Exhibit 10.5
(GARDNER DENVER LOGO) [c24156c2415600.gif]
Gardner Denver, Inc.
Nonemployee Director Stock Option Agreement

 
RECIPIENT:
  SHARES:   PURCHASE   GRANT   EXPIRATION
 
      PRICE:   DATE:   DATE:

This Agreement is made between Gardner Denver, Inc., a Delaware corporation,
having its principal executive office in Quincy, Illinois (the “Company”), and
the undersigned, a nonemployee director of the Company (the “Director”).
The parties have agreed as follows:

1.   Pursuant to the Gardner Denver, Inc. Long-Term Incentive Plan, as amended,
(the “Plan”), the Company grants to the Director a nonstatutory option to
purchase the number of shares of the Company’s common stock, par value $0.01 per
share (the “Shares”), specified above, at the price specified above, subject to
the following conditions:

  (a)   Subject to Sections 2 and 6, the option rights are fully exercisable on
the first anniversary of the date of grant of this option (the “Grant Date”).  
  (b)   During the lifetime of the Director, the option rights are exercisable
only by the Director or the Director’s legal representative.     (c)   The
option rights shall expire at the Expiration Date specified above, or at such
earlier time as may be provided by Sections 2 or by cash payments made in
cancellation pursuant to Section 6, and such option rights shall not be
exercisable after such expiration.

2.   If the Director shall cease to serve as a director of the Company by reason
of retirement in accordance with any retirement plan or policy of the Company
then in effect or by reason of disability during service as a director, option
rights not otherwise fully exercisable at the time of such retirement or
cessation of service as a director due to disability shall become fully
exercisable upon such retirement or cessation of service, and such option rights
shall be exercisable for five years following such retirement or cessation of
service (but not after the Expiration Date). If the Director shall die during
service as a director or shall die within the five-year period during which the
option rights may be exercised following retirement or disability, option rights
not otherwise fully exercisable at the time of the death of the Director shall
become fully exercisable upon such death, and such option rights shall be
exercisable for one year following such death (but not after the Expiration
Date). If after the expiration of one year from the Grant Date, the Director
shall cease to serve as a director of the Company for any reason other than
death, disability or retirement, the option rights shall continue to be
exercisable for a period of 90 days after such cessation of service (but not
after the Expiration Date).   3.   This option may be exercised by delivering to
the Company at its principal executive office (directed to the attention of the
Corporate Secretary) a written notice, signed by the Director or a person
entitled to exercise the option by will or the laws of descent and distribution,
as the case may be, of the election to exercise the option and stating the
number of Shares in respect of which it is then being exercised. The option
shall be deemed exercised as of the date the Company receives such notice. As an
essential part of such notice, it shall be accompanied by payment of the full
purchase price of the Shares then being purchased. In the event the option shall
be exercised by any person other than the Director, such notice shall be
accompanied by appropriate evidence of the right of such person to exercise the
option. Payment of the full purchase price may be made in (a) cash, (b) Shares,
or (c) any combination of cash and Shares, provided that any Shares used by the
Director in payment of the purchase price must have been held by the Director
for a period of more than six months, and provided further that the Company
reserves the right to prohibit the use of Shares as payment of the purchase
price. Shares used in payment of the purchase price shall be valued at the
market close price of such Shares on the composite tape of the New York Stock
Exchange or as reported in the consolidated transaction reporting system for the
date of exercise. Upon the proper exercise of the option, the Company shall
issue in the name of the person exercising the option, and deliver to such
person, a certificate or certificates for the Shares purchased, or shall
otherwise properly evidence the purchase of such Shares in the Company’s stock
records. The Director shall have no rights as a stockholder in respect of any
Shares as to which the option shall not have been effectively exercised as
provided in this Agreement.   4.   This option shall not be exercisable if such
exercise would violate (a) any applicable requirement under the Securities Act
of 1933, as amended (the “Act”), the Securities Exchange Act of 1934, as
amended, or the listing requirements of any stock exchange; (b) any applicable
state securities law; or (c) any other applicable legal requirement.

--------------------------------------------------------------------------------

 

    Furthermore, if a registration statement with respect to the Shares to be
issued upon the exercise of this option is not in effect or if counsel for the
Company deems it necessary or desirable in order to avoid possible violation of
the Act, the Company may require, as a condition to its issuance of the Shares,
the delivery to the Company of a commitment in writing by the person exercising
the option that at the time of such exercise it is the person’s intention to
acquire such Shares for the person’s own account for investment only and not
with a view to, or for resale in connection with, the distribution of such
Shares, that such person understands that the Shares may be “restricted
securities” as defined in Rule 144 issued under the Act, and that any resale,
transfer or other disposition of the Shares will be accomplished only in
compliance with Rule 144, the Act, or other or subsequent applicable rules and
regulations under the Act. The Company may place on the certificates evidencing
such Shares an appropriate legend reflecting such commitment and the Company may
refuse to permit transfer of such Shares until it has been furnished evidence
satisfactory to it that no violation of the Act or the applicable rules and
regulations would be involved in such transfer.   5.   This option may not be
assigned, encumbered or transferred except, in the event of the death of a
Participant by will or by the laws of descent and distribution. The Employee
shall have the right, subject to the provisions of this Section 5, to transfer
all or any portion of the option granted under this Agreement (or an amendment
thereto), for estate planning purposes, to (a) the Employee’s spouse, children,
grandchildren, parents, siblings, stepchildren, stepgrandchildren or in-laws
(“Family Members”), (b) entities that are exclusively family-related, including
trusts for the exclusive benefit of Family Members and limited partnerships or
limited liability companies in which Family Members are the only partners or
members, or (c) such other persons or entities specifically approved by the
Committee of the Board of Directors that administers the Plan (the “Committee”).
The terms and conditions applicable to the transfer of any such stock options or
portion of an option transferred by the Employee shall be established by the
Committee, in its discretion but in accordance with this Section 5 shall remain
subject to the same terms and conditions as were applicable immediately prior to
the transfer, including those provisions regarding exercisability of the option
following the cessation of employment of the Employee by the Company and the
death of the Employee, except that no transferee may further transfer an option
or portion of an option transferred by the Employee in accordance with this
Section 5, other than by will or the laws of descent and distribution. In order
to effect a transfer in accordance with this Section 5, the Employee shall
deliver to the Company (in the manner set forth in Section 4) a Notice of
Transfer of Option substantially in the form attached to this Agreement.   6.  
If (i) the Company is to be merged into or consolidated with one or more
corporations and the Company is not to be the surviving corporation, (ii) the
Company is to be dissolved and liquidated, (iii) substantially all the assets
and business of the Company are to be sold, or (iv) there occurs a “change of
control” of the Company, then the option rights not otherwise exercisable shall
become fully exercisable. In the case of a change of control, (i) the Company
shall make payment in cash to the Director in an amount equal to the
appreciation in the value of the option from the purchase price specified in
this Agreement to the “change of control price”; (ii) such cash payment shall be
due and payable, and shall be paid by the Company, immediately upon the
occurrence of the change of control; and (iii) after such payment, the Director
shall have no further rights under this Agreement with respect to option rights
outstanding at the time of the change of control. For purposes of this
Agreement, a “change of control” and the “change of control price” shall be as
defined in Section 2 of the Plan.   7.   The committee of the Board of Directors
that administers the Plan (the “Committee”) shall have authority, subject to the
express provisions of the Plan, to construe this Agreement and the Plan, to
establish, amend and rescind rules and regulations relating to the Plan, and to
make all other determinations in the judgment of the Committee necessary or
desirable for the administration of the Plan. The Committee may correct any
defect or supply any omission or reconcile any inconsistency in the Plan or in
this Agreement in the manner and to the extent it shall deem expedient to carry
the Plan into effect. All action by the Committee under the provisions of this
paragraph shall be conclusive for all purposes.   8.   The Company and Employee
agree that any claim, dispute or controversy arising under or in connection with
this Agreement (including, without limitation, any such claim, dispute or
controversy arising under any federal, state or local statute, regulation or
ordinance or any of the Company’s employee benefit plans, policies or programs)
shall be resolved solely and exclusively by binding arbitration. The arbitration
shall be held in the city of St. Louis (or at such other location as shall be
mutually agreed by the parties). The arbitration shall be conducted in
accordance with the Expedited Employment Arbitration Rules (the “Rules”) of the
American Arbitration Association (the “AAA”) in effect at the time of the
arbitration, except that the arbitrator shall be selected by alternatively
striking from a list of five arbitrators supplied by the AAA. All fees and
expenses of the arbitration, including a transcript if either requests, shall be
borne equally by the parties. If Employee prevails as to any material issue
presented to the arbitrator, the entire cost of such proceedings (including,
without limitation, Employee’s reasonable attorneys’ fees) shall be borne by the
Company. If Employee does not prevail as to any material issue, each party will
pay for the fees and expenses of its own attorneys, experts, witnesses, and
preparation and presentation of proofs and post-hearing briefs (unless the party
prevails on a claim for which attorney’s fees are recoverable under the Rules).
Any action to enforce or vacate the arbitrator’s award shall be governed by the
Federal Arbitration Act, if applicable, and otherwise by applicable state law.
If either the Company or Employee pursues any claim, dispute or controversy
against the other in a proceeding other than the arbitration provided for
herein, the responding party shall be entitled to dismissal or injunctive relief
regarding such action and recovery of all costs, losses and attorney’s fees
related to such action. Notwithstanding the provisions of this paragraph, either
party may seek injunctive relief in a court of competent jurisdiction, whether
or not the case is then pending before the panel of arbitrators. Following the
court’s determination of the injunction issue, the case shall continue in
arbitration as provided herein.

--------------------------------------------------------------------------------

 

9.   If a Change of Control occurs during the term of this Agreement, any stock
option which is not exercisable in full shall be entitled, in lieu of the
exercise of the portion of the stock option which is not exercisable, to obtain
a cash payment in an amount equal to the difference between the option price of
such stock option to be determined pursuant to Section 21 of the Plan..   10.  
The Director agrees to notify the Company promptly of the disposition, whether
by sale, exchange or otherwise, of any Shares acquired pursuant to the exercise
of this option if such disposition occurs within one year from the acquisition
of the Shares. Such notice shall state the date and manner of disposition and
the proceeds, if any, received by the Director.   11.   This Agreement and the
option granted under this Agreement shall be subject to all of the provisions of
the Plan as are in effect from time to time, which provisions of the Plan shall
govern if there is any inconsistency between this Agreement and the Plan.   12.
  The community interest, if any, of any spouse of the Employee in any of the
Options shall be subject to all of the terms, conditions and restrictions of
this Agreement and the Plan, and shall be forfeited and surrendered to the
Company upon the occurrence of any of the events requiring the Employee’s
interest in such Options to be so forfeited and surrendered pursuant to this
Agreement.   13.   This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without reference
to its principles of conflict of laws.   14.   This Agreement sets forth the
entire agreement, and supersedes all other agreements and understandings,
whether oral or written, by and between the parties relating to the subject
matter hereof.

By your signature and the Company’s signature below, you and the Company agree
that these options are granted under and governed by the terms and conditions of
the Company’s Long-Term Incentive Plan as amended and the Incentive Stock Option
Agreement.
THE DIRECTOR ACKNOWLEDGES AND AGREES THAT THE OPTIONS SUBJECT TO THIS OPTION
AWARD SHALL VEST AND BECOME EXERSIZABLE, IF AT ALL, ONLY DURING THE PERIOD OF
DIRECTOR’S SERVICE TO THE COMPANY OR AS OTHERWISE PROVIDED IN THIS AGREEMENT
(NOT THROUGH THE ACT OF BEING GRANTED THE OPTIONS). THE DIRECTOR FURTHER
ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT OR THE PLAN SHALL CONFER
UPON DIRECTOR ANY RIGHT WITH RESPECT TO FUTURE OPTION AWARDS OR CONTINUATION OF
DIRECTOR’S SERVICE TO THE COMPANY. The Director acknowledges receipt of a copy
of the Plan, represents that he or she is familiar with the terms and provisions
thereof, and hereby accepts the Option Award subject to all of the terms and
provisions hereof and thereof, including the mandatory Dispute Resolution
Procedure. The Director has reviewed this Agreement and the Plan in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Agreement, and fully understands all provisions of this Agreement
and the Plan.

                  GARDNER DENVER, INC.    
 
           
 
  By:        
 
     
 
   
 
           
 
  Title:        
 
           
 
                DIRECTOR    
 
           
 
  Signed:        
 
           
 
           
 
  Dated: