COLUMBUS MCKINNON CORPORATION
EVA(R) INCENTIVE COMPENSATION PLAN
STATEMENT OF PURPOSE
1.1 The purpose of the Plan is to provide a system of incentive compensation, which will promote the
maximization of EVA over the long-term. In order to align associate incentives with shareholder and lender
interests, incentive compensation will reward the creation of value. This Plan will tie incentive compensation to
Economic Value Added ("EVA") and, thereby, reward for creating value and penalize for destroying value.
1.2 EVA is the performance measure of value creation for Columbus McKinnon Corporation. EVA reflects the
benefits and costs of capital employment. Associates create value when they use capital in an endeavor that
generates a return that exceeds the cost of the capital employed. Conversely value is destroyed when capital is
used in an endeavor that generates a return that is less than the cost of capital employed. By imputing the cost of
capital upon the operating profits generated by a business group, EVA measures the total value created (or
destroyed). The Plan will reward increases in EVA and penalize decreases over time.
EVA = NET OPERATING PROFIT AFTER TAX - CAPITAL CHARGE
1.3 Each Plan Participant is placed in a classification. Each classification has a prescribed target bonus. The
bonus acquired in any one year is the result of multiplying the Actual Bonus Percentage times the Participant's
total earnings as defined in the Plan and a positive balance is distributed each year through the payroll system.
DEFINITION OF EVA AND THE COMPONENTS OF EVA
Unless the context provides a different meaning, the following terms shall have the following meanings:
2.1 OPERATING GROUP means a group of business divisions that are uniquely identified for the purpose of
calculating EVA and EVA based bonus awards.
2.2 PARTICIPATING UNIT means a single division that is uniquely identified for the purpose of calculating
EVA and EVA based bonus awards.
2.3 CAPITAL means