<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from______to______
Commission file number: 1-1511
FEDERAL-MOGUL CORPORATION
EMPLOYEE INVESTMENT PROGRAM
26555 Northwestern Highway
Southfield, Michigan 48034
The Plan holds shares of common stock (without par value) of
Federal-Mogul Corporation (see address above).
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Retirement Programs Committee
Federal-Mogul Corporation
We have audited the accompanying statements of net assets available for plan
benefits of the Federal-Mogul Corporation Employee Investment Program as of
December 31, 1999 and 1998, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1999 and 1998, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held for investment purposes at end of year as of December 31, 1999 is presented
for purposes of additional analysis and is not a required part of the financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
Detroit, MI
June 26, 2000
<PAGE>
FEDERAL-MOGUL CORPORATION
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
EMPLOYEES' INVESTMENT PROGRAM
<TABLE>
<CAPTION>
December 31
1999 1998
------------- ------------
ASSETS
<S> <C> <C>
Investments in master trust (See Note 6) $ 193,521,209 $ 39,192,864
Participant loans receivable 2,903,654 996,846
------------- ------------
Total Assets 196,424,863 40,189,710
LIABILITIES
Accrued Expenses 6,173 -
Forfeited accounts owed to FMC (See Note 1) 77,950 91,106
------------- ------------
Total Liabilities 84,123 91,106
------------- ------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 196,340,740 $ 40,098,604
============= ============
</TABLE>
See notes to financial statements
1
<PAGE>
FEDERAL-MOGUL CORPORATION
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
EMPLOYEES' INVESTMENT PROGRAM
<TABLE>
<CAPTION>
December 31
1999 1998
------------ ------------
<S> <C> <C>
Additions
Dividends and Interest $ 6,819,652 $ 856,834
Contributions:
Participants 8,543,875 4,474,861
Federal-Mogul Corporation 4,075,511 1,727,121
------------ ------------
Total Additions 19,439,038 7,058,816
Deductions
Benefits paid to participants 4,310,128 2,622,202
Portion of Company Match Account forfeited upon
withdrawal of members (See Note 2) 35,080 61,772
------------ ------------
Total Deductions 4,345,208 2,683,974
Transfers from another FMC investment program 155,437,677 (43,827)
Net unrealized appreciation/(depreciation) in fair value of
investments (See Note 7) (14,289,371) 6,979,751
------------ ------------
Net increase 156,242,136 11,310,766
Net assets available for plan benefits at beginning of year 40,098,604 28,787,838
------------ ------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $196,340,740 $ 40,098,604
============ ============
</TABLE>
See notes to financial statements
2
<PAGE>
FEDERAL-MOGUL CORPORATION
EMPLOYEES' INVESTMENT PROGRAM
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
1. DESCRIPTION OF THE PLAN
The following description of the Federal-Mogul Corporation Employees' Investment
Program (the "Plan") provides only general information. Participants should
refer to the Plan agreement for a more complete description of the Plan's
provisions.
During 1999 and 1998, the Plan received assets transferred from other investment
programs of Federal-Mogul Corporation (the "Company").
GENERAL
The Plan is a defined contribution plan which provides eligible hourly employees
of Company with a program for making voluntary pretax and after-tax
contributions. Substantially all hourly employees of the Company and
subsidiaries are eligible to participate in the Plan. It is subject to the
provisions of the Employee Retirement Income Security Act (ERISA).
MASTER TRUST
The Plan invests in a single master trust through a master trust agreement with
The State Street Bank (the "Trustee"). The trust agreement provides, among other
things, that the Trustee, safekeeps all investments, and keeps account for all
investments, receipts, and disbursements, benefit payments, and other
transactions.
3
<PAGE>
1. DESCRIPTION OF THE PLAN (CONTINUED)
CONTRIBUTIONS & VESTING
<TABLE>
<CAPTION>
Frankfort Greenville Milan Van Wert Blacksburg Logansport St. Johns All Others
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Company Match
(% of participant contribution) 50% 50% 50% 50% N/A 40% N/A 50%
2. Matching Amount
(% of participant compensation) 8% 8% 8% 8% N/A 8% N/A 8%
3. Maximum Contribution
(% of participant compensation) 20% 20% 20% 20% 20% 20% 20% 20%
4. Vesting Schedule
Years of Service
less than 2 0% 0% 0% 0% N/A 0% 0% 0%
less than 3 0% 25% 25% 25% N/A 25% 0% 25%
less than 4 0% 50% 50% 50% N/A 50% 0% 50%
less than 5 0% 75% 75% 75% N/A 75% 0% 75%
5 or more 100% 100% 100% 100% N/A 100% 100% 100%
5. Pension Contribution Yes Yes No No No Yes Yes Yes
6. Eligibility to participate 60 days 90 days 90 days 90 days 90 days 90 days 90 days Immediate
Eligibility for company match 60 days 1 year of 1 year of 60 days N/A 1 year of 90 days Immediate
service service service
</TABLE>
Full vesting also occurs upon death, disability, or retirement at designiated
ages. In addition, special vesting provisions will become effective if if the
Plan is determined to be "top-heavy," pursuant to the Internal Revenue Code.
4
<PAGE>
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contribution and
allocations of the (a) the Company's contribution and (b) Plan earnings, and
charged with an allocation of certain administrative expenses. These
administrative expenses, paid by participants, are netted against the net asset
value of the investment fund. Allocations are based on participant earnings or
account balances, as defined. The benefit to which a participant is entitled is
the benefit that can be provided from the participant's vested account.
FORFEITURES
Shares of Federal-Mogul Corporation common stock which are not vested at the
time of a participant's withdrawal from the Plan are forfeited and are applied
as a reduction of required Company contributions.
If the individual is re-employed within 60 months of his/her severance of
employment and repays the full amount previously distributed to him/her from the
Company contribution account and otherwise qualifies for reinstatement in the
Plan, the amount of the forfeiture is re-credited to his/her account in the
reinstatement year.
INVESTMENT OPTIONS
The Plan provides for eight investment options which includes a stable value
fund, a bond fund, a large cap equity fund, a mid cap equity fund, a small cap
equity fund, an international fund, a brokerage account and common stock of the
Company.
PARTICIPANT LOANS RECEIVABLE
The Plan allows participants to borrow from their account upon written request
and certain plan conditions. The maximum amount of a participant's borrowings
shall not exceed $50,000 over a 12 month period and is limited to the lower of
50% of the participant's vested account balance or 90% of the participant's
employee contribution accounts. No borrowings shall be given for amounts under
$1,000. Loans for the purchase of a primary residence can be for a 15-year
duration. All other borrowings shall be paid back in equal payments through
payroll deductions not to exceed four-and-one-half years.
PAYMENT OF BENEFITS / WITHDRAWALS
In the event of retirement (as defined by the Plan agreement), death, permanent
disability, termination of employment, (as defined by the Plan agreement), or
attainment of age 59 1/2, the vested balances in the participant's accounts will
be distributed to the participant or the participant's beneficiary in either a
lump-sum distribution, an annual or more frequent installment.
2. SIGNIFICANT ACCOUNT POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the accrual method of
accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION
Investments in Federal-Mogul Corporation common stock, the Bond Fund, the Large
Cap Equity Fund, the Mid Cap Equity Fund, the Small Cap Equity Fund, the
International Fund, and the Brokerage Account are valued at quoted market
prices. The Stable Value Fund is valued at fair market value as estimated by
LaSalle National Trust. The Stable Value Fund value represents contributions
plus interest, less administrative expenses.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
5
<PAGE>
SIGNIFICANT ACCOUNT POLICIES (CONTINUED)
PAYMENT OF BENEFITS
Benefits are recorded when paid
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires the Plan's management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Reclassifications
Certain amounts included in the 1998 financial statements have been reclassified
to conform to the 1999 presentation.
3. PARTY-IN-INTEREST TRANSACTIONS
Certain of the Plan's investments are held by a consolidated master trust (the
"Trust") administered by the Trustee. During the years ended December 31, 1999
and December 31, 1998, the Trust purchased 1,443,654 and 206,232 shares of
common stock of Federal-Mogul Corporation for a total cost of $43,585,601 and
$11,179,982 respectively.
Fees incurred for legal, accounting and other services rendered by
parties-in-interest were based on customary and reasonable rates for such
services and were paid by the Company on behalf of the Plan. Forfeited shares
which have not been applied as a reduction of contributions at year-end are
reflected as a liability to the Company and will be applied to reduce future
Company contributions.
4. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right,
under the Plan, to discontinue its contributions at any time and terminate the
Plan, subject to the provisions of ERISA. In the event the Plan is terminated or
partially terminated, the Company shall determine the share of each participant
affected thereby and all accounts shall fully vest. The funds shall then be
distributed to the member and no portion of the funds shall be returned to the
Company.
5. INCOME TAX STATUS
The Internal Revenue Service has ruled favorably on the Plan as of October 25,
1996 that the Plan qualifies under section 401 (a) of the Internal Revenue Code
(IRC) and the related trust therefore, is not subject to tax under present
income tax laws. The Plan is required to operate in conformity with the IRC and
the Employee Retirement Income Security Act of 1974 to maintain its
qualification. The Company is not aware of any course of action or series of
events that have occurred that might adversely affect the Plan's qualified
status.
6
<PAGE>
6. INVESTMENTS IN MASTER TRUST
Certain of the Plan's investments are held by a the Trust administered by the
Trustee. At December 31, 1999 and 1998 the Plan holds a 35% share and a 19%
share, respectively, of the master trust.
The fair value of net assets of the Trust at December 31, 1999 and December 31,
1998 were as follows:
<TABLE>
<CAPTION>
December 31, 1999 December 31, 1998
----------------- -----------------
<S> <C> <C>
Investments:
Stable Value Fund $ 166,565,765 $ 40,901,369
Bond Fund 40,420,469 8,934,232
Large Cap Equity Fund 192,112,508 47,329,310
Mid Cap Equity Fund 9,891,731 20,717,520
Small Cap Equity Fund 30,522,675 -
International Fund 17,081,362 6,499,520
Brokerage Account 1,753,017 -
Federal-Mogul Common Stock Fund* 56,713,676 84,316,050
Cooper Common Stock Fund 26,926,944 -
Cooper Cameron Stock Fund 1,430,827 -
Loan Fund 6,309,030 -
--------------- ---------------
Total Investments 549,728,004 208,698,001
Receivable from FMC - 511,180
Cash equivalents, including accrued interest - 304,995
Participant loans receivable 5,546,787 -
--------------- ---------------
Total Assets 555,274,791 209,514,176
Forfeited accounts owed to FMC 108,777 110,054
Accrued Expenses 17,635 -
--------------- ---------------
Total Liabilities 126,412 110,054
--------------- ---------------
NET ASSETS OF THE MASTER TRUST $ 555,148,379 $ 209,404,122
=============== ===============
</TABLE>
* non-participant directed
7
<PAGE>
6. INVESTMENTS IN MASTER TRUST (CONTINUED)
During the year ended December 31, 1999 and December 1998 the Trust had
investment income amounting to $19,484,720 and $5,384,652, respectively, and had
realized and unrealized depreciation and appreciation in the fair value of
investments of ($45,152,207) and $33,939,645 respectively as follows:
<TABLE>
<CAPTION>
Net Realized and
Unrealized
Appreciation
Net Investment (Depreciation) in
Income During Fair Value During
Period Period
-------------- -----------------
<S> <C> <C>
Year Ended December 31, 1999
--------------------------------------------------
Stable Value Fund $ 3,519,893 $ -
Bond Fund 525,602 666,306
Large Cap Equity Fund 6,936,253 11,612,073
Mid Cap Equity Fund 157,266 984,078
Small Cap Equity Fund 3,788,264 2,089,255
International Fund 568,724 3,295,700
Brokerage Account 405,364 -
Federal Mogul Common Stock Fund 2,467,194 (61,195,526)
Cooper Common Stock Fund 220,151 (2,940,791)
Cooper Cameron Stock Fund 461 336,698
Loan Fund 895,548 -
------------ -------------
$ 19,484,720 $ (45,152,207)
Year Ended December 31, 1998
--------------------------------------------------
Stable Value Fund $ 2,203,445 $ -
Bond Fund 250,989 250,802
Large Cap Equity Fund 1,808,627 2,817,610
Mid Cap Equity Fund 719,194 674,085
International Fund 209,720 436,003
Federal Mogul Common Stock Fund 192,677 29,761,145
------------ -------------
$ 5,384,652 $ 33,939,645
</TABLE>
8
<PAGE>
6. INVESTMENTS IN MASTER TRUST (CONTINUED)
The changes in the fair value of net assets of the consolidated master trust for
the years ended December 31, 1999, and December 31, 1998 as summarized as
follows:
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
-------------- --------------
<S> <C> <C>
Additions:
Dividends/interest income $ 19,484,720 $ 5,384,652
Contributions from participating employees 25,412,255 14,462,175
Contributions from Federal-Mogul Corporation 6,844,589 1,400,610
------------- -------------
Total Additions 51,741,564 21,247,437
Deductions:
Members' accounts distributed upon withdrawal 20,331,070 19,235,493
Portion of company match account forfeited upon
withdrawal of members 69,809 69,572
------------- -------------
Total Deductions 20,400,879 19,305,065
Net appreciation/(depreciation) in market value of investments (45,152,207) 33,939,645
Transfers from other plans 359,555,779 290,496
------------- -------------
NET INCREASE/(DECREASE) 345,744,257 36,172,513
------------- -------------
Net assets available for plan benefits at beginning of year 209,404,122 173,231,609
------------- -------------
NET ASSETS OF MASTER TRUST AT END OF PERIOD $ 555,148,379 $ 209,404,122
============= =============
</TABLE>
9
<PAGE>
7. NONPARTICIPANT-DIRECTED INVESTMENTS
Information about the net assets and the significant components of the changes
in net assets relating to the nonparticipant-directed investments is as follows:
<TABLE>
<CAPTION>
December 31,
1999 1998
---------------------------------
<S> <C> <C>
Net Assets:
Federal-Mogul Common Stock $ 13,929,434 $ 19,449,290
---------------------------------
$ 13,929,434 $ 19,449,290
=================================
</TABLE>
<TABLE>
<CAPTION>
Changes in Net Assets: Year Ended
December 31, 1999
------------------
<S> <C>
Contributions $ 3,302,792
Dividends and interest 630,728
Net appreciation/depreciation (15,641,672)
Benefits paid to participants (918,799)
Transfers to participant-directed investments 1,561,143
Transfers from other plans 5,545,952
------------------
$ (5,519,856)
==================
</TABLE>
10
<PAGE>
FEDERAL-MOGUL CORPORATION
EMPLOYEES' INVESTMENT PROGRAM
EIN: 38-0533580
SCHEDULE H, LINE 4I
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
DECEMBER 31, 1999
The following is a Schedule of Assets Held for Investment outside of the Master
Trust:
<TABLE>
<CAPTION>
Identity of Issue, Borrower, Description of Investment including Maturity Date, Historical Cost Current Value
Lessor or Similar Party Interest, Collateral, Par or Maturity Value
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Participant Loans Receivable 9.25% (average interest rate) $ 2,903,654 $ 2,903,654
======================================
</TABLE>
There were no investment assets reportable as acquired and disposed of during
the year.
11
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, The
Federal-Mogul Corporation Employee Investment Program has duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
FEDERAL-MOGUL CORPORATION
EMPLOYEE INVESTMENT PROGRAM
By: /s/ James Zamoyski
-------------------------------------
James Zamoyski
Retirement Programs Committee
Dated: June 27, 2000
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Document
-------------- --------
<S> <C>
23 Consent of Ernst & Young (filed herewith and incorporated herein by reference)
</TABLE>
