COLUMBUS MCKINNON CORPORATION
                            CORPORATE INCENTIVE PLAN
                                    JULY 2001


This INCENTIVE PLAN will focus only on PRETAX INCOME, as defined.

At the  beginning of each fiscal year the Columbus  McKinnon  Board of Directors
("Board") will establish a BUDGET TARGET PERCENTAGE defined as the percentage of
TARGET BONUS that will be paid if actual results equal budget for the quarter or
year.  The BUDGET  TARGET  PERCENTAGE  will be  established  by the Board at the
beginning of each year,  and it will be based on the Board's  judgment about the
budget, current and expected economic conditions, the financial condition of the
Company, and other pertinent factors.


PRETAX INCOME
-------------
     PRETAX  INCOME  will  be  consolidated   pretax  income  as  shown  in  the
     periodically  published  financial  statements  of the  Company,  with  the
     following adjustments, which will be made at the discretion of the Board:

     o   The effects  of acquisitions and divestitures,  significant  changes in
         accounting rules, and other significant  abnormal  transactions  during
         the year will be adjusted appropriately so that ACTUAL PRETAX INCOME is
         on a basis equivalent to BUDGETED PRETAX INCOME for that year.

     o   Both BUDGETED PRETAX INCOME  and ACTUAL PRETAX INCOME  will exclude any
         BONUS expense.


BONUS FLOOR
-----------
     In no event will any BONUS be paid if ACTUAL  PRETAX  INCOME  equals 75% or
     less of BUDGETED PRETAX INCOME.


PARTICIPANTS
------------
     Board  designated CM  associates,  except Sales  Directors,  Regional Sales
     Managers,  and  District  Sales  Managers  (covered  by a separate  revenue
     quota-based plan), will participate in the INCENTIVE PLAN.


BASE PAY
--------
     BASE PAY used for the annual calculation is defined as compensation  earned
     during the calendar year that ends within the fiscal year,  but it excludes
     bonuses, severance pay, tuition reimbursement, restricted stock bonuses and
     interest,  dividends  and in  lieu of  dividend  payments,  moving  expense
     reimbursement,  and service and recognition  awards.  BASE PAY used for the
     interim quarterly payments will be compensation  earned during the PREVIOUS
     fiscal quarter, with the same exclusions.


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BONUS PAYMENTS
--------------
     BONUS  payments  will be made based upon each  PARTICIPANT'S  PARTICIPATION
     PERCENTAGE, as assigned.

     For ACTUAL PRETAX INCOME above the BONUS FLOOR,  BONUSES will be calculated
     by multiplying BASE PAY times the PARTICIPATION  PERCENTAGE and again times
     a factor,  which is the  Board-assigned  annual BUDGETED TARGET  PERCENTAGE
     plus or minus two times the  percentage  difference  between  ACTUAL PRETAX
     INCOME and BUDGETED PRETAX INCOME for the quarter or year.

     For fiscal 2002,  quarterly  payments will not be made; one payment,  based
     upon the results for the full fiscal year ending  March 31,  2002,  will be
     made within two-and-one-half months after the end of this fiscal year.

     Beginning with fiscal 2003, for the first three fiscal quarters, 75% of the
     BONUSES  calculated  based upon quarterly ACTUAL and BUDGETED PRETAX INCOME
     will be paid within two months after the end of each  quarter.  At year-end
     following  the annual  audit,  the full year  amount,  reduced by  previous
     quarterly payments,  will be paid out within  two-and-one-half months after
     the end of each fiscal year.


VESTING
-------
     A  PARTICIPANT  who has BASE PAY AND is in the  employ of CM on a date four
     weeks after the end of the fiscal quarter or fiscal year  ("VESTING  DATE")
     will be eligible  for a BONUS  payment.  PARTICIPANTS  who have  terminated
     prior to the VESTING DATE either  voluntarily or with or without cause will
     not be eligible for a BONUS payment.  PARTICIPANTS who have died,  retired,
     are  receiving  short-term  disability  benefits or  workers'  compensation
     benefits,  or are on lay-off  subject to recall as of the VESTING DATE will
     be eligible for a BONUS payment.

TRANSFERS
---------
     PARTICIPANTS who transfer during a year from one  PARTICIPATION  PERCENTAGE
     to another will participate at the new PARTICIPATION  PERCENTAGE  beginning
     the first day of the next fiscal quarter.


















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                         COLUMBUS MCKINNON CORPORATION
                            INCENTIVE PLAN ADDENDUM
                                   JULY 2001



This INCENTIVE  PLAN ADDENDUM will focus on DEBT REPAYMENT  only, and it will be
in place for only Fiscal 2002.

At the beginning of Fiscal 2002, the CM Board of Directors  established a TARGET
DEBT REPAYMENT amount -- $50 MILLION.  An ADDENDUM BONUS will be paid for ACTUAL
DEBT REPAYMENT in excess of that TARGET DEBT REPAYMENT.


DEBT REPAYMENT
--------------
     DEBT REPAYMENT will be calculated as the reduction in  consolidated  funded
     debt as shown in the published  financial  statements of the Company,  with
     the following adjustments:

     o   The  effects of  acquisitions,   divestitures,  and  other  significant
         transactions  outside the ordinary  course of business  during the year
         will be excluded from the calculation.


BONUS FLOOR
-----------
     If ACTUAL DEBT REPAYMENT falls below the TARGET DEBT REPAYMENT, no ADDENDUM
     BONUS will be paid, and no BONUS reduction will be assessed.


PARTICIPANTS
------------
     Only members of the Executive  Committee  and the  Operating  Group Leaders
     will participate in this INCENTIVE PLAN ADDENDUM.


BASE PAY, VESTING, AND TRANSFERS
--------------------------------
     These terms will be defined as they are in the INCENTIVE PLAN.


ADDENDUM BONUS PAYMENTS
-----------------------
     An ADDENDUM  BONUS will be calculated by multiplying  one percentage  point
     per $1 million of the excess of ACTUAL  DEBT  REPAYMENT  over  TARGET  DEBT
     REPAYMENT times BASE PAY times the PARTICIPATION PERCENTAGE.

     The ADDENDUM  BONUS will be calculated  and paid based upon the results for
     the fiscal year only; no quarterly  calculations  or payments will be made.
     Payment  will be made  after the  year-end  audit  within  two and one half
     months after the end of the fiscal year.