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                                                                    EXHIBIT 10.4

                              GARDNER DENVER, INC.

                          EXECUTIVE ANNUAL BONUS PLAN

                                JANUARY 1, 2006

I. PURPOSE OF THE PLAN

      The Gardner Denver, Inc. Executive Annual Bonus Plan (the "Plan") is
intended to provide Gardner Denver, Inc. (the "Company") a means by which it can
engender and sustain a sense of personal commitment on the part of its senior
executives in the continued growth, development and financial success of the
Company and encourage them to remain with and devote their best efforts to the
business of the Company, thereby advancing the interests of the Company and its
shareholders. Accordingly, the Company may award to senior executives annual
incentive compensation on the terms and conditions established herein.

II. DEFINITIONS

      2.1 "Annual Incentive Award" or "Award" means the compensation payable in
cash granted under the Plan to a Participant by the Committee pursuant to such
terms, conditions, restrictions and limitations established by the Committee and
the Plan.

      2.2 "Board" means the Board of Directors of the Company.

      2.3 For all purposes of the Plan, a "Change in Control" shall have
occurred if any of the following events shall occur:

            (a) The Company is merged, consolidated or reorganized into or with
      another corporation or other legal person, and immediately after such
      merger, consolidation or reorganization less than a majority of the
      combined voting power of the then-outstanding securities of such
      corporation or person immediately after such transaction are held in the
      aggregate by the holders of Voting Stock of the Company immediately prior
      to such transaction;

            (b) The Company sells all or substantially all of its assets to any
      other corporation or other legal person, and less than a majority of the
      combined voting power of the then-outstanding securities of such
      corporation or person immediately after such sale are held in the
      aggregate by the holders of Voting Stock of the Company immediately prior
      to such sale;

            (c) There is a report filed on Schedule 13D or Schedule 14D-1 (or
      any successor schedule, form or report), each as promulgated pursuant to
      the Exchange Act, disclosing that any person (as the term "person" is used
      in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become
      the beneficial

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      owner (as the term "beneficial owner" is defined under Rule 13(d)(3) or
      any successor rule or regulation promulgated under the Exchange Act) of
      securities representing 20% or more of the Voting Stock;

            (d) The Company files a report or proxy statement with the
      Securities and Exchange Commission pursuant to the Exchange Act disclosing
      in Response to Form 8-K or Schedule 14A (or any successor schedule, form
      or report or item therein) that a Change in Control of the Company has or
      may have occurred or will or may occur in the future pursuant to any
      then-existing contract or transaction; or

            (e) If during any period of two consecutive years, individuals who
      at the beginning of any such period constitute the Directors of the
      Company cease for any reason to constitute at least a majority thereof,
      provided, however, that for purposes of this Section 2.3(e), each Director
      who is first elected, or first nominated for election by the Company's
      stockholders, by a vote of at least two-thirds of the Directors of the
      Company (or a committee thereof) then still in office who were Directors
      of the Company at the beginning of any such period will be deemed to have
      been a Director of the Company at the beginning of such period.

      Notwithstanding the foregoing provisions of Section 2.3(c) or 2.3(d)
hereof, unless otherwise determined in a specific case by majority vote of the
Board, a Change in Control shall not be deemed to have occurred for purposes of
the Plan solely because (i) the Company, (ii) an entity in which the Company
directly or indirectly beneficially own a 50% or more of the Voting Stock, or
(iii) any employee stock ownership plan or any other employee benefit plan
sponsored by the Company, either files or becomes obligated to file a report or
a proxy statement under or in response to Schedule 13D, Schedule 14D-1, Form 8-K
or Schedule 14A (or any successor schedule, form or report or item therein)
under the Exchange Act, disclosing beneficial ownership by it of shares of
Voting Stock, whether in excess of 20% or otherwise, or because the Company
reports that a change in control of the Company has or may have occurred or will
or may occur in the future by reason of such beneficial ownership.

      2.4 "Code" means the Internal Revenue Code of 1986, as amended from time
to time.

      2.5 "Commission" means the Securities and Exchange Commission.

      2.6 "Committee" means the Management Development and Compensation
Committee of the Board, or such other committee designated by the Board to
administer the Plan, provided that the Committee shall consist of three or more
persons, each of whom is an "outside director" within the meaning of Section
162(m) and a "disinterested person" within the meaning of Rule 16b-3 under the
Exchange Act.

      2.7 "Employee" means an employee of the Company or any of its subsidiaries
or affiliates.

      2.8 "Exchange Act" means the Securities Exchange Act of 1934, as amended.

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      2.9 "Participant" means a Senior Executive Officer of the Company who is
selected by the Committee to participate in the Plan.

      2.10 "Plan" means the Gardner Denver, Inc. Management Annual Incentive
Plan dated January 1, 2001.

      2.11 "Performance Goals" shall be defined as the performance criterion or
criteria established by the Committee, pursuant to Section V hereof, for the
purpose of determining Awards under the Plan.

      2.12 "Performance Period" means the consecutive 12 month period that
constitutes the Company's fiscal year.

      2.13 "Section 162(m)" means Section 162(m) of the Code and the regulations
promulgated thereunder.

      2.14 "Senior Executive Officer" means the Chairman, Chief Executive
Officer, President, any Executive Vice President, any Senior Vice President, any
senior officer reporting directly to the Chief Executive Officer and any other
Vice President or senior executive or officer designated by the Chief Executive
Officer.

      2.15 "Voting Stock" means securities entitled to vote in an election of
Directors of the Company.

III. ADMINISTRATION

      3.1 The overall administration of the Plan, including the final
determination of Awards to each Participant, is vested in the Committee.

      3.2 Determinations of the Committee in administering the Plan shall be
final and binding upon all Participants.

IV. ELIGIBILITY

      Participation in the Plan shall be limited to Senior Executive Officers.
Participants will be selected for participation annually by the Committee not
later than 90 days after the commencement of the Performance Period. The
Committee may withdraw its approval for participation in the Plan for a
Participant at any time. In the event of such withdrawal, such Participant shall
cease to be a Participant as of the date designated by the Committee and the
Employee shall be notified of such withdrawal as soon as practicable following
such action. Further, such Employee shall cease to have any right to an Award
for the Performance Period in which such withdrawal is effective; provided,
however, that the Committee may, in its sole discretion, authorize a prorated
award based on the number of full months of participation prior to the effective
date of such withdrawal and the Company's performance during such period.

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V. PERFORMANCE GOALS AND MEASURES

      5.1. Performance Goals shall be established by the Committee not later
than 90 days after commencement of the Performance Period relating to a specific
Award. The Performance Goals may be identical for all Participants or, at the
discretion of the Committee, may be different to reflect more appropriate
measures of individual performance. The criterion or criteria used in
establishing Performance Goals may, at the discretion of the Committee, include
one or any combination of the following: (i) the Company's return on equity,
assets, capital or investment; (ii) pre-tax or after-tax profit levels expressed
in absolute dollars or earnings per share of the Company; or (iii) operating
cash flow or cash flow from operating activities. The Performance Goals
established by the Committee shall include a threshold level of performance
below which no Award will be payable and a maximum Award opportunity for each
Senior Executive Officer. The determination of attainment of the Performance
Goals shall be determined in accordance with generally accepted accounting
principles and certified in writing by the Committee.

      5.2 The Committee shall be authorized to make adjustments in the method of
calculating attainment of Performance Goals in recognition of: (i) extraordinary
or non-recurring items; (ii) changes in tax laws; (iii) changes in generally
accepted accounting principles or changes in accounting policies; (iv) charges
related to restructured or discontinued operations; (v) restatement of prior
period financial results; and (vi) any other unusual, non-recurring gain or loss
that is separately identified and quantified in the Company's financial
statements.

VI. AWARDS

      6.1 Awards under the Plan shall be paid in cash.

      6.2 At the first meeting of the Committee after the expiration of the
Performance Period, the Committee shall review the prior year's performance in
relation to the Performance Goals and determine the level of achievement of the
Performance Goals. Payment of Annual Incentive Awards to Participants under the
Plan shall occur only after the Committee has certified in writing that the
Performance Goals have been achieved for the relevant Performance Period.
Notwithstanding the attainment of Performance Goals for the Company as a whole,
Awards for Individual Participants under the Plan may be denied or adjusted by
the Committee, in its sole judgment, based on its assessment of the
Participant's performance. However, no upward adjustment may be made to an
Annual Incentive Award for a Participant if Section 162(m) would limit the
deduction the Company may claim for that Participant's compensation. The maximum
Annual Incentive Award that may be granted to a Senior Executive Officer under
the Plan for any Performance Period may not exceed $3,000,000 or, if less, three
times the Senior Executive Officer's base salary as of the last day of the
Performance Period.

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VII. DEFERRALS AND SETTLEMENTS

      The Committee may permit Participants to elect to defer receipt of all or
a portion of the Annual Incentive Award under administrative policies
established by the Company from time to time, which shall be in compliance with
Section 162(m).

VIII. WITHHOLDING TAXES

      The Company shall have the right to deduct from any payment to be made
pursuant to the Plan the amount of any taxes required by law.

IX. NO RIGHT TO CONTINUED EMPLOYMENT OR AWARDS

      No person shall have any claim or right to be granted an Award, and the
granting of an Award shall not be construed as giving a Participant the right to
be retained in the employ of the Company or any of its subsidiaries. Further,
the Company and its subsidiaries expressly reserve the right at any time to
terminate the employment of any Participant free from any liability under the
Plan; except that a Participant who was actively employed as of the last day of
the applicable Performance Period shall be eligible to receive payment of his
Award, as determined pursuant to Section 6.2 hereof, even though the Participant
is no longer an active employee of the Company at the time the Committee
actually pays Awards under the Plan for the applicable Performance Period. The
Committee shall also have the discretion to grant eligibility to a Participant
to receive payment of an Award, notwithstanding the fact that the Participant is
not employed by the Company at the end of the Performance Period.

X. CHANGE IN CONTROL

      Immediately upon a Change in Control, all outstanding Awards shall be
deemed earned at the maximum Performance Goal level and the Company shall make a
payment in cash to each Participant within ten (10) days after the effective
date of the Change in Control in the amount of such maximum Award. The granting
of Awards under the Plan shall in no way affect the right of the Company to
adjust, reclassify, reorganize, or otherwise change its capital or business
structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all
or any portion of its business or assets.

XI. AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION

      The Board may amend, modify, suspend or terminate this Plan for any
purpose except that no amendment or alteration shall be effective prior to
approval by the Company's shareholders to the extent such approval is then
required pursuant to Section 162(m) or otherwise required as a matter of law.
Further, no amendment to the Plan shall be effective that would: (i) increase
the maximum amount that can be paid to a Participant under the Plan; (ii) change
the performance criterion or criteria set forth in Section V hereof for payment
of Awards; or (iii) modify the eligibility requirements for Participants in the
Plan unless first approved by the Company's shareholders.

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XII. GOVERNING LAW

      The validity, construction and effect of the Plan and any actions taken or
relating to the Plan shall be determined in accordance with the laws of the
State of Delaware and applicable federal law.

XIII. OTHER BENEFIT AND COMPENSATION PROGRAMS

      Unless otherwise specifically provided to the contrary in the relevant
plan, program or practice, Awards received by Participants under the Plan shall
not be deemed a part of a Participant's regular, recurring compensation for
purposes of calculating payments or benefits under any other Company benefit
plan, program or practice or any severance policy of the Company. Further, the
Company may adopt other compensation programs, plans or arrangements for
employees below the level of Senior Executive Officer as it deems necessary and
appropriate.

XIV. SUCCESSORS AND ASSIGNS

      The Plan shall be binding on all successors and assigns of a Participant,
including, without limitation, the estate of such Participant and the executor,
administrator or trustee of such estate, or any receiver or trustee in
bankruptcy or representative of the Participant's creditors.

XV. EFFECTIVE DATE

      This Plan shall be effective as of January 1, 2006. Notwithstanding the
foregoing, the adoption of this Plan is expressly conditioned upon the approval
by the Company's shareholders at the annual meeting of the Company's
shareholders held in May 2005. If the shareholders of the Company shall fail to
approve this Plan prior to such date, this Plan shall terminate and cease to be
of any further force or effect. Subject to earlier termination pursuant to
Section XI, the Plan shall terminate effective December 31, 2010. After
termination of the Plan, no future awards may be granted under the Plan.

XVI. INTERPRETATION

      The Plan is designed to comply with Section 162(m) of the Code, and all
provisions hereof shall be construed in a manner consistent with that intent.

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