UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
(Mark One)
[ ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1997
OR
[ X ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________ to __________
Commission file number ____________________
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
The Terex Corporation and Affiliates' 401(k) Retirement Savings Plan
for Represented Employees
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
Terex Corporation
500 Post Road East, Suite 320
Westport, Connecticut 06880
<PAGE>
TEREX CORPORATION AND AFFILIATES'
401(k) RETIREMENT SAVINGS PLAN
FOR REPRESENTED EMPLOYEES
Financial Statements
December 31, 1997
<PAGE>
TEREX CORPORATION AND AFFILIATES' 401(k)
RETIREMENT SAVINGS PLAN FOR REPRESENTED EMPLOYEES
INDEX
- -------------------------------------------------------------------------------
Page
REPORT OF INDEPENDENT ACCOUNTANTS............................................1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits..........................2
Statement of Changes in Net Assets Available for Benefits................3
Notes to Financial Statements........................................4 - 8
SUPPLEMENTAL SCHEDULES:
Item 27(a) - Assets Held for Investment Purposes.........................9
Item 27(d) - Reportable Transactions....................................10
<PAGE>
Report of Independent Accountants
To the Participants and Administrative Committee of the
Terex Corporation and Affiliates'
401(k) Retirement Savings Plan for Represented Employees
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Terex Corporation and Affiliates' 401(k) Retirement Savings Plan for
Represented Employees (the "Plan") at December 31, 1997 and 1996, and the
changes in net assets available for benefits for the year ended December 31,
1997, in conformity with generally accepted accounting principles. 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 of these statements in accordance with
generally accepted auditing standards which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
the supplemental schedules listed in the accompanying index is presented for
purposes of additional analysis and is not a required part of the basic
financial statements but is additional information required by ERISA. Such
information has been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
Price Waterhouse LLP
Stamford, Connecticut
June 24, 1998
<PAGE>
2
TEREX CORPORATION AND AFFILIATES' 401(k)
RETIREMENT SAVINGS PLAN FOR REPRESENTED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996
--------------- --------------
ASSETS:
Investments:
<S> <C> <C>
Mutual funds, at fair value.............................. $ 1,051,144 $ 969,480
Corporate common stock, at fair value.................... 96,714 26,225
Guaranteed Investment Contracts, at contract value....... 10,299 ---
Loans to participants.................................... 60,375 37,916
--------------- --------------
Total investments................................... 1,218,532 1,033,621
--------------- --------------
Receivables:
Employee contributions................................... 14,892 12,480
Employer contributions................................... 8,097 782
Interest on participants loans........................... 490 486
--------------- --------------
Total receivables................................... 23,479 13,748
--------------- --------------
NET ASSETS AVAILABLE FOR BENEFITS............................ $ 1,242,011 $ 1,047,369
=============== ==============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
3
TEREX CORPORATION AND AFFILIATES' 401(k)
RETIREMENT SAVINGS PLAN FOR REPRESENTED EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
- -------------------------------------------------------------------------------
ADDITIONS:
Investment income.......................................... $ 36,553
Employee contributions..................................... 242,920
Employer contributions..................................... 39,746
Transfer into plan......................................... 88,617
--------------
Total additions....................................... 407,836
--------------
DEDUCTIONS:
Withdrawals................................................ 355,581
Administrative fees........................................ 2,845
--------------
Total deductions...................................... 358,426
--------------
NET APPRECIATION IN AGGREGATE FAIR VALUE OF INVESTMENTS........ 145,232
NET INCREASE.......................................... 194,642
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of period........................................ 1,047,369
--------------
End of period.............................................. $ 1,242,011
==============
See accompanying notes to financial statements.
<PAGE>
4
TEREX CORPORATION AND AFFILIATES' 401(k)
RETIREMENT SAVINGS PLAN FOR REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
General - The Terex Corporation and Affiliates' 401(k) Retirement
Savings Plan for Represented Employees (the "Plan") was established on
January 1, 1987. The Plan is a defined contribution plan that covers
certain eligible employees of Terex Corporation and its subsidiaries
("Terex" or the "Company") meeting minimum eligibility requirements.
Certain officers of Terex serve as trustees of the Plan (the
"Trustees"). The investments of the Plan are held by Massachusetts
Mutual Life Insurance Company ("Mass Mutual") and the Principal
Financial Group ("Principal").
Participants of the Plan are the hourly-rate employees of the Company's
Unit Rig division ("Unit Rig"), the Terex Parts Distribution Center
("Southaven") and the Bowerston Division of Simon Access ("Bowerston"),
which was acquired by the Company on April 7, 1997. Bowerston
maintained a defined contribution retirement plan with Principal. On
June 25, 1997, most of the assets of the plan were transferred to Mass
Mutual. Subsequent to the acquisition the Bowerston facility was
closed. Investments of the former Bowerston employees remain in the
Plan, however there are no additional contributions being made. Certain
investments in Guaranteed Investment Contracts ("GICs") maturing
through December 31, 2002 continue to be held by Principal. Terms for
each subsidiary location are negotiated under separate collective
bargaining agreements and differ with respect to participant
contributions, employer contributions and loans to participants. The
general provisions for each location are discussed below.
The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
An Administrative Committee, consisting of at least three members
appointed by the Company's Board of Directors, administers the benefit
structure of the Plan. The Company is considered the Plan Administrator
for purposes of ERISA.
Participant Eligibility- Employees at Unit Rig are eligible to
participate in the Plan after they complete six months of service and
employees at Southaven are eligible to participate after three months
of service.
Participant Contributions - Participants at Unit Rig may contribute up
to 20% of their compensation, participants at Southaven may contribute
up to 16% of their compensation. Contributions may be in any
combination of pre or post-tax earnings. The maximum pre-tax
contribution permitted under Internal Revenue Service regulations in
1997 was $9,500. Participants are able to direct current contributions
and redistribute accumulated contributions and earnings between
investment funds.
Employer Contributions - The plan in effect at Southaven provides that
Terex will match 50% of the first 6% of the employees salary that is
contributed to the plan. The terms of each subsidiary's collective
bargaining agreement provide that the Company may make, in its sole
discretion, supplementary contributions. All Company contributions are
made in Terex Common Stock.
Vesting - All participants are immediately fully vested in their
voluntary contributions plus any actual earnings thereon. The vesting
period for supplemental contributions is determined by the Company at
the time of contribution. Participants at Southaven vest in the
employer matching contributions after one year of eligible service.
Participants employed at Bowerston on April 7, 1997 are fully vested in
employer contributions. Bowerston participants hired after April 7,
1997 vest in employer contributions after one year of eligible service.
Forfeitures - Nonvested employer contributions of terminated employees
become forfeitures and are held in a separate account and shall be used
to reduce future employer contributions. However, employees that return
to service within five years from their separation date will be
entitled to continue vesting on the employer contributions which were
previously forfeited.
<PAGE>
5
TEREX CORPORATION AND AFFILIATES' 401(k)
RETIREMENT SAVINGS PLAN FOR REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN (continued)
Allocation of Earnings - Each participant's account is credited with
contributions and an allocation of earnings from the respective
investment funds. A participant's contributions are used to purchase
shares in the various investment funds. The value of and the earnings
credited to a participant's account are based on the proportionate
number of shares owned by the participant and the fair value of the
investment on the valuation date.
Payment of Benefits - Upon retirement, disability, or death, the entire
balance of the participant's account becomes payable to the participant
or designated beneficiary. Upon any other termination of employment,
the participant receives the vested portion of his/her account;
however, if the vested portion of the participant's account is greater
than $5,000 he/she can elect to keep the investments in the Plan.
Withdrawals are also permitted for financial hardship, as defined by
the Plan, or upon attainment of age 59-1/2. All benefits are paid in a
lump sum.
Participant Loans - Participants may obtain loans in an amount equal to
the lesser of $50,000 or 50% of the vested portion of their account
balance, subject to the discretion of the Plan Administrator and
certain other restrictions. Terms of all loans are established by the
Plan Administrator.
The above brief description of the Plan is intended to give a general
summary of the principal provisions of the Plan. Further information
about the Plan is contained in the Terex Corporation and Affiliates'
401(k) Retirement Savings Plan for Represented Employees Summary Plan
Description. This booklet is available from the Company.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The accompanying financial statements have been
prepared on the accrual basis. The Form 5500 reports filed with the
Department of Labor have been prepared on a cash basis and record
Company and employee contributions when received.
Investments - Plan investments are stated at fair value based on
published market prices or other independent sources. Loans to
participants are valued at cost which approximates fair value. Net
appreciation (depreciation) in aggregate fair value of investments is
comprised of all realized and unrealized gains and losses during the
year.
Expenses - Fees and expenses related to administering the Plan are
generally paid by Terex.
Withdrawals - Withdrawals are recognized at the time of distribution to
the participant.
Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
<PAGE>
6
TEREX CORPORATION AND AFFILIATES' 401(k)
RETIREMENT SAVINGS PLAN FOR REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
3. INVESTMENTS
The investments of the Plan are held and managed by Mass Mutual and
Principal. A schedule of investments held at December 31, 1997 and 1996
follows:
<TABLE>
<CAPTION>
1997 1996
----------------------------- -----------------------------
Market Cost Market Cost
-------------- -------------- -------------- --------------
Mass Mutual Group
<S> <C> <C> <C> <C>
Annuity Contract Fixed Fund*............... $ 496,138 $ 496,138 $ 566,208 $ 566,208
Mass Mutual Value Equity Fund*............... 144,020 99,641 97,133 78,792
Mass Mutual Destiny Aggressive Fund.......... 50,612 38,551 65,095 55,384
Mass Mutual Destiny Conservative Fund........ 27,958 24,045 19,569 17,680
Mass Mutual Destiny All Equity Fund*......... 102,073 74,601 73,936 60,383
Mass Mutual Destiny Moderate Fund*........... 69,131 55,675 45,812 39,751
Mass Mutual Core Bond Fund................... 22,775 20,488 14,675 13,610
Mass Mutual International Equity Fund........ 38,468 32,966 23,174 19,779
Mass Mutual Growth Fund...................... 40,099 31,873 36,197 30,580
Mass Mutual Small Cap Value Equity Fund...... 59,870 45,428 27,681 22,452
Terex Corporation Common Stock*.............. 96,714 51,587 26,225 16,863
Principal Guaranteed Investment Contracts 10,299 10,299 -- --
Loans to Participants........................ 60,375 60,375 37,916 37,916
------------- -------------- -------------- --------------
TOTAL.................................... $ 1,218,532 $ 1,041,667 $ 1,033,621 $ 959,398
============== ============== ============== ==============
</TABLE>
* Investment represents 5% or more of net assets available for benefits at
December 31, 1997.
<PAGE>
7
TEREX CORPORATION AND AFFILIATES' 401(k)
RETIREMENT SAVINGS PLAN FOR REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
3. INVESTMENTS (Continued)
Participants and employer contributions are allocated to investment programs in
accordance with the participant's election. The following is a summary of
changes in investmetns by investment program for the year ended December 31,
1997:
<TABLE>
<CAPTION>
Mass Mutual
Group Mass Mutual Mass Mutual Mass Mutual
Annuity Mass Mutual Destiny Destiny Mass Mutual Destiny
Contract Value Aggressive Conservative Destiny All Moderate Mutual Core
Fixed Fund Equity Fund Fund Fund Equity Fund Fund Bond Fund
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investments at January 1, 1997.......$ 566,208 $ 97,133 $ 65,095 $ 19,569 $ 73,936 $ 45,812 $ 14,675
Additions:
Investment income and gain/loss.... 35,683 30,489 13,087 2,858 19,002 8,346 1,719
Contributions, loan repayments &
transfers........................ 194,027 33,410 15,986 12,333 27,934 20,378 12,291
Deductions - Benefits, loans issued,
expenses & transfers............... (299,780) (17,012) (43,556) (6,802) (18,799) (5,405) (5,910)
Investments at December 31, 1997.....$ 496,138 $ 144,020 $ 50,612 $ 27,958 $ 102,073 $ 69,131 $ 22,775
</TABLE>
<TABLE>
<CAPTION>
Mass Mass Mutual Terex Principal
Mass Mutual Mutual Small Cap Corporation Guaranteed
International Growth Value Equity Common Investment Loans to
Equity Fund Fund Fund Stock Contracts Participants Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investments at January 1, 1997.......$ 23,174 $ 36,197 $ 27,681 $ 26,225 $ --- $ 37,916 $ 1,033,621
Additions:
Investment income and gain/loss.... 3,817 7,032 11,678 47,529 545 --- 181,785
Contributions, loan repayments &
transfers........................ 18,599 17,357 30,160 32,887 36,589 59,266 511,217
Deductions - Benefits, loans issued,
expenses & transfers............... (7,122) (20,487) (9,649) (9,927) (26,835) (36,807) (508,091)
Investments at December 31, 1997.....$ 38,468 $ 40,099 $ 59,870 $ 96,714 $ 10,299 $ 60,375 $ 1,218,532
</TABLE>
<PAGE>
8
TEREX CORPORATION AND AFFILIATES' 401(k)
RETIREMENT SAVINGS PLAN FOR REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
4. INCOME TAX STATUS
The Internal Revenue Service (the "IRS") has notified the Plan
Administrator by a letter dated July 31, 1996 that the Plan qualified
under Sections 401(a) and 401(k) of the Internal Revenue Code (the
"IRC") and is, therefore, not subject to tax under present income tax
law. Once qualified, the Plan is required to operate in conformity with
the IRC to maintain its tax exempt status. It is the opinion of the
Plan Administrator that the Plan continues to be qualified and exempt
from tax under Sections 401(a) and 401(k) of the IRC.
5. TERMINATION OF THE PLAN
The Company believes that the Plan will continue without interruption
but reserves the right to discontinue the Plan. In the event that such
discontinuance results in the complete or partial termination of the
Plan, the balance in each participant's account will be distributed by
the Trustees.
6. SUBSEQUENT EVENT
Effective January 1, 1998 the assets of the hourly-rate employees at
PPM Cranes, Inc. were transferred into the Plan under the terms of a
negotiated collective bargaining agreement. During 1997 these
participants were included in the Terex Corporation and Affiliates'
401(k) Retirement and Savings Plan, which covers certain salaried and
non-union hourly employees.
<PAGE>
9
TEREX CORPORATION AND AFFILIATES' 401(k) EIN #38-2863240
RETIREMENT SAVINGS PLAN FOR REPRESENTED EMPLOYEES PLAN #006
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - ITEM 27(a)
AS OF DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Fair Value/
Number of Contract
Description Units Value Cost
- ------------------------------------------------------------- ---------- ------------- --------------
MUTUAL FUNDS:
<S> <C> <C> <C>
Mass Mutual Group Annuity Contract Fixed Fund............. 41,239 $ 496,138 $ 496,138
Mass Mutual Value Equity Fund............................. 32 144,020 99,641
Mass Mutual Destiny Aggressive Fund....................... 310 50,612 38,551
Mass Mutual Destiny Conservative Fund..................... 189 27,958 24,045
Mass Mutual Destiny All Equity Fund....................... 562 102,073 74,601
Mass Mutual Destiny Moderate Fund......................... 441 69,131 55,675
Mass Mutual Core Bond Fund................................ 25 22,775 20,488
Mass Mutual International Equity Fund..................... 171 38,468 32,966
Mass Mutual Growth Fund................................... 201 40,099 31,873
Mass Mutual Small Cap Value Equity Fund................... 88 59,870 45,428
------------- -------------
Total Mutual Funds...................................... 1,051,144 919,406
COMMON STOCK:
Terex Corporation Common Stock............................ 2,428 96,714 51,587
INVESTMENT CONTRACTS:
Principal Financial Group Guaranteed Investment Contracts.
10,299 10,299
LOANS TO PARTICIPANTS, AT INTEREST RATES RANGING FROM 10.25%
TO 10.75%, MATURING THROUGH NOVEMBER 1, 2002..............
60,375 60,375
------------- --------------
TOTAL ASSETS HELD FOR INVESTMENT PURPOSES.................... $ 1,218,532 $1,041,667
============= ==============
</TABLE>
<PAGE>
10
TEREX CORPORATION AND AFFILIATES' 401(k)
RETIREMENT SAVINGS PLAN FOR REPRESENTED EMPLOYEES
SCHEDULE OF REPORTABLE TRANSACTIONS - ITEM 27(d)
YEAR ENDED DECEMBER 31, 1997
- -------------------------------------------------------------------------------
The following series of transactions were in excess of 5% of the fair value of
Plan assets at the beginning of the Plan year:
Number and
Type of Realized
Description Purchases Sales Transactions Gain/(Loss)
- ---------------------------- ----------- --------- ------------ -------------
Mass Mutual Group Annuity
Contract Fixed Fund....... $205,766 $297,162 * $ ---
* Massachusetts Mutual Life Insurance Company, the Plan record keeper, cannot
provide this information.
<PAGE>
11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees have duly caused this annual report to be signed by the undersigned
thereunto duly authorized.
The Terex Corporation and Affiliates'
401(k) Retirement Savings Plan
for Represented Employees
__________________________________________
Date: June 25, 1998 By: /s/ Joseph F. Apuzzo
Joseph F. Apuzzo
Vice President Finance and Controller
Terex Corporation
