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<SEC-DOCUMENT>/in/edgar/work/0000097216-00-500019/0000097216-00-500019.txt : 20001115
<SEC-HEADER>0000097216-00-500019.hdr.sgml : 20001115
ACCESSION NUMBER:		0000097216-00-500019
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20000930
FILED AS OF DATE:		20001114

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TEREX CORP
		CENTRAL INDEX KEY:			0000097216
		STANDARD INDUSTRIAL CLASSIFICATION:	 [3537
]		IRS NUMBER:				341531521
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231
</COMPANY-DATA>

		FILING VALUES:
			FORM TYPE:		10-Q
			SEC ACT:		
			SEC FILE NUMBER:	001-10702
			FILM NUMBER:		764436
</FILING-VALUES>

			BUSINESS ADDRESS:	
				STREET 1:		500 POST ROAD EAST
				STREET 2:		STE 320
				CITY:			WESTPORT
				STATE:			CT
				ZIP:			06880
				BUSINESS PHONE:		2032227170
</BUSINESS-ADDRESS>

				MAIL ADDRESS:	
					STREET 1:		500 POST ROAD EAST
					STREET 2:		STE 320
					CITY:			WESTPORT
					STATE:			CT
					ZIP:			06880
</MAIL-ADDRESS>

					FORMER COMPANY:	
						FORMER CONFORMED NAME:	BLACK MAMMOTH CONSOLIDATED MINING CO
						DATE OF NAME CHANGE:	19671002
</FORMER-COMPANY>
</FILER>
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>TEREX CORP. SEPTEMBER 30, 2000 10Q
<TEXT>





                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549



                                 F O R M 10 - Q

(Mark One)

     [x]          Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                For the quarterly period ended September 30, 2000

     [ ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934



                         Commission file number 1-10702


                                Terex Corporation
             (Exact name of registrant as specified in its charter)

            Delaware                                     34-1531521
   (State of Incorporation)                   (IRS Employer Identification No.)

           500 Post Road East, Suite 320, Westport, Connecticut 06880
                    (Address of principal executive offices)


                                 (203) 222-7170
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months,  and (2) has been subject to such filing  requirements
for the past 90 days.

                                YES X NO _______


Number of  outstanding  shares of common  stock:  27.7 million as of November 6,
2000.


The Exhibit Index appears on page 32.



<PAGE>

                                      INDEX

                       TEREX CORPORATION AND SUBSIDIARIES

GENERAL

This Quarterly  Report on Form 10-Q filed by Terex  Corporation  ("Terex" or the
"Company")  includes  financial   information  with  respect  to  the  following
subsidiaries  of the Company (all of which are  wholly-owned  except PPM Cranes,
Inc.) which are  guarantors  (the  "Guarantors")  of the Company's  $250 million
principal  amount  of 8-7/8%  Senior  Subordinated  Notes due 2008 (the  "Senior
Subordinated  Notes").  See Note I to the Company's September 30, 2000 Condensed
Consolidated Financial Statements.

                          State or other jurisdiction of       I.R.S. employer
 Guarantor                incorporation or organization    identification number

Terex Cranes, Inc.                      Delaware                   06-1513089
PPM Cranes, Inc.                        Delaware                   39-1611683
Koehring Cranes, Inc.                   Delaware                   06-1423888
Terex-Telelect, Inc.                    Delaware                   41-1603748
Terex-RO Corporation                     Kansas                    44-0565380
Terex Aerials, Inc.                     Wisconsin                  39-1028686
Terex Mining Equipment, Inc.            Delaware                   06-1503634
Payhauler Corp.                         Illinois                   36-3195008
The American Crane Corporation       North Carolina                56-1570091
O & K Orenstein & Koppel, Inc.          Delaware                   58-2084520
Amida Industries, Inc.               South Carolina                57-0531390
Cedarapids, Inc.                          Iowa                     42-0332910

                                                                        Page No.
PART I     FINANCIAL INFORMATION

 Item 1  Condensed Consolidated Financial Statements

   TEREX CORPORATION
      Condensed Consolidated Statement of Operations --
          Three months and nine months ended September 30, 2000 and 1999......3
      Condensed Consolidated Balance Sheet - September 30, 2000
          and December 31, 1999...............................................4
      Condensed Consolidated Statement of Cash Flows --
          Nine months ended September 30, 2000 and 1999.......................5
      Notes to Condensed Consolidated Financial Statements --
          September 30, 2000..................................................6

   PPM CRANES, INC.
      Condensed Consolidated Statement of Operations --
          Three months and nine months ended September 30, 2000 and 1999.....16
      Condensed Consolidated Balance Sheet - September 30, 2000
          and December 31, 1999..............................................17
      Condensed Consolidated Statement of Cash Flows --
          Nine months ended September 30, 2000 and 1999......................18
      Notes to Condensed Consolidated Financial Statements --
          September 30, 2000.................................................19

 Item 2  Management's Discussion and Analysis of Financial Condition
          and Results of Operations..........................................21
 Item 3  Quantitative and Qualitative Disclosures About Market Risk..........27

PART II    OTHER INFORMATION

 Item 1  Legal Proceedings...................................................29
 Item 2  Changes in Securities and Use of Proceeds...........................29
 Item 3  Defaults Upon Senior Securities.....................................29
 Item 4  Submission of Matters to a Vote of Security Holders.................29
 Item 5  Other Information...................................................29
 Item 6  Exhibits and Reports on Form 8-K....................................29

SIGNATURES ..................................................................31
EXHIBIT INDEX ...............................................................32


                                       2
<PAGE>

                          PART 1. FINANCIAL INFORMATION
               ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                       TEREX CORPORATION AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                      (in millions, except per share data)
<TABLE>
<CAPTION>

                                                         For the Three Months        For the Nine Months
                                                         Ended September 30,         Ended September 30,
                                                      --------------------------- ---------------------------
                                                          2000          1999          2000          1999
                                                      ------------- ------------- ------------- -------------

<S>                                                   <C>           <C>           <C>           <C>
Net sales.............................................$    475.1    $    495.6    $  1,622.1    $  1,367.0
Cost of goods sold....................................     388.4         407.1       1,332.1       1,130.9
                                                      ------------- ------------- ------------- -------------

     Gross profit.....................................      86.7          88.5         290.0         236.1
Selling, general and administrative expenses..........      39.3          38.7         124.1          98.8
                                                      ------------- ------------- ------------- -------------

     Income from operations...........................      47.4          49.8         165.9         137.3

Other income (expense):
     Interest income..................................       1.6           2.5           4.1           3.7
     Interest expense.................................     (26.0)        (20.0)        (77.7)        (48.9)
     Gain on sale of businesses.......................      57.2         ---            57.2         ---
     Other income (expense) - net.....................      (0.2)         (1.3)         (1.8)         (3.2)
                                                      ------------- ------------- ------------- -------------

Income before income taxes............................      80.0          31.0         147.7          88.9
Provision for income taxes............................     (30.3)         (1.1)        (51.9)         (2.6)
                                                      ------------- ------------- ------------- -------------

Net income............................................$     49.7    $     29.9    $     95.8    $     86.3
                                                      ============= ============= ============= =============



Net income per common share:
    Basic.............................................$     1.84    $     1.12    $      3.51   $      3.74
    Diluted...........................................$     1.79    $     1.07    $      3.41   $      3.49

Weighted average number shares outstanding
  in per share calculation:
        Basic.........................................      27.0          26.6          27.3          23.1
        Diluted.......................................      27.8          28.0          28.1          24.7
</TABLE>



   The accompanying notes are an integral part of these financial statements.

                                       3
<PAGE>

<TABLE>
<CAPTION>

                       TEREX CORPORATION AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEET
                                  (in millions)


                                                                                         September 30,      December 31,
                                                                                              2000              1999
                                                                                        ----------------- -----------------
Assets
Current assets
<S>                                                                                      <C>                <C>
     Cash and cash equivalents.........................................................  $        260.8     $      133.3
     Trade receivables (net of allowance of $6.1 at September 30, 2000
       and $5.8 at December 31, 1999)..................................................           391.3            429.2
     Net inventories...................................................................           584.1            665.6
     Deferred taxes....................................................................            47.2             47.2
     Other current assets..............................................................            47.0             40.0
                                                                                         ------------------ ----------------
         Total current assets..........................................................         1,330.4          1,315.3
Long-term assets
     Property, plant and equipment - net...............................................           130.6            172.8
     Goodwill..........................................................................           491.5            554.7
     Deferred taxes....................................................................            33.3             55.3
     Other assets......................................................................            75.6             79.4
                                                                                         ------------------ ----------------

Total assets...........................................................................  $      2,061.4     $    2,177.5
                                                                                         ================== ================

Liabilities and Stockholders' Equity
Current liabilities
     Notes payable and current portion of long-term debt...............................  $         21.3     $       57.6
     Trade accounts payable............................................................           312.2            297.0
     Accrued compensation and benefits.................................................            25.2             27.3
     Accrued warranties and product liability..........................................            47.7             55.9
     Other current liabilities.........................................................           137.3            141.7
                                                                                         ------------------ ----------------
         Total current liabilities.....................................................           543.7            579.5
Non-current liabilities
     Long-term debt, less current portion..............................................         1,001.0          1,098.8
     Other.............................................................................            70.2             66.4

Commitments and contingencies

Stockholders' equity
     Warrants to purchase common stock.................................................             0.3              0.8
     Equity rights.....................................................................             0.7              0.8
     Common stock, $.01 par value - authorized 150.0 shares; issued 27.7 at September
       30, 2000 and 27.5 at December 31, 1999..........................................             0.3              0.3
     Additional paid-in capital........................................................           357.6            355.0
     Retained earnings.................................................................           187.8             92.0
     Accumulated other comprehensive income............................................           (85.5)           (16.1)
     Less cost of shares of common stock in treasury (0.9 shares at September 30, 2000)           (14.7)           ---
                                                                                         ------------------ ----------------
         Total stockholders' equity....................................................           446.5            432.8
                                                                                         ------------------ ----------------

Total liabilities and stockholders' equity.............................................  $      2,061.4     $    2,177.5
                                                                                         ================== ================
</TABLE>


   The accompanying notes are an integral part of these financial statements.



                                       4
<PAGE>

<TABLE>
<CAPTION>

                       TEREX CORPORATION AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                  (in millions)

                                                                                      For the Nine Months
                                                                                      Ended September 30,
                                                                                   ---------------------------
                                                                                        2000         1999
                                                                                   -------------- ------------
 Operating Activities
<S>                                                                                 <C>            <C>
    Net income....................................................................  $      95.8    $     86.3
    Adjustments to reconcile net income to cash provided by (used in) operating
      activities:
         Depreciation.............................................................         16.6          10.6
         Amortization.............................................................         14.8           9.3
         Gain on sale of businesses...............................................        (34.2)        ---
         Deferred taxes...........................................................         22.0         ---
         Gain on sale of fixed assets.............................................         (0.4)         (0.1)
         Changes  in  operating  assets  and  liabilities  (net  of  effects  of
          acquisitions):
           Trade receivables......................................................          5.9        (114.6)
           Net inventories........................................................         32.5         (34.2)
           Trade accounts payable.................................................         34.7          39.4
           Other, net.............................................................        (56.0)          3.7
                                                                                    -------------- -------------
              Net cash provided by operating activities...........................        131.7           0.4
                                                                                    -------------- -------------


 Investing Activities
    Proceeds from sale of businesses..............................................        144.3         ---
    Capital expenditures..........................................................        (17.7)        (12.8)
    Acquisition of businesses, net of cash acquired...............................         (4.1)       (475.9)
    Proceeds from sale of assets..................................................          9.2           2.7
                                                                                    -------------- -------------
              Net cash provided by (used in) investing activities.................        131.7        (486.0)
                                                                                    -------------- -------------


 Financing Activities
    Principal repayments of long-term debt........................................        (58.3)        (32.1)
    Net incremental repayments under revolving line of credit agreements..........        (56.0)        (29.2)
    Purchase of common stock held in treasury.....................................        (14.7)        ---
    Proceeds from issuance of common stock........................................        ---           162.8
    Proceeds from issuance of long-term debt, net of issuance costs...............        ---           505.8
    Other.........................................................................         (3.3)          8.0
                                                                                    -------------- -------------
              Net cash provided by (used in) financing activities.................       (132.3)        615.3
                                                                                    -------------- -------------
 Effect of Exchange Rate Changes on  Cash and Cash Equivalents....................         (3.6)         (0.7)
                                                                                    -------------- -------------


 Net Increase in Cash and Cash Equivalents........................................        127.5         129.0

 Cash and Cash Equivalents at Beginning of Period.................................        133.3          25.1
                                                                                    -------------- -------------

 Cash and Cash Equivalents at End of Period.......................................  $     260.8    $    154.1
                                                                                    ============== =============
</TABLE>



   The accompanying notes are an integral part of these financial statements.



                                       5
<PAGE>

                       TEREX CORPORATION AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                               September 30, 2000

                      (in millions, unless otherwise noted)


NOTE A -- BASIS OF PRESENTATION

Basis  of  Presentation.   The  accompanying  unaudited  condensed  consolidated
financial  statements of Terex  Corporation and subsidiaries as of September 30,
2000 and for the three months and nine months ended  September 30, 2000 and 1999
have been prepared in accordance with generally accepted  accounting  principles
for interim financial  information and the instructions to Form 10-Q and Article
10 of Regulation  S-X.  Accordingly,  they do not include all of the information
and  footnotes  required  by  generally  accepted  accounting  principles  to be
included  in  full  year  financial  statements.   The  accompanying   condensed
consolidated  balance  sheet as of December  31, 1999 has been  derived from the
audited consolidated balance sheet as of that date.

The condensed  consolidated  financial  statements include the accounts of Terex
Corporation and its majority owned subsidiaries ("Terex" or the "Company").  All
material intercompany balances, transactions and profits have been eliminated.

In the opinion of management,  all adjustments  considered  necessary for a fair
presentation have been made. Such adjustments  consist only of those of a normal
recurring  nature.  Operating results for the three months and nine months ended
September  30, 2000 are not  necessarily  indicative  of the results that may be
expected for the year ending December 31, 2000. For further  information,  refer
to the consolidated  financial  statements and footnotes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1999.

Cash and cash  equivalents  at September  30, 2000 and December 31, 1999 include
$16.8 and $8.6, respectively, which was not immediately available for use.

NOTE B - SALE OF BUSINESSES

On  September  30, 2000,  the Company  completed  the sale of its  truck-mounted
forklift  businesses to various  subsidiaries of Partek  Corporation of Finland,
for $144 in cash, subject to adjustment.  During the nine months ended September
30,  2000 and 1999,  total net sales for the  Company's  truck-mounted  forklift
business were approximately $68 and $7,  respectively,  and were included in the
Terex Lifting segment.  The Company intends to use the approximately $125 of net
after-tax proceeds from this transaction to repay long-term bank debt.

NOTE C - INVENTORIES

Net inventories consist of the following:

                                          September 30,      December 31,
                                              2000              1999
                                        ----------------  ----------------
Finished equipment....................  $      184.9      $      235.3
Replacement parts.....................         167.4             176.8
Work-in-process.......................          69.1              81.9
Raw materials and supplies............         162.7             171.6
                                        ----------------- ----------------

Net inventories.......................  $      584.1      $      665.6
                                        ================= ================






                                       6
<PAGE>

NOTE D -- PROPERTY, PLANT AND EQUIPMENT

Net property, plant and equipment consists of the following:

                                           September 30,      December 31,
                                                2000              1999
                                          ----------------- -----------------
Property.................................  $       16.8     $        23.3
Plant....................................          80.8              97.2
Equipment................................          97.9             112.5
                                           ---------------- -----------------
                                                  195.5             233.0
Less:  Accumulated depreciation..........         (64.9)            (60.2)
                                           ---------------- -----------------
Net property, plant and equipment........  $      130.6     $       172.8
                                           ================ =================


NOTE E - EARNINGS PER SHARE
<TABLE>
<CAPTION>

                                                                 Three Months Ended September 30,
                                                               (in millions, except per share data)
                                              ----------------------------------------------------------------------
                                                              2000                                1999
                                              ----------------------------------- ----------------------------------
                                                                        Per-Share                        Per-Share
                                                  Income      Shares      Amount    Income    Shares      Amount
                                              ------------- ----------- --------- --------- ----------- ------------
 Basic earnings per share
<S>                                           <C>              <C>      <C>       <C>           <C>     <C>
    Income before extraordinary items......   $    49.7        27.0     $  1.84   $   29.9      26.6    $    1.12

 Effect of dilutive securities
    Warrants...............................       ---           0.1                  ---         0.1
    Stock Options..........................       ---           0.5                  ---         0.9
    Equity Rights..........................       ---           0.2                  ---         0.4
                                              ------------  -----------           --------- ----------

 Income available to common
   stockholders - diluted..................   $    49.7        27.8     $  1.79   $   29.9      28.0    $    1.07
                                              ============  =========== ========= ========= =========== ============
</TABLE>
<TABLE>
<CAPTION>


                                                              Nine Months Ended September 30,
                                                            (in millions, except per share data)
                                              ----------------------------------------------------------------------
                                                             2000                                1999
                                              ----------------------------------------------------------------------
                                                                        Per-Share                        Per-Share
                                                 Income      Shares      Amount    Income      Shares      Amount
                                              ------------- ----------- --------- --------- ----------- -----------
Basic earnings per share
<S>                                           <C>              <C>      <C>       <C>           <C>     <C>
   Income before extraordinary items......    $    95.8        27.3     $  3.51   $   86.3      23.1    $   3.74

Effect of dilutive securities
   Warrants...............................        ---           0.1                  ---        0.1
   Stock Options..........................        ---           0.5                  ---        0.9
   Equity Rights..........................        ---           0.2                  ---        0.6
                                              ------------- -----------           ---------- -------

Income available to common
  stockholders - diluted..................    $    95.8        28.1     $  3.41   $    86.3     24.7     $  3.49
                                              ============ ============ ========= ========== ========== ===========
</TABLE>



NOTE F - STOCKHOLDER'S EQUITY

Total  non-shareowner  changes  in equity  (comprehensive  income)  include  all
changes in equity during a period except those  resulting from  investments  by,
and distributions to, shareowners.  The specific components include: net income,
deferred  gains and losses  resulting  from foreign  currency  translation,  and
minimum pension liability adjustments.  For the three months ended September 30,
2000 and  September  30, 1999 and the nine months ended  September  30, 2000 and
September 30, 1999, total  non-shareowner  changes in equity were $25.6,  $52.1,
$26.4 and $81.2, respectively.


                                       7
<PAGE>

In March 2000, the Company's Board of Directors authorized the purchase of up to
2.0 shares of the Company's  outstanding  common stock over the following twelve
months. As of September 30, 2000, the Company had acquired 0.9 shares at a total
cost of $14.7.

NOTE G -- LITIGATION AND CONTINGENCIES

The Company is subject to a number of contingencies and uncertainties  including
product  liability  claims,  self-insurance  obligations,  tax  examinations and
guarantees.  Many  of the  exposures  are  unasserted  or  proceedings  are at a
preliminary  stage,  and it is not presently  possible to estimate the amount or
timing of any cost to the  Company.  However,  management  does not believe that
these  contingencies and uncertainties  will, in the aggregate,  have a material
adverse effect on the Company. When it is probable that a loss has been incurred
and  possible to make  reasonable  estimates  of the  Company's  liability  with
respect to such matters, a provision is recorded for the amount of such estimate
or for the minimum  amount of a range of  estimates  when it is not  possible to
estimate the amount within the range that is most likely to occur.

The Company generates  hazardous and nonhazardous wastes in the normal course of
its operations.  As a result, the Company is subject to a wide range of federal,
state,  local and foreign  environmental  laws and  regulations,  including  the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),
that (i) govern  activities  or operations  that may have adverse  environmental
effects,  such as discharges to air and water,  as well as handling and disposal
practices for hazardous and nonhazardous  wastes,  and (ii) impose liability for
the costs of cleaning  up, and certain  damages  resulting  from,  sites of past
spills,  disposals or other releases of hazardous  substances.  Compliance  with
such laws and regulations has, and will, require  expenditures by the Company on
a continuing basis.

Clark Material Handling Company  ("CMHC"),  the purchaser of the Company's Clark
material  handling  business,  and certain of CMHC's related entities have filed
voluntary petitions for bankruptcy. In connection with the sale of the Company's
Clark  material  handling  business  to  CMHC in  November  1996,  CMHC  assumed
liabilities from the Company arising from product  liability claims dealing with
Clark material handling products manufactured prior to the date of such sale. In
September  2000,  the  bankruptcy  court  granted  CMHC's  motion to reject  its
obligations  to  indemnify  and defend the  Company for such  product  liability
claims. However, substantially all litigation involving product liability claims
related to Clark  material  handling  products has been stayed until January 15,
2001.  At such time as the stay is no longer in effect,  the Company  will incur
liability arising from certain of these product liability claims. The Company is
unable at this time to determine  what  liabilities it will incur as a result of
CMHC's bankruptcy,  or to estimate the amount of such liabilities;  however, the
Company does not believe that these liabilities,  in the aggregate,  will have a
material adverse effect on the financial position of the Company.

NOTE H - BUSINESS SEGMENT INFORMATION

The Company operates primarily in two industry segments: Terex Lifting and Terex
Earthmoving. Included in Other are the results of Amida Industries, Inc. as well
as the results of Terex  Bartell,  Ltd.  and Terex  Bartell Inc. for the periods
from  April  1,  1999  and  September  20,  1999,   their  respective  dates  of
acquisition,  as well as general and  corporate  items for the three  months and
nine months ended September 30, 2000 and 1999.  Industry segment  information is
presented below:

                                    Three Months Ended      Nine Months Ended
                                      September 30,           September 30,
                                    --------------------- ---------------------
                                       2000       1999        2000       1999
                                    ---------- ---------- ----------- ---------
Sales
  Terex Lifting.................... $  232.7   $  242.5   $   715.2   $   746.9
  Terex Earthmoving................    230.1      244.2       872.6       599.5
  Other............................     12.3        8.9        34.3        20.6
                                    ---------- ---------- ----------- ---------
    Total.......................... $  475.1   $  495.6   $ 1,622.1   $ 1,367.0
                                    ========== ========== =========== =========

Income (Loss) from Operations
  Terex Lifting.................... $   25.0   $   22.6   $    74.5   $    75.3
  Terex Earthmoving................     21.6       26.1        88.8        62.6
  Other............................      0.8        1.1         2.6        (0.6)
                                    ---------- ---------- ----------- ---------
    Total.......................... $   47.4   $   49.8   $   165.9   $   137.3
                                    ========== ========== =========== =========

                                       8
<PAGE>

NOTE I -- CONSOLIDATING FINANCIAL STATEMENTS

On March  31,  1998 and  March 9,  1999,  the  Company  issued  and sold  $150.0
aggregate principal amount and $100.0 aggregate principal amount,  respectively,
of 8-7/8% Senior Subordinated Notes due 2008 (the "Senior Subordinated  Notes").
The Senior  Subordinated Notes are each jointly and severally  guaranteed by the
following   wholly-owned   subsidiaries   of  the  Company  (the   "Wholly-owned
Guarantors"):  Terex Cranes, Inc., Koehring Cranes, Inc., Terex-Telelect,  Inc.,
Terex-RO  Corporation,  Terex  Aerials,  Inc.,  Terex  Mining  Equipment,  Inc.,
Payhauler Corp., O & K Orenstein & Koppel, Inc., The American Crane Corporation,
Amida  Industries,  Inc. and  Cedarapids,  Inc. The  financial  results of Amida
Industries,  Inc.  and  Cedarapids,  Inc.  are  included  in the  results of the
Wholly-owned  Guarantors  since  April  1,  1999  and  August  26,  1999,  their
respective  dates of acquisition.  The Senior  Subordinated  Notes are each also
jointly and severally  guaranteed by PPM Cranes,  Inc.,  which is 92.4% owned by
Terex.

The following summarized condensed  consolidating  financial information for the
Company  segregates  the  financial   information  of  Terex  Corporation,   the
Wholly-owned Guarantors, PPM Cranes, Inc. and the Non-guarantor Subsidiaries.

Terex  Corporation  consists of parent company  operations.  Subsidiaries of the
parent company are reported on the equity basis.

Wholly-owned  Guarantors  combine the operations of the  Wholly-owned  Guarantor
subsidiaries.  Subsidiaries of  Wholly-owned  Guarantors that are not themselves
guarantors are reported on the equity basis.

PPM Cranes, Inc. consists of the operations of PPM Cranes, Inc. Its subsidiaries
are reported on the equity basis.

Non-guarantor Subsidiaries combine the operations of subsidiaries which have not
provided a guarantee of the  obligations of Terex  Corporation  under the Senior
Subordinated Notes.

Debt and Goodwill  allocated  to  subsidiaries  is  presented  on an  accounting
"push-down" basis.




                                       9
<PAGE>

TEREX CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2000
(in millions)
<TABLE>
<CAPTION>

                                                         Wholly-                       Non-
                                            Terex         owned          PPM        guarantor    Intercompany
                                         Corporation    Guarantors   Cranes, Inc.  Subsidiaries  Eliminations  Consolidated
                                         ------------- ------------- ------------- ------------- ------------- -------------
<S>                                      <C>           <C>           <C>           <C>           <C>           <C>
Net sales............................... $      67.9   $     158.9   $     19.3    $    264.9    $    (35.9)   $     475.1
   Cost of goods sold...................        58.9         130.5         16.8         218.1         (35.9)         388.4
                                         ------------- ------------- ------------- ------------- ------------- -------------
Gross profit............................         9.0          28.4          2.5          46.8         ---             86.7
   Selling, general & administrative             8.1           4.1          1.7          25.4         ---             39.3
     expenses
                                         ------------- ------------- ------------- ------------- ------------- -------------
Income (loss) from operations...........         0.9          24.3          0.8          21.4         ---             47.4
  Interest income.......................         1.3          (0.1)       ---             0.4         ---              1.6
  Interest expense......................        (4.6)         (4.9)        (1.5)        (15.0)        ---            (26.0)
  Gain on sale of businesses............        10.3         ---          ---            46.9         ---             57.2
  Income (loss) from equity investees...        61.5         ---          ---           ---           (61.5)         ---
  Other income (expense) - net..........         1.3          (0.3)       ---            (1.2)        ---             (0.2)
                                         ------------- ------------- ------------- ------------- ------------- -------------
Income (loss) before income taxes.......        70.7          19.0         (0.7)         52.5         (61.5)          80.0
  Provision for income taxes............       (21.0)         (0.1)       ---            (9.2)        ---            (30.3)
                                         ------------- ------------- ------------- ------------- ------------- -------------
Net income (loss)....................... $      49.7   $      18.9   $     (0.7)   $     43.3    $    (61.5)   $      49.7
                                         ============= ============= ============= ============= ============= =============
</TABLE>

<TABLE>
<CAPTION>

TEREX CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1999
(in millions)

                                                           Wholly-                       Non-
                                              Terex         owned          PPM        guarantor   Intercompany
                                           Corporation   Guarantors    Cranes, Inc.  Subsidiaries Eliminations  Consolidated
                                           ------------- ------------- ------------- ------------ ------------- -------------
<S>                                        <C>           <C>           <C>           <C>           <C>           <C>
Net sales...............................   $    124.3    $    151.7    $    18.9     $    255.5    $    (54.8)   $     495.6
   Cost of goods sold...................        108.6         127.0         16.7          207.1         (52.3)         407.1
                                           ------------- ------------- ------------- ------------ ------------- -------------
Gross profit............................         15.7          24.7          2.2           48.4          (2.5)          88.5
   Selling, general & administrative              5.9           8.7          1.3           22.8         ---             38.7
     expenses
                                           ------------- ------------- ------------- ------------ ------------- -------------
Income (loss) from operations...........          9.8          16.0          0.9           25.6          (2.5)          49.8
  Interest income.......................          1.4           0.1        ---              1.0         ---              2.5
  Interest expense......................         (6.3)         (2.1)        (1.2)         (10.4)        ---            (20.0)
  Income (loss) from equity investees...         25.8          (0.2)       ---            ---           (25.6)         ---
  Other income (expense) - net..........         (0.4)         (0.2)        (0.1)          (0.6)        ---             (1.3)
                                           ------------- ------------- ------------- ------------ ------------- -------------
Income (loss) before income taxes.......         30.3          13.6         (0.4)          15.6         (28.1)          31.0
  Provision for income taxes............         (0.4)        ---          ---             (0.7)        ---             (1.1)
                                           ------------- ------------- ------------- ------------ ------------- -------------
Net income (loss).......................   $     29.9    $     13.6    $    (0.4)    $     14.9    $    (28.1)   $      29.9
                                           ============= ============= ============= ============ ============= =============
</TABLE>





                                       10
<PAGE>

TEREX CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2000
(in millions)
<TABLE>
<CAPTION>

                                                         Wholly-                       Non-
                                            Terex         owned          PPM        guarantor    Intercompany
                                         Corporation    Guarantors   Cranes, Inc.  Subsidiaries  Eliminations  Consolidated
                                         ------------- ------------- ------------- ------------- ------------- -------------
<S>                                      <C>           <C>           <C>           <C>           <C>           <C>
Net sales............................... $     289.0   $     504.6   $     51.8    $    955.6    $   (178.9)   $   1,622.1
   Cost of goods sold...................       255.7         421.9         45.1         786.7        (177.3)       1,332.1
                                         ------------- ------------- ------------- ------------- ------------- -------------
Gross profit............................        33.3          82.7          6.7         168.9          (1.6)         290.0
   Selling, general & administrative            17.5          24.8          4.8          77.0         ---            124.1
     expenses
                                         ------------- ------------- ------------- ------------- ------------- -------------
Income (loss) from operations...........        15.8          57.9          1.9          91.9          (1.6)         165.9
  Interest income.......................         2.8           0.2        ---             1.1         ---              4.1
  Interest expense......................       (15.2)        (14.8)        (4.3)        (43.4)        ---            (77.7)
  Gain on sale of businesses............        10.3         ---          ---            46.9         ---             57.2
  Income (loss) from equity investees...       121.1         ---          ---           ---          (121.1)         ---
  Other income (expense) - net..........         1.7          (0.9)        (0.1)         (2.5)        ---             (1.8)
                                         ------------- ------------- ------------- ------------- ------------- -------------
Income (loss) before income taxes.......       136.5          42.4         (2.5)         94.0        (122.7)         147.7
  Provision for income taxes............       (40.7)         (0.3)       ---           (10.9)        ---            (51.9)
                                         ------------- ------------- ------------- ------------- ------------- -------------
Net income (loss)....................... $      95.8   $      42.1   $     (2.5)   $     83.1    $   (122.7)   $      95.8
                                         ============= ============= ============= ============= ============= =============
</TABLE>

<TABLE>
<CAPTION>

TEREX CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1999
(in millions)

                                                         Wholly-                       Non-
                                            Terex         owned          PPM        guarantor    Intercompany
                                         Corporation    Guarantors   Cranes, Inc.  Subsidiaries  Eliminations  Consolidated
                                         ------------- ------------- ------------- ------------- ------------- -------------
<S>                                      <C>           <C>           <C>           <C>           <C>           <C>
Net sales............................... $     362.9   $     445.2   $     58.1    $    635.3    $   (134.5)   $   1,367.0
   Cost of goods sold...................       316.4         372.4         51.4         519.5        (128.8)       1,130.9
                                         ------------- ------------- ------------- ------------- ------------- -------------
Gross profit............................        46.5          72.8          6.7         115.8          (5.7)         236.1
   Selling, general & administrative            19.2          20.5          4.0          55.1         ---             98.8
     expenses
                                         ------------- ------------- ------------- ------------- ------------- -------------
Income (loss) from operations...........        27.3          52.3          2.7          60.7          (5.7)         137.3
  Interest income.......................         1.8           0.2        ---             1.7         ---              3.7
  Interest expense......................       (14.2)         (5.8)        (3.4)        (25.5)        ---            (48.9)
  Income (loss) from equity investees...        72.9          (0.8)         0.2          (0.6)        (71.7)         ---
  Other income (expense) - net..........        (0.4)         (0.8)        (0.2)         (1.8)        ---             (3.2)
                                         ------------- ------------- ------------- ------------- ------------- -------------
Income (loss) before income taxes.......        87.4          45.1         (0.7)         34.5         (77.4)          88.9
  Provision for income taxes............        (1.1)          0.1        ---            (1.6)        ---             (2.6)
                                         ------------- ------------- ------------- ------------- ------------- -------------
Net income (loss)....................... $      86.3   $      45.2         (0.7)         32.9         (77.4)   $      86.3
                                         ============= ============= ============= ============= ============= =============
</TABLE>





                                       11
<PAGE>

TEREX CORPORATION
CONDENSED CONSOLIDATING BALANCE SHEET
SEPTEMBER 30, 2000
(in millions)

<TABLE>
<CAPTION>

                                                           Wholly-                       Non-
                                              Terex         owned          PPM        guarantor    Intercompany
                                           Corporation   Guarantors    Cranes, Inc.  Subsidiaries  Eliminations   Consolidated
                                           ------------- ------------- ------------- ------------- ------------- -------------
Assets
   Current assets
<S>                                        <C>           <C>           <C>           <C>           <C>           <C>
     Cash and cash equivalents..........   $    114.2    $      0.8    $     0.1     $     145.7   $    ---      $     260.8
     Trade receivables - net............         27.7         102.2         14.6           246.8        ---            391.3
     Intercompany receivables...........         28.3          28.2         17.2            68.0       (141.7)         ---
     Net inventories....................         93.1         165.4         15.9           323.8        (14.1)         584.1
     Other current assets...............         53.8           1.9          0.2            38.3        ---             94.2
                                           ------------- ------------- ------------- ------------- ------------- -------------
       Total current assets.............        317.1         298.5         48.0           822.6       (155.8)       1,330.4
   Long-term assets
     Property, plant & equipment - net..         10.3          45.8          0.5            74.0        ---            130.6
     Investment in and advances to
       (from) subsidiaries..............        347.3        (103.7)        (9.0)         (131.4)      (103.2)         ---
     Goodwill...........................          9.4         160.1         12.3           309.7        ---            491.5
     Other assets.......................         39.7          38.3          0.8            30.1        ---            108.9
                                           ------------- ------------- ------------- ------------- ------------- -------------

Total assets............................   $    723.8    $    439.0    $    52.6     $   1,105.0   $   (259.0)   $   2,061.4
                                           ============= ============= ============= ============= ============= =============

Liabilities and stockholders' equity
   (deficit)
   Current liabilities
     Notes  payable and  current  portion
       of long-term debt................   $      2.7    $      0.1    $     0.5     $      18.0   $    ---      $      21.3
     Trade accounts payable.............         31.7          77.6          7.4           195.5        ---            312.2
     Intercompany payables..............          5.0          19.0          9.1           108.6       (141.7)         ---
     Accruals    and    other     current
       liabilities......................         70.4          32.4          8.5            98.9        ---            210.2
                                           ------------- ------------- ------------- ------------- ------------- -------------
       Total current liabilities........        109.8         129.1         25.5           421.0       (141.7)         543.7
   Non-current liabilities
     Long-term debt, less current portion       146.7         210.0         62.6           581.7        ---          1,001.0
     Other long-term liabilities........         20.8          16.2          1.2            32.0        ---             70.2
   Stockholders' equity (deficit).......        446.5          83.7        (36.7)           70.3       (117.3)         446.5
                                           ------------- ------------- ------------- ------------- ------------- -------------

Total liabilities and stockholders'
   equity (deficit).....................   $    723.8    $    439.0    $    52.6     $   1,105.0   $   (259.0)   $   2,061.4
                                           ============= ============= ============= ============= ============= =============
</TABLE>




                                       12
<PAGE>

TEREX CORPORATION
CONDENSED CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1999
(in millions)
<TABLE>
<CAPTION>

                                                          Wholly-                       Non-
                                             Terex         owned          PPM        Guarantor    Intercompany
                                          Corporation    Guarantors   Cranes, Inc.  Subsidiaries  Eliminations  Consolidated
                                          ------------- ------------- ------------- ------------- ------------- -------------
Assets
   Current assets
<S>                                       <C>           <C>           <C>           <C>           <C>           <C>
     Cash and cash equivalents..........  $      64.3   $       1.7   $      0.1    $     67.2    $    ---      $     133.3
     Trade receivables - net............         90.2         103.5         21.3         214.2         ---            429.2
     Intercompany receivables...........          8.8          26.1         13.7          57.0        (105.6)         ---
     Net inventories....................        130.3         190.2         18.2         330.7          (3.8)         665.6
     Other current assets...............         50.2           8.8        ---            28.2         ---             87.2
                                          ------------- ------------- ------------- ------------- ------------- -------------
       Total current assets.............        343.8         330.3         53.3         697.3        (109.4)       1,315.3
   Long-term assets
     Property, plant & equipment - net..         17.3          49.1          0.1         106.3         ---            172.8
     Investment in  and   advances   to
      (from)   subsidiaries.............        311.4        (185.7)       (20.6)        (95.2)         (9.9)         ---
     Goodwill - net.....................         28.7         151.5         12.0         362.5         ---            554.7
     Other assets - net.................         74.5          28.0          0.4          31.8         ---            134.7
                                          ------------- ------------- ------------- ------------- ------------- -------------

Total assets............................  $     775.7   $     373.2   $     45.2    $  1,102.7    $   (119.3)   $   2,177.5
                                          ============= ============= ============= ============= ============= =============

Liabilities   and    stockholders' equity
   (deficit)
   Current liabilities
     Notes  payable and  current  portion
       of long-term debt................  $      16.6   $      (0.8)  $      0.8    $     41.0    $    ---      $      57.6
     Trade accounts payable.............         41.4          53.3          6.4         195.9         ---            297.0
     Intercompany payables..............         30.6          15.9          4.5          54.1        (105.1)         ---
     Accruals    and    other     current        68.5          30.2          7.5         118.7        ----            224.9
       liabilities......................
                                          ------------- ------------- ------------- ------------- ------------- -------------
       Total current liabilities........        157.1          98.6         19.2         409.7        (105.1)         579.5
   Non-current liabilities
     Long-term debt, less current portion       170.8         223.7         59.8         644.5         ---          1,098.8
     Other long-term liabilities........         15.0           9.3          0.4          41.7         ---             66.4
   Stockholders' equity (deficit).......        432.8          41.6        (34.2)          6.8         (14.2)         432.8
                                          ------------- ------------- ------------- ------------- ------------- -------------

Total   liabilities   and   stockholders'
   equity (deficit).....................  $     775.7   $     373.2   $     45.2    $  1,102.7    $   (119.3)   $   2,177.5
                                          ============= ============= ============= ============= ============= =============
</TABLE>





                                       13
<PAGE>

TEREX CORPORATION
CONDENSED CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2000
(in millions)
<TABLE>
<CAPTION>

                                                           Wholly-                       Non-
                                              Terex         owned          PPM        Guarantor    Intercompany
                                           Corporation    Guarantors   Cranes, Inc.  Subsidiaries  Eliminations   Consolidated
                                           ------------- ------------- ------------- ------------- ------------- ----------------
Net cash provided by (used in)
<S>                                        <C>           <C>           <C>           <C>           <C>           <C>
   operating activities.................   $     61.4    $      1.1    $     1.1     $     68.1    $    ---      $     131.7
                                           ------------- ------------- ------------- ------------- ------------- -------------
Cash flows from investing activities
   Proceeds from sale of businesses.....         51.8         ---          ---             92.5         ---            144.3
   Capital expenditures.................         (2.2)         (8.1)        (0.3)          (7.1)        ---            (17.7)
   Acquisition of businesses, net of
     cash acquired......................        ---            (0.5)       ---             (3.6)        ---             (4.1)
   Proceeds from sale of assets.........        ---             6.6        ---              2.6         ---              9.2
                                           ------------- ------------- ------------- ------------- ------------- -------------
       Net cash provided by (used in)
         investing activities...........         49.6          (2.0)        (0.3)          84.4         ---            131.7
                                           ------------- ------------- ------------- ------------- ------------- -------------
Cash flows from financing activities
   Principal repayments of long-term debt       (45.6)        ---           (0.8)         (11.9)        ---            (58.3)
   Net incremental borrowings
     (repayments) under revolving
     line of credit agreements..........        ---           ---          ---            (56.0)        ---            (56.0)
   Purchase of common stock held in
     treasury...........................        (14.7)        ---          ---            ---           ---            (14.7)
   Proceed from issuance of common stock        ---           ---          ---            ---           ---            ---
   Proceeds from issuance of long-term
      debt, net of issuance costs.......        ---           ---          ---            ---           ---            ---
   Other................................         (0.8)        ---          ---             (2.5)        ---             (3.3)
                                           ------------- ------------- ------------- ------------- ------------- -------------
     Net cash provided by (used in)
       financing activities.............        (61.1)        ---           (0.8)         (70.4)        ---           (132.3)
                                           ------------- ------------- ------------- ------------- ------------- -------------
Effect of exchange rates on cash and
   cash equivalents.....................        ---           ---          ---             (3.6)        ---             (3.6)
                                           ------------- ------------- ------------- ------------- ------------- -------------
Net increase (decrease) in cash and cash
   equivalents..........................         49.9          (0.9)       ---             78.5         ---            127.5
Cash and cash equivalents, beginning of
   period...............................         64.3           1.7          0.1           67.2         ---            133.3
                                           ------------- ------------- ------------- ------------- ------------- -------------
Cash and cash equivalents,
   end of period........................   $    114.2    $      0.8    $     0.1     $    145.7    $    ---      $     260.8
                                           ============= ============= ============= ============= ============= =============
</TABLE>





                                       14
<PAGE>

TEREX CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1999
(in millions)
<TABLE>
<CAPTION>

                                                           Wholly-                       Non-
                                              Terex         Owned          PPM        Guarantor    Intercompany
                                           Corporation    Guarantors   Cranes, Inc.  Subsidiaries  Eliminations   Consolidated
                                           ------------- ------------- ------------- ------------- ------------- --------------
Net cash provided by (used in)
<S>                                        <C>           <C>           <C>           <C>           <C>           <C>
   operating activities.................   $    332.2    $   (119.7)   $     0.2     $   (212.3)   $    ---      $       0.4
                                           ------------- ------------- ------------- ------------- ------------- -------------
Cash flows from investing activities
   Acquisition of businesses, net of
     cash acquired......................       (475.9)        ---          ---            ---           ---           (475.9)
   Capital expenditures.................         (0.8)         (6.0)        (0.2)          (5.8)        ---            (12.8)
   Proceeds from sale of excess assets..        ---             2.1        ---              0.6         ---              2.7
                                           ------------- ------------- ------------- ------------- ------------- -------------
    Net cash provided by (used in)
      investing activities..............       (476.7)         (3.9)        (0.2)          (5.2)        ---           (486.0)
                                           ------------- ------------- ------------- ------------- ------------- -------------
Cash flows from financing activities
   Proceeds from issuance of long-term
      debt, net of issuance costs.......         94.9         128.0        ---            282.9         ---            505.8
   Proceeds from issuance of common stock       162.8         ---          ---            ---           ---            162.8
   Principal repayments of long-term debt       (17.8)         (0.2)       ---            (14.1)        ---            (32.1)
   Net incremental borrowings
     (repayments)          under
     revolving line of credit agreements        ---           ---          ---            (29.2)        ---            (29.2)
   Payment of premiums on early
     extinguishment of debt.............        ---           ---          ---            ---           ---            ---
   Other................................        ---            (0.3)       ---              8.3         ---              8.0
                                           ------------- ------------- ------------- ------------- ------------- -------------
     Net cash provided by (used in)
       financing activities.............        239.9         127.5        ---            247.9         ---            615.3
                                           ------------- ------------- ------------- ------------- ------------- -------------
Effect of exchange rates on cash and
   cash equivalents.....................        ---           ---          ---             (0.7)        ---             (0.7)
                                           ------------- ------------- ------------- ------------- ------------- -------------
Net increase (decrease) in cash and cash
   equivalents..........................         95.4           3.9        ---             29.7         ---            129.0
Cash and cash equivalents, beginning of
   period...............................          9.3           0.5          0.1           15.2         ---             25.1
                                           ------------- ------------- ------------- ------------- ------------- -------------
Cash and cash equivalents,
   end of period........................   $    104.7    $      4.4    $     0.1     $     44.9    $    ---      $     154.1
                                           ============= ============= ============= ============= ============= =============
</TABLE>







                                       15
<PAGE>

                                PPM CRANES, INC.

                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                  (in millions)



<TABLE>
<CAPTION>

                                           For the Three Months Ended      For the Nine Months
                                                  September 30,            Ended September 30,
                                           --------------------------- ----------------------------
                                               2000          1999          2000          1999
                                           ------------- ------------- -------------- -------------

<S>                                        <C>           <C>           <C>            <C>
Net sales..................................$     19.3    $     20.3    $     51.8     $    63.6
Cost of goods sold.........................      16.8          17.7          45.1          55.8
                                           ------------- ------------- -------------- -------------

     Gross profit..........................       2.5           2.6           6.7           7.8

Engineering, selling
    and administrative expenses............       1.7           1.6           4.8           4.8
                                           ------------- ------------- -------------- -------------

     Income from operations................       0.8           1.0           1.9           3.0

Other income (expense):
     Interest expense......................      (1.5)         (1.3)         (4.3)         (3.5)
     Amortization of debt issuance costs...     ---            (0.1)         (0.1)         (0.2)
                                           ------------- ------------- -------------- -------------

Income (loss) before income taxes..........      (0.7)         (0.4)         (2.5)         (0.7)
Provision for income taxes.................     ---           ---           ---           ---
                                           ------------- ------------- -------------- -------------

Net loss...................................$     (0.7)   $     (0.4)   $     (2.5)    $    (0.7)
                                           ============= ============= ============== =============
</TABLE>



   The accompanying notes are an integral part of these financial statements.





                                       16
<PAGE>

<TABLE>
<CAPTION>

                                PPM CRANES, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEET
                       (in millions, except share amounts)

                                                                         September 30,     December 31,
                                                                             2000              1999
                                                                        ----------------  ---------------
ASSETS
Current assets:
<S>                                                                      <C>              <C>
   Cash and cash equivalents...........................................  $         0.1    $         0.1
   Trade accounts receivables (net of allowance of $0.7 at September
     30, 2000 and $0.6 at December 31, 1999)...........................           14.6             21.3
   Net inventories.....................................................           15.9             18.2
   Due from affiliates.................................................           17.2             14.5
   Other current assets ...............................................            0.2            ---
                                                                         ---------------- -----------------
     Total current assets..............................................           48.0             54.1
Long-term assets:
   Property, plant and equipment - net.................................            0.5              0.2
   Goodwill............................................................           12.3             13.2
   Other assets........................................................            0.8              0.9
                                                                         ---------------- -----------------

Total assets...........................................................  $        61.6    $        68.4
                                                                         ================ =================


LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
   Trade accounts payable..............................................  $         7.4    $         6.4
   Accrued warranties and product liability............................            6.9              6.9
   Accrued expenses....................................................            1.6              0.7
   Due to affiliates...................................................            9.1              5.3
   Due to Terex Corporation............................................            9.0             18.2
   Current portion of long-term debt...................................            0.5              1.1
                                                                         ---------------- -----------------
     Total current liabilities.........................................           34.5             38.6
                                                                         ---------------- -----------------

Non-current liabilities:
   Long-term debt, less current portion................................           62.6             62.8
   Other non-current liabilities.......................................            1.2              1.2
                                                                         ---------------- -----------------
     Total non-current liabilities.....................................           63.8             64.0
                                                                         ---------------- -----------------

Commitments and contingencies

Shareholders' deficit
   Common stock, Class A, $.01 par value -
     authorized 8,000 shares; issued and outstanding 5,000 shares......          ---              ---
   Common stock, Class B, $.01 par value -
     authorized 2,000 shares; issued and outstanding 413 shares........          ---              ---
   Accumulated deficit.................................................          (36.7)           (34.2)
   Accumulated other comprehensive income..............................          ---              ---
                                                                         ---------------- -----------------
      Total shareholders' deficit......................................          (36.7)           (34.2)
                                                                         ---------------- -----------------

Total liabilities and shareholders' deficit............................  $        61.6    $        68.4
                                                                         ================ =================
</TABLE>


   The accompanying notes are an integral part of these financial statements.





                                       17
<PAGE>

<TABLE>
<CAPTION>

                                PPM CRANES, INC.

                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                  (in millions)



                                                                  For the Nine Months
                                                                  Ended September 30,
                                                                -----------------------
                                                                   2000         1999
                                                                ------------ ----------
OPERATING ACTIVITIES
<S>                                                             <C>          <C>
   Net loss.................................................... $    (2.5)   $   (0.7)
   Adjustments to reconcile net loss to cash
     used in operating activities:
       Depreciation and amortization...........................       1.1         1.1
       Changes in operating assets and liabilities:
         Trade accounts receivable.............................       6.7        (3.2)
         Net inventories.......................................       2.3         9.4
         Trade accounts payable................................       1.0        (0.3)
         Net amounts due to affiliates.........................      (8.1)       (4.6)
         Other, net............................................       0.6        (0.8)
                                                                ------------ ------------
           Net cash provided by operating activities...........       1.1         0.9
                                                                ------------ ------------

INVESTING ACTIVITIES
   Capital expenditures........................................      (0.3)       (0.2)
                                                                ------------ ------------
     Net cash used in investing activities.....................      (0.3)       (0.2)
                                                                ------------ ------------

FINANCING ACTIVITIES
   Principal repayments of long-term debt......................      (0.8)       (0.5)
                                                                ------------ ------------
     Net cash used in financing activities.....................      (0.8)       (0.5)
                                                                ------------ ------------

EFFECT OF EXCHANGE RATE CHANGES ON
   CASH AND CASH EQUIVALENTS...................................     ---         ---
                                                                ------------ ------------

NET INCREASE IN CASH AND CASH EQUIVALENTS......................     ---           0.2

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD...............       0.1         0.2
                                                                ------------ ------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD..................... $     0.1    $    0.4
                                                                ============ ============
</TABLE>



   The accompanying notes are an integral part of these financial statements.




                                       18
<PAGE>

                                PPM CRANES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                               September 30, 2000

                     (in millions unless otherwise denoted)


NOTE 1 -- Description of the Business and Basis of Presentation

PPM Cranes,  Inc.  (sometimes  referred to as Terex Cranes - Conway  Operations)
(the  "Company" or "PPM") is engaged in the design,  manufacture,  marketing and
worldwide  distribution  and  support  of  construction   equipment,   primarily
hydraulic cranes and related spare parts.

On May 9, 1995, Terex  Corporation,  through its  wholly-owned  subsidiary Terex
Cranes,  Inc., a Delaware  corporation,  completed the acquisition of all of the
capital stock of Legris  Industries,  Inc., a Delaware  corporation,  which then
owned 92.4% of the capital stock of PPM Cranes, Inc.

The condensed  consolidated  financial  statements  reflect Terex  Corporation's
basis in the assets and  liabilities of the Company which was accounted for as a
purchase  transaction.  As a result,  the debt and goodwill  associated with the
acquisition have been "pushed down" to the Company's financial statements.

In the opinion of management,  all adjustments  considered  necessary for a fair
presentation have been made. Such adjustments  consist only of those of a normal
recurring  nature.  Operating results for the three months and nine months ended
September  30, 2000 are not  necessarily  indicative  of the results that may be
expected for the year ending December 31, 2000. For further  information,  refer
to the Company's consolidated financial statements and footnotes thereto for the
year ended December 31, 1999.

The  condensed  consolidated  financial  statements  include the accounts of the
Company and its wholly-owned  inactive subsidiary,  PPM Far East Pte. Ltd. Prior
to  November  30,  1999,  the  accounts  of  the  Company's  other  wholly-owned
subsidiary,  Terex Cranes Pty. Ltd. ("Terex Australia"),  were also included. On
November 30, 1999,  the Company sold its  ownership in Terex  Australia to Terex
Corporation.  All  material  intercompany  transactions  and  profits  have been
eliminated.


NOTE 2 -- Inventories

Net inventories consist of the following:

                                         September 30,     December 31,
                                             2000             1999
                                       ----------------- ----------------
Finished equipment..................... $         2.8    $         3.6
Replacement parts......................           6.8              6.8
Work in process........................           2.4              1.9
Raw materials and supplies.............           3.9              5.9
                                        $        15.9    $        18.2
                                        ================ =================

note 3 -- Property, Plant and Equipment

Net property, plant and equipment consists of the following:
                                        September 30,     December 31,
                                            2000              1999
                                       ----------------- ----------------
Property, plant and equipment........  $         0.7    $         0.4
Less:  Accumulated depreciation......           (0.2)            (0.2)
                                       ---------------- -----------------
Net property, plant and equipment....  $         0.5    $         0.2
                                       ================ =================





                                       19
<PAGE>

NOTE 4 - COMMITMENTS AND Contingencies

The Company is involved in product  liability and other lawsuits incident to the
operation  of its  business.  Insurance  with third  parties is  maintained  for
certain of these items. It is  management's  opinion that none of these lawsuits
will have a materially adverse effect on the Company's financial position.

On March 31, 1998 and March 9, 1999,  Terex  Corporation  issued and sold $150.0
aggregate principal amount and $100.0 aggregate principal amount,  respectively,
of 8-7/8% Senior Subordinated Notes due 2008 (the "Senior Subordinated  Notes").
The Senior  Subordinated  Notes are each  jointly and  severally  guaranteed  by
certain domestic subsidiaries of Terex Corporation, including PPM.

NOTE 5 - RELATED PARTY TRANSACTIONS

During the three months and nine months ended  September 30, 2000 and 1999,  the
Company had transactions with various unconsolidated affiliates as follows:

                                        Three Months Ended    Nine Months Ended
                                         September 30,           September 30,
                                      ---------------------- -------------------
                                           2000       1999     2000       1999
                                      ---------- ----------- ---------- --------
 Product sales and service revenues    $   0.4   $   ---     $  1.4     $  ---
 Management fee expense                $   0.3   $     0.3   $  0.8     $    0.8
 Interest expense                      $   1.2   $     1.4   $  4.0     $    3.8

Included in management  fee expenses are expenses paid by Terex  Corporation  on
behalf of the Company (e.g. legal, treasury and tax services expense).




                                       20
<PAGE>

       ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS

The Company operates primarily in two industry segments: Terex Lifting and Terex
Earthmoving.  Included  in Other  are the  results  of the  operations  of Amida
Industries,  Inc.  ("Amida") and Terex  Bartell,  Ltd. and Terex  Bartell,  Inc.
(collectively  "Bartell"),  for the periods from April 1, 1999 and September 20,
1999, their  respective  dates of acquisition,  as well as general and corporate
items for the three months and nine months ended September 30, 2000 and 1999.

Three  Months  Ended  September  30, 2000  Compared  with the Three Months Ended
September 30, 1999

The table below is a comparison of net sales, gross profit, selling, general and
administrative  expenses, and income from operations,  by segment, for the three
months ended September 30, 2000 and 1999.
<TABLE>
<CAPTION>

                                               Three Months Ended
                                                    September 30,      Increase
                                             ------------------------
                                                2000          1999    (Decrease)
                                             ------------ ----------- ----------
NET SALES
<S>                                          <C>          <C>         <C>
   Terex Lifting.............................$   232.7    $    242.5  $    (9.8)
   Terex Earthmoving.........................    230.1         244.2      (14.1)
   Other.....................................     12.3           8.9        3.4
                                             ------------ ----------- ----------
     Total...................................$   475.1    $    495.6  $   (20.5)
                                             ============ =========== ==========

GROSS PROFIT
   Terex Lifting.............................$    39.2    $     38.2  $     1.0
   Terex Earthmoving.........................     45.9          48.5       (2.6)
   Other.....................................      1.6           1.8       (0.2)
                                             ------------ ----------- ----------
     Total...................................$    86.7    $     88.5  $    (1.8)
                                             ============ =========== ==========

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
   Terex Lifting.............................$    14.2    $     15.6  $    (1.4)
   Terex Earthmoving.........................     24.3          22.4        1.9
   Other.....................................      0.8           0.7        0.1
                                             ------------ ----------- ----------
     Total...................................$    39.3    $     38.7  $     0.6
                                             ============ =========== ==========

INCOME FROM OPERATIONS
   Terex Lifting.............................$    25.0    $     22.6  $     2.4
   Terex Earthmoving.........................     21.6          26.1       (4.5)
   Other.....................................      0.8           1.1       (0.3)
                                             ------------ ----------- ----------
     Total...................................$    47.4    $     49.8  $    (2.4)
                                             ============ =========== ==========
</TABLE>


     Net Sales

Sales decreased $20.5 million,  or  approximately  4%, to $475.1 million for the
three months ended September 30, 2000 over the comparable 1999 period. Excluding
the impact of businesses acquired during 1999, net sales were down approximately
19%  from  the  third  quarter  of  1999,  as  acquired  companies   contributed
approximately $72 million in incremental net sales.

Terex  Lifting's  sales were $232.7 million for the three months ended September
30, 2000, a decrease of $9.8 million or approximately 4% from $242.5 million for
the three  months  ended  September  30,  1999.  The decline in sales was caused
mainly by two factors:  continued softness in the mobile hydraulic cranes market
and a reduced level of activity in the aerial work platforms business due to the
closing of the Company's  Milwaukee  facility during the fourth quarter of 1999,
which were  partially  offset by the results of the businesses  acquired  during
1999 (approximately $20 million).  Terex Lifting's backlog was $129.1 million at
September  30, 2000 and $179.5  million at September  30, 1999.  The decrease in
backlog is consistent with the weakness in the mobile hydraulic crane and aerial



                                       21
<PAGE>

work  platforms  businesses  and was also  impacted  by the  divestiture  of the
Company's  truck-mounted  forklift  business.   Backlog  does  not  include  any
significant parts orders,  which are normally filled in the period ordered.  The
sales mix was  approximately  11% parts for the three months ended September 30,
2000  compared  to  approximately  10% parts  for the  comparable  1999  period,
reflecting the decrease in machine sales.

Terex  Earthmoving's  sales  were  $230.1  million  for the three  months  ended
September  30,  2000, a decrease of $14.1  million  from $244.2  million for the
three  months  ended  September  30,  1999.  The  decrease  in sales was  driven
primarily by the decline in the mining  business,  offset somewhat by businesses
acquired in 1999  (approximately  $49  million).  Backlog was $110.6  million at
September  30, 2000  compared  to $204.2  million at  September  30,  1999.  The
decrease in backlog is primarily  due to the decline in the mining  business and
the  impact of the  completion  of the Coal  India  contract.  The sales mix was
approximately  25% parts for the three months ended  September 30, 2000 compared
to 23% parts for the comparable 1999 period,  reflecting the decrease in machine
sales.

Net sales for Other in the three  months  ended  September  30, 2000  represents
sales from Amida and Bartell.  Amida and Bartell were acquired by Terex on April
1, 1999 and September 20, 1999,  respectively.  In 1999, net sales  consisted of
sales from Amida and  Bartell,  subsequent  to their dates of  acquisition,  and
service  revenues  generated by Terex's parts  distribution  center for services
provided to a third party.

     Gross Profit

Gross  profit for the three  months  ended  September  30, 2000  decreased  $1.8
million over the comparable 1999 period,  or approximately 2%, to $86.7 million.
The  decrease in gross  profit is a  combination  of a decrease in sales  offset
somewhat by improved  gross  profit  percentages  in both the Terex  Lifting and
Terex Earthmoving businesses as management continues to focus on cost controls.

Terex  Lifting's  gross profit  increased  $1.0 million to $39.2 million for the
three months ended  September 30, 2000,  compared to $38.2 million for the three
months ended  September 30, 1999. The increase in gross profit was driven by the
contribution of businesses acquired in 1999 and the continued performance of the
utility aerial device  business,  offset  somewhat by the overall decline in net
sales  for  hydraulic  cranes  and  aerial  work  platforms.  Gross  profit as a
percentage of sales  increased to 16.8% from 15.8% in 1999,  due primarily to an
increase in parts sales as a percentage of total sales,  the  performance of the
businesses  acquired in 1999 and the  performance  of the utility  aerial device
business.

Terex Earthmoving's  gross profit decreased  approximately 5% or $2.6 million to
$45.9 million for the three months ended  September 30, 2000,  compared to $48.5
million for the three months  ended  September  30, 1999.  The decrease in gross
profit is due  primarily to the decline in sales in the mining  business and the
impact  of the  one-time  charge  related  to  the  further  integration  of the
Company's surface mining truck and hydraulic shovel businesses,  offset somewhat
by the  performance  of the  businesses  acquired  in  1999.  The  gross  margin
percentage  remained  unchanged at 19.9% in the three months ended September 30,
2000 and 1999.  Excluding  the  one-time  charge,  the gross  margin  percentage
increased to 21.3%,  which  reflects the impact of the higher margin  businesses
acquired in 1999 and a continued focus on cost controls.

     Selling, General and Administrative Expenses

Selling, general and administrative expenses increased slightly to $39.3 million
for the three months ended  September  30, 2000 from $38.7 million for the three
months  ended  September  30,  1999,  principally  reflecting  the effect of the
businesses  acquired in 1999.  As a percentage  of sales,  selling,  general and
administrative  expenses  increased to 8.3% for the three months ended September
30, 2000 as compared to 7.8% for the three  months  ended  September  30,  1999.
Excluding  the  impact of  businesses  acquired  in 1999,  selling  general  and
administrative  expenses  as a  percentage  of sales  remained  constant at 7.8%
compared to the prior year.

Terex Lifting's selling,  general and administrative expenses decreased to $14.2
million for the three months ended September 30, 2000 from $15.6 million for the
three months ended  September 30, 1999.  This  decrease in selling,  general and
administrative  expenses  was  principally  due to a  continued  focus  on  cost
controls as most units  reported  decreases in these  expenses over the previous
year, offset somewhat by increased costs resulting from the businesses  acquired
in 1999. As a percentage of sales, selling,  general and administrative expenses
for the quarter decreased to 6.1% compared to 6.4% in 1999. Excluding businesses
acquired in 1999,  selling,  general and  administrative  expenses for the three
months ended September 30, 2000 were 5.2% as a percentage of sales.

                                       22
<PAGE>

Terex Earthmoving's  selling,  general and administrative  expenses increased to
$24.3 million for the three months ended  September 30, 2000, from $22.4 million
for  the  comparable  period  in  1999,  principally  due to the  effect  of the
businesses  acquired in 1999.  As a percentage  of sales,  selling,  general and
administrative  expenses increased to 10.6% for the three months ended September
30, 2000, as compared to 9.2% in the comparable 1999 period.

     Income from Operations

On a  consolidated  basis,  the  Company  had income  from  operations  of $47.4
million,  or 10.0% of sales,  for the three  months  ended  September  30, 2000,
compared to income from operations of $49.8 million,  or 10.0% of sales, for the
three months ended September 30, 1999.

Terex  Lifting's  income from  operations  of $25.0 million for the three months
ended  September 30, 2000  increased by $2.4 million over the three months ended
September 30, 1999. The increase is the result of operating  income  contributed
by the businesses  acquired in 1999,  partially  offset by decreasing  sales and
gross  margins  within the  Company's  mobile  hydraulic  cranes and aerial work
platforms businesses.  Income from operations as a percentage of sales increased
to 10.7%  for the three  months  ended  September  30,  2000,  from 9.3% for the
comparable 1999 period.

Terex  Earthmoving's  income from operations  decreased by $4.5 million to $21.6
million,  or 9.4% of sales,  for the three months ended  September 30, 2000 from
$26.1 million, or 10.7% of sales, for the three months ended September 30, 1999.
The  decrease  in income from  operations  and  operating  margins is due to the
decline in sales and the one-time charge ($3.0 million) related to the Company's
mining  business.  Excluding the one-time  charge,  income from  operations as a
percent of sales remained flat at 10.7%.

     Net Interest Expense

During the three months ended  September  30, 2000,  the  Company's net interest
expense  increased  $6.9  million to $24.4  million  from $17.5  million for the
comparable 1999 period. This increase was primarily due to higher debt levels in
the three months ended September 30, 2000 versus the comparable  period in 1999.
The higher debt levels were incurred to fund the  acquisition of Powerscreen and
Cedarapids during the third quarter of 1999.

     Gain on Sale of Businesses

During the three months ended September 30, 2000, the Company recognized a $57.2
million gain on the sale of its  truck-mounted  forklift  businesses  to various
subsidiaries of Partek  Corporation of Finland for $144 million in cash, subject
to adjustment.

     Income Taxes

During the three  months ended  September  30, 2000,  the  Company's  income tax
expense was $30.3 million as compared to $1.1 million for the three months ended
September  30, 1999.  This increase  resulted from the  resolution in the fourth
quarter  of 1999 of an IRS audit of the  Company's  income tax  returns  for the
years 1987 through 1989 and the  capitalization  of certain deferred tax assets.
As a result of the  capitalization of these deferred tax assets, the Company now
reports a higher  effective  tax rate,  but still makes use of  substantial  net
operating loss carryforwards to minimize cash paid for taxes.




                                       23
<PAGE>

Nine Months Ended  September 30, 2000 Compared with Nine Months Ended  September
30, 1999

The table below is a comparison of net sales, gross profit, selling, general and
administrative  expenses,  and income from operations,  by segment, for the nine
months ended September 30, 2000 and 1999.

                                                 Nine Months Ended
                                                     September 30,     Increase
                                              -----------------------
                                                 2000        1999     (Decrease)
                                              ----------- ----------- ----------
NET SALES
   Terex Lifting..............................$   715.2   $   746.9   $  (31.7)
   Terex Earthmoving..........................    872.6       599.5      273.1
   Other......................................     34.3        20.6       13.7
                                              ----------- ----------- ----------
     Total....................................$ 1,622.1   $ 1,367.0   $  255.1
                                              =========== =========== ==========

GROSS PROFIT
   Terex Lifting..............................$   120.9   $   119.4   $    1.5
   Terex Earthmoving..........................    162.9       112.9       50.0
   Other......................................      6.2         3.8        2.4
                                              ----------- ----------- ----------
     Total....................................$   290.0   $   236.1   $   53.9
                                              =========== =========== ==========

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
   Terex Lifting..............................$    46.4   $    44.1   $    2.3
   Terex Earthmoving..........................     74.1        50.3       23.8
   Other......................................      3.6         4.4       (0.8)
                                              ----------- ----------- ----------
     Total....................................$   124.1   $    98.8   $   25.3
                                              =========== =========== ==========

INCOME FROM OPERATIONS
   Terex Lifting..............................$    74.5   $    75.3   $   (0.8)
   Terex Earthmoving..........................     88.8        62.6       26.2
   Other......................................      2.6        (0.6)       3.2
                                              ----------- ----------- ----------
     Total....................................$   165.9   $   137.3   $   28.6
                                              =========== =========== ==========

     Net Sales

Sales increased $255.1 million,  or  approximately  19%, to $1,622.1 million for
the nine months  ended  September  30,  2000 over the  comparable  1999  period.
Excluding the impact of 1999 acquisitions, net sales were down approximately 14%
from  the  first  nine  months  of  1999,  as  acquired  businesses  contributed
approximately $445 million in incremental net sales.

Terex  Lifting's  sales were $715.2 million for the nine months ended  September
30,  2000, a decrease of $31.7  million from $746.9  million for the nine months
ended September 30, 1999. The decline in sales was caused mainly by two factors:
softness in the mobile  hydraulic  cranes market and a reduced level of activity
in the aerial  work  platforms  business  due to the  closing  of the  Company's
Milwaukee facility, which were partially offset by the results of the businesses
acquired in 1999  (approximately  $87 million).  The sales mix was approximately
11% parts for the nine months ended September 30, 2000 compared to approximately
9% parts for the  comparable  1999  period,  reflecting  the decrease in machine
sales.

Terex  Earthmoving's  sales  were  $872.6  million  for the  nine  months  ended
September  30, 2000, an increase of $273.1  million from $599.5  million for the
nine  months  ended  September  30,  1999.  The  increase in sales was driven by
businesses  acquired in 1999 (approximately $349 million) and the performance of
the  construction  truck  business,  offset  somewhat by a decline in the mining
business.  The sales mix was  approximately  20% parts for the nine months ended
September 30, 2000 compared to 24% parts for the comparable 1999 period.

Net sales for Other in the nine months ended September 30, 2000 represents sales
from  Amida  and  Bartell  and  service  revenues  generated  by  Terex's  parts
distribution  center for services  provided to a third party through March 2000.
Amida and  Bartell  were  acquired by Terex on April 1, 1999 and  September  20,
1999, respectively. In 1999, net sales consisted of sales from Amida and Bartell
subsequent  to their dates of  acquisition  and service  revenues  generated  by
Terex's parts distribution center.

                                       24
<PAGE>

     Gross Profit

Gross  profit for the nine  months  ended  September  30, 2000  increased  $53.9
million over the comparable 1999 period, or approximately 23%, to $290.0 million
as a result of acquisitions  and improved gross profit  percentages in the Terex
Lifting and Terex Earthmoving businesses.

Terex  Lifting's  gross profit  increased $1.5 million to $120.9 million for the
nine months ended  September 30, 2000,  compared to $119.4  million for the nine
months ended  September 30, 1999. The increase in gross profit was due primarily
to the contribution of businesses acquired in 1999 and the continued performance
of the utility aerial device business, offset somewhat by the overall decline in
net sales for  hydraulic  cranes and aerial work  platforms.  Gross  profit as a
percentage  of sales  increased to 16.9% from 16.0% in 1999 due primarily to the
impact of the  businesses  acquired  in 1999,  an  increase  in part  sales as a
percentage  of total  sales and the  performance  of the utility  aerial  device
business.

Terex  Earthmoving's  gross profit increased $50.0 million to $162.9 million for
the nine months ended  September  30, 2000,  compared to $112.9  million for the
nine months  ended  September  30,  1999.  The  increase in gross  profit is due
primarily to the performance of businesses  acquired in 1999, offset somewhat by
the decline in sales and the impact of a one-time  charge related to the further
integration  of  the  Company's   surface  mining  truck  and  hydraulic  shovel
businesses.  The gross margin percentage  decreased slightly to 18.7% from 18.8%
in the comparable 1999 period.  Excluding the one-time charge,  the gross margin
percentage actually increased to 19.0%.

     Selling, General and Administrative Expenses

Selling, general and administrative expenses increased to $124.1 million for the
nine months  ended  September  30,  2000 from $98.8  million for the nine months
ended  September 30, 1999,  principally  reflecting the effect of the businesses
acquired in 1999. As a percentage of sales, selling,  general and administrative
expenses  increased  to 7.7% for the nine  months  ended  September  30, 2000 as
compared to 7.2% for the nine months ended  September  30, 1999.  Excluding  the
impact of  businesses  acquired in 1999,  selling,  general  and  administrative
expenses as a percentage of sales was 7.3%.

Terex Lifting's selling,  general and administrative expenses increased to $46.4
million for the nine months ended  September 30, 2000 from $44.1 million for the
nine months ended  September  30, 1999.  This  increase in selling,  general and
administrative expenses was principally due to businesses acquired in 1999. As a
percentage of sales, selling,  general and administrative  expenses for the nine
months increased to 6.5% compared to 5.9% in 1999. Excluding businesses acquired
in 1999, selling,  general and administrative expenses for the nine months ended
September 30, 2000 actually decreased to 5.8% as a percentage of sales.

Terex Earthmoving's selling, general and administrative expenses increased $23.8
million to $74.1  million for the nine months ended  September  30,  2000,  from
$50.3 million for the comparable  period in 1999,  principally due to the effect
of the businesses acquired in 1999. As a percentage of sales,  selling,  general
and administrative expenses increased slightly to 8.5% for the nine months ended
September 30, 2000, from 8.4% for the comparable 1999 period.

     Income from Operations

On a consolidated  basis,  the income from  operations of the Company  increased
$28.6 million to $165.9  million,  or 10.2% of sales,  for the nine months ended
September 30, 2000,  compared to income from  operations of $137.3  million,  or
10.0% of sales, for the nine months ended September 30, 1999.

Terex  Lifting's  income from  operations  of $74.5  million for the nine months
ended  September  30, 2000  decreased  slightly  from $75.3 million for the nine
months ended September 30, 1999. The decrease is the result of decreasing  sales
and gross margins within the Company's  mobile  hydraulic cranes and aerial work
platforms businesses, partially offset by approximately $13 million of operating
income contributed by the businesses acquired in 1999. Income from operations as
a percentage of sales was 10.4% for the nine months ended September 30, 2000, an
increase from 10.1% for the comparable 1999 period.

Terex  Earthmoving's  income  from  operations  increased  by $26.2  million  or
approximately 42% to $88.8 million, or 10.2% of sales, for the nine months ended
September 30, 2000 from $62.6  million,  or 10.4% of sales,  for the nine months
ended  September  30,  1999.  The  increase  in income  from  operations  is due
primarily  to the impact of the 1999  acquisitions  and the  performance  of the
Company's  construction  truck business,  offset somewhat by the one-time charge
related to the Company's  mining  business  ($3.0  million) and a decline in the
mining business.

                                       25
<PAGE>

     Net Interest Expense

During the nine months ended  September  30, 2000,  the  Company's  net interest
expense  increased  $28.4  million to $73.6  million from $45.2  million for the
comparable 1999 period. This increase was primarily due to higher debt levels in
the nine months ended  September 30, 2000 versus the comparable  period in 1999.
The higher debt levels were incurred to fund the  acquisition of Powerscreen and
Cedarapids during the third quarter of 1999.

     Gain on Sale of Businesses

During the nine months ended September 30, 2000, the Company  recognized a $57.2
million gain on the sale of its  truck-mounted  forklift  businesses  to various
subsidiaries of Partek  Corporation of Finland for $144 million in cash, subject
to adjustment.

     Income Taxes

During the nine months  ended  September  30,  2000,  the  Company's  income tax
expense was $51.9  million as compared to $2.6 million for the nine months ended
September  30, 1999.  This increase  resulted from the  resolution in the fourth
quarter  of 1999 of an IRS audit of the  Company's  income tax  returns  for the
years 1987 through 1989 and the  capitalization  of certain deferred tax assets.
As a result of the  capitalization of these deferred tax assets, the Company now
reports a higher  effective  tax rate,  but still makes use of  substantial  net
operating loss carryforwards to minimize cash paid for taxes.

LIQUIDITY AND CAPITAL RESOURCES

Net cash of $131.7 million was provided by operating  activities during the nine
months  ended  September  30,  2000,  of which  approximately  $73  million  was
generated  from  reductions of working  capital.  Net cash provided by investing
activities was $131.7  million  during the nine months ended  September 30, 2000
and  primarily  represents  the  proceeds  from  the  sale of the  truck-mounted
forklift  business.  Net cash used in financing  activities  was $132.3  million
during the nine months ended  September  30, 2000,  which  primarily  represents
principal  repayments of the  Company's  long-term  debt and  revolving  line of
credit. Cash and cash equivalents totaled $260.8 million at September 30, 2000.

Debt reduction and an improved capital  structure are major focal points for the
Company.  The Company  regularly reviews its alternatives to improve its capital
structure  and to reduce debt service  through debt  refinancings,  issuances of
equity,  asset  sales,   strategic   dispositions  of  business  units,  or  any
combination  thereof.  In this regard,  the Company  committed to generate  $200
million of free cash flow by the end of 2000 from working capital  reduction and
operating  results,  which was anticipated to be used to either pay down debt or
increase the liquidity of the Company.  Through the nine months ended  September
30, 2000, the Company paid down  approximately $114 million of bank debt. During
the first week of October,  the Company paid down an additional  $125 million of
debt from the net after-tax proceeds from the sale of its truck-mounted forklift
business.

The Company continually explores and conducts discussions regarding acquisitions
and other  strategic  corporate  transactions  with respect to  businesses  with
complementary  products  and services and in other  industries.  Such  potential
acquisitions  range from  transactions that are relatively small to transactions
which may be  significant  to the  Company.  The  purchase  price  for  possible
acquisitions may be paid with internally  generated cash,  through the public or
private  issuance of common stock (which would  increase the number of shares of
common  stock   outstanding)  or  other  securities  of  the  Company,   through
borrowings,  or a combination thereof. No assurance can be given with respect to
the timing, likelihood or business effect of any possible transaction, including
whether the Company will be able to identify suitable acquisition candidates and
whether the Company will be able to raise sufficient funds to complete potential
future acquisitions.

On March 9, 2000, the Company's Board of Directors authorized the purchase of up
to 2 million  shares of the Company's  common stock over the following 12 months
from  available  cash. As of September  30, 2000,  the Company had purchased 917
thousand   shares  of  common  stock  to  be  held  in  treasury  for  aggregate
consideration of $14.7 million.

The Company's  businesses are working capital  intensive and require funding for
purchases of production and replacement parts inventories,  capital expenditures
for  repair,  replacement  and  upgrading  of  existing  facilities,  as well as
financing of receivables from customers and dealers. The Company has significant
debt service requirements, including semi-annual interest payments on the Senior
Subordinated  Notes and monthly  interest  payments on the Company's bank credit
facilities.  Management  believes that cash generated from operations,  together
with the Company's bank credit facilities and cash on hand, provides the Company
adequate   liquidity  to  meet  the   Company's   operating   and  debt  service
requirements.


                                       26
<PAGE>

CONTINGENCIES AND UNCERTAINTIES

         Euro

On  January  1,  1999,  11 of the 15  member  countries  of the  European  Union
established  fixed conversion rates between their existing  currencies  ("legacy
currencies") and one common currency,  the euro. The euro now trades on currency
exchanges and may be used in business  transactions.  Beginning in January 2002,
new euro-denominated  bills and coins will be issued, and legacy currencies will
be withdrawn from circulation.  The Company's operating subsidiaries affected by
the euro  conversion are assessing the systems and business issues raised by the
euro currency  conversion.  These issues include,  among others, (1) the need to
adapt  computer  and  other  business   systems  and  equipment  to  accommodate
euro-denominated  transaction  and (2) the  competitive  impact of  cross-border
price  transparency,  which may make it more  difficult for businesses to charge
different  prices  for  the  same  products  on  a   country-by-country   basis,
particularly once the euro currency is issued in 2002. The Company believes that
the euro  conversion has not and will not have a material  adverse impact on its
financial condition or results of operations.

         Other

The Company is subject to a number of contingencies and uncertainties  including
product  liability  claims,  self-insurance  obligations,  tax  examinations and
guarantees.  Many  of the  exposures  are  unasserted  or  proceedings  are at a
preliminary  stage,  and it is not presently  possible to estimate the amount or
timing of any cost to the  Company.  However,  the Company does not believe that
these  contingencies and uncertainties  will, in the aggregate,  have a material
adverse effect on the Company. When it is probable that a loss has been incurred
and  possible to make  reasonable  estimates  of the  Company's  liability  with
respect to such matters, a provision is recorded for the amount of such estimate
or for the  minimum  amount  of a range of  estimates  when it not  possible  to
estimate the amount within the range that is most likely to occur.

The Company generates  hazardous and nonhazardous wastes in the normal course of
its manufacturing  operations.  As a result, Terex is subject to a wide range of
federal, state, local and foreign environmental laws and regulations. These laws
and regulations govern actions that may have adverse  environmental  effects and
also require  compliance  with certain  practices when handling and disposing of
hazardous  and  nonhazardous  wastes.  These laws and  regulations  also  impose
liability for the costs of, and damages resulting from,  cleaning up sites, past
spills,  disposals and other releases of hazardous  substances.  Compliance with
these laws and regulations has, and will continue  require,  the Company to make
expenditures.  The Company does not expect that these  expenditures  will have a
material adverse effect on its business or profitability.


Clark Material Handling Company  ("CMHC"),  the purchaser of the Company's Clark
material  handling  business,  and certain of CMHC's related entities have filed
voluntary petitions for bankruptcy. In connection with the sale of the Company's
Clark  material  handling  business  to  CMHC in  November  1996,  CMHC  assumed
liabilities from the Company arising from product  liability claims dealing with
Clark material handling products manufactured prior to the date of such sale. In
September  2000,  the  bankruptcy  court  granted  CMHC's  motion to reject  its
obligations  to  indemnify  and defend the  Company for such  product  liability
claims. However, substantially all litigation involving product liability claims
related to Clark  material  handling  products has been stayed until January 15,
2001.  At such time as the stay is no longer in effect,  the Company  will incur
liability arising from certain of these product liability claims. The Company is
unable at this time to determine what liabilities,  it will incur as a result of
CMHC's bankruptcy,  or to estimate the amount of such liabilities;  however, the
Company does not believe that these liabilities,  in the aggregate,  will have a
material adverse effect on the financial position of the Company.



       ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The  Company  is  exposed to certain  market  risks  which  exist as part of its
ongoing   business   operations  and  the  Company  uses  derivative   financial
instruments,  where appropriate, to manage these risks. The Company, as a matter
of policy, does not engage in trading or speculative  transactions.  For further
information on accounting policies related to derivative financial  instruments,
refer to the Company's  Annual  Report on Form 10-K for the year ended  December
31, 1999.

                                       27
<PAGE>

 Foreign Exchange Risk

The Company is exposed to fluctuations in foreign currency cash flows related to
third party purchases and sales, intercompany product shipments and intercompany
loans.  The  Company  is also  exposed to  fluctuations  in the value of foreign
currency  investments in subsidiaries  and cash flows related to repatriation of
these  investments.  Additionally,  the Company is exposed to  volatility in the
translation of foreign  currency  earnings to U.S.  Dollars.  Primary  exposures
include the U.S.  Dollars versus  functional  currencies of the Company's  major
markets which include the British Pound,  German Mark, French Franc,  Irish Punt
and  Italian  Lira.  The  Company   assesses  foreign  currency  risk  based  on
transactional  cash flows and  identifies  naturally  offsetting  positions  and
purchases hedging instruments to protect anticipated exposures. At September 30,
2000,  the  Company  had foreign  currency  contracts  which were hedges of firm
commitments  totaling  approximately $33 million. The fair market value of these
arrangements,  which  represents  the  cost to  settle  these  contracts,  was a
liability of approximately $0.9 million at September 30, 2000.

Interest Rate Risk

The  Company  is exposed  to  interest  rate  volatility  with  regard to future
issuances  of fixed rate debt and  existing  issuances  of  variable  rate debt.
Primary exposure includes  movements in the U.S. prime rate and London Interbank
Offer Rate  ("LIBOR").  The Company uses interest rate swaps to reduce  interest
rate  volatility.  At September  30, 2000,  the Company had  approximately  $258
million of interest  rate swaps fixing  interest  rates between 5.68% and 9.69%.
The fair  market  value of these  arrangements,  which  represents  the costs to
settle these contracts,  was an asset of approximately $1.1 million at September
30, 2000.

At September  30, 2000,  the Company  performed a  sensitivity  analysis for the
Company's  derivatives and other financial  instruments  that have interest rate
risk.  The  Company  calculated  the  pretax  earnings  effect  on its  interest
sensitive  instruments.  Based on this  sensitivity  analysis,  the  Company has
determined that an increase of 10% in the Company's  weighted  average  interest
rates  at  September  30,  2000  would  have  increased   interest   expense  by
approximately $3.3 million in the nine months ended September 30, 2000.

                                       28
<PAGE>

PART II       OTHER INFORMATION

Item 1.       Legal Proceedings

The Company is involved in certain claims and litigation arising in the ordinary
course  of  business,  which  are  not  considered  material  to  the  financial
operations or cash flow of the Company. For information concerning contingencies
see "Management's  Discussion and Analysis of Financial Condition and Results of
Operations -- Contingencies and Uncertainties."

Item 2.       Changes in Securities and Use of Proceeds
Not applicable.

Item 3.       Defaults Upon Senior Securities
Not applicable.

Item 4.       Submission of Matters to a Vote of Security Holders

Not applicable.

Item 5.       Other Information

Forward Looking Information

Certain information in this Quarterly Report includes forward-looking statements
regarding future events or the future financial  performance of the Company that
involve certain contingencies and uncertainties, including those discussed above
in the section entitled  "Contingencies and  Uncertainties".  In addition,  when
included  in this  Quarterly  Report  or in  documents  incorporated  herein  by
reference,  the  words  "may,"  "expects,"  "intends,"  "anticipates,"  "plans,"
"projects,"  "estimates"  and the  negatives  thereof and  analogous  or similar
expressions are intended to identify  forward-looking  statements.  However, the
absence of these words does not mean that the statement is not  forward-looking.
The Company has based these  forward-looking  statements on current expectations
and  projections  about future  events.  These  statements are not guarantees of
future performance. Such statements are inherently subject to a variety of risks
and  uncertainties  that could cause actual  results to differ  materially  from
those   reflected   in  such   forward-looking   statements.   Such   risks  and
uncertainties,  many of which are beyond the Company's control,  include,  among
others:  the sensitivity of construction  and mining activity to interest rates,
government spending and general economic conditions; the ability to successfully
integrate  acquired  businesses;  the  retention  of key  management  personnel;
foreign currency fluctuations; the Company's businesses are very competitive and
may be affected by  pricing,  product  initiatives  and other  actions  taken by
competitors;  the  effects  of changes in laws and  regulations;  the  Company's
business is  international  in nature and is subject to exchange  rates  between
currencies,  as well as  international  politics;  the ability of  suppliers  to
timely  supply parts and  components  at  competitive  prices and the  Company's
ability to timely manufacture and deliver products to customers; compliance with
the restrictive covenants contained in the Company's debt agreements;  continued
use  of  net  operating   loss   carryforwards;   compliance   with   applicable
environmental  laws and  regulations;  and other  factors.  Actual events or the
actual  future  results of the  Company may differ  materially  from any forward
looking  statement due to these and other risks,  uncertainties  and significant
factors.  The forward-looking  statements  contained herein speak only as of the
date of this Quarterly Report and the  forward-looking  statements  contained in
documents  incorporated  herein by  reference  speak  only as of the date of the
respective  documents.   The  Company  expressly  disclaims  any  obligation  or
undertaking to release publicly any updates or revisions to any  forward-looking
statement  contained or  incorporated  by reference in this Quarterly  Report to
reflect any change in the  Company's  expectations  with  regard  thereto or any
change in events,  conditions or  circumstances  on which any such  statement is
based.

Item 6.       Exhibits and Reports on Form 8-K

              (a) The exhibits set forth on the accompanying  Exhibit Index have
                  been filed as part of this Form 10-Q.

              (b) Reports on Form 8-K.

               -    A report on Form 8-K dated  July 20,  2000 was filed on July
                    21, 2000,  announcing the signing of a definitive  agreement
                    to sell the  Company's  truck-mounted  forklift  business to
                    subsidiaries of Partek Corporation.

                                       29
<PAGE>

               -    A report on Form 8-K dated  September  30, 2000 was filed on
                    October 4, 2000,  announcing  the  completion of the sale of
                    the   Company's    truck-mounted    forklift   business   to
                    subsidiaries of Partek Corporation.

                                       30
<PAGE>

                                   SIGNATURES



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                              TEREX CORPORATION
                                                 (Registrant)


Date:  November 14, 2000                  /s/ Joseph F. Apuzzo
                                             Joseph F. Apuzzo
                                             Chief Financial Officer
                                             (Principal Financial Officer)


Date:  November 14, 2000                  /s/ Kevin M. O'Reilly
                                             Kevin M. O'Reilly
                                             Controller
                                             (Principal Accounting Officer)

                                       31
<PAGE>

EXHIBIT INDEX


3.1    Restated Certificate of Incorporation of Terex Corporation  (incorporated
       by  reference  to Exhibit 3.1 to the Form S-1  Registration  Statement of
       Terex Corporation, Registration No. 33-52297).

3.2    Certificate of Elimination  with respect to the Series B Preferred  Stock
       (incorporated  by  reference to Exhibit 4.3 to the Form 10-K for the year
       ended  December  31,  1998 of  Terex  Corporation,  Commission  File  No.
       1-10702).

3.3    Certificate  of  Amendment  to  Certificate  of  Incorporation  of  Terex
       Corporation dated September 5, 1998 (incorporated by reference to Exhibit
       3.3 to the Form  10-K  for the  year  ended  December  31,  1998 of Terex
       Corporation, Commission File No. 1-10702).

3.4    Amended  and  Restated  Bylaws  of  Terex  Corporation  (incorporated  by
       reference to Exhibit 3.2 to the Form 10-K for the year ended December 31,
       1998 of Terex Corporation, Commission File No. 1-10702).

4.1    Warrant Agreement dated as of December 20, 1993 between Terex Corporation
       and Mellon  Securities Trust Company,  as Warrant Agent  (incorporated by
       reference to Exhibit 4.40 to the Form S-1 Registration Statement of Terex
       Corporation, Registration No. 33-52297).

4.2    Form of Series A Warrant  (incorporated  by  reference to Exhibit 4.41 to
       the Form S-1 Registration  Statement of Terex  Corporation,  Registration
       No. 33-52297).

4.3    Indenture  dated  as of March  31,  1998  among  Terex  Corporation,  the
       Guarantors  named therein and United States Trust Company of New York, as
       Trustee  (incorporated  by reference to Exhibit 4.6 of Amendment No. 1 to
       the Form S-4 Registration  Statement of Terex  Corporation,  Registration
       No. 333-53561).

4.4    First  Supplemental  Indenture,  dated as of September 23, 1998,  between
       Terex Corporation and United States Trust Company of New York, as Trustee
       (to Indenture dated as of March 31, 1998)  (incorporated  by reference to
       Exhibit 4.4 to the Form 10-Q for the quarter ended  September 30, 1999 of
       Terex Corporation, Commission File No. 1-10702).

4.5    Second Supplemental  Indenture,  dated as of April 1, 1999, between Terex
       Corporation  and United  States Trust Company of New York, as Trustee (to
       Indenture  dated as of March 31,  1998)  (incorporated  by  reference  to
       Exhibit 4.5 to the Form 10-Q for the quarter ended  September 30, 1999 of
       Terex Corporation, Commission File No. 1-10702).

4.6    Third  Supplemental  Indenture,  dated as of July 29, 1999, between Terex
       Corporation  and United  States Trust Company of New York, as Trustee (to
       Indenture  dated as of March 31,  1998)  (incorporated  by  reference  to
       Exhibit 4.6 to the Form 10-Q for the quarter ended  September 30, 1999 of
       Terex Corporation, Commission File No. 1-10702).

4.7    Fourth Supplemental Indenture, dated as of August 26, 1999, between Terex
       Corporation  and United  States Trust Company of New York, as Trustee (to
       Indenture  dated as of March 31,  1999)  (incorporated  by  reference  to
       Exhibit 4.7 to the Form 10-Q for the quarter ended  September 30, 1999 of
       Terex Corporation, Commission File No. 1-10702).

4.8    Indenture  dated  as of  March  9,  1999  among  Terex  Corporation,  the
       Guarantors  named therein and United States Trust Company of New York, as
       Trustee  (incorporated  by  reference to Exhibit 4.4 to the Form 10-K for
       the year ended December 31, 1998 of Terex  Corporation,  Commission  File
       No. 1-10702).

4.9    First  Supplemental  Indenture,  dated as of April 1, 1999, between Terex
       Corporation  and United  States Trust Company of New York, as Trustee (to
       Indenture  dated as of March  9,  1999)  (incorporated  by  reference  to
       Exhibit 4.8 to the Form 10-Q for the quarter ended  September 30, 1999 of
       Terex Corporation, Commission File No. 1-10702).

4.10   Second Supplemental  Indenture,  dated as of July 30, 1999, between Terex
       Corporation  and United  States Trust Company of New York, as Trustee (to
       Indenture  dated as of March  9,  1999)  (incorporated  by  reference  to
       Exhibit 4.9 to the Form 10-Q for the quarter ended  September 30, 1999 of
       Terex Corporation, Commission File No. 1-10702).

4.11   Third Supplemental Indenture,  dated as of August 26, 1999, between Terex
       Corporation  and United  States Trust Company of New York, as Trustee (to
       Indenture  dated as of March  9,  1999)  (incorporated  by  reference  to
       Exhibit 4.11 to the Form 10-Q for the quarter ended September 30, 1999 of
       Terex Corporation, Commission File No. 1-10702).


                                       32
<PAGE>

10.1   Terex Corporation  Incentive Stock Option Plan, as amended  (incorporated
       by  reference  to Exhibit 4.1 to the Form S-8  Registration  Statement of
       Terex Corporation, Registration No. 33-21483).

10.2   1994  Terex  Corporation  Long  Term  Incentive  Plan   (incorporated  by
       reference  to Exhibit  10.2 to the Form 10-K for the year ended  December
       31, 1994 of Terex Corporation, Commission File No. 1-10702).

10.3   Terex Corporation Employee Stock Purchase Plan (incorporated by reference
       to Exhibit 10.3 to the Form 10-K for the year ended  December 31, 1994 of
       Terex Corporation, Commission File No. 1-10702).

10.4   1996  Terex  Corporation  Long  Term  Incentive  Plan   (incorporated  by
       reference  to Exhibit  10.1 to Form S-8  Registration  Statement of Terex
       Corporation, Registration No. 333-03983).

10.5   Amendment  No. 1 to 1996  Terex  Corporation  Long  Term  Incentive  Plan
       (incorporated  by reference to Exhibit 10.5 to the Form 10-K for the year
       ended  December  31,  1999 of  Terex  Corporation,  Commission  File  No.
       1-10702).

10.6   Amendment  No. 2 to 1996  Terex  Corporation  Long  Term  Incentive  Plan
       (incorporated  by reference to Exhibit 10.6 to the Form 10-K for the year
       ended  December  31,  1999 of  Terex  Corporation,  Commission  File  No.
       1-10702).

10.7   Terex  Corporation  1999  Long-Term   Incentive  Plan   (incorporated  by
       reference  to Exhibit  10.7 to the Form 10-Q for the quarter  ended March
       31, 2000 of Terex Corporation, Commission File No. 1-10702).

10.8   Terex  Corporation  2000  Incentive  Plan  (incorporated  by reference to
       Exhibit  10.8 to the Form 10-Q for the  quarter  ended  June 30,  2000 of
       Terex Corporation, Commission File No. 1-10702).

10.9   Common  Stock  Appreciation  Rights  Agreement  dated  as of May 9,  1995
       between the  Company  and United  States  Trust  Company of New York,  as
       Rights  Agents  (incorporated  by  reference  to  Exhibit  10.29  of  the
       Amendment  No.  1  to  the  Form  S-1  Registration  Statement  of  Terex
       Corporation, Registration No. 33-52711).

10.10  SAR  Registration  Rights  Agreement  dated as of May 9,  1995  among the
       Company and the Purchasers, as defined therein (incorporated by reference
       to  Exhibit  10.31 of the  Amendment  No. 1 to the Form S-1  Registration
       Statement of Terex Corporation, Registration No. 33-52711).

10.11  Credit  Agreement  dated as of March 6,  1998  among  Terex  Corporation,
       certain of its  subsidiaries,  the lenders named  therein,  Credit Suisse
       First Boston, as  Administrative  Agent, Bank Boston N.A., as Syndication
       Agent and Canadian  Imperial  Bank of Commerce  and First Union  National
       Bank, as  Co-Documentation  Agents  (incorporated by reference to Exhibit
       10.13 to the Form  10-K for the year  ended  December  31,  1998 of Terex
       Corporation, Commission File No. 1-10702).

10.12  Guarantee  Agreement  dated as of March 6, 1998 of Terex  Corporation and
       Credit  Suisse  First  Boston,  as  Collateral  Agent   (incorporated  by
       reference to Exhibit  10.14 to the Form 10-K for the year ended  December
       31, 1998 of Terex Corporation, Commission File No. 1-10702).

10.13  Guarantee Agreement dated as of March 6, 1998 of Terex Corporation,  each
       of the subsidiaries of Terex Corporation listed therein and Credit Suisse
       First Boston,  as Collateral Agent  (incorporated by reference to Exhibit
       10.15 to the Form  10-K for the year  ended  December  31,  1998 of Terex
       Corporation, Commission File No. 1-10702).

10.14  Security Agreement dated as of March 6, 1998 of Terex  Corporation,  each
       of the subsidiaries of Terex Corporation listed therein and Credit Suisse
       First Boston,  as Collateral Agent  (incorporated by reference to Exhibit
       10.16 to the Form  10-K for the year  ended  December  31,  1998 of Terex
       Corporation, Commission File No. 1-10702).

10.15  Pledge Agreement dated as of March 6, 1998 of Terex Corporation,  each of
       the  subsidiaries of Terex  Corporation  listed therein and Credit Suisse
       First Boston,  as Collateral Agent  (incorporated by reference to Exhibit
       10.17 to the Form  10-K for the year  ended  December  31,  1998 of Terex
       Corporation, Commission File No. 1-10702).

10.16  Form  Mortgage,  Leasehold  Mortgage,  Assignment  of Leases  and  Rents,
       Security  Agreement and Financing  entered into by Terex  Corporation and
       certain of the  subsidiaries  of Terex  Corporation,  as  Mortgagor,  and
       Credit Suisse First Boston,  as Mortgagee  (incorporated  by reference to
       Exhibit  10.18 to the Form 10-K for the year ended  December  31, 1998 of
       Terex Corporation, Commission File No. 1-10702).

10.17  Amendment No. 1 to Credit Agreement dated as of March 6, 1998 among Terex
       Corporation,  certain of its  subsidiaries,  the lenders  named  therein,
       Credit  Suisse First  Boston,  as  Administrative  and  Collateral  Agent
       (incorporated by reference to Exhibit 10.17 to the Form 10-K for the year
       ended  December  31,  1998 of  Terex  Corporation,  Commission  File  No.
       1-10702).


                                       33
<PAGE>

10.18  Amendment No. 2 to Credit Agreement dated as of March 6, 1998 among Terex
       Corporation,  certain of its  subsidiaries,  the lenders  named  therein,
       Credit  Suisse First  Boston,  as  Administrative  and  Collateral  Agent
       (incorporated by reference to Exhibit 10.18 to the Form 10-K for the year
       ended  December  31,  1998 of  Terex  Corporation,  Commission  File  No.
       1-10702).

10.19  Amendment No. 3 to Credit Agreement dated as of March 6, 1998 among Terex
       Corporation,  certain of its  subsidiaries,  the lenders  named  therein,
       Credit  Suisse First  Boston,  as  Administrative  and  Collateral  Agent
       (incorporated by reference to Exhibit 10.19 to the Form 10-K for the year
       ended  December  31,  1998 of  Terex  Corporation,  Commission  File  No.
       1-10702).

10.20  Amendment No. 4 to Credit Agreement dated as of March 6, 1998 among Terex
       Corporation,  certain of its subsidiaries, the lenders named therein, and
       Credit  Suisse First  Boston,  as  Administrative  and  Collateral  Agent
       (incorporated  by  reference  to  Exhibit  10.1 to the Form  8-K  Current
       Report,  Commission File  No.1-10702,  dated July 27, 1999 and filed with
       the Commission on August 10, 1999).

10.21  Amendment No. 5 to Credit Agreement dated as of March 6, 1998 among Terex
       Corporation,  certain of its subsidiaries, the lenders named therein, and
       Credit  Suisse First  Boston,  as  Administrative  and  Collateral  Agent
       (incorporated  by  reference  to  Exhibit  10.2 to the Form  8-K  Current
       Report,  Commission File No. 1-10702,  dated July 27, 1999 and filed with
       the Commission on August 10, 1999).

10.22  Amendment No. 6 to Credit Agreement dated as of March 6, 1998 among Terex
       Corporation,  certain of its subsidiaries, the lenders named therein, and
       Credit  Suisse First  Boston,  as  Administrative  and  Collateral  Agent
       (incorporated  by  reference  to  Exhibit  10.22 to the Form 10-Q for the
       quarter ended  September 30, 1999 of Terex  Corporation,  Commission File
       No. 1-10702).

10.23  Amendment No. 7 to Credit Agreement dated as of March 6, 1998 among Terex
       Corporation,  certain of its subsidiaries,  the lenders named therein and
       Credit  Suisse First  Boston,  as  Administrative  and  Collateral  Agent
       (incorporated by reference to Exhibit 10.21 to the Form 10-K for the year
       ended  December  31,  1999 of  Terex  Corporation,  Commission  File  No.
       1-10702).

10.24  Amendment No. 8 to Credit Agreement dated as of March 6, 1998 among Terex
       Corporation,  certain of its subsidiaries, the lenders named therein, and
       Credit  Suisse First  Boston,  as  Administrative  and  Collateral  Agent
       (incorporated  by  reference  to  Exhibit  10.24 to the Form 10-Q for the
       quarter  ended June 30, 2000 of Terex  Corporation,  Commission  File No.
       1-10702).

10.25  Tranche C Credit  Agreement,  dated as of July 2, 1999,  as  amended  and
       restated  as of August 23,  1999,  among Terex  Corporation,  the lenders
       named  therein,  and Credit Suisse First Boston,  as  Administrative  and
       Collateral Agent  (incorporated by reference to Exhibit 10.23 to the Form
       10-Q for the  quarter  ended  September  30,  1999 of Terex  Corporation,
       Commission File No. 1-10702).

10.26  Amendment No. 1 to Tranche C Credit  Agreement  dated as of July 2, 1999,
       as amended and restated as of August 23, 1999,  among Terex  Corporation,
       the  lenders  named   therein,   and  Credit  Suisse  First  Boston,   as
       Administrative and Collateral Agent (incorporated by reference to Exhibit
       10.26  to the Form  10-Q for the  quarter  ended  June 30,  2000 of Terex
       Corporation, Commission File No. 1-10702).

10.27  Purchase  Agreement  dated as of March 9, 1999 among the  Company and the
       Initial  Purchasers,  as defined  therein  (incorporated  by reference to
       Exhibit  10.20 to the Form 10-K for the year ended  December  31, 1998 of
       Terex Corporation, Commission File No. 1-10702).

10.28  Registration Rights Agreement dated as of March 9, 1999 among the Company
       and the  Purchasers,  as defined  therein  (incorporated  by reference to
       Exhibit  10.21 to the Form 10-K for the year ended  December  31, 1998 of
       Terex Corporation, Commission File No. 1-10702).

10.29  Underwriting  Agreement,  dated as of September  17, 1999,  between Terex
       Corporation and Salomon Smith Barney Inc.  (incorporated  by reference to
       Exhibit 1 of the Form 8-K Current  Report,  Commission  File No. 1-10702,
       dated and filed with the Commission on September 18, 1999).

10.30  Stock  Purchase  Agreement  between  Raytheon  Engineers  &  Constructors
       International,  Inc.  and Terex  Corporation,  dated as of July 19,  1999
       (incorporated  by  reference  to  Exhibit  10.27 to the Form 10-Q for the
       quarter ended  September 30, 1999 of Terex  Corporation,  Commission File
       No. 1-10702).

10.31  Stock Purchase  Agreement  between Terex Corporation and Hartford Capital
       Appreciation  Fund, Inc., dated July 23, 1999  (incorporated by reference
       to Exhibit  10.28 to the Form 10-Q for the quarter  ended  September  30,
       1999 of Terex Corporation, Commission File No. 1-10702).

                                       34
<PAGE>

10.32  Asset Purchase and Sale Agreement  between Terex  Corporation  and Partek
       Acquisition  Company,  Inc.,  dated as of July 20, 2000  (incorporated by
       reference to Exhibit 1 of the Form 8-K Current  Report,  Commission  File
       No.  1-10702,  dated  September 30, 2000 and filed with the Commission on
       October 5, 2000).

10.33  Share Purchase and Sale Agreement among  Powerscreen  International  plc,
       Partek Cargotec Holding Ltd and, for purposes of Article 9 only,  Moffett
       Engineering Limited, dated as of July 20, 2000 (incorporated by reference
       to Exhibit 2 of the Form 8-K Current Report, Commission File No. 1-10702,
       dated  September  30,  2000 and filed with the  Commission  on October 5,
       2000).

10.34  Share Purchase and Sale Agreement among Holland Lift International  B.V.,
       Partek Cargotec  Holding  Netherlands B.V. and, for purposes of Article 9
       only, Kooi B.V., dated as of July 20, 2000  (incorporated by reference to
       Exhibit 3 of the Form 8-K Current  Report,  Commission  File No. 1-10702,
       dated  September  30,  2000 and filed with the  Commission  on October 5,
       2000).

10.35  Asset  Purchase  and Sale  Agreement  among PPM  Deutschland  GmbH  Terex
       Cranes,  Hiab GmbH and,  for  purposes of Section 2.3 only,  Holland Lift
       International  B.V.,  Partek Cargotec  Holding  Netherlands B.V. and Kooi
       B.V.,  dated as of  September  29, 2000  (incorporated  by  reference  to
       Exhibit 4 of the Form 8-K Current  Report,  Commission  File No. 1-10702,
       dated  September  30,  2000 and filed with the  Commission  on October 5,
       2000).

10.36  Contract of  Employment,  dated as of  September 1, 1999,  between  Terex
       Corporation and Filip Filipov (incorporated by reference to Exhibit 10.29
       to the Form  10-Q  for the  quarter  ended  September  30,  1999 of Terex
       Corporation, Commission File No. 1-10702).

10.37  Supplement to Contract of Employment,  dated as of April 1, 2000, between
       Terex Corporation and Filip Filipov.*

10.38  Amended and Restated Employment and Compensation  Agreement,  dated as of
       April 1, 2000, between Terex Corporation and Ronald M. DeFeo.*

10.39  Form of Change in Control and  Severance  Agreement  dated as of April 1,
       2000  between   Terex   Corporation   and  certain   executive   officers
       (incorporated  by  reference  to  Exhibit  10.34 to the Form 10-Q for the
       quarter  ended June 30, 2000 of Terex  Corporation,  Commission  File No.
       1-10702).

12.1   Calculation of Ratio of Earnings to Fixed Charges. *

27.1   Financial Data Schedule.*


*        Exhibit filed with this document.

                                       35


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>EX. 10.37 CONTRACT OF EMPLOYMENT - FIL FILIPOV
<TEXT>

                                   SUPPLEMENT
                                       TO
                             CONTRACT OF EMPLOYMENT


         Supplement,  dated as of April 1, 2000, to Contract of Employment dated
as of September 1, 1999 between  Terex  Corporation  (the  "Company")  and Filip
Filipov ("Executive").

         WHEREAS,  the Company and  Executive  entered  into that  certain
Contract of Employment  dated as of September 1, 1999 (the "Original Contract").

         WHEREAS,  the  Company  and the  Executive  desire  to  supplement  the
Original Contract as provided for in this Supplement.

         NOW,  THEREFORE,  the Original  Contract is  supplemented by adding the
following additional provisions:

Sec.   13    Defined Terms

Unless otherwise  defined herein,  the definitions of capitalized  terms used in
this contract are provided in Sec. 20 hereof.

Sec. 14      Change in Control

If the Executive's employment shall be terminated within twenty-four (24) months
following a Change in Control (defined below), unless such termination is (i) by
the Company for Cause, (ii) by reason of death or Permanent Disability, or (iii)
by the  Executive  without  Good Reason,  in lieu of the two year notice  period
provided  for  termination  of  Executive  in Sec. 11 and any other  payments or
benefits to Executive provided for in the Original  Contract,  the Company shall
pay to the  Executive  an amount equal to the sum of (a) a lump sum equal to two
(2) times  Executive's  annual  salary in effect at the time  written  notice of
termination  is given to  Executive;  (b) two (2)  times  Executive's  last paid
annual bonus for a calendar  year  preceding the calendar year in which the Date
of  Termination  occurs;  and (c) any accrued  vacation pay, in each case to the
extent not  theretofore  paid (the sum of the amounts  described in clauses (a),
(b) and (c) shall be hereinafter  referred to as the  "Severance").  The Company
shall  pay  to  the   Executive  any  Severance  in  a  cash  lump  sum  payment
simultaneously  with the  termination  of Executive's  employment  following any
Change  in  Control.  In  addition,   simultaneously  with  the  termination  of
Executive's  employment  following any Change in Control (x) all unvested  stock
options and stock grants  previously  awarded to Executive shall immediately and
unconditionally  vest and  Executive  shall have the right to exercise any stock
options  held by him in  accordance  with  their  terms  but in no  event  shall
Executive  have less than six (6) months  following the Date of  Termination  to
exercise  said  options;  (y) all units  granted to  Executive  pursuant  to the
Company's  1999 Long Term  Incentive  Compensation  Plan shall  immediately  and
unconditionally vest for their maximum cumulative value and be paid to Executive
simultaneously  with the  termination  of  employment  following  any  Change in
Control;  and (z) the Company shall provide  Executive with continuing  coverage
under the life, disability, accident and health insurance programs for employees
of the Company generally and under any supplemental programs covering executives
of the Company,  as from time to time in effect,  for the twenty four (24) month
period  from  such   termination  or  until  Executive   becomes   eligible  for
substantially  similar  coverage  under  the  employee  welfare  plans  of a new
employer,  whichever occurs earlier,  provided that  Executive's  right to elect
continued medical coverage after termination of employment under Part 6 of Title
I of the Employee  Retirement Income Security Act of 1974, as amended,  shall be
deemed  satisfied by the coverage  provided in this clause (z).  Executive shall
also be entitled to a  continuation  of all other benefits in effect at the time
of  termination  (including,  without  limitation,   automobile,  country  club,
vacation and pension  benefits,  if  applicable)  for the twenty four (24) month
period  following  such  termination  or until  Executive  becomes  eligible for
substantially similar benefits from a new employer.

Sec.  15     Excise Tax Gross-Up

     1.   Notwithstanding  anything in this Agreement to the contrary and except
          as set  forth  below,  in the  event it shall be  determined  that any
          payment or distribution by the Company or its affiliates to or for the
          benefit of the Executive  (whether paid or payable or  distributed  or
          distributable  pursuant to the terms of this  Agreement or  otherwise,
          but  determined  without regard to any  additional  payments  required
          under this Sec. 15) (a  "Payment")  would be subject to the excise tax
          imposed by  Section  4999 of the  Internal  Revenue  Code of 1986,  as
          amended (the "Code") or any ---- interest or penalties are incurred by
          the  Executive  with  respect  to such  excise tax (such  excise  tax,
          together  with  any  such  interest  and  penalties,  are  hereinafter
          collectively  referred to as the  "Excise  Tax"),  then the  Executive
          shall be  entitled  to receive  an  additional  payment  (a  "Gross-Up
          Payment") in an amount such that after payment by the Executive of all
          taxes  (including  any interest or  penalties  imposed with respect to
          such taxes), including,  without limitation, any income taxes (and any
          interest and  penalties  imposed with respect  thereto) and Excise Tax
          imposed upon the Gross-Up Payment,  the Executive retains an amount of
          the  Gross-Up  Payment  equal  to the  Excise  Tax  imposed  upon  the
          Payments.  Notwithstanding  the  foregoing,  if it shall be determined
          that the  Executive  is entitled to a Gross-Up  Payment,  but that the
          Payments  do not exceed  105% of the  greatest  amount  (the  "Reduced
          Amount") that could be paid to the Executive  such that the receipt of
          Payments  would  not give rise to any  Excise  Tax,  then no  Gross-Up
          Payment  shall  be made to the  Executive  and  the  Payments,  in the
          aggregate, shall be reduced to the Reduced Amount.


     2.   Subject  to the  provisions  of  Paragraph  3 of  this  Sec.  15,  all
          determinations  required  to be made  under  this Sec.  15,  including
          whether and when a Gross-Up Payment is required and the amount of such
          Gross-Up  Payment  and the  assumptions  to be utilized in arriving at
          such  determination,  shall be made by  PricewaterhouseCoopers  LLP or
          such other nationally  recognized  certified public accounting firm as
          may be designated by the Executive (the "Accounting Firm") which shall
          provide detailed  supporting  calculations both to the Company and the
          Executive  simultaneously  with any event  giving  rise to a  Gross-Up
          Payment.  All fees and expenses of the Accounting  Firm shall be borne
          solely by the Company. Any Gross-Up Payment, as determined pursuant to
          this  Sec.  15,  shall  be  paid  by  the  Company  to  the  Executive
          simultaneously  with any event giving rise to a Gross-Up Payment.  Any
          determination by the Accounting Firm shall be binding upon the Company
          and the Executive.  As a result of the  uncertainty in the application
          of Section  4999 of the Code at the time of the initial  determination
          by  the  Accounting  Firm  hereunder,  it is  possible  that  Gross-Up
          Payments which will not have been made by the Company should have been
          made ("Underpayment"), consistent with the calculations required to be
          made  hereunder.  In the event that the Company  exhausts its remedies
          pursuant to Paragraph 3 of this Sec. 15 and the  Executive  thereafter
          is required to make a payment of any Excise Tax, the  Accounting  Firm
          shall determine the amount of the  Underpayment  that has occurred and
          any such Underpayment  shall be promptly paid by the Company to or for
          the benefit of the Executive.

     3.   The Executive  shall notify the Company in writing of any claim by the
          Internal  Revenue  Service  that,  if  successful,  would  require the
          payment by the Company of the  Gross-Up  Payment or the  Underpayment.
          Such  notification  shall be given as soon as practicable but no later
          than ten (10) business days after the Executive is informed in writing
          of such  claim and shall  apprise  the  Company  of the nature of such
          claim and the date on which such claim is  requested  to be paid.  The
          Executive  shall not pay such  claim  prior to the  expiration  of the
          thirty  (30) day  period  following  the  date on which it gives  such
          notice to the Company (or such shorter  period ending on the date that
          any  payment  of taxes  with  respect  to such  claim is due).  If the
          Company  notifies the Executive in writing prior to the  expiration of
          such  period  that it desires to contest  such  claim,  the  Executive
          shall:

               (a) provide the Company any information  reasonably  requested by
          the Company relating to such claim,

               (b) take such action in connection  with contesting such claim as
          the Company  shall  reasonably  request in writing  from time to time,
          including,  without  limitation,  accepting legal  representation with
          respect  to such  claim  by an  attorney  reasonably  selected  by the
          Company,

               (c) cooperate with the Company in good faith in order effectively
          to contest such claim, and

               (d) permit the Company to participate in any proceedings relating
          to such claim;

          provided,  however,  that the Company  shall bear and pay directly all
          costs and  expenses  (including  additional  interest  and  penalties)
          incurred in connection  with such contest and shall indemnify and hold
          the Executive  harmless,  on an after-tax basis, for any Excise Tax or
          income tax  (including  interest and penalties  with respect  thereto)
          imposed as a result of such  representation  and  payment of costs and
          expenses.  Without  limitation  on the  foregoing  provisions  of this
          Paragraph 3 of Sec.  15, the  Company  shall  control all  proceedings
          taken in  connection  with such contest  and, at its sole option,  may
          pursue  or  forgo  any and all  administrative  appeals,  proceedings,
          hearings and conferences  with the taxing authority in respect of such
          claim and may, at its sole option,  either direct the Executive to pay
          the tax  claimed  and sue for a refund  or  contest  the  claim in any
          permissible manner, and the Executive agrees to prosecute such contest
          to a determination before any administrative  tribunal,  in a court of
          initial  jurisdiction  and in one or  more  appellate  courts,  as the
          Company  shall  determine;  provided,  however,  that  if the  Company
          directs  the  Executive  to pay such  claim and sue for a refund,  the
          Company shall pay the amount of such payment to the  Executive,  along
          with an additional Gross-Up Payment,  and shall indemnify and hold the
          Executive  harmless,  on an  after-tax  basis,  from any Excise Tax or
          income tax  (including  interest or penalties  with  respect  thereto)
          imposed  with  respect to such  payment or with respect to any imputed
          income with respect to such  payment;  and further  provided  that any
          extension of the statute of  limitations  relating to payment of taxes
          for the  taxable  year of the  Executive  with  respect  to which such
          contested  amount  is  claimed  to be due is  limited  solely  to such
          contested  amount.  Furthermore,  the Company's control of the contest
          shall be limited to issues  with  respect to which a Gross-Up  Payment
          would be payable  hereunder  and the  Executive  shall be  entitled to
          settle or contest,  as the case may be, any other issue  raised by the
          Internal Revenue Service or any other taxing authority.

     4.   If, after the receipt by the  Executive  of an amount  advanced by the
          Company pursuant to Paragraph 3 of this Sec.15, the Executive receives
          any refund with respect to such claim, the Executive shall (subject to
          the Company's  complying with the  requirements of Paragraph 3 of this
          Sec.  15)  promptly  pay to the  Company  the  amount  of such  refund
          (together  with any  interest  paid or  credited  thereon  after taxes
          applicable thereto).

Sec. 16  Payment for Past Service

Notwithstanding  any other  provisions  of this  Agreement,  if the  Executive's
employment is terminated at any time following a Change in Control in accordance
with Sec. 14, the Company shall pay the Executive,  in cash, an aggregate amount
not less than the sum of (a)  Executive's  annual  bonus  for the most  recently
completed  fiscal year to the extent such bonus has not been paid to  Executive,
which bonus shall not be less than the annual bonus paid to Executive during the
preceding  year,  if any;  (b) the product of (i) a fraction,  the  numerator of
which is the  number of days in the  current  fiscal  year  through  the Date of
Termination,  and the  denominator of which is 365 and (ii) the annual bonus for
the calendar year preceding the Date of Termination  that has most recently been
paid  to the  Executive;  (c)  any  accrued  vacation  pay,  to the  extent  not
theretofore  paid to Executive;  and (d) any other  amounts  earned by Executive
prior to the Date of Termination but not previously paid.

Sec. 17    Noncompete and Confidentiality

     1.   In consideration of the agreements and payments of the Company herein,
          in the event Executive's employment with the Company is terminated and
          Executive  receives  payment from the Company in accordance  with Sec.
          14, the Executive  agrees that for a period of twenty-four (24) months
          from the Date of Termination,  he will not,  without the prior written
          permission of the Company, directly or indirectly,  (i) enter into the
          employ of or render any services to any person,  firm, or  corporation
          engaged in the manufacture or sale of products currently  manufactured
          or distributed  by the Company,  or if Executive does not have Company
          wide   responsibility,   the  divisions  and  subsidiaries  for  which
          Executive has management responsibility,  which directly or indirectly
          compete  with  the  business  of the  Company  or such  divisions  and
          subsidiaries,  as the case  may be (a  "Competitive  Business");  (ii)
          engage in any Competitive  Business for his own account;  (iii) become
          associated  with  or  interested  in any  Competitive  Business  as an
          individual,   partner,   shareholder,   creditor,  director,  officer,
          principal,  agent, employee,  trustee,  consultant,  advisor or in any
          other relationship or capacity; or (iv) solicit,  induce or entice, or
          cause any other person or entity to solicit, induce or entice to leave
          the employ of the Company  any person who was  employed or retained by
          the  Company  on the Date of  Termination.  However,  nothing  in this
          Agreement shall preclude  Executive from investing his personal assets
          in the securities of any corporation or other business entity which is
          engaged in a  business  competitive  with that of the  Company if such
          securities  are  traded  on  a  national  stock  exchange  or  in  the
          over-the-counter  market and if such investment does not result in his
          beneficially  owning,  at any time, more than five percent (5%) of the
          publicly-traded equity securities of such competitor.  Nothing in this
          Agreement  shall  preclude  Executive  from  retaining his position or
          membership in trade associations and professional organizations.

     2.   In consideration of the agreements and payments of the Company herein,
          the Executive shall keep  confidential  and not disclose to any person
          any information  relating to the Company's  business and/or  finances,
          which  information  was  obtained  during  and/or as incident to or in
          connection with the Executive's  employment with the company and which
          otherwise  is not public  information.  The  Executive  agrees he will
          conduct himself in a professional manner and not make any disparaging,
          negative or other statements  regarding the Company, its affiliates or
          any of the  officers,  directors  or  employees  of the Company or its
          affiliates  which  could  in any way  have an  adverse  affect  on the
          business or affairs of the Company or its  affiliates  or otherwise be
          injurious  to or not be in the  best  interests  of the  Company,  its
          affiliates or any such other persons.

     3.   The Executive agrees that this  non-competition  and  non-solicitation
          covenant is  reasonable  under the  circumstances,  and the  Executive
          further  agrees that his services for and on behalf of the Company are
          unique and irreplaceable. The Executive further agrees that any breach
          of the covenants  contained in Paragraphs 1 or 2 of this Sec. 17 would
          irreparably  injure the Company and/or its affiliates or subsidiaries.
          Accordingly, the Executive agrees that the Company may, in addition to
          pursuing any other remedies it may have at law or in equity, obtain an
          injunction  against the Executive  from any court having  jurisdiction
          over the matter  restraining  any further  violation of the  covenants
          contained in Paragraphs 1 or 2 of this Sec. 17.

     4.   Upon  termination  of  Executive's  employment  with the Company,  the
          Company  shall have the right to designate a reasonable  amount of the
          Severance  to be  allocated  to  this  covenant  not  to  compete  and
          confidentiality.

Sec. 18  Outplacement Services

In the event of the termination of the Executive's  employment after a Change in
Control as provided  for in Sec.  14, the Company  agrees,  at its sole cost and
expense, to provide the Executive with outplacement  services for a period of at
least twelve (12) months following the Date of Termination.  The Company and the
Executive shall use their good faith efforts to locate a provider, and determine
the scope of,  outplacement  services  which is  reasonably  acceptable  to both
parties  taking into account the status of the  Executive as a senior  executive
officer.

Sec. 19 Legal Expenses

The  Company  agrees to pay all  reasonable  out-of-pocket  costs and  expenses,
including all reasonable attorneys' fees and disbursements, actually incurred by
the  Executive in  collecting  or enforcing  payments to which he is  ultimately
determined to be entitled  (whether by agreement among the parties,  court order
or otherwise) pursuant to this Supplement in accordance with its terms.

Sec. 20 Definitions

For purposes of this  Supplement,  the  following  terms shall have the meanings
indicated below:

     1.   "Beneficial  Owner" shall have the meaning defined in Rule 13d-3 under
          the Securities and Exchange Act of 1934, as amended.

     2.   "Cause" for termination by the Company of the  Executive's  employment
          shall mean (i) the willful,  substantial  and failure by the Executive
          to  substantially  perform  the  Executive's  duties  with the Company
          (other than any such failure resulting from the Executive's incapacity
          due to physical or mental illness) in a manner reasonably satisfactory
          to the Chief  Executive  Officer of the Company after  written  notice
          detailing the reasons for such failure,  (ii) the willful  engaging by
          the  Executive  in  conduct  which  is  demonstrably   and  materially
          injurious to the Company or its subsidiaries, monetarily or otherwise,
          or (iii) the entry by a court of competent  jurisdiction  of an order,
          or the entering into by the Executive of a consent decree, barring the
          Executive from serving as an officer or director of a public  company.
          For  purposes of clauses (i) and (ii) of this  definition,  no act, or
          failure to act,  on the  Executive's  part  shall be deemed  "willful"
          unless done, or omitted to be done, by the Executive not in good faith
          and without  reasonable belief that the Executive's act, or failure to
          act, was in the best interest of the Company.

     3.   A  "Change  in  Control"  shall  be  deemed  to have  occurred  if the
          conditions set forth in any one of the following paragraphs shall have
          been satisfied:

                           (a) any person is or becomes  the  Beneficial  Owner,
                  directly or  indirectly,  of  securities  of the Company  (not
                  including in the securities  beneficially owned by such person
                  any   securities   acquired   directly   from   the   Company)
                  representing  35% or more of the combined  voting power of the
                  Company's then  outstanding  securities,  excluding any person
                  who  becomes  such  a  Beneficial  Owner  in  connection  with
                  transactions described in clauses (x), (y) or (z) of paragraph
                  (c) below; or

                           (b) there is a change in the composition of the Board
                  of  Directors  of  the  Company  occurring  within  a  rolling
                  two-year period, as a result of which fewer than a majority of
                  the directors are Incumbent Directors  ("Incumbent  Directors"
                  shall mean  directors  who either (x) are members of the Board
                  as of the  date  of this  Agreement  or (y)  are  elected,  or
                  nominated  for  election,  to the Board  with the  affirmative
                  votes of at least a majority of the Incumbent Directors at the
                  time of such election or nomination,  but shall not include an
                  individual not otherwise an Incumbent  Director whose election
                  or nomination  is in  connection  with an actual or threatened
                  proxy  contest,   including  but  not  limited  to  a  consent
                  solicitation,  relating to the  election of  directors  to the
                  Board); or

                           (c)  there  is  consummated,  in any  transaction  or
                  series  of   transactions,   of  a  complete   liquidation  or
                  dissolution of the Company or a merger,  consolidation or sale
                  of  all  or   substantially   all  of  the  Company's   assets
                  (collectively, a "Business Combination") other than a Business
                  Combination  after which (x) the  stockholders  of the Company
                  own more  than 50  percent  of the  common  stock or  combined
                  voting power of the voting securities of the company resulting
                  from the Business Combination,  (y) at least a majority of the
                  board of directors of the resulting corporation were Incumbent
                  Directors and (z) no  individual,  entity or group  (excluding
                  any corporation resulting from the Business Combination or any
                  employee  benefit plan of such  corporation or of the Company)
                  becomes  the  Beneficial  Owner of 35  percent  or more of the
                  combined  voting  power  of the  securities  of the  resulting
                  corporation,  who  did  not own  such  securities  immediately
                  before the Business Combination; or

                           (d) the stockholders of the Company approve a plan of
                  complete liquidation or dissolution of the Company or there is
                  consummated  a sale or  disposition  by the  Company of all or
                  substantially all the Company's assets.

     4.   "Date of  Termination,"  with respect to any purported  termination of
          the Executive's  employment shall mean the later of (i) date specified
          in the  notice or (ii)  thirty  (30) days from the date of the  notice
          unless such notice is for a termination of Executive for Cause.

     5.   "Exchange  Act" shall mean the  Securities  Exchange  Act of 1934,  as
          amended from time to time.

     6.   "Good  Reason" for  termination  by the  Executive of the  Executive's
          employment shall mean the occurrence  (without the Executive's express
          written  consent) of any one of the following acts by the Company,  or
          failures  by the  Company  to act,  unless,  in the case of any act or
          failure  to act as  described  below,  such act or  failure  to act is
          corrected prior to the Date of Termination  specified in the notice of
          termination given in respect thereof:

               (a) the  assignment to the  Executive of any duties  inconsistent
          with the  Executive's  status  as a senior  executive  officer  of the
          Company  or  a  substantial   adverse  alteration  in  the  nature  of
          Executive's authority, duties or responsibilities, or any other action
          by  the  Company  which  results  in  a  diminution  in  such  status,
          authority, duties or responsibilities (it being understood that a mere
          change in authority,  duties or responsibilities,  or any other action
          by the Company will not constitute Good Reason in and of itself unless
          it  results in a  substantial  adverse  alteration  or  diminution  of
          Executive's authority, duties or responsibilities), excluding for this
          purpose an isolated, insubstantial and inadvertent action not taken in
          bad faith and which is remedied by the Company  promptly after receipt
          of notice thereof given by the Executive;

               (b) a reduction by the Company in Executive's  base salary and/or
          annual  bonus as in  effect  on the date  hereof or as the same may be
          increased from time to time,  except for  across-the-board  reductions
          similarly  affecting all senior  executives of the Company,  provided,
          however,  that  such  across-the-board  reductions  are not  made as a
          result of, or in contemplation of, a Change in Control;

               (c) the failure by the Company to pay to Executive any portion of
          Executive's    current    compensation    except    pursuant   to   an
          across-the-board  compensation deferral similarly affecting all senior
          executives   of   the   Company,   provided,    however,   that   such
          across-the-board  compensation  deferrals are not made as a result of,
          or in contemplation of, a Change in Control;

               (d)  the  failure  by the  Company  to  continue  in  effect  any
          compensation  plan or other  benefit in which  Executive  participates
          which is material to Executive's total  compensation,  except pursuant
          to an  across-the-board  compensation or benefit deferral or reduction
          similarly  affecting all senior  executives of the Company,  provided,
          however, that such across-the-board  compensation or benefit deferrals
          are not made as a  result  of,  or in  contemplation  of, a Change  in
          Control; or

               (e) the failure by the  Company to continue to provide  Executive
          with benefits  substantially similar to those enjoyed by the Executive
          under any of the Company's pension,  life insurance,  medical,  health
          and accident,  disability plans or other benefits (including,  without
          limitation,  automobile, country club, vacation, and pension benefits)
          in which  Executive was  participating  at the time, the taking of any
          action by the Company which would  directly or  indirectly  materially
          reduce any of such  benefits or deprive the  Executive of any material
          fringe benefit enjoyed by Executive at the time,  (including,  without
          limitation,  automobile, country club, vacation and pension benefits),
          or the failure by the Company to provide  Executive with the number of
          paid vacation days to which Executive he is then entitled.

     7.   "Permanent  Disability" shall be deemed the reason for the termination
          by the Company of the  Executive's  employment  if, as a result of the
          Executive's   incapacity  due  to  physical  or  mental  illness,  the
          Executive shall have been absent from the full-time performance of the
          Executive's   duties  with  the  Company  for  a  period  of  six  (6)
          consecutive  months or nine (9) months  out of any  twelve  (12) month
          period,  the  Company  shall  have  given  the  Executive  a notice of
          termination  for  Disability,  and, within thirty (30) days after such
          notice of termination is given,  the Executive shall not have returned
          to the full-time performance of the Executive's duties.

Sec. 21 Term of Agreement

     1.   The  provisions  contained  in  this  Supplement  shall  be  effective
          immediately  upon its execution by the parties hereto and shall remain
          in effect until the earliest of (i) the termination of the Executive's
          employment with the Company prior to a Change in Control (other than a
          termination of Executive's  employment in  anticipation of a Change in
          Control)  for any of the  following:  by the  Company  for  Cause,  by
          Executive  for any  reason  other  than  Good  Reason  or by reason of
          Executive's  death or Permanent  Disability;  (ii) the  termination of
          Executive's  employment with the Company following a Change in Control
          by reason of death or Permanent  Disability,  by the Company for Cause
          or by the  Executive  for any reason other than for a Good Reason;  or
          (iii)  three  (3)  years  after  the  date  of a  Change  in  Control.
          Notwithstanding  the  foregoing,  the  provisions  contained  in  this
          Supplement  shall  terminate two (2) years after its effective date if
          the  Executive  is still in the employ of the  Company and a Change in
          Control  has not  occurred  and is not  reasonably  expected  to occur
          within the six (6) month period thereafter.

         IN WITNESS WHEROF, the parties hereto have caused this Supplement to be
executed as of the day and year first above written.



TEREX CORPORATION

By:_______________________                            _______________________
       Ronald M. DeFeo                                    Filip Filipov
       Chairman and
       Chief Executive Officer
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>EX. 10.38 CONTRACT OF EMPLOYMENT - RON DEFEO
<TEXT>


                              AMENDED AND RESTATED
                      EMPLOYMENT AND COMPENSATION AGREEMENT

         THIS AMENDED AND RESTATED  EMPLOYMENT AND COMPENSATION  AGREEMENT (this
"Agreement"),  made  and  entered  into  as of  April  1,  2000,  between  Terex
Corporation,  a Delaware  corporation,  with its principal office located at 500
Post Road East,  Suite 320,  Westport,  CT  (together  with its  successors  and
assigns  permitted  under  this  Agreement)  ("Terex"),   and  Ronald  M.  DeFeo
("DeFeo"), whose address is 45 Beachside Avenue, Westport, CT 06880.

                              W I T N E S S E T H:
         WHEREAS,  Terex and DeFeo  entered  into that  certain  Employment  and
Compensation Agreement dated as of June 1, 1999 (the "Original Agreement").

         WHEREAS, Terex has determined that it is in the best interests of Terex
and its  stockholders  to enter into this  Agreement  amending and restating the
obligations and duties of both Terex and DeFeo; and

         WHEREAS, Terex wishes to assure itself of the services of DeFeo for the
period  hereinafter  provided,  and DeFeo is willing to be employed by Terex for
said period, upon the terms and conditions provided in this Agreement;

         NOW,  THEREFORE,  in consideration of the premises and mutual covenants
contained herein and for other good and valuable  consideration,  the receipt of
which is  mutually  acknowledged,  Terex and DeFeo  (individually  a "Party" and
together the "Parties") agree as follows:

     1. DEFINITIONS.

          (a) "Affiliate" shall mean an entity

               (i) that is directly or indirectly  controlled by or under common
          control with Terex, or

               (ii) that controls Terex.

                                       2
<PAGE>

          (b) "Base Salary" shall mean the annual salary provided for in Section
     3 below, as adjusted from time to time by the Board.

          (c)  "Beneficial  Owner" shall have the meaning  defined in Rule 13d-3
     under the Exchange Act.

          (d)  "Beneficiary"  shall mean the  person or  persons  named by DeFeo
     pursuant  to Section 21 below or, in the event that no such person is named
     and survives DeFeo, his estate.

          (e) "Board" shall mean the Board of Directors of Terex.

          (f) "Cause" shall mean:

               (i) DeFeo's conviction in a court of law of, or guilty plea or no
          contest plea to, a felony  charge or a  misdemeanor  charge  involving
          moral turpitude,

               (ii)  willful,  substantial  and  continued  failure  by DeFeo to
          perform his duties under this Agreement,

               (iii) willful engagement by DeFeo in conduct that is demonstrably
          and materially injurious to Terex,

               (iv) entry by a court or  quasi-judicial  governmental  agency of
          the  United  States or a  political  subdivision  thereof  of an order
          barring  DeFeo from  serving as an  officer  or  director  of a public
          company, or

               (v) a breach by DeFeo of Section 10 or Section 11 below.  For the
          purposes  of  clauses  (ii) and  (iii) of this  definition,  no act or
          failure to act on the part of DeFeo shall be deemed  "willful"  (x) if
          caused by a Disability  or (y) unless done,  or omitted to be done, by
          him not in good faith or  without  reasonable  belief  that his act or
          omission was in the best interest of Terex.

          (g) "Change in Control" shall mean

               (i) any Person  becoming  the  Beneficial  Owner of 35 percent or
          more  of  the  combined  voting  power  of  Terex's  then  outstanding
          securities,  excluding any Person who becomes such a Beneficial  Owner
          in connection with  transactions  described in clauses (x), (y) or (z)
          of paragraph (iii) below;

               (ii) a change in the composition of the Board occurring  within a
          rolling two-year period, as a result of which fewer than a majority of
          the directors are Incumbent  Directors  ("Incumbent  Directors"  shall
          mean  directors who either (x) are members of the Board as of the date
          of this  Agreement or (y) are elected,  or nominated for election,  to
          the Board with the  affirmative  votes of at least a  majority  of the
          Incumbent  Directors at the time of such election or  nomination,  but
          shall not include an individual  not  otherwise an Incumbent  Director
          whose  election  or  nomination  is in  connection  with an  actual or
          threatened  proxy  contest,  including  but not  limited  to a consent
          solicitation, relating to the election of directors to the Board);

               (iii) consummation, in any transaction or series of transactions,
          of a  complete  liquidation  or  dissolution  of  Terex  or a  merger,
          consolidation  or sale of all or  substantially  all of Terex's assets
          (collectively,   a  "Business  Combination")  other  than  a  Business
          Combination after which (x) the stockholders of Terex own more than 50
          percent of the combined  voting power of the voting  securities of the
          company  resulting  from  the  Business  Combination,  (y) at  least a
          majority of the board of directors of the resulting  corporation  were
          Incumbent Directors and (z) no individual,  entity or group (excluding
          any  corporation  resulting  from  the  Business  Combination  or  any
          employee  benefit plan of such  corporation  or of Terex)  becomes the
          Beneficial Owner of 35 percent or more of the combined voting power of
          the  securities  of the  resulting  corporation,  who did not own such
          securities immediately before the Business Combination; or

                                       3
<PAGE>

               (iv)  the  stockholders  of  Terex  approve  a plan  of  complete
          liquidation  or dissolution of Terex or there is consummated a sale or
          disposition by Terex of all or substantially all Terex's assets.

          (h) "Code" shall mean the Internal  Revenue Code of 1986, as from time
     to time amended.

          (i) "Committee" shall mean the Compensation Committee of the Board.

          (j)   "Covenant   Period"  shall  mean  the  period   beginning   with
     commencement  of the Term and ending as provided  in Section  11(b) and, as
     applicable, Section 12(b).

          (k) "Date of  Termination"  shall mean,  with respect to any purported
     termination  of  DeFeo's   employment  during  the  Term,  (i)  if  DeFeo's
     employment  terminates  due to  Disability,  30  days  after  a  good-faith
     determination  of Disability by Terex  (provided  that DeFeo shall not have
     returned to full-time performance of his duties during such 30-day period),
     and (ii) if DeFeo's  employment  terminates for any other reason,  the date
     specified  in the Notice of  Termination  (which  shall be not less than 30
     days, and, in the case of Voluntary  Termination by DeFeo, not more than 60
     days, after the date of such Notice of Termination).

          (l) "Disability" shall mean DeFeo's inability to perform the essential
     duties  set  forth in this  Agreement  by reason  of a  physical  or mental
     disability or infirmity  that has  continued for more than six  consecutive
     months or for such shorter  periods as aggregate  more than 24 weeks in any
     24-month period.

          (m) "Exchange Act" shall mean the Securities  Exchange Act of 1934, as
     from time to time amended.

                                       4
<PAGE>

          (n) "Good Reason" shall mean the occurrence  (without  DeFeo's express
     written  consent) of any one of the  following  acts or  omissions by Terex
     unless,  in the case of any act or omission  described in this Section 1(n)
     or Section 9(j) below,  such act or omission is corrected prior to the Date
     of Termination specified in the Notice of Termination in respect thereof:

               (i) the  assignment  to DeFeo  of any  duties  inconsistent  with
          DeFeo's status as a senior executive officer of Terex or a substantial
          adverse  alteration  in the  nature of  DeFeo's  authority,  duties or
          responsibilities,  or any other  action by Terex  which  results  in a
          diminution in such status,  authority,  duties or responsibilities (it
          being   understood  that  a  mere  change  in  authority,   duties  or
          responsibilities,  or any other  action by Terex  will not  constitute
          Good  Reason  in and of  itself  unless it  results  in a  substantial
          adverse  alteration  or  diminution  of DeFeo's  authority,  duties or
          responsibilities),   excluding   for   this   purpose   an   isolated,
          insubstantial and inadvertent  action not taken in bad faith and which
          is remedied by Terex promptly after receipt of notice thereof given by
          DeFeo;

               (ii) a reduction  by Terex in DeFeo's base salary  and/or  annual
          bonus as in effect on the date hereof or as the same may be  increased
          from time to time, except for  across-the-board  reductions  similarly
          affecting all senior executives of Terex, provided, however, that such
          across-the-board  reductions  are  not  made  as a  result  of,  or in
          contemplation of, a Change in Control;

               (iii) the failure by Terex to pay to DeFeo any portion of DeFeo's
          current   compensation   except   pursuant   to  an   across-the-board
          compensation  deferral  similarly  affecting all senior  executives of
          Terex,  provided,  however,  that such  across-the-board  compensation
          deferrals  are not  made as a result  of,  or in  contemplation  of, a
          Change in Control;

                                       5
<PAGE>

               (iv) the failure by Terex to continue in effect any  compensation
          plan or other benefit in which DeFeo participates which is material to
          DeFeo's total  compensation,  except  pursuant to an  across-the-board
          compensation or benefit deferral or reduction  similarly affecting all
          senior   executives   of   Terex,   provided,   however,   that   such
          across-the-board  compensation or benefit  deferrals are not made as a
          result of, or in contemplation of, a Change in Control;

               (v) the  failure  by Terex to  continue  to  provide  DeFeo  with
          benefits  substantially similar to those enjoyed by DeFeo under any of
          Terex's  pension,  life  insurance,   medical,  health  and  accident,
          disability  plans or other benefits  (including,  without  limitation,
          automobile,  country club,  vacation,  and pension  benefits) in which
          DeFeo was participating at the time, the taking of any action by Terex
          which  would  directly  or  indirectly  materially  reduce any of such
          benefits or deprive DeFeo of any material  fringe  benefit  enjoyed by
          DeFeo at the time, (including, without limitation, automobile, country
          club,  vacation  and  pension  benefits),  or the  failure by Terex to
          provide  DeFeo with the number of paid vacation days to which DeFeo is
          then entitled; or

               (vi) the  relocation of Terex's  principal  offices to a location
          more than 50 miles from the  location  of such  offices on the date of
          this  Agreement or a requirement  that DeFeo be based  anywhere  other
          than at Terex's principal DeFeo offices except for necessary travel on
          Terex's  business to an extent  substantially  consistent with DeFeo's
          business travel obligations on the date of this Agreement.

          (o) "Notice of  Termination"  shall mean delivery of written notice by
     one Party and receipt thereof by the other Party in accordance with Section
     25 below, which notice shall indicate the specific termination provision in
     this  Agreement  relied upon and shall set forth in  reasonable  detail the
     facts and  circumstances  claimed  to  provide a basis for  termination  of
     DeFeo's employment hereunder.

                                       6
<PAGE>

          (p) "Person" shall have the meaning  defined in Section 3(a)(9) of the
     Exchange  Act, as modified  and used in Sections  13(d) and 14(d)  thereof;
     provided, however, that a Person shall not include:

               (i) Terex or any subsidiary or affiliate (as such term is defined
          in Rule 12b-2 promulgated under the Exchange Act),

               (ii) a trustee or other  fiduciary  holding  securities  under an
          employee benefit plan of Terex or any Subsidiary or Affiliate,

               (iii) an underwriter  temporarily  holding securities pursuant to
          an offering of such securities, or

               (iv)  a  corporation  owned,  directly  or  indirectly,   by  the
          stockholders  of Terex in  substantially  the same proportion as their
          ownership of stock of Terex.

          (q) "Spouse" shall mean, during the Term of Employment,  the woman who
     as of any relevant date is legally married to DeFeo.

          (r) "Subsidiary" shall mean a corporation of which Terex owns directly
     or  indirectly  more  than  50  percent  of  its   outstanding   securities
     representing  the right,  other than as affected  by events of default,  to
     vote for the election of directors.

          (s) "Term of Employment" or "Term" shall mean the period  specified in
     Section  2(b) below  during  which DeFeo is employed by Terex or any of its
     Affiliates.

                                       7
<PAGE>

     2.   TERM OF EMPLOYMENT, POSITIONS AND DUTIES.

          (a) Employment of DeFeo.  Terex hereby employs DeFeo, and DeFeo hereby
     accepts  employment  with Terex,  in the  position  and with the duties and
     responsibilities  set forth below and upon such other terms and  conditions
     as are hereinafter stated.

          (b) Term of Employment.  The Term of Employment  shall commence on the
     date of this Agreement and shall terminate on December 31, 2001,  unless it
     is  sooner  terminated  as  provided  in  Section  9 below or  extended  by
     agreement of the Parties;  provided,  however, that, if a Change in Control
     shall occur on or prior to December 31, 2001, the Term of Employment  shall
     continue  in effect  until  the  later of (x) 36 months  after the month in
     which such Change in Control occurs or (y) December 31, 2001.

          (c) Title, Duties and Authorities.

               (i) Until termination of his employment hereunder, DeFeo shall be
          employed as Chief Executive Officer of Terex,  reporting to the Board,
          with all the authorities and responsibilities  that normally accrue to
          the  position of chief  executive  officer,  and shall hold such other
          titles as the Board may grant,  including but not limited to President
          and Chief Operating Officer of Terex.

               (ii)  Consistent  with its  obligations  to  stockholders,  Terex
          agrees to use its best  efforts to procure the  election of DeFeo as a
          member of and Chairman of the Board and to ensure DeFeo's  re-election
          to that position during the Term.

          (d) Time and Effort.

               (i) DeFeo agrees to devote his best efforts and abilities and his
          full  business  time and attention to the affairs of Terex in order to
          carry out his duties and responsibilities under this Agreement.

               (ii) Notwithstanding the foregoing,  nothing shall preclude DeFeo
          from

                                       8
<PAGE>

                    (A)  serving  on the  boards of (x) a  reasonable  number of
               trade  associations  and  charitable  organizations,  (y)  United
               Rentals,  Inc. and (z) with the prior  consent of the Board,  any
               other business not in competition with Terex,

                    (B) engaging in charitable activities and community affairs,
               and

                    (C) managing his personal investments and affairs; provided,
               however,  that any such  activities do not  materially  interfere
               with the proper  performance  of his duties and  responsibilities
               specified in Section 2(c) above.

     3. BASE SALARY.

                  DeFeo shall receive from Terex an initial Base Salary, payable
in accordance with the regular payroll  practices of Terex, of $600,000.  During
the Term, the Board shall review the Base Salary for increase no less often than
annually as of the beginning of each calendar year after 1999.

     4. ANNUAL BONUS.

          (a)  Entitlement.  DeFeo shall  receive an annual  bonus in respect of
     each calendar  year during the Term of  Employment  in accordance  with any
     annual incentive plan or plans  established by Terex either for DeFeo alone
     or for members of Terex's senior management generally.

          (b) Payment.  The annual bonus shall be payable as soon as  reasonably
     practicable  after the completion of Terex's audited  financial  statements
     for such calendar  year,  prepared in accordance  with  generally  accepted
     accounting principles, but in no event later than 120 days after the end of
     the calendar year.



                                       9
<PAGE>

     5. LONG-TERM INCENTIVE COMPENSATION.

                  During  the Term  DeFeo  shall  participate  in any  long-term
incentive  plan or plans  established  by Terex  either  for DeFeo  alone or for
members of Terex's senior management generally.

     6. EQUITY OPPORTUNITY.

                  During the Term DeFeo shall be  eligible to receive  grants of
options  to  purchase  shares of  Terex's  stock and awards of shares of Terex's
stock,  either or both as determined by the  Committee,  under and in accordance
with the  terms of  applicable  plans of Terex  and  related  option  and  award
agreements.  DeFeo shall also be entitled to participate in any equity  programs
of  Subsidiaries  or  Affiliates  upon  such  terms  and  conditions  as  may be
established by the Committee.

     7. EXPENSE REIMBURSEMENT.

                  DeFeo shall be entitled to prompt  reimbursement  by Terex for
all  reasonable  out-of-pocket  expenses  incurred  by him  during  the  Term in
performing  services under this Agreement,  upon his submission of such accounts
and records as may be reasonably required by Terex.

     8. EMPLOYEE BENEFIT PLANS.

                  During the Term DeFeo shall be entitled to  participate in all
life insurance, short-term and long-term disability,  accident, health insurance
and savings/retirement plans that are applicable to Terex employees generally or
to the senior executives of Terex. DeFeo shall be entitled to the number of paid
vacation days per year determined by Terex,  which,  however,  shall not be less
than four weeks in any calendar  year.  DeFeo shall also be entitled to all paid
holidays given by Terex to its employees generally.

                                       10
<PAGE>

     9. TERMINATION OF EMPLOYMENT.

          (a) General.  Notwithstanding  anything to the contrary herein, in the
     event of  termination  of DeFeo's  employment  under this Agreement for any
     reason  whatsoever,  he, his dependents or his  Beneficiary,  as may be the
     case,  shall be entitled to receive (in  addition to payments  and benefits
     under, and except as specifically  provided in, subsections (b) through (i)
     below as applicable):

               (i) his Base Salary through the Date of Termination;

               (ii) payment in lieu of any unused  vacation,  in accordance with
          Terex's vacation policy and applicable laws:

               (iii) any annual bonus not yet paid to him for any calendar  year
          prior to the year in which his termination  occurs,  which bonus shall
          not be less than the annual bonus paid to DeFeo for the calendar  year
          preceding the Date of Termination  that has most recently been paid to
          DeFeo;

               (iv) a prorated  amount of DeFeo's bonus for the calendar  during
          which his termination  occurs,  which bonus shall not be less than the
          product of (A) the annual  bonus paid to DeFeo for the  calendar  year
          preceding the Date of Termination  that has most recently been paid to
          DeFeo and (B) a fraction, the numerator of which is the number of days
          in the current  calendar year through the Date of Termination  and the
          denominator of which is 365;

               (v) any deferred  compensation  under any incentive  compensation
          plan of Terex or any deferred compensation agreement then in effect;

               (vi)  any  other  compensation  or  benefits,  including  without
          limitation  long-term  incentive  compensation  described in Section 5
          above,  benefits under equity grants and awards described in Section 6
          above and employee  benefits under plans described in Section 8 above,
          that have vested  through the Date of  Termination  or to which he may
          then be  entitled  in  accordance  with the  applicable  terms of each
          grant, award or plan; and



                                       11
<PAGE>

               (vi)  reimbursement  in  accordance  with  Section 7 above of any
          business  expenses  incurred by DeFeo through the Date of  Termination
          but not yet paid to him.

          (b)  Termination  due to Death.  In the event that DeFeo's  employment
     terminates due to his death, his Beneficiary shall be entitled, in addition
     to the compensation and benefits specified in Section 9(a), to:

               (i) his Base  Salary,  at the rate in  effect  on the date of his
          death, through the end of the month in which his death occurs, and

               (ii) an annual bonus under Terex's Annual Incentive  Compensation
          Plan  prorated to the date of death,  plus any  discretionary  payment
          that may be  awarded,  for the year in which his death  occurs,  which
          bonus shall not be less than the product of (A) the annual  bonus paid
          to DeFeo for the calendar year preceding the Date of Termination  that
          has most recently been paid to DeFeo and (B) a fraction, the numerator
          of which is the number of days in the current  calendar  year  through
          the date of termination and the denominator of which is 365.

          (c)  Termination  due  to  Disability.   In  the  event  that  DeFeo's
     employment  terminates due to  Disability,  as determined by Terex based on
     competent medical advice, he or his Beneficiary,  as the case may be, shall
     be entitled,  in addition to the  compensation  and  benefits  specified in
     Section  9(a),  to  an  annual  bonus  under   Terex's   Annual   Incentive
     Compensation   Plan  prorated  to  the  Date  of   Termination,   plus  any
     discretionary  payment  that may be  awarded,  for the  year in  which  his
     termination  due to Disability  occurs,  which bonus shall not be less than
     the  product of (A) the annual  bonus paid to DeFeo for the  calendar  year
     preceding the Date of Termination that has most recently been paid to DeFeo
     and (B) a  fraction,  the  numerator  of which is the number of days in the
     current  calendar year through the date of termination  and the denominator
     of which is 365.

                                       12
<PAGE>

          (d)  Termination  by  Terex  for  Cause.  In the  event  that  DeFeo's
     employment is  terminated by Terex for Cause,  he shall be entitled only to
     the  compensation and benefits  specified in Section 9(a).

     Notwithstanding the foregoing, termination for Cause may not occur pursuant
     to clauses (ii), (iii),  (iv), (v) or (vi) of Section 1(f) above unless and
     until, with the Board's prior approval, Terex has delivered to DeFeo Notice
     of  Termination,  which  shall  contain  in  reasonable  detail  the  facts
     purporting to constitute such nonperformance,  act, omission or breach, and
     afforded  him 30 days  thereafter  to cure the same  and/or to  respond  in
     writing to the Board setting forth his position  that his  termination  for
     Cause  should not occur and  requesting  reconsideration  by the Board,  in
     which event (x) the effective date of  termination  of employment  shall be
     deferred until the Board has had the  opportunity to consider  whether such
     nonperformance,  act, omission or breach has been cured and to consider any
     request by DeFeo for  reconsideration,  and (y) the Board shall  thereafter
     cause a  written  notice to be  delivered  on its  behalf to DeFeo  stating
     either that it has rescinded its determination that his employment is to be
     terminated for Cause or that affirms its determination  that his employment
     is to be  terminated  for  Cause and that  contains  an  effective  date of
     termination  of  employment,  which shall be not earlier than 15 days after
     such notice is given. Section 1(n)(i) to the contrary notwithstanding, upon
     delivery to DeFeo of Notice of Termination  under this Section 9(d),  DeFeo
     shall be suspended  from all duties and  responsibilities  unless and until
     the  Board  rescinds  its  determination  that  his  employment  is  to  be
     terminated for Cause.

                                       13
<PAGE>

          (e) Termination by Terex Without Cause or by DeFeo for Good Reason.

               (i) Terex shall provide DeFeo 30 days' Notice of  Termination  of
          his employment  without Cause, and DeFeo shall provide 30 days' Notice
          of Termination of his employment for Good Reason.

               (ii) In the event of termination  by Terex of DeFeo's  employment
          without Cause or of  termination  by DeFeo of his  employment for Good
          Reason,  he shall be  entitled,  in addition to the  compensation  and
          benefits specified in Section 9(a), to:

                    (A) two  times  his  Base  Salary,  at the  rate  in  effect
               immediately before such termination,

                    (B) two times the average of his annual  earned  bonuses for
               the two calendar  years in the Term  preceding  the year in which
               the Term ends,

                    (C) continuing coverage under the life, disability, accident
               and health insurance  programs for Terex employees  generally and
               under any supplemental  programs  covering Terex  executives,  as
               from time to time in effect,  for the  two-year  period from such
               termination  or until DeFeo  becomes  eligible for  substantially
               similar  coverage  under  the  employee  welfare  plans  of a new
               employer,  whichever occurs earlier,  provided that DeFeo's right
               to  elect  continued   medical  coverage  after   termination  of
               employment  under  Part 6 of Title I of the  Employee  Retirement
               Income  Security  Act  of  1974,  as  amended,  shall  be  deemed
               satisfied by the coverage provided in this clause (C),

                    (D)  immediate  and  unconditional  vesting of the  unvested
               stock options and stock grants  previously  awarded to DeFeo and,
               for the one-year period  following either such  termination,  the
               right  to  exercise  any  stock  options  held by him;  provided,
               however,  that any unvested  "performance"  stock options,  stock
               grants,  long-term incentive awards or other similar awards shall
               not  vest  unless  their  specified  performance  objectives  are
               achieved  prior  to the  Date of  Termination  and  otherwise  as
               provided in the relevant plan documents, and

                                       14
<PAGE>

                    (E) continuation of all other benefits in effect on the Date
               of  Termination  (including,   without  limitation,   automobile,
               country club,  vacation and pension benefits,  if applicable) for
               the two (2) years  period  following  such  termination  or until
               DeFeo becomes eligible for substantially  similar benefits from a
               new employer.

               (iii) The payments specified in Section 9(e)(ii)(A) and (B) shall
          be made by Terex to DeFeo as follows:

                    (A) 50 percent of the amounts  due shall be paid  ratably in
               cash over the 12 months following the Date of Termination, and

                    (B) the  remaining 50 percent of these amounts shall be paid
               in a cash lump sum at the  beginning of the 13th month  following
               the Date of Termination.

               (iv) DeFeo's  right to terminate his  employment  for Good Reason
          shall not be  affected  by his  incapacity  due to  physical or mental
          illness. DeFeo's continued employment shall not constitute consent to,
          or  a  waiver  of  rights  with   respect  to,  any  act  or  omission
          constituting Good Reason.

          (f)  Voluntary  Termination  by  DeFeo.  DeFeo  shall  have the  right
     voluntarily  to terminate his  employment  in accordance  with Section 1(k)
     above.  If he does so, he shall be entitled  only to the  compensation  and
     benefits specified in Section 9(a).

          (g)  Termination  by Terex  Without  Cause or by DeFeo for Good Reason
     Following  a Change in  Control.  In the event of  termination  of  DeFeo's
     employment  within 24 months  following  a Change in  Control  (i) by Terex
     without  Cause or (ii) by DeFeo for Good Reason,  he shall be entitled,  in
     addition to the compensation and benefits specified in Section 9(a), to the
     amounts specified in Section 9(e)(ii) (A) and (B), payable to him in a cash


                                       15
<PAGE>

     lump sum on the Date of Termination, and to the additional rights specified
     in Section 9(e)(ii)(C),  (D) and (E). In addition,  DeFeo shall be entitled
     to immediate and unconditional vesting of any unvested  "performance" stock
     options,  stock grants,  long-term  incentive  awards  (including,  without
     limitation,  units issued to DeFeo and outstanding under the 1999 Long Term
     Incentive Plan for their maximum cumulative value) or other similar awards

          (h) Terex's  Election Not to Extend the  Agreement.  In the event that
     Terex does not extend this  Agreement  or enter into a new  employment  and
     compensation  agreement,  commencing  at the end of the  Term,  on terms at
     least as  favorable  as those set forth in this  Agreement,  DeFeo shall be
     entitled, in addition to the compensation and benefits specified in Section
     9(a), to the amounts  specified in Section  9(e)(ii)(A) and (B), payable to
     him  as  provided  in  Section  9(e)(iii),  and to  the  additional  rights
     specified in Section 9(e)(ii)(C), (D) and (E).

          (i) DeFeo's  Election Not to Extend the  Agreement.  In the event that
     DeFeo does not accept an offer by Terex to extend this  Agreement  or enter
     into a new  employment  and  compensation  agreement  on  terms at least as
     favorable as those set forth in this Agreement commencing at the end of the
     Term, he shall be deemed to have  terminated his employment  voluntarily as
     of the end of the Term and shall be entitled only to the  compensation  and
     benefits specified in Section 9(a).

          (j) Cessation of Payments. If, during or after the Term, DeFeo commits
     a breach of Section 10 or  Section  11 below,  Terex  shall have no further
     obligation  to make payments to him under this  Agreement  except as may be
     required in accordance with Section 9(a).

                                       16
<PAGE>

          (k)  Notice  Requirements.   Any  purported   termination  of  DeFeo's
     employment  that  is  not  effected   pursuant  to  Notice  of  Termination
     satisfying the  requirements of Sections 1(k) and 1(o) and Section 25 shall
     not be effective for purposes of this Agreement.

     10. EXCISE TAX GROSS-UP.

          (a)  Notwithstanding  anything in this  Agreement  to the contrary and
     except as set forth  below,  in the event it shall be  determined  that any
     payment or distribution by Terex or its affiliates to or for the benefit of
     DeFeo (whether paid or payable or distributed or distributable  pursuant to
     the terms of this Agreement or otherwise,  but determined without regard to
     any additional payments required under this Section 10) (a "Payment") would
     be subject to the  excise  tax  imposed by Section  4999 of the Code or any
     interest or penalties are incurred by DeFeo with respect to such excise tax
     (such  excise tax,  together  with any such  interest  and  penalties,  are
     hereinafter collectively referred to as the "Excise Tax"), then DeFeo shall
     be entitled to receive an additional  payment (a "Gross-Up  Payment") in an
     amount  such  that  after  payment  by DeFeo of all  taxes  (including  any
     interest or  penalties  imposed  with  respect to such  taxes),  including,
     without  limitation,  any income  taxes  (and any  interest  and  penalties
     imposed  with  respect  thereto)  and Excise Tax imposed  upon the Gross-Up
     Payment,  DeFeo  retains  an amount of the  Gross-Up  Payment  equal to the
     Excise Tax imposed upon the Payments.  Notwithstanding the foregoing, if it
     shall be determined that DeFeo is entitled to a Gross-Up Payment,  but that
     the  Payments  do not exceed  105% of the  greatest  amount  (the  "Reduced
     Amount")  that  could be paid to DeFeo such that the  receipt  of  Payments
     would not give rise to any Excise Tax,  then no Gross-Up  Payment  shall be
     made to DeFeo and the Payments,  in the aggregate,  shall be reduced to the
     Reduced Amount.

                                       17
<PAGE>

          (b)  Subject  to  the   provisions   of  Section   10(c)  below,   all
     determinations required to be made under this Section 10, including whether
     and when a Gross-Up  Payment is  required  and the amount of such  Gross-Up
     Payment   and  the   assumptions   to  be  utilized  in  arriving  at  such
     determination,  shall be made by  PricewaterhouseCoopers  LLP or such other
     nationally recognized certified public accounting firm as may be designated
     by DeFeo (the "Accounting  Firm") which shall provide  detailed  supporting
     calculations both to Terex and DeFeo  simultaneously  with any event giving
     rise to a Gross-Up  Payment.  All fees and expenses of the Accounting  Firm
     shall be borne  solely  by  Terex.  Any  Gross-Up  Payment,  as  determined
     pursuant to this Section 10, shall be paid by Terex to DeFeo simultaneously
     with any event giving rise to a Gross-Up  Payment.  Absent  manifest error,
     any  determination  by the Accounting  Firm shall be binding upon Terex and
     DeFeo. As a result of the uncertainty in the application of Section 4999 of
     the Code at the time of the initial  determination  by the Accounting  Firm
     hereunder,  it is possible that Gross-Up  Payments which will not have been
     made by Terex should have been made  ("Underpayment"),  consistent with the
     calculations  required  to be  made  hereunder.  In the  event  that  Terex
     exhausts its remedies  pursuant to Section  10(c) and DeFeo  thereafter  is
     required to make a payment of any Excise  Tax,  the  Accounting  Firm shall
     determine  the amount of the  Underpayment  that has  occurred and any such
     Underpayment  (including  any  interest  and  penalties  thereon)  shall be
     promptly paid by Terex to or for the benefit of DeFeo.

          (c) DeFeo shall  notify  Terex in writing of any claim by the Internal
     Revenue Service that, if successful,  would require the payment by Terex of
     the Gross-Up Payment or the Underpayment.  Such notification shall be given
     as soon as practicable but no later than ten (10) business days after DeFeo
     is informed in writing of such claim and shall  apprise Terex of the nature
     of such  claim and the date on which such  claim is  requested  to be paid.


                                       18
<PAGE>

     DeFeo shall not pay such claim prior to the  expiration  of the thirty (30)
     day period  following  the date on which he gives such  notice to Terex (or
     such  shorter  period  ending on the date that any  payment  of taxes  with
     respect to such claim is due). If Terex  notifies DeFeo in writing prior to
     the expiration of such period that it desires to contest such claim,  DeFeo
     shall:

               (i) provide Terex any information  reasonably  requested by Terex
          relating to such claim,

               (ii) take such action in connection with contesting such claim as
          Terex  shall  reasonably   request  in  writing  from  time  to  time,
          including,  without  limitation,  accepting legal  representation with
          respect to such claim by an attorney reasonably selected by Terex,

               (iii) cooperate with Terex in good faith in order  effectively to
          contest such claim, and

               (iv) permit Terex to participate in any  proceedings  relating to
          such claim; provided,  however, that Terex shall bear and pay directly
          all costs and expenses  (including  additional interest and penalties)
          incurred in connection  with such contest and shall indemnify and hold
          DeFeo harmless,  on an after-tax  basis,  for any Excise Tax or income
          tax (including interest and penalties with respect thereto) imposed as
          a result of such  representation  and  payment of costs and  expenses.
          Without limitation on the foregoing  provisions of this Section 10(c),
          Terex shall  control all  proceedings  taken in  connection  with such
          contest  and,  at its sole  option,  may  pursue  or forgo any and all
          administrative appeals, proceedings, hearings and conferences with the
          taxing authority in respect of such claim and may, at its sole option,
          either  direct  DeFeo to pay the tax  claimed  and sue for a refund or


                                       19
<PAGE>

          contest  the claim in any  permissible  manner,  and  DeFeo  agrees to
          prosecute such contest to a  determination  before any  administrative
          tribunal,  in a  court  of  initial  jurisdiction  and in one or  more
          appellate courts, as Terex shall determine; provided, however, that if
          Terex  directs  DeFeo to pay such  claim and sue for a  refund,  Terex
          shall  pay  the  amount  of  such  payment  to  DeFeo,  along  with an
          additional  Gross-Up  Payment,  and  shall  indemnify  and hold  DeFeo
          harmless,  on an  after-tax  basis,  from any Excise Tax or income tax
          (including  interest or penalties with respect  thereto)  imposed with
          respect to such  payment or with  respect to any  imputed  income with
          respect to such  payment;  and further  provided that any extension of
          the  statute  of  limitations  relating  to  payment  of taxes for the
          taxable year of DeFeo with respect to which such  contested  amount is
          claimed  to be  due  is  limited  solely  to  such  contested  amount.
          Furthermore, Terex's control of the contest shall be limited to issues
          with respect to which a Gross-Up  Payment  would be payable  hereunder
          and DeFeo shall be entitled to settle or contest,  as the case may be,
          any other issue  raised by the Internal  Revenue  Service or any other
          taxing authority.

          (d) If,  after the  receipt  by DeFeo of an amount  advanced  by Terex
     pursuant to Section  10(c),  DeFeo receives any refund with respect to such
     claim,  DeFeo shall (subject to Terex's  complying with the requirements of
     Section  10(c))  promptly pay to Terex the amount of such refund  (together
     with any interest paid or credited thereon after taxes applicable thereto).

     11. CONFIDENTIAL INFORMATION.

          (a) Acknowledgments. DeFeo acknowledges that:

               (i) As a result of his employment with Terex,  DeFeo has obtained
          and will obtain secret and  confidential  information  concerning  the
          business of Terex and its Affiliates,  including,  without limitation,
          the  identity  of  customers  and  sources of supply,  their needs and
          requirements,  the  nature  and extent of  contracts  with  them,  and
          related cost, price and sales information.

                                       20
<PAGE>

               (ii) Terex and its  Affiliates  will  suffer  damage that will be
          difficult to compute if, during the Term or  thereafter,  DeFeo should
          divulge secret and confidential  information  relating to the business
          of Terex heretofore or hereafter  acquired by him in the course of his
          employment with Terex or any of its Affiliates.

               (iii)  The  provisions  of this  Section  11 are  reasonable  and
          necessary  for  the  protection  of the  business  of  Terex  and  its
          Affiliates.

          (b)  Confidential  Information.  DeFeo  agrees that he will not at any
     time,  either during the Term of Employment or  thereafter,  divulge to any
     person,  firm or  corporation  any  information  obtained or learned by him
     during the course of his  employment  with Terex or any of its  Affiliates,
     with regard to the  operational,  financial,  business or other  affairs of
     Terex or its Affiliates,  their officers and directors,  including, without
     limitation,  trade "know how," secrets,  customer lists, sources of supply,
     pricing policies, operational methods or technical processes, except

               (i) in the course of performing his duties hereunder,

               (ii) with Terex's express written consent,

               (iii) to the extent  that any such  information  is in the public
          domain,  is ascertainable  from public or published  information or is
          known to any person who is not subject to a  contractual  or fiduciary
          obligation  owed to Terex not to disclose  such  information,  in each
          case  other  than  as a  result  of  DeFeo's  breach  of  any  of  his
          obligations hereunder, or

               (iv) when  required to be disclosed  by court order,  subpoena or
          other government process.

               In the event  that DeFeo  shall be  required  to make  disclosure
          pursuant to the  provisions of clause (iv) of the preceding  sentence,
          he shall  promptly,  but in no event more than 48 hours after learning
          of such court order,  subpoena,  or other government  process,  notify
          Terex,  by  personal  delivery  or by  facsimile,  confirmed  by mail.
          Further, at Terex's written request and expense, DeFeo shall

                                       21
<PAGE>

               (i) take all  reasonably  necessary  steps  requested by Terex to
          defend against the enforcement of such court order,  subpoena or other
          government process, and;

               (ii) permit Terex to intervene  and  participate  with counsel of
          its choice in any proceeding relating to the enforcement thereof.

          (c)  Return  of  Documents  and  Property.  Upon  termination  of  his
     employment  with  Terex,  or at any time Terex may so  request,  DeFeo will
     promptly deliver to Terex all files,  memoranda,  notes, records,  reports,
     manuals,  data,  drawings,  blueprints and other  documents and information
     (and all copies  thereof)  relating  to the  business  of Terex  and/or its
     Affiliates,  and all property  associated  therewith,  that are then in his
     possession or under his control.

          (d) Remedies and Sanctions.  In the event that DeFeo is found to be in
     violation  of Section  11(b) or (c),  Terex  shall be entitled to relief as
     provided in Section 13 below.

     12. NONCOMPETITION/NONSOLICITATION.

          (a) Acknowledgments. DeFeo acknowledges that:

               (i) Terex and its  Affiliates  will  suffer  damage  that will be
          difficult to compute if, during the Term or  thereafter,  DeFeo should
          enter a competitive business.

               (ii)  The  provisions  of  this  Section  12 are  reasonable  and
          necessary  for  the  protection  of the  business  of  Terex  and  its
          Affiliates.

          (b)  Noncompetition  and  Nonsolicitation.  During the Covenant Period
     (which  shall  extend  for 18 months  after the  Term,  unless  the date of
     termination  is  within  twenty-four  (24)  months  following  a Change  in
     Control,  in which event the  Covenant  Period shall extend for a period of
     twenty-four  (24) months from the date of termination)  DeFeo,  without the
     prior written permission of Terex, shall not, directly or indirectly:

                                       22
<PAGE>

               (i)  enter  into the  employ  of or render  any  services  to any
          person,  firm or corporation engaged in any business that derives more
          than  5  percent   of  its  gross   sales  from   products   that  are
          interchangeable  with or  substitutable  for a product  sold by one or
          more of the  businesses  conducted  by Terex or any of its  Affiliates
          when the Term ends (a "Competitive Business"),

               (ii) engage in any Competitive Business for his own account,

               (iii) become  associated  with or interested  in any  Competitive
          Business as an individual,  partner, shareholder,  creditor, director,
          officer, principal, agent, employee, trustee,  consultant,  advisor or
          in any other relationship or capacity,

               (iv)  employ or  retain,  or have or cause  any  other  person or
          entity to employ or retain, any person who was employed or retained by
          Terex or any of its Affiliates while DeFeo was employed by Terex, or

               (v) solicit,  endeavor to entice away from or knowingly interfere
          with Terex or any of its Affiliates,  any of its or their customers or
          sources of supply.

                 Notwithstanding,  the  foregoing,  nothing  in this  Agreement
shall preclude DeFeo from investing his personal assets in the securities of any
corporation or other business  entity that is engaged in a Competitive  Business
if  such  securities  are  traded  on  a  national  stock  exchange  or  in  the
over-the-counter   market  and  if  such  investment  does  not  result  in  his
beneficially  owning, at any time, more than five percent of the publicly-traded
equity securities of such competitor.

                                       23
<PAGE>

          (c) Remedies and Sanctions.  In the event that DeFeo is found to be in
     violation of Section  12(b),  Terex shall be entitled to relief as provided
     in Section 13 below.

     13. INJUNCTIVE RELIEF.

          (a) If DeFeo commits a breach, or threatens to commit a breach, of any
     of the provisions of Section 11 or 12 above, Terex shall have the right and
     remedy  to seek to  have  the  provisions  of this  Agreement  specifically
     enforced by any court having equity jurisdiction, it being acknowledged and
     agreed by DeFeo that the services being rendered  hereunder to Terex are of
     a special,  unique and extraordinary  character and that any such breach or
     threatened breach will cause irreparable  injury to Terex and that monetary
     damages  will not  provide  an  adequate  remedy to Terex.  The  rights and
     remedies enumerated in this Section 13(a) shall be independent of the other
     and shall be severally  enforceable,  and such rights and remedies shall be
     in addition to, and not in lieu of, any other damages,  rights and remedies
     available to Terex under law or equity.

          (b) If DeFeo shall violate any covenant  contained in this Section 13,
     the Covenant Period shall automatically  extend for 13 months from the date
     on which DeFeo  permanently  ceases such  violation or, if later,  from the
     date of entry  by a court of  competent  jurisdiction  of a final  order or
     judgment enforcing such covenant.

          (c) If any  provision of this  Section 13 is held to be  unenforceable
     because of the scope,  duration or area of its applicability,  the tribunal
     making  such  determination  shall  have the  power to modify  such  scope,
     duration,  or area, or all of them,  and any such  provision  shall then be
     applicable in such modified form.

                                       24
<PAGE>

     14. OUTPLACEMENT SERVICES.

                  In the event of the termination of DeFeo's  employment after a
Change in Control or without  Cause or for Good  Reason or Terex does not extend
this Agreement or enter into a new employment  and  compensation  agreement with
DeFeo, in each case as provided for in this Agreement, Terex agrees, at its sole
cost and expense, to provide DeFeo with outplacement services for a period of at
least  twelve (12) months  following  the date of  termination.  Terex and DeFeo
shall use their good faith efforts to locate a provider, and determine the scope
of, outplacement  services which is reasonably acceptable to both parties taking
into account the status of DeFeo as a senior executive officer.

     15. WITHHOLDING TAXES.

                  All payments to DeFeo or his  Beneficiary  shall be subject to
withholding on account of federal,  state and local taxes as required by law. If
any payment under this Agreement is  insufficient  to provide the amount of such
taxes required to be withheld, Terex may withhold such taxes from any subsequent
payment due DeFeo or his  Beneficiary.  In the event that all  payments  due are
insufficient to provide the required amount of such withholding  taxes, DeFeo or
his Beneficiary,  within five days after written notice from Terex, shall pay to
Terex the amount of such withholding taxes in excess of the payments due.

     16. INDEMNIFICATION AND LIABILITY INSURANCE.

                  Nothing herein is intended to limit Terex's indemnification of
DeFeo,  and  Terex  shall  indemnify  him to the  fullest  extent  permitted  by
applicable law consistent with Terex's  Certificate of Incorporation and By-Laws
as in  effect  on the date of this  Agreement,  with  respect  to any  action or
failure to act on his part while he is (x) an  officer,  director or employee of
Terex or any  Subsidiary  or Affiliate or (y) a director or officer of any trade
association or business  enterprise that is not a subsidiary or Affiliate and in
which capacity his service is at Terex's request.  To the extent that directors'
and officers' liability insurance is obtainable on commercially  economic terms,
Terex shall  cause  DeFeo to be  covered,  during the Term and after the Term in


                                       25
<PAGE>

respect  of claims  arising  from any such  service  during  the  Term,  by such
insurance on terms no less favorable than the directors' and officers' liability
insurance  maintained  by Terex as in  effect on the date of this  Agreement  in
terms of coverage,  limits and  reimbursement  of defense  costs.  In any period
during which such insurance coverage is not obtainable on commercially  economic
terms, Terex shall cause DeFeo to be covered by as much of such insurance as may
be obtained for the largest  premium paid by Terex for such an insurance  policy
in effect during the Term.

     17. ASSIGNABILITY, SUCCESSORS, BINDING AGREEMENT.

          (a) In addition to any  obligations  imposed by law upon any successor
     to  Terex,  Terex  will use its best  efforts  to  persuade  any  successor
     (whether  direct  or  indirect,  by  purchase,  merger,   consolidation  or
     otherwise)  to all or  substantially  all of the business  and/or assets of
     Terex to expressly  assume and agree to perform this  Agreement in the same
     manner and to the same extent that Terex would be required to perform it if
     no such  succession  had  taken  place.  Failure  of  Terex to use its best
     efforts to obtain such assumption and agreement prior to the  effectiveness
     of any such  succession  shall  be a breach  of this  Agreement  and  shall
     entitle DeFeo to compensation from Terex in the same amount and on the same
     terms as DeFeo would be entitled to hereunder  if he were to terminate  his
     employment  for Good Reason  after a Change in Control,  except  that,  for
     purposes  of  implementing  the  foregoing,  the  date on  which  any  such
     succession becomes effective shall be deemed the Date of Termination.

                                       26
<PAGE>

          (b) This Agreement shall inure to the benefit of and be enforceable by
     DeFeo's  personal  or  legal  representatives,  executors,  administrators,
     successors, heirs, distributees,  devisees and legatees. If DeFeo shall die
     while any  amount  would  still be  payable to him  hereunder  (other  than
     amounts  which,  by  their  terms,  terminate  upon  his  death)  if he had
     continued to live,  all such amounts,  unless  otherwise  provided  herein,
     shall  be paid in  accordance  with  the  terms  of this  Agreement  to the
     executors, personal representatives or administrators of DeFeo's estate.

     18. REPRESENTATIONS.

                  The Parties  respectively  represent  and warrant that each is
fully  authorized  and  empowered  to enter  into  this  Agreement  and that the
performance of its or his obligations,  as the case may be, under this Agreement
will not violate any agreement between such Party and any other person,  firm or
organization.  Terex  represents  and warrants that this Agreement has been duly
authorized  by  all  necessary  corporate  action  and  is  valid,  binding  and
enforceable in accordance with its terms.

     19. ENTIRE AGREEMENT.

                  Except to the extent otherwise provided herein, this Agreement
contains the entire  understanding and agreement between the Parties  concerning
the subject matter hereof and supersedes any prior  agreements,  whether written
or oral,  between the Parties concerning the subject matter hereof. In the event
of a conflict  between this  Agreement and terms of any benefit  plan,  grant or
award,  the  provisions  of this  Agreement  shall govern the  determination  of
DeFeo's rights.  Notwithstanding  the previous sentence,  to the extent that the
provisions of any benefit plan,  grant or award are more favorable to DeFeo than
the provisions of this Agreement,  the provisions of such benefit plan, grant or
award shall govern the determination of DeFeo's rights.

                                       27
<PAGE>

     20. AMENDMENT OR WAIVER.

                 No  provision  in this  Agreement  may be amended  unless such
amendment  is agreed to in writing  and  signed by both DeFeo and an  authorized
officer of Terex.  No waiver by either Party of any breach by the other Party of
any condition or provision  contained in this  Agreement to be performed by such
other Party  shall be deemed a waiver of a similar or  dissimilar  condition  or
provision  at the same or any prior or  subsequent  time.  Any waiver must be in
writing and signed by the Party to be charged with the waiver.

     21. SEVERABILITY.

                  In the event that any  provision or portion of this  Agreement
shall be determined to be valid or unenforceable  for any reason, in whole or in
part, the remaining provisions of this Agreement shall be unaffected thereby and
shall remain in full force and effect to the fullest extent permitted by law.

     22. SURVIVAL.

                 The  respective  rights and  obligations  of the Parties under
this Agreement shall survive any termination of DeFeo's employment with Terex.

     23. BENEFICIARIES/REFERENCES.

                DeFeo shall be entitled to select (and  change,  to the extent
permitted  under any applicable law) a beneficiary or  beneficiaries  to receive
any compensation or benefit payable under this Agreement following DeFeo's death
by giving Terex written  notice  thereof.  In the event of DeFeo's death or of a
judicial determination of his incompetence, reference in this Agreement to DeFeo
shall be deemed to refer, as appropriate,  to his  beneficiary,  estate or other
legal representative.

                                       28
<PAGE>

     24. MITIGATION.

                Terex agrees that, if DeFeo's  employment by Terex  terminates
during the Term, DeFeo is not required to seek other employment or to attempt in
any way to reduce any amounts payable to him due under this Agreement.  Further,
the amount of any  payment  shall not be reduced by any  compensation  earned by
DeFeo as the result of employment by another employer,  by retirement  benefits,
by offset against any amount claimed to be owed by DeFeo to Terex, or otherwise.

     25. GOVERNING LAW.

                  This  Agreement   shall  be  governed  by  and  construed  and
interpreted  in accordance  with the laws of the State of  Connecticut,  without
reference to principles of conflict of laws.

     26. RESOLUTION OF DISPUTES.

          (a)  Arbitration.  Except as provided in Section  24(b),  any disputes
     arising under or in  connection  with this  Agreement  shall be resolved by
     arbitration,  to be held in Stamford,  Connecticut,  in accordance with the
     commercial rules and procedures of the American Arbitration Association.

          (b) Litigation.  Notwithstanding  the foregoing,  DeFeo shall have the
     right to waive his rights under Section 24(a) and have any dispute resolved
     by a court of competent jurisdiction.

          (c) Costs.  Except as provided in Sections  10(c),  11(b) and 27, each
     Party shall bear its or his respective  costs,  fees (including  attorneys'
     fees) and expenses of any arbitration or litigation in connection with this
     Agreement.

          (d) Continuation of Payments. Pending the outcome or resolution of any
     dispute  between  the  Parties,  Terex  shall  continue to pay to DeFeo all
     amounts,  and  provide  on his  behalf  all  benefits,  due him under  this
     Agreement.

                                       29
<PAGE>

     27. LEGAL EXPENSES.

                 Terex  agrees  to  pay  the  reasonable  out-of  pocket  legal
expenses  actually  incurred by DeFeo in  connection  with the  negotiation  and
execution of this  Agreement.  Terex agrees to pay all reasonable  out-of-pocket
costs and expenses,  including all reasonable attorneys' fees and disbursements,
actually  incurred by DeFeo in collecting  or enforcing  payments to which he is
ultimately  determined to be entitled  (whether by agreement  among the parties,
court order or  otherwise)  pursuant to this  Agreement in  accordance  with its
terms.

     28. NOTICES.

                  Any notice given to either Party shall be in writing and shall
be deemed to have been  given  when  delivered  either  personally,  by fax,  by
overnight  delivery  service  (such as Federal  Express) or sent by certified or
registered mail, postage prepaid,  return receipt  requested,  duly addressed to
the Party concerned at the address indicated below or to such changed address as
the Party may subsequently give notice of.

If to Terex:
         Terex Corporation
         500 Post Road East
         Westport, CT 06880
         Attention: General Counsel
         Fax: (203) 227-1647

If to DeFeo:
         Ronald M. DeFeo
         45 Beachside Avenue
         Westport, CT 06880
         Fax: (203) 227-8317



                                       30
<PAGE>

     29. HEADINGS.

                  The headings of the sections  contained in this  Agreement are
for convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.

     30. COUNTERPARTS.

                  This Agreement may be executed in counterparts,  each of which
when so executed and delivered shall be an original,  but all such  counterparts
together shall constitute one and the same instrument.

         IN WITNESS WHEREOF,  the undersigned have executed this Agreement as of
the date first written above.
                                                 Terex Corporation


                                                 By: _________________________
                                                        Name:
                                                        Title:


                                                 ---------------------------
                                                           Ronald M. DeFeo

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>4
<FILENAME>0004.txt
<DESCRIPTION>12.1 CALC. OF RATIO OF EARNINGS TO FIXED CHARGES
<TEXT>



                                                                    EXHIBIT 12.1
<TABLE>
<CAPTION>


                                TEREX CORPORATION
                CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
                              (amounts in millions)


                                                      Three Months Ended            Nine months Ended
                                                        September 30,                 September 30,
                                                  -------------------------     -------------------------
                                                      2000         1999             2000         1999
                                                  ------------ ------------     ----------- -------------
      Earnings
        Income  (loss) before taxes and minority
<S>                                                <C>         <C>              <C>          <C>
          interest..............................   $  80.0     $   31.0         $   147.7    $   88.9

        Adjustments:
          Minority   interest   in   losses   of
          consolidated subsidiaries.............      ---          ---              ---          ---
          Undistributed  (income)  loss  of less
          than 50% owned investments............      ---          ---              ---          ---
          Distributions   from   less  than  50%
          owned investments.....................      ---          ---              ---          ---
          Fixed charges.........................      28.2         21.8             83.3          53.7
                                                  ------------ ------------     -----------  ------------

        Earnings................................     108.2         52.8            231.0         142.6
                                                  ------------ ------------     -----------  ------------

      Combined fixed charges, including
          preferred accretion
        Interest    expense,    including   debt
          discount amortization.................      26.0         20.0             77.7         48.9
        Accretion  of   redeemable   convertible
          preferred stock........................    ---          ---              ---          ---
        Amortization/writeoff  of debt  issuance
          costs.................................      0.9          0.6              2.7          1.7
        Portion      of      rental      expense
          representative   of  interest   factor
          (assumed to be 33%)...................      1.3          1.2              2.9          3.1
                                                  ------------ ------------     -----------  ------------

        Fixed charges...........................   $ 28.2      $  21.8          $  83.3      $  53.7
                                                  ------------ ------------     -----------  ------------

      Ratio  of  earnings   to  combined   fixed
          charges...............................      3.8x         2.4x             2.8x         2.7x
                                                  ============ ============     ===========  ============
</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-27
<SEQUENCE>5
<FILENAME>0005.txt
<DESCRIPTION>FDS -- 10-Q 9/30/00
<TEXT>

<TABLE> <S> <C>


<ARTICLE>                     5

<MULTIPLIER>                                        1000


<S>                             <C>
<PERIOD-TYPE>                                      9-mos
<FISCAL-YEAR-END>                            DEC-31-2000
<PERIOD-START>                                JAN-1-2000
<PERIOD-END>                                 SEP-30-2000
<CASH>                                           260,800
<SECURITIES>                                           0
<RECEIVABLES>                                    397,400
<ALLOWANCES>                                      (6,100)
<INVENTORY>                                      584,100
<CURRENT-ASSETS>                               1,330,400
<PP&E>                                           195,500
<DEPRECIATION>                                   (64,900)
<TOTAL-ASSETS>                                 2,061,400
<CURRENT-LIABILITIES>                            543,700
<BONDS>                                        1,001,000
<PREFERRED-MANDATORY>                                  0
<PREFERRED>                                            0
<COMMON>                                             300
<OTHER-SE>                                       446,200
<TOTAL-LIABILITY-AND-EQUITY>                   2,061,400
<SALES>                                        1,622,100
<TOTAL-REVENUES>                               1,622,100
<CGS>                                          1,332,100
<TOTAL-COSTS>                                  1,332,100
<OTHER-EXPENSES>                                       0
<LOSS-PROVISION>                                       0
<INTEREST-EXPENSE>                                77,700
<INCOME-PRETAX>                                  147,700
<INCOME-TAX>                                      51,900
<INCOME-CONTINUING>                               95,800
<DISCONTINUED>                                         0
<EXTRAORDINARY>                                        0
<CHANGES>                                              0
<NET-INCOME>                                      95,800
<EPS-BASIC>                                          3.51
<EPS-DILUTED>                                          3.41



</TABLE>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
