def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box: |
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o Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)) |
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þ Definitive Proxy Statement |
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o Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
Terra Industries Inc.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
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þ No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11. |
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1) Title of each class of securities to which transaction applies: |
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2) Aggregate number of securities to which transaction applies: |
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): |
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4) Proposed maximum aggregate value of transaction: |
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o Fee paid previously with preliminary materials. |
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o Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing. |
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1) Amount Previously Paid: |
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2) Form, Schedule or Registration Statement No.: |
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SEC 1913 (02-02) |
Persons who are to respond to the collection of information
contained in this form are not required to respond unless the form displays a currently valid
OMB control number. |
March 14, 2008
To Our
Stockholders:
We are pleased to invite you to attend the annual meeting of
stockholders of Terra Industries Inc. to be held at
9:00 a.m. on Tuesday, May 6, 2008, at the Omni
Berkshire Place, 21 East
52nd Street
at Madison Avenue, New York, New York 10022.
The accompanying notice of meeting and proxy statement describe
the matters to be considered and voted upon at the annual
meeting. In conjunction with the annual meeting, we will also
report on Terra and its business, and you will have an
opportunity to discuss matters of interest concerning Terra.
We hope all stockholders will be able to attend this meeting.
Please check the appropriate box on your proxy card if you plan
to attend.
It is important that you be represented whether or not you plan
to attend the annual meeting personally. Please promptly
complete, date and return your proxy card in the enclosed return
envelope to ensure that your vote will be received and counted.
In the alternative, you may submit your proxy by telephone or
via the Internet as described in more detail in the proxy
section entitled How to Vote.
On behalf of the board of directors and management, thank you
for your support during 2007. We look forward to seeing you at
the meeting.
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Michael L. Bennett
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Henry R. Slack
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President and Chief Executive Officer
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Chairman
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Notice of 2008
Annual Meeting of Stockholders
To the
Stockholders:
The annual meeting of the stockholders of Terra Industries Inc.
(Terra or the Company) will be held at
the Omni Berkshire Place, 21 East
52nd Street
at Madison Avenue, New York, New York 10022, on Tuesday,
May 6, 2008 at 9:00 a.m. in order to:
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a.
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elect three Class I directors to serve until the 2011
annual meeting of stockholders, and until their successors are
elected and qualified;
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b.
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consider and act upon a proposal to ratify the Audit
Committees selection of the firm of Deloitte &
Touche LLP as Terras independent accountants for
2008; and
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c.
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transact such other business as may properly come before the
annual meeting.
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Only stockholders of record of Terras common stock at the
close of business on February 22, 2008 are entitled to
notice of, and to vote at, the annual meeting.
John W. Huey
Vice President, General Counsel
and Corporate Secretary
March 14, 2008
Proxy
Statement
GENERAL
The annual meeting of the stockholders of Terra Industries Inc.
will be held at the Omni Berkshire Place, 21 East
52nd Street
at Madison Avenue, New York, New York 10022, on Tuesday,
May 6, 2008, at 9:00 a.m.
The mailing address of Terras principal executive offices
is Terra Centre, 600 Fourth Street, P.O. Box 6000,
Sioux City, Iowa
51102-6000.
This proxy statement and the accompanying proxy are first being
sent or given to stockholders on or about March 14, 2008.
Terras board of directors solicits the accompanying proxy.
The stockholder may revoke it at any time before it is voted at
the annual meeting by giving written notice to the Corporate
Secretary. This proxy, if properly executed, duly returned and
not revoked, will be voted for the election of directors, except
to the extent the stockholder directs otherwise. Such proxy will
also be voted on the other matters described in this proxy
statement, in accordance with the instructions in the proxy. The
board of directors is not aware at this date of any matter
proposed to be presented at the annual meeting other than the
election of directors and the ratification of the Audit
Committees selection of independent accountants. The
persons named in the accompanying proxy will have discretionary
authority to vote on any other matter that is properly presented
at the meeting, according to their best judgment. A
stockholders presence at the annual meeting does not of
itself revoke the proxy.
SECURITIES
ENTITLED
TO
VOTE
The only securities eligible to be voted at the annual meeting
are Terra common shares. Only holders of common shares at the
close of business on the record date, February 22, 2008,
are entitled to vote. Each common share represents one vote, and
all shares vote together as a single class. There were
90,768,279 common shares issued and outstanding on
February 22, 2008.
QUORUM;
VOTE
REQUIRED
The presence in person or by proxy of stockholders entitled to
cast a majority of all the votes entitled to be cast at the
meeting constitutes a quorum. Stockholders are entitled to one
(1) vote per share.
A majority of all the votes cast at a meeting at which a quorum
is present is sufficient to approve any matter which properly
comes before the meeting, except as otherwise provided by law or
by Terras charter, and except that a plurality of all the
votes cast at a meeting at which a quorum is present is
sufficient to elect a director.
In the election for directors, every stockholder has the right
to vote each share of stock owned by such stockholder on the
record date for as many persons as there are directors to be
elected. Cumulative voting is not permitted. To be elected, a
director-nominee must receive a plurality of the votes cast at
the meeting. Common shares of stockholders abstaining from
voting but otherwise present at the meeting in person or by
proxy (abstentions), votes withheld and broker
non-votes will not be counted as votes cast for such purpose and
therefore will have no effect on the results of the election.
The proposal to ratify the Audit Committees selection of
independent accountants must receive a majority of the votes
cast at the meeting. Abstentions and broker non-votes will not
be counted as votes cast for such purposes and therefore will
have no effect on the results of the vote.
1
HOW
TO
VOTE;
SUBMITTING
YOUR
PROXY;
REVOKING
YOUR
PROXY
You may vote your shares either by voting in person at the
annual meeting or by submitting a completed proxy. By submitting
your proxy, you are legally authorizing another person to vote
your shares. The enclosed proxy designates Henry R. Slack,
Michael L. Bennett and Daniel D. Greenwell to vote your shares
in accordance with the voting instructions you indicate in your
proxy.
If you submit your executed proxy designating
Messrs. Slack, Bennett and Greenwell as the individuals
authorized to vote your shares, but you do not indicate how your
shares are to be voted, then your shares will be voted by those
individuals in accordance with the Boards recommendations,
which are described in this proxy statement. In addition, if any
other matters are properly brought up at the annual meeting
(other than the proposals contained in this proxy statement),
then each of these individuals will have the authority to vote
your shares on those matters in accordance with his discretion
and judgment. The Board currently does not know of any matters
to be raised at the annual meeting other than the proposals
contained in this proxy statement.
You may submit your proxy either by mail, by telephone at
1-800-652-VOTE
(8683) within the United States, Canada and Puerto
Rico or 1-781-575-2300 outside the United States, Canada and
Puerto Rico any time on a touch-tone telephone (the numbers set
forth in the accompanying proxy materials) or via the Internet
at www.investorvote.com. Please let us know whether you plan to
attend the annual meeting by marking the appropriate box on your
proxy card or by following the instructions provided when you
submit your proxy by telephone or via the Internet. In order for
your proxy to be validly submitted and for your shares to be
voted in accordance with your proxy, we must receive your
mailed proxy by 5:00 p.m., Eastern Time, on May 5,
2008. If you submit your proxy by telephone or via the Internet,
then you may submit your voting instructions up until
12:00 a.m. Eastern Time, on May 6, 2008.
Your proxy is revocable. After you have submitted your proxy,
you may revoke it by mail before the annual meeting by sending a
written notice to Terras Vice President, General Counsel
and Corporate Secretary at 600 Fourth Street,
P.O. Box 6000, Sioux City, IA
51102-6000.
If you wish to revoke your submitted proxy card and submit new
voting instructions by mail, then you must sign, date and mail a
new proxy card with your new voting instructions, which we must
receive by 5:00 p.m., Eastern Time, on May 5, 2008. If
you submitted your proxy by telephone or via the Internet, you
may revoke your submitted proxy
and/or
submit new voting instructions by that same method, which must
be received by 12:00 a.m. Eastern Time, on May 6,
2008. You also may revoke your proxy in person and vote your
shares at the annual meeting. Attending the annual meeting
without taking one of the actions above will not revoke your
proxy.
Your vote is very important to the Company. If you do not plan
to attend the annual meeting, we encourage you to read the
enclosed proxy statement and submit your completed proxy card
prior to the annual meeting in accordance with the above
instructions so that your shares will be represented and voted
in accordance with your instructions.
If your shares are not registered in your name but in the
street name of a bank, broker or other holder of
record (a nominee), then your name will not appear
in the Companys register of stockholders. Those shares are
held in your nominees name, on your behalf, and your
nominee will be entitled to vote your shares. In order for you
to attend the annual meeting, you must bring a letter or account
statement showing that you beneficially own the shares held by
the nominee. Note that even if you attend the annual meeting,
you cannot vote the shares that are held by your nominee unless
you have a proxy from your nominee. Rather, you should submit
your proxy, which will instruct your nominee how to vote those
shares on your behalf.
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IMPORTANT
NOTICE
REGARDING
THE
AVAILABILITY
OF
PROXY
MATERIALS
FOR THE
STOCKHOLDER
MEETING
TO BE
HELD
ON
TUESDAY,
MAY
6,
2008
The proxy statement and the 2007 annual report to stockholders
are available on the Companys Web site at
http://www.terraindustries.com/investor_info/tra/pubs_sec/intro.htm.
Information on how to obtain directions to be able to attend the
meeting and vote in person are available by contacting Kim
Mathers, Communications Manager, at
(712) 233-6411.
or
You may write to us at:
Terra Industries Inc.
Investor Relations
600 Fourth Street
P.O. Box 6000
Sioux City, IA
51102-6000
The Company makes available, free of charge on our Web site, the
Proxy Statement, Annual Report on
Form 10-K,
Quarterly Reports on
Form 10-Q,
Current Reports on
Form 8-K
and amendments to these reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Exchange Act, as soon as
reasonably practicable after these documents are electronically
filed with, or furnished to, the SEC. These documents are posted
on the Web site at www.terraindustries.com. Select the
Investor Information link and then the
Pubs/SEC Filings link.
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Proposal 1:
Election of Directors
ELECTION
OF
DIRECTORS
The board of directors is divided into three classes, and
directors in each class serve staggered, three-year terms. The
term of office of the three directors assigned to Class I
expires at this meeting, and such three directors are nominated
for re-election at this annual meeting to serve three-year terms
until the annual meeting in 2011 and until their successors are
elected and qualify. As provided by Maryland law, the terms of
office of the three directors assigned to Class II continue
until the annual meeting in 2009, and the terms of office of the
two directors assigned to Class III continue until the
annual meeting in 2010, and in each case until their successors
are elected and qualify. The directors in each class are set
forth below.
To be elected, a nominee must receive a plurality of the votes
cast at the meeting. Unless otherwise indicated, proxies in the
accompanying form will be voted for the nominees named below or
for any successor nominee designated by the Board. Such a
successor nominee would be designated only in the unlikely event
that a nominee named below becomes unable or unwilling to serve
as a director before the election.
All of the nominees named below are incumbent directors. Set
forth below opposite the name and age of each nominee for
Class I director, and for the Class II and
Class III directors whose terms are continuing, are his or
her present positions and offices with Terra, his or her
principal occupations during the past five years, the year in
which he or she was first elected a director, and the other
boards of directors of companies subject to reporting
requirements of the U.S. federal securities laws on which
they currently serve.
4
NOMINEES
FOR
ELECTION
AS
CLASS
I DIRECTOR
Terms Expiring at
Annual Meeting in 2008
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Present Positions
and Offices with Terra, Principal Occupation
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Year First
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Name
and Age
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During
the Past Five Years and Other Public Company Boards
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Elected
Director
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Peter S. Janson (60)
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Corporate Director. Mr. Janson retired from AMEC Inc. (an
engineering and environmental services firm) in 2002; served as
Chairman & Chief Executive Officer of AMEC Inc. and
director of AMEC plc from 2000 to 2002; and President and Chief
Executive Officer of Agra Inc. (an engineering and environmental
services firm which was sold to AMEC in 2000) from 1999 to 2000.
Mr. Janson also serves as a director of TK Corporation, serving
on the Audit and Compensation Committees, and as a director of
Tembec Industries, Inc., serving on the Corporate Governance and
HR Committee, and as Chairman of both the Environment, Health
and Safety Committee as well as the Committee for Strategic
Purposes.
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2005
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Michael L. Bennett (54)
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Mr. Bennett, who has been employed by the company for
34 years, has served as President and Chief Executive
Officer of Terra since April 2001; and Executive Vice President
and Chief Operating Officer from February 1997 to April 2001.
Mr. Bennett has served as a Director of Alliant Energy Resources
since 2003, is a member of its Capital Approval, Compensation
and Personnel, and Executive Committees, and is Chairman of the
Nominating and Governance Committee and the Lead Independent
Director.
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2001
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James R. Kroner (46)
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Private Investor. Mr. Kroner served as Chief Financial Officer
and Chief Investment Officer for Endurance Specialty Holdings
Ltd., from December 2001 to December 2005; and Managing Director
of Fox Paine & Company from January 2000 to December 2001.
Mr. Kroner also serves as a director of United America
Indemnity, Ltd., and is a member of the Audit Committee.
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2006
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CLASS
II
DIRECTORS
CONTINUING
IN
OFFICE
Terms Expiring at
Annual Meeting in 2009
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Present Positions
and Offices with Terra, Principal Occupation
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Year First
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Name
and Age
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During
the Past Five Years and Other Public Company Boards
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Elected
Director
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Martha O. Hesse (65)
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Private Investor. Ms. Hesse was President and Chief Executive
Officer of Hesse Gas Company (an energy investment company) from
1990 to 2003. She served as Chairman of the U.S. Federal Energy
Regulatory Commission from 1986 to 1989, and previously served
as assistant secretary for Management and Administration for the
U.S. Department of Energy as well as Senior Vice President of
First Chicago Corporation. Ms. Hesse serves as Chairman of the
boards of Enbridge Energy Company, Inc., Enbridge Energy
Partners, Enbridge Energy Management and is a member of the
Audit, and Finance and Risk Committees of each.
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2001
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Henry R. Slack (58)
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Mr. Slack has served as Chairman of the Terra Board of Directors
since April 2001. He also serves as a director of E. Oppenheimer
and Son International Limited; has served as Chairman of First
Africa Group since 2006; and was Chairman of Task (USA) Inc. (a
private investment firm) from September 1999 to June 2002.
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1983
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Dennis McGlone (58)
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Private Investor. Mr. McGlone served as President, Chief
Executive Officer and Director of Copperweld Corp. from February
2004 to October 2005; President, Chief Operating Officer, and
Director of Copperweld from October 2002 to February 2004; and
Vice President Copperweld from July 2001 to October 2002. He
served as Vice President, Corporate Officer of Armco Inc./AK
Steel, from 1996 to March 2001.
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2006
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CLASS
III
DIRECTORS
CONTINUING
IN
OFFICE
Terms Expiring at
Annual Meeting in 2010
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Present Positions
and Offices with Terra, Principal Occupation
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Year First
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Name
and Age
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During
the Past Five Years and Other Public Company Boards
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Elected
Director
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David E. Fisher (65)
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Private Investor. Mr. Fisher also serves as a director of Falcon
Oil & Gas Ltd. and is Chairman of its Audit Committee and
member of its Compensation Committee.
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1993
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Dod A. Fraser (57)
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Mr. Fraser is President of Sackett Partners Incorporated.
Previously, Mr. Fraser was an investment banker: a General
Partner of Lazard Frères & Co. and most recently a
Managing Director and Group Executive of Chase Manhattan Bank,
now JP Morgan Chase, where he led the global oil and gas group.
Mr. Fraser also serves as a board member of Smith International,
Inc., an oilfield service company, and Forest Oil Corporation,
an independent oil and gas company. He serves as Chairman of the
Audit Committees of both Smith and Forest Oil.
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2003
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The board of directors recommends that you vote FOR the
election of each of the above-named director-nominees for
Class I director.
6
Corporate
Governance
GENERAL
Terra strives to uphold the highest standards of ethical
conduct, to follow corporate governance best practices, to
report accurately and transparently, and to fully comply with
the laws, rules and regulations that govern Terras
business.
Terras board of directors currently consists of eight
members. In accordance with its Corporate Governance Guidelines,
Terras Board has affirmatively determined that David E.
Fisher, Dod A. Fraser, Martha O. Hesse, Peter S. Janson, James
R. Kroner, Dennis McGlone and Henry R. Slack each meet the
criteria for independence required by the New York Stock
Exchange (NYSE) listing standards. The Boards
independence determination was based on information provided by
our directors and discussions among our officers and directors.
The Board considered transactions, relationships and
arrangements with each of the directors and director nominees
and concluded that none of the non-employee directors was
involved in any transactions, relationships or arrangements not
otherwise disclosed that would impair his or her independence.
Mr. Bennett did not meet the independence standards because
he is an employee of Terra. The Nominating and Corporate
Governance Committee reviews and designates director-nominees in
accordance with the policies and principles of its charter and
the Corporate Governance Guidelines.
Terra has structured its board of directors to provide separate
positions for a non-executive chairman of the board and a chief
executive officer. The Board plans to maintain these
responsibilities as separate positions.
During 2007, in accordance with the Corporate Governance
Guidelines, non-management directors met at regularly scheduled
executive sessions of the Board without management and the
independent directors met in executive session. The chairman of
the board, Henry R. Slack, presided at all executive sessions of
the Board, which are held at each of our Board meetings.
The Board currently has three committeesAudit,
Compensation, and Nominating and Corporate Governance. A
description of each committee and its function appears in the
Board of Directors and Committees section of this
proxy statement under the heading Board Committees.
The Audit, Compensation, and Nominating and Corporate Governance
Committees are each composed solely of independent directors as
required by the NYSE listing standards. Each committee has its
own charter setting forth the qualifications for membership and
the committees purposes, goals and responsibilities. Each
of these committees has the power to hire independent legal,
financial or other advisors it deems necessary, without
consulting or obtaining the advance approval of any Terra
officer.
The Board has also adopted a Code of Ethics and Standards of
Business Conduct, which outlines the principles, policies and
laws that govern Terras activities and which serve as a
tool for professional conduct in the workplace. The Code of
Ethics and Standards of Business Conduct applies to Terras
principal executive officer and principal financial officer and
also includes all other officers, directors and employees.
It is the Boards practice to encourage all board members
to attend the Companys annual stockholders meeting,
although no written policy has been adopted in that regard. All
board members attended the Companys 2007 stockholder
meeting held May 8, 2007, in New York, New York.
Current versions of Terras Corporate Governance
Guidelines, Code of Ethics and Standards of Business Conduct and
committee charters can be found in the Investor
Information and Charters/Guidelines sections
of Terras website at www.terraindustries.com, and are
available in print, free of charge, to any stockholder upon
request.
7
COMMUNICATION
Interested parties who wish to report questionable practices by
Terra employees may do so by calling Terras toll free,
anonymous hotline at 1-866-551-8010 (in the U.S. and
Canada) or at
011-44-866-551-8010
(in the U.K.). Interested parties who wish to communicate any
message or voice a complaint to the Board, any of its committees
or the non-management directors should address their
communications to: Henry R. Slack, Chairman of the Board; Terra
Industries Inc.; 600 Fourth Street; Sioux City, Iowa 51101. Such
communications can also be made by calling
712-277-1340
or by e-mail
at boardethics@terraindustries.com.
8
Board of
Directors and Committees
BOARD
COMMITTEES
Audit
Committee. The
Audit Committee met five times in 2007 and is currently composed
of Mr. Fisher (Chairman), Ms. Hesse, Mr. Janson
and Mr. Kroner. The committee is composed entirely of
non-employee directors, each of whom meets the
independence requirements of the NYSE listing
standards. In accordance with Terras Audit Committee
charter, all members of the committee are financially literate
and the board of directors has determined that Mr. Fisher
meets the requirements to be named audit committee
financial expert as the term has been defined by the
Securities and Exchange Commission (SEC). The Audit
Committee Charter is available on Terras Web site as set
out in the Corporate Governance section above.
The Audit Committee reviews Terras procedures for
reporting financial information to the public. The Audit
Committee also reviews Terras internal audits, reports and
related recommendations. Its members are directly responsible
for Terras independent auditor and have the sole authority
to appoint or replace the independent auditor. The committee
reviews the scope of the annual audit. The committee also
reviews related reports and recommendations and preapproves any
non-audit services provided by such firm. In addition, the
committee maintains, through regularly scheduled meetings, open
lines of communication between the board of directors and
Terras financial management, internal auditors and
independent auditor. See the Audit Committee Report
below.
Compensation
Committee. The
Compensation Committee met five times in 2007 and is currently
composed of Messrs. Fraser (Chairman), Fisher, Janson and
McGlone. Each of the members of the committee meets the
independence requirements of the NYSE listing
standards. The committees functions include establishing
the compensation to be paid to Terras executive officers.
The committee also administers certain employee benefit plans,
establishes and, in consultation with management, administers
compensation guidelines and personnel policies. See the report
on Executive Compensation below. The Compensation
Committee charter is available on Terras Web site as set
out in the Corporate Governance section above.
Nominating
and Corporate Governance
Committee. The
Nominating and Corporate Governance Committee met two times in
2007. It is currently composed of Ms. Hesse (Chairman),
Mr. Fraser and Mr. Slack. Each of the members of the
committee meets the independence requirements of the
NYSE listing standards. The committees functions include
helping the Board fulfill its responsibilities to stockholders
by shaping the Companys corporate governance and enhancing
the quality and independence of the Board nominees. In addition,
the committee identifies and reviews qualifications of potential
Terra director candidates, to include those recommended by
stockholders, and makes recommendations to the Board for
nomination or election. Nominees for director are selected on
the basis of broad experience, wisdom, integrity, ability to
make independent analytical inquiries, understanding of
Terras business environment, and willingness to devote
adequate time and energy to board duties. The Board considers
directors of diverse backgrounds, in terms of both the
individuals involved and their various experiences and areas of
expertise. Each board member must ensure that future commitments
(including commitments to serve on boards of other companies) do
not materially interfere with the members service as a
Terra director. The Nominating and Corporate Governance
Committee charter is available on Terras Web site as set
out in the Corporate Governance section above.
The Nominating and Corporate Governance Committee charter also
provides that the committee will review candidates who have been
recommended by stockholders. Appropriate materials describing
the personal and professional background and experience of
candidates recommended by stockholders should be communicated to
the Board as set out in the Corporate Governance section of this
proxy statement
9
under the heading Communication. The committee will
evaluate all such stockholder recommended candidates on the
basis of the same qualities and characteristics as described in
the preceding paragraph.
The board of directors establishes special Board committees from
time to time, determining such committees specific
functions as they are established. The Board and its committees
occasionally take action by unanimous written consent in lieu of
a meeting.
MEETINGS
OF THE
BOARD
The board of directors held five regular meetings and four
special meetings in 2007. Each director attended at least
86 percent of the total meetings of the Board and of Board
committees of which he or she was a member.
COMPENSATION
COMMITTEE
INTERLOCKS
AND
INSIDER
PARTICIPATION
The Compensation Committee is composed of the directors named as
signatories to the Compensation Committee Report
below. No director has any direct or indirect material interest
in or relationship with Terra other than shareholdings as
discussed below and as related to his or her position as a
director, except as described under the caption
Transactions with Related Persons. During 2007, no
officer or other employee of Terra served on the board of
directors of any other entity, where any officer or director of
such entity also served on Terras Board.
10
EQUITY
SECURITY
OWNERSHIP
Principal
stockholders.
The following table shows the ownership of Terra
securities as of February 14, 2008 by the only persons
known to Terra to beneficially own more than five percent of any
class of Terra voting securities. The information in this table
is based on information reported to the SEC by or on behalf of
such persons:
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Name
and address of
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Title
of
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Percentage
|
beneficial
owner
|
|
|
class
|
|
|
Amount and nature
of beneficial ownership
1/
|
|
|
of
class
|
Goldman Sachs Asset Management, L.P.
2/
32 Old Slip
New York, New York 10005
|
|
|
Common
Shares
|
|
|
5,648,998 shared voting and investment power
|
|
|
6.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AXA Financial Inc.
3/
1290 Avenue of the Americas
New York, New York 10104
|
|
|
Common
Shares
|
|
|
5,223,463 sole voting and investment power
|
|
|
5.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brookside Capital Partners Fund LP
4/
111 Huntington Avenue
Boston, Massachusetts 02199
|
|
|
Common
Shares
|
|
|
5,081,770 sole voting and investment power
|
|
|
5.68%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Barclays Global Investors NA.
5/
45 Fremont Street
San Francisco, California 94105
|
|
|
Common
Shares
|
|
|
4,773,432 sole voting and investment power
|
|
|
5.33%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dawson-Herman Capital Management,
Inc.6/
354 Perquot Avenue
P.O. Box 760
Southport, Connecticut 06890-2558
|
|
|
Common
Shares
|
|
|
4,639,895 sole voting and investment power
|
|
|
5.18%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/ |
|
The
number of common shares listed does not include shares of
Series A preferred.
|
|
2/ |
|
Goldman
Sachs Asset Management, L.P. is an investment advisor, and
disclaims beneficial ownership of any securities managed on its
behalf by third parties.
|
|
3/ |
|
AXA
Financial Inc. reports that the majority of the shares reflected
on their 13-G filing as of 12/31/07 are held by unaffiliated
third-party client accounts managed by Alliance Capital
Management L.P., as an investment adviser. Alliance is a
majority-owned subsidiary of AXA Financial Inc.
|
|
4/ |
|
Brookside
Capital Partners Fund L.P. acts by and through its general
partner, Brookside Investors. Brookside Investors acts by and
through its general partner, Brookside Management.
Mr. Domenic J. Ferrante is the managing member of Brookside
Management and thus is the controlling person of Brookside
Management. The number of shares of common stock reported as
owned is as of February 6, 2008.
|
|
5/ |
|
Barclays
Global Investors, NA is an investment adviser and the shares
reported are held by the company in trust accounts for the
economic benefit of the beneficiaries of those accounts.
|
|
6/ |
|
Dawson-Herman
Capital Management, Inc., an investment advisor, has beneficial
ownership of the shares through the investment discretion it
exercises over its clients accounts.
|
11
Directors and
Officers. The
following table shows, as of February 14, 2008, the number
of Terra common shares owned by (1) each director;
(2) Terras chief executive officer (who is also a
director); (3) the six other most highly-compensated
executive officers; and (4) all directors and executive
officers as a group.
|
|
|
|
|
|
|
Number of Common
Shares
|
|
Name
|
|
Beneficially
Owned
1/
|
|
|
|
|
D.E. Fisher
|
|
|
48,800
|
|
D.A. Fraser
|
|
|
40,000
|
|
M.O. Hesse
|
|
|
46,128
|
|
P.S. Janson
|
|
|
40,000
|
2/
|
J.R. Kroner
|
|
|
16,500
|
|
D. McGlone
|
|
|
15,000
|
|
H.R. Slack
|
|
|
77,250
|
|
M.L. Bennett
|
|
|
747,236
|
|
D.D. Greenwell
|
|
|
86,509
|
|
F.G. Meyer
|
|
|
318,300
|
|
J.D. Giesler
|
|
|
154,906
|
|
R.S. Sanders Jr.
|
|
|
123,687
|
|
J.W. Huey
|
|
|
41,864
|
|
P. Thompson
|
|
|
113,107
|
|
Directors and all executive officers as a group (17 persons)
|
|
|
1,986,373
|
|
|
|
|
1/ |
|
Each
director or executive officer has sole voting and investment
power over the shares shown as beneficially owned. Each director
and executive officer individually and beneficially owned less
than one percent, and the directors and executive officers as a
group owned 2.2% of Terras issued and outstanding common
shares. These share numbers include ownership of restricted
common shares, which is subject to certain vesting conditions,
and shares held under Terras Employees Savings and
Investment Plan.
|
|
2/ |
|
Includes
20,000 directly owned shares pledged as security.
|
SECTION 16(A)
BENEFICIAL
OWNERSHIP
REPORTING
COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934
requires Terras executive officers, directors and
beneficial owners of more than 10 percent of Terras
common shares to file initial reports of beneficial ownership
and reports of changes in beneficial ownership of the shares
with the SEC and the NYSE. Executive officers and directors are
required by SEC regulations to furnish Terra with copies of all
Section 16(a) reports they file. All persons who were Terra
executive officers, directors and beneficial owners of more than
10 percent of Terras common shares at any time during
2007 filed all reports required under Section 16(a) during
and with respect to 2007 in a timely manner, except Richard S.
Sanders and Joe A. Ewing, who each filed one Form 4 late.
This conclusion is based solely on a review of the copies of
such filings furnished to Terra and of written representations
from Terras executive officers and directors.
12
Executive
Compensation and Other Information
COMPENSATION
DISCUSSION
AND
ANALYSIS
As a producer and marketer of nitrogen products for agricultural
and industrial markets, Terras operating results are
affected by the volatile nature of the nitrogen products
industry. During the last year, demand for nitrogen products has
been especially strong, which has contributed to our record
earnings and returns during 2007. However, the current period of
strong growth was preceded by a period of approximately six
years of difficult market conditions characterized by losses and
low returns. We expect that market volatility will continue to
be a factor in this industry and have designed our executive
compensation program to reflect these fundamental factors. For
additional details regarding the cyclical nature of the nitrogen
products industry and our performance in light of these
conditions, see the Managements Discussion and Analysis of
Financial Conditions and Results of Operations in our 2007
annual report on
Form 10-K.
Objectives
The Compensation Committees primary objectives in
designing our executive compensation program are to
(i) provide competitive incentive rewards for the
achievement of specific annual goals by Terra;
(ii) minimize fixed costs during cyclical downturns; and
(iii) provide incentives to manage our North American and
United Kingdom asset base as well as new investments to earn
returns in excess of our cost of capital over the long term.
Elements of
Compensation
Our compensation program is comprised of three primary
components:
|
|
|
Base Salary: |
|
Base salaries are targeted at the low end of the market range in
order to maintain low fixed cash costs during cyclical downturns. |
|
Annual Incentives: |
|
Annual incentives are paid in cash and provide the opportunity
during periods of average and cyclically robust performance for
management to earn competitive total cash compensation through a
combination of salary and annual incentive payments. |
|
Long-Term Incentives: |
|
Long-term incentives are paid in restricted shares and
performance shares in order to align the interests of our
executive officers with those of our stockholders. While a
portion is subject to time-based vesting in order to promote
retention, for our most senior officers, a significant portion
is comprised of performance share grants that will not vest
unless Terra meets specified performance goals and will vest at
above-target levels in the case of superior company performance.
In particular, the vesting criteria for the performance share
grants has significant upside potential tied to the ability of
our senior officers to successfully manage our existing asset
base and invest in new assets to generate returns in excess of
the cost of capital. Together with base salary and annual cash
incentive awards, long-term incentive awards are intended to
provide the opportunity for our executive officers to achieve
total compensation at approximately the 50th percentile of
companies in our survey comparison group if target levels of
performance are met. |
The Compensation Committees approach to executive
compensation is to review all three elements of compensation
together, rather than considering each element separately, and
to benchmark total compensation levels against a survey
comparison group of approximately 400 companies, as
described
13
in the next paragraph. On a total compensation basis, the
combination of base salaries, annual cash incentive awards and
long-term incentives should provide our executive officers with
above-average compensation for above-average individual and
company performance and below-average compensation for
below-average performance.
Role of Peer
Groups and Competitive Benchmarking
In implementing our compensation program, our Compensation
Committee has reviewed studies conducted by its compensation
consultant, Towers Perrin, which compare our compensation to
that of companies that are similar to us in revenue, market
capitalization or industry profile. For 2007, the survey
comparison group, which included approximately
400 companies, was comprised of a combination of
general industry and chemical industry
companies. Towers Perrin employed regression analysis to
normalize the data relative to Terras annual revenues to
ensure comparability. Our Compensation Committee also reviewed
publicly available data on the compensation paid to the chief
executive officers, chief financial officers and chief legal
officers of 23 companies in our industry or a related
industry, including most of the 13 companies included in
the Performance Chart that appears on page 25 of our 2007
annual report on
Form 10-K.
However, the broader survey comparison group serves as the
Compensation Committees main source of executive
compensation benchmarking. We believe that the broader group is
appropriate in our case, because Terra has few direct
U.S. competitors, and many of the companies in our industry
peer group do not compete with us in executive recruitment. In
addition, we recruit executive talent from across a broad range
of industries.
Internal Pay
Equity
Our Compensation Committees approach to determining the
compensation of Michael Bennett, our Chief Executive Officer, is
generally the same approach that is used to determine the
compensation levels of our other senior executives, with two
principal exceptions.
First, the performance measure for Mr. Bennetts
annual incentive award differs from those of our other executive
officers. The individual goals applicable to Mr. Bennett
under our Annual Incentive Plan are based on total company
performance, whereas the individual goals of the executives who
report directly to Mr. Bennett are generally based on their
particular areas of responsibility. This distinction is intended
to reflect Mr. Bennetts level of accountability and
influence with respect to overall company performance.
Additionally, in the case of long-term incentive awards, which
are comprised of a combination of time-based restricted stock
and performance share awards, two-thirds of
Mr. Bennetts awards are comprised of performance
shares, whereas half of the other senior executives awards
are comprised of performance shares. The Compensation Committee
believes that Mr. Bennett has a greater ability to
influence company performance, and, therefore, his awards should
have more upside and downside potential than awards granted to
our other executive officers.
|
|
III.
|
Role of Our
Compensation Consultant
|
In 2005, our Compensation Committee selected and retained Towers
Perrin to serve as its independent compensation consultant.
Towers Perrin advises and consults with the Chairman of our
Compensation Committee in connection with our compensation
programs and has particularly focused on long-term incentive
compensation, stock ownership guidelines and executive severance
and change in control arrangements. While Towers Perrin advises
our Compensation Committee in making its decisions, including by
providing our Compensation Committee with information about
current market practices, our Compensation Committee retains
ultimate authority to make all final determinations. Our Vice
President, Investor Relations and Human Resources, Joe Ewing,
often provides Towers Perrin with the necessary data and
background information that it needs in order to prepare
materials requested by the Compensation Committee.
14
In addition to its role advising our Compensation Committee on
executive compensation matters, during 2007, Towers Perrin
worked with the Nominating and Corporate Governance Committee of
our Board of Directors to review the compensation of our
non-employee directors, including annual retainers, meeting
fees, committee chair fees and the use of equity-based
compensation. At the request of our Compensation Committee,
Towers Perrin also assisted us in preparing the executive
compensation disclosure in this proxy statement and in our 2007
proxy statement by reviewing the Compensation Discussion and
Analysis and, based on data we provided, assisting in the
preparation of the proxy tables. Finally, senior management
engaged Towers Perrins office in the United Kingdom to
consult on the compensation and benefits of certain employees of
GrowHow UK Limited, a joint venture company formed by Terra and
Kemira GrowHow Oyj in 2007. Towers Perrins work for the UK
joint venture, which has been approved by our Compensation
Committee, generated approximately $25,000 in fees for Towers
Perrin. The Towers Perrin representative who serves as the
direct liaison with our Compensation Committee did not perform
any services for the joint venture.
|
|
IV.
|
2007 Executive
Compensation Program
|
Our Compensation Committee developed a 2007 executive
compensation program that provided for the following:
For 2007, our executive officers received base salaries at
approximately the 25th percentile of the comparison group
of companies. The Compensation Committee determined that base
salaries should be targeted around that level in order to
control fixed costs in light of the volatile nature of the
nitrogen products industry. The Summary Compensation Table below
details the annual base salaries paid in 2007 to each of our
named executive officers.
|
|
B.
|
Annual
Incentive Compensation
|
The cash incentive awards to be paid to our executive officers
are allocated from an overall pool of available funds that is
established by our Compensation Committee during the first
quarter of each year based on the aggregate value of the
potential awards payable to all participants in our Annual
Incentive Plan. Payout levels under the Annual Incentive Plan
are determined based on a combination of individual performance
against individual goals and our achievement of net income
targets, as described below.
Mr. Bennett prepared a proposal for his own individual
performance goals that was reviewed, modified and approved by
the Compensation Committee in the first quarter of 2007. In
addition, during the first quarter of 2007, each other executive
officer worked with Mr. Bennett to establish individual
performance goals for 2007, which focused on the
executives corresponding function, department or business
unit and which tracked Mr. Bennetts own individual
goals from an overall corporate perspective. At the same time,
during the first quarter of 2007, the Compensation Committee
approved the 2007 target annual incentive awards for each of our
executive officers.
While funding of the incentive pool for 2007 was dependent on
2007 net income, performance by each executive officer
against the corresponding individual performance goals based on
recommendations by Mr. Bennett was used by the Compensation
Committee to determine the executives actual award. In its
exercise of discretion to determine individual awards under our
Annual Incentive Plan, our Compensation Committee applied
negative discretion to adjust the amount of certain individual
awards downward and also exercised its discretion in some cases
to increase the amount of individual awards above target or
maximum award levels. The aggregate of all awards paid did not,
however, exceed the funding of the pool. In a similar manner,
the Board evaluates Mr. Bennetts performance at the
end of each year and determines the extent to which he has met
his performance goals and sets his actual bonus.
15
The following table, which sets forth the target and actual
annual incentive award for each of our named executive officers
under our 2004, 2005, 2006 and 2007 Annual Incentive Plans,
reflects how the cyclical nature of our business affected our
Annual Incentive Plan payouts. Our performance for 2004 and 2007
was robust while our performance for 2005 and 2006 was below
target.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Target
|
|
|
Actual
|
|
|
Target
|
|
|
Actual
|
|
|
Target
|
|
|
Actual
|
|
|
Target
|
|
|
Actual
|
|
|
|
2004
|
|
|
2004
|
|
|
2005
|
|
|
2005
|
|
|
2006
|
|
|
2006
|
|
|
2007
|
|
|
2007
|
|
|
|
Annual
|
|
|
Annual
|
|
|
Annual
|
|
|
Annual
|
|
|
Annual
|
|
|
Annual
|
|
|
Annual
|
|
|
Annual
|
Executive
|
|
|
Incentives
|
|
|
Incentives
|
|
|
Incentives
|
|
|
Incentives
|
|
|
Incentives
|
|
|
Incentives
|
|
|
Incentives
|
|
|
Incentives
|
Bennett
|
|
|
$273,000
|
|
|
$500,000
|
|
|
$315,000
|
|
|
$200,000
|
|
|
$575,000
|
|
|
$0
|
|
|
$825,000
|
|
|
$1,468,500
|
Greenwell
|
|
|
N/A
|
|
|
N/A
|
|
|
$78,750
|
|
|
$52,000
|
|
|
$116,000
|
|
|
$0
|
|
|
$150,000
|
|
|
$300,000
|
Meyer
|
|
|
$114,000
|
|
|
$200,000
|
|
|
$146,250
|
|
|
$100,000
|
|
|
$200,000
|
|
|
$0
|
|
|
$262,500
|
|
|
$550,000
|
Giesler
|
|
|
$86,000
|
|
|
$150,000
|
|
|
$86,000
|
|
|
$54,000
|
|
|
$134,400
|
|
|
$0
|
|
|
$139,200
|
|
|
$230,000
|
Sanders
|
|
|
$61,250
|
|
|
$110,000
|
|
|
$64,750
|
|
|
$50,000
|
|
|
$98,500
|
|
|
$0
|
|
|
$132,000
|
|
|
$245,000
|
Huey
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
$132,500*
|
|
|
$0
|
|
|
$137,500
|
|
|
$265,000
|
Thompson
|
|
|
$84,000
|
|
|
$140,000
|
|
|
$84,000
|
|
|
$55,000
|
|
|
$109,000
|
|
|
$0
|
|
|
$139,200
|
|
|
$280,000**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Mr. Hueys 2006
target incentive amount was prorated to reflect that he was
hired on October 25, 2006.
** Mr. Thompson was
awarded a full bonus for 2007, even though he left Terra in
September 2007 to become the Chief Executive Officer of GrowHow
UK Limited, a joint venture company formed by Terra and Kemira
GrowHow Oyj.
The Annual Incentive Plan covers our officers and certain other
key employees. The size of the pool is determined based on our
achievement of net income. The following table illustrates how
the amount of the pool has been affected by our net income
levels during 2004, 2005, 2006 and 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Target Amount of
|
|
|
Actual Amount
|
|
|
|
Target Net
|
|
|
Actual Adjusted
|
|
|
Annual Incentive
|
|
|
of Annual
|
Year
|
|
|
Income
|
|
|
Net Income*
|
|
|
Pool**
|
|
|
Incentive Pool**
|
2004
|
|
|
$45 million
|
|
|
$68.7 million
|
|
|
$1.5 million
|
|
|
$2.4 million
|
2005
|
|
|
$55 million
|
|
|
$38.7 million
|
|
|
$1.7 million
|
|
|
$1.2 million
|
2006
|
|
|
$55 million
|
|
|
$4.2 million
|
|
|
$2.4 million
|
|
|
$0
|
2007
|
|
|
$55 million
|
|
|
$225.59 million
|
|
|
$3.0 million
|
|
|
$5.82 million
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* The calculation of net
income is adjusted in the manner described below.
** This pool includes amounts
payable to all officers and key employees who are eligible for
our Annual Incentive Plan. The target and actual amounts for our
named executive officers under our Annual Incentive Plan are set
forth in the prior table.
The funding of the pool for the 2007 Annual Incentive Plan was
determined based on the following performance measures:
|
|
|
|
|
If Terra had achieved less than $30 million of net income,
the incentive pool would not have been funded.
|
|
|
|
If Terra had achieved net income of $30 million, 50% of the
target annual incentive pool would have been funded.
|
|
|
|
For each $0.5 million in net income Terra achieved above
$30 million and up to $105 million, an additional 1%
of the target annual incentive pool would have been funded.
|
16
Under this formula, if Terra had achieved $55 million in
net income, the incentive pool would have been funded at 100% of
the target amount, and at $105 million in net income, the
incentive pool would have been funded at the maximum level of
200% of the target amount.
The Compensation Committee selected achievement of
$55 million in net income as the target for 100% funding of
the incentive pool for 2007, because that level of net income
equates to approximately a 9% annualized return on capital
employed (ROCE), which, according to outside studies performed
by investment bankers at the request of our Chief Financial
Officer, was approximately equal to our cost of capital.
The Compensation Committees approach in determining net
income for purposes of the Annual Incentive Plan is that while
annual incentive compensation levels for our executive officers
should reflect operating costs incurred during the relevant
year, decisions made by the Board about Terras capital
structure should neither increase nor decrease executive
compensation levels. This approach was reflected in the
calculation of 2007 net income, which included an asset
impairment charge relating to the sale of our facility in
Beaumont, Texas but excluded exceptional expenses relating to
the refinancing of Terras long-term debt.
While achievement of a threshold amount of net income is
required in order for the incentive pool to be funded, the
Compensation Committee retains discretion to make funds
available for annual incentive awards to reward exceptional
individual performance even if threshold performance measures
are not met. Because of our failure to achieve net income
performance measures in 2006, the incentive pool was not funded,
but the Compensation Committee decided to pay bonuses of
approximately $20,000 in the aggregate during that period to
certain participants in the Annual Incentive Plan, none of whom
was an executive officer, based on their extraordinary
individual performance during that period.
In accordance with our philosophy of tying long-term incentive
awards to company performance, the Compensation Committee has
designed our long-term incentive program to accomplish the
following objectives: (1) reward achievement of return on
capital employed (ROCE) targets on a cumulative basis over a
three-year period; (2) provide more substantial incentives
for achieving returns above the cost of capital; (3) assist
with attraction and retention of executives; and (4) align
management incentives with stockholder interests through the use
of equity awards. To these ends, our long-term incentive
compensation is comprised of a combination of performance share
awards, which only vest upon achievement of performance goals
relating to our return on capital employed (ROCE), and
restricted shares, which vest based on continued employment.
Each year, the Compensation Committee sets an annual target
award for each executive officer who participates in our
long-term incentive plan. For 2007, in the case of executive
officers other than Mr. Bennett, target grants ranged from
100% to 140% of annual base salary. Mr. Bennetts
target grant was set at 300% of his annual base salary. The
Compensation Committee determined that these target levels were
appropriate for 2007 based on market data with respect to the
comparison group of companies and the objective of setting
long-term compensation to allow our executive officers to
achieve total compensation at approximately the
50th percentile if target levels of performance are met.
The target value of the long-term incentive awards for 2007 for
each of the named executive officers (expressed as a percentage
of base salary) is set forth in the narrative following the
Summary Compensation Table on page 24.
The Compensation Committee determined that in the case of
executive officers other than Mr. Bennett, 50% of the value
of the 2007 long-term incentive grant should be subject to
time-based vesting criteria to assist in executive retention,
while the remaining 50% should be subject to performance-based
vesting criteria. As previously noted, Mr. Bennett received
one-third of his grant in restricted shares and two-thirds in
performance share grants. The performance share grants for 2007
were approved by the Compensation
17
Committee on February 27, 2007 and were made on
February 28, 2007, and the restricted share grants for 2007
were approved by the Compensation Committee on July 24,
2007 and were made July 25, 2007 (except for
Mr. Thompsons restricted share grant, which was
approved by the Compensation Committee on August 31, 2007
and made on September 4, 2007).
In accordance with applicable disclosure rules, the Summary
Compensation Table on page 24 reflects the amounts we
recognized as an accounting expense pursuant to FAS 123R
for 2007 in connection with awards granted in 2007 and in prior
years. These values were not, however, considered by us or the
Compensation Committee when determining the long-term incentive
award grants. Instead, the Compensation Committee considered the
fair market value of the shares on the grant date and, in the
case of performance share awards, the value of potential payouts
based on achievement of the performance targets described below.
The full grant date values (determined in accordance with
FAS 123R) are set forth in the Grant of Plan-Based Awards
Table on page 27, and the fair market value of these
awards, based on our stock price of $47.76 per share as of
December 31, 2007, is set forth in the Outstanding Equity
Awards at Fiscal Year End Table on page 32.
2007 Performance
Share Awards
For purposes of the 2007 performance share grants, the number of
shares to be issued will depend on Terras annualized
average return on capital employed (ROCE) over the three-year
performance period ending on December 31, 2009. We use ROCE
as the performance metric because ROCE is a critical indicator
of good operating and investment decisions by management, is an
important measurement for judging success of Terras
strategic initiatives, and is a critical metric for investors.
The following table illustrates target and actual achievement of
ROCE as of December 31, 2007, with respect to the
2005-2007,
2006-2008
and
2007-2009
performance periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level of Payout
|
|
|
|
|
Actual
|
|
Actual Average
|
|
for Performance
|
Performance
|
|
Target
|
|
Achievement of
|
|
Annual ROCE
|
|
Share Awards
|
Period
|
|
ROCE
|
|
ROCE (by year)
|
|
(as of 12/31/07)
|
|
(as a % of target)
|
|
|
|
|
2005
|
|
6.974%
|
|
|
|
|
2005-2007
|
|
9%
|
|
2006
|
|
4.303%
|
|
13.020%
|
|
200%
|
|
|
|
|
2007
|
|
29.560%
|
|
|
|
|
|
|
|
|
|
2006
|
|
4.303%
|
|
|
|
To be determined
|
2006-2008
|
|
9%
|
|
2007
|
|
29.560%
|
|
16.364%
|
|
after 12/31/08
|
|
2007-2009
|
|
9%
|
|
2007
|
|
29.560%
|
|
29.560%
|
|
To be determined
after 12/31/09
|
|
The performance share grant payouts for the 2007 grant cycle
(with a performance period ending in 2009) will be
determined based on the following measures:
|
|
|
|
|
If Terras annualized average ROCE for the period is less
than 4%, no shares will be delivered.
|
|
|
|
If Terras annualized average ROCE for the period is
between 4% and 9%, 1% of the target number of shares will be
delivered for each 0.05% by which annualized average ROCE
exceeds 4%. Thus, if annualized average ROCE is equal to 9%,
100% of the target number of shares will be delivered.
|
18
|
|
|
|
|
If Terras annualized average ROCE for the period exceeds
9%, an additional 1% of the target number of shares will be
delivered for each 0.025% by which annualized average ROCE
exceeds 9%, up to a maximum of 200% of the target number of
shares.
|
Annualized average ROCE of 9% over a cumulative three year
period was determined by the Compensation Committee to be an
appropriate goal, as outside studies performed by investment
bankers indicated that it is approximately equal to our cost of
capital. As noted above in the description of the Annual
Incentive Plan, the Compensation Committee believes that while
long-term performance awards to our executive officers should
reflect operating costs incurred during the relevant performance
period, decisions made by the Board about Terras capital
structure should not affect executive compensation levels.
Therefore, in the calculation of ROCE for the 2007 period, we
included an asset impairment charge relating to the sale of our
facility in Beaumont, Texas, as well as the equity earnings of
the GrowHow UK Joint Venture, and we excluded exceptional
expenses relating to the refinancing of Terras long-term
debt.
Performance share grants vest at the end of a three-year
performance period, based on achievement of performance goals
and assuming that the participant remains employed by Terra.
Upon vesting of a performance share grant, the holder is
entitled to receive a number of shares ranging from 0% to 200%
of the target number of shares subject to the award, based on
achievement of ROCE. Individual performance does not play a part
in determining the level of vesting. Except in the case of
death, total disability or other special circumstances
identified by the Compensation Committee, the performance share
grants will be forfeited if employment terminates for any reason
prior to vesting, except that in the event of a change in
control of Terra, vesting of the performance share awards will
immediately accelerate and the holder will be entitled to the
greater of the target number of shares subject to the award and
a number based on actual company performance prior to the change
in control. In the event of termination of employment due to
death, the holder will become entitled to a number of
performance shares based on actual performance prior to death.
In the event of termination of employment due to total
disability, performance shares will continue to vest following
termination based on achievement of performance goals. With
regards to the performance shares held by Mr. Thompson, our
Board determined that GrowHow UK Limited would be considered an
employer for the purpose of the continued vesting of his equity
awards.
2007 Restricted
Share Awards
The restricted shares are subject to cliff vesting with 100% of
the award vesting on the third anniversary of the grant date,
assuming that the participant remains employed by Terra at such
time. Except in the case of death, total disability or other
special circumstances identified by the Compensation Committee,
the restricted shares will be forfeited if employment terminates
for any reason prior to vesting, except that vesting will
accelerate in full in the event of a change in control of Terra.
In the event of termination of employment due to death or total
disability, the vesting of restricted shares will accelerate in
full. With regards to the restricted shares held by
Mr. Thompson, our Board determined that GrowHow UK Limited
would be considered an employer for the purpose of the continued
vesting of his equity awards.
D. Severance
Prior to 2006, we were a party to executive retention agreements
with our senior executives that provided for payments and
benefits in the event of a termination of employment following a
change in control, but no executives were covered by employment
agreements or other severance arrangements that established the
level of payments and benefits to be provided in connection with
a termination that was not related to a change in control.
During this period, executive severance was generally determined
through individual negotiations, which often led to a variety of
inconsistent results. In 2006, the Compensation Committee
decided that a standard form of severance agreement covering
non-change in control severance was needed to promote additional
stability, ensure equitable treatment and avoid the need for
individual negotiations. At
19
the same time, the Compensation Committee decided to review its
change in control severance practices. In connection with the
Compensation Committees review of our severance practices,
Towers Perrin provided the Compensation Committee with
information about severance benefits that are generally provided
in the event of an involuntary termination of a senior
executives employment, both in the change in control and
non-change in control contexts.
Based on the Compensation Committees review, on
October 5, 2006, we entered into employment severance
agreements with each individual who was an executive officer of
Terra at that time. In addition, we entered into an employment
severance agreement with Mr. Huey in October 2006 when he
became an executive officer.
All employment severance agreements with our executive officers
are identical except that Mr. Bennetts agreement
provides for an initial term of five years rather than three,
and the approval of three-quarters of our Board is required in
order to terminate Mr. Bennett for cause. Our
Compensation Committee considered these distinctions appropriate
in order to reflect Mr. Bennetts unique role within
our company. For a thorough description of the material terms of
the agreements with each of our named executive officers, see
the narrative following the Summary Compensation Table beginning
on page 24. For a description and quantification of the
payments and benefits that may be provided to the named
executive officers under these agreements, see
Post-Employment Payments beginning on page 39.
The Compensation Committee selected the severance multiples and
levels of benefits based on information that Towers Perrin
provided in 2006 regarding current market practices relating to
executive severance. Annually, the Compensation Committee
considers and may extend the term of the agreements by one year.
Should the Compensation Committee decide not to extend their
terms, the agreements will expire two years thereafter, except
that Mr. Bennetts agreement will expire three years
thereafter. In October 2008, the first annual extension will be
considered by the Compensation Committee.
E. Defined
Benefit Pension Plans
We no longer offer defined benefit pension plans to our
employees. We do, however, maintain the Terra Industries Inc.
Employees Retirement Plan, which is a tax-qualified
defined benefit pension plan maintained for the benefit of all
U.S. employees hired before July 1, 2003 (which
includes each of our named executive officers, other than
Messrs. Thompson, Greenwell or Huey).
On January 1, 1992, we adopted a supplemental executive
retirement plan, which we refer to as the SERP. The Compensation
Committee and the Board established the SERP so that certain
management and highly compensated employees would not be
ineligible for the benefits that would have been provided to
them under our tax-qualified defined benefit pension plan but
for the limits imposed by the Internal Revenue Code and the
Employee Retirement Income Security Act. The SERP is an unfunded
plan. Participants in the SERP have the status of unsecured
creditors of Terra. As of December 31, 2007, the only named
executive officers who had accrued benefits under the SERP were
Messrs. Bennett, Meyer, Giesler and Sanders.
Mr. Thompson participates in the Terra Nitrogen (UK) Ltd.
Pension Scheme, which is a pension plan maintained for the
benefit of employees in the United Kingdom. On June 30,
2003, the defined benefit portion of the plan was frozen with
respect to all future accruals, and all pension benefits under
the plan began to accrue on a defined contribution plan basis.
For a description of the benefits accrued by each of our named
executive officers under our defined benefit pension plans as of
December 31, 2007, see the Pension Benefits table on
page 35.
20
F. Defined
Contribution Plans
We maintain a 401(k) plan, which is a tax-qualified defined
contribution plan maintained for the benefit of all
U.S. employees, including our named executive officers. The
401(k) plan permits employees to contribute a portion of their
pay to the plan on a pre-tax basis. We also provide for a
company matching contribution as well as a direct company
contribution in the case of employees who are not eligible to
participate in the Terra Industries Inc. Employees
Retirement Plan. The amount of our 2007 contribution to the
401(k) on behalf of each of our named executive officers is set
forth in the explanation of the All Other Compensation column of
the Summary Compensation Table.
We established a nonqualified Supplemental Deferred Compensation
Plan on December 20, 1993. Due to the substantial
restrictions imposed by Section 409A of the Internal
Revenue Code, on December 31, 2004, we froze the plan with
respect to future deferrals. In general, the plan allowed
participants to defer certain portions of annual base salary and
annual incentive awards and to determine how to invest amounts
deferred pursuant to the plan. The plan is unfunded.
Participants in the plan have the status of unsecured creditors
of Terra. As of December 31, 2007, the only named executive
officers with an outstanding balance in the plan were
Messrs. Giesler and Sanders.
G. Employee
Welfare and Fringe Benefit Plans
Our named executive officers are eligible to participate in our
welfare and fringe benefit plans on the same basis as all of our
other full-time employees. These benefits include our medical,
dental and vision plans, life insurance, short-term and
long-term disability plans, business travel accident insurance,
tuition reimbursement, healthcare spending accounts, and
dependent care spending accounts. In addition, due to
limitations on the level of base salary covered by our primary
long-term disability policy and in order to provide executive
officers with long-term disability coverage equal to 60% of base
salary (which is the rate of coverage provided to all
U.S. employees), we maintain supplemental long-term
disability policies.
The named executive officers are provided company-paid
memberships in a local country club of their choice. We cover
any costs associated with this perquisite, including taxes. This
perquisite is provided in order to allow the executives to
entertain business associates of Terra, such as partners in
joint ventures, customers and suppliers. The named executive
officers are also permitted to use the club amenities for
personal and family activities.
|
|
A.
|
Stock
Ownership/Retention Guidelines
|
The Compensation Committee reviewed market data assembled by
Towers Perrin to arrive at a recommendation with respect to
stock ownership by our executive officers. The purpose of the
guidelines is to encourage our executive officers to own and
retain shares of our stock, thereby aligning their interests
with those of our other stockholders. Although these guidelines
are not mandatory, executive officers are strongly encouraged to
follow them. However, special circumstances may require an
executive officer to depart from the guidelines on occasion.
Current ownership guidelines are as follows:
|
|
|
Chief Executive Officer
|
|
4 times annual base salary
|
Senior Vice Presidents
|
|
3 times annual base salary
|
Vice Presidents
|
|
1 times annual base salary
|
Fifty percent of unvested restricted shares will count toward
the ownership guidelines prior to vesting. After satisfying the
ownership guidelines described above, the executive officers are
asked to hold an additional
21
50% of any shares awarded to them under our long-term incentive
programs (including restricted shares and performance share
grants) for a minimum of 12 months following vesting.
As of December 31, 2007, Mr. Bennetts share
ownership exceeded 20 times his annual base salary. The other
named executive officers also exceeded their respective
guideline multiples as of December 31, 2007.
In October 2007, our Board implemented share ownership
guidelines for all non-employee directors of 20,000 shares
for all except the Chairman, which guideline is
30,000 shares. All newly elected directors are to be
allowed a five-year period from election to satisfy the new
guidelines.
Terras charter and bylaws provide indemnification for its
officers and directors to the maximum extent permitted by law.
In general, we will pay the costs of legal defense, settlements
or judgments on behalf of the officer or director relating to
actions taken in the course of employment or service with Terra,
as long as conduct meets applicable standards. We have entered
into Indemnity Agreements with the executive officers and
directors, including the named executive officers. The
agreements provide the maximum indemnity available under
Maryland General Corporate Law, which is substantially the same
as that provided under our charter and bylaws, and provide for
certain procedural requirements in order to obtain
indemnification, the timing of required determinations,
indemnification payments, advancement of expenses, and the
rights of officers and directors in the event that we fail to
provide indemnification or to advance expenses.
|
|
C.
|
Role of
Executive Officers in Determining Compensation
|
Executive officers who are directly involved in administering
the executive compensation program include Mr. Bennett and
Mr. Ewing, who is our Vice President, Investor Relations
and Human Resources. Mr. Bennett is excluded from
discussions and decisions regarding his own compensation.
Mr. Ewing manages the administrative aspects of the
Compensation Committees relationship with Towers Perrin,
as well as the calculation and presentation to the Compensation
Committee of proposed executive annual salaries, annual
incentive awards, and long-term incentive awards. Mr. Ewing
corresponds frequently with Mr. Fraser, the Chairman of our
Compensation Committee. Mr. Ewing communicates frequently
with Mr. Bennett in all matters relating to executive
compensation, other than those matters that relate to
Mr. Bennetts own compensation. Mr. Ewing also
occasionally relies on Mr. Greenwell, our Senior Vice
President and Chief Financial Officer, to calculate and review
Terras net income and return on capital employed (ROCE),
which are the relevant performance measures under our Annual
Incentive Plan and our long-term incentive program,
respectively. Mr. Huey, Vice President, General Counsel and
Corporate Secretary, is engaged with respect to legal and SEC
issues relating to executive compensation, including reporting
and disclosure issues.
Pursuant to its charter, the Compensation Committee is required
to meet at least twice annually but will meet more frequently to
the extent necessary. In 2007, the Compensation Committee met
five times. Generally, executive officers who attend the
meetings are Mr. Bennett, Mr. Ewing, and
Mr. Huey, who acts as secretary of the meeting.
Mr. Bennett and Mr. Ewing present the recommendations
for any changes to compensation of our executive officers,
except that no recommendations are made with respect to
Mr. Bennett. Final decisions are made by the Compensation
Committee in executive session, excluding all members of
management. Decisions regarding Mr. Bennett are then
communicated by Messrs. Slack and Fraser to
Mr. Bennett and subsequently to Mr. Ewing.
Mr. Ewing is responsible for implementing all approved
changes. Decisions regarding the other executive officers are
communicated by Mr. Bennett to Mr. Ewing.
22
COMPENSATION
COMMITTEE
REPORT
We have reviewed and discussed the Compensation Discussion and
Analysis with management. Based on such review and discussions,
we recommended to the Board that the Compensation Discussion and
Analysis be included in Terras annual report on
Form 10-K
and this proxy statement on Schedule 14A.
Members of
the Compensation Committee
of the Board of Directors
Dod A. Fraser, Chairman
David E. Fisher
Peter S. Janson
Dennis McGlone
23
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The following table summarizes the compensation of each of our
named executive officers for the fiscal year ended
December 31, 2007. The named executive officers are our
Chief Executive Officer, current and former Chief Financial
Officer and three other most highly compensated executive
officers ranked by their total compensation in the table below.
In addition, one officer whose employment with Terra ended in
2007 is included because his compensation for 2007 exceeded that
of other named executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
&
Non-qualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
Compensation
|
|
|
All Other
|
|
|
|
|
Name &
Principal
|
|
|
|
|
|
|
|
|
Bonus
|
|
|
Awards
|
|
|
Awards
|
|
|
Compensation
|
|
|
Earnings
|
|
|
Compensation
|
|
|
|
|
Position
|
|
|
Year
|
|
|
Salary ($)
|
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)(4)(5)
|
|
|
($)(6)
|
|
|
Total ($)
|
|
M. Bennett,
|
|
|
2007
|
|
|
$
|
540,385
|
|
|
$
|
|
|
|
$
|
2,770,201
|
|
|
$
|
|
|
|
$
|
1,468,500
|
|
|
$
|
96,713
|
|
|
$
|
24,166
|
|
|
$
|
4,899,965
|
|
President & CEO
|
|
|
2006
|
|
|
$
|
492,308
|
|
|
$
|
|
|
|
$
|
1,147,153
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
80,572
|
|
|
$
|
22,421
|
|
|
$
|
1,742,453
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D. Greenwell,
|
|
|
2007
|
|
|
$
|
268,404
|
|
|
$
|
1,250
|
|
|
$
|
377,773
|
|
|
$
|
|
|
|
$
|
298,750
|
|
|
$
|
|
|
|
$
|
35,285
|
|
|
$
|
981,462
|
|
SVP & CFO (7)
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F. Meyer,
|
|
|
2007
|
|
|
$
|
346,923
|
|
|
$
|
25,000
|
|
|
$
|
795,406
|
|
|
$
|
|
|
|
$
|
525,000
|
|
|
$
|
14,020
|
|
|
$
|
20,600
|
|
|
$
|
1,726,949
|
|
Executive Vice
|
|
|
2006
|
|
|
$
|
332,615
|
|
|
$
|
|
|
|
$
|
432,857
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
34,424
|
|
|
$
|
26,733
|
|
|
$
|
826,630
|
|
President and former SVP & CFO (8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. Giesler,
|
|
|
2007
|
|
|
$
|
230,462
|
|
|
$
|
|
|
|
$
|
559,488
|
|
|
$
|
|
|
|
$
|
230,000
|
|
|
$
|
26,366
|
|
|
$
|
20,578
|
|
|
$
|
1,066,894
|
|
SVP Commercial Operations
|
|
|
2006
|
|
|
$
|
222,615
|
|
|
$
|
|
|
|
$
|
295,988
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
31,718
|
|
|
$
|
24,248
|
|
|
$
|
574,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Sanders, Jr.
|
|
|
2007
|
|
|
$
|
216,154
|
|
|
$
|
|
|
|
$
|
456,517
|
|
|
$
|
|
|
|
$
|
245,000
|
|
|
$
|
18,420
|
|
|
$
|
21,777
|
|
|
$
|
957,868
|
|
VP Manufacturing
|
|
|
2006
|
|
|
$
|
197,692
|
|
|
$
|
|
|
|
$
|
233,094
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
20,077
|
|
|
$
|
23,540
|
|
|
$
|
474,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. Huey
|
|
|
2007
|
|
|
$
|
273,077
|
|
|
$
|
|
|
|
$
|
217,079
|
|
|
$
|
|
|
|
$
|
265,000
|
|
|
$
|
|
|
|
$
|
26,919
|
|
|
$
|
782,075
|
|
VP, General Counsel & Corporate Secretary (9)
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P. Thompson,
|
|
|
2007
|
|
|
$
|
261,154
|
|
|
$
|
1,600
|
|
|
$
|
464,238
|
|
|
$
|
|
|
|
$
|
278,400
|
|
|
$
|
88,020
|
|
|
$
|
29,346
|
|
|
$
|
1,122,758
|
|
Former VP Sales & Marketing (10)
|
|
|
2006
|
|
|
$
|
216,769
|
|
|
$
|
|
|
|
$
|
243,673
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
67,169
|
|
|
$
|
25,940
|
|
|
$
|
553,551
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24
|
|
|
(1)
|
|
Represents
annual incentive plan payments in excess of the named executive
officers maximum opportunity under the annual incentive
plan.
|
(2)
|
|
Represents
the compensation costs of equity grants for financial reporting
purposes for the year under FAS 123R, rather than an amount
paid to or realized by the named executive officer. See
Terras Annual Report on
Form 10-K
for the assumptions made in determining FAS 123R values.
The FAS 123R value as of the grant date for equity grants
is spread over the number of months of service required for the
grant to become non-forfeitable. For additional information
about stock-based grants made in 2007, see the Grants of
Plan-Based Awards table and accompanying footnotes and narrative.
|
(3)
|
|
Reflects
the amount earned for 2007 performance under the annual
incentive plan, up to the individuals maximum incentive
opportunity. Amounts in excess of the maximum opportunity are
shown in the Bonus column. Amounts were earned in
2007 and paid in 2008.
|
(4)
|
|
In
the case of each of our named executive officers other than
Messrs. Greenwell, Huey and Thompson, amounts shown are
solely an estimate of the increase for 2007 in the actuarial
present value of the named executive officers age 65
accrued benefit under the Terra Industries Inc. Employees
Retirement Plan (Retirement Plan) and, in the case
of Messrs. Bennett, Meyer, Giesler and Sanders, under the
Terra Industries Inc. Excess Benefit Plan (SERP). No
amount is payable under these plans before a participant attains
age 55. In the case of Mr. Thompson, the amount shown
is an estimate of the increase for 2007 in the actuarial present
value of his age 62 accrued benefit under the Terra
Nitrogen (UK) Ltd. Pension Scheme (UK Plan). This
value was determined using an exchange rate of £1 =$1.96.
As of December 31, 2007, no amount was payable under this
plan before a participant attained age 52.
|
(5)
|
|
Assumptions
used to calculate the actuarial present value of the accrued
benefits of the named executive officers are further described
under Pension Benefits Table Narrative on page 36. The
Change in Pension Value and Non-qualified Deferred Compensation
Earnings Column also reports the amount of above market earnings
on compensation that is deferred outside of tax-qualified plans.
No amount is reported with respect to earnings on deferred
compensation plans because above market rates are not permitted
under the Supplemental Deferred Compensation Plan.
|
(6)
|
|
See
All Other Compensation disclosure for details.
|
(7)
|
|
Mr. Greenwell
was not a named executive officer in 2006.
|
(8)
|
|
Mr. Meyer
held the title of SVP & CFO until August 1, 2007.
|
(9)
|
|
Mr. Huey
was not a named executive officer in 2006.
|
(10)
|
|
The
compensation amounts set forth above represent amounts paid to
Mr. Thompson with respect to the entire year of 2007, even
though Mr. Thompson left his position with Terra to become
CEO of GrowHow UK Limited (GrowHow UK) on
September 14, 2007. GrowHow UK is a joint venture between
Terra and Kemira GrowHow Oyj. Terra owns 50% of the joint
venture interests and considers GrowHow UK a subsidiary for SEC
reporting purposes. All compensation that he received after
September 14, 2007 is attributable to his service with
GrowHow UK. Such compensation was paid by Terra to
Mr. Thompson, and, except with regards to his incentive
compensation and equity awards, Terra will be reimbursed for
these amounts by GrowHow UK.
|
25
All Other
Compensation Table
The following table describes each component of the All Other
Compensation column in the Summary Compensation Table.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registrant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Perquisites
&
|
|
|
to Defined
|
|
|
|
|
|
Tax
|
|
|
|
|
|
|
|
|
|
|
Other Personal
|
|
|
Contribution
|
|
|
Insurance
|
|
|
Reimbursements
|
|
|
|
|
|
|
|
Name
|
|
|
Benefits(1)
|
|
|
Plans(2)
|
|
|
Premiums(3)
|
|
|
(4)
|
|
|
Other(5)
|
|
|
Total
|
|
M. Bennett,
President & CEO
|
|
|
$
|
6,120
|
|
|
$
|
12,752
|
|
|
$
|
1,354
|
|
|
$
|
3,940
|
|
|
$
|
|
|
|
$
|
24,166
|
|
D. Greenwell,
SVP & CFO
|
|
|
$
|
7,711
|
|
|
$
|
19,093
|
|
|
$
|
395
|
|
|
$
|
5,087
|
|
|
$
|
2,999
|
|
|
$
|
35,285
|
|
F. Meyer,
EVP & Former SVP & CFO
|
|
|
$
|
5,702
|
|
|
$
|
9,294
|
|
|
$
|
1,532
|
|
|
$
|
4,072
|
|
|
$
|
|
|
|
$
|
20,600
|
|
J. Giesler, SVP Commercial
Operations
|
|
|
$
|
5,702
|
|
|
$
|
10,878
|
|
|
$
|
325
|
|
|
$
|
3,673
|
|
|
$
|
|
|
|
$
|
20,578
|
|
R. Sanders,
VP Manufacturing
|
|
|
$
|
7,129
|
|
|
$
|
9,792
|
|
|
$
|
459
|
|
|
$
|
4,397
|
|
|
$
|
|
|
|
$
|
21,777
|
|
J. Huey,
VP, General Counsel & Corporate Secretary
|
|
|
$
|
5,369
|
|
|
$
|
19,783
|
|
|
$
|
1,767
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
26,919
|
|
P. Thompson,
Former VP Sales &
Marketing
|
|
|
$
|
5,810
|
|
|
$
|
19,105
|
|
|
$
|
568
|
|
|
$
|
3,863
|
|
|
$
|
|
|
|
$
|
29,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts
include only country club dues for each executive.
|
|
(2)
|
Includes
company contributions to each executives 401(k) account.
|
|
(3)
|
Includes
group life insurance premiums for coverage in excess of $50,000.
|
|
(4)
|
Includes
tax
gross-ups
paid by Terra in 2007 on perquisites and other benefits from
2006. These
gross-ups
are based only on taxes from company payment of country club
dues for all of the named executive officers, with the exception
of Mr. Greenwell. Mr. Greenwells
gross-up
also includes $2,032 related to moving expenses.
|
|
(5)
|
Includes
taxable moving expenses.
|
26
Grants of
Plan-Based Awards in 2007
The following table provides information on awards under the
Annual Incentive Plan and restricted share and performance share
awards granted in 2007 to each of our named executive officers.
The amount of the performance share awards and restricted share
awards that was expensed in 2007 is shown in the Summary
Compensation Table on page 24.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
|
Exercise
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Awards:
|
|
|
or Base
|
|
|
|
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future
Payouts Under
|
|
|
Estimated Future
Payouts Under
|
|
|
Number of
|
|
Number of
|
|
|
Price of
|
|
Market
|
|
|
|
Fair Value of
|
|
|
|
|
|
|
|
|
|
Type of
|
|
|
Non-Equity
Incentive Plan Awards(4)
|
|
|
Equity Incentive
Plan Awards(5)
|
|
|
Shares of
|
|
Securities
|
|
|
Option
|
|
Price on
|
|
|
|
Stock &
|
|
|
|
|
Grant
|
|
Date of
|
|
|
Award
|
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
|
Stock or
|
|
Underlying
|
|
|
Awards
|
|
Grant
|
|
|
|
Option
|
|
Name
|
|
|
Date(1)
|
|
Action(2)
|
|
|
(3)
|
|
|
($)
|
|
($)
|
|
($)
|
|
|
(#)
|
|
(#)
|
|
(#)
|
|
|
Units
(#)(6)
|
|
Options
(#)
|
|
|
($ /
Sh)
|
|
Date
|
|
|
|
Awards(7)
|
|
M. Bennett,
|
|
|
25-Jul-07
|
|
24-Jul-07
|
|
|
RS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,400
|
|
|
|
|
|
|
|
|
NA
|
|
|
$
|
26.35
|
|
|
|
$
|
537,540
|
|
President & CEO
|
|
|
28-Feb-07
|
|
27-Feb-07
|
|
|
PS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
69,000
|
|
|
|
138,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
17.45
|
|
|
|
$
|
2,408,100
|
|
|
|
|
27-Feb-07
|
|
|
|
|
AI
|
|
|
|
412,500
|
|
|
|
825,000
|
|
|
|
1,650,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D. Greenwell,
|
|
|
25-Jul-07
|
|
24-Jul-07
|
|
|
RS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,200
|
|
|
|
|
|
|
|
|
NA
|
|
|
$
|
26.35
|
|
|
|
$
|
189,720
|
|
SVP & CFO
|
|
|
28-Feb-07
|
|
27-Feb-07
|
|
|
PS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,400
|
|
|
|
20,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
17.45
|
|
|
|
$
|
362,960
|
|
|
|
|
27-Feb-07
|
|
|
|
|
AI
|
|
|
|
74,688
|
|
|
|
149,375
|
|
|
|
298,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F. Meyer,
|
|
|
25-Jul-07
|
|
24-Jul-07
|
|
|
RS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,100
|
|
|
|
|
|
|
|
|
NA
|
|
|
$
|
26.35
|
|
|
|
$
|
239,785
|
|
EVP and former
|
|
|
28-Feb-07
|
|
27-Feb-07
|
|
|
PS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,300
|
|
|
|
30,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
17.45
|
|
|
|
$
|
533,970
|
|
SVP & CFO
|
|
|
27-Feb-07
|
|
|
|
|
AI
|
|
|
|
131,250
|
|
|
|
262,500
|
|
|
|
525,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. Giesler,
|
|
|
25-Jul-07
|
|
24-Jul-07
|
|
|
RS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,600
|
|
|
|
|
|
|
|
|
NA
|
|
|
$
|
26.35
|
|
|
|
$
|
147,560
|
|
SVP Commercial
|
|
|
28-Feb-07
|
|
27-Feb-07
|
|
|
PS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,400
|
|
|
|
18,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
17.45
|
|
|
|
$
|
328,060
|
|
Operations
|
|
|
27-Feb-07
|
|
|
|
|
AI
|
|
|
|
69,600
|
|
|
|
139,200
|
|
|
|
278,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Sanders,
|
|
|
25-Jul-07
|
|
24-Jul-07
|
|
|
RS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,300
|
|
|
|
|
|
|
|
|
NA
|
|
|
$
|
26.35
|
|
|
|
$
|
139,655
|
|
VP Manufacturing
|
|
|
28-Feb-07
|
|
27-Feb-07
|
|
|
PS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,900
|
|
|
|
17,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
17.45
|
|
|
|
$
|
310,610
|
|
|
|
|
27-Feb-07
|
|
|
|
|
AI
|
|
|
|
66,000
|
|
|
|
132,000
|
|
|
|
264,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. Huey,
|
|
|
25-Jul-07
|
|
24-Jul-07
|
|
|
RS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,600
|
|
|
|
|
|
|
|
|
NA
|
|
|
$
|
26.35
|
|
|
|
$
|
174,108
|
|
VP, Gen. Counsel &
|
|
|
28-Feb-07
|
|
27-Feb-07
|
|
|
PS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,200
|
|
|
|
22,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
17.45
|
|
|
|
$
|
390,880
|
|
Corp. Secretary
|
|
|
27-Feb-07
|
|
|
|
|
AI
|
|
|
|
68,750
|
|
|
|
137,500
|
|
|
|
275,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P. Thompson,
|
|
|
04-Sep-07
|
|
31-Aug-07
|
|
|
RS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,600
|
|
|
|
|
|
|
|
|
NA
|
|
|
$
|
26.38
|
|
|
|
$
|
147,728
|
|
Former VP Sales &
|
|
|
28-Feb-07
|
|
27-Feb-07
|
|
|
PS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,400
|
|
|
|
18,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
17.45
|
|
|
|
$
|
328,060
|
|
Marketing
|
|
|
27-Feb-07
|
|
|
|
|
AI
|
|
|
|
69,600
|
|
|
|
139,200
|
|
|
|
278,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Reflects the date
grants were actually made.
|
(2)
|
Reflects the date
grants were approved by the Compensation Committee.
|
(3)
|
For purposes of this
table, RS means a grant of Restricted Stock, PS means a grant of
Performance Stock and AI means a grant under the Annual
Incentive Plan.
|
(4)
|
Reflects grants made
under Terras Annual Incentive Plan. Actual payouts under
this plan are based on performance versus financial targets over
the corresponding fiscal year and individual performance. Cash
payouts are made after completion of the one-year performance
period. Threshold awards are 50% of target and maximum awards
are 200% of target.
|
(5)
|
Reflects grants of
performance shares made under Terras long-term incentive
performance plan. Actual payouts under this plan are based on
performance versus financial targets over a three-year period
and depend on actual performance versus targets over the
performance period, except that in the event of a change in
control, performance shares will be issued immediately at the
higher of target or actual performance level for the quarters
completed prior to the change in control. Threshold award is
zero shares, and maximum award is 200% of targeted shares.
|
(6)
|
Reflects grants of
restricted shares that have time-based vesting, which vest 100%
on the third anniversary of the grant date or immediately upon a
change in control.
|
(7)
|
Amounts reflect
maximum payouts for the performance share grants and stock price
on the date of grant.
|
27
The following is a description of material factors necessary to
understand the information disclosed in the Summary Compensation
Table and the Grants of Plan-Based Awards Table. This
description is intended to supplement the information discussed
in the Compensation Discussion and Analysis.
Employment
Severance Agreements
Background
On October 5, 2006, we entered into an employment severance
agreement with each of our named executive officers other than
Mr. Huey, with whom we entered into an employment severance
agreement on October 25, 2006. Mr. Thompsons
employment severance agreement was terminated on
September 14, 2007, when he left Terra to join GrowHow UK.
The named executive officers were previously parties to
executive retention agreements with us, which provided for
severance and other benefits in the event of a termination of
employment following a change in control. The new employment
severance agreements supersede and replace the executive
retention agreements and provide for severance and other
benefits in the event of a termination of employment under
circumstances that are both related to and unrelated to a change
in control.
Term
Each employment severance agreement has a three-year term, with
the exception of the agreement with Mr. Bennett, which has
a five-year term. The term may be extended for additional
one-year periods in the Boards sole discretion. The
employment severance agreements may not be terminated during the
two-year period following a change in control of Terra without
the executives consent.
Severance and
Post-Termination Benefits
The employment severance agreements provide that the executives
will be entitled to certain compensation and benefits upon a
qualifying termination of employment. The extent and nature of
the compensation and benefits are identified and quantified in
the disclosure entitled Post-Employment Payments,
which appears on page 39 of this proxy statement.
Excise Tax
Gross-Up
The employment severance agreements provide that the executives
will be entitled to a
gross-up
payment to make the executives whole for any excise taxes
imposed as a result of Section 280G of the Internal Revenue
Code. Entitlement to a
gross-up
payment is not contingent on an executives termination of
employment. The estimated amount of the excise tax
gross-up for
each named executive officer is quantified in the disclosure
entitled Post-Employment Payments, which appears on
page 39 of this proxy statement.
Restrictive
Covenants
The employment severance agreements contain restrictive
covenants that apply following termination of a named executive
officers employment with Terra and are described in the
disclosure entitled Post-Employment Payments, which
appears on page 39 of this proxy statement.
Annual Incentive
Compensation
2007 Officer and
Key Employee Incentive Plan
We maintain an Annual Incentive Plan in which our officers and
other key employees selected by Mr. Bennett are entitled to
participate. As described in the Compensation Discussion and
Analysis, the Annual Incentive Plan provides participants,
including the named executive officers, the opportunity to earn
annual cash incentive awards based upon the achievement of
certain performance goals. Awards are paid from a pool
established by the Compensation Committee. Funding of the pool
for 2007 was based on performance
28
targets relating to net income. A description of performance
target levels and corresponding funding levels is set forth in
the Compensation Discussion and Analysis.
Each named executive officers threshold, target and
maximum incentive award amounts are disclosed in the Grants of
Plan-Based Awards table. Annual incentive payments may be
increased or decreased based on individual performance. Payment
of an annual incentive award is made as soon as practicable
following our determination of whether and to what extent
performance goals have been satisfied, subject to approval by
the Compensation Committee. Generally, in order to be entitled
to receive an annual incentive award payment, an employee must
be employed during the applicable fiscal year and until the date
of payment. However, the Compensation Committee made an
exception for Mr. Thompson, who became the CEO of GrowHow
UK (a joint venture of which Terra owns 50%) on
September 14, 2007, due to the crucial role that he played
in the development of GrowHow UK and in the first months after
its formation, and awarded Mr. Thompson his full annual
incentive payment for 2007.
For 2007, our Compensation Committee set the following target
annual incentive award amounts for the named executive officers:
|
|
|
|
|
Mr. Bennetts target annual incentive award was equal
to 150% of base salary;
|
|
|
|
Mr. Meyers target annual incentive award was equal to
75% of base salary;
|
|
|
|
The target annual incentive award for each of
Messrs. Greenwell, Giesler, Sanders and Thompson was equal
to 60% of base salary; and
|
|
|
|
Mr. Hueys target annual incentive award was equal to
50% of base salary.
|
Mr. Greenwells target annual incentive award was
increased from 50% to 60% of his base salary in August 2007,
when he was promoted to the position of Chief Financial Officer.
In 2007, Terra exceeded the maximum level of performance under
the Annual Incentive Plan, and therefore the incentive pool was
funded at the maximum level. Each of our named executive
officers was eligible to receive an amount of up to 200% of
their target annual incentive award amounts. The actual awards
granted to each of our named executive officers was determined
by our Compensation Committee, based on its determination of
each named executive officers fulfillment of his
individual performance goals. For each of Messrs. Bennett,
Giesler, Sanders and Huey, the Compensation Committee, in its
discretion, granted an award that was less than such
executives maximum target level. For each of
Messrs. Greenwell, Meyer and Thompson, the Compensation
Committee, in its discretion, granted an award that was greater
than such executives maximum target level. This result is
reflected in the Non-Equity Incentive Plan Compensation and
Bonus columns of the Summary Compensation Table.
Long-Term
Incentive Awards
We maintain the Terra Industries Inc. Stock Incentive Plan of
2002, which we refer to as the 2002 Plan, and the 2007 Omnibus
Incentive Compensation Plan, which we refer to as the 2007 Plan,
under which the Compensation Committee may grant to the named
executive officers, as well as other eligible employees, stock
options, stock appreciation rights, restricted shares,
performance shares and other forms of stock-based compensation.
2007 Long-Term
Incentive Grants
For 2007, the Compensation Committee granted each of our named
executive officers an award based on a combination of restricted
shares and performance shares. Each named executive
officers target grant was determined as a percentage of
base salary. For 2007, our Compensation Committee set the
following target long-term incentive award values for the named
executive officers:
|
|
|
|
|
Mr. Bennetts target long-term incentive award was
equal to 300% of base salary;
|
29
|
|
|
|
|
The target long-term incentive award for Mr. Meyer was
equal to 140% of base salary; and
|
|
|
|
|
|
The target long-term incentive award for Messrs. Greenwell,
Giesler, Sanders, Huey and Thompson was equal to 130% of base
salary.
|
With the exception of Mr. Bennett, all executive officers
were expected to receive one half of their grants in the form of
restricted shares and the other half in the form of performance
share grants. Mr. Bennett received one-third of his grant
in restricted shares and two-thirds in performance share grants.
In all cases, the number of shares subject to the grant was
calculated by dividing the target dollar value of the award by
the average of Terras closing stock price during the
twenty trading days prior to the date that the awards were
approved by the Compensation Committee. The average stock price
was rounded to the nearest fifty cents, and the target number of
shares was rounded to the nearest 100 shares, except that
in the case of awards granted to Mr. Bennett, the target
number of shares was rounded to the nearest 1,000 shares.
The number of shares of Terra common stock subject to each grant
and the grant date fair value of these awards is reflected in
the Grants of Plan-Based Awards table. The accounting cost
recognized in 2007 with respect to outstanding equity grants is
reflected in the Summary Compensation Table.
|
|
|
|
|
Restricted share grants. We
granted restricted shares to each of our named executive
officers other than Mr. Thompson on July 25, 2007. We
granted restricted shares to Mr. Thompson on
September 4, 2007. The principal terms and conditions of
these grants are described below.
|
|
|
|
|
|
Vesting. Each restricted share
grant is subject to cliff vesting with respect to 100% of the
restricted shares subject to the award on the third anniversary
of the grant date. However, in the event of a change in control
of Terra (within the meaning of the restricted share award
agreements) or termination of employment due to death or total
disability, all restricted shares will become immediately
vested. The Compensation Committee has the authority to extend
or accelerate the vesting period at any time, in its discretion.
|
|
|
|
Forfeiture. Upon an
executives termination of employment for any reason other
than death, total disability or such other circumstances as
determined by the Compensation Committee in its sole discretion,
any unvested restricted shares held by the executive will be
immediately forfeited and terminated. With regards to the
restricted shares held by Mr. Thompson, our Board
determined that GrowHow UK would be considered an employer for
the purpose of the continued vesting of his equity awards.
|
|
|
|
Voting and Dividend
Rights. Holders of restricted shares
are entitled to all rights of a stockholder of Terra, including
the right to vote and receive dividends with respect to the
restricted shares. However, if any distribution is made to our
stockholders other than a cash dividend, then any securities or
other property received by other stockholders will be subject to
the same restrictions applicable to the restricted shares.
|
|
|
|
|
|
Performance share grants. We
granted performance shares to each of our named executive
officers on February 28, 2007. The principal terms and
conditions of these grants are described below.
|
|
|
|
|
|
Vesting. Each performance share
grant is subject to cliff vesting with respect to all shares
subject to the award after December 31, 2009, based on
achievement of the performance goals during the period from
January 1, 2007 through December 31, 2009, as
described in the Compensation Discussion and Analysis. Upon
vesting, a holder will become entitled to receive a number of
shares ranging from 0% to 200% of the target number of shares
subject to the award, based on achievement of performance goals.
In the event of a change in control of Terra (within the meaning
of the performance share award agreements), vesting of
performance share awards will immediately accelerate and the
holder will be entitled to the greater of the target
|
30
|
|
|
|
|
number of shares subject to the award and a number based on
actual company performance prior to the change in control. In
the event of termination of employment due to death, the holder
will become entitled to a number of performance shares based on
actual performance prior to death. In the event of termination
of employment due to total disability, performance shares will
continue to vest following termination based on achievement of
performance goals. In special circumstances, as determined by
the Compensation Committee, the Compensation Committee may
extend the period for earning all or a portion of a
holders performance shares. With regards to the
performance shares held by Mr. Thompson, our Board
determined that GrowHow UK would be considered an employer for
the purpose of the continued vesting of his equity awards.
|
|
|
|
|
|
Forfeiture. Upon an
executives termination of employment prior to the end of
the performance period for any reason other than death, total
disability or such other circumstances as determined by the
Compensation Committee in its sole discretion, any unvested
performance shares held by the executive will be immediately
forfeited and terminated.
|
Pre-2007
Long-Term Incentive Grants
In accordance with applicable disclosure rules, the Stock Awards
column of the Summary Compensation Table reflects the amounts
that we recognized as an accounting expense for 2007 in
connection with restricted shares and performance share awards
granted in 2007 and in prior years. An expense was recognized in
2007 for prior-year awards granted in 2004, 2005 and 2006. We
granted time-based restricted shares in 2004, 2005 and 2006 on
terms and conditions that are substantially the same as the
grants made in 2007 and described above. We also made
performance share grants in 2005 and 2006. These grants, which
were made on July 29, 2005 and February 17, 2006, were
subject to three-year performance periods ending on
December 31, 2007 and December 31, 2008, respectively.
Retirement
Benefits
Defined Benefit
Pension Plans
We maintain a U.S. tax-qualified defined benefit plan, an
excess benefit plan, which we refer to as the SERP, and a U.K.
defined benefit plan, each of which covers certain named
executive officers. For a description of the material terms of
these plans and the present value of each named executive
officers accumulated benefits under these plans as of
December 31, 2007, see the Pension Benefit Table and
accompanying disclosure, beginning on page 35.
Defined
Contribution Plans
We maintain a 401(k) plan, which is a tax-qualified defined
contribution plan maintained for the benefit of all
U.S. employees, including each of our named executive
officers. The 401(k) plan permits employees to contribute a
portion of eligible pay to the plan on a pre-tax basis. During
2007, we matched 100% of the first 3% of eligible compensation
that an employee contributed to the 401(k) plan and 60% of the
next 3% of pay contributed. In addition, in the case of
employees hired after June 30, 2003 and who are therefore
ineligible to participate in the U.S. tax-qualified defined
benefit plan, we made an additional non-elective contribution
for 2007 equal to 3.2% of eligible compensation. The amount of
our 2007 contribution to the 401(k) on behalf of each of our
named executive officers is set forth in the explanation of the
All Other Compensation column of the Summary Compensation Table.
31
Outstanding
Equity Awards at 2007 Fiscal Year-End
Option
Awards
The following table provides information on the holdings of
stock option and stock awards by each of our named executive
officers as of December 31, 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
Awards
|
|
|
Stock
Awards
|
|
|
|
|
|
|
|
Equity Incentive
|
|
|
|
|
|
|
|
|
|
|
Equity Incentive
|
|
Equity Incentive
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
Plan Awards:
|
|
|
|
Number of
|
|
Number of
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
Market or Payout
|
|
|
|
Securities
|
|
Securities
|
|
Securities
|
|
|
|
|
|
|
|
|
Market Value of
|
|
Unearned
|
|
Value of Unearned
|
|
|
|
Underlying
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
|
Number of Shares
|
|
Shares or Units
|
|
Shares, Units or
|
|
Shares, Units or
|
|
|
|
Unexercised
|
|
Unexercised
|
|
Unexercised
|
|
Option
|
|
|
|
|
or Units of Stock
|
|
of Stock That
|
|
Other Rights
|
|
Other Rights That
|
|
|
|
Options (#)
|
|
Options (#)
Un-
|
|
Unearned Options
|
|
Exercise
|
|
Option Expiration
|
|
|
That Have Not
|
|
Have Not
|
|
That Have Not
|
|
Have Not Vested
|
Name
|
|
|
Exercisable
|
|
exercisable
|
|
(#)
|
|
Price ($)
|
|
Date
|
|
|
Vested (#)
|
|
Vested ($)(1)
|
|
Vested (#)
|
|
($)(1)
|
M. Bennett,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,000
|
(3)
|
|
$
|
2,579,040
|
|
|
|
|
|
|
|
|
|
President & CEO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
77,000
|
(4)
|
|
$
|
3,677,520
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,400
|
(5)
|
|
$
|
974,304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
308,000
|
(6)
|
|
$
|
14,710,080
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
138,000
|
(7)
|
|
$
|
6,590,880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D. Greenwell, SVP &
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,579
|
(2)
|
|
$
|
457,493
|
|
|
|
|
|
|
|
|
|
CFO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,500
|
(3)
|
|
$
|
358,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,400
|
(4)
|
|
$
|
1,022,064
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,200
|
(5)
|
|
$
|
343,872
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,800
|
(6)
|
|
$
|
2,044,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,800
|
(7)
|
|
$
|
993,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F. Meyer,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,500
|
(3)
|
|
$
|
1,552,200
|
|
|
|
|
|
|
|
|
|
EVP and former SVP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,100
|
(4)
|
|
$
|
1,533,096
|
|
|
|
|
|
|
|
|
|
& CFO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,100
|
(5)
|
|
$
|
434,616
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
64,200
|
(6)
|
|
$
|
3,066,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,600
|
(7)
|
|
$
|
1,461,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. Giesler,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
(3)
|
|
$
|
1,194,000
|
|
|
|
|
|
|
|
|
|
SVP Commercial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,100
|
(4)
|
|
$
|
1,151,016
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,600
|
(5)
|
|
$
|
267,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,200
|
(6)
|
|
$
|
2,302,032
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,800
|
(7)
|
|
$
|
897,888
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Sanders, VP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,500
|
(3)
|
|
$
|
883,560
|
|
|
|
|
|
|
|
|
|
Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(4)
|
|
$
|
955,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,300
|
(5)
|
|
$
|
253,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
(6)
|
|
$
|
1,910,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,800
|
(7)
|
|
$
|
850,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. Huey, VP, General
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,000
|
(4)
|
|
$
|
1,146,240
|
|
|
|
|
|
|
|
|
|
Counsel & Corporate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,600
|
(5)
|
|
$
|
315,216
|
|
|
|
|
|
|
|
|
|
Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,200
|
(7)
|
|
$
|
534,912
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P. Thompson, former
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,500
|
(3)
|
|
$
|
883,560
|
|
|
|
|
|
|
|
|
|
VP Sales &
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,100
|
(4)
|
|
$
|
959,976
|
|
|
|
|
|
|
|
|
|
Marketing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,600
|
(5)
|
|
$
|
267,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,200
|
(6)
|
|
$
|
1,919,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,800
|
(7)
|
|
$
|
897,888
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See footnotes on following page.
32
|
|
|
(1)
|
|
Based
on a year-end closing price of $47.76 per share.
|
(2)
|
|
Mr. Greenwell
was awarded an off-cycle grant of restricted shares upon his
hiring in April 2005. These restricted shares will time-vest on
April 7, 2008 or earlier upon a
change-in-control.
|
(3)
|
|
Restricted
shares will time-vest on July 30, 2008 or earlier upon a
change-in-control.
|
(4)
|
|
Restricted
shares will time-vest on August 3, 2009 or earlier upon a
change-in-control.
|
(5)
|
|
Restricted
shares will time vest on July 26, 2010 or earlier upon a
change-in-control.
|
(6)
|
|
This
performance plan cycle will end December 31, 2008. The
actual number of shares issued subsequent to that time will
depend on actual performance versus targets over the performance
period, except that in the event of a change in control,
performance shares will be issued immediately at the higher of
target or actual performance level for the quarters completed
prior to the change in control. The threshold award is zero;
therefore, the number of shares and market value shown in the
Equity Incentive Plan Awards: Number of Unearned Shares, Units
or Other Rights that have not Vested column and the Equity
Incentive Plan Awards: Market or Payout Value of Unearned
Shares, Units or Other Rights that have not Vested column are
based on performance through December 31, 2007 (200% of
target) for the 2006 performance plan grant.
|
(7)
|
|
This
performance plan cycle will end December 31, 2009. The
actual number of shares issued subsequent to that time will
depend on actual performance versus targets over the performance
period, except that in the event of a change in control,
performance shares will be issued immediately at the higher of
target or actual performance level for the quarters completed
prior to the change in control. The threshold award is zero;
therefore, the number of shares and market value shown in the
Equity Incentive Plan Awards: Number of Unearned Shares, Units
or Other Rights that have not Vested column and the Equity
Incentive Plan Awards: Market or Payout Value of Unearned
Shares, Units or Other Rights that have not Vested column are
based on performance through December 31, 2007 (200% of
target) for the 2007 performance plan grant.
|
33
Option Exercises
and Stock Vested
The following table provides information, for each of our named
executive officers, on the number of restricted shares that
became vested in 2007 and the value realized before payment of
any applicable withholding taxes and broker commissions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock
Awards
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
Shares
Acquired
|
|
|
|
|
Number of
Shares
|
|
|
|
|
|
on Exercise
|
|
Value Realized
on
|
|
|
Acquired on
Vesting
|
|
Value Realized
on
|
Name
|
|
|
(#)(1)
|
|
Exercise
($)(2)
|
|
|
(#)(3)
|
|
Vesting
($)(4)
|
M. Bennett,
President & CEO
|
|
|
|
136,000
|
|
|
|
1,916,920
|
|
|
|
|
80,000
|
|
|
|
1,940,800
|
|
D. Greenwell,
SVP & CFO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F. Meyer,
EVP and former SVP & CFO
|
|
|
|
100,000
|
|
|
|
3,140,500
|
|
|
|
|
60,000
|
|
|
|
1,455,600
|
|
J. Giesler, SVP Commercial
Operations
|
|
|
|
3,600
|
|
|
|
37,818
|
|
|
|
|
30,000
|
|
|
|
727,800
|
|
R. Sanders,
VP Manufacturing
|
|
|
|
3,600
|
|
|
|
31,086
|
|
|
|
|
25,000
|
|
|
|
606,500
|
|
J. Huey, VP, General Counsel &
Corporate Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P. Thompson, former VP Sales &
Marketing
|
|
|
|
10,000
|
|
|
|
121,350
|
|
|
|
|
30,000
|
|
|
|
727,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Reflects
stock options exercised in 2007
|
(2)
|
|
Based
on the intrinsic value of stock option at date of exercise.
|
(3)
|
|
Reflects
time-vesting restricted shares vesting on July 30, 2007.
These shares were granted on July 27, 2004.
|
(4)
|
|
Based
on the market price at date of vesting of $24.26.
|
34
Pension Benefits
in Fiscal Year 2007
The following table sets forth information on the pension
benefits for each of our named executive officers as of
December 31, 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Years
|
|
Present Value
of
|
|
Payments
|
|
|
|
|
|
Credited
Service
|
|
Accumulated
|
|
During Last
|
Name
|
|
|
Plan
Name
|
|
(#)(1)
|
|
Benefit
($)(2)
|
|
Fiscal
Year ($)
|
M. Bennett, President
& CEO
|
|
|
Terra Industries Inc. Employees
Retirement Plan
|
|
|
35
|
|
|
$
|
529,463
|
|
|
$
|
|
|
|
|
|
Terra Industries Inc. Excess Benefit
Plan
|
|
|
35
|
|
|
$
|
658,581
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D. Greenwell, SVP &
CFO(3)
|
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F. Meyer, EVP and
former SVP & CFO
|
|
|
Terra Industries Inc. Employees
Retirement Plan
|
|
|
26
|
|
|
$
|
423,706
|
|
|
$
|
|
|
|
|
|
Terra Industries Inc. Excess Benefit
Plan
|
|
|
26
|
|
|
$
|
229,472
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. Giesler, SVP
Commercial
|
|
|
Terra Industries Inc. Employees
Retirement Plan
|
|
|
26
|
|
|
$
|
189,438
|
|
|
$
|
|
|
Operations
|
|
|
Terra Industries Inc. Excess Benefit
Plan
|
|
|
26
|
|
|
$
|
4,246
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Sanders, VP
Manufacturing
|
|
|
Terra Industries Inc. Employees
Retirement Plan
|
|
|
14
|
|
|
$
|
136,405
|
|
|
$
|
|
|
|
|
|
Terra Industries Inc. Excess Benefit
Plan
|
|
|
14
|
|
|
$
|
4,612
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. Huey, VP, General
Counsel & Corporate
Secretary(4)
|
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P. Thompson, former
VP Sales & Marketing
|
|
|
Terra Nitrogen (UK) Ltd. Pension
Scheme
|
|
|
28
|
|
|
$
|
1,024,963
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Except
in the case of Mr. Giesler, credited service is the period
of the executives actual service with Terra. In the case
of Mr. Giesler, credited service commenced on
August 1, 1987, which was the date Mr. Giesler became
employed by Freeport McMoran Inc. (FMI). FMI owned Agricultural
Minerals and Chemicals Inc., which was acquired by Terra.
Mr. Gieslers benefits under the Retirement Plan are
offset by benefits under the FMI defined benefit pension plan.
|
(2)
|
|
Actuarial
present value for the Retirement Plan and SERP was determined in
accordance with the following assumptions:
|
|
|
Discount
rate equals 6.44%.
|
|
|
Postretirement
mortality was projected using the RP2000CH table projected to
2013 using Scale AA.
|
|
|
Employees
are assumed to have elected benefits in the form of a single
life annuity.
|
|
|
Benefits
commence at age 65.
|
|
|
The
Actuarial present value for the UK Plan was determined in
accordance with the following assumptions:
|
|
|
Discount
rate equals 7%.
|
|
|
The
exchange rate for calculating the benefit was £1 =$1.96.
|
|
|
Postretirement
mortality was projected using the PA92(C=2010) table.
|
|
|
Mr. Thompson
is assumed to have elected benefits in the form of a joint life
annuity. Upon Mr. Thompsons death, his surviving
spouse, if applicable, would be entitled to his full pension
benefits for a period of 5 years. Thereafter,
Mr. Thompsons surviving spouse, if applicable, would
be entitled to 52.5% of Mr. Thompsons annual pension
benefit until her death.
|
|
|
Benefits
commence at age 62.
|
35
|
|
|
(3)
|
|
Mr. Greenwell
is not a participant in the Terra Industries Inc.
Employees Retirement Plan or Excess Benefit Plan.
|
(4)
|
|
Mr. Huey
is not a participant in the Terra Industries Inc.
Employees Retirement Plan or Excess Benefit Plan.
|
We maintain a U.S. tax-qualified defined benefit plan (the
Terra Industries Inc. Employees Retirement Plan or the
Retirement Plan) for the benefit of all
U.S. employees hired before July 1, 2003, including
each of our named executive officers except
Messrs. Greenwell, Huey and Thompson. The Retirement Plan
is closed to employees hired on or after July 1, 2003.
We also maintain an excess benefit plan (the SERP)
and the Terra Nitrogen (UK) Ltd. Pension Scheme (the UK
Plan), which is a U.K. defined benefit plan. The purpose
of the SERP is to restore those benefits that a participant
would otherwise lose in the tax-qualified plan due to Internal
Revenue Code compensation limits and benefit limits.
On June 30, 2003, the defined benefit portion of the UK
Plan was frozen with respect to all future accruals, and all
pension benefits under the plan began to accrue on a defined
contribution plan basis.
Retirement
Plan
Benefit Accrual
Formula
The Retirement Plan provides an unreduced single life annuity at
age 65 equal to an amount which:
Multiplies
|
|
|
|
|
1.55% of the highest 60 month average pensionable
compensation by
|
|
|
Years of credited service and
|
Subtracts
|
|
|
|
|
0.6% of the highest 60 month average pensionable
compensation up to the social security compensation limit
multiplied by years of credited service (up to a maximum of
35 years).
|
Prior to 2004, pensionable compensation included total salary
and wages paid to the participant for services rendered in the
period considered as service, including bonuses, overtime,
commissions and salary deferrals under a Section 401(k) or
Section 125 plan. Effective January 1, 2004, bonuses
are no longer considered as part of pensionable compensation.
Vesting
An employee hired prior to July 1, 2003 became eligible to
participate once he or she had completed a 12 consecutive
month period of at least 1,000 hours of service. Benefits
under the Retirement Plan cliff vest after five years of service.
Early
Retirement
Eligibility for early retirement under the Retirement Plan is
age 55 with 5 years of vesting service. For a
participant who commences pension benefits directly from active
status, the early retirement reductions are 3% per year from
age 65, 10% per year from age 60, 8% per year from
age 59, 6% per year from age 58 and 5% per year from
age 56. All other participants who commence pension
benefits prior to age 65 are subject to an actuarial
reduction of 6.67% per year from age 65 and 3.33% per year
from age 60. As of the date of this proxy statement, only
Mr. Meyer is eligible for early retirement under the
Retirement Plan.
Forms of
Benefit
Participants in the Retirement Plan generally can choose among
the following optional forms of benefit:
|
|
|
|
|
Single life annuity
|
|
|
50% joint and survivor annuity
|
|
|
75% joint and survivor annuity
|
36
|
|
|
|
|
100% joint and survivor annuity
|
|
|
10 year or 15 year certain and life annuity
|
|
|
Social Security level income benefit.
|
Each option is provided on an actuarially equivalent basis.
SERP
The Retirement Plan benefits are limited by various constraints
by the Internal Revenue Code. The SERP is an unfunded plan
maintained to provide benefits to a certain group of management
and highly compensated employees. The terms of the SERP, as they
relate to our named executive officers, with respect to benefit
accrual formula, vesting, early retirement and forms of benefit
are the same as the Retirement Plan, except that under the SERP,
pensionable compensation is not subject to the limits imposed by
the Internal Revenue Code and deferred compensation is not
excluded from the definition of pensionable compensation under
the SERP.
UK Plan
Benefit Accrual
Formula
Benefits accrued under the UK Plan until it was frozen on
June 30, 2003. No benefits have accrued since that date.
Prior to the date on which it was frozen, the UK Plan provided
participants with a joint life annuity upon retirement equal to
an amount which:
Multiplied
|
|
|
|
|
2.2% of Final Pensionable Salary up to £11,250 plus 1.83%
of Final Pensionable Salary beyond £11,250 by
|
|
|
Years of credited service up until June 30, 2003
|
Subtracted
Final Pensionable Salary means the greater of
(i) annual remuneration, excluding any profit sharing
arrangements, for the 12 months ending June 30, 2003
or (ii) the highest annual remuneration, excluding profit
sharing arrangements, in the 10 years prior to
June 30, 2003.
State Pension Element means generally 2% of the UK
Basic State Pension.
Early
Retirement
Under recently enacted UK law, the early retirement age will be
raised from 50 to 55 effective April 6, 2010. Terra began
implementing this increase in annual one-year increments
beginning on April 6, 2006. Therefore, as of
December 31, 2007, eligibility for early retirement under
the UK Plan was age 52. Additionally, early retirement
requires 10 years of service and employer consent, provided
that consent is not required upon retirement after the age of 60
as long as the member has sufficient service under the UK Plan.
Pension benefits are reduced by 4% per year for each year prior
to age 62. As of the date of this proxy statement,
Mr. Thompson was eligible for early retirement under the UK
Plan.
Forms of
Benefit
Participants in the UK Plan generally can choose between the
following optional forms of benefit:
|
|
|
|
|
Joint life annuity
|
|
|
Joint life annuity with initial lump sum payment
|
Each option is provided on an actuarially equivalent basis.
37
Nonqualified
Deferred Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
Registrant
|
|
Aggregate
|
|
Aggregate
|
|
|
|
|
|
Contributions
|
|
Contributions
|
|
Earnings in
|
|
Withdrawals/
|
|
Aggregate
|
|
|
|
in Last FY
|
|
in Last FY
|
|
Last FY
|
|
Distributions
|
|
Balance at
|
Name
|
|
|
($)(1)
|
|
($)(1)
|
|
($)(1)
|
|
($)
|
|
Last
FYE ($)
|
M. Bennett,
President & CEO
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D. Greenwell,
SVP & CFO
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F. Meyer,
EVP and former SVP & CFO
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. Giesler,
SVP Commercial Operations
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
2,225
|
|
|
$
|
|
|
|
$
|
38,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Sanders,
VP Manufacturing
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
9,977
|
|
|
$
|
|
|
|
$
|
224,142
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. Huey,
VP, General Counsel & Corporate Secretary
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P. Thompson,
Former VP Sales & Marketing
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The
deferred compensation plan was frozen prior to 2007. See the
narrative accompanying this table for more detail about this
plan.
|
The Nonqualified Deferred Compensation table shows information
about our Supplemental Deferred Compensation Plan, which was
frozen with respect to future deferrals on December 31,
2004. In general, prior to January 1, 2005, the plan
allowed participants to defer up to 20% of the
participants annual base salary and 20% of the
participants annual cash incentive awards and to determine
how to invest amounts deferred pursuant to the plan.
Participants with notional account balances remaining under the
Supplemental Deferred Compensation Plan are permitted to invest
their balances in various mutual funds. Participants are
permitted to make unlimited changes to their investment
alternatives under the Supplemental Deferred Compensation Plan.
For 2007, the value of Mr. Gieslers account balance
increased by 6% and the value of Mr. Sanders account
balance increased by 5%. Such changes were solely attributable
to investment gains.
38
Post-Employment
Payments
This section describes and quantifies potential payments that
may be made to each named executive officer at, following, or in
connection with the resignation, severance, retirement, or other
termination of the named executive officers employment or
a change in control of Terra.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M.
Bennett, President & CEO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Qualifying
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
Change in
|
|
Control &
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrelated to a
|
|
Control Without
|
|
Qualifying
|
|
|
|
Death
|
|
Disability
|
|
For Cause
|
|
|
Voluntary
|
|
|
Change in Control
|
|
Termination
|
|
Termination
|
Cash Severance
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
2,062,500
|
|
$
|
|
|
$
|
2,750,000
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Shares
|
|
|
$
|
7,230,864
|
|
$
|
7,230,864
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
7,230,864
|
|
$
|
7,230,864
|
Performance Share Awards
|
|
|
$
|
21,300,960
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
21,300,960
|
|
$
|
21,300,960
|
Unexercisable Options
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Total
|
|
|
$
|
28,531,824
|
|
$
|
7,230,864
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
28,531,824
|
|
$
|
28,531,824
|
Retirement Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DB Plan
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
307,018
|
DC Plan
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Total
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
307,018
|
Unvested Deferred Compensation
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Other Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health & Welfare
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
15,387
|
|
$
|
|
|
$
|
15,387
|
Outplacement
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
64,141
|
|
$
|
|
|
$
|
64,141
|
Perquisites
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Long-Term Disability
|
|
|
$
|
|
|
$
|
1,378,157
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Tax Gross-Ups
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
7,013,472
|
|
$
|
8,852,635
|
Total
|
|
|
$
|
|
|
$
|
1,378,157
|
|
$
|
|
|
|
$
|
|
|
|
$
|
79,528
|
|
$
|
7,013,472
|
|
$
|
8,932,163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
28,531,824
|
|
$
|
8,609,021
|
|
$
|
|
|
|
$
|
|
|
|
$
|
2,142,028
|
|
$
|
35,545,296
|
|
$
|
40,521,005
|
39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D.
Greenwell, SVP & CFO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Qualifying
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
Change in
|
|
Control &
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrelated to a
|
|
Control Without
|
|
Qualifying
|
|
|
|
Death
|
|
Disability
|
|
For Cause
|
|
|
Voluntary
|
|
|
Change in Control
|
|
Termination
|
|
Termination
|
Cash Severance
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
720,000
|
|
$
|
|
|
$
|
960,000
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Shares
|
|
|
$
|
2,181,629
|
|
$
|
2,181,629
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
2,181,629
|
|
$
|
2,181,629
|
Performance Share Awards
|
|
|
$
|
3,037,536
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
3,037,536
|
|
$
|
3,037,536
|
Unexercisable Options
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Total
|
|
|
$
|
5,219,165
|
|
$
|
2,181,629
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
5,219,165
|
|
$
|
5,219,165
|
Retirement Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DB Plan
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
DC Plan
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Total
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Unvested Deferred Compensation
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Other Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health & Welfare
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
28,764
|
|
$
|
|
|
$
|
28,764
|
Outplacement
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
34,986
|
|
$
|
|
|
$
|
34,986
|
Perquisites
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Long-Term Disability
|
|
|
$
|
|
|
$
|
1,158,250
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Tax Gross-Ups
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
1,087,451
|
|
$
|
1,644,292
|
Total
|
|
|
$
|
|
|
$
|
1,158,250
|
|
$
|
|
|
|
$
|
|
|
|
$
|
63,750
|
|
$
|
1,087,451
|
|
$
|
1,708,042
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
5,219,165
|
|
$
|
3,339,879
|
|
$
|
|
|
|
$
|
|
|
|
$
|
783,750
|
|
$
|
6,306,616
|
|
$
|
7,887,207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F.
Meyer, EVP and former SVP & CFO
|
|
|
|
|
|
|
|
|
|
|
|
|
Qualifying
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
Change in
|
|
Control &
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrelated to a
|
|
Control Without
|
|
Qualifying
|
|
|
|
Death
|
|
Disability
|
|
For Cause
|
|
|
Voluntary
|
|
Change in Control
|
|
Termination
|
|
Termination
|
Cash Severance
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
$
|
918,750
|
|
$
|
|
|
$
|
1,225,000
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Shares
|
|
|
$
|
3,519,912
|
|
$
|
3,519,912
|
|
$
|
|
|
|
$
|
|
$
|
|
|
$
|
3,519,912
|
|
$
|
3,519,912
|
Performance Share Awards
|
|
|
$
|
4,527,648
|
|
$
|
|
|
$
|
|
|
|
$
|
|
$
|
|
|
$
|
4,527,648
|
|
$
|
4,527,648
|
Unexercisable Options
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
$
|
|
|
$
|
|
|
$
|
|
Total
|
|
|
$
|
8,047,560
|
|
$
|
3,519,912
|
|
$
|
|
|
|
$
|
|
$
|
|
|
$
|
8,047,560
|
|
$
|
8,047,560
|
Retirement Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DB Plan
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
$
|
|
|
$
|
|
|
$
|
186,750
|
DC Plan
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
$
|
|
|
$
|
|
|
$
|
|
Total
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
$
|
|
|
$
|
|
|
$
|
186,750
|
Unvested Deferred Compensation
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
$
|
|
|
$
|
|
|
$
|
|
Other Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health & Welfare
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
$
|
15,387
|
|
$
|
|
|
$
|
15,387
|
Outplacement
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
$
|
40,817
|
|
$
|
|
|
$
|
40,817
|
Perquisites
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
$
|
|
|
$
|
|
|
$
|
|
Long-Term Disability
|
|
|
$
|
|
|
$
|
1,113,994
|
|
$
|
|
|
|
$
|
|
$
|
|
|
$
|
|
|
$
|
|
Tax Gross-Ups
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
$
|
|
|
$
|
1,493,453
|
|
$
|
2,377,205
|
Total
|
|
|
$
|
|
|
$
|
1,113,994
|
|
$
|
|
|
|
$
|
|
$
|
56,204
|
|
$
|
1,493,453
|
|
$
|
2,433,409
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
8,047,560
|
|
$
|
4,633,906
|
|
$
|
|
|
|
$
|
|
$
|
974,954
|
|
$
|
9,541,013
|
|
$
|
11,892,719
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J.
Giesler, SVP Commercial Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Qualifying
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
Change in
|
|
Control &
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrelated to a
|
|
Control Without
|
|
Qualifying
|
|
|
|
Death
|
|
Disability
|
|
For Cause
|
|
|
Voluntary
|
|
|
Change in Control
|
|
Termination
|
|
Termination
|
Cash Severance
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
556,800
|
|
$
|
|
|
$
|
742,400
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Shares
|
|
|
$
|
2,612,472
|
|
$
|
2,612,472
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
2,612,472
|
|
$
|
2,612,472
|
Performance Share Awards
|
|
|
$
|
3,199,920
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
3,199,920
|
|
$
|
3,199,920
|
Unexercisable Options
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Total
|
|
|
$
|
5,812,392
|
|
$
|
2,612,472
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
5,812,392
|
|
$
|
5,812,392
|
Retirement Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DB Plan
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
69,749
|
DC Plan
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Total
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
69,749
|
Unvested Deferred Compensation
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Other Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health & Welfare
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
15,387
|
|
$
|
|
|
$
|
15,387
|
Outplacement
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
27,056
|
|
$
|
|
|
$
|
27,056
|
Perquisites
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Long-Term Disability
|
|
|
$
|
|
|
$
|
573,280
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Tax Gross-Ups
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
1,109,066
|
|
$
|
1,610,584
|
Total
|
|
|
$
|
|
|
$
|
573,280
|
|
$
|
|
|
|
$
|
|
|
|
$
|
42,443
|
|
$
|
1,109,066
|
|
$
|
1,653,027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
5,812,392
|
|
$
|
3,185,752
|
|
$
|
|
|
|
$
|
|
|
|
$
|
599,243
|
|
$
|
6,921,458
|
|
$
|
8,277,568
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R.
Sanders, VP Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Qualifying
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
Change in
|
|
Control &
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrelated to a
|
|
Control Without
|
|
Qualifying
|
|
|
|
Death
|
|
Disability
|
|
For Cause
|
|
|
Voluntary
|
|
|
Change in Control
|
|
Termination
|
|
Termination
|
Cash Severance
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
528,000
|
|
$
|
|
|
$
|
704,000
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Shares
|
|
|
$
|
2,091,888
|
|
$
|
2,091,888
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
2,091,888
|
|
$
|
2,091,888
|
Performance Share Awards
|
|
|
$
|
2,760,528
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
2,760,528
|
|
$
|
2,760,528
|
Unexercisable Options
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Total
|
|
|
$
|
4,852,416
|
|
$
|
2,091,888
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
4,852,416
|
|
$
|
4,852,416
|
Retirement Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DB Plan
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
50,015
|
DC Plan
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Total
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
50,015
|
Unvested Deferred Compensation
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Other Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health & Welfare
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
21,775
|
|
$
|
|
|
$
|
21,775
|
Outplacement
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
25,657
|
|
$
|
|
|
$
|
25,657
|
Perquisites
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Long-Term Disability
|
|
|
$
|
|
|
$
|
709,953
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Tax Gross-Ups
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
974,231
|
|
$
|
1,442,296
|
Total
|
|
|
$
|
|
|
$
|
709,953
|
|
$
|
|
|
|
$
|
|
|
|
$
|
47,432
|
|
$
|
974,231
|
|
$
|
1,489,728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
4,852,416
|
|
$
|
2,801,841
|
|
$
|
|
|
|
$
|
|
|
|
$
|
575,432
|
|
$
|
5,826,647
|
|
$
|
7,096,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J.
Huey, VP, General Counsel & Corporate Secretary
|
|
|
|
|
|
|
|
|
|
|
|
Qualifying
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
Change in
|
|
Control &
|
|
|
|
|
|
|
|
|
|
|
|
Unrelated to a
|
|
Control Without
|
|
Qualifying
|
|
|
|
Death
|
|
Disability
|
|
For Cause
|
|
Voluntary
|
|
Change in Control
|
|
Termination
|
|
Termination
|
Cash Severance
|
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
618,750
|
|
$
|
|
|
$
|
825,000
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Shares
|
|
|
$
|
1,461,456
|
|
$
|
1,461,456
|
|
$
|
|
$
|
|
$
|
|
|
$
|
1,461,456
|
|
$
|
1,461,456
|
Performance Share Awards
|
|
|
$
|
1,069,824
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
|
$
|
1,069,824
|
|
$
|
1,069,824
|
Unexercisable Options
|
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
|
$
|
|
|
$
|
|
Total
|
|
|
$
|
2,531,280
|
|
$
|
1,461,456
|
|
$
|
|
$
|
|
$
|
|
|
$
|
2,531,280
|
|
$
|
2,531,280
|
Retirement Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DB Plan
|
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
|
$
|
|
|
$
|
|
DC Plan
|
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
|
$
|
|
|
$
|
|
Total
|
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
|
$
|
|
|
$
|
|
Unvested Deferred Compensation
|
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
|
$
|
|
|
$
|
|
Other Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health & Welfare
|
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
15,387
|
|
$
|
|
|
$
|
15,387
|
Outplacement
|
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
32,071
|
|
$
|
|
|
$
|
32,071
|
Perquisites
|
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
|
$
|
|
|
$
|
|
Long-Term Disability
|
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
|
$
|
|
|
$
|
|
Tax Gross-Ups
|
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
|
$
|
579,120
|
|
$
|
1,083,868
|
Total
|
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
47,458
|
|
$
|
579,120
|
|
$
|
1,131,326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
2,531,280
|
|
$
|
1,461,456
|
|
$
|
|
$
|
|
$
|
666,208
|
|
$
|
3,110,400
|
|
$
|
4,487,606
|
42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P.
Thompson, former VP Sales & Marketing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Qualifying
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Change in
|
|
Control &
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrelated to a
|
|
|
Control Without
|
|
Qualifying
|
|
|
|
Death
|
|
Disability
|
|
For Cause
|
|
|
Voluntary
|
|
|
Change in Control
|
|
|
Termination
|
|
Termination
|
Cash Severance
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Shares
|
|
|
$
|
2,110,992
|
|
$
|
2,110,992
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
2,110,992
|
|
$
|
2,110,992
|
Performance Share Awards
|
|
|
$
|
2,817,840
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
2,817,840
|
|
$
|
2,817,840
|
Unexercisable Options
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
Total
|
|
|
$
|
4,928,832
|
|
$
|
2,110,992
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
4,928,832
|
|
$
|
4,928,832
|
Retirement Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DB Plan
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
DC Plan
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
Total
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
Unvested Deferred Compensation
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
Other Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health & Welfare
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
Outplacement
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
Perquisites
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
Long-Term Disability
|
|
|
$
|
|
|
$
|
772,289
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
Tax Gross-Ups
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
Total
|
|
|
$
|
|
|
$
|
772,289
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
4,928,832
|
|
$
|
2,883,281
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
4,928,832
|
|
$
|
4,928,832
|
Named Executive
Officers Employed by the Company as of December 31,
2007
We have entered into executive severance agreements and maintain
certain plans that will require us to pay compensation and
provide certain benefits to each of our named executive officers
at, following, or in connection with the executives
termination of employment or a change in control of Terra.
Mr. Thompsons executive severance agreement was
terminated on September 14, 2007, when he left Terra to
join GrowHow UK. Therefore, as of December 31, 2007, Terra
had no remaining obligations thereunder. The material terms and
conditions relating to these payments and benefits are described
below. Unless otherwise specifically noted, the terms described
below apply to each named executive officer, other than
Mr. Thompson, on an identical basis. The material terms and
conditions relating to the payments that Mr. Thompson would
receive at, following, or in connection with his termination of
employment or a change in control of Terra are described below.
Involuntary
Termination Without Cause or Voluntary Termination
for Good Reason on December 31, 2007, Other
Than During the Two-Year Period Following a Change in
Control
If a named executive officers employment with Terra had
been involuntarily terminated by Terra without cause
or voluntarily terminated by the executive for good
reason on December 31, 2007, the executive would have
been entitled to the following payments and benefits:
|
|
|
|
|
A lump-sum cash severance payment in an amount equal to 1.5
times the sum of his annual base salary at termination and his
target annual incentive award for 2007;
|
|
|
Continuation of medical and dental benefits until the earlier of
two years following the date of termination or the date the
executive becomes covered by another employers major
medical plan; and
|
|
|
Outplacement services at our expense until the earlier of the
first anniversary of termination and the date that the executive
becomes employed by a new employer.
|
43
Termination Due
to Death on December 31, 2007
If a named executive officers employment with Terra was
terminated due to death on December 31, 2007, then his
estate would have been entitled to the following payments and
benefits:
|
|
|
|
|
Immediate vesting of all unvested restricted shares; and
|
|
|
Immediate vesting of all unvested performance shares at a level
based on actual performance during the performance period
through December 31, 2007.
|
Termination Due
to Disability on December 31, 2007
If a named executive officers employment with Terra was
terminated due to his disability on December 31, 2007, he
would have been entitled to the following payments and benefits:
|
|
|
|
|
Immediate vesting of all unvested restricted shares; and
|
|
|
Payment of monthly disability benefits.
|
Change in
Control Without a Qualifying Termination on
December 31, 2007
If a change in control of Terra occurred on
December 31, 2007, each named executive officer would have
been entitled to the following benefits:
|
|
|
|
|
Immediate vesting of all unvested restricted shares;
|
|
|
Immediate vesting of a number of performance shares equal to the
greater of the target number of shares subject to each
outstanding performance share grant and a number based on actual
performance during the performance period through
December 31, 2007; and
|
|
|
Payment of a
gross-up to
make the executive whole for any excise tax imposed as a result
of Section 280G of the Internal Revenue Code.
|
Involuntary
Termination Without Cause or Voluntary Termination
for Good Reason on December 31, 2007 During the
Two-Year Period Following a Change in
Control
If a named executive officers employment with Terra was
involuntarily terminated by Terra without cause or
voluntarily terminated by the executive for good
reason on December 31, 2007 and during the two-year
period following a change in control of Terra, he
would have been entitled to the following payments and benefits:
|
|
|
|
|
A lump-sum cash severance payment in an amount equal to two
times the sum of his annual base salary at termination and his
target annual incentive award for 2007;
|
|
|
Continuation of medical and dental benefits until the earlier of
two years following the date of termination or the date the
executive becomes covered by another employers major
medical plan;
|
|
|
Outplacement services at our expense until the earlier of the
first anniversary of termination and the date that the executive
becomes employed by a new employer;
|
|
|
Immediate vesting of all benefits accrued under the SERP and two
years of additional age and service credit for purposes of
calculating such benefits (only applicable to
Messrs. Bennett, Meyer, Giesler and Sanders, because
Messrs. Greenwell, Huey and Thompson do not participate in
the SERP);
|
|
|
Immediate vesting of all unvested restricted shares;
|
|
|
Immediate vesting of a number of performance shares equal to the
greater of the target number of shares subject to each
outstanding performance share grant and a number based on actual
performance during the performance period through
December 31, 2007; and
|
|
|
Payment of a
gross-up to
make the executive whole for any excise tax imposed as a result
of Section 280G of the Internal Revenue Code.
|
44
Material Defined
Terms
The terms cause and good reason as used
above are defined under the employment severance agreements and
mean the following:
Cause means (i) the willful and continued
failure of the executive to perform substantially the
executives duties with the Terra (other than any such
failure resulting from incapacity due to physical or mental
illness); (ii) the willful engaging by the executive in
illegal conduct or gross misconduct which is materially and
demonstrably injurious to Terra; or (iii) the
executives willful and material breach of the employment
severance agreement.
Good Reason means, other than during the two-year
period following a change in control (as defined in
the employment severance agreements), (i) our failure to
pay the executive any compensation when due (other than an
inadvertent failure that is remedied within 10 business days
following notice by the executive) and (ii) delivery by
Terra to the executive of a notice to terminate the
executives employment other than for cause or
permanent disability (as defined in the employment
severance agreement).
Good Reason means, during the two-year period
following a change in control (as defined in the
employment severance agreements), (i) our failure to pay
the executive any compensation when due (other than an
inadvertent failure that is remedied within 10 business days
following notice by the executive); (ii) delivery by Terra
to the executive of a notice to terminate the executives
employment other than for cause or permanent
disability (as defined in the employment severance
agreements); (iii) a reduction in the executives
annual base salary of 10% or more from the level in effect
immediately prior to the change in control;
(iv) the relocation of the executives principal place
of employment to a location more than 50 miles from
immediately prior to the change; (v) a reduction in the
executives target annual incentive award of more than 10%
from the level in effect immediately prior to the change
in control; (vi) a material diminution in the
executives titles, duties, responsibilities or status from
those in effect immediately prior to the change in
control; (vii) the removal of the executive from, or
any failure to re-elect the executive to, any of the offices the
executive held immediately prior to the change in
control; or (viii) any material reduction in
executives retirement, insurance or fringe benefits from
the levels in effect immediately prior to the change in
control.
The term change in control, as defined under the
employment severance agreements, means, in general, the
occurrence of any one of the following events: (i) certain
changes in the membership of a majority of the Board;
(ii) consummation of certain mergers or consolidations of
Terra with any other corporation following which our
stockholders hold less than 60% of the combined voting power of
the surviving entity; (iii) approval by our stockholders of
a plan of complete liquidation or dissolution of Terra; or
(iv) certain acquisitions by a third-party or
third-parties, acting in concert, of at least 25% of our then
outstanding voting securities.
The definition of change in control for purposes of
the restricted share agreements and the performance share
agreements is substantially the same as that definition for
purposes of the employment severance agreements.
Release
Requirement
Pursuant to the employment severance agreements, an executive
will not be entitled to severance and other separation benefits
unless he executes a release of claims in favor of Terra and the
release becomes effective and irrevocable.
Post-Employment
Covenants
In exchange for the above described payments and benefits to the
extent provided for under the employment severance agreements,
following termination of employment, the executive will remain
subject to
45
confidentiality, cooperation and
non-solicitation/non-competition covenants that are set forth in
the employment severance agreements. The confidentiality
covenant prohibits the executive from disclosing
confidential information as defined under the
employment severance agreements. The cooperation covenant
requires the executive to cooperate with Terra in connection
with any lawsuit or investigation that related to the
executives employment with Terra. The
non-solicitation/non-competition covenant prohibits the
executive, for a period of one year following his termination of
employment, from (i) engaging in any activity that is in
competition with Terra (including any business relating to the
production or marketing of nitrogen products) and
(ii) soliciting or hiring any of our employees without our
consent.
Named Executive
Officers Termination Prior to December 31,
2007
On September 14, 2007, our Vice President, Sales and
Marketing, Paul Thompson, resigned his position in order to
accept the position of Chief Executive Officer of GrowHow UK.
Mr. Thompsons executive severance agreement with
Terra was terminated effective September 14, 2007, and no
payments or benefits were made or provided to Mr. Thompson
in connection with his resignation from Terra.
Mr. Thompson continues to hold his restricted share awards
and performance share awards that were previously granted to him
by Terra, which will continue to vest under the same terms and
conditions due to our Boards designation of the UK Joint
Venture as an employer for purposes of continuation of vesting
of equity awards. Mr. Thompson continued to participate in
the Terras long-term disability plan until
December 31, 2007. Mr. Thompson would be entitled to
certain payments and benefits pursuant to the terms of his
equity awards and Terras long-term disability plan upon
certain terminations, as set forth below.
Termination Due
to Death on December 31, 2007
If Mr. Thompsons employment with GrowHow UK was
terminated due to death on December 31, 2007, then his
estate would have been entitled to the following payments and
benefits:
|
|
|
|
|
Immediate vesting of all unvested restricted shares; and
|
|
|
Immediate vesting of all unvested performance shares at a level
based on actual performance during the performance period
through December 31, 2007.
|
Termination Due
to Disability on December 31, 2007
If Mr. Thompsons employment with GrowHow UK was
terminated due to his disability on December 31, 2007, he
would have been entitled to the following payments and benefits:
|
|
|
|
|
Immediate vesting of all unvested restricted shares; and
|
|
|
Payment of monthly disability benefits.
|
Change in
Control on December 31, 2007
If a change in control of Terra occurred on
December 31, 2007, Mr. Thompson would have been
entitled to the following benefits:
|
|
|
|
|
Immediate vesting of all unvested restricted shares; and
|
|
|
Immediate vesting of a number of performance shares equal to the
greater of the target number of shares subject to each
outstanding performance share grant and a number based on actual
performance during the performance period through
December 31, 2007.
|
The definition of change in control for purposes of
the restricted share agreements and the performance share
agreements is substantially the same as that definition for
purposes of the employment severance agreements, as stated above.
46
Methodologies and
Assumptions used for Calculating Other Potential Post-Employment
Payments
For purposes of quantifying the other potential post-employment
payments disclosed in the preceding tables, we utilized the
following assumptions and methodologies:
|
|
|
|
|
Date of triggering event: The date of each
triggering event is December 31, 2007.
|
|
|
Determination of cash severance: Following a
qualifying triggering event, each named executive officer is
entitled to cash severance equal to the sum of the named
executive officers current base salary and target annual
incentive award multiplied by the appropriate severance
multiple. The severance multiple is 1.5 in the case of a
termination other than within two years following a change in
control of Terra, and is two in the case of a termination during
the two-year period following a change in control. In accordance
with this formula, each named executive officers cash
severance was determined based on the following:
|
|
|
|
|
|
Mr. Bennett: Annual base salary of $550,000 as of
December 31, 2007, and 2007 target annual incentive award
of $825,000.
|
|
|
|
Mr. Greenwell: Annual base salary of $300,000 as of
December 31, 2007, and 2007 target annual incentive award
of $180,000.
|
|
|
|
Mr. Meyer: Annual base salary of $350,000 as of
December 31, 2007, and 2007 target annual incentive award
of $262,500.
|
|
|
|
Mr. Giesler: Annual base salary of $232,000 as of
December 31, 2007, and 2007 target annual incentive award
of $139,200.
|
|
|
|
Mr. Sanders: Annual base salary of $220,000 as of
December 31, 2007, and 2007 target annual incentive award
of $132,000.
|
|
|
|
Mr. Huey: Annual base salary of $275,000 as of
December 31, 2007, and 2007 target annual incentive award
of $137,500.
|
|
|
|
|
|
Number of performance shares subject to vesting in the event
of a change in control: The performance share
award agreements provide that in the event of a change in
control of Terra, a number of performance shares equal to
the greater of the target number of shares subject to each
outstanding performance share grant and a number based on actual
performance during the performance period through
December 31, 2007 will become vested. Based on company
performance as of December 31, 2007, the actual performance
number for each of the outstanding performance share grants is
at least equal to the maximum level of performance, and
therefore, we have assumed vesting at the maximum level (200% of
target).
|
|
|
Number of restricted shares subject to vesting in the event
of death or disability: The restricted share
award agreements for the grants of restricted shares made in
July 2007 (or September 2007 for Mr. Thompson) provide that
in the event of a termination of employment due to death or
disability, the restricted shares subject to such grant will
vest in full.
|
|
|
Number of performance shares subject to vesting in the event
of death: The performance share award agreements
provide that in the event of a termination of employment due to
death, performance shares will vest at a level based on actual
performance during the performance period through the date of
death. Based on company performance as of December 31,
2007, the actual performance number for each of the outstanding
performance share grants is at least equal to the maximum level
of performance, and therefore, we have assumed vesting at the
maximum level (200% of target).
|
|
|
Value of restricted shares and performance shares subject to
vesting: The value of each restricted share and
performance share that was subject to vesting upon a triggering
event was determined by
|
47
|
|
|
|
|
multiplying the number of shares subject to vesting by the
closing price of Terra common stock on December 31, 2007,
the last trading day of 2007 (i.e., $47.76).
|
|
|
|
|
|
Value of continuation of health and dental
benefits: The value of health and dental benefits
which are continued for a two-year period following certain
qualifying triggering events was determined based on assumptions
used for financial reporting purposes under Financial Accounting
Standards Board Statement of Financial Accounting Standards
No. 106 (Employers Accounting for Postretirement
Benefits Other Than Pensions).
|
|
|
Value of post-termination outplacement
services: The value of post-termination
outplacement services was determined based on a value equal to
approximately 12% of an executives annual base salary as
of the date of termination of employment, which was adjusted
based on assumptions used for financial reporting purposes under
Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 106 (Employers Accounting
for Postretirement Benefits Other Than Pensions).
|
|
|
Incremental value of accelerated vesting of SERP benefits and
additional age/service credit in the event of a change in
control: These amounts, which are
applicable to Messrs. Bennett, Meyer, Giesler and Sanders,
were calculated by adding two years of credited service to the
year-end 2007 total pension benefit (i.e., sum of tax-qualified
pension and SERP) for the named executive officer and then
determining the present value of that accrued benefit deferred
to the date the executive reaches age 63, which is the
earliest age at which unreduced pension benefits would be
available to the executive with an extra two years of age. The
actuarial basis for these determinations is the same as the
basis used in the Pension Benefits Table.
|
|
|
Value of monthly disability benefits: The
value of monthly disability benefits is based on the present
value of the excess of each named executive officers
monthly disability benefit under our long-term disability plan
that covers the executive as of December 31, 2007, over the
monthly disability benefit that would be payable under our
long-term disability plan that is generally available to all
employees. Amounts are calculated using a 7% discount rate and
assuming that each named executive officer continues to receive
monthly disability benefits until age 65.
|
|
|
Determination of excise tax payments and tax
gross-up
payments made in connection with a change in
control: We determined the amount of the excise
tax payment by multiplying by 20% the excess parachute
payment that would arise in connection with payments made
to the applicable named executive officers upon either
(i) a change in control of Terra or (ii) a qualifying
termination of employment following a change in control. The
excess parachute payment was determined in accordance with the
provisions of Section 280G of the Internal Revenue Code. We
utilized the following key assumptions to determine the
applicable named executive officers tax
gross-up
payment:
|
|
|
|
|
|
based on our performance through December 31, 2007, all of
our outstanding performance share awards are currently expected
to vest at 200% of the target level. Therefore, the amount of
the excise tax with respect to the performance share awards was
calculated assuming that all performance goals with respect to
the performance share awards had already been met at the 200%
level. The result is that the amount of the excise tax
attributable to both the performance share awards and the
restricted shares is based solely on the value of the
accelerated vesting and the lapse of the obligation to perform
future services;
|
|
|
a statutory federal income tax rate of 35%, a Medicare tax rate
of 1.45% and a state income tax rate of 8.98%, which is the
maximum individual income tax rate for Iowa;
|
|
|
each named executive officers Section 280G base
amount was determined based on average
W-2
compensation for the period from
2003-2007
(or the period of the executives employment with Terra, if
shorter); and
|
|
|
the interest rate assumption was 120% of the applicable federal
rate for December 2007.
|
48
Director
Compensation
The following table summarizes the compensation of each of our
non-employee directors for the fiscal year ended
December 31, 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
Pension
|
|
|
|
|
|
|
|
|
|
|
Fees Earned
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
Value &
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
or Paid
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
Deferred
|
|
|
All Other
|
|
|
|
|
|
|
|
in Cash
|
|
|
Awards
|
|
|
Awards
|
|
|
Compensation
|
|
|
Compensation
|
|
|
Compensation
|
|
|
|
|
Name
|
|
|
($)(1)
|
|
|
($)(2)(3)
|
|
|
($)
|
|
|
($)
|
|
|
Earnings ($)
|
|
|
($)
|
|
|
Total ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fisher, D.
|
|
|
$
|
60,000
|
|
|
$
|
271,960
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
331,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fraser, D.
|
|
|
$
|
54,000
|
|
|
$
|
271,960
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
325,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hesse, M.
|
|
|
$
|
51,500
|
|
|
$
|
271,960
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
323,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Janson, P.
|
|
|
$
|
51,250
|
|
|
$
|
286,910
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
338,160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kroner, J.
|
|
|
$
|
45,000
|
|
|
$
|
232,500
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
277,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McGlone, D.
|
|
|
$
|
45,000
|
|
|
$
|
232,500
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
277,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Slack, H.
|
|
|
$
|
100,000
|
|
|
$
|
291,690
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
391,690
|
|
|
|
|
|
(1)
|
|
This
column sets forth the amount of the fees earned by each director
from Terra during 2007. For information about the nature of such
fees, see the narrative accompanying this table.
|
(2)
|
|
These
amounts represent the accounting cost of stock-based
compensation granted from 2004 through 2007 that was accrued
during 2007.
|
(3)
|
|
Based
on restricted share awards of 10,000 shares made annually
from 2004 through 2007 (except for the 2004 through 2006 grants
to the Chairman of the Board, Mr. Slack, which were for
15,000 restricted shares) and the restricted share award of
10,000 shares made to Mr. Janson on February 18,
2005 upon his appointment to the Board. These grants generally
have a three-year vesting period, but by resolution adopted
August 16, 2006, the Board voted to eliminate the
restriction on the share awards starting in 2006 and going
forward.
|
In May 2003, the board of directors voted to compensate
non-employee directors using a combination of cash and shares.
In 2007, the board of directors again reviewed the compensation
plan and structure for non-employee directors and made certain
revisions thereto while leaving intact the mix of cash and
shares.
Director Fees
Paid in Cash
Under the director compensation policy, in 2007, Mr. Slack,
Chairman of the Board, received an annual cash retainer of
$100,000 (paid quarterly). The other non-employee directors each
received an annual retainer of $27,500 (paid quarterly) and
meeting fees of $1,250 per meeting attended. Mr. Fisher
received an additional annual cash retainer of $10,000 (paid
quarterly) for serving as Chairman of the Audit Committee.
Ms. Hesse, Chairman of the Nominating and Corporate
Governance Committee, and Mr. Fraser, Chairman of the
Compensation Committee, each received an additional annual cash
retainer of $4,000 (paid quarterly) for serving as committee
chairs.
49
Director Stock
Awards
Pre-2006 Stock
Awards
Prior to 2006, non-employee directors were granted restricted
shares as part of their compensation. These restricted shares
are subject to cliff vesting with 100% of the award vesting on
the third anniversary of the grant date. If a directors
service on the Board terminates for any reason prior to vesting
(including as a result of death, retirement or total
disability), all restricted shares will continue to be eligible
for vesting following termination. All restricted shares will
become immediately vested in full in the event of a change in
control of Terra.
The following table sets forth the restricted shares held by
each non-employee director that remained subject to vesting as
of the date of this proxy statement and the expected vesting
date:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Unvested
|
|
|
|
|
|
Name
|
|
|
Restricted
Shares
|
|
|
|
Vesting
Date
|
|
Fisher, D.
|
|
|
|
10,000
|
|
|
|
|
7/30/08
|
|
|
|
|
|
|
|
|
|
|
|
|
Fraser, D.
|
|
|
|
10,000
|
|
|
|
|
7/30/08
|
|
|
|
|
|
|
|
|
|
|
|
|
Hesse, M.
|
|
|
|
10,000
|
|
|
|
|
7/30/08
|
|
|
|
|
|
|
|
|
|
|
|
|
Janson, P.
|
|
|
|
10,000
|
|
|
|
|
7/30/08
|
|
|
|
|
|
|
|
|
|
|
|
|
Slack, H.
|
|
|
|
15,000
|
|
|
|
|
7/30/08
|
|
|
|
|
|
|
|
|
|
|
|
|
2007 Stock
Awards
Pursuant to a resolution of the Board dated August 16,
2006, the Board determined that beginning in 2006 and on a
going-forward basis, director stock awards would be delivered in
the form of fully vested shares of Terra common stock. In 2007,
Mr. Slack, Chairman of the Board, received an annual grant
of 15,000 shares, while the other non-employee directors
received an annual grant of 10,000 shares. By resolution of
the Board of Directors dated October 23, 2007, the Board
determined that new equity grants should be made August 1 each
year, and that starting August 2008, the number of shares
awarded shall be determined by reference to a fixed dollar
amount divided by the share price of Terra shares for the
previous 20 trading days immediately preceding the date of
grant, rounded up to the next whole share. The dollar value used
in the numerator is $150,000 for all non-employee directors
except for Mr. Slack, the chairman, in which case the
numerator is the sum of $225,000. In addition, the Board
determined that each newly elected outside director will
receive, simultaneously with his or her election to the Board,
an initial grant of Terra shares that is equivalent to the
annual equity grant as described above.
Director Stock
Ownership Guides
Pursuant to resolution of the Board of Directors dated
October 23, 2007, the Board implemented, effective
immediately, Terra stock ownership guidelines for all
non-employee directors. The guide for all non-employee directors
is 20,000 shares for all except the Chairman, which guide
shall be 30,000 shares. All newly elected directors are to
be allowed a five year period from election to satisfy the new
guidelines.
50
Other Director
Compensation
We reimburse all directors for reasonable travel and other
necessary business expenses incurred in the performance of their
services for Terra. Non-employee directors do not receive any
additional payments or perquisites. A director who is a Terra
employee, such as Mr. Bennett, does not receive any
additional compensation for service as a director.
51
TRANSACTIONS
WITH
RELATED
PERSONS
During 2007, the Company was engaged in no transactions, nor are
any such transactions currently proposed, in which a related
party, as that term is defined in Title 17,
Chapter II, Subpart §229.404 of the Code of Federal
Regulations, had or will have a direct or indirect material
interest and which involves an amount exceeding $120,000.
POLICIES
AND
PROCEDURES
The Audit Committee of the board of directors reviews all
material transactions with any related person as identified by
management. Related persons include any of our directors or
executive officers, certain of our stockholders and their
immediate family members.
At its February 2008 meeting, the Audit Committee and Board of
Directors adopted a written policy for evaluating related person
transactions. To identify related person transactions under such
policy, each year we submit and require our directors and
officers to complete Director and Officer Questionnaires
identifying any transactions with us in which the officer or
director or their family members have an interest. Additionally,
all material undertakings by the Company are reviewed by
management, with a view, in part, to identify if a related
person is involved. Pursuant to our policy, we periodically
compile a list of related persons (Related Person List), based
on information gathered from responses to the Director and
Officer Questionnaire along with information concerning
stockholders who beneficially own more than five percent (5%) of
the voting securities of Terra, and distribute the list to key
members of management for review. Management is instructed to
review the Related Person List and promptly inform the General
Counsel of any current or proposed transactions with any person
on the list. The General Counsel is to report to the Audit
Committee any potential Related Person Transaction so
identified. We review related person transactions due to the
potential for a conflict of interest. Our Code of Business
Conduct and Ethics requires all directors, officers and
employees who may have a potential or apparent conflict of
interest to immediately notify our General Counsel.
We expect our directors, officers and employees to act and make
decisions that are in the Companys best interests and
encourage them to avoid situations which present a conflict
between our interests and their own personal interests. Our
directors, officers and employees are prohibited from taking any
action that may make it difficult for them to perform their
duties, responsibilities and services to Terra in an objective
and fair manner. The Nominating and Corporate Governance
Committee is charged with responsibility to bring before the
board of directors all requests for a waiver of the
Companys Code of Ethics and Standards of Business Conduct.
52
Audit Committee
Report
The responsibilities of the Audit Committee, which are set forth
in the Audit Committee charter adopted by the board of
directors, include providing oversight to Terras financial
reporting process through periodic meetings with Terras
independent auditors, internal auditors and management to review
accounting, auditing, internal controls and financial reporting
matters. Terra management is responsible for the preparation and
integrity of the financial reporting information and related
systems of internal controls. The Audit Committee, in carrying
out its role, relies on Terras senior management,
including its senior financial management, its internal audit
function, and its independent auditors.
The Audit Committee appointed Deloitte & Touche LLP as
independent accountants for Terra for the fiscal year 2008 and
recommends that stockholders vote in favor of
Proposal 2: Ratification of Selection of Independent
Accountants.
We have reviewed and discussed with senior management
Terras audited financial statements included in the 2007
Annual Report to Stockholders. Management has confirmed to us
that the data in such financial statements (i) has been
prepared with integrity and objectivity and is managements
responsibility, and (ii) has been prepared in conformity
with generally accepted accounting principles.
We have discussed with Deloitte & Touche LLP,
Terras independent auditors, the matters required to be
discussed by the Statement of Audit Standard No. 61
(SAS 61) Communications with Audit Committees. SAS
61 requires Terras independent auditors to provide us with
additional information regarding the scope and results of their
audit of Terras financial statements, including with
respect to (i) their responsibility under generally
accepted auditing standards, (ii) significant accounting
policies, (iii) management judgments and estimates,
(iv) any significant audit adjustments, (v) any
disagreements with management, and (vi) any difficulties
encountered in performing the audit.
We have received from Deloitte & Touche a letter
providing the disclosures required by Independence Standards
Board Standard No. 1 (Independence Discussions with Audit
Committees) with respect to any relationships between
Deloitte & Touche and Terra that in their professional
judgment may reasonably be thought to bear on independence.
Deloitte & Touche has discussed its independence with
us, and has confirmed in such letter that, in its professional
judgment, it is independent of Terra within the meaning of the
federal securities laws. Deloitte & Touche have also
discussed with us its findings related to its review of
Terras internal control procedures as required by
Section 404 of the Sarbanes-Oxley Act.
Based on the review and discussions described above with respect
to Terras audited financial statements included in
Terras 2007 Annual Report to Stockholders, we have
recommended to the board of directors that such financial
statements be included in Terras Annual Report on
Form 10-K
for filing with the SEC.
The Audit Committee has a policy concerning the approval of
audit and non-audit services to be provided by Terras
independent auditors. A copy of this policy can be found in
Terras Audit Committee Charter on our Web site at
www.terraindustries.com in the Investor Information section,
Charters and Guidelines. The policy requires that all services
provided by Terras independent auditors to Terra,
including audit services and permitted audit-related and
non-audit related services, be pre-approved by the Audit
Committee.
53
In giving our recommendation to the board of directors, we have
relied on (i) managements representation that the
data in such financial statements has been prepared with
integrity and objectivity and in conformity with generally
accepted accounting principles, and (ii) the report of
Terras independent auditors with respect to such financial
statements.
Members of the Audit Committee
of the Board of Directors
D.E. Fisher, Chairman
M.O. Hesse
P.S. Janson
J.R. Kroner
54
Proposal 2:
Ratification of Selection of Independent Accountants
The board of directors recommends that the stockholders ratify
the Audit Committees selection of Deloitte &
Touche LLP as independent accountants for Terra for the fiscal
year 2008.
It is expected that members of Deloitte & Touche will
attend the annual meeting to make a statement if they desire to
do so and to respond to any appropriate questions that may be
asked by stockholders.
PRINCIPAL
ACCOUNTANT
AUDIT
FEES
AND
SERVICE
FEES
The table below describes fees for professional audit services
rendered by Deloitte & Touche, Terras principal
accountant, for the audit of Terras annual financial
statements for the years ended December 31, 2007 and
December 31, 2006 and fees billed for other services
rendered by Deloitte & Touche during those periods.
All such audit and other services, as well as related fees for
2007, were approved in advance by the Audit Committee.
|
|
|
|
|
|
|
|
|
Type
of Fee
|
|
2007
|
|
|
2006
|
|
Audit Fees
1/
|
|
$
|
1,411,841
|
|
|
$
|
1,600,235
|
|
Audit Related Fees
2/ 4/
|
|
|
253,261
|
|
|
|
44,679
|
|
|
|
|
|
|
|
|
|
|
Total Audit and Audit Related Fees
|
|
|
1,665,102
|
|
|
|
1,644,914
|
|
|
|
|
|
|
|
|
|
|
Tax Fees
3/ 4/
|
|
|
305,621
|
|
|
|
262,902
|
|
All Other Fees
4/
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,970,723
|
|
|
$
|
1,907,816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/ |
|
Audit
Fees, including those for statutory audits, include the
aggregate fees paid by Terra during the fiscal year indicated
for professional services rendered by Deloitte for the audit of
Terras annual financial statements and review of financial
statements included in Terras
Form 10-Qs.
|
2/ |
|
Audit
Related Fees include the aggregate fees paid related to the
audit of the Companys retirement, savings and investment
plans, and audit related procedures as a result of the GrowHow
UK Limited joint venture.
|
3/ |
|
Tax
Fees include the aggregate fees paid by Terra during the fiscal
year indicated for professional services rendered by the
principal accountant for tax compliance, tax advice and tax
planning.
|
4/ |
|
The
full amount of each such service and related fees were approved
in advance by the Audit Committee.
|
The Audit Committee has advised Terras board of directors
that it has determined that the non-audit services rendered by
Terras independent auditors during Terras most
recent fiscal year are compatible with maintaining such
auditors independence.
The board of directors recommends that you vote FOR the
ratification of the Audit Committees selection of
independent accountants.
55
Submission of
Stockholder Proposals for 2009 Annual Meeting
Stockholder proposals intended for submission at the 2009 annual
meeting of stockholders must be received by Terra at its
principal executive offices on or before November 14, 2008
to be eligible for inclusion in Terras proxy statement and
accompanying proxy for such meeting. If a stockholder intends to
bring a matter before the 2009 annual meeting of stockholders
other than by submitting a proposal for inclusion in the proxy
statement, the stockholder must give timely notice to Terra and
otherwise satisfy the requirements of the Securities Exchange
Act of 1934. To be timely, such notice must be received by the
Corporate Secretary at Terras principal executive offices
not earlier than January 6, 2009 and not later than
February 5, 2009.
MISCELLANEOUS
Terra will pay the cost of soliciting proxies. Proxies are
solicited through the mail. Certain Terra employees, without
additional compensation, may also solicit proxies personally, by
telephone or by fax. Terra will reimburse brokers and other
persons holding stock in their names, or in the names of
nominees, at approved rates, for their expenses for sending
proxy material to principals and obtaining their proxies.
A copy of Terras Annual Report on
Form 10-K
for the fiscal year ended December 31, 2007 filed with the
Securities and Exchange Commission (without exhibits) will be
made available to stockholders without charge upon written
request to the Investor Relations Department, Terra Industries
Inc., Terra Centre, 600 Fourth Street,
P.O. Box 6000, Sioux City, Iowa
51102-6000.
March 14, 2008
56
. NNNNNNNNNNNN Admission Ticket NNNNNNNNNNNNNNN C123456789 000004 000000000.000000 ext
000000000.000000 ext 000000000.000000 ext 000000000.000000 ext MR A SAMPLE DESIGNATION (IF ANY)
000000000.000000 ext 000000000.000000 ext ADD 1 Electronic Voting Instructions ADD 2 ADD 3 You can
vote by Internet or telephone! ADD 4 Available 24 hours a day, 7 days a week! ADD 5 Instead of
mailing your proxy, you may choose one of the two voting ADD 6 methods outlined below to vote your
proxy. NNNNNNNNN VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxies submitted by the
Internet or telephone must be received by 12:00 a.m., Eastern Time, on May 6, 2008. Vote by
Internet Log on to the Internet and go to www.investorvote.com Follow the steps outlined on the
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free1-800-652-VOTE (8683) on a touch tone telephone. There is NO CHARGE to you for the call.
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message. this example. Please do not write outside the designated areas. Annual Meeting Proxy Card
123456 C0123456789 12345 3 IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG
THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. 3 A
Proposals The Board of Directors recommends a vote FOR all the nominees listed and FOR Proposal
2. 1. Election of Class I Directors: For Withhold For Withhold For Withhold + 01 Michael L.
Bennett 02 Peter S. Janson 03 James R. Kroner For Against Abstain 2. Ratification of Audit
Committees selection of Deloitte & Touche LLP as independent accountants for 2008. B Non-Voting
Items Change of Address Please print your new address below. Comments Please print your
comments below. Meeting Attendance Mark the box to the right if you plan to attend the Annual
Meeting. C Authorized Signatures This section must be completed for your vote to be counted.
Date and Sign Below NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee, or guardian, please also give
your full title. If a corporation, please sign in full corporate name by an authorized officer. If
a partnership, please sign in full partnership name by an authorized person. Date (mm/dd/yyyy)
Please print date below. Signature 1 Please keep signature within the box. Signature 2 Please
keep signature within the box. C 1234567890 J N T MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE
140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND
NNNNNNN3 1 D V 0 1 6 2 6 9 1 MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND + <STOCK#>
00UHJD . |
2008 Annual Meeting Admission Ticket 2008 Annual Meeting of Terra Industries Inc. Stockholders
Tuesday, May 6, 2008, 9:00 A.M. Local Time Omni Berkshire Place 21 East 52nd Street at Madison
Avenue New York, New York 10022 Upon arrival, please present this admission ticket and photo
identification at the registration desk. Terra News and Information Our goal is to provide
interested parties with timely information in an efficient, cost effective manner most convenient
to you. We distribute our news releases and other materials in email, fax and hard copy format. Let
us know what materials youd like to receive and how by: 3 Providing your contact information
via our website at www.terraindustries.com or 3 Calling us at (800) 831-1002, ext. 8788.
3 IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND
RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. 3 Proxy TERRA INDUSTRIES INC.
TERRA INDUSTRIES INC. Proxy Solicited on Behalf of the Board of Directors The undersigned hereby
acknowledges receipt of the Notice of 2008 Annual Meeting of Stockholders and Proxy statement, each
dated March 14, 2008, and revoking all prior proxies, hereby appoints HENRY R. SLACK, MICHAEL L.
BENNETT and DANIEL D. GREENWELL, jointly and severally, as proxies, with power of substitution, to
vote at the Annual Meeting of Stockholders (including adjournments) of TERRA INDUSTRIES INC. to be
held May 6, 2008, with all powers the undersigned would possess if personally present, on the
election of directors, on the Proposals described in the Proxy Statement and, in accordance with
their discretion, on any other business that may come before the meeting. You are encouraged to
specify your choices by marking the appropriate boxes, SEE REVERSE SIDE, but you need not mark any
boxes if you wish to vote in accordance with the Board of Directors recommendations. The Proxies
cannot vote your shares unless you sign and return this card. PLEASE VOTE, DATE AND SIGN THIS PROXY
ON THE OTHER SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. |