EXHIBIT 10(a)

CRANE CO. CORPORATE
EVA INCENTIVE COMPENSATION PLAN

As Amended & Restated Effective January 1, 2002

1. 

Purpose.

            In 1988, Crane Co., a Delaware corporation (the “Company”),
initially adopted an annual incentive compensation program based on the
principles of Economic Value Added.  The purpose of this approach is to maximize
shareholder value by aligning management’s interests with those of the Company’s
shareholders and rewarding management for sustainable and continuous improvement
in the business being managed.  The Board of Directors of the Company (the
“Board”) approved certain amendments to the Plan effective January 1, 2002 for
the corporate office participants in order to more closely align the EVA
calculations under the Plan with the financial results reported to shareholders
and to achieve greater transparency to the participants in the financial
calculations required under the Plan.  This is an amendment and restatement of
the Plan effective January 1, 2002 for the corporate office participants.  For
all periods prior to January 1, 2002, the provisions of the Plan as in effect
prior to this restatement shall govern. 

2. 

Definitions.

            For purposes of this Plan, the following capitalized terms shall
have the respective meanings set forth below:

                    (a)  “Annual Payout” means an annual cash payment to a
Participant determined in accordance with Section 7 and includes the payment of
shares of restricted stock for Plan Year 2002 as set forth in Section 7(a).

                    (b)  “Average Capital Employed” means, for any Plan Year,
the weighted average monthly operating capital for the year, but without
deducting any reserves for asbestos-related claims, as determined by the Company
following the close of the Plan Year.

                    (c)   “Bank Account” means a bookkeeping account established
for each Participant.

                    (d)   “Board” shall have the meaning given to such term in
Section 1.

                    (e)   “Bonus Pool” means each of the bonus pools established
in accordance with Section 5.

                    (f)   “Company” shall have the meaning given to such term in
Section 1.

                    (g)   “Committee” means the Management Organization and
Compensation Committee of the Board.

                    (h)   “Cost of Capital” means, for any Plan Year, the
weighted average cost of equity and the after-tax cost of debt.  The cost of
equity and the after-tax cost of debt shall be fixed by the Committee prior to
the beginning of the Plan Year and the weighted average monthly Cost of Capital
shall be determined by the Committee following the close of the Plan Year.

                    (i)   “EVA” means, for any Plan Year, the Return on Capital
less the Cost of Capital, multiplied by the Average Capital Employed.

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                    (j)   “EVA Award” means each Participant’s individual award
amount for a Plan Year as determined in accordance with Section 6.

                    (k)   “NOPAT” means net operating profit after tax for the
Plan Year as set forth in the Company’s audited financial statements plus the
after-tax amount of expenses for asbestos-related claims against the Company and
its subsidiaries during such Plan Year.

                    (l)    “Participants” means the individuals designated by
the Committee in accordance with Section 4 as eligible to participate in the
Plan.

                    (m)    “Participation Percentage” means the Bonus Pool
percentage established for each Participant in accordance with Section 6.  The
aggregate Participation Percentages of all Participants for a Plan Year shall
not exceed 100%.

                    (n)    “Plan Year” means each calendar year during the term
of this Plan.

                    (o)    “Return on Capital” means, for any Plan Year, NOPAT
divided by Average Capital Employed.

                    (p)    “Target Bonus” means a target bonus for each
Participant, stated as a percentage of the Participant’s base annual salary for
the Plan Year, established by the Committee in accordance with Section 4.

3. 

Administration.

            The Plan will be administered by the Committee.  The Committee’s
decisions in the administration of the Plan shall be final and binding on all
parties.  The Committee shall have the sole discretionary authority to interpret
the Plan, to establish and modify administrative rules for the Plan, to
designate the employees eligible to participate in the Plan, to establish and
adjust any EVA formula or calculation as provided in Sections 4, 5 and 6, to
impose such conditions and restrictions on awards under the Plan as it
determines appropriate, and to take such steps in connection with the Plan and
awards made under the Plan as it may deem necessary or advisable. 
Notwithstanding the foregoing, the Committee may, in its discretion, delegate
any or all of its powers and duties hereunder to the Company’s Chief Executive
Officer, provided that, with respect to the participation hereunder by the Chief
Executive Officer and any other officers of the Company whose compensation is
subject to the deduction limitation set forth in Section 162(m) of the Internal
Revenue Code, all such powers and duties shall remain with the Committee to the
extent necessary to ensure, to the extent practicable, that amounts payable
under this Plan qualify as “performance-based compensation” under Section
162(m)(4)(C) of the Internal Revenue Code and the regulations thereunder.

            The Committee may employ attorneys, consultants, accountants or
other persons and the Committee and the Company and its officers and directors
shall be entitled to rely upon the advice, opinions or valuations of any such
persons.  All usual and reasonable expenses of the Committee shall be paid by
the Company.  No Committee member shall receive compensation with respect to his
or her services for the Committee except as may be authorized by the Board.  All
actions taken and all interpretations and determinations made by the Committee
in good faith shall be final and binding upon all employees who have received
awards, the Company and all other interested persons.  No member of the
Committee shall be personally liable for any action, determination or
interpretation taken or made in good faith with respect to this Plan or awards
made hereunder, and all members of the Committee shall be fully indemnified and
protected by the Company in respect of any such action, determination or
interpretation.

4.

Eligibility.

            The persons who shall participate in this Plan shall be such
officers and other key employees of the Company as may be designated as
Participants by the Company’s Chief Executive Officer.  Not later

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than the end of the first month of each Plan Year, the Committee shall fix a
Participation Percentage and a Target Bonus for each Participant, provided that
the Participation Percentage and Target Bonus for a Participant who becomes a
Participant during the Plan Year shall be fixed at the time such participation
commences.

5.

Calculation of EVA and Determination of Bonus Pool.

            As soon as practicable following the close of each Plan Year, the
Company shall determine, subject to review and approval by the Committee, the
EVA for such Plan Year upon which the Bonus Pool calculation shall be based. 

            For each Plan Year, a Bonus Pool shall be established by applying a
formula to the EVA for the Plan Year.  Such formula shall utilize both a
percentage of the change in the EVA of the Company from the prior Plan Year,
whether positive or negative, plus a percentage of the positive EVA, if any, in
the current Plan Year.  Unless and until revised by the Committee, the Bonus
Pool for the Company shall be determined as follows:

If Prior Year EVA was:
 

The Current Plan Year EVA Formula is:

 

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Positive
 

10% of the change in EVA (positive or negative) from prior Plan Year plus 6% of
any positive EVA in current Plan Year

 

 
 

 

 

Negative
 

15% of the change in EVA (positive or negative) from prior Plan Year

 

6.

Determination of Participant EVA Awards.

            Each Participant’s EVA Award for a Plan Year shall be equal to the
Bonus Pool for such Plan Year multiplied by such Participant’s Participation
Percentage.  The Chief Executive Officer will retain discretion to revise a
Participant’s Participation Percentage if the Chief Executive Officer deems it
appropriate as circumstances develop during the Plan Year; provided, however, in
the case of an executive officer who is subject to the limitations of Section
162(m) of the Internal Revenue Code, such revision may be made only by the
Committee and may only have a negative effect on the amount of such
Participant’s EVA Award for the Plan Year.  As soon as practicable after the end
of the Plan Year, the Committee will review and adopt a resolution approving the
calculation of EVA, the Bonus Pool and the EVA Award for each Participant
pursuant to the formula established at the beginning of the year (revised
downward if the Committee so determines); provided, however, that no EVA Award
with respect to any executive officer who is subject to the limitations of
Section 162(m) of the Internal Revenue Code may exceed $3,000,000 for any
particular Plan Year.

7. 

Annual Payouts and Allocations to Participants’ Bank Accounts.

            (a)   Annual Payout for 2002. For Plan Year 2002, as soon as
practicable after each Participant’s EVA Award for such Plan Year has been
determined, the EVA Award shall be credited or debited to the Participant’s Bank
Account, and the Participant will receive an Annual Payout, in the form of a
lump sum cash payment, in an amount equal to the greater of (i) one-third of the
Participant’s Bank Account following such credit or debit or (ii) 75% of the
Participant’s Target Bonus for the Plan Year multiplied by a fraction, the
numerator of which is the Company’s operating profit for the Plan Year as set
forth in the Company’s audited financial statements (excluding charges for
asbestos claims) and the denominator of which is $168 million.  Any balance
remaining in a Participant’s Bank Account after the cash payment described in
the immediately preceding sentence is made shall be immediately distributable to
such Participant in the form of a number of shares of restricted Company Common
Stock having a fair market value as of the date of grant (as determined by the
Committee) equal to such remaining Bank Account balance.  Such restricted stock
shall be granted pursuant to, and subject to the terms and conditions of, the
Crane Co. 2001 Stock Incentive Plan and shall vest in substantially equal
installments

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on the first, second and third anniversaries of the date of grant.  Additional
provisions applicable to such restricted shares are set forth in Section 8
below.

            (b)   Annual Payout after 2002.  For each Plan Year after 2002, as
soon as practicable after each Participant’s EVA Award for such Plan Year has
been determined, each Participant shall receive an Annual Payout equal to the
lesser of (i) the total amount of such EVA Award or (ii) the Participant’s
Target Bonus.  If a Participant’s EVA Award exceeds such Target Bonus amount for
that Plan Year, the excess shall be credited to the Participant’s Bank Account
and there shall be added to the Annual Payout described in the immediately
preceding sentence an amount equal to one-third (1/3) of the amount in the
Participant’s Bank Account following such credit.  If a Participant’s EVA Award
is less than the Target Bonus amount for that Plan Year, the Participant shall
receive an additional amount from the Participant’s Bank Account until the total
amount received, including the EVA Award, equals the Target Bonus, and if there
is any remaining amount in the Participant’s Bank Account after such payment,
the Participant shall receive one-third of such remaining amount.  All Annual
Payouts shall be paid in a lump sum as soon as practicable after the Annual
Payout amounts are determined by the Committee. 

            (c)   Bank Account.  Following payment of the Annual Payout as
described above, the remainder of the Bank Account balance will represent the
Participant’s “equity” in his or her EVA Bank Account for future years. 
Interest shall be credited to the undistributed positive amount credited to each
Participant’s Bank Account at the rate of 6% per annum.

8.

Treatment of Participants’ Bank Accounts Upon Termination of Employment or Other
Events.

 

If a Participant leaves the Company by reason of termination or resignation or
ceases to be eligible to participate in the Plan, his or her Bank Account
balance will be treated as follows:

EVENT
 

DISPOSITION OF ACCOUNT BALANCE/RESTRICTED SHARES

 

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Terminate/quit
 

Lose Bank Account balance; forfeit unvested restricted shares

 

Removed from plan/demotion
 

Bank Account balance paid out in two equal installments on the two succeeding
Annual Payout dates; restricted shares continue to vest

 

Unit sold by Crane Co.
 

Receive Bank Account balance in cash; all restricted shares become fully vested

 

Normal retirement at age 65/death/disability
 

Receive Bank Account balance in cash; all restricted shares become fully vested

 

Unit spun off
 

No payout; Bank Account balance continued with spun off company; all restricted
shares become fully vested

 

Crane Co. acquired
 

Receive Bank Account balance in cash; all restricted shares become fully vested

 

Transfer to another business unit
 

Bank Account balance transfers with Participant to new unit; restricted shares
continue to vest

 

9. 

Miscellaneous.

            (a)   Plan Amendment and Termination.  The Board may modify, suspend
or terminate the Plan at any time.

            (b)   Effect of Award on Other Employee Benefits.  By acceptance of
participation in this Plan, each Participant agrees that his or her EVA Award is
special additional compensation and that it will not affect any employee
benefit, e.g., life insurance, etc., in which the recipient participates, except
that

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Annual Payouts made under this Plan shall be included in the employee’s
compensation for purposes of the Company’s qualified and nonqualified retirement
and savings plan.

            (c)   Right to Continued Employment; Additional Awards. The receipt
of an EVA Award shall not give the Participant any right to continued
employment, and the right and power to dismiss any Participant from his or her
employment is specifically reserved to the Company. In addition, the receipt of
an EVA Award with respect to any Plan Year shall not entitle the recipient to an
EVA Award with respect to any subsequent Plan Year.

            (d)   Adjustments to Performance Goals. When a performance goal is
based on EVA or other quantifiable financial or accounting measure, it may be
necessary to exclude significant non-budgeted or non-controllable gains or
losses from actual financial results in order to properly measure performance.
The Committee will decide those items that shall be considered in adjusting
actual results.

            (e)   Withholding Taxes. The Company shall have the right to deduct
from all payments under this Plan any Federal, state or local taxes required by
law to be withheld with respect to such payments.

            (f)   Governing Law. This Plan shall be construed in accordance with
and governed by the laws of the State of Delaware, other than the conflict of
law provisions thereof.