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
FOR REPRESENTED EMPLOYEES
Financial Statements
December 31, 1998
<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, 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 FOR REPRESENTED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31
- --------------------------------------------------------------------------------
1998 1997
----------- -----------
ASSETS:
Investments:
Mutual funds, at fair value......................... $ 1,877,870 $ 1,051,144
Corporate common stock, at fair value............... 536,196 96,714
Guaranteed Investment Contracts, at contract value.. --- 10,299
Loans to participants............................... 265,965 60,375
----------- -----------
Total investments.............................. 2,680,031 1,218,532
----------- -----------
Receivables:
Employee contributions.............................. 22,484 14,892
Employer contributions.............................. 4,610 8,097
Interest on participants loans...................... 350 490
----------- -----------
Total receivables.............................. 27,444 23,479
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS....................... $ 2,707,475 $ 1,242,011
=========== ===========
See accompanying notes to financial statements.
<PAGE>
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, 1998
- --------------------------------------------------------------------------------
ADDITIONS:
Investment income.................................... $ 57,091
Employee contributions............................... 345,054
Employer contributions............................... 52,783
Transfer from other plan............................. 1,056,186
--------------
Total additions................................. 1,511,114
DEDUCTIONS:
Withdrawals.......................................... 125,044
Administrative fees.................................. 2,350
--------------
Total deductions................................ 127,394
NET APPRECIATION IN AGGREGATE FAIR VALUE OF INVESTMENTS.. 81,744
--------------
NET INCREASE.................................... 1,465,464
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of period.................................. 1,242,011
--------------
End of period........................................ $ 2,707,475
==============
See accompanying notes to financial statements.
<PAGE>
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").
Effective January 1, 1998, the hourly-rate employees at PPM Cranes,
Inc. ("PPM") began participation in the Plan and on July 14, 1998, the
related assets were transferred to the Plan from the Terex Corporation
and Affiliates' 401(k) Retirement Savings Plan under the terms of a
negotiated collective bargaining agreement.
In addition to the PPM employees, 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 former
Bowerston Division of Simon Access ("Bowerston"), which was closed
subsequent to the acquisition of the business on April 7, 1997.
Investments of the former Bowerston employees remain in the Plan,
however, there are no additional employee or employer contributions
being made. 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,
employees at Southaven and PPM 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 and PPM 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
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 in effect at Unit Rig does not
provide for Terex to match any portion of employee contributions to
the Plan. 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 plan in effect at PPM provides that Terex will match
50% of the first 5% of the employees salary that is contributed to the
plan. The terms of each division'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. Participants
at Southaven and PPM 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 but prior to the closure of the
facility vest in employer contributions after one year of eligible
service. The vesting period for supplemental contributions is
determined by the Company at the time of contribution.
<PAGE>
TEREX CORPORATION AND AFFILIATES' 401(k)
RETIREMENT SAVINGS PLAN FOR REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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.
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.
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.
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.
Investments - Plan investments are stated at fair value based on
published market prices or other independent sources. 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 FOR REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
3. INVESTMENTS
<TABLE>
The investments of the Plan are held and managed by Mass Mutual.
A schedule of investments held at December 31, 1998 and
1997 follows:
1998 1997
--------------------------------- ----------------------------------
Market Cost Market Cost
---------------- ---------------- ----------------- ----------------
Mass Mutual Group
<S> <C> <C> <C> <C>
Annuity Contract Fixed Fund*............... $ 1,047,802 $ 1,047,802 $ 496,138 $ 496,138
Mass Mutual Value Equity Fund*............... 219,832 158,423 144,020 99,641
Mass Mutual Destiny Aggressive Fund.......... 83,220 72,539 50,612 38,551
Mass Mutual Destiny Conservative Fund........ 55,089 47,533 27,958 24,045
Mass Mutual Destiny All Equity Fund.......... 132,768 105,142 102,073 74,601
Mass Mutual Destiny Moderate Fund............ 89,896 75,130 69,131 55,675
Mass Mutual Core Bond Fund................... 45,605 41,878 22,775 20,488
Mass Mutual International Equity Fund........ 36,013 32,397 38,468 32,966
Mass Mutual Growth Fund...................... 100,701 93,324 40,099 31,873
Mass Mutual Small Cap Value Equity Fund...... 66,944 63,432 59,870 45,428
Terex Corporation Common Stock*.............. 536,196 338,204 96,714 51,587
Principal Guaranteed Investment Contracts --- --- 10,299 10,299
Loans to Participants*....................... 265,965 --- 60,375 ---
---------------- ---------------- ----------------- ----------------
TOTAL.................................... $ 2,680,031 $ 2,075,804 $ 1,218,532 $ 981,292
================ ================ ================= ================
</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 FOR REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
3. INVESTMENTS (continued)
Participant and employer contributions are allocated to investment programs in
accordance with the participant's elections. The following is a summary of
changes in investments by investments program for the year ended December 31,
1998:
<TABLE>
Mass Mutual
Group Mass Mass Mutual Mass Mutual Mass
Annuity Mutual Destiny Destiny Mutual
Contract Value Equity Aggressive Conservative Destiny All
Fixed Fund Fund Fund Fund Equity Fund
------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Investments at January 1, 1998 ...... $ 496,138 $ 144,020 $ 50,612 $ 27,958 $ 102,073
Additions:
Investment income and gain/ loss .... 53,915 28,156 3,454 4,278 5,214
Contributions, loan repayments &
interfund transfers ................. 438,548 42,201 20,216 10,186 27,831
Transfer from other plan ............ 373,316 23,631 33,441 15,998 15,794
Deductions - Benefits, loans issued,
expenses & interfund transfers ...... (314,115) (18,176) (24,503) (3,331) (18,144)
----------------------------------------------------------------
Investments at December 31, 1998 .... $ 1,047,802 $ 219,832 $ 83,220 $ 55,089 $ 132,768
================================================================
</TABLE>
<TABLE>
Mass Mass
Mutual Mass Mutual
Destiny Mass Mass Mutual Mutual Small Cap
Moderate Mutual Core International Growth Value Equity
Fund Bond Fund Equity Fund Fund Fund
--------- ----------- ------------- ------- ------------
<S> <C> <C> <C> <C> <C>
Investments at January 1, 1998 ........ $ 69,131 $ 22,775 $ 38,468 $ 40,099 $ 59,870
Additions:
Investment income and gain/ loss . 5,618 2,563 1,989 5,403 (8,067)
Contributions, loan repayments &
interfund transfers .............. 11,779 10,801 8,931 23,028 26,002
Transfer from other plan .............. 27,252 11,878 1,430 53,552 6,409
Deductions - Benefits, loans issued,
expenses & interfund transfers ... (23,884) (2,412) (14,805) (21,381) (17,270)
----------------------------------------------------------------
Investments at December 31, 1998........ $ 89,896 $ 45,605 $ 36,013 $ 100,701 $ 66,944
================================================================
</TABLE>
<TABLE>
Terex Principal
Corporation Guaranteed
Common Investment Loans to
Stock Contracts Participants Total
------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Investments at January 1, 1998............. $ 96,714 $ 10,299 $ 60,375 $ 1,218,532
Additions:
Investment income and gain/ loss...... 36,312 -- -- 138,835
Contributions, loan repayments &
interfund transfers................... 117,900 -- 138,689 876,112
Transfer from other plan................... 324,184 -- 169,301 1,056,186
Deductions - Benefits, loans issued,
expenses & interfund transfers........ (38,914) (10,299) (102,400) (609,634)
---------------------------------------------------------
Investments at December 31, 1998........... $ 536,196 $ -- $ 265,965 $ 2,680,031
=========================================================
</TABLE>
<PAGE>
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
On July 31, 1998, the Company completed the acquisition of The
American Crane Corporation ("American Crane"). The American Crane
employees covered by a negotiated collective bargaining agreement
became eligible for participation in the Plan during February 1999 and
on March 3, 1999, assets vaued at $1,517,685 were transferred into the
Plan from The American Crane Corporation Savings and Investment 401(k)
Plan.
<PAGE>
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, 1998
- --------------------------------------------------------------------------------
Fair Value/
Contract Value
Description Cost
- ------------------------------------------------------------------- ------------
MUTUAL FUNDS:
Mass Mutual Group Annuity Contract Fixed Fund...... $ 1,047,802 $ 1,047,802
Mass Mutual Value Equity Fund...................... 219,832 158,423
Mass Mutual Destiny Aggressive Fund................ 83,220 72,539
Mass Mutual Destiny Conservative Fund.............. 55,089 47,533
Mass Mutual Destiny All Equity Fund................ 132,768 105,142
Mass Mutual Destiny Moderate Fund.................. 89,896 75,130
Mass Mutual Core Bond Fund......................... 45,605 41,878
Mass Mutual International Equity Fund.............. 36,013 32,397
Mass Mutual Growth Fund............................ 100,701 93,324
Mass Mutual Small Cap Value Equity Fund............ 66,944 63,432
------------ ------------
Total Mutual Funds............................... 1,877,870 1,737,600
COMMON STOCK:
Terex Corporation Common Stock..................... 536,196 338,204
LOANS TO PARTICIPANTS, AT INTEREST RATES RANGING
FROM 9.75% TO 10.50%, MATURING THROUGH
DECEMBER 31, 2003.................................... 265,965 ---
------------ ------------
TOTAL ASSETS HELD FOR INVESTMENT PURPOSES $ 2,680,031 $ 2,075,804
============ ============
<PAGE>
TEREX CORPORATION AND AFFILIATES' 401(k) EIN #38-2863240
RETIREMENT SAVINGS PLAN FOR REPRESENTED EMPLOYEES PLAN #006
SCHEDULE OF REPORTABLE TRANSACTIONS - ITEM 27(d)
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)
- ------------------------------------------------ ----------------- --------------- ---------------- --------------
<S> <C> <C> <C> <C>
Mass Mutual Group Annuity Contract Fixed Fund... $ 845,602 $ 340,355 * $ ---
Mass Mutual Value Equity Fund................. 70,026 21,665 * 8,766
Mass Mutual Growth Fund....................... 76,927 21,151 * 1,551
Terex Corporation Common Stock................ 460,372 56,133 * 3,551
</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 for
Represented Employees
/s/ Joseph F. Apuzzo
--------------------------------------
Date: June 29, 1999 By: Joseph F. Apuzzo
Vice President - Corporate Finance
Terex Corporation
