TEREX CORP
EXH 10-5 OPTION AGMNT UNDER 2000 INCNTV PLAN
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<TYPE>EX-10
<SEQUENCE>6
<FILENAME>exh10-5.txt
<DESCRIPTION>EXH 10-5 OPTION AGMNT UNDER 2000 INCNTV PLAN
<TEXT>

                                     FORM OF

                                OPTION AGREEMENT

                                    UNDER THE

                                TEREX CORPORATION

                               2000 INCENTIVE PLAN

     Agreement,  made as of the [DATE]  between  TEREX  CORPORATION,  a Delaware
corporation, having an office at 500 Post Road East, Westport, Connecticut 06880
(hereinafter called the "Corporation") and [OPTIONEE NAME] (the "Participant").

                              W I T N E S S E T H:

     The Corporation  hereby grants to the Participant as of [GRANT DATE] ("Date
of  Grant")  options  to  purchase  [#####]  shares of the  common  stock of the
Corporation  of the par value of $.01 per  share at  $[STRIKE  PRICE]  per share
subject to the following terms and conditions:

     1.  Forfeitures  and Vesting.  Options are not  exercisable  until  vested.
Options shall vest in accordance with the following schedule:

                    Anniversary of
                     Date of Grant                  Participant is vested in:
                     ----------------               -------------------------
                         1st                              25% of the options
                         2nd                              50% of the options
                         3rd                              75% of the options
                         4th                             100% of the options

     When the  Participant  terminates  employment  with the Corporation and its
subsidiaries and affiliates,  all non-vested options shall be forfeited,  except
in the case of the  Participant's  death or  Disability.  An  individual  who is
employed by a subsidiary or affiliate of the Corporation shall be deemed to have
ceased  employment with the  Corporation at such time as the  Corporation  owns,
either directly or indirectly,  less than 50% of the total combined voting power
of all  classes  of stock  entitled  to vote of such  subsidiary  or  affiliate.
Non-vested  options  which have not been  forfeited as provided for in the first
sentence of this paragraph shall become fully vested at the earliest to occur of
(i) the date set forth in the vesting  schedule  above,  (ii) the  Participant's
death or Disability,  and (iii) a Change in the Control of the Corporation.  The
options shall expire on [OPTION EXPIRATION DATE].


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     2. Exercise of Options.  Vested  options shall only be  exercisable  by the
Participant  while the Participant is in active  employment with the Corporation
or a subsidiary or affiliate of the Corporation,  except that vested options may
be exercisable (i) in the case of the Participant's death or Disability,  during
a  twelve-month  period  following  such  death  or  Disability,  (ii)  during a
six-month  period  commencing on the date of the  Participant's  termination  of
employment by the Corporation, and (iii) during the three-year period commencing
on the date of a Change  in  Control  of the  Corporation.  In no event  may the
options be exercised after the expiration date of the options.

     3. Transfer  Restrictions.  The options are not transferable except that in
the event of the Participant's  death,  options may be exercised by the executor
or administrator of the Participant's  estate or the  Participant's  distributee
until the options expire in accordance with paragraphs 1 and 2 hereof.

     4.  Payment on Exercise of Option.  Vested  options may be exercised at the
office of the Corporation in Westport, Connecticut (or at such other location as
determined by the Committee) with respect to a part or all of the shares covered
by such options. The option price for the shares for which options are exercised
shall  be paid on the date of  exercise  in cash or by  certified  check or bank
check,  or on such other terms as the Committee  determines.  For information on
other available terms, contact the Human Resources Department.  The value of any
share of common  stock  delivered  in payment of the option  price  shall be its
Market Price at the time the option is exercised.

     5.  Issuance of Shares.  Upon the  exercise of an option with  respect to a
part or all of the shares in the manner and within the time herein provided, the
Corporation  shall issue and deliver to the  Participant the number of shares of
its common stock with respect to which the option was exercised.

     6. Plan.  These options are either  incentive stock options or nonqualified
stock options awarded pursuant to the Terex Corporation 2000 Incentive Plan (the
"Plan") and are subject to all of the terms and  conditions of said Plan,  which
is hereby incorporated  herein by reference.  All capitalized terms used but not
defined in this  Agreement  shall have the  meanings  given to such terms in the
Plan.

     7.  Withholding  Taxes.  In order to  enable  the  Corporation  to meet any
applicable U.S. federal,  state or local withholding tax requirements arising as
a result of the exercise of an option,  a Participant  shall pay the Corporation
the amount of tax to be withheld.

     8. Employment. Participation in the Plan shall not affect the Corporation's
right to discharge a  Participant  or  constitute  an  agreement  of  employment
between the Participant and the Corporation.

     9.  Governing Law. This  Agreement  shall be  interpreted  and construed in
accordance with the laws of the State of Delaware.

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     IN WITNESS  WHEREOF,  the parties hereto have caused this instrument to be
executed as of the day and year first hereinabove written.


                                              TEREX CORPORATION



                                     By:      _______________________________
                                              [CORPORATE OFFICER]

                                              _______________________________

                                              [OPTIONEE NAME]



Address:  _________________________________________

Social Security No.: ______________________________




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