<PAGE>
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
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
Financial Statements
December 31, 1997
<PAGE>
TEREX CORPORATION AND AFFILIATES'
401(k) RETIREMENT SAVINGS PLAN
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..........................................4-9
SUPPLEMENTAL SCHEDULES
Item 27(a) - Assets Held for Investment Purposes........................10
Item 27(d) - Reportable Transactions....................................11
<PAGE>
Report of Independent Accountants
To the Participants and Administrative Committee of the
Terex Corporation and Affiliates
401(k) Retirement Savings Plan
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 (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
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................................. $ 30,612,376 $ 20,558,324
Corporate common stock, at fair value....................... 2,258,781 1,002,461
Guaranteed Investment Contracts, at contract value.......... 1,319,101 -
Loans to participants....................................... 1,868,108 727,962
-------------- --------------
Total investments...................................... 36,058,366 22,288,747
-------------- --------------
Receivables:
Employee contributions...................................... 285,373 132,297
Employer contributions...................................... 101,755 48,548
Interest on participants loans.............................. 6,182 3,766
-------------- --------------
Total receivables...................................... 393,310 184,611
-------------- --------------
TOTAL ASSETS.................................................... 36,451,676 22,473,358
-------------- --------------
LIABILITIES:
Assets held for former subsidiary........................... - 10,882,768
-------------- --------------
NET ASSETS AVAILABLE FOR BENEFITS............................... $ 36,451,676 $ 11,590,590
============== ==============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
3
TEREX CORPORATION AND AFFILIATES'
401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
- -------------------------------------------------------------------------------
ADDITIONS:
Investment income.......................................... $ 922,377
Employee contributions..................................... 3,320,875
Employer contributions..................................... 924,676
Transfers into plan........................................ 21,750,410
Rollovers.................................................. 98,598
---------------
Total additions....................................... 27,016,936
---------------
DEDUCTIONS:
Withdrawals................................................ 4,016,714
Administrative fees........................................ 15,251
Transfer out to plan of former subsidiary.................. 526,248
---------------
Total deductions...................................... 4,558,213
---------------
NET APPRECIATION IN AGGREGATE FAIR VALUE OF INVESTMENTS........ 2,402,363
NET INCREASE.......................................... 24,861,086
---------------
NET ASSETS AT BEGINNING OF YEAR.............................. 11,590,590
---------------
NET ASSETS AVAILABLE FOR BENEFITS AT END OF YEAR............... $ 36,451,676
===============
See accompanying notes to financial statements.
<PAGE>
4
TEREX CORPORATION AND AFFILIATES'
401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
General - The Terex Corporation and Affiliates' 401(k) Retirement
Savings Plan (the "Plan"), was established on April 1, 1987. The Plan
is a defined contribution plan that covers certain salaried and
non-union hourly 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"), the Principal Financial
Group ("Principal") and Fidelity Management Trust Company ("Fidelity").
On April 7, 1997, the Company completed the acquisition of the
industrial businesses of the Simon Access division ("Simon") of Simon
Engineering plc. Simon maintained a defined contribution retirement
plan with Principal. On June 25, 1997, most of the assets of the plan
held by Principal were transferred to Mass Mutual. Guaranteed
Investment Contracts ("GICs") maturing through December 31, 2002
continue to be held by Principal. No additional employee or employer
contributions are allowed to be made to these investments at Principal,
nor are participants allowed to obtain loans against these accounts.
On November 27, 1996 Terex sold a wholly-owned subsidiary, and on April
28, 1997 the former subsidiary established its own 401(k) plan. As a
result, the assets of the participants of the former subsidiary are
shown as a liability in the Plan's Statement of Net Assets Available
for Benefits at December 31, 1996. These assets plus any contributions,
withdrawals and income earned during 1997 were transferred to the plan
established by the format subsidiary on April 28, 1997.
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 - Permanent employees may begin participation
on the first day of the month following their hiring.
Participant Contributions - Participants may contribute a maximum of
16% of their compensation to the Plan in any combination of pre or
post-tax earnings. The maximum pre-tax contribution permitted under the
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 presently provides that Terex will
match 50% of the first 6% of the salary that is contributed to the
plan. The contribution matched by Terex is made in Terex Common Stock.
Vesting - Participants are immediately fully vested in their voluntary
contributions plus any actual earnings thereon. Participants vest in
the employer contribution after one year of eligible service.
<PAGE>
5
TEREX CORPORATION AND AFFILIATES'
401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN (continued)
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.
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 in
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.
Assets Held by Former Trustee- On April 1, 1995 the investment manager
of the Plan was changed from Fidelity to Mass Mutual. At the time of
the transfer of Plan assets to Mass Mutual, certain participants
elected to maintain existing funds at Fidelity. No additional employee
or employer contributions are allowed to be made to these investments
at Fidelity, nor are participants allowed to obtain loans against these
accounts.
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 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 approximate 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.
<PAGE>
6
TEREX CORPORATION AND AFFILIATES'
401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
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.
3. INVESTMENTS
The investments of the Plan are held and managed by Mass Mutual,
Fidelity and Principal. A schedule of investments held at December 31,
1997 and 1996 follows:
<TABLE>
<CAPTION>
1997 1996
------------------------------ -----------------------------
Market Cost Market Cost
--------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Mass Mutual Group Annuity Contract Fixed Fund* $ 8,734,933 $ 8,734,933 $ 10,206,643 $ 10,206,643
Mass Mutual Value Equity Fund*............... 4,149,825 3,636,949 2,769,560 2,110,311
Mass Mutual Destiny Aggressive Fund*......... 3,381,115 3,124,310 1,420,243 1,180,997
Mass Mutual Destiny Conservative Fund........ 577,290 551,885 318,472 280,999
Mass Mutual Destiny All Equity Fund*......... 4,878,175 4,676,051 922,429 740,586
Mass Mutual Destiny Moderate Fund*........... 2,017,290 1,889,946 778,194 658,426
Mass Mutual Core Bond Fund................... 398,525 389,750 323,502 297,261
Mass Mutual International Equity Fund*....... 2,232,356 2,247,194 501,028 430,481
Mass Mutual Growth Fund*..................... 2,908,768 2,607,243 2,252,812 1,787,129
Mass Mutual Small Cap Value Equity Fund...... 1,207,535 1,090,246 444,344 363,064
Principal Guaranteed Investment Contracts.... 1,319,101 1,319,101 --- ---
Terex Corporation Common Stock*.............. 2,258,781 1,260,982 1,002,461 717,057
Fidelity Magellan Fund....................... 19,141 7,058 170,325 118,985
Fidelity Growth Company Fund................. 64,118 50,923 129,401 86,551
Fidelity Growth & Income Fund................ 33,468 13,264 264,262 172,587
Fidelity Balanced Fund....................... 9,837 6,648 57,109 46,752
Loans to Participants*....................... 1,868,108 1,868,108 727,962 727,962
-------------- -------------- --------------- --------------
TOTAL.................................... $ 36,058,366 $ 33,474,591 $ 22,288,747 $ 19,925,791
============== ============== =============== ==============
</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
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Mass Mutual
Group Mass Mutual Mass Mutual Mass Mutual
Annuity Mass Mutual Destiny Destiny Mass Mutual Destiny Mass
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.......$10,206,643 $ 2,769,560 $ 1,420,243 $ 318,472 $ 922,429 $ 778,194 $ 323,502
Additions:
Investment income and gain/loss.... 575,328 506,827 234,371 43,139 257,757 145,452 23,280
Contributions, loan repayments &
transfers........................ 1,565,427 358,520 375,679 104,668 484,059 206,646 67,801
Transfers into plan.................. 4,098,464 2,450,693 2,590,168 425,424 4,362,912 1,538,860 224,283
Deductions - Benefits, loans issued,
expenses & transfers............... (2,404,154) (455,718) (550,383) (156,515) (586,928) (345,342) (58,805)
Transfers to plan of former
subsidiary......................... (5,306,775) (1,480,057) (688,963) (157,898) (562,054) (306,520) (181,536)
----------------------------------------------------------------------------------------------
Investments at December 31, 1997.....$ 8,734,933 $ 4,149,825 $ 3,381,115 $ 577,290 $4,878,175 $2,017,290 $ 398,525
==============================================================================================
</TABLE>
<TABLE>
<CAPTION>
Mass
Mass Mutual Principal Terex
Mass Mutual Mutual Value Guaranteed Fidelity Corporation
International Growth Equity Investments Sub Total Common Loans to
Equity Fund Fund Fund Contracts (1) Stock Participants Total
---------------------------------------------------------------------------------------------------------
Investments at
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January 1, 1997........$ 501,028 $ 2,252,812 $ 444,344 $ --- $ 621,097 $ 1,002,461 $ 727,962 $22,288,747
Additions:
Investment income
and gain/loss.... 15,905 199,110 142,885 27,768 58,843 1,094,075 --- 3,324,740
Contributions, loan
repayments &
transfers............ 295,023 748,280 414,477 --- --- 896,516 1,375,014 6,892,110
Transfers into plan...... 1,951,055 1,598,899 701,544 1,343,752 --- --- 464,356 21,750,410
Deductions - Benefits,
loans issued, expenses
& transfers............ (229,327) (328,551) (57,450) (52,419) (553,376) (734,271) (275,386) (6,788,625)
Transfers to plan of
former subsidiaries.... (301,328) (1,561,782) (438,265) --- --- --- (423,838) (11,409,016)
----------------------------------------------------------------------------------------------------------
Investments at
December 31, 1997......$ 2,232,356 $ 2,908,768 $ 1,207,535 $1,319,101 $ 126,564 $ 2,258,781 $ 1,868,108 $36,058,366
==========================================================================================================
</TABLE>
<PAGE>
8
TEREX CORPORATION AND AFFILIATES'
401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
3. INVESTMENTS (continued)
<TABLE>
<CAPTION>
Fidelity Fidelity
Fidelity Growth Growth Fidelity
Magellan Company Income Balanced Fidelity
Fund Fund Fund Fund Sub Total
------------- -------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net assets available for benefits at January 1, 1997..... $ 170,325 $ 129,401 $ 264,262 $ 57,109 $ 621,097
Additions:
Investment income & gain/loss........................ 13,315 15,689 25,458 4,381 58,843
Contributions, loan repayments & transfers........... --- --- --- --- ---
Deductions - Benefits, loan disbursements & transfers.... (164,499) (80,973) (256,250) (51,654) (553,376)
------------- -------------- ------------- ------------- --------------
Net assets available for benefits at December 31, 1997... $ 19,141 $ 64,117 $ 33,470 $ 9,836 $ 126,564
============= ============== ============= ============= ==============
</TABLE>
<PAGE>
9
TEREX CORPORATION AND AFFILIATES'
401(k) RETIREMENT SAVINGS PLAN
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, 1995 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 as
directed by the Trustees.
6. SUBSEQUENT EVENT
Effective January 1, 1998 the assets of the hourly- rate employees at
PPM Cranes, Inc. were transferred from the Plan to the Terex
Corporation and Affiliates' 401(k) Retirement Savings Plan for
Represented Employees under the terms of a negotiated collective
bargaining agreement.
<PAGE>
10
TEREX CORPORATION AND AFFILIATES' EIN #34-1531521
401(k) RETIREMENT SAVINGS PLAN Plan #004
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - ITEM 27(a)
AS OF DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of Fair Value /
Description Units Contract Value Cost
- ----------------------------------------------------- ------------- --------------- -------------
MUTUAL FUNDS:
<S> <C> <C> <C>
Mass Mutual Group Annuity Contract Fixed Fund..... 719,851 $ 8,734,933 $ 8,734,933
Mass Mutual Value Equity Fund..................... 936 4,149,825 3,636,949
Mass Mutual Destiny Aggressive Fund............... 20,708 3,381,115 3,124,310
Mass Mutual Destiny Conservative Fund............. 3,894 577,290 551,885
Mass Mutual Destiny All Equity Fund............... 26,847 4,878,175 4,676,051
Mass Mutual Destiny Moderate Fund................. 12,880 2,017,290 1,889,946
Mass Mutual Core Bond Fund........................ 444 398,525 389,750
Mass Mutual International Equity Fund............. 9,922 2,232,356 2,247,194
Mass Mutual Growth Fund........................... 14,606 2,908,768 2,607,243
Mass Mutual Small Cap Value Equity Fund........... 1,780 1,207,535 1,090,246
Fidelity Magellan Fund............................ 201 19,141 7,058
Fidelity Growth Company Fund...................... 1,480 64,118 50,923
Fidelity Growth & Income Fund..................... 878 33,468 13,264
Fidelity Balanced Fund............................ 644 9,837 6,648
-------------- --------------
Total Mutual Funds............................ 30,612,376 29,026,400
COMMON STOCK:
Terex Corporation Common Stock.................... 58,012 2,258,781 1,260,982
INVESTMENT CONTRACTS:
Principal Financial Group Guaranteed Investment Contracts 1,319,101 1,319,101
LOANS TO PARTICIPANTS, AT INTEREST RATES RANGING FROM 8.00%
TO 11.00%, MATURING THROUGH DECEMBER 31, 2002............ 1,868,108 1,868,108
-------------- ---------------
TOTAL ASSETS HELD FOR INVESTMENT PURPOSES.................... $ 36,058,366 $ 33,474,591
============== ===============
</TABLE>
<PAGE>
11
TEREX CORPORATION AND AFFILIATES'
401(k) RETIREMENT SAVINGS PLAN
REPORTABLE TRANSACTIONS - ITEM 27(d)
FOR THE 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:
<TABLE>
<CAPTION>
Number and
Type of Realized
Description Purchases Sales Transactions Gain/(Loss)
- ---------------------------------------------- ----------------- --------------- -------------- ----------------
Mass Mutual Group Annuity Contract
<S> <C> <C> <C>
Fixed Fund................................. $ 5,130,575 $ 2,294,471 * $ ---
Mass Mutual Value Equity Fund................ $ 2,925,551 $ 354,979 * $ 354,938
Mass Mutual Destiny Aggressive Fund.......... $ 3,002,092 $ 567,996 * $ 567,914
Mass Mutual Destiny All Equity Fund.......... $ 4,942,625 $ 663,541 * $ 657,473
Mass Mutual Destiny Moderate Fund............ $ 1,789,280 $ 384,569 * $ 370,632
Mass Mutual International Equity Fund........ $ 2,263,989 $ 315,287 * $ 308,535
Mass Mutual Growth Fund...................... $ 2,080,128 $ 339,256 * $ 338,136
Mass Mutual Small Cap Value Equity Fund...... $ 995,628 $ 60,720 * $ 57
Principal Financial Group Guaranteed
Investment Contracts...................... $ 1,343,752 $ 53,290 * $ ---
</TABLE>
* Massachusetts Mutual Life Insurance Company and the Principal Financial Group,
the record keepers, cannot provide this information.
<PAGE>
12
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
__________________________________________
Date: June 25, 1998 By: /s/ Joseph F. Apuzzo
Joseph F. Apuzzo
Vice President Finance and Controller
Terex Corporation
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-00949) of Terex Corporation of our report dated
June 24, 1998 appearing on page 1 of this Form 11-K.
Price Waterhouse LLP
Stamford, CT
June 24, 1998
