AMENDMENT NO. 1
TO
1996 TEREX CORPORATION
LONG-TERM INCENTIVE PLAN
WHEREAS, the Board of Directors of Terex Corporation (the
"Corporation") adopted the 1996 Terex Corporation Long-Term Incentive Plan (the
"Plan") on December 13, 1995, which Plan was ratified by the stockholders of the
Corporation on April 5, 1996;
WHEREAS, on May 8, 1997 the stockholders of the Corporation approved
(i) an amendment to Section 5.2 of the Plan to increase the shares of Common
Stock available from 300,000 shares to 1,000,000 shares and (ii) an amendment to
the Plan to permit the Committee to grant Performance Awards;
WHEREAS, on May 19, 1997 the Board of Directors of the Corporation
approved an amendment to the definition of the term "Change of Control of the
Corporation" as used in the Plan.
NOW, THEREFORE, the Plan is amended as follows:
1. The definition of "Change of Control of the Corporation" contained in
Section 2.1 of the Plan is amended in its entirety to read as follows:
"2.1 A "Change in Control of the Corporation" shall mean:
(i) the sale, assignment, lease, transfer or conveyance
(in one transaction or a series of transactions) of all or
substantially all of the Corporation's assets;
(ii) the Corporation shall be merged or consolidated
with another corporation, and as a result of such merger or
consolidation either (a) the Corporation is not the
continuing or surviving corporation or (b) less than 51% of
the outstanding voting securities of the surviving or
resulting corporation shall be owned in the aggregate by the
shareholders of the Corporation immediately prior to such
merger or consolidation;
(iii) the liquidation or dissolution of the Corporation
or the adoption of a plan by the stockholders of the
Corporation relating to the dissolution or liquidation of
the Corporation;
(iv) the acquisition by any person or group (as such
term is used in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended) of a direct or indirect majority in
interest (more than 50%) of the voting power of the Stock of
the Corporation by way of purchase, merger or consolidation
or otherwise, or
(v) during any period of two consecutive years,
individuals who at the beginning of such period constituted
the Board of Directors of the Corporation (which includes
any new directors whose election by such Board of Directors
or whose nomination for election by the stockholders of the
Corporation was approved by a vote of at least 66 2/3% of
the directors then still in office who were either directors
at the beginning of such period or whose election or
nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of
Directors of the Corporation.
For purposes of this Section 2.1, the term "person"
shall mean any individual, corporation, partnership, joint
venture, association, joint stock company, trust,
unincorporated organization, government or any agency or
political subdivision thereof, or any other entity.
For purposes of Section 2.1, the rules of Section
318(a) of the Code and the regulations issued thereunder
shall be used to determine stock ownership."
2. Section 5.2 of the Plan is amended in its entirety to read as follows:
"5.2 Maximum Amount Available. The total number of
shares of Stock (including Restricted Stock, if any)
optioned or granted under this Plan during the term of the
Plan shall not exceed 1,000,000 shares except as increased
or otherwise adjusted in accordance with Section 5.3. No
Participant may be granted, in the aggregate, awards which
would result in the Participant receiving more than 20% of
the maximum number of shares available for award under the
Plan. Solely for the purpose of computing the total number
of shares of Stock optioned or granted under this Plan,
there shall not be counted any shares which have been
forfeited if the Participant received no benefits of
ownership from the Stock and any shares covered by an option
which, prior to such computation, has terminated in
accordance with its terms or has been canceled by the
Participant or the Corporation."
3. ARTICLE VIII of the Plan is amended in its entirety to read as follows:
"ARTICLE VIII
Performance Awards
The Committee may grant, either alone or in addition to
other awards granted under the Plan, cash bonuses or other
awards, including Stock Options and Restricted Stock, based
on performance measures ("Performance Awards") to such
Participants as the Committee, or the Chairman, President,
Executive Vice President and Chief Financial Officer (acting
as a group) of the Corporation, if the Committee in its
discretion delegates the right to allocate awards pursuant
to Section 4, authorizes and under such terms as the
Committee establishes. With respect to certain Performance
Awards which the Committee intends to qualify for a tax
deduction ("Qualifying Performance Awards"), the Committee
shall establish targets only in terms of one or more of the
following objective measures: Common Stock price, earnings
per share, total shareholder return, return on investment,
cost control, working capital, cash flow management,
operating income, gross or operating margins, cash flow
margins, revenue growth, management development, succession
planning, earnings before interest and taxes, earnings
before interest, taxes, depreciation and amortization, net
income, market share, customer satisfaction or employee
satisfaction. If the Committee does not desire the
Performance Award to qualify for a tax deduction, the
measures of performance or other criteria for such
Performance Awards shall be established by the Committee in
its absolute discretion. Performance Awards, including
Qualifying Performance Awards, may be paid in cash, by grant
of Stock Options or Restricted Stock or any other form of
property as the Committee shall determine. Performance
Awards shall entitle the Participant to receive up to a
maximum of 100% of the Performance Award if the measures of
performance established by the Committee are met. The
Committee shall determine the times at which Performance
Awards are to be made and all conditions of such awards.
Performance Awards shall be subject to any applicable
federal, state or local withholding tax requirements. A
Participant may not receive more than three (3) Performance
Awards in a single pay period. The maximum amount of
Qualifying Performance Awards that may be granted to any
Participant with respect to each calendar year (whether or
not then vested) cannot exceed ten times the Participant's
annual salary. Qualifying Performance Awards shall be made
in a manner that satisfies Section 162(m) of the Internal
Revenue Code of 1986, as amended."
4. Except as expressly set forth in this Amendment No. 1 to the Plan, the Plan
shall remain unchanged and in full force and effect.