DETOMASO INDUSTRIES INC, 10-K, 1996-04-16

DETOMASO INDUSTRIES INC
10-K, 1996-04-16
MOTOR VEHICLES & PASSENGER CAR BODIES

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

X Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act
- ---
of 1934 [Fee Required]

For the fiscal year ended December 31, 1995 or
------------------------

Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
- ---
Act of 1934. [No Fee Required]

For the transition period from to .
-------------------- -----------------------

Commission File Number 0-2642
----------

DE TOMASO INDUSTRIES, INC.
--------------------------
(Exact name of registrant as specified in its charter)

Maryland 52-0466460
- -------------------------------------------------- -------------------------
(State of other jurisdiction of incorporation (I.R.S. Employer I.D. No.)
or organization)

P.O. Box 856
107 Monmouth Street, Red Bank, New Jersey 07701
- ------------------------------------------ -------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (908) 842-7200
----------------------------

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange
Title of each class on which registered
------------------- ---------------------

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $2.50 per share

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 (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes: X No:
------------ ------------

The aggregate market value of the voting stock held by non-affiliates of the
registrant, computed by reference to the average of bid and asked price of the
stock as of March 28, 1996, was $48,444,756.

The number of shares of common stock, $2.50 par value, outstanding as of March
28, 1996 was 4,714,332.

DOCUMENTS INCORPORATED BY REFERENCE:
None.
Page 1 of 120 Pages
Exhibit Index appears at Pages 68-69.

<PAGE>

PART I
------

Item 1. Business
- ------ --------

(a) General Development of Business
-------------------------------

Introduction
- ------------

Having effected during 1995 a basic restructuring of its operations and
strategic direction, the Company today provides an array of temporary management
and opportunistic capital investment resources to troubled businesses located
primarily in Italy. By rendering these services, the Company acquires the
ability to earn fees from the engagements (including negotiated bonuses in the
form of cash or equity for achieving agreed upon results), to make investments
of its capital, alone or with other strategic or financial investors, in
minority or controlling equity positions in managed clients ("Portfolio
Companies").

The Company plans to realize income from the operations of wholly or
majority owned companies and from the disposition of its equity interests in the
Portfolio Companies at enhanced values resulting from the rendering of
management services by the Company.

The Company's new business structure enables it to apply its management and
capital investment skills to present and future Portfolio Companies as well as
to outside clients, to incentivize outside clients to make greater use of the
Company's resources, and to utilize its clients as sources for new management
engagements and capital investment opportunities.

The Company's strategic refocus is an outgrowth of the sudden illness in
1993 of the Company's former chairman, Alejandro De Tomaso, and, contemporane-
ously, the divestiture by the Company of the entirety of its controlling
interest in its principal Italian operating subsidiary, Maserati S.p.A. to Fiat
Auto S.p.A.

In 1993, after the Maserati sale, the Company's only operating subsidiary
was G.B.M. S.p.A. (since renamed Moto Guzzi S.p.A. and referred to throughout
this report as "Moto Guzzi"). At that time, Moto Guzzi was a manufacturer of
medium and high priced motorcycles which for years had been both unprofitable
and undercapitalized. The Company's Board was prepared to consider a capital
investment by or joint venture with a third party, the sale of its interest in
Moto Guzzi, or some other form of business combination to repair Moto Guzzi's
capital deficiencies and financial condition.

When those efforts proved unsuccessful, the Company, in May 1994, engaged
Temporary Integrated Management S.r.l. ("T.I.M.") to provide Moto Guzzi with
critically needed temporary management in order to staunch losses and to design
a capital plan for future growth or sale of the subsidiary. Management selected
and installed by T.I.M. continues to operate Moto Guzzi. As described below,
under T.I.M.'s direction, Moto Guzzi increased production

<PAGE>

and sales, reduced costs, and achieved virtual break-even results on an
operating profit basis. The Company's 100%-owned motorcycle manufacturing
subsidiary today manufactures a high priced line of motorcycles under the
trademark "Moto Guzzi", and is the successor to businesses acquired by the
Company in 1972. Moto Guzzi cycles vary in engine displacement from 300cc to
1,100cc, although the subsidiary has determined to focus its future sales and
development efforts on its larger motorcycles, having engines of 750cc or
greater.

T.I.M. is now a wholly-owned subsidiary of the Company, having been
acquired in 1995 as part of the purchase of substantially all of the operating
assets of Finprogetti, S.p.A., (see "Finprogetti Acquisition", below). While
the operations of T.I.M. to date have not been material to the consolidated
results of operations of the Company, the acquisition of T.I.M. was an essential
component of the redirection of the Company's business strategy, as it permits
the Company to combine T.I.M.'s skill and knowledge in providing capable
management to troubled businesses with the Company's abilities in analyzing
capital requirements and transaction structuring, and to apply such capabilities
to investment opportunities arising out of T.I.M.'s management engagement.

Previously, in November, 1993, T.I.M.'s management services were engaged by
Finprogetti, itself a financially troubled, privately held Italian corporation,
the capital of which was invested in real estate and financial services
ventures. Finprogetti acquired a 55% equity interest in T.I.M. in November, 1994
by buying shares from Albino Collini, T.I.M.'s founder. Sig. Collini had become
Finprogetti's managing director in November, 1993.

Finprogetti Acquisition
- -----------------------

In December 1994, (T.I.M. having managed Moto Guzzi during the last seven
months of the year), the Company's Board received an offer from Finprogetti in
which it was proposed that: (a) the Company would acquire substantially all of
the operating assets of Finprogetti, including its Italian real estate
interests, its T.I.M. subsidiary, a leasing and factoring company and certain
Italian tax receivables aggregating Lit. 5,150,000,000 ($3,243,073)* , in
exchange for newly issued shares of the Company's common stock valued at Lit.
20,106.73 per share ($12.26 at the then-prevailing exchange rate), and (b)
Finprogetti would make or cause others to make additional equity investments in
the Company aggregating up to Lit. 15,000,000,000

- --------------------

*
Throughout this statement, all amounts are stated in Italian Lire, unless
otherwise stated. Amounts in Italian lire have been converted into U.S.
dollars solely for convenience at the exchange rate of 1,588 to the U.S.
dollar prevailing on December 31, 1995.

The US dollar equivalent amounts are included solely for the convenience of
the readers of the financial statements. It should not be construed that
the assets and liabilities, expressed in US dollar equivalents, can
actually be realized in or extinguished by US dollars at the exchange rates
used in the accompanying translation.

<PAGE>

($9,445,844) paying cash therefor at the same price of Lit. 20,106.73 per share.
If aggregate additional investments were less than Lit. 15,000,000,000, it was
agreed that Finprogetti would realize a reduction in the number of shares to be
issued in connection with the acquisition of the Finprogetti assets.

Under the agreement ultimately negotiated with Finprogetti, which closed on
July 17, 1995, a total of 1,922,652 shares of common stock were issued in
exchange for the Finprogetti assets, and certain of the Finprogetti shareholders
purchased an additional 408,008 shares for an aggregate amount of Lit.
8,203,706,600 (approximately $5 million). A portion of the 1,922,652 shares are
being held in escrow pending receipt by the Company of a Lit. 5,150 million
Italian tax refund due to one of the acquired Finprogetti companies. See Note
3 to Notes to the Financial Statements.

The former Finprogetti real estate assets acquired by the Company are not
presently intended to be held long term. The Company either will seek a
strategic partner to help manage the properties or will seek to dispose of them
in due course and at maximally favorable values.

Lita Acquisition
- ----------------

In the first execution of its new business plan following its acquisition
of Finprogetti's subsidiaries, including T.I.M., on July 25, 1995, the Company,
through one of its Italian subsidiaries, acquired Lita S.p.A. ("Lita"), an
Italian manufacturer of steel tubing used for automotive purposes and in the
manufacture of metal furniture. Lita's operations, while not material to the
Company's consolidated 1995 results of operations, are expected to be material
to the Company's operations in 1996.

Lita was acquired from a client of T.I.M. which had retained T.I.M. to
manage the company after a material decline in Lita's operations, and to oversee
its sale to a third party to be identified by T.I.M. The physical and
operational presence of T.I.M. at Lita, its ability to examine and comprehen-
sively analyze the operational and capital needs of the client, and T.I.M.'s
ability to provide its client access to the capital finance resources of the
Company represents an example of an investment opportunity arising from T.I.M.'s
management business. The stock of Lita was acquired at a cost of Lit. 615
million ($387,280), representing a discount of approximately Lit. 1,600 million
($1,007,557) from the book value of its assets. Through management provided to
Lita by T.I.M., the Company hopes to enhance the value of Lita as a Portfolio
Company and benefit both from income generated from Lita's operations and from
an eventual disposition of the rejuvenated subsidiary.

In summary, while the strategic focus of the Company is to seek
opportunistic investments through relationships developed from its management
service business with business owners and bank creditors, today, through its
Italian Portfolio Companies, the Company has material operations in the
following industry segments:

<PAGE>

- the manufacture and sale of high priced motorcycles through its Moto
Guzzi subsidiary;

- the operation and sale of operating and developmental real property
through subsidiaries acquired from Finprogetti; and

- the manufacture and sale of specialty steel tubing through its Lita
subsidiary.

Additionally, the Company owns 84.35 % of the capital stock of O.A.M.
S.p.A., the entity which had owned Maserati S.p.A. Chrysler Corporation has
owned a 15.65% equity interest in O.A.M. since 1986.

The Company also owns 100% or controlling interests in the following
subsidiaries which are either inactive or which are being liquidated, and which
in the aggregate account for less than 1% of the consolidated net worth of the
Company: Tridentis, S.A., Newstead, Ltd., Finprogetti Servizi S.p.A., American
Finance, S.p.A., MAI, Inc. and Storm S.p.A.

The Company's strategic plan is to expand substantially the size and scope
of the Company's hands-on management and financing business in "turnaround" and
opportunistic investment situations. The Company intends to engage from time to
time in strategic relationships with other enterprises which are both well-
capitalized and which finance troubled and underperforming businesses or which
are seeking "local" partners with hands-on management capabilities.

The Company was incorporated under the laws of the State of Maryland in
1917.

The following table summarizes the subsidiaries' legal jurisdictions and
operations. The following charts depict the structure of the Company as at
December 31, 1995.

<PAGE>

The following is a textual summary of the current organizational chart
of the Company. The chart in graphical form is included in the paper version
of this filing:

The Company owns 100% of the equity interest in Maserati Automobiles, Inc.,
a Delaware corporation, Finprogetti International Holding, S.A. ("FIH") and
Finprogetti Servizi S.p.A. ("Servizi"). The Company owns a 99.9% equity
interest in Moto Guzzi S.p.A. ("Moto Guzzi") and American Finance S.p.A. ("AF"),
a 99.67% equity interest in Finprogetti Investimenti Immobiliari S.p.A.
("Immobiliari"), and a 45% equity interest in Temporary Integrated
Management S.p.A. ("TIM") all Italian corporations. FIH owns the remaining
.33% equity interest in Immobiliari. Servizi owns the remaining 55% equity
interest in TIM.

Moto Guzzi owns a 99.67% equity interest in Centro Ricambi S.r.l., an
Italian corporation, and a 25% equity interest in A+G Motorrad GmbH, a
German corporation.

AF owns a 100% equity interest in Tridentis Financiere, S.A. ("Tridentis"),
a Luxembourg corporation, an 83.92% equity interest in O.A.M. S.r.l. ("OAM"),
and a 99.9% equity interest in Storm S.r.l., Italian corporations. Tridentis
owns a 100% equity interest in Newstead, Ltd., an Ireland corporation.

Immobiliari owns a 99.9% equity interest in Pastorino Strade, S.r.l., a 25%
equity interest in Domer S.r.l., an 80% equity interest in Grand Hotel Bitia
S.r.l. and a 66.67% equity interest in Immobiliare Broseta S.r.l., all Italian
entities. FIH owns the remaining .10% equity interest in Pastorino Strade.
Domer owns a 68.19% equity interest in Interim S.p.A. which in turn owns the
remaining 33.33% equity interest in Immobiliare Broseta.

Servizi owns a 95.54% equity interest in Finproservice S.p.A., an Italian
corporation.

FIH owns a 99.9% equity interest in Lita S.p.A., an Italian corporation.

<PAGE>

(b) Financial Information About Industry Segments.
---------------------------------------------

Information on net sales, operating profit, depreciation and
amortization, capital expenditures and assets employed for each segment of the
Company's business for the three year period ended December 31, 1995 is
contained in Note 14 to the Financial Statements and is incorporated herein by
reference.

(c) Narrative Description of Business
---------------------------------
The Company has three (3) business segments: motorcycles, steel
tubing and commercial real estate development. Two such segments - motorcycles
and real estate - were material to the Company's 1995 results of operations.

(i) Motorcycles
-----------

The motorcycle segment continues to dominate reported results of
operations in 1995, accounting for approximately 89.5% of the Company's
consolidated net sales.

Moto Guzzi, the Company's 100%-owned motorcycle manufacturing
subsidiary, manufactures a high priced line of motorcycles under the trademark
"Moto Guzzi", and is the successor to businesses acquired by the Company in
1972. Moto Guzzi cycles vary in engine displacement from 300cc to 1,100cc,
although the subsidiary has made a strategic decision to concentrate development
and sales efforts on its largest motorcycles, having engines of 750cc or larger.
Moto Guzzi spare parts are distributed through Centro Ricambi S.r.l. ("Centro
Ricambi"), now a 100% owned subsidiary of Moto Guzzi following purchase of the
minority shareholding of 3.33% in the first quarter of 1996. Moto Guzzi had also
manufactured and sold smaller and lower priced cycles under the "Benelli"
trademark, but closed production of these vehicles in 1993. Moto Guzzi
continues to maintain a small inventory of Benelli motorcycles.

All motorcycle manufacturing is conducted at Moto Guzzi's Mandello, Italy
facility. Moto Guzzi manufactures certain power train components, acquires
certain other components from outside suppliers, and performs finishing work and
assembly into motorcycle bodies. Moto Guzzi's operations have been managed since
May 1994 by a T.I.M.-appointed manager.

Distribution
- ------------

Moto Guzzi maintains an Italian distribution network of over 200
independent dealers.

In 1995, a single importer-distributor acted as exclusive importer-
distributor for Moto Guzzi in each of France, Japan, Denmark, Finland, Germany,
Greece, Malta, New Zealand, Norway, Portugal, Sweden, Austria, Switzerland,
Australia, the U.K., the United States and Holland.

Moto Guzzi owns a 25% equity interest in A+G Motorod GmbH ("A+G"), a German
corporation, the majority of the shares of which is owned by Aprilia S.p.A.,
another Italian

<PAGE>

manufacturer of motorcycles with small displacement engines. A+G distributes
the motorcycles of both Moto Guzzi and Aprilia in the German market. An amended
shareholders' agreement has extended the current arrangement through December
31, 1996 by which time Moto Guzzi must decide to continue the existing
arrangement or to terminate it, with a view to distributing its products in
Germany directly or through another distributor.

No single Italian dealer accounted for more than 5% of the sales of Moto
Guzzi in 1995. The Italian dealers who distribute Moto Guzzi motorcycles
generally handle other brands as well.

Net Sales
- ---------

Since 1981, sales and production of Moto Guzzi motorcycles, with only
occasional interruptions, had been declining consistently. Production of Moto
Guzzi's larger Moto Guzzi machines declined from 2,935 units in 1992 to 2,175
units in 1993. Similar declines were sustained in the smaller Benelli
motorcycles (including Benelli models marketed as small Moto Guzzi models).

In 1994, following the engagement of T.I.M. to improve manufacturing and
sales results, Moto Guzzi's overall unit sales improved by 28% and production of
the company's larger machines expanded to 3,048 units. In 1995, units sales
increased by 23.1% from 4,278 in 1994 to 5,266 in 1995, of which 4,800 had
engine displacements of 350cc or greater and 466 had displacements of less than
350cc. Additionally, 448 Benelli motorcycles were sold from inventory.

All sales are invoiced in Italian lire except sales to the United States
which are invoiced in US dollars. Prices are customarily reviewed and are
increased to cover increases in production costs at periodic intervals and in
light of prevailing exchange rates. Italian prices for motorcycles traditionally
have been higher than export prices. In 1995, Moto Guzzi increased prices of its
various models twice, with such increases aggregating approximately 9% on
average for domestic sales and for export sales invoiced in lire and 4% in
respect of export sales to the US, which are invoiced in US dollars. Export
sales continued to reflect lower margins than domestic Italian sales.

Sales in 1995 of Moto Guzzi machines to the Italian and other governments
were 16.2% of its total motorcycle sales revenues.

Backlogs
- --------

Moto Guzzi's entire 1995 production capacity was covered by orders in hand
on January 1, 1995. Such orders were subject to cancellation without penalty.
Backlog of Moto Guzzi units for 1995 delivery at January 1, 1995 was
approximately Lit. 54,803,000,000 ($33,912,747) in the aggregate, representing
5,523 units. Backlog was approximately Lit 10,000,000,000 ($6,188,119) at
January 1, 1994. Orders for 1996 delivery exceed current production capacity

<PAGE>

and the Company expects it will again be unable fully to satisfy demand for its
motorcycles in the current year. Such orders too are cancelable without
penalty. The Company has drawn up a sales and production plan for 1996 for
approximately 6,400 motorcycles based on supplying strategic markets and
customers. Customarily, additional orders have been received during the course
of the year.

Moto Guzzi is seeking to increase production and productivity without
increasing the size of its work force by increased use of component outsourcing.

Competition
- -----------

The sale of motorcycles is a highly competitive business, with competition
typically coming from all powered passenger vehicles, as well as motorcycles.
The overall market in Italy contracted slightly in 1995, with new vehicle
registrations in Italy declining by 2.7% compared to 1994. Overall, Moto Guzzi
had a 2.3% share of the Italian domestic market in 1995 and sales of its largest
motorcycles (over 750 cc) represented approximately a 2.6% market share. Moto
Guzzi's share of the Italian market must be considered in the light of its
inability to meet demand in 1995 due to production capacity limitations, as
noted above.

The Italian market remains dominated by large, well-financed Japanese
manufacturers. A number of Italian and foreign manufacturers, principally
Cagiva, Honda, Yamaha, Kawasaki and Suzuki, sell their products in the Italian
market. In 1995, the Italian market shares of the principal competitors of Moto
Guzzi on a unit basis were as follows:

For the largest machines (over 750cc):

Harley Davidson - 19.7%; BMW - 17.5%; Ducati - 14.6%; Honda - 14.1%;
Suzuki- 9.3%; Kawasaki - 8.0%; Moto Guzzi 2.6%; Triumph 2.5%.

For all motorcycles:

Honda - 25.4%; Yamaha - 15.2%; Aprilia - 12.1%; Suzuki - 9.0 %; BMW - 6.7%;
Kawasaki - 6.6%; Ducati - 6.1%; Cagiva 5.2%; Harley Davidson - 4.1%; Motor Guzzi
2.3%.

Moto Guzzi maintains an extremely small share of the world-wide motorcycle
market, which is dominated by many of the same manufacturers that predominate in
Italy.

Raw Materials and Components
- ----------------------------

The source and supply of motorcycle raw materials, including aluminum for
power train components, is not a significant business risk for Moto Guzzi. There
are multiple reliable sources for components.

<PAGE>

The cost of imported raw materials is affected by variations in currency
exchange rates. In 1994, the value of the Italian lire had declined relative to
the currency of Italy's primary trading partners which resulted simultaneously
in an increase in the cost of imported raw materials and in an improvement in
the price competitiveness of Italian-made finished goods, such as Moto Guzzi's
motorcycles. In 1995, as a result of greater stability, currency exchange rates
had a less significant effect on costs and price competitiveness.

During 1995, the costs of materials and components for production of a
motorcycle increased by approximately 6.2% over 1994 average costs levels.
Approximately 4.8% of this was due to material cost increases, 1.2% to
outsourcing of certain components and 0.2% to technical improvements and
modifications to specifications. A significant element of the raw material price
increase was in respect of purchased aluminum components which increased by
approximately 30%, mainly due to aluminum prices.

Research and Development and Continuing Engineering
- ---------------------------------------------------

Moto Guzzi is continuously engaged in company-sponsored programs of product
improvement and development. Aggregate 1995 research and development
expenditures by Moto Guzzi were Lit. 861 million ($542,191) compared to Lit. 197
million ($124,055) in 1994, and Lit. 409 million ($257,557) in 1993. Of the Lit.
861 million expenditure in 1995, approximately Lit. 602 million was in respect
of development of models whose production will commence in 1996.

These on-going programs relate to developing more powerful engines with
improved performance and durability characteristics, superior braking systems,
suspensions, frames, transmissions and other components applicable to two-
wheeled vehicles.

Seasonal Nature of Business
- ---------------------------

Moto Guzzi's business has been turned around to the point that again it is
affected by seasonal factors. Retail market demand is highest in the spring and
early summer, whereas most sales to the Italian government take place in the
last quarter of the year. Moto Guzzi, like most Italian companies, traditionally
shuts down production in August of each year and traditionally also has reduced
production over the Christmas holidays and in the period immediately following,
while inventory is being taken. Moto Guzzi is now seeking to reduce the
production slowdown during this December-January period as part of its effort to
increase overall production levels by not suspending production during the
period of physical inventory taking.

Working Capital Items
- ---------------------

Moto Guzzi is not affected by any unusual industry practices relating to
returns of merchandise or extended payment, nor are they required to carry
unusually significant inventories. Due to a strategic decision to increase
component outsourcing, inventory levels

<PAGE>

increased in 1995. See "Management's Discussion and Analysis of Financial
Conditions and Results of Operations" below.

Patents and Trademarks
- ----------------------

Except as described below, the business of Moto Guzzi is not and has not
been in any material respect dependent upon patents, licenses, franchises or
concessions. The component parts of motorcycles are manufactured pursuant to
well known techniques and include components which are not unique to its
products, although some of these components are specially styled and designed.
Management believes that the trade name "Moto Guzzi" and the related trademarks
are well known and highly regarded throughout the world, and appropriate steps
have been taken to protect Moto Guzzi's rights in these trade names and
trademarks in those countries representing significant markets.

Compliance with Governmental Regulations
- ----------------------------------------

Moto Guzzi, along with other motorcycle manufacturers, has incurred
substantial costs in designing and testing products to comply with safety and
emissions requirements. Such standards have added, and will continue to add,
substantially to the price of the vehicles while competitive pressures have kept
export prices lower than domestic Italian sales prices.

The distribution of motorcycles in the United States is not subject to the
required federal safety equipment and damage susceptibility regulations
applicable only to automobiles, such as bumper durability, and front and side
impact resistance and passive restraint systems insofar as they relate to newly
manufactured post-1990 vehicles, nor to state or federal automobile fuel economy
or emissions regulations with respect to such vehicles.

All motorcycles produced by the Company and its subsidiaries for sale in
the United States are manufactured with the intent to comply with all applicable
federal safety standards. The Company's 1995 model year motorcycles comply with
EPA emission standards applicable in all 50 states.

Employees and Employee Relations
- --------------------------------

At December 31, 1995, Moto Guzzi had 338 employees, compared to 303 at
December 31, 1994, of whom approximately 74% were engaged in factory production
and the balance in various supervisory, sales, purchasing, administrative,
design, engineering and clerical activities. At December 31, 1995, Centro
Ricambi had 19 employees. Approximately 42% of Centro Ricambi's employees are
engaged in warehouse and shipping work, with the balance engaged in supervisory,
purchasing, administrative and clerical activities. Labor hourly costs increased
approximately 3.4% in 1995 at Moto Guzzi as a result of pay rises of 2.5% and a
bonus for reaching production targets of approximately 0.9%. Annualized labor
costs based on data through December 31, 1995 were approximately 17 % higher
than in 1994 in the aggregate due

<PAGE>

to the engagement of additional personnel, pay increases and increased overtime.
Overtime hours amounted to 9.6% of total hours in 1995 compared to 5.9% in 1994.

Moto Guzzi was not subjected to any strikes or work stoppages in 1995,
whereas two national strikes in 1994 cost Moto Guzzi 3,217 production hours. In
Modena, the local Centro Ricambi "company" contract expired on March 31, 1994. A
new contract has not yet been signed. Moto Guzzi's "company" contract was
renegotiated early in 1996. The terms of the renegotiation are not expected to
have a significant impact on labor costs. In 1995, Moto Guzzi did not avail
itself of any Italian government furlough program due to production furloughs.

Under Italian law, persons in a company acquire the right to severance pay
based upon salary and years of service. At December 31, 1995, the Company was
obligated to pay employees an aggregate of Lit. 8,231,00,000 ($5,183,000)
compared to Lit. 7,137,000,000 ($4,494,000) at December 31, 1994.

(ii) Steel Tubing
------------

Although not material to its 1995 consolidated operations, Lita, which was
acquired on July 25, 1995, is expected to be a material line of business in
1996. Summary information about Lita is therefore provided in this report.
All of the stock of Lita was acquired at a cost of Lit. 615,000,000 ($383,344),
representing a sizeable discount against the book value of its assets of Lit.
2,264,000,000 ($1,424,000). Lita manufactures plain and perforated molded steel
tubes used principally in the automotive and furniture industries. The
subsidiary's factory in Torino has a production capacity of approximately 15,000
tons, but the company produced at 60% of capacity in 1995 and has achieved
capacity utilization of less than 73% since 1992. T.I.M. had been engaged by
the former owners of Lita in October 1994 to provide management assistance, and
to assist in identifying potential acquirors. Since T.I.M.'s engagement, most
of the customers lost by Lita in 1994 have been regained, supplier relationships
re-established and export relationships established. As budgeted by T.I.M.'s
managers, Lita, in 1996, is accordingly expected to realize substantially higher
revenues than in 1995, and, as a consequence, is expected to become a material
subsidiary of the Company.

(iii) Commercial Real Estate Development Segment
------------------------------------------

The Company acquired as part of the Finprogetti transaction a real estate
portfolio, which it will seek to liquidate at opportune times. The portfolio
consists of investments in four properties in Italy and a minority shareholding
in a property development company.

Commercial property at Cologne, Italy, has a book value of Lit. 16,276
million and outstanding loans secured on the property amounting to Lit. 14,546
million at December 31, 1995. The Cologne property is approximately 22,000
square meters, 80% of which is currently rented to a multinational company under
an operating lease expiring in 1998. The remaining space can only be
commercially exploited after repairs to the existing structure. A sale, at
market value, of all or a portion of the Company's 100% interest to the
Company's

<PAGE>

affiliate, Interim S.p.A. is currently being examined. In current market
conditions, the Company expects to recover the book value of the property, after
depreciation through the date of sale.

The Company has a 66.7% interest in Immobiliare Broseta S.r.l. which owns
industrial and commercial holdings and additional surrounding land aggregating
approximately 66,000 square meters in Bergamo, Italy. The remaining 33.3% is
held by the Company's affiliate, Interim S.p.A. Net of minority interests
Broseta has a value of approximately Lit. 5,200 million in the Company's balance
sheet as at December 31, 1995. The real estate has a book value of Lit. 11,949
million and outstanding loans of Lit. 4,716 million and the major part of the
property is represented by six buildings to be restructured for residential use.
The Company is negotiating to dispose of its 66.7% interest in this property to
Domer S.p.A., at market value (which is not expected to be less than book
value), in return for secured loan notes and unsecured loan notes payable on the
earlier of completion and eventual sale of the development or three years.

The Company owns an 80% interest in unimproved land aggregating 2,539,020
square meters near Cagliari (Sardinia), Italy and which has a book value at
December 31, 1995 of Lit. 6,000 million. An unaffiliated third party has
acquired an option to purchase the Company's interest on or before June 30, 1996
for an amount above book value. The Company does not believe this option will
be exercised. The land has development potential for tourism or residential
purposes and the Company will explore its disposition following the lapse, or
otherwise of the outstanding option.

The Company owns a 100% interest in Pastorino S.r.l., which owns concession
rights over 196 spaces in a municipal parking garage in Genoa, Italy. The book
value of the concession rights is Lit. 4,641 million at December 1995. The
rights last until the year 2041 and are being depreciated over the period from
acquisition to this date. The Company has sub-contracted management of the
parking spaces under a three year contract and will consider disposition on the
termination of this contract or sooner, depending on market conditions.

The Company owns a minority interest in Interim S.p.A. (through a 25%
indirect interest in Domer S.p.A. which owns 68.2% of Interim S.p.A.).
Interim S.p.A. is a property development company based in Brescia, Italy which
has several projects under active development as at December 31, 1995. This
investment has a value of Lit. 1,630 million as at December 31, 1995 and the
Company has no current intention to dispose of it.

(d) Financial Information About Foreign and
Domestic (Italian) Operations and Export Sales
----------------------------------------------

Motorcycle Business
- -------------------

All motorcycle production occurs in Italy and foreign sales are made to
distributors located outside Italy. Most foreign sales are made to Western
European countries. Although

<PAGE>

in the aggregate sales outside of Italy are significant, sales to any particular
country other than France, Germany, the United Kingdom, Holland, Australia,
Japan, Austria and Switzerland are insignificant. In 1995, the Company had
aggregate sales outside of Italy of Lit. 35,634 million ($22,440,000)
representing 65% of total motorcycle sales.

Set forth below are charts illustrating percentage of motorcycle sales
revenues attributable to various geographic areas in the three most recent
fiscal years.

Geographic Areas
----------------
Year Ended December 31
Benelli & Moto Guzzi Motorcycles 1995 1994 1993
- -------------------------------- ---- ---- ----

Italy 35% 38% 35%
Europe (other than Italy) 49% 51% 41%
United States 6% 5% 6%
Elsewhere 10% 6% 18%

Steel Tubing
- ------------

All sales by Lita were made within Italy.

Item 2. Properties

The following facilities were, and unless so indicated, are presently,
leased or owned by the Company in the active conduct of its business:

(a) 1,460 square feet of office space at 107 Monmouth Street, Red Bank,
New Jersey 07701, in which are located the United States
administrative offices of the Company, and which is occupied under a
month-to-month lease, at a monthly rental of $970. It is anticipated
that the Company will relocate its administrative offices closer to
the region's international airports and to the residence of the
Company's President and CEO.

(b) Factory and office facilities owned in fee and located in Mandello del
Lario, Italy in a group of one, two and three story buildings
aggregating 54,550 square meters, and which is used by Moto Guzzi This
facility is currently operating at approximately 50% of production
capacity calculated as a percentage of available space, compared to a
utilization rate of 30% in 1994.

<PAGE>

(c) One single-story 2,800 square meter concrete building located in
Modena, Italy and completed in late 1983 with an 8 meter ceiling,
rented on a month-to-month basis by Centro Ricambi from De Tomaso
Modena, an affiliate of Mr. Alejandro De Tomaso, at a monthly rental
of Lit. 9,000,000 ($5,569) since January 1, 1984. This facility has
been fully utilized as a spare parts distribution facility for Moto
Guzzi. The subsidiary is seeking to relocate its operations to other
facilities.

(d) Office, retail showroom, service and warehouse space at 1501 Caton
Avenue, Baltimore, Maryland, situated on a 2.9 acre tract in a steel
and masonry building of approximately 25,000 square feet, owned by
MAI. The facility had operated at approximately 40% of capacity in
1994. Insofar as MAI has suspended operations, the facility became
vacant in 1995. The Company has agreed to sell the property and,
subject to obtaining a zoning variance from the City of Baltimore,
expects to consummate the sale prior to the end of the third quarter.
The agreement will expire in July 1996 if the variance has not been
obtained.

(e) A combined commercial and residential building in Rome owned by OAM.
The two-story building occupies approximately 1,100 square meters. The
commercial portion (the basement, ground floor and access ramp) is
rented to a Guzzi dealership pursuant to a long-term lease. The first
floor is rented for residential purposes, and contains approximately
152 square meters of space. The Company is attempting to dispose of
the property during the current fiscal year at not less than book
value.

(f) Offices aggregating 480 square meters in Milan, Italy, used by
Finprogetti Servizi, Finprogetti Investimenti Immobiliari and T.I.M.
are leased from an entity affiliated with Francesco Pugno Vanoni, the
Chairman of the Board of the Company, and his brother, at a cost of
Lit. 130,000,000 ($82,000) in 1995 under a lease expiring on August
31, 2000. The rental is believed to be comparable to rents paid for
similar facilities elsewhere in Milan.

(g) Warehouse, offices and surrounding land aggregating 63,874 square
meters in Cologne, Italy. Approximately 80% of the 22,122 square meter
office and warehouse space is rented to a single tenant at an annual
rental of Lit. 1,280,000,000 ($806,000) and negotiations are
proceeding to rent the remainder of the space to the tenant. The
Company is negotiating the disposition of the property, which is
encumbered by a Lit. 14,546 million ($9,160,000) mortgage.

(h) Unimproved land aggregating 2,539,020 square meters in Cagliari,
Italy. The Company, through Finprogetti Immobiliari, owns an 80%
interest therein, and is exploring its disposition. An unaffiliated
third party has acquired an option to purchase the Company's interest
on or before June 30, 1996 for Lit. 10,600,000,000 ($6,675,000) less
outstanding debt.

<PAGE>

(i) Industrial and commercial holdings and additional surrounding land
aggregating 66,301 square meters in Bergamo, Italy. The Company owns,
directly or indirectly through its Finprogetti subsidiaries, a 66.7%
interest in the property which is available for development but is
essentially unused. The sites include six structures which date from
the 17th century. The Company is currently negotiating to dispose of
this property and related debt of Lit. 4,716 million.

(j) Offices aggregating 150 square meters in Brescia, Italy used by
Finproservice S.p.A. at an annual rental of Lit. 16,000,000 ($9,901)
under a six year lease expiring in 2001.

(k) Subconcession rights to 196 spaces in a municipal parking garage in
Genoa, Italy. The spaces are managed by an unaffiliated party under an
agreement which expired in June 1995. Subsequently, the Company has
sub-contracted management of the parking spaces under a three year
contract and will consider disposition on the termination of this
contract or sooner, depending on market conditions.

(l) The Company also owns minority interests in entities which own other
property in Bergamo and Brescia.

(m) Factory and related commercial facility aggregating approximately
10,000 square meters in Torino, Italy leased by Lita, used at
approximately 60% of capacity.

Item 3. Legal Proceedings
- ------ -----------------

A shareholder has commenced a litigation in federal court seeking to compel
the Board of Directors to hold a shareholders meeting relating to the 1993 sale
of Maserati to Fiat. The Company believes the action is without merit, and, in
any event, will be rendered moot by the expected ratification of such sale by
the shareholders at the forthcoming shareholder's meeting.

The Company and its subsidiaries are involved in litigation in the normal
course of business, Management does not believe, based on the advice of its
legal advisors, that the final settlement of such litigation will have an
adverse effect on the Company's consolidated financial position as at December
31, 1995.

Item 4. Submission of matters to a vote of Security Holders
- ------ ---------------------------------------------------

(a) A Vote of Security Holders

None.

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
- ------ ---------------------------------------------------------------------

As of March 28, 1996, there were 1,334 holders of record of the Company's
common stock.

<PAGE>

The Company's common stock traded on the non-NASD over-the-counter market,
commonly called the "pink sheets" in 1993 and until September 23, 1994. Since
September 24, 1994, the common stock has traded on the NASDAQ small-
capitalization market system. The reported prices represent inter-dealer
prices, which do not include retail mark-ups, mark-downs, or any commission to
the broker-dealer, and may not necessarily represent actual transactions.

Bid Prices

1993 High Bid Low Bid
---- -------- -------

1st Quarter 3 1/2 3 1/2
2nd Quarter 4 1/2 4
3rd Quarter - -
4th Quarter 2 2

1994
----

lst Quarter 3 2 1/2
2nd Quarter 5 1/2 2 1/2
3rd Quarter through September 23 5 1/2 4
September 26 through September 30 5 4 1/2
4th Quarter 9 1/4 4 1/4

1995
----

lst Quarter 9 1/2 7 3/4
2nd Quarter 9 5/8 8 1/2
3rd Quarter 9 3/4 9 3/8
4th Quarter 10 1/2 9 1/2

1996
----

January 1 through March 28 11 10 1/4

No dividends were declared or paid during 1993, 1994 or 1995. The Company
does not believe that its capital needs will permit the payment of a dividend in
the foreseeable future.

<PAGE>

Item 6. Selected Financial Data
- ------ -----------------------
Year ended
December 31 Years ended December 31,
1995 1995 1994 1993 1992 1991
--------------------------------------------------------------------------
US$(1)
(Millions of Italian Lire - except for per share amounts)
<S> <C> <C> <C> <C> <C> <C>

Net Sales $ 45,499 Lit. 72,253 51,994 41,919 45,346 32,219

Loss from continuing operations
before extraordinary items (4,395) (6,980) (3,277) (6,736) (3,967) (9,811)

Net (loss)/income (4,395) (6,980) (3,277) 153,497 (2) (75,984) (17,320)

Loss per share from continuing
operations before extraordinary
items (1.30) (2,065) (1,593) (2,203) (1,928) (4,769)

Net (loss)/income per share (1.30) (2,065) (1,593) 50,204 (2) (36,931) (8,418)

Total Assets 115,133 182,830 118,661 127,556 223,295 264,724

Long-term debt 11,397 18,098 5,004 5,738 71,949 (3) 32,056
</TABLE>

Cash dividends paid per
common share Dividends have not been paid in the past.

1995 figures include the effects of acquisitions of certain subsidiaries and
assets from Finprogetti S.p.A. and of Lita S.p.A.

1 The above information for the year ended December 31, 1995, expressed
in Italian Lire, has been translated into U.S. Dollar equivalents in
thousands of dollars (except for per share amounts), at the rate of
exchange prevailing at December 31, 1995. The prevailing exchange
rates as at the end of the five most recently completed fiscal years
is as follows:

1,588 Lire per U.S. Dollar at December 31, 1995
1,622 Lire per U.S. Dollar at December 31, 1994
1,713 Lire per U.S. Dollar at December 31, 1993
1,478 Lire per U.S. Dollar at December 31, 1992
1,147 Lire per U.S. Dollar at December 31, 1991

The high, low and average conversion rates for the years 1991-1995 are
as follows:
High Low Average
---- --- -------
1995 1,767 1,565 1,626
1994 1,689 1,539 1,612
1993 1,713 1,478 1,574
1992 1,475 1,066 1,243
1991 1,364 1,089 1,241

2 Includes a gain of Lit. 160,233 million (Lit. 52,407 per share)
resulting from the sale of the Company's 51% interest in Maserati
S.p.A. to Fiat.

3 Long-term debt in 1992 includes advances from affiliates of Lit.
61,000 million.

<PAGE>

Item 7. Management's Discussion and Analysis of
Financial Conditions and Results of Operations
----------------------------------------------

General
- -------

The acquisition of T.I.M. as part of the Finprogetti transaction enables
the Company to apply that subsidiary's management skills to "turn around"
troubled companies, enhancing their value. The significant progress achieved at
Moto Guzzi at which an operating loss of only Lit. 45,000,000 ($28,000) was
realized in 1995, bears witness to the importance of that transaction. Based on
its 1996 production budget, Moto Guzzi's unit production and sales should
increase by 20% over 1995 levels.

The acquisition of Lita S.p.A. at a price substantially below its book
value illustrates how a T.I.M. management engagement for a client can give rise
to an opportunistic investment. Lita, a manufacturer of steel tubing, expects
to realize increases in production and revenues over 1995 levels of 50% and 73%
respectively. Lita's 1996 operations will be material to the Company's
operations.

T.I.M.'s management engagements frequently involve "turn around" plans
requiring financial restructurings. Such restructurings frequently involve the
need for new capital, as well as the need for creditors to forgive debt or to
convert debt into equity. Each such engagement affords the Company an
investment opportunity. What distinguishes the company from other financial
investors is that the Company, in investing its capital, relies on its own
management skills rather than those of others. The real estate holdings
acquired from Finprogetti, while currently constituting material assets on the
Company's balance sheet, are intended to be disposed of, with the net proceeds
to be utilized to make investments in companies to be managed by T.I.M.

In reviewing the information that follows, the reader should think of the
Company as management and capital resources which are brought to bear through
the operation of and investments in troubled companies, with the objective of
realizing operating profits and investment gains.

Results of Operations
- ---------------------

Overview
- --------

Net Sales

Overall the Company has seen a growth of 38.7% in net sales in 1995
compared to 1994 as follows:

Organic Growth of motorcycle segment 30.4%
Acquired businesses 14.4%
Disposed operations (5.9%)

<PAGE>

Margins

Underlying margins in the motorcycle business, the Company's largest,
increased to 15.1% in 1995 from 13.5% in 1994. Margin growth has, however, been
contained by reserves and writeoffs for inventory and tooling resulting from
strategic decisions to concentrate on larger motorbikes and largely to abandon
the smaller "Moto Guzzi" and "Benelli" models. The motorcycle business was
still in a turnaround phase at the end of 1995 and, while results achieved in
1995 are very encouraging, further work remains to put this business on a sound
"stand-alone" basis. Margins in 1995 were also affected by a large increase in
product development costs from Lit. 197 million in 1994 to Lit. 861 million in
1995.

Margins decreased slightly in 1994 compared to 1993, due largely to a
favorable reduction of obsolescence reserves in 1993 outweighing a small
improvement in the motorcycle business in 1994.

Selling, General and Administrative Expenses

Selling, general and administrative expenses reflect an increase of
approximately Lit. 2,200 million (US $1,385,000), resulting from the Finprogetti
and Lita businesses acquired. Direct transaction costs of Lit. 1,224 million
(US $771,000) were capitalized as part of the purchase cost but, more generally,
costs of reorganizing the Company's operating structure have added to expense in
1995 while the benefits will accrue to future periods. The Company's new
operational structure, which was put in place in the second half of 1995, has a
higher cost than in prior periods which the Company will seek to recover from
bringing certain accounting and legal functions in-house, from retainer and
success fees from services to third parties and operating profits and investment
gains from Portfolio Companies.

There have also been small increases of administrative costs at Moto Guzzi
reflecting investment in personnel for new computer systems and a management
group to control outsourcing. Reductions in selling, general and administrative
expenses in 1994 compared to 1993 largely reflect the efforts of T.I.M. in
reducing costs at Moto Guzzi during the early phase of that company's
turnaround.

Interest Income and Expense

Interest income in 1994 was significantly influenced by Lit. 2,976 million
($1,874,000) of imputed interest on the final installment of Lit. 27,000 million
due from Fiat for the sale of Maserati to Fiat in 1993 which was received on
January 1, 1995.

Interest expense has also been significantly affected by the Finprogetti
and Lita acquisitions which have resulted in an increase of approximately Lit.
1,100 million of interest expense in the six months since acquisition,
principally from real estate loans. External interest expense relative to Moto
Guzzi has also increased over 1994, due mainly to build-up of

<PAGE>

inventory levels. Interest expense in 1994 declined from 1993 due to disposal
of debt and advances from banks relating to the disposition of Maserati.

Taxation

The Lit. 420 million tax charge on operating losses from continuing
operations of Lit. 6,110 million appears as anomalous. It results from the fact
that most of the Company's operations are in Italy where companies are taxed on
their individual results without the possibility of filing consolidated returns.
The Company's corporate and tax structure will be examined in 1996 to seek to
improve tax efficiency.

Discontinued operations

In May 1993, the Company completed the disposition of its remaining equity
interest in its Maserati S.p.A. subsidiary. Maserati, which manufactured
Maserati and Innocenti automobiles, had been the Company's most significant
industry segment until its disposition.

Net Loss

The principal reasons for the increased loss in 1995 compared to 1994 are
as follows: (1) Management made a strategic decision to focus Moto Guzzi
production on a small number of large, high priced models, resulting in
increases in inventory reserve and write-offs of tooling of approximately
Lit. 1,800 million ($1,134,000) and research and development expenses for new
models which was more than Lit. 600 million ($378,000) above 1994's level;
(2) the Company incurred interest expense associated with the real estate
acquired from Finprogetti of approximately Lit. 1,000 million ($630,000), and
exchange losses of approximately Lit. 900 million ($567,000) arising from a
domestic currency swap related to the planned self-tender and from short term
intercompany advances from subsidiaries.

The loss of Lit. 3,277 million in 1994, compared to Lit. 6,736 million in
1993, declined as a result of the commencement of the turnaround at Moto Guzzi
since T.I.M. managers took charge in May 1994, and net interest benefits arising
from the proceeds from the sale of Maserati.

<PAGE>

Motorcycles
- -----------

Summary Information (in millions of lire)

Net sales to unaffiliated customers, in millions of Italian lire:
'95-'94 '94-'93
1995 1994 Growth % 1993 Growth %
---- ---- -------- ---- --------

Motorcycles 55,218 40,714 35.6% 29,986 35.8%
Parts 9,453 8,135 16.2% 7,498 8.5%

Results:

Operating loss (45) (632) (846)

Net sales exclude sales of parts from Moto Guzzi to its spare parts
distribution subsidiary. Operating loss is total revenues less operating
expenses, excluding interest, corporate expenses and other income/(expense).

Net Sales and Orders

Units sold increased to 5,266 in 1995 up from 4,278 in 1994 (excluding
clearance of old Benelli inventory), with significant growth in the sales of the
Company's larger and more expensive models (over 750 cc), where sales increased
to 4,800 units from 4,149 units. Moto Guzzi increased prices of its various
models twice in 1995, with such increases aggregating approximately 9% on
average for domestic sales Italy and for export sales invoices in lire and 4% in
respect of export sales to the United States, which are invoiced in US dollars.
Unit sales in 1994 improved 28% from 1993 unit sales.

Sales in 1995 of Moto Guzzi motorcycles to Italian and foreign government
bodies amounted to 16.2% of total motorcycle sales revenues (1994 - 17.7%).
While sales to government bodies in Italy are significant as a whole to Italian
sales, sales to no single government agency are significant.

The strong growth in motorcycle sales must be viewed in the light of
production capacity restraints. Orders in 1995 were in excess of production
capacity. Orders for 1996 delivery also exceed current production capacity and
the Company expects it will again be unable fully to satisfy demand for its
motorcycles in the current year. The Company has drawn up a sales and
production plan for 1996 based on supplying strategic markets and customers for
approximately 6,400 motorcycles. Orders received for the current fiscal year,
as in prior years, are subject to cancellation by the purchaser(s) without
penalty.

<PAGE>

Margins

Underlying margins, excluding the effects of non-recurring items and
research and development expenditure, have improved from 13.5% in 1994 to
15.1% in 1995. Reported margins for 1995, however, have been contained to only
11.3% as a result of approximately Lit. 1,800 million of non-recurring reserves
and write-offs of inventory and tooling resulting from the strategic decision to
concentrate on larger motorbikes and largely abandon the smaller "Moto Guzzi"
and "Benelli" models and increased research and product development expenditures
of Lit. 861 million compared to Lit. 197 million in 1994.

The increase in underlying margins in 1995 results from generally favorable
selling price increases compared to unit cost increases. Unit production costs
have benefitted from increased volumes and reduced per unit absorption of fixed
costs, but have been affected by inflation price increases of 4.8%, increased
labor costs from pay increases and high overtime levels and increased
outsourcing which alone has caused a 1.2% cost increase. Export sales continued
to reflect lower margins than domestic Italian sales.

The Company's plan is to continue to increase outsourcing as this will
enable higher volumes which are expected to more than compensate the higher cost
of externally manufactured components.

Raw Material Prices

A significant element of the raw material unit price increase in 1995 over
1994 of 4.8% has been in respect of purchased aluminum components which
increased in price by approximately 30%, mainly due to the increased price of
aluminum on world markets. There have been no other significant raw material
price changes other than increases in line with inflation.

The Company's decision to outsource a larger number of components in 1995
has had a negative impact on unit prices of approximately 1.2%, compared to
1994.

Labor Costs

Annualized labor costs, based on data through December 31, 1995, were
approximately 17% higher than in 1994 in the aggregate due to the engagement of
additional personnel (357 compared to 322), pay increases and increased
overtime. Overtime hours amounted to 9.6% of total hours in 1995 compared to
5.9% in 1994. Hourly labor costs increased approximately 3.4% in 1995 as a
result of pay rises of 2.5% and a bonus for reaching production targets of
approximately 0.9%.

Two national strikes in 1994 cost 3,217 production hours. There were no
strikes or work stoppages in 1995.

<PAGE>

Expenses

Selling, general and administrative expenses have increased from Lit. 4,931
million in 1994 to Lit. 6,378 million ($4,016,000) in 1995. This includes an
exceptional bad debt expense of Lit. 425 million ($268,000) and exchange losses
of Lit. 338 million ($218,000) as well as investments in personnel for planned
changes in information management systems and a new work group to coordinate all
aspects of outsourcing.

Operating Loss

As a result of increased revenues, increased margins and increased
productivity, Moto Guzzi reduced its operating loss significantly from 1994
levels, achieving a virtual break even operating result.

Impact of Changing Prices and Exchange Rates

Inflation continues to have an impact on the motorcycle business. As noted
above, aluminum component prices increased by approximately 30% in 1995,
compared to 1994, mainly due to the increased metal commodity price. Overall
unit material cost increases were approximately 6.2% and labor unit cost
increases were 3.2%.

Both raw material costs and export selling prices are affected by exchange
rates. Approximately 67% by units and 65.3% by sales are represented by exports
which are denominated in lire except for sales to the United States, which are
denominated in U.S. dollars and are not significant to overall sales. Exchange
rates were relatively stable in 1995 against other major currencies.

To the extent permitted by competition, the company seeks to pass its
increased costs from changing prices on to its customers by increasing selling
prices. Currently, the Company is still benefitting from the devaluation of the
Lire in 1993, following its exit from the European Exchange Mechanism and has
been able to pass on cost increases in 1995 in its selling prices.

The Company's properties were acquired many years ago and the depreciation
charges are significantly lower than if they were based on current prices.
Other plant and machinery will be replaced over future years at higher costs
with higher depreciation charges which, in many cases, may be offset by
technological improvements. The Company accounts for inventories on the last-
in-first-out (LIFO) method, under which the cost of sales reported in the
financial statements approximates current costs and thus provides a closer
matching of revenues and costs in periods of increasing costs.

<PAGE>

Steel Tubing
- ------------

Summary Information (in millions of lire)

1995 (five months)
----

Net Sales to unaffiliated customers 5,831

Operating profit 235

Operating profit/(loss) is total revenues less operating expenses,
excluding interest, corporate expenses and other income/(expense).

General

Lita S.p.A. is located in Torino and is specialized in the production of
plain and perforated high frequency welded tubes destined for the autovehicle
sector (65%), furniture (14%), white goods (9%) and other minor market sectors
(12%). Products included aluminized steel welded tubes, aluminum clad steel
tubes, cold-rolled and hot-rolled steel welded tubes in various shapes (round,
rectangular, oval, square etc) from 10 - 65mm diameter and sold both in sections
of 6 m. (industry standard) and other lengths to meet particular client
requirements. Production takes place in a factory of approximately 10,000 m2
which is owned by the subsidiary's founding family. Annual production capacity
(two shifts) is approximately 15,000 tons.

T.I.M. has worked with Lita since 1994 in preparation for it becoming
autonomous. It was previously owned by a multinational group. As a result of
the previous owners policy, Lita did not export, volumes had constantly reduced
since 1993 and customers had been lost as its production declined. Most of the
customers lost in 1994 have now been regained, supplier relationships re-
established and the companies image in the market restored.

Net sales

The results of Lita S.p.A. are included in operations since July 26, 1995.
Considering the shut-down for most of August, net sales represent approximately
4 months results. Total net sales for fiscal 1995 amounted to Lit. 14, 541
million.

Operating Profit

The results of Lita in the limited period since acquisition must be
considered very satisfactory, considering that these are after fees paid to
T.I.M. of Lit. 184 million.

<PAGE>

Lita is autonomously financed by credit lines secured on trade receivables
and, accordingly, its positive results can be directly compared with the Lit.
615 million investment made in July 1995.

Real Estate
- -----------

The Company's real estate operations were acquired from Finprogetti in
1995. The Company does not plan to remain engaged in the segment on a long
term basis.

Summary Information (in millions of lire)

1995 (six months)
----

Rental income 770
Operating loss (92)
Real estate book values December 31, 1995 34,227
Related loans, December 31, 1995 19,262

Operating profit/(loss) is total revenues less operating expenses,
excluding interest, corporate expenses and other income/(expense).

Rental income

Rental income is in respect of one commercial property, Cologne,
approximately 80% of which is rented to a multinational company at an annual
rental of Lit. 1,280 million and income from a parking concession in Genoa.
Rentals from Cologne amounted to Lit. 690 million and from the parking
concessions, Lit. 80 million in the six months to December 31, 1995. Rentals
for Cologne are indexed to the cost of living index and the rental agreement
expires in 1988. Other properties, described briefly below, are under
development or awaiting development and have no operating income.

Profitability

The real estate business is not currently profitable due to depreciation,
real estate taxes and company administration costs exceeding rental income.

Development and Sale Prospects

The Company is seeking to dispose of two of its properties before the end
of the second quarter, with particular concern to dispose of the related
mortgage debt liabilities. Negotiations are at an advanced stage, though
currently there is no certainty that the transactions described below will be
completed.

The Company expects to sell its 66.7% owned investment in land and
contiguous industrial areas in Bergamo to its 25% affiliate, Domer S.p.A., at
book value in exchange for a purchase consideration comprised of loan notes
payable and assumption of debt due in 1996 of Lit. 4,716 million.

<PAGE>

The Company is seeking to sell all or a portion of its 100% interest in
Cologne at book value, also to Domer S.p.A. or Interim S.p.A. The finance
structure for such transaction has yet to be agreed. In the second case,
Interim would assume responsibility for payments due on related mortgage debt
through 1996.

The Company will examine disposal opportunities of its remaining real
estate property, comprising undeveloped land in Sardinia, following expiration
or exercise of an option held by a third party (in an amount above the carrying
value of the property) which option expires on June 30, 1996.

Liquidity and Capital Resources
- -------------------------------

Corporate Resources and Commitments

The Company has approximately Lit. 24,100 million ($15,200,000) of cash and
Lit. 17,100 million ($10,705,000) of investments in certificates of deposit and
other similar securities as at December 31, 1995. A tax receivable of
approximately Lit. 5,200 million ($3,275,000) has been reimbursed to the Company
since December 31, 1995.

Approximately Lit. 16,200 million ($10,200,000) of the investments are held
as security for a bank letter of credit issued to guarantee repurchase at a
price of $11.27 per share by the Company of 776,520 shares formerly owned by the
ex-Chairman of the Company, Mr. De Tomaso and now held by a trust. At the
exchange rates in effect on December 31, 1995, the total dollar liability is
less than Lit. 14,000 million ($8,816,000) and the Company is seeking to release
the excess security.

The Company plans to conduct a redemption offer to purchase up to 80% of
the shares held of record by each of its public shareholders at $12.26.
Shareholders representing 66.55% of outstanding stock as at December 31, 1995
have agreed not to participate. It is anticipated that the redemption offer
will be initiated before the end of the second quarter of 1996.

The following proforma analysis shows the effects on cash, investments and
shareholder's equity if the planned redemption offer is accepted by 100% of
those shareholders entitled to participate and the commitment to purchase the
shares formerly owned by Mr. De Tomaso were effected as at December 31, 1995:

Lit. m Cash Investments Equity

Financial Statements . . . . . . 24,137 17,176 51,221

Shares subject to repurchase . - (13,897) -

Redemption offer . . . . . .(24,564) - (24,564)
------- ------ ------
Proforma . . . . . . . . . . . (427) 3,279 26,657
======= ====== ======

<PAGE>

Apart from the Italian real estate properties and tax refund discussed
above, the Company expects to sell a property owned by its closed Maserati
distributor in Baltimore for a net price of approximately Lit. 1,750 million
($1,100,000) in the second quarter of 1996 and plans to undertake a public
offering of its securities which it hopes to consummate, if at all, before the
end of the third quarter of the current year.

Management is confident that the Company's current liquid assets and
liquidable assets are more than adequate to enable the Company to meet all of
its intended obligations in the current fiscal year, including providing cash
for operations and its planned self-tender. Management intends that the net
proceeds of its planned public offering of securities, if consummated, will be
used to fund opportunistic investments arising from its management engagements.

Other corporate matters

On January 1, 1995, the Company received the final installment of Lit.
27,000 million ($17,003,000) from the sale of its Maserati subsidiary in 1993.
Lit. 23,750 million had been received in 1994 from this sale and was applied to
finance investments in securities and reductions in advances from banks.
Proceeds (advances) in 1994 had largely been applied to offset negative
operating cash flows of Maserati prior to its sale and in Moto Guzzi.

The Company received Lit. 8,204 million in 1995 from shares issued in
respect of the Finprogetti acquisition and paid Lit. 5,000 million to repurchase
shares formerly owned by its former Chairman, Mr. Alejandro De Tomaso. Both
these cash movements are only a part of larger transactions and reference is
made to Note 3 of Notes to the Financial Statements, below, and Item 1 of the
Company's 10-K, above, for a complete description.

Tax receivables for value added taxes and taxes on income amounting to
approximately Lit. 14,500 million (of which Lit. 5,150 were acquired in the
Finprogetti transaction) have represented a significant drain on liquidity
during 1993 to 1995. Approximately Lit. 5,200 million has been received in
January 1996 and will be applied to offset corporate expenses and to the planned
redemption offer. The timing of receipt of further amounts is uncertain.

Other corporate assets and liabilities include finance receivables and
payables acquired as part of the Finprogetti acquisition. The Company intends
not to enter into new finance transactions through the acquired Finprogetti
subsidiary with third parties and expects that these balances will rapidly
reduce in 1996 with no significant net inflows from or outflows to support these
operations.

Corporate expenses, less interest receivable

The Company's corporate expenses, less corporate income from treasury
management and recharge of services to third parties has given rise to
significant negative cash flow in 1995 and

<PAGE>

corporate net of services invoiced to subsidiaries and third parties, will give
rise to negative cash flow in 1996.

Corporate expenses, at a lower level, in 1994 were largely covered by cash
flows from operations.

Real estate

The major effects on liquidity and capital resources of real estate
activities derive from principal repayments of loans and interest on such loans.
In 1995, since acquisition in July 1995, there were negative cash flows of
approximately Lit. 2,000 million principally as a result of loan repayments and
interest.

Of the loans secured on the Company's real estate investments as at
December 31, 1995, Lit. 9,550 million (relative to the Cologne and Broseta
properties) is repayable in 1996. As noted above, the Company is seeking to
dispose of both of these properties before the end of the second quarter and,
thereby to eliminate these obligations.

If the Cologne property is not disposed of then the Company estimates that
net cash outflows for the real estate sector will total approximately Lit. 5,000
million in 1996, largely due to current loan payments.

Operating subsidiaries

Working Capital

Moto Guzzi's working capital increased significantly at December 31, 1995
over December 31, 1994 as a result of a buildup of inventory. The buildup was
the outgrowth of Moto Guzzi's strategic decision significantly to increase
component outsourcing to increase productivity. Management believes that 1995
year end inventory levels as a percentage of 1995 revenues (37%) is higher than
optimal. The 1996 outsourcing budget contemplates that by the end of the 1996
fiscal year, inventory will fall below 30% of expected revenues.

In 1995, the Company rearranged loans of Lit. 4,151 million in default as
at December 31, 1994, along with accrued interest and exchange movements for
part of the loan denominated in ECU, into a renegotiated loan facility of Lit.
5,248 million repayable in installments over five years. Trade credit
facilities, primarily lines of credit for bank advances against account
receivables have also been arranged and Moto Guzzi has total facilities of Lit.
18,300 million as at March 1996, as well as import/export facilities. In total,
facilities are sufficient for planned operations, though not for significant
capital investment (see below).

A capital increase of Moto Guzzi by way of waiver of non-interest bearing
intercompany debt was also made in 1995. This covered accumulated local losses
and increased the share capital by approximately Lit. 6,000 million.

<PAGE>

The Company will also record a profit for local accounting purposes for 1995.
While not affecting consolidated reported results, these changes and results
have given increased respectability and access to credit in Italy to the
Company.

The Company is actively seeking financing for a capital expenditure
programme which is an important part of Moto Guzzi's longer-term turnaround
plan. Currently, such financing has not been arranged.

Lita, the steel tubing subsidiary, is autonomously financed and has access
to bank advances against trade receivables and unsecured bank borrowings.
Facilities at December 31, 1995 amounted to Lit. 6,000 million against which
Lit. 3,425 million of advances had been drawn.

<PAGE>

ANNUAL REPORT ON FORM 10-K

ITEM 8, ITEM 14(A)(1) AND (2) AND ITEM 14(D)

LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES AND
SUPPLEMENTARY DATA

YEAR ENDED DECEMBER 31, 1995

DE TOMASO INDUSTRIES, INC

RED BANK, NEW JERSEY

<PAGE>

REPORT OF INDEPENDENT AUDITORS

Shareholders and Board of Directors
De Tomaso Industries, Inc.

We have audited the consolidated balance sheets of De Tomaso Industries, Inc.
and subsidiaries as of December 31, 1995 and 1994, and the related consolidated
statements of operations, shareholders' equity and cash flows for each of the
three years in the period ended December 31, 1995, all expressed in Italian
Lire. Our audits also included the financial statement schedule listed in the
index at Item 14(a). These financial statements and schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and related schedules are free of material misstatement. An audit
incudes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above, present
fairly, in all material respects, the consolidated financial position of De
Tomaso Industries, Inc. and subsidiaries at December 31, 1995 and 1994, and the
consolidated results of its operations and its cash flows for each of the three
years in the period ended December 31, 1995, in conformity with accounting
principles generally accepted in the United States of America. Also, in our
opinion, the related financial schedule, when considered in relation to the
basic consolidated financial statements taken as a whole, present fairly in all
material respects the information set forth therein.

RECONTA ERNST & YOUNG

April 3, 1996
Milan, Italy

<PAGE>

DE TOMASO INDUSTRIES, INC. AND SUBSIDIARIES
BALANCE SHEETS
DECEMBER 31, 1995 AND 1994

DECEMBER 31 DECEMBER 31 DECEMBER 31
1995 1995 1994
NOTE US$'000 LIRE M. LIRE M.

<S> <C> <C> <C> <C>
ASSETS

CASH AND CASH EQUIVALENTS............................ 15,200 24,137 5,286
MARKETABLE SECURITIES, AT COST....................... -- -- 5,000
RECEIVABLES.......................................... 25,016 39,726 48,259
Trade, less allowance of Lit. 1,268 in
1995 and Lit. 571 in 1994....................... 14,940 23,725 14,416
Finance receivables, less allowance of Lit. 2,200. 4,784 7,597 -
Receivables from related parties.................. 12 2,282 3,624 1,521
Other receivables................................. 3,010 4,780 5,322
Installment receivable from sale of subsidiary.... - - 27,000

INVENTORIES.......................................... 19,343 30,717 20,174
Raw materials, spare parts and work-in-process.... 13,520 21,469 17,609
Finished products................................. 5,824 9,248 2,565

PREPAID EXPENSES..................................... 698 1,109 1,322

------------ ------------ ------------
TOTAL CURRENT ASSETS 60,257 95,689 80,041
------------ ------------ ------------

PROPERTY, PLANT AND EQUIPMENT........................ 4,855 7,709 12,954
Land.............................................. 679 1,078 1,123
Buildings......................................... 2,782 4,418 10,346
Machinery and equipment........................... 19,136 30,388 29,790
------------ ------------ ------------
22,597 35,884 41,259
Less allowances for depreciation.................. (17,742) (28,175) (28,305)
------------ ------------ ------------

TRADEMARKS AND OTHER INTANGIBLE ASSETS NET OF
AMORTIZATION OF LIT. 250 MILLION................... 2,991 4,750 -
GOODWILL............................................. 919 1,459 -
REAL ESTATE FOR SALE................................. 4 21,554 34,227 -
INVESTMENTS IN UNCONSOLIDATED COMPANIES.............. 1,389 2,205 259
MARKETABLE AND OTHER SECURITIES AND INVESTMENTS...... 10,816 17,176 14,759
OTHER ASSETS......................................... 5 12,352 19,615 10,648

------------ ------------ ------------
TOTAL ASSETS $ 115,133 LIT. 182,830 LIT. 118,661
============ ============ ============

</TABLE>

See Notes to Consolidated Financial Statements

F-1

<PAGE>

DE TOMASO INDUSTRIES, INC. AND SUBSIDIARIES
BALANCE SHEETS
DECEMBER 31, 1995 AND 1994

December 31 December 31 December 31
1995 1995 1994
Note US$'000 Lire M. Lire M.

<S> <C> <C> <C> <C>
LIABILITIES

Advances from banks.............................. 6 11,674 18,538 15,784
Advances from banks for finance activities....... 6 5,429 8,621 -
Accounts payable................................. 14,843 23,570 12,838
Accrued expenses................................. 7 5,725 9,092 11,981
Amounts due to related and affiliated parties.... 12 321 509 35
Income taxes payable............................. 9 389 617 -
Current portion of long-term real estate debt.... 8 6,014 9,550 -
Current portion of other long-term debt.......... 8 1,175 1,866 5,681

----------- ----------- ------------
TOTAL CURRENT LIABILITIES 45,570 72,363 46,319
----------- ----------- ------------

Long-term real estate debt, less current portion. 8 6,116 9,712 -
Other long-term debt, less current portion....... 8 5,281 8,386 5,004
Termination indemnities ......................... 5,183 8,231 7,137
Provision for claims ............................ 2,264 3,595 3,195

Minority interests............................... 10,562 16,773 13,849
Common Stock subject to repurchase............... 3,15 7,902 12,549 -

SHAREHOLDERS' EQUITY............................. 32,255 51,221 43,157

Voting preferred stock, convertible share for
share into common stock par value $2.50 per
share:
Authorized 2,000,000 shares; 1,000,000 - - 1,453
shares issued and outstanding in 1994..........
Common stock, par value $2.50 per share:
Authorized 10,000,000 shares; 4,714,332
(1994 - 2,057,446) shares issued and
outstanding less 776,530 subject to
repurchase..................................... 4,247 6,744 2,988
Additional paid in capital....................... 44,919 71,332 47,543
Treasury stock, at cost.......................... (7,447) (11,826) -
Deficit.......................................... (10,030) (15,926) (8,946)
Equity adjustment from translation............... 448 711 119
Accretion expense and related exchange gains..... 118 186 -

----------- ----------- ------------
$115,133 Lit. 182,830 Lit. 118,661
=========== =========== ============
</TABLE>

See Notes to Consolidated Financial Statements

F-2

<PAGE>

DE TOMASO INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENT OF OPERATIONS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

1995 1995 1994 1993
US$'000 Lire m. Lire m. Lire m.
<S> <C> <C> <C> <C>

Net sales......................................... 45,499 72,253 51,994 41,919
Cost of sales..................................... (39,931) (63,410) (46,256) (36,060)
---------- ---------- ---------- -----------
5,568 8,843 5,738 5,859

Selling, general and administrative expenses...... (10,220) (16,230) (10,818) (12,439)
Rental income..................................... 485 770 - -
Other income, net................................. 323 513 990 1,117
---------- ---------- ---------- -----------
(3,844) (6,104) (4,090) (5,463)

Interest expense.................................. (2,801) (4,448) (3,874) (8,033)
Interest income................................... 2,797 4,442 5,536 6,772
---------- ---------- ---------- -----------

Loss from continuing operations before
income taxes and minority interests.............. (3,848) (6,110) (2,428) (6,724)
Income taxes...................................... (264) (420) (39) (12)
---------- ---------- ---------- -----------
Loss from continuing operations before
minority interest................................ (4,112) (6,530) (2,467) (6,736)
Minority interests................................ (283) (450) (810) 0
---------- ---------- ---------- -----------

Loss from continuing operations................... (4,395) (6,980) (3,277) (6,736)

Discontinued operations........................... - - - 160,233

Loss from operations.............................. - - - (22,885)
Gain on disposal (net of minority interest of
Lit. 13,039)..................................... - - - 183,118

---------- ---------- ---------- -----------
NET (LOSS)/INCOME................................. $ (4,395) LIT. (6,980) LIT. (3,277) LIT. 153,497
========== ========== ========== ===========

EARNINGS/(LOSS) PER SHARE US$ LIRE LIRE LIRE

LOSS FROM CONTINUING OPERATIONS PER SHARE......... $ (1.30) LIT. (2,065) LIT. (1,593) LIT. (2,203)
DISPOSED OPERATIONS............................... $ - LIT. - LIT. - LIT. 52,407
---------- ---------- ---------- -----------
NET INCOME/(LOSS) PER SHARE....................... $ (1.30) LIT. (2,065) LIT. (1,593) LIT. 50,204
========== ========== ========== ===========

AVERAGE NUMBER OF COMMON SHARES AND
EQUIVALENTS OUTSTANDING
DURING THE YEAR.................................. 3,380,441 3,380,441 2,057,446 3,057,446

EARNINGS PER SHARE IF PREFERRED SHARES
HAD BEEN CONVERTED AND REPURCHASED
JANUARY 1, 1995................................. (1.25) LIT (1,978)

</TABLE>

See Notes to Consolidated Financial Statements

F-3
<PAGE>

DE TOMASO INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

LIRE MILLION Voting Additional Retained Accretion
preferred Common paid-in Earnings/ Treasury Translation Expense,
stock stock capital (deficit) stock Adjustment Net Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>

AT JANUARY 1, 1993 LIT. 1,453 2,988 47,453 (159,166) - 695 (106,487)
Net income for the year - - - 153,497 - - - 153,497
Translation adjustment - - - - - (1,129) - (1,129)
---------- --------- ----------- ---------- --------- ------------ ---------- -----------
AT DECEMBER 31, 1993 LIT. 1,453 2,988 47,453 (5,669) - (434) - 45,881
Net loss for the year - - - (3,277) - - - (3,277)
Translation adjustment - - - - - 553 - 553
---------- --------- ----------- ---------- --------- ------------ ---------- -----------
AT DECEMBER 31, 1994 LIT. 1,453 2,988 47,453 (8,946) - 119 - 43,157
Net loss for the year - - - (6,980) - - - (6,980)
Translation adjustment - - - - - 592 - 592
Conversion of shares (1,453) 1,453 - - - -
Repurchase of shares (A) - - - - (11,826) - - (11,826)
Shares subject to - (1,128) (11,607) - - - 186 (12,549)
repurchse (B)
Issues of shares - 3,431 35,396 - - - - 38,827

---------- --------- ----------- ---------- --------- ------------ ---------- -----------
AT DECEMBER 31, 1995 LIT. - 6,744 71,332 (15,926) (11,826) 711 186 51,221
---------- --------- ----------- ---------- --------- ------------ ---------- -----------

---------- --------- ----------- ---------- --------- ------------ ---------- -----------
AT DECEMBER 31, 1995 $'000 - 4,247 44,919 (10,030) (7,447) 448 118 32,255
========== ========= =========== ========== ========= ============ ========== ===========

</TABLE>

(A) Treasury stock represents 703,774 shares recorded at cost.

(B) Shares subject to repurchase relate to 776,530 shares subject to repurchase
under certain conditions on July 17, 1998, as described in Note 3. Such shares
were recorded at the date of the contingent repurchase agreement at their
estimated market value of $10.00 (Lit. 16,400) per share. Accretion expense
represents amortization over the period through July 17, 1998 of the difference
between market value and the agreed repurchase price of $11.27, net of exchange
movements.

See Notes to Consolidated Financial Statements

F-4

<PAGE>

DE TOMASO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
DECEMBER 31, 1995, 1994 AND 1993

1995 1995 1994 1993
US$'000 Lire m. Lire m. Lire m.
<S> <C> <C> <C> <C>
Net (loss)/income (4,395) (6,980) (3,277) 153,497
Adjustments to reconcile net (loss)/income to net
Cash (used)/provided by operating activities:
Depreciation and amortization 1,883 2,990 1,907 5,886
Gain on sales of operating assets (154) (244) (2,841) -
Minority interests in net income 283 450 810 13,039
Gain on sale of stock of subsidiary - - - (196,157)
Provision for termination indemnities 753 1,196 1,027 1,058
Payments of termination indemnities (638) (1,013) (1,135) (561)
Provision for inventory obsolescence 990 1,572 669 1,261
Other operating activities 1,316 2,089 1,512 (1,067)

CHANGES IN OPERATING ASSETS AND LIABILITIES:
Trade and other receivables 766 1,217 (1,103) 781
Related party receivables (857) (1,361) 903 4,689
Inventories (5,702) (9,055) 509 (8,314)
Prepaid expenses 269 427 (546) (667)
Accounts payable and accrued expenses 2,083 3,308 2,170 (4,591)
Related party payables (495) (786) (178) 64
-------- -------- -------- --------
NET CASH (USED)/PROVIDED BY OPERATING ACTIVITIES (3,898) (6,190) 427 (31,082)
-------- -------- -------- --------

INVESTING ACTIVITIES:
Decrease/(Increase) in investments 2,038 3,236 (14,468) -
Purchase of subsidiaries, net of cash acquired (751) (1,193) - -
Proceeds on disposal of operating assets 679 1,079 2,911 -
Deferred receipts from sale of Maserati 17,003 27,000 23,750 -
Purchases of property, plant and equipment (1,747) (2,775) (1,131) (1,369)
-------- -------- -------- --------
NET CASH PROVIDED/(USED) BY INVESTING ACTIVITIES 17,222 27,347 11,062 (1,369)

Financing activities

Net increase/(decrease) in advances from banks (2,374) (3,770) (7,211) 5,192
Proceeds from share issues 5,166 8,204 -
Repurchase of shares (3,149) (5,000) - -
Advances for sale of Maserati - - - 28,500
Proceeds from long-term debt 247 392 - -
Principal payments of long-term debt (1,317) (2,091) (1,654) (2,028)
-------- -------- -------- --------
NET CASH PROVIDED/(USED) BY FINANCING ACTIVITIES (1,427) (2,265) (8,865) 31,664
-------- -------- -------- --------

Increase/(decrease) in cash and cash equivalents 11,897 18,892 2,624 (787)
Exchange movement on opening cash balances (26) (41) - -
Cash and cash equivalents, beginning of period 3,329 5,286 2,662 3,449
------ -------- -------- --------
Cash and cash equivalents, end of period $ 15,200 Lit. 24,137 Lit. 5,286 Lit. 12,662
======== ======== ======== ========

</TABLE>
F-5

<PAGE>

DE TOMASO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
DECEMBER 31, 1995, 1994 AND 1993

SUPPLEMENTAL SCHEDULE OF NON CASH INVESTING AND FINANCING ACTIVITIES

The transactions referred to below are detailed in Note 3.

In connection with the Finprogetti acquisition, the Company issued stock for
Lit. 38,223 million in exchange for cash of Lit. 8,204 million and assets with a
fair value of Lit. 29,707 million net of advances from banks of Lit. 12,572
million and long-term debt of Lit. 19,431 million. Cash acquired amounted to
Lit. 631 million. The Company also paid costs, included in the total purchase
price, of Lit. 1,224 million in this transaction.

In connection with the repurchase of stock formerly owned by the ex Chairman,
also described in Note 3, the Company gave assets with a book value of Lit.
6,629 million as part of the consideration for the stock repurchased.

The Company issued stock with a value of Lit. 603 million to purchase the
minority shareholding in its motorcycle subsidiary, GBM S.p.A.

The Company assumed advances from banks of Lit. 3,425 million in connection with
the acquisition of Lita. S.p.A. and acquired each of Lit. 15 million.

OTHER SUPPLEMENTAL INFORMATION

Interest paid in 1995 amounted to Lit. 4,416 million and Lit. 4,051 million and
Lit. 14,379 million in 1994 and 1993 respectively.

See Notes to Consolidated Financial Statements

F-6

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

1. BACKGROUND AND ORGANIZATION

De Tomaso Industries Inc. is incorporated in the United States but operates
primarily in Italy, managing troubled and underperforming Italian companies. It
provides temporary management services to third parties and its subsidiaries
which operate in three industry segments: the manufacture and distribution of
"Moto Guzzi" brand motorcycles in Italy, Europe and elsewhere in the world; the
manufacture and distribution of steel tubes for the automotive and furniture
markets; and the development and sale of commercial real estate property.
Information on the Company's operations by segment and geographic area are
included in Notes 13 and 14 to the Financial Statements.

The primary financial statements are shown in Italian lire because all of the
Company's material operating entities are based and operate entirely in Italy.
Translation of lire amounts into U.S. Dollar amounts is included solely for the
convenience of the readers of the financial statements and has been made at the
rate of Lit. 1,588 to US $1, the approximate exchange rate at December 31, 1995.
It should not be construed that the assets and liabilities, expressed in US
dollar equivalents, can actually be realized in or extinguished by US dollars at
that or any other rate.

In these Financial Statements, the word "Company" is used to denote De Tomaso
Industries, Inc. and its subsidiaries.

2. SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The consolidated financial statements include the accounts of the Company and
its majority owned subsidiaries. Significant intercompany accounts and
transactions have been eliminated on consolidation.

Use of estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from these assumptions.

F-7

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Foreign currency translation

The financial statements of non Italian entities have been translated from the
applicable functional currency to Italian lire using the year-end exchange rate
for balance sheet items and the average exchange rate for the year for statement
of operation items. The translation differences resulting from the change in
exchange rate from year to year have been reported separately as a component of
shareholder's equity.

Foreign currency transactions

Transactions, receivables and payables denominated in currencies other than the
functional currency are recorded at the exchange rate in effect on the
transaction date. Such receivables and payables are adjusted to current
exchange rates as of the date paid or the balance sheet date, whichever is
earlier. Gains and losses are included in the statement of operations.

Cash equivalents

The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.

Revenue recognition

Revenues from sale of products are recorded upon shipment, which is generally
when title passes.

Research and development

The Company's motorcycle business is continuously engaged in company-sponsored
programs of product improvement and development. Other businesses do not
conduct research and development activities. Research and development costs are
expensed as they are incurred.

Aggregate 1995 research and development expenditures were Lit. 861 million
($542,000) compared to Lit. 197 million in 1994, and Lit. 409 million in 1993.
Of the 1995 expenditure, approximately

F-8

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Lit. 602 million ($379,000) was in respect of the development of models whose
production is planned to commence in 1996.

Inventories

Inventories are stated at the lower of cost or market with cost being determined
principally by the last in, first out (LIFO) method applying average cost of the
year to increases in inventory quantities. If inventories had been determined by
the lower of cost or market value using the first in, first out (FIFO) methods,
which approximates current cost, inventories would have been greater by
approximately Lit. 2,000 million in 1995 and Lit. 4,900 million in 1994.

Valuation reserves included in the inventory balances were Lit. 6,612 million
($4,164,000) and Lit. 5,451 million as of December 31, 1995 and 1994,
respectively.

Property, plant and equipment

Property, plant and equipment are recorded at cost. Depreciation is provided on
the straight-line method over the estimated useful lives of the assets.

Goodwill and other intangibles

On the purchases of businesses or other assets, the excess of purchase cost over
fair value of assets acquired is accounted for as goodwill and is amortized on a
straight line basis over a period determined by the Company taking into
consideration the nature of the business or assets acquired. Goodwill in the
balance sheet as at December 31, 1995 relative to the Finprogetti acquisition is
being amortized over 10 years. Where the fair value of assets acquired is higher
than the purchase price, then the excess is applied to reduce firstly the long-
term intangible assets acquired, then other long-term assets and fixed assets.

Trademarks and other intangibles, in respect of the Company's temporary
management subsidiary, are being amortized over 10 years. Concession rights,
included in other assets (Note 5), are amortized over the life of the
concession.

F-9

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Real estate for sale

It is the Company's intention to sell its real estate portfolio. Properties are
valued at estimated market value, allowing for depreciation through to the
expected dates of sales. In the absence of definite contracts for sale, no
amounts have been included in current assets at December 31, 1995.

Marketable and other securities and investments

Marketable and other securities and investments consist primarily of fixed
income investments which cannot be readily sold using established markets. Such
securities are carried at fair value which approximates cost plus accrued
interest. Lit. 15,000 million of such amounts are deposited as security in
respect of the Company's commitment to repurchase the shares which were
previously owned by its former Chairman (see Notes 3 and 15). At December 31,
1994, there were marketable securities included for Lit. 5,000 million in
respect of government bonds which could be readily sold using established
markets and which were valued at cost plus accrued interest which approximated
market value.

Termination indemnities

All employees of the Company's Italian subsidiaries are entitled to receive
severance pay in accordance with the terms of applicable national labor law and
contracts. The liability for severance pay is accrued for service to date and is
payable immediately on termination. The liability is calculated in accordance
with the individual employee's length of service, employment category and
compensation and is adjusted annually by a cost of living index provided by the
Italian Government. There is no vesting period or funding requirement associated
with the liability. The liability recorded in the balance sheet is the amount
that the employee would be entitled to if the employee separates immediately.

Income taxes

Income taxes are provided by each entity included in the consolidation in
accordance with local laws. Deferred income taxes have been provided using the
liability method in accordance with FASB Statement No. 109 Accounting for Income
Taxes.

F-10

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Statements of cash flow

The cash flows for the roll-over of maturing fixed-term securities into new
securities is included in the caption "Net Decrease/(Increase) in Investments"
in the Consolidated Statement of Cash Flows. Advances from banks arise
primarily under the Company's short-term lines of credit with its banks. These
short-term obligations are payable on demand. The cash flows for these items
are included in the caption "Net increase/(decrease) in advances from bank" in
the Consolidated Statements of Cash Flow.

Net income/(loss) per common share

Net income/(loss) per common share is based on the average number of shares of
common stock and dilutive common stock equivalents outstanding during the years.
All outstanding convertible preferred stock of the Company (which were converted
during 1995) were considered to be common stock equivalents and were considered
anti-dilutive for 1994.

Reclassifications

Comparative figures for 1994 and 1993 have been reclassified to conform with
1995 presentation.

Impact of recently issued Accounting standards

In March 1995, the FASB issued Statement No. 121, Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, which requires
impairment losses to be recorded on long-lived assets used in operations when
indicators of impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than the assets' carrying amounts.
Statement 121 also addresses the accounting for long-lived assets that are
expected to be disposed of.

The Company will adopt Statement 121 in the first quarter of 1996 and, based on
current circumstances, does not believe that the effects of adoption will be
material.

F-11

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

3. ACQUISITIONS AND PURCHASE OF TREASURY STOCK

Finprogetti acquisition

On July 17, 1995, effective July 1, 1995, pursuant to the terms of the
"Finprogetti Agreement" the Company acquired from Finprogetti S.p.A. (an Italian
entity) all of that company's equity interests in its principal operating
subsidiaries and a tax receivable of Lit. 5,150 million in exchange for shares
of the Company. The operating subsidiaries comprised TIM, a temporary management
company specialized in the "turnaround" of troubled and underperforming Italian
and foreign companies, subsidiaries holding Italian real estate buildings and
concession rights and a leasing/factoring company, Finproservice. As part of the
same transaction, the Company acquired the minority interest in TIM from Dott.
Albino Collini, its founder and CEO. Under the terms of the Finprogetti
Agreement, the final number of the Company's shares to be issued was conditional
on the purchase before September 30, 1995 by Finprogetti S.p.A., or its
shareholders or third parties directed by it, of a specified number of shares in
the Company at a stipulated price of Lit. 20,106.73 ($12.26 at then-current
exchange rates) per share. After the receipt of cash of Lit. 8,204 million
(approximately U.S. $5,000,000) for the subscription to 408,008 shares, the
Company adjusted the number of shares to be given so that 1,922,652 shares were
issued to effect the acquisition from Finprogetti S.p.A., in addition to the
shares issued in exchange for cash. Of the total number of shares issued of
2,330,660 for the acquisition from Finprogetti, including the subsequent
purchase of 408,008 shares, 248,673 are to be held in escrow pending
realization by the Company of the tax receivable of Lit. 5,150 million that
was included in the assets acquired.

The Lit 39,447 million total purchase price reported in the balance sheet to
effect the Finprogetti Agreement reflects Lit. 38,223 million (Lit. 16,400 per
share; U.S.$10.00 per share) assigned to the 2,330,660 shares issued plus costs
of Lit. 1,224 million incurred in connection with the acquisition. The
acquisition has been accounted for by the purchase method. Accordingly, the
purchase price has been allocated to the assets purchased and the liabilities
assumed based on the fair values at the date of the acquisition. The purchase
price was allocated as follows:

US$'000 Lire m.

Cash 5,166 8,204
Real estate interests 21,479 34,109
Concession rights over real estate 2,960 4,700
Less: related long-term debt (12,238) (19,431)
Trademark and other intangible assets 3,148 5,000
Other assets and liabilities, net 3,355 5,329
Goodwill 967 1,536
------- -------
24,837 39,447
======= =======

F-12

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

3. ACQUISITIONS AND PURCHASE OF TREASURY STOCK (Continued)

The excess of the purchase price paid over the fair values of the net assets
acquired has been recorded as goodwill, which is being amortized in accordance
with the Company's policy. Results of the Finprogetti companies are included in
operations from July 1, 1995 and the amount of goodwill amortization for fiscal
year 1995 was Lit. 77 million.

Lita acquisition

On July 25, 1995, the Company acquired Lita S.p.A., an Italian manufacturer of
steel tubes for the motor and furniture industries for cash in the amount of
Lit. 615 million ($387,000). The fair value of the assets received was Lit.
1,649 million ($1,038,000) in excess of the purchase price. This excess has been
allocated to reduce the carrying value of property, plant and equipment by Lit.
1,482 million ($933,000) and other non-current assets by Lit. 167 million
($105,000). A valuation allowance was established against the deferred tax asset
arising from the adjustment of the book basis of the assets. When realized the
tax benefit will be credited to income.

Purchase of treasury stock

In April 1995, the Company entered into an agreement with Mr. Alejandro De
Tomaso (DeTomaso Agreement), the then Chairman of the Board, under which the
Company would repurchase Mr. De Tomaso's 1,000,000 shares of preferred stock and
480,304 shares of common stock at a price of Lit. 18,400 per share, converted
into dollars at the exchange rate in effect on closing date of Lit. 1,637.

Prior to the closing of that transaction, Mr. De Tomaso conveyed such shares,
subject to the DeTomaso Agreement, by gift. The shares are currently held by a
trust.

Performance under the De Tomaso Agreement was conditional upon the consummation
of the Finprogetti acquisition. Contemporaneously with the closing of that
transaction, 703,774 of the preferred and common shares formerly owned by Mr. De
Tomaso were delivered to the Company in exchange for cash of Lit. 5,000 million
and properties (a hotel and a museum collection of Maserati vehicles and
engines) that had a book carrying value of Lit. 6,629 million. The remaining
preferred and common shares formerly owned by Mr. De Tomaso have been exchanged
for an equal number of shares of newly issued common stock, which the Company is
required to register for sale at the request of the holder.

F-13

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

3. ACQUISITIONS AND PURCHASE OF TREASURY STOCK (Continued)

The value of Lit. 11,826 million (Lit. 16,804 per share; $10.26 per share)
placed on the Treasury stock acquired in 1995 pursuant to the DeTomaso Agreement
represents the book value of the consideration, including taxes payable of Lit
197 million, given in exchange for the treasury stock and no net gain or loss
has been recognized on the transaction.

Under the terms of the De Tomaso Agreement, if the remaining 776,530 shares are
not sold by their current owner prior to July 17, 1998 (the third anniversary of
the Finprogetti transaction), the Company is committed to acquire the shares at
$11.27 per share. The Company has obtained a letter of credit to guarantee
payment of the repurchase price which is collateralized by certain investment
securities owned by the Company and reported in the balance sheet in the amount
of Lit. 16,518 million. The agreement also provides that (a) at any time prior
to July 17, 1998, the Company may offer to buy any part or all of such shares at
$11.27 per share and (b) if such an offer made by the Company is not accepted,
the Company's commitment to buy the remaining 776,530 shares is reduced by the
number of shares stipulated in the offer that was not accepted. These 776,530
shares were recorded on the balance sheet at July 17, 1995 at estimated market
value of $10.00 (Lit. 16,400 per share) as shares subject to repurchase and are
not included in shareholders' equity. The difference between $10.00 and the
redemption price of $11.27 is being amortized over the period to July 17, 1998.

Proforma information

The pro forma unaudited results of operations for the years ended December 31,
1995 and 1994, assuming the Finprogetti and Lita acquisitions and the repurchase
of shares from the former Chairman had been consummated as at January 1, 1994,
are as follows:

F-14

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

3. ACQUISITIONS AND PURCHASE OF TREASURY STOCK (Continued)

1995 1995 1994
US$'000 Lire m. Lire m.

Net sales 51,891 82,403 66,870
Rental income 1,242 1,972 4,640
Finance income 1,032 1,639 2,686

Net loss (4,848) (7,699) (7,021)

Net loss per common share $(1.03) Lit. (1,369) Lit. (1,499)

It cannot be inferred that the proforma operating results as shown above would
have resulted had the acquisitions and repurchase of shares been consummated as
at January 1, 1994 as transactions between the entities acquired and their then
parent companies may not have occurred or may have occurred on different terms
and conditions.

4. REAL ESTATE FOR SALE

1995 1995
US$'000 Lire m.

Building ready for sale 10,249 16,276
Real estate under development
Buildings 5,568 8,842
Industrial areas 1,959 3,109
Undeveloped land 3,778 6,000
------- -------
21,554 34,227
======= =======

All of the real property was acquired as part of the Finprogetti transaction.
Part of one building ready for sale is rented to a third party under an
operating lease agreement expiring in 1998. A mortgage over the building and a
lien over the rentals received has been given as security for this loan (see
Note 8). The Company is seeking to dispose of this property by the end of the
second quarter of 1996. Alternatively, a sale of a significant interest in the
property with proceeds sufficient to cover all debt repayments on related loans
in 1996 is being examined, again with the objective of completion within the end
of the second quarter of 1996.

F-15

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

4. REAL ESTATE FOR SALE (Continued)

A building and contiguous industrial areas under development are mortgaged in
favor of a financial institution as collateral for a loan facility of Lit. 6,000
million, which has not yet drawn upon. Bank advances from another institution of
Lit. 4,716 million have been drawn down, secured by such loan facility and are
included in the short-term portion of real estate debt (see Note 8). The Company
has agreed in principle to sell its 66.7% interest in this property to its 25%
affiliate, Domer S.p.A. at book value. Closing of this transaction is expected
before the end of the second quarter.

Undeveloped land represents an area in Sardinia for development of hotel and
leisure facilities and is owned by the Company through an 80% interest in Grand
Hotel Bitia S.r.l. The minority shareholder has an option, expiring on June 30,
1996, to purchase the Company's interest at a price above carrying value. The
Company will examine disposal of this property following the exercise or expiry
of the outstanding option.

None of the proposed disposals have been finalized and, accordingly, no amounts
in respect of real estate are included in current assets.

5. OTHER ASSETS

1995 1995 1994
US$'000 Lire m. Lire m.

Concession rights net of
amortization of Lit. 59 2,923 4,641 -
Tax receivables 9,160 14,546 10,292
Other 269 428 356
------ ------ ------
12,352 19,615 10,648
====== ====== ======

A mortgage over the concession rights has been granted as collateral for certain
loans (see Note 8). Tax receivables represent amounts for which reimbursement
has been requested. Current tax balances for value added and other taxes to be
utilized against future liabilities are included in current assets. The times
for reimbursement in Italy have, in the recent past, invariably been in excess
of 12 months and, accordingly, amounts for which reimbursement has been
requested are not classified as current assets. Interest accrues on these
receivables at rates set from time to time by the Italian Government.

F-16

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

6. ADVANCES FROM BANKS AND CREDIT ARRANGEMENTS

The operating subsidiaries of the Company have lines of credit arrangements with
a number of Italian banks. Under these, the Company, at December 31, 1995, could
have borrowed up to Lit. 18,550 million ($ 11,681,000). The line of credit
arrangements do not have termination dates and are periodically reviewed. At the
end of March 1996, facilities totalling Lit. 23,570 million had been arranged.
The average interest rate on advances from banks was approximately 12.75% and
12.9% at December 31, 1995 and 1994. Advances from banks for finance
activities relate to factoring and leasing activities of a company acquired
in the Finprogetti acquisition and are partly secured by guarantees
given by Finprogetti S.p.A. The average interest rate on these borrowings was
approximately 12.75% as at December 31, 1995. No significant new finance
transactions will be entered into and these activities and relative facilities
will gradually expire as individual positions are closed.

7. ACCRUED EXPENSES

1995 1995 1994
US$'000 Lire m. Lire m.

Salaries, wages and related items 2,186 3,471 4,717
Value added and other non income taxes 1,001 1,590 1,550
Other accrued expenses 2,538 4,031 5,714
----- ----- ------
5,725 9,092 11,981
===== ===== ======

F-17

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

8. LONG-TERM DEBT

Long-term debt from real estate activities:

1995 1995
US$'000 Lire m.
Mortgage note payable secured on
land and buildings. Interest at a rate of
11.95%, payable in semi-annual installments,
final installment due in 1998 5,668 9,000

Mortgage note payable secured on land,
buildings, concession rights and lien on rents.
12.55%, payable in semi-annual
installments, final installment due in 1999 3,492 5,546

Advances in respect of mortgage loan
granted but not drawn down (see below) 2,970 4,716

------- -------
12,130 19,262
Less current portion (6,014) (9,550)
------- -------
6,116 9,712
------- -------
======= =======

All of the above long-term debt was acquired as part of the Finprogetti
transaction (see Note 3). The Company has in place a mortgage loan facility of
Lit. 6,000 million secured on land and buildings and has drawn down advances
from another financial institution, secured by this facility, of Lit. 4,716
million ($2,970,000) which are included above. The mortgage loan, when drawn
down, will be repayable in installments.

F-18

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

8. LONG-TERM DEBT (Continued)

Other long-term debt:

1995 1995 1994
US$'000 Lire m. Lire m.
Mortgage note payable, collateralized by
substantially all property, plant and
equipment of the motorcycle operations.
10.08% interest p.a., payable in semi-
annual installments, including interest 1,834 2,913 3,255

Unsecured notes payable:
12.40% interest p.a., payable in semi-annual
installments, including interest 3,305 5,248 4,151
12.36% interest p.a., payable in semi-annual
installments, including interest 1,301 2,066 2,443

Unsecured note payable denominated
in Swiss Francs at 5.15% interest, p.a. - - 796

Sundry notes payable 16 25 40

------ ------ ------

6,456 10,252 10,685
Less current portion (1,175) (1,866) (5,681)
------ ------ ------
5,281 8,386 5,004
====== ====== ======

As at December 31, 1994 a loan of one of the Company's subsidiaries of Lit.
4,151 million ($2,613,000) was technically in default and was classified as a
current liability. During 1995, the Company renegotiated this loan, including
accrued interest and unrealized exchange losses on a portion denominated in ECU,
in a new facility repayable over five years.

F-19

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

8. LONG-TERM DEBT (Continued)

Maturities of long-term debt over the next five years are as follows:

Real Estate Loans Other Loans
----------------------- --------------------
US$'000 Lire m. US$'000 Lire m.

1996 6,014 9,550 1,175 1,866
1997 3,147 4,998 1,234 1,959
1998 2,132 3,386 1,294 2,055
1999 837 1,328 1,361 2,162
2000 - - 1,008 1,601
Subsequent to 2000 - - 384 609
------ ------ ------ ------
12,130 19,262 6,456 10,252
====== ====== ====== ======

As discussed in Note 5, the Company is seeking to dispose of its real estate
interests. Disposals, planned to be completed before the end of the second
quarter of 1996, would eliminate the related real estate loans above.

9. INCOME TAXES

Loss from continuing operations before income taxes, minority interests and
extraordinary items consisted of the following:

1995 1995 1994 1993
$'000 Lire m. Lire m. Lire m.

United States (3,742) (5,942) (413) (1,650)
Italy (106) (168) (2,015) (5,074)
------- ------- ------- -------
(3,848) (6,110) (2,428) (6,724)
======= ======= ======= =======

F-20

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

9. INCOME TAXES (Continued)

The provisions/(credit) for income taxes from continuing operations consisted of
the following:

1995 1995 1994 1993
$'000 Lire m Lire m. Lire m.
Current taxation
United States - - - -
Italy 264 420 39 12
----- ----- ----- -----
264 420 39 12
===== ===== ===== =====

Deferred taxation
United States - - - -
Italy - - - -
------ ------ ----- ------
264 420 39 12
====== ====== ===== ======

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Valuation allowances have
been recorded for the deferred tax assets as management believes it more likely
than not that these assets will not be realized. Significant components of the
Company's deferred tax assets as of December 31, 1995 are as follows:

1995 1995 1994
$'000 Lire m. Lire m.

Short-term reserves 2,666 4,234 6,574
Carrying values of fixed assets 2,023 3,212 -
Net operating loss carryforwards 8,004 12,710 21,503
Other 120 191 -
--------- --------- ---------
12,813 20,347 28,077
Valuation allowance (12,813) (20,347) (28,077)
--------- --------- ---------
Net deferred tax assets - - -
========= ========= =========

F-21

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

9. INCOME TAXES (Continued)

The effective provision/(credit) for income taxes from continuing operations
varied from the income taxes at the statutory US federal income tax rates as
follows:

1995 1995 1994 1993
$'000 Lire m. Lire m.Lire m.

Computed tax/(credit) at U.S.
federal rate (1,347) (2,138) (850) 2,353
Losses for which valuation
allowance has been provided 2,004 3,181 889 (2,341)
Utilization of tax losses (491) (780) - -
Elimination of intercompany profit 312 496 - -
Other (213) (339) -
-
------ ------ ----- -----
264 420 39 12
====== ====== ===== =====

At December 31, 1995 the Company had net operating loss carryforwards for
Italian income tax purposes of approximately Lit. 25,340 million ($15,958,000)
which expires as follows:

1995 1995
US$'000 Lire m.

1996 61 97
1997 2,159 3,428
1998 10,814 17,172
1999 2,218 3,522
2000
706 1,121
------ ------
15,958 25,340
====== ======

For US Federal income tax purposes, the Company has net operating loss
carryforwards of approximately US$ 6,000,000 at December 31, 1995. These losses
expire from 2003 through 2010.

United States income taxes have not been provided on unremitted earnings of
subsidiaries located outside the United States as such earnings are considered
to be permanently reinvested. Approximately Lit. 4,800 million of earnings of
foreign subsidiaries cannot be distributed under local laws.

F-22

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

10. CAPITAL STOCK

248,673 common stock shares issued as part of the Finprogetti acquisition (see
Note 3) do not have a right to vote until receipt of a Lit. 5,150 million tax
receivable that was included in the assets acquired.

The Company has entered into a commitment to repurchase shares from its ex-
Chairman in respect of 776,530 shares as described in Note 3 and 15.

11. STOCK OPTIONS

The Board of Directors of the Company have approved two share options plans for
1,300,000 shares in total, to be submitted to the forthcoming shareholder's
meeting for their approval.

The "1995 Non-Qualified Plan" provides for the grant of non-qualified stock
options for officers and key employees. Options over a total of 1,150,000 shares
have been authorized by the Board. Grants were made in 1995 (subject to approval
of the plans) of a total of 960,000 options at an exercise price of $12.26. The
options granted can be exercised as follows:

1996 228,000
1997 228,000
1998 228,200
1999 138,000
2000 138,000

Under the "1995 Director's Plan", 5,000 options will be granted annually to each
non-employee Director of the Company for each full year of service, reduced pro
rata for incomplete years of service. The exercise price is fixed as at a price
of $12.26 for 1995 and, for years after 1995, at the reported closing price of
the stock on January 2 of the following year.

When shareholders' approval is obtained, the Company will account for stock
options in accordance with APB No. 25 which requires recognition of compensation
expense when the fair value of the stock exceeds the exercise price.

F-23

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

12. RELATED PARTY TRANSACTIONS

Receivables from related parties and affiliated companies

1995 1995 1994
US$'000 Lire m. Lire m.

A+G Motorad GmbH 1,739 2,761 1,506
Finprogetti S.p.A. 533 847 -
Other 10 16 15
----- ----- -----
2,282 3,624 1,521
===== ===== =====

The amounts due from A+G Motorad GmbH, a 25% owned entity (1994 - 45% owned)
accounted for using the equity method, resulted from the purchase of products
and services from the Company. Sales to A+G Motorad GmbH, consisting primarily
of motorcycles and parts were Lit. 7,660 million ($ 4,823,000) in 1995 and
Lit. 4,736 million and Lit. 5,169 million in 1994 and 1993 respectively.

The balance with Finprogetti S.p.A. results principally from balances in
existence at the date of acquisition of the Finprogetti subsidiaries.

Amounts due to related parties and affiliated companies

1995 1995 1994
US$'000 Lire m. Lire m.

Finprogetti S.p.A. 217 345 -
Interim S.p.A. 98 155 -
Other 6 9 35
--- --- ---
321 509 35
=== === ===

Amounts due to Finprogetti S.p.A. are in respect of balances arising from a
group value added tax system in effect prior to the acquisition by the Company,
personnel of Finprogetti S.p.A. who worked for the Company from the July 17,
1995 but who become employees of the Company as at December 31, 1995 and for
office machinery and furniture sold to the Company. Amounts due

F-24

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

12. RELATED PARTY TRANSACTIONS (Continued)

to Interim S.p.A., are in respect of real estate consulting and management
services rendered to the Company's real estate subsidiaries.

Various guarantee arrangements between the acquired Finprogetti companies and
their former parent company have expired before or shortly after December 31,
1995, with the exception of guarantees by Finprogetti S.p.A. of part of the bank
advances in respect of finance activities (see Note 7).

Transactions and arrangements with former Chairman

The repurchase of shares formerly owned by the ex-Chairman and commitment of the
Company to acquire the remaining shares formerly owned by him are detailed in
Notes 3 and 15. The repurchase has been accounted for at cost.

Morrison Cohen Singer & Weinstein, LLP

The law firm of Morrison Cohen Singer & Weinstein, LLP, of which Howard E.
Chase, a Director of the Company and its Chief Executive Officer, was a member
until September 1, 1995, and to which he is now of counsel, was paid by the
Company and its subsidiaries in 1995 an aggregate of Lit. 1,327 million
($816,000 at the actual dollar amounts invoiced) in legal fees and disbursements
for services rendered.

The law firm of which Mr. Garavaglia, a Director of the Company, is a member was
paid an aggregate of Lit. 268 million ($169,000) by the Company and its
subsidiaries in 1995 for legal, statutory audit and tax consulting services
rendered.

Rental agreements

Currently, rent is being paid in the amount of Lit. 108 million ($68,000)
annually by Centro Ricambi, the spare parts distribution subsidiary, to DeTomaso
Modena for the 2,800 square meter distribution facility owned by the affiliate
of Mr. DeTomaso. Management believes this rate of rental conforms with
prevailing market rates. The Company plans to vacate the facility and move to
other available space.

Mr. Francesco Pugno Vanoni, a Director of the Company, and his brother own
offices in Milan which are leased to certain subsidiaries of the Company
acquired from Finprogetti at a rental of Lit. 130 million ($82,000) per year.
Management believes this rate of rental conforms with prevailing market rates.

F-25

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

13. EXPORT SALES AND GEOGRAPHIC INFORMATION

The Company's sales by geographic destination were as follows:

1995 1994 1993
Lire m. Lire m. Lire m.

Italy 35% 38% 35%
Europe other than Italy 49% 51% 41%
United States 6% 5% 6%
Elsewhere 10% 6% 18%

Sales to Germany represented approximately 14% of motorcycle sales in 1995. No
other country represented over 10% of motorcycle sales. As at December 31, 1995
all operating subsidiaries of the Company were located in Italy. The Company has
assets in the Unites States in respect of offices which deal with regulatory
matters and the remaining assets of a previous distribution company which
have yet to be sold. Identifiable assets in the United States are not
significant.

14. INDUSTRY SEGMENT ANALYSIS

The following tables shows net sales, operating profit and identifiable assets
for the Company's industry segments:

Net Sales
1995 1995 1994 1993
$'000 Lire m. Lire m. Lire m.

Motorcycles 45,878 72,854 54,961 43,593
Steel tubing 3,675 5,836 - -
Other:
Management services 961 1,526 - -
Corporate services and other 587 932 2,305 3,408
Disposed operations - - 1,073 1,027
------ ------ ------ ------
51,101 81,148 58,339 48,028
Intersegment eliminations (5,602) (8,895) (6,345) (6,109)
------ ------ ------ ------
Total net sales 45,499 72,253 51,994 41,919
======= ====== ====== ======
Real Estate - rentals 485 770 - -
======= ======= ====== ======

F-26

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

14. INDUSTRY SEGMENT ANALYSIS (Continued)

Intersegment sales represent sales of spare parts by the Company's motorcycle
production subsidiary to its spare part distribution subsidiary, management
services provided by the Company's temporary management subsidiary and corporate
administrative services. They are accounted for at prices comparable to
unaffiliated customers.

Operating profit/(loss)

1995 1995 1994 1993
$'000 Lire m. Lire m. Lire m.

Motorcycles (28) (45) (632) (846)
Steel tubing 148 235 - -
Real estate (58) (92) - -
--- --- --- ---
Operating profit/(loss) 62 98 (632) (846)
Corporate expenses less other income (4,189) (6,652) (4,368) (4,617)
Interest, net (4) (6) 1,662 (1,261)
Income taxes (264) (420) (39) (12)
----- ------ ------ -------
Loss from continuing operations (4,395) (6,980) (3,277) (6,736)
====== ===== ===== =====

Operating profit/(loss) is total revenues less operating expenses, excluding
interest, corporate expenses and other income/(expense).

Capital expenditure and depreciation expense recorded in the financial
statements relate primarily to the Company's motorcycle segment in 1995, 1994
and 1993.

Identifiable assets
1995 1995 1994
$'000 Lire m. Lire m.

Motorcycles 36,937 58,656 47,206
Steel tubing 5,547 8,808 -
Real estate 26,388 41,904 -
Corporate 46,261 73,462 71,475
------- ------- -------

115,133 182,830 118,681
======= ======= =======

F-27

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

14. INDUSTRY SEGMENT ANALYSIS (Continued)

Identifiable assets for operating industry segments are those identifiable
assets used by those industry segments. There are no shared assets. Corporate
assets are represented by cash, investments, tax and other receivables,
financing of the operating industry segments and other assets in the course of
realization following the sale of the Company's Maserati business, disposed of
in 1993.

15. COMMITMENTS AND CONTINGENCIES

Planned self-tender offer

The Company plans to conduct a redemption offer to purchase up to 80% of the
shares held of record by each of its public shareholders at $12.26 per share.
Such shareholders own approximately 33.45% of the Company's outstanding stock at
December 31, 1995. Shareholders owning 66.55% of the outstanding stock as at
such date have agreed not to participate. It is anticipated that the redemption
offer will be initiated before the end of the second quarter of 1996. The
Company also has a commitment to purchase the shares formerly owned by Mr. De
Tomaso and now held by a trust, as described in Note 3.

The following proforma analysis shows the effects on cash, investments and
shareholder's equity if the planned redemption offer is all cash, is accepted by
100% of those shareholders entitled to participate and the commitment to
purchase the shares formerly owned by Mr. De Tomaso were effected as at December
31, 1995:

Lit. m Cash Investments Equity

Financial Statements . . . . . 24,137 17,176 51,221
Shares subject to repurchase - (13,897) -
Redemption (assuming all cash) (24,564) - (24,564)
------ ------- ------
Proforma . . . . . . . . . . . (427) 3,279 26,657
======= ====== ======

The Company is seeking to dispose of certain of its real estate interests, which
depending on the timing thereof, could provide additional cash for the planned
redemption offer, to meet its obligations arising in the ordinary course of
business and to provide funds for further investment.

F-28

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

15. COMMITMENTS AND CONTINGENCIES (Continued)

As at December 31, 1995, investments for a total of Lit. 16,215 million are held
as security for the repurchase of shares formerly owned by Mr. De Tomaso. The
Company, by switching the form of the security from cash into zero coupon bonds
or similar investments, should be able to release approximately Lit. 2,000
million in available cash.

The completion of the planned redemption offer, assuming 100% acceptance of an
all cash offer, will be dependant on realizing sufficient proceeds from the sale
of fixed assets and/or arranging adequate credit facilities.

Other commitments

The Company has no other material commitments other than for purchases of goods
for production or resale in the ordinary course of business.

Litigation

The Company and its subsidiaries are involved in litigation in the normal course
of business. Management does not believe, based on the advice of its legal
advisors, that the final settlement of such litigation will have an adverse
effect on the Company's consolidated financial position as at December 31, 1995.

16. CONCENTRATION OF CREDIT RISKS

Concentrations of credit risk with respect to trade accounts receivable are
limited due to the large number of entities in the customer base. Sales to
governmental bodies in Italy are significant as a whole, but no single
government body represents more than 10% of net sales.

The Company is reducing the level of its finance activities acquired from
Finprogetti and does not intend to take on any significant new contracts.

The Company maintains cash and cash equivalents, short and long investments with
various financial institutions of national standing in Italy and the United
States.

F-29

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

17. FINANCIAL INSTRUMENTS

The Company does not normally enter into foreign exchange contracts in the
normal course of its business. In 1995, the Company entered into a domestic
currency swap through March 1996 for US $10,000,000 in respect of its intention
to conduct a redemption offer, payable in US dollars, as discussed in Note 15.

Off balance sheet risk

Unrealized losses arising through December 31, 1995 on the domestic currency
swap above, have been included in the financial statements as at December 31,
1995. In view of the imminence of the planned redemption offer, the Company
is not planning to enter into any new arrangements.

As described in Notes 3 and 15, the Company has a commitment denominated in US
Dollars to repurchase shares formerly owned by its ex-Chairman, Mr. De Tomaso.
At the exchange rate at December 31, 1995, this commitment amounts to Lit.
13,897 million.

Fair value of financial instruments

The following methods and assumptions were used by the Company in estimating its
fair value disclosure for financial instruments.

Cash and cash equivalents: the carrying amount of cash and cash equivalents
reported by the Company approximates their fair value.

Short and long term debt: the carrying amount of the Company's borrowings under
its short-term credit arrangements, approximates their fair value. The fair
values of the Company's long-term debt are estimated using cash flow analyses,
based on the Company's incremental borrowing rates for similar types of
borrowing arrangements.

Fixed interest securities which have maturities from one to three years: fair
value for marketable quoted securities is based on market price and for non
marketable securities, is estimated using discounted cash flow analysis based on
similar investments available as at the balance sheet date.

There are no significant differences between fair value and carrying value for
any of the Company's financial instruments as at December 31, 1995.

F-30

<PAGE>

De Tomaso Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995

18. SUBSEQUENT EVENTS

The Company has agreed to purchase the outstanding stock of Moto America Inc.,
the sole distributor of Moto Guzzi motorcycles in the United States. The
acquisition is not material and will be consummated by issue of stock by the
Company. It is expected that the results of Moto America, Inc. will be included
in operations from April 1, 1996.

F-31

<PAGE>

DE TOMASO INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>

- ----------------------------------------------------------------------------------------------------------
COL A COL. B Col. C Col. D Col. E
- ----------------------------------------------------------------------------------------------------------
(1) (2)
Balance at Charged to Charged to Balance at
beginning costs and other accounts Deductions end
Description of period expenses Describe Describe of period
- ----------------------------------------------------------------------------------------------------------

IN MILLIONS OF ITALIAN LIRE

YEAR ENDED DECEMBER 31, 1995

Deducted from asset accounts:
<S> <C> <C> <C> <C> <C>

Allowance for doubtful accounts 571 433 (a) 2,464 3,468
Inventory obsolescence reserve 5,451 1,772 (b) (611) 6,612
------ ------ -------- ------
6,022 2,205 2,464 (611) 10,080
------ ------ ------ -------- ------

YEAR ENDED DECEMBER 31, 1994

Deducted from asset accounts:

Allowance for doubtful accounts 588 91 (c) (108) 571
Inventory obsolescence reserve 7,144 669 (c) (2,361) 5,451
------ ------ ------ -------- ------
7,732 760 (2,470) 6,022
------ ------ ------ -------- ------
YEAR ENDED DECEMBER 31, 1993

Deducted from asset accounts:

Allowance for doubtful accounts 1,526 81 (c) (149) 588
(d) (870)
Inventory obsolescence reserve 25,558 1,261 (c) (890) 7,144
(d)(18,785)
------ ----- -------- ------
27,084 1,342 (20,694) 7,732
------ ------ -------- ------
Product warranty liability 2,118 (c) (831) 257
(e) 185
(f) (260)
(d) (955)
------ --------
IN THOUSANDS OF US DOLLARS

YEAR ENDED DECEMBER 31, 1995

Deducted from asset accounts:

Allowance for doubtful accounts 352 273 (a) 1,552 2,184
(e) 7
Inventory obsolescence reserve 3,361 1,116 (e) 72 (b) (385) 4,164

------ ------ ------ -------- ------
3,713 1,389 1,631 (385) 6,348
------ ------ ------ -------- ------
</TABLE>

(a) Acquisitions of businesses
(b) Disposal of inventory
(c) Amounts written off
(d) Sale of business
(e) Exchange movements
(f) Product warranty payments

<PAGE>

Item 9. Changes in and Disagreements with Accountants
in Accounting and Financial Disclosure
---------------------------------------------

None.

<PAGE>

PART III

Information required to be included in Part III will be filed by
amendment to this Annual Report on Form 10K within 120 days of the end of the
Company's fiscal year.

<PAGE>

SIGNATURES
----------

Pursuant to the requirements of Section 13 or 15(d) of the
Securities and Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereupon duly authorized.

April 12, 1996 s/ Howard E. Chase
-------------------
Howard E. Chase
President and Chief Executive Officer

April 12, 1996 s/ Carlo Previtali
-------------------
Carlo Previtali
Secretary/Treasurer

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the Registrant and in the capacity and on the dates indicated.

April 12, 1996 s/ Howard E. Chase
-------------------
Howard E. Chase - Director

April 12, 1996 s/ Santiago De Tomaso
----------------------
Santiago De Tomaso - Director

April 12, 1996 s/ Mario Tozzi-Condivi
-----------------------
Mario Tozzi-Condivi -
Vice Chairman and Director

April 12, 1996 s/ Albino Collini
------------------
Albino Collini -
Chief Operating Officer and Director

April 12, 1996 s/ Francesco Pugno Vanoni
--------------------------
Francesco Pugno Vanoni -
Chairman of the Board and Director

--------------------------
Patrick D'Angelo - Director

April 12, 1996 s/ Giovanni Avallone
--------------------------
Giovanni Avallone - Director

April 12, 1996 s/ Roberto Corradi
--------------------------
Roberto Corradi - Director

April 12, 1996 s/ Carlo Garavaglia
--------------------------
Carlo Garavaglia - Director

April 12, 1996 s/ Maria Luisa Ruzzon
----------------------
Maria Luisa Ruzzon - Director

<PAGE>

PART IV

INDEX TO EXHIBITS
-----------------
Page Number
-----------

2(a) Amended and Restated Stock Purchase Agreement dated
July 17, 1995 between Registrant and Finprogetti
S.p.A. with Exhibits A, B, C & D (filed as Exhibit
2.1 to Current Report on Form 8-K for Event Dated
July 17, 1995).

3(a) Restated Articles of Incorporation of Registrant
(filed as Exhibit 3(a) to Registrant's 1981 Annual
Report on Form 10-K).

3(b) By-laws of Registrant (filed as Exhibit 3(b) to
Registrant's 1981 Annual Report on Form 10-K).

3(c) Articles of Amendment to Articles of Incorporation
filed January 31, 1986 with Maryland Department of
Assessments and Taxation (filed as Exhibit 3(c) to
Registrant's 1985 Annual Report on Form 10-K).

3(d) Articles of Incorporation, as amended by the Articles
of Amendment described in 3(c), above (filed as
Exhibit 3(d) to Registrant's 1985 Annual Report on
Form 10-K).

10(a) Agreement dated May 17, 1993 between O.A.M. S.p.A., Fiat
Auto, S.p.A. and other (filed as Exhibit 10.1 to the Current
Report Dated May 17, 1993 filed on Form 8-K).

10(b) Voting Agreement dated July 17, 1995 among Finprogetti,
S.p.A. and Messrs Howard E. Chase, Mario Tozzi-Condivi and
Albino Collini (filed as Exhibit 10.1 to Current Report on Form
8-K for Event Dated July 17, 1995).

10(c) Agreement dated July 20, 1995 between De Tomaso Industries, Inc.
and Pirunico Trustees (Jersey) Limited (filed as Exhibit 10.2 to
Current Report on Form 8-K for Event Dated July 17, 1995.

10(d) Agreement dated May 17, 1993 between O.A.M. S.p.A., Fiat
Auto S.p.A., and others (filed as Exhibit 10.1 to the Current
Report Dated May 17, 1993 filed on Form 8-K).

<PAGE>

<TABLE>

<S> <C> <C>
10(e) Agreement dated April 27, 1993 between Registrant and Finpro-
getti, S.p.A., together with Exhibits A-D thereto (filed on
Exhibit 10(b) to 1994 Annual Report on Form 10-K/A,
Amendment No. 2).

10(f) Agreement dated April 10, 1995 between Registrant and Alejan-
dro DeTomaso (filed as Exhibit 10(c) to 1994 Annual Report on
Form 10-K/A, Amendment No. 2).

10(g) Agreement dated as of November 1, 1995 between the Registrant
and Howard E. Chase. 71

10(h) Agreement dated as of November 1, 1995 between the Registrant
and Albino Collini. 83

10(i) Agreement dated as of November 1, 1995 between the Registrant
and Francesco Pugno Vanoni. 85

10(j) Agreement dated as of November 1, 1995 between the Registrant
and Como Consultants, Limited. 88

10(k) Agreement dated as of November 1, 1995 between the Registrant
and Domenico Costa. 101

10(l) Agreement dated as of November 1, 1995 between the Registrant
and Carlo Previtali. 103

10(m) Agreement dated as of November 1, 1995 between the Registrant
and Giovanni Avallone. 105

10(n) Option Agreement between the Registrant and Howard E. Chase. 107

10(o) Option Agreement between the Registrant and Albino Collini. 109

10(p) Option Agreement between the Registrant and Como
Consultants, Limited. 111

10(q) Option Agreement between the Registrant and Domenico Costa. 113

10(r) Option Agreement between the Registrant and Carlo Previtali. 115

10(s) Option Agreement between the Registrant and Giovanni Aval-
lone. 117

<PAGE>

10(t) Option Agreement between the Registrant and Santiago De
Tomaso. 119

21. Subsidiaries: The Registrant's significant subsidiaries, the
jurisdiction of their incorporation and nature of their
respective activities is contained in the current Annual
Report on Form 10-K.
</TABLE>

Exhibit 10.g

EXBHIBIT 10(g)

EMPLOYMENT AGREEMENT
--------------------

EMPLOYMENT AGREEMENT (the "Agreement") dated as of November 1,
1995 (the "Effective Date") by and between De TOMASO INDUSTRIES, INC., a
Maryland corporation (the "Company"), and the individual whose name is set forth
on the signature page hereof and on Exhibit A hereto ("Executive").

W I T N E S S E T H:
- - - - - - - - - -

WHEREAS, the Company wishes to employ Executive in an executive
capacity and Executive is desirous of being so employed;

NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereto agree as follows:

1. Employment, Duties and Acceptance.
---------------------------------

(a) The Company hereby employs Executive for the Term (as
hereinafter defined) to render such services to the Company and to hold such
offices of the Company as is set forth in Exhibit A hereto.

(b) Executive agrees to devote substantially all of his
working time, attention and energies to the performance of the business of the
Company and its Affiliates; and Executive shall not, directly or indirectly,
alone or as a member of any partnership or other organization, or as an officer,
director or employee of any other corporation, partnership or other
organization, be actively engaged in or concerned with any other duties or
pursuits which materially interfere with the performance of his duties
hereunder, or which, even if noninterfering, may be inimical, or contrary, to
the best interests of the Company and its Affiliates, except those duties or
pursuits specifically authorized by the Board of Directors (the "Board") of the
Company, and except as set forth in Exhibit A.

(c) The principal place of employment of Executive
hereunder shall at all times during the Term be in the greater New York, New
York area, and/or Milan, Italy or such other locations as are mutually
acceptable to Executive and the Company.

(d) Executive hereby accepts such employment and agrees to
render the services described above.

2. Term of Employment.
-------------------

The initial period of Executive's employment under this Agreement is
as set forth in Exhibit A. This Agreement shall automatically be renewed on the
same terms for successive

<PAGE>

one-year periods (the initial period and, if the period of employment is so
renewed such additional period(s) of employment are collectively referred to
herein as the "Term") unless terminated by written notice given by either party
to the other at least 90 days prior to the end of the applicable period.

3. Compensation and Benefits.
--------------------------

(a) As full compensation for all services to be rendered
pursuant to this Agreement, the Company agrees to pay Executive during the Term
such base salary as is set forth in Exhibit A (the "Salary"). The Salary shall
be payable in such installments as is the policy of the Company with respect to
executive employees of the Company. Executive confirms that some or all of his
Salary may be paid and some or all of his benefits may be provided by
subsidiaries or Affiliates of the Company if he provides services hereunder for
them, provided that in such case the Company shall guarantee payment.

(b) Executive may receive increases in Salary and bonuses on
such dates, in such amounts and on such other terms as may be determined by the
Board in its sole discretion.

(c) The Company shall pay or reimburse Executive for all
reasonable expenses, actually incurred or paid by him during the Term in the
performance of his services under this Agreement, upon presentation of expense
statements or vouchers or such other supporting information as it reasonably may
require. (d) Executive shall be eligible under any incentive plan, stock option
plan, stock award plan, bonus, participation or extra compensation plan,
pension, group insurance or other so-called "fringe" benefits, if any, which the
Company generally provides for its executives.

(e) At the request of the Executive, the Company shall use its
best efforts to provide to Executive medical insurance with coverage reasonably
satisfactory to Executive, the cost thereof to be charged against Executive's
Salary. (f) In the event that the Company obtains group life and/or disability
insurance covering its executives generally, Executive shall be included under
such group plans.

(g) Subject to fulfillment of his duties hereunder, Executive shall
be entitled to vacation time in accordance with the vacation policy of the
Company.

(h) Executive shall be entitled to the same level of coverage (as
determined from time to time by the Board) under such directors' and officers'
liability insurance policies, and insurance for its employees against claims
arising in connection with allegations of libel, if any, or other arrangements
as are available to senior executive officers and directors of the Company or
its Affiliates, to the fullest extent permitted by the existing By-Laws of any

<PAGE>

such company. Additionally, the Company shall indemnify and hold Executive
harmless, to the fullest extent permitted by the laws of the State of the
Company's incorporation, from and against all claims, demands, costs, charges
and expenses (including reasonable attorneys' fees) whatsoever or howsoever
incurred or sustained by Executive or his legal representatives in connection
with any action, suit or proceeding, whether or not groundless, to which he or
his legal representatives may be made a party by reason of his being or having
been an officer, director or employee of the Company or any of its Affiliates.
This sub-section shall survive the termination of this Agreement.

(i) The Executive shall be entitled to such additional benefits
as are set forth in Exhibit A.

4. Confidentiality.
----------------

(a) Executive shall not, during the Term of this Agreement, or
at any time following termination of this Agreement, directly or indirectly,
disclose or permit to be known (other than (i) as is reasonably required in the
regular course of his duties, including disclosures to the Company's advisors
and consultants, (ii) as required by law or (iii) with the prior written consent
of the Board of Directors), to any person, firm or corporation, any confidential
information acquired by him during the course of, or as an incident to, his
employment or the rendering of services hereunder, relating to the Company or
any of its subsidiaries, any client, investor, corporate partner, or joint
venturer of the Company or any of its subsidiaries, or any corporation,
partnership or other entity owned or controlled, directly or indirectly, by the
Company or its subsidiaries or, to the knowledge of Executive, by any of the
other persons or entities listed above, or in which the Company or any of its
subsidiaries or, to the knowledge of Executive, any of the other persons or
entities listed above, has a beneficial interest. Such confidential information
shall include, but shall not be limited to, business affairs, proprietary
technology, trade secrets, patented processes, research and development data,
know-how, market studies and forecasts, competitive analyses, pricing policies,
employee lists, personnel policies, the substance of agreements with customers,
suppliers and others, marketing or dealership arrangements, servicing and
training programs and arrangements, customer lists and any other documents
embodying such confidential information. This confidentiality obligation shall
not apply to any confidential information which becomes publicly available other
than pursuant to a breach of this Section 4 by Executive.

(b) All information and documents relating to the Company and
its affiliates as hereinabove described shall be the exclusive property of the
Company and upon termination of Executive's employment with the Company, all
documents, records, reports, writings and other similar documents containing
confidential information, including copies thereof, then in Executive's
possession or control shall be returned and left with the Company.

<PAGE>

5. Noncompetition; Noninterference.
--------------------------------

Executive agrees that during the Term of his employment by the Company
and during the period of the greater of (i) two years following the termination
of Executive's employment hereunder or (ii) the balance of the Term, (the
"Noncompetition Period"), Executive shall not, directly or indirectly, as owner,
partner, joint venturer, stockholder, employee, broker, agent, principal,
trustee, corporate officer, director, licensor, or in any capacity whatsoever
engage in, become financially interested in, be employed by, render any
consultation or business advice with respect to, or have any connection with
(collectively, a "Relationship"), any entity which provides services or intends
to provide services which are competitive with any services provided by the
Company or any of its subsidiaries, to any customer, client or account of the
Company or any of its subsidiaries or to any party which was a customer, client
or account of the Company or any of its subsidiaries at any time during the Term
or to any prospective customer, client or account which the Company or any of
its subsidiaries has solicited or for which the Company has made a proposal,
during the 12 months preceding the commencement of the Noncompetition Period;
provided, however, that Executive may own any securities of any corporation
which is engaged in such business and is publicly owned and traded but in an
amount not to exceed at any one time one percent (1%) of any class of stock or
securities of such company and; provided, further, that Executive shall not be
prohibited from having a Relationship (after termination of Executive's
employment) with any subsidiary or division of any entity which does not engage
or propose to engage in any of the activities from which Executive is precluded
as set forth above, notwithstanding that subsidiaries or divisions of such
entity may be engaged in such activities (subject to Executive's continued
compliance with his confidentiality obligations contained in Section 4). In
addition, Executive shall not, directly or indirectly, during the Noncompetition
Period, request or cause any suppliers or customers with whom the Company or any
of its subsidiaries has a business relationship to cancel or terminate any such
business relationship with the Company or any of its subsidiaries or have a
Relationship with any company or business which solicits, interferes with or
entices from the Company any employee (or former employee) of the Company or of
any subsidiary of the Company or which employs any manager (or former manager)
of the Company or any of its subsidiaries.

6. Injunction and Enforceability of Covenants.
-------------------------------------------

(a) If Executive commits a breach, or threatens to commit a
breach, of any of the provisions of Section 4, 5 or 9 hereof, the Company shall
have the right and remedy to have the provisions of this Agreement specifically
enforced by any court having appropriate jurisdiction over the parties, it being
acknowledged and agreed that any such breach or threatened breach will cause
irreparable injury to the Company and that money damages will not provide an
adequate remedy to the Company.

(b) If any of the covenants contained in Section 4, 5 or 9
hereof, or any part thereof, is hereafter construed to be invalid or
unenforceable by a court of appropriate

<PAGE>

jurisdiction over the parties, the same shall not affect the remainder of the
covenant or covenants, which shall be given full effect without regard to the
invalid portions.

(c) If any of the covenants contained in Section 4, 5 or 9
hereof, or any part thereof, is held to be unenforceable by a court of
appropriate jurisdiction over the parties, because of the duration of such
provision or the area covered thereby, the parties agree that the court making
such determination shall have the power to reduce the duration and/or area of
such provision and, in its reduced form, such provision shall then be
enforceable.

(d) The parties hereto intend to and hereby confer jurisdiction
to enforce the covenants contained in Sections 4, 5 and 9 hereof upon the courts
of any country, state or other jurisdiction within the geographical scope of
such covenants. In the event that the courts of any one or more of such states
shall hold any such covenant wholly unenforceable by reason of the breadth of
such scope or otherwise, it is the intention of the parties hereto that such
determination not bar or in any way affect the Company's right to the relief
provided above in the courts of any country, state or other jurisdiction within
the geographical scope of such other covenants, as to breaches of such covenants
in such other respective jurisdictions, the above covenants as they relate to
each state being, for this purpose, severable into diverse and independent
covenants.

(e) The existence of any claim or cause of action by Executive
against the Company or any Affiliate of the Company shall not constitute a
defense to the enforcement by the Company of the covenants contained in Sections
4, 5 and 9 hereof, but such claim or cause of action shall be litigated
separately.

7. Termination.
------------

(a) The Company may terminate this Agreement upon written notice
to Executive if Executive acts, or fails to act, in a manner that provides Cause
for termination. For purposes of this Agreement, the term "Cause" means (1) the
willful and continuing neglect by Executive of his duties or obligations
hereunder (other than breaches of the covenants set forth in Sections 4, 5 and 9
hereof which breaches are governed by clause (7) below); provided, however, that
any such neglect shall constitute "Cause" hereunder only if such neglect remains
uncured for a period of 30 days after written notice describing the same is
given to the Executive; and provided, further, that isolated, insubstantial or
nonmaterial neglect or failure shall not constitute Cause hereunder; (2) the
willful refusal by Executive to comply with the lawful instructions or
directions of the party to whom Executive reports hereunder, provided, however,
that any such refusal shall constitute "Cause" hereunder only if such
instructions or directions are in respect of matters which may be properly
required of Executive hereunder and only if such refusal continues for a period
of more than 5 days after written notice describing same is given to the
Executive; (3) Executive's conviction (which, through lapse of time or
otherwise, is not subject to appeal) of any felony under the laws of any country
or political subdivision thereof, involving theft, embezzlement or moral
turpitude; (4) Executive's performance of any act which would constitute a crime
or offense involving money or property

<PAGE>

of the Company or any of its subsidiaries, or would constitute a felony in the
jurisdiction in which such act occurred, regardless of whether or not the
Executive is prosecuted; (5) any attempt by Executive improperly to secure any
personal profit in connection with the business of the Company or any of its
subsidiaries, (6) chronic alcoholism or drug addiction; or (7) any breach by
Executive of the terms of Sections 4, 5 or 9 of this Agreement; provided such
breach continues uncured for 10 days after written notice of such breach is
given by the Company to Executive.

(b) Executive may terminate this Agreement on written notice to
the Company if any one or more of the following shall occur:

(1) a material breach of the terms of this Agreement by the
Company, which breach continues uncured for 30 days after written notice thereof
is first given;

(2) a material breach by the Company of any other material
agreement with Executive, which breach continues for 30 days after written
notice thereof is first given.

(1) Executive's death during the Term; provided, however,
that Executive's legal representatives shall be entitled to receive his Salary
through the last day of the month in which his death occurs.

(2) Executive becoming physically or mentally disabled so
that he is unable substantially to perform his services hereunder for (a) a
period of 60 consecutive days, or (b) for shorter periods aggregating 120 days
during any twelve month period during the Term. Notwithstanding such disability
the Company shall continue to pay Executive his Salary through the date of such
termination.

(3) As provided in Exhibit A.

(d) Upon any termination of Executive's employment hereunder for
any reason, with or without Cause, whether by the Company or by Executive,
Executive shall be deemed to have resigned from all positions held by him as an
officer and/or director of the Company and all of its subsidiaries.

<PAGE>

while such disagreement is being resolved, provided that if the disagreement is
resolved adversely to the Executive, then Executive shall be required to repay
to the Company such amount as is so determined and provided further that the
Company shall not be obligated to make such payments while the disagreement is
being resolved unless the Executive delivers to the Company security for such
repayment obligation, reasonably satisfactory to the Board.

8. Salary Continuation.
---------------------

In the event that Executive's employment is terminated (i) by the
Company at any time (other than at the end of the Term) for any reason which
would not constitute Cause (as defined above) (and other than disability or
death), which termination shall be on thirty (30) days' prior written notice to
Executive or (ii) by the Executive under Section 7(b), the Company shall pay
Executive for a period equal to the remainder of the then current Term (such
period being herein referred to as the "Salary Continuation Period"), his Salary
at the then current rate, payable in such installments as the Company
customarily paid Executive, and continue to allow Executive to participate in
the Company's health insurance and disability insurance programs, if any, to the
extent permitted under such programs, during the Salary Continuation Period.
Executive shall not be obligated to seek or assume other employment, and shall
not otherwise be obligated to take any action to mitigate damages, nor shall the
amount of compensation paid to Executive from any other employment affect the
amount payable by the Company hereunder.

9. Inventions Discovered by Executive.
-----------------------------------

Executive shall promptly disclose to the Company any invention,
improvement, discovery, process, formula, or method or other intellectual
property, whether or not patentable, whether or not copyrightable, in the
Company's Field of Interest (collectively, "Inventions") made, conceived or
first reduced to practice by the Executive, either alone or jointly with others,
while performing services hereunder. Executive hereby assigns to the Company all
of his right, title and interest in and to any such Inventions. During and after
the Term, Executive shall execute any documents necessary to perfect the
assignment of such Inventions to the Company and to enable the Company to apply
for, obtain, and enforce patents and copyrights in any and all countries on such
Inventions. Executive hereby irrevocably designates the counsel to the Company
(or such other person as the Company may designate from time to time) as his
agent and attorney-in-fact to execute and file any such document and to do all
lawful acts necessary to apply for and obtain patents and copyrights and to
enforce the Company's rights under this Section. This Section 9 shall survive
the termination of this Agreement.

10. Indemnification.
----------------

The Executive shall indemnify the Company, to the maximum extent
permitted by applicable law, against all costs, damages and expenses incurred by
the Company as a result of the breach by Executive of his obligations contained
in this Agreement.

<PAGE>

11. Representations and Agreements of Executive.
--------------------------------------------

(a) Executive represents and warrants that he is free to enter
into this Agreement and to perform the duties required hereunder, and that there
are no employment contracts or understandings, restrictive covenants or other
restrictions, whether written or oral, preventing the performance of his duties
hereunder.

(b) Executive agrees to submit to a medical examination and to
cooperate and supply such other information and documents as may be required by
any insurance company in connection with the Company's obtaining life insurance
on the life of Executive, if the Company so desires, and any other type of
insurance or fringe benefit as the Company shall determine from time to time to
obtain.

12. Definitions.
------------

As used herein, the following terms have the following meanings:

(1) "Affiliate" means and includes any person, corporation or
other entity controlling, controlled by or under common control with the
corporation in question.

(2) "Company's Field of Interest" means the businesses of the
Company as described in such Business Plan as the Board of Directors from time
to time establishes and in subsequent disclosures during the Executive's
employment hereunder.

13. Arbitration.
------------

Any controversy or claim arising out of or relating to this Agreement
or the breach thereof (other than disputes with respect to alleged violations of
the covenants contained in Sections 4, 5 and 9 hereof, and the Company's pursuit
of the remedies described in Section 6 hereof in connection therewith) shall be
settled by arbitration. Such arbitration is to be administered by, and conducted
in Milan in accordance with the rules then obtaining of the International
Chamber of Commerce and the arbitrators are to be selected in accordance with
such rules. Judgment upon the award rendered may be entered in any court having
jurisdiction thereof. The parties shall be free to pursue any remedy before the
arbitration tribunal that they shall be otherwise permitted to pursue in a court
of competent jurisdiction. The award of the arbitrators shall be final and
binding. The party which prevails in any such arbitration shall be reimbursed
the cost of attorneys fees and experts and other costs and expenses incurred in
connection therewith.

14. Notices.
-------

<PAGE>

mail (return receipt requested and received), telecopy (confirmed receipt by
return fax from the receiving party) or delivered personally, as follows (or to
such other address as either party shall designate by notice in writing to the
other in accordance herewith):

If to the Company:

De Tomaso Industries, Inc.
P.O. Box 856
107 Monmouth Street
Red Bank, New Jersey 07701
Telephone: (908) 842-7200
Fax: (908) 842-1219

with a copy to:

Howard E. Chase
750 Lexington Avenue
New York, New York 10022
Telephone: (212) 735-8679
Fax: (212) 735-8708

and with another copy to:

De Tomaso Industries, Inc.
Via Fieno, 8
20123 Milano, Italy
Attention: Francesco Pugno Vanoni, Chairman of the Board
Telephone: (011 39 02) 72010144
Fax: (011 39 02) 72010136

If to Executive:

See Exhibit A

15. General.
--------

(a) This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely in New York.

<PAGE>

representation, promise or inducement has been made by either party that is not
embodied in this Agreement, and neither party shall be bound by or liable for
any alleged representation, promise or inducement not so set forth.

(c) This Agreement may be amended, modified, superseded,
canceled, renewed or extended, and the terms or covenants hereof may be waived,
only by a written instrument executed by the parties hereto, or in the case of a
waiver, by the party waiving compliance. The failure of a party at any time or
times to require performance of any provision hereof shall in no manner affect
the right at a later time to enforce the same. No waiver by a party of the
breach of any term or covenant contained in this Agreement, whether by conduct
or otherwise, or any one or more or continuing waivers of any such breach, shall
constitute a waiver of the breach of any other term or covenant contained in
this Agreement.

(d) This Agreement shall be binding upon the legal
representatives, heirs, distributees, successors and assigns of the parties
hereto.

(e) If this Agreement is translated into Italian or any
other language, the English version shall be controlling.

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

De TOMASO INDUSTRIES, INC.

By:_____________________________

_____________________________

<PAGE>

EXHIBIT A TO EMPLOYMENT AGREEMENT
BETWEEN
DETOMASO INDUSTRIES, INC.
AND
HOWARD E. CHASE (EXECUTIVE)

The following numbered paragraphs correspond to the numbered
paragraphs of the Employment Agreement to which this Exhibit A is attached.

1(a) The Executive shall be employed as President and Chief
Executive Officer (CEO) to perform such duties commensurate with such office as
the Board shall reasonably direct him to perform, which duties shall be
consistent with the provisions of the By-Laws in effect on the date hereof that
relate to the duties of the CEO and the President. Without limiting the
foregoing, the Executive shall be responsible for the management of all
activities of the Company, including implementation of such Business Plan as the
Board of the Company may from time to time adopt. Executive acknowledges that
the Company's present corporate strategy is to increase the number of
shareholders of the Company and Executive shall use his reasonable efforts to
achieve such goal. The Executive shall report to the Board of Directors of the
Company. The Executive shall also perform such services for the Company's
subsidiaries, consistent with the foregoing level of responsibility, as may,
from time to time, be designated by the Company. The Company acknowledges that
Executive has advised the Company that he intends to serve on an "of counsel"
basis to the law firm of which he was previously a partner, Morrison Cohen
Singer & Weinstein, LLP, which law firm is counsel to the Company, and the
Company consents thereto, provided that same does not interfere with the
performance of his duties hereunder.

1(b) Executive further agrees to accept election and to serve
during all or any part of the Term as a director of the Company if elected to
such position by the shareholders of the Company, and of any direct or indirect
subsidiary of the Company if elected to such position by the Company, without
any compensation therefor other than that specified in this Agreement. The
Company shall use its best efforts to cause Executive to be elected as a
director of the Company during the Term and shall include him in the management
slate for election as a director at every shareholders meeting during the Term
at which his term as a director would otherwise expire.

2. The initial period of the Term shall be five (5) years commencing
on the Effective Date.

3(a) The Executive's base salary shall be at an annual rate of
$375,000, which amount shall automatically increase on each anniversary of the
Effective Date hereof by the percentage

<PAGE>

increase during such then-ended 12 month period in the Consumer Price Index for
the New York-New Jersey metropolitan area.

3(i) The Company shall make available to Executive the use of an
apartment or other suitable living accommodations in Milan, Italy, reasonably
acceptable to Executive, and all costs related thereto, including, without
limitation, rent, furniture and furnishings, and utilities shall be borne by the
Company.

7(c)(3) If, on December 31, 1996 the Company's common stock is not
"publicly traded" (which shall mean that the common stock is included in the
NASDAQ interdealer quotation system, Small Capitalization or National, or listed
on a U.S. stock exchange), then unless on or before December 31, 1996, the
Company has filed such documents and/or taken such other action as is necessary
to cause such common stock to resume being publicly traded, the Company may, at
its option, terminate the Executive's employment hereunder by notice thereof
given not later than January 31, 1997, such termination to be effective as of
April 30, 1997; provided that the foregoing shall not apply if the Company has
"gone private" (as provided in Rule 13e-3 of the Rules and Regulations under the
Securities Exchange Act of 1934). If, during the 20 trading days preceding
December 31, 1997, the average of the last sale prices of the Company's common
stock as quoted on the NASDAQ interdealer quotation system or as reported by any
U.S. stock exchange on which the Company's common stock is listed, is less than
$12.50 per share, then the Company may, at its option, terminate the Executive's
employment hereunder by notice thereof given not later than January 31, 1998,
such termination to be effective on October 31, 1998; provided that if between
the date hereof and December 31, 1997 the Company shall (i) pay a dividend in
common stock or make a distribution in common stock, (ii) subdivide its
outstanding common stock, (iii) combine its outstanding common stock into a
smaller number of shares of common stock, (iv) effect any increase or decrease
in the number of outstanding shares of common stock without receipt of
consideration by the Company, or (v) issue by reclassification of its common
stock other securities of the Company, then such average quoted or listed last
sale price shall be adjusted to such per share price as would have been
applicable had the events described in clauses (i), (ii) (ii), (iv) and (v) not
occurred. The provisions of paragraph 5 (Noncompetition and Noninterference) and
of paragraph 8 (Salary Continuation) shall not be applicable to an employment
termination under this paragraph 7(c)(3).

14. Notices to the Executive:

Howard E. Chase
44 Holland Brook Road
Whitehouse Station, New Jersey 08889
Telephone: (908) 534-1307
Fax: (908) 534-6511

Exhibit 10.h

EXHIBIT 10(h)

EXHIBIT A TO EMPLOYMENT AGREEMENT
BETWEEN
DETOMASO INDUSTRIES, INC.
AND
ALBINO COLLINI (EXECUTIVE)

The following numbered paragraphs correspond to the numbered
paragraphs of the Employment Agreement to which this Exhibit A is attached.

1(a) The Executive shall be employed as Executive Vice-President
and Chief Operating Officer (COO) to perform such duties commensurate with such
office as the President shall reasonably direct him to perform, which duties
shall be consistent with the provisions of the ByLaws in effect on the date
hereof that relate to the duties of the COO and Executive Vice- President. The
Executive shall report to the President of the Company. The Executive shall also
perform such services for the Company's subsidiaries, consistent with the
foregoing level of responsibility, as may, from time to time, be designated by
the Company.

2. The initial period of the Term shall be five (5) years commencing
on the Effective Date.

3(a) The Executive's base salary shall be at an annual rate of
$250,000, which amount shall automatically increase on each anniversary of the
Effective Date hereof by the percentage increase during such then-ended 12 month
period in the Consumer Price Index (or comparable index for changes in the
"cost-of-living") for the Milan, Italy metropolitan area. In addition to the
foregoing, as an inducement to the Executive to enter into this Agreement, the
Company shall pay to Executive the sum of $250,000. Such amount shall be fully
earned upon the execution of this Agreement and shall be payable at the rate of
$50,000 per year, due and payable on the first 5 anniversaries of the date of
this Agreement, regardless of whether or not this Agreement is or is not in
effect, for any reason, on such payment dates.

<PAGE>

3(i) During the Term, the Company shall, at its expense, provide
to Executive the use of an Alfa Romeo or other car comparable to the Alfa Romeo
now driven by Executive and the Company shall pay for all costs of insurance,
maintenance, repair and operation.

7(c)(3) If, on December 31, 1996 the Company's common stock is not
"publicly traded" (which shall mean that the common stock is included in the
NASDAQ interdealer quotation system, Small Capitalization or National, or listed
on a U.S. stock exchange), then unless on or before December 31, 1996, the
Company has filed such documents and/or taken such other action as is necessary
to cause such common stock to resume being publicly traded, the Company may, at
its option, terminate the Executive's employment hereunder by notice thereof
given not later than January 31, 1997, such termination to be effective as of
April 30, 1997; provided that the foregoing shall not apply if the Company has
"gone private" (as provided in Rule 13e-3 of the Rules and Regulations under the
Securities Exchange Act of 1934). If, during the 20 trading days preceding
December 31, 1997, the average of the last sale prices of the Company's common
stock as quoted on the NASDAQ interdealer quotation system or as reported by any
U.S. stock exchange on which the Company's common stock is listed, is less than
$12.50 per share, then the Company may, at its option, terminate the Executive's
employment hereunder by notice thereof given not later than January 31, 1998,
such termination to be effective on October 31, 1998; provided that if between
the date hereof and December 31, 1997 the Company shall (i) pay a dividend in
common stock or make a distribution in common stock, (ii) subdivide its
outstanding common stock, (iii) combine its outstanding common stock into a
smaller number of shares of common stock, (iv) effect any increase or decrease
in the number of outstanding shares of common stock without receipt of
consideration by the Company, or (v) issue by reclassification of its common
stock other securities of the Company, then such average quoted or listed last
sale price shall be adjusted to such per share price as would have been
applicable had the events described in clauses (i), (ii) (ii), (iv) and (v) not
occurred. The provisions of paragraph 5 (Non-competition and Non-Interference)
and of paragraph 8 (Salary Continuation) shall not be applicable to an
employment termination under this paragraph 7(c)(3).

14. Notices to the Executive:

Albino Collini
[home address]

Telephone:
Fax:

Exhibit 10.i

EXHIBIT 10(i)

De Tomaso Industries, Inc.
Finprogetti S.p.A.
Via Fieno, 8
20123 Milan, Italy

November 1, 1995

Sig. Francesco Pugno Vanoni

Dear Sig. Pugno Vanoni:

This letter shall confirm the agreements which have been
reached between you ("Director") and De Tomaso Industries, Inc. (the "Company")
as follows:

(1) For a period of 5 years beginning on November 1, 1995 you
shall hold yourself available to serve as a member of the Board of Directors of
the Company and, if requested, as a member of its Executive Committee. In any
year in which you make yourself available to so serve, you shall be entitled to
receive a salary at the rate of 80 million lira per annum. In any year in which
you do not make yourself available to so serve for any reason, including your
becoming disabled such that you would be unable to so serve, or if you are not
requested to so serve for "Cause" as defined below, you shall not be entitled to
receive such salary.

(2) In consideration of your agreement to make yourself
available as provided in paragraph 1 above, the Company confirms that its
Non-Qualified Stock Option Committee has granted to you on November 1, 1995 an
option under the Company's 1995 Non-Qualified Stock Option Plan (the "Plan") to
purchase 40,000 shares of Common Stock of the Company at an exercise price of
$12.26 per share. Such options shall be exercisable to the extent of 8,000
options in the first year, 16,000 options in the second year, 24,000 options in
the third year, 32,000 options in the fourth year and 40,000 options in the
fifth year. If during such 5 year period i) you shall die, ii) you shall become
disabled such that you are unable to serve on the Board of Directors, or iii)
you are not elected to the Board of Directors for any reason, except for
"Cause", then your option shall become fully exercisable and may thereafter be
exercised for a limited permit of time, as provided in the Plan. If you are
dismissed from the Board of Directors for "Cause" then all option rights shall
terminate, as provided in the Plan.

<PAGE>

Page 2
Sig. Francesco Pugno Vanoni November 1, 1995

(3) For purposes of this Agreement, the term "Cause" means (1)
the willful and continuing neglect by Director of his duties or obligations
hereunder (other than breaches of the covenants governed by clause (7) below);
provided, however, that any such neglect shall constitute "Cause" hereunder only
if such neglect remains uncured for a period of 30 days after written notice
describing the same is given to the Director; and provided, further, that
isolated, insubstantial or non-material neglect or failure shall not constitute
Cause hereunder; (2) the willful refusal by Director to comply with the lawful
instructions or directions of the party to whom Director reports hereunder,
provided, however, that any such refusal shall constitute "Cause" hereunder only
if such instructions or directions are in respect of matters which may be
properly required of Director hereunder and only if such refusal continues for a
period of more than 5 days after written notice describing same is given to the
Director; (3) Director's conviction (which, through lapse of time or otherwise,
is not subject to appeal) of any felony under the laws of any country or
political subdivision thereof, involving theft, embezzlement or moral turpitude;
(4) Director's performance of any act which would constitute a crime or offense
involving money or property of the Company or any of its subsidiaries, or would
constitute a felony in the jurisdiction in which such act occurred, regardless
of whether or not the Director is prosecuted; (5) any attempt by Director
improperly to secure any personal profit in connection with the business of the
Company or any of its subsidiaries, (6) chronic alcoholism or drug addiction; or
(7) (i) disclosure by the Director of any confidential information relating to
the Company or any of its subsidiaries or any client, investor, corporate
partner or joint venturer of the Company or any of its subsidiaries (such as,
but not limited to, business affairs, proprietary technology, trade secrets,
patented processes, research and development data, know-how, market studies and
forecasts, competitive analyses, pricing policies, employee lists, personnel
policies, the substance of agreements with customers, suppliers and others,
marketing or dealership arrangements, servicing and training programs and
arrangements, customer lists and any other documents embodying such confidential
information) or, (iii) Director directly or indirectly engaging in or being
affiliated with any business activity with or for any entity which provides
services which are competitive with those provided by the Company or any of its
subsidiary, to any customer, client or account of the Company or any subsidiary;
provided such act continues uncured for 10 days after written notice of such
breach is given by the Company to Director.

We look forward to a long and mutually beneficial
relationship.

Very truly yours,

De TOMASO INDUSTRIES, INC.

<PAGE>

By:___________________________
Howard E. Chase, President
CONFIRMED AND AGREED:

________________________________________________
Francesco Pugno Vanoni

Exhibit 10.j

EXHIBIT 10(j)

CONSULTING AGREEMENT

CONSULTING AGREEMENT (the "Agreement") dated as of November 1, 1995
(the "Effective Date") by and between De TOMASO INDUSTRIES, INC., a Maryland
corporation (the "Company"), and COMO CONSULTANTS LIMITED ("Consultant") with
respect to the services of MARIO TOZZI-CONDIVI ("Executive").

W I T N E S S E T H:
- - - - - - - - - -

WHEREAS, the Company wishes to engage Consultant to provide the
services of Executive in an executive capacity and Consultant is desirous of
being so engaged;

NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereto agree as follows:

1. Consultancy, Duties and Acceptance.
-----------------------------------

(a) The Company hereby engages Consultant for the Term
(as hereinafter defined) to cause Executive to render such services to the
Company and to hold such offices of the Company as is set forth in Exhibit A
hereto.

(b) Consultant shall cause Executive to devote substantially
all of his working time, attention and energies to the performance of the
business of the Company and its Affiliates; and Executive shall not, directly or
indirectly, alone or as a member of any partnership or other organization, or as
an officer, director or employee of any other corporation, partnership or other
organization, be actively engaged in or concerned with any other duties or
pursuits which materially interfere with the performance of his duties
hereunder, or which, even if non-interfering, may be inimical, or contrary, to
the best interests of the Company and its Affiliates, except those duties or
pursuits specifically authorized by the Board of Directors (the "Board") of the
Company, and except as set forth in Exhibit A.

(c) The principal place for the performance of Executive's
services hereunder shall at all times during the Term be in the greater New
York, New York area, and/or Milan, Italy or such other locations as are mutually
acceptable to Executive and the Company.

(d) Consultant hereby accepts such engagement and agrees to
cause Executive to render the services described above.

2. Term of Consulting.
-------------------

<PAGE>

The initial period of Consultant's engagement under this Agreement is
as set forth in Exhibit A. This Agreement shall automatically be renewed on the
same terms for successive one-year periods (the initial period and, if the
period of consulting is so renewed such additional period(s) of consulting are
collectively referred to herein as the "Term") unless terminated by written
notice given by either party to the other at least 90 days prior to the end of
the applicable period.

3. Compensation and Benefits.
--------------------------

(a) As full compensation for all services to be rendered
pursuant to this Agreement, the Company agrees to pay Consultant during the Term
such consulting fee as is set forth in Exhibit A (the "Consulting Fee"). The
Consulting Fee shall be payable in such installments as is the policy of the
Company with respect to executive employees of the Company. Executive confirms
that some or all of his Salary may be paid and some or all of his benefits may
be provided by subsidiaries or Affiliates of the Company if he provides services
hereunder for them, provided that in such case the Company shall guarantee
payment.

(b) Consultant may receive increases in Consulting Fee and
bonuses on such dates, in such amounts and on such other terms as may be
determined by the Board in its sole discretion.

(c) The Company shall pay or reimburse Consultant for all
reasonable expenses, actually incurred or paid by Consultant during the Term in
the performance of the consulting services under this Agreement, upon
presentation of expense statements or vouchers or such other supporting
information as it reasonably may require.

(d) Executive shall be eligible under any incentive plan, stock
option plan, stock award plan, bonus, participation or extra compensation plan,
pension, group insurance or other so-called "fringe" benefits, if any, which the
Company generally provides for its executives.

(e) At the request of the Consultant, the Company shall use its
best efforts to provide to Consultant medical insurance for Executive with
coverage reasonably satisfactory to Consultant, the cost thereof to be charged
against the Consulting Fee.

(f) In the event that the Company obtains group life and/or
disability insurance covering its executives generally, Executive shall be
included under such group plans, if permitted thereunder.

(g) Subject to fulfillment of his duties hereunder, Executive
shall be entitled to vacation time in accordance with the vacation policy of
the Company.

(h) Executive shall be entitled to the same level of coverage
(as determined from time to time by the Board) under such directors' and
officers' liability insurance

<PAGE>

policies, and insurance for its employees against claims arising in connection
with allegations of libel, if any, or other arrangements as are available to
senior executive officers and directors of the Company or its Affiliates, to the
fullest extent permitted by the existing By-Laws of any such company.
Additionally, the Company shall indemnify and hold Executive harmless, to the
fullest extent permitted by the laws of the State of the Company's
incorporation, from and against all claims, demands, costs, charges and expenses
(including reasonable attorneys' fees) whatsoever or howsoever incurred or
sustained by Executive or his legal representatives in connection with any
action, suit or proceeding, whether or not groundless, to which he or his legal
representatives may be made a party by reason of his being or having been an
officer, director or employee of the Company or any of its Affiliates. This
sub-section shall survive the termination of this Agreement.

(i) The Consultant shall be entitled to such
additional benefits as are set forth in Exhibit A.

4. Confidentiality.
----------------

(a) Each of Consultant and Executive shall not, during the Term
of this Agreement, or at any time following termination of this Agreement,
directly or indirectly, disclose or permit to be known (other than (i) as is
reasonably required in the regular course of the consulting services, including
disclosures to the Company's advisors and consultants, (ii) as required by law
or (iii) with the prior written consent of the Board of Directors), to any
person, firm or corporation, any confidential information acquired during the
course of, or as an incident to, the rendering of services hereunder, relating
to the Company or any of its subsidiaries, any client, investor, corporate
partner, or joint venturer of the Company or any of its subsidiaries, or any
corporation, partnership or other entity owned or controlled, directly or
indirectly, by the Company or its subsidiaries or, to the knowledge of
Consultant or Executive, by any of the other persons or entities listed above,
or in which the Company or any of its subsidiaries or, to the knowledge of
Consultant or Executive, any of the other persons or entities listed above, has
a beneficial interest. Such confidential information shall include, but shall
not be limited to, business affairs, proprietary technology, trade secrets,
patented processes, research and development data, know-how, market studies and
forecasts, competitive analyses, pricing policies, employee lists, personnel
policies, the substance of agreements with customers, suppliers and others,
marketing or dealership arrangements, servicing and training programs and
arrangements, customer lists and any other documents embodying such confidential
information. This confidentiality obligation shall not apply to any confidential
information which becomes publicly available other than pursuant to a breach of
this Section 4 by Consultant or Executive.

<PAGE>

(b) All information and documents relating to the Company and its
affiliates as hereinabove described shall be the exclusive property of the
Company and upon termination of this Agreement with the Company, all documents,
records, reports, writings and other similar documents containing confidential
information, including copies thereof, then in Consultant's or Executive's
possession or control shall be returned and left with the Company.

5. Non-Competition; Non-Interference.
----------------------------------

Consultant agrees that during the Term and during the period of the
greater of (i) two years following the termination of Consultant's engagement
hereunder or (ii) the balance of the Term, (the "Non-Competition Period"),
Consultant shall not, and Consultant shall take all action required to insure
that Executive does not, directly or indirectly, as owner, partner, joint
venturer, stockholder, employee, broker, agent, principal, trustee, corporate
officer, director, licensor, or in any capacity whatsoever engage in, become
financially interested in, be employed by, render any consultation or business
advice with respect to, or have any connection with (collectively, a
"Relationship"), any entity which provides services or intends to provide
services which are competitive with any services provided by the Company or any
of its subsidiaries, to any customer, client or account of the Company or any of
its subsidiaries or to any party which was a customer, client or account of the
Company or any of its subsidiaries at any time during the Term or to any
prospective customer, client or account which the Company or any of its
subsidiaries has solicited or for which the Company has made a proposal, during
the 12 months preceding the commencement of the Non-Competition Period;
provided, however, that Consultant and Executive may own any securities of any
corporation which is engaged in such business and is publicly owned and traded
but in an amount not to exceed at any one time one percent (1%) of any class of
stock or securities of such company and; provided, further, that Consultant and
Executive shall not be prohibited from having a Relationship (after termination
of Executive's employment) with any subsidiary or division of any entity which
does not engage or propose to engage in any of the activities from which
Consultant and Executive are precluded as set forth above, notwithstanding that
subsidiaries or divisions of such entity may be engaged in such activities
(subject to continued compliance with the confidentiality obligations contained
in Section 4). In addition, Consultant shall not, and Consultant shall take all
action required to insure that Executive does not, directly or indirectly,
during the Non-Competition Period, request or cause any suppliers or customers
with whom the Company or any of its subsidiaries has a business relationship to
cancel or terminate any such business relationship with the Company or any of
its subsidiaries or have a Relationship with any company or business which
solicits, interferes with or entices from the Company any employee (or former
employee) of the Company or of any subsidiary of the Company or which employs
any manager (or former manager) of the Company or any of its subsidiaries.

6. Injunction and Enforceability of Covenants.
-------------------------------------------

(a) If Consultant or Executive commits a breach, or
threatens to commit a breach, of any of the provisions of Section 4, 5 or 9
hereof, the Company shall have the right and remedy to have the provisions of
this Agreement specifically enforced by any court

<PAGE>

having appropriate jurisdiction over the parties, it being acknowledged and
agreed that any such breach or threatened breach will cause irreparable injury
to the Company and that money damages will not provide an adequate remedy to the
Company.

(b) If any of the covenants contained in Section 4, 5 or 9
hereof, or any part thereof, is hereafter construed to be invalid or
unenforceable by a court of appropriate jurisdiction over the parties, the same
shall not affect the remainder of the covenant or covenants, which shall be
given full effect without regard to the invalid portions.

(e) The existence of any claim or cause of action by Consultant
or Executive against the Company or any Affiliate of the Company shall not
constitute a defense to the enforcement by the Company of the covenants
contained in Sections 4, 5 and 9 hereof, but such claim or cause of action shall
be litigated separately.

7. Termination.
------------

(a) The Company may terminate this Agreement upon written notice
to Consultant if Executive acts, or fails to act, in a manner that provides
Cause for termination. For purposes of this Agreement, the term "Cause" means
(1) the willful and continuing neglect by Executive of his duties or obligations
hereunder (other than breaches of the covenants set forth in Sections 4, 5 and 9
hereof which breaches are governed by clause (7) below); provided,
--------

<PAGE>

however, that any such neglect shall constitute "Cause" hereunder only if such
- -------
neglect remains uncured for a period of 30 days after written notice describing
the same is given to the Executive; and provided, further, that isolated,
-------- -------
insubstantial or non-material neglect or failure shall not constitute Cause
hereunder; (2) the willful refusal by Executive to comply with the lawful
instructions or directions of the party to whom Executive reports hereunder,
provided, however, that any such refusal shall constitute "Cause" hereunder only
-------
if such instructions or directions are in respect of matters which may be
properly required of Executive hereunder and only if such refusal continues for
a period of more than 5 days after written notice describing same is given to
the Executive; (3) Executive's conviction (which, through lapse of time or
otherwise, is not subject to appeal) of any felony under the laws of any country
or political subdivision thereof, involving theft, embezzlement or moral
turpitude; (4) Executive's performance of any act which would constitute a crime
or offense involving money or property of the Company or any of its
subsidiaries, or would constitute a felony in the jurisdiction in which such act
occurred, regardless of whether or not the Executive is prosecuted; (5) any
attempt by Executive improperly to secure any personal profit in connection with
the business of the Company or any of its subsidiaries, (6) chronic alcoholism
or drug addiction; or (7) any breach by Executive of the terms of Sections 4, 5
or 9 of this Agreement; provided such breach continues uncured for 10 days after
--------
written notice of such breach is given by the Company to Executive.

(b) Consultant may terminate this Agreement on written notice
to the Company if any one or more of the following shall occur:

(1) a material breach of the terms of this Agreement by
the Company, which breach continues uncured for 30 days after written notice
thereof is first given;

(2) a material breach by the Company of any other material
agreement with Consultant, which breach continues for 30 days after written
notice thereof is first given.

(1) Executive's death during the Term; provided, however,
that Consultant shall be entitled to receive the Consulting Fee through the last
day of the month in which Executive's death occurs.

(2) Executive becoming physically or mentally disabled so
that he is unable substantially to perform his services hereunder for (a) a
period of 60 consecutive days, or (b) for shorter periods aggregating 120 days
during any twelve month period during the Term. Notwithstanding such disability
the Company shall continue to pay Consultant the Consulting Fee through the date
of such termination.

(3) As provided in Exhibit A.

<PAGE>

(d) Upon any termination of this Agreement for any
reason, with or without Cause, whether by the Company or by Consultant,
Executive shall be deemed to have resigned from all positions held by him as an
officer and/or director of the Company and all of its subsidiaries.

(e) All determinations of Cause by the Company pursuant to
this Section 7 and all determinations by the Company not to renew this Agreement
pursuant to Section 2 hereof shall be made by the vote of a majority of the
entire Board of Directors. If the Consultant disagrees with the Company's
determination that Cause exists, or if the Company disagrees with the
Consultant's determination that it may terminate this Agreement under Section
7(b), then such determination shall be subject to review and resolution in
accordance with Section 13 and the Company shall continue to pay Consultant all
amounts payable hereunder while such disagreement is being resolved, provided
that if the disagreement is resolved adversely to the Consultant, then
Consultant shall be required to repay to the Company such amount as is so
determined and provided further that the Company shall not be obligated to make
such payments while the disagreement is being resolved unless the Consultant
delivers to the Company security for such repayment obligation, reasonably
satisfactory to the Board.

8. Consulting Fee Continuation.
----------------------------

In the event that this Agreement is terminated (i) by the Company at
any time (other than at the end of the Term) for any reason which would not
constitute Cause (as defined above) (and other than disability or death), which
termination shall be on thirty (30) days' prior written notice to Consultant or
(ii) by the Consultant under Section 7(b), the Company shall pay Consultant for
a period equal to the remainder of the then current Term (such period being
herein referred to as the "Consulting Fee Continuation Period"), the Consulting
Fee at the then current rate, payable in such installments as the Company
customarily paid Consultant, and continue to allow Consultant to participate in
the Company's health insurance and disability insurance programs, if any, to the
extent permitted under such programs, during the Consulting Fee Continuation
Period. Consultant shall not be obligated to seek or assume other employment,
and shall not otherwise be obligated to take any action to mitigate damages, nor
shall the amount of compensation paid to Consultant or Executive from any other
engagement affect the amount payable by the Company hereunder.

9. Inventions Discovered by Executive.
-----------------------------------

Consultant shall cause Executive to promptly disclose to the Company
any invention, improvement, discovery, process, formula, or method or other
intellectual property,

<PAGE>

whether or not patentable, whether or not copyrightable, in the Company's Field
of Interest (collectively, "Inventions") made, conceived or first reduced to
practice by the Executive, either alone or jointly with others, while performing
services hereunder. Consultant hereby assigns to the Company all of its right,
title and interest in and to any such Inventions. During and after the Term,
Consultant shall cause Executive to execute any documents necessary to perfect
the assignment of such Inventions to the Company and to enable the Company to
apply for, obtain, and enforce patents and copyrights in any and all countries
on such Inventions. Consultant hereby irrevocably designates the counsel to the
Company (or such other person as the Company may designate from time to time) as
its agent and attorney-in-fact to execute and file any such document and to do
all lawful acts necessary to apply for and obtain patents and copyrights and to
enforce the Company's rights under this Section. This Section 9 shall survive
the termination of this Agreement.

10. Indemnification.
----------------

The Consultant and Executive shall jointly and severally indemnify the Company,
to the maximum extent permitted by applicable law, against all costs, damages
and expenses incurred by the Company as a result of the breach by either of them
of their obligations contained in this Agreement.

11. Representations and Agreements of Consultant.
---------------------------------------------

(a) Consultant represents and warrants that Consultant is free
to enter into this Agreement and Executive and Consultant are fee to perform the
duties required hereunder, and that there are no employment contracts or
understandings, restrictive covenants or other restrictions, whether written or
oral, preventing the performance of the services required hereunder.

(b) Consultant agrees to cause Executive to submit to a medical
examination and to cooperate and supply such other information and documents as
may be required by any insurance company in connection with the Company's
obtaining life insurance on the life of Executive, if the Company so desires,
and any other type of insurance or fringe benefit as the Company shall
determine from time to time to obtain.

12. Definitions.
------------

As used herein, the following terms have the following
meanings:

(1) "Affiliate" means and includes any person, corporation or other
entity controlling, controlled by or under common control with the corporation
in question.
(2) "Company's Field of Interest" means the businesses of the Company
as described in such Business Plan as the Board of Directors from time to time
establishes and in subsequent disclosures during the consulting engagement
hereunder.

<PAGE>

13. Arbitration.
------------

Any controversy or claim arising out of or relating to this
Agreement or the breach thereof (other than disputes with respect to alleged
violations of the covenants contained in Sections 4, 5 and 9 hereof, and the
Company's pursuit of the remedies described in Section 6 hereof in connection
therewith) shall be settled by arbitration. Such arbitration is to be
administered by, and conducted in Milan in accordance with the rules then
obtaining of the International Chamber of Commerce and the arbitrators are to be
selected in accordance with such rules. Judgment upon the award rendered may be
entered in any court having jurisdiction thereof. The parties shall be free to
pursue any remedy before the arbitration tribunal that they shall be otherwise
permitted to pursue in a court of competent jurisdiction. The award of the
arbitrators shall be final and binding. The party which prevails in any such
arbitration shall be reimbursed the cost of attorneys fees and experts and other
costs and expenses incurred in connection therewith.

14. Notices.
--------

All notices, requests, consents and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given if sent by private overnight mail service
(delivery confirmed by such service), registered or certified mail (return
receipt requested and received), telecopy (confirmed receipt by return fax from
the receiving party) or delivered personally, as follows (or to such other
address as either party shall designate by notice in writing to the other in
accordance herewith):

If to the Company:

De Tomaso Industries, Inc.
P.O. Box 856
107 Monmouth Street
Red Bank, New Jersey 07701
Telephone: (908) 842-7200
Fax: (908) 842-1219

with a copy to:

Howard E. Chase
750 Lexington Avenue
New York, New York 10022

<PAGE>

Telephone: (212) 735-8679
Fax: (212) 735-8708

and with another copy to:

De Tomaso Industries, Inc.
Via Fieno, 8
20123 Milano, Italy
Attention: Francesco Pugno Vanoni, Chairman of the Board
Telephone: (011 39 02) 72010144
Fax: (011 39 02) 72010136

If to Executive:

See Exhibit A

15. General.
--------

(a) This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely in New York.

(b) This Agreement sets forth the entire agreement and
understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof. No representation, promise or
inducement has been made by either party that is not embodied in this Agreement,
and neither party shall be bound by or liable for any alleged representation,
promise or inducement not so set forth.

(d) This Agreement shall be binding upon the legal
representatives, heirs, distributees, successors and assigns of the parties
hereto.

<PAGE>

(e) If this Agreement is translated into Italian or
any other language, the English version shall be controlling.

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

De TOMASO INDUSTRIES, INC.

By:______________________________

COMO CONSULTANTS LIMITED

By:______________________________

CONFIRMED, CONSENTED TO AND
AGREED TO IN ALL RESPECTS:

_________________________________________
Mario Tozzi-Condivi ("Executive")

<PAGE>

EXHIBIT A TO CONSULTING AGREEMENT
BETWEEN
DETOMASO INDUSTRIES, INC.
AND
COMO CONSULTANTS LIMITED

The following numbered paragraphs correspond to the numbered
paragraphs of the Consulting Agreement to which this Exhibit A is attached.

1(a) The Executive shall serve as Vice-Chairman of the Board and
Chairman of the Executive Committee and shall perform such duties commensurate
with such offices as the Board shall reasonably direct him to perform, which
duties shall be consistent with the provisions of the By-Laws in effect on the
date hereof that relate to such offices. The Executive shall report to the
President of the Company. The Executive shall also perform such services for the
Company's subsidiaries, consistent with the foregoing level of responsibility,
as may, from time to time, be designated by the Company.

1(b) Executive shall accept election and serve during all or any
part of the Term as a director of the Company if elected to such position by the
shareholders of the Company, and of any direct or indirect subsidiary of the
Company if elected to such position by the Company, without any compensation
therefor other than that specified in this Agreement. The Company shall use its
best efforts to cause Executive to be elected as a director of the Company
during the Term and shall include him in the management slate for election as a
director at every shareholders meeting during the Term at which his term as a
director would otherwise expire.

2. The initial period of the Term shall be five (5) years
commencing on the Effective Date.

3(a) The Executive's base salary shall be at an annual rate of
US$185,000, which amount shall automatically increase on each anniversary of the
Effective Date hereof by the percentage increase during such then-ended 12 month
period in the Consumer Price Index (or comparable index for changes in the
"cost-of-living") for the Milan, Italy metropolitan area.

<PAGE>

unless on or before December 31, 1996, the Company has filed such documents
and/or taken such other action as is necessary to cause such common stock to
resume being publicly traded, the Company may, at its option, terminate the
Consultant's engagement hereunder by notice thereof given not later than January
31, 1997, such termination to be effective as of April 30, 1997; provided that
the foregoing shall not apply if the Company has "gone private" (as provided in
Rule 13e-3 of the Rules and Regulations under the Securities Exchange Act of
1934). If, during the 20 trading days preceding December 31, 1997, the average
of the last sale prices of the Company's common stock as quoted on the NASDAQ
interdealer quotation system or as reported by any U.S. stock exchange on which
the Company's common stock is listed, is less than $12.50 per share, then the
Company may, at its option, terminate the Consultant's engagement hereunder by
notice thereof given not later than January 31, 1998, such termination to be
effective on October 31, 1998; provided that if between the date hereof and
December 31, 1997 the Company shall (i) pay a dividend in common stock or make a
distribution in common stock, (ii) subdivide its outstanding common stock, (iii)
combine its outstanding common stock into a smaller number of shares of common
stock, (iv) effect any increase or decrease in the number of outstanding shares
of common stock without receipt of consideration by the Company, or (v) issue by
reclassification of its common stock other securities of the Company, then such
average quoted or listed last sale price shall be adjusted to such per share
price as would have been applicable had the events described in clauses (i),
(ii) (ii), (iv) and (v) not occurred. The provisions of paragraph 5
(Non-competition and Non-Interference) and of paragraph 8 (Salary Continuation)
shall not be applicable to a termination under this paragraph 7(c)(3).

14. Notices to the Consultant:

Como Consultants Limited
Balla Villey
Arragon Lane Santon
Isle of Man, Channel Islands
IM4 1HT
Attention: Mario Tozzi-Condivi
Telephone: 011-44-1624-825-036
011-44-1624-824-968
Fax: 011-44-1624-825-865

Exhibit 10.k

EXHIBIT 10(k)

EXHIBIT A TO EMPLOYMENT AGREEMENT
BETWEEN
DETOMASO INDUSTRIES, INC.
AND
DOMENICO COSTA (EXECUTIVE)

The following numbered paragraphs correspond to the numbered
paragraphs of the Employment Agreement to which this Exhibit A is attached.

1(a) The Executive shall be employed as Managing Director of the
Company's subsidiary, Temporary Integrated Management, to perform such duties
commensurate with such office as the President shall reasonably direct him to
perform, which duties shall be consistent with the provisions of the By-Laws in
effect on the date hereof that relate to the duties of the Managing Director.
The Executive shall report to the President of the Company. The Executive shall
also perform such services for the Company's subsidiaries, consistent with the
foregoing level of responsibility, as may, from time to time, be designated by
the Company.

2. The initial period of the Term shall be three (3) years
commencing on the Effective Date.

3(a) The Executive's base salary shall be at an annual rate of
Lit. 240,000,000.

3(i) During the Term, the Company shall, at its expense, provide
to Executive the use of a medium size car and the Company shall pay for all
costs of insurance, maintenance, repair and operation thereof.

<PAGE>

1934). If, during the 20 trading days preceding December 31, 1997, the average
of the last sale prices of the Company's common stock as quoted on the NASDAQ
interdealer quotation system or as reported by any U.S. stock exchange on which
the Company's common stock is listed, is less than $12.50 per share, then the
Company may, at its option, terminate the Executive's employment hereunder by
notice thereof given not later than January 31, 1998, such termination to be
effective on October 31, 1998; provided that if between the date hereof and
December 31, 1997 the Company shall (i) pay a dividend in common stock or make a
distribution in common stock, (ii) subdivide its outstanding common stock, (iii)
combine its outstanding common stock into a smaller number of shares of common
stock, (iv) effect any increase or decrease in the number of outstanding shares
of common stock without receipt of consideration by the Company, or (v) issue by
reclassification of its common stock other securities of the Company, then such
average quoted or listed last sale price shall be adjusted to such per share
price as would have been applicable had the events described in clauses (i),
(ii) (ii), (iv) and (v) not occurred. The provisions of paragraph 5
(Noncompetition and Noninterference) and of paragraph 8 (Salary Continuation)
shall not be applicable to an employment termination under this paragraph
7(c)(3).

14. Notices to the Executive:

Domenico Costa
[home address]

Telephone:
Fax:

Exhibit 10.l

EXHIBIT 10(l)

EXHIBIT A TO EMPLOYMENT AGREEMENT
BETWEEN
DETOMASO INDUSTRIES, INC.
AND
CARLO PREVITALI (EXECUTIVE)

The following numbered paragraphs correspond to the numbered
paragraphs of the Employment Agreement to which this Exhibit A is attached.

1(a) The Executive shall be employed as Treasurer to perform such
duties commensurate with such office as the President shall reasonably direct
him to perform, which duties shall be consistent with the provisions of the
By-Laws in effect on the date hereof that relate to the duties of the Treasurer.
The Executive shall report to the President of the Company. The Executive shall
also perform such services for the Company's subsidiaries, consistent with the
foregoing level of responsibility, as may, from time to time, be designated by
the Company.

2. The initial period of the Term shall be three (3) years
commencing on the Effective Date.

3(a) The Executive's base salary shall be at an annual rate of
Lit. 240,000,000.

3(i) During the Term, the Company shall, at its expense, provide
to Executive the use of a full size Lancia and the Company shall pay for all
costs of insurance, maintenance, repair and operation thereof.

<PAGE>

Page 2
November 1, 1995

the Company may, at its option, terminate the Executive's employment hereunder
by notice thereof given not later than January 31, 1997, such termination to be
effective as of April 30, 1997; provided that the foregoing shall not apply if
the Company has "gone private" (as provided in Rule 13e-3 of the Rules and
Regulations under the Securities Exchange Act of 1934). If, during the 20
trading days preceding December 31, 1997, the average of the last sale prices of
the Company's common stock as quoted on the NASDAQ interdealer quotation system
or as reported by any U.S. stock exchange on which the Company's common stock is
listed, is less than $12.50 per share, then the Company may, at its option,
terminate the Executive's employment hereunder by notice thereof given not later
than January 31, 1998, such termination to be effective on October 31, 1998;
provided that if between the date hereof and December 31, 1997 the Company shall
(i) pay a dividend in common stock or make a distribution in common stock, (ii)
subdivide its outstanding common stock, (iii) combine its outstanding common
stock into a smaller number of shares of common stock, (iv) effect any increase
or decrease in the number of outstanding shares of common stock without receipt
of consideration by the Company, or (v) issue by reclassification of its common
stock other securities of the Company, then such average quoted or listed last
sale price shall be adjusted to such per share price as would have been
applicable had the events described in clauses (i), (ii) (ii), (iv) and (v) not
occurred. The provisions of paragraph 5 (Non-competition and Non-Interference)
and of paragraph 8 (Salary Continuation) shall not be applicable to an
employment termination under this paragraph 7(c)(3).

14. Notices to the Executive:

Carlo Previtali
[home address]

Telephone:
Fax:

Exhibit 10.m

EXHIBIT 10(m)

EXHIBIT A TO EMPLOYMENT AGREEMENT
BETWEEN
DETOMASO INDUSTRIES, INC.
AND
GIOVANNI AVALLONE (EXECUTIVE)

The following numbered paragraphs correspond to the numbered
paragraphs of the Employment Agreement to which this Exhibit A is attached.

1(a) The Executive shall be employed as Director in Special Projects
and Merchant Banking Group to perform such duties commensurate with such office
as the President shall reasonably direct him to perform, which duties shall be
consistent with the provisions of the ByLaws in effect on the date hereof. The
Executive shall report to the President of the Company. The Executive's
employment hereunder shall be on a part-time basis, subject to his other
business interests. If the Executive becomes available on a full time basis then
it is expected that the Company and the Executive will negotiate an amendment to
this Employment Agreement, with appropriate adjustment to the compensation
payable hereunder. The Executive shall also perform such services for the
Company's subsidiaries, consistent with the foregoing level of responsibility,
as may, from time to time, be designated by the Company.

1(b) Executive further agrees to accept election and to serve during
all or any part of the Term as a director of the Company if elected to such
position by the shareholders of the Company, and of any direct or indirect
subsidiary of the Company if elected to such position by the Company, without
any compensation therefor other than that specified in this Agreement. The
Company shall use its best efforts to cause Executive to be elected as a
director of the Company during the Term and shall include him in the management
slate for election as a director at every shareholders meeting during the Term
at which his term as a director would otherwise expire.

2. The initial period of the Term shall be three (3) years
commencing on the Effective Date.

3(a) The Executive's base salary shall be at an annual rate of
Lit. 50,000,000.

<PAGE>

Page 2
November 1, 1995

thereof given not later than January 31, 1997, such termination to be effective
as of April 30, 1997; provided that the foregoing shall not apply if the Company
has "gone private" (as provided in Rule 13e-3 of the Rules and Regulations under
the Securities Exchange Act of 1934). If, during the 20 trading days preceding
December 31, 1997, the average of the last sale prices of the Company's common
stock as quoted on the NASDAQ interdealer quotation system or as reported by any
U.S. stock exchange on which the Company's common stock is listed, is less than
$12.50 per share, then the Company may, at its option, terminate the Executive's
employment hereunder by notice thereof given not later than January 31, 1998,
such termination to be effective on October 31, 1998; provided that if between
the date hereof and December 31, 1997 the Company shall (i) pay a dividend in
common stock or make a distribution in common stock, (ii) subdivide its
outstanding common stock, (iii) combine its outstanding common stock into a
smaller number of shares of common stock, (iv) effect any increase or decrease
in the number of outstanding shares of common stock without receipt of
consideration by the Company, or (v) issue by reclassification of its common
stock other securities of the Company, then such average quoted or listed last
sale price shall be adjusted to such per share price as would have been
applicable had the events described in clauses (i), (ii) (ii), (iv) and (v) not
occurred. The provisions of paragraph 5 (Non-competition and Non-Interference)
and of paragraph 8 (Salary Continuation) shall not be applicable to an
employment termination under this paragraph 7(c)(3).

14. Notices to the Executive:

Giovanni Avallone
[home address]

Telephone:
Fax:

Exhibit 10.n

EXHIBIT 10(n)

November 1, 1995

Mr. Howard E. Chase
44 Holland Brook Road
Whitehouse Station, New Jersey 08889

Re: DE TOMASO INDUSTRIES, INC. ("DTI")
1995 NON-QUALIFIED STOCK OPTION PLAN

Dear Mr. Chase:

I am pleased to advise you that on November 1, 1995 DTI
granted to you an option (the "Option" or "Options") to purchase up to 300,000
shares of DTI's Common Stock pursuant to the provisions of DTI's 1995
Non-Qualified Stock Option Plan (the "Non-Qual Plan"). The Option entitles you
to purchase DTI's shares from DTI, at a price of $12.26 per share, being not
less than the fair market value of a share of DTI Common Stock on November 1,
1995. You may exercise your Option starting on May 1, 1996, provided however
that you may not purchase more than 20% of such shares prior to November 1,
1996, or more than 40% of such shares prior to November 1, 1997 (including all
prior purchases hereunder) or more than 60% of such shares prior to November 1,
1998 (including all prior purchases hereunder) or more than 80% of such shares
prior to November 1, 1999 (including all prior purchases hereunder). The Option
expires on November 1, 2000, unless sooner terminated as provided in the
Non-Qual Plan. Additional terms and conditions regarding this Option are fully
set forth in the copy of the Non-Qual Plan accompanying this letter. For your
convenience, we highlight the following provisions of the Non-Qual Plan.

(1) To exercise your Option, you should give DTI written
notice of the number of shares of DTI Common Stock you wish to purchase (the
minimum number of shares at any one time is 50) and include payment for such
shares with your notice.

(2) Your Option to buy shares is non-transferrable and
expires earlier than the expiration date set forth above if your employment with
DTI is terminated for any reason. In the event of retirement, you may exercise
your Option within three (3) months after the effective date of your retirement.
In the event of death, your Option is exercisable within three (3) months
thereafter, and in the event of your permanent disability, your Option is
exercisable within six (6) months thereafter. In the event of termination of
your employment for "cause" (as defined in the Non-Qual Plan) your Option shall
immediately terminate.

<PAGE>

Page 2
Mr. Howard E. Chase November 1, 1995

(3) You will be required to hold the shares which you
acquire under the Option unless and until the shares are registered pursuant to
federal securities law or the shares can be sold pursuant to an exemption from
the registration requirements of the federal securities laws. The shares which
may be purchased under the Option are not presently registered under the federal
securities laws.

(4) At the time of your acquisition of any shares of DTI's
Common Stock pursuant to this Option, DTI may require that you represent to DTI
in writing that you are acquiring such shares for your own account for
investment, and not with a view to, or for sale in connection with, the
distribution of all or a part thereof. The certificate for such shares may
include any legends which DTI deems appropriate to reflect any restrictions on
transfer.

We look forward to your continuing relationship with DTI,
and continuing success in the future.

Very truly yours,

De TOMASO INDUSTRIES, INC.

By:_______________________________________
Francesco Pugno Vanoni, Chairman

Exhibit 10.o

EXHIBIT 10(o)

November 1, 1995

Mr. Albino Collini

Re: DE TOMASO INDUSTRIES, INC. ("DTI")
1995 NON-QUALIFIED STOCK OPTION PLAN

Dear Mr. Collini:

I am pleased to advise you that on November 1, 1995 DTI
granted to you an option (the "Option" or "Options") to purchase up to 150,000
shares of DTI's Common Stock pursuant to the provisions of DTI's 1995
Non-Qualified Stock Option Plan (the "Non-Qual Plan"). The Option entitles you
to purchase DTI's shares from DTI, at a price of $12.26 per share, being not
less than the fair market value of a share of DTI Common Stock on November 1,
1995. You may exercise your Option starting on May 1, 1996, provided however
that you may not purchase more than 20% of such shares prior to November 1,
1996, or more than 40% of such shares prior to November 1, 1997 (including all
prior purchases hereunder) or more than 60% of such shares prior to November 1,
1998 (including all prior purchases hereunder) or more than 80% of such shares
prior to November 1, 1999 (including all prior purchases hereunder). The Option
expires on November 1, 2000, unless sooner terminated as provided in the
Non-Qual Plan. Additional terms and conditions regarding this Option are fully
set forth in the copy of the Non-Qual Plan accompanying this letter. For your
convenience, we highlight the following provisions of the Non-Qual Plan.

(2) Your Option to buy shares is non-transferrable and expires
earlier than the expiration date set forth above if your employment with DTI is
terminated for any reason. In the event of retirement, you may exercise your
Option within three (3) months after the effective date of your retirement. In
the event of death, your Option is exercisable within three (3) months
thereafter, and in the event of your permanent disability, your Option is
exercisable within six (6) months thereafter. In the event of termination of
your employment for "cause" (as defined in the Non-Qual Plan) your Option shall
immediately terminate.

<PAGE>

Page 2
Mr. Albino Collini November 1, 1995

(4) At the time of your acquisition of any shares of
DTI's Common Stock pursuant to this Option, DTI may require that you represent
to DTI in writing that you are acquiring such shares for your own account for
investment, and not with a view to, or for sale in connection with, the
distribution of all or a part thereof. The certificate for such shares may
include any legends which DTI deems appropriate to reflect any restrictions on
transfer.

We look forward to your continuing relationship with DTI, and
continuing success in the future.

Very truly yours,

De TOMASO INDUSTRIES, INC.

By:__________________________________
Howard E. Chase, President

Exhibit 10.p

EXHIBIT 10(p)

November 1, 1995

Como Consultants Limited
Balla Villey
Arragon Lane Santon
Isle of Man, Channel Islands
IM4 1HT

Attention: Mr. Mario Tozzi-Condivi

Re: DE TOMASO INDUSTRIES, INC. ("DTI")
1995 NON-QUALIFIED STOCK OPTION PLAN

Dear Mr. Tozzi-Condivi:

I am pleased to advise you that on November 1, 1995 DTI
granted to you an option (the "Option" or "Options") to purchase up to 200,000
shares of DTI's Common Stock pursuant to the provisions of DTI's 1995
Non-Qualified Stock Option Plan (the "Non-Qual Plan"). The Option entitles you
to purchase DTI's shares from DTI, at a price of $12.26 per share, being not
less than the fair market value of a share of DTI Common Stock on November 1,
1995. You may exercise your Option starting on May 1, 1996, provided however
that you may not purchase more than 20% of such shares prior to November 1,
1996, or more than 40% of such shares prior to November 1, 1997 (including all
prior purchases hereunder) or more than 60% of such shares prior to November 1,
1998 (including all prior purchases hereunder) or more than 80% of such shares
prior to November 1, 1999 (including all prior purchases hereunder). The Option
expires on November 1, 2000, unless sooner terminated as provided in the
Non-Qual Plan. Additional terms and conditions regarding this Option are fully
set forth in the copy of the Non-Qual Plan accompanying this letter. For your
convenience, we highlight the following provisions of the Non-Qual Plan.

(2) Your Option to buy shares is non-transferrable and
expires earlier than the expiration date set forth above if your employment with
DTI is terminated for any reason. In the event of retirement of Mr.
Tozzi-Condivi, you may exercise your Option within three (3) months after the
effective date of your retirement. In the event of death of Mr. Tozzi-Condivi,
your Option is exercisable within three (3) months thereafter, and in the event
of permanent

<PAGE>

Page 2
Como Consultants Limited November 1, 1995

disability of Mr. Tozzi-Condivi, your Option is exercisable within six (6)
months thereafter. In the event of termination of your consulting for "cause"
(as defined in the Non-Qual Plan) your Option shall immediately terminate.

(4) At the time of your acquisition of any shares of
DTI's Common Stock pursuant to this Option, DTI may require that you represent
to DTI in writing that you are acquiring such shares for your own account for
investment, and not with a view to, or for sale in connection with, the
distribution of all or a part thereof. The certificate for such shares may
include any legends which DTI deems appropriate to reflect any restrictions on
transfer.

We look forward to your continuing relationship with DTI, and
continuing success in the future.

Very truly yours,

De TOMASO INDUSTRIES, INC.

By:__________________________________
Howard E. Chase, President

Exhibit 10.q

EXHIBIT 10(q)

November 1, 1995

Mr. Domenico Costa

Re: DE TOMASO INDUSTRIES, INC. ("DTI")
1995 NON-QUALIFIED STOCK OPTION PLAN

Dear Mr. Costa:

I am pleased to advise you that on November 1, 1995 DTI
granted to you an option (the "Option" or "Options") to purchase up to 60,000
shares of DTI's Common Stock pursuant to the provisions of DTI's 1995
Non-Qualified Stock Option Plan (the "Non-Qual Plan"). The Option entitles you
to purchase DTI's shares from DTI, at a price of $12.26 per share, being not
less than the fair market value of a share of DTI Common Stock on November 1,
1995. You may exercise your Option starting on may 1, 1996, provided however
that you may not purchase more than 331/3% of such shares prior to November 1,
1996, or more than 662/3% of such shares prior to November 1, 1997 (including
all prior purchases hereunder). The Option expires on November 1, 2000, unless
sooner terminated as provided in the Non-Qual Plan. Additional terms and
conditions regarding this Option are fully set forth in the copy of the Non-Qual
Plan accompanying this letter. For your convenience, we highlight the following
provisions of the Non-Qual Plan.

(3) You will be required to hold the shares which you
acquire under the Option unless and until the shares are registered pursuant to
federal securities law or the shares

<PAGE>

Page 2
Mr. Domenico Costa November 1, 1995

can be sold pursuant to an exemption from the registration requirements of the
federal securities laws. The shares which may be purchased under the Option are
not presently registered under the federal securities laws.

(4) At the time of your acquisition of any shares of
DTI's Common Stock pursuant to this Option, DTI may require that you represent
to DTI in writing that you are acquiring such shares for your own account for
investment, and not with a view to, or for sale in connection with, the
distribution of all or a part thereof. The certificate for such shares may
include any legends which DTI deems appropriate to reflect any restrictions on
transfer.

We look forward to your continuing relationship with DTI, and
continuing success in the future.

Very truly yours,

De TOMASO INDUSTRIES, INC.

By:___________________________________
Howard E. Chase, President

Exhibit 10.r

EXHIBIT 10(r)

November 1, 1995

Mr. Carlo Previtali

Re: DE TOMASO INDUSTRIES, INC. ("DTI")
1995 NON-QUALIFIED STOCK OPTION PLAN

Dear Mr. Previtali:

I am pleased to advise you that on November 1, 1995 DTI
granted to you an option (the "Option" or "Options") to purchase up to 60,000
shares of DTI's Common Stock pursuant to the provisions of DTI's 1995
Non-Qualified Stock Option Plan (the "Non-Qual Plan"). The Option entitles you
to purchase DTI's shares from DTI, at a price of $12.26 per share, being not
less than the fair market value of a share of DTI Common Stock on November 1,
1995. You may exercise your Option starting on May 1, 1996, provided however
that you may not purchase more than 331/3% of such shares prior to November 1,
1996, or more than 662/3% of such shares prior to November 1, 1997 (including
all prior purchases hereunder). The Option expires on November 1, 2000, unless
sooner terminated as provided in the Non-Qual Plan. Additional terms and
conditions regarding this Option are fully set forth in the copy of the Non-Qual
Plan accompanying this letter. For your convenience, we highlight the following
provisions of the Non-Qual Plan.

(3) You will be required to hold the shares which you
acquire under the Option unless and until the shares are registered pursuant to
federal securities law or the shares

<PAGE>

Page 2
Mr. Carlo Previtali November 1, 1995

(4) At the time of your acquisition of any shares of
DTI's Common Stock pursuant to this Option, DTI may require that you represent
to DTI in writing that you are acquiring such shares for your own account for
investment, and not with a view to, or for sale in connection with, the
distribution of all or a part thereof. The certificate for such shares may
include any legends which DTI deems appropriate to reflect any restrictions on
transfer.

We look forward to your continuing relationship with DTI, and
continuing success in the future.

Very truly yours,

De TOMASO INDUSTRIES, INC.

By:___________________________________
Howard E. Chase, President

Exhibit 10.s

EXHIBIT 10(s)

November 1, 1995

Mr. Giovanni Avallone
Orimartin
Via Cinovetti 13
Brescia, Italy

Re: DE TOMASO INDUSTRIES, INC. ("DTI")
1995 NON-QUALIFIED STOCK OPTION PLAN

Dear Mr. Avallone:

I am pleased to advise you that on November 1, 1995 DTI
granted to you an option (the "Option" or "Options") to purchase up to 60,000
shares of DTI's Common Stock pursuant to the provisions of DTI's 1995
Non-Qualified Stock Option Plan (the "Non-Qual Plan"). The Option entitles you
to purchase DTI's shares from DTI, at a price of $12.26 per share, being not
less than the fair market value of a share of DTI Common Stock on November 1,
1995. You may exercise your Option starting on May 1, 1996, provided however
that you may not purchase more than 331/3% of such shares prior to November 1,
1996, or more than 662/3% of such shares prior to November 1, 1997 (including
all prior purchases hereunder). The Option expires on November 1, 2000, unless
sooner terminated as provided in the Non-Qual Plan. Additional terms and
conditions regarding this Option are fully set forth in the copy of the Non-Qual
Plan accompanying this letter. For your convenience, we highlight the following
provisions of the Non-Qual Plan.

<PAGE>

Page 2
Mr. Giovanni Avallone November 1, 1995

(4) At the time of your acquisition of any shares of
DTI's Common Stock pursuant to this Option, DTI may require that you represent
to DTI in writing that you are acquiring such shares for your own account for
investment, and not with a view to, or for sale in connection with, the
distribution of all or a part thereof. The certificate for such shares may
include any legends which DTI deems appropriate to reflect any restrictions on
transfer. We look forward to your continuing relationship with DTI, and
continuing success in the future.

Very truly yours,

De TOMASO INDUSTRIES, INC.

By:_________________________________
Howard E. Chase, President

Exhibit 10.t

EXHIBIT 10(t)

November 1, 1995

Mr. Santiago De Tomaso

Re: DE TOMASO INDUSTRIES, INC. ("DTI")
1995 NON-QUALIFIED STOCK OPTION PLAN

Dear Mr. De Tomaso:

I am pleased to advise you that on November 1, 1995 DTI
granted to you an option (the "Option" or "Options") to purchase up to 30,000
shares of DTI's Common Stock pursuant to the provisions of DTI's 1995
Non-Qualified Stock Option Plan (the "Non-Qual Plan"). The Option entitles you
to purchase DTI's shares from DTI, at a price of $12.26 per share, being not
less than the fair market value of a share of DTI Common Stock on November 1,
1995. You may exercise your Option starting on May 1, 1996, provided however
that you may not purchase more than 331/3% of such shares prior to November 1,
1996, or more than 662/3% of such shares prior to November 1, 1997 (including
all prior purchases hereunder). The Option expires on November 1, 2000, unless
sooner terminated as provided in the Non-Qual Plan. Additional terms and
conditions regarding this Option are fully set forth in the copy of the Non-Qual
Plan accompanying this letter. For your convenience, we highlight the following
provisions of the Non-Qual Plan.

(3) You will be required to hold the shares which you
acquire under the Option unless and until the shares are registered pursuant to
federal securities law or the shares

<PAGE>

Page 2
Mr. Santiago De Tomaso November 1, 1995

Very truly yours,

De TOMASO INDUSTRIES, INC.

By:___________________________________
Howard E. Chase, President

<ARTICLE> 5

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<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 15,199,622
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<RECEIVABLES> 15,738,665
<ALLOWANCES> 798,489
<INVENTORY> 19,343,199
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0
0
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