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2: EX-5 Opinion re: Legality -- ex_5-1 HTML 14K
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4: EX-10 Exhibit 10.2 Stock Purchase Agreement HTML 97K
5: EX-20 Exhibit 20.1 Prospectus Supplement 36 189K
Exhibit 20.1
PROSPECTUS SUPPLEMENT
(To Prospectus Dated January 9, 2002)
1,346,582 Shares
[TEREX LOGO]
Common Stock
$17.3045 per share
_________________
We are offering by this prospectus supplement an aggregate of 1,346,582
shares of our common stock, par value $.01 per share. Our common stock is listed
on the New York Stock Exchange under the symbol "TEX." The last reported sale
price of our common stock on the New York Stock Exchange on January 10, 2002 was
$17.60 per share.
The purchasers identified in the table set forth below under the caption
"Plan of Distribution" have agreed to purchase the number of shares of our
common stock set forth opposite their name pursuant to the Stock Purchase
Agreement Concerning the Acquisition of Terex Common Stock, dated as of November
26, 2001, among us, our wholly-owned subsidiary and the parties named therein.
The sale of our common stock to the purchasers will result in gross proceeds to
us of approximately $23,300,000, before deducting offering expenses payable by
us.
Investing in our common stock involves risks. See "Risk Factors" on page
S-4.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the prospectus to which it relates is truthful or
complete. Any representation to the contrary is a criminal offense.
The date of this prospectus supplement is January 14, 2002
You should rely only on the information contained in or incorporated by
reference in this prospectus supplement and the prospectus that is also part of
this document. We have not authorized anyone to provide you with different
information. We are not making an offer of these securities in any state where
the offer is not permitted. You should not assume that the information contained
in this prospectus supplement or the accompanying prospectus is accurate as of
any dates other than the date on the front of this prospectus supplement or the
accompanying prospectus.
______________________
TABLE OF CONTENTS
Prospectus Supplement
Page
----
FORWARD-LOOKING STATEMENTS...................................................S-1
PROSPECTUS SUPPLEMENT SUMMARY................................................S-2
RISK FACTORS.................................................................S-4
Risks Related to this Offering..........................................S-4
Risks Related to Our Business...........................................S-4
PRICE RANGE OF COMMON STOCK
AND DIVIDEND POLICY.....................................................S-6
USE OF PROCEEDS..............................................................S-7
CAPITALIZATION...............................................................S-7
DESCRIPTION OF COMMON STOCK..................................................S-8
PLAN OF DISTRIBUTION.........................................................S-8
CERTAIN UNITED STATES TAX CONSEQUENCES TO
NON-UNITED STATES HOLDERS...............................................S-9
LEGAL MATTERS...............................................................S-10
INFORMATION WE INCORPORATE BY REFERENCE.....................................S-10
Prospectus
Page
----
ABOUT THIS PROSPECTUS..........................................................2
ABOUT TEREX....................................................................2
RATIOS OF EARNINGS TO FIXED CHARGES............................................3
USE OF PROCEEDS................................................................3
DESCRIPTION OF DEBT SECURITIES.................................................3
DESCRIPTION OF CAPITAL STOCK..................................................14
DESCRIPTION OF WARRANTS.......................................................18
DESCRIPTION OF RIGHTS.........................................................20
DESCRIPTION OF PURCHASE CONTRACTS.............................................20
DESCRIPTION OF UNITS .........................................................20
PLAN OF DISTRIBUTION..........................................................21
LEGAL MATTERS.................................................................22
EXPERTS.......................................................................22
WHERE YOU CAN FIND MORE INFORMATION...........................................22
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE...............................22
-i-
FORWARD-LOOKING STATEMENTS
This prospectus supplement, the accompanying prospectus and the documents
incorporated by reference contain and refer to forward-looking statements that
involve risks and uncertainties. Generally, the words "may," "expects,"
"intends," "anticipates," "plans," "projects," "estimates" or similar words are
intended to identify forward-looking statements. However, the absence of these
words does not mean that the statement is not forward- looking. We have based
these forward-looking statements on our current expectations and projections
about future events. These statements are not guarantees of future performance.
It is possible that actual events and results will differ materially as future
events are difficult to predict. In addition, many of the risks, uncertainties
and assumptions about us are beyond our control. Some of these risks,
uncertainties and assumptions are:
o our business is highly cyclical and weak general economic conditions
in the second half of 2001 and the first half of 2002 may affect the
sales of our products and our financial results for 2001 and 2002;
o construction and mining activity are affected by interest rates and
government spending;
o our ability to successfully integrate new businesses may affect our
future performance;
o changes in our key management personnel;
o our businesses are in very competitive industries and may be affected
by pricing, product and other actions taken by our competitors;
o changes in laws and regulations;
o we manufacture and sell our products in many countries and we may be
affected by 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 ability to pay dividends may be limited by the terms of our
existing debt agreements and state law;
o we have a significant amount of debt and our debt agreements contain a
number of restrictive covenants; and
o we are subject to various environmental laws and regulations.
The forward-looking statements made or referred to in this prospectus
supplement, the accompanying prospectus and the documents incorporated by
reference reflect our expectations and projections at the time the statement was
made. We do not undertake any obligation to update publicly any forward-looking
statement which may result from changes in events, conditions, circumstances or
expectations on which we have based any forward- looking statement.
S-1
PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights information contained elsewhere in this prospectus
supplement and the accompanying prospectus. This summary is not complete and may
not contain all of the information that you should consider before investing in
our common stock. You should read the entire prospectus supplement and the
accompanying prospectus carefully, including the "Risk Factors" section and the
documents incorporated by reference, which are described under "Information We
Incorporate By Reference", carefully. References in this prospectus supplement
to "Terex," "we," "our," and "us" 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. Our
products are manufactured at 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.
We currently operate in three business segments: Terex Americas, Terex
Europe and Terex Mining. The focus of Terex Americas and Terex Europe is
geographic. Terex Americas includes the business units located in North and
South America, Australia and Asia, with the exception of those business units
included within Terex Mining. Terex Europe includes the business units located
in Europe, with the exception of those business units included within Terex
Mining. While our business is becoming increasingly global, the geographic
organization of these segments reflect our belief that our business is a local
one that can best be developed and served by focusing our operations
geographically, rather than by product, and by developing local relationships
among equipment users, distribution channels and the manufacturer.
The Terex Mining business segment includes the results of our mining
operations in Tulsa, Oklahoma, and in Germany and certain sales offices in
Australia, South America and Africa. The Terex Mining business is organized
under product lines and not geographic lines because of the worldwide scope of
the mining business. In the mining industry, manufacturers and customers are
located in various areas around the globe, with many customers operating
multiple sites in widely dispersed locations, with the result that local
geographic concerns are far less significant than a manufacturer's global range.
Our principal executive offices are located at 500 Post Road East,
Westport, Connecticut 06880, and our telephone number is (203) 222-7170.
Terex Americas and Terex Europe
The Terex Americas and Terex Europe segments manufacture and sell
telescopic mobile cranes (including rough terrain, truck and all terrain mobile
cranes), tower cranes (including self-erecting, hammerhead, flat top and luffing
jib tower cranes), lattice boom cranes, utility aerial devices (including digger
derricks and articulated aerial devices), telescopic material handlers
(including container stackers and rough terrain, telescopic boom material
handlers), truck-mounted cranes (boom trucks), aerial work platforms (including
scissor, articulated boom and straight telescoping aerial work platforms),
loader backhoes, articulated and rigid off-highway trucks, scrapers, crushing
and screening equipment, asphalt pavers, asphalt mixing plants, and related
components and replacement parts. In addition, the Terex Americas and Terex
Europe segments manufacture and sell various light construction equipment,
including mobile and portable floodlighting systems, concrete power trowels,
concrete placement systems, concrete finishing systems, concrete mixers,
generators, traffic control products, and related components and replacement
parts.
Terex Mining
The Terex Mining segment manufactures and sells large hydraulic excavators
and high capacity surface mining trucks, and related components and replacement
parts.
S-2
Recent Developments
During the third quarter of 2001, we announced that a number of our
production facilities would reduce staffing, 11 facilities would be closed and
that other additional non-recurring expenses would be incurred. The
restructuring program is designed to maximize factory utilization and to
leverage common purchasing, engineering and marketing operations in the Americas
and Europe. The plan is expected to be fully implemented by the end of the first
quarter of 2002.
On October 1, 2001, we acquired CMI Corporation, also known as CMI, a
manufacturer and marketer of a wide variety of mobile equipment and materials
processing equipment for the road building and heavy construction industry. In
connection with the acquisition of CMI, we issued approximately 3.6 million
shares of our common stock in exchange for all of the shares of CMI common
stock.
On November 26, 2001, we announced our plan to acquire Atlas Weyhausen,
also known as Atlas. On the same date we also announced that we entered into an
agreement to acquire The Schaeff Group, also known as Schaeff. Atlas is a German
manufacturer of wheeled excavators and truck mounted articulated cranes. Atlas
competes primarily in two product categories: wheeled excavators from 11 to 20
tons and truck mounted articulated cranes. Schaeff is a German manufacturer of
compact construction equipment and a full range of scrap material handlers.
Schaeff competes primarily in four product categories: mini-excavators ranging
from 1.5 to 5.5 tons, midi-excavators ranging from 6.5 to 11 tons, wheel loaders
ranging from 50 to 140 hp, and scrap material handlers ranging from 20 to 65
tons. The Atlas transaction closed on December 28, 2001. The Schaeff transaction
closed on January 14, 2002.
On December 10, 2001, we sold 5.75 million shares of our common stock in an
equity offering. The net proceeds of our equity offering of approximately $96.1
million were used to repay outstanding indebtedness under our revolving credit
facility and for general corporate purposes.
On December 17, 2001, we sold $200,000,000 aggregate principal amount of
our 9-1/4% senior subordinated notes due 2011 in a private debt offering. The
net proceeds of our debt offering of approximately $195 million were used to
repay outstanding term loan indebtedness under our bank credit facility.
S-3
RISK FACTORS
Investing in shares of our common stock can be risky. Before you invest in
shares of our common stock, you should carefully consider the following factors
and other information contained or incorporated in this prospectus supplement or
the accompanying prospectus.
Risks Related to this Offering
Our significant debt levels may limit our future ability to obtain additional
financing and to pursue business opportunities.
As of September 30, 2001, we had total debt of approximately $1,038
million, which represented approximately 70% of our total capitalization. On a
pro forma basis as of September 30, 2001, after giving effect to our debt
offering consummated on December 17, 2001, our equity offering consummated on
December 10, 2001, our intended use of proceeds from these offerings and our
acquisition of CMI Corporation on October 1, 2001, our total debt would have
been approximately $1,020 million, which would have represented approximately
63% of our total capitalization.
There are several important consequences of having debt, including the
following:
o a 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
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.
Our inability to comply with the restrictive debt covenants contained in our
existing debt agreements could lead to an acceleration of our debt under our
debt agreements and possibly bankruptcy.
Our 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.
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
S-4
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. General economic
conditions were down during 2001 as compared to 2000. We anticipate continuing
weak conditions in many of our end markets in the near-term, particularly during
the first half of 2002. We have taken a number of steps to reduce our fixed
costs and diversify our operations to decrease the negative impact of these
cycles. There can be no assurance however, that these steps will prevent the
negative impact of poor economic conditions.
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.
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
currently does not have an employment agreement with us. 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, British Pound
Sterling and 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.
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
S-5
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.
Restrictions on Dividends
Our ability to pay dividends on our common stock is limited under the terms
of our existing debt agreements. In addition, Delaware law generally restricts
us from paying dividends in circumstances where the payment would make our
liabilities exceed our assets or where the payment would make us unable to pay
our debts as they become due.
We do not plan on paying dividends on our common stock in the near term.
Instead, we intend to retain any earnings to repay indebtedness and to fund the
development and growth of our business. Any future payments of cash dividends
will depend on our financial condition, capital requirements and earnings, as
well as other factors that the Board of Directors may consider.
PRICE RANGE OF COMMON STOCK
AND DIVIDEND POLICY
Our common stock is listed on the New York Stock Exchange under the symbol
"TEX." The following table sets forth for the quarters indicated, the high and
low sales prices of our common stock as reported on the New York Stock Exchange
Composite Tape.
Price Range
---------------------
Low High
--- ----
2000
First Quarter.................................... $11.13 $28.88
Second Quarter................................... 12.38 17.25
Third Quarter.................................... 12.00 19.50
Fourth Quarter................................... 11.56 17.19
2001
First Quarter.................................... $14.44 $20.35
Second Quarter................................... 16.75 24.50
Third Quarter ................................... 15.35 22.94
Fourth Quarter .................................. 15.78 19.00
2002
First Quarter (through January 10, 2001)......... $17.25 $18.10
The last reported sale of our common stock on the New York Stock Exchange
Composite Tape on January 10, 2002 was $17.60 per share. As of January 9, 2002,
there were approximately 1,237 record holders of our common stock.
We did not declare or pay a cash dividend on our common stock in 2000, 2001
or to date in 2002, nor do we anticipate paying cash dividends on our common
stock in the foreseeable future. Certain of our debt agreements contain
restrictions as to the payment of cash dividends. In addition, payment of
dividends is limited by Delaware law. We intend generally to retain any earnings
to repay indebtedness and to fund the development and growth of our business.
Any future payments of cash dividends will depend on our financial condition,
capital requirements and earnings, as well as other factors that the Board of
Directors may consider.
S-6
USE OF PROCEEDS
The net proceeds from the sale of our common stock offered hereby will be
approximately $23,200,000. We will use these proceeds for general corporate
purposes, which may include acquisitions and prepayment of debt.
CAPITALIZATION
The following table shows our consolidated capitalization as of September
30, 2001, and as adjusted at that date as described in footnote (1) below. This
table should be read together with the historical consolidated financial
statements and related notes incorporated by reference in this prospectus
supplement and the accompanying prospectus.
As of September 30, 2001
(dollars in millions)
---------------------
As
Historical Adjusted(1)
---------- -----------
Cash and cash equivalents............................... $ 260.8 $ 260.8
Notes payable and current portion of long-term
debt..................... $ 28.9 $ 26.8
Long-term debt, less current portion.................... 1,009.2 992.8
Stockholders' equity:
Equity rights........................................ 0.7 0.7
Common stock, $0.01 par value-authorized
150 million shares; 28.0million shares issued,
37.4 million shares issued, as adjusted..... 0.3 0.4
Additional paid-in capital........................... 360.9 531.9
Retained earnings.................................... 198.3 196.3
Accumulated other comprehensive income (loss)........ (100.8) (100.8)
Less cost of shares of common stock in treasury
(1.1 million shares)............................... (17.5) (17.5)
Total stockholders' equity......................... 441.9 611.0
Total capitalization............................... $1,480.0 $1,630.6
______________________________
(1) Adjusted to reflect (i) the net proceeds of approximately $195 million from
the sale of our 9.25% notes in a debt offering consummated on December 17,
2001 and the intended use of the net proceeds therefrom to repay
outstanding debt, (ii) the net proceeds from the sale of 5.75 million
shares of our common stock in an equity offering consummated on December
10, 2001 and the intended use of the net proceeds therefrom to repay
outstanding debt and (iii) the issuance of approximately 3.6 million shares
of our common stock and the assumption of approximately $72.2 million of
debt in connection with the acquisition of CMI Corporation on October 1,
2001.
S-7
DESCRIPTION OF COMMON STOCK
Our restated certificate of incorporation authorizes us to issue up to
150,000,000 shares of our common stock. As of January 9, 2002 we had 36,370,201
shares of our common stock outstanding.
The following is a summary of the material terms of our common stock.
Because it is only a summary, it does not contain all the information that may
be important to you. Accordingly, you should read carefully the more detailed
provisions of our restated certificate of incorporation and amended and restated
bylaws.
Each outstanding share of our common stock entitles the holder to one vote,
either in person or by proxy, on all matters submitted to a vote of
stockholders, including the election of directors. There is no cumulative voting
in the election of directors, which means that the holders of a majority of the
outstanding shares of common stock can elect all of the directors then standing
for election. Subject to preferences which may be applicable to any outstanding
shares of preferred stock, holders of common stock have equal ratable rights to
any dividends that may be declared by the board of directors out of legally
available funds.
Holders of our common stock have no conversion, redemption or preemptive
rights to subscribe for any of our securities. All outstanding shares of our
common stock are fully paid and nonassessable. In the event of any liquidation,
dissolution or winding-up of our affairs, holders of our common stock will be
entitled to share ratably in our assets remaining after provision for payment of
liabilities to creditors and preferences applicable to outstanding shares of
preferred stock. The rights, preferences and privileges of holders of our common
stock are subject to the rights of the holders of any outstanding shares of
preferred stock.
Our restated certificate of incorporation provides that directors shall not
be personally liable to us or our stockholders for monetary damages for breach
of fiduciary duties as a director except to the extent otherwise required by
Delaware law. Our amended and restated bylaws provide for indemnification of our
officers and directors to the fullest extent permitted by Delaware law.
Our amended and restated bylaws provide that our stockholders must provide
prior notice for nominations for election to the board of directors or for
proposing matters which can be acted upon at stockholders meeting. This
provision could be considered an "anti-takeover" provision.
The transfer agent and registrar for our common stock is American Stock
Transfer & Trust Company.
PLAN OF DISTRIBUTION
The purchasers identified in the table set forth below have agreed to
purchase the number of shares of our common stock set forth opposite their name,
at a price of $17.3045 per share, pursuant to the Stock Purchase Agreement
Concerning the Acquisition of Terex Common Stock, dated as of November 26, 2001,
among us, our wholly-owned subsidiary and the parties named therein, also known
as the Stock Purchase Agreement.
Name Shares of Common Stock Aggregate Purchase Price
---- ---------------------- ------------------------
Hans Schaeff 224,430 $3,883,648.94
Karl Schaeff 224,431 3,883,666.24
Alexander Schaeff 224,431 3,883,666.24
Harald Schaeff 224,430 3,883,648.94
Annette Walser-Schaeff 224,430 3,883,648.94
Peter Schaeff 224,430 3,883,648.94
S-8
The purchasers have agreed, subject to certain exceptions described in the
Stock Purchase Agreement, that for a period of 36 months from the date of this
prospectus supplement, they will not offer, sell or otherwise dispose of the
shares of our common stock covered by this prospectus supplement. The purchasers
are not restricted from entering into hedging transactions or pledging or
lending such shares.
We have not used the services of an underwriter, placement agent or other
agent in connection with this placement.
CERTAIN UNITED STATES TAX CONSEQUENCES TO
NON-UNITED STATES HOLDERS
A general discussion of certain United States federal income and estate tax
consequences of the ownership and disposition of our common stock applicable to
Non-U.S. Holders (as defined) is set forth below. In general, a "Non-U.S.
Holder" is a person other than: (i) a citizen or resident (as defined for United
States Federal income or estate tax purposes, as the case may be) of the United
States; (ii) a corporation organized in or under the laws of the United States
or a 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 court within the United States is able to exercise primary
supervision over the administration of the trust and one or more U.S. trustees
has the authority to control all substantial decisions of the trust. The
discussion is based on current law and is provided for general information only.
The discussion set forth in this section does not address aspects of United
States Federal taxation other than income and estate taxation and does not
address all aspects of Federal income and estate taxation. The discussion does
not consider any specific facts or circumstances that may apply to a particular
Non-U.S. Holder and does not address all aspects of United States Federal income
tax law that may be relevant to Non-U.S. Holders that may be subject to special
treatment under such law (for example, insurance companies, tax- exempt
organizations, financial institutions or broker-dealers). Accordingly,
prospective investors are urged to consult their tax advisors regarding the
United States Federal, state, local and non-U.S. current and possible future
income and other tax consequences of holding and disposing of our common stock.
Dividends
In general, the gross amount of dividends paid to a Non-U.S. Holder will be
subject to United States withholding tax at a 30% rate (or any lower rate
prescribed by an applicable tax treaty) unless the dividends are effectively
connected with a trade or business carried on by the Non-U.S. Holder within the
United States. In determining the applicability of a tax treaty that provides
for a lower rate of withholding, a Non-U.S. Holder will be required to file
certain forms in order to claim the benefit of an applicable treaty rate.
Dividends effectively connected with a trade or business carried on by a Non-
U.S. Holder within the United States will generally not be subject to
withholding (if the Non-U.S. Holder properly complies with applicable
certification and disclosure requirements) and will generally be subject to
United States Federal income tax at applicable graduated Federal income tax
rates. Effectively connected dividends may be subject to different treatment
under an applicable tax treaty depending on whether such dividends are
attributable to a permanent establishment of the Non-U.S. Holder in the United
States. In addition, in the case of a Non-U.S. Holder which is a corporation,
effectively connected income may be subject to the branch profits tax (which is
generally imposed on a foreign corporation at a rate of 30% of the deemed
repatriation from the United States of "effectively connected earnings and
profits") except to the extent that an applicable tax treaty provides otherwise.
A Non-U.S. Holder eligible for a reduced rate of United States withholding tax
pursuant to an income tax treaty may obtain a refund of any excess amounts
withheld by filing an appropriate claim for refund with the Internal Revenue
Service, also known as the IRS.
Sale of Common Stock
Generally, a Non-U.S. Holder will not be subject to United States Federal
income tax on any gain realized upon the disposition of our common stock by him
unless: (i) we have been, are, or become a "U.S. real property holding
corporation" for Federal income tax purposes and certain other requirements are
met; (ii) the gain is effectively connected with a trade or business carried on
by the Non-U.S. Holder (or by a partnership, trust or estate in which the
Non-U.S. Holder is a partner or beneficiary) within the United States; or (iii)
our common stock is disposed of by an individual Non- U.S. Holder who holds our
common stock as a capital asset and is present in the United States for 183 days
or more in the taxable year of the disposition, and the gains are considered
derived from sources within the United States. We believe that we have not been,
are not currently and, based upon our current business plans, are not likely to
become a U.S. real property holding corporation.
S-9
A Non-U.S. Holder also may be subject to tax pursuant to the provisions of
United States tax law applicable to certain United States expatriates. Non-U.S.
Holders should consult applicable treaties, which may exempt from United States
taxation gains realized upon the disposition of our common stock in certain
cases.
Estate Tax
Our common stock owned or treated as owned by an individual Non-U.S. Holder
at the time of death will be includible in the individual's gross estate for
United States Federal estate tax purposes, unless an applicable treaty provides
otherwise, and may be subject to United States Federal estate tax.
Backup Withholding and Information Reporting
We must report annually to the IRS and to Non-U.S. Holders the amount of
dividends paid to, and the tax withheld with respect to, each Non-U.S. Holder.
These information reporting requirements apply regardless of whether withholding
was reduced by an applicable tax treaty or if withholding was not required
because the dividends were effectively connected with a trade or business in the
United States of the Non-U.S. Holder. Copies of these information returns also
may be made available under the provisions of a specific treaty or agreement to
the tax authorities in the country in which the Non-U.S. Holder resides or is
established. Under current law, United States backup withholding tax (which
generally is a withholding tax, presently imposed at the rate of 30.5% on
certain payments to persons that fail to furnish the information required under
the United States information reporting and backup withholding rules) generally
will apply to dividends paid on our common stock to a Non-U.S. Holder unless
applicable certification requirements are met.
The payment of the proceeds from the disposition of our common stock to or
through the United States office of a broker or a foreign office of a U.S.
broker will be subject to information reporting and backup withholding unless
the owner certifies its foreign status as described above or otherwise
establishes an exemption and the broker has no actual knowledge to the contrary.
The payment of the proceeds from the disposition of our common stock to or
through a foreign office of a broker will not be subject to backup withholding
and generally will not be subject to information reporting unless the broker is
a U.S. person or a non-U.S. person with certain enumerated connections with the
United States. Unless the broker has documentary evidence in its files that the
owner is a Non-U.S. Holder and certain conditions are met or the holder
otherwise establishes an exemption, information reporting and backup withholding
generally will apply to dispositions through (a) a non-United States office of a
United States broker and (b) a non-United States office of a non- United States
broker that is either a "controlled foreign corporation" for United States
Federal income tax purposes or a person 50% or more of whose gross income from
all sources for a three year testing period was effectively connected with a
United States trade or business.
Any amount withheld under the backup withholding rules from a payment to a
Non-U.S. Holder would be allowed as a credit against such Non-U.S. Holder's
United States Federal income tax and any amounts withheld in excess of such
Non-U.S. Holder's United States Federal income tax liability would be refunded,
provided that required information is furnished to the IRS.
THE FOREGOING DISCUSSION OF CERTAIN U.S. FEDERAL INCOME TAX AND ESTATE TAX
CONSIDERATIONS IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE.
ACCORDINGLY, EACH PROSPECTIVE NON-U.S. HOLDER OF SHARES OF OUR COMMON STOCK
SHOULD CONSULT HIS, HER OR ITS OWN TAX ADVISOR WITH RESPECT TO THE FEDERAL,
STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND
DISPOSITION OF OUR COMMON STOCK.
LEGAL MATTERS
Certain legal matters in connection with the shares of our common stock
offered hereby will be passed upon for us by Robinson Silverman Pearce Aronsohn
& Berman LLP, 1290 Avenue of the Americas, New York, New York 10104.
INFORMATION WE INCORPORATE BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" information that we file with them, which means that we can disclose
important information to you by referring you to those documents. The
S-10
information incorporated by reference is an important part of this prospectus
supplement and the accompanying prospectus. We incorporate by reference the
documents listed on page 22 of the accompanying prospectus.
S-11
PROSPECTUS
TEREX CORPORATION
Debt Securities
Preferred Stock
Common Stock
Warrants
Rights
Purchase Contracts
Units
_____________________________
We may offer from time to time the following types of securities:
o our debt securities, in one or more series, which may be senior debt
securities or subordinated debt securities, in each case consisting of
notes or other unsecured evidences of indebtedness;
o shares of our preferred stock;
o shares of our common stock;
o warrants to purchase any of the other securities that may be sold
under this prospectus;
o rights to purchase preferred stock or common stock;
o purchase contracts to acquire any of the other securities that may be
sold under this prospectus; and
o any combination of these securities, individually or as units.
The securities will have an aggregate initial offering price of up to
$300,000,000. The securities may be offered separately or together in any
combination and as separate series. We will provide specific terms of these
securities in supplements to this prospectus. You should read this prospectus
and any prospectus supplement, as well as the documents incorporated or deemed
to be incorporated by reference in this prospectus, carefully before you invest.
Our common stock is traded on the New York Stock Exchange under the symbol
"TEX." On January 7, 2002, the closing sale price of our common stock as
reported on the New York Stock Exchange was $17.87.
We will sell these securities directly, through agents, dealers or
underwriters as designated from time to time, or through a combination of these
methods. We reserve the sole right to accept, and together with our agents,
dealers and underwriters reserve the right to reject, in whole or in part, any
proposed purchase of securities to be made directly or through agents,
underwriters or dealers. If any agents, dealers or underwriters are involved in
the sale of any securities, the relevant prospectus supplement will set forth
any applicable commissions or discounts. Our net proceeds from the sale of
securities also will be set forth in the relevant prospectus supplement.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
This prospectus may not be used to consummate sales of securities unless
accompanied by the applicable prospectus supplement.
_____________________________
The date of this prospectus is January 9, 2002.
TABLE OF CONTENTS
Page
----
ABOUT THIS PROSPECTUS..........................................................2
ABOUT TEREX....................................................................2
RATIOS OF EARNINGS TO FIXED CHARGES............................................3
USE OF PROCEEDS................................................................3
DESCRIPTION OF DEBT SECURITIES.................................................3
DESCRIPTION OF CAPITAL STOCK..................................................14
DESCRIPTION OF WARRANTS.......................................................18
DESCRIPTION OF RIGHTS.........................................................20
DESCRIPTION OF PURCHASE CONTRACTS.............................................20
DESCRIPTION OF UNITS .........................................................20
PLAN OF DISTRIBUTION..........................................................21
LEGAL MATTERS.................................................................22
EXPERTS .....................................................................22
WHERE YOU CAN FIND MORE INFORMATION...........................................22
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE...............................22
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission, or SEC, using a "shelf" registration
process. Under the shelf process, we may, from time to time, offer up to
$300,000,000 aggregate public offering price of the debt securities, preferred
stock, common stock, warrants, rights, purchase contracts and units. In this
prospectus we will refer to the debt securities, preferred stock, common stock,
warrants, rights, purchase contracts and units collectively as the "securities."
This prospectus provides you with a general description of the securities that
we may offer. Each time that we sell securities, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering. The prospectus supplement also may add, update or change information
contained in this prospectus. You should read both this prospectus and any
prospectus supplement together with additional information described under the
heading "Where You Can Find More Information." We may only use this prospectus
to sell securities if it is accompanied by a prospectus supplement. We are only
offering these securities in states where the offer is permitted.
The registration statement that contains this prospectus, including the
exhibits to the registration statement, contains additional information about us
and the securities offered under this prospectus. That registration statement
can be read at the SEC's web site or at the SEC's offices referenced under the
heading "Where You Can Find More Information."
ABOUT TEREX
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 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.
We currently operate in three business segments: Terex Americas, Terex
Europe and Terex Mining. The focus of Terex Americas and Terex Europe is
geographic. Terex Americas includes the business units located in North and
South America, Australia and Asia, with the exception of those business units
included within Terex Mining. Terex Europe includes the business units located
in Europe, with the exception of those business units included within Terex
Mining. While our business is becoming increasingly global, the geographic
organization of these segments reflect our belief that our business is a local
one that can best be developed and served by focusing our operations
geographically, rather than by product, and by developing local relationships
among equipment users, distribution channels and the manufacturer.
2
The Terex Mining business segment includes the results of our mining
operations in Tulsa, Oklahoma, and in Germany and certain sales offices in
Australia, South America and Africa. The Terex Mining business is organized
under product lines and not geographic lines because of the worldwide scope of
the mining business. In the mining industry, manufacturers and customers are
located in various areas around the globe, with many customers operating
multiple sites in widely dispersed locations, with the result that local
geographic concerns are far less significant than a manufacturer's global range.
Our principal executive offices are located at 500 Post Road East,
Westport, Connecticut 06880, and our telephone number is (203) 222-7170.
Terex Americas and Terex Europe
The Terex Americas and Terex Europe segments manufacture and sell
telescopic mobile cranes (including rough terrain, truck and all terrain mobile
cranes), tower cranes (including self-erecting, hammerhead, flat top and luffing
jib tower cranes), lattice boom cranes, utility aerial devices (including digger
derricks and articulated aerial devices), telescopic material handlers
(including container stackers and rough terrain, telescopic boom material
handlers), truck-mounted cranes (boom trucks), aerial work platforms (including
scissor, articulated boom and straight telescoping aerial work platforms),
loader backhoes, articulated and rigid off-highway trucks, scrapers, crushing
and screening equipment, asphalt pavers, asphalt mixing plants, and related
components and replacement parts. In addition, the Terex Americas and Terex
Europe segments manufacture and sell various light construction equipment,
including mobile and portable floodlighting systems, concrete power trowels,
concrete placement systems, concrete finishing systems, concrete mixers,
generators, traffic control products, and related components and replacement
parts.
Terex Mining
The Terex Mining segment manufactures and sells large hydraulic excavators
and high capacity surface mining trucks, and related component and replacement
parts.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth our unaudited historical ratios of earnings
to fixed charges for the periods indicated below:
Nine Months
Ended
Year Ended December 31, September30,
----------------------------------------- -------------
1996 1997 1998 1999 2000 2000 2001
---- ---- ---- ---- ---- ---- ----
Ratio of
earnings to
fixed charges..... - 1.6x 2.4x 2.1x 2.5x 2.8x 1.3x
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 indebtedness issuance costs, and rental expense
representative of the interest factor. Earnings were insufficient to cover fixed
charges by $42.2 million during the year ended December 31, 1996.
USE OF PROCEEDS
Unless we state otherwise in the applicable prospectus supplement, we
expect to use the net proceeds from the sale of the securities for general
corporate purposes, including capital expenditures, working capital, repayment
or reduction of long-term and short-term debt and the financing of acquisitions
and other business combinations. We may invest funds that we do not immediately
require in short-term marketable securities.
DESCRIPTION OF DEBT SECURITIES
We may issue debt securities either separately, or together with, or upon
the conversion of or in exchange for, other securities. The debt securities may
be our unsecured and unsubordinated obligations or our subordinated obligations.
We use the term "senior debt securities" to refer to the unsecured and
unsubordinated obligations. We use the term
3
"subordinated debt securities" to refer to the subordinated obligations. The
subordinated debt securities of any series may be our senior subordinated
obligations, subordinated obligations, junior subordinated obligations or may
have such other ranking as is described in the relevant prospectus supplement.
We may issue any of these types of debt securities in one or more series.
Our senior debt securities may be issued from time to time under a senior
debt securities indenture with a trustee to be named in the senior debt
securities indenture. Our subordinated debt securities may be issued from time
to time under a subordinated debt securities indenture with a trustee to be
named in the subordinated debt securities indenture, which will describe the
specific terms of the debt securing series. We use the term "indenture" to refer
to the senior debt securities indenture or the subordinated debt securities
indenture. We use the term "indentures" to refer both the senior debt securities
indenture and the subordinated debt securities indenture. We use the term
"trustee" to refer to the trustee named in the senior debt securities indenture
or the subordinated debt securities indenture. We use the term "trustees" to
refer to both the trustee named in the senior debt securities indenture and the
subordinated debt securities indenture.
The following summary of selected provisions of the indentures and the debt
securities is not complete. Before making an investment in our debt securities,
you should review the applicable prospectus supplement and the form of
applicable indenture. That indenture will be filed with the Securities and
Exchange Commission in connection with the offering of the specific debt
securities.
Some of our operations are conducted through our subsidiaries. Accordingly,
our cash flow and our ability to service our debt, including the debt
securities, are dependent upon the earnings of our subsidiaries and the
distribution of those earnings to us, whether by dividends, loans or otherwise.
The payment of dividends and the making of loans and advances to us by our
subsidiaries may be subject to statutory or contractual restrictions, are
contingent upon the earnings of our subsidiaries and are subject to various
business considerations. Our right to receive assets of any of our subsidiaries
upon their liquidation or reorganization (and the consequent right of the
holders of the debt securities to participate in those assets) will be
effectively subordinated to the claims of that subsidiary's creditors (including
trade creditors), except to the extent that we are recognized as a creditor of
that subsidiary, in which case our claims would still be subordinate to any
security interests in the assets of the subsidiary and any indebtedness of the
subsidiary senior to that held by us.
General
We can issue an unlimited amount of debt securities under the indentures.
We can issue debt securities from time to time and in one or more series as
determined by us. In addition, we can issue debt securities of any series with
terms different from the terms of debt securities of any other series and the
terms of particular debt securities within any series may differ from each
other, all without the consent of the holders of previously issued series of
debt securities. The debt securities of each series will be our direct,
unsecured obligations.
The applicable prospectus supplement relating to the series of debt
securities will describe the specific terms of the debt securities being
offered, including, where applicable, the following:
o the title of the series of debt securities;
o whether the debt securities of the series will be senior debt
securities or subordinated debt securities;
o any limit on the aggregate principal amount of debt securities of the
series;
o the name of the trustee and its corporate trust office;
o whether the debt securities of the series are to be issuable in
registered or bearer form or both and whether the debt securities of
the series may be represented initially by a debt security in
temporary or permanent global form, and, if so, the initial depositary
with respect to such temporary or permanent global debt security and
the circumstances under which beneficial owners of interests in any
such temporary or permanent global debt security may exchange such
interests for debt securities of such series of like tenor and of any
authorized form and denomination and the authorized newspapers for
publication of notices to holders of bearer securities;
4
o any other terms required to establish a series of bearer securities,
including, but not limited to, tax compliance procedures;
o the price or prices at which the debt securities of the series will be
issued;
o the person to whom any interest will be payable on any debt securities
of the series, if other than the person in whose name the debt
security is registered at the close of business on the regular record
date for the payment of interest;
o the date or dates on which the principal of and premium, if any, on
the debt securities of the series is payable or the method or methods,
if any, used to determine those dates;
o the rate or rates at which the debt securities of the series will bear
interest or the method or methods, if any, used to calculate those
rate or rates;
o the date or dates, if any, from which interest on the debt securities
of the series will accrue, or the method or methods, if any, used to
determine those dates;
o the stated maturities of installments of interest, if any, on which
any interest on the debt securities of the series will be payable and
the regular record dates for any interest payable on any debt
securities of the series which are registered securities;
o the place or places where and the manner in which the principal of and
premium, if any, and interest, if any, on the debt securities of the
series will be payable and the place or places where the debt
securities of the series may be presented for transfer and, if
applicable, conversion or exchange and the place or places where
notices and demands in respect of the debt securities of the series
may be served on us;
o our right, if any, to redeem the debt securities, and the period or
periods within which, the price or prices at which and the terms and
conditions upon which, the debt securities of the series may be
redeemed, in whole or in part;
o our obligation, if any, to redeem or purchase the debt securities of
the series pursuant to any sinking fund or analogous provisions or at
the option of a holder of such debt securities, the conditions, if
any, giving rise to such obligation, and the period or periods within
which, the price or prices at which and the terms and conditions upon
which, the debt securities of the series shall be redeemed or
purchased, in whole or part, and any provisions for the remarketing of
such debt securities;
o the denominations in which any registered securities of the series are
to be issuable, if other than denominations of $1,000 and any integral
multiple thereof, and the denominations in which any bearer securities
of the series are to be issuable, if other than denominations of
$5,000 and $100,000;
o the currency or currencies, including composite currencies, of payment
of principal or premium, if any, and interest, if any, on the debt
securities of the series, if other than U.S. dollars, and, if other
than U.S. dollars, whether the debt securities of the series may be
satisfied and discharged other than as provided in the applicable
indenture;
o if the amount of payments of principal of, premium, if any, and
interest, if any, on the debt securities of the series is to be
determined by reference to an index, formula or other method, or based
on a coin or currency or currency unit other than that in which the
debt securities of the series are stated to be payable, the manner in
which these amounts are to be determined and the calculation agent, if
any, with respect thereto;
o if other than the principal amount thereof, the portion of the
principal amount of the debt securities of the series which will be
payable upon declaration or acceleration of the maturity thereof
pursuant to an event of default;
o if we agree to pay any additional amounts on any of the debt
securities, and coupons, if any, of the series to any holder in
respect of any tax, assessment or governmental charge withheld or
deducted, the circumstances and procedures under which we will make
these payments, and whether those additional amounts paid by us will
be treated as interest or principal pursuant to the applicable
indenture, and whether we will have the option to redeem these debt
securities rather than pay these additional amounts;
5
o whether the debt securities of the series are convertible or
exchangeable into other debt or equity securities, and, if so, the
terms and conditions upon which such conversion or exchange will be
effected, including the initial conversion or exchange price or rate
and any adjustments thereto, the conversion or exchange period and
other conversion or exchange provisions;
o whether the debt securities of the series are issuable upon the
conversion or exchange of other debt or equity securities, and, if so,
the terms and conditions upon which the issuance will be effected,
including the time, manner and place for the issuance;
o any terms applicable to debt securities of any series issued at an
issue price below their stated principal amount, including the issue
price thereof and the rate or rates at which the original issue
discount will accrue;
o whether the debt securities of the series are to be issued or
delivered (whether at the time of original issuance or at the time of
exchange of a temporary security of such series or otherwise), or any
installment of principal or any premium or interest is to be payable
only, upon receipt of certificates or other documents or satisfaction
of other conditions in addition to those specified in the applicable
indenture;
o whether the debt securities of the series, in whole or any specified
part, will not be defeasible pursuant to the applicable indenture and,
if other than by an officers' certificate, the manner in which any
election by us to defease the debt securities of the series will be
evidenced;
o any deletions from, modifications of or additions to the events of
default or our covenants with respect to the debt securities of the
series, whether or not these events of default or covenants are
consistent with the events of default or covenants set forth in this
prospectus and any change in the rights of the trustee or the
requisite holders of the debt securities of the series to declare the
principal amount of that series due and payable pursuant to the
applicable indenture;
o any special United States federal income tax considerations applicable
to the debt securities of the series; and
o any other terms of the debt securities of the series not inconsistent
with the provisions of the applicable indenture.
The prospectus supplement relating to any series of subordinated debt
securities being offered will also describe the subordination provisions
applicable to that series, if different from the subordination provisions
described in this prospectus. In addition, the prospectus supplement relating to
a series of subordinated debt will describe our rights, if any, to defer
payments of interest on the subordinated debt securities by extending the
interest payment period.
Debt securities may be issued as original issue discount securities to be
sold at a substantial discount below their principal amount. In the event of an
acceleration of the maturity of any original issue discount security, the amount
payable to the holder upon acceleration will be determined in the manner
described in the applicable prospectus supplement. Special United States federal
tax and other considerations applicable to original issue discount securities
will be described in the applicable prospectus supplement. In addition, special
United States federal tax considerations or other restrictions or terms
applicable to any debt securities to be issued in bearer form, offered
exclusively to non-United States holders or denominated in a currency other than
United States dollars will be set forth in the applicable prospectus supplement.
The above is not intended to be an exclusive list of the terms that may be
applicable to any debt securities and we are not limited in any respect in our
ability to issue debt securities with terms different from or in addition to
those described above or elsewhere in this prospectus, provided that the terms
are not inconsistent with the applicable indenture. Any applicable prospectus
supplement will also describe any special provisions for the payment of
additional amounts with respect to the debt securities.
Subordination Provisions Relating to Subordinated Debt
Except as otherwise described in the applicable prospectus supplement
relating to a series of subordinated debt securities, the subordinated debt
securities will be issued under the subordinated debt securities indenture and
will rank
6
subordinated and junior in right of payment, to the extent set forth in the
subordinated debt securities indenture, to all of our "senior indebtedness,"
which is defined below; if:
o we default in the payment of any principal of, or premium, if any, or
interest on any senior indebtedness when it becomes due and payable
after any applicable grace period, and the default is continuing;
o there is any other default in respect of our senior indebtedness which
has occurred and is continuing which would permit the senior
indebtedness to be accelerated;
o there is any judicial proceeding pending regarding any default in
respect of our senior indebtedness; and
o the subordinated debt securities of the series are accelerated;
then, unless and until (i) the event of default is cured or waived or ceases to
exist, (ii) any acceleration is rescinded or annulled, or (iii) any judicial
proceeding is terminated, we cannot make any payment on account of or acquire
the subordinated debt securities prior to the repayment in full of our
outstanding senior indebtedness. Nevertheless, holders of subordinated debt
securities may still receive and retain payments made:
o from a trust of the type described in "--Discharge and Defeasance"
below;
o in our capital stock; or
o in other securities which are payable no earlier than the final stated
maturity date of the subordinated debt securities of the series, have
terms no more restrictive than those of the subordinated debt
securities of the series and are subordinated in right of payment to
the senior indebtedness at least to the same extent as the
subordinated debt securities of the series.
If there is any insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up, assignment for the benefit of our
creditors, marshalling of our assets and liabilities, or other similar
proceeding, whether or not voluntary, relating to us, our creditors or our
assets, then all senior indebtedness must be paid in full or otherwise provided
for before any payment may be made to any holders of subordinated debt
securities other than payments made:
o from a trust of the type described in "--Discharge and Defeasance"
below;
o in our capital stock; or
o in other securities which are payable no earlier than the final stated
maturity date of the subordinated debt securities of the series, have
terms no more restrictive than those of the subordinated debt
securities of the series and are subordinated in right of payment to
the senior indebtedness at least to the same extent as the
subordinated debt securities of the series.
The subordinated debt securities indenture trustee and the holders of
subordinated debt securities must return and deliver any payments of cash,
property or securities received by them, other than any permitted payments
described above, to the trustee or other paying agent for application to the
payment of all senior indebtedness until all senior indebtedness is paid in
full.
Unless otherwise specified with respect to a series of subordinated debt
securities issued under the subordinated debt securities indenture, "senior
indebtedness" under the subordinated debt securities indenture means the
principal of, premium, if any, and interest on and any other amounts due on or
in connection with any of the following indebtedness, incurred, assumed or
guaranteed by us, whether or not outstanding on the date we issue any series of
subordinated debt securities (including renewals, extensions and refundings of
these obligations):
o our obligations for borrowed money;
o our obligations evidenced by bonds, debentures, notes or other similar
instruments;
o our capital lease obligations;
7
o all obligations of the type referred to above of other persons secured
by a lien on any of our assets, whether or not we have assumed those
obligations; and
o all obligations of the type referred to above of other persons for the
payment of which we are responsible or liable as obligor or guarantor.
However, senior indebtedness does not include:
o any indebtedness, including other series of debt securities issued
under the subordinated debt securities indenture, created or evidenced
by or outstanding pursuant to an instrument that expressly provides
that the indebtedness is subordinated to any other indebtedness of
ours, unless that indebtedness expressly provides that it will be
senior to the subordinated debt securities of the series;
o any indebtedness that by its terms states that it will not be senior
in right of payment to the subordinated debt securities of the series;
and
o any indebtedness of ours to any of our affiliates or subsidiaries.
The subordinated debt securities indenture does not limit the amount of
senior indebtedness that we may issue. We may issue senior subordinated debt
securities under the subordinated debt securities indenture.
Form, Exchange, Registration and Transfer
The debt securities of a series may be issued as registered securities, as
bearer securities (with or without coupons attached) or as both registered
securities and bearer securities. Debt securities of a series may be issuable in
whole or in part in the form of one or more global debt securities, as described
below under "--Global Debt Securities." Unless otherwise indicated in an
applicable prospectus supplement, registered securities will be issuable in
denominations of $1,000 and integral multiples thereof, and bearer securities
will be issuable in denominations of $5,000.
At the option of the holder, subject to the terms of the indentures and the
limitations applicable to global securities described in the applicable
prospectus supplement, the holder of the debt securities of any series can
exchange the debt securities for other debt securities in any authorized
denomination and of like tenor and aggregate principal amount.
Subject to the terms of the indentures and the limitations applicable to
global securities set forth in the applicable prospectus supplement, holders of
the debt securities of any series may present the debt securities for exchange
or for registration of transfer, duly endorsed or with the form of transfer
endorsed thereon duly executed if so required by us or the security registrar,
at the office of the security registrar or at the office of any transfer agent
designated by us for this purpose. Unless otherwise provided in the debt
securities of any series that the holder presents for transfer or exchange, we
will make no service charge for any registration of transfer or exchange, but we
may require payment of any taxes or other governmental charges.
In the event of any redemption of debt securities of any series, we will
not be required to:
o issue, register the transfer of or exchange debt securities of that
series during a period beginning at the opening of business 15 days
before any selection of debt securities of that series to be redeemed
and ending at the close of business on the day of mailing of the
relevant notice of redemption; or
o register the transfer of, or exchange any debt securities of the
series or portion thereof, called for redemption, except the
unredeemed portion of any being redeemed in part.
Covenants
Except as permitted under "-- Mergers and Sales of Assets" and as otherwise
specified in an applicable prospectus supplement, the indentures prohibit us
from entering into a reorganization, restructuring, merger or similar
8
transaction. All other covenants, if any, that will apply to a particular series
of debt securities will be set forth in the indenture relating to such series of
debt securities.
Payment and Paying Agents
Unless otherwise indicated in an applicable prospectus supplement, payment
of principal of, premium, if any, and interest, if any, on debt securities of
the series will be made at an office of the agency designated by us in
accordance with the applicable indenture, except that at our option, payment of
principal and premium, if any, or interest also may be made by check payable to
payee and mailed to the address of payee as it appears in the debt securities
registrar or by wire transfer to an account maintained by the payee. Unless
otherwise indicated in an applicable prospectus supplement, payment of any
installment of interest on debt securities of a series will be made to the
person in whose name the debt security is registered at the close of business on
the regular record date for the interest payment.
Global Debt Securities
The debt securities of a series may be issued in whole or in the form of
one or more fully registered global securities. A debt security in global form
will be deposited with, or on behalf of, a depositary, which will be identified
in an applicable prospectus supplement. Global debt securities are expected to
be deposited with the Depository Trust Company. A global debt security may be
issued in either registered or bearer form and in either temporary or permanent
form. Unless and until a debt security is exchanged in whole or in part for the
individual debt security represented thereby, a debt security in global form may
not be transferred except as a whole to the depositary for the debt security or
to a nominee or successor of the depositary. If any debt securities of a series
are issuable in global form, the applicable prospectus supplement will describe
the circumstances, if any, under which beneficial owners of interests in a
global debt security may exchange their interests for definitive debt securities
of that series of like tenor and principal amount in any authorized form and
denomination, the manner of payment of principal of, premium, if any, and
interest, if any, on the global debt securities and the specific terms of the
depositary arrangement with respect to any global debt security.
The specific terms of the depositary arrangement with respect to a series
of debt securities will be described in the prospectus supplement relating to
the series. We anticipate that the following provisions will generally apply to
depositary arrangements.
Upon the issuance of a global security, the depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the debt securities represented by such global security to the accounts of
institutions or persons, commonly known as participants, that have accounts with
the depositary or its nominee. The accounts to be credited will be designated by
the underwriters, dealers or agents. Ownership of beneficial interests in a
global security will be limited to participants or persons that may hold
interests through participants. Ownership of interests in such global security
will be shown on, and the transfer of those ownership interests will be effected
only through, records maintained by the depositary (with respect to
participants' interests) and such participants (with respect to the owners of
beneficial interests in such global security). The laws of some jurisdictions
may require that certain purchasers of securities take physical delivery of the
securities in definitive form. These limits and laws may impair the ability to
transfer beneficial interests in a global security.
So long as the depositary, or its nominee, is the registered holder and
owner of such global security, the depositary or such nominee, as the case may
be, will be considered the sole owner and holder for all purposes of the debt
securities and for all purposes under the applicable indenture. Except as set
forth below or as otherwise provided in the applicable prospectus supplement,
owners of beneficial interests in a global security will not be entitled to have
the debt securities represented by such global security registered in their
names, will not receive or be entitled to receive physical delivery of debt
securities in definitive form and will not be considered to be the owners or
holders of any debt securities under the applicable indenture or such global
security. Accordingly, each person owning a beneficial interest in a global
security must rely on the procedures of the depositary and, if such person is
not a participant, on the procedures of the participant through which such
person owns its interest, to exercise any rights of a holder of debt securities
under the applicable indenture of such global security. We understand that under
existing industry practice, in the event we request any action of holders of
debt securities or if an owner of a beneficial interest in a global security
desires to take any action that the depositary, as the holder of such global
security is entitled to take, the depositary would authorize the participants to
take such action, and that the participants would authorize beneficial owners
owning through such participants to take such actions or would otherwise act
upon the instructions of beneficial owners owning through them.
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Payments of principal of and premium, if any, and interest, if any, on debt
securities represented by a global security will be made to the depositary or
its nominee, as the case may be, as the registered owner and holder of such
global security, against surrender of the debt securities at the principal
corporate trust office of the trustee. Interest payments will be made at the
principal corporate trust office of the trustee or by a check mailed to the
holder at its registered address. Payment in any other manner will be specified
in the prospectus supplement.
We expect that the depositary, upon receipt of any payment of principal,
premium, if any, of interest, if any, in respect of a global security, will
credit immediately participants' accounts with payments in amounts proportionate
to their respective beneficial interests in the principal amount of such global
security as shown on the records of the depositary. We expect that payments by
participants to owners of beneficial interests in a global security 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 or registered in 'street name,' and will be the responsibility of
such participant. We are not responsible or liable (and neither is the trustee
or our agent) for any aspect of the records relating to, or payments made on
account of, beneficial ownership interests in a global security or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests or for any other aspect of the relationship between the
depositary and its participants or the relationship between such participants
and the owners of beneficial interests in such global security owning through
such participants.
Unless and until it is exchanged in whole or in part for debt securities in
definitive form, a global security may not be transferred except as a whole by
the depositary to a nominee of such depositary or by a nominee of such
depositary to such depositary or another nominee of such depositary.
Unless otherwise provided in the applicable prospectus supplement, debt
securities represented by a global security will be exchangeable for debt
securities in definitive form of like tenor as such global security in
denominations of $1,000 and in any greater amount that is an integral multiple
thereof if:
o the depositary notifies us and the trustee that it is unwilling or
unable to continue as depositary for such global security or if at any
time the depositary ceases to be a clearing agency registered under
the Exchange Act and a successor depositary is not appointed by us
within 90 days;
o we, in our sole discretion, determine not to have all of the debt
securities represented by a global security and notify the trustee
thereof; or
o there shall have occurred and be continuing an event of default or an
event which, with the giving of notice or lapse of time, or both,
would constitute an event of default with respect to the debt
securities.
Any debt security that is exchangeable pursuant to the preceding sentence is
exchangeable for debt securities registered in such names as the depositary
shall instruct the trustee. It is expected that such instructions may be based
upon directions received by the depositary from its participants with respect to
ownership of beneficial interests in such global security. Subject to the
foregoing, a global security is not exchangeable except for a global security or
global securities of the same aggregate denominations to be registered in the
name of the depositary or its nominee.
Mergers and Sales of Assets
Each indenture provides that we may not consolidate with or merge into any
other person or convey, transfer or lease our properties and assets
substantially as an entirety to another person, unless, among other things:
o we are the continuing corporation, or the resulting, surviving or
transferee person (if other than us) is a corporation, partnership or
trust organized and existing under the laws of the United States, any
state thereof, or the District of Columbia, and that person expressly
assumes all of our obligations under the applicable debt securities
and the applicable indenture;
o immediately after giving effect to the transaction, no event which is,
or after notice or passage of time or both would be, an event of
default (any such event, a "default") or event of default shall have
occurred or be continuing under the applicable indenture; and
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o we deliver to the trustee an officers' certificate and an opinion of
counsel to the effect that the consolidation, merger, conveyance,
transfer or lease, as the case may be, complies with the indenture and
that all conditions precedent provided in the indenture with respect
to the transaction have been satisfied.
Upon the assumption of our obligations by a person to whom the properties
or assets are conveyed or transferred, we will be discharged from all
obligations under the applicable debt securities and the applicable indenture,
except in the case of a lease of our properties and assets substantially as an
entirety.
Events of Default
Each indenture provides that if an event of default occurs and is
continuing with respect to a series of debt securities, the trustee or the
holders of not less than 25% in aggregate principal amount of the outstanding
debt securities of that series may declare the principal amount (or, if any of
the debt securities of that series are original issue discount securities, that
portion of the principal amount of the debt securities as may be specified by
the terms thereof) of the debt securities of that series to be immediately due
and payable. Under certain circumstances, the holders of a majority in aggregate
principal amount of the outstanding debt securities of the series may rescind
the declaration.
Under each indenture, unless otherwise specified with respect to a series
of debt securities, the following events will constitute an event of default
with respect to a series of debt securities:
o default in payment of the principal of any debt security of the series
or any required sinking fund payment;
o default in payment of any interest or other amounts on any debt
security of the series when due, continuing for 30 days;
o with respect to each series of debt securities, failure to perform any
other of our covenants applicable to that series, which failure
continues for 60 days after written notice to us by the trustee or to
us and the trustee by the holders of at least 25% in principal amount
of the outstanding debt securities of that series specifying such
failure, requiring it to be remedied and stating that such notice is a
"Notice of Default";
o specified events of bankruptcy or insolvency; and
o any other event of default applicable to a series of debt securities
as set forth in the applicable prospectus supplement.
The trustee will give notice to holders of the debt securities of any
continuing default known to the trustee within 90 days after the occurrence of
the default. However, the trustee may withhold notice of any default under the
debt securities of a series, other than a payment default, if it determines that
withholding the notice is in the interests of the holders.
The holders of a majority in principal amount of the outstanding debt
securities of any series may direct the time, method and place of conducting any
proceeding for any remedy available to the trustee or exercising any trust or
power conferred on the trustee with respect to the debt securities of that
series so long as the direction does not conflict with any law or the indenture
and subject to other limitations provided for in the applicable indenture.
Before proceeding to exercise any right or power under the indenture at the
direction of holders, the trustee will be entitled to receive from the holders
reasonable security or indemnity satisfactory to it against the costs, expenses
and liabilities which might be incurred by it in complying with the direction.
With respect to each series of debt securities, no holder will have any right to
pursue any remedy with respect to the applicable indenture or the debt
securities, unless:
o the holder has previously given the trustee written notice of a
continuing event of default with respect to the debt securities of
that series;
o the holders of at least 25% in aggregate principal amount of the
outstanding debt securities of the series have made a written request
to the trustee to pursue the remedy;
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o the holder or holders have offered to the trustee reasonable security
or indemnity satisfactory to the trustee;
o the holders of a majority in aggregate principal amount of the
outstanding debt securities of the series have not given the trustee a
direction inconsistent with the request within 60 days after receipt
of the request; and
o the trustee has failed to comply with the request within the 60-day
period.
Notwithstanding the foregoing, the right of any holder of any debt security
or coupon to receive payment of the principal of, premium, if any, and interest
in respect of a debt security or payment of the coupon on the date specified for
payment in the debt security or coupon representing the installment of interest
(the "stated maturity" or "stated maturities") or to institute suit for the
enforcement of payment may not be impaired or adversely affected without the
holder's consent. The holders of at least a majority in aggregate principal
amount of the outstanding debt securities of any series may waive an existing
default with respect to that series and its consequences, other than (i) any
default in any payment of the principal of, and premium, if any, or interest on,
any debt security of the series, or (ii) any default in respect of the covenants
or provisions in the applicable indenture which may not be modified without the
consent of the holder of each outstanding debt security of the series affected
as described in "-Modification and Waiver," below.
Each indenture provides for us to deliver to the trustee within 120 days
after the end of each of our fiscal years an officers' certificate stating
whether or not the signers know of any default that occurred during the last
fiscal year.
Modification and Waiver
The indentures permit us and the applicable trustee to execute a
supplemental indenture without the consent of the holders of the debt securities
or any related coupons:
o to evidence the succession of another corporation to us and the
assumption by it of our obligations under the applicable indenture and
the debt securities;
o to add to our covenants, agreements and obligations for the benefit of
the holders of all the debt securities of any series or to surrender
any right or power conferred in the applicable indenture upon us;
o to provide that bearer securities may be registrable as to principal,
to change or eliminate any restrictions (including restrictions
relating to payment in the United States) on the payment of principal
of and premium, if any, or interest, if any, on bearer securities, to
permit bearer securities to be issued in exchange for registered
securities, to permit bearer securities to be issued in exchange for
bearer securities of other authorized denominations or to permit the
issuance of debt securities in uncertificated form;
o to establish the form or terms of debt securities of any series or
coupons as permitted by the applicable indenture;
o to provide for the acceptance of appointment under the applicable
indenture of a successor trustee with respect to the debt securities
of one or more series and to add to or change any provisions of that
indenture as shall be necessary to provide for or facilitate the
administration of the trusts by more than one trustee;
o to cure any ambiguity, defect or inconsistency;
o to add to, change or eliminate any provisions (which addition, change
or elimination may apply to one or more series of debt securities),
provided that the addition, change or elimination neither (a) applies
to any debt security of any series that was created prior to the
execution of the supplemental indenture and is entitled to the benefit
of that provision nor (b) modifies the rights of the holder of any
such debt security with respect to that provision;
o to add events of default for the benefit of all or any series of debt
securities;
o to secure the debt securities; or
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o to make any other change that does not adversely affect the rights of
any holder of the debt securities.
Each indenture also permits us and the applicable trustee, with the consent
of the holders of not less than a majority in aggregate principal amount of the
outstanding debt securities of the series affected by the supplemental
indenture, to execute a supplemental indenture to add provisions to, or change
in any manner or eliminate any provisions of, the indenture with respect to that
series of debt securities or modify in any manner the rights of the holders of
the debt securities of that series and any related coupons under the applicable
indenture. However, the supplemental indenture will not, without the consent of
the holder of each outstanding debt security affected thereby:
o change the stated maturity of the principal of, or any installment of
principal or interest on, the debt securities or any premium payable
upon redemption thereof;
o reduce the amount of principal of any original issue discount
securities that would be due and payable upon declaration of
acceleration of maturity thereof;
o reduce the principal amount of, or premium, if any, or the rate of
interest on, the debt securities;
o change the place or currency of payment of principal and premium, if
any, or interest, if any, on the debt securities;
o impair the right to institute suit for the enforcement of any payment
on or with respect to the debt securities;
o reduce the percentage of the outstanding debt securities of any series
necessary to modify or amend the indenture;
o modify the foregoing requirements or reduce the percentage in
principal amount of outstanding debt securities of any series
necessary to waive any covenant or past default; or
o in the case of subordinated debt securities, amend or modify any of
the provisions of the applicable indenture relating to subordination
of the debt securities in any manner adverse to the holders of the
debt securities.
Holders of not less than a majority of the principal amount of the outstanding
debt securities of any series may waive certain past defaults and may waive
compliance by us with certain of the restrictive covenants described above with
respect to the debt securities of that series.
Discharge and Defeasance
Unless otherwise indicated in an applicable prospectus supplement, each
indenture provides that we may satisfy and discharge obligations thereunder with
respect to the debt securities of any series by delivering to the trustee for
cancellation all outstanding debt securities of the series or depositing with
the trustee, after the outstanding debt securities have become due and payable,
or will become due and payable within one year or will be called for redemption
within one year, cash sufficient to pay at stated maturity or redemption all of
the outstanding debt securities of the series and all other sums payable under
the indenture with respect to the series.
In addition, unless otherwise indicated in an applicable prospectus
supplement, each indenture provides that we may:
o be discharged from our obligations in respect of the debt securities
of a series ("defeasance and discharge"); or
o cease to comply with specified restrictive covenants ("covenant
defeasance"), including those described under "-Mergers and Sales of
Assets";
and the omission will not be an event of default with respect to the debt
securities of that series, in each case at any time prior to the stated maturity
or redemption thereof, if we irrevocably deposit with the trustee, in trust:
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o sufficient funds in the currency or currency unit in which the debt
securities are denominated to pay the principal of, premium, if any,
and interest to stated maturity or redemption on, the debt securities
of that series; or
o that amount of direct obligations of, or obligations of the principal
of, premium, if any, and interest on which are fully guaranteed by,
the government which issued the currency in which the debt securities
are denominated, and which are not subject to prepayment, redemption
or call, as will, together with the predetermined and certain income
to accrue thereon without consideration of any reinvestment thereof,
be sufficient to pay when due the principal of, premium, if any, and
interest to stated maturity or redemption on, the debt securities of
that series.
The defeasance and discharge and covenant defeasance described above are
effective only if, among other things, we deliver an opinion of counsel to the
effect that (i) we have met all of the conditions precedent to the defeasance
and the holders of the debt securities of the series will not recognize income,
gain or loss for United States federal income tax purposes as a result of the
defeasance, and will be subject to tax in the same manner as if no defeasance
had occurred and (ii) in the case of defeasance and discharge, the opinion as to
tax consequences is based upon an Internal Revenue Service ruling or a change in
applicable federal income tax law.
Upon the defeasance and discharge, the holders of the debt securities of
the series will no longer be entitled to the benefits of the applicable
indenture, except for the purposes of registration of transfer and exchange of
the debt securities of the series and replacement of lost, stolen or mutilated
debt securities and may look only to the deposited funds or obligations for
payment.
The Trustees under the Indentures
The trustees under the indentures, and/or one or more of their respective
affiliates, may be lenders under our credit agreements and may provide other
commercial banking, investment banking and other services to us and/or our
subsidiaries and affiliates. Each trustee will be permitted to engage in other
transactions with us and/or our subsidiaries and affiliates. However, if any
trustee acquires any conflicting interest, as defined in the Trust Indenture
Act, it must eliminate the conflict or resign.
The trustees will perform only those duties that are specifically set forth
in the indentures, unless an event of default occurs and is continuing. In case
an event of default occurs and is continuing, a trustee will exercise the same
degree of care and skill as a prudent individual would exercise in the conduct
of his or her own affairs.
Applicable Law
The debt securities and the indentures will be governed by and construed in
accordance with the laws of the State of New York, except to the extent that the
Trust Indenture Act is applicable.
Conversion or Exchange
If and to the extent indicated in the applicable prospectus supplement, the
debt securities of any series may be convertible or exchangeable into other
securities, the specific terms on which debt securities of any series may be so
converted or exchanged will be set forth in the applicable prospectus
supplement. These terms may include provisions for conversion or exchange,
either mandatory, at the option of the holder, or at our option, in which case
the number of shares of other securities to be received by the holders of debt
securities would be calculated as of a time and in the manner stated in the
applicable prospectus supplement.
DESCRIPTION OF CAPITAL STOCK
The following description of our common stock and preferred stock, together
with the additional information we include in any applicable prospectus
supplements, summarizes the material terms and provisions of the common stock
and preferred stock that we may offer under this prospectus. For the complete
terms of our common stock and preferred stock, please refer to our restated
certificate of incorporation and amended and restated bylaws that are
incorporated by reference into the registration statement which includes this
prospectus. The General Corporation Law of Delaware may also affect
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the terms of these securities. While the terms we have summarized below will
apply generally to any future common stock or preferred stock that we may offer,
we will describe the particular terms of any series of these securities in more
detail in the applicable prospectus supplement. If we indicate in a prospectus
supplement, the terms of any common stock or preferred stock we offer under that
prospectus supplement may differ from the terms we describe below.
Under our restated certificate of incorporation our authorized capital
stock consists of 150,000,000 shares of common stock, $0.01 par value per share,
and 50,000,000 shares of preferred stock, $0.01 par value per share. As of
December 10, 2001, we had 36,325,414 shares of common stock outstanding and no
shares of preferred stock outstanding. All outstanding shares of common stock
are duly authorized, validly issued, fully paid and nonassessable.
Common Stock
Each outstanding share of our common stock entitles the holder to one vote,
either in person or by proxy, on all matters submitted to a vote of
stockholders, including the election of directors. There is no cumulative voting
in the election of directors, which means that the holders of a majority of the
outstanding shares of common stock can elect all of the directors then standing
for election. Subject to preferences which may be applicable to any outstanding
shares of preferred stock, holders of common stock have equal ratable rights to
any dividends that may be declared by the board of directors out of legally
available funds.
Holders of common stock have no conversion, redemption or preemptive rights
to subscribe for any of our securities. All outstanding shares of common stock
are fully paid and nonassessable. In the event of any liquidation, dissolution
or winding-up of our affairs, holders of common stock will be entitled to share
ratably in our assets remaining after provision for payment of liabilities to
creditors and preferences applicable to outstanding shares of preferred stock.
The rights, preferences and privileges of holders of common stock are subject to
the rights of the holders of any outstanding shares of preferred stock.
Our restated certificate of incorporation provides that directors shall not
be personally liable to us or our stockholders for monetary damages for breach
of fiduciary duties as a director except to the extent otherwise required by
Delaware law. Our amended and restated bylaws provide for indemnification of our
officers and directors to the fullest extent permitted by Delaware law.
Our amended and restated bylaws provide that our stockholders must provide
prior notice for nominations for election to the board of directors or for
proposing matters which can be acted upon at a stockholders meeting. This
provision could be considered an "anti-takeover" provision.
The transfer agent and registrar for our common stock is American Stock
Transfer & Trust Company.
Preferred Stock
General
Our board of directors is authorized to issue shares of preferred stock
from time to time up to an aggregate of 50,000,000 shares of our preferred
stock, in one or more series or classes, and to fix for each series voting
powers and those preferences and relative participating, optional or other
special rights and those qualifications, limitations or restrictions as are
permitted by the Delaware General Corporation Law.
Our board of directors is authorized to determine the terms for each series
of preferred stock, and the prospectus supplement will describe the terms of any
series of preferred stock being offered, including:
o the designation of the shares and the number of shares that constitute
the series;
o the dividend rate (or the method of calculation thereof), if any, on
the shares of the series and the priority as to payment of dividends
with respect to other classes or series of our capital stock and the
payment date of dividends;
o the dividend periods (or the method of calculation thereof);
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o the date from which dividends on the preferred stock shall accumulate,
if applicable;
o the voting rights of the shares;
o the liquidation preference and the priority as to payment of the
liquidation preference with respect to other classes or series of our
capital stock and any other rights of the shares of the series upon
our liquidation or winding-up;
o whether the preferred stock will rank senior or junior to or on a
parity with any other class or series of preferred stock;
o whether or not and on what terms the shares of the series will be
subject to redemption or repurchase at our option;
o whether and on what terms the shares of the series will be convertible
into or exchangeable for other securities;
o the provision of a sinking fund, if any, for the preferred stock;
o whether the shares of the series of preferred stock will be listed on
a securities exchange;
o any special United States federal income tax considerations applicable
to the series; and
o the other rights and privileges and any qualifications, limitations or
restrictions of the rights or privileges of the series.
Dividends
Holders of shares of preferred stock shall be entitled to receive, when and
as declared by our board of directors out of our funds legally available
therefor, an annual cash dividend payable at the dates and at the rates, if any,
per share per annum as set forth in the applicable prospectus supplement.
Unless otherwise set forth in the applicable prospectus supplement, each
series of preferred stock will rank junior as to dividends to any preferred
stock that may be issued in the future that is expressly senior as to dividends
to that preferred stock. If we should fail at any time to pay accrued dividends
on any senior shares at the time the dividends are payable, we may not pay any
dividend on the junior preferred stock or redeem or otherwise repurchase shares
of junior preferred stock until the accumulated but unpaid dividends on the
senior shares have been paid or set aside for payment in full by us.
Unless otherwise set forth in the applicable prospectus supplement, no
dividends (other than in common stock or other capital stock ranking junior to
the preferred stock of any series as to dividends and upon liquidation) may be
declared or paid or set aside for payment, nor may any other distribution be
declared or made upon the common stock, or any of our other capital stock
ranking junior to or on a parity with the preferred stock of that series as to
dividends, nor may any common stock or any of our other capital stock ranking
junior to or on a parity with the preferred stock of that series as to dividends
be redeemed, purchased or otherwise acquired for any consideration (or any
moneys be paid to or made available for a sinking fund for the redemption of any
shares of any of that stock) by us (except by conversion into or exchange for
other capital stock of ours ranking junior to the preferred stock of that series
as to dividends) unless:
o if that series of preferred stock has a cumulative dividend, full
cumulative dividends on the preferred stock of that series have been
or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for all past dividend
periods and the then current dividend period; and
o if such series of preferred stock does not have a cumulative dividend,
full dividends on the preferred stock of such series have been or
contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for payment for the then
current dividend period.
However, any monies deposited in any sinking fund with respect to any
preferred stock in compliance with the provisions of the sinking fund may be
applied to the purchase or redemption of that preferred stock in accordance with
the terms of the sinking fund, regardless of whether at the time of the
application full dividends, including cumulative
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dividends, upon shares of the preferred stock outstanding on the last dividend
payment date have been paid or declared and set apart for payment. In addition,
any junior or parity preferred stock or common stock may be converted into or
exchanged for our stock ranking junior to the preferred stock as to dividends.
The amount of dividends payable for the initial dividend period or any
period shorter than a full dividend period shall be computed on the basis of a
360-day year of twelve 30-day months, unless otherwise set forth in the
applicable prospectus supplement. Accrued but unpaid dividends will not bear
interest, unless otherwise set forth in the applicable prospectus supplement.
Redemption
All shares of any series of preferred stock will be redeemable to the
extent set forth in the prospectus supplement relating to the series. All shares
of any series of preferred stock will be convertible into shares of common stock
or into shares of any other series of preferred stock to the extent set forth in
the applicable prospectus supplement.
Liquidation Rights
Unless otherwise set forth in the applicable prospectus supplement, in the
event of our liquidation, dissolution or winding up, the holders of shares of
each series of preferred stock are entitled to receive out of our assets
available for distribution to stockholders, before any distribution of assets is
made to holders of (i) any other shares of preferred stock ranking junior to
that series of preferred stock as to rights upon liquidation, dissolution or
winding up and (ii) shares of common stock, liquidating distributions per share
in the amount of the liquidation preference specified in the applicable
prospectus supplement for that series of preferred stock plus any dividends
accrued and accumulated but unpaid to the date of final distribution. However,
the holders of each series of preferred stock will not be entitled to receive
the liquidating distribution of, plus such dividends on, those shares until the
liquidation preference of any shares of our capital stock ranking senior to that
series of the preferred stock as to the rights upon liquidation, dissolution or
winding up shall have been paid (or a sum set aside therefor sufficient to
provide for payment) in full.
If upon our liquidation, dissolution or winding up, the amounts payable
with respect to the preferred stock, and any other preferred stock ranking as to
any distribution on a parity with the preferred stock are not paid in full, then
the holders of the preferred stock and the other parity preferred stock will
share ratably in any distribution of assets in proportion to the full respective
preferential amount to which they are entitled. Unless otherwise specified in a
prospectus supplement for a series of preferred stock, after payment of the full
amount of the liquidating distribution to which they are entitled, the holders
of shares of preferred stock will not be entitled to any further participation
in any distribution of our assets. Neither a consolidation or merger of us with
another corporation nor a sale of securities shall be considered a liquidation,
dissolution or winding up of us.
Voting Rights
The holders of each series or class of preferred stock we may issue will
have no voting rights, except as required by law and as described below or in
the applicable prospectus supplement. Our board of directors may, upon issuance
of a series or class of preferred stock, grant voting rights to the holders of
that series or class to elect additional board members if we fail to pay
dividends in a timely fashion.
Without the affirmative vote of a majority of the shares of any class of
preferred stock then outstanding, we may not:
o increase or decrease the aggregate number of authorized shares of that
class;
o increase or decrease the par value of the shares of that class; or
o alter or change the powers, preferences or special rights of the
shares of that class so as to affect them adversely.
17
If the amendment would adversely alter or change the powers, preferences or
special rights of one or more series of a class of preferred stock, but not the
entire class, then only the shares of the affected series will have the right to
vote on the amendment.
Miscellaneous
The holders of our preferred stock will have no preemptive rights. All
shares of preferred stock being offered by the applicable prospectus supplement
will be fully paid and not liable to further calls or assessment by us. If we
should redeem or otherwise reacquire shares of our preferred stock, then these
shares will resume the status of authorized and unissued shares of preferred
stock undesignated as to series, and will be available for subsequent issuance.
There are no restrictions on repurchase or redemption of the preferred stock
while there is any arrearage on sinking fund installments except as may be set
forth in an applicable prospectus supplement. Payment of dividends on any series
of preferred stock may be restricted by loan agreements, indentures and other
transactions entered into by us. Any material contractual restrictions on
dividend payments will be described or incorporated by reference in the
applicable prospectus supplement.
When we offer to sell a series of preferred stock, we will describe the
specific terms of the series in the applicable prospectus supplement. If any
particular terms of a series of preferred stock described in a prospectus
supplement differ from any of the terms described in this prospectus, then the
terms described in the applicable prospectus supplement will be deemed to
supersede the terms described in this prospectus.
No Other Rights
The shares of a series of preferred stock will not have any preferences,
voting powers or relative, participating, optional or other special rights
except as set forth above or in the applicable prospectus supplement, our
charter or the applicable certificate of designation or as otherwise required by
law.
Transfer Agent
The transfer agent and registrar for each series of preferred stock will be
designated in the applicable prospectus supplement.
DESCRIPTION OF WARRANTS
We may issue, either separately or together with other securities, warrants
for the purchase of any of the other types of securities that we may sell under
this prospectus.
The warrants will be issued under warrant agreements to be entered into
between us and a bank or trust company, as warrant agent, all to be set forth in
the applicable prospectus supplement relating to any or all warrants in respect
of which this prospectus is being delivered. Copies of the form of agreement for
each warrant, which we refer to collectively as "warrant agreements," including
the forms of certificates representing the warrants, which we refer to
collectively as "warrant certificates" and reflecting the provisions to be
included in such agreements that will be entered into with respect to the
particular offerings of each type of warrant, have been or will be filed as
exhibits to the registration statement of which this prospectus forms a part or
as exhibits to documents which have been or will be incorporated by reference in
this prospectus.
The following description sets forth certain general terms and provisions
of the warrants to which any prospectus supplement may relate. The particular
terms of the warrants to which any prospectus supplement may relate and the
extent, if any, to which the general provisions may apply to the warrants so
offered will be described in the applicable prospectus supplement. The following
summary of certain provisions of the warrants, warrant agreements and warrant
certificates does not purport to be complete and is subject to, and is qualified
in its entirety by express reference to, all the provisions of the warrant
agreements and warrant certificates, including the definitions therein of
certain terms.
General
The prospectus supplement shall set forth the terms of the warrants in
respect of which this prospectus is being delivered as well as the related
warrant agreement and warrant certificates, including the following, where
applicable:
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o the principal amount of, or the number of securities, as the case may be,
purchasable upon exercise of each warrant and the initial price at which the
principal amount or number of securities, as the case may be, may be purchased
upon such exercise;
o the designation and terms of the securities, if other than common stock,
purchasable upon exercise thereof and of any securities, if other than common
stock, with which the warrants are issued;
o the procedures and conditions relating to the exercise of the warrants;
o the date, if any, on and after which the warrants, and any securities
with which the warrants are issued, will be separately transferable;
o the offering price of the warrants, if any;
o the date on which the right to exercise the warrants will commence and
the date on which that right will expire;
o a discussion of any material United States federal income tax
considerations applicable to the exercise of the warrants;
o whether the warrants represented by the warrant certificates will be
issued in registered or bearer form, and, if registered, where they may be
transferred and registered;
o call provisions of the warrants, if any;
o antidilution provisions of the warrants, if any; and
o any other material terms of the warrants.
Exercise of Warrants
Each warrant will entitle the holder to purchase for cash that principal
amount of or number of securities, as the case may be, at the exercise price set
forth in, or to be determined as set forth in, the applicable prospectus
supplement relating to the warrants. Unless otherwise specified in the
applicable prospectus supplement, warrants may be exercised at the corporate
trust office of the warrant agent or any other office indicated in the
applicable prospectus supplement at any time up to 5:00 p.m. New York City time
on the expiration date set forth in the applicable prospectus supplement. After
5:00 p.m. New York City time on the expiration date, unexercised warrants will
become void. Upon receipt of payment and the warrant certificate properly
completed and duly executed, we will, as soon as practicable, issue the
securities purchasable upon exercise of the warrant. If less than all of the
warrants represented by the warrant certificate are exercised, a new warrant
certificate will be issued for the remaining amount of warrants.
No Rights of Security Holder Prior to Exercise
Prior to the exercise of their warrants, holders of warrants will not have
any of the rights of holders of the securities purchasable upon then exercise of
the warrants, and will not be entitled to:
o in the case of warrants to purchase debt securities, payments of
principal of, premium, if any, or interest, if any, on the debt securities
purchasable upon exercise; or
o in the case of warrants to purchase equity securities, the right to vote
or to receive dividend payments or similar distributions on the securities
purchasable upon exercise.
Exchange of Warrant Certificates
Warrant certificates will be exchangeable for new warrant certificates of
different denominations at the corporate trust office of the warrant agent or
any other office indicated in the applicable prospectus supplement.
19
DESCRIPTION OF RIGHTS
We may issue rights for the purchase of shares of preferred stock or common
stock. Each series of rights will be issued under a separate rights agreement
between us and a bank or trust company, all as set forth in the prospectus
supplement relating to the particular issue of rights. The bank or trust company
will act solely as our agent in connection with the certificates relating to the
rights and will not assume any obligation or relationship of agency or trust for
or with any holders of rights certificates or beneficial owners of rights. The
rights agreement and the rights certificates relating to each series of rights
have been or will be filed as exhibits to the registration statement of which
this prospectus forms a part or as exhibits to documents which have been or will
be incorporated by reference in this prospectus.
The applicable prospectus supplement will describe the terms of the rights
to be issued, including the following where applicable:
o the date for determining the stockholders entitled to the rights
distribution;
o the aggregate number of shares of preferred stock or common stock
purchasable upon exercise of such rights and the exercise price;
o the aggregate number of rights being issued;
o the date, if any, on and after which such rights may be transferable
separately;
o the date on which the right to exercise such rights shall commence and
the date on which such right shall expire;
o any special United States federal income tax consequences; and
o any other terms of such rights, including terms, procedures and
limitations relating to the distribution, exchange and exercise of
such rights.
DESCRIPTION OF PURCHASE CONTRACTS
We may issue, from time to time, purchase contracts, including contracts
obligating holders to purchase from us and us to sell to the holders, a
specified principal amount of debt securities or a specified number of shares of
common stock or preferred stock or any of the other securities that we may sell
under this prospectus at a future date or dates. The consideration payable upon
settlement of the purchase contracts may be fixed at the time the purchase
contracts are issued or may be determined by a specific reference to a formula
set forth in the purchase contracts. The purchase contracts may be issued
separately or as part of units consisting of a purchase contract and other
securities or obligations issued by us or third parties, including United States
treasury securities, securing the holders' obligations to purchase the relevant
securities under the purchase contracts. The purchase contracts may require us
to make periodic payments to the holders of the purchase contracts or units or
vice versa, and the payments may be unsecured or prefunded on some basis. The
purchase contracts may require holders to secure their obligations under the
purchase contracts.
The prospectus supplement will describe the terms of any purchase
contracts. The description in the prospectus supplement will not necessarily be
complete and will be qualified in its entirety by reference to the purchase
contracts, and, if applicable, collateral arrangements and depositary
arrangements, relating to the purchase contracts.
DESCRIPTION OF UNITS
We may, from time to time, issue units comprised of one or more of the
other securities that may be offered under this prospectus, in any combination.
Each unit will be issued so that the holder of the unit is also the holder of
each security included in the unit. Thus, the holder of a unit will have the
rights and obligations of a holder of each included security. The unit agreement
under which a unit is issued may provide that the securities included in the
unit may not be held or transferred separately at any time, or at any time
before a specified date.
Any applicable prospectus supplement will describe:
20
o the material terms of the units and of the securities comprising the
units, including whether and under what circumstances those securities
may be held or transferred separately;
o any material provisions relating to the issuance, payment, settlement,
transfer or exchange of the units or of the securities comprising the
units; and
o any material provisions of the governing unit agreement that differ
from those described above.
PLAN OF DISTRIBUTION
We may sell the debt securities, preferred stock, common stock, warrants,
rights, purchase contracts or units (together referred to as the "offered
securities") through underwriters or dealers, directly to one or more purchasers
or investors, through agents, or through a combination of these methods.
This prospectus or the applicable prospectus supplement will set forth the
terms of the offering of any offered securities, including:
o the name or names of any underwriters, dealers or agents;
o the price of the offered securities and the net proceeds to us from
such sale;
o any over-allotment options under which underwriters may purchase
additional securities from us;
o any underwriting commissions or other items constituting underwriters'
compensation;
o any initial public offering price; and
o any securities exchanges on which such securities may be listed.
If underwriters are used in the sale, the offered securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The offered securities may be offered to the public either through underwriting
syndicates represented by managing underwriters or directly by one or more
investment banking firms or others, as designated. Unless otherwise set forth in
the applicable prospectus supplement, the obligations of the underwriters or
agents to purchase the offered securities will be subject to certain conditions
precedent and the underwriters will be obligated to purchase all the offered
securities if any are purchased. Any initial public offering price and any
underwriting commissions or other items constituting underwriters' compensation
may be changed from time to time.
If a dealer is utilized in the sale of any offered securities, we will sell
those offered securities to the dealer, as principal. The dealer may then resell
the offered securities to the public at varying prices to be determined by the
dealer at the time of resale.
We may sell offered securities directly to one or more purchasers or
investors, or through agents at a fixed price or prices, which may be changed,
or at varying prices determined at time of sale. Unless otherwise indicated in
the prospectus supplement, any agent will be acting on a best efforts basis for
the period of its appointment.
If an applicable prospectus supplement indicates, we will authorize agents,
underwriters or dealers to solicit offers by certain specified institutions to
purchase offered securities from us at the public offering price set forth in
the prospectus supplement under delayed delivery contracts providing for payment
and delivery on a specified date in the future. These contracts will be subject
only to those conditions set forth in the prospectus supplement, and the
prospectus supplement will set forth the commission payable for solicitation of
the contracts.
Under agreements entered into with us, agents and underwriters who
participate in the distribution of the offered securities may be entitled to
indemnification by us against certain civil liabilities, including liabilities
under the Securities Act of 1933, as amended, or to contribution with respect to
payments which the agents or underwriters may be required to make. Agents and
underwriters may be customers of, engage in transactions with or perform
services for us in the ordinary course of business.
21
LEGAL MATTERS
The validity of the securities offered by this prospectus will be passed
upon by Robinson Silverman Pearce Aronsohn& Berman LLP, 1290 Avenue of the
Americas, New York, New York 10104.
EXPERTS
The consolidated financial statements of Terex Corporation and PPM Cranes,
Inc. as of December 31, 2000 and 1999 and for each of the three years in the
period ended December 31, 2000 incorporated in this prospectus by reference to
the Annual Report on Form 10-K of Terex Corporation for the year ended December
31, 2000 have been so incorporated in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We are a reporting company and file annual, quarterly and special reports,
proxy statements and other information with the Securities and Exchange
Commission, or the SEC. You may read and copy such material at the Public
Reference Room maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for more information on the
operation of the Public Reference Room. You can also find our SEC filings at the
SEC's web site at http://www.sec.gov. In addition, you may inspect our SEC
filings at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" information that we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings we will make with
the SEC under Section13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934:
1. Annual Report on Form 10-K for the year ended December 31, 2000;
2. Quarterly Report on Form 10-Q for the calendar quarter ended March 31,
2001;
3. Quarterly Report on Form 10-Q for the calendar quarter ended June 30,
2001;
4. Quarterly Report on Form 10-Q for the calendar quarter ended September
30, 2001;
5. The Company's Notice of Annual Meeting of Stockholders and Proxy
Statement dated April 2, 2001;
6. Current Report on Form 8-K dated March 14, 2001 and filed with the
Securities and Exchange Commission on March 15, 2001;
7. Current Report on Form 8-K dated March 22, 2001 and filed with the
Securities and Exchange Commission on March 23, 2001;
8. Current Report on Form 8-K dated June 27, 2001 and filed with the
Securities and Exchange Commission on June 28, 2001;
9. Current Report on Form 8-K dated October 1, 2001 and filed with the
Securities and Exchange Commission on October 2, 2001;
10. Current Report on Form 8-K dated December 5, 2001 and filed with the
Securities and Exchange Commission on December 6, 2001;
22
11. Current Report on Form 8-K dated December 10, 2001 and filed with the
Securities and Exchange Commission on December 11, 2001;
12. Current Report on Form 8-K dated December 19, 2001 and filed with the
Securities and Exchange Commission on December 19, 2001; and
13. The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A dated February 22, 1991, including
any amendment or report filed with the Commission for the purpose of
updating such description.
This prospectus is part of a registration statement we have filed with the
SEC relating to the securities. As permitted by SEC rules, this prospectus does
not contain all of the information included in the registration statement and
the accompanying exhibits and schedules we file with the SEC. You may refer to
the registration statement and the exhibits and schedules for more information
about us and our securities. The registration statement and exhibits and
schedules are also available at the SEC's Public Reference Room or through its
web site.
You may request a copy of these filings at no cost, by written request or
by telephone at the following address:
Terex Corporation
500 Post Road East
Westport, Connecticut 06880
(203) 222-7170
Attn: Secretary
You should rely only on the information contained or incorporated in this
prospectus or any supplement. We have not authorized anyone else to provide you
with different information. You should not rely on any other representations.
Our affairs may change after this prospectus or any supplement is distributed.
You should not assume that the information in this prospectus or any supplement
is accurate as of any date other than the date on the front of those documents.
You should read all information supplementing this prospectus.
23
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘8-K’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 1/15/02 |
| | 1/14/02 | | 1 | | 5 | | | 424B5 |
| | 1/10/02 | | 1 | | 8 | | | 424B3 |
| | 1/9/02 | | 1 | | 14 | | | SC 13G |
| | 1/7/02 | | 14 | | | | | S-4/A |
| For Period End: | | 12/28/01 | | 5 |
| | 12/19/01 | | 36 | | | | | 8-K |
| | 12/17/01 | | 5 | | 9 |
| | 12/11/01 | | 36 | | | | | 8-K |
| | 12/10/01 | | 5 | | 36 | | | 8-K, DEL AM, S-3 |
| | 12/6/01 | | 35 | | | | | 424B5, 8-K |
| | 12/5/01 | | 35 | | | | | 8-K |
| | 11/26/01 | | 1 | | 10 | | | 8-K |
| | 10/2/01 | | 35 | | | | | 8-K |
| | 10/1/01 | | 5 | | 35 |
| | 9/30/01 | | 6 | | 35 | | | 10-Q, 4 |
| | 6/30/01 | | 35 | | | | | 10-Q, 4 |
| | 6/28/01 | | 35 | | | | | 425, 8-K |
| | 6/27/01 | | 35 |
| | 4/2/01 | | 35 |
| | 3/31/01 | | 35 | | | | | 10-Q |
| | 3/23/01 | | 35 | | | | | 8-K |
| | 3/22/01 | | 35 | | | | | 10-K, 8-K |
| | 3/15/01 | | 35 | | | | | 8-K |
| | 3/14/01 | | 35 |
| | 1/10/01 | | 8 | | | | | 4 |
| | 12/31/00 | | 35 | | | | | 10-K, 11-K, 4, 5 |
| | 12/31/99 | | 35 | | | | | 10-K, 11-K, 5, 5/A |
| | 12/31/96 | | 16 | | | | | 10-K, 5 |
| List all Filings |
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