Exhibit 10 (e)
Executive Benefit Plan













                            WOODWARD GOVERNOR COMPANY
                             EXECUTIVE BENEFIT PLAN

                            EFFECTIVE JANUARY 1, 2001





<PAGE>

                                TABLE OF CONTENTS
                                                                            PAGE


I.       PURPOSE AND EFFECTIVE DATE..........................................1

     1.1.     Purpose........................................................1
     1.2.     Effective Date.................................................1
     1.3.     Continuation and Combination of Two Prior Plan.................1


II.      DEFINITIONS.........................................................1

     2.1.     "Account"......................................................1
     2.2.     "Administrator"................................................2
     2.3.     "Affiliate"....................................................2
     2.4.     "Base Salary"..................................................2
     2.5.     "Beneficiary"..................................................2
     2.6.     "Board"........................................................2
     2.7.     "Bonus"........................................................2
     2.8.     "Change in Control"............................................3
     2.9.     "Code".........................................................4
     2.10.    "Company"......................................................5
     2.11.    "Deferral Contribution Amounts"................................5
     2.12.    "Deferral Election"............................................5
     2.13.    "Disability"...................................................5
     2.14.    "Distribution Election"........................................5
     2.15.    "Early Retirement Date"........................................5
     2.16.    "Election Period"..............................................5
     2.17.    "Eligible Member"..............................................5
     2.18.    "Exchange Act".................................................5
     2.19.    "FICA".........................................................5
     2.20.    "Investment Fund or Funds".....................................5
     2.21.    "Normal Retirement Date".......................................5
     2.22.    "Participant"..................................................6
     2.23.    "Plan".........................................................6
     2.24.    "Plan Year"....................................................6
     2.25.    "Prior Account Balance"........................................6
     2.26.    "Retirement"...................................................6
     2.27.    "Supplemental Benefit Amounts".................................6
     2.28.    "Supplemental MISOP Amount"....................................6
     2.29.    "Supplemental RIP Amount"......................................7
     2.30.    "Valuation Date"...............................................7


III.     PARTICIPATION.......................................................7

     3.1.     Participation..................................................7
     3.2.     ERISA Exemption................................................7


IV.      DEFERRAL CONTRIBUTION AMOUNTS.......................................7
     4.1.     Permissible Deferrals under the Plan...........................7
     4.2.     Deferral Elections.............................................8
     4.3.     Crediting of Deferral Elections................................9


                                       i
<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)
                                                                            PAGE


     4.4.     Vesting........................................................9
     4.5.     Deferred Contribution Amounts Subject to FICA at Time of
                Deferral. ...................................................9


V.       SUPPLEMENTAL BENEFIT AMOUNTS........................................9

     5.1.     Computation of Supplemental Benefit Amounts....................9
     5.2.     Vesting.......................................................10
     5.3.     Crediting of Supplemental Benefit Amounts.....................10


VI.      ACCOUNTS AND INVESTMENTS...........................................11

     6.1.     Valuation of Accounts.........................................11
     6.2.     Hypothetical Investment Funds.................................11
     6.3.     Crediting of Investment Return................................11
     6.4.     Changing Investment Fund Options..............................12
     6.5.     Investment Alternatives After Death...........................12


VII.     PAYMENT OF BENEFITS................................................12

     7.1.     Distribution at Specific Future Date..........................12
     7.2.     Distribution Upon Retirement or Disability....................12
     7.3.     Distribution On Other Termination of Employment...............13
     7.4.     Unscheduled Withdrawal........................................13
     7.5.     Unforeseeable Emergency.......................................14
     7.6.     Time and Form of Elections....................................14
     7.7.     Form of Payment and Withholding...............................14


VIII.    DEATH BENEFITS.....................................................14

     8.1.     Death Prior to Commencement of Benefits.......................14
     8.2.     Death After Commencement of Benefits..........................14
     8.3.     Administrator Discretion Regarding Form.......................15


IX.      ADMINISTRATION.....................................................15

     9.1.     Authority of Administrator....................................15
     9.2.     Participant's Duty to Furnish Information.....................15
     9.3.     Interested Member of Administrator............................15
     9.4.     Indemnification...............................................15
     9.5.     Claims Procedure..............................................15


X.       AMENDMENT AND TERMINATION..........................................16


XI.      MISCELLANEOUS......................................................16

     11.1.    No Implied Rights; Rights on Termination of Service...........16
     11.2.    No Employment Rights..........................................16
     11.3.    Nature of the Plan............................................17
     11.4.    Nontransferability............................................17
     11.5.    Successors and Assigns........................................18
     11.6.    Payment with Respect to Incapacitated Persons.................18
     11.7.    Arbitration...................................................18
     11.8.    Gender and Number.............................................18
     11.9.    Headings......................................................18
     11.10.   Severability..................................................19


                                       ii
<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

                                                                            PAGE


     11.11.   Effect on Other Employee Benefit Plans........................19
     11.12.   Non-U.S. Participants.........................................19
     11.13.   Applicable Law................................................19

Exhibit A...................................................................20

              INVESTMENT FUNDS UNDER THE WOODWARD GOVERNOR COMPANY
                EXECUTIVE BENEFIT PLAN......................................20


                                      iii
<PAGE>

                            WOODWARD GOVERNOR COMPANY
                             EXECUTIVE BENEFIT PLAN


I.    PURPOSE AND EFFECTIVE DATE.

      1.1.  PURPOSE. The Woodward Governor Company Executive Benefit Plan has
            been established by Woodward Governor Company to attract and retain
            certain key members by:

            (a)   providing a tax-deferred capital accumulation vehicle to
                  supplement such members' individual retirement contributions,
                  thereby encouraging savings for retirement, and

            (b)   supplementing such members' retirement income, available under
                  the Woodward Governor Company Retirement Income Plan (the
                  "RIP") and the Woodward Governor Company Member Investment and
                  Stock Ownership Plan (the "MISOP"), which is otherwise limited
                  pursuant to the rules and regulations of the Internal Revenue
                  Code of 1986, as amended.

      1.2.  EFFECTIVE DATE. The Plan shall be effective January 1, 2001 and
            shall remain in effect until terminated in accordance with
            Article X.

      1.3.  CONTINUATION AND COMBINATION OF TWO PRIOR PLAN. The Plan is intended
            to be:

            (a)   an amendment, restatement and continuation of the Woodward
                  Governor Company Amended and Restated Unfunded Deferred
                  Compensation Plan No.1 (the "DC Plan No. 1"),

            (b)   an amendment, restatement and continuation of the Woodward
                  Governor Company Unfunded Deferred Compensation Plan No. 2
                  (the "DC Plan No. 2), and

            (c)   the merger and combination of the DC Plan No. 1 and the DC
                  Plan No. 2 into this single plan for ease in the Company's
                  administration.

II.   DEFINITIONS.

      When used in the Plan and initially capitalized, the following words and
      phrases shall have the meanings indicated:

      2.1.  "ACCOUNT" means the recordkeeping account established for each
            Participant in the Plan for purposes of accounting for the amount of
            the Participant's:


                                       1
<PAGE>

            (a)   Deferral Contribution Amounts deferred and credited in
                  accordance with Article IV each year, if any,

            (b)   Supplemental Benefit Amounts determined and credited in
                  accordance with Article V each year, if any, and

            (c)   account balance, if any, under the prior DC Plan No. 1 and/or
                  prior DC Plan No. 2 on the day immediately preceding the
                  effective date of this Plan,

            all adjusted periodically to reflect the hypothetical investment
            return on such amounts in accordance with Article VI.

      2.2.  "ADMINISTRATOR" means the Compensation Committee or such other
            individual or committee appointed and delegated by the Board to
            administer the Plan in accordance with Article IX. To the extent so
            delegated, the term "Administrator" hereunder shall be deemed to
            refer to such individual or committee. The Compensation Committee
            shall take such actions it deems necessary or desirable to ensure
            that such individual or committee has sufficient and appropriate
            authority for carrying out the intent and purpose of the Plan.

      2.3.  "AFFILIATE" means:

            (a)   any corporation, partnership, joint venture, trust,
                  association or other business enterprise which is a member of
                  the same controlled group of corporations, trades or
                  businesses as the Company within the meaning of Code Section
                  414, and

            (b)   any other entity that is designated as an Affiliate by the
                  Board.

      2.4.  "BASE SALARY" means a Participant's base salary in effect for a
            given year as reflected in the personnel records of the Company.

      2.5.  "BENEFICIARY" means the person or entity designated by the
            Participant to receive the Participant's Plan benefits in the event
            of the Participant's death. If the Participant does not designate a
            Beneficiary, or if the Participant's designated Beneficiary
            predeceases the Participant, the Participant's estate shall be the
            Beneficiary under the Plan.

      2.6.  "BOARD" means the Board of Directors of the Company.

      2.7.  "BONUS" means any incentive compensation awarded to a Participant
            for a given year under the Woodward Governor Company Annual
            Incentive Compensation Plan and/or the Woodward Governor Company
            Long-Term Incentive Compensation Plan.


                                       2
<PAGE>

      2.8.  "CHANGE IN CONTROL" shall be deemed to have occurred if:

            (a)   any "person" (as defined in Section 13(d) and 14(d) of the
                  Exchange Act) (excluding for this purpose the Company or any
                  subsidiary of the Company, or any employee benefit plan of the
                  Company or any subsidiary of the Company, or any person or
                  entity organized, appointed or established by the Company for
                  or pursuant to the terms of such plan which acquires
                  beneficial ownership of voting securities of the Company) is
                  or becomes the "beneficial owner" (as defined in Rule 13d-3
                  under the Exchange Act) directly or indirectly of securities
                  of the Company representing fifteen percent (15%) or more of
                  the combined voting power of the Company's then outstanding
                  securities; provided, however, that no Change in Control shall
                  be deemed to have occurred:

                  (i)   as the result of an acquisition of securities of the
                        Company by the Company which, by reducing the number of
                        voting securities outstanding, increases the direct or
                        indirect beneficial ownership interest of any person to
                        fifteen percent (15%) or more of the combined voting
                        power of the Company's then outstanding securities, but
                        any subsequent increase in the direct or indirect
                        beneficial ownership interest of such a person in the
                        Company shall be deemed a Change in Control; or

                  (ii)  as a result of the acquisition directly from the Company
                        of securities of the Company representing less than
                        fifty percent (50%) of the voting power of the Company;
                        or

                  (iii) if the Board determines in good faith that a person who
                        has become the beneficial owner directly or indirectly
                        of securities of the Company representing fifteen
                        percent (15%) or more of the combined voting power of
                        the Company's then outstanding securities has
                        inadvertently reached that level of ownership interest,
                        and if such person divests as promptly as practicable a
                        sufficient amount of securities of the Company so that
                        the person no longer has a direct or indirect beneficial
                        ownership interest in fifteen percent (15%) or more of
                        the combined voting power of the Company's then
                        outstanding securities; or

            (b)   during any period of two (2) consecutive years (not including
                  any period prior to the effective date (as set forth in
                  Section 1.2 above) of the Plan), individuals who at the
                  beginning of such two-year period constitute the Board and any
                  new director or directors (except for any director designated
                  by a person who has entered into an agreement with the Company
                  to effect a transaction described in subparagraph (a) above or
                  subparagraph (c) below) whose election by the Board or
                  nomination for election by the


                                       3
<PAGE>

                  Company's shareholders was approved by a vote or at least
                  two-thirds of the directors then still in office who either
                  were directors at the beginning of the period or whose
                  election or nomination for election was previously so
                  approved, cease for any reason to constitute at least a
                  majority of the Board (such individuals and any such new
                  directors being referred to as the "Incumbent Board"); or

            (c)   approval by the shareholders of the company of a complete
                  liquidation or dissolution of the Company; or

            (d)   consummation of:

                  (i)   an agreement for the sale or disposition of the Company
                        or all or substantially all of the Company's assets,

                  (ii)  a plan of merger or consolidation of the Company with
                        any other corporation, or

                  (iii) a similar transaction or series of transactions
                        involving the Company (any transaction described in
                        subparagraphs (i) and (ii) or this paragraph (d) being
                        referred to as a "Business Combination"), in each case
                        unless after such a Business Combination:

                        (a)   the shareholders of the Company immediately prior
                              to the Business Combination continue to own,
                              directly or indirectly, more than fifty-one
                              percent (51%) of the combined voting power of the
                              then outstanding voting securities entitled to
                              vote generally in the election of directors of the
                              new (or continued) entity (including, but not by
                              way of limitation, an entity which as a result of
                              such transaction owns the Company or all or
                              substantially all of the Company's former assets
                              either directly or through one or more
                              subsidiaries) immediately after such Business
                              Combination, in substantially the same proportion
                              as their ownership in the Company immediately
                              prior to such Business Combination, and

                        (b)   at least a majority of the members of the board of
                              directors of the entity resulting from such
                              Business Combination were members of the Incumbent
                              Board at the time of the execution of the initial
                              agreement, or of the action of the Board,
                              providing for such Business Combination.

      2.9.  "CODE" means the Internal Revenue Code of 1986, as amended.


                                       4
<PAGE>

      2.10. "COMPANY" means Woodward Governor Company and any successor thereto.

      2.11. "DEFERRAL CONTRIBUTION AMOUNTS" means the amounts of Base Salary and
            Bonus deferred by a Participant, if any, and credited to his or her
            Account in accordance with Article IV but such amounts specifically
            and expressly do not include any Prior Account Balance of such
            Participant.

      2.12. "DEFERRAL ELECTION" means the written election made by an Eligible
            Member to defer such Eligible Member's Base Salary and/or Bonus for
            any given year in accordance with Article IV.

      2.13. "DISABILITY" means Disability as defined in the Woodward Governor
            Company Long-Term Disability Plan.

      2.14. "DISTRIBUTION ELECTION" means the written election made by a
            Participant regarding the form of payment distribution of his or her
            Account in accordance with Article VII.

      2.15. "EARLY RETIREMENT DATE" means the date on which any Plan Participant
            retires from active employment with the Company or any Affiliate on
            or after he has attained age 55 but before he has attained age 65.

      2.16. "ELECTION PERIOD" means the period specified by the Administrator
            during which a Deferral Election may be made with respect to a
            Participant's Base Salary and/or Bonus payable for a Plan Year.

      2.17. "ELIGIBLE MEMBER" means a member of the Company or an Affiliate who
            has been selected by the Administrator to participate in the Plan in
            accordance with Article III.

      2.18. "EXCHANGE ACT" means the Securities and Exchange Act of 1934.

      2.19. "FICA" means the employment tax imposed on a member's income under
            the Federal Insurance Contributions Act (Chapter 21 of the Code)
            which is comprised of Old-Age, Survivors and Disability Insurance
            and Hospital Insurance.

      2.20. "INVESTMENT FUND OR FUNDS" means the investment funds designated by
            the Administrator as the basis for determining the hypothetical
            investment return to be credited in accordance with Article VI to
            Participants' Accounts. Initially, the Investment Funds shall mirror
            the available investment funds under the MISOP, as set forth on the
            attached Exhibit A. Thereafter, the Administrator may change the
            Investment Funds at such times as it deems appropriate.


                                       5
<PAGE>

      2.21. "NORMAL RETIREMENT DATE" means the date on which any Plan
            Participant retires from active employment with the Company or any
            Affiliate on or after he has attained age 65.

      2.22. "PARTICIPANT" means an Eligible Member who has:

            (a)   been notified by the Administrator of his eligibility to
                  participate in the Plan, and

            (b)   either:

                  (i)   completed and submitted a Deferral Election in
                        accordance with Section 4.2, or

                  (ii)  had credited to his Account, by the Company,
                        Supplemental Benefit Amounts in accordance with Article
                        V, or

                  (iii) had an account balance under the prior DC Plan No. 1
                        and/or the prior DC Plan No. 2 on the day immediately
                        preceding the effective date of this Plan.

      2.23. "PLAN" means the Woodward Governor Company Executive Benefits Plan,
            as amended from time to time.

      2.24. "PLAN YEAR" means the 12 consecutive month period beginning each
            January 1.

      2.25. "PRIOR ACCOUNT BALANCE" means an Eligible Member's account
            balance(s), if any, under the prior DC Plan No. 1 and/or prior DC
            Plan No. 2 which were transferred to this Plan by the Company and
            credited to his Account pursuant to Section 3.1(B)(3).

      2.26. "RETIREMENT" means termination of employment by a Participant by
            reason of retiring from active employment with the Company or any
            Affiliate on his Early Retirement Date or Normal Retirement Date.

      2.27. "SUPPLEMENTAL BENEFIT AMOUNTS" means the amounts computed on behalf
            of the Participant, if any, and credited to his or her Account in
            accordance with Article V which represents the sum of the
            Participant's Supplemental MISOP Amounts and Supplemental RIP
            Amounts.

      2.28. "SUPPLEMENTAL MISOP AMOUNT" means that portion of the Supplemental
            Benefit Amounts computed under Section 5.1(b) of the Plan
            specifically pertaining to the MISOP and credited to the
            Participant's Account in accordance with Article V.


                                       6
<PAGE>

      2.29. "SUPPLEMENTAL RIP AMOUNT" means that portion of the Supplemental
            Benefit Amounts computed under Section 5.1(a) of the Plan
            specifically pertaining to the RIP and credited to the Participant's
            Account in accordance with Article V.

      2.30. "VALUATION DATE" means a date on which the Investment Funds are
            valued and the Participant's Account is adjusted for any resulting
            gains or losses. The Administrator shall determine the Valuation
            Date and such date shall be at least once every calendar year.

III.  PARTICIPATION.

      3.1.  PARTICIPATION. The Administrator shall select those members eligible
            to participate in the Plan. In selecting Eligible Members, the
            Administrator shall take into consideration such factors as it deems
            relevant in connection with accomplishing the purposes of the Plan.
            An Eligible Member shall become a Participant in the Plan when (A)
            he is notified in writing by the Administrator that he is eligible
            to participate in the Plan, and (B) he has either (1) completed and
            submitted a Deferral Election to the Administrator in accordance
            with Article IV, or (2) had credited to his Account, by the Company,
            Supplemental Benefit Amounts in accordance with Article V, or (3)
            had credited to his Account, by the Company, his account balance, if
            any, under the prior DC Plan No. 1 and/or the prior DC Plan No. 2 on
            the day immediately preceding the effective date of this Plan.

      3.2.  ERISA EXEMPTION. It is the intent of the Company that the Plan be
            exempt from Parts 2, 3 and 4 of Subtitle B of Title I of the
            Employee Retirement Income Security Act of 1974, as amended
            ("ERISA"), as an unfunded plan that is maintained by the Company
            primarily for the purpose of providing deferred compensation for a
            select group of management of highly compensated employees (the
            "ERISA Exemption"). Notwithstanding anything to the contrary in
            Section 3.1 or in any other provision of the Plan, the Administrator
            may in its sole discretion exclude any one or more members from
            eligibility to participate or from participation in the Plan, may
            exclude any Participant from continued participation in the Plan,
            and may take any further action (including the immediate payment of
            the Participant's entire interest under the Plan in a lump-sum) it
            considers necessary or appropriate if the Administrator reasonably
            determines in good faith that such exclusion or further action is
            necessary in order for the Plan to qualify for, or to continue to
            qualify for, the ERISA Exemption.

IV.   DEFERRAL CONTRIBUTION AMOUNTS.

      4.1.  PERMISSIBLE DEFERRALS UNDER THE PLAN. An Eligible Member may elect
            to defer:


                                       7
<PAGE>

            (a)   DEFERRAL OF BASE SALARY: up to 50% of his or her Base Salary
                  for a Plan Year, in increments of 1%, provided, however, that
                  any election to defer over 30% of Base Salary must be approved
                  in advance by the Administrator, and

            (b)   DEFERRAL OF BONUS: up to 100% of his or her Bonus for a Plan
                  Year, in increments of 25%, by filing a Deferral Election in
                  accordance with Section 4.2 below.

      4.2.  DEFERRAL ELECTIONS. A Participant's Deferral Election shall be in
            writing, and shall be filed with the Administrator at such time and
            in such manner as the Administrator shall provide, subject to the
            following:

            (a)   A Deferral Election pertaining to Base Salary and/or Bonus
                  shall be made during the election period established by the
                  Administrator which shall end no later than December 31
                  preceding the first day of the Plan Year in which such Base
                  Salary and/or Bonus would otherwise be payable.

            (b)   At the discretion of the Administrator, a Deferral Election
                  may be made by

                  (i)   newly-hired Eligible Members for the Plan Year in which
                        they commence employment,

                  (ii)  a member who becomes an Eligible Member after the
                        beginning of a Plan Year for the Plan Year in which they
                        become an Eligible Member.

                  Notwithstanding the preceding sentence, such Deferral
                  Elections must be made within thirty (30) days of their date
                  of hire or the date the member becomes an Eligible Member,
                  whichever applies. However, such Deferral Elections shall be
                  prospective and shall apply only to Base Salary and/or Bonus
                  that would otherwise be paid to the Eligible Member after the
                  Deferral Election is made.

            (c)   Deferral Elections shall be expressed as a percentage of Base
                  Salary or Bonus, within the limits provided under the Plan.

      Once made, a Deferral Election for:

            (A)   Base Salary shall remain in effect for all subsequent Plan
                  Years unless changed or revoked by the Participant in
                  accordance with rules established by the Administrator, and

            (B)   Bonus shall remain in effect only for the Plan Year for which
                  such Bonus Deferral Election was made.


                                       8
<PAGE>

                  Any such modification or revocation with respect to Base
                  Salary shall be effective for the Plan Year following the Plan
                  Year in which it is made. Notwithstanding anything to the
                  contrary, any revocation for Base Salary and/or Bonus shall
                  become effective as soon as practicable in the event it is
                  made because of the Participant's Disability or if the
                  Administrator, in its sole discretion, determines that the
                  Participant has suffered a severe financial hardship or a bona
                  fide administrative mistake was made. If a Deferral Election
                  is revoked in accordance with any of the foregoing, the
                  Participant may not make a new Deferral Election until the
                  election period established by the Administrator for making
                  deferrals for the next Plan Year.

      4.3.  CREDITING OF DEFERRAL ELECTIONS. The amount of Base Salary and Bonus
            that a Participant elects to defer under the Plan shall be credited
            by the Company to the Participant's Account as Deferral Contribution
            Amounts as of the date such Base Salary or such Bonus would have
            been paid to the Participant absent the Deferral Election.

      4.4.  VESTING. A Participant's Deferral Contribution Amounts for each Plan
            Year shall be fully vested at the time credited to such
            Participant's Account.

      4.5.  DEFERRED CONTRIBUTION AMOUNTS SUBJECT TO FICA AT TIME OF DEFERRAL. A
            Participant's Deferred Contribution Amounts are subject to FICA at
            the time the amounts are contributed to the Plan for deferral. The
            gross amount of the Participant's Base Salary deferral and Bonus
            deferral will be contributed to the Participant's Account and the
            corresponding FICA tax due will be deducted from that portion of the
            Participant's Base Salary or Bonus not deferred, as the case may be.
            Notwithstanding the foregoing, if a Participant has elected to defer
            a percentage of his or her Bonus such that contribution of the gross
            amount of the Bonus deferred would leave insufficient funds to remit
            the applicable FICA tax to the government, then the applicable Bonus
            amount contributed to the Participant's Account shall be made net of
            the smallest amount of FICA tax needed to satisfy such liability
            which cannot be covered from the portion of Bonus not deferred.

V.    SUPPLEMENTAL BENEFIT AMOUNTS.

      5.1.  COMPUTATION OF SUPPLEMENTAL BENEFIT AMOUNTS. An Eligible Member
            designated by the Administrator for participation under the Plan
            shall be entitled to a Supplemental Benefit Amount for each Plan
            Year that he is an Eligible Member which is equal to the sum of:

            (a)   SUPPLEMENTAL BENEFIT RELATING TO THE RIP: the excess, if any,
                  of:

                  (i)   the benefit the Participant otherwise would have been
                        entitled to have credited to a separate account for his
                        benefit under the RIP for


                                       9
<PAGE>

                        a given year if such benefit was calculated without
                        regard to the following:

                        (A)   Code Section 415,

                        (B)   Code Section 401(a)(17), and

                        (C)   any Deferral Election made by the Participant for
                              such given year under Article IV of this Plan,
                              OVER

                  (ii)  the accrued benefit which the Participant is entitled to
                        have credited to a separate account for his benefit for
                        such given year under the RIP, PLUS

            (b)   SUPPLEMENTAL BENEFIT RELATING TO THE MISOP: the excess, if
                  any, of:

                  (i)   the benefit the Participant otherwise would have been
                        entitled to have credited to a separate account for his
                        benefit under the MISOP for a given year if such benefit
                        was calculated without regard to the following:

                        (A)   Code Section 415,

                        (B)   Code Section 401(a)(17),

                        (C)   Code Section 401(k)(3),

                        (D)   Code Section 401(m)(2), and

                        (E)   Code Section 402(g), OVER

                  (ii)  the actual benefit which the Participant is entitled to
                        have credited to a separate account for his benefit for
                        such given year under the MISOP.

      5.2.  VESTING. A Participant's Supplemental Benefit Amounts calculated by
            the Company for each Plan Year shall be fully vested at the time
            credited to such Participant's Account.

      5.3.  CREDITING OF SUPPLEMENTAL BENEFIT AMOUNTS. The Supplemental Benefit
            Amounts computed in Section 5.1 above for each Plan Year shall be
            credited by the Company to the Participant's Account as soon as
            reasonably practicable.


                                       10
<PAGE>

VI.   ACCOUNTS AND INVESTMENTS.

      6.1.  VALUATION OF ACCOUNTS. The Administrator shall establish an Account
            for each Participant who:

            (a)   has filed a Deferral Election to defer Base Salary and/or
                  Bonus, or

            (b)   has been credited with a Supplemental Benefit Amount, or

            (c)   has a Prior Account Balance on the effective date of this
                  Plan.

            Such Account shall be credited with a Participant's Deferral
            Contribution Amounts and Supplemental Benefit Amounts as set forth
            in Sections 4.3 and 5.3, respectively, and with the Participant's
            Prior Account Balance, if any. As of each Valuation Date, the
            Participant's Account shall be adjusted upward or downward to
            reflect:

            (i)   the investment return to be credited as of such Valuation Date
                  pursuant to Section 6.3 below,

            (ii)  the amount of distributions, if any, to be debited as of that
                  Valuation Date under Article VII, and

            (iii) the amount of forfeitures, if any, to be debited under Section
                  7.4(a).

      6.2.  HYPOTHETICAL INVESTMENT FUNDS. Each Participant generally may direct
            the manner in which his or her Deferral Contribution Amounts,
            Supplemental MISOP Amounts, if any, and/or Prior Account Balance, if
            any, shall be deemed invested in and among the Investment Funds;
            provided, however, that each investment election made by a
            Participant shall, notwithstanding anything to the contrary in the
            Plan, be strictly subject to the consent of the Administrator which,
            in its sole discretion, may elect to honor the Participant's request
            or have the Account deemed invested in another manner. Such deemed
            investment election shall be made in accordance with such procedures
            as the Administrator shall establish and any such election shall be
            made in whole percentages. The investment authority shall remain at
            all times with the Administrator. The selection of Investment Funds
            by a Participant shall be for the sole purpose of determining the
            rate of return to be credited to his or her Account and shall not be
            treated or interpreted in any manner whatsoever as a requirement or
            direction to actually invest assets in any Investment Fund or any
            other investment media.

      6.3.  CREDITING OF INVESTMENT RETURN. Each Participant's Account shall be
            credited on each Valuation Date with his or her allocable share of
            investment gains or losses of each Investment Fund in which his or
            her Deferral Contribution Amounts, Supplemental MISOP Amounts, if
            any, and/or Prior Account Balance, if any, are hypothetically
            invested. The Administrator shall adopt a protocol for allocating
            the deemed investment gains and losses similar to that used in the
            MISOP. Notwithstanding anything to the contrary, if a Participant
            elects to invest


                                       11
<PAGE>

            in the hypothetical Investment Fund for Woodward Governor Company
            Common Stock, such Participant's Account shall also be credited with
            any deemed dividends paid during the period beginning with the
            immediately preceding Valuation Date and ending with the current
            Valuation Date.

      6.4.  CHANGING INVESTMENT FUND OPTIONS. Subject to any exceptions set
            forth on Exhibit A, a Participant may, on a daily basis, make a new
            election with respect to the hypothetical Investments Funds in which
            his or her Deferral Contribution Amounts, Supplemental MISOP
            Amounts, if any, and/or Prior Account Balance, if any, shall be
            deemed invested in the future. Any such election shall be made in
            the form specified by the Administrator.

      6.5.  INVESTMENT ALTERNATIVES AFTER DEATH. For periods after the Valuation
            Date coincident with or following a Participant's death and pursuant
            to procedures established by the Administrator, the Participant's
            Account balance pertaining to Deferral Contribution Amounts,
            Supplemental MISOP Amounts, if any, and/or Prior Account Balance, if
            any, shall be reallocated and reinvested among the Investment Funds
            in accordance with the Beneficiary's hypothetical investment
            direction.

VII.  PAYMENT OF BENEFITS.

      7.1.  DISTRIBUTION AT SPECIFIC FUTURE DATE. At the time an Eligible Member
            is notified by the Administrator of his or her eligibility to
            participate in the Plan, the Eligible Member may elect one or more
            future Valuation Dates as of which all or a portion of his or her
            Deferral Contribution Amounts and earnings thereon shall be
            determined for payment. Any distribution as of a specific future
            date made to an Eligible Member pursuant to his election shall be
            paid in a single lump-sum payment. Any such future date shall be a
            Valuation Date in a specific future year which is at least five Plan
            Years after the Plan Year for which the initial Deferral
            Contribution Amounts were credited to such Participant's Account;
            provided, however, that only one distribution per Plan Year may be
            elected under this Section 7.1; provided, further that, if the
            Participant elects a distribution at one or more specific future
            dates and has a termination of employment prior to any such date,
            distribution shall commence pursuant to Sections 7.2, 7.3, 8.1 or
            8.2, as applicable. A distribution election under this Section 7.1
            may be revoked or extended to a Valuation Date in a future Plan Year
            by filing a one-time revocation or extension election with the
            Administrator at least 12 months prior to the first day of the Plan
            Year in which such distribution was scheduled to take place.
            Notwithstanding the foregoing, any amounts distributable under this
            Section 7.1 shall be paid as soon as practicable following such
            relevant Valuation Date.

      7.2.  DISTRIBUTION UPON RETIREMENT OR DISABILITY. If a Participant
            terminates employment with the Company and/or Affiliates by reason
            of Retirement or


                                       12
<PAGE>

            Disability, distribution of the Participant's Account shall be made
            by or commence on the Valuation Date coincident with or next
            following such Participant's termination of employment. Distribution
            under this Section 7.2 shall be made:

            (a)   in a lump sum, or

            (b)   in substantially equal annual, quarterly or monthly
                  installments for a period up to but not exceeding 10 years

            as elected by the Participant on his or her Distribution Election. A
            Participant may revoke or change his or her Distribution Election
            under this Section 7.2 by filing a new Distribution Election with
            the Administrator; provided, however, that any Distribution Election
            that has not been on file with the Administrator at least 12 months
            prior to the first day of the Plan Year in which the Participant's
            termination of employment occurs shall be void and disregarded. A
            Participant cannot alter or change his Distribution Election once he
            has begun to receive payments under the Plan. Notwithstanding the
            foregoing, a Participant (or his legal representative) whose
            termination of employment occurs by reason of Disability may request
            that the Administrator distribute the Participant's Account in
            another payment form following such termination of employment for
            Disability or defer distribution of the Participant's Account until
            such Participant is no longer eligible for coverage under the
            Woodward Governor Company Long-Term Disability Plan, in which case
            the Administrator, in its sole discretion, shall determine whether
            to make payment in another form or defer such distributions after
            taking into consideration all factors which it deems relevant. If
            the Participant does not have a valid Distribution Election on file
            with the Administrator at the time of Retirement or Disability, the
            Participant's Account shall be paid in a single sum under paragraph
            (a) above.

      7.3.  DISTRIBUTION ON OTHER TERMINATION OF EMPLOYMENT. If a Participant's
            employment with the Company or Affiliates terminates for any reason
            other than Retirement, Disability or death, the Participant's
            Account shall be paid in a lump sum payment as of the Valuation Date
            coincident with or next following such termination of employment.

      7.4.  UNSCHEDULED WITHDRAWAL. A Participant may request a withdrawal of
            all or a portion of his or her Deferral Contribution Amounts and
            earnings thereon by filing a Distribution Election with the
            Administrator specifying the amount of the Deferral Contribution
            Amounts to be withdrawn. Payment of such amount, adjusted by the
            amount forfeited as set forth in Subsection (a) below, shall be made
            as of the first Valuation Date administratively practicable after
            such request is received, and shall be subject to the following:

            (a)   An amount equal to 10% of the withdrawal requested shall be
                  debited to the Participant's Account and permanently
                  forfeited.


                                       13
<PAGE>

            (b)   Any Deferral Election in effect at the time of such withdrawal
                  shall be void for periods after such withdrawal.

            (c)   The Participant shall not be eligible to file a new Deferral
                  Election until the election period for the Plan Year
                  commencing at least 12 months after such withdrawal.

      7.5.  UNFORESEEABLE EMERGENCY. Prior to the date otherwise scheduled for
            payment under the Plan, upon showing an unforeseeable emergency, a
            Participant may request that the Administrator accelerate payment of
            all or a portion of his or her Deferral Contribution Amounts and
            earnings thereon in an amount not exceeding the amount necessary to
            meet the unforeseeable emergency. For purposes of the Plan, an
            unforeseeable emergency means an unanticipated emergency that is
            caused by an event beyond the control of the Participant and that
            would result in severe financial or medical hardship to the
            Participant if early withdrawal were not permitted. Severe financial
            or medical hardship shall be deemed to exist in the event of the
            Participant's long and serious illness, impending bankruptcy or
            other similar extraordinary circumstances. The determination of an
            unforeseeable emergency shall be made by the Administrator in its
            sole discretion, based on such information as the Administrator
            shall deem to be necessary and relevant and such decision shall be
            final and binding on all parties.

      7.6.  TIME AND FORM OF ELECTIONS. All Distribution Elections under this
            Article VII shall be made at the time and in the form established by
            the Administrator and shall be subject to such other rules and
            limitations that the Administrator, in its sole discretion, may
            establish.

      7.7.  FORM OF PAYMENT AND WITHHOLDING. All payments under the Plan shall
            be made in cash and are subject to the withholding of all applicable
            federal, state and local and foreign governmental taxes.

VIII. DEATH BENEFITS.

      8.1.  DEATH PRIOR TO COMMENCEMENT OF BENEFITS. If a Participant dies prior
            to commencement of payment of his or her Account, the Participant's
            Beneficiary shall receive a survivor benefit in an amount equal to
            the Participant's Account balance to be paid in a single lump sum as
            soon as practicable following the Participant's death.

      8.2.  DEATH AFTER COMMENCEMENT OF BENEFITS. If a Participant terminates
            employment due to Retirement or Disability, and dies prior to the
            time his or her Account balance has been fully distributed, the
            Participant's Beneficiary shall receive the remaining portion of the
            Participant's Account at the regularly-scheduled date of payment for
            any remaining installment payments of the Participant's Account.


                                       14
<PAGE>

      8.3.  ADMINISTRATOR DISCRETION REGARDING FORM. Notwithstanding the
            foregoing provisions of this Article VIII, a Beneficiary may request
            that the Administrator approve an alternate form of payment of
            survivor benefits under this Article VIII which request may be
            granted in the sole discretion of the Administrator.

IX.   ADMINISTRATION.

      9.1.  AUTHORITY OF ADMINISTRATOR. The Administrator shall have full power
            and authority to carry out the terms of the Plan. The Administrator
            may establish such rules and regulations as it may consider
            necessary or desirable for the effective and efficient
            administration of the Plan. The Administrator's interpretation,
            construction and administration of the Plan, including any
            adjustment of the amount or recipient of the payments to be made,
            shall be binding and conclusive on all persons for all purposes.
            Neither the Company, including its officers, members or directors,
            nor the Administrator or the Board or any member thereof, shall be
            liable to any person for any action taken or omitted in connection
            with the interpretation, construction and administration of the
            Plan.

      9.2.  PARTICIPANT'S DUTY TO FURNISH INFORMATION. Each Participant shall
            furnish to the Administrator such information as it may from time to
            time request for the purpose of the proper administration of this
            Plan.

      9.3.  INTERESTED MEMBER OF ADMINISTRATOR. If a member of the Administrator
            is also a Participant in the Plan, he or she may not decide or
            determine any matter or question concerning his or her benefits
            unless such decision or determination could be made by him or her
            under the Plan if he or she were not a member of the Administrator.

      9.4.  INDEMNIFICATION. No person (including any present or former member
            of the Administrator, and any present or former officer or member of
            the Company or any Affiliate) shall be personally liable for any act
            done or omitted to be done in good faith in the administration of
            the Plan. Each present or former officer or member of the Company or
            any Affiliate to whom the Administrator has delegated any portion of
            its responsibilities under the Plan and each present or former
            member of the Administrator shall be indemnified and saved harmless
            by the Company (to the extent not indemnified or saved harmless
            under any liability insurance or other indemnification arrangement
            with respect to the Plan) from and against any an all claims of
            liability to which they are subjected by reason of any act done or
            omitted to be done in good faith in connection with the
            administration of the Plan, including all expenses reasonably
            incurred in their defense if the Company fails to provide such
            defense. No member of the Administrator shall be liable for any act
            or omission of any other member of the Administrator, nor for any
            act or omission upon his own part, excepting his own willful
            misconduct or gross neglect.

      9.5.  CLAIMS PROCEDURE. If a Participant or Beneficiary ("Claimant") is
            denied all or a portion of an expected benefit under this Plan for
            any reason, he or she may file a claim with the Administrator. The
            Administrator shall notify the Claimant within 90 days of allowance
            or denial of the claim, unless the Claimant receives written


                                       15
<PAGE>

            notice from the Administrator prior to the end of the 90-day period
            stating that special circumstances require an extension (of up to 90
            additional days) of the time for decision. The notice of the
            decision shall be in writing, sent by mail to Claimant's last known
            address, and if a denial of the claim, shall contain the following
            information: (a) the specific reasons for the denial; (b) specific
            reference to pertinent provisions of the Plan on which the denial is
            based; and (c) if applicable, a description of any additional
            information or material necessary to perfect the claim, an
            explanation of why such information or material is necessary, and an
            explanation of the claims review procedure. A Claimant is entitled
            to request a review of any denial of his or her claim by the Board.
            The request for review must be submitted within 60 days of mailing
            of notice of the denial. Absent a request for review within the
            60-day period, the claim shall be deemed to be conclusively denied.
            The Claimant or his or her representatives shall be entitled to
            review all pertinent documents, and to submit issues and comments
            orally and in writing. The Board shall render a review decision in
            writing within 60 days after receipt of a request for a review,
            provided that, in special circumstances the Board may extend the
            time for decision by not more than 60 days upon written notice to
            the Claimant. The Claimant shall receive written notice of the
            Board's review decision, together with specific reasons for the
            decision and reference to the pertinent provisions of the Plan.

X.    AMENDMENT AND TERMINATION.

      The Board may amend or terminate the Plan at any time; provided, however,
      that no such amendment or termination shall have a material adverse effect
      on any Participant's rights under the Plan accrued as of the date of such
      amendment or termination without such Participant's written consent. Upon
      termination of the Plan, the Board may cause a lump-sum payment of all
      benefits for all Participants at substantially the same time.

XI.   MISCELLANEOUS.

      11.1. NO IMPLIED RIGHTS; RIGHTS ON TERMINATION OF SERVICE. Neither the
            establishment of the Plan nor any amendment thereof shall be
            construed as giving any Participant, Beneficiary or any other
            person, individually or as a member of a group, any legal or
            equitable right unless such right shall be specifically provided for
            in the Plan or conferred by specific action of the Board or the
            Administrator in accordance with the terms and provisions of the
            Plan. Except as expressly provided in this Plan, neither the Company
            nor any of its Affiliates shall be required or be liable to make any
            payment under the Plan.

      11.2. NO EMPLOYMENT RIGHTS. Nothing herein shall constitute a contract of
            employment or of continuing service or in any manner obligate the
            Company or any Affiliate to continue the services of any
            Participant, or obligate any Participant to continue in the service
            of the Company or Affiliates, or as a


                                       16
<PAGE>

            limitation of the right of the Company or Affiliates to discharge
            any of their members, with or without cause.

      11.3. NATURE OF THE PLAN.

            (a)   UNFUNDED PLAN. Nothing herein contained shall require or be
                  deemed to require the Company to segregate, earmark or
                  otherwise set aside any funds or other assets to provide for
                  any payments made hereunder. Benefits hereunder shall be paid
                  from assets which shall continue, for all purposes, to be part
                  of the general, unrestricted assets of the Company and its
                  Affiliates. The obligations of the Company hereunder shall be
                  an unfunded and unsecured promise to pay money in the future.
                  However, the Company may establish one or more trusts to
                  assist in meeting its obligations under the Plan, the assets
                  of which shall be subject to the claims of the Company's
                  general creditors. No current or former Participant,
                  Beneficiary or other person, individually or as a member of a
                  group, shall have any right, title or interest in any account,
                  fund, grantor trust, or any asset that may be acquired by the
                  Company in respect of its obligations under the Plan (other
                  than as a general creditor of the Company with an unsecured
                  claim against its general assets).

            (b)   EXCEPTION FOR CHANGE IN CONTROL. Notwithstanding the
                  provisions of paragraph (a) of this Section 11.3, the Company
                  shall create a rabbi trust to hold funds to be used in payment
                  of the obligations of the Company under the Plan, which trust
                  shall not be funded except as provided in the following
                  sentence. In the event of a Change in Control (or prior
                  thereto in the sole discretion of the Company), the Company
                  shall fund such trust in an amount equal to not less than the
                  total value of the Participants' Accounts under the Plan as of
                  the Valuation Date immediately preceding the Change in
                  Control, provided that any funds contained therein shall
                  remain subject to the claims of the Company's general
                  creditors. In addition, upon a Change in Control, the trust by
                  its terms shall become irrevocable.

      11.4. NONTRANSFERABILITY. Prior to payment thereof, no benefit under the
            Plan shall be assignable or subject to any manner of alienation,
            sale, transfer, claims of creditors, pledge, attachment or
            encumbrances of any kind, except pursuant to a domestic relations
            order awarding benefits to an "alternate payee" (within the meaning
            of Code Section 414(p)(8)) that the Administrator determines
            satisfies the criteria set forth in paragraphs (1), (2) and (3) of
            Code Section 414(p) (a "DRO"). Notwithstanding any provision of the
            Plan to the contrary, the Plan benefits awarded to an alternate
            payee under a DRO shall be paid in a single lump sum to the
            alternate payee on the Valuation Date as soon as administratively
            practicable following the date the Administrator determines the
            order is a DRO,


                                       17
<PAGE>

            and such amounts, as adjusted for earnings, gains and losses, will
            be deducted from the Participant's Account as of such Valuation
            Date.

      11.5. SUCCESSORS AND ASSIGNS. The rights, privileges, benefits and
            obligations under the Plan are intended to be, and shall be treated
            as legal obligations of and binding upon the Company, its successors
            and assigns, including successors by merger, consolidation,
            reorganization or otherwise.

      11.6. PAYMENT WITH RESPECT TO INCAPACITATED PERSONS. Any amounts payable
            hereunder to any person who is a minor or under a legal disability,
            as determined under applicable state law, or who is unable to manage
            properly his or her financial affairs may be paid (a) to the legal
            representative of such person, (b) to anyone acting as the person's
            agent under a durable power of attorney, (c) to an adult relative or
            friend of the person or (d) to anyone with whom the person is
            residing. Any payment of a benefit made in accordance with the
            provisions of this section shall be a complete discharge of any
            liability for the making of such payment under the Plan. The
            Administrator's reliance on the written power of attorney or other
            instrument of agency governing a relationship between the person
            entitled to benefit the person to whom the Administrator directs
            payment of the benefit shall be fully protected at least to the same
            extent as though the Administrator had dealt directly with the
            person entitled to the benefit as a fully competent person. In the
            absence of actual knowledge to the contrary, the Administrator may
            assume that the instrument of agency was validly executed, that the
            person was competent at the time of execution and that at the time
            of reliance, the agency had not been terminated or amended.

      11.7. ARBITRATION. Any controversy or claim arising out of or relating to
            this Plan, or breach hereof, shall be settled by arbitration in the
            City of Chicago in accordance with the laws of the State of Illinois
            with an arbitrator appointed by the Company. The arbitration shall
            be conducted in accordance with the rules of the American
            Arbitration Association, except with respect to the selection of an
            arbitrator. The arbitrator's determination shall be final and
            binding upon all parties and judgment upon the award rendered by the
            arbitrator may be entered in any court having jurisdiction thereof.

      11.8. GENDER AND NUMBER. Except when otherwise indicated by the context,
            words in the masculine gender shall include the feminine and neuter
            genders, the plural shall include the singular, and the singular
            shall include the plural.

      11.9. HEADINGS. The headings of the various Articles and Sections in the
            Plan are solely for convenience and shall not be relied upon in
            construing any provisions hereof. Any reference to a Section shall
            refer to a Section of the Plan unless specified otherwise.


                                       18
<PAGE>

       11.10. SEVERABILITY. Whenever possible, each provision of the Plan shall
              be interpreted in such manner as to be effective and valid under
              applicable law, but it any provision of the Plan is held to be
              invalid, illegal or unenforceable in any respect under any
              applicable law or rule in any jurisdiction, such invalidity,
              illegality or unenforceability shall not affect any other
              provision or any other jurisdiction, and the Plan shall be
              reformed, construed and enforced in such jurisdiction so as to
              best give effect to the intent of the Company under the Plan.

       11.11. EFFECT ON OTHER EMPLOYEE BENEFIT PLANS. Any benefit paid or
              payable under this Plan shall not be included in a Participant's
              compensation for purposes of computing benefits under any employee
              benefit plan maintained or contributed by the Company or any
              Affiliate except as may otherwise be required under the specific
              terms of such employee benefit plan.

       11.12. NON-U.S. PARTICIPANTS. With respect to any Affiliate which employs
              Participants who reside outside the United States, and
              notwithstanding anything herein to the contrary, the Administrator
              may, in its sole discretion, amend the terms of the Plan in order
              to conform such terms with the requirements of local law or to
              meet the objectives of the Plan, and may, where appropriate,
              establish one or more sub-plans to reflect such amended
              provisions.

       11.13. APPLICABLE LAW. This Plan is established under and will be
              construed according to the laws of the State of Illinois, to the
              extent not preempted by the laws of the United States.

                                      * * *

         IN WITNESS WHEREOF, the undersigned has caused this Plan to be executed
this ______ day of _________________, 2000.

                               WOODWARD GOVERNOR COMPANY



                               By:
                                   --------------------------------------


                                       19
<PAGE>

                                                                       EXHIBIT A


                                INVESTMENT FUNDS
                                      UNDER
              THE WOODWARD GOVERNOR COMPANY EXECUTIVE BENEFIT PLAN


     The Investment Funds designated by the Administrator, in its sole
discretion and from time to time, as the basis for determining the hypothetical
investment return to be credited to Participants' Accounts in accordance with
Article 6 of the Woodward Governor Company Executive Benefit Plan (the "Plan"),
if applicable, are currently as follows:

     1.   Vanguard Treasury Money Market Fund,

     2.   Vanguard Short-Term Corporate Fund,

     3.   Vanguard Total Bond Market Index Fund,

     4.   Vanguard Wellington Fund,

     5.   Vanguard 500 Index Fund,

     6.   Vanguard Windsor II Fund,

     7.   Vanguard U.S. Growth Fund,

     8.   Vanguard International Growth Fund,

     9.   Vanguard Explorer Fund, and

     10.  Woodward Governor Company Common Stock but only if the Participant's
          investment election for this Investment Fund is approved in advance
          for such Participant by the Board of Directors of Woodward Governor
          Company (the "Board"). Notwithstanding anything to the contrary in
          this Exhibit A or the Plan, if a Participant is granted permission to
          elect this Investment Fund, such Participant may only revoke such
          Investment Fund election with the prior approval of the Board. The
          applicable value of the common stock as of any Valuation Date shall be
          equal to the closing price of such common stock on NASDAQ quoted by
          the WALL STREET JOURNAL for the applicable Valuation Date. The
          Participant's Account shall also be credited with deemed dividends, if
          any, on such common stock.


                                       20