and defeasance had not occurred (and, in the
case of legal defeasance only, such Opinion of Counsel must be based on a ruling
of the Internal Revenue Service or other change in applicable Federal income tax
law).
If the funds deposited with the trustee to effect legal defeasance or
covenant defeasance are insufficient to pay the principal of, premium, if any,
and interest on the New Notes when due, then the obligations of Terex under the
Indenture will be revived and no such defeasance will be deemed to have
occurred.
Concerning the Trustee
United States Trust Company of New York is the trustee under the
Indenture and has been appointed by Terex as Registrar and Paying Agent with
regard to the New Notes. Such bank may also act as a depository of funds for, or
make loans to and perform other services for, Terex or its Affiliates in the
ordinary course of business in the future.
The holders of a majority in principal amount of the outstanding notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the trustee, subject to
certain exceptions. The Indenture will provide that if an Event of Default
occurs (and is not cured), the trustee will be required, in the exercise of its
power, to use the degree of care of a prudent man in the conduct of his own
affairs. Subject to such provisions, the trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the request of any
holder of notes, unless such holder shall have offered to the trustee security
and indemnity satisfactory to it against any loss, liability or expense and then
only to the extent required by the terms of the Indenture. The trustee may
resign at any time or may be removed by Terex. If the trustee resigns, is
removed or becomes incapable of acting as trustee or if a vacancy occurs in the
office of the trustee for any cause, a successor trustee shall be appointed in
accordance with the provisions of the Indenture.
If the trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
62
the provisions of, the Trust Indenture Act and the Indenture. The Indenture also
contains certain limitations on the right of the trustee, as a creditor of
Terex, to obtain payment of claims in certain cases, or to realize on certain
property received by it in respect of any such claims, as security or otherwise.
Governing Law
The Indenture provides that it, the Guarantees and the New Notes are
governed by, and construed in accordance with, the laws of the State of New York
without giving effect to applicable principles of conflicts of law to the extent
that the application of the law of another jurisdiction would be required
thereby.
Certain Definitions
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries (the "Acquired Person") (i) existing at the time such Person
becomes a Restricted Subsidiary of Terex or at the time it merges or
consolidates with Terex or any of its Restricted Subsidiaries or (ii) assumed in
connection with the acquisition of assets from such Person.
"Affiliate" of any specified Person means:
(1) any other Person which, directly or indirectly, is in control of, is
controlled by or is under common control with such specified Person; or
(2) any other Person who is a director or officer:
(A) of such specified Person;
(B) of any subsidiary of such specified Person; or
(C) any Person described in clause (1) above.
For purposes of this definition, control of a Person means the power,
direct or indirect, to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Asset Disposition" means any sale, lease, transfer, conveyance or other
disposition (or series of related sales, leases, transfers or dispositions) by
Terex or any Restricted Subsidiary, including any disposition by means of a
merger or consolidation (each referred to for the purposes of this definition as
a "disposition"), of:
(1) any shares of Capital Stock of a Restricted Subsidiary (other than
directors qualifying shares or shares required by applicable law to be held by a
Person other than Terex or a Restricted Subsidiary);
(2) all or substantially all the assets of any division or line of business
of Terex or any Restricted Subsidiary; or
(3) any other assets of Terex or any Restricted Subsidiary outside of the
ordinary course of business of Terex or such Restricted Subsidiary
(other than, in the case of (1), (2) and (3) above, a disposition by a
Restricted Subsidiary to Terex or by Terex or a Restricted Subsidiary to a
Wholly Owned Subsidiary); provided, however, that each of (x) the consummation
of any sale or series of related sales of assets or properties of Terex and the
Restricted Subsidiaries by Terex and any Restricted Subsidiaries having an
aggregate fair market value of less than $1 million in any fiscal year and (y)
the discounting of accounts receivable or the sale of inventory, in each case in
the ordinary course of business, shall not be deemed an Asset Disposition.
63
"Average Life" means, as of the date of determination, with respect to any
Indebtedness or Preferred Stock, the quotient obtained by dividing:
(1) the sum of the products of numbers of years from the date of
determination to the dates of each successive scheduled principal payment of
such Indebtedness or redemption or similar payment with respect to such
Preferred Stock multiplied by the amount of such payment by
(2) the sium of all such payments.
"Bank Indebtedness" means:
(1) the Iindebtedness outstanding or arising under the Credit Facility up
to a maximum principal amount of $950 million;
(2) all obligations and other amounts owing to the holders of such
Indebtedness or any agent or representative thereof outstanding or arising under
the Credit Facility (including, but not limited to, interest (including interest
accruing on or after the filing of any petition in bankruptcy, reorganization or
similar proceeding relating to Terex or any Restricted Subsidiary, whether or
not a claim for such interest is allowed in such proceeding), fees, charges,
indemnities, expense reimbursement obligations and other claims under the Credit
Facility); and
(3) all Hedging Obligations arising in connection therewith with any party
to the Credit Facility.
"Board of Directors" means the Board of Directors of Terex or any committee
thereof duly authorized to act on behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligations" of a Person means any obligation which is
required to be classified and accounted for as a capital lease on the face of a
balance sheet of such Person prepared in accordance with GAAP; the amount of
such obligation shall be the capitalized amount thereof, determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such capital lease prior to
the first date upon which such lease may be terminated by the lessee without
payment of a penalty.
"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such person, including any Preferred
Stock, but excluding any debt securities convertible into or exchangeable for
such equity.
"Cash Equivalents" means:
(1) marketable direct obligations issued by, or unconditionally guaranteed
by, the United States Government or issued by any agency thereof and backed by
the full faith and credit of the United States, in each case maturing within one
year from the date of acquisition thereof;
(2) marketable direct obligations issued by any state of the United States
of America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Rating Services or Moody's Investors
Service, Inc.;
(3) commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having a rating of at least
A-1 from Standard & Poor's Rating Services or at least P-1 from Moody's
Investors Service, Inc.;
64
(4) certificates of deposit or bankers acceptances maturing within one year
from the date of acquisition thereof issued by (x) any bank organized under the
laws of the United States of America or any state thereof or the District of
Columbia or (y) a commercial banking institution organized and located in a
country recognized by the United States of America, in each case having at the
date of acquisition thereof combined capital and surplus of not less than $200
million (or the foreign currency equivalents thereof);
(5) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (1) above entered into
with any bank meeting the qualifications specified in clause (4) above;
(6) investments in money market funds which invest substantially all their
assets in securities of the types described in clauses (1) through (5) above;
and
(7) other short-term investments utilized by foreign Restricted
Subsidiaries in accordance with normal investment practices for cash management
not exceeding $1.0 million in aggregate principal amount outstanding at any
time.
"Cash Flow" for any period means the Consolidated Net Income for such
period, plus the following (but without duplication) to the extent deducted in
calculating such Consolidated Net Income for such period:
(1) income tax expense;
(2) Consolidated Interest Expense;
(3) depreciation expense and amortization expense, provided that
consolidated depreciation and amortization expense of a Subsidiary that is not a
Wholly Owned Subsidiary shall only be added to the extent of the equity interest
of Terex in such Subsidiary; and
(4) all other non-cash charges (other than any recurring non-cash charges
to the extent such charges represent an accrual of or reserve for cash
expenditures in any future period).
Notwithstanding clause (4) above, there shall be deducted from Cash Flow in
any period any cash expended in such period that funds a non-recurring, non-cash
charge accrued or reserved in a prior period which was added back to Cash Flow
pursuant to clause (4) in such prior period.
"Change of Control" means the occurrence of any of the following events:
(1) any "person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act) is or becomes the beneficial owner (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be
deemed to have beneficial ownership of all shares that such Person has the right
to acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than 40% of the total voting
power of the Voting Stock of Terex, whether as a result of issuance of
securities of Terex, any merger, consolidation, liquidation or dissolution of
Terex, any direct or indirect transfer of securities or otherwise;
(2) (A) another corporation merges into Terex or Terex
consolidates with or merges into any other corporation, or
(B) Terex conveys, transfers or leases all or substantially
all its assets (computed on a consolidated basis) to any person or
group, in one transaction or a series of transactions other than any
conveyance, transfer or lease between Terex and a Wholly Owned
Subsidiary of Terex, in each case in one transaction or a series of
related transactions with the effect that either (x) immediately after
such transaction any person or entity or group (as so defined) of
persons or entities shall have become the beneficial owner of
securities of the surviving corporation of such merger or consolidation
representing a majority of the combined voting power of the outstanding
securities of the surviving corporation ordinarily having the right to
vote in the election of directors or (y) the securities of Terex that
are outstanding immediately prior to such transaction and which
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represent 100% of the combined voting power of the securities of Terex
ordinarily having the right to vote in the election of directors are
changed into or exchanged for cash, securities or property, unless
pursuant to such transaction such securities are changed into or
exchanged for, in addition to any other consideration, securities of
the surviving corporation that represent immediately after such
transaction, at least a majority of the combined voting power of the
securities of the surviving corporation ordinarily having the right to
vote in the election of directors; or
(3) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of Terex (together
with any new directors whose election by such Board of Directors or whose
nomination for election by the shareholders of Terex was approved by a vote of
60% of the directors of Terex then still in office who were either directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of Terex then in office.
The phrase "all or substantially all" of the assets of Terex will likely be
interpreted under applicable state law and will be dependent upon particular
facts and circumstances. As a result, there may be a degree of uncertainty in
ascertaining whether a sale or transfer of "all or substantially all" of the
assets of Terex has occurred.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock Appreciation Rights" means up to 1,000,000 common stock
appreciation rights issued on May 9, 1995 pursuant to a Common Stock
Appreciation Rights Agreement between Terex and United States Trust Company of
New York, as agent.
"Consolidated Cash Flow Coverage Ratio" as of any date of determination
means the ratio of (a) the aggregate amount of Cash Flow for the period of the
most recent four consecutive fiscal quarters for which financial statements are
available to (b) Consolidated Interest Expense for such four fiscal quarters;
provided, however, that:
(1) if Terex or any Restricted Subsidiary has issued any Indebtedness since
the beginning of such period that remains outstanding or if the transaction
giving rise to the need to calculate the Consolidated Cash Flow Coverage Ratio
is an issuance of Indebtedness, or both, Cash Flow and Consolidated Interest
Expense for such period shall be calculated after giving effect on a pro forma
basis to such Indebtedness as if such Indebtedness had been issued on the first
day of such period and the discharge of any other Indebtedness repaid,
repurchased, defeased or otherwise discharged with the proceeds of such new
Indebtedness as if such discharge had occurred on the first day of such period;
(2) if since the beginning of such period Terex or any Restricted
Subsidiary shall have made any Asset Disposition, the Cash Flow for such period
shall be reduced by an amount equal to the Cash Flow (if positive) directly
attributable to the assets which are the subject of such Asset Disposition for
such period, or increased by an amount equal to the Cash Flow (if negative),
directly attributable thereto for such period, and Consolidated Interest Expense
for such period shall be reduced by an amount equal to the Consolidated Interest
Expense directly attributable to any Indebtedness of Terex or any Restricted
Subsidiary repaid, repurchased, defeased or otherwise discharged with respect to
Terex and its continuing Restricted Subsidiaries in connection with such Asset
Dispositions for such period (or, if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest Expense for such period directly
attributable to the Indebtedness of such Restricted Subsidiary to the extent
Terex and its continuing Restricted Subsidiaries are no longer liable for such
Indebtedness after such sale);
(3) if since the beginning of such period Terex or any Restricted
Subsidiary (by merger or otherwise) shall have made an Investment in any
Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary) or
an acquisition of assets (including Capital Stock of a Subsidiary), including
any acquisition of assets occurring in connection with a transaction causing a
calculation to be made hereunder, Cash Flow and Consolidated Interest Expense
for such period shall be calculated after giving pro forma effect thereto
(including the issuance of any Indebtedness) as if such Investment or
acquisition occurred on the first day of such period; and
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(4) if since the beginning of such period any Person (that subsequently
became a Restricted Subsidiary or was merged with or into Terex or any
Restricted Subsidiary since the beginning of such period) shall have made any
Asset Disposition or any Investment that would have required an adjustment
pursuant to clause (2) or (3) above if made by Terex or a Restricted Subsidiary
during such period, Cash Flow and Consolidated Interest Expense for such period
shall be calculated after giving pro forma effect thereto as if such Asset
Disposition or Investment occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given
to an acquisition of assets, the amount of income or earnings relating thereto,
and the amount of Consolidated Interest Expense associated with any Indebtedness
issued in connection therewith, the pro forma calculations shall be determined
in good faith by a responsible financial or accounting officer of Terex. If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest of such Indebtedness shall be calculated as if the average
interest rate for the period up to the date of determination had been the
applicable rate for the entire period (taking into account any Interest Rate
Protection Agreement applicable to such Indebtedness if such Interest Rate
Protection Agreement has a remaining term in excess of 12 months). For purposes
of this definition, whenever pro forma effect is to be given to any Indebtedness
Incurred pursuant to a revolving credit facility the amount outstanding under
such Indebtedness shall be equal to the average of the amount outstanding during
the period commencing on the first day of the first of the four most recent
fiscal quarters for which financial statements are available and ending on the
date of determination.
"Consolidated Interest Expense" means, for any period, the total interest
expense of Terex and its consolidated Restricted Subsidiaries, plus, to the
extent not included in such interest expense but Incurred by Terex or its
Restricted Subsidiaries:
(1) interest expense attributable to capital leases;
(2) amortization of debt discount;
(3) capitalized interest;
(4) original issue discount and non-cash interest payments or accruals;
(5) commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers acceptance financing;
(6) net costs under Hedging Obligations (including amortization of fees);
(7) dividends in respect of all Disqualified Stock held by Persons other
than Terex, a Subsidiary Guarantor or a Wholly Owned Subsidiary;
(8) interest Incurred in connection with investments in discontinued
operations;
(9) the interest portion of any deferred payment obligations constituting
Indebtedness; and
(10) the cash contributions to any employee stock ownership plan or similar
trust to the extent such contributions are used by such plan or trust to pay
interest or fees to any Person (other than Terex) in connection with
Indebtedness Incurred by such plan or trust.
For purposes of this definition, interest expense attributable to any
Indebtedness represented by the guarantee (other than (a) Guarantees permitted
by the terms of clause (b)(10) of the covenant described under "---Certain
Covenants---Limitation on Indebtedness" and (b)(11) of the covenant described
under "---Limitation on Indebtedness and Preferred Stock of Restricted
Subsidiaries" and (b) Guarantees by Terex of Indebtedness of a consolidated
Restricted Subsidiary or by a consolidated Restricted Subsidiary of Terex or
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another consolidated Restricted Subsidiary) by such person or a Subsidiary of
such person of an obligation of another person shall be deemed to be the
interest expense attributable to the Indebtedness guaranteed.
"Consolidated Net Income" means, for any period, the net income or loss of
Terex and its consolidated Subsidiaries; provided, however, that there shall not
be included in such Consolidated Net Income:
(1) any net income of any Person if such Person is not a Restricted
Subsidiary, except that (A) Terex's equity in the net income of any such Person
for such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash actually distributed by such Person during such period
to Terex or a Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution to a Restricted
Subsidiary, to the limitations contained in clause (3) below) and (B) Terex's
equity in a net loss of any such Person for such period shall be included in
determining such Consolidated Net Income;
(2) any net income of any Person acquired by Terex or a Subsidiary in a
pooling of interests transaction for any period prior to the date of such
acquisition;
(3) any net income of any Restricted Subsidiary if such Restricted
Subsidiary is subject to restrictions, directly or indirectly, on the payment of
dividends or the making of distributions by such Subsidiary, directly or
indirectly, to Terex, except that (A) Terex's equity in the net income of any
such Restricted Subsidiary for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash actually distributed
by such Restricted Subsidiary during such period to Terex or another Restricted
Subsidiary as a dividend or other distribution (subject, in the case of a
dividend or other distribution to another Restricted Subsidiary, to the
limitation contained in this clause) and (B) Terex's equity in a net loss of any
such Restricted Subsidiary for such period shall be included in determining such
Consolidated Net income;
(4) any gain or loss realized upon the sale or other disposition of any
property, plant or equipment of Terex or its consolidated subsidiaries
(including pursuant to any sale and leaseback arrangement) which is not sold or
otherwise disposed of in the ordinary course of business and any gain or loss
realized upon the sale or other disposition of any Capital Stock of any Person;
(5) all extraordinary, unusual or non-recurring gains, and any
extraordinary or non-recurring loss as recorded on the statement of operations
in accordance with GAAP; and
(6) the cumulative effect of a change in accounting principles.
"Credit Facility" means a collective reference to any term loan and
revolving credit facilities (including, but not limited to, the amended and
restated credit agreement, dated March 29, 2001, by and among Terex, certain of
its subsidiaries and certain financial institutions, and the amended and
restated Tranche C credit agreement, dated March 29, 2001, among Terex and
certain financial institutions), including any related notes, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, as such credit facilities and/or related documents may be further
amended, restated, supplemented, renewed, replaced or otherwise modified from
time to time whether or not with the same agent, trustee, representative lenders
or holders and irrespective of any changes in the terms and conditions thereof.
Without limiting the generality of the foregoing, the term "Credit Facility"
shall include agreements in respect of reimbursement of letters of credit issued
pursuant to the Credit Facility and agreements in respect of Hedging Obligations
with lenders party to the Credit Facility and shall also include any amendment,
amendment and restatement, renewal, extension, restructuring, supplement or
modification to any Credit Facility and all refunding, refinancings (in whole or
in part) and replacements of any Credit Facility, including any agreement (i)
extending the maturity of any indebtedness incurred thereunder or contemplated
thereby, or (ii) adding or deleting borrowers or guarantors thereunder, so long
as borrowers and issuers include one or more of Terex and its Restricted
Subsidiaries and their respective successors and assigns.
"Currency Agreement Obligations" means the obligations of any person under
a foreign exchange contract, currency swap agreement or other similar agreement
or arrangement to protect such person against fluctuations in currency values.
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"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Depository" means The Depository Trust Company, its nominees and their
respective successors.
"Designated Senior Indebtedness" means (i) so long as any Bank Indebtedness
is outstanding, such Bank Indebtedness and (ii) provided no Bank Indebtedness is
outstanding, any other Senior Indebtedness of Terex permitted to be incurred
under the Indenture which, at the date of determination, has an aggregate
principal amount outstanding of, or under which, at the date of determination,
the holders thereof are committed to lend up to, at least $20 million and is
specifically designated by Terex in the instrument evidencing or governing such
Senior Indebtedness as "Designated Senior Indebtedness" for purposes of the
Indenture.
"Disqualified Stock" means, with respect to any Person, any Capital Stock
which by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable) or upon the happening of any event:
(1) matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise prior to the 91st day after the Stated Maturity of the
New Notes;
(2) is convertible or exchangeable for Indebtedness or Disqualified Stock
prior to the 91st day after the Stated Maturity of the New Notes; or
(3) is redeemable at the option of the holder thereof, in whole or in part
on or prior to the 91st day after the Stated Maturity of the New Notes;
provided, however, that any Capital Stock that would not constitute Disqualified
Stock but for provisions thereof giving holders thereof the right to require
such Person to repurchase or redeem such Capital Stock upon the occurrence of an
"asset sale" or "change of control" occurring prior to the first anniversary of
the Stated Maturity of the New Notes shall not constitute Disqualified Stock if
the "asset sale" or "change of control" provisions applicable to such Capital
Stock are not more favorable to the holders of such Capital Stock than the
provisions described under "---Certain Covenants --- Limitation on Sales of
Assets and Subsidiary Stock" and "---Certain Covenants---Change of Control."
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Notes" means Terex's $150.0 million principal amount of 8-7/8%
Senior Subordinated notes due 2008 issued under the Indenture, dated March 31,
1998, among Terex, the guarantors named therein and United States Trust Company
of New York, as trustee, as such may be amended or supplemented from time to
time and Terex's $100.0 million principal amount of 8-7/8% Senior Subordinated
notes due 2008 issued under the Indenture, dated March 9, 1999, among Terex, the
guarantors named therein and United States Trust Company of New York, as
trustee, as such may be amended or supplemented from time to time.
"Floor Plan Guarantees" means guarantees (including but not limited to
repurchase or remarketing obligations) by Terex or a Restricted Subsidiary
Incurred in the ordinary course of business consistent with past practice of
Indebtedness Incurred by a franchise dealer, or other purchaser or lessor, for
the purchase of inventory manufactured or sold by Terex or a Restricted
Subsidiary, the proceeds of which Indebtedness is used solely to pay the
purchase price of such inventory to such franchise dealer and any related
reasonable fees and expenses (including financing fees), provided, however, that
(1) to the extent commercially practicable, the Indebtedness so guaranteed is
secured by a perfected first priority Lien on such inventory in favor of the
holder of such Indebtedness and (2) if Terex or such Restricted Subsidiary is
required to make payment with respect to such guarantee, Terex or such
Restricted Subsidiary will have the right to receive either (q) title to such
inventory, (r) a valid assignment of a perfected first priority Lien in such
inventory or (s) the net proceeds of any resale of such inventory.
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"GAAP" means generally accepted accounting principles in the United States
of America on March 29, 2001, including those set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
approved by a significant segment of the accounting profession.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing in any manner any Indebtedness or other
obligation of any Person and any obligation, direct or indirect, contingent or
otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation of such Person (whether
arising by virtue of partnership arrangements, or by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise); or
(2) entered into for purposes of assuring in any other manner the obligee
of such Indebtedness or other obligation of the payment thereof or to protect
such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements of
negotiable instruments for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Hedging Obligations" of any Person means the obligations of such Person
pursuant to any interest rate swap agreement, foreign currency exchange
agreement, interest rate collar agreement, option or futures contract or other
similar agreement or arrangement designed to protect such Person against changes
in interest rates or foreign exchange rates.
"holder" or "noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"Inactive Subsidiary" means a Subsidiary which at the time of determination
owns assets having a fair market value of less than $50,000, does not conduct
any business activity and is not an obligor with respect to any Indebtedness.
"Incur" means create, issue, assume, Guarantee, incur or otherwise become
liable for, directly or indirectly, or otherwise become responsible for,
contingently or otherwise, Indebtedness or Disqualified Stock; provided,
however, that any Indebtedness or Disqualified Stock of a Person existing at the
time such Person becomes a subsidiary (whether by merger, consolidation,
acquisition or otherwise) shall be deemed to be Incurred by such Subsidiary at
the time it becomes a Subsidiary. The term "Incurrence" when used as a noun
shall have a correlative meaning.
"Indebtedness" of any Person means, without duplication, and whether or not
contingent:
(1) the principal of and premium (if any) in respect of (A) indebtedness of
such Person for money borrowed and (B) indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which such
Person is responsible or liable;
(2) all Capital Lease Obligations of such Person;
(3) all obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations of such Person and
all obligations of such Person under any title retention agreement (but
excluding trade accounts payable arising in the ordinary course of business);
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(4) all obligations of such Person for the reimbursement of any obligor on
any letter of credit, banker's acceptance or similar credit transaction;
(5) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock (measured at
the greater of its voluntary or involuntary maximum fixed repurchase price plus
accrued and unpaid dividends);
(6) to the extent not otherwise included in this definition, all Hedging
Obligations;
(7) all obligations of the type referred to in clauses (1) through (5) of
other Persons and all dividends of other Persons for the payment of which, in
either case, such Person is responsible or liable, directly or indirectly, as
obligor, guarantor or otherwise, including by means of any Guarantee (other than
in each case by reason of activities described in the proviso to the definition
of "Guarantee"); and
(8) all obligations of the type referred to in clauses (1) through (7) of
other Persons secured by any Lien on any property or asset of such Person
(whether or not such obligation is assumed by such Person), the amount of such
obligation being deemed to be the lesser of the value of such property or assets
or the amount of the obligation so secured.
For purposes hereof, the "maximum fixed repurchase price" of any
Disqualified Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Stock as if such
Disqualified Stock were purchased on any date on which Indebtedness shall be
required to be determined pursuant to the Indenture, and if such price is based
upon, or measured by, the fair market value of such Disqualified Stock, such
fair market value to be determined in good faith by the Board of Directors. For
purposes hereof, the amount of any Indebtedness issued with original issue
discount shall be the original purchase price plus accrued interest, provided,
however, that such accretion shall not be deemed an incurrence of Indebtedness.
"Interest Rate Protection Agreement" means any interest rate swap
agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect Terex or any Restricted Subsidiary against
fluctuations in interest rates.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable or deposits on the balance sheet of the Person
making the advance or loan, in each case in accordance with GAAP) or other
extensions of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person and shall include the designation of a
Restricted Subsidiary as an Unrestricted Subsidiary.
For purposes of the definition of "Unrestricted Subsidiary," the definition
of "Restricted Payment" and the covenant described under "---Certain
Covenants---Limitation on Restricted Payments":
(1) "Investment" shall include the portion (proportionate to Terex's equity
interest in such Subsidiary) of the fair market value of the net assets of any
Subsidiary of Terex at the time that such Subsidiary is designated an
Unrestricted Subsidiary; provided, however, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, Terex shall be deemed to continue to have
a permanent investment in an Unrestricted Subsidiary in an amount (if positive)
equal to (x) Terex's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to Terex's equity interest in
such Subsidiary) of the fair market value of the net assets of such Subsidiary
at the time of such redesignation; and
(2) any property transferred to or from an Unrestricted Subsidiary shall be
valued at its fair market value at the time of such transfer, in each case as
determined in good faith by the Board of Directors.
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Notwithstanding the foregoing, in no event shall any issuance of Capital
Stock (other than Preferred Stock or Disqualified Stock, or Capital Stock
exchangeable, exercisable or convertible for any of the foregoing) of Terex in
exchange for Capital Stock, property or assets of another Person constitute an
Investment by Terex in such Person.
"issue" means issue, assume, Guarantee, Incur or otherwise become liable
for; provided, however, that any Indebtedness or Capital Stock of a Person
existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be issued by such
Subsidiary at the time it becomes a Subsidiary; and the term "issuance" has a
corresponding meaning.
"Lien" means any mortgage, pledge, security interest, privilege,
conditional sale or other title retention agreement or other similar lien
(statutory or otherwise), or encumbrance upon or with respect to any property of
any kind, real or personal, moveable or immovable, now owned or hereafter
acquired.
"Net Available Cash" from an Asset Disposition means cash payments received
(including any cash payments received by way of deferred payment of principal
pursuant to a note or installment receivable or otherwise, but only as and when
received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Indebtedness or other obligations relating
to such properties or assets or received in any other non-cash form) therefrom,
in each case net of:
(1) all legal, title and recording tax expenses, commissions and other fees
and expenses Incurred, and all Federal, state, provincial, foreign and local
taxes required to be paid or accrued as a liability under GAAP, as a consequence
of such Asset Disposition;
(2) all payments made on any Indebtedness which (A) is secured by any
assets subject to such Asset Disposition, in accordance with the terms of any
lien upon or other security agreement of any kind with respect to such assets,
or (B) which must by its terms, or in order to obtain a necessary consent to
such Asset Disposition, or by applicable law be repaid out of the proceeds from
such Asset Disposition;
(3) all distributions and other payments required to be made to minority
interest holders in Subsidiaries or joint ventures as a result of such Asset
Disposition; and
(4) reasonable amounts provided by the seller as a reserve, in accordance
with GAAP, against any liabilities associated with the property or other assets
disposed of in such Asset Disposition and retained by Terex or any Restricted
Subsidiary after such Asset Disposition, including, without limitation, pension
and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Disposition. Further, with respect to an Asset
Disposition by a Subsidiary which is not a Wholly Owned Subsidiary, Net
Available Cash shall be reduced pro rata for the portion of the equity of such
Subsidiary which is not owned by Terex.
"Net Cash Proceeds", with respect to any issuance or sale of Capital Stock,
means the cash proceeds of such issuance or sale plus, in the case of an
issuance of Capital Stock upon any exercise, exchange or conversion of
securities (including options, warrants, rights and convertible exchangeable
debt), of Terex that were issued for cash on or after March 29, 2001, the amount
of cash originally received by Terex upon the issuance of such securities
(including options, warrants, rights and convertible or exchangeable debt), net
of attorneys fees, accountants fees, underwriters or placement agents fees,
discounts or commissions and brokerage, consultant and other fees and expenses
actually Incurred or required to be Incurred in connection with such issuance or
sale and also net of taxes paid or payable as a result thereof.
"Obligations" means with respect to any Indebtedness all obligations for
principal, premium, interest, penalties, fees, indemnifications, reimbursements,
and other amounts payable pursuant to the documentation governing such
Indebtedness.
"Permitted Investment" means an Investment by Terex or any Restricted
Subsidiary in:
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(1) Terex, a Restricted Subsidiary or a Person that will, upon the making
of such Investment, become a Restricted Subsidiary; provided, however, that the
primary business of such Restricted Subsidiary is a Related Business;
(2) another Person if as a result of such Investment such other Person is
merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, Terex or a Restricted Subsidiary; provided,
however, that such Person's primary business is a Related Business;
(3) Investments in Cash Equivalents;
(4) receivables owing to Terex or any Restricted Subsidiary if created or
acquired in the ordinary course of business;
(5) loans or advances to employees made in the ordinary course of business
consistent with past practices of Terex or such Restricted Subsidiary;
(6) stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to Terex or any Restricted
Subsidiary or in satisfaction of judgments;
(7) any Person to the extent such Investment represents the non-cash
portion of the consideration received for an Asset Disposition as permitted
pursuant to the covenant described under "---Certain Covenants---Limitation on
Sales of Assets and Subsidiary Stock";
(8) so long as no Default has occurred and is continuing (or would result
therefrom), any Investment made with the proceeds of a substantially concurrent
sale of Capital Stock (other than Disqualified Stock) of Terex; provided,
however, that the Net Cash Proceeds from such sale shall be excluded from clause
3(B) of Section (a) of the covenant described under "---Certain
Covenants---Limitation on Restricted Payments";
(9) Investments by Terex or any Restricted Subsidiary, in an aggregate
amount not to exceed $3 million, in an Unrestricted Subsidiary formed primarily
for the purposes of financing purchases and leases of inventory manufactured by
Terex or any Restricted Subsidiary;
(10) Floor Plan Guarantees permitted by the terms of clause (b)(10) of the
covenant described under "---Certain Covenants---Limitation on Indebtedness" and
(b)(11) of the covenant described under "---Limitation on Indebtedness and
Preferred Stock of Restricted Subsidiaries"; and
(11) other Investments that do not exceed in the aggregate $10 million at
any one time outstanding.
"Permitted Liens" means, with respect to any Person:
(1) pledges or deposits by such Person under workmen's compensation laws,
unemployment insurance laws or similar legislation, or good faith deposits in
connection with bids, tenders, contracts (other than for the payment of
Indebtedness) or leases to which such Person is a party, or deposits to secure
public or statutory obligations of such Person or deposits or cash or United
States government bonds to secure surety or appeal bonds to which such Person is
a party, or deposits as security for contested taxes or import duties or for the
payment of rent, in each case Incurred in the ordinary course of business;
(2) Liens imposed by law, including carriers , warehousemen's and mechanics
Liens, in each case for sums not yet due or being contested in good faith by
appropriate proceedings; or other Liens arising out of judgments or awards
against such Person with respect to which such Person shall then be proceeding
with an appeal or other proceedings for review;
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(3) Liens for taxes, assessments or other governmental charges not yet
subject to penalties for non-payment or which are being contested in good faith
by appropriate proceedings provided appropriate reserves have been taken on the
books of Terex;
(4) Liens to secure the performance of statutory obligations or in favor of
issuers of surety bonds, performance bonds, appeal bonds or letters of credit or
other obligations of a like nature issued pursuant to the request of and for the
account of such Person, in each case in the ordinary course of its business;
provided, however, that such letters of credit do not constitute Indebtedness;
(5) Liens securing a Hedging Obligation so long as the related Indebtedness
is, and is permitted to be under the Indenture, secured by a Lien on the same
property securing the Hedging Obligation;
(6) Liens for the purpose of securing the payment (or the refinancing of
the payment) of all or a part of any Purchase Money Indebtedness or Capital
Lease Obligations relating to assets or property acquired, constructed or leased
in the ordinary course of business provided that (x) the aggregate principal
amount of Indebtedness secured by such Liens shall not exceed the cost of the
assets or property so acquired or constructed and (y) such Liens shall not
encumber any other assets or property of Terex or any Restricted Subsidiary
other than such Assets or property and assets affixed or appurtenant thereto;
(7) Liens arising from precautionary Uniform Commercial Code financing
statement filings regarding operating leases entered into by Terex and its
Subsidiaries in the ordinary course of business;
(8) Liens in favor of Terex and/or any of its Restricted Subsidiaries,
other than such a Lien with respect to intercompany indebtedness if Terex or a
Subsidiary Guarantor is not the beneficiary of such a Lien;
(9) Liens securing Indebtedness of a Person existing at the time that such
Person is acquired by, merged into or consolidated with Terex or any Restricted
Subsidiary; provided, however, that such Liens were not incurred in connection
with, or in contemplation of, such acquisition, merger or consolidation, and do
not extend to any property or assets other than those of such Person;
(10) Liens on property or assets existing at the time of acquisition
thereof by Terex or any Restricted Subsidiary; provided, however, that such
Liens were not incurred in connection with, or in contemplation of, such
acquisition, and do not extend to any other property or assets;
(11) Liens existing on March 29, 2001;
(12) Liens arising from the rendering of a final judgement or order against
Terex or any Restricted Subsidiary that does not give rise to an Event of
Default;
(13) encumbrances consisting of zoning restrictions, surety exceptions,
utility easements, licenses, rights of way, easements of ingress or egress over
property of Terex or any Restricted Subsidiary, rights or restrictions of record
on the use of real property, minor defects in title, landlords and lessors liens
under leases on property located on the rented premises, in each case not
interfering in any material respect with the ordinary conduct of the business of
Terex and the Restricted Subsidiaries;
(14) Liens securing Senior Indebtedness;
(15) Liens with respect to Floor Plan Guarantees permitted by the terms of
clause (b)(10) of the covenant described under "---Certain
Covenants---Limitation on Indebtedness" and (b)(11) of the covenant described
under "---Limitation on Indebtedness and Preferred Stock of Restricted
Subsidiaries"; and
(16) any extension, renewal, refinancing, refunding or replacement of any
Permitted Lien, provided that such new Lien is limited to the property or assets
that secured (or under the arrangement under which the original Permitted Lien,
could secure) the obligations to which such Liens relate.
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"Person" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of any class or classes (however designated) which is preferred as
to the payment of dividends, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over shares
of Capital Stock of any other class of such Person.
"Public Equity Offering" means an underwritten primary or combined primary
and secondary public offering of common stock (other than Disqualified Stock) of
Terex pursuant to an effective registration statement under the Securities Act
which public equity offering results in gross proceeds to Terex of not less than
$50 million.
"Purchase Money Indebtedness" means any Indebtedness of a Person to any
seller or other Person incurred to finance the acquisition (including in the
case of a Capitalized Lease Obligation, the lease) of any after acquired real or
personal tangible property or assets related to the Business of Terex or the
Restricted Subsidiaries and which is incurred substantially concurrently with
such acquisition and is secured only by the assets so financed.
"Refinance" means, in respect of any Indebtedness, to refinance, extend,
renew, refund, repay, prepay, redeem, defease or retire, or to issue other
Indebtedness in exchange or replacement for, such indebtedness. "Refinanced" and
"Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of Terex or any Restricted Subsidiary existing on March 29, 2001 or
Incurred in compliance with the Indenture, including Indebtedness that
Refinances Refinancing Indebtedness; provided, however, that:
(1) such Refinancing Indebtedness has a Stated Maturity no earlier than the
earlier of (x) the Stated Maturity of the Indebtedness being Refinanced and (y)
the Stated Maturity of the New Notes;
(2) such Refinancing Indebtedness has an Average Life at the time such
Refinancing Indebtedness is Incurred that is equal to or greater than the
Average Life of the Indebtedness being Refinanced; and
(3) such Refinancing Indebtedness has an aggregate principal amount (or if
Incurred with original issue discount, an aggregate issue price) that is equal
to or less that the aggregate principal amount (or if Incurred with original
issue discount, the aggregate accreted value) then outstanding or committed
(plus unpaid accrued interest) under the Indebtedness being Refinanced, plus
actual fees and expenses Incurred in connection with the Refinancing;
provided, further, however, that (x) Refinancing Indebtedness shall not include
(1) Indebtedness of a Subsidiary that is not a Wholly Owned Subsidiary or a
Subsidiary Guarantor that Refinances Indebtedness of Terex or (2) Indebtedness
of Terex or a Restricted Subsidiary that Refinances Indebtedness of an
Unrestricted Subsidiary, (y) if the Indebtedness being Refinanced is not Senior
Indebtedness, then such Refinancing Indebtedness shall rank no more senior than,
and shall be at least as subordinated in right of payment, to the New Notes as
the Indebtedness being Refinanced and (z) Refinancing Indebtedness shall be
secured only by assets of a similar type and in a similar amount to those that
secured the Indebtedness so refinanced.
"Related Business" means any business in the manufacture or sale of capital
goods or parts or services, or otherwise reasonably related, ancillary or
complementary to the businesses of Terex and the Restricted Subsidiaries on
March 29, 2001.
"Representative" means the indenture trustee or other trustee, agent or
representative in respect of any Designated Senior Indebtedness; provided that
if, and for so long as, any Designated Senior Indebtedness lacks such a
representative, then the Representative for such Designated Senior Indebtedness
shall at all times be the holders of a majority in outstanding principal amount
of such Designated Senior Indebtedness in respect of any Designated Senior
Indebtedness.
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"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" means any Subsidiary of Terex that is not an
Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of any Person secured by a
Lien.
"Senior Indebtedness" means with respect to Terex or any Subsidiary
Guarantor (x) Bank Indebtedness and (y) any other Indebtedness that, by the
terms of the instrument creating or evidencing such Indebtedness, is expressly
made senior in right of payment to the New Notes or the applicable Guarantee,
other than:
(1) any obligation of such Person to any subsidiary of such Person or to
any officer, director or employee of such Person or any such subsidiary;
(2) any liability of such Person for federal, state, local or other taxes
owed or owing by such Person;
(3) any accounts payable or other liability of such Person to trade
creditors arising in the ordinary course of business (including Guarantees
thereof or instruments evidencing such liabilities);
(4) any Indebtedness, Guarantee or obligation of such Person which is,
expressly by its terms, subordinate or junior in any respect to any other
Indebtedness, Guarantee or obligation of such Person;
(5) that portion of any Indebtedness of such Person which at the time of
issuance is issued in violation of the Indenture;
(6) Indebtedness of such Person represented by Disqualified Stock; or
(7) Capitalized Lease Obligations.
"Senior Subordinated Indebtedness" means the New Notes and any other
Indebtedness of Terex that specifically provides that such Indebtedness is to
rank pari passu with the New Notes in right of payment and is not subordinated
by its terms in right of payment to any Indebtedness or other obligation of
Terex which is not Senior Indebtedness.
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"Significant Subsidiary" of Terex within the meanings of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the final date
specified in such security as the fixed date on which all outstanding principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency unless such contingency has occurred).
"Subordinated Obligation" means any Indebtedness of Terex or any Subsidiary
Guarantor (whether outstanding on March 29, 2001 or thereafter Incurred) which
is subordinate or junior in right of payment to the New Notes or the relevant
Subsidiary Guarantee, as applicable, pursuant to a written agreement to that
effect.
"Subsidiary" means:
(1) any corporation, association, partnership, limited liability company or
other business entity of which more than 50% of the total voting power of shares
of Capital Stock or other interests (including partnership interests) entitled
76
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by:
(A) Terex;
(B) Terex and one or more Subsidiaries; or
(C) one or more Subsidiaries; or
(2) any limited partnership of which Terex or any Subsidiary is a general
partner; or
(3) any other Person (other than a corporation or limited partnership) in
which Terex, or one or more other Subsidiaries or Terex and one or more other
Subsidiaries, directly or indirectly, has more than 50% of the outstanding
partnership or similar interests or has the power, by contract or otherwise, to
direct or cause the direction of the policies, management and affairs thereof.
Unless the context other wise requires, Subsidiary means each direct and
indirect Subsidiary of Terex.
"Subsidiary Guarantee" means a Guarantee by a Subsidiary Guarantor of
Terex's Obligations with respect to the New Notes.
"Subsidiary Guarantor" means any Subsidiary of Terex that Guarantees
Terex's Obligations with respect to the New Notes.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15
U.S.C.ss.ss.77aaa-77bbbb) as in effect on the date of this Indenture.
"Trustee" means the party named as such in the Indenture until a successor
replaces it and, thereafter, means the successor.
"Unrestricted Subsidiary" means any Subsidiary of Terex (other than a
Subsidiary Guarantor) designated as such pursuant to and in compliance with the
covenant described under "Limitation on Designations of Unrestricted
Subsidiaries." Any such designation may be revoked by a resolution of the Board
of Directors of Terex delivered to the trustee, subject to the provisions of
such covenant.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.
"Voting Stock" of a Person means Capital Stock of such Person of the class
or classes pursuant to which the holders thereof have the general voting power
under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such Person (irrespective of whether or not
at the time stock of any other class or classes shall have or might have voting
power by reason of the happening of any contingency).
"Wholly Owned Subsidiary" means:
(1) a Restricted Subsidiary all the Capital Stock of which (other than
directors qualifying shares and shares held by other Persons to the extent such
Shares are required by applicable law to be held by a Person other than Terex or
a Restricted Subsidiary) is owned by Terex or one or more Wholly Owned
Subsidiaries; and
(2) each of Terex Cranes, Inc., P.P.M. Cranes, Inc., P.P.M. S.A., and any
future wholly owned subsidiaries of any of the foregoing, in each case so long
as Terex or one or more Wholly Owned Subsidiaries maintains a percentage
ownership interest in such entity equal to or greater than such ownership
interest (on a fully diluted basis) on the later of (A) March 29, 2001 or (B)
77
the date such entity is incorporated or acquired by Terex or one or more Wholly
Owned Subsidiaries.
Book-Entry, Delivery and Form
General
The New Notes initially will be issued in the form of one or more fully
registered notes in global form (the "Global Notes"). The Global Notes will be
deposited upon issuance with the Trustee as custodian for DTC and registered in
the name of DTC or its nominee, in each case for credit to the accounts of
institutions that have accounts with DTC or its nominee (the "DTC participants")
and to the accounts of institutions that have accounts with Euroclear or its
nominee participants (the "Euroclear participants" and, collectively with the
DTC participants, the "participants"). Each of DTC and Euroclear is referred to
herein as a "Book Entry Facility." Ownership of beneficial interests in the
Global Notes will be limited to participants or persons that may hold interests
through participants. Ownership of beneficial interest in the Global Notes will
be shown on, and the transfer of that ownership will be effected only through,
records maintained by a Book Entry Facility or its nominee (with respect to
participants interests) for such Global Notes or by participants or persons that
hold interests through participants (with respect to beneficial interests of
persons other than participants). The laws of some jurisdictions may require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such limits and laws may impair the ability to transfer or
pledge beneficial interests in the Global Notes.
So long as DTC, or its nominee, is the registered holder of the Global
Notes, DTC or such nominee, as the case may be, will be considered the sole
legal owner and holder of such notes represented by such Global Notes for all
purposes under the Indenture and the New Notes. Except as set forth below,
owners of beneficial interests in the Global Notes will not be entitled to have
such Global Notes or any notes represented thereby registered in their names,
will not receive or be entitled to receive physical delivery or certificated
notes in exchange therefor and will not be considered to be the owners or
holders of such Global Notes or any notes represented thereby for any purpose
under the New Notes or the Indenture. We understand that under existing industry
practice, in the event an owner of a beneficial interest in a Global Notes
desires to take any action that DTC, as the holder of such Global Notes, is
entitled to take, DTC would authorize the participants to take such action, and
that the participants would authorize beneficial owners owning through such
participants to take such action or would otherwise act upon the instructions of
beneficial owners owning through them.
Any payment of principal or interest due on the New Notes on any interest
payment date or at maturity will be made available by us to the trustee by such
date. As soon as possible thereafter, the trustee will make such payments to DTC
or its nominee, as the case may be, as the registered owner of the Global Notes
representing such notes in accordance with existing arrangements between the
trustee and the depositary.
We expect that DTC or its nominee, upon receipt of any payment of principal
or interest in respect of the Global Notes will credit immediately the accounts
of the related participants with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Notes as
shown on the records of DTC. We also expect that payments by participants to
owners of beneficial interests in the Global Notes held through such
participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form of registered in "street name," and will be the responsibility of such
participants.
None of us, the trustee or any payment agent for the Global Notes will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global Notes
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests or for other aspects of the relationship between
the depositary and its participants or the relationship between such
participants and the owners of beneficial interests in the Global Notes owning
through such participants.
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Because of time zone differences, the securities account of a Euroclear
participant purchasing an interest in a Global Note from a DTC participant will
be credited, and any such crediting will be reported to the relevant Euroclear
participant, during the securities settlement processing day (which must be a
business day for Euroclear) immediately following the DTC settlement date. Cash
received in Euroclear as a result of sales of interests in a Global Note by or
through a Euroclear participant to a DTC participant will be received with value
on the DTC settlement date but will be available in the relevant Euroclear cash
account only as of the business day following settlement in DTC.
As long as the New Notes are represented by a Global Note, DTC's
nominee will be the holder of such notes and therefore will be the only entity
that can exercise a right to repayment or repurchase of such notes. See
"Description of the New Notes---Change of Control" and "---Certain
Covenants---Limitation on Sales of Assets and Subsidiary Stock." Notice by
participants or by owners of beneficial interests in the Global Notes held
through such participants of the exercise of the option to elect repayment of
beneficial interests in notes represented by the Global Note must be transmitted
to the relevant Book Entry Facility in accordance with its procedures on a form
required by the relevant Book Entry Facility and provided to participants. In
order to ensure that DTC's nominee will timely exercise a right to repayment
with respect to a particular Note, the beneficial owner of such note must
instruct the broker or other participant to exercise a right to repayment.
Different firms have cut-off times for accepting instructions from their
customers and, accordingly, each beneficial owner should consult the broker or
other participant through which it holds an interest in a note in order to
ascertain the cut-off time by which such an instruction must be given in order
for timely notice to be delivered to DTC. We will not be liable for any delay in
delivery of notices of the exercise of the option to elect repayment.
Unless and until exchanged in whole or in part for notes in definitive
form in accordance with the terms of the New Notes, the Global Notes may not be
transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTC
to DTC or another nominee of DTC or by DTC or any such nominee to a successor of
DTC or a nominee of each successor.
Although DTC has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Global Notes among participants of a
Book Entry Facility, it is under no obligation to perform or continue to perform
such procedures, and such procedures may be discontinued at any time. None of us
or the trustee will have any responsibility for the performance by a Book Entry
Facility or its participants or indirect participants of their respective
obligations under the rules and procedures governing their operations. We and
the trustee may conclusively rely on, and shall be protected in relying on,
instructions from a Book Entry Facility for all purposes.
Certificated notes
The Global Notes shall be exchangeable for corresponding notes in
certificated fully registered form ("certificated notes") registered in the name
of persons other than DTC or its nominee only if (A) DTC (i) notifies Terex that
it is unwilling or unable to continue as depositary for the Global Notes or (ii)
at any time ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), (B) there shall have
occurred and be continuing an Event of Default (as defined in the Indenture)
with respect to the applicable notes or (C) Terex executes and delivers to the
trustee an order that the Global Notes shall be so exchangeable. Any
certificated notes will be issued only in fully registered form, and shall be
issued without coupons in denominations of $1,000 and integral multiples
thereof. Any certificated notes so issued will be registered in such names and
in such denominations as DTC shall request.
The Clearing System
DTC has advised us as follows: DTC is a limited-purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code, and "a clearing agency" registered pursuant to the
provisions of section 17A of the Exchange Act. DTC was created to hold
securities of institutions that have accounts with its participants and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of participants, thereby elimination the need for physical movement of
79
securities certificates. DTC's participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. Access to DTC's book-entry system is also available to others
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a participant, whether directly or
indirectly.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary describes the material United States federal
income tax consequences of the ownership and disposition of the New Notes by
U.S. Holders (as defined below) who acquire such securities in the Exchange
Offer (the "Initial U.S. Holders"). This summary is based on the Internal
Revenue Code of 1986, as amended to the date hereof (the "Code"), administrative
pronouncements, judicial decisions and existing and proposed Treasury
Regulations, changes to any of which subsequent to the date of this Prospectus
may affect the tax consequences described herein. This summary discusses only
Notes held as capital assets within the meaning of Section 1221 of the Code. It
does not discuss all of the tax consequences that may be relevant to a holder in
light of his particular circumstances or to holders subject to special rules,
such as persons who are not U.S. Holders (as defined below) or Initial U.S.
Holders, certain financial institutions, insurance companies, tax-exempt
entities, dealers in securities or foreign currency and holders who hold the New
Notes as part of a straddle, hedging, conversion or other integrated
transaction. Holders of Notes should consult their tax advisors with regard to
the application of the United States federal income tax laws to their particular
situations as well as any tax consequences arising under the laws of any state,
local or foreign taxing jurisdiction.
As used herein, the term "U.S. Holder" means a beneficial owner of a
Note that, for United States federal income tax purposes, is (i) a citizen or
resident of the United States, (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States or of any
political subdivision thereof, (iii) an estate the income of which is subject to
United States federal income taxation regardless of its source, or (iv) a trust,
if a U.S. court is able to exercise primary supervision over the administration
of such trust and one or more U.S. fiduciaries have the authority to control all
substantial decisions of such trust.
Exchange Offer
The exchange of Old Notes for New Notes pursuant to the Exchange Offer
will not result in any federal income tax consequences to U.S. Holders. When a
U.S. Holder exchanges an Old Note for a New Note pursuant to the Exchange Offer,
the U.S. Holder will have the same adjusted basis and holding period in the New
Note as in the Old Note immediately before the exchange. There will be no
federal income tax consequences of the Exchange Offer to nonexchanging Holders.
Payment of Interest
Stated interest paid on a New Note will generally be taxable as
ordinary income at the time it accrues or is received in accordance with the
U.S. Holder's method of accounting for federal income tax purposes. In addition,
a U. S. Holder will be required to report, as interest income, "original issue
discount" on the New Notes, identical to the original issue discount on the Old
Notes.
Sale, Exchange or Redemption
Upon the sale, exchange or redemption of a New Note, a U.S. Holder will
recognize taxable gain or loss equal to the difference between the amount
realized on the sale, exchange or redemption (excluding amounts attributable to
accrued and unpaid interest, which amounts will be includible as ordinary
interest income) and such U.S. Holder's tax basis in the New Note. Gain or loss
realized on the sale, exchange or redemption or a New Note will be capital gain
or loss. Capital gains or losses recognized on New Notes held more than one year
(including the period of ownership of the Old Notes) will be treated as
long-term capital gains or losses. The deduction of capital losses is subject to
certain limitations. Investors should consult their tax advisors regarding the
treatment of capital gains and losses.
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THE FOREGOING IS A SUMMARY OF THE PRINCIPAL FEDERAL INCOME TAX
CONSEQUENCES TO A U.S. HOLDER OF A NEW NOTE. EACH HOLDER OF AN OLD NOTE IS URGED
TO CONSULT ITS TAX ADVISOR TO DETERMINE THE SPECIFIC FEDERAL INCOME TAX
CONSEQUENCES OF ACCEPTING THE EXCHANGE OFFER, AS WELL AS THE EFFECT OF STATE,
LOCAL AND FOREIGN INCOME AND OTHER TAX LAWS.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account as a
result of the Exchange Offer must acknowledge that it will deliver a prospectus
in connection with any resale of such New Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of New Notes received in exchange for Old Notes where
such Old Notes were acquired as a result of market-making activities or other
trading activities. We have agreed that, for a period of 180 days after the
Expiration Date, we will make this Prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale.
We will not receive any proceeds from any sale of New Notes by
broker-dealers. New Notes received by broker-dealers for their own account as a
result of the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the New Notes or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
the prevailing market prices or negotiated prices. Any of these resales may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any of these
broker-dealers and/or the purchasers of any such New Notes. Any broker-dealer
that resells New Notes that it received for its own account as a result of the
Exchange Offer and any broker or dealer that participates in a distribution of
such New Notes may be deemed to be an "underwriter" within the meaning of the
Securities Act, and any profit on any of these resales of New Notes and any
commissions or concessions received by any of these persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 90 days after the Expiration Date, we will send
additional copies of this Prospectus and any amendment or supplement to this
Prospectus to any broker-dealer that requests such documents in the Letter of
Transmittal.
We have agreed to pay all expenses incident to this Exchange Offer
other than commissions or concessions of any brokers or dealers. We will
indemnify the holders of the New Notes (including any broker-dealers) against
some liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
Certain legal matters with respect to the New Notes offered hereby will
be passed upon for Terex by Robinson Silverman Pearce Aronsohn & Berman LLP,
1290 Avenue of the Americas, New York, New York 10104.
EXPERTS
The consolidated financial statements of the Company incorporated in this
Prospectus by reference to the Company's Annual Report on Form 10-K for the year
ended December 31, 2000 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on authority of said
firm as experts in auditing and accounting.
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WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission a
Registration Statement on Form S-4 under the Securities Act, to register the New
Notes offered hereby. This Prospectus does not contain all of the information
that you can in the Registration Statement, as permitted by the rules and
regulations of the Securities and Exchange Commission. As a result, statements
in this Prospectus concerning the contents of any contract or other document are
not necessarily complete. You should read the full text of any contract or
document filed as an exhibit to the Registration Statement for a more complete
understanding of the contract or document or matter involved.
While any New Notes remain outstanding, we will make available, upon
request, to any holder of New Notes the information required pursuant to Rule
144 (d)(4) under the Securities Act of 1933 during any period in which we are
not subject to Section 13 or 15(d) of the Securities Exchange Act of 1934. Any
such request should be directed to the our Corporate Secretary.
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission under the Exchange
Act. The Exchange Act file number for our Securities and Exchange Commission
filings is 1-12302. You may read and copy any document we file at the following
Securities and Exchange Commission public reference rooms:
Judiciary Plaza 500 West Madison Street 7 World Trade Center
450 Fifth Street, N.W. 14th Floor Suite 1300
Rm. 1024 Chicago, Illinois 60661 New York, NY 10048
Washington D.C. 20549
You may obtain information on the operation of the public reference
room in Washington, D.C. by calling the Securities and Exchange Commission at
1-800-SEC-0330. We file information electronically with the Securities and
Exchange Commission. Our Securities and Exchange Commission filings are
available from the Securities and Exchange Commission's Internet site at
http://www.sec.gov, which contains reports, proxy and information statements and
other information regarding issuers that file electronically. You may also
inspect our Securities and Exchange Commission reports and other information at
the New York Stock Exchange, 20 Broad Street, New York, New York 10005.
INCORPORATION OF DOCUMENTS BY REFERENCE
We can disclose important information to you by referring you to those
documents that we have previously filed with the Securities and Exchange
Commission or documents that we file with the Securities and Exchange Commission
in the future. The information incorporated by reference is considered to be
part of this Prospectus, and information in documents that we file later with
the Securities and Exchange Commission will automatically update and supersede
information in this Prospectus. We incorporate by reference the documents listed
below into this offering circular, and any future filings made by us with the
Securities and Exchange Commission under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934, as amended, until we close this exchange
offer. The documents we incorporate by reference are:
1. Our Annual Report on Form 10-K for the fiscal year ended December 31,
2000.
2. Our Quarterly Report on Form 10-Q for the calendar quarter ended March
31, 2001.
3. Our definitive proxy materials on Schedule 14A as filed with the
Securities and Exchange Commission on April 6, 2001.
4. Our Current Report on Form 8-K dated March 14, 2001 and filed on March
15, 2001.
5. Our Current Report on Form 8-K dated March 22, 2001 and filed on March
23, 2001.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address and number: Terex Corporation,
Attention: Secretary, 500 Post Road East, Suite 320, Westport, Connecticut
06880; telephone (203) 222-7170.
82
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law ("DGCL") and
Article IX of Terex's Restated By-laws provide for the indemnification of
Terex's directors and officers in a variety of circumstances, which may include
liabilities under the Securities Act.
Article IX of Terex's Restated By-laws generally requires Terex to
indemnify its officers and directors against all liabilities (including
judgments, settlements, fines and penalties) and reasonable expenses incurred in
connection with the investigation, defense, settlement or appeal of certain
actions, whether instituted by a third party or a stockholder (either directly
or indirectly) and including specifically, but without limitation, actions
brought under the Securities Act, and/or the Exchange Act; except that no such
indemnification will be permitted if such director or officer was not successful
in defending against any such action and it is determined that the director or
officer breached or failed to perform his or her duties to Terex, and such
breach or failure constitutes (i) a willful breach of his or her "duty of
loyalty", (ii) acts or omissions not in good faith or involving intentional
misconduct or a knowing violation of the law, (iii) a violation of Section 174
of the Delaware General Corporation Law, relating to prohibited dividends or
distributions or the repurchase or redemption of stock or (iv) a transaction
where such individual derived an improper financial profit (unless it is deemed
that such profit is immaterial in light of all of the circumstances)
(collectively, "Breach of Duty"). Notwithstanding the foregoing, subject to
certain exceptions, the Restated By-laws provide that directors or officers
initiating an action, are not entitled to indemnification.
The Restated By-laws also establish certain procedures by which (i) a
director or officer may request an advance on his or her reasonable expenses,
prior to the final disposition of an action, (ii) Terex may withhold an
indemnification payment from a director or officer, (iii) a director or officer
may be entitled to partial indemnification and (iv) a director or officer may
challenge Terex's denial to furnish him or her with requested indemnification.
Additionally, the Restated By-laws provide that the adverse termination of an
action against an officer or director, is not in and of itself sufficient to
create a presumption that a director or officer engaged in conduct constituting
a Breach of Duty.
Finally, Terex's Restated Certificate of Incorporation, as amended,
contains a provision which eliminates the personal liability of a director to
Terex and its stockholders for certain breaches of his or her fiduciary duty of
care as a director. This provision does not, however, eliminate or limit the
personal liability of a director (i) for any breach of such director's "duty of
loyalty" (as further defined therein) to Terex or its stockholders, (ii) for
acts or omissions not in "good faith" (as further defined therein) or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL, relating in general to the willful or negligent payment
of an illegal dividend or the authorization of an unlawful stock repurchase or
redemption, or (iv) for any transaction from which the director derived an
improper personal profit to the extent of such profit. This provision of the
Restated Certificate of Incorporation offers persons who serve on the Board of
Directors of Terex protection against awards of monetary damages resulting from
negligent (except as indicated above) and "grossly" negligent actions taken in
the performance of their duty of care, including grossly negligent business
decisions made in connection with takeover proposals for Terex. As a result of
this provision, the ability of Terex or a stockholder thereof to successfully
prosecute an action against a director for a breach of his duty of care has been
limited. However, the provision does not affect the availability of equitable
remedies such as an injunction or rescission based upon a director's breach of
his duty of care. Although the validity and scope of Section 145 of the DGCL has
not been tested in court, the Commission has taken the position that the
provision will have no effect on claims arising under the Federal securities
laws.
Terex maintains a directors' and officers' insurance policy which
insures the officers and directors of Terex from any claim arising out of an
alleged wrongful act by such persons in their respective capacities as officers
and directors of Terex.
II - 1
Item 21. Exhibits and Financial Statement Schedules
(a) Exhibits
3.1 Restated Certificate of Incorporation of Terex Corporation
(incorporated by reference to Exhibit 3.1 to the Form S-1 Registration
Statement of Terex Corporation, Registration No. 33-52297).
3.2 Certificate of Elimination with respect to the Series B Preferred Stock
(incorporated by reference to Exhibit 4.3 to the Form 10-K for the year
ended December 31, 1998 of Terex Corporation, Commission File No.
1-10702).
3.3 Certificate of Amendment to Certificate of Incorporation of Terex
Corporation dated September 5, 1998 (incorporated by reference to
Exhibit 3.3 to the Form 10-K for the year ended December 31, 1998 of
Terex Corporation, Commission File No. 1-10702).
3.4 Amended and Restated Bylaws of Terex Corporation (incorporated by
reference to Exhibit 3.2 to the Form 10-K for the year ended December
31, 1998 of Terex Corporation, Commission File No. 1-10702).
4.1 Indenture dated as of March 31, 1998 among Terex Corporation, the
Guarantors named therein and United States Trust Company of New York,
as Trustee (incorporated by reference to Exhibit 4.6 of Amendment No. 1
to the Form S-4 Registration Statement of Terex Corporation,
Registration No. 333-53561).
4.2 First Supplemental Indenture, dated as of September 23, 1998, between
Terex Corporation and United States Trust Company of New York, as
Trustee (to Indenture dated as of March 31, 1998) (incorporated by
reference to Exhibit 4.4 to the Form 10-Q for the quarter ended
September 30, 1999 of Terex Corporation, Commission File No. 1-10702).
4.3 Second Supplemental Indenture, dated as of April 1, 1999, between Terex
Corporation and United States Trust Company of New York, as Trustee (to
Indenture dated as of March 31, 1998) (incorporated by reference to
Exhibit 4.5 to the Form 10-Q for the quarter ended September 30, 1999
of Terex Corporation, Commission File No. 1-10702).
4.4 Third Supplemental Indenture, dated as of July 29, 1999, between Terex
Corporation and United States Trust Company of New York, as Trustee (to
Indenture dated as of March 31, 1998) (incorporated by reference to
Exhibit 4.6 to the Form 10-Q for the quarter ended September 30, 1999
of Terex Corporation, Commission File No. 1-10702).
4.5 Fourth Supplemental Indenture, dated as of August 26, 1999, between
Terex Corporation and United States Trust Company of New York, as
Trustee (to Indenture dated as of March 31, 1999) (incorporated by
reference to Exhibit 4.7 to the Form 10-Q for the quarter ended
September 30, 1999 of Terex Corporation, Commission File No. 1-10702).
4.6 Fifth Supplemental Indenture, dated March 29, 2001, between Terex
Corporation and the United States Trust Company of New York, as Trustee
(to Indenture dated as of March 31, 1998) (incorporated by reference to
Exhibit 4.6 to the Form 10-Q for the quarter ended March 31, 2001 of
Terex Corporation, Commission File No. 1-10702).
4.7 Indenture dated as of March 9, 1999 among Terex Corporation, the
Guarantors named therein and United States Trust Company of New York,
as Trustee (incorporated by reference to Exhibit 4.4 to the Form 10-K
for the year ended December 31, 1998 of Terex Corporation, Commission
File No. 1-10702).
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4.8 First Supplemental Indenture, dated as of April 1, 1999, between Terex
Corporation and United States Trust Company of New York, as Trustee (to
Indenture dated as of March 9, 1999) (incorporated by reference to
Exhibit 4.8 to the Form 10-Q for the quarter ended September 30, 1999
of Terex Corporation, Commission File No. 1-10702).
4.9 Second Supplemental Indenture, dated as of July 30, 1999, between Terex
Corporation and United States Trust Company of New York, as Trustee (to
Indenture dated as of March 9, 1999) (incorporated by reference to
Exhibit 4.9 to the Form 10-Q for the quarter ended September 30, 1999
of Terex Corporation, Commission File No. 1-10702).
4.10 Third Supplemental Indenture, dated as of August 26, 1999, between
Terex Corporation and United States Trust Company of New York, as
Trustee (to Indenture dated as of March 9, 1999) (incorporated by
reference to Exhibit 4.11 to the Form 10-Q for the quarter ended
September 30, 1999 of Terex Corporation, Commission File No. 1-10702).
4.11 Fourth Supplemental Indenture, dated as of March 29, 2001, between
Terex Corporation and the United States Trust Company of New York, as
Trustee (to Indenture dated as of March 9, 1999) (incorporated by
reference to Exhibit 4.11 to the Form 10-Q for the quarter ended March
31, 2001 of Terex Corporation, Commission File No. 1-10702).
4.12 Indenture, dated as of March 29, 2001, between Terex Corporation and
United States Trust Company of New York, as Trustee (incorporated by
reference to Exhibit 4.12 to the Form 10-Q for the quarter ended March
31, 2001 of Terex Corporation, Commission File No. 1-10702).
5.1 Opinion of Robinson Silverman Pearce Aronsohn & Berman LLP as to the
legality of the New Notes.**
10.1 Terex Corporation Incentive Stock Option Plan, as amended (incorporated
by reference to Exhibit 4.1 to the Form S-8 Registration Statement of
Terex Corporation, Registration No. 33-21483).
10.2 1994 Terex Corporation Long Term Incentive Plan (incorporated by
reference to Exhibit 10.2 to the Form 10-K for the year ended December
31, 1994 of Terex Corporation, Commission File No. 1-10702).
10.3 Terex Corporation Employee Stock Purchase Plan (incorporated by
reference to Exhibit 10.3 to the Form 10-K for the year ended December
31, 1994 of Terex Corporation, Commission File No. 1-10702).
10.4 1996 Terex Corporation Long Term Incentive Plan (incorporated by
reference to Exhibit 10.1 to Form S-8 Registration Statement of Terex
Corporation, Registration No. 333-03983).
10.5 Amendment No. 1 to 1996 Terex Corporation Long Term Incentive Plan
(incorporated by reference to Exhibit 10.5 to the Form 10-K for the
year ended December 31, 1999 of Terex Corporation, Commission File No.
1-10702).
10.6 Amendment No. 2 to 1996 Terex Corporation Long Term Incentive Plan
(incorporated by reference to Exhibit 10.6 to the Form 10-K for the
year ended December 31, 1999 of Terex Corporation, Commission File No.
1-10702).
10.7 Terex Corporation 1999 Long-Term Incentive Plan (incorporated by
reference to Exhibit 10.7 to the Form 10-Q for the quarter ended March
31, 2000 of Terex Corporation, Commission File No. 1-10702).
10.8 Terex Corporation 2000 Incentive Plan (incorporated by reference to
Exhibit 10.8 to the Form 10-Q for the quarter ended June 30, 2000 of
Terex Corporation, Commission File No. 1-10702).
10.9 Common Stock Appreciation Rights Agreement dated as of May 9, 1995
between the Company and United States Trust Company of New York, as
Rights Agents (incorporated by reference to Exhibit 10.29 of the
Amendment No. 1 to the Form S-1 Registration Statement of Terex
Corporation, Registration No. 33-52711).
II-3
10.10 SAR Registration Rights Agreement dated as of May 9, 1995 among the
Company and the Purchasers, as defined therein (incorporated by
reference to Exhibit 10.31 of the Amendment No. 1 to the Form S-1
Registration Statement of Terex Corporation, Registration No.
33-52711).
10.11 Amended and Restated Credit Agreement, dated as of March 29, 2001,
among Terex Corporation, certain of its Subsidiaries, the Lenders named
therein, and Credit Suisse First Boston, as Administrative Agent
(incorporated by reference to Exhibit 10.11 to the Form 10-Q for the
quarter ended March 31, 2001 of Terex Corporation, Commission File No.
1-10702).
10.12 Amended and Restated Tranche C Credit Agreement, dated as of March 29,
2001, among Terex Corporation, the Lenders named therein, and Credit
Suisse First Boston, as Administrative Agent and Collateral Agent
(incorporated by reference to Exhibit 10.12 to the Form 10-Q for the
quarter ended March 31, 2001 of Terex Corporation, Commission File No.
1-10702).
10.13 Credit Agreement dated as of March 6, 1998 among Terex Corporation,
certain of its subsidiaries, the lenders named therein, Credit Suisse
First Boston, as Administrative Agent, Bank Boston N.A., as Syndication
Agent and Canadian Imperial Bank of Commerce and First Union National
Bank, as Co-Documentation Agents (incorporated by reference to Exhibit
10.13 to the Form 10-K for the year ended December 31, 1998 of Terex
Corporation, Commission File No. 1-10702).
10.14 Guarantee Agreement dated as of March 6, 1998 of Terex Corporation and
Credit Suisse First Boston, as Collateral Agent (incorporated by
reference to Exhibit 10.14 to the Form 10-K for the year ended December
31, 1998 of Terex Corporation, Commission File No. 1-10702).
10.15 Guarantee Agreement dated as of March 6, 1998 of Terex Corporation,
each of the subsidiaries of Terex Corporation listed therein and Credit
Suisse First Boston, as Collateral Agent (incorporated by reference to
Exhibit 10.15 to the Form 10-K for the year ended December 31, 1998 of
Terex Corporation, Commission File No. 1-10702).
10.16 Security Agreement dated as of March 6, 1998 of Terex Corporation, each
of the subsidiaries of Terex Corporation listed therein and Credit
Suisse First Boston, as Collateral Agent (incorporated by reference to
Exhibit 10.16 to the Form 10-K for the year ended December 31, 1998 of
Terex Corporation, Commission File No. 1-10702).
10.17 Pledge Agreement dated as of March 6, 1998 of Terex Corporation, each
of the subsidiaries of Terex Corporation listed therein and Credit
Suisse First Boston, as Collateral Agent (incorporated by reference to
Exhibit 10.17 to the Form 10-K for the year ended December 31, 1998 of
Terex Corporation, Commission File No. 1-10702).
10.18 Form Mortgage, Leasehold Mortgage, Assignment of Leases and Rents,
Security Agreement and Financing entered into by Terex Corporation and
certain of the subsidiaries of Terex Corporation, as Mortgagor, and
Credit Suisse First Boston, as Mortgagee (incorporated by reference to
Exhibit 10.18 to the Form 10-K for the year ended December 31, 1998 of
Terex Corporation, Commission File No. 1-10702).
10.19 Tranche C Credit Agreement, dated as of July 2, 1999, as amended and
restated as of August 23, 1999, among Terex Corporation, the lenders
named therein, and Credit Suisse First Boston, as Administrative and
Collateral Agent (incorporated by reference to Exhibit 10.23 to the
Form 10-Q for the quarter ended September 30, 1999 of Terex
Corporation, Commission File No. 1-10702).
10.20 Amendment No. 1 to Tranche C Credit Agreement dated as of July 2, 1999,
as amended and restated as of August 23, 1999, among Terex Corporation,
the lenders named therein, and Credit Suisse First Boston, as
Administrative and Collateral Agent (incorporated by reference to
Exhibit 10.26 to the Form 10-Q for the quarter ended June 30, 2000 of
Terex Corporation, Commission File No. 1-10702).
II-4
10.21 Purchase Agreement dated as of March 9, 1999 among the Company and the
Initial Purchasers, as defined therein (incorporated by reference to
Exhibit 10.20 to the Form 10-K for the year ended December 31, 1998 of
Terex Corporation, Commission File No. 1-10702).
10.22 Registration Rights Agreement dated as of March 9, 1999 among the
Company and the Purchasers, as defined therein (incorporated by
reference to Exhibit 10.21 to the Form 10-K for the year ended December
31, 1998 of Terex Corporation, Commission File No. 1-10702).
10.23 Underwriting Agreement, dated as of September 17, 1999, between Terex
Corporation and Salomon Smith Barney Inc. (incorporated by reference to
Exhibit 1 of the Form 8-K Current Report, Commission File No. 1-10702,
dated and filed with the Commission on September 18, 1999).
10.24 Stock Purchase Agreement between Raytheon Engineers & Constructors
International, Inc. and Terex Corporation, dated as of July 19, 1999
(incorporated by reference to Exhibit 10.27 to the Form 10-Q for the
quarter ended September 30, 1999 of Terex Corporation, Commission File
No. 1-10702).
10.25 Stock Purchase Agreement between Terex Corporation and Hartford Capital
Appreciation Fund, Inc., dated July 23, 1999 (incorporated by reference
to Exhibit 10.28 to the Form 10-Q for the quarter ended September 30,
1999 of Terex Corporation, Commission File No. 1-10702).
10.26 Asset Purchase and Sale Agreement between Terex Corporation and Partek
Acquisition Company, Inc., dated as of July 20, 2000 (incorporated by
reference to Exhibit 1 of the Form 8-K Current Report, Commission File
No. 1-10702, dated September 30, 2000 and filed with the Commission on
October 5, 2000).
10.27 Purchase Agreement dated as of March 22, 2001 among the Company and the
Purchasers, as defined therein (incorporated by reference to Exhibit
10.27 to the Form 10-Q for the quarter ended March 31, 2001 of Terex
Corporation, Commission File No. 1-10702).
10.28 Registration Rights Agreement dated as of March 29, 2001 among the
Company and the Initial Purchasers, as defined therein (incorporated by
reference to Exhibit 10.28 to the Form 10-Q for the quarter ended March
31, 2001 of Terex Corporation, Commission File No. 1-10702).
10.29 Share Purchase and Sale Agreement among Powerscreen International plc,
Partek Cargotec Holding Ltd and, for purposes of Article 9 only,
Moffett Engineering Limited, dated as of July 20, 2000 (incorporated by
reference to Exhibit 2 of the Form 8-K Current Report, Commission File
No. 1-10702, dated September 30, 2000 and filed with the Commission on
October 5, 2000).
10.30 Share Purchase and Sale Agreement among Holland Lift International
B.V., Partek Cargotec Holding Netherlands B.V. and, for purposes of
Article 9 only, Kooi B.V., dated as of July 20, 2000 (incorporated by
reference to Exhibit 3 of the Form 8-K Current Report, Commission File
No. 1-10702, dated September 30, 2000 and filed with the Commission on
October 5, 2000).
10.31 Asset Purchase and Sale Agreement among PPM Deutschland GmbH Terex
Cranes, Hiab GmbH and, for purposes of Section 2.3 only, Holland Lift
International B.V., Partek Cargotec Holding Netherlands B.V. and Kooi
B.V., dated as of September 29, 2000 (incorporated by reference to
Exhibit 4 of the Form 8-K Current Report, Commission File No. 1-10702,
dated September 30, 2000 and filed with the Commission on October 5,
2000).
10.32 Contract of Employment, dated as of September 1, 1999, between Terex
Corporation and Filip Filipov (incorporated by reference to Exhibit
10.29 to the Form 10-Q for the quarter ended September 30, 1999 of
Terex Corporation, Commission File No. 1-10702).
10.33 Supplement to Contract of Employment, dated as of April 1, 2000,
between Terex Corporation and Filip Filipov (incorporated by reference
to Exhibit 10.37 to the Form 10-Q for the quarter ended September 30,
2000 of Terex Corporation, Commission File No. 1-10702).
II-5
10.34 Amended and Restated Employment and Compensation Agreement, dated as of
April 1, 2000, between Terex Corporation and Ronald M. DeFeo
(incorporated by reference to Exhibit 10.38 to the Form 10-Q for the
quarter ended September 30, 2000 of Terex Corporation, Commission File
No 1-10702).
10.35 Form of Change in Control and Severance Agreement dated as of April 1,
2000 between Terex Corporation and certain executive officers
(incorporated by reference to Exhibit 10.34 to the Form 10-Q for the
quarter ended June 30, 2000 of Terex Corporation, Commission File No.
1-10702).
12.1 Calculation of Ratio of Earnings to Fixed Charges. **
21.1 Subsidiaries of Terex Corporation. **
23.1 Consent of Independent Accountants - PricewaterhouseCoopers LLP,
Stamford, Connecticut. **
23.2 Consent of Robinson Silverman Pearce Aronsohn & Berman LLP (included as
part of Exhibit 5.1)**
24.1 Power of Attorney (included on signature page).
25.1 Statement of Eligibility of United States Trust Company of New York as
Trustee on Form T-1. *
99.1 Form of Letter of Transmittal.**
99.2 Form of Notice of Guaranteed Delivery.**
------------------
* To be filed by Amendment.
** Filed herewith.
II-6
Terex Corporation
Report of PricewaterhouseCoopers LLP (included as part of Exhibit 23.1)
Schedule II -- Valuation and Qualifying Accounts and Reserves S-1
All other schedules are omitted as the required information is
inapplicable or the information is presented in the consolidated financial
statements or related notes.
Item 22. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement: (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement; (iii) to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
Terex pursuant to the foregoing provisions, or otherwise, Terex has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Terex of expenses incurred or paid
by a director, officer or controlling person of Terex in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, Terex
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
(c) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form,
within one business day of receipt of such requests, and to send the
incorporated documents by first-class mail or other equally prompt means. This
includes information contained in documents filed subsequent to the effective
date of the registration statement through the date of responding to the
request.
(d) To supply by means of a post-effective amendment all information
concerning a transaction, and Terex being acquired involved therein, that was
not the subject of and included in the registration statement when it became
effective.
The undersigned Registrant hereby further undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II - 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
TEREX CORPORATION
By: /s/ Ronald M. DeFeo
----------------------------------
Name: Ronald M. DeFeo
Title: Chairman, President, Chief Executive Officer
and Chief Operating Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Name and Signature Title Date
------------------ ----- ----
/s/ Ronald M. DeFeo Chairman, Chief Executive
------------------- Officer and Director May 22, 2001
Ronald M. DeFeo (Principal Executive Officer)
/s/ Joseph F. Apuzzo Chief Financial Officer May 22, 2001
-------------------- (Principal Financial Officer)
Joseph F. Apuzzo
/s/ Kevin M. O'Reilly Controller May 22, 2001
--------------------- (Principal Accounting Officer)
Kevin M. O'Reilly
--------------------- Director
G. Chris Andersen
/s/ William H. Fike Director May 22, 2001
-------------------
William H. Fike
/s/ Donald P. Jacobs Director May 22, 2001
--------------------
Donald P. Jacobs
/s/ Don DeFosset Director May 22, 2001
----------------
Don DeFosset
/s/ Marvin B. Rosenberg Director May 22, 2001
-----------------------
Marvin B. Rosenberg
/s/ David A. Sachs Director May 22, 2001
------------------
David A. Sachs
II - 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
TEREX CRANES, INC.
By: /s/ Eric I Cohen
-----------------
Name: Eric I Cohen
Title: Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Fil Filipov President May 22, 2001
--------------- (Principal Executive Officer)
Fil Filipov
/s/ Joseph F. Apuzzo Vice President, Treasurer May 22, 2001
-------------------- and Director
Joseph F. Apuzzo Principal Financial
and Accounting Officer)
/s/ Eric I Cohen Vice President, Secretary and Director May 22, 2001
----------------
Eric I Cohen
/s/ Ronald M. DeFeo Director May 22, 2001
-------------------
Ronald M. DeFeo
II - 9
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
PPM CRANES, INC.
By: /s/ Eric I Cohen
--------------------
Name: Eric I Cohen
Title: Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Fil Filipov President May 22, 2001
--------------- (Principal Executive Officer)
Fil Filipov
/s/ Joseph F. Apuzzo Vice President, Treasurer May 22, 2001
-------------------- and Director
Joseph F. Apuzzo (Principal Financial
and Accounting Officer)
/s/ Eric I Cohen Vice President, Secretary and Director May 22, 2001
----------------
Eric I Cohen
/s/ Ronald M. DeFeo Director May 22, 2001
-------------------
Ronald M. DeFeo
------------------- Director
Eric B. Fonstad
II - 10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
KOEHRING CRANES, INC.
By: /s/ Eric I Cohen
----------------
Name: Eric I Cohen
Title: Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Fil Filipov President May 22, 2001
--------------- (Principal Executive Officer)
Fil Filipov
/s/ Joseph F. Apuzzo Vice President-Finance and Director May 22, 2001
-------------------- (Principal Financial and Accounting Officer)
Joseph F. Apuzzo
/s/ Eric I Cohen Vice President, Secretary and Director May 22, 2001
----------------
Eric I Cohen
/s/ Ronald M. DeFeo Director May 22, 2001
-------------------
Ronald M. DeFeo
II - 11
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
TEREX-TELELECT, INC.
By /s/ Ronald M. DeFeo
Name: Ronald M. DeFeo
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Ronald M. DeFeo President and Director May 22, 2001
-------------------
Ronald M. DeFeo (Principal Executive Officer)
/s/ Joseph F. Apuzzo Vice President-Finance May 22, 2001
--------------------
Joseph F. Apuzzo (Principal Financial and Accounting Officer)
/s/ Eric I Cohen Vice President and Secretary May 22, 2001
----------------
Eric I Cohen
II - 12
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
TEREX-RO CORPORATION
By: /s/ Ronald M. DeFeo
---------------------
Name: Ronald M. DeFeo
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Ronald M. DeFeo President and Director May 22, 2001
------------------- (Principal Executive Officer)
Ronald M. DeFeo
/s/ Joseph F. Apuzzo Vice President-Finance May 22, 2001
-------------------- (Principal Financial and Accounting Officer)
Joseph F. Apuzzo
/s/ Eric I Cohen Vice President and Secretary May 22, 2001
----------------
Eric I Cohen
II - 13
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
TEREX AERIALS, INC.
By: /s/ Ronald M. DeFeo
-------------------
Name: Ronald M. DeFeo
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Ronald M. DeFeo President and Director May 22, 2001
-------------------
Ronald M. DeFeo (Principal Executive Officer)
/s/ Joseph F. Apuzzo Vice President-Finance May 22, 2001
--------------------
Joseph F. Apuzzo (Principal Financial and Accounting Officer)
/s/ Eric I Cohen Vice President, Secretary and Director May 22, 2001
----------------
Eric I Cohen
II - 14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
TEREX MINING EQUIPMENT, INC.
By: /s/ Ronald M. DeFeo
Name: Ronald M. DeFeo
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Ronald M. DeFeo President and Director May 22, 2001
------------------- (Principal Executive Officer)
Ronald M. DeFeo
/s/ Joseph F. Apuzzo Vice President-Finance May 22, 2001
-------------------- (Principal Financial Officer)
Joseph F. Apuzzo
/s/ Eric I Cohen Vice President, Secretary and Director May 22, 2001
----------------
Eric I Cohen
II - 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
PAYHAULER CORP.
By: /s/ Ronald M. DeFeo
---------------------
Name: Ronald M. DeFeo
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Ronald M. DeFeo President and Director May 22, 2001
------------------- (Principal Executive Officer)
Ronald M. DeFeo
/s/ Joseph F. Apuzzo Vice President-Finance May 22, 2001
-------------------- (Principal Financial and Accounting Officer)
Joseph F. Apuzzo
/s/ Eric I Cohen Vice President and Secretary May 22, 2001
----------------
Eric I Cohen
II - 16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
O&K ORENSTEIN & KOPPEL, INC.
By: /s/ Ronald M. DeFeo
Name: Ronald M. DeFeo
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Ronald M. DeFeo President and Director May 22, 2001
------------------- (Principal Executive Officer)
Ronald M. DeFeo
/s/ Joseph F. Apuzzo Vice President-Finance May 22, 2001
-------------------- (Principal Financial Officer)
Joseph F. Apuzzo
/s/ Eric I Cohen Vice President, Secretary and Director May 22, 2001
----------------
Eric I Cohen
II - 17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
THE AMERICAN CRANE CORPORATION
By: /s/ Ronald M. DeFeo
-------------------
Name: Ronald M. DeFeo
Title: Chairman
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Ronald M. DeFeo Chairman and Director May 22, 2001
------------------- (Principal Executive Officer)
Ronald M. DeFeo
/s/ Joseph F. Apuzzo Vice President-Finance May 22, 2001
-------------------- (Principal Financial Officer)
Joseph F. Apuzzo
/s/ Eric I Cohen Vice President, Secretary and Director May 22, 2001
----------------
Eric I Cohen
II - 18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
AMIDA INDUSTRIES, INC.
By: /s/ Eric I Cohen
Name: Eric I Cohen
Title: Senior Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Ronald M. DeFeo President and Director May 22, 2001
------------------- (Principal Executive Officer)
Ronald M. DeFeo
/s/ Joseph F. Apuzzo Vice President-Finance May 22, 2001
--------------------
Joseph F. Apuzzo (Principal Financial Officer)
/s/ Eric I Cohen Vice President, Secretary and Director May 22, 2001
----------------
Eric I Cohen
II-19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
CEDARAPIDS, INC.
By:/s/ Eric I Cohen
Name: Eric I Cohen
Title: Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Ronald M. DeFeo President and Director May 22, 2001
------------------- (Principal Executive Officer)
Ronald M. DeFeo
/s/ Joseph F. Apuzzo Vice President-Finance May 22, 2001
-------------------- (Principal Financial Officer)
Joseph F. Apuzzo
/s/ Eric I Cohen Vice President, Secretary and Director May 22, 2001
----------------
Eric I Cohen
II-20
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
STANDARD HAVENS, INC.
By: /s/ Eric I Cohen
Name: Eric I Cohen
Title: Senior Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Ronald M. DeFeo President and Director May 22, 2001
-------------------
Ronald M. DeFeo (Principal Executive Officer)
/s/ Joseph F. Apuzzo Vice President-Finance May 22, 2001
--------------------
Joseph F. Apuzzo (Principal Financial Officer)
/s/ Eric I Cohen Senior Vice President, Secretary May 22, 2001
---------------- and Director
Eric I Cohen
II-21
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
STANDARD HAVENS PRODUCTS, INC.
By: /s/ Eric I Cohen
Name: Eric I Cohen
Title: Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Ronald M. DeFeo President and Director May 22, 2001
------------------- (Principal Executive Officer)
Ronald M. DeFeo
/s/ Joseph F. Apuzzo Vice President-Finance May 22, 2001
-------------------- (Principal Financial Officer)
Joseph F. Apuzzo
/s/ Eric I Cohen Vice President, Secretary and Director May 22, 2001
----------------
Eric I Cohen
II-22
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
BL PEGSON USA, INC.
By: /s/ Eric I Cohen
Name: Eric I Cohen
Title: Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Ronald M. DeFeo President and Director May 22, 2001
------------------- (Principal Executive Officer)
Ronald M. DeFeo
/s/ Joseph F. Apuzzo Vice President-Finance May 22, 2001
-------------------- (Principal Financial Officer)
Joseph F. Apuzzo
/s/ Eric I Cohen Vice President, Secretary and Director May 22, 2001
----------------
Eric I Cohen
II-23
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
BENFORD AMERICA, INC.
By: /s/ Eric I Cohen
Name: Eric I Cohen
Title: Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Ronald M. DeFeo President and Director May 22, 2001
------------------- (Principal Executive Officer)
Ronald M. DeFeo
/s/ Joseph F. Apuzzo Vice President-Finance May 22, 2001
-------------------- (Principal Financial Officer)
Joseph F. Apuzzo
/s/ Eric I Cohen Vice President, Secretary and Director May 22, 2001
----------------
Eric I Cohen
II-24
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
COLEMAN ENGINEERING, INC.
By: /s/ Eric I Cohen
Name: Eric I Cohen
Title: Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Ronald M. DeFeo President and Director May 22, 2001
------------------- (Principal Executive Officer)
Ronald M. DeFeo
/s/ Joseph F. Apuzzo Vice President-Finance May 22, 2001
-------------------- (Principal Financial Officer)
Joseph F. Apuzzo
/s/ Eric I Cohen Vice President, Secretary and Director May 22, 2001
----------------
Eric I Cohen
II-25
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
FINLAY HYDRASCREEN USA, INC.
By: /s/ Eric I Cohen
Name: Eric I Cohen
Title: Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Ronald M. DeFeo President and Director May 22, 2001
------------------- (Principal Executive Officer)
Ronald M. DeFeo
/s/ Joseph F. Apuzzo Vice President-Finance May 22, 2001
-------------------- (Principal Financial Officer)
Joseph F. Apuzzo
/s/ Eric I Cohen Vice President, Secretary and Director May 22, 2001
----------------
Eric I Cohen
II-26
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
EARTHKING, INC.
By: /s/ Eric I Cohen
Name: Eric I Cohen
Title: Secretary
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Christian Ragot President May 22, 2001
------------------- (Principal Executive Officer)
Christian Ragot
/s/ Eric I Cohen Secretary and Director May 22, 2001
----------------
Eric I Cohen
II-27
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
POWERSCREEN HOLDINGS USA INC.
By: /s/ Eric I Cohen
----------------
Name: Eric I Cohen
Title: Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Ronald M. DeFeo President and Director May 22, 2001
------------------- (Principal Executive Officer)
Ronald M. DeFeo
/s/ Joseph F. Apuzzo Vice President-Finance May 22, 2001
-------------------- (Principal Financial Officer)
Joseph F. Apuzzo
/s/ Eric I Cohen Vice President, Secretary and Director May 22, 2001
----------------
Eric I Cohen
II-28
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
POWERSCREEN INTERNATIONAL LLC
By: Powerscreen North America Inc.,
as Managing Member
By: /s/ Eric I Cohen
Name: Eric I Cohen
Title: Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons of the
Managing member in the capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Ronald M. DeFeo President and Director May 22, 2001
------------------- (Principal Executive Officer)
Ronald M. DeFeo
/s/ Joseph F. Apuzzo Vice President-Finance May 22, 2001
-------------------- (Principal Financial Officer)
Joseph F. Apuzzo
/s/ Eric I Cohen Vice President, Secretary and Director May 22, 2001
----------------
Eric I Cohen
II-29
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
POWERSCREEN NORTH AMERICA INC.
By:/s/ Eric I Cohen
-----------------
Name: Eric I Cohen
Title: Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Ronald M. DeFeo President and Director May 22, 2001
------------------- (Principal Executive Officer)
Ronald M. DeFeo
/s/ Joseph F. Apuzzo Vice President-Finance May 22, 2001
-------------------- (Principal Financial Officer)
Joseph F. Apuzzo
/s/ Eric I Cohen Vice President, Secretary and Director May 22, 2001
----------------
Eric I Cohen
II-30
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
POWERSCREEN USA LLC
By: Powerscreen Holdings USA Inc.,
as Managing Member
By: /s/ Eric I Cohen
------------------
Name: Eric I Cohen
Title: Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons of the
Managing Member in the capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Ronald M. DeFeo President and Director May 22, 2001
------------------- (Principal Executive Officer)
Ronald M. DeFeo
/s/ Joseph F. Apuzzo Vice President-Finance May 22, 2001
-------------------- (Principal Financial Officer)
Joseph F. Apuzzo
/s/ Eric I Cohen Vice President, Secretary and Director May 22, 2001
----------------
Eric I Cohen
II-31
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
ROYER INDUSTRIES, INC.
By: /s/ Eric I Cohen
Name: Eric I Cohen
Title: Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Ronald M. DeFeo President and Director May 22, 2001
------------------- (Principal Executive Officer)
Ronald M. DeFeo
/s/ Joseph F. Apuzzo Vice President-Finance May 22, 2001
-------------------- (Principal Financial Officer)
Joseph F. Apuzzo
/s/ Eric I Cohen Vice President, Secretary and Director May 22, 2001
----------------
Eric I Cohen
II-32
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Westport, Connecticut,
on May 22, 2001.
TEREX BARTELL, INC.
By: /s/ Eric I Cohen
-----------------
Name: Eric I Cohen
Title: Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Ronald M. DeFeo and Eric I Cohen, or
either of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Ronald M. DeFeo President and Director May 22, 2001
------------------- (Principal Executive Officer)
Ronald M. DeFeo
/s/ Joseph F. Apuzzo Vice President-Finance May 22, 2001
-------------------- (Principal Financial Officer)
Joseph F. Apuzzo
/s/ Eric I Cohen Vice President, Secretary and Director May 22, 2001
----------------
Eric I Cohen
II-33