Exhibit 10 (a)


The following Plan is to be  in effect for the calendar  year 1998.  It will  be
reviewed at the close of that year and will be continued, modified, or cancelled
with respect  to succeeding years solely  at the discretion of  the Stock Option
and Compensation Committee of the PORTEC, Inc. Board of Directors.

 1.  PARTICIPATION

   a.     The President & General  Manager and key management employees  of each
          division, employed as of January 1 of the year, will, upon recommenda-
          tion by the President & General Manager and subject to approval of the
          President  & Chief Executive  Officer of PORTEC,  Inc., participate in
          the plan for such  division.  Persons promoted or  employed subsequent
          to January  1 to fill  an eligible management position  vacancy may be
          included in  the division's  incentive compensation  program on  a pro
          rata basis, upon the  President & Chief Executive  Officer's approval.
          The  incentive compensation payable to such an employee shall be based
          on the number of calendar  months during the year the person  has held
          that  management position.  However, the inclusion of such an employee
          in the  program shall not  result in a  reduction of the  Total Target
          Bonus Fund, defined below, for the other participants.

   b.     "Individual Target  Bonus Levels" for  each eligible position  will be
          established  as a percentage of actual salary paid during the calendar
          year, or portion  of the years  determined by date  of entry into  the
          program, in  accordance with the  corporate standards relating  to the
          position of the participant (Exhibit A attached).  Exceptions to these
          standards require approval of the President & Chief Executive Officer.
          "Individual Maximum  Bonus Levels"  shall equal double  the Individual
          Target Bonus Levels.

 2.  DIVISION TARGET BONUS FUND

   a.     A "Total  Target Bonus Fund" will  be calculated for each  division by
          means  of  bonus formulas  such that  if  certain targets  for Pre-Tax
          Profit  and Working  Capital  to Sales  Objectives are  satisfactorily
          attained, an amount equal  to the sum  of the Individual Target  Bonus
          Levels for eligible management people in that division will accrue.

   b.     The minimum point below which no bonus fund will be developed relating
          to  the  Pre-Tax Profit  and Working  Capital  to Sales  Objectives is
          called  the "threshold"  which  will generally  be  established at  70
          percent of the target performance.  Below this level, no bonus will be
          paid.

   c.     The  "Total Maximum  Bonus Fund"  shall equal  twice the  Total Target
          Bonus  Fund and  will  generally be  established in  the range  of 130
          percent to 150 percent of the target performance.

   d.     The bonus fund (meaning the total actual bonuses paid) will be limited
          to 8 percent of Pre-Tax Profits, regardless of other calculations.

 3.  GENERAL PERFORMANCE OBJECTIVES

   a.     Shortly  after the  beginning  of each  year,  the President  &  Chief
          Executive  Officer will  consider  the approved  profit plan,  current
          backlog, and invested  capital of  each division   together with  such
          other  factors as  he  deems appropriate  to  set Pre-Tax  Profit  and
          Working  Capital to  Sales  Objectives for  each  Division subject  to
          approval  of the  Board of  Directors' Stock  Option and  Compensation
          Committee.    These  targets  will  normally   be  determined  at  the
          performance level set  by the  approved business plan  for that  year.
          However, the President & Chief Executive Officer may set targets which
          are  different  than profit  plan  performance  depending on  specific
          circumstances.

   b.     The  percentage  of such  Total Target  Bonus  Fund for  each division
          related to Pre-Tax Profit and Working Capital to Sales Objectives, and
          the objectives established for Pre-Tax Profits and  Working Capital to
          Sales are shown in Exhibit B.

 4.  INDIVIDUAL ALLOCATION AND ADJUSTMENT

   a.     Customary practice  will be to  distribute available  bonus funds  pro
          rata over the Target Bonus levels of participants.  However,  unless a
          participant is  actively at work  for the Company  on December 31,  or
          retires (within the meaning of  the Company's plan), becomes disabled,
          or  dies during the operating year, no incentive compensation shall be
          payable to him.  If any participant  shall retire, become disabled, or
          die  during the year, the incentive compensation for such year payable
          to him, his estate or designee, shall be based on the number of months
          during the year he was in the active employ of the Company.  Incentive
          compensation that would have been payable to participants had they re-
          mained in the employ of the Company during the full calendar year, but
          not payable to them under the foregoing
     provisions, shall not be used to increase the incentive compensation of the
     other participants.

   b.     Notwithstanding,  the  preceding  paragraph, the  President  & General
          Manager  can adjust  the bonus  level of  any participant,  other than
          himself by a  factor of 75 percent  to 125 percent  to reflect low  or
          high  personal performance during the  year.  The  President & General
          Manager's  bonus level  may be adjusted  in the same  manner as recom-
          mended and approved by the President & Chief Executive Officer.

     However,  such adjustments cannot increase  the Total Bonus  Fund as deter-
     mined in Paragraph  2 or  exceed a participant's  Individual Maximum  Bonus
     Level.   Available bonus funds will  then be distributed pro  rata over the
     bonus levels which exclude these adjustments.

   c.     The  adjustment recommendations  of each  President &  General Manager
          will be submitted to and will be subject  to the final approval of the
          President  & Chief Executive Officer  of PORTEC, Inc.  Recommendations
          as to the incentive compensation  to be paid to General  Managers will
          be made by the President & Chief Executive Officer.

 5.  PAYMENT

   a.     Payment  of incentive compensation for the year will not be made until
          after  the completion  of the  year-end Company  audit by  the outside
          Public Accountants.  Payment  should generally be made not  later than
          February 28 of  the next succeeding  year.   However, the President  &
          Chief Executive  Officer may elect  to pay 80% of  the estimated bonus
          amounts prior to December 31, with the remainder of the bonus  amounts
          paid after  the year-end  audit.   For  the  purpose of  pension  plan
          computations  and for  making  deductions for  withholding and  social
          security  taxes, incentive  compensation payments  will be  taken into
          account  in the year of payment.  Incentive compensation payments will
          not influence levels of group insurance coverage.

   b.     Total  bonus amounts payable for  each individual shall  be rounded to
          the nearest dollar.

 6.  ACCOUNTING PROCEDURES

   a.     PRE-TAX PROFIT:  This portion  of the bonus will be determined  by the
          relationship of actual Pre-Tax  Profit relative to the  Pre-Tax Profit
          target.  In the determination of Pre-Tax Profits,  standard accounting
          practices (as  shown below  and covered in  the Accounting  Procedures
          Manual of PORTEC,  Inc.) currently in  effect at PORTEC, Inc.  will be
          continued, including practices as  to depreciation charges, allocation
          of general office expense,  methods of inventory valuation, retirement
          fund provisions, divisional  charges, and other operating  procedures.
          Gains or losses  on the disposition of  fixed assets will be  excluded
          except  for  those  realized  in  the  ordinary  course  of  business.
          Incentive  compensation will  be included in  the calculation  of both
          target and actual Pre-Tax Profit.

   b.     WORKING CAPITAL  TO SALES (WC/S):   This portion of the  bonus will be
          determined  by the relationship of  the actual WC/S  ratio relative to
          the Plan ratio  for that year.   The  WC/S ratio for  this purpose  is
          defined as:

                                   Average (A/R + Inventory - A/P)
          Working Capital to Sales  =
                                             Gross Sales

          Where: A/R = Net Accounts Receivable Trade balance at month-end.

                 INVENTORY = Net Inventory balance at month-end.

                 A/P = Net Accounts Payable Trade & Unvouchered balance at
                      month-end.

                 GROSS SALES = Gross sales for the year.

          In the determination of these items,  standard accounting practices as
          shown in the current Accounting Procedures Manual of Portec, Inc. will
          be  continued.    Twelve   month-end  balances  for  (January  through
          December) A/R, A/P, and  Inventory will be averaged for  the numerator
          of the ratio.

 7.  ADJUSTMENTS TO THE PLAN

     a.   Changes of major significance not contemplated at the time the Pre-Tax
          Profit  Objectives  are determined  for a  division,  such as  but not
          limited to, acquisitions of products or businesses, major expenditures
          for  plant or equipment expansion or modernization, and disposition of
          assets or a product line may require a revision in  the Pre-Tax Profit
          Objectives for  a particular division.  In such cases, the President &
          Chief  Executive Officer  can  adjust the  Pre-Tax Profit  Objectives,
          subject to  the approval of the  Board of Directors' Stock  Option and
          Compensation  Committee, in order to establish a revised basis for the
          computation of incentive compensation.

     b.   In unusual circumstances,  it may not be possible to construct a bonus
          formula meeting all of these criteria to provide reasonable incentives
          for  division  management.   In  this  event,  the  President &  Chief
          Executive Officer  can seek approval  of an alternative  bonus formula
          from  the  Stock Option  and Compensation  Committee  of the  Board of
          Directors.

                                    EXHIBIT A

                              TARGET BONUS SCHEDULE




                                         TARGET BONUS
                    POSITION            AS % OF SALARY

               GENERAL MANAGER                    25%
               DIRECT REPORTS TO G.M. OF:

               MANUFACTURING,
               ACCOUNTING,
               SALES, AND
               ENGINEERING(1)                     20%


               ALL OTHER PARTICIPANTS             15%









NOTES:

(1)  ALSO INCLUDES PLANT MANAGERS OF MAJOR REMOTELY LOCATED MANUFACTURING
     FACILITIES.













                                    EXHIBIT A

                              TARGET BONUS SCHEDULE

                            MATERIALS HANDLING GROUP


                                         TARGET BONUS
                    POSITION            AS % OF SALARY

               VICE PRESIDENT &
               GENERAL MANAGER                    30%


               DIRECT REPORTS TO G.M. OF:

               MANUFACTURING,
               ACCOUNTING,
               SALES, AND
               ENGINEERING(1)                     20%


               ALL OTHER PARTICIPANTS             15%

               NOTES:

(1)  ALSO INCLUDES PLANT MANAGERS OF MAJOR REMOTELY LOCATED MANUFACTURING
     FACILITIES.











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                                                             EXHIBIT B

                                                 1998 BONUS PERFORMANCE OBJECTIVES




DIVISION:



              CATEGORY                              WEIGHT              THRESHOLD              TARGET              MAXIMUM


              PRE-TAX PROFITS                                          $                    $                    $


              WORKING CAPITAL
              TO SALES



     TOTAL                        100%


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                             DISTRIBUTED ONLY TO THE

                               APPLICABLE DIVISION