UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1998
OR
[ ] 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, 1998
<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, 1998 and 1997, and the changes in net assets available
for benefits for the year ended December 31, 1998, 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 conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
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. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
PricewaterhouseCoopers LLP
Stamford, Connecticut
June 25, 1999
<PAGE>
TEREX CORPORATION AND AFFILIATES'
401(k) RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31
- --------------------------------------------------------------------------------
1998 1997
------------ ------------
ASSETS:
Investments:
Mutual funds, at fair value....................... $ 32,278,413 $ 30,612,376
Corporate common stock, at fair value............. 3,582,096 2,258,781
Guaranteed Investment Contracts, at contract value 842,966 1,319,101
Loans to participants............................. 1,767,930 1,868,108
------------ ------------
Total investments............................ 38,471,405 36,058,366
------------ ------------
Receivables:
Employee contributions............................ 152,982 285,373
Employer contributions............................ 51,960 101,755
Interest on participants loans.................... 3,843 6,182
------------ ------------
Total receivables............................ 208,785 393,310
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS..................... $ 38,680,190 $ 36,451,676
============ ============
See accompanying notes to financial statements.
<PAGE>
TEREX CORPORATION AND AFFILIATES'
401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
ADDITIONS:
Investment income....................................... $ 852,178
Employee contributions.................................. 3,518,416
Employer contributions.................................. 1,174,175
Rollover contributions.................................. 244,859
Transfer from other plan................................ 2,303,081
-----------------
Total additions.................................... 8,092,709
DEDUCTIONS:
Withdrawals............................................. 7,048,447
Administrative fees..................................... 15,312
Transfer to other plan.................................. 1,056,186
-----------------
Total deductions................................... 8,119,945
NET APPRECIATION IN AGGREGATE FAIR VALUE OF INVESTMENTS..... 2,255,750
-----------------
NET INCREASE....................................... 2,228,514
-----------------
NET ASSETS AT BEGINNING OF YEAR............................. 36,451,676
-----------------
NET ASSETS AVAILABLE FOR BENEFITS AT END OF YEAR............ $ 38,680,190
=================
See accompanying notes to financial statements.
<PAGE>
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").
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.
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.
On January 5, 1998, the Company completed the acquisition of Payhauler
Corporation. On April 15, 1998, all of the assets from the Payhauler
Corporation 401(k) Plan were transferred into the Plan.
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 1998 was $10,000. There is no
limit to post-tax contributions. 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.
Forfeitures - Nonvested employer contributions of employees that have
separated from the Company 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.
<PAGE>
TEREX CORPORATION AND AFFILIATES'
401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN (continued)
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.
Participant Loans - Participants may obtain loans in an amount up 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 Trustees- 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.
Additionally, certain participants maintain retirement accounts in
Guaranteed Investment Contracts ("GICs") maturing through December 31,
2001 held by Principal, the former custodian of an acquired business.
No additional employee or employer contributions are allowed to be made
to the investments at Principal, 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.
Investments - Plan investments in mutual funds, common stock and
participant loans are stated at fair value based on published market
prices or other independent sources. The GICs are stated at contract
value 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>
TEREX CORPORATION AND AFFILIATES'
401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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,
1998 and 1997 follows:
<TABLE>
1998 1997
--------------------------------- ---------------------------------
Market Cost Market Cost
---------------- ---------------- ---------------- ----------------
Mass Mutual Group Annuity
<S> <C> <C> <C> <C>
Contract Fixed Fund*........................ $ 8,400,151 8,400,151 $ 8,734,933 $ 8,734,933
Mass Mutual Value Equity Fund*............... 4,828,487 3,760,877 4,149,825 3,636,949
Mass Mutual Destiny Aggressive Fund*......... 3,572,142 3,210,187 3,381,115 3,124,310
Mass Mutual Destiny Conservative Fund........ 841,225 749,296 577,290 551,885
Mass Mutual Destiny All Equity Fund*......... 5,059,929 4,657,202 4,878,175 4,676,051
Mass Mutual Destiny Moderate Fund*........... 2,165,915 1,930,888 2,017,290 1,889,946
Mass Mutual Core Bond Fund................... 617,297 564,577 398,525 389,750
Mass Mutual International Equity Fund*....... 2,333,718 2,264,785 2,232,356 2,247,194
Mass Mutual Growth Fund*..................... 3,014,823 2,556,283 2,908,768 2,607,243
Mass Mutual Small Cap Value Equity Fund...... 1,282,801 1,299,585 1,207,535 1,090,246
Principal Guaranteed Investment Contracts.... 842,966 842,966 1,319,101 1,319,101
Terex Corporation Common Stock*.............. 3,582,096 2,346,638 2,258,781 1,260,982
Fidelity Magellan Fund....................... 25,579 8,243 19,141 7,058
Fidelity Growth Company Fund................. 81,576 56,627 64,118 50,923
Fidelity Growth & Income Fund................ 42,943 15,541 33,468 13,264
Fidelity Balanced Fund....................... 11,827 7,789 9,837 6,648
Loans to Participants........................ 1,767,930 --- 1,868,108 ---
---------------- ---------------- ---------------- ----------------
TOTAL.................................... $ 38,471,405 $ 32,671,635 $ 36,058,366 $ 31,606,483
================ ================ ================ ================
</TABLE>
* Investment represents 5% or more of net assets available for benefits at
December 31, 1998.
<PAGE>
TEREX CORPORATION AND AFFILIATES'
401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
3. INVESTMENTS (continued)
Participant and employer contributions are allocated to investment programs in
accordance with the participant's election. The following summarizes the changes
in investments by investment program for the year ended December 31, 1998:
<TABLE>
Mass Mutual Mass Mutual Mass Mutual
Group Annuity Mass Mutual Destiny Destiny Mass Mutual
Contract Fixed Value Equity Aggressive Conservative Destiny All
Fund Fund Fund Fund Equity Fund
-------------- ------------ ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Investments at January 1, 1998 $ 8,734,933 $ 4,149,825 $ 3,381,115 $ 577,290 $ 4,878,175
Additions:
Investment income and gain/loss .............. 661,682 592,649 231,591 77,098 296,937
Contributions, loan repayments &
interfund transfers .......................... 1,925,580 589,756 633,050 205,066 944,158
Transfer from other plan .......................... 468,315 400,248 250,103 128,336 122,314
Deductions:
Benefits, loans issued, expenses &
interfund transfers .......................... (3,017,043) (880,360) (890,276) (130,567) (1,165,861)
Transfer to other plan ....................... (373,316) (23,631) (33,441) (15,998) (15,794)
----------------------------------------------------------------------
Investments at December 31, 1998 .................. $ 8,400,151 $ 4,828,487 $ 3,572,142 $ 841,225 $ 5,059,929
======================================================================
</TABLE>
<TABLE>
Mass Mutual
Mass Mutual Mass Mass Mutual Small Cap
Destiny Mutual Core International Mass Mutual Value Equity
Moderate Fund Bond Fund Equity Fund Growth Fund Fund
----------- ---------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Investments at January 1, 1998 $ 2,017,290 $ 398,525 $ 2,232,356 $ 2,908,768 $ 1,207,535
Additions:
Investment income and gain/loss .............. 168,169 39,886 95,788 293,917 (169,402)
Contributions, loan repayments &
interfund transfers .......................... 511,943 247,960 360,951 449,259 235,436
Transfer from other plan .......................... 275,871 13,108 120,907 235,226 244,913
Deductions:
Benefits, loans issued, expenses &
interfund transfers .......................... (780,106) (70,304) (474,854) (818,795) (229,272)
Transfer to other plan ....................... (27,252) (11,878) (1,430) (53,552) (6,409)
----------------------------------------------------------------------
Investments at December 31, 1998 .................. $ 2,165,915 $ 617,297 $ 2,333,718 $ 3,014,823 $ 1,282,801
======================================================================
</TABLE>
<TABLE>
Principal Terex
Guaranteed Corporation
Investment Fidelity Sub Common Loans to
Contracts Total (1) Stock Participants Total
--------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Investments at January 1, 1998 $ 1,319,101 $ 126,564 $ 2,258,781 $ 1,868,108 $ 36,058,366
Additions:
Investment income and gain/loss .............. 58,804 35,361 725,448 --- 3,107,928
Contributions, loan repayments &
interfund transfers .......................... --- --- 1,319,744 1,149,896 8,572,799
Transfer from other plan .......................... --- --- 43,740 --- 2,303,081
Deductions:
Benefits, loans issued, expenses &
interfund transfers .......................... (534,939) --- (441,433) (1,080,773) (10,514,583)
Transfer to other plan ....................... --- --- (324,184) (169,301) (1,056,186)
----------------------------------------------------------------------
Investments at December 31, 1998 .................. $ 842,966 $ 161,925 $ 3,582,096 $ 1,767,930 $ 38,471,405
======================================================================
</TABLE>
(1) See detail on following page.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
3. INVESTMENTS (continued)
<TABLE>
Fidelity Fidelity
Fidelity Growth Company Growth Fidelity
Magellan Fund Income Fund Balanced Fidelity
Fund Fund Sub Total
------------ --------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Net assets available for benefits at January 1, 1998..... $ 19,141 $ 64,117 $ 33,470 $ 9,836 $ 126,564
Additions:
Investment income & gain/loss........................ 6,438 17,459 9,473 1,991 35,361
Contributions, loan repayments & transfers........... --- --- --- --- ---
Deductions - Benefits, loan disbursements & transfers.... --- --- --- --- ---
------------ --------------- ------------- ------------- --------------
Net assets available for benefits at December 31, 1998... $ 25,579 $ 81,576 $ 42,943 $ 11,827 $ 161,925
============ =============== ============= ============== ==============
</TABLE>
<PAGE>
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
On July 31, 1998, the Company completed the acquisition of The
American Crane Corporation ("American Crane"). The non-union employees
of American Crane became eligible for participation in the Plan during
February 1999 and on March 3, 1999, assets valued at $3,337,052 were
transferred into the Plan from The American Crane Corporation Savings
and Investment 401(k) Plan.
<PAGE>
TEREX CORPORATION AND AFFILIATES' EIN #34-1531521
401(k) RETIREMENT SAVINGS PLAN Plan #004
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - ITEM 27(a)
AS OF DECEMBER 31, 1998
- --------------------------------------------------------------------------------
Description Fair Value / Cost
Contract Value
- ------------------------------------------------------------------- ------------
MUTUAL FUNDS:
Mass Mutual Group Annuity Contract Fixed Fund....$ 8,400,151 $ 8,400,151
Mass Mutual Value Equity Fund.................... 4,828,487 3,760,877
Mass Mutual Destiny Aggressive Fund.............. 3,572,142 3,210,187
Mass Mutual Destiny Conservative Fund............ 841,225 749,296
Mass Mutual Destiny All Equity Fund.............. 5,059,929 4,657,202
Mass Mutual Destiny Moderate Fund................ 2,165,915 1,930,888
Mass Mutual Core Bond Fund....................... 617,297 564,577
Mass Mutual International Equity Fund............ 2,333,718 2,264,785
Mass Mutual Growth Fund.......................... 3,014,823 2,556,283
Mass Mutual Small Cap Value Equity Fund.......... 1,282,801 1,299,585
Fidelity Magellan Fund........................... 25,579 8,243
Fidelity Growth Company Fund..................... 81,576 56,627
Fidelity Growth & Income Fund.................... 42,943 15,541
Fidelity Balanced Fund........................... 11,827 7,789
-------------- ------------
Total Mutual Funds........................... 32,278,413 29,482,031
COMMON STOCK:
Terex Corporation Common Stock................... 3,582,096 2,346,638
INVESTMENT CONTRACTS:
Principal Financial Group Guaranteed
Investment Contract........................... 842,966 842,966
LOANS TO PARTICIPANTS, AT INTEREST RATES
RANGING FROM 8.00% TO 11.00%, MATURING
THROUGH DECEMBER 31, 2003......................... 1,767,930 ---
-------------- ------------
TOTAL ASSETS HELD FOR INVESTMENT PURPOSES $ 38,471,405 $ 32,671,635
============== ============
<PAGE>
REPORTABLE TRANSACTIONS - ITEM 27(d)
FOR THE YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
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>
Number and
Type of Realized
Description Purchases Sales Transactions Gain/(Loss)
- ----------------------------------------------- ---------------- ---------------- ---------------- ----------------
Mass Mutual Group Annuity
<S> <C> <C> <C> <C>
Contract Fixed Fund.......................... $ 3,131,843 $ 3,937,660 * $ ---
</TABLE>
* Massachusetts Mutual Life Insurance Company, the Plan record keeper, cannot
provide this information.
<PAGE>
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
/s/ Joseph F. Apuzzo
--------------------------------------
Date: June 29, 1999 By: Joseph F. Apuzzo
Vice President - Corporate Finance
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 25, 1999 appearing on page 1 of this Form 11-K.
PricewaterhouseCoopers LLP
Stamford, CT
June 25, 1999
