TEREX CORP, S-3/A, 1997-06-30

TEREX CORP
S-3/A, 1997-06-30
INDUSTRIAL TRUCKS, TRACTORS, TRAILORS & STACKERS

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 30, 1997.

REGISTRATION NO. 333-27749

================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 1

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

TEREX CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
DELAWARE 3537 34-1531521
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>

500 POST ROAD EAST
WESTPORT, CONNECTICUT 06880
(203) 222-7170
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------

MARVIN B. ROSENBERG, ESQ.
TEREX CORPORATION
500 POST ROAD EAST
WESTPORT, CONNECTICUT 06880
(203) 222-7170
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------

COPIES TO:

<TABLE>
<S> <C>
ROBINSON SILVERMAN PEARCE ARONSOHN & BERMAN LLP SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
1290 AVENUE OF THE AMERICAS 919 THIRD AVENUE
NEW YORK, NEW YORK 10104 NEW YORK, NEW YORK 10022
ATTENTION: STUART A. GORDON, ESQ. ATTENTION: MARK C. SMITH, ESQ.
ERIC I COHEN, ESQ.
</TABLE>

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

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

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES
LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED JUNE 30, 1997

7,000,000 SHARES

[TEREX LOGO]

Common Stock
($.01 par value)
------------------

Of the shares of common stock, par value $.01 per share ("Common Stock"), of
Terex Corporation ("Terex" or the "Company") offered hereby (the "Shares"),
5,000,000 are being sold by the Company and 2,000,000 are being sold by the
Selling Stockholder named herein under "Selling Stockholder" (the "Offering").
The Company will not receive any of the proceeds from the sale of Shares by the
Selling Stockholder. The Common Stock is listed on the New York Stock Exchange
("NYSE") under the Symbol "TEX." On June 27, 1997, the last reported sale price
of the Common Stock on the NYSE Composite Tape was $18 3/4.

FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH
AN INVESTMENT IN THE COMMON STOCK, SEE "RISK FACTORS" BEGINNING ON PAGE 11
HEREIN.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS PROCEEDS TO
PRICE TO DISCOUNTS AND TO SELLING
PUBLIC COMMISSIONS COMPANY(1) STOCKHOLDER
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Per Share..................... $ $ $ $
Total(2)...................... $ $ $ $
</TABLE>

(1) Before deduction of expenses payable by the Company estimated at $1,062,500.
(2) The Company has granted the Underwriters an option, exercisable by Credit
Suisse First Boston Corporation for 30 days from the date of this
Prospectus, to purchase a maximum of 700,000 additional shares of Common
Stock from the Company solely to cover over-allotments of Shares. If the
option is exercised in full, the total Price to Public will be $ ,
Underwriting Discounts and Commissions will be $ , and Proceeds to
Company will be $ .

The Shares are offered by the several Underwriters when, as and if issued
by the Company, delivered to and accepted by the Underwriters and subject to
their right to reject orders in whole or in part. It is expected that the Shares
will be ready for delivery on or about , 1997, against payment in
immediately available funds.

CREDIT SUISSE FIRST BOSTON

SALOMON BROTHERS INC

FURMAN SELZ LLC

J.P. MORGAN & CO.

Prospectus dated , 1997.
<PAGE> 3

[PHOTO PAGE]

CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES OFFERED
HEREBY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE SHORT
COVERING TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES,
SEE "UNDERWRITING."

P&H IS A REGISTERED TRADEMARK OF HARNISCHFEGER CORPORATION. SIMON IS A
REGISTERED TRADEMARK OF SIMON ENGINEERING PLC. CELLA IS A TRADEMARK OF SERGIO
CELLA. EFFER IS A TRADEMARK OF EFFER SPA. ALL OTHER TRADEMARKS AND THE
TRADENAMES REFERRED TO IN THIS PROSPECTUS ARE REGISTERED TRADEMARKS OF TEREX
CORPORATION.

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<PAGE> 4

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and financial statements and
the related notes thereto appearing elsewhere or incorporated by reference in
this Prospectus. Except as otherwise indicated, all information contained in
this Prospectus assumes no exercise of the over-allotment option of the
Underwriters. As used herein, unless otherwise indicated or unless the context
otherwise requires, the following terms shall have the respective meanings set
forth below: (i) "Terex" or the "Company" refers to Terex Corporation and its
subsidiaries, including the Simon Access Companies and the Square Shooter
Business; (ii) the "Simon Access Companies" and the "Simon Acquisition,"
respectively, refer to certain former subsidiaries of Simon Engineering plc and
the acquisition thereof by the Company on April 7, 1997; (iii) the "Square
Shooter Business" and the "Square Shooter Acquisition," respectively, refer to
Baraga Products, Inc. and M&M Enterprises of Baraga, Inc. and the acquisition
thereof by the Company on April 14, 1997; (iv) the "Clark Material Handling
Segment" and the "Clark Sale," respectively, refer to the former worldwide
material handling business of the Company and the sale thereof on November 27,
1996; and (v) "Continuing Operations" refers to the operations of the Company
excluding the Clark Material Handling Segment and all references in this
Prospectus to "actual sales" and "actual operating income" are to sales and
operating income from Continuing Operations. References in this Prospectus to
the Company's pro forma sales, pro forma results of operations and pro forma
indebtedness for 1996 and the quarter ended March 31, 1997 refer to or are
derived from the Company's Unaudited Pro Forma Condensed Consolidated Statements
of Operations for the year ended December 31, 1996 and for the quarter ended
March 31, 1997, respectively, and the Company's Unaudited Pro Forma Condensed
Consolidated Balance Sheet as of March 31, 1997, in each case, giving effect to
(1) the Simon Acquisition, (2) the Square Shooter Acquisition, (3) the
redemption of the Company's Series A Cumulative Redeemable Convertible Preferred
Stock, par value $.01 per share (the "Series A Preferred Stock"), (4) the New
Credit Facility (as defined below) and application of the net proceeds
therefrom, and (5) the completion of the Offering by the Company and the
application of the net proceeds therefrom; and, with respect to the year ended
December 31, 1996, the repayment of indebtedness with a portion of the net
proceeds from the Clark Sale, as if such application of proceeds had occurred at
the beginning of such period. References in this Prospectus to "pro forma"
market share and backlog information include the market shares and backlogs of
the Simon Access Companies and the Square Shooter Business.

THE COMPANY

The Company generated 1996 sales of approximately $678 million, as compared
to sales of approximately $501 million for 1995. Of such increase of $177
million, approximately $98 million is attributable to organic growth in the
Company's continuing operations while approximately $79 million resulted from
the inclusion in 1996 of full-year results of operations for certain acquired
businesses, as compared to part-year results of operations for such acquired
businesses included in 1995. Nearly 25% of the Company's 1996 sales were
replacement parts and related business, which typically have higher margins than
sales of new machines. Approximately 68% of 1996 sales were generated outside
North America. Excluding approximately $30 million of nonrecurring charges
during 1996, the Company's 1996 operating income was approximately $35 million,
as compared to actual operating income of $13 million in 1995. Pro forma 1996
sales were $887 million, and pro forma 1996 operating income, excluding special
charges of $30 million, was approximately $50 million. The

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<PAGE> 5

Company's pro forma backlog as of March 31, 1997 was $232 million, as compared
to pro forma backlog of $166 million as of December 31, 1996.

Net income for the Company was $3.5 million for the first quarter of 1997
($5.3 million on a pro forma basis). For 1996, factoring out extraordinary and
non-recurring events, the net loss was $7.4 million. On a pro forma basis, and
factoring out extraordinary and non-recurring events, 1996 net income was $10.5
million. The 1995 net loss was $42.5 million.

The Company's ratio of indebtedness to total capitalization at March 31,
1997, December 31, 1996 and December 31, 1995 was 128%, 106%, and 124%,
respectively. On a pro forma basis, the ratio of indebtedness to total
capitalization at March 31, 1997 was approximately 100%. The Company's
stockholders' deficit at March 31, 1997, December 31, 1996 and December 31, 1995
was $73.5 million, $71.7 million and $96.9 million, respectively. On a pro forma
basis, at March 31, 1997 the stockholders' deficit of the Company was $0.2
million, primarily reflecting the effects of the Offering.

Terex Cranes

Terex Cranes manufactures telescopic mobile cranes (including rough
terrain, truck and all terrain mobile cranes), aerial work platforms (including
scissor, articulated boom and straight telescoping boom aerial work platforms),
utility aerial devices (including digger derricks and articulated aerial
devices), telescopic material handlers (including container stackers and rough
terrain lift trucks), truck mounted cranes (boom trucks) and related components
and replacement parts. These products are primarily used by construction and
industrial customers, as well as utility companies. While Terex Cranes' market
share varies by product and geographic market, the Company believes it has
strong market share positions in the products and geographic markets which
account for the largest percentage of its annual sales. The Company believes
that it is the second largest manufacturer in the United States (with an
estimated 30% market share) and the leading manufacturer in France and Italy of
rough terrain, truck and all terrain telescopic mobile cranes. Terex Cranes is
comprised of a number of divisions and subsidiaries, and is headquartered in
Conway, South Carolina.

Terex Cranes generated approximately $364 million of 1996 sales (54% of
total Company 1996 sales), as compared to 1995 sales of approximately $252
million (50% of total Company sales). Approximately 61% of such 1996 sales was
generated outside North America. Replacement parts and related business
accounted for approximately 20% of Terex Cranes' 1996 sales. Excluding $18.3
million of nonrecurring charges during 1996 ($13.3 million related to goodwill
and $5.0 million related to fixed assets and other items), Terex Cranes' 1996
operating income was approximately $23.1 million, as compared to operating
income of approximately $7.2 million in 1995. On a pro forma basis, in 1996
Terex Cranes generated approximately $573 million of sales (65% of total Company
1996 pro forma sales). 1996 pro forma operating income was $38 million before
the $18.3 million of nonrecurring charges mentioned above.

Terex Trucks

Terex Trucks manufactures articulated and rigid off-highway trucks, high
capacity surface mining trucks and related components and replacement parts.
These products are used primarily by construction, mining and government
customers. Terex Trucks is headquartered in Motherwell, Scotland and is
comprised of Terex Equipment Limited ("TEL"), located in Motherwell, Scotland,
and Unit Rig ("Unit Rig"), located in Tulsa, Oklahoma.

Terex Trucks generated approximately $315 million of sales in 1996 (46% of
total Company 1996 sales) as compared to sales of approximately $250 million for
1995 (50% of total Company sales). Approximately 75% of Terex Trucks' 1996 sales
were generated outside of North America. Replacement parts and related business
accounted for approximately 33% of Terex Trucks' 1996 sales. Excluding
approximately $10.4 million of nonrecurring charges during 1996 ($8.5 million
primarily to reduce the value of a production facility to reflect changes in
production and $1.9 million of goodwill), Terex Trucks' 1996 operating income
was approximately $16.0 million, as compared to approximately $13.0 million in
1995.

4
<PAGE> 6

INDUSTRY OVERVIEW AND OUTLOOK FOR PRINCIPAL PRODUCTS

Telescopic Mobile Cranes -- Demand in the telescopic mobile crane industry
is primarily dependent upon construction activity and the replacement cycle for
the existing population of cranes. The Company believes that the worldwide
mobile crane industry is entering a period of growth due to a combination of the
following factors: (i) a strong and sustained period of construction activity in
North America and expected growth in construction activity in Europe as well as
in infrastructure development in emerging markets, including the Pacific Rim;
(ii) the unusually high number of telescopic mobile cranes built in the late
1970s in North America are beginning to reach the ends of their useful lives
(which the Company estimates to be approximately 20 years); and (iii) higher
rental fleet utilization. Because construction projects require differing boom
lengths and lifting capacities and the ownership by contractors of a full fleet
of machines with varying capabilities is impractical, the market for telescopic
mobile cranes is increasingly dominated by rental fleets. The Company believes
that rental fleet operators, which according to industry sources represent
approximately 85% of the new telescopic mobile crane market in North America and
approximately 55% in France and Italy, desire products which are low cost,
simple to use and easy to maintain, enabling them to generate higher returns on
their investments. The Company seeks to capitalize on these trends with its low
cost, best value strategy which focuses on improving customer productivity and
investment returns.

Aerial Work Platforms -- The aerial work platform industry in North America
has developed over the past 20 years as an efficient alternative to scaffolding
and ladders. As with the telescopic mobile crane industry, the aerial work
platform market has been increasingly dominated by rental fleets because
contractors require workers to be elevated only for limited times during a given
job and different jobs require different platform heights, making ownership of a
single machine impractical. The Company believes that approximately 90% of all
aerial work platform sales in North America are to rental fleets. Recently, the
equipment rental industry has been undergoing a process of consolidation. As a
result, the larger aerial work platform rental fleet owners are increasingly
demanding products that are low cost, simple to use and easy to maintain. To
meet the objectives of the equipment rental industry the Company has designed
its aerial work platforms to incorporate these characteristics.

Utility Aerial Devices -- The Company also manufactures utility aerial
devices which are used to set telephone poles and move transformers and other
material to work areas at the top of poles, and to elevate workers to work areas
at the top of poles or in trees. Customers include electric utilities, local
telephone companies, private utility repair contractors and tree trimmers. The
Company believes that the utility industry is moving toward outsourcing its
maintenance functions to independent maintenance contractors, and that it is
well positioned to capitalize on this trend due to its strategy to manufacture
simplified products at lower cost, its existing dealer relationships and its
direct relationships with major private contractors.

Off-Highway Trucks -- According to industry sources, the global market for
off-highway trucks is concentrated in three main regions: North America
(approximately 35%), Europe (approximately 28%) and the Pacific Rim
(approximately 22%). These markets are dependent on large private construction
project activity and public infrastructure development, both of which have been
soft in Europe in recent years and strong in the United States and the Pacific
Rim. The Company believes that it is well positioned to capitalize on any demand
that may arise from such activity or development. Terex believes that fleet
operators in the United States and large construction companies in the Pacific
Rim generally prefer products that are low cost, simple to use and easy to
maintain, and that its products exhibit these characteristics. The Company also
believes that it is well positioned to capitalize on future growth in Europe
through an existing private label supply agreement and in China through an
existing joint venture relationship.

High Capacity Surface Mining Trucks -- High capacity surface mining trucks
are typically operated around the clock, seven days a week, often running
several weeks between maintenance stops. Accordingly, availability, reliability
and hauling efficiency are of critical concern to mine operators. The Company
offers electric drive trucks in which a diesel engine drives an alternator which
powers two wheel motors, and believes that electric drive vehicles are more
reliable and less expensive to operate than mechanical drive trucks. Terex
believes that the current demand levels will continue, with earnings
opportunities from the development of more cost efficient designs and
manufacturing processes. The Company is taking several strategic actions to
reduce the cost of its

5
<PAGE> 7

trucks which include component outsourcing, modular assembly process
implementation and development of a larger capacity truck with a new generation
electric drive system.

BUSINESS STRATEGY

The Company has undergone significant management changes since 1992. Ronald
M. DeFeo joined the Company in May 1992, was appointed President and Chief
Operating Officer in October 1993 and was named Chief Executive Officer in March
1995. Since joining the Company, Mr. DeFeo has recruited several new senior
executives to Terex, and under the direction of this new management team, Terex
has implemented a series of interrelated strategic initiatives designed to
increase sales, earnings and shareholder value.

Focus on Core Operations -- For most of 1996, Terex was comprised of three
operating businesses: Terex Cranes, Terex Trucks and the Clark Material Handling
Segment, which manufactured internal combustion and electric lift trucks,
electric walkies and related components and replacement parts. Given the growth
prospects, higher margins and stronger competitive positions of the Terex Cranes
and Terex Trucks segments, as compared to the relatively low margins and market
share of its material handling business, in November 1996 Terex sold the Clark
Material Handling Segment for approximately $140 million in cash. The Clark Sale
has enabled management to focus on growing and improving the operations of its
core crane and truck businesses.

Reduce Costs and Improve Manufacturing Efficiency -- Over the past few
years, the Company has initiated several programs to increase profitability
through cost reductions and improved manufacturing efficiency. The Company's
cost cutting has enabled it to increase profitability at its core operations and
rapidly overhaul and integrate acquisitions. The Company follows a disciplined
acquisition integration strategy in order to improve profitability. As part of
the integration strategy, the Company evaluates every cost component of the
acquired business and typically (i) consolidates manufacturing operations, (ii)
increases the efficiency of manufacturing processes through improved material
flow and outsourcing, (iii) reduces overhead and (iv) emphasizes those products
that yield the highest margins, including the replacement parts and related
business. More specifically, this strategy involves eliminating marginally
profitable or unprofitable product lines, closing underutilized and inefficient
plants, liquidating excess inventories and substantially reducing both hourly
and salaried indirect personnel. The Company has also been able to apply its
cost reduction strategy, developed through acquisition integration, to its
existing businesses. Management believes it has established a philosophy of
continuous cost reduction in all of its operations. Recent examples of cost
reduction initiatives are listed below.

- When the Company acquired PPM (as defined below) in May 1995, total
headcount at PPM was approximately 840, including approximately 430
employees categorized as indirect. As a result of numerous cost reduction
initiatives, total headcount at PPM was reduced to approximately 640 at
December 31, 1996, while the indirect headcount at PPM was reduced to
approximately 260. During that same period sales at PPM increased.

- The Company has streamlined many of its manufacturing facilities by
outsourcing capital intensive, low value added production processes
enabling the Company to focus on product design and integration. For
example, by outsourcing certain welding operations at its Conway, South
Carolina telescopic mobile crane manufacturing facility, the Company
believes it has achieved over $2 million of annualized savings.

- Cost reductions at the newly acquired Simon Access Companies have already
begun, including reduction of headcount by approximately 130 as of May
15, 1997, primarily in indirect personnel. The Company estimates
initiatives already implemented will reduce annual operating expenses by
approximately $7 million and the Company anticipates further cost savings
as the Simon Access Companies are more completely integrated into the
Terex family.

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<PAGE> 8

product design at a lower price, it can increase sales and gain market share.
For example, Terex Cranes' primary customers, rental companies, are generally
unable to charge a premium rental rate for equipment that has sophisticated, but
nonessential features. Consequently, the Company believes its products offer
virtually the same utility and marketability as the competition's products, but
at a lower cost to the customer.

Improve Financial Flexibility -- The Company has initiated a strategy to
improve significantly its financial flexibility and strengthen its capital
structure. These efforts are intended to provide the Company with sufficient
credit quality and liquidity to execute its growth initiatives. The Company used
approximately $45 million of proceeds from the Clark Sale to redeem all of its
Series A Preferred Stock (which had a 13% per annum accretion rate) and
approximately $70 million to retire outstanding bank debt. In addition, on April
7, 1997, the Company and certain of its subsidiaries entered into the New Credit
Facility which increased the Company's borrowing capacity, reduced its cost of
funds and reduced the covenant restrictions relative to the Company's then
existing credit facility. The Company intends to use the proceeds of the
Offering to reduce the Company's total debt outstanding as described in "Use of
Proceeds."

Expand Core Operations -- Over the past several years, the Company has
expanded the size and scope of its core crane and truck operations through both
acquisitions and new product development in order to increase the Company's
market share of targeted products and geographic markets and to insulate the
Company from potential cyclical changes in any one market. These initiatives
have expanded the Company's product lines, added new technology and improved the
Company's distribution network. The Company expects that acquisitions and new
product development will continue to be important components of its growth
strategy. Future acquisitions will be financed by internally generated funds,
bank borrowings, public offerings or private placements of equity or debt
securities, or a combination of any one or more of the foregoing.

During the past several years, the Company has spent approximately $200
million to strengthen its core businesses by purchasing the businesses listed
below:

<TABLE>
<CAPTION>
ACQUIRED
SOURCE OF OPERATING OR LICENSED
YEAR ACQUISITION PURCHASE PRICE FINANCING LOCATIONS PRODUCTS BRAND NAMES
- ---- --------------- -------------- -------------- -------------- -------------- ---------------------
<C> <S> <C> <C> <C> <C> <C>
1995 PPM $104.5 million Issuance of South Telescopic P&H, PPM, BENDINI
(paid in cash Senior Secured Carolina, Mobile Cranes
and Notes France, Italy
securities)

1997 Simon Access $90.0 million Cash on hand Kansas, Ohio, Aerial Work SIMON, TELELECT, RO,
Companies (paid in cash) and borrowings South Dakota, Platforms, CELLA
under the New Wisconsin, Utility Aerial
Credit Ireland, Italy Devices, Boom
Facility Trucks

1997 Square Shooter (terms not Cash on hand Michigan Telescopic SQUARE SHOOTER
Business disclosed) and borrowings Rough Terrain
under the New Lift Trucks
Credit
Facility
</TABLE>

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<PAGE> 9

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered by the Company(1)....... 5,000,000 shares
Common Stock offered by the Selling
Stockholder................................ 2,000,000 shares
Common Stock to be outstanding after the
Offering(1)(2)............................. 18,686,543 shares
Use of proceeds.............................. The net proceeds from the sale of the Common
Stock offered by the Company will be used
primarily to redeem a portion of the Senior
Secured Notes (as defined below), with the
balance, if any, available for general
corporate purposes, including repayment of
indebtedness under the New Credit Facility (as
defined below). Under the terms of the New
Credit Facility a portion of the net proceeds
from the sale of the Common Stock offered by
the Company may be required to be used to
repay indebtedness thereunder.
The Company will not receive any of the
proceeds from the sale of the Common Stock
offered by the Selling Stockholder.
Dividend policy.............................. It is the Company's current policy to retain
earnings, if any, to repay indebtedness and to
fund the development and growth of its
business. The Company does not plan on paying
dividends on the Common Stock in the
foreseeable future. Certain of the Company's
debt agreements contain restrictions as to the
payment of cash dividends. The terms of the
Company's outstanding Series B Preferred Stock
(as defined below) also restrict the Company's
ability to pay cash dividends on the Common
Stock.
NYSE symbol.................................. TEX
Risk factors................................. Prospective investors should carefully
consider all the information set forth in this
Prospectus and, in particular, should evaluate
the specific factors set forth under "Risk
Factors" before purchasing any of the Common
Stock.
</TABLE>

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

(1) If the over-allotment option of the Underwriters is exercised in full, the
total number of Shares to be offered by the Company and the total number of
shares of Common Stock to be outstanding after the Offering would be
5,700,000 and 19,386,543 respectively.

(2) Does not include (a) up to an aggregate of 1,730,022 shares of Common Stock
reserved for issuance under the Company's incentive and other benefit plans;
(b) 306,436 shares of Common Stock issuable upon exercise or redemption of
the Company's issued and outstanding warrants to purchase Common Stock; (c)
87,300 shares of Common Stock issuable upon conversion of the Company's
issued and outstanding preferred stock; and (d) 434,526 shares of Common
Stock issuable under the Company's outstanding common stock appreciation
rights ("Equity Rights") assuming all holders exercised their Equity Rights
on June 15, 1997 and the Company elected to issue shares of Common Stock to
satisfy its obligations thereunder.

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<PAGE> 10

SUMMARY CONSOLIDATED FINANCIAL DATA

(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

HISTORICAL AND PRO FORMA FINANCIAL INFORMATION

The summary historical consolidated financial data of the Company set forth
below as of and for the years ended December 31, 1994, 1995 and 1996 have been
derived from the audited historical consolidated financial statements of the
Company and the related notes thereto incorporated by reference in this
Prospectus. The summary historical consolidated financial data as of and for the
quarters ended March 31, 1996 and 1997 have been derived from unaudited interim
financial statements of the Company and the related notes thereto incorporated
by reference in this Prospectus. Operating results for interim periods are not
necessarily indicative of results for the entire fiscal year. The summary pro
forma data as of and for the year ended December 31, 1996 and the quarter ended
March 31, 1997 have been derived from the unaudited pro forma financial
statements included elsewhere in this Prospectus. The following pro forma
financial information is not necessarily indicative of what the actual financial
position and results of operations of the Company would have been as of and for
the periods indicated, nor does it purport to represent the financial position
or results of operations for future periods. The following data should be read
in conjunction with the "Selected Consolidated Financial Data," "Pro Forma
Financial Information" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
YEAR ENDED DECEMBER 31, (UNAUDITED)
------------------------------------------------------- ----------------------------------------------
PRO FORMA PRO FORMA
AS ADJUSTED AS ADJUSTED
BEFORE THE PRO FORMA BEFORE THE PRO FORMA
OFFERING AS ADJUSTED OFFERING AS ADJUSTED
1994 1995 1996 1996 1996 1996 1997 1997 1997
------ ------ ------ ----------- ----------- ------ ------ ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales............. $314.1 $501.4 $678.5 $ 887.1 $ 887.1 $173.2 $176.3 $ 227.3 $ 227.3
Cost of goods sold.... 266.0 431.0 609.3(1) 780.9 780.9 149.8 148.8 193.1 193.1
------ ------ ------ ------ ------ ------ ------ ------ ------
Gross profit.......... 48.1 70.4 69.2(1) 106.2 106.2 23.4 27.5 34.2 34.2
Engineering, selling
and administrative
expenses............. 37.7 57.6 64.1(2) 86.0 86.0 16.3 14.1 20.5 20.5
------ ------ ------ ------ ------ ------ ------ ------ ------
Income from
operations........... 10.4 12.8 5.1(3) 20.2 20.2 7.1 13.4 13.7 13.7
Interest income....... 0.5 0.7 1.2 1.2 1.2 0.1 0.6 0.6 0.6
Interest expense...... (28.3) (38.7) (44.8) (44.1) (33.5) (11.4) (9.5) (10.9) (8.2)
Amortization of debt
issuance costs....... (2.3) (2.3) (2.6) (2.8) (2.1) (0.6) (0.7) (0.7) (0.5)
Gain on sale of stock
of former
subsidiary........... 26.0 1.0 -- -- -- -- -- -- --
Other income
(expense), net....... (1.4) (5.6) (1.1) (1.1) (1.1) 2.1 0.3 0.3 0.3
------ ------ ------ ------ ------ ------ ------ ------ ------
Income (loss) from
continuing operations
before income taxes
and extraordinary
items................ 4.9 (32.1) (42.2) (26.6) (15.3) (2.7) 4.1 3.0 5.9
Provision for income
taxes................ -- -- (12.1)(4) (12.4) (12.4) -- (0.2) (0.2) (0.2)
------ ------ ------ ------ ------ ------ ------ ------ ------
Income (loss) from
continuing operations
before extraordinary
items................ 4.9 (32.1) (54.3) (39.0) (27.7) (2.7) 3.9 2.8 5.7
Income (loss) from
discontinued
operations........... (3.7) 4.4 102.0(5) -- -- 3.2 -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------
Income (loss) before
extraordinary
items................ 1.2 (27.7) 47.7 (39.0) (27.7) 0.5 3.9 2.8 5.7
Extraordinary loss on
retirement of debt... (0.7) (7.5) -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------
Net income (loss)..... 0.5 (35.2) 47.7 (39.0) (27.7) 0.5 3.9 2.8 5.7
Less preferred stock
accretion............ (6.0) (7.3) (22.9)(6) (0.7) (0.7) (1.9) (0.4) (0.4) (0.4)
------ ------ ------ ------ ------ ------ ------ ------ ------
Income (loss)
applicable to common
stock................ $ (5.5) $(42.5) $ 24.8 $ (39.7) $ (28.4) $ (1.4) $ 3.5 $ 2.4 $ 5.3
====== ====== ====== ====== ====== ====== ====== ====== ======
Per Common and Common
Equivalent Share:
Income (loss) from
continuing
operations......... $(0.10) $(3.79) $(5.81) $ (2.99) $ (1.56) $(0.43) $ 0.24 $ 0.17 $ 0.27
Income (loss) from
discontinued
operations......... (0.36) 0.42 7.67 -- -- 0.30 -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------
Loss before
extraordinary
items.............. (0.46) (3.37) 1.86 (2.99) (1.56) (0.13) 0.24 0.17 0.27
Extraordinary loss on
retirement of
debt............... (0.07) (0.72) -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------
Net income (loss)..... $(0.53) $(4.09) $ 1.86 $ (2.99) $ (1.56) $(0.13) $ 0.24 $ 0.17 $ 0.27
====== ====== ====== ====== ====== ====== ====== ====== ======
Average Number of
Common and Common
Equivalent Shares
Outstanding in Per
Share Calculation.... 10.3 10.4 13.3 13.3 18.3 10.6 14.4 14.4 19.4
------ ------ ------ ------ ------ ------ ------ ------ ------
(continued on following page)
</TABLE>

9
<PAGE> 11

- ---------------
(1) As disclosed in "Management's Discussion and Analysis of Financial Condition
and Results of Operations," cost of goods sold includes $27.2 million in
nonrecurring charges. Excluding these charges, gross profit would have been
$96.4 million or 14.2% of net sales.

(2) As disclosed in "Management's Discussion and Analysis of Financial Condition
and Results of Operations," engineering, selling and administrative expenses
includes $2.8 million in nonrecurring charges. Excluding these charges,
engineering, selling and administrative expenses would have been $61.3
million.

(3) Includes the effect of the nonrecurring charges set forth in (1) and (2)
above. Excluding these charges, income from operations would have been $35.1
million.

(4) This charge reflects the utilization of acquired net operating losses by
P.P.M. S.A.

(5) Represents the income from operations of the Clark Material Handling Segment
($17.5 million) and the gain on the Clark Sale ($84.5 million).

(6) Includes annual accretion of the Series A Preferred Stock of $7.7 million,
annual accretion of the issued and outstanding redeemable preferred stock of
the Company and redeemable preferred stock of a subsidiary aggregating $0.7
million, and a $14.5 million nonrecurring charge as a result of the
redemption of the Series A Preferred Stock.

(7) Includes nonrecurring charges of $18.3 million. The nonrecurring charges are
primarily comprised of the write-down of goodwill and fixed assets at the
Terex Cranes -- Conway Operations (as defined below). Excluding these items,
income from operations at Terex Cranes would have been $23.1 million.

(8) Includes nonrecurring charges of $10.4 million. The nonrecurring charges are
primarily comprised of the write-down of fixed assets used at Unit Rig due
to the outsourcing of certain manufacturing processes to third parties.
Excluding these items, income from operations at Terex Trucks would have
been $16.0 million.

(9) Includes nonrecurring charges of $1.3 million. Excluding these charges,
General/Corporate/Eliminations would have been $4.0 million.

10
<PAGE> 12

RISK FACTORS

Certain information in this Prospectus includes forward looking statements
regarding future events or the future financial performance of the Company that
involve certain risks and uncertainties, including, but not limited to, those
discussed below and in "Management's Discussion and Analysis of Financial
Condition and Results of Operations." In addition, the Company's expectations
are predominantly based on what it considers key economic assumptions.
Construction and mining activity are sensitive to interest rates, government
spending and general economic conditions. Some of the other significant factors
for the Company include integration of acquired businesses, retention of key
management, foreign currency movements, pricing, product initiatives and other
actions taken by competitors, the effects of changes in laws and regulations,
continued use of net operating loss carryovers and other factors. Actual events
or the actual future results of the Company may differ materially from any
forward looking statement due to these and other risks, uncertainties and
significant factors.

In addition to other matters described in this Prospectus, the following
should be carefully considered in connection with an investment in the Common
Stock:

SIGNIFICANT LEVERAGE

The Company is highly leveraged. The ratio of the Company's indebtedness to
total capitalization was 124%, 106% and 128% at December 31, 1995, December 31,
1996 and March 31, 1997, respectively. The significant increase from December
31, 1996 to March 31, 1997 was caused by the redemption of the Series A
Preferred Stock. As of March 31, 1997, on a pro forma basis, giving effect to
the Offering, the Simon Acquisition and the Square Shooter Acquisition (together
with the Simon Acquisition, the "Acquisitions") the Company had approximately
$275.1 million of indebtedness, and the ratio of the Company's indebtedness to
total capitalization was 100%. Net cash flows for the Company were ($32.4
million) for the quarter ended March 31, 1997, $65.0 million for the year ended
December 31, 1996 and ($1.2 million) for the year ended December 31, 1995. For
further discussions regarding the components of cash flow, refer to
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

This substantial leverage has several important consequences, including the
following: (i) a substantial portion (which, in the first quarter of 1997, was
approximately 39%) of the Company's net cash provided by operating activities,
will be dedicated to servicing its indebtedness and (ii) the Company's ability
to withstand competitive pressures, adverse economic conditions and adverse
changes in governmental regulations, to make acquisitions, and to take advantage
of significant business opportunities that may arise, may be negatively
affected. The Company's ability to meet its debt service obligations and to
reduce its total indebtedness will be dependent upon future performance, which
will be subject to general economic conditions, its ability to achieve cost
savings and other financial, business and other factors affecting the operations
of the Company, many of which are beyond its control. If the Company is unable
to generate sufficient operating cash flow in the future to service its debt, it
may be required to refinance all or a portion of such debt or to obtain
additional financing. There can be no assurance, however, that any refinancing
would be possible or that any additional financing could be obtained.

RESTRICTIONS IMPOSED BY THE TERMS OF THE COMPANY'S INDEBTEDNESS

The Indenture (as defined herein) and the New Credit Facility (as defined
herein) impose upon the Company certain financial and operating covenants,
including, among others, restrictions on the ability of the Company to incur
debt, pay dividends, or take certain other corporate actions. In addition, the
New Credit Facility requires that the Company maintain a certain financial ratio
and provides for limitations on capital expenditures. The foregoing covenants
may restrict the Company's ability to borrow additional funds, dispose of
assets, or otherwise pursue its business strategies, and may impair the
Company's ability to obtain additional financing to fund future working capital
requirements, capital expenditures, acquisitions, and other general corporate
purposes. See "-- Acquisition Strategy; Integration of Acquired Businesses."
Changes in economic or business conditions, results of operations or other
factors could in the future cause a violation of one or more covenants in the
Company's debt instruments.

11
<PAGE> 13

INDUSTRY CYCLICALITY AND SUBSTANTIAL COMPETITION

Sales of products manufactured and sold by the Company have historically
been subject to substantial cyclical variation extending over a number of years
based on general economic conditions. Downward cycles result in reductions in
product sales which adversely impact the Company's results of operations. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." The Company recognizes the potential adverse impact of cyclical
variations in sales of products and has taken a number of steps to reduce its
fixed costs to decrease the impact of cyclicality. See "Business
Strategy -- Reduce Costs and Improve Manufacturing Efficiency."

The markets in which the Company competes are highly competitive. To
successfully compete, the Company must remain competitive in the areas of
quality, price, product line, ease of use, safety, comfort and customer service.
Many of the Company's competitors have greater financial resources than the
Company. See "Business -- Competition."

ACQUISITION STRATEGY; INTEGRATION OF ACQUIRED BUSINESSES

The Company expects to continue a strategy of identifying and acquiring
businesses with complementary products and services which could be expected to
enhance the Company's operations and profitability. Future acquisitions may be
financed by internally generated funds, bank borrowings, public offerings or
private placements of equity or debt securities, or a combination of any one or
more of the foregoing. There can be no assurance, however that the Company will
continue to identify suitable new acquisition candidates, obtain financing
necessary to complete such acquisitions or acquire businesses on satisfactory
terms, or that any business acquired by the Company will be integrated
successfully into the Company's operations or prove to be profitable. Moreover,
the Company's ability to obtain financing adequate to enable the completion of
suitable acquisitions may be limited by its current debt structure and leverage.
See "-- Significant Leverage" and "-- Restrictions Imposed by the Terms of the
Company's Indebtedness." Successful integration of businesses acquired,
including the Simon Access Companies and the Square Shooter Business, will
depend, in part, on the Company's ability to manage these additional businesses
and eliminate redundancies and excess costs. Material failure or substantial
delay in accomplishing such integration could have a material adverse effect on
the Company's results of operations and financial condition.

TAX AUDIT ISSUES

The Internal Revenue Service (the "IRS") is currently examining the
Company's Federal tax returns for the years 1987 through 1989. In December 1994,
the Company received an examination report from the IRS proposing a substantial
tax deficiency. The examination report raised a variety of issues, including the
Company's substantiation for certain deductions taken during this period, the
Company's utilization of certain net operating loss carryovers ("NOLs") and the
availability of such NOLs to offset future taxable income. The Company filed an
administrative appeal to the examination report in April 1995. As a result of a
meeting with the Manhattan division of the IRS in July 1995, in June 1996 the
Company was advised that the matter was being referred back to the Milwaukee
audit division of the IRS. The Milwaukee audit division of the IRS is currently
reviewing information provided by the Company over the past 18 months. The
ultimate outcome of this matter is subject to the resolution of significant
legal and factual issues. Given the stage of the audit, and the number and
complexity of the legal and administrative proceedings involved in reaching a
resolution of this matter, it is unlikely that the ultimate outcome, if
unfavorable to the Company, will be determined for at least several years. If
the IRS were to prevail on all the issues raised, the amount of the tax
assessment would be approximately $56 million plus interest and penalties, which
interest and penalties would significantly exceed the amount of any tax
assessment. If the Company were required to pay a significant portion of the
assessment with related interest and penalties, such payment would exceed the
Company's resources. In such event, the viability of the Company would be placed
in jeopardy, and it is uncertain that the Company could, through financing or
otherwise, obtain the funds required to pay such assessment, interest, and
applicable penalties. Management believes, however, that the Company will be
able to provide adequate documentation for a substantial portion of the
deductions questioned by the IRS and that there is substantial support for the
Company's past and future utilization of the NOLs. Based upon consultation with
its tax advisors, management believes that the Company's position will prevail
on the

12
<PAGE> 14

most significant issues and that the outcome of the examination will not have a
material adverse effect on its financial condition or results of operations, but
may result in some reduction in the amount of the NOLs available to the Company.
No additional accruals have been made for any amounts which might be due as a
result of this matter because the possible loss ranges from zero to $56 million
plus interest and penalties, and the ultimate outcome cannot be determined or
estimated at this time. No reserves are being expensed to cover the potential
liability.

Under the terms of the Company's Revolving Credit Agreement, dated as of
April 7, 1997, with The First National Bank of Boston, as Agent, and the other
lending institutions party thereto (the "New Credit Facility"), an event of
default will occur if the Company incurs any liability for federal income taxes
which results in an expenditure of cash of more than $15 million in excess of
the amounts shown as owed on tax returns filed by the Company prior to April 7,
1997. If this were to occur, the maturity of the New Credit Facility may be
accelerated and recourse may be taken against the accounts receivable and
inventory securing advances under the New Credit Facility. In such event, the
Company would seek to refinance the indebtedness outstanding under the New
Credit Facility. There can be no assurance, however, that any refinancing would
be obtainable or, if obtainable, that the terms of such refinancing would be
acceptable to the Company.

SIGNIFICANT STOCKHOLDER

As of June 27, 1997, Randolph W. Lenz is the beneficial owner of
approximately 28.9% of the outstanding Common Stock, and after consummation of
this Offering will be the beneficial owner of approximately 10.6% (10.2% if the
over-allotment option of the Underwriters is exercised in full). Mr. Lenz
retired as the Chairman of the Board and as a Director of the Company on August
28, 1995, and currently serves as a consultant to the Company. In connection
with his retirement, Mr. Lenz entered into an agreement with the Company
pursuant to which, among other things, he agreed that he will not compete with
the Company until November 2000, and will vote his shares of Common Stock in the
manner recommended by the Board of Directors and will not acquire any additional
shares of Common Stock other than pursuant to the retirement agreement until
November 1998. In addition, the agreement also provided for the granting by the
Company to Mr. Lenz of a five-year $1.8 million forgivable loan bearing interest
at a rate of 6.56% per annum. See "Selling Stockholder."

The Company has entered into an agreement, dated June 27, 1997 (the
"Standstill Agreement"), with Mr. Lenz and certain of his affiliates which
places certain limitations on the ability of Mr. Lenz and such affiliates to
acquire, sell or otherwise dispose of shares of the Company's capital stock. See
"-- Shares Eligible for Future Sale." However, Mr. Lenz and one or more of such
affiliates currently pledge, and, subject to the terms of the Standstill
Agreement, may in the future pledge, shares of Common Stock owned by them as
collateral for loans. If Mr. Lenz or such affiliates default under such loans,
the pledgee may have the right to sell the shares of Common Stock pledged to it
in satisfaction of such obligations. The sale or other disposition of a
substantial amount of such shares of Common Stock in the public market could
adversely affect the prevailing market price for the Common Stock. The sale or
disposition of a substantial amount of such shares of Common Stock owned by Mr.
Lenz and his affiliates could also result in an Ownership Change (as defined
below). See "-- Continuation of Net Operating Loss Carryovers."

CONTINUATION OF NET OPERATING LOSS CARRYOVERS

The Company currently has NOLs of approximately $200 million. The Company
would be subject to an annual limitation (described below) on its ability to
utilize its NOLs to offset future taxable income if the Company undergoes an
ownership change (an "Ownership Change") within the meaning of Section 382 of
the Internal Revenue Code of 1986, as amended ("Section 382"). Generally, an
Ownership Change is deemed to occur if the aggregate cumulative increase in the
percentage ownership of the capital stock of the Company (which generally
includes for this purpose, but is not limited to, the Common Stock and certain
options and warrants) by persons owning five percent or more of such capital
stock and certain public groups (within the meaning of Section 382) is more than
50 percentage points in any three-year testing period. In the event of an
Ownership Change, the Company's utilization of its NOLs would be limited to an
annual amount (without extending the applicable 15-year carryforward period for
NOLs) equal to the product of the fair market value of the Company immediately
before such Ownership Change (as determined pursuant to Section 382, which may

13
<PAGE> 15

provide for certain reductions in value) multiplied by the long-term tax-exempt
rate, which is an interest-indexed rate that is published monthly by the IRS and
which is approximately 5.64% as of the date of this Prospectus. NOLs arising
after the date that any Ownership Change occurs will be unaffected by such
Ownership Change.

While the issuance of Common Stock by the Company and the sale by the
Selling Stockholder of Common Stock in the Offering, together with other events
that have previously occurred, will not constitute an Ownership Change, the
consummation of the Offering will significantly increase the possibility that an
Ownership Change may occur within the three-year testing period. It is
impossible for the Company to ensure that such an Ownership Change will not
occur in the future, in part because the Company has no ability to restrict the
acquisition or disposition of the Company's capital stock by persons whose
ownership could cause an Ownership Change. If Mr. Lenz and/or his affiliates
(see "-- Significant Stockholder") were to sell all or substantially all of
their remaining shares of the Company's capital stock prior to November 1998 in
a manner other than as contemplated by the Standstill Agreement, there would be
a substantial likelihood that an Ownership Change would occur. As a result, as
set forth more fully under "-- Shares Eligible for Future Sale," the Company has
entered into the Standstill Agreement with Mr. Lenz and certain of his
affiliates which, among other things, reduces the likelihood that future sales
of the Company's capital stock by Mr. Lenz or his affiliates will, by
themselves, cause an Ownership Change. However, there can be no assurance that
the Standstill Agreement will in fact prevent an Ownership Change from
occurring. In addition, the Company may in the future take certain actions
which, alone or coupled with other events, could give rise to an Ownership
Change, if in the exercise of the business judgment of the Company such actions
(which may include future issuances of equity securities) are necessary or
desirable. If an Ownership Change were to occur subsequent to the Offering, the
NOL annual limitation under Section 382 could substantially reduce the Company's
future after-tax earnings and cash flow.

RELIANCE ON KEY MANAGEMENT

The success of the Company's business is dependent upon the management and
leadership skills of Ronald M. DeFeo, the Company's President and Chief
Executive Officer. The Company does not have an employment agreement with Mr.
DeFeo and the loss of his services could have a material adverse effect on the
Company.

SEC INVESTIGATION

In March 1994, the Securities and Exchange Commission (the "Commission")
initiated a private investigation, which included the Company and certain of its
affiliates, to determine whether violations of certain aspects of the Federal
securities laws had occurred. To date, the inquiry of the Commission has
primarily focused on accounting treatment and reporting matters relating to
various transactions which took place in the late 1980s and early 1990s. The
Company is cooperating with the Commission in its investigation and it is not
possible at this time to determine the outcome of the Commission's
investigation.

ENVIRONMENTAL AND RELATED MATTERS

The Company generates hazardous and nonhazardous wastes in the normal
course of its manufacturing operations. As a result, the Company is subject to a
wide range of federal, state, local and foreign environmental laws and
regulations, including the Comprehensive Environmental Response, Compensation
and Liability Act ("CERCLA"), that (i) govern activities or operations that may
have adverse environmental effects, such as discharges to air and water, as well
as handling and disposal practices for hazardous and nonhazardous wastes, and
(ii) impose liability for the costs of cleaning up, and certain damages
resulting from, sites of past spills, disposals or other releases of hazardous
substances. Compliance with such laws and regulations has, and will, require
expenditures by the Company on a continuing basis. The Company does not expect
that these expenditures will have a material adverse effect on its financial
condition or results of operations.

FOREIGN CURRENCIES AND INTEREST RATE RISK

14
<PAGE> 16

incurred in the same currencies. The major foreign currencies, among others, in
which the Company does business are the Pound Sterling and the French Franc. In
1996, approximately 55% of revenues were denominated in U.S. dollars, 20% in
Pounds Sterling and 12% in French Francs, with the remaining 13% denominated in
other currencies. For pro forma 1996, the percentage of revenues denominated in
U.S. dollars would have increased to between 65% and 70%. Costs of the Company
are primarily incurred in the same currencies and in percentages which are not
materially different from the revenue percentages. Since the Company's financial
statements are denominated in U.S. dollars, changes in exchange rates between
the dollar and other currencies have had and will have an impact on the reported
results of the Company. To date, this impact has not been material. The Company
may, from time to time, hedge specifically identified committed cash flows in
foreign currencies using forward currency sale or purchase contracts. The
Company has not engaged in any speculative or profit motivated hedging
activities. Although revenues and costs of the Company may be partially hedged,
currency fluctuations will impact the Company's financial performance in the
future. In addition, international operations are subject to a number of
potential risks, including, among others, currency exchange controls, transfer
restrictions and rate fluctuations, trade barriers, the effects of income and
withholding tax, and governmental expropriation.

The Company's borrowings are at both fixed and floating rates of interest.
For the floating rate portion of the borrowings, the Company is at risk for
fluctuations in interest rates. The Company does not currently hedge any
interest rate risk.

RESTRICTIONS ON DIVIDENDS

Contractual restrictions exist under the Company's 13.25% Senior Secured
Notes due May 15, 2002 (the "Senior Secured Notes") and the New Credit Facility
which limit the Company's ability to pay dividends on its capital stock. The
terms of the Company's Series B Cumulative Redeemable Convertible Preferred
Stock (the "Series B Preferred Stock") also limit the Company's ability to pay
cash dividends on any class of capital stock of the Company junior to or on a
parity with the Series B Preferred Stock. See "Description of Securities-
Preferred Stock." In addition, under Delaware law the Company's ability to pay
dividends is subject to the statutory limitation that such payment be made
either (i) out of its surplus (the excess of its net assets over its total
liabilities plus stated capital) or (ii) in the event that there is no surplus,
out of its net profits for the fiscal year in which the dividend is declared
and/or the preceding fiscal year. The Company intends generally to retain
earnings, if any, to repay indebtedness and to fund the development and growth
of its business. The Company does not plan on paying dividends on the Common
Stock in the foreseeable future. Any future payments of cash dividends will
depend upon the financial condition, capital requirements and earnings of the
Company, as well as other factors that the Board of Directors may deem relevant.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this Offering, 18,686,543 shares (19,386,543 shares if
the over-allotment option of the Underwriters is exercised in full) of Common
Stock will be outstanding (based on the number of shares outstanding as of June
15, 1997). As of June 15, 1997, there were also (a) up to an aggregate of
1,730,022 shares of Common Stock reserved for issuance under the Company's
incentive and other benefit plans; (b) an aggregate of 306,436 shares of Common
Stock reserved for issuance upon exercise of Series A Warrants (as described
under "Description of Securities -- Common Stock Purchase Warrants"); (c) an
aggregate of 87,300 shares of Common Stock reserved for issuance upon conversion
of Series B Preferred Stock (as described under "Description of
Securities -- Preferred Stock"); and (d) 434,526 shares of Common Stock issuable
under the Equity Rights assuming all holders exercised their Equity Rights on
June 15, 1997 and the Company elected to issue shares of Common Stock to satisfy
its obligations thereunder (as described under "Description of
Securities -- Equity Rights").

The Company and certain of its executive officers and directors have agreed
with the Underwriters that they will not, directly or indirectly, offer, sell,
contract to sell, announce their intention to sell, or otherwise dispose of, and
the Company has agreed that it will not file with the Commission a registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
relating to, any shares of Common Stock or securities convertible or
exchangeable into or exercisable for any shares of Common Stock, without the
prior written

15
<PAGE> 17

consent of Credit Suisse First Boston Corporation for a period of 180 days after
the date of this Prospectus except (i) any shares of Common Stock issuable upon
the exercise or redemption of an option or warrant or the conversion or exchange
of a security, in each case outstanding on the date of this Prospectus and in
accordance with the terms of the respective securities, (ii) any securities of
the Company sold or granted pursuant to the Company's incentive and other
benefit plans as in effect as of the date of this Prospectus, (iii) any shares
of Common Stock issued upon exercise of the Company's issued and outstanding
Equity Rights in accordance with the terms thereof and (iv) any warrants or
securities convertible into Common Stock issued in exchange for any of the
Company's warrants, options or stock appreciation rights outstanding on the date
of this Prospectus.

In connection with the Selling Stockholder's participation in the Offering,
the Company has entered into the Standstill Agreement with Mr. Lenz and certain
of his affiliates pursuant to which Mr. Lenz and such affiliates have, among
other things, agreed to certain limitations on their ability to (i) acquire
additional shares of the Company's capital stock for a period of three years
from the date of the Offering, subject to certain exceptions, and (ii) sell or
otherwise dispose of shares of capital stock of the Company owned by them upon
consummation of the Offering other than in compliance with the time and volume
limitations set forth in the Standstill Agreement. Such restrictions on sales
and other dispositions, which generally apply until the later of thirty days
after the date on which the Selling Stockholder and his affiliates are no longer
the beneficial owners of 5% or more of the Common Stock outstanding at such date
and February 10, 1999, are intended to reduce the likelihood that sales or other
dispositions by Mr. Lenz and/or his affiliates would cause an Ownership Change.
See "-- Continuation of Net Operating Loss Carryovers." However, pursuant to the
terms of the Standstill Agreement, Mr. Lenz and his affiliates generally will be
permitted during such period to engage in certain margin transactions, customary
borrowing transactions and, under certain conditions, pledge, option or other
like arrangements with respect to the shares of capital stock of the Company
owned by them. If Mr. Lenz or his affiliates were to default under such
arrangements, the other parties to such transactions may have the right to take
possession of the relevant capital stock in satisfaction of the obligations of
Mr. Lenz or his affiliates. If such a transfer of ownership were to occur, it
would increase the likelihood that an Ownership Change could occur. Provided
that Mr. Lenz and his affiliates have complied with all of their obligations
under the Standstill Agreement, the restrictions set forth in (i) and (ii) above
will cease to apply in the event an Ownership Change were to occur. The
continuing effectiveness of the Standstill Agreement is conditioned on the
consummation of the Offering on or prior to September 15, 1997.

The effect, if any, that future market sales of shares of Common Stock or
the availability of shares for sale will have on the market price prevailing
from time to time cannot be predicted. Nevertheless, sales of substantial
additional amounts of Common Stock in the public market, or the perception that
such sales could occur, could adversely affect the prevailing market price for
the Common Stock.

16
<PAGE> 18

THE COMPANY

Terex is a global manufacturer of a broad range of construction and mining
related capital equipment. The Company strives to manufacture machines which are
low cost, simple to use and easy to maintain. The Company's principal products
include telescopic mobile cranes, aerial work platforms, utility aerial devices,
telescopic material handlers, truck mounted cranes, rigid and articulated
off-highway trucks and high capacity surface mining trucks and related
components and replacement parts. The Company's products are manufactured at 12
plants in the United States and Europe and are sold primarily through a
worldwide network of dealers in over 750 locations to the global construction,
infrastructure and surface mining markets. The Company's operations began in
1983 with the purchase of Northwest Engineering Company, the Company's original
business and name. Since 1983, management has expanded and changed the Company's
business through a series of acquisitions and dispositions. In 1988, Northwest
Engineering Company merged into a subsidiary acquired in 1986 named Terex
Corporation, with Terex Corporation as the surviving entity. As a result of the
completion of the PPM Acquisition (as defined below) in May 1995, the Company's
operations were divided into three principal segments: Material Handling, Heavy
Equipment and Mobile Cranes. On November 27, 1996, the Company completed the
sale of the Clark Material Handling Segment, which was originally acquired in
July 1992 (see "Business -- Discontinued Operations" below), and currently
operates two business segments: Terex Cranes and Terex Trucks. Terex Cranes
manufactures telescopic mobile cranes (including rough terrain, truck and all
terrain mobile cranes), aerial work platforms (including scissor, articulated
boom and straight telescoping boom aerial work platforms), utility aerial
devices (including digger derricks and articulated aerial devices), telescopic
material handlers (including container stackers, scrap handlers and telescopic
rough terrain boom forklifts), truck mounted cranes (boom trucks) and related
components and replacement parts. These products are primarily used by
construction and industrial customers and utility companies. Terex Cranes is
comprised of a number of divisions and subsidiaries, and is headquartered in
Conway, South Carolina. Terex Trucks manufactures articulated and rigid
off-highway trucks and high capacity surface mining trucks and related
components and replacement parts. These products are used primarily by
construction, mining and government customers. Terex Trucks is headquartered in
Motherwell, Scotland and is comprised of TEL, located in Motherwell, Scotland,
and Unit Rig, located in Tulsa, Oklahoma. The principal executive offices of the
Company are located at 500 Post Road East, Westport, Connecticut 06880 and its
telephone number is (203) 222-7170.

Terex Cranes was established as a separate business segment as a result of
the acquisition (the "PPM Acquisition") in May 1995 of substantially all of the
shares of P.P.M. S.A. and certain of its subsidiaries, including P.P.M. SpA,
Brimont Agraire S.A., a specialized trailer manufacturer in France, PPM Krane
GmbH, a sales organization in Germany, and Baulift Baumaschinen Und Krane
Handels GmbH, a parts distributor in Germany (collectively, "PPM Europe") from
Potain S.A., and all of the capital stock of Legris Industries, Inc., which
owned 92.4% of the capital stock of PPM Cranes, Inc. ("PPM North America" or
"Terex Cranes -- Conway Operations"); and PPM Europe and PPM North America are
collectively referred to herein as "PPM"), from Legris Industries, S.A.
Concurrently with the completion of the PPM Acquisition, the Company contributed
the assets (subject to liabilities) of its Koehring Cranes and Excavators and
Mark Industries division to Terex Cranes, Inc., a wholly-owned subsidiary of the
Company. The former division now operates as Koehring Cranes, Inc. ("Koehring"
or "Terex Cranes -- Waverly Operations"), a wholly owned subsidiary of Terex
Cranes, Inc.

The Company recently completed two acquisitions to augment its Terex Cranes
segment. On April 7, 1997, the Company completed the Simon Acquisition, pursuant
to which the Company acquired substantially all of the capital stock of the
Simon Access Companies for $90 million (subject to adjustment under certain
circumstances). The Simon Access Companies consist principally of business units
in the United States and Europe engaged in the manufacture, sale and worldwide
distribution of access equipment designed to position people and materials to
work at heights. The Simon Access Companies' products include utility aerial
devices, aerial work platforms and truck mounted cranes (boom trucks) which are
sold to customers in the industrial and construction markets, as well as utility
companies. Specifically, the Company acquired 100% of the outstanding common
stock of (i) Simon Telelect, Inc. (now named Terex Telelect Inc.), a Delaware
corporation ("Telelect"), (ii) Simon Aerials, Inc. (now named Terex Aerials,
Inc.), a Wisconsin corporation and parent company of Terex RO ("Aerials"), (iii)
Sim-Tech Management Limited, a private limited company incorporated under the
laws of Hong Kong ("Sim-Tech"), (iv) Simon Cella, S.r.1., a company incorporated
under the laws of Italy ("Cella"), and

17
<PAGE> 19

(v) Simon Aerials Limited, a company incorporated under the laws of Ireland
("Aerials Limited"); and 60% of the outstanding common stock of Simon-Tomen
Engineering Company Limited, a limited liability stock company organized under
the laws of Japan ("Tomen-Engineering"). On April 14, 1997, the Company
completed the Square Shooter Acquisition. The Square Shooter Business
manufactures the Square Shooter, a rough terrain telescopic lift truck designed
to lift materials to heights where they are used in construction.

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

The Common Stock is listed on the NYSE under the symbol "TEX." The
following table sets forth, for the quarters indicated, the high and low sales
prices of the Common Stock as reported on the NYSE Composite Tape.

PRICE RANGE
------------
HIGH
LOW ----
---
<S> <C> <C>
1995
First Quarter ended March 31, 1995............................. $ 5 7/8 $ 7 1/8
Second Quarter ended June 30, 1995............................. 4 1/2 6 3/4
Third Quarter ended September 30, 1995......................... 3 1/8 5 3/4
Fourth Quarter ended December 31, 1995......................... 4 5 1/2

1996
First Quarter ended March 31, 1996............................. $ 4 1/8 $ 7 1/8
Second Quarter ended June 30, 1996............................. 6 3/8 9 1/4
Third Quarter ended September 30, 1996......................... 6 1/2 9 3/8
Fourth Quarter ended December 31, 1996......................... 6 5/8 10 1/8

1997
First Quarter ended March 31, 1997............................. $ 9 1/2 $13 1/2
Second Quarter (through June 27, 1997)......................... 13 1/8 19 1/2
</TABLE>

The last reported sale price of the Common Stock on the NYSE Composite Tape
on June 27, 1997 was $18 3/4 per share. As of June 26, 1997, there were 732
record holders of Common Stock.

No dividends were declared or paid in 1995 or 1996. Certain of the
Company's debt agreements contain restrictions as to the payment of cash
dividends. The terms of the Company's outstanding Series B Preferred Stock also
restrict the Company's ability to pay cash dividends on the Common Stock. In
addition, payment of dividends is limited by Delaware law. The Company intends
generally to retain earnings, if any, to repay indebtedness and to fund the
development and growth of its business. The Company does not plan on paying
dividends on the Common Stock in the foreseeable future. Any future payments of
cash dividends will depend upon the financial condition, capital requirements
and earnings of the Company, as well as other factors that the Board of
Directors may deem relevant.

18
<PAGE> 20

USE OF PROCEEDS

Assuming a public offering price of $18.75 per share, the net proceeds from
the sale of the Common Stock offered by the Company hereby are estimated to be
approximately $87.8 million (or approximately $100.2 million if the
Underwriters' over-allotment option is exercised in full). Such proceeds will be
used by the Company, subject to the terms of the New Credit Facility described
below, to redeem $80.2 million of aggregate principal amount of Senior Secured
Notes plus $7.6 million of redemption premium (or $83.3 million plus $7.9
million of redemption premium if the Underwriters' over-allotment option is
exercised in full) of Senior Secured Notes. The balance, if any, of the net
proceeds from the sale of the Common Stock offered by the Company, may be used
for general corporate purposes, including repayment of indebtedness under the
New Credit Facility. The Senior Secured Notes were issued in May 1995, bear
interest at the rate of 13.25% per annum, and mature on May 15, 2002. No
amortization of principal is required prior to the maturity of the Senior
Secured Notes. The redemption price of the Senior Secured Notes is 109.46% of
the principal amount thereof.

Pursuant to the terms of the New Credit Facility, and based upon then
outstanding indebtedness and availability thereunder, the Company may be
required to apply up to a maximum of $22 million of the net proceeds from the
sale of the Common Stock offered hereby to reduce outstanding indebtedness under
the New Credit Facility. As of the date of this Prospectus, the Company would
have been required to apply approximately $3.0 million, or 3%, of the net
proceeds of the Offering to reduce outstanding indebtedness under the New Credit
Facility. However, based upon management's current estimates of future
outstanding indebtedness and availability under the New Credit Facility, the
Company believes that at the expected date of the application of the net
proceeds of the Offering it will not be required to apply any such net proceeds
to reduce indebtedness then outstanding under the New Credit Facility, with the
full amount being available for the uses set forth above. Interest on amounts
borrowed under the New Credit Facility fluctuates between 0.5% and 1.5% per
annum in excess of the prime rate for a prime rate loan, or between 2.0% and
3.0% per annum in excess of the adjusted eurodollar rate for a eurodollar rate
loan. The margin over the prime rate or eurodollar rate paid by the Company is
based upon the Company's fixed charge coverage ratio from time to time. The New
Credit Facility matures on April 7, 2000, and no amortization of principal is
required prior thereto. The proceeds of the New Credit Facility were used for
working capital and general corporate purposes, including the repayment of
existing indebtedness, the Simon Acquisition and the Square Shooter Acquisition.
Any portion of the net proceeds from the sale of Common Stock offered hereby
used to repay amounts borrowed under the New Credit Facility will reduce the
amount of Senior Secured Notes to be redeemed by the Company with the net
proceeds of this Offering.

Assuming application of the net proceeds in the manner set forth in the
first paragraph above of this Section, an extraordinary charge to earnings of
$11.9 million ($12.4 million if the Underwriters' over-allotment option is
exercised in full) will be recorded in the quarter that the Offering is
completed as a result of the premium on the redemption of the Senior Secured
Notes of $7.6 million ($7.9 million if the Underwriters' over-allotment option
is exercised in full) and the write-off of unamortized debt origination costs
related to the redemption of such Senior Secured Notes of $4.3 million ($4.5
million if the Underwriters' over-allotment option is exercised in full).

Pending application of the net proceeds from the Offering, the Company will
invest such net proceeds in interest bearing accounts and short-term, interest
bearing securities.

The Company will not receive any of the approximately $35.5 million net
proceeds from the sale of the Common Stock offered by the Selling Stockholder
hereby.

19
<PAGE> 21

CAPITALIZATION

The following table sets forth (i) the consolidated capitalization of the
Company as of March 31, 1997, (ii) adjustments to the capitalization of the
Company to give pro forma effect to the Acquisitions and the New Credit Facility
and application of the net proceeds therefrom, (iii) adjustments to the
capitalization of the Company to give pro forma effect to the Offering by the
Company and the application of the estimated net proceeds therefrom as described
in "Use of Proceeds" and (iv) the consolidated pro forma capitalization of the
Company as of March 31, 1997. The table should be read in conjunction with
"Selected Consolidated Financial Data" and "Pro Forma Financial Information"
included elsewhere in this Prospectus and the historical financial statements of
the Company and the related notes thereto and the historical combined financial
statements of the Simon Access Companies and the related notes thereto
incorporated by reference in this Prospectus.

<TABLE>
<CAPTION>
AS OF MARCH 31, 1997
------------------------------------------------------------------
ADJUSTMENTS FOR
ACQUISITIONS
AND
TEREX NEW CREDIT ADJUSTMENTS FOR PRO FORMA
HISTORICAL FACILITY THE OFFERING AS ADJUSTED
---------- --------------- --------------- -----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Cash and cash equivalents............... $ 39.6 $ (35.7)(1) $ -- $ 3.9
======= ====== ====== =======
Notes payable and current portion of
long-term debt........................ $ 22.7 $ -- $ -- $ 22.7
Long-term debt, less current portion.... 261.1 71.5(2) (80.2)(4) 252.4
Minority interest, including redeemable
preferred stock of a subsidiary....... 10.4 -- -- 10.4
Redeemable convertible preferred
stock................................. 0.8 -- -- 0.8
Stockholders' Deficit
Warrants to purchase common stock..... 3.2 -- -- 3.2
Common stock, $0.01 par value --
authorized 30 million shares;
13,306,692 shares issued and
outstanding; 18,306,692 shares
issued and outstanding pro forma... 0.1 -- 0.1(5) 0.2
Additional paid-in capital............ 56.0 -- 87.7(5) 143.7
Accumulated deficit................... (122.6) (2.6)(3) (11.9)(6) (137.1)
Pension liability adjustment.......... (2.0) -- -- (2.0)
Cumulative translation adjustment..... (8.2) -- -- (8.2)
------- ------ ------ -------
Total Stockholders' Deficit........ (73.5) (2.6) 75.9 (0.2)
------- ------ ------ -------
Total Capitalization.......... $ 221.5 $ 68.9 $ (4.3) $ 286.1
======= ====== ====== =======
</TABLE>

- ---------------
(1) Represents cash used in the Acquisitions and termination of the then
existing credit facility.

(2) Represents borrowings under the New Credit Facility in connection with the
Acquisitions, plus the refinancing and assumption of certain debt of the
Acquired Companies, plus the issuance of a purchase money promissory note in
connection with the Square Shooter Acquisition, which is payable over three
years with interest at a rate of 8% per annum.

(3) Represents the effect on equity of the $2.0 million prepayment penalty and
the write-off of $0.6 million of debt origination fees related to the
termination of the then existing credit facility.

(4) Represents the principal amount of the Senior Secured Notes to be redeemed
with the net proceeds of the Offering, assuming the full amount of the net
proceeds of the Offering by the Company are available to redeem the Senior
Secured Notes.

(5) Assumes the sale of 5,000,000 shares of Common Stock by the Company at
$18.75 per share ($0.1 million of which is attributed to the par value of
the Common Stock) less approximately $6 million in fees and expenses related
to the Offering.

(6) Represents the effect on equity of the 9.46% redemption premium ($7.6
million) on the Senior Secured Notes to be redeemed, plus the pro rata
write-off of $4.3 million in debt origination costs related to the
redemption of such Senior Secured Notes.

20
<PAGE> 22

PRO FORMA FINANCIAL INFORMATION

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 1996

The following pro forma condensed consolidated statement of operations (the
"1996 Pro Forma Statement of Operations") is based on the historical audited
consolidated financial statements of the Company for the year ended December 31,
1996 and the related notes thereto incorporated by reference in this Prospectus,
adjusted to give effect to the following transactions as if they had occurred on
January 1, 1996: (i) the application of the net proceeds from the Clark Sale;
(ii) the Acquisitions, and the New Credit Facility and application of the net
proceeds therefrom, except for $2.6 million of extraordinary charges related to
the prepayment of the then existing credit facility; and (iii) the completion of
the Offering by the Company and the application of the net proceeds therefrom as
described in "Use of Proceeds," except for extraordinary charges of $11.9
million related to the redemption of Senior Secured Notes with the net proceeds
to the Company of the Offering. The 1996 Pro Forma Statement of Operations does
not purport to represent what the Company's results of operations would have
been had the transactions listed above actually occurred on the dates indicated
or to predict the Company's results of operations in the future. This statement
is qualified in its entirety by, and should be read in conjunction with, the
historical consolidated financial statements of the Company and the related
notes thereto and the historical combined financial statements of the Simon
Access Companies and the related notes thereto incorporated by reference in this
Prospectus and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included elsewhere in this Prospectus. As used herein,
the "Acquired Companies" refers collectively to the Simon Access Companies and
the Square Shooter Business. The total purchase price for the Acquisitions was
$98.7 million. The Acquisitions were accounted for as purchase transactions.
Management believes that the final allocation of the purchase price for the
Acquisitions will not materially differ from the amounts shown in the pro forma
condensed consolidated financial statements.

YEAR ENDED DECEMBER 31, 1996

(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
ADJUSTMENTS FOR PRO FORMA
APPLICATION HISTORICAL ACQUISITIONS AS ADJUSTED ADJUSTMENTS
HISTORICAL OF CLARK SALE ACQUIRED AND NEW BEFORE THE FOR THE PRO FORMA
TEREX PROCEEDS(3) COMPANIES CREDIT FACILITY OFFERING OFFERING(10) AS ADJUSTED
---------- ------------- --------- --------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales................... $678.5 $ $ 208.6 $ $ 887.1 $ $ 887.1
Cost of goods sold.......... 609.3 170.7 1.0(5) 780.9 780.9
------ ----- ------ ----- ------ ----- ------
Gross profit.............. 69.2 37.9 (1.0) 106.2 106.2
Engineering, selling and
administrative expenses... 64.1 28.9 (7.0)(6) 86.0 86.0
------ ----- ------ ----- ------ ----- ------
Income from operations.... 5.1 9.0 6.0 20.2 20.2
Other income (expense)
Interest income............. 1.2 0.2 (0.2)(7) 1.2 1.2
Interest expense.......... (44.8)(1) 6.3 (5.9) 0.3(8) (44.1) 10.6 (33.5)
Amortization of debt
issuance costs.......... (2.6) -- (0.2)(9) (2.8) 0.7 (2.1)
Other income (expense),
net..................... (1.1) -- (1.1) (1.1)
------ ----- ------ ----- ------ ----- ------
Income (loss) from
Continuing Operations
before income taxes..... (42.2) 6.3 3.3 5.9 (26.6) 11.3 (15.3)
Provision for income
taxes..................... (12.1) (0.3) (12.4) (12.4)
------ ----- ------ ----- ------ ----- ------
Income (loss) from
Continuing Operations... $(54.3) $ 6.3 $ 3.0 $ 5.9 $ (39.0) $ 11.3 $ (27.7)
====== ===== ====== ===== ====== ===== ======
Per common and common
equivalent share.......... $(5.81)(2) $2.14(4) $ 0.23 $0.44 $ (2.99) $ 0.62 $ (1.56)
====== ===== ====== ===== ====== ===== ======
Average number of common and
common equivalent shares
outstanding in per share
calculation............... 13.3 13.3 13.3 13.3 13.3 18.3 18.3
====== ===== ====== ===== ====== ===== ======
</TABLE>

(footnotes on following page)

21
<PAGE> 23

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 1996

(1) On November 27, 1996, the Company consummated the Clark Sale. As a result,
the Clark Material Handling Segment was accounted for as a discontinued
operation for the year ended December 31, 1996. Generally accepted
accounting principles permit, but do not require, the allocation of
interest expense between continuing operations and discontinued operations.
The Company has elected not to allocate interest expense to discontinued
operations because, such allocation, although permitted by generally
accepted accounting principles, would not necessarily be indicative of the
use of proceeds from the Clark Sale and the effect on interest expense of
Continuing Operations. As a result, loss from Continuing Operations
includes substantially all of the interest expense of the Company, and
income from discontinued operations does not include any material interest
expense.

(2) Includes annual accretion of the Series A Preferred Stock of $7.7 million,
annual accretion of the Series B Preferred Stock and redeemable preferred
stock of a subsidiary aggregating $0.7 million, and a $14.5 million
nonrecurring charge as a result of the redemption of the Series A Preferred
Stock.
(3) Reflects the effect of the application of a portion of the proceeds from
the Clark Sale to repay the amounts outstanding under the then existing
credit facility, as if such application had taken place on January 1, 1996.
(4) Reflects the adjustment discussed in (3) above and the effect of the
application of a portion of the net proceeds of the Clark Sale to redeem
the Series A Preferred Stock, as if each such application had taken place
on January 1, 1996.
(5) Reflects the adjustment of historical goodwill amortization of the Simon
Access Companies and the Square Shooter Business to equal the amortization
over 40 years of goodwill arising as a result of the Acquisitions.

(6) Represents reductions in costs and expenses resulting from the elimination
of overstaffing and redundant staffing throughout the Simon Access
Companies, primarily through the elimination of the administrative
headquarters and foreign sales offices, which initiatives have already been
implemented. The estimated reduction in expense was calculated based on the
salary and benefits and ancillary costs related to employees who have been
terminated. No savings related to plant closure have been assumed.
Liabilities related to these employee terminations have been accrued in
connection with the Simon Acquisition pursuant to EITF 95-3 "Recognition of
Liabilities in Connection with a Business Combination."

(7) Represents the elimination of interest income on cash on hand at the Simon
Access Companies as such cash was not included as part of the assets
acquired by the Company in the Simon Acquisition.

(8) Represents the net increase in interest expense for 1996 as a result of the
Acquisitions. This increase reflects the pro forma effect of the $66.5
million of additional debt incurred at the time of the Acquisitions as
though such debt was incurred on January 1, 1996. The majority of the debt
bears interest at a variable rate which was assumed to be 8.5% for the
entire year. The pro forma 1996 interest expense on this $66.5 million debt
totals $5.6 million. A 0.25% increase in the interest rate on this variable
rate debt would increase interest expense by $0.2 million, resulting in a
net income decrease of $0.2 million. The 1996 actual interest expense for
the Acquired Companies was $5.9 million, resulting in a net adjustment of
interest expense of $0.3 million. In addition, in connection with the
Acquisitions the Company assumed $5.0 million of non-interest bearing debt.

(9) Represents the amortization of the net additional debt origination fees
related to the New Credit Facility.

(10) Represents the effect of the proposed sale of 5,000,000 shares of Common
Stock by the Company at $18.75 per share ($0.1 million of which is
attributed to the par value of the Common Stock) less an estimated $6.0
million in fees. Assumes all of the net proceeds of the Offering to the
Company of $80.2 million are applied to redeem Senior Secured Notes at a
price of 109.46% of the principal amount thereof. This will result in a
reduction of the interest expense related to the Senior Secured Notes as
set forth. The decrease in amortization of debt issuance costs results from
the pro rata reduction of the debt issuance costs of the Senior Secured
Notes for those Senior Secured Notes redeemed using the net proceeds of the
Offering to the Company.

22
<PAGE> 24

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA

AS OF AND FOR THE QUARTER ENDED MARCH 31, 1997

The following unaudited pro forma condensed consolidated financial
statements (the "First Quarter Pro Forma Financial Statements") are based on the
historical unaudited consolidated financial statements of the Company as of and
for the quarter ended March 31, 1997 and the related notes thereto incorporated
by reference in this Prospectus, adjusted to give effect to the following
transactions as if they had occurred on January 1, 1997 (March 31, 1997 for
Balance Sheet Data): (i) the Acquisitions, and the New Credit Facility and
application of the net proceeds therefrom, except, with respect to the statement
of operations, for $2.6 million of extraordinary charges related to the
prepayment of the then existing credit facility; and (ii) the completion of the
Offering by the Company and the application of the net proceeds therefrom as
described in "Use of Proceeds," except, with respect to the statement of
operations, for extraordinary charges of $11.9 million related to the redemption
of Senior Secured Notes with the net proceeds to the Company of the Offering.
The First Quarter Pro Forma Financial Statements do not purport to represent
what the Company's results of operations or financial condition would have been
had the transactions listed above actually occurred on the dates indicated or to
predict the Company's results of operations or financial condition in the
future. These statements are qualified in their entirety by, and should be read
in conjunction with, the historical consolidated financial statements of the
Company and the related notes thereto and the historical combined financial
statements of the Simon Access Companies and the related notes thereto
incorporated by reference in this Prospectus and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere in
this Prospectus. The total purchase price for the Acquisitions was $98.7
million. The Acquisitions were accounted for as purchase transactions.
Management believes that the final allocation of the purchase price for the
Acquisitions will not materially differ from the amounts shown in the pro forma
condensed consolidated financial statements.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1997

(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
ADJUSTMENTS FOR PRO FORMA
HISTORICAL ACQUISITIONS AS ADJUSTED ADJUSTMENTS
HISTORICAL ACQUIRED AND NEW BEFORE THE FOR THE PRO FORMA
TEREX COMPANIES CREDIT FACILITY OFFERING OFFERING(5) AS ADJUSTED
---------- ---------- ---------------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net sales.............................. $176.3 $ 51.0 $ -- $ 227.3 $ $ 227.3
Cost of goods sold..................... 148.8 44.0 0.3(1) 193.1 193.1
------ ----- ----- ------ ----- ------
Gross profit......................... 27.5 7.0 (0.3) 34.2 34.2
Engineering, selling and administrative
expenses............................. 14.1 8.2 (1.8)(2) 20.5 20.5
------ ----- ----- ------ ----- ------
Income (loss) from operations........ 13.4 (1.2) 1.5 13.7 13.7
Other income (expense) Interest
income............................... 0.6 0.2 (0.2)(3) 0.6 0.6
Interest expense..................... (9.5) (1.3) (0.1)(4) (10.9) 2.7 (8.2)
Amortization of debt issuance
costs.............................. (0.7) -- (0.7) 0.2 (0.5)
Other income (expense) -- net........ 0.3 -- 0.3 0.3
------ ----- ----- ------ ----- ------
Income (loss) from Continuing
Operations before income taxes..... 4.1 (2.3) 1.2 3.0 2.9 5.9
Provision for income taxes............. (0.2) -- -- (0.2) (0.2)
------ ----- ----- ------ ----- ------
Income (loss) from Continuing
Operations......................... $ 3.9 $ (2.3) $ 1.2 $ 2.8 $ 2.9 $ 5.7
====== ===== ===== ====== ===== ======
Per common and common equivalent
share................................ $ 0.24 $(0.16) $ 0.08 $ 0.17 $0.15 $ 0.27
====== ===== ===== ====== ===== ======
Average number of common and common
equivalent shares outstanding in per
share calculation.................... 14.4 14.4 14.4 14.4 19.4 19.4
====== ===== ===== ====== ===== ======
</TABLE>

- ---------------
(1) Reflects the adjustment of historical goodwill amortization of the Simon
Access Companies and the Square Shooter Business to equal the amortization
over 40 years of goodwill arising as a result of the Acquisitions.
(2) Represents reductions in costs and expenses resulting from the elimination
of overstaffing and redundant staffing throughout the Simon Access
Companies, primarily through the elimination of the administrative
headquarters, foreign sales offices and plant closures, which initiatives
have already been implemented. Liabilities related to these employee
terminations have been accrued in connection with the Simon Acquisition
pursuant to EITF 95-3 "Recognition of Liabilities in Connection with a
Business Combination."
(3) Represents the elimination of interest income on cash on hand at the Simon
Access Companies as such cash was not included as part of the assets
acquired by the Company in the Simon Acquisition.

(4) Represents the additional interest expense related to the $71.5 million of
debt incurred and assumed at the time of the Acquisitions as though such
debt was incurred on January 1, 1997.

(5) Represents the effect of the proposed sale of 5,000,000 shares of Common
Stock by the Company at $18.75 per share of ($0.1 million of which is
attributed to the par value of the Common Stock) less an estimated $6.0
million in fees and expenses. Assumes all of the net proceeds of the
Offering to the Company of $80.2 million are applied to redeem Senior
Secured Notes at a price of 109.46% of the principal amount thereof. This
will result in a reduction of the interest expense related to the Senior
Secured Notes as set forth. The decrease in amortization of debt issuance
costs results from the pro rata reduction of the debt issuance costs of the
Senior Secured Notes for those Senior Secured Notes redeemed using the net
proceeds of the Offering to the Company.

23
<PAGE> 25

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

AS OF MARCH 31, 1997

(DOLLARS IN MILLIONS)

<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS AS ADJUSTED
HISTORICAL FOR ACQUISITIONS BEFORE THE ADJUSTMENTS
HISTORICAL ACQUIRED AND NEW OFFERING FOR THE PRO FORMA
TEREX COMPANIES CREDIT FACILITY (13)(14) OFFERING AS ADJUSTED
---------- --------- ---------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Current assets
Cash and cash equivalents............ $ 39.6 $ 1.0 $(36.7)(1) $ 3.9 $ 3.9
Cash securing letters of credit...... 2.9 -- 2.9 2.9
Net trade receivables................ 109.6 23.1 132.7 132.7
Net inventories...................... 188.5 38.8 227.3 227.3
Other current assets................. 11.0 0.9 11.9 11.9
------- ------- ------- ------- ------- -------
Total current assets........... 351.6 63.8 (36.7) 378.7 378.7
Long-term assets
Property, plant and
equipment -- net................... 30.7 23.1 (2.0)(2) 51.8 51.8
Goodwill -- net...................... 31.8 14.4 37.1(3) 83.3 83.3
Debt issuance costs -- net........... 12.5 -- 1.0(4) 13.5 $ (4.3)(9) 9.2
Other assets......................... 4.0 11.8 -- 15.8 15.8
------- ------- ------- ------- ------- -------
Total assets................... $ 430.6 $ 113.1 $ (0.6) $ 543.1 $ (4.3) $ 538.8
======= ======= ======= ======= ======= =======
Current liabilities
Notes payable and current portion of
long-term debt..................... $ 22.7 $ 51.5 $(51.5)(5) $ 22.7 $ $ 22.7
Trade accounts payable............... 103.0 28.4 131.4 131.4
Due to affiliates.................... -- 3.6 (3.6)(5) -- --
Accrued compensation and benefits.... 14.9 2.3 17.2 17.2
Accrued warranties and product
liability.......................... 19.6 4.9 24.5 24.5
Other current liabilities............ 42.5 3.5 3.0(6) 49.0 49.0
------- ------- ------- ------- ------- -------
Total current liabilities...... 202.7 94.2 (52.1) 244.8 244.8
Non-current liabilities
Long-term debt, less current
portion............................ 261.1 4.9 66.6(7) 332.6 (80.2)(10) 252.4
Other................................ 29.1 1.5 30.6 30.6
Minority interest, including redeemable
preferred stock of a subsidiary...... 10.4 -- 10.4 10.4
Redeemable convertible preferred
stock................................ 0.8 -- 0.8 0.8
Commitments and contingencies
Stockholders' deficit
Warrants to purchase common stock.... 3.2 -- 3.2 3.2
Common Stock......................... 0.1 4.0 (4.0)(8) 0.1 0.1(11) 0.2
Additional paid-in capital........... 56.0 25.5 (25.5)(8) 56.0 87.7(11) 143.7
Accumulated deficit.................. (122.6) (17.0) 14.4(8) (125.2) (11.9)(12) (137.1)
Pension liability adjustment......... (2.0) -- (2.0) (2.0)
Cumulative translation adjustment.... (8.2) -- (8.2) (8.2)
------- ------- ------- ------- ------- -------
Total stockholders' equity
(deficit).................... (73.5) 12.5 (15.1) (76.1) 75.9 (0.2)
------- ------- ------- ------- ------- -------
Total liabilities and
stockholders' deficit........ $ 430.6 $ 113.1 $ (0.6) $ 543.1 $ (4.3) $ 538.8
======= ======= ======= ======= ======= =======
</TABLE>

- ---------------
(1) Represents cash used in the Acquisitions and termination of the then
existing credit facility. Also reflects the elimination of cash on hand at
the Acquired Companies as such cash was not included as part of the assets
acquired by the Company in the Acquisitions.

(2) Represents a reduction in value of the fixed assets of the Simon Access
Companies due to plant closure.

(3) Represents the net increase in goodwill at the Acquired Companies as a
result of the Acquisitions.

(4) Represents the net increase in debt issuance costs as a result of the New
Credit Facility.

(5) Represents the forgiveness of amounts due to affiliates as part of the
Simon Acquisition.

(6) Represents additional liabilities incurred, primarily for termination
payments, on account of the Simon Acquisition.

(7) Represents borrowings under the New Credit Facility in connection with the
Acquisitions plus the issuance of a $1.5 million purchase money promissory
note in connection with the Square Shooter Acquisition, which is payable
over three years with interest at a rate of 8% per annum.

(footnotes continued on following page)

24
<PAGE> 26

(8) Represents the elimination of the equity accounts of the Acquired
Companies, and the impact on equity of the fees and expenses incurred in
connection with the early termination of the Company's then existing credit
facility.

(9) Represents the pro rata write-off of $4.3 million in debt origination costs
related to the redemption of a portion of the Senior Secured Notes with the
net proceeds of the Offering, assuming the full amount of the net proceeds
of the Offering are available to redeem Senior Secured Notes.

(10) Represents the principal amount of the Senior Secured Notes to be redeemed
with the net proceeds of the Offering, assuming the full amount of the net
proceeds of the Offering by the Company are available to redeem the Senior
Secured Notes.

(11) Represents the effect of the proposed sale of 5,000,000 shares of Common
Stock by the Company at $18.75 per share ($0.1 million of which is
attributed to the par value of the Common Stock) less approximately $6.0
million in fees and expenses related to the Offering.

(12) Represents the effect on equity of the 9.46% redemption premium ($7.6
million) on the Senior Secured Notes to be redeemed, plus the pro rata
write-off of $4.3 million in debt origination costs related to the
redemption of such Senior Secured Notes.

(13) The purchase price for the Acquired Companies is as follows:

<TABLE>
<S> <C>
Cash...................................................... $ 93.8
Seller Note............................................... 1.5
Other Expense............................................. 3.4
------
$ 98.7
======
</TABLE>

(14) The estimated fair values of assets and liabilities acquired in the
Acquisitions are summarized as follows:

<TABLE>
<S> <C>
Accounts receivable....................................... $ 23.1
Inventories............................................... 38.8
Other current assets...................................... 0.9
Property, plant and equipment............................. 21.1
Goodwill.................................................. 51.5
Other assets.............................................. 11.8
Accounts payable and other current liabilities............ (42.1)
Long-term debt............................................ (4.9)
Other non-current liabilities............................. (1.5)
------
$ 98.7
======
</TABLE>

25
<PAGE> 27

SELECTED CONSOLIDATED FINANCIAL DATA

(IN MILLIONS EXCEPT PER SHARE AMOUNTS)

The selected historical consolidated financial data of the Company set
forth below as of and for the five years ended December 31, 1996 have been
derived from the audited historical consolidated financial statements of the
Company and the related notes thereto incorporated by reference in this
Prospectus. The selected historical consolidated financial data as of and for
the quarters ended March 31, 1996 and 1997 have been derived from unaudited
interim financial statements of the Company and the notes thereto incorporated
by reference in this Prospectus. Operating results for interim periods are not
necessarily indicative of results for the entire fiscal year. The following data
should be read in conjunction with the historical financial statements of the
Company and the related notes thereto incorporated by reference in this
Prospectus and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
---------------------------------------------- ----------------
1992 1993 1994 1995 1996 1996 1997
------ ------ ------ ------ ------ ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales............................................. $282.4 $274.7 $314.1 $501.4 $678.5 $173.2 $176.3
Cost of goods sold.................................... 252.8 242.2 266.0 431.0 609.3(1) 149.8 148.8
------ ------ ------ ------ ------ ------ ------
Gross profit.......................................... 29.6 32.5 48.1 70.4 69.2(1) 23.4 27.5
Engineering, selling and administrative expenses...... 36.3 40.7 37.7 57.6 64.1(2) 16.3 14.1
------ ------ ------ ------ ------ ------ ------
Income (loss) from operations......................... (6.7) (8.2) 10.4 12.8 5.1(3) 7.1 13.4
Interest income....................................... 1.3 0.9 0.5 0.7 1.2 0.1 0.6
Interest expense...................................... (22.9) (30.0) (28.3) (38.7) (44.8)(4) (11.4) (9.5)
Amortization of debt issuance costs................... (1.7) (3.4) (2.3) (2.3) (2.6) (0.6) (0.7)
Gain on sale of stock of former subsidiary............ -- 3.0 26.0 1.0 -- -- --
Other income (expense), net........................... 30.6 (3.0) (1.4) (5.6) (1.1) 2.1 0.3
------ ------ ------ ------ ------ ------ ------
Income (loss) from continuing operations before income
taxes and extraordinary items....................... 0.6 (40.7) 4.9 (32.1) (42.2) (2.7) 4.1
Provision for income taxes............................ 0.1 -- -- -- (12.1)(5) -- (0.2)
------ ------ ------ ------ ------ ------ ------
Income (loss) from continuing operations before
extraordinary items................................. 0.7 (40.7) 4.9 (32.1) (54.3) (2.7) 3.9
Income (loss) from discontinued operations............ 2.2 (24.3) (3.7) 4.4 102.0(6) 3.2 --
------ ------ ------ ------ ------ ------ ------
Income (loss) before extraordinary items.............. 2.9 (65.0) 1.2 (27.7) 47.7 0.5 3.9
Extraordinary loss on retirement of debt.............. -- (1.5) (0.7) (7.5) -- -- --
------ ------ ------ ------ ------ ------ ------
Net income (loss)..................................... 2.9 (66.5) 0.5 (35.2) 47.7 0.5 3.9
Less preferred stock accretion........................ -- (0.2) (6.0) (7.3) (22.9)(7) (1.9) (0.4)
------ ------ ------ ------ ------ ------ ------
Income (loss) applicable to common stock.............. $ 2.9 $(66.7) $ (5.5) $(42.5) $ 24.8 $ (1.4) $ 3.5
====== ====== ====== ====== ====== ====== ======
Per Common and Common Equivalent Share:
Income (loss) from continuing operations............ $ 0.07 $(4.11) $(0.10) $(3.79) $(5.81) $(0.43) $ 0.24
Income (loss) from discontinued operations.......... 0.22 (2.44) (0.36) 0.42 7.67 0.30 --
------ ------ ------ ------ ------ ------ ------
Loss before extraordinary items..................... 0.29 (6.55) (0.46) (3.37) 1.86 (0.13) 0.24
Extraordinary loss on retirement of debt............ -- (0.15) (0.07) (0.72) -- -- --
====== ====== ====== ====== ====== ====== ======
Net income (loss)................................. $ 0.29 $(6.70) $(0.53) $(4.09) $ 1.86 $(0.13) $ 0.24
====== ====== ====== ====== ====== ====== ======
Average Number of Common and Common Equivalent Shares
Outstanding in Per Share Calculation................ 9.9 10.0 10.3 10.4 13.3 10.6 14.4
====== ====== ====== ====== ====== ====== ======
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital..................................... $ 97.2 $ 69.5 $ 56.5 $115.7 $195.2 $116.6 $148.9
Total assets........................................ 477.3 390.7 401.6 478.9 471.2 491.4 430.6
Total debt.......................................... 217.6 218.0 190.9 329.9 281.3 334.6 283.8
Stockholders' deficit............................... (9.1) (62.3) (55.7) (96.9) (71.7) (97.1) (73.5)

(footnotes on following page)
</TABLE>

26
<PAGE> 28

NOTES TO SELECTED CONSOLIDATED FINANCIAL DATA

(1) As disclosed in "Management's Discussion and Analysis of Financial Condition
and Results of Operations," cost of goods sold includes $27.2 million in
nonrecurring charges. Excluding these charges, gross profit would have been
$96.4 million or 14.2% of net sales.

(3) Includes the effect of the nonrecurring charges set forth in (1) and (2)
above. Excluding these charges, income from operations would have been $35.1
million.

(4) On November 27, 1996, the Company consummated the Clark Sale. As a result,
the Clark Material Handling Segment was accounted for as a discontinued
operation for the year ended December 31, 1996. Generally accepted
accounting principles permit, but do not require, the allocation of interest
expense between continuing operations and discontinued operations. The
Company has elected not to allocate interest expense to discontinued
operations because such allocation, although permitted by generally accepted
accounting principles, would not necessarily be indicative of the use of
proceeds from the Clark Sale and the effect on interest expense of
Continuing Operations. As a result, loss from Continuing Operations includes
substantially all of the interest expense of the Company, and income from
discontinued operations does not include any material interest expense.

(5) $11.3 million of this charge reflects the utilization of acquired net
operating losses by P.P.M. S.A.

(6) Represents the income from operations of the Clark Material Handling Segment
($17.5 million) and the gain on the Clark Sale ($84.5 million).

(7) Includes annual accretion of the Series A Preferred Stock of $7.7 million,
annual accretion of the Series B Preferred Stock and redeemable preferred
stock of a subsidiary aggregating $0.7 million, and a $14.5 million
nonrecurring charge as a result of the redemption of the Series A Preferred
Stock.

27
<PAGE> 29

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

The Company currently operates in two industry segments: Terex Cranes and
Terex Trucks. The Company previously operated a third industry segment, the
Clark Material Handling Segment, the results of which are accounted for as
Income from Discontinued Operations. Terex Cranes consists of Terex
Cranes -- Waverly Operations, Terex Cranes -- Conway Operations and PPM Europe.
Terex Trucks consists of TEL and Unit Rig.

Three Months Ended March 31, 1996 Compared With Three Months Ended March 31,
1997

The table below is a comparison of net sales, gross profit, engineering,
selling and administrative expenses, income from operations and income from
discontinued operations, by segment, for the three months ended March 31, 1996
and 1997.

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31,
----------------- INCREASE
1996 1997 (DECREASE) % CHANGE
------ ------ ---------- --------
(IN MILLIONS OF
DOLLARS)
<S> <C> <C> <C> <C>
NET SALES
Terex Cranes...................................... $102.5 $ 97.1 $ (5.4) (5.3)%
Terex Trucks...................................... 70.9 77.7 6.8 9.6
General/Corporate/Eliminations.................... (0.2) 1.5 1.7 --
------ ------ -----
Total..................................... $173.2 $176.3 $ 3.1 1.8
====== ====== =====
GROSS PROFIT
Terex Cranes...................................... $ 14.9 $ 14.3 $ (0.6) (4.0)%
Terex Trucks...................................... 9.1 12.8 3.7 40.7
General/Corporate/Eliminations.................... (0.6) 0.4 1.0 --
------ ------ -----
Total..................................... $ 23.4 $ 27.5 $ 4.1 17.5
====== ====== =====
ENGINEERING, SELLING AND ADMINISTRATIVE EXPENSES
Terex Cranes...................................... $ 8.7 $ 6.8 $ (1.9) (21.8)%
Terex Trucks...................................... 6.2 6.4 0.2 3.2
General/Corporate/Eliminations.................... 1.4 0.9 (0.5) --
------ ------ -----
Total..................................... $ 16.3 $ 14.1 $ (2.2) (13.5)
====== ====== =====
INCOME FROM OPERATIONS
Terex Cranes...................................... $ 6.2 $ 7.5 $ 1.3 21.0
Terex Trucks...................................... 2.9 6.4 3.5 120.7
General/Corporate/Eliminations.................... (2.0) (0.5) 1.5 --
------ ------ -----
Total..................................... $ 7.1 $ 13.4 $ 6.3 88.7%
====== ====== =====
INCOME FROM DISCONTINUED OPERATIONS................. $ 3.2 $ -- $ (3.2)
====== ====== =====
</TABLE>

Net Sales

Sales increased $3.1 million, or approximately 2%, to $176.3 million for
the three months ended March 31, 1997 over the comparable 1996 period,
reflecting a strong sales quarter at TEL, partially offset by a decrease in
sales for Terex Cranes.

Terex Cranes' sales were $97.1 million for the three months ended March 31,
1997, a decrease of $5.4 million from $102.5 million for the three months ended
March 31, 1996. The decrease in Terex Cranes' sales was due to the timing of
shipments and the weakening of the French Franc. Sales were strong at Terex

28
<PAGE> 30

Cranes -- Waverly Operations, including the aerial work platform product line,
but were offset by weaker sales at PPM Europe and Terex Cranes -- Conway
Operations, particularly in Europe. Terex Cranes' backlog was $101.0 million at
March 31, 1997, as compared to $67.2 million at December 31, 1996 and $57.3
million at March 31, 1996. Backlog levels at March 31, 1997 increased from
December 31, 1996 for all Terex Cranes operations. Backlog was particularly
strong in the aerial work platform product line. The sales mix between machines
and parts for the first quarter of 1997 was relatively unchanged from the
comparable period in the prior year.

Terex Trucks' sales increased $6.8 million to $77.7 million for the three
months ended March 31, 1997 from $70.9 million for the three months ended March
31, 1996. The increase in sales was primarily in the TEL product line. Sales in
Europe were lower than the 1996 quarter reflecting continued weakness in the
European construction sector. This weakness was offset by sales growth in North
America and the developing regions of Southeast Asia. Machine sales increased
15.4%, and parts sales increased 2.2%. Parts sales have higher margins than
machine sales. The sales mix was approximately 29% parts for the three months
ended March 31, 1997 compared to 31% parts for the comparable 1996 period.
Backlog was $69.1 million at March 31, 1997 compared to $53.4 million at
December 31, 1996 and $87.0 million at March 31, 1996. The March 31, 1996
backlog included a single order for about $25.0 million, which was subsequently
canceled. Adjusting for that event, backlog at March 31, 1996 was $62.0 million.

Net sales for corporate are service revenues of $1.5 million generated by
Terex's parts distribution center. These services were provided to the purchaser
of the Clark Material Handling Segment during the three months ended March 31,
1997 pursuant to a service contract entered into with the purchaser as part of
the Clark Sale. The contract expires in November 1999.

Gross Profit

Gross profit for the three months ended March 31, 1997 increased $4.1
million to $27.5 million as compared to $23.4 million for the three months ended
March 31, 1996. The gross profit at Terex Trucks was partially offset by a
decrease in gross profit at Terex Cranes.

Terex Cranes' gross profit decreased $0.6 million to $14.3 million for the
three months ended March 31, 1997, compared to $14.9 million for the three
months ended March 31, 1996. The decrease was due to the decrease in sales; the
gross margin percentage at Terex Cranes was 14.7% for the three months ended
March 31, 1997 versus 14.5% for the comparable 1996 period.

Terex Trucks' gross profit increased $3.7 million to $12.8 million for the
three months ended March 31, 1997 compared to $9.1 million for the three months
ended March 31, 1996. The increase in gross profit was primarily due to
increased manufacturing efficiencies and an increased share of higher margin TEL
machines. The gross margin percentage at Terex Trucks was 16.5% for the three
months ended March 31, 1997, as compared to 12.8% for the three months ended
March 31, 1996.

Engineering, Selling and Administrative Expenses

Engineering, selling and administrative expenses (which include the
Company's research and development expenses) decreased to $14.1 million for the
three months ended March 31, 1997 from $16.3 million for the three months ended
March 31, 1996, reflecting cost reductions at the corporate level and at Terex
Cranes. Terex Cranes' engineering, selling and administrative expenses decreased
to $6.8 million for the three months ended March 31, 1997 from $8.7 million for
the three months ended March 31, 1996, reflecting the effect of cost reduction
actions at PPM Europe and Terex Cranes -- Conway Operations. Engineering,
selling and administrative expenses as a percentage of sales at Terex Cranes
decreased to 7.0% for the three months ended March 31, 1997, as compared to 8.5%
for the comparable 1996 period. Terex Trucks' engineering, selling and
administrative expenses increased $0.2 million to $6.4 million for the three
months ended March 31, 1997, as compared to $6.2 million for the same period in
1996. However, Terex Trucks' expenses decreased to 8.2% of sales for the three
months ended March 31, 1997 from 8.7% of sales for the comparable 1996 period.
See "Business -- Research and Development" for a discussion of the Company's
engineering expenses.

29
<PAGE> 31

Income From Operations

On a consolidated basis, the Company had operating income from Continuing
Operations of $13.4 million for the three months ended March 31, 1997, compared
to operating income of $7.1 million for the three months ended March 31, 1996,
for the reasons mentioned below. For the three months ended March 31, 1997,
unallocated corporate expense declined by $0.5 million versus the three months
ended March 31, 1996.

Terex Cranes' income from operations of $7.5 million for the three months
ended March 31, 1997 increased by $1.3 million as compared with the three months
ended March 31, 1996, primarily due to the effect of cost control initiatives
implemented at PPM Europe and Terex Cranes -- Conway Operations, and continued
strong performance by Terex Cranes -- Waverly Operations.

Terex Trucks' income from operations increased by $3.5 million to $6.4
million for the three months ended March 31, 1997 from $2.9 million for the
three months ended March 31, 1996, primarily due to the realization of increased
revenues, improved gross margin percentages, and level engineering, selling and
administrative charges. Improved gross margin percentages were seen at Unit Rig
as a result of the outsourcing of certain manufacturing processes, and in the
TEL product line due to manufacturing efficiencies at the Motherwell, Scotland
facility.

Interest Expense

During the three months ended March 31, 1997, the Company's interest
expense decreased $1.9 million to $9.5 million from $11.4 million for the three
months ended March 31, 1996. This decrease was primarily due to the $139.5
million of cash provided by the Clark Sale, which allowed the Company to
eliminate borrowings under its revolving credit facility. Similarly, the Company
was able to invest excess cash during the period, and, accordingly, interest
income for the three months ended March 31, 1997 increased $0.5 million to $0.6
million from $0.1 million for the three months ended March 31, 1996.

Other Income (Expense)

Other income (expense) for the three months ended March 31, 1997 was
primarily amortization of debt issue costs. During the three months ended March
31, 1996 the Company realized a gain of $2.4 million on the sale of excess
property in Scotland.

Income From Discontinued Operations

As a result of the Clark Sale, the Company did not have any income from
discontinued operations for the three months ended March 31, 1997 compared to
$3.2 million for the comparable period in the prior year.

30
<PAGE> 32

Year Ended December 31, 1995 Compared With Year Ended December 31, 1996

The table below is a comparison of net sales, gross profit, engineering,
selling and administrative expenses, income (loss) from operations, and income
(loss) from discontinued operations, by segment, for 1995 and 1996. The 1996
amounts include $30.0 million in nonrecurring charges comprised of $18.4 million
at Terex Cranes ($16.8 million gross profit; $1.6 million engineering, selling
and administrative expenses), $10.4 million at Terex Trucks (gross profit), and
$1.2 million General/Corporate/Eliminations (engineering, selling and
administrative expenses).

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
----------------- INCREASE
1995 1996 (DECREASE) % CHANGE
------ ------ ---------- --------
(IN MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C>
NET SALES
Terex Cranes...................................... $252.3 $363.9 $111.6 44.2%
Terex Trucks...................................... 250.3 314.9 64.6 25.8
General/Corporate/Eliminations.................... (1.2) (0.3) 0.9 --
------ ------ ------
Total..................................... $501.4 $678.5 $177.1 35.3
====== ====== ======
GROSS PROFIT
Terex Cranes...................................... $ 35.2 $ 38.1 $ 2.9 8.2%
Terex Trucks...................................... 35.9 31.3 (4.6) (12.8)
General/Corporate/Eliminations.................... (0.7) (0.2) 0.5 --
------ ------ ------
Total..................................... $ 70.4 $ 69.2 $ (1.2) (1.7)
====== ====== ======
GROSS PROFIT (EXCLUDING NONRECURRING CHARGES)
Terex Cranes...................................... $ 35.2 $ 54.9 $ 19.7 56.0%
Terex Trucks...................................... 35.9 41.7 5.8 16.2
General/Corporate/Eliminations.................... (0.7) (0.2) 0.5 --
------ ------ ------
$ 70.4 $ 96.4 $ 26.0 36.9
====== ====== ======
ENGINEERING, SELLING AND ADMINISTRATIVE EXPENSES
Terex Cranes...................................... $ 28.0 33.3 $ 5.3 18.9%
Terex Trucks...................................... 22.9 25.7 2.8 12.2
General/Corporate/Eliminations.................... 6.7 5.1 (1.6) --
------ ------ ------
Total..................................... $ 57.6 $ 64.1 $ 6.5 11.3
====== ====== ======
INCOME (LOSS) FROM OPERATIONS
Terex Cranes...................................... $ 7.2 $ 4.8 $ (2.4) (33.3)%
Terex Trucks...................................... 13.0 5.6 (7.4) (56.9)
General/Corporate/Eliminations.................... (7.4) (5.3) 2.1 --
------ ------ ------
Total..................................... $ 12.8 $ 5.1 $ (7.7) (60.2)
====== ====== ======
INCOME (LOSS) FROM OPERATIONS (EXCLUDING
NONRECURRING CHARGES)
Terex Cranes...................................... $ 7.2 $ 23.2 $ 16.0 222.2%
Terex Trucks...................................... 13.0 16.0 3.0 23.1
General/Corporate/Eliminations.................... (7.4) (4.1) 3.3 44.6
------ ------ ------
Total..................................... $ 12.8 $ 35.1 $ 22.3 174.2
====== ====== ======
INCOME (LOSS) FROM DISCONTINUED OPERATIONS.......... $ 4.4 $102.0 $ 97.6
====== ====== ======
</TABLE>

31
<PAGE> 33

Net Sales

Sales increased $177.1 million, or approximately 35.3%, to $678.5 million
from $501.4 million in 1995, reflecting the PPM Acquisition in the second
quarter of 1995.

Terex Cranes' sales were $363.9 million for 1996, an increase of $111.6
million, or 44.2%, from $252.3 million in 1995 which did not include PPM prior
to the PPM Acquisition. Machine sales increased $94.9 million to $291.8 million
in 1996. This increase was due primarily to the inclusion of PPM Europe and
Terex Cranes - Conway Operations for all of 1996, as compared to 1995 when the
results of these operations were not included prior to May 9, 1995. The increase
in Terex Cranes' sales in 1996 as compared to 1995 was also attributable to an
increase of $34.3 million in sales at Terex Cranes - Waverly Operations as
compared to 1995 and, to a lesser extent, to a growth in sales at PPM Europe and
Terex Cranes - Conway Operations during such period. Parts sales increased $11.4
million to $64.3 million in 1996. Terex Cranes' bookings were $356.1 million for
1996, compared to $236.7 million for 1995, an increase of $119.4 million.

Terex Trucks' sales increased $64.6 million in 1996 to $314.9 million.
Machines sales increased 36.2% primarily due to increased presence in the Asian
market and the United States rental market, and parts sales increased 8.5% in
1996. The sales mix was approximately 29% parts in 1996 compared to 34.6% parts
in 1995. Terex Trucks' bookings for 1996 were $277.9 million, a decrease of $3.0
million, or 1.1%, from 1995. Backlog decreased to $53.4 million at December 31,
1996 from $88.8 million in 1995 as a result of a large order which was placed
late in 1995. However, the average backlog increased slightly to $68.1 million
for 1996 as compared to $57.0 million for 1995.

Gross Profit

Gross profit for 1996 decreased $1.2 million to $69.2 million. The decline
in the gross profit was primarily due to the $16.8 million write down of
goodwill and other long lived assets at Terex Cranes and $10.4 million of
nonrecurring charges recorded at Terex Trucks in the fourth quarter of 1996.
These charges substantially offset the increased gross profit from increased net
sales during 1996 as compared to 1995. Gross profit as a percentage of net sales
for 1996 decreased to 10.2% as compared to 14.0% for 1995 as a result of the
nonrecurring charges. However, excluding these $27.2 million charges in 1996,
gross profit as a percentage of sales increased to 14.2% and increased from
$70.4 million to $96.4 million.

Terex Cranes' gross profit increased $2.9 million to $38.1 million for
1996, compared to $35.2 million for 1995, reflecting the PPM Acquisition, the
effect of cost reduction actions put in place at PPM Europe and Terex
Cranes -- Conway Operations, and improved performance at Terex Cranes -- Waverly
Operations. These improvements were substantially offset by an impairment charge
which resulted from a detailed analysis of future cash flows from operations
primarily at Terex Cranes -- Conway Operations facility. Excluding the
impairment charge, Terex Cranes' gross profit in 1996 increased $19.7 million as
compared to 1995 and the gross profit percentage increased to 15.1% as compared
to 14.0% in 1995.

Terex Trucks' gross profit decreased $4.6 million to $31.3 million in 1996
compared to $35.9 million for 1995. Excluding the $10.4 million nonrecurring
charges noted above, Terex Trucks' gross profit increased $5.8 million in 1996
as compared to 1995. The $10.4 million nonrecurring charges are comprised mainly
of $8.6 million at Unit Rig for the reduction in value of the Unit Rig Tulsa
facility due to changes in production methods, and $1.9 million of goodwill
associated with TEL's acquisition of its UK distributor, IMACO, which was
written off and recorded as an impairment charge in 1996. Exclusive of these
nonrecurring charges, the gross profit percentage in 1996 decreased to 13.2%
from 14.3% in 1995 due to an increase in the proportion of machine sales as
compared to parts sales. Parts sales have higher margins than machine sales.

Engineering, Selling and Administrative Expenses

Engineering, selling and administrative expenses (which include the
Company's research and development expenses) increased to $64.1 million in 1996
from $57.6 million for 1995, reflecting the effects of the PPM Acquisition.
However, engineering, selling and administrative expenses as a percentage of net
sales decreased to 9.4% for 1996 from 11.5% for 1995. Terex Trucks' engineering,
selling and administrative expenses increased to

32
<PAGE> 34

$25.7 million for 1996 from $22.9 million for 1995 primarily due to costs
associated with a new parts sales office and a new U.K. dealership. Terex
Cranes' engineering, selling and administrative expenses increased to $33.3
million for 1996 from $28.0 million for 1995, reflecting the PPM Acquisition and
nonrecurring charges of $1.6 million. See "Business -- Research and Development"
for a discussion of the Company's engineering expenses.

Income (Loss) From Operations

Terex Cranes' income from operations of $4.8 million for 1996 decreased by
$2.4 million over 1995, primarily due to the impairment charges at the Terex
Cranes -- Conway Operations facility, which were offset somewhat by the
increased net sales and the effect of cost control initiatives implemented at
all PPM operations since they were acquired by the Company, and continued strong
performance by Terex Cranes -- Waverly Operations.

Terex Trucks' income from operations decreased by $7.4 million to $5.6
million for 1996 from $13.0 million in 1995, primarily due to the nonrecurring
charges mentioned above under "Gross Profit." Excluding these charges, income
from operations increased to $16.0 million.

On a consolidated basis, the Company had operating income of $5.1 million
for 1996, compared to operating income of $12.8 million for 1995, for the
reasons mentioned above.

Interest Expense

Net interest expense increased to $43.6 million for 1996 from $38.0 million
in 1995 as a result of incremental borrowings associated with the PPM
Acquisition. The Company realized gains in 1996 of $3.3 million from the sale of
excess property principally in Scotland and Italy.

Other Income (Expense)

During 1996, the Company recorded a provision for income taxes of $12.1
million; in 1995, the Company recorded no provision for income taxes. The 1996
provision for income taxes primarily relates to $11.3 million of tax expense
recognized at PPM Europe in connection with its recapitalization which required
the Company to utilize a net operating loss carryforward. The additional $0.8
million provision relates to taxes due on the sale of property in Europe.

In 1995, the Company had a gain of $1.0 million from the sale of stock of a
former subsidiary and recorded a charge of $0.5 million to recognize the
impairment in value of certain properties held for sale.

Income (Loss) From Discontinued Operations

Income from discontinued operations in the Clark Material Handling Segment
increased $97.6 million to $102.0 million for 1996 as compared to $4.4 million
in 1995. The increased income was primarily due to the gain realized on the
Clark Sale of $84.5 million. Gross profit for 1996 (through the date of the
Clark Sale) increased $1.2 million to $46.0 million as compared to 1995 even
though net sales decreased $124.2 million or 23%. Additionally, in 1995 the
Clark Material Handling Segment recorded charges of $6.0 million related to
severance costs, exit costs and the impairment in value of certain properties
held for sale.

Extraordinary Items

The Company recorded a charge of $7.5 million in 1995 to recognize a loss
on the early extinguishment of debt in connection with its debt refinancing in
May 1995.

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<PAGE> 35

Year Ended December 31, 1994 Compared With Year Ended December 31, 1995

The table below is a comparison of net sales, gross profit, engineering,
selling and administrative expenses, income (loss) from operations and income
(loss) from discontinued operations, by segment, for 1994 and 1995.

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
----------------- INCREASE
1994 1995 (DECREASE) % CHANGE
------ ------ ---------- --------
(IN MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C>
NET SALES
Terex Cranes...................................... $ 90.4 $252.3 $161.9 179.1%
Terex Trucks...................................... 226.8 250.3 23.5 10.4
General/Corporate/Eliminations.................... (3.1) (1.2) 1.9 --
------ ------ ------
Total..................................... $314.1 $501.4 $187.3 59.6
====== ====== ======
GROSS PROFIT
Terex Cranes...................................... $ 14.2 $ 35.2 $ 21.0 147.9%
Terex Trucks...................................... 33.9 35.9 2.0 5.9
General/Corporate/Eliminations.................... -- (0.7) (0.7) --
------ ------ ------
Total..................................... $ 48.1 $ 70.4 $ 22.3 46.4
====== ====== ======
ENGINEERING, SELLING AND ADMINISTRATIVE EXPENSES
Terex Cranes...................................... $ 6.3 $ 28.0 $ 21.7 344.4%
Terex Trucks...................................... 22.7 22.9 0.2 0.9
General/Corporate/Eliminations.................... 8.7 6.7 (2.0) --
------ ------ ------
Total..................................... $ 37.7 $ 57.6 $ 19.9 52.8
====== ====== ======
INCOME (LOSS) FROM OPERATIONS
Terex Cranes...................................... $ 7.9 $ 7.2 $ (0.7) (8.9)%
Terex Trucks...................................... 11.2 13.0 1.8 16.1
General/Corporate/Eliminations.................... (8.7) (7.4) 1.3 --
------ ------ ------
Total..................................... $ 10.4 $ 12.8 $ 2.4 23.1
====== ====== ======
INCOME (LOSS) FROM DISCONTINUED OPERATIONS
Clark Material Handling Segment................... $ (3.7) $ 4.4 $ 8.1
------ ------ ------
Total..................................... $ (3.7) $ 4.4 $ 8.1
====== ====== ======
</TABLE>

Net Sales

Sales increased $187.3 million to $501.4 million, or approximately 60%, for
1995 as compared to 1994.

Terex Cranes' sales were $252.3 million for 1995, an increase of $161.9
million from $90.4 million in 1994 due primarily to the PPM Acquisition. Terex
Cranes' backlog was $85.3 million at December 31, 1995, reflecting the
additional PPM backlog, compared to $11.7 million at December 31, 1994.

Terex Trucks' sales increased $23.5 million for 1995 over 1994. Machines
sales increased 8%, and parts sales increased 7%. The sales mix was
approximately 35% parts for 1995 compared to 36% parts for 1994. Terex Trucks'
parts sales were adversely affected by the strike at the Company's parts
distribution center. Terex Trucks' bookings for 1995 were $271.3 million, an
increase of $39.1 million, or 17%, from 1994. Terex Trucks' backlog was $88.8
million at December 31, 1995 compared to $67.8 million at December 31, 1994.

Gross Profit

Gross profit of $70.4 million for 1995 was $22.3 million, or 46%, higher
than gross profit of $48.1 million for 1994.

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<PAGE> 36

Terex Cranes' gross profit increased $21.0 million to $35.2 million for
1995, compared to $14.2 million for 1994, primarily reflecting the addition of
the May through December 1995 results of PPM. The gross profit percentage for
Terex Cranes was 14% for 1995 and 16% for 1994. The gross profit percentage
decrease was primarily due to costs related to integrating PPM into Terex
Cranes.

Terex Trucks' gross profit increased $2.0 million to $35.9 million for 1995
compared to $33.9 million for 1994. The gross profit percentage for Terex Trucks
was 14% for 1995 and 15% for 1994.

Engineering, Selling and Administrative Expenses

Engineering, selling and administrative expenses (which include the
Company's research and development expenses) increased to $57.6 million for 1995
from $37.7 million for 1994. Terex Cranes' engineering, selling and
administrative expenses increased to $28.0 million for 1995 from $6.3 million
for 1994 reflecting the PPM Acquisition. Terex Trucks' engineering, selling and
administrative expenses increased to $22.9 million for 1995 from $22.7 million
for 1994 as a result of costs associated with the start-up of a new parts
service business, which substantially offset the cost savings at other
operations. Corporate administrative expenses in 1994 included a charge of $2.2
million in connection with the termination of a management contract with KCS
Industries, L.P. ("KCS"), a Connecticut limited partnership principally owned by
certain present and former officers of the Company, offset by allocations to
operating segments. See "Business -- Research and Development" for a discussion
of the Company's engineering expenses.

Income (Loss) From Operations

Terex Cranes' income from operations of $7.2 million for 1995 decreased by
$0.7 million versus 1994, primarily due to losses at PPM. As a result of cost
reductions, improvements in inventory management and consolidation of model
offerings, PPM Europe, Terex Cranes -- Conway Operations and Terex Cranes --
Waverly Operations were profitable in 1994 and 1995 after several years of
losses.

Terex Trucks' income from operations improved by $1.8 million to $13.0
million for 1995 from $11.2 million in 1994, primarily as a result of reduced
costs, offset by costs associated with the start-up of a new parts service
business.

On a consolidated basis, the Company realized operating income of $12.8
million for 1995, compared to $10.4 million for 1994.

Interest Expense

Net interest expense increased to $38.0 million for 1995 from $27.8 million
in 1994 as a result of incremental borrowings associated with the PPM
Acquisition. The Company realized gains of $1.0 million and $26.0 million from
sales of common stock of a former subsidiary during 1995 and 1994, respectively.

Other Income (Expense)

The Company recorded a charge of $0.5 million in 1995 to recognize the
impairment in value of certain properties held for sale.

The Company also incurred net foreign exchange losses of $1.9 million,
trademark-related expenses of $1.3 million, and $0.6 million of group retiree
expenses during 1995.

The Company recorded a charge of $2.5 million in 1995 for payments related
to the retirement of its former Chairman of the Board in August 1995, and future
payments related to the consulting obligations under the retirement agreement of
the former Chairman.

During 1995 and 1994, the Company recorded no provision for income taxes.

Extraordinary Items

The Company recorded a charge of $7.5 million in 1995 to recognize a loss
on the early extinguishment of debt in connection with the May 1995 refinancing.
During 1994, the Company recognized extraordinary losses totaling $0.7 million
to write-off unamortized discount and debt issuance costs when it repurchased
$27.3 million of its old senior secured debt.

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<PAGE> 37

Income (Loss) from Discontinued Operations

Income from discontinued operations in the Clark Material Handling Segment
increased $8.1 million to $4.4 million for 1995, as compared to a loss of $3.7
million for 1994. The increased income was primarily due to increased sales and
to the success of the cost reduction programs put in place in the latter half of
1995.

LIQUIDITY AND CAPITAL RESOURCES

The Company's businesses are working capital intensive and require funding
for purchases of production and replacement parts inventories, capital
expenditures for repair, replacement and upgrading of existing facilities as
well as financing of receivables from customers and dealers. The Company has
significant debt service requirements, including semi-annual interest payments
on the Senior Secured Notes and monthly interest payments of approximately $0.6
million on the New Credit Facility.

Debt reduction and an improved capital structure are major focal points for
the Company. In this regard, the Company regularly reviews its alternatives to
improve its capital structure and to reduce debt through debt refinancings,
issuances of equity, asset sales, including the sale of business units, or any
combination thereof. As part of its strategy to strengthen its capital structure
and reduce debt, on November 27, 1996, the Company completed the Clark Sale for
an aggregate cash purchase price, subject to adjustments, of approximately $140
million. Upon closing, the Company immediately paid down its then existing
credit facility. In accordance with the indenture governing the Senior Secured
Notes (the "Indenture"), the Company offered to repurchase (the "Notes Offer")
$100 million principal amount of Senior Secured Notes at par plus accrued
interest. The Notes Offer expired on December 27, 1996, but no Senior Secured
Notes were tendered for repurchase.

Consistent with its strategy of improving its capital structure, on
December 30, 1996, the Company called all of its issued and outstanding Series A
Preferred Stock for redemption on January 29, 1997 (the "Redemption Date"). The
Series A Stock was accreting initially at a rate of 13% per annum, which was to
increase to 18% per annum at the end of 1998. All 1,200,000 shares of the Series
A Preferred Stock outstanding on the Redemption Date were redeemed at a
redemption price of $37.80 per share, or approximately $45.4 million in
aggregate.

Net cash of $17.6 million was used in operating activities during 1996,
primarily due to an increase in working capital at year end for the expansion of
the Company's business. Net cash provided by investing activities was $135.7
million during 1996 principally due to the Clark Sale. Net cash used by
financing activities during 1996 was principally due to the repayment of the
Company's then existing credit facility ($70 million) with the proceeds from the
Clark Sale, offset partially by the use of the lending facilities in the United
Kingdom. Cash and cash equivalents totaled $72 million at December 31, 1996.

Net cash of $15 million was provided by operating activities during the
three months ended March 31, 1997, of which $7.0 million was provided by
operating results plus depreciation and amortization, plus an increase of
approximately $8.6 million in accrued interest payable. Net cash used in
investing activities was $0.4 million during the three months ended March 31,
1997. Net cash used by financing activities was $43.1 million during the three
months ended March 31, 1997, principally due to the redemption of the Series A
Preferred Stock in January 1997 for $45.4 million. Cash and cash equivalents
totaled $39.6 million at March 31, 1997.

As of March 31, 1997, the Company had no balance outstanding under its then
existing credit facility, letters of credit issued under that credit facility
totaled $7.5 million, and the additional amount that the Company could have
borrowed thereunder was $43.4 million.

Concurrently with the Simon Acquisition the Company entered into the New
Credit Facility. The New Credit Facility provides the Company with the ability
to borrow (in the form of revolving loans and up to $20 million in outstanding
letters of credit) up to $125 million. The New Credit Facility is secured by
substantially all of the Company's domestic receivables and inventory. The
amount of borrowings available under the New Credit Facility is limited to
established percentages of eligible receivables and eligible inventory of
certain of the Company's domestic subsidiaries. The New Credit Facility matures
on April 7, 2000. At the option of the Company, revolving loans may be in the
form of prime rate loans bearing interest at a rate of between 0.5% and 1.5% per
annum in excess of the prime rate or eurodollar rate loans bearing interest at a
rate of between 2.0% and 3.0% per annum in excess of the adjusted eurodollar
rate. The margin over the prime rate or eurodollar rate paid by the Company is
based upon the Company's fixed charge coverage ratio from time to time. As of
April 30, 1997, the Company had availability of $32.0 million under the New
Credit Facility. After application of proceeds

36
<PAGE> 38

of the Offering, the Company estimates that it will have availability of at
least $20 million under the New Credit Facility.

TEL has a bank facility which provides, among other things, a working
capital facility of 6 million Pounds Sterling, and PPM Europe has working
capital facilities aggregating $6 million. Management intends to seek additional
working capital financing facilities for the Company's international operations
to provide additional liquidity worldwide.

Factors Affecting Future Liquidity

The Company currently has $250 million of Senior Secured Notes outstanding.
The Indenture places certain limits on the Company's ability to incur additional
indebtedness; permit the existence of liens; issue, pay dividends on or redeem
equity securities; utilize the proceeds of asset sales; consolidate, merge or
transfer assets to another entity; and enter into transactions with affiliates.
As part of the Company's efforts to improve its capital structure, all or a
substantial portion of the proceeds of the Offering to the Company will be used
to repay indebtedness, including the redemption of a portion of the Senior
Secured Notes.

The New Credit Facility also places restrictions on the Company's ability
to incur additional indebtedness; permit the existence of liens; issue, pay
dividends and or redeem equity securities; utilize the proceeds of asset sales;
consolidate, merge or transfer assets to another entity; and enter into
transactions with affiliates.

In connection with the PPM Acquisition, Terex Cranes, Inc., a wholly owned
subsidiary of the Company established to complete the PPM Acquisition, issued
redeemable preferred stock, having an aggregate liquidation preference of
approximately $21.4 million, subject to adjustment. The number of shares of
Terex Cranes preferred stock issued is subject to adjustment calculated by
reference to Western European telescopic mobile crane demand in 1996 and 1997.
The preferred stock does not bear a dividend and, accordingly, the Company has
valued this stock at approximately $8.8 million (discounted at 15%) including
accretion.

The Company's debt service obligations for 1997 before taking into account
the use of proceeds from the Offering include approximately $16.6 million on May
15 and November 15, 1997 on the Senior Secured Notes and variable monthly
payments of approximately $0.6 million on the New Credit Facility. Management
believes that with cash generated from operations, together with the New Credit
Facility, the Company has adequate liquidity to meet the Company's operating and
debt service requirements for the foreseeable future.

Foreign Currencies and Interest Rate Risk

The Company's products are sold in over 50 countries around the world and,
accordingly, revenues of the Company are generated in foreign currencies, while
the costs associated with those revenues are only partly incurred in the same
currencies. The major foreign currencies, among others, in which the Company
does business are the Pound Sterling and the French Franc. The Company may, from
time to time, hedge specifically identified committed cash flows in foreign
currencies using forward currency sale or purchase contracts. Such foreign
currency contracts have not historically been material in amount. The Company's
borrowings are at both fixed and floating rates of interest. For the floating
rate portion of the borrowings, the Company is at risk for fluctuations in
interest rates. The Company does not currently hedge any interest rate risk.

CONTINGENCIES AND UNCERTAINTIES

In March 1994, the Commission initiated a private investigation, which
included the Company and certain of its affiliates, to determine whether
violations of certain aspects of the Federal securities laws have taken place.
See "Risk Factors -- SEC Investigation." During 1996, the Company incurred $0.3
million of legal fees and expenses on behalf of the Company, directors and
executives of the Company, and KCS. In general, under the Company's by-laws, the
Company is obligated to indemnify officers and directors for all liabilities
arising in the course of their duties on behalf of the Company. To date, no
officer or director has had legal representation

37
<PAGE> 39

separate from the Company's legal representation, and no allocation of the legal
fees for such representation has been made.

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

The Company is also subject to certain contingencies and uncertainties
concerning net operating loss carryovers and environmental liabilities. See
"Risk Factors -- Tax Audit Issues," "-- Continuation of Net Operating Loss
Carryovers" and "-- Environmental and Related Matters."

INDUSTRY OVERVIEW AND OUTLOOK

TELESCOPIC MOBILE CRANES

Mobile cranes with telescoping booms were developed in the 1950s as
advanced hydraulics became available. Telescopic mobile cranes are generally
used only for a limited period during the later stages of a construction
project. As each project may require differing boom lengths and lifting
capacities, contractors tend to rent specific machines as needed rather than own
a fleet of machines of varying capabilities. As a result, according to industry
sources, approximately 85% of all new telescopic mobile crane sales in North
America are made to rental fleets. Because of the market's rental orientation
and that cranes are used in the later stages of construction projects, the
demand for new telescopic mobile cranes typically lags behind the demand for
other construction equipment by between 12 and 24 months during a cyclical
economic recovery. Initially in an economic recovery, rising end-user demand is
first reflected in rising rental fleet utilization rates rather than in new
crane orders. As rental fleet utilization reaches a practical maximum level,
generally new orders for telescopic mobile cranes increase. New telescopic
mobile crane orders also result from fleet replacement demand, which is affected
by the aging of the telescopic mobile crane population. From 1974 through 1981,
the North American telescopic mobile crane market consumed an average of over
3,500 machines per year. During the recession which began in 1982, the North
American telescopic mobile crane consumption declined to a low of 600 machines
and many competitors exited the industry. During the period from 1990 through
1996, the North American telescopic mobile crane market consumed an average of
approximately 1,300 machines per year, with a high of over 2,200 machines in
1990 and a low of approximately 1,000 machines in 1992 and 1993.

The Company believes that the North American telescopic mobile crane
industry is entering a period of growth due to a strong and sustained period of
construction activity in North America, high rental fleet utilizations, and the
fact that the unusually large number of telescopic mobile cranes that were built
in the late 1970s are beginning to reach the end of their useful lives (which
the Company estimates to be approximately 20 years). These factors have
contributed to a 26% increase in telescopic mobile crane shipments in 1996, as
compared with 1995. The Company believes that it is well positioned to
capitalize on the continued growth of the North American telescopic mobile crane
market. Terex Cranes offers products which are low cost, simple to use and easy
to maintain. The Company believes new cranes which incorporate these
characteristics enable rental fleet operators to generate higher returns on
their investments, which are critical to their success and ability to expand. By
pursuing a strategy oriented toward improving customers' productivity and
investment returns, Terex Cranes increased its market share in 1996, and
management believes that such a strategy will lead to its fuller participation
in the continued growth of the North American market.

The European telescopic mobile crane market, which is approximately the
same size as the North American market (ranging between 1,000 and 2,000 unit
shipments per year), has not had an increase in demand to the extent experienced
in North America during 1996. Excluding Germany, construction activity has
remained at recessionary levels for the last four years, which the Company
believes was due initially to a cyclical downturn

38
<PAGE> 40

and more recently to fiscal tightening as European countries attempt to meet the
budget deficit targets established by the Maastricht Treaty. The Company's
principal markets in Europe are in France and Italy, where the Company believes
it has the largest market shares. The French and Italian markets are less
dominated by rental fleets than the North American market; the Company believes
that approximately 55% of new telescopic mobile crane sales in France and Italy
are to rental fleet operators with the balance to end users. An increase in
construction activity in those countries, therefore, would tend to have a more
immediate impact on new telescopic mobile crane sales than would a similar
increase in North America. The Company believes that it is well positioned to
participate in any cyclical increase in demand in France and Italy due to its
local manufacturing, strong local distribution and low cost relative to its
major European competitors.

Outside North America and Europe, the most active new telescopic mobile
crane markets for the Company are the Pacific Rim and the Middle East. Terex
Cranes maintains distributors in each of these markets, and sells approximately
15% of its newly manufactured telescopic mobile cranes to these markets. The
Pacific Rim, particularly Indonesia, generated significant demand for telescopic
mobile cranes during 1996. This demand is expected to continue as infrastructure
development accelerates in that part of the world.

The Company also manufactures truck mounted cranes (boom trucks), which are
telescopic cranes mounted on production truck chassis. Over the past 20 years,
boom trucks have replaced truck mobile cranes in the market for under 30 ton
lifting devices. Conditions in the North American market for boom trucks remain
positive due to overall construction activity in North America.

AERIAL WORK PLATFORMS

The aerial work platform industry in North America has developed over the
past 20 years as an efficient alternative to scaffolding and ladders, and has
been supported by regulations mandating minimum safety standards for people
working at heights. Aerial work platforms are used for indoor or outdoor
applications in a variety of construction, industrial and commercial settings
which require workers to be lifted to heights to perform their jobs. The Company
believes that approximately 90% of all aerial work platform sales in North
America are to rental fleets. The aerial work platform market has developed into
a rental market because (i) contractors require workers to be elevated only for
limited times during a given job, and different jobs require different platform
heights making ownership of a single specification unit impractical, and (ii)
industrial customers are increasingly outsourcing their equipment requirements
to rental providers. Recently, the equipment rental industry has been undergoing
a process of consolidation. As a result, the larger aerial work platform rental
fleet operators are increasingly demanding products that are low cost, simple to
use and easy to maintain. To meet the objectives of the equipment rental
industry, the Company has designed its aerial work platforms to incorporate
these characteristics.

UTILITY AERIAL DEVICES

The Company also manufactures utility aerial devices which are used to set
telephone poles and move transformers and other material to work areas at the
top of poles (digger derricks), and to elevate workers to work areas at the top
of poles or in trees. Customers include electric utilities, local telephone
companies, private utility repair contractors and tree trimmers. The Company
believes that utilities are increasingly outsourcing maintenance to private
contractors in an effort to reduce costs, and that it is well positioned to
capitalize on this trend due to its strategy to manufacture simplified products
at lower cost, its existing dealer relationships and its direct relationships
with major private contractors.

TELESCOPIC CONTAINER STACKERS

Telescopic container stackers were developed in the early 1980s to
manipulate shipping containers efficiently in port storage areas and inland
terminals. Telescopic container stackers are particularly effective in storage
areas where containers are continually added and removed, and where the
efficient manipulation of, and access to, specific containers is required. The
Company believes that because of the efficiency of telescopic container
stackers, demand has steadily grown, primarily outside the United States in port
areas where storage capacity is constrained. Demand has been particularly strong
in South America, the Pacific Rim and Europe. The

39
<PAGE> 41

Company believes that the United States market offers growth potential as the
benefits of this product are better recognized.

OFF-HIGHWAY TRUCKS

Off-highway trucks, which include articulated trucks and rigid frame
trucks, are generally sold to construction companies, fleet contractors who
provide trucks to large construction companies, and to dealer rental fleets.
According to industry sources, the global market is concentrated in three main
regions: North America (approximately 35%), Europe (approximately 28%), and the
Pacific Rim (approximately 22%). These markets are dependent on large private
construction project activity and public infrastructure development, both of
which have been soft in Europe in recent years and strong in the United States
and the Pacific Rim. The Company believes that it is well positioned to
capitalize on any demand that may arise from such activity or development. Terex
believes that fleet operators in the United States and large construction
companies in the Pacific Rim generally prefer products that are low cost, simple
to use and easy to maintain, and that its products have these characteristics.
The Company also believes that it is well positioned to capitalize on future
growth in Europe through an existing private label supply agreement and in China
through an existing joint venture relationship.

HIGH CAPACITY SURFACE MINING TRUCKS

High capacity surface mining trucks are designed to haul coal or ore. They
range in capacities from 120 to 300 tons, and are used in larger surface mines
around the world. The trucks are typically operated around the clock, seven days
a week, often running several weeks between maintenance stops. Accordingly, of
critical concern to mine operators is (i) reliability -- that the truck is
operating in excess of 90% of the time and (ii) hauling efficiency -- the
operating cost per ton hauled, including fuel consumption, tire wear and
maintenance. There are two types of trucks offered: electric and mechanical
drive. The Company offers electric drive trucks in which a diesel engine drives
an alternator which powers two wheel motors, one in each rear wheel. Terex
believes that electric drive vehicles are more efficient than mechanical drive
trucks. As a result of the efficiency and reliability of its trucks, the Company
has been able to increase its market share slightly in recent years despite
difficult competitive conditions in the industry. The Company believes that it
is the third largest manufacturer with a global market share of approximately
13%. The worldwide market is approximately 270 units per year, with sales
generally direct to large surface mines. To respond to the continuing demand of
large mines to improve financial returns through lower costs and higher hauling
capacities, the Company is taking several strategic actions including reducing
the cost of its trucks through component outsourcing and modular assembly
process implementation, as well as development of a 320 ton capacity truck (as
compared to 260 tons, its current largest truck) with a new generation electric
drive system. The Company believes that the current demand levels will continue,
with earnings opportunities from the development of more cost efficient designs
and manufacturing processes.

BUSINESS

GENERAL

40
<PAGE> 42

PRODUCTS

Telescopic Mobile Cranes

Telescopic mobile cranes are used primarily in new industrial, commercial
construction and public works construction industries and in maintenance
applications, to lift equipment or material to heights in excess of 50 feet. The
Company's Terex Cranes segment manufactures the following types of telescopic
mobile cranes:

<TABLE>
<C> <S>
Rough Terrain Cranes -- are designed to lift materials and equipment on
rough or uneven terrain and are most often located on a single
construction or work site such as a building site, a highway or a
utility project for long periods of time. Rough terrain cranes cannot
be driven on highways and accordingly must be transported by truck to
[CRANE PHOTO] the work site. Rough terrain cranes manufactured by Terex Cranes have
maximum lifting capacities of up to 90 tons and maximum tip heights of
up to 205 feet. Terex Cranes manufactures its rough terrain cranes at
its facilities located at Waverly, Iowa, Conway, South Carolina,
Montceau les Mines, France, and Crespellano, Italy under the brand
names TEREX, LORAIN, P&H, PPM and BENDINI.

Truck Cranes -- have two cabs and can travel rapidly from job site to
job site at highway speeds. In contrast to rough terrain cranes which
are often located for extended periods at a single work site, truck
cranes are often used for multiple local jobs, primarily in urban or
[CRANE PHOTO] suburban areas. Truck cranes manufactured by Terex Cranes have maximum
lifting capacities of up to 75 tons and maximum tip heights of up to
193 feet. Terex Cranes manufactures truck cranes at its Waverly, Iowa
and Conway, South Carolina facilities under the brand names P&H and
LORAIN.

All Terrain Cranes -- were developed in Europe as a cross between rough
terrain and truck cranes in that they are designed to travel across
both rough terrain and highways. All terrain cranes have two cabs and
are versatile and highly maneuverable. All terrain cranes manufactured
[CRANE PHOTO] by Terex Cranes have lifting capacities of up to 130 tons and maximum
tip heights of up to 223 feet. Terex Cranes manufactures its all
terrain cranes at its Montceau les Mines, France facility under the
brand names TEREX and PPM.
</TABLE>

Truck Mounted Cranes (Boom Trucks)

Terex Cranes manufactures telescopic boom cranes for mounting on commercial
truck chassis. Terex also distributes truck mounted articulated cranes under the
EFFER brand name which are manufactured by EFFER SpA. Truck mounted cranes are
used primarily in the construction industry to lift equipment or materials to
various heights. Boom trucks are generally lighter and have a lower lifting
capacity than truck cranes, and are used for many of the same applications when
lower lifting capabilities are required. An advantage of a boom truck is that
the equipment or material to be lifted by the crane can be transported by the
truck which can travel at highway speeds. Applications include the installation
of air conditioners and other roof equipment. The Company's Terex Cranes segment
manufactures the following types of cranes for installation on truck chassis:

<TABLE>
<C> <S>
Telescopic Boom Truck Mounted Cranes -- enable an operator to reach
[CRANE PHOTO] heights of up to 167 feet and have a maximum lifting capacity of up to
37.5 tons. Terex Cranes manufactures its telescopic boom truck mounted
cranes at its Olathe, Kansas facility under the brand name RO-STINGER.

Articulated Boom Truck Mounted Cranes -- are for users who prefer
greater capacities over the greater vertical reach provided by a
[CRANE PHOTO] telescopic boom truck mounted crane. At its Olathe, Kansas facility,
Terex Cranes acts as the master distributor for the EFFER brand line of
articulated boom truck mounted cranes which have maximum capacities up
to 87,305 pounds and horizontal reach to 66 feet.
</TABLE>

41
<PAGE> 43

Aerial Work Platforms

Aerial work platforms are self propelled devices which position workers and
materials easily and quickly to elevated work areas. These products have
developed over the past 20 years as alternatives to scaffolding and ladders. The
work platform is mounted on either a telescoping and/or articulating boom or on
a vertical lifting scissor mechanism.

<TABLE>
<C> <S>
Scissor Lifts -- are used in open areas in indoor or outdoor
applications in a variety of construction, industrial and commercial
settings. Scissor lifts manufactured by Terex Cranes have maximum
[CRANE PHOTO] working heights of up to 52 feet and maximum load capacities of up to
2,000 pounds. Terex Cranes manufactures scissor aerial work platforms
at its Waverly, Iowa, Bowerston, Ohio and Milwaukee, Wisconsin
facilities under the brand names TEREX, SIMON and MARK.

Straight Telescopic Boom Lifts -- are used primarily outdoors in
residential, commercial and industrial new construction and maintenance
projects. Straight telescopic boom lifts manufactured by Terex Cranes
[CRANE PHOTO] have maximum working heights of up to 126 feet and maximum load
capacities of up to 650 pounds. Terex Cranes manufactures its straight
telescopic aerial work platforms at its Waverly, Iowa, Bowerston, Ohio
and Milwaukee, Wisconsin facilities under the brand names TEREX, SIMON
and MARK.

Articulating Telescopic Boom Lifts -- are generally used in industrial
environments where the articulation allows the user to access elevated
areas over machines or structural obstacles which prevent access with a
scissor lift or straight boom. Articulating lifts available from Terex
[CRANE PHOTO] Cranes have maximum working heights of up to 70 feet and maximum load
capacities of up to 500 pounds. Terex Cranes manufactures its
articulating telescopic boom lifts at its Waverly, Iowa, Bowerston,
Ohio and Milwaukee, Wisconsin facilities under the brand names TEREX,
SIMON and MARK.
</TABLE>

Utility Aerial Devices

Utility aerial devices are used to set utility poles and move workers and
materials to work areas at the top of utility poles and towers. Utility aerial
devices are mounted on commercial truck chassis which include separately
installed steel cabinets for tool and material storage. Most utility aerial
devices are insulated to permit live wire work.

<TABLE>
<C> <S>
Articulated Aerial Devices -- are used to elevate workers to work areas
at the top of utility poles or in trees and include one or two man
baskets. Articulated aerial devices available from Terex Cranes include
[CRANE PHOTO] telescopic, non-overcenter and overcenter models and range in working
heights from 32 to 203 feet. Articulated aerial devices are
manufactured by Terex Cranes at its Watertown, South Dakota facility
under the brand names TELELECT and HI-RANGER.

Digger Derricks -- are used to set telephone poles. The digger derricks
include a telescopic boom with an auger mounted at the tip which digs a
hole, and a device to grasp, manipulate and set the pole. Digger
[CRANE PHOTO] derricks available from Terex Cranes have sheave heights exceeding 70
feet and lifting capacities up to 48,000 pounds. Digger derricks are
manufactured by Terex Cranes at its Watertown, South Dakota facility
under the brand names TELELECT and HI-RANGER.
</TABLE>

Telescopic Material Handlers

Telescopic material handlers are used to lift containers or other material
from one location to another at the same job site.

42
<PAGE> 44

<TABLE>
<C> <S>
Telescopic Container Stackers -- are used to pick up and stack
containers at dock and terminal facilities. At the end of a telescopic
container stacker's boom is a spreader which enables it to attach to
containers of varying lengths and weights and to rotate the container
up to 360 degrees. Telescopic container stackers are particularly
effective in storage areas where containers are continually added and
[CRANE PHOTO] removed, and where the efficient manipulation of, and access to,
specific containers is required. Telescopic container stackers
manufactured by Terex Cranes have lifting capacities up to 49.5 tons,
can stack up to six full or nine empty containers and are able to
maneuver through very narrow areas. Terex Cranes manufactures its
telescopic container stackers under the brand names PPM and P&H
SUPERSTACKERS at its Conway, South Carolina and Montceau les Mines,
France facilities.

Rough Terrain Telescopic Boom Forklifts -- serve a similar function as
smaller size rough terrain telescopic mobile cranes and are used
exclusively to move and place materials on new residential and
commercial job sites. Terex Cranes manufactures rough terrain
[CRANE PHOTO] telescopic boom forklifts with load capacities of up to 10,000 pounds
and with a maximum extended reach of up to 31 feet and lift
capabilities of up to 48 feet. Terex Cranes manufactures rough terrain
telescopic boom forklifts at its facility in Baraga, Michigan under the
brand name SQUARE SHOOTER.
</TABLE>

Rigid and Articulated Off-Highway Trucks

Terex Trucks manufactures two distinct types of off-highway trucks with
hauling capacities from 25 to 100 tons: articulated and rigid frame. Terex
Trucks manufactures rigid and articulated trucks at its TEL facility in
Motherwell, Scotland. TEL manufactures and markets articulated trucks and rigid
frame trucks under the TEREX brand name and sells to other truck manufacturers
on a private label basis.

<TABLE>
<C> <S>
Articulated Off-Highway Trucks -- are three axle, six wheel drive
machines with a capacity range of 25 to 40 tons. Their differentiating
feature is an oscillating connection between the cab and body which
allows the cab and body to move independently, thereby enabling all six
[CRANE PHOTO] tires to maintain ground contact for improved traction on rough
terrain. This allows the truck to move effectively through extremely
rough or muddy off-road conditions. Articulated off-highway trucks are
typically used together with an excavator or wheel loader to move dirt
in connection with road, tunnel or other infrastructure construction
and commercial, industrial or major residential construction projects.

Rigid Off-Highway Trucks -- are two axle machines which generally have
larger capacities than articulated trucks but can operate only on
[CRANE PHOTO] improved or graded surfaces. The capacities of rigid off-highway trucks
range from 35 to 100 tons, and off-highway trucks have applications in
large construction or infrastructure projects, aggregates and smaller
surface mines.

High Capacity Surface Mining Trucks -- are off road dump trucks with
capacities in excess of 120 tons primarily for surface mining. Terex
Trucks' haulers are powered by a diesel engine driving an electric
generator that provides power to individual electric motors in each of
[CRANE PHOTO] the rear wheels. Unit Rig's current LECTRA HAUL product line consists
of a series of rear dump trucks with payload capacities ranging from
120 to 260 tons, and bottom dump trucks with capacities ranging from
180 to 270 tons. Terex Trucks' high capacity surface mining trucks are
manufactured at Unit Rig, located in Tulsa, Oklahoma, under the UNIT
RIG and LECTRA HAUL brand names.
</TABLE>

BUSINESS STRATEGY

The Company has undergone significant management changes since 1992. Ronald
M. DeFeo joined the Company in May 1992, was appointed President and Chief
Operating Officer in October 1993 and was named

43
<PAGE> 45

Chief Executive Officer in March 1995. Since joining the Company, Mr. DeFeo has
recruited several new senior executives to Terex, and under the direction of
this new management team, Terex has implemented a series of interrelated
strategic initiatives designed to increase sales, earnings and shareholder
value.

- When the Company acquired PPM in May 1995, total headcount at PPM was
approximately 840, including approximately 430 employees categorized as
indirect. As a result of numerous cost reduction initiatives, total
headcount at PPM was reduced to approximately 640 at December 31, 1996,
while the indirect headcount at PPM was reduced to approximately 260.
During that same period sales at PPM increased.

Increase Sales Through Best Value Strategy -- The Company tailors its
pricing strategy by product line to provide customers with an attractive
cost/benefit relationship. In general, the Company has focused its product lines
on products with simplified designs which it can manufacture at low cost. The
Company has streamlined its product lines, manufacturing fewer models, and has
increased the number of interchangeable parts between models. This strategy has
enabled the Company to offer its products at prices that are often 10% to 15%
below those offered by its competitors. The Company believes that by offering
its customers a simplified product design at a lower price, it can increase
sales and gain market share. For example, Terex Cranes' primary customers,
rental companies, are generally unable to charge a premium rental rate for
equipment that has sophisticated, but nonessential features. Consequently, the
Company believes its products offer virtually the same utility and marketability
as the competition's products, but at a lower cost to the customer.

44
<PAGE> 46

credit quality and liquidity to execute its growth initiatives. The Company used
approximately $45 million of proceeds from the Clark Sale to redeem all of its
Series A Preferred Stock (which had a 13% per annum accretion rate) and
approximately $70 million to retire outstanding bank debt. In addition, on April
7, 1997, the Company and certain of its subsidiaries entered into the New Credit
Facility which increased the Company's borrowing capacity, reduced its cost of
funds and reduced the covenant restrictions relative to the Company's then
existing credit facility. The Company intends to use the proceeds of the
Offering to reduce the Company's total debt outstanding. See "Use of Proceeds."

During the past several years, the Company has spent approximately $200
million to strengthen its core businesses by purchasing the businesses listed
below:

<TABLE>
<CAPTION>
SOURCE OF OPERATING ACQUIRED OR LICENSED
YEAR ACQUISITION PURCHASE PRICE FINANCING LOCATIONS PRODUCTS BRAND NAMES
- ---- --------------- -------------- -------------- -------------- -------------- ---------------------
<C> <S> <C> <C> <C> <C> <C>
1995 PPM $104.5 million Issuance of South Telescopic P&H, PPM, BENDINI
(paid in cash Senior Secured Carolina, Mobile Cranes
and Notes France, Italy
securities)

1997 Square Shooter (terms not Cash on hand Michigan Telescopic SQUARE SHOOTER
Business disclosed) and borrowings Rough Terrain
under the New Lift Trucks
Credit
Facility
</TABLE>

BACKLOG

The Company's backlog as of December 31, 1995 and 1996 and March 31, 1996
and 1997 was as follows:

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
----------------- -----------------
1995 1996 1996 1997
------ ------ ------ ------
(IN MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C>
Terex Cranes.................................. $ 85.3 $ 67.2 $ 57.3 $101.1
Terex Trucks.................................. 88.8 53.4 87.0 69.1
------ ------ ------ ------
Total............................... $174.1 $120.6 $144.3 $170.2
====== ====== ====== ======
</TABLE>

Substantially all of the Company's backlog orders are expected to be filled
within one year, although there can be no assurance that all such backlog orders
will be filled within that time period. The Company's backlog orders represent
primarily new machine orders. Parts orders are generally filled on an as-ordered
basis. Backlog in Terex Cranes decreased in 1996 as manufacturing efficiencies
reduced lead times, improving product availability for customers. The backlog
for the Terex Trucks' segment was unusually high at year end 1995 as a result of
a large order for Unit Rig equipment which was placed late in 1995, and at March
31, 1996 due to a $25 million order at TEL which was subsequently canceled.
Backlog for both segments increased at March 31, 1997 over December 31, 1996 due
to a significant increase in orders reflecting favorable industry conditions and
the Company's improved competitive position. Pro forma backlog improved to $232
million at March 31, 1997 from $166 million at December 31, 1996.

45
<PAGE> 47

DISTRIBUTION

Terex Cranes distributes its products primarily through a global network of
dealers in over 750 different locations. With respect to telescopic mobile
cranes in North America, Terex Cranes maintains extensive dealer networks. The
geographic strength of Terex Cranes' telescopic mobile cranes marketed under the
LORAIN brand name centers in the midwest and mid-Atlantic regions of the United
States and the geographic strength of telescopic mobile cranes marketed under
the P&H brand name centers in the southern and western regions of the United
States. Terex Cranes' European distribution is carried out primarily under three
brand names, TEREX, PPM and BENDINI, through a single distribution network
comprised of both distributors and a direct sales force. Terex Cranes sells its
utility aerial devices under the SIMON, TEREX and TELELECT brand names
principally through a network of North American distributors and through
Company-owned dealerships located in Fontana, California, Richmond, Virginia,
Charlotte, North Carolina, and Emmaus, Pennsylvania. Terex Cranes sells its
aerial work platform products through a distribution network that includes many
of the Aerials Limited and Aerials dealers throughout the world, but principally
in North America and Europe. Terex Cranes' aerial work platform products are
sold under the brand names TEREX, MARK and SIMON.

TEL markets machines and replacement parts primarily through worldwide
dealership networks. TEL's truck dealers are independent businesses which
generally serve the construction, mining, timber and/or scrap industries.
Although these dealers carry products of a variety of manufacturers, and may or
may not carry more than one of the Company's products, each dealer generally
carries only one manufacturer's "brand" of each particular type of product. The
Company employs sales representatives who service these dealers from offices
located throughout the world. Unit Rig distributes its products and services
directly to customers primarily through its own distribution system.

RESEARCH AND DEVELOPMENT

The Company maintains engineering staffs at several of its locations who
design new products and improvements in existing product lines. The Company's
engineering expenses are primarily incurred in connection with the improvement
of existing products, efforts to reduce costs of existing products and, in
certain cases, the development of products which may have additional
applications or represent extensions of the existing product line. Such costs
amounted to $6.1 million, $5.0 million and $2.1 million in 1996, 1995 and 1994,
respectively. The increases in engineering expenses from 1994 to 1996 were due
to the effects of the PPM Acquisition.

MATERIALS

Principal materials used by the Company in its various manufacturing
processes include steel, castings, engines, tires, hydraulic cylinders, electric
controls and motors, and a variety of other fabricated or manufactured items. In
the absence of labor strikes or other unusual circumstances, substantially all
materials are normally available from multiple suppliers. Current and potential
suppliers are evaluated on a regular basis on their ability to meet the
Company's requirements and standards. Electric wheel motors and controls used in
the Unit Rig product line are currently supplied exclusively by General Electric
Company. The Company is endeavoring to develop alternative sources. If the
Company is unable to develop alternative sources, or if there is disruption or
termination of its relationship with General Electric Company (which is not
governed by a written contract), it could have a material adverse effect on Unit
Rig's operations.

COMPETITION

Telescopic Mobile Cranes -- The domestic telescopic mobile crane industry
is comprised primarily of three manufacturers. The Company believes that Terex
Cranes is the second largest domestic manufacturer, with approximately a 30%
market share. The Company believes that the number one domestic manufacturer is
Grove Worldwide, and the number three domestic manufacturer is Link-Belt, a
subsidiary of Sumitomo Corp. The Company's principal markets in Europe are in
France and Italy, where the Company believes it has the largest market shares.
In Europe, Terex Cranes' primary competitors are Grove Cranes Ltd. (including
the recently acquired Krupp Mobilkran), Liebherr Werk Ehingen and DeMag. Outside
the United States and Europe, the most

46
<PAGE> 48

active new mobile crane markets for the Company are the Pacific Rim and the
Middle East. Terex Cranes sells approximately 15% of its newly manufactured
telescopic mobile cranes to those markets.

The United States boom truck industry is dominated by four manufacturers,
of which the Company believes Terex RO, with a 25% pro forma market share, is
the second largest behind Grove National.

Aerial Work Platforms -- The aerial work platform industry in North America
is fragmented, with seven major competitors. The Company believes that its
approximate 7% pro forma market share makes it the fifth largest manufacturer of
aerial work platforms in North America, behind JLG, Genie, Grove Manlift and
Snorkel. The Company believes that approximately 41,000 aerial platforms were
sold in the United States during 1996, of which approximately 70% were scissor
lifts, 19% were articulated boom lifts, and 11% were straight boom lifts. The
Company believes that its market share in boom lifts is greater than its market
share in scissor lifts.

Utility Aerial Devices -- The utility aerial device industry is comprised
primarily of three manufacturers. The Company believes that it has a 20% pro
forma market share of that industry and that it is the second largest
manufacturer in the United States of utility aerial devices behind Altec.
Outside the United States, the Company is focusing primarily on the Mexican and
Caribbean markets.

Telescopic Container Stackers -- The Company believes that three
manufacturers account for approximately 66% of the global market for telescopic
container stackers. The Company believes that it has a global market share of
25% and that it is the second largest manufacturer behind Kalmar. Other
manufacturers include Valmet Belloti and Taylor.

Telescopic Rough Terrain Lift Trucks -- OmniQuip and Gradall are the
largest manufacturers of telescopic rough terrain lift trucks. The Company
believes that the Square Shooter Business has approximately a 4% pro forma
market share.

Off-Highway Trucks -- The global market for off-highway trucks is
concentrated in three main regions: North America (approximately 35%), Europe
(approximately 28%) and the Pacific Rim (approximately 22%). Four manufacturers
dominate the global market. The Company believes that it is the third largest of
these manufacturers (behind Volvo and Caterpillar), with approximately a 10%
global market share.

High Capacity Surface Mining Trucks -- The high capacity surface mining
truck industry includes three principal manufacturers: Caterpillar,
Komatsu-Dresser and the Company. The Company believes that it is the third
largest manufacturer with a global market share of approximately 13%.

EMPLOYEES

As of March 31, 1997, the Company had approximately 2,150 employees. The
Company considers its relations with its personnel to be satisfactory.
Approximately 44% of the Company's employees are represented by labor unions
which have entered into or are in the process of entering into various separate
collective bargaining agreements with the Company. The Company experienced a
labor strike at its parts distribution center in Southaven, Mississippi during
the second quarter of 1995 which was settled in February 1997. The strike had no
appreciable effect on the conduct of business or financial results of that
operation as a whole, although individual product line sales growth may have
been hindered. The National Labor Relations Board has filed an unfair labor
practice charge against the Company's Terex Cranes operation in Conway, South
Carolina. The Company does not anticipate that the outcome of such charge will
have a material adverse effect on the Company.

After giving effect to the Simon Acquisition, the Square Shooter
Acquisition and various cost cutting initiatives taken in connection with the
integration of those businesses, the Company had approximately 3,405 employees.

PATENTS, LICENSES AND TRADEMARKS

Several of the trademarks and trade names of the Company, in particular the
TEREX, LORAIN, UNIT RIG, MARK, P&H, PPM, SIMON, TELELECT and SQUARE SHOOTER
trademarks, are important to the business of the Company. The Company owns and
maintains trademark registrations and patents in countries where it conducts
business, and monitors the status of its trademark registrations and patents to
maintain them in force and

47
<PAGE> 49

renews them as required. The Company also protects its trademark, trade name and
patent rights when circumstances warrant such action, including the initiation
of legal proceedings, if necessary. P&H is a registered trademark of
Harnischfeger Corporation which the Company has the right to use for certain
products pursuant to a license agreement until 2011. Pursuant to the terms of
the Simon Acquisition agreements, the Company has the right to use the SIMON
name for certain products until April 7, 2000.

ENVIRONMENTAL MATTERS

The Company is subject to a wide range of Federal, state, local and foreign
environmental laws, including CERCLA, that regulate the discharge of materials
into the environment. Compliance with such laws has not had a material effect on
the Company. In addition, the Company has not incurred, and does not expect to
incur in the future, any material capital expenditures for environmental control
facilities.

LEGAL PROCEEDINGS

In December 1994, the Company received an examination report from the IRS
proposing a substantial tax deficiency based upon an alleged inability of the
Company to substantiate certain deductions taken by the Company from 1987 to
1989 and the Company's utilization of certain NOLs. This matter is currently
pending in the Milwaukee audit division of the IRS. For a discussion of this
matter, see "Risk Factors -- Tax Audit Issues" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Contingencies and
Uncertainties."

In March 1994, the Commission initiated a private investigation, which
included the Company and certain of its affiliates, to determine whether
violations of certain aspects of the Federal securities laws had occurred. For a
discussion of this investigation, see "Risk Factors -- SEC Investigation" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Contingencies and Uncertainties."

The Company is involved in various other legal proceedings which have
arisen in the normal course of its operations. The outcome of these other legal
proceedings, if determined adversely to the Company, is unlikely to have a
material adverse effect on the Company.

SEASONAL FACTORS

The Company markets a large portion of its products in North America and
Europe, and its sales of trucks and cranes during the fourth quarter of each
year (i.e., October through December) to the construction industry are usually
lower than sales of such equipment during each of the first three quarters of
the year because of the normal winter slowdown of construction activity.
However, sales of trucks to the mining industry are generally less affected by
such seasonal factors.

DISCONTINUED OPERATIONS

On November 27, 1996, the Company sold substantially all of the assets and
liabilities of the Clark Material Handling Segment for an aggregate cash
purchase price, subject to adjustments, of approximately $140 million. Prior to
the disposition the Clark Material Handling Segment consisted of Clark Material
Handling Company and certain affiliated companies which were acquired by the
Company in July 1992 from Clark Equipment Company. The Clark Material Handling
Segment designed, manufactured and marketed a complete line of internal
combustion and electric lift trucks, electric walkies and related components and
replacement parts under the CLARK trademark.

48
<PAGE> 50

PROPERTIES

The following table outlines the principal manufacturing, warehouse and
office facilities owned or leased by the Company and its subsidiaries:

<TABLE>
<CAPTION>
ENTITY FACILITY LOCATION TYPE AND SIZE OF FACILITY
- ----------------------------------- ----------------------------- ------------------------------
<S> <C> <C>
Terex (Corporate Offices).......... Westport, Connecticut(1) Office; 14,898 sq. ft.
Terex (Distribution Center)........ Southaven, Mississippi(1) Warehouse and light
manufacturing; 505,000 sq.
ft. (2)

TEREX TRUCKS
Unit Rig........................... Tulsa, Oklahoma Manufacturing, warehouse and
office; 375,587 sq. ft.
TEL................................ Motherwell, Scotland Manufacturing, warehouse and
office; 473,000 sq. ft.
TEREX CRANES
Terex Cranes -- Waverly Waverly, Iowa(3) Office, manufacturing and
Operations....................... warehouse; 383,000 sq. ft.
Terex Cranes -- Conway Conway, South Carolina(1) Office, manufacturing and
Operations....................... warehouse; 257,040 sq. ft.
PPM S.A. .......................... Montceau les Mines, France Office, manufacturing and
warehouse; 419,764 sq. ft.
P.P.M. SpA......................... Crespellano, Italy Office, manufacturing and
warehouse; 79,900 sq. ft.
PPM Europe Subsidiary.............. Dortmund, Germany(1) Office and warehouse; 129,180
sq. ft.
PPM Europe Subsidiary.............. Rethel, France Office, manufacturing and
warehouse; 215,300 sq. ft.
Telelect........................... Huron, South Dakota Manufacturing; 88,000 sq. ft.
Telelect........................... Watertown, South Dakota Office, manufacturing and
warehouse; 222,450 sq. ft.
Telelect........................... Emmaus, Pennsylvania Office; 20,000 sq. ft.
Telelect........................... Fontana, California Office; 36,000 sq. ft.
Telelect........................... Richmond, Virginia(1) Office; 30,000 sq. ft.
Telelect........................... Charlotte, North Carolina(1) Office; 7,800 sq. ft.
Telelect........................... Milwaukee, Wisconsin Office; 3,200 sq. ft.
Cella.............................. Brescia, Italy(1) Manufacturing and office;
64,000 sq. ft.
Aerials Limited.................... Cork, Ireland(1) Manufacturing; 80,000 sq. ft.
Sim-Tech........................... Hong Kong(1) Office; 830 sq. ft.
Aerials (Terex Ro)................. Olathe, Kansas Manufacturing and office;
80,400 sq. ft.
Aerials............................ Bowerston, Ohio Manufacturing, office and
warehouse; 47,000 sq. ft.
Aerials............................ Milwaukee, Wisconsin Manufacturing, office and
warehouse; 103,000 sq. ft.
</TABLE>

- ---------------
(1) These facilities are either leased or subleased by the indicated entity.
(2) Includes 239,400 sq. ft. of warehouse space which the Company currently
leases to others.
(3) The Company also owns a 66,000 sq. ft. facility in Waterloo, Iowa which it
currently leases to others.

Unit Rig also has 10 owned or leased locations for parts distribution and
rebuilding of components, of which two are in the United States, two are in
Canada and six are outside North America.

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<PAGE> 51

The properties listed above are suitable and adequate for the Company's
needs. The Company has determined that certain of its properties exceed its
requirements. Such properties may be sold, leased or utilized in another manner
and have been excluded from the above list.

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following individuals are currently directors of the Company:

<TABLE>
<CAPTION>
FIRST YEAR
POSITIONS AND ELECTED
NAME AGE OFFICES WITH COMPANY DIRECTOR
- ------------------------------------- --- ---------------------------------------- -----------
<S> <C> <C> <C>
Ronald M. DeFeo...................... 45 President, Chief Executive Officer, 1993
Chief Operating Officer and Director
Marvin B. Rosenberg.................. 56 Senior Vice President, General Counsel, 1992
Secretary and Director
G. Chris Andersen.................... 59 Director 1992
William H. Fike...................... 60 Director 1995
Bruce I. Raben....................... 43 Director 1992
David A. Sachs....................... 37 Director 1992
Adam E. Wolf......................... 83 Director 1983
</TABLE>

Ronald M. DeFeo was appointed a director of the Company in 1993 and was
appointed President and Chief Operating Officer of the Company on October 4,
1993, and Chief Executive Officer of the Company on March 24, 1995. Mr. DeFeo
joined the Company in May 1992 as President of the Company's Heavy Equipment
Group. A year later, he also assumed the responsibility of serving as the
President of Clark Material Handling Company. Prior to joining the Company on
May 1, 1992, Mr. DeFeo was a Senior Vice President of J.I. Case Company, the
farm and construction equipment division formerly of Tenneco Inc., and also
served as a Managing Director of Case Construction Equipment throughout Europe.
While at J.I. Case, Mr. DeFeo was also a Vice President of North American
Construction Equipment Sales and General Manager of Retail Operations.

Marvin B. Rosenberg was appointed a director of the Company in 1992 and was
appointed a Senior Vice President of the Company effective January 1, 1994. He
has served as Secretary and General Counsel of the Company since 1987. From 1987
through 1993, Mr. Rosenberg served as General Counsel of KCS, an entity that,
until December 31, 1993, provided administrative, financial, marketing,
technical, real estate and legal services to the Company and its subsidiaries.

G. Chris Andersen was appointed a director of the Company in 1992. Mr.
Andersen was a Vice Chairman of PaineWebber Incorporated from March 1990 through
1995. Mr. Andersen is currently a partner of Andersen, Weinroth & Co. L.P., an
investment banking firm, and also serves as a director of Sunshine Mining &
Refining Company, United Waste Systems, Inc. and Headway Corporation Services.

William H. Fike was appointed a director of the Company in 1995. Mr. Fike
is the Vice Chairman of Magna International, Inc., an automotive parts
manufacturer based in Ontario, Canada ("Magna"). Prior to joining Magna in
September 1994, Mr. Fike was employed by Ford Motor Company from 1966 to 1994,
where he served most recently as President of Ford Europe. Mr. Fike serves as a
director of Magna and AGCO Corporation.

Bruce I. Raben was appointed a director of the Company in 1992. Mr. Raben
is a managing director of CIBC Wood Gundy Securities Corp. Prior to joining CIBC
Wood Gundy Securities Corp. in February 1996, Mr. Raben was employed as an
Executive Vice President of Jefferies & Company, Inc. Mr. Raben serves as a
director of Equity Marketing Inc., Optical Security, Inc. and Talton Holdings,
Inc.

David A. Sachs was appointed a director of the Company in 1992. Mr. Sachs
is a principal of Onyx Partners, Inc., a merchant banking firm. From 1990 to
1994, Mr. Sachs was employed at TMT-FW, Inc., an affiliate of Taylor & Co., a
private investment firm based in Fort Worth, Texas. Mr. Sachs serves as a
director of Talton Holdings, Inc.

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<PAGE> 52

Adam E. Wolf was appointed a director of the Company in 1983. Mr. Wolf has
been principally self-employed as an attorney throughout his career. He has
served on several boards of directors, including those of a telephone company, a
bank and a hospital.

The following table sets forth the respective names and ages of the
Company's current executive officers, indicating all positions and offices held
by each such person. Each officer is elected by the Board to hold office for one
year or until his successor is duly elected and qualified.

<TABLE>
<CAPTION>
NAME AGE POSITIONS AND OFFICES HELD
- --------------------------------- --- ------------------------------------------------------
<S> <C> <C>
Ronald M. DeFeo.................. 45 President, Chief Executive Officer and Chief Operating
Officer and Director
David J. Langevin................ 46 Executive Vice President
Marvin B. Rosenberg.............. 56 Senior Vice President, General Counsel, Secretary and
Director
Joseph F. Apuzzo................. 41 Vice President -- Finance and Controller
Brian J. Henry................... 38 Vice President -- Finance, Treasurer and Director of
Investor Relations
Steven E. Hooper................. 44 Vice President, Human Resources
</TABLE>

For information regarding Messrs. DeFeo and Rosenberg, refer to the table
listing directors above.

David J. Langevin was appointed Executive Vice President of the Company
effective January 1, 1994, and served as Acting Chief Financial Officer of the
Company from March 1993 through December 1993. He had been employed as a Vice
President of KCS since 1988 until joining the Company in 1993.

Joseph F. Apuzzo was appointed Vice President -- Finance and Controller of
the Company on May 15, 1996. Mr. Apuzzo previously held the position of Vice
President, Corporate Controller since joining the Company on October 9, 1995.
Mr. Apuzzo was Vice President of Corporate Finance at D'Arcy Masius Benton &
Bowles, Inc. from September 1994 until October 1995. Mr. Apuzzo was employed by
Price Waterhouse LLP in various capacities from 1983 until September 1994.

Brian J. Henry was appointed Vice President -- Finance and Treasurer of the
Company on July 11, 1995. Mr. Henry also serves as the Company's Director of
Investor Relations. Mr. Henry formerly held the position of Vice
President -- Corporate Development and Acquisitions and has been employed by the
Company since 1993. He was employed by KCS from 1990 until 1993.

Steven E. Hooper was appointed Vice President, Human Resources of the
Company on September 15, 1995, after serving as Director of Human Resources of
the Company since January 1994. He was previously a Human Resources Director at
Allied Signal Aerospace from October 1992 to December 1993. Prior to October
1992, Mr. Hooper was with Tenneco Inc. for eight years in various senior level
human resources positions.

SELLING STOCKHOLDER

Of the 7,000,000 shares of Common Stock being offered hereby, 2,000,000
shares are being offered by Mr. Randolph W. Lenz (the "Selling Stockholder"). As
of June 27, 1997, the Selling Stockholder was the beneficial owner of
approximately 4.0 million shares, or 28.9%, of the outstanding Common Stock.
After consummation of the Offering, the Selling Stockholder will be the
beneficial owner of approximately 2.0 million shares, or 10.6% (10.2% if the
over-allotment option of the Underwriters is exercised in full), of Common
Stock. Prior to his retirement on August 28, 1995, Mr. Lenz served as Chief
Executive Officer, Chairman of the Board and a director of the Company. In
connection with his retirement, Mr. Lenz entered into an agreement with the
Company pursuant to which an affiliate of Mr. Lenz provides consulting services
to the Company until the year 2000. In consideration thereof, an affiliate of
Mr. Lenz received a consulting fee equal to Mr. Lenz' 1995 base salary of
$486,000 until December 31, 1996. In addition, the agreement also provided for
(i) the granting of a five-year $1.8 million forgivable loan bearing interest at
a rate of 6.56% per annum, subject to certain conditions, and (ii) grants of
Common Stock of up to an aggregate of 200,000 shares of Common Stock conditioned
upon the Company achieving certain financial and public stock market price
objectives. As of the date of this Prospectus, Mr. Lenz has received 100,000
shares of Common Stock pursuant to the agreement. Mr. Lenz also agreed not to

51
<PAGE> 53

compete with the Company until November 2000 and to vote his shares of Common
Stock as recommended by the Board of Directors until November 1998. See "Risk
Factors -- Shares Eligible for Future Sale" for a description of the Standstill
Agreement among the Company, the Selling Stockholder and certain of his
affiliates which was entered into in connection with the Selling Stockholder's
participation in the Offering.

DESCRIPTION OF SECURITIES

The Company's authorized capital stock consists of 40,000,000 shares of
capital stock, $.01 par value, consisting of 30,000,000 shares of Common Stock
and 10,000,000 shares of preferred stock. As of June 15, 1997, 13,686,543 shares
of Common Stock and 38,800 shares of Series B Preferred Stock were issued and
outstanding.

COMMON STOCK

Each outstanding share of Common Stock entitles the holder to one vote,
either in person or by proxy, on all matters submitted to a vote of
stockholders, including the election of directors. There is no cumulative voting
in the election of directors, which means that the holders of a majority of the
outstanding shares of Common Stock can elect all of the directors then standing
for election. Subject to preferences which may be applicable to any outstanding
shares of preferred stock, holders of Common Stock have equal ratable rights to
such dividends as may be declared from time to time by the Board of Directors
out of funds legally available therefor.

Holders of Common Stock have no conversion, redemption or preemptive rights
to subscribe for any securities of the Company. All outstanding shares of Common
Stock are fully paid and nonassessable. In the event of any liquidation,
dissolution or winding-up of the affairs of the Company, holders of Common Stock
will be entitled to share ratably in the assets of the Company remaining after
provision for payment of liabilities to creditors and preferences applicable to
outstanding shares of preferred stock. The rights, preferences and privileges of
holders of Common Stock are subject to the rights of the holders of any
outstanding shares of preferred stock.

The Restated Certificate of Incorporation provides that directors of the
Company shall not be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duties as a director except to the
extent otherwise required by Delaware law. The Restated By-laws of the Company
provide for indemnification of the officers and directors of the Company to the
fullest extent permitted by Delaware law.

PREFERRED STOCK

The Board of Directors of the Company is authorized to issue up to
10,000,000 shares of preferred stock, par value $.01 per share, in one or more
series, with such designations, powers, preferences and rights of such series
and the qualifications, limitations or restrictions thereon, including, but not
limited to, the fixing of dividend rights, dividend rates, conversion rights,
voting rights, rights and terms of redemption (including sinking fund
provisions), the redemption price or prices, and the liquidation preferences, in
each case, if any, as the Board of Directors of the Company may by resolution
determine, without any further vote or action by the Company's stockholders.

By resolution adopted January 24, 1994, the Board of Directors of the
Company authorized the issuance of a series of preferred stock consisting of
89,800 shares of Series B Preferred Stock in connection with the termination of
a management contract with KCS, of which 38,800 are issued and outstanding as of
the date of this Prospectus and fixed the terms of such Series B Preferred
Stock. All of the currently outstanding Series B Preferred Stock was issued to
Mr. Randolph W. Lenz. The following summary of the terms and provisions of the
Series B Preferred Stock does not purport to be complete and is qualified in its
entirety by reference to the relevant sections of the Company's Certificate of
Designation of Preferences and Rights of the Series B Preferred Stock.

Liquidation Preference. In the event of the liquidation of the Company,
before any distribution or payment shall be made to the holders of Common Stock
or any other stock ranking junior to the Series B Preferred Stock, the holders
of the Series B Preferred Stock are entitled to be paid, out of the assets of
the Company available for distribution to its stockholders, a liquidation
preference (the "Series B Liquidation Preference"), equal to $25.00

52
<PAGE> 54

per share, plus all accrued and unpaid dividends thereon to such date, in cash.
In addition, the Series B Liquidation Preference accretes and accrues daily at
the rate of 13% per annum from December 9, 1994 through December 9, 1999 and 18%
per annum thereafter through the date (the "Series B Accretion Termination
Date") on which the Company is required to pay current dividends on the Series B
Preferred Stock in accordance with its terms, which date is based primarily upon
the terms of the Company's debt instruments.

Dividends. Subject to the prior preferences and rights of any stock
ranking senior to the Series B Preferred Stock, holders of shares of the Series
B Preferred Stock are entitled to receive, when and as declared by the Board of
Directors, out of funds legally available for the payment of dividends,
cumulative cash dividends that will accrue from the Series B Accretion
Termination Date at the rate of (a) 13% per annum from the Series B Accretion
Termination Date through December 9, 1999 and (b) 18% per annum thereafter. So
long as any shares of Series B Preferred Stock shall be outstanding, the Company
shall not declare or pay any dividend whatsoever, whether in cash, property or
otherwise (other than dividends payable in shares of the class or series upon
which such dividends are declared or paid) on, purchase or redeem any stock
ranking junior to the Series B Preferred Stock in respect of the right to
receive dividends. In addition, the Company cannot pay dividends on the Common
Stock during any 12 month period exceeding 4% of the Current Market Price (as
defined) per share of the Common Stock on the trading day immediately prior to
the declaration of any cash dividend until the expiration of specified periods.

Redemption. The Series B Preferred Stock may be redeemed by the Company in
cash at any time in whole or from time to time, in part, at the option of the
Company, at a per share redemption price equal to the Series B Liquidation
Preference per share on the date of redemption plus all accrued but unpaid
dividends thereon to and including the date of redemption. The Company is
required to redeem all of the then outstanding shares of Series B Preferred
Stock on or prior to December 31, 2001.

Voting. Except for certain matters affecting the preferences, rights,
privileges, powers or benefits of the Series B Preferred Stock or as otherwise
required by law, the holders of the issued and outstanding shares of Series B
Preferred Stock shall have no voting rights.

Conversion Right. Each holder of shares of Series B Preferred Stock has
the right, at such holder's option, at any time or from time to time, to convert
any of such shares of Series B Preferred Stock into the number of fully paid and
nonassessable shares of Common Stock determined by dividing (i) $25.00 by (ii)
the conversion price, initially $11.11 and subject to adjustment in certain
circumstances, in effect on the date of conversion. At March 31, 1997, an
aggregate of 87,300 shares of Common Stock were issuable upon conversion in full
of the Series B Preferred Stock.

COMMON STOCK PURCHASE WARRANTS

In connection with the private placement of the Series A Preferred Stock,
the Company issued 1,300,000 Common Stock purchase warrants (the "Series A
Warrants") of which 128,464 warrants were outstanding at April 30, 1997. Each
Series A Warrant may be exercised, in whole or in part, at the option of the
holder at any time before December 31, 2000 and is redeemable by the Company
under certain circumstances. As of April 30, 1997, upon the exercise or
redemption of a Series A Warrant, the holder thereof was entitled to receive
2.41 shares of Common Stock. The exercise price for the Series A Warrants is
$.01 for each share of Common Stock. The number of shares of Common Stock
issuable upon exercise or redemption of the Series A Warrants is subject to
adjustment in certain circumstances. At June 15, 1997, an aggregate of 306,436
shares of Common Stock were issuable upon exercise in full of the outstanding
Series A Warrants.

EQUITY RIGHTS

Concurrently with the issuance of the Senior Secured Notes, the Company
issued 1,000,000 Equity Rights pursuant to a Common Stock Appreciation Rights
Agreement between the Company and the United States Trust Company of New York,
as agent. The Equity Rights are traded separately from the Senior Secured Notes.

53
<PAGE> 55

All of the Equity Rights are currently outstanding. Each Equity Right
entitles the holder thereof, upon exercise at any time on or prior to May 15,
2002, to receive cash or, at the election of the Company, Common Stock in an
amount equal to the average closing sale price per share of the Common Stock for
the 60 consecutive trading days prior to the date of the exercise (the "Current
Price"), less $7.288 per share, subject to adjustment in certain circumstances.
Changes in the Current Price do not affect the net income or loss reported by
the Company; however, changes in the Current Price vary the amount of cash that
the Company would have to pay or the number of shares of Common Stock that would
have to be issued in the event holders exercise the Equity Rights. As of June
15, 1997, the Current Price of the Common Stock was $15.544, which would have
required the Company to issue 434,526 shares of Common Stock in the event the
holders had exercised the Equity Rights. Each Equity Right not exercised on or
prior to 5:00 p.m., New York City time, on May 15, 2002 will become void. Equity
Rights may be exercised by the holder thereof in whole or in part.

The holders of Equity Rights have no rights to vote on matters submitted to
the stockholders of the Company and have no rights to receive dividends. The
holders of Equity Rights are not entitled to share in the assets of the Company
in the event of the liquidation or dissolution of the Company or the winding up
of the Company's affairs.

TRANSFER AGENT AND REGISTRAR

The registrar and transfer agent for the Common Stock is American Stock
Transfer & Trust Company, 40 Wall Street, New York, New York 10005.

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<PAGE> 56

UNDERWRITING

Under the terms and subject to the conditions contained in an Underwriting
Agreement dated , 1997 (the "Underwriting Agreement"), the
Underwriters named below (the "Underwriters"), for whom Credit Suisse First
Boston Corporation, Salomon Brothers Inc, Furman Selz LLC and J.P. Morgan
Securities Inc. are acting as representatives (the "Representatives"), have
severally but not jointly agreed to purchase from the Company and the Selling
Stockholder the following respective numbers of shares of Common Stock:

<TABLE>
<CAPTION>
NUMBER
UNDERWRITER OF SHARES
----------------------------------------------------------------- -----------
<S> <C>
Credit Suisse First Boston Corporation...........................
Salomon Brothers Inc.............................................
Furman Selz LLC..................................................
J.P. Morgan Securities Inc.......................................
-----------
Total..................................................
===========
</TABLE>

The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will be obligated to purchase all of the shares of Common Stock
offered hereby (other than those shares covered by the over-allotment option
described below) if any are purchased. The Underwriting Agreement provides that,
in the event of a default by an Underwriter, in certain circumstances the
purchase commitments of non-defaulting Underwriters may be increased or the
Underwriting Agreement may be terminated.

The Company has granted to the Underwriters an option, expiring at the
close of business on the 30th day after the date of this Prospectus, to purchase
up to 700,000 additional shares at the initial public offering price less the
underwriting discounts and commissions, all as set forth on the cover page of
this Prospectus. Such option may be exercised only to cover over-allotments in
the sale of the shares of Common Stock. To the extent that such option is
exercised, each Underwriter will become obligated, subject to certain
conditions, to purchase approximately the same percentage of such additional
shares of Common Stock as it was obligated to purchase pursuant to the
Underwriting Agreement.

The Company and the Selling Stockholder have been advised by the
Representatives that the Underwriters propose to offer the Shares to the public
initially at the public offering price set forth on the cover page of this
Prospectus and, through the Representatives, to certain dealers at such price
less a concession of $ per Share, and the Underwriters and such dealers may
allow a discount of $ per Share on sales to certain other dealers. After the
initial public offering, the public offering price, concession and discount to
dealers may be changed by the Representatives.

The Company and certain of its executive officers and directors have agreed
with the Underwriters that they will not offer, sell, contract to sell, announce
their intention to sell, or otherwise dispose of, directly or indirectly, or
file with the Commission a registration statement under the Securities Act
relating to, any shares of Common Stock or securities convertible into or
exchangeable or exercisable for any shares of Common Stock, without the prior
written consent of Credit Suisse First Boston Corporation for a period of 180
days after the date of this Prospectus, except (i) any shares of Common Stock
issuable upon the exercise or redemption of an option or warrant or the
conversion or exchange of a security in each case outstanding on the date of
this Prospectus and in accordance with the terms of the respective securities,
(ii) any securities of the Company sold or granted pursuant to the Company's
incentive and other benefit plans as in effect as of the date of this
Prospectus, (iii) any shares of Common Stock issued upon exercise of the
Company's issued and outstanding Rights and (iv) any warrants or securities
convertible into Common Stock issued in exchange for any of the Company's
warrants, options or stock appreciation rights outstanding on the date of this
Prospectus.

The Company has entered into the Standstill Agreement with the Selling
Stockholder and certain of his affiliates pursuant to which the Selling
Stockholder and such affiliates have agreed (i) not to offer, sell, contract to
sell, announce their intention to sell, pledge, exchange, contract to exchange,
assign, contract to assign or otherwise dispose of or contract to dispose of,
directly or indirectly, any additional shares of Common Stock or

55
<PAGE> 57

securities convertible into or exchangeable or exercisable for any shares of
Common Stock without the prior written consent of Credit Suisse First Boston
Corporation for a period of 120 days after the date of this Prospectus, and (ii)
thereafter to certain other limitations on their ability to acquire, sell, or
otherwise dispose of capital stock of the Company owned by them upon completion
of the Offering. See "Risk Factors -- Shares Eligible for Future Sale." In
addition, the Company has agreed to (i) indemnify the Selling Stockholder
against certain liabilities, including civil liabilities under the Securities
Act, or to contribute to payments which the Selling Stockholder may be required
to make in respect thereof, and (ii) pay up to $50,000 of the Selling
Stockholder's expenses in connection with the Offering.

The Company and the Selling Stockholder have agreed to indemnify the
Underwriters against certain liabilities, including civil liabilities under the
Securities Act, or to contribute to payments which the Underwriters may be
required to make in respect thereof.

Certain of the Underwriters and their affiliates have provided certain
financial advisory and investment banking services to the Company in the past.

As of the date of this Prospectus, certain of the Underwriters and their
affiliates may be owners of Senior Secured Notes and may therefore receive a
portion of the net proceeds of the Offering in connection with the redemption of
such Senior Secured Notes with a portion of such net proceeds. See "Use of
Proceeds." The Representatives have informed the Company that they do not expect
that the Underwriters and their affiliates will, in the aggregate, receive more
than 10% of the net proceeds of the Offering.

The Representatives, on behalf of the Underwriters, may engage in
over-allotment, stabilizing transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). Over-allotment involves syndicate
sales in excess of the offering size, which creates a syndicate short position.
Stabilizing transactions permit bids to purchase shares of Common Stock so long
as the stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of Common Stock in the open market after the
distribution has been completed in order to cover syndicate short positions.
Penalty bids permit the Representatives to reclaim a selling concession from a
syndicate member when the securities originally sold by such syndicate member
are purchased in a syndicate covering transaction to cover syndicate short
positions. Such stabilizing transactions, syndicate covering transactions and
penalty bids may cause the price of the securities to be higher than it would
otherwise be in the absence of such transactions. These transactions may be
effected on The New York Stock Exchange or otherwise and, if commenced, may be
discontinued at any time.

NOTICE TO CANADIAN RESIDENTS

RESALE RESTRICTIONS

The distribution of the Shares in Canada is being made only on a private
placement basis exempt from the requirement that the Company and the Selling
Stockholder prepare and file a prospectus with the securities regulatory
authorities in each province where trades of the Shares are effected.
Accordingly, any resale of the Shares in Canada must be made in accordance with
applicable securities laws which will vary depending on the relevant
jurisdiction, and which may require resales to be made in accordance with
available statutory exemptions or pursuant to a discretionary exemption granted
by the applicable Canadian securities regulatory authority. Purchasers are
advised to seek legal advice prior to any resale of the Shares.

REPRESENTATIONS OF PURCHASERS

Each purchaser of Shares in Canada who receives a purchase confirmation
will be deemed to represent to the Company, the Selling Stockholder and the
dealer from whom such purchase confirmation is received that (i) such purchaser
is entitled under applicable provincial securities laws to purchase such Shares
without the benefit of a prospectus qualified under such securities laws, (ii)
where required by law, that such purchaser is purchasing as principal and not as
agent and (iii) such purchaser has reviewed the text above under "Resale
Restrictions."

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<PAGE> 58

RIGHTS OF ACTION (ONTARIO PURCHASERS)

The securities offered hereby are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Section 32 of the Regulation under the Securities Act (Ontario). As a result,
Ontario purchasers must rely on other remedies that may be available, including
common law rights of action for damages or rescission or rights of action under
the civil liability provisions of the United States Federal securities laws.

ENFORCEMENT OF LEGAL RIGHTS

All of the issuer's directors and officers as well as the experts named
herein and the Selling Stockholder may be located outside of Canada and, as a
result, it may not be possible for Canadian purchasers to effect service of
process within Canada upon the issuer, such persons or the Selling Stockholder.
All or a substantial portion of the assets of the issuer, such persons and the
Selling Stockholder may be located outside of Canada and, as a result, it may
not be possible to satisfy a judgment against the issuer, such persons or the
Selling Stockholder in Canada or to enforce a judgment obtained in Canadian
courts against the issuer, such persons or the Selling Stockholder outside of
Canada.

NOTICE TO BRITISH COLUMBIA RESIDENTS

A purchaser of Shares to whom the Securities Act (British Columbia) applies
is advised that such purchaser is required to file with the British Columbia
Securities Commission a report within ten days of the sales of any Shares
acquired by such purchaser pursuant to this offering. Such report must be in the
form attached to British Columbia Securities Commission Blanket Order BOR
#95/17, a copy of which may be obtained from the Company. Only one such report
must be filed in respect of Shares purchased on the same date and under the same
prospectus exemption.

TAXATION AND ELIGIBILITY FOR INVESTMENT

Canadian purchasers of Shares should consult their own legal and tax
advisers with respect to the tax consequences of an investment in the Shares in
their particular circumstances and with respect to the eligibility of the Shares
for investment by the purchaser under relevant Canadian legislation.

CERTAIN UNITED STATES TAX CONSEQUENCES TO NON-UNITED STATES HOLDERS

A general discussion of certain United States federal income and estate tax
consequences of the ownership and disposition of Common Stock applicable to
Non-U.S. Holders (as defined) of Common Stock is set forth below. In general, a
"Non-U.S. Holder" is a person other than: (i) a citizen or resident (as defined
for United States Federal income or estate tax purposes, as the case may be) of
the United States; (ii) a corporation organized in or under the laws of the
United States or a political subdivision thereof; (iii) an estate the income of
which is subject to United States federal income taxation regardless of its
source or (iv) a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more U.S.
trustees has the authority to control all substantial decisions of the trust.
The discussion is based on current law and is provided for general information
only. The discussion set forth in this section does not address aspects of
United States Federal taxation other than income and estate taxation and does
not address all aspects of Federal income and estate taxation. The discussion
does not consider any specific facts or circumstances that may apply to a
particular Non-U.S. Holder and does not address all aspects of United States
Federal income tax law that may be relevant to Non-U.S. Holders that may be
subject to special treatment under such law (for example, insurance companies,
tax-exempt organizations, financial institutions or broker-dealers).
ACCORDINGLY, PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISORS
REGARDING THE UNITED STATES FEDERAL, STATE, LOCAL AND NON-U.S. CURRENT AND
POSSIBLE FUTURE INCOME AND OTHER TAX CONSEQUENCES OF HOLDING AND DISPOSING OF
COMMON STOCK.

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<PAGE> 59

DIVIDENDS

In general, the gross amount of dividends paid to a Non-U.S. Holder will be
subject to United States withholding tax at a 30% rate (or any lower rate
prescribed by an applicable tax treaty) unless the dividends are effectively
connected with a trade or business carried on by the Non-U.S. Holder within the
United States. In determining the applicability of a tax treaty that provides
for a lower rate of withholding, dividends paid to an address in a foreign
country are presumed under current regulations of the Treasury Department to be
paid to a resident of that country. Under proposed Treasury regulations,
however, a Non-U.S. Holder would be required to file certain forms in order to
claim the benefit of an applicable treaty rate. Dividends effectively connected
with a trade or business carried on by a Non-U.S. Holder within the United
States will generally not be subject to withholding (if the Non-U.S. Holder
properly files IRS Form 4224 with the payor of the dividend) and will generally
be subject to United States federal income tax at ordinary Federal income tax
rates. Effectively connected dividends may be subject to different treatment
under an applicable tax treaty depending on whether such dividends are
attributable to a permanent establishment of the Non-U.S. Holder in the United
States. In the case of a Non-U.S. Holder which is a corporation, effectively
connected income may be subject to the branch profits tax (which is generally
imposed on a foreign corporation at a rate of 30% of the deemed repatriation
from the United States of "effectively connected earnings and profits") except
to the extent that an applicable tax treaty provides otherwise. A Non-U.S.
Holder eligible for a reduced rate of United States withholding tax pursuant to
an income tax treaty may obtain a refund of any excess amounts withheld by
filing an appropriate claim for refund with the IRS.

SALE OF COMMON STOCK

Generally, a Non-U.S. Holder will not be subject to United States Federal
income tax on any gain realized upon the disposition of his Common Stock unless:
(i) the Company has been, is, or becomes a "U.S. real property holding
corporation" for Federal income tax purposes and certain other requirements are
met; (ii) the gain is effectively connected with a trade or business carried on
by the Non-U.S. Holder (or by a partnership, trust or estate in which the
Non-U.S. Holder is a partner or beneficiary) within the United States; or (iii)
the Common Stock is disposed of by an individual Non-U.S. Holder, who holds the
Common Stock as a capital asset and is present in the United States for 183 days
or more in the taxable year of the disposition, and the gains are considered
derived from sources within the United States. The Company believes that it has
not been, is not currently and, based upon its current business plans, is not
likely to become a U.S. real property holding corporation. A Non-U.S. Holder
also may be subject to tax pursuant to the provisions of United States tax law
applicable to certain United States expatriates. Non-U.S. Holders should consult
applicable treaties, which may exempt from United States taxation gains realized
upon the disposition of Common Stock in certain cases.

ESTATE TAX

Common Stock owned or treated as owned by an individual Non-U.S. Holder at
the time of death will be includible in the individual's gross estate for United
States Federal estate tax purposes, unless an applicable treaty provides
otherwise, and may be subject to United States Federal estate tax.

BACKUP WITHHOLDING AND INFORMATION REPORTING

The Company must report annually to the IRS and to Non-U.S. Holders the
amount of dividends paid to, and the tax withheld with respect to, each Non-U.S.
Holder. These information reporting requirements apply regardless of whether
withholding was reduced by an applicable tax treaty or if withholding was not
required because the dividends were effectively connected with a trade or
business in the United States of the Non-U.S. Holder. Copies of these
information returns also may be made available under the provisions of a
specific treaty or agreement to the tax authorities in the country in which the
Non-U.S. Holder resides or is established. Under current law, United States
backup withholding tax (which generally is a withholding tax imposed at the rate
of 31% on certain payments to persons that fail to furnish the information
required under the United States information reporting and backup withholding
rules) generally will not apply to dividends paid on Common Stock to a Non-U.S.
Holder at an address outside the United States, absent actual knowledge by the
payor that the payee is not a Non-U.S. Holder or to dividends paid to Non-U.S.
Holders that are either subject to the U.S.

58
<PAGE> 60

withholding tax (whether at 30% or a reduced treaty rate) or that are exempt
from such withholding because such dividends constitute effectively connected
income. Under proposed United States Treasury regulations not currently in
effect, however, a Non-U.S. Holder will be subject to backup withholding unless
applicable certification requirements are met. Backup withholding and
information reporting generally will apply to dividends paid on Common Stock to
a Non-U.S. Holder at an address inside the United States unless such Non-U.S.
Holder owner, under penalties of perjury, certifies, among other things, its
status as a Non-U.S. Holder or otherwise establishes an exemption.

The payment of the proceeds from the disposition of Common Stock to or
through the United States office of a broker will be subject to information
reporting and backup withholding unless the owner certifies its foreign status
as described above or otherwise establishes an exemption. The payment of the
proceeds from the disposition of Common Stock to or through a foreign office of
a non-United States broker will not be subject to backup withholding and
generally will not be subject to information reporting. Unless the broker has
documentary evidence in its files that the owner is a Non-U.S. Holder and
certain conditions are met or the holder otherwise establishes an exemption,
information reporting generally will apply to dispositions through (a) a non-
United States office of a United States broker and (b) a non-United States
office of a non-United States broker that is either a "controlled foreign
corporation" for United States federal income tax purposes or a person 50% or
more of whose gross income from all sources for a three year testing period was
effectively connected with a United States trade or business.

The backup withholding and information reporting rules are currently under
review by the Treasury Department and their application to the Common Stock is
subject to change.

Any amount withheld under the backup withholding rules from a payment to a
Non-U.S. Holder would be allowed as a credit against such Non-U.S. Holder's
United States Federal income tax and any amounts withheld in excess of such
Non-U.S. Holder's United States Federal income tax liability would be refunded,
provided that required information is furnished to the IRS.

LEGAL MATTERS

Certain legal matters in connection with the shares of Common Stock offered
hereby will be passed upon for the Company by Robinson Silverman Pearce Aronsohn
& Berman LLP, 1290 Avenue of the Americas, New York, New York 10104, and for the
Underwriters by Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, New
York, New York 10022. Skadden, Arps, Slate, Meagher & Flom LLP has from time to
time represented, and is currently representing, the Company with respect to
various unrelated legal matters.

EXPERTS

The consolidated financial statements of the Company incorporated in this
Prospectus by reference to the Company's Annual Report on Form 10-K for the year
ended December 31, 1996 have been so incorporated in reliance on the report of
Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.

The combined financial statements of Simon Access Companies as of December
31, 1996 and for the year then ended, incorporated in this Prospectus by
reference to the Company's Current Report on Form 8-K/A dated May 22, 1997 have
been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

The consolidated financial statements of PPM Cranes, Inc. as of December
31, 1996 and 1995 and for the year and eight months ended December 31, 1996 and
1995, respectively, incorporated in this Prospectus by reference to the
Company's Annual Report on Form 10-K for the year ended December 31, 1996 have
been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

The consolidated statements of operations, shareholders' equity and cash
flows for the year ended December 31, 1994 of PPM Cranes, Inc., incorporated by
reference in this Prospectus and Registration Statement

59
<PAGE> 61

have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon incorporated by reference elsewhere herein, which is based
in part on the report of Price Waterhouse (Australia), independent accountants.
The financial statements referred to above are incorporated by reference in
reliance upon such reports given upon the authority of such firms as experts in
accounting and auditing.

AVAILABLE INFORMATION

Terex Corporation is subject to the informational requirements of the
Exchange Act, and in accordance therewith files reports, proxy statements and
other information with the Commission. Such reports, proxy statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at its offices at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549 and at the regional offices of the
Commission located at Seven World Trade Center, 13th Floor, New York, New York
10048 and at Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such materials may also be obtained by mail
from the Public Reference Section of the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Additionally,
the Commission maintains a Web site containing reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission. The address for such Web site is http://www.sec.gov.

In addition, the Common Stock is listed on the NYSE under the symbol "TEX"
and reports, proxy statements and other information concerning the Company may
also be inspected at the offices of the NYSE, 20 Broad Street, New York, New
York 10005.

The Company has filed with the Commission a Registration Statement on Form
S-3 (together with all amendments, exhibits, schedules, and supplements thereto,
the "Registration Statement") under the Securities Act, with respect to the
Common Stock offered hereby. This Prospectus, which constitutes a part of the
Registration Statement, does not contain all of the information set forth in the
Registration Statement, as permitted by the rules and regulations of the
Commission. For further information with respect to the Company and the Common
Stock offered hereby, reference is hereby made to the Registration Statement,
which may be inspected and copied at the Public Reference Section of the
Commission referred to above.

The Company furnishes stockholders with annual reports containing audited
financial statements. The Company also furnishes its common stockholders with
proxy material for its annual meetings complying with the proxy requirements of
the Exchange Act.

INCORPORATION OF DOCUMENTS BY REFERENCE

The following documents which have been filed by the Company with the
Commission are incorporated in this Prospectus by reference:

1. The Company's Annual Report on Form 10-K for the year ended December 31,
1996.

2. The Company's Notice of Annual Meeting of Stockholders and Proxy
Statement dated April 4, 1997.

3. The Company's Current Report on Form 8-K dated April 21, 1997, as
amended on Form 8-K/A dated May 22, 1997.

4. The Company's Current Report on Form 8-K dated February 26, 1997.

5. The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1997.

6. The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A dated February 22, 1991.

All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of
this Prospectus and prior to the termination of the Offering shall be deemed to
be incorporated by reference in and to be a part of this Prospectus from the
date of filing of such reports and documents.

60
<PAGE> 62

Any statement contained herein or in a document which is incorporated by
reference herein or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently filed document
that is also deemed to be incorporated by reference herein modifies or
supersedes such prior statement. Any statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.

This Prospectus incorporates documents by reference which are not presented
or delivered herewith. These documents (other than exhibits to such documents)
are available upon written or oral request from the Company, without charge, to
each person to whom a copy of this Prospectus has been delivered, including a
copy of its most recent Annual Report to Shareholders. Requests should be
directed to Terex Corporation, Attention: Secretary, 500 Post Road East,
Westport, Connecticut 06880 (telephone (203) 222-7170).

61
<PAGE> 63

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

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDER OR ANY
UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................ 3
Risk Factors.............................. 11
The Company............................... 17
Price Range of Common Stock and Dividend
Policy.................................. 18
Use of Proceeds........................... 19
Capitalization............................ 20
Pro Forma Financial Information........... 21
Selected Consolidated Financial Data...... 26
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.............................. 28
Industry Overview and Outlook............. 38
Business.................................. 40
Management................................ 50
Selling Stockholder....................... 51
Description of Securities................. 52
Underwriting.............................. 55
Notice to Canadian Residents.............. 56
Certain United States Tax Consequences to
Non-United States Holders............... 57
Legal Matters............................. 59
Experts................................... 59
Available Information..................... 60
Incorporation of Documents by Reference... 60
</TABLE>

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

LOGO

7,000,000 Shares

Common Stock
($.01 par value)

PROSPECTUS

CREDIT SUISSE FIRST BOSTON

SALOMON BROTHERS INC

FURMAN SELZ LLC

J.P. MORGAN & CO.

------------------------------------------------------
<PAGE> 64

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table itemizes the expenses incurred by the Company in
connection with the offering of the Common Stock being registered. All the
amounts shown are estimates except the Securities and Exchange Commission
registration fee, the NASD fee, and the New York Stock Exchange listing fee.

<TABLE>
<CAPTION>
ITEM AMOUNT
----------------------------------------------------------------- -------
<S> <C>
SEC Registration Fee............................................. $35,730
NASD Fee......................................................... 12,291
NYSE Listing Fee................................................. 44,800
Transfer Agent Fees and Expenses................................. *
Printing and Engraving Expenses.................................. *
Legal Fees and Expenses (other than Blue Sky).................... *
Accounting Fees and Expenses..................................... *
Blue Sky Fees and Expenses (including fees of counsel)........... *
Miscellaneous Expenses........................................... $ *
-------
TOTAL.................................................. $ *
=======
</TABLE>

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

* To be filed by amendment.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the Delaware General Corporation Law ("DGCL") and Article IX
of the Company's Restated By-laws provide for the indemnification of the
Company's directors and officers in a variety of circumstances, which may
include liabilities under the Securities Act.

Article IX of the Company's Restated By-laws generally requires the Company
to indemnify its officers and directors against all liabilities (including
judgments, settlements, fines and penalties) and reasonable expenses incurred in
connection with the investigation, defense, settlement or appeal of certain
actions, whether instituted by a third party or a stockholder (either directly
or indirectly) and including specifically, but without limitation, actions
brought under the Securities Act and/or the Exchange Act; except that no such
indemnification will be permitted if such director or officer was not successful
in defending against any such action and it is determined that the director or
officer breached or failed to perform his or her duties to the Company, and such
breach or failure constitutes (i) a willful breach of his or her "duty of
loyalty", (ii) acts or omissions not in good faith or involving intentional
misconduct or a knowing violation of the law, (iii) a violation of Section 174
of the Delaware General Corporation Law, relating to prohibited dividends or
distributions or the repurchase or redemption of stock, or (iv) a transaction
where such individual derived an improper financial profit (unless it is deemed
that such profit is immaterial in light of all of the circumstances)
(collectively, "Breach of Duty"). Notwithstanding the foregoing, subject to
certain exceptions, the Restated By-laws provide that directors or officers
initiating an action are not entitled to indemnification.

The Restated By-laws also establish certain procedures by which (i) a
director or officer may request an advance on his or her reasonable expenses
prior to the final disposition of an action, (ii) the Company may withhold an
indemnification payment from a director or officer, (iii) a director or officer
may be entitled to partial indemnification and (iv) a director or officer may
challenge the Company's denial to furnish him or her with requested
indemnification. Additionally, the Restated By-laws provide that the adverse
termination of an action against an officer or director is not in and of itself
sufficient to create a presumption that a director or officer engaged in conduct
constituting a Breach of Duty.

II-1
<PAGE> 65

Finally, the Company's Restated Certificate of Incorporation, as amended,
contains a provision which eliminates the personal liability of a director to
the Company and its stockholders for certain breaches of his or her fiduciary
duty of care as a director. This provision does not, however, eliminate or limit
the personal liability of a director (i) for any breach of such director's "duty
of loyalty" (as further defined therein) to the Company or its stockholders,
(ii) for acts or omissions not in "good faith" (as further defined therein) or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL, relating in general to the willful or negligent payment
of an illegal dividend or the authorization of an unlawful stock repurchase or
redemption, or (iv) for any transaction from which the director derived an
improper personal profit to the extent of such profit. This provision of the
Restated Certificate of Incorporation offers persons who serve on the Board of
Directors of the Company protection against awards of monetary damages resulting
from negligent (except as indicated above) and "grossly" negligent actions taken
in the performance of their duty of care, including grossly negligent business
decisions made in connection with takeover proposals for the Company. As a
result of this provision, the ability of the Company or a stockholder thereof to
successfully prosecute an action against a director for a breach of his duty of
care has been limited. However, the provision does not affect the availability
of equitable remedies such as an injunction or rescission based upon a
director's breach of his duty of care.

The Commission has taken the position that the foregoing provisions will
have no effect on claims arising under the Federal securities laws.

The Company maintains a directors' and officers' insurance policy which
insures the officers and directors of the Company from any claim arising out of
an alleged wrongful act by such persons in their respective capacities as
officers and directors of the Company.

The form of Underwriting Agreement to be filed as Exhibit 1.1 to this
Registration Statement provides for the reciprocal indemnification (a) by the
Underwriters of the Company and its directors and officers and (b) by the
Company of the Underwriters and its directors and officers, against certain
liabilities under the Securities Act.

ITEM 16. EXHIBITS

<TABLE>
<C> <S>
1.1 Underwriting Agreement.*
3.1 Restated Certificate of Incorporation of Terex Corporation (incorporated by
reference to Exhibit 3.1 to the Registration Statement on Form S-1 of Terex
Corporation, Registration No. 33-52297).
3.2 Restated Bylaws of Terex Corporation (incorporated by reference to Exhibit 3.2 to
the Registration Statement on Form S-1 of Terex Corporation, Registration No.
33-52297).
4.1 Specimen Common Stock certificate (incorporated be reference to Exhibit 4.1 to the
Registration Statement on Form S-1 of Terex Corporation, Registration No. 33-77484).
5.1 Opinion of Robinson Silverman Pearce Aronsohn & Berman LLP as to legality of
securities being registered.*
10.1 Standstill Agreement, dated June 27, 1997, among Terex Corporation, Randolph W. Lenz
and the other parties named therein.
23.1 Consent of Robinson Silverman Pearce Aronsohn & Berman LLP (included as part of
Exhibit 5.1).
23.2 Independent Accountants' consent of Price Waterhouse LLP.
23.3 Consent of Ernst & Young LLP Independent Auditors.
23.4 Independent Accountants' consent of Price Waterhouse -- Melbourne, Australia.
24.1 Power of attorney (included on signature pages).
</TABLE>

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

* To be filed by amendment or by Current Report on Form 8-K.

ITEM 17. UNDERTAKINGS

The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,

II-2
<PAGE> 66

where applicable, each filing of an employee benefit plan's Annual Report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.

The Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities
Act, information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-3
<PAGE> 67

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 1 to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Westport, State of Connecticut, on June 30, 1997.

TEREX CORPORATION

By: /s/ RONALD M. DeFEO
------------------------------------
Ronald M. DeFeo, President,
Chief Executive Officer and
Chief Operating Officer

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 to Registration Statement has been signed by the following
persons in the capacities and on the date(s) indicated.

<TABLE>
<CAPTION>
NAME TITLE DATE
- ------------------------------------------ ----------------------------------- -------------
<C> <S> <C>

RONALD M. DeFEO* President, Chief Executive Officer, June 30, 1997
- ------------------------------------------ Chief Operating Officer and
(Ronald M. DeFeo) Director (Principal Executive
Officer)

DAVID J. LANGEVIN* Executive Vice President, (Acting June 30, 1997
- ------------------------------------------ Principal Financial Officer)
(David J. Langevin)

JOSEPH F. APUZZO* Vice President Finance and June 30, 1997
- ------------------------------------------ Controller (Principal Accounting
(Joseph F. Apuzzo) Officer)

/s/ MARVIN B. ROSENBERG Senior Vice President, Secretary, June 30, 1997
- ------------------------------------------ General Counsel and Director
(Marvin B. Rosenberg)

G. CHRIS ANDERSEN* Director June 30, 1997
- ------------------------------------------
(G. Chris Andersen)

WILLIAM H. FIKE* Director June 30, 1997
- ------------------------------------------
(William H. Fike)

BRUCE I. RABEN* Director June 30, 1997
- ------------------------------------------
(Bruce I. Raben)

DAVID A. SACHS* Director June 30, 1997
- ------------------------------------------
(David A. Sachs)

ADAM E. WOLF* Director June 30, 1997
- ------------------------------------------
(Adam E. Wolf)

*By: /s/ MARVIN B. ROSENBERG
- ------------------------------------------
(Marvin B. Rosenberg), as
Attorney-in-fact
</TABLE>

II-4
<PAGE> 68

EXHIBIT INDEX

ITEM 16. EXHIBITS

<TABLE>
<C> <S>
1.1 Underwriting Agreement.*
3.1 Restated Certificate of Incorporation of Terex Corporation (incorporated by reference
to Exhibit 3.1 to the Registration Statement on Form S-1 of Terex Corporation,
Registration No. 33-52297).
3.2 Restated Bylaws of Terex Corporation (incorporated by reference to Exhibit 3.2 to the
Registration Statement on Form S-1 of Terex Corporation, Registration No. 33-52297).
4.1 Specimen Common Stock certificate (incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-1 of Terex Corporation, Registration No.
33-77484).
5.1 Opinion of Robinson Silverman Pearce Aronsohn & Berman LLP as to legality of
securities being registered.*
10.1 Standstill Agreement, dated June 27, 1997, among Terex Corporation, Randolph W. Lenz
and the other parties named therein.
23.1 Consent of Robinson Silverman Pearce Aronsohn & Berman LLP (included as part of
Exhibit 5.1).
23.2 Independent Accountants' consent of Price Waterhouse LLP.
23.3 Consent of Ernst & Young LLP Independent Auditors.
23.4 Independent Accountant's consent of Price Waterhouse -- Melbourne, Australia.
24.1 Power of attorney (included on signature pages).
</TABLE>

- ---------------
* To be filed by amendment or by Current Report on Form 8-K.

<PAGE> 1
Exhibit 10.1

STANDSTILL AGREEMENT

STANDSTILL AGREEMENT (the "Agreement"), dated as of June 27,
1997 between Terex Corporation (the "Company"), Randolph W. Lenz (the
"Stockholder"), Alass Investment Partners, Ltd. ("Alass Investments"), Corsta
Corporation ("Corsta"), FWD Corporation ("FWD"), Corsta Yacht Charters, Inc.
("Yacht"), Equity Funding Group, L.C. ("Equity"), First Out Corporation
("First"), Sam Ltd. ("Sam") and Alass Corporation ("Alass" and, together with
Alass Investments, Corsta, FWD, Yacht, Equity, First and Sam, the "Stockholder
Affiliates").

WHEREAS, the Stockholder and the Stockholder Affiliates
beneficially own 3,979,561 shares of common stock, par value $.01 per share (the
"Common Stock") of the Company and 38,800 shares of the Company's Series B
Cumulative Redeemable Convertible Preferred Stock (the "Preferred Stock");

WHEREAS, the Stockholder holds options to acquire 43,000
shares of Common Stock (the "Options") and the right to receive 10,750 shares of
restricted stock (the "Restricted Stock") under the Company's 1994 Long Term
Incentive Plan;

WHEREAS, the Stockholder and/or his affiliate may have the
right to receive up to an additional 100,000 shares of Common Stock from the
Company pursuant to that certain agreement (the "Retirement Agreement"), dated
as of November 2, 1995, between the Company and the Stockholder;

WHEREAS, it is contemplated that the Company will effect a
public offering (the "Public Offering") of up to 5,000,000 shares (the "Company
Shares") of the Common Stock;

WHEREAS, it is contemplated that in conjunction with the
Public Offering, the Stockholder will sell up to 2,000,000 shares (the
"Stockholder Shares" and, together with the Company Shares, the "Firm Shares")
of Common Stock;

WHEREAS, in connection with the Public Offering, it is
contemplated that the Company will grant to the underwriters an option
exercisable for 30 days to buy up to that number of additional shares equal to
10% of the Firm Shares (the "Company Option Shares");
<PAGE> 2
WHEREAS, the managing underwriters of the Public Offering have
informed the Company that the execution and delivery of this Agreement by the
Stockholder and the Stockholder Affiliates is a condition to the Stockholder and
the Stockholder Affiliates participating in the Public Offering; and

WHEREAS, in order to endeavor to preserve without limitation
the net operating loss carryovers to which the Company is entitled pursuant to
the Internal Revenue Code of 1986, as amended, or any successor statute and the
regulations or any successor regulations thereunder (such statute and
regulations, collectively, the "Code"), the Stockholder and the Stockholder
Affiliates have agreed to the restrictions set forth herein.

NOW THEREFORE, in consideration of the premises and mutual
agreements set forth herein and intending to be legally bound the parties agree
as follows:

1. Participation in Public Offering; Reduction in Size of
Offering. The Company will use its best efforts to cause the managing
underwriters to include the Stockholder Shares in the Public Offering. If the
managing underwriters advise the Company that in their opinion the number of
shares of Common Stock to be included in the Firm Shares exceeds the number of
such shares which can be sold in the Public Offering, the Company Shares and the
Stockholder Shares shall be reduced pro rata (the reduction in the number of
Stockholder Shares caused by any such pro rata reduction being referred to
herein as the "Stockholder Cut-back") so that the aggregate number of shares to
be sold in the Public Offering shall not exceed that number of shares which in
the opinion of the managing underwriters can be sold. The Stockholder and the
Stockholder Affiliates acknowledge that their right to participate in the Public
Offering is conditioned upon their completing and executing all questionnaires,
powers of attorney, custody agreements, indemnities, underwriting agreements and
other documents reasonably required by the managing underwriters.

2. Acquisition of Capital Stock by the Stockholder and the
Stockholder Affiliates. Each of the Stockholder, the Stockholder Affiliates and
any Affiliates (as such term is defined in Rule 144 under the Securities Act of
1933, as amended (the "Securities Act")) of the Stockholder or the Stockholder
Affiliates whose acquisitions of Capital Stock would be attributed to the
Stockholder or the Stockholder Affiliates, as the case may be, for purposes of
Section 382 of the Code (such Affiliates are referred to herein as "Attributable
Persons"), will not acquire or contract to acquire, directly or indirectly, any
shares of Common Stock, any

2
<PAGE> 3
securities convertible into or exchangeable or exercisable for any shares of
Common Stock, any other capital stock now or hereafter issued by the Company or
any other indirect interest or option in any of the foregoing (collectively, the
"Capital Stock") for a period of three years from the second business day
following the closing of the sale of the Firm Shares, or, if later, the second
business day following the closing of the sale of the Company Option Shares (the
"Standstill Period"), except (i) as a result of (a) a stock split, stock
dividend, other pro rata distribution to all stockholders of the Company, or
other transactions having similar effect, or (b) the conversion or exercise of
the Preferred Stock or the Options in accordance with their terms as in effect
on the date hereof, or (ii) in compliance with the terms of Section 4(g)(i) and
(ii) of the Retirement Agreement as in effect on the date hereof; provided,
however, that nothing herein shall be deemed to prevent any of the Stockholder,
the Stockholder Affiliates or the Attributable Persons from acquiring or
contracting to acquire any indirect interest in or option to purchase Capital
Stock if such person shall, prior to consummating such acquisition or contract,
deliver to the Company a written opinion of nationally-recognized independent
tax counsel to the Stockholder ("Tax Counsel") stating that the proposed
acquisition or contract should not result, at the time of consummation or at any
other time during the Standstill Period, in a change of ownership of the
relevant Capital Stock as determined for federal income tax purposes. For
purposes of this Section 2 and Section 17 below, (i) the term "should," as used
in connection with an opinion of Tax Counsel, shall refer to a standard that is
higher than a "more likely than not" standard but lower than an "unqualified"
standard, and (ii) any opinion of Tax Counsel shall set forth the relevant law
and facts upon which it is based, provided, that such opinion may be based upon
assumptions of fact if such assumptions are based upon facts set forth in a
certificate of a person with actual knowledge of such facts which certificate
shall be attached to such opinion. The Stockholder and the Stockholder
Affiliates will be jointly and severally liable for any breach of the terms of
this Agreement by their respective Attributable Persons. At the request of the
Stockholder the Company will pay the reasonable fees and disbursements of Tax
Counsel incurred in rendering the opinion required by this Section 2 or by
Section 17.

3. Hold-back Agreement. For a period of 120 days after the
date of the final prospectus relating to the initial public offering of the Firm
Shares, each of the Stockholder and the Stockholder Affiliates will not offer,
sell, contract to sell, announce their intention to sell, pledge, exchange,
contract to exchange, assign, contract to assign or otherwise dispose of or
contract to dispose of, directly or indirectly, including, without limitation,
through any call or put option or other similar arrangement, any additional
shares of Capital Stock without the prior written

3
<PAGE> 4
consent of Credit Suisse First Boston Corporation, or any successor thereto, or,
if Credit Suisse First Boston Corporation shall not be the managing underwriter
of the Public Offering, then such other managing underwriter of the Public
Offering.

4. Disposition of Capital Stock by the Stockholder and the
Stockholder Affiliates. Each of the Stockholder and the Stockholder Affiliates
will not Dispose (as such term is defined below) of any shares of Capital Stock,
except that:

a. following the expiration of the 120 day period
contemplated by Section 3 above, the Stockholder and the Stockholder Affiliates
may Dispose of to persons other than "Prohibited Persons" (as such term is
defined below) (i) an aggregate number of shares of Common Stock equal to 75% of
such Company Option Shares as are not purchased by the underwriters and (ii) an
aggregate number of shares of Common Stock equal to the Stockholder Cut-back, if
any, in each case whether by Disposition (as such term is defined below) of
Common Stock or by Disposition of a number of Preferred Shares convertible into
such number of shares of Common Stock;

b. during the period commencing on November 1, 1998
and terminating on the first date that the Stockholder, the Stockholder
Affiliates and their respective Affiliates are collectively the beneficial
owners of less than 5% of the Common Stock outstanding at such date, the
Stockholder and the Stockholder Affiliates may Dispose of to persons other than
Prohibited Persons up to a number of shares of Common Stock (whether by
Disposition of Common Stock or by Disposition of a number of Preferred Shares
convertible into such number of shares of Common Stock) that will result, after
giving effect to such Dispositions, in the Stockholder, the Stockholder
Affiliates and their respective Affiliates being collectively the beneficial
owners of less than 5% of the Common Stock outstanding at such date, provided,
however, that any Dispositions made pursuant to this clause b. shall not result,
after giving effect to any such Dispositions, in the Stockholder, the
Stockholder Affiliates and their respective Affiliates being collectively the
beneficial owners of less than 4.9% of the Common Stock outstanding at such
date;

c. from and after the later of (x) the 30th day after
the Stockholder, the Stockholder Affiliates and their respective Affiliates file
a final report pursuant to Rule 13d-2 of the Exchange Act reflecting collective
beneficial ownership of less than 5% of the Common Stock outstanding at such
date by the Stockholder, the Stockholder Affiliates and their respective
Affiliates or (y) February 10, 1999, the Stockholder and the Stockholder
Affiliates may Dispose of to persons

4
<PAGE> 5
other than Prohibited Persons the balance of the shares of Common Stock (whether
by Disposition of Common Stock or by Disposition of a number of Preferred Shares
convertible into such number of shares of Common Stock) owned by the Stockholder
and the Stockholder Affiliates; and

d. Notwithstanding anything herein to the contrary,
at any time following the expiration of the 120 day period contemplated by
Section 3 above, the Stockholder will be permitted to Dispose of an aggregate of
up to 200,000 shares of Common Stock owned by the Stockholder or any Stockholder
Affiliate to one or more of the Stockholder's children.

e. the restrictions set forth in Sections 2, 4 and 6
hereof shall no longer be in effect (provided, that all other terms and
provisions of this Agreement shall remain in full force and effect) from and
after any date on which there is deemed to have occurred, in the reasonable
judgment of the Company, an "ownership change" of the Company for the purposes
of Section 382 of the Code; provided that the Stockholder and the Stockholder
Affiliates shall have complied fully with all of their agreements,
representations and warranties under this Agreement.

5. Representations and Warranties. The Stockholder and the
Stockholder Affiliates each jointly and severally warrants on the date hereof
that:

a. The Stockholder and the Stockholder Affiliates are
the owners of record and beneficially of the Common Stock, the Preferred Stock,
the Restricted Stock and the Options set forth opposite the name of the
Stockholder and the Stockholder Affiliates on Exhibit A hereto. Except as
specifically set forth on Exhibit A hereto, each of the Stockholder and the
Stockholder Affiliates owns such Common Stock, Preferred Stock, Restricted Stock
and Options free and clear of all liens, charges, pledges, security interests,
claims and encumbrances whatsoever ("Liens"). Except as set forth on Exhibit A,
the Stockholder, the Stockholder Affiliates and their respective Attributable
Persons do not beneficially own any shares of Capital Stock or any other
indirect interest in any Capital Stock. Except for (i) the Preferred Stock, the
Restricted Stock and the Options (ii) for the Retirement Agreement, and (iii) as
set forth on Exhibit A, there is no subscription, option, warrant, call, right,
agreement or commitment relating to the issuance, sale, delivery, pledge,
exchange, transfer or acquisition of any shares of Capital Stock to or from the
Stockholder, the Stockholder Affiliates or their respective Attributable
Persons.

5
<PAGE> 6
b. Except as set forth on Exhibit B hereto,
immediately following consummation of the Public Offering, the Stockholders and
the Stockholder Affiliates will own their remaining shares of Common Stock,
Preferred Stock, Restricted Stock and Options free and clear of all Liens.

c. The execution, delivery and performance of this
Agreement by each of the Stockholder and the Stockholder Affiliates does not and
will not (i) conflict with or result in any breach of any provision of the
organizational documents of any Stockholder Affiliate, (ii) result in the
creation of any Lien on the shares of Common Stock or Preferred Stock or Options
owned by the Stockholder or the Stockholder Affiliates, (iii) result in any
event which (with notice or lapse of time or both) would constitute a breach of
or default under any of the terms of any agreement to which the Stockholder or
the Stockholder Affiliates are bound or by which any of their respective
properties or assets is bound or (iv) violate or conflict with any order, writ,
injunction, decree, statute, rule or regulation applicable to the Stockholder or
the Stockholder Affiliates.

d. Each of the Stockholder and the Stockholder
Affiliates has all requisite power and authority, and has full legal capacity
and is competent to execute and deliver and perform this Agreement. The
execution and delivery of this Agreement by each of the Stockholder and the
Stockholder Affiliates has been duly and validly authorized by all necessary
action on the part of each of the Stockholder and the Stockholder Affiliates.
This Agreement has been duly and validly executed and delivered by such Seller
and constitutes a legal, valid and binding obligation of each of the Stockholder
and the Stockholder Affiliates in accordance with its terms.

6. Additional Agreements.

a. In the event that the Stockholder or any of the
Stockholder Affiliates (the "Purported Seller") makes a purported Disposition of
shares of Capital Stock ("Prohibited Shares") in contravention of the terms of
this Agreement, such attempted Disposition shall be void ab initio and the
purported acquiror (the "Purported Acquiror") shall not be entitled to any
rights as a stockholder of the Company with respect to the Prohibited Shares
(including, without limitation, the right to vote or to retain or receive
dividends with respect to the Prohibited Shares). All rights with respect to the
Prohibited Shares shall remain the property of the Purported Seller until such
time as the Prohibited Shares are resold as set forth in this Section 6. The
Purported Acquiror, by acquiring purported ownership of the

6
<PAGE> 7
Prohibited Shares, shall be deemed to have consented to all the provisions of
this Section 6.

b. Upon demand by the Company, the Purported Acquiror
shall transfer any certificate or other evidence of purported ownership of the
Prohibited Shares within the Purported Acquiror's possession or control, along
with any dividends or other distributions paid by the Company with respect to
the Prohibited Shares that were received by the Purported Acquiror (the
"Prohibited Distributions"), to an agent designated by the Company (the
"Agent"). If the Purported Acquiror has sold the Prohibited Shares after
purportedly acquiring them, the Purported Acquiror shall be deemed to have sold
the Prohibited Shares as Agent for the Purported Seller, and in lieu of
transferring the Prohibited Shares and Prohibited Distributions to the Agent
shall transfer to the Agent the Prohibited Distributions and the proceeds of
such sale (the "Resale Proceeds") except to the extent that the Agent grants
written permission to the Purported Acquiror to retain a portion of the Resale
Proceeds not exceeding the amount that would have been payable by the Agent to
the Purported Acquiror pursuant to the following clause c. if the Prohibited
Shares had been sold by the Agent rather than by the Purported Acquiror.

c. The Agent shall sell in an arm's-length
transaction any Prohibited Shares transferred to the Agent by the Purported
Acquiror, and the proceeds of such sale (the "Sale Proceeds"), or the Resale
Proceeds, if applicable, shall be allocated to the Purported Acquiror up to the
purported purchase price paid or value of consideration tendered by the
Purported Acquiror for the Prohibited Shares. Any Resale Proceeds or Sale
Proceeds in excess of the amount allocable to the Purported Acquiror pursuant to
the preceding sentence, together with any Prohibited Distributions, shall be the
property of the Purported Seller.

d. Upon a determination by the Company that there has
been a purported Disposition of Prohibited Shares in contravention of the terms
of this Agreement, the Company may take such action, in addition to any action
described in this Section 6, as the Company, in its sole and absolute
discretion, deems necessary or advisable to give effect to the provisions and
intent of this Agreement, including, without limitation, refusing to give effect
on the books of the Company to such purported Disposition or instituting
proceedings to enjoin such purported Disposition or redeeming the Prohibited
Shares.

7. Condition of Company's Obligations. The obligations of the
Company hereunder, including, but not limited to, using its best efforts to
cause the managing underwriters to include the Stockholder Shares in the Public
Offering, are

7
<PAGE> 8
subject to the condition that (i) each of the representations and warranties of
the Stockholder and the Stockholder Affiliates set forth in section 5 hereof are
true and correct in all material respects as of the date of each of the pricing
and the closing of the Public Offering and (ii) each of the Stockholder, the
Stockholder Affiliates and their respective Affiliates shall have complied with
the terms and conditions of this Agreement in all material respects.

8. Successors; Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

9. Waivers and Amendments. No waiver of any term, provision or
condition of this Agreement, in any one or more instances, shall be deemed to be
or construed as a further or continuing waiver of any such term, provision or
condition or as a waiver of any other term, provision or condition of this
Agreement. The provisions of this Agreement may not be amended, except in a
writing signed by both parties.

10. Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing, shall be
deemed to have been duly given when delivered personally or mailed in the United
States by registered or certified mail, postage prepaid, or sent by fax, telex
or telegram, addressed as follows:

To the Company:
Terex Corporation
500 Post Road East
Westport, CT 06880
Attention: Marvin B. Rosenberg

To the Stockholder or the Stockholder Affiliates:
Randolph W. Lenz
c/o Equity Merchant Banking
2419 E. Commercial Blvd.
Suite 304
Fort Lauderdale, FL 33308

11. Entire Agreement. This Agreement contains all the terms
and conditions agreed upon by the parties hereto, and no other agreements, oral
or otherwise, regarding the subject matter hereof shall be deemed to exist to
bind either

8
<PAGE> 9
of the parties hereto unless in writing and executed by the parties hereto after
the date hereof. This Agreement is separate from and shall in no way affect or
supersede the Retirement Agreement which shall remain in full force and effect,
unmodified by the terms of this Agreement; provided, however, that in the event
of any conflict between, or ambiguity resulting from, the terms of this
Agreement and the terms of the Retirement Agreement, the terms of this Agreement
shall supersede the terms of the Retirement Agreement in resolving such conflict
or ambiguity. In addition, the parties hereto hereby agree that the
participation of the Stockholder and the Stockholder Affiliates in the Public
Offering as contemplated hereunder shall be in full satisfaction of all
obligations of the Company to the Stockholder and his Affiliates arising by
reason of the Public Offering under Section 7(e) of the Retirement Agreement and
under Sections 2 and 3 of the Registration Rights Agreement, dated as of
December 9, 1994, by among the Stockholder, David J.
Langevin, Marvin B. Rosenberg and the Company.

12. Headings. The headings as provided herein are for conve-
nience only and are not to be considered in the interpretation of any provisions
found herein.

13. Jurisdiction and Governing Law. Jurisdiction over
proceedings with regard to this Agreement shall be exclusively in the courts of
the State of New York and each party consents and submits to the non-exclusive
personal jurisdiction of any court in the State of New York in respect of such
proceedings. Each party waives any objection that it may now or hereafter have
to the laying of venue of any such proceedings in any court in the State of New
York and any claim that it may now or hereafter have that any such proceedings
in any court in the State of New York have been brought in an inconvenient
forum. This Agreement shall be construed and interpreted in accordance with and
governed by the laws of the State of New York, other than the conflict of laws
provisions of such laws.

14. Injunctive Relief. It is hereby agreed and acknowledged
that the parties hereto cannot be adequately compensated in damages or other
remedies in an action at law if the other parties fail to comply with any of the
obligations herein imposed on them and that, in the event of any such failure,
an aggrieved party will be irreparably damaged. Any such party shall, therefore,
be entitled to injunctive relief, including specific performance, to enforce
such obligations, without the posting of any bond, and if any action should be
brought in equity to enforce any of the provisions of this Agreement, none of
the parties hereto or their respective affiliates, successors or assigns shall
raise the defense that there is an adequate remedy at law. The foregoing shall
not, however, be construed as a waiver of any

9
<PAGE> 10
of the rights which the parties may have for damages under this Agreement or
otherwise, and all of the parties' rights and remedies shall be unrestricted.

15. Severability. In case any one or more of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Agreement, and
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein; provided, however, that the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
invalid, illegal or unenforceable term, provision, covenant or restriction.

16. Termination. Unless otherwise agreed by the parties hereto
in writing, this Agreement shall terminate without any further rights or
obligations of any of the parties hereto if the Public Offering is not
consummated on prior to September 15, 1997.

17. Certain Definitions. For purposes of this Agreement, the
terms "beneficial owner," "beneficial ownership" and "beneficially own" shall
have the meaning ascribed to such terms by Rule 13d-1 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").

For purposes of this Agreement "Dispose" shall mean any offer,
sale, contract to sell, pledge, exchange, contract to exchange, assignment,
contract to assign or other disposition of or contract to dispose of, directly
or indirectly, including without limitation, through any call or put option or
other similar arrangement, of any shares of Capital Stock and "Disposition"
shall have a meaning correlative to the foregoing; provided, however, that the
terms "Dispose" and "Disposition" shall include any indirect Disposition that
results from an offer, sale, contract to sell, pledge, exchange, contract to
exchange, assignment, contract to assign or other disposition of or contract to
dispose of, directly or indirectly, including without limitation, through any
call or put option or other similar arrangement, of any equity or other
ownership interest in any Stockholder Affiliate, which indirect Disposition
results in a change of ownership as determined for federal income tax purposes
of all or a portion of the Capital Stock owned actually or constructively by the
Stockholder through the Stockholder's direct or indirect equity or other
ownership interest in such Stockholder Affiliate. Notwithstanding the foregoing,
for purposes of Section 4 of this Agreement the term "pledge" as used with
regard to Capital Stock shall not include, and nothing in Section 4 of this

10
<PAGE> 11
Agreement shall be deemed to prevent the Stockholder and the Stockholder
Affiliates from engaging in (in each case, with respect to the remaining shares
of Capital Stock owned by them after the Public Offering), (i) customary
margin-loan transactions with brokerage firms or other similar entities entered
into in the ordinary course of business, (ii) other bona fide customary
borrowing transactions with financial institutions entered into in the ordinary
course of business, and (iii) any other similar pledge of, or any put or call
option or other similar arrangement with respect to, such Capital Stock in
connection with a borrowing transaction or otherwise; provided, that in the case
of (iii), prior to engaging in such transaction, the relevant party shall
deliver to the Company a written opinion of Tax Counsel stating that the
proposed transaction should not be deemed, at the time of consummation or at any
time thereafter, to result in a change of ownership of the relevant Capital
Stock as determined for federal income tax purposes.

For purposes of this Agreement, a "Prohibited Person" shall
mean any person that the Stockholder, after reasonable inquiry, believes or has
reason to believe (i) is a "5-percent shareholder" (as defined under Section 382
of the Code, excluding for this purpose, a public group treated as a 5-percent
shareholder thereunder) with respect to the Company or (ii) as a result of the
relevant Disposition, will become such a "5-percent stockholder" with respect to
the Company; provided, that no Disposition otherwise permitted by the terms of
clauses a., b. or c. of Section 4 hereof shall be deemed to have been made to a
Prohibited Person if such Disposition is made pursuant to a bona fide brokers'
transactions (as such term is defined in Rule 144(g) under the Securities Act)
on the New York Stock Exchange.

18. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.

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<PAGE> 12
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth above.

TEREX CORPORATION

By: /s/ Marvin Rosenberg
------------------------------------------
Name: Marvin B. Rosenberg
Title: Senior Vice President

/s/ Randolph W. Lenz
---------------------------------------------
Randolph W. Lenz

ALASS INVESTMENT PARTNERS,
LTD.

By: Alass Corporation
its General Partner
By: /s/ Thomas S. Gallagher
------------------------------------------
Name: Thomas S. Gallagher
Title: Treasurer and Secretary

CORSTA CORPORATION

By: /s/ Thomas S. Gallagher
------------------------------------------
Name: Thomas S. Gallagher
Title: Secretary

ALASS CORPORATION

By: /s/ Thomas S. Gallagher
------------------------------------------
Name: Thomas S. Gallagher
Title: Treasurer and Secretary

FWD CORPORATION

By: /s/ Joseph L. Kaufmann
------------------------------------------
Name: Joseph L. Kaufmann
Title: Vice President of Finance
<PAGE> 13
CORSTA YACHT CHARTERS, INC.

By: /s/ Patricia B. Zuckerman
------------------------------------------
Name: Patricia B. Zuckerman
Title: Secretary

EQUITY FUNDING GROUP, L.C.

By: /s/ Thomas S. Gallagher
------------------------------------------
Name: Thomas S. Gallagher
Title: Manager

FIRST OUT CORPORATION

By: /s/ Thomas S. Gallagher
------------------------------------------
Name: Thomas S. Gallagher
Title: Vice President & Secretary

SAM LTD.

By: /s/ C. Lenz
------------------------------------------
Name: C. Lenz
Title: V. P.

<PAGE> 1

EXHIBIT 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our reports
dated March 6, 1997 appearing on pages F-2 and F-34 of Terex Corporation's
Annual Report on Form 10-K for the year ended December 31, 1996.

We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of Terex
Corporation of our report dated May 22, 1997 relating to the combined financial
statements of Simon Telelect, Inc. and subsidiaries, Simon Aerials Inc. and
subsidiaries, Simon-Cella, S.r.1, Sim-Tech Management Limited, Simon Aerials
Limited and Simon Tomen Engineering Company Limited ("Simon Access"), which
appears in the Current Report on Form 8-K/A of Terex Corporation dated May 22,
1997.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

PRICE WATERHOUSE LLP

Stamford, Connecticut

June 27, 1997

<PAGE> 1

EXHIBIT 23.3

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated August 22, 1995, with respect to the consolidated
statements of operations, shareholders' equity and cash flows for the year ended
December 31, 1994 of PPM Cranes, Inc. incorporated by reference in Amendment No.
1 to the Registration Statement (Form S-3) and related Prospectus of Terex
Corporation for the registration of 7,700,000 shares of its common stock, par
value $.01 per share.

ERNST & YOUNG LLP

Greenville, South Carolina

June 27, 1997

<PAGE> 1

EXHIBIT 23.4

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of Terex
Corporation of our report dated 30 January 1995 relating to the financial
statements of PPM of Australia Pty Ltd as at 31 December 1994. We also consent
to the reference to the Australian Firm of Price Waterhouse under the heading
"Experts" in the context as experts in accounting and auditing in such
Prospectus.

Price Waterhouse

Melbourne, Australia

27 June, 1997