Document:

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                                                                     EXHIBIT 4.1

                                  FORM OF NOTE

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST
COMPANY (THE "SECURITIES DEPOSITORY") TO A NOMINEE OF THE SECURITIES DEPOSITORY
OR BY THE SECURITIES DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS NOTE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE SECURITIES DEPOSITORY, TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE SECURITIES DEPOSITORY (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE SECURITIES DEPOSITORY), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

No. 1
CUSIP: 053332 AD 4                                                  $200,000,000
ISIN:  US053332AD45

                                 AUTOZONE, INC.

                           4.375% Senior Note due 2013

Original Issue Date: June 3, 2003
Interest Payment Dates: December 1 and June 1
Maturity Date: June 1, 2013
Interest Rate: 4.375%

         AUTOZONE, INC., a Nevada corporation (hereinafter called the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of TWO HUNDRED MILLION DOLLARS (the
"Principal Amount") on the Maturity Date shown above, except as provided below,
and to pay interest thereon at the rate per annum shown above. The Company will
pay interest semiannually on the Interest Payment Dates, commencing on December
1, 2003. Interest on this Note will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the Original Issue
Date shown above. The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in such Indenture, be paid
to the Person in whose name this Note (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such

<PAGE>

                                                                               2

interest, which shall be the May 15 or the November 15 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for shall forthwith
cease to be payable to the registered Holder on such Regular Record Date, and
may be paid to the Person in whose name this Note (or one or more Predecessor
Securities) is registered on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Company, or may be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange upon which the Notes may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in such Indenture. The
Company will pay interest on overdue principal, overdue premium, if any, and
overdue installments of interest, if any, from time to time on demand at the
interest rate borne by the Notes to the extent lawful.

         In the event this Global Note is surrendered in exchange for Notes in
definitive form, principal and interest payable with respect to Notes in
definitive form will be payable at the office or agency of the Company
maintained for that purpose in New York, New York (the Place of Payment), in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided, however, that
payment of interest payable with respect to such Notes in definitive form, may
be made at the option of the Company by check mailed to the address of the
Person entitled thereto as such address shall appear on the Security Register.

         This Note is one of a duly authorized issue of securities of the
Company (the "Securities") evidencing its unsecured indebtedness, of the series
hereinafter specified, all issued under and pursuant to a senior indenture,
dated as of July 22, 1998, (herein referred to as the "Indenture"), duly
executed and delivered by the Company and Bank One Trust Company, N.A., (as
successor in interest to The First National Bank of Chicago), as Trustee
(hereinafter called the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and Holders of the Securities. The Securities may be issued
in one or more series, which different series may be issued in various aggregate
principal amounts, may mature at different times, may bear interest, if any, at
different rates, may be subject to different redemption provisions, if any, may
be subject to different sinking, purchase or analogous funds, if any, may be
subject to different covenants and Events of Default and may otherwise vary as
in the Indenture provided. This Note is one of a series designated as the
"4.375% Notes due 2013" of the Company (herein referred to as the "Notes"),
initially issued in an aggregate principal amount of Two Hundred Million Dollars
($200,000,000). The Company may from time to time, without notice to or the
consent of the holders of the Notes, create and issue additional Notes ranking
equally and ratably with the Notes and otherwise similar in all respects, except
for the issue price, the issue date, the payment of interest accruing prior to
the issue date of such additional Notes and, in some cases, the first payment of
interest following the issue date of such additional Notes, so that such further
Notes shall be consolidated and form a single series with the Notes.

         The Notes constitute senior unsecured debt obligations of the Company
and rank equally in right of payment among themselves and with all other
existing and future senior, unsecured and unsubordinated debt obligations of the
Company.

<PAGE>

                                                                               3

         The Notes will be redeemable, in whole at any time or in part from time
to time, at the option of the Company, at a redemption price equal to accrued
and unpaid interest on the principal amount being redeemed to the redemption
date plus the greater of (i) 100% of the principal amount of such Notes; or (ii)
as determined by the Quotation Agent, the sum of the present values of the
remaining scheduled payments of principal and interest on such Notes (not
including any portion of such payments of interest accrued to the redemption
date) discounted to the date of redemption on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate,
plus 0.20%.

         "Adjusted Treasury Rate" means, with respect to any date of redemption,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such date of redemption.

         "Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the Notes to be redeemed that would be used, at the time of selection
and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of such
Notes.

         "Comparable Treasury Price" means, with respect to any date of
redemption, the average of the Reference Treasury Dealer Quotations for such
redemption date, after excluding the highest and lowest such Reference Treasury
Dealer Quotations, or if the Trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all Reference Treasury Dealer
Quotations.

         "Quotation Agent" means Citigroup Global Markets Inc. or SunTrust
Capital Markets, Inc. or another Reference Treasury Dealer appointed by the
Company.

         "Reference Treasury Dealer" means each of Citigroup Global Markets Inc.
and SunTrust Capital Markets, Inc. and their respective successors and any other
primary treasury dealer the Company shall select; provided, however, that if any
of the foregoing shall cease to be a primary treasury dealer in New York City,
the Company shall substitute therefor another primary treasury dealer.

         "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any date of redemption, the average, as determined
by the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such date of redemption.

         Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each holder of the Notes to be
redeemed.

         Unless the Company defaults in payment of the redemption price, on and
after the date of redemption, interest will cease to accrue on the Notes or
portions of the Notes called for redemption.

<PAGE>

                                                                               4

         The Notes will not be subject to, or have the benefit of, any sinking
fund.

         In case an Event of Default (as defined in the Indenture) with respect
to the Notes shall have occurred and be continuing, the principal hereof may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture provides that in certain events such declaration and its
consequences may be waived by the Holders of a majority in aggregate principal
amount of the Notes then Outstanding. Any such waiver by the Holder of this Note
(unless revoked as provided in the Indenture) shall be conclusive and binding
upon such Holder and upon all future Holders and owners of this Note and of any
note issued upon the transfer hereof or in exchange or substitution hereof,
irrespective of whether or not any notation of such waiver is made upon this
Note or such other Notes.

         The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of all Outstanding Securities or, in certain cases,
of the Outstanding Securities of each series to be affected, evidenced as in the
Indenture provided, to execute supplemental indentures adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or modifying in any manner the rights of the
Holders of the Securities of each such series; provided, however, that no such
supplemental indenture shall (i) change the Stated Maturity of the principal
amount thereof or the rate of interest, if any, thereon, or any premium payable
upon the redemption thereof, or change the coin or currency in which any
Security or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption Date or
Repayment Date, as the case may be) or (ii) reduce the percentage in principal
amount of the Outstanding Securities or the Outstanding Securities of any
particular series, the consent of whose Holders is required for any such
supplemental indenture or the consent of whose Holders is required for any
waiver of compliance with certain provisions of the Indenture or certain
defaults thereunder or their consequences provided for in the Indenture. It is
also provided in the Indenture that prior to the acceleration of maturity of the
Securities of any particular series upon the occurrence of an Event of Default
with respect to such series as permitted by the Indenture, the Holders of a
majority in aggregate principal amount of the Securities of such series at the
time Outstanding may on behalf of the Holders of all of the Securities of such
series waive any past default under the Indenture with respect to Securities of
such series and its consequences, except a default in the payment of the
principal of or premium, if any, or interest, if any, on any of the Securities
of such series. Any such consent or waiver by the Holder of this Note (unless
revoked as provided in the Indenture) shall be conclusive and binding upon such
Holder and upon all future Holders and owners of this Note and of any Note
issued upon transfer hereof or in exchange or substitution hereof, irrespective
of whether or not any notation of such consent or waiver is made upon this Note
or such other Notes.

         No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, and premium, if any, and
interest on this Note at the time, place and rate, and in the coin or currency,
herein and in the Indenture prescribed.

<PAGE>

                                                                               5

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable by the Holder hereof on the
security Register of the Company, upon due presentment of this Note for
registration of transfer at the office of the Security Registrar, or at the
office of any Security Co-Registrar duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to, the Company and the
Security Registrar or any such Security Co-Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Notes of authorized denominations and for the same aggregate principal
amount will be issued to the designated transferee or transferees.

         The Notes are issuable only as registered Notes without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Notes are
exchangeable for new Notes of any authorized denominations of the same aggregate
principal amount as requested by the Holder surrendering the same. If definitive
Notes are so delivered, the Company may make such changes to the form of this
Note as are necessary or appropriate to allow for the issuance of such
definitive Notes.

         No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

         Prior to due presentment for registration of transfer, the Company, the
Trustee, the Security Registrar, any Security Co-Registrar and any agent of the
Company or the Trustee may treat the Person in whose name this Note is
registered as the absolute owner hereof for all purposes, whether or not this
Note be overdue, and neither the Company, the Trustee, the Security Registrar,
any Security, the Registrar nor any such agent shall be affected by notice to
the contrary.

         The Holder of this Note shall not have recourse for the payment of
principal of or interest on this Note or for any claim based on this Note or the
Indenture against any director, officer or stockholder, past, present or future,
of the Company. By acceptance of this Note, the Holder waives any such claim
against any such Person.

         The Indenture and this Note shall be governed by and construed in
accordance with the laws of the State of New York.

         All terms used but not defined in this Note which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.

         Unless the certificate of authentication thereon has been executed by
the Trustee under such indenture, this Note shall not be entitled to any benefit
under such Indenture or be valid or obligatory for any purpose.

<PAGE>

                                                                               6

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed manually or in facsimile.

Dated: June 3, 2003

                                   AUTOZONE, INC.

                                   By:_____________________________
                                   Title:

                                   By:_____________________________
                                   Title:

Dated: June 3, 2003

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Securities of the series designated therein, referred to in
the within-mentioned Indenture.

BANK ONE TRUST COMPANY, N.A., as Trustee

By:________________________________
         Authorized Officer<PAGE>
                                                                    EXHIBIT 4(C)

                       THE GORMAN-RUPP COMPANY 401(k) PLAN

                 (As Amended and Restated as of August 1, 2000)

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                             PAGE

<S>      <C>      <C>                                                                                          <C>
ARTICLE I -           DEFINITIONS AND CONSTRUCTION...............................................................1

         1.1      Definitions....................................................................................1

                  (1)      Account and Sub-Account...............................................................1

                  (2)      Act...................................................................................1

                  (3)      Administrator or Plan Administrator...................................................1

                  (4)      Automatic Salary Reduction Election...................................................1

                  (5)      Before-Tax Contributions..............................................................1

                  (6)      Before-Tax Contributions Sub-Account..................................................1

                  (7)      Beneficiary...........................................................................2

                  (8)      Code..................................................................................3

                  (9)      Committee.............................................................................3

                  (10)     Company...............................................................................3

                  (11)     Contributing Member...................................................................3

                  (12)     Controlled Group......................................................................3

                  (13)     Covered Employee......................................................................3

                  (14)     Effective Date........................................................................4

                  (15)     Eligible Employee.....................................................................4

                  (16)     Employee..............................................................................4

                  (17)     Employer..............................................................................4

                  (18)     Employer Contributions................................................................5

                  (19)     Employer Matching Contributions.......................................................5

                  (20)     Employer Matching Contributions Sub-Account...........................................5

                  (21)     Employer Profit Sharing Contributions.................................................5

</TABLE>

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<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
                                                                                                             PAGE

<S>      <C>      <C>                                                                                           <C>
                  (22)     Employer Profit Sharing Contributions Sub-Account.....................................5

                  (23)     Fiduciary.............................................................................5

                  (24)     Gorman-Rupp Stock.....................................................................5

                  (25)     Gorman-Rupp Stock Fund................................................................5

                  (26)     Hardship..............................................................................5

                  (27)     Investment Fund.......................................................................6

                  (28)     Member................................................................................6

                  (29)     Money Market Fund.....................................................................6

                  (30)     Named Fiduciaries.....................................................................6

                  (31)     Plan..................................................................................6

                  (32)     Plan Year.............................................................................6

                  (33)     Restricted Employer Matching Contributions............................................6

                  (34)     Restricted Employer Matching Contributions Sub-Account................................7

                  (35)     Rollover Contributions................................................................7

                  (36)     Rollover Contributions Sub-Account....................................................7

                  (37)     Salary Reduction Agreement............................................................7

                  (38)     Spouse................................................................................7

                  (39)     Trust.................................................................................7

                  (40)     Trust Agreement.......................................................................7

                  (41)     Trust Fund............................................................................7

                  (42)     Trustee...............................................................................7

                  (43)     Valuation Date........................................................................7

         1.2      Construction...................................................................................8
</TABLE>

                                      -ii-
<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
                                                                                                             PAGE

<S>      <C>      <C>                                                                                           <C>
ARTICLE II -          ELIGIBILITY AND MEMBERSHIP.................................................................9

         2.1      Eligible Employee..............................................................................9

         2.2      Commencement of Membership.....................................................................9

         2.3      Contributing Membership........................................................................9

         2.4      Duration of Membership.........................................................................9

ARTICLE III -         BEFORE-TAX AND ROLLOVER CONTRIBUTIONS.....................................................11

         3.1      Amount of Contributions.......................................................................11

         3.2      Payments to Trustee...........................................................................11

         3.3      Changes in Contributions......................................................................11

         3.4      Suspension and Resumption of Contributions....................................................12

         3.5      Rollover Contributions........................................................................12

ARTICLE IV -          EMPLOYER CONTRIBUTIONS....................................................................13

         4.1      Amount of Employer Contributions..............................................................13

         4.2      Time for Making Employer Contributions........................................................14

         4.3      Return of Employer Contributions..............................................................14

         4.4      Allocation of Employer Matching Contributions and Restricted Employer Matching Contributions..15

         4.5      Funding Policy................................................................................16

ARTICLE V -           LIMITATIONS ON CONTRIBUTIONS..............................................................17

         5.1      Limitation on Deferrals.......................................................................17

         5.2      Limitation on Before-Tax Contributions........................................................18

         5.3      Limitation on Matching Contributions..........................................................20

         5.4      Aggregate Limit and Monitoring Procedures.....................................................22

         5.5      Limitation on Individual Allocations..........................................................24
</TABLE>

                                      -iii-
<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
                                                                                                             PAGE

<S>      <C>      <C>                                                                                           <C>
         5.6      Limitation on Total Individual Benefits.......................................................26

         5.7      Definitions for Limitations Provisions........................................................27

         5.8      Limitation on Employer Contributions..........................................................28

ARTICLE VI -          INVESTMENT OF CONTRIBUTIONS...............................................................29

         6.1      Investment Funds..............................................................................29

         6.2      Account; Sub-Account..........................................................................29

         6.3      Reports.......................................................................................30

         6.4      Investment of Contributions...................................................................30

         6.5      Directions to Trustee.........................................................................31

         6.6      Loans to Members..............................................................................31

ARTICLE VII -         MAINTENANCE AND VALUATION OF MEMBERS' ACCOUNTS............................................36

         7.1      Valuation of Investment Funds.................................................................36

         7.2      Procedures in Making Allocations and Corrections..............................................37

         7.3      Registration and Voting of Gorman-Rupp Stock..................................................38

         7.4      Tender or Sale of Gorman-Rupp Stock...........................................................39

ARTICLE VIII -        VESTING, DISTRIBUTIONS AND WITHDRAWALS....................................................41

         8.1      Nonforfeitable Member Interests...............................................................41

         8.2        Distributions on Death While an Employee....................................................41

         8.3        Distributions on Other Termination of Employment............................................41

         8.4      Distributions on Death after Termination of Employment........................................41

         8.5      Time of Distribution..........................................................................41

         8.6      Withdrawal of Contributions...................................................................43

         8.7      Order of Distributions and Withdrawals........................................................44
</TABLE>

                                      -iv-
<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
                                                                                                             PAGE

<S>      <C>      <C>                                                                                           <C>
         8.8      Facility of Payment...........................................................................45

         8.9      Duplication of Benefits.......................................................................45

         8.10     Distribution on Sale of Assets or Subsidiary..................................................45

         8.11     Transfers of Eligible Rollover Distributions..................................................46

         8.12     Distribution of Gorman-Rupp Stock.............................................................48

         8.13     Distributions Pursuant to a QDRO..............................................................48

ARTICLE IX -          ADMINISTRATION OF THE TRUST FUND..........................................................49

         9.1      Appointment of Trustee........................................................................49

         9.2      Duties of Trustee.............................................................................49

         9.3      The Trust Fund................................................................................49

         9.4      No Guarantee Against Loss.....................................................................49

         9.5      Payment of Benefits...........................................................................50

         9.6      Compensation and Expenses.....................................................................50

         9.7      No Diversion of Trust Fund....................................................................50

         9.8      Transfer to this Plan from Other Plans........................................................51

ARTICLE X -           ADOPTION OF THE PLAN BY OTHER EMPLOYERS...................................................52

         10.1     Adoption......................................................................................52

         10.2     Withdrawal of Employer........................................................................52

         10.3     Withdrawal of Employee Group..................................................................52

ARTICLE XI -          THE COMMITTEE.............................................................................54

         11.1     Appointment of Committee......................................................................54

         11.2     Formalities of Committee Action...............................................................54

         11.3     Plan Interpretation and Findings of Fact......................................................54
</TABLE>

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                                TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
                                                                                                             PAGE

<S>      <C>      <C>                                                                                           <C>
         11.4     Electronic Media..............................................................................55

         11.5     Assistance....................................................................................56

         11.6     Uniform Administration of Plan................................................................56

ARTICLE XII -         ADMINISTRATION OF THE PLAN AND FIDUCIARY RESPONSIBILITY...................................57

         12.1     Responsibility for Administration.............................................................57

         12.2     Named Fiduciaries.............................................................................57

         12.3     Delegation of Fiduciary Responsibilities......................................................57

         12.4     Immunities....................................................................................58

         12.5     Limitation on Exculpatory Provisions..........................................................59

         12.6     Plan Conversions..............................................................................59

ARTICLE XIII -        CLAIMS PROCEDURES.........................................................................60

         13.1     Method of Filing Claim........................................................................60

         13.2     Notification by Committee.....................................................................60

         13.3     Review Procedure..............................................................................60

ARTICLE XIV -         AMENDMENT, SUSPENSION OR TERMINATION......................................................62

         14.1     Right to Amend, Suspend or Terminate..........................................................62

         14.2     Procedure for Amendment, Suspension or Termination............................................62

         14.3     Effect of Termination.........................................................................62

         14.4     Prohibition on Decreasing Accrued Benefits....................................................62

ARTICLE XV -          MISCELLANEOUS.............................................................................64

         15.1     Spendthrift Provisions........................................................................64

         15.2     No Enlargement of Employment Rights...........................................................64

         15.3     Notices, Reports and Statements...............................................................64
</TABLE>

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                                TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
                                                                                                             PAGE

<S>      <C>      <C>                                                                                           <C>
         15.4     Action by Company.............................................................................65

         15.5     Merger or Transfer of Assets..................................................................65

         15.6     Acquisitions..................................................................................65

         15.7     Severability Provision........................................................................66

         15.8     Military Service..............................................................................66

ARTICLE XVI -         TOP-HEAVY PLAN REQUIREMENTS...............................................................66

         16.1     Definitions...................................................................................66

                  (1)      Aggregation Group....................................................................66

                  (2)      Compensation.........................................................................66

                  (3)      Defined Benefit Plan.................................................................66

                  (4)      Defined Contribution Plan............................................................67

                  (5)      Determination Date...................................................................67

                  (6)      Former Key Employee..................................................................67

                  (7)      Key Employee.........................................................................67

                  (8)      Non-Key Employee.....................................................................68

                  (9)      Permissive Aggregation Group.........................................................68

                  (10)     Required Aggregation Group...........................................................68

                  (11)     Top-Heavy Account Balance............................................................68

                  (12)     Top-Heavy Group......................................................................69

                  (13)     Top-Heavy Plan.......................................................................69

         16.2     Determination of Top-Heavy Status.............................................................69

         16.3     Minimum Contribution Requirement..............................................................70

         16.4     Coordination With Other Plans.................................................................71
</TABLE>

                                      -vii-
<PAGE>

                       THE GORMAN-RUPP COMPANY 401(k) PLAN
                 (As Amended and Restated as of August 1, 2000)

         The Gorman-Rupp Company, an Ohio corporation, hereby amends and
completely restates The Gorman-Rupp Company Individual Profit Sharing Retirement
Plan to be known as The Gorman-Rupp Company 401(k) Plan to read as follows
effective as of August 1, 2000.

                    ARTICLE I - DEFINITIONS AND CONSTRUCTION

         1.1 Definitions. The following terms when used in the Plan and Trust
Agreement with initial capital letters, unless the context clearly indicates
otherwise, shall have the following respective meanings:

         (1) Account and Sub-Account: See Section 6.2.

         (2) Act: The Employee Retirement Income Security Act of 1974, as the
same has been and may be amended from time to time.

         (3) Administrator or Plan Administrator: The Administrator of the Plan
as defined in section 3(16)(A) of the Act and section 414(g) of the Code, shall
be the Company, which may delegate all or any part of its powers, duties and
authorities in such capacity (without ceasing to be the Administrator of the
Plan) as hereinafter provided.

         (4) Automatic Salary Reduction Election: An election deemed to be made
by an Eligible Employee to reduce, or to forego an increase in, his Credited
Compensation by the percentage specified in Section 3.1 and to have his Employer
contribute such amount to the Trust as a Before-Tax Contribution.

         (5) Before-Tax Contributions: See Section 3.1.

         (6) Before-Tax Contributions Sub-Account: See Section 6.2.

<PAGE>

         (7) Beneficiary: A Member's Spouse or, if he has no Spouse or his
Spouse consents (in the manner hereinafter described in this Subsection (6)) to
the designation hereinafter provided for in this Subsection (6), such person or
persons other than, or in addition to, his Spouse as may be designated by a
Member as his death beneficiary under the Plan. Such a designation may be made,
revoked or changed only by an instrument (in form acceptable to the Committee)
which is signed by the Member, which, if he has a Spouse, includes his Spouse's
written consent to the action to be taken pursuant to such instrument (unless
such action results in the Spouse being named as the Member's sole Beneficiary),
and which is filed with the Committee before the Member's death. A Spouse's
consent required by this Subsection (6) shall be signed by the Spouse, shall
acknowledge the effect of such consent, shall be witnessed by a member of the
Committee or by a notary public and shall be effective only with respect to such
Spouse. At any time when all the persons designated by the Member as his
Beneficiary have ceased to exist, his Beneficiary shall be his Spouse or, if he
does not then have a Spouse, such relative or relatives of the Member (by blood,
marriage or adoption) and in such proportions as the Committee may select, or,
in the discretion of the Committee, the Member's estate. If a Member has no
Spouse and he has not made an effective Beneficiary designation pursuant to this
Subsection (6), his Beneficiary shall be determined by the Committee as provided
in the immediately preceding sentence. A person (or persons) designated by a
Participant as his Beneficiary who or which ceases to exist shall not be
entitled to any part of any payment thereafter to be made to the Participant's
Beneficiary unless the Participant's designation specifically provided to the
contrary or unless the Participant's Beneficiary is his Spouse who shall have
survived him, in which event any remaining payments shall be made to such
Spouse's estate unless the Participant has otherwise provided and the Spouse has
consented thereto as

                                      -2-
<PAGE>

hereinabove set forth. If two or more persons designated as a Member's
Beneficiary are in existence, any action permitted or required to be taken by a
Beneficiary pursuant to any provision of the Plan shall not be effective unless
such action is taken by all such persons other than any contingent Beneficiary
who is not entitled to any payment under the Plan until after another then
existing Beneficiary ceases to exist; and if all such persons cannot agree in
respect of any such action required to be taken by a Beneficiary, such action
shall be taken by the Committee and shall be binding on all such persons to the
extent permitted by applicable law.

         (8) Code: The Internal Revenue Code of 1986, as the same has been and
may be amended from time to time.

         (9) Committee: The committee provided for in Article XI.

         (10) Company: The Gorman-Rupp Company, an Ohio corporation.

         (11) Contributing Member: See Section 2.3.

         (12) Controlled Group: The Employers and any and all other
corporations, trades and/or businesses, the employees of which, together with
Employees of the Employers, are required by section 414 of the Code to be
treated as if they were employed by a single employer.

         (13) Covered Employee: (a) An Employee of an Employer, excluding (i) in
the case of the Company each Employee who is employed as a Student Employee by
the Company and (ii) any Employee who is a `leased employee' within the meaning
of section 414(n) of the Code and (b) effective as of January 1, 1992, an
Employee of a foreign subsidiary of an Employer who is a U.S. citizen. For the
purposes of the Plan, an Employee is employed as a Student Employee if he is
employed by the Company pursuant to its interns, cooperative education, work
experience or summer help programs.(14) Credited Compensation The total of

                                      -3-
<PAGE>

an Employee's compensation for services performed for a Controlled Group Member
which is currently includible in gross income determined without regard to any
Salary Reduction Agreement under this Plan or amounts deferred by an Employee
pursuant to a salary reduction agreement entered into under Section 125 of the
Code. For purposes of this Subsection and any other Section of the Plan,
Credited Compensation of an Employee for any Plan Year in excess of $170,000 (as
adjusted pursuant to Code section 401(a)(17)) shall not be taken into account.

         (14) Effective Date: January 1, 1984, for the Company and Members who
enter the Plan as its Employees, and, for any other Employers and Members who
enter the Plan as their Employees, the effective date specified by such Employer
in connection with its adoption of the Plan.

         (15) Eligible Employee: An Employee who satisfies the eligibility
requirements for membership in the Plan set forth in Section 2.1.

         (16) Employee: Effective as of January 1, 1997, any person who is
classified by a Controlled Group Member as an employee and, to the extent
required by Code section 414(n), any person who is a "leased employee" of a
Controlled Group Member. For purposes of this Subsection, a "leased employee"
means any person who, pursuant to an agreement between a Controlled Group Member
and any other person ("leasing organization"), has performed services for the
Controlled Group Member on a substantially full-time basis for a period of at
least one year, and such services are performed under the primary direction or
control of the Controlled Group Member.

         (17) Employer: The Company and any other member of the Controlled Group
adopting the Plan pursuant to Section 10.1.

                                      -4-
<PAGE>

         (18) Employer Contributions: Employer Matching Contributions, Employer
Profit Sharing Contributions and Restricted Employer Matching Contributions.

         (19) Employer Matching Contributions: See Section 4.1(1).

         (20) Employer Matching Contributions Sub-Account: See Section 6.2.

         (21) Employer Profit Sharing Contributions: Employer Contributions made
to the Trust on account of each Plan Year during the period commencing on
January 1, 1984 and ending on December 31, 1988 which were credited to a
Member's Account

         (22) Employer Profit Sharing Contributions Sub-Account: See Section
6.2.

         (23) Fiduciary: Any person, including each Named Fiduciary, who is a
fiduciary as defined in section 3(21)(A) of the Act.

         (24) Gorman-Rupp Stock: Common shares, without par value, of the
Company.

         (25) Gorman-Rupp Stock Fund: One of the Investment Funds which shall be
invested and reinvested in Gorman-Rupp Stock.

         (26) Hardship: Financial need on the part of a Member on account of:

         (a) expenses for medical care described in section 213(d) of the Code
     previously incurred by the Member, the Member's Spouse or any dependents of
     the Member (as defined in section 152 of the Code) or necessary for those
     persons to obtain medical care described in such section 213(d);

         (b) costs directly related to the purchase of a principal residence for
     the Member (excluding mortgage payments);

                                      -5-
<PAGE>

         (c) payment of tuition, related educational fees and room and board
     expenses for the next 12 months of post-secondary education for the Member,
     or the Member's Spouse, children or dependents;

         (d) payments necessary to prevent the eviction of the Member from the
     Member's principal residence or foreclosure on the mortgage of that
     residence; or

         (e) any other financial need which the Commissioner of Internal
     Revenue, through the publication of revenue rulings, notices and other
     documents of general applicability, may from time to time designate as a
     deemed immediate and heavy financial need as provided in Treasury
     Regulations ss. 1.401(k)-1(d)(2)(iv)(A).

         (27) Investment Fund: Any of the funds established and maintained under
the provisions of Section 6.1.

         (28) Member: An Eligible Employee who has become or continues to be a
Member of the Plan in accordance with the provisions of Article II.

         (29) Money Market Fund: One of the Investment Funds which shall be
invested and reinvested in money market instruments including U.S. Government
securities, high-quality commercial paper, repurchase agreements and
certificates of deposit.

         (30) Named Fiduciaries: The persons designated in or pursuant to
Section 12.2.

         (31) Plan: The Gorman-Rupp Company 401(k) Plan, the terms of which are
herein set forth, as the same may be amended, supplemented or restated from time
to time.

         (32) Plan Year: A calendar year.

         (33) Restricted Employer Matching Contributions: See Section 4.1(2).

                                      -6-
<PAGE>

         (34) Restricted Employer Matching Contributions Sub-Account: An account
established for each Member to which Restricted Employer Matching Contributions
made on or after August 1, 2000 shall be allocated.

         (35) Rollover Contributions: Amounts transferred to a Member's Account
pursuant to Section 3.5 of the Plan.

         (36) Rollover Contributions Sub-Account: See Section 6.2.

         (37) Salary Reduction Agreement: An arrangement made under the Plan
pursuant to which an Employee agrees to reduce, or to forego an increase in, his
Credited Compensation and his Employer agrees to contribute to the Trust the
amount so reduced or foregone as a Before-Tax Contribution.

         (38) Spouse: The person to whom a Member is legally married at the
specified time.

         (39) Trust: The trust created by the Trust Agreement.

         (40) Trust Agreement: The Trust Agreement between the Company and the
Trustee dated as of January 1, 1984, creating the Trust contemplated by the
Plan, as the same may be amended, supplemented or restated from time to time, or
any trust agreement superseding the same.

         (41) Trust Fund: The trust estate held by the Trustee under the
provisions of the Plan and Trust Agreement.

         (42) Trustee: National City Bank, or its successor or successors in
trust under the Trust Agreement.

         (43) Valuation Date: Each day on which the New York Stock Exchange is
open for trading.

                                      -7-
<PAGE>

         1.2 Construction. (1) Unless the context otherwise indicates, the
masculine wherever used in the Plan shall include the feminine, the singular
shall include the plural and the plural shall include the singular.

         (2) Whenever the word "person" appears in the Plan, it shall refer to
both natural and legal persons.

         (3) Where headings have been supplied for portions of the Plan and of
the Trust Agreement (other than the headings to the Subsections in Section 1.1),
they have been supplied for convenience only and are not to be taken as limiting
or extending the meaning of any of such portions of such documents.

         (4) Except to the extent federal law controls, the Plan shall be
governed, construed and administered according to the laws of the State of Ohio,
and all persons accepting or claiming benefits under the Plan or Trust Agreement
shall be bound and deemed to consent to their provisions.

         (5) This amendment and restatement of the Plan shall constitute an
amendment, restatement and continuation of the Plan. This amendment and
restatement is generally effective August 1, 2000. However, certain provisions
of this amendment and restatement are effective as of some other date. The
provisions of this amendment and restatement which are effective prior to August
1, 2000 shall be deemed to amend the corresponding provisions of the Plan as in
effect before this amendment and restatement. Events occurring before the
applicable effective date of any provision of this amendment and restatement
shall be governed by the applicable provision of the Plan in effect on the date
of the event.

                                      -8-
<PAGE>

                    ARTICLE II - ELIGIBILITY AND MEMBERSHIP

         2.1 Eligible Employee. On and after January 1, 1999, an Employee shall
become an Eligible Employee under the Plan on the first date that he is a
Covered Employee.

         2.2 Commencement of Membership. An Eligible Employee shall become a
Member in the Plan by becoming a Contributing Member pursuant to an Automatic
Salary Reduction Election or a Salary Reduction Agreement.

         2.3 Contributing Membership. Any Eligible Employee who was a
Contributing Member on December 31, 1998 shall continue to be a Contributing
Member on January 1, 1999, unless he has elected to suspend his Before-Tax
Contributions pursuant to Section 3.4. An Employee who first becomes an Eligible
Employee (or again becomes an Eligible Employee after ceasing to be an Eligible
Employee) on or after January 1, 1999 shall become a Contributing Member, as of
the first payroll date after becoming an Eligible Employee, pursuant to an
Automatic Salary Reduction Election, unless such Eligible Employee files with
the Committee at least ten days before such payroll date a Salary Reduction
Agreement or a written election (on a form provided by the Committee) not to
have Before-Tax Contributions contributed to the Trust on his behalf. A Salary
Reduction Agreement filed by an Eligible Employee shall include (a) his
authorization to his Employer to withhold from, or reduce, each payment of
Credited Compensation made to him after the date his Salary Reduction Agreement
is filed with the Committee by the amount designated in such Agreement and to
have his Employer pay the same amount to the Trust as Before-Tax Contributions,
and (b) his direction that the Before-Tax Contributions and Employer
Contributions made for him be invested in any one or more of the Investment
Funds, as provided in Section 6.4.

         2.4 Duration of Membership. Once an Eligible Employee becomes a Member,
he shall remain a Member so long as he continues to be an Employee or has an

                                      -9-
<PAGE>

Account under the Plan, whether or not he continues to be an Eligible Employee,
provided, however, that if a Member ceases to be an Eligible Employee,
Before-Tax Contributions may not be made for him pursuant to Section 3.1, until
he again becomes an Eligible Employee. If a Member ceases to be an Employee and
later again becomes an Employee, he shall become an Eligible Employee on the
first date that he is a Covered Employee.

                                      -10-
<PAGE>

              ARTICLE III - BEFORE-TAX AND ROLLOVER CONTRIBUTIONS

         3.1 Amount of Contributions. A Member who files a Salary Reduction
Agreement with the Committee, as provided in Section 2.3, shall agree to have
his Employer make Before-Tax Contributions for him to the Trust of (1) effective
prior to January 1, 2001, up to 10% (in 1% increments) and, (2) effective
January 1, 2001, up to 15% (in 1% increments), of his unreduced Credited
Compensation through equal percentage reductions of each payment of Credited
Compensation otherwise payable to him. A Member who becomes a Contributing
Member pursuant to an Automatic Salary Reduction Election as provided in Section
2.3 shall be deemed to agree to have his Employer make Before-Tax Contributions
for him to the Trust of 2% of his unreduced Credited Compensation through equal
percentage reductions of each payment of Credited Compensation otherwise payable
to him. If a Member's Before-Tax Contributions must be reduced to comply with
the requirements of Section 5.4 or the requirements of applicable law, his
Before-Tax Contributions as so reduced shall be the maximum percentage of his
unreduced Credited Compensation permitted by such Section or law notwithstanding
the foregoing provisions of this Section requiring that Before-Tax Contributions
be made in 1% increments of his unreduced Credited Compensation.

         3.2 Payments to Trustee. Before-Tax Contributions made for a Member
pursuant to his Salary Reduction Agreement shall be transmitted by his Employer
to the Trustee not later than 15 business days after the end of the month in
which such Contributions would otherwise have been payable to him as Credited
Compensation.

         3.3 Changes in Contributions. The percentage of Before-Tax
Contributions elected (or deemed elected) to be made by a Member pursuant to
Section 3.1 shall continue in effect, notwithstanding any changes in the
Member's Credited Compensation.. A Member may, however, in accordance with the
percentages permitted by Sections 3.1, change the percentage of

                                      -11-
<PAGE>

his Before-Tax Contributions effective as of the next payroll date in accordance
with procedures established by the Committee.

         3.4 Suspension and Resumption of Contributions. A Member may suspend
his Before-Tax Contributions effective as of any date in accordance with
procedures established by the Committee. A Member who has suspended his
Before-Tax Contributions may, in accordance with procedures established by the
Committee, resume making such Before-Tax Contributions as of any payroll date if
he is then an Eligible Employee and he has again enrolled pursuant to Sections
2.3 and 3.1.

         3.5 Rollover Contributions. The Trustee shall, at the direction of the
Committee, receive and thereafter hold and administer as a Rollover Contribution
and part of the Trust Fund (1) all or any portion of an eligible rollover
distribution (as defined in Section 8.11(3) of the Plan except that the
distribution shall be from another qualified trust) that was distributed to a
Member, or is transferred at the request of a Member, from a qualified trust,
provided that the requirements of Section 402(c) or 401(a)(31) of the Code are
met or (2) the entire amount of a distribution to a Member that satisfies the
requirements of section 408(d)(3)(A)(ii) of the Code. For purposes of this
Section, the term "qualified trust" shall have the meaning ascribed to such term
in Subsection 9.8(1) of the Plan.

                                      -12-
<PAGE>

                      ARTICLE IV - EMPLOYER CONTRIBUTIONS

         4.1 Amount of Employer Contributions. (1) (Employer Matching
Contributions) Subject to the provisions of the Plan and Trust Agreement and to
the extent it lawfully may, each Employer shall contribute to the Trust on
account of each Plan Year, out of its net earnings for such Plan Year, and/or
its accumulated earnings from prior Plan Years, an amount (the "Employer
Matching Contributions") equal to (a) for the period commencing on or after
January 1, 1989 and ending on December 31, 1998, 20% of the first 2% of
Before-Tax Contributions and 10% of the next 4% of Before-Tax Contributions made
during the Plan Year pursuant to Section 3.1, and (b) for the Plan Year
commencing on January 1, 1999 and for the period from January 1, 2000 through
July 31, 2000, an Employer Matching Contribution equal to 20% of the first 4% of
Before-Tax Contributions made during such Plan Year or period pursuant to
Section 3.1 for its Employees who are entitled to an allocation of the
Employer's Employer Matching Contributions for such Plan Year or period pursuant
to Section 4.4.

         (2) (Restricted Employer Matching Contributions) Subject to the
provisions of the Plan and Trust Agreement and to the extent it lawfully may,
each Employer shall contribute to the Trust on account of the period commencing
on or after August 1, 2000 and ending on December 31, 2000 and on account of
each Plan Year thereafter, out of its net earnings for such period or Plan Year,
and/or its accumulated earnings from prior Plan Years, an amount (the
"Restricted Employer Matching Contributions") equal to 40% of the first 4% of
Before-Tax Contributions made during such period or Plan Year pursuant to
Section 3.1 for its Employees who are entitled to an allocation of the
Employer's Restricted Employer Matching Contributions for such period or Plan
Year pursuant to Section 4.4.

         (3) As used in this Section, the terms "net earnings" and "accumulated
earnings" shall mean the net earnings and accumulated earnings, respectively, of
each Employer

                                      -13-
<PAGE>

as determined by the auditor of such Employer in accordance with generally
accepted accounting principles.

         4.2 Time for Making Employer Contributions. (1) (Employer Matching
Contributions) Each Employer shall make its Employer Matching Contributions to
the Trust not later than 30 days after the end of each calendar month and such
Contributions shall be equal to 20% of the first 4% of Before-Tax Contributions
made during such calendar month for Members who are Employees of such Employer
and who are entitled to an allocation of the Employer's Matching Contributions
for such calendar month pursuant to Section 4.4.

         (2) (Restricted Employer Matching Contributions) Each Employer shall
make its Restricted Employer Matching Contributions to the Trust not later than
30 days after the end of each calendar month and such Contributions shall be
equal to 40% of the first 4% of Before-Tax Contributions made during such
calendar month for Members who are Employees of such Employer and who are
entitled to an allocation of the Restricted Employer's Matching Contributions
for such calendar month pursuant to Section 4.4.

         4.3 Return of Employer Contributions. (1) Except as provided in
Subsection (2) of this Section or in Sections 5.1(3), 5.2(5) and 5.5(4), the
Trust Fund shall never inure to the benefit of the Employers and shall be held
for the exclusive purposes of providing benefits to Employees, Members and their
Beneficiaries and defraying reasonable expenses of administering the Plan.

         (2) If an Employer Contribution to the Trust is made by an Employer by
a mistake of fact, the excess of the amount contributed over the amount that
would have been contributed had there not occurred a mistake of fact shall be
returned to such Employer if the Employer so directs within one year after the
payment of such contribution. If an Employer

                                      -14-
<PAGE>

Contribution made by an Employer which is conditioned upon the deductibility of
the Contribution under section 404 of the Code (or any successor thereto) is not
fully deductible under such Code Section (or any successor thereto), such
Contribution, to the extent the deduction therefor is disallowed, shall be
returned to the Employer if the Employer so directs within one year after the
disallowance of the deduction.

         (3) Earnings attributable to Employer Contributions returned to an
Employer pursuant to this Section may not be returned, but losses attributable
thereto shall reduce the amount to be returned.

         4.4 Allocation of Employer Matching Contributions and Restricted
Employer Matching Contributions. (1) Each Employer Matching Contribution made in
respect of a calendar month pursuant to Section 4.2(1) shall, subject to the
provisions of Articles V and XVI, be allocated and credited to the Account of
each Employee of the Employer for whom Before-Tax Contributions were made during
such calendar month, and who is both a Member and an Eligible Employee on the
last day of such calendar month, with each such Employee being credited with a
portion of such Employer's Employer Matching Contribution equal to (a) for the
period from January 1, 1989 through December 31, 1998, 20% of the first 2% of
Before-Tax Contributions and 10% of the next 4% of Before-Tax Contributions made
for him pursuant to Section 3.1 during such calendar month and (b) for the
period from January 1, 1999 through July 31, 2000, 20% of the first 4% of
Before-Tax Contributions made for him pursuant to Section 3.1 during such
calendar month. (2) On or after August 1, 2000, each Restricted Employer
Matching Contribution made in respect of a calendar month pursuant to Section
4.2(2) shall, subject to the provisions of Articles V and XVI, be allocated and
credited to the Account of each Employee of the Employer for whom Before-Tax
Contributions were made during such calendar month, with

                                      -15-
<PAGE>

each such Employee being credited with a portion of such Employer's Restricted
Employer Matching Contribution equal to 40% of the first 4% of Before-Tax
Contributions made for him pursuant to Section 3.1 during such calendar month.

         4.5 Funding Policy. To the extent such has not already been done, the
Company shall determine, establish and carry out a funding policy and method
consistent with the objectives of the Plan and the requirements of Title I of
the Act.

                                      -16-
<PAGE>

                    ARTICLE V - LIMITATIONS ON CONTRIBUTIONS

         5.1 Limitation on Deferrals. (1) Notwithstanding the foregoing
provisions of Articles III and IV, the sum of a Member's Before-Tax
Contributions shall not, for any taxable year of such Member commencing on or
after January 1, 2000, exceed $10,500 (as such amount may be adjusted for
increases in the cost of living pursuant to regulations prescribed by the
Secretary of the Treasury). For purposes of this Section a Member's Before-Tax
Contributions shall include (a) any employer contribution made under any
qualified cash or deferred arrangement as defined in section 401(k) of the Code
to the extent not includible in gross income for the taxable year under section
402(a)(8) of the Code (determined without regard to section 402(g) of the Code),
(b) any employer contribution to the extent not includible in gross income for
the taxable year under section 402(h)(1)(B) of the Code (determined without
regard to section 402(g) of the Code) and (c) any employer contribution to
purchase an annuity contract under section 403(b) of the Code under a salary
reduction agreement within the meaning of section 3121(A)(5)(D) of the Code.

         (2) In the event that the amount described in Subsection (1) of this
Section is exceeded for a Member for any taxable year of such Member specified
in such Subsection (1) (hereinafter called the "excess deferrals"), such excess
deferrals (and any income allocable thereto) shall be distributed to the Member
by April 1 following the close of the taxable year in which such excess
deferrals occurred if (and only if), by March 1 following the close of such
taxable year the Member (a) allocates the amount of such excess deferrals among
the plans under which the excess deferrals were made and (b) notifies the
Committee of the portion allocated to this Plan.

         (3) In the event that a portion of a Member's Before-Tax Contributions
are distributed to him pursuant to Subsection (2) of this Section, Restricted
Employer Matching

                                      -17-
<PAGE>

Contributions (prior to August 1, 2000, Employer Matching Contributions) made
with respect to such Before-Tax Contributions (and any income allocable thereto)
shall be returned to the Employer which made such Restricted Employer Matching
Contributions (prior to August 1, 2000, Employer Matching Contributions).

         5.2 Limitation on Before-Tax Contributions. (1) Notwithstanding the
foregoing provisions of Articles III and IV and effective as of January 1, 1997,
for any Plan Year,

         (a) the actual deferral percentage (as defined in Subsection (2) of
     this Section) for the group of highly compensated Eligible Employees (as
     defined in Subsection (3) of this Section) for such Plan Year shall not
     exceed the actual deferral percentage for all other Eligible Employees for
     the preceding Plan Year multiplied by 1.25, or

         (b) the excess of the actual deferral percentage for the group of
     highly compensated Eligible Employees for such Plan Year over the actual
     deferral percentage for all other Eligible Employees for the preceding Plan
     Year shall not exceed 2 percentage points, and the actual deferral
     percentage for the group of highly compensated Eligible Employees for such
     Plan Year shall not exceed the actual deferral percentage for all other
     Eligible Employees for the preceding Plan Year multiplied by 2.

If two or more plans which include cash or deferred arrangements are considered
as one plan for purposes of sections 401(a)(4) or 410(b) of the Code, such
arrangements included in such plans shall be treated as one arrangement for the
purposes of this Subsection; and if any highly compensated Eligible Employee is
a participant under two or more cash or

                                      -18-
<PAGE>

deferred arrangements of the Controlled Group, all such arrangements shall be
treated as one cash or deferred arrangement for purposes of determining the
deferral percentage with respect to such Eligible Employee.

         (2) For the purposes of this Section, the actual deferral percentage
for a specified group of Eligible Employees for a Plan Year shall be the average
of the ratios (calculated separately for each Eligible Employee in such group)
of (a) the amount of Before-Tax Contributions actually paid to the Trust for
each such Eligible Employee for such Plan Year (including any "excess deferrals"
described in Section 5.1) to (b) the Eligible Employee's Credited Compensation
for such Plan Year.

         (3) For the purposes of the Plan, the term "highly compensated Eligible
Employee" for a particular Plan Year shall mean any Eligible Employee (a) who,
during the current or the preceding Plan Year, was at any time a 5-percent owner
(as such term is defined in Code section 416(i)(1)) or (b) for the preceding
Plan Year, received compensation from the Controlled Group in excess of the
amount in effect for such Plan Year under Code section 414(q)(1)(B). For the
purposes of this Subsection, the term "compensation" shall mean (i) for the
period prior to January 1, 1998, the sum of an Employee's compensation under
Section 5.5(3) and his Before-Tax Contributions, and (ii) for the period
commencing on and after January 1, 1998, an Employee's compensation under
Section 5.5(3).

         (4) In the event that excess contributions (as such term is hereinafter
defined) are made to the Trust for any Plan Year, then, prior to March 15 of the
following Plan Year, such excess contributions (and any income allocable
thereto) shall be distributed to the highly compensated Eligible Employees on
the basis of the respective portions of the excess contributions attributable to
each such Eligible Employee. The income allocable to excess contributions is
equal to the sum of the allocable gain or loss for the Plan Year. Effective as
of

                                      -19-
<PAGE>

January 1, 1997, for the purposes of this Subsection (4), the term "excess
contributions" shall mean, for any Plan Year, the excess of (a) the aggregate
amount of Before-Tax Contributions actually paid to the Trust on behalf of
highly compensated Eligible Employees for such Plan Year over (b) the maximum
amount of such Before-Tax Contributions permitted for such Plan Year under
Subsection (1) of this Section, determined by reducing Before-Tax Contributions
made on behalf of highly compensated Eligible Employees beginning with the
highly compensated Eligible Employee with the highest dollar amount of
Before-Tax Contributions.

         (5) In the event all or a portion of a Member's Before-Tax
Contributions are distributed to him pursuant to Subsection (4) of this Section,
Restricted Employer Matching Contributions (prior to August 1, 2000, Employer
Matching Contributions) made with respect to such Before-Tax Contributions (and
any income allocable thereto) shall be returned to the Employer which made such
Restricted Employer Matching Contributions (prior to August 1, 2000, Employer
Matching Contributions).

         5.3 Limitation on Matching Contributions. (1) Notwithstanding the
foregoing provisions of Article IV and effective as of January 1, 1997, for any
Plan Year the contribution percentage (as defined in Subsection (2) of this
Section) for the group of highly compensated Eligible Employees (as defined in
Section 5.2(3)) for such Plan Year shall not exceed the greater of (a) 125
percent of the contribution percentage for all other Eligible Employees for the
preceding Plan Year or (b) the lesser of (i) 200 percent of the contribution
percentage for all other Eligible Employees for the preceding Plan Year or (ii)
the contribution percentage for all other Eligible Employees for the preceding
Plan Year plus 2 percentage points. If two or more plans of the Controlled Group
to which employer matching contributions are made are treated as one plan for
purposes of section 410(b) of the Code, such plans shall be treated as one plan
for

                                      -20-
<PAGE>

purposes of this Subsection (1); and if a highly compensated Eligible Employee
participates in two or more plans of the Controlled Group to which such
contributions are made, all such contributions shall be aggregated for purposes
of this Subsection (1).

         (2) For the purposes of this Section, the contribution percentage for a
specified group of Eligible Employees for a Plan Year shall be the average of
the ratios (calculated separately for each Eligible Employee in such group) of
(a) the sum of the Restricted Employer Matching Contributions (prior to August
1, 2000, Employer Matching Contributions) and, at the election of the Company,
any Before-Tax Contributions not taken into account for the Plan Year under
Section 5.2(2), made under the Plan by or on behalf of each such Eligible
Employee for such Plan Year to (b) the Eligible Employee's Credited Compensation
for such Plan Year.

         (3) In the event that excess aggregate contributions (as such term is
hereinafter defined) are made to the Trust for any Plan Year, then, prior to
March 15 of the following Plan Year, such excess contributions (and any income
allocable thereto) shall be distributed to the highly compensated Eligible
Employees on the basis of the respective portions of the excess contributions
attributable to each such Eligible Employee. The income allocable to excess
aggregate contributions is equal to the sum of the allocable gain or loss for
the Plan Year. Effective as of January 1, 1997, for the purposes of this
Subsection (3), the term "excess aggregate contributions" shall mean, for any
Plan Year, the excess of (a) the aggregate amount of the Restricted Employer
Matching Contributions (prior to August 1, 2000, Employer Matching
Contributions) actually paid to the Trust on behalf of highly compensated
Eligible Employees for such Plan Year over (b) the maximum amount of such
Restricted Employer Matching Contributions (prior to August 1, 2000, Employer
Matching Contributions) permitted for such

                                      -21-
<PAGE>

Plan Year under Subsection (1) of this Section, determined by reducing
Restricted Employer Matching Contributions (prior to August 1, 2000, Employer
Matching Contributions) made on behalf of highly compensated Eligible Employees
beginning with the highly compensated Eligible Employee with the highest dollar
amount of Restricted Employer Matching Contributions (prior to August 1, 2000,
Employer Matching Contributions).

         (4) The determination of excess aggregate contributions under this
Section shall be made after (a) first determining the excess deferrals under
Section 5.1 and (b) then determining the excess contributions under Section 5.2.

         5.4 Aggregate Limit and Monitoring Procedures. (1) Notwithstanding the
provisions of Article III or Article IV, if after the application of Sections
5.1, 5.2 and 5.3, the sum of the actual deferral percentage and the contribution
percentage for the group of highly compensated Eligible Employees (as defined in
Section 5.2(3)) exceeds the "aggregate limit" (as defined in Treasury Regulation
section 1.401(m)-2(b)(3)) then the contributions made for such Plan Year for
highly compensated Eligible Employees shall be reduced so that the aggregate
limit is not exceeded. Such reductions shall be made first in Before-Tax
Contributions (but only to the extent that they are not matched by Restricted
Employer Matching Contributions (prior to August 1, 2000, Employer Matching
Contributions)) and then in Restricted Employer Matching Contributions (prior to
August 1, 2000, Employer Matching Contributions). Reductions in contributions
shall be made in the manner provided in Section 5.2 or 5.3, as applicable. The
amount by which each such highly compensated Eligible Employee's contributions
are reduced shall be treated as excess contributions or excess aggregate
contributions under Section 5.2 or 5.3, as applicable. For the purposes of this
Section, the actual deferral percentage and contribution percentage of the
highly compensated Eligible Employees are determined after any

                                      -22-
<PAGE>

reductions required to meet those tests under Sections 5.2 and 5.3.
Notwithstanding the foregoing provisions of this Section, no reduction shall be
required by this Subsection if either (a) the actual deferral percentage of the
highly compensated Eligible Employees does not exceed 1.25 multiplied by the
actual deferral percentage of the non-highly compensated Eligible Employees, or
(b) the contribution percentage of the highly compensated Eligible Employees
does not exceed 1.25 multiplied by the contribution percentage of the non-highly
compensated Eligible Employees.(2) In order to ensure that at least one of the
actual deferral percentages specified in Section 5.2(1), at least one of the
contribution percentages specified in Section 5.3(1) and the aggregate limit
described in Subsection (1) of this Section are satisfied for each applicable
Plan Year, the Company shall monitor (or cause to be monitored) the amount of
Before-Tax Contributions and Employer Contributions being made to the Plan for
each Eligible Employee during each Plan Year. In the event that the Company
determines that neither of such actual deferral percentages, neither of such
contribution percentages or the aggregate limit will be satisfied for a Plan
Year, the Before-Tax Contributions and Employer Contributions made thereafter
for each highly compensated Eligible Employee (as defined in Section 5.2(3))
shall be reduced (pursuant to non-discriminatory rules adopted by the Company)
to the extent necessary to decrease the actual deferral percentage and/or the
contribution percentage for highly compensated Eligible Employees for such Plan
Year to a level which satisfies either of the actual deferral percentages,
either of the contribution percentages and/or the aggregate limit.

         (2) In order to ensure that excess deferrals (as such term is defined
in Section 5.1(2)) shall not be made to the Plan for any taxable year for any
Member, the Company shall monitor (or cause to be monitored) the amount of
Before-Tax Contributions being made, or to be made, to the Plan for each Member
during each taxable year and shall take such action

                                      -23-
<PAGE>

(pursuant to non-discriminatory rules adopted by the Company) to prevent
Before-Tax Contributions made, or to be made, for any Member under the Plan for
any taxable year from exceeding the maximum amount applicable under Section
5.1(1).

         (3) The actions permitted by Subsections (2) and (3) of this Section
are in addition to, and not in lieu of, any other actions that may be taken
pursuant to other Sections of the Plan or that may be permitted by applicable
law or regulation in order to ensure that the limitations described in Sections
5.1, 5.2, and 5.3 and Subsection (1) of this Section are met.

         5.5 Limitation on Individual Allocations. (1) Notwithstanding any other
provision of the Plan, the maximum annual addition (as defined in Subsection (2)
of this Section) to a Member's account for any Plan Year (which shall be the
limitation year) shall in no event exceed the lesser of (a) 25% of the Member's
compensation for such Plan Year or (b)1 $30,000 ($35,000 effective January 1,
2001) (as such amount is adjusted pursuant to section 415(d) of the Code).

         (2) For the purposes of this Section, the term "annual addition" means
the sum for any Plan Year of:

         (a) all contributions (including, without limitation, Before-Tax
     Contributions made pursuant to Section 3.1 but excluding Rollover
     Contributions) made by a member of the Controlled Group which are allocated
     to the Member's account pursuant to a defined contribution plan maintained
     by a member of the Controlled Group,

         (b) all employee contributions made by the Member to a defined
     contribution plan maintained by a member of the Controlled Group,

--------

1 As amended by Amendment No. 1, effective as of January 1, 1995.

                                      -24-
<PAGE>

         (c) all forfeitures allocated to the Member's account pursuant to a
     defined contribution plan maintained by a member of the Controlled Group,
     and

         (d) any amount attributable to medical benefits allocated to the
     Member's account established under section 419A(d)(1) of the Code if the
     Member is or was a key-employee (as such term is defined in section 416(i)
     of the Code) during such Plan Year or any preceding Plan Year, and any
     amounts allocated after March 31, 1984, to the Member's individual medical
     account, as defined in section 415(1)(2) of the Code, which is part of a
     pension or annuity plan maintained by a member of the Controlled Group.

         (3) For the purposes of this Section and effective as of January 1,
1998, the term "compensation" shall mean compensation with the meaning of Code
section 415(c)(3) and the regulations thereunder. A Member's compensation as
used in this Section shall not exceed $170,000 (as adjusted pursuant to Code
section 401(a)(17)) for any Plan Year.

         (4) If a Member's annual addition (as defined in Subsection (2) of this
Section) for a Plan Year would exceed the limitations of Subsection (1) of this
Section as a result of the allocation of forfeitures, a reasonable error in
estimating the Member's compensation, or a reasonable error in determining the
amount of Before-Tax Contributions that may be made with respect to the Member
under the limitations of this Section (or other facts and circumstances which
the Commissioner of Internal Revenue finds justify application of the following
rules of this Subsection), Before-Tax Contributions (if any) made with respect
to the Member for such Plan Year (together with any gains attributable thereto)
shall be returned to him to the extent necessary to effectuate the required
reduction in the annual addition. If the return of all such Before-Tax
Contributions is not sufficient to effectuate such reduction, Employer
Contributions allocable to such Member's Account for such Year shall, to the
extent necessary to effectuate

                                      -25-
<PAGE>

that such reduction, be held by the Trustee in a suspense account and shall be
used to reduce Employer Contributions for the next Year (and succeeding Years,
as necessary) for such Member if such Member is covered by the Plan at the end
of any such Year; and if he is not covered by the Plan at the end of any such
Year, such Employer Contributions held by the Trustee in such suspense account
shall be allocated and reallocated to the accounts of other Members, except that
no such allocation or reallocation shall cause the limitations of Subsection (1)
of this Section to be exceeded for any such other Member for such Year.
Investment gains and losses shall not be allocated to the suspense account
during the period such suspense account is required to be maintained pursuant to
this Subsection (4). In the event of termination of the Plan, any then remaining
balance of the suspense account, to the extent it may not then be allocated to
Employee-Members, shall revert to the Company.

         5.6 Limitation on Total Individual Benefits. The provisions of this
Section 56. shall only be effective prior to January 1, 2000. Notwithstanding
any other provision of the Plan, except as otherwise provided in section 415(e)
of the Code, in any case in which an individual is a participant in both a
defined benefit plan and a defined contribution plan maintained by the
Controlled Group, the sum of the defined benefit plan fraction and the defined
contribution plan fraction for any Plan Year shall not exceed 1.0. For purposes
of the preceding sentence,

         (a) the defined benefit plan fraction for any Plan Year is a fraction,
     (i) the numerator of which is the projected annual benefit of the
     participant under the plan (determined as of the close of the Plan Year),
     and (ii) the denominator of which is the lesser of (A) the product of 1.25
     multiplied by the dollar limitation in effect under section 415(b)(1)(A) of
     the Code for such Year or (B) the product of 1.4, multiplied by the

                                      -26-
<PAGE>

         amount which may be taken into account under section 415(b)(1)(B) of
     the Code with respect to such participant under the plan for such Year; and

         (b) the defined contribution plan fraction for any Plan Year is a
     fraction (i) the numerator of which is the sum of the annual additions to
     the participant's account as of the close of the Plan Year and for all
     prior Plan Years, and (ii) the denominator of which is the sum of the
     lesser of the following amounts determined for such Plan Year and for each
     prior Plan Year of service with the Controlled Group:

                  (A) the product of 1.25, multiplied by the dollar limitation
          in effect under section 415(c)(1)(A) of the Code for such Year, or

                  (B) the product of 1.4, multiplied by the amount which may be
          taken into account under section 415(c)(1)(B) of the Code with respect
          to such participant under such plan for such Year.

         5.7 Definitions for Limitations Provisions. (1) For purposes of
applying the limitations set forth in Sections 5.5 and 5.6, all qualified
defined benefit plans (whether or not terminated) ever maintained by the
Controlled Group shall be treated as one defined benefit plan, and all qualified
defined contribution plans (whether or not terminated) ever maintained by the
Controlled Group shall be treated as one defined contribution plan.

         (2) As used in Sections 5.5, 5.6 and this Section 5.7, the term
"Controlled Group" shall be construed in the light of sections 414(b) and 414(c)
of the Code, as modified by section 415(h) of the Code.

         (3) Notwithstanding any other provisions of the Plan, the limitations
of Code section 415 are hereby incorporated by reference to the extent not
described in or inconsistent with the provisions of Sections 5.5 and 5.6 and
this Section 5.7.

                                      -27-
<PAGE>

         5.8 Limitation on Employer Contributions. An Employer's Employer
Contributions to the Trust on account of any Plan Year shall in no event exceed
the amount that would be deductible for such Year for purposes of federal taxes
on income under applicable provisions of the Code and shall be made on the
condition that such Contributions are deductible under applicable provisions of
the Code. For the purposes of this Section, the term "Employer Contributions"
shall include Before-Tax Contributions made for an Employee of an Employer.

                                      -28-
<PAGE>

                    ARTICLE VI - INVESTMENT OF CONTRIBUTIONS

         6.1 Investment Funds. The Trust Fund shall be divided into Investment
Funds, which shall include the Gorman-Rupp Stock Fund and the Money Market Fund.
The Trustee shall establish such other Investment Funds, as directed by the
Committee in its discretion, which may be in addition to or in lieu of the
initial Investment Funds. All Before-Tax Contributions and Employer
Contributions shall be invested therein as provided in Section 6.4. Subject to
applicable provisions of the Plan and Trust Agreement, the Trustee shall hold,
manage, administer, value, invest, reinvest, account for and otherwise deal with
each Investment Fund separately. The Trustee shall invest and reinvest the
principal and income of each such Fund and shall keep each such Fund invested,
without distinction between principal and income, as required under the terms of
the Plan and Trust Agreement. Dividends, interest and other distributions
received by the Trustee in respect of each Investment Fund shall be reinvested
in the same Fund. The determination of the Trustee as to whether an investment
is within the category of investments which may be purchased for an Investment
Fund shall be conclusive. The Trustee in its sole discretion may keep such
portion of each Investment Fund in cash or cash equivalents pending the
selection and purchase of suitable investments under each such Fund or as the
Trustee may from time to time deem to be advisable to maintain sufficient
liquidity to meet the obligations of the Plan or for other reasons, and the
Trustee shall not be liable for interest on uninvested funds.

         6.2 Account; Sub-Account. The Trustee shall establish and maintain an
Account for each Member, which Account shall reflect, pursuant to Sub-Accounts
established and maintained thereunder, the amount, if any, of the Member's (a)
Before-Tax Contributions, (b) Employer Profit Sharing Contributions, (c)
Employer Matching Contributions, (d) Restricted Employer Matching Contributions
and (e) Rollover Contributions. The Trustee shall also

                                      -29-
<PAGE>

maintain separate records which shall show (i) the portion of each such
Sub-Account invested in each Investment Fund and (ii) the amount of
contributions thereto, payments and withdrawals therefrom and the amount of
income, expenses, gains and losses attributable thereto. The interest of each
Member in the Trust Fund at any time shall consist of his Account balance (as
determined pursuant to Sections 7.1 and 7.2) as of the last preceding Valuation
Date plus credits and minus debits to such Account since that Date.

         6.3 Reports. The Trustee shall cause reports to be made quarterly to
each Member and to the Beneficiary of each deceased Member as to the value of
his Account. In addition, the Trustee shall cause such a report to be made to
each Member who (a) requests such a report in writing (provided that only one
report shall be furnished a Member upon such a request in any 12-month period)
or (b) terminates his employment with an Employer.

         6.4 Investment of Contributions. (1) Each Member shall, in accordance
with procedures established by the Committee, direct that all Before-Tax
Contributions, Employer Contributions (other than Restricted Employer Matching
Contributions) and Rollover Contributions made to the Trust Fund for such Member
be invested in such of the Investment Funds provided in Section 6.1 as the
Member shall elect, provided, however, that investment elections shall be made
in multiples of 1% of such Contributions. An investment election made by a
Member shall remain in effect and be applicable to all subsequent Before-Tax
Contributions, Employer Contributions (other than Restricted Employer Matching
Contributions) and Rollover Contributions made for him unless an investment
change is made by him and becomes effective pursuant to Subsection (2) of this
Section. In the absence of an effective investment election by a Member, all
Before-Tax Contributions, Employer Contributions (other than Restricted Employer
Matching Contributions) and Rollover Contributions made to the Trust

                                      -30-
<PAGE>

Fund for such Member shall be invested in the Money Market Fund. Restricted
Employer Matching Contributions made on behalf of a Member shall be invested in
the Gorman-Rupp Stock Fund.

         (2) A Member may, in accordance with procedures established by the
Committee, change his investment election to any other election permitted by
Subsection (1) of this Section with respect to all subsequent Before-Tax
Contributions and Employer Contributions (other than Restricted Employer
Matching Contributions) made for him. In addition, a Member may, as of any
Valuation Date, in accordance with procedures established by the Committee,
elect to transfer all or a part (in 1% increments) of the portion of his Account
(excluding his Restricted Employer Matching Contributions Sub-Account) which has
been invested in an Investment Fund (based on the value of such Account on the
immediately preceding Valuation Date) to any other Investment Fund specified by
him. In addition, after age 59, a Member may, in accordance with procedures
established by the Committee, elect to transfer all or a part (in 1% increments)
of his Restricted Employer Matching Contributions Sub-Account which has been
invested in the Gorman-Rupp Stock Fund (based on the value of such Sub-Account
on the immediately preceding Valuation Date) to any other Investment Fund
specified by him.

         6.5 Directions to Trustee. The Committee shall give appropriate and
timely directions to the Trustee in order to permit the Trustee to give effect
to the investment elections and investment change elections made under Section
6.4 and to provide funds for distributions and withdrawals pursuant to Article
VIII and other provisions of the Plan.

         6.6 Loans to Members. (1) A Member who is an Employee or a "party in
interest" within the meaning of Section 3(14) of ERISA may apply, in a manner
prescribed by

                                      -31-
<PAGE>

the Committee, for a loan from his Account (which, for purposes of this Section
6.6 shall not include any amounts allocated to the Member's Restricted Employer
Matching Contributions Sub-Account). If the Committee determines that the Member
is not in bankruptcy or similar proceedings and is entitled to a loan in
accordance with the following provisions of this Section, the Committee shall
direct the Trustee to make a loan to the Member from his Account.

         (2) A Member shall not be entitled to a loan under this Section unless
the Member consents to (a) the use of the Member's Account as security as
provided in Subsection (5)(c) of this Section and (b) the possible reduction of
the Member's Account as provided in Subsection (6) of this Section.

         (3) Each loan shall be in an amount which is not less than $1,000. A
Member may have only one loan outstanding at any one time. The maximum loan to
any Member (when added to the outstanding balance of all other loans to the
Member from all qualified employer plans (as defined in section 72(p)(4) of the
Code) of the Controlled Group) shall be an amount which does not exceed the
lesser of

         (a) $50,000, reduced by the excess (if any) of (i) the highest
     outstanding balance of such other loans during the one-year period ending
     on the day before the date on which such loan is made, over (ii) the
     outstanding balance of such other loans on the date on which such loan is
     made, or

         (b) 50% of the value of such Member's Account (excluding the Member's
     Restricted Matching Employer Contributions Sub-Account) on the date on
     which such loan is made.

         (4) For each Member for whom a loan is authorized pursuant to this
Section, the Committee shall (a) direct the Trustee to liquidate the Member's
interest in the Investment

                                      -32-
<PAGE>

Funds as directed in writing by the Member or, in the absence of such written
direction, on a default basis determined by the Committee, to the extent
necessary to provide funds for the loan, (b) direct the Trustee to disburse such
funds to the Member upon the Member's execution of the promissory note and
security agreement referred to in Subsection (5)(d) of this Section, (c)
transmit to the Trustee the executed promissory note and security agreement
referred to in Subsection (5)(d) of this Section, and (d) establish and maintain
a separate recordkeeping account within the Member's Account (the "Loan
Account") (i) which initially shall be in the amount of the loan, (ii) to which
the funds for the loan shall be deemed to have been allocated and then disbursed
to the Member, (iii) to which the promissory note shall be allocated and (iv)
which shall show the unpaid principal of and interest on the promissory note
from time to time. All payments of principal and interest by a Member shall be
credited initially to his Loan Account and applied against the Member's
promissory note, and then invested in the Investment Funds pursuant to the
Member's direction under Section 6.1.

         (5) Loans made pursuant to this Section:

         (a) shall be made available to all Members on a reasonable equivalent
     basis;

         (b) shall not be made available to highly compensated Eligible
     Employees in a percentage amount greater than the percentage amount made
     available to other Members;

         (c) shall be secured by the Member's Loan Account; and

         (d) shall be evidenced by a promissory note and security agreement
     executed by the Member which provides for:

                  (i) the security referred to in paragraph (c) of this
          Subsection;

                                      -33-
<PAGE>

                  (ii) a rate of interest determined by the Committee in
          accordance with applicable law;

                  (iii) repayment within a specified period of time, which shall
          not extend beyond five years unless the loan is used for the purchase
          of the Member's principal residence;

                  (iv) repayment in equal payments over the term of the loan,
          with payments not less frequently than quarterly; and

                  (v) for such other terms and conditions as the Committee shall
          determine, which shall include provision that:

                         (A) with respect to a Member who is an Employee, the
               loan will be repaid pursuant to authorization by the Member of
               equal payroll deductions over the repayment period sufficient to
               amortize fully the loan within the repayment period, provided,
               however, the Committee may waive the requirement of equal payroll
               deductions if the Company payroll through which the Member is
               paid cannot accommodate such deductions;

                         (B) the loan shall be prepayable in whole at any time
               without penalty; and

                         (C) the loan shall be in default and become immediately
               due and payable upon the first to occur of the following events:

                              (I) the Member's failure to make a required
                    payment on the promissory note, which payment remains unpaid
                    through the end of the calendar quarter following the
                    calendar quarter in which such payment was due;

                                      -34-
<PAGE>

                              (II) in the case of a Member who is not an
                    Employee, distribution of his Account;

                              (III) the filing of a petition, the entry of an
                    order or the appointment of a receiver, liquidator, trustee
                    or other person in a similar capacity, with respect to the
                    Member, pursuant to any state or federal law relating to
                    bankruptcy, moratorium, reorganization, insolvency or
                    liquidation, or any assignment by the Member for the benefit
                    of his creditors; or

                              (IV) the death, retirement or termination of
                    employment of a Member or the occurrence of any other event
                    permitting distribution of any portion of the Member's
                    Account (other than a withdrawal on account of Hardship as
                    permitted under Section 8.6).

         (6) Notwithstanding any other provision of the Plan, a loan made
pursuant to this Section shall be a first lien against the Member's Loan
Account. Any amount of principal or interest due and unpaid on the loan at the
time of any default on the loan shall be deemed to be distributed to the Member
at the time of default and shall be satisfied by deduction from the Member's
Loan Account, as follows:

         (a) in the case of a Member who is an Employee and who is not, at the
     time of the default, eligible to receive distribution of his Account under
     the provisions of Article VIII, other than a withdrawal on account of
     Hardship under Section 8.6, or by order of a court, at such time as he
     first becomes eligible to receive distribution of his Account

                                      -35-
<PAGE>

     under the provisions of Article VIII, other than a withdrawal on account
     of Hardship under Section 8.6, or by order of a court; or

         (b) in the case of any other Member, immediately upon such default.

          ARTICLE VII - MAINTENANCE AND VALUATION OF MEMBERS' ACCOUNTS

         7.1 Valuation of Investment Funds. (1) The Trustee shall, as of the
close of business on each Valuation Date, determine the value of each Investment
Fund. Each such valuation shall be made on the basis of the market value (as
determined by the Trustee) of the assets of each Fund, except that property
which the Trustee determines does not have a readily determinable market value,
and bonds and notes issued or guaranteed by the United States, shall be valued
at fair market value as determined by the Trustee in such manner as it deems
appropriate, and the Trustee's determination of such value shall be conclusive
on all interested persons for all purposes of the Plan. A similar valuation
shall be made at any other time upon the written direction of the Committee to
the Trustee or when the Trustee deems it appropriate to make such a valuation.

         (2) The Trustee shall determine, from the change in value of each
Investment Fund between the current Valuation Date and the then last preceding
Valuation Date, the net gain or loss of each such Fund during such period
resulting from expenses and realized and unrealized earnings, profits and losses
of the Fund during such period. For this purpose, income or other earnings
accrued but not collected during such period and expenses incurred but not paid
during such period shall not be counted, and the transfer of funds to or from an
Investment Fund pursuant to Section 6.4, Before-Tax Contributions and Employer
Contributions allocated to an Investment Fund, and payments, distributions and
withdrawals from an Investment Fund to provide benefits under the Plan for
Members or Beneficiaries shall not be deemed to be earnings, profits, expenses
or losses of the Investment Fund.

                                      -36-
<PAGE>

         (3) After each Valuation Date, the net gain or loss of each Investment
Fund determined pursuant to Subsections (1) and (2) of this Section shall be
allocated as of such Valuation Date to the Accounts of Members and Beneficiaries
of deceased Members in proportion to the amounts of such Accounts invested in
each Fund on such Valuation Date. In determining the amounts of Accounts on a
Valuation Date for the purposes of this Subsection (3), Before-Tax Contributions
and Employer Contributions to the Trust during or on account of a Plan Year
shall be deemed to have been made and allocated to the Accounts of Members on
the first day following the close of such Year. However, the Committee may adopt
rules to the effect that in determining the allocation of the net gain or loss
of each Investment Fund for any such period there shall be counted, on a
proportionate basis, distributions from or other debits to the Accounts of
Members and Beneficiaries since the beginning of such period to the extent the
amounts so distributed or debited were in such Fund during such period. Such
rules shall be uniform in their application to all persons who are similarly
situated.

         7.2 Procedures in Making Allocations and Corrections. In computing the
allocation of Employer Contributions and of the net gain or loss of each
Investment Fund, computations shall be made to four decimal places unless the
Committee determines that a different number of decimal places should be used.
In computing the amounts to be allocated and credited or debited to the Accounts
of Members or Beneficiaries, computations shall be made to the nearest cent or,
in the discretion of the Committee, to the last full cent, ten cents or dollar,
and any resulting excess or deficiency shall either be treated as general
earnings or expenses of the Fund or be used to correct errors in determining or
making any debits or credits to the Accounts of Members or Beneficiaries, all as
determined by the Committee in its discretion. Errors in determining or making
any credits or debits to Accounts may be adjusted in

                                      -37-
<PAGE>

such manner as the Committee and the Trustee deem to be fair and feasible,
including, but not limited to, the recomputation of the credits or debits in
question, the addition of adjustments to the income or expenses of an Investment
Fund or the making of adjustments as provided in the preceding sentence. The
Trustee need not delay distributions because of the possibility of such
recomputations and adjustments, and, to the extent permitted by applicable law,
neither the Trustee, any Employer nor the Committee (either as a committee or as
individuals) shall be liable for any overpayment made by the Trustee in reliance
upon the amounts of the Accounts of Members or Beneficiaries as reflected at the
time of such distribution in the record of such Accounts maintained by the
Trustee as provided in Section 6.2.

         7.3 Registration and Voting of Gorman-Rupp Stock. All shares of
Gorman-Rupp Stock acquired by the Trustee shall be held in the possession of the
Trustee or in a depository until disposed of pursuant to provisions of the Plan.
Such shares may be registered in the name of the Trustee or its nominee. Before
each annual or special meeting of its stockholders, the Company shall cause to
be sent to each Member and Beneficiary of a deceased Member who has Gorman-Rupp
Stock allocated to his Account on the record date of such meeting a copy of the
proxy solicitation material therefor, together with a form requesting
confidential instructions to the Trustee on how to vote the shares of
Gorman-Rupp Stock (including fractional shares) allocated to such Member's
Account. Upon receipt of such instructions, the Trustee shall vote the shares as
instructed. Instructions received from individual Members and Beneficiaries by
the Trustee shall be held in the strictest confidence and shall not be divulged
or released to any person including officers or Employees of the Company. To the
extent a Member or Beneficiary does not direct the Trustee in whole or in part
with respect to the

                                      -38-
<PAGE>

exercise of voting rights arising under Gorman-Rupp Stock allocated to his
Account, such voting rights shall not be exercised by the Trustee.

         7.4 Tender or Sale of Gorman-Rupp Stock. (1) Except to the extent
necessary to make distributions or withdrawals from the Plan as provided in
Article VIII or except as otherwise expressly provided in the Plan or the Trust
Agreement, the Trustee shall not sell, alienate, encumber, pledge, transfer or
otherwise dispose of, or tender or withdraw, any Gorman-Rupp Stock held by it
under the Plan. In the event the Committee determines that a tender offer for
shares of Gorman-Rupp Stock has commenced, then, notwithstanding any other
provision of the Plan or Trust Agreement, the following provisions of this
Section shall become applicable.

         (2) In the event it is determined that an offer described in Subsection
(1) of this Section has commenced, the Trustee shall cause to be sent to each
Member and Beneficiary of a deceased Member who, on the effective date of such
offer or at any time during the effective period of such offer, has Gorman-Rupp
Stock allocated to his Account all pertinent information in respect of such
offer, including all the terms and conditions thereof, together with a form
prescribed by the Trustee pursuant to which each such Member and Beneficiary may
direct the Trustee to tender or sell pursuant to such offer all or part of the
shares of Gorman-Rupp Stock so allocated to his Account. The Trustee shall
tender or sell only those shares of Gorman-Rupp Stock as to which valid and
timely directions to tender or sell are received and not validly and timely
revoked, and all other shares of Gorman-Rupp Stock held under the Plan shall
continue to be held by the Trustee. If in the course of an offer described in
Subsection (1) of this Section there shall arise any issue on which Members or
Beneficiaries of deceased Members who have directed the tender or sale of shares
of Gorman-Rupp Stock are required or have an opportunity

                                      -39-
<PAGE>

to alter their circumstances (including but not limited to an opportunity to
withdraw shares of Gorman-Rupp Stock previously tendered and an opportunity to
tender shares of Gorman-Rupp Stock in a competing offer), the Trustee shall, in
accordance with the foregoing provisions of this Subsection (2) and to the
extent reasonably practicable, solicit the directions of such Members and
Beneficiaries with respect to each such issue and act in response to such
directions. The instructions received by the Trustee from Members or
Beneficiaries shall be held by the Trustee in strict confidence and shall not be
divulged or released to any person, including directors, officers or employees
of the Company or any Employer, except as otherwise required by law.

         (3) Funds received in exchange for tendered shares of Gorman-Rupp Stock
shall be used by the Trustee to purchase Gorman-Rupp Stock (or other employer
securities within the meaning of Section 407(d) of ERISA) as soon as
practicable. In the interim, the Trustee shall invest such funds in short-term
investments permitted under the Trust Agreement.

         (4) Any decision by a Member or Beneficiary to tender (or not tender)
or to sell (or not sell) pursuant to Subsection (2) of this Section shall
constitute an exercise of control over the assets in his Account by such Member
or Beneficiary within the meaning of section 404(c) of the Act, and each Member
or Beneficiary who so exercises such control shall by such exercise release and
agree, on his behalf and on the behalf of his heirs and beneficiaries, to
indemnify and hold harmless the Trustee, the Employers and the Committee from
and against any claim, demand, loss, liability, cost or expense (including
reasonable attorney's fees) caused by or arising out of such exercise, including
without limitation any diminution in value or losses incurred from such
exercise.

                                      -40-
<PAGE>

             ARTICLE VIII - VESTING, DISTRIBUTIONS AND WITHDRAWALS

         8.1 Nonforfeitable Member Interests. Each Member's interest in the
Trust Fund shall be nonforfeitable at all times and shall be distributed and
withdrawn only as provided in the following Sections of this Article.

         8.2 (2) Distributions on Death While an Employee. If a Member dies
while in the employ of a Controlled Group Member, his entire Account shall be
paid to the Member's Beneficiary in a lump sum in cash and/or shares of
Gorman-Rupp Stock to the extent provided in Section 8.12, as elected by the
Beneficiary, within 60 days after the date of such Member's death.

         8.3 (3) Distributions on Other Termination of Employment. If a Member's
employment with the Controlled Group terminates other than by reason of his
death, his entire Account shall be paid to him in a lump sum in cash and/or
shares of Gorman-Rupp Stock to the extent provided in Section 8.12, as elected
by the Member. If the value of a Member's Account is $5,000 or less,
distribution of his Account shall be made as soon as practicable after the date
of his termination of employment. If the value of a Member's Account exceeds
$5,000, distribution of such Account shall not be made prior to the Member's
attainment of age 70 without his written request.

         8.4 Distributions on Death after Termination of Employment. If a Member
dies after his employment with the Controlled Group terminates and before his
Account has been paid to him, his Account shall be paid to his Beneficiary as
provided in Section 8.3.

         8.5 Time of Distribution. Effective as of January 1, 1997 and subject
to the provisions of Section 8.6, the distribution of a Member's Account shall
occur as provided in the

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

(2) As amended in its entirety by Amendment No. 1, effective as of 8/1/2000.

(3) As amended in its entirety by Amendment No. 1, effective as of 8/1/2000.

                                      -41-
<PAGE>

preceding Sections of this Article, but in no event later than 60 days after the
close of the Plan Year in which the latest of the following events occurs: (a)
the date on which the Member attains age 70, (b) the 10th anniversary of the
year in which the Member commenced membership in the Plan, or (c) the date of
the Member's termination of employment with the Controlled Group; provided,
however, that (i) a distribution to a Member pursuant to Section 8.3 shall be
made not later than the time provided in the following sentences of this Section
and (ii) a distribution to a Beneficiary pursuant to Sections 8.2 and 8.4 shall
be made within five years after the Member's death. Notwithstanding any other
provision of the Plan, to the extent required under section 401(a)(9) of the
Code, the entire Account of a Member who is a 5-percent owner (as defined in
section 416 of the Code) or who attains age 70 1/2 prior to January 1, 1999
shall be distributed or commence to be distributed to him, in accordance with
Section 8.3 or section 401(a)(9) of the Code (as elected by the Member), not
later than April 1 of the calendar year following the calendar year in which he
attains age 70 1/2 (whether or not his employment with the Controlled Group has
terminated) and, with respect to such Members who are Employees, on December 31
of such year and each succeeding year. In addition, the entire Account of any
other Member shall be distributed or commence to be distributed to him, in
accordance with Section 8.3 or section 401(a)(9) of the Code (as elected by the
Member), not later than the April 1 of the calendar year following the later of
(I) the calendar year in which he attains age 70 1/2 or (II) the calendar year
of his termination of employment. Distributions under the Plan shall be made in
accordance with the provisions of section 401(a)(9) of the Code and Treasury
Regulations issued thereunder, (including Treasury Regulations ss.
1.401(a)(9)-2), and such provisions shall control to the extent that they are
inconsistent with any other provision of the Plan.

                                      -42-
<PAGE>

         8.6 Withdrawal of Contributions. (1) Pursuant to procedures prescribed
by the Committee, effective as of any Valuation Date, a Member who has
established the existence of a Hardship may withdraw in cash such portion of his
Before-Tax Contributions Sub-Account (excluding any earnings allocated thereto)
as is necessary to alleviate such Hardship (as determined under Subsection (5)
of this Section).

         (2) Pursuant to procedures prescribed by the Committee, effective as of
any Valuation Date, a Member who has withdrawn his entire Before-Tax
Contributions Sub-Account (except any earnings allocated thereto) and who has
established the existence of a Hardship may withdraw in cash such part of his
Employer Profit Sharing Contributions Sub-Account, if any, as is necessary to
alleviate such Hardship (as determined under Subsection (5) of this Section).

         (3) Pursuant to procedures prescribed by the Committee, effective as of
any Valuation Date, a Member who has withdrawn his entire Before-Tax
Contributions Sub-Account (except any earnings allocated thereto) and his
Employer Profit Sharing Contributions Sub-Account and who has established the
existence of a Hardship may withdraw in cash such part of his Rollover
Contributions Sub-Account, if any, as is necessary to alleviate such Hardship
(as determined under Subsection (5) of this Section).

         (4) Pursuant to procedures prescribed by the Committee, effective as of
any Valuation Date, a Member who has withdrawn his entire Before-Tax
Contributions Sub-Account (except any earnings allocated thereto), his entire
Employer Profit Sharing Contributions Sub-Account and his entire Rollover
Contributions Sub-Account and who has established the existence of a Hardship
may withdraw in cash such part of his Employer Matching Contributions
Sub-Account as is necessary to alleviate such Hardship (as determined under
Subsection (5) of this Section).

                                      -43-
<PAGE>

         (5) For purposes of the Plan, a withdrawal will be treated as being
necessary to alleviate such Hardship only if (a) the withdrawal does not exceed
the amount necessary to meet such financial needs (including any amounts
necessary to pay any federal, state or local income taxes or penalties
reasonably anticipated to result from such distribution); (b) the Member has
obtained all distributions, other than hardship withdrawals, and all nontaxable
(at the time of the loan) loans currently available under the Plan and any other
plan maintained by any Employer; (c) the Member's Before-Tax Contributions (or
any comparable contributions to any other plan maintained by any Employer) are
suspended for a period of 12 months following receipt of the Hardship
withdrawal; and (d) the amount of the Member's Before-Tax Contributions (and any
comparable contributions to any other plan maintained by any Employer) for the
Member's taxable year immediately following the taxable year of the Hardship
withdrawal shall not be in excess of the applicable limit under Section 402(g)
of the Code for such next taxable year less the amount of such Member's
Before-Tax Contributions (and any comparable contributions to any other plan
maintained by any Employer) for the taxable year of the Hardship withdrawal. For
purposes of the preceding sentence, the phrase "any other plan maintained by any
Employer" means any other qualified or nonqualified deferred compensation plan
maintained by any Employer, including a stock option, stock purchase or similar
plan, or a cash or deferred arrangement that is part of a cafeteria plan within
the meaning of Section 125 of the Code, and such phrase shall be interpreted in
a manner consistent with Treasury regulations issued under Section 401(k) of the
Code.

         8.7 Order of Distributions and Withdrawals. In the event a distribution
or withdrawal is to be made from the Trust Fund pursuant to any provision of the
Plan or Trust Agreement and it is necessary to liquidate part (but not all) of
the Member's Account which is

                                      -44-
<PAGE>

invested in more than one Investment Fund to effect such distribution or
withdrawal, such Member shall designate (on a form approved by the Trustee,
signed by him and filed with the Committee) which Investment Fund or Funds in
which his Account is invested shall be liquidated (to the extent of his interest
therein) in order to make such distribution or withdrawal. If the Member is not
able or willing to make the decision contemplated by the first sentence of this
Section, such decision shall be made by the Trustee.

         8.8 Facility of Payment. In the event the Committee finds that any
Member or Beneficiary to whom a benefit is payable hereunder is unable to care
for his affairs because of physical, mental, or legal incompetence, the
Committee, in its discretion, may cause any payment due to him hereunder, for
which prior claim has been made by a duly qualified guardian or other legal
representative, to be paid to the individual or institution deemed by the
Committee to be maintaining or responsible for the maintenance of such Member or
Beneficiary. Any such payment shall be deemed a payment for the account of such
Member or Beneficiary and shall constitute a complete discharge of any liability
therefor under the Plan.

         8.9 Duplication of Benefits. To the extent permitted by law and except
as otherwise provided in the Plan, benefits under this Plan shall be in addition
to benefits provided under any other employee pension benefit plan (as such term
is defined in section 3(2) of the Act) which is now or hereafter adopted or
maintained by any member of the Controlled Group.

         8.10 Distribution on Sale of Assets or Subsidiary. In the event that a
Member's employment with the Controlled Group is terminated because of the
disposition by an Employer of substantially all of the assets of a trade or
business, or its interest in a subsidiary, and such Member continues employment
with the corporation acquiring such assets or such subsidiary, the Member shall
be entitled to a distribution of his Account as provided in Section 8.3 within
60

                                      -45-
<PAGE>

days after the Valuation Date coinciding with or next following the date his
employment so terminates; provided that the purchaser of such assets or
subsidiary does not maintain the Plan (within the meaning of Treasury
Regulations issued under section 401(k)(10) of the Code) after the disposition.

         8.11 Transfers of Eligible Rollover Distributions. (1) If a Member or
Spouse is eligible to receive a distribution from the Plan that constitutes an
"eligible rollover distribution" (as defined in Subsection (3) of this Section)
and the Member or Spouse elects to have all or a portion of such distribution
paid directly to an "eligible retirement plan" (as defined in Subsection (3) of
this Section) and specifies the eligible retirement plan to which the
distribution is to be paid, such distribution (or portion thereof) shall be made
in the form of a direct rollover to the eligible retirement plan so specified. A
Member or Spouse may not elect a direct rollover of a portion of an eligible
rollover distribution unless the amount to be rolled over is at least $500. A
direct rollover is a payment made by the Plan to the eligible retirement plan so
specified for the benefit of the Member or Spouse. Notwithstanding the preceding
provisions of this Section, a direct rollover of an eligible rollover
distribution shall not be made if a Member's or Spouse's eligible rollover
distributions for a Plan Year are reasonably expected to total less than $200.
Unless otherwise specifically provided herein, for purposes of this Section, the
term "Spouse" shall include a former spouse who is an alternate payee under a
qualified domestic relations order, as defined in section 414(p) of the Code.

         (2) The Company shall prescribe reasonable procedures for elections to
be made pursuant to this Section. Within a reasonable period of time (as
prescribed by Treasury regulations or rulings) before the payment of an eligible
rollover distribution, the Company shall

                                      -46-
<PAGE>

provide a written notice to the Member or Spouse describing his or her rights
under this Section and such other information required to be provided under
section 402(f) of the Code.

         (3) For purposes of the Plan, the term "eligible rollover distribution"
means any distribution of all or any portion of the balance to the credit of the
distributee from the Plan, except (a) any distribution that is one of a series
of substantially equal periodic payments (not less frequently than annually)
made for the life (or life expectancy) of the distributee or the joint lives (or
joint life expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more, (b) any
distribution to the extent the distribution is required under section 401(a)(9)
of the Code, (c) the portion of any distribution that is not includible in gross
income, (d) any withdrawal on account of Hardship and (e) such other amounts
specified in Treasury regulations or rulings issued under section 402(c) of the
Code. For purposes of this Section, the term "eligible retirement plan" means an
individual retirement account or annuity described in section 408 of the Code, a
defined contribution plan that meets the requirements of section 401(a) of the
Code and accepts rollovers, an annuity plan described in section 403(a) of the
Code, or any other type of plan that is included within the definition of
"eligible retirement plan" under section 401(a)(31)(D) of the Code; provided
however, that with respect to a Spouse (but not a former spouse who is an
alternate payee) who receives a distribution after a Member's death an "eligible
retirement plan" shall mean only an individual retirement account or annuity
described in section 408 of the Code.

         (4) The provisions of this Section are intended to comply with the
provisions of section 401(a)(31) of the Code and shall be interpreted in
accordance with such section and Treasury regulations and rulings issued
thereunder. The provisions of this Section shall be effective for distributions
under the Plan on and after January 1, 1993.

                                      -47-
<PAGE>

         8.12 Distribution of Gorman-Rupp Stock. Notwithstanding the preceding
provisions of this Article, a Member or Beneficiary who is eligible to receive a
distribution under Section 8.2, 8.3 or 8.4 (but not Section 8.6) may elect to
receive that portion of his distribution which is attributable to his interest
in the Gorman-Rupp Stock Fund in the form of whole shares of Gorman-Rupp Stock
with any fractional shares of Gorman-Rupp Stock in cash.

         8.13 Distributions Pursuant to a QDRO. If a qualified domestic
relations order (as defined in section 414(p) of the Code) so provides, the
portion of a Member's Account that is payable to the alternate payee(s) may be
distributed to the alternate payee(s) at the time specified in such order,
regardless of whether the Member is entitled to a distribution from the Plan at
such time. The portion of the Account so payable shall be valued as of the
Valuation Date coinciding with or next following the date specified in such
order.

                                      -48-
<PAGE>

                  ARTICLE IX - ADMINISTRATION OF THE TRUST FUND

         9.1 Appointment of Trustee. The Company has appointed National City
Bank to act as Trustee under the Plan and has executed the Trust Agreement with
such Trustee. The Company may, without the consent of any Member, other Employer
or other person, execute amendments to such Trust Agreement, execute such
further agreements as it in its sole discretion may deem necessary or desirable
to carry out the Plan, or at any time, upon 30 days written notice, remove the
Trustee and appoint a successor.

         9.2 Duties of Trustee. The Trustee shall invest Before-Tax
Contributions and Employer Contributions paid to it and earnings thereon in
accordance with the Plan and Trust Agreement. The Trustee shall also establish
and maintain separate Accounts for each Member in accordance with Articles IV,
VI and VII. The Trustee in its relation to the Plan shall be entitled to all of
the rights, privileges, immunities and benefits conferred upon it by the Plan or
Trust Agreement and shall be subject to all of the duties imposed upon it by the
Plan and Trust Agreement. The Trustee Agreement is hereby incorporated in the
Plan by reference, and each Employer, by adopting the Plan, approves the Trust
Agreement and authorizes the Company to execute any amendment or supplement
thereto in its behalf.

         9.3 The Trust Fund. The Trust Fund shall be held by the Trustee for the
exclusive benefit of the Members and their Beneficiaries and shall be invested
by the Trustee upon such terms and in such property as is provided in the Plan
and in the Trust Agreement. The Trustee shall from time to time make payments
and distributions from the Trust Fund as provided in the Plan.

         9.4 No Guarantee Against Loss. Neither the Trustee nor any Employer nor
the Committee nor any member of the Committee in any manner guarantees the Trust
Fund or

                                      -49-
<PAGE>

any part thereof against loss or depreciation. All persons having any interest
in the Trust Fund shall look solely to the Trust Fund for payment with respect
to such interest.

         9.5 Payment of Benefits. All payments of benefits provided for by the
Plan shall be made solely out of the Trust Fund and in accordance with
instructions given to the Trustee by the Committee pursuant to the terms of the
Plan, and neither any Employer nor the Trustee nor the Committee nor any member
of the Committee shall be otherwise liable for any benefits payable under the
Plan.

         9.6 Compensation and Expenses. The Trustee shall be entitled to receive
such reasonable compensation for its services as may be agreed upon by it and
the Company. Such compensation and the expenses of the Trustee and other
expenses necessary for the proper administration of the Plan and Trust,
including without limitation, costs incident to the purchase and sale of
securities, such as brokerage fees, commissions and transfer taxes, shall be
paid by the Trustee from the Trust Fund, except that the Employers may, in their
sole discretion, pay all or any part of such compensation and expenses. Taxes,
if any, on any property held by the Trustee shall be paid out of the Trust Fund
and taxes, if any, other than transfer taxes, on distributions to a Member or
Beneficiary of a Member shall be paid by the Member or the Beneficiary,
respectively.

         9.7 No Diversion of Trust Fund. Except as provided in Sections 4.3(2),
5.1(3), 5.2(5), 5.5(4) and 9.6, it shall be and is hereby made impossible, at
any time prior to the satisfaction of all liabilities with respect to Employees
and their Beneficiaries under the Plan, for any part of the corpus or income of
the Trust Fund to be (within the taxable year or thereafter) used for, or
diverted to, purposes other than the exclusive benefit of Employees or their
Beneficiaries.

                                      -50-
<PAGE>

         9.8 Transfer to this Plan from Other Plans. (1) The Trustee shall, at
the direction of the Committee, receive and thereafter hold and administer as a
part of the Trust Fund for a Member all cash and other property which may be
transferred to the Trustee from a trust held under another plan in which the
Member was a participant, which meets the requirements of sections 401(a) and
501(a) of the Code ("a qualified trust") and which is not subject to the
survivor annuity requirements of section 401(a)(11) of the Code. Subject to
other provisions of the Plan and Trust Agreement, the Trustee shall have the
authority to sell or otherwise convert to cash any property transferred to it
pursuant to this Section.

         (2) Cash or other property transferred to the Trustee pursuant to
Subsection (1) of this Section shall be allocated to such Investment Fund(s)
(including a new Investment Fund or Investment Funds established and maintained
by the Trustee) as the Trustee shall determine.

                                      -51-
<PAGE>

               ARTICLE X - ADOPTION OF THE PLAN BY OTHER EMPLOYERS

         10.1 Adoption. Any member of the Controlled Group may, with the consent
of the Company, adopt the Plan and thereby become an Employer hereunder by
executing an instrument evidencing such adoption on the order of its Board of
Directors and filing a copy thereof with the Company and the Trustee, and such
instrument shall (subject to such terms and conditions as the Company may
require or approve) become incorporated in the Plan by reference.

         10.2 Withdrawal of Employer. Any Employer (other than the Company)
which adopts the Plan may elect separately to withdraw from the Plan, and such
withdrawal shall constitute a termination of the Plan as to it, but amendments
to the Plan (except those made pursuant to Sections 10.1 and 10.3) may be made
only by the Company. Any such withdrawal shall be expressed in an instrument
executed by the withdrawing Employer on the order of its Board of Directors and
filed with the Company, the Committee and the Trustee. In the event of such a
withdrawal of an Employer or in the event the Plan is terminated as to an
Employer (but not all the Employers) pursuant to Section 14.1, such Employer
shall cease to be an Employer and, as soon as practicable after such withdrawal
or termination, the Trustee shall make distribution (if such distribution is
permitted by applicable law) pursuant to Section 8.3 to Members affected by such
withdrawal or termination as if each such Member's employment with the
Controlled Group had terminated.

         10.3 Withdrawal of Employee Group. Any Employer may elect to withdraw
from the Plan any designated group of its Employees while continuing to include
another group or other groups of its Employees within the Plan, and any such
withdrawal shall constitute a termination of the Plan as to the Employees to
which it is applicable. Any such withdrawal of a designated group of Employees
shall be expressed in an instrument executed by the Employer on

                                      -52-
<PAGE>

the order of its Board of Directors and filed with the Company (if the Employer
making such withdrawal is not the Company), the Committee and the Trustee. In
the event of such a withdrawal by an Employer or in the event the Plan is
terminated by the Company as to a group of Employees of another Employer
pursuant to Section 14.1, the Trustee shall, as soon as practicable after such
withdrawal or termination, make distribution (if such distribution is permitted
by applicable law) pursuant to Section 8.3 to Members affected by such
withdrawal or termination as if each such Member's employment with the
Controlled Group had terminated.

                                      -53-
<PAGE>

                           ARTICLE XI - THE COMMITTEE

         11.1 Appointment of Committee. The President of the Company shall
appoint a Committee of at least three persons (who may or may not be Members) to
administer the Plan, shall fill vacancies whenever necessary to maintain three
members serving on the Committee, shall designate the Chairman of the Committee
and from time to time may remove members from the Committee and add members
thereto. The Company shall certify the number and names of the members of the
Committee to the Trustee, which may rely upon such certification until it
receives written notice from the Company as to a change in the membership of the
Committee.

         11.2 Formalities of Committee Action. The Committee shall hold its
meetings at such times and places as it may determine. A majority of its members
shall constitute a quorum and all decisions and determinations of the Committee
shall be made by a majority of its members. Any decision or determination
reduced to writing and signed by a majority of the members of the Committee
shall be as fully effective as if it had been made by a majority vote at the
meeting duly called and held. The Committee may authorize any one member to sign
documents on behalf of the Committee in order to give evidence with respect to
action taken by the Committee. The Committee may appoint a Secretary who need
not be a member of the Committee and who shall keep minutes of its meetings. The
Committee may make such rules and regulations for the conduct of its business as
it deems advisable.

         11.3 Plan Interpretation and Findings of Fact. The Committee shall have
sole and absolute discretion to interpret the provisions of the Plan (including,
without limitation, by supplying omissions from, correcting deficiencies in, or
resolving inconsistencies or ambiguities in, the language of the Plan), to make
factual findings with respect to any issue arising under the Plan, to determine
the rights and status under the Plan of Members and other persons, to decide

                                      -54-
<PAGE>

disputes arising under the Plan and to make any determinations and findings with
respect to the benefits payable thereunder and the persons entitled thereto as
may be required for the purposes of the Plan. In furtherance of, but without
limiting, the foregoing, the Committee is hereby granted the following specific
authorities, which it shall discharge in its sole and absolute discretion in
accordance with the terms of the Plan (as interpreted, to the extent necessary,
by the Committee): (1) to resolve all questions (including factual questions)
arising under the provisions of the Plan as to any individual's entitlement to
become a Member; (2) to determine the amount of benefits, if any, payable to any
person under the Plan (including, to the extent necessary, making any factual
findings with respect thereto); and (3) to conduct the review procedure
specified in Section 13.3. All decisions of the Committee as to the facts of any
case, as to the interpretation of any provision of the Plan or its application
to any case, and as to any other interpretative matter or other determination or
question under the Plan shall be final and binding on all parties affected
thereby, subject to the provisions of Article XIII. The Committee shall direct
the Trustee relative to benefits to be paid under the Plan and shall furnish the
Trustee with any information reasonably required by it for the purpose of paying
benefits under the Plan.

         11.4 Electronic Media. Notwithstanding any provision of the Plan to the
contrary, including any provision which requires the use of a written
instrument, to the extent permitted by applicable law, the Committee may
establish procedures for the use of electronic media in communications and
transactions between the Plan or the Committee and Participants and
Beneficiaries. Electronic media may include, but are not limited to, e-mail, the
Internet, intranet systems and automated telephonic response systems.

                                      -55-
<PAGE>

         11.5 Assistance. The Committee may employ or retain such clerical,
legal, accounting, investment or other assistance as it deems necessary or
advisable for the proper administration of the Plan and Trust Fund.

         11.6 Uniform Administration of Plan. All action taken by the Committee
under the Plan shall treat all persons similarly situated in a uniform and
consistent manner.

                                      -56-
<PAGE>

     ARTICLE XII - ADMINISTRATION OF THE PLAN AND FIDUCIARY RESPONSIBILITY

         12.1 Responsibility for Administration. Except to the extent that
particular responsibilities are assigned to other Fiduciaries pursuant to the
Trust Agreement or some other Section of the Plan, the Company (as the Plan
Administrator) shall be responsible for the administration of the Plan. Each
other Fiduciary shall have such powers, duties, responsibilities and authorities
as shall be conferred upon him or delegated to him pursuant to provisions of the
Plan or Trust Agreement. Any person may serve in more than one fiduciary
capacity with respect to the Plan or Trust Fund if, pursuant to the Plan and/or
Trust Agreement, he is assigned or delegated any multiple fiduciary capacities.

         12.2 Named Fiduciaries. For purposes of the Plan, the Named Fiduciaries
shall be the Company, the Committee and the Trustee. The Company may, by an
instrument authorized and signed by the President of the Company, designate any
other person or persons as a Named Fiduciary or Named Fiduciaries to perform
functions specified in such instrument (or in a delegation pursuant to Section
12.3) which relate to the administration of the Plan or the Trust Fund, provided
such designee accepts such designation. Such a designation may be terminated at
any time by written notice from the President of the Company to the designee or
by written notice from the designee to such President.

         12.3 Delegation of Fiduciary Responsibilities. (1) The Company may
delegate to any person or persons any one or more powers, functions, duties
and/or responsibilities with respect to the Plan or the Trust Fund, other than
trustee responsibilities (as defined in section 405(c) of the Act) assigned to
the Trustee by the Trust Agreement or some other Section of the Plan. However,
no such power, function, duty or responsibility which is assigned to a Fiduciary
(other than the Company) pursuant to the Trust Agreement or some other Section
of the Plan shall be so delegated without the written consent of such Fiduciary.

                                      -57-
<PAGE>

         (2) Any delegation pursuant to Subsection (1) of this Section (a) shall
be signed by the President of the Company, be delivered to and accepted in
writing by the delegatee, (b) shall contain such provisions and conditions
relating to such delegation as such President deems appropriate, (c) shall
specify the powers, functions, duties and/or responsibilities therein delegated,
(d) may be amended from time to time by written agreement signed by the
President of the Company and by the delegatee, and (e) may be revoked (in whole
or in part) at any time by written notice (i) from the President of the Company
delivered to the delegatee or (ii) from the delegatee delivered to the President
of the Company.

         12.4 Immunities. Except as otherwise provided in Section 12.5 or by
applicable law, (a) no Fiduciary shall have the obligation to discharge any
duty, function or responsibility which is specifically assigned to another
Fiduciary or Fiduciaries by the terms of the Plan or the Trust Agreement or is
delegated exclusively to another Fiduciary or Fiduciaries pursuant to procedures
for such delegation provided for in the Plan or in the Trust Agreement; (b) no
Fiduciary shall be liable for any action taken or not taken with respect to the
Plan or Trust Fund except for his own negligence, bad faith or willful
misconduct; (c) no Fiduciary shall be personally liable upon any contract or
other instrument made or executed by him or in his behalf in the administration
of the Plan or Trust Fund; (d) no Fiduciary shall be liable for the neglect,
omission or wrongdoing of another Fiduciary; (e) each Employer and each officer
or director thereof, Employees, the Committee and each member thereof, and any
other person(s) to whom the Company delegates (or the Plan or the Trust
Agreement assigns) any duty with respect to the Plan or Trust Fund, may rely and
shall be fully protected in acting in good faith (i) upon the advice of counsel
(who may be of counsel for an Employer or another Fiduciary), (ii) upon the
records of a member of the Controlled Group, (iii) upon the opinion,
certificate, valuation,

                                      -58-
<PAGE>

report, recommendation or determination (A) of the auditor selected by an
Employer or of the Trustee or (B) of any person employed by the Trustee to
render advice with regard to any responsibility the Trustee has under the Plan
or Trust Agreement and (iv) upon any certificate, statement or other
representation made by or any information furnished by an Employee, a Member, a
Beneficiary or the Trustee and (f) the Committee and its members shall not be
required to make inquiry into the propriety of any action by an Employer or the
Trustee.

         12.5 Limitation on Exculpatory Provisions. Notwithstanding any other
provision of the Plan or Trust Agreement, no provision of the Plan or Trust
Agreement shall be construed to relieve or have the effect of relieving any
Fiduciary from any responsibility or liability for any obligation,
responsibility or duty imposed on such Fiduciary by Part 4 of Title I of the
Act.

         12.6 Plan Conversions. Notwithstanding any provision of the Plan to the
contrary, during any conversion period, in accordance with procedures
established by the Administrator, the Administrator may temporarily suspend, in
whole or in part, certain provisions of the Plan, which may include, but are not
limited to, a Participant's right to change his contribution election, a
Participant's right to change his investment election and a Participant's right
to borrow or withdraw from his Account or obtain a distribution from his
Account.

                                      -59-
<PAGE>

                        ARTICLE XIII - CLAIMS PROCEDURES

         13.1 Method of Filing Claim. Any Member or Beneficiary who thinks that
he is entitled to have received a distribution under the Plan or the Trust
Agreement which he has not received or that the amounts credited to his Account
are inaccurate may file with any member of the Committee a written claim
specifying the basis for his claim and the facts upon which he relies in making
such claim. Such claim must be signed by the claimant or his authorized
representative and shall be deemed filed when delivered to such a Committee
member.

         13.2 Notification by Committee. Unless such claim is allowed in full by
the Committee, the Committee shall (within 90 days after such was filed, plus an
additional 90 days if required for processing and if notice of the additional
90-day extension of time indicating the specific circumstances requiring the
extension and the day by which a decision shall be rendered is given to the
claimant within the first 90-day period) cause written notice to be mailed to
the claimant of the total or partial denial of such claim. Such notice shall be
written in a manner calculated to be understood by the claimant and shall state
the specific reason(s) for the denial of the claim, specific reference(s) to
pertinent provisions of the Plan and/or Trust Agreement on which the denial of
the claim was based, a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of why such
material or information is necessary, and appropriate information as to the
steps to be taken if the claimant wishes to submit his claim for review. If a
claimant does not receive any notice from the Committee within 90 days after his
claim is filed with the Committee, his claim shall be deemed to have been
denied.

         13.3 Review Procedure. Within six months after the denial of his claim,
the claimant or his duly authorized representative may appeal such denial by
filing with any officer of the Company a written request for a review of said
claim. If such an appeal is so filed within

                                      -60-
<PAGE>

such six months, a Named Fiduciary designated by the Company, shall conduct a
full and fair review of such claim and mail or deliver to the claimant a written
decision within 60 days after such appeal was filed unless special circumstances
require an extension of time, in which case such decision shall be rendered not
later than 120 days after such appeal was filed. If an extension of time for
review is required, written notice of the extension shall be furnished to the
claimant prior to the commencement of the extension. Such decision shall be
written in a manner calculated to be understood by the claimant, shall state the
specific reason(s) for the decision, shall make specific reference(s) to
pertinent provisions of the Plan and/or Trust Agreement on which the decision is
based and shall, to the extent permitted by applicable law, be final and binding
on all interested persons. During such review, the claimant or his duly
authorized representative shall be given an opportunity to review documents that
are pertinent to the claimant's claim and to submit issues and comments in
writing. If the decision on review is not furnished within such 60-day or
120-day period, as the case may be, the claim shall be deemed denied on review.

                                      -61-
<PAGE>

               ARTICLE XIV - AMENDMENT, SUSPENSION OR TERMINATION

         14.1 Right to Amend, Suspend or Terminate. Subject to the limitations
of Section 9.7, the Company has reserved, and does hereby reserve, the right at
any time, without the consent of any other Employer or of the Members,
Beneficiaries or any other person, (a) to amend the Plan, in whole or in part,
and (b) to suspend Employer Contributions to the Plan and (c) to terminate the
Plan, in whole or in part or as to any or all of the Employers or as to any
designated group of Employees, Members and their Beneficiaries. No such
amendment, suspension or termination shall decrease the amount to be contributed
by the Employers on account of any Plan Year preceding the Plan Year in which
such amendment, suspension or termination is approved by the Company.

         14.2 Procedure for Amendment, Suspension or Termination. Any amendment,
suspension or termination of the Plan pursuant to Section 14.1 shall be
expressed in an instrument executed by the Company and shall become effective as
of the date designated in such instrument or, if no date is so designated, on
the date of its execution.

         14.3 Effect of Termination. If the Plan shall be terminated by the
Company as to all Employers, Before-Tax Contributions and Employer Contributions
shall cease and, as soon as practicable after such termination, the Trustee
shall make distribution (if such distribution is permitted by applicable law) to
all Members pursuant to Section 8.3 as if each Member's employment with the
Controlled Group had terminated.

         14.4 Prohibition on Decreasing Accrued Benefits. No amendment to the
Plan (other than an amendment described in section 412(c)(8) of the Code) shall
have the effect of decreasing the accrued benefit of any Member. For purposes of
the preceding sentence, a Plan amendment which has the effect of (a) eliminating
or reducing an early retirement benefit or a retirement-type subsidy (as defined
in regulations of the Secretary of the Treasury) or (b)

                                      -62-
<PAGE>

eliminating an optional form of benefit (except as permitted by any such
regulations) with respect to benefits attributable to service before the
amendment, shall be treated as decreasing accrued benefits, provided, however,
that in the case of a retirement-type subsidy this sentence shall apply only
with respect to a Member who satisfies (either before or after the amendment)
the preamendment conditions for the subsidy.

                                      -63-
<PAGE>

                           ARTICLE XV - MISCELLANEOUS

         15.1 Spendthrift Provisions. No right or interest of any kind of a
Member or Beneficiary in the Trust Fund shall be anticipated, assigned (either
in law or in equity), alienated or be subject to encumbrance, garnishment,
attachment, execution or levy of any kind, voluntary or involuntary, or any
other legal or equitable process, except in accordance with a qualified domestic
relations order as defined in section 414(p) of the Code. The Committee shall
establish procedures to determine the qualified status of domestic relations
orders and to administer distributions under such qualified orders in accordance
with section 414(p) of the Code.

         15.2 No Enlargement of Employment Rights. The establishment of the Plan
shall not be construed as conferring any legal rights upon any Employee or any
person in respect of commencement, continuation, suspension, resumption or
termination of employment nor shall it interfere with or in any other way affect
the rights of an Employer to terminate or suspend employment and to treat any
Employee or other person without regard to the effect which such treatment might
have upon him as a Member.

         15.3 Notices, Reports and Statements. (1) All notices, reports and
statements given, made, delivered or transmitted to a Member shall be deemed
duly given, made, delivered or transmitted when mailed with postage prepaid and
addressed to the Member at the address last appearing on the books of the
Committee. A Member may change his address from time to time by written notice
in the form prescribed by the Committee.

         (2) Written directions, instructions, notices and other communications
from Members to the Employers or the Committee shall be mailed by first class
mail or delivered to

                                      -64-
<PAGE>

                           The Gorman-Rupp Company
                           305 Bowman Street
                           P.O. Box 1217
                           Mansfield, Ohio 44901

                           Attention:  401(k) Plan Committee

or to such other address as may be communicated in writing by the Company. Any
such direction, instruction, notice or other communication shall be deemed to
have been given when actually received at such location.

         15.4 Action by Company. Whenever the Company is authorized to act under
the Plan, such action shall be taken, unless otherwise provided in the Plan or
in a resolution of the Board of Directors of the Company, by written instrument
executed by (a) the President or a Vice President of the Company and (b) the
Secretary, Treasurer, an Assistant Treasurer or an Assistant Secretary of the
Company. To the extent permitted by applicable law, the Trustee may rely on any
instrument so executed as being validly authorized and as properly evidencing
the action of the Company.

         15.5 Merger or Transfer of Assets. There shall be no merger or
consolidation of this Plan with, or transfer of assets or liabilities of such
Plan to, any other plan unless each Member in the Plan would (if the Plan then
terminated) receive a benefit immediately after the merger, consolidation, or
transfer which is equal to or greater than the benefit he would have been
entitled to receive immediately before the merger, consolidation, or transfer
(if the Plan had then terminated).

         15.6 Acquisitions. In the event an Employer acquires all or a part of
another business organization (whether by merger, purchase of assets or
otherwise), the Committee shall determine the terms and conditions under which,
and the extent, if any, to which, remuneration paid by such business
organization and its predecessors, subsidiaries and affiliates shall be

                                      -65-
<PAGE>

recognized as Credited Compensation for purposes of the Plan, but no action
shall be taken pursuant to this Section which would discriminate in favor of
shareholders, officers or highly compensated employees of such business
organization as compared with other employees of such business organization.

         15.7 Severability Provision. If any provision of the Plan or Trust
Agreement or the application of such provision to any person or circumstances
shall be held invalid, the remainder of the Plan and Trust Agreement, or the
application of such provision to persons or circumstances other than those as to
which it is held invalid, shall not be affected thereby.

         15.8 Military Service. Effective as of December 12, 1994,
notwithstanding any provisions of this Plan to the contrary, contributions,
benefits and service credit with respect to qualified military service will be
provided in accordance with section 414(u) of the Code. "Qualified military
service" means any service in the uniformed services (as defined in Chapter 43
of title 38 of the United States Code) by an individual if such individual is
entitled to reemployment rights under such chapter with respect to such service.

                   ARTICLE XVI - TOP-HEAVY PLAN REQUIREMENTS

         16.1 Definitions. For the purposes of this Article, the following
terms, when used with initial capital letters, shall have the following
respective meanings:

         (1) Aggregation Group: Permissive Aggregation Group or Required
Aggregation Group, as the context shall require.

         (2) Compensation: An Employee's compensation as defined in Section
5.5(3), subject to the dollar limitation described in Section 1.1(14).

         (3) Defined Benefit Plan: A qualified plan as defined in section 414(j)
of the Code.

                                      -66-
<PAGE>

         (4) Defined Contribution Plan: A qualified plan as defined in section
414(i) of the Code.

         (5) Determination Date: For any Plan Year, the last day of the
immediately preceding Plan Year, except that in the case of the first Plan Year
of the Plan, the Determination Date shall be the last day of such first Plan
Year.

         (6) Former Key Employee: A Non-Key Employee with respect to a Plan Year
who was a Key Employee in a prior Plan Year. Such term shall also include his
Beneficiary in the event of his death.

         (7) Key Employee: An Employee or former Employee who, at any time
during the current Plan Year or any of the four preceding Plan Years, is (a) an
officer of a Controlled Group member (limited to no more than 50 Employees, or,
if lesser, the greater of 3 or 10 percent of the Employees) having an annual
Compensation greater than 50 percent of the dollar amount in effect under
section 415(b)(1)(A) of the Code for any such Plan Year, (b) one of the 10
Employees owning (or considered as owning within the meaning of section 318 of
the Code) the largest interests in a Controlled Group member and having annual
compensation of more than the dollar amount in effect under section 415(c)(1)(A)
of the Code, (c) a 5-percent owner (as such term is defined in section
416(i)(1)(B)(i) of the Code), or (d) a 1-percent owner (as such term is defined
in Section 416(i)(1)(B)(ii) of the Code) having an annual Compensation of more
than $150,000. For purposes of clause (b) of this Subsection, if two Employees
have the same interest in a Controlled Group member, the Employee having greater
annual compensation from such Controlled Group member shall be treated as having
a larger interest. For purposes of determining the number of officers taken into
account under clause (a) of this Subsection, Employees described in section
414(q)(8) of the Code shall be excluded. Effective for Plan

                                      -67-
<PAGE>

Years beginning after December 31, 1988, for purposes of this Subsection,
compensation has the meaning given such term by Code section 414(q)(7). The term
`Key Employee' shall also include such Employee's Beneficiary in the event of
his death.

         (8) Non-Key Employee: An Employee or former Employee who is not a Key
Employee. Such term shall also include his Beneficiary in the event of his
death.

         (9) Permissive Aggregation Group: The group of qualified plans of the
Employer consisting of:

         (a) the plans in the Required Aggregation Group; plus

         (b) one (1) or more plans designated from time to time by the Committee
     that are not part of the Required Aggregation Group but that satisfy the
     requirements of sections 401(a)(4) and 410 of the Code when considered with
     the Required Aggregation Group.

If the group includes two or more Defined Benefit Plans, the same actuarial
assumptions shall be used with respect to all such Plans and shall be specified
in such Plans.

         (10) Required Aggregation Group: The group of qualified plans of the
Employer consisting of:

         (a) each plan in which a Key Employee participates; plus

         (b) each other plan which enables a plan in which a Key Employee
     participates to meet the requirements of sections 401(a)(4) or 410 of the
     Code.

If the group includes two or more Defined Benefit Plans, the same actuarial
assumptions shall be used with respect to all such Plans and shall be specified
in such Plans.

         (11) Top-Heavy Account Balance: A Member's (including a Member who has
received a total distribution from this Plan) or a Beneficiary's
aggregate-balance standing to his

                                      -68-
<PAGE>

Account as of the Valuation Date coinciding with or immediately preceding the
Determination Date (as adjusted by the amount of any Employer Contributions made
or due to be made after such Valuation Date but before the expiration of the
extended payment period in section 412(c)(10) of the Code); provided, however,
that such balance shall include the aggregate distributions made during the five
(5) consecutive Plan Years ending with the Plan Year that includes the
Determination Date (including distributions under a terminated plan which if it
had not been terminated would have been included in a Required Aggregation
Group), and provided further that if an Employee or former Employee has not
performed services for any Employer maintaining the Plan at any time during the
5-year period ending on the Determination Date, his Account (and/or the Account
of his Beneficiary) shall not be taken into account.

         (12) Top-Heavy Group. An Aggregation Group if, as of a Determination
Date, the aggregate present value of accrued benefits for Key Employees in all
plans in the Aggregation Group (whether Defined Benefit Plans or Defined
Contribution Plans) is more than sixty percent (60%) of the aggregate present
value of accrued benefits for all employees in such plans. Proportional
subsidies shall be ignored in determining the top-heavy status of a Defined
Benefit Plan, but non-proportional subsidies shall be considered when making
such determination.

         (13) Top-Heavy Plan. See Section 16.2.

         16.2 Determination of Top-Heavy Status. (1) Except as provided by
Subsections (2) and (3) of this Section, the Plan shall be a Top-Heavy Plan if,
as of a Determination Date:

         (a) the aggregate of Top-Heavy Account Balances for Key Employees is
     more than sixty percent (60%) of the aggregate of all Top-Heavy Account
     Balances, excluding

                                      -69-
<PAGE>

     for this purpose the aggregate Top-Heavy Account Balances of Former Key
     Employees; or

         (b) if the Plan is included in a Required Aggregation Group which is a
     Top-Heavy Group.

         (2) If the Plan is included in a Required Aggregation Group which is
not a Top-Heavy Group, the Plan shall not be a Top-Heavy Plan notwithstanding
the fact that the Plan would otherwise be a Top-Heavy Plan under Subsection (1)
of this Section.

         (3) If the Plan is included in a Permissive Aggregation Group which is
not a Top-Heavy Group, the Plan shall not be a Top-Heavy Plan notwithstanding
the fact that the Plan would otherwise be a Top-Heavy Plan under Subsection (1)
of this Section.

         16.3 Minimum Contribution Requirement. Notwithstanding any other
provisions of the Plan to the contrary, if the Plan is a Top-Heavy Plan for any
Plan Year:

         (a) Each Non-Key Employee who is eligible to share in any Employer
     Contribution for such Plan Year shall be entitled to receive an allocation
     of such Contribution which is at least equal to three percent (3%) of his
     Compensation for such Plan Year.

         (b) The percentage minimum contribution requirement set forth in
     paragraph (a) above with respect to a Plan Year shall not exceed the
     percentage at which Employer Contributions are made (or required to be
     made) under the Plan for such Plan Year for the Key Employee for whom such
     percentage is the highest for such Year. The determination referred to in
     the immediately preceding sentence shall be determined for each Key
     Employee by dividing the Employer Contributions allocated to such Key
     Employee in that Plan Year by such Key Employee's Compensation for such
     Plan Year.

                                      -70-
<PAGE>

         (c) The percentage minimum contribution requirement set forth in
     paragraph (a) above may also be reduced or eliminated in accordance with
     Section 16.4(2).

         (d) For the purpose of paragraph (b) above, contributions taken into
     account shall include like contributions under all other Defined
     Contribution Plans in the Required Aggregation Group, excluding any such
     plan in the Required Aggregation Group if that plan enables a Defined
     Benefit Plan in such Required Aggregation Group to meet the requirements of
     section 401(a)(4) or section 410 of the Code.

         (e) For the purpose of this Section, the term "Employer Contributions"
     shall include Before-Tax Contributions made for an Employee.

         16.4 Coordination With Other Plans. (1) In applying this Article, an
Employer and all Controlled Group Members shall be treated as a single employer,
and the qualified plans maintained by such single employer shall be taken into
account.

         (2) In the event that another Defined Contribution Plan maintained by
the Controlled Group provides contributions or benefits on behalf of Members in
this Plan, such other plan(s) shall be taken into account in determining whether
this Plan satisfies Section 16.3 and, the minimum contribution required for a
Non-Key Employee in this Plan under Section 16.3 will be reduced or eliminated,
in accordance with the requirements of section 416 of the Code and the
Regulations thereunder, if a minimum contribution is made in whole or in part in
respect of such other plan(s).

         (3) Principles similar to those specifically applicable to this Plan
under this Article, and in general as provided for in section 416 of the Code
and the Regulations thereunder, shall be applied to the other plan(s) required
to be taken into account under this Article in

                                      -71-
<PAGE>

determining whether this Plan and such other plan(s) meet the requirements of
such section 416 of the Code and the Regulations thereunder.

                                   * * * * *

         DATED as of August 1, 2000, but actually executed at Mansfield, Ohio,
on December 28, 2000.

                              THE GORMAN-RUPP COMPANY

                              By:  /s/ JEFFREY S. GORMAN
                                   ---------------------------------------
                                    PRESIDENT AND CEO

                              And  /s/ ROBERT E. KIRKENDALL
                                   ---------------------------------------
                                     VICE PRESIDENT AND SECRETARY

                                      -72-
<PAGE>

                               AMENDMENT NO. 1 TO
                       THE GORMAN-RUPP COMPANY 401(K) PLAN
                 (AS AMENDED AND RESTATED AS OF AUGUST 1. 2000)

         The Gorman-Rupp Company hereby adopts this Amendment No. 1 to The
Gorman-Rupp Company 401(k) Plan (As Amended and Restated as of August 1, 2000)
(the "Plan"). Words and phrases used herein with initial capital letters that
are defined in the Plan are used herein as so defined.

                                       I.

         Effective as of January 1, 1995, clause (b) of Section 5.5(1) of the
Plan is hereby amended to read as follows:

         "(b) $30,000 ($35,000 effective January 1, 2001) (as such amount is
         adjusted pursuant to section 4 15(d) of the Code)"

                                       II.

         Effective as of August 1, 2000, Section 8.2 of the Plan is hereby
amended in its entirety to read as follows:

                  "8.2 Distributions on Death While an Employee. If a Member
         dies while in the employ of a Controlled Group Member, his entire
         Account shall be paid to the Member's Beneficiary in a lump sum in cash
         and/or shares of Gorman-Rupp Stock to the extent provided in Section
         8.12, as elected by the Beneficiary, within 60 days after the date of
         such Member's death."

                                      III.

         Effective as of August 1, 2000, Section 8.3 of the Plan is hereby
amended in its entirety to read as follows:

                  "8.3 Distributions on Other Termination of Employment. If a
         Member's employment with the Controlled Group terminates other than by
         reason of his death, his entire Account shall be paid to him in a lump
         sum in cash and/or shares of Gorman-Rupp Stock to the extent provided
         in Section 8.12, as elected by the Member. If the value of a Member's
         Account is $5,000 or less, distribution of his Account shall be made as
         soon as practicable after the date

<PAGE>

         of his termination of employment. If the value of a Member's Account
         exceeds $5,000, distribution of such Account shall not be made prior to
         the Member's attainment of age 70 without his written request."

         EXECUTED this 15th day of March, 2001.

                          THE GORMAN-RUPP COMPANY

                          By:    /s/ KENNETH E. DUDLEY
                                 ----------------------------------------------
                                 Name:  Kenneth E. Dudley
                                 Title:   Chief Financial Officer & Treasurer

                          By:    /s/ ROBERT E. KIRKENDALL
                                 ----------------------------------------------
                                 Name:  Robert E. Kirkendall
                                 Title:    Vice President & Corporate Secretary

<PAGE>

                               AMENDMENT NO. 2 TO
                       THE GORMAN-RUPP COMPANY 401(K) PLAN
                 (AS AMENDED AND RESTATED AS OF AUGUST 1, 2000)

         The Gorman-Rupp Company hereby adopts this Amendment No. 2 to The
Gorman-Rupp Company 401(k) Plan (As Amended and Restated as of August 1, 2000)
(the "Plan"). Words and phrases used herein with initial capital letters that
are defined in the Plan are used herein as so defined.

         The purpose of this Amendment is to reflect (1) the merger of the
Flo-Pak, Inc. 401(k) Plan & Trust (formerly known as the Hardwick-Morrison
Company, Inc. 401(k) Plan & Trust) into The Gorman-Rupp Company 401(k) Plan as
of November 1, 2002, and (2) the adoption of various provisions of the Economic
Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA"). The Gorman-Rupp
Company intends for this Amendment to satisfy the "good faith" compliance
requirements of EGTRRA and intends that this Amendment be construed in
accordance with EGTRRA and guidance issued thereunder.

                                       I.

         Effective as of January 1, 2002, the second sentence of Subsection (14)
of Section 1.1 of the Plan is hereby amended in its entirety to read as follows:

         "For purposes of this Subsection and any other Section of the Plan,
         effective as of January 1, 2002, Credited Compensation of an Employee
         for any Plan Year in excess of $200,000 (as adjusted for cost-of-living
         increases in accordance with Code section 401(a)(17)(B)) shall not be
         taken into account."

                                      II.

         Effective as of November 1, 2002, Section 1.1 of the Plan is hereby
amended by the addition of the following new Subsections, immediately following
Subsection (24) of Section 1.1 of the Plan, to read as follows:

                  "(24A) Flo-Pak Plan: The Flo-Pak 401(k) Plan & Trust (formerly
         known as the Hardwick-Morrison Company, Inc. 401(k)

<PAGE>

                  Plan & Trust) as in effect on October 31, 2002, which was
                  merged into the Plan effective as of November 1, 2002.

                  (24B) Flo-Pak Plan Employee Contributions: Elective deferral
         contributions made to the Flo-Pak Plan by a Former Flo-Pak Plan Member.

                  (24C) Flo-Pak Plan Employer Contributions: Employer
         contributions made to the Flo-Pak Plan on behalf of a Former Flo-Pak
         Plan Member.

                  (24D) Flo-Pak Plan Employee Contributions Sub-Account: See
         Section 6.2.

                  (24E) Flo-Pak Plan Employer Contributions Sub-Account: See
         Section 6.2.

                  (24F) Former Flo-Pak Plan Member: Any person who on October
         31, 2002 had amounts held in one or more accounts maintained under the
         Flo-Pak Plan."

                                      III.

         Effective as of November 1, 2002, Subsection (36) of Section 1.1 of the
Plan is hereby amended in its entirety to read as follows:

                  "(36) Rollover Contributions: Amounts transferred to a
         Member's Account pursuant to Section 3.5 of the Plan and rollover
         contributions made to the Flo-Pak Plan."

                                      IV.

         Effective as of November 1, 2002, Article II of the Plan is hereby
amended by the addition of a new Section 2.5 at the end thereof to read as
follows:

                  "2.5 Former Flo-Pak Plan Member. A Flo-Pak Plan Member shall
         be a Member on November 1, 2002; provided, however, that if he is not
         an Eligible Employee on November 1, 2002, Before-Tax Contributions may
         not be made for him pursuant to Section 3.1, unless and until he
         becomes an Eligible Employee."

                                       V.

         Effective as of January 1, 2002, clause (2) of Section 3.5 of the Plan
is hereby amended to read as follows:

                  "(2) the entire amount of a distribution to a Member that is
         attributable solely to a rollover contribution from a qualified trust

<PAGE>

         and otherwise satisfies the requirements of section
         408(d)(3)(A)(ii) of the Code."

                                      VI.

         Effective as of January 1, 2003, Article III of the Plan is hereby
amended by the addition of a new Section 3.6 to the end thereof to read as
follows:

                  "3.6 Catch-Up Before-Tax Contributions. Effective on and after
         January 1, 2003, all Members who have elected to make Before-Tax
         Contributions to this Plan and who have attained age 50 before the end
         of a particular Plan Year shall be eligible to make catch-up
         contributions for such Plan Year (the "Catch-Up Before-Tax
         Contributions") in accordance with, and subject to the limitations of,
         section 414(v) of the Code; provided, however, that Catch-Up Before-Tax
         Contributions shall not be eligible for Employer Matching Contributions
         under Section 4.1(1) of the Plan or Restricted Employer Matching
         Contributions under Section 4.1(2) of the Plan and; provided, further,
         that Catch-Up Before-Tax Contributions shall not be taken into account
         for purposes of the provisions of the Plan implementing the required
         limitations of Sections 401(a)(30) and 415(c) of the Code (i.e.,
         Sections 5.1(1) and 5.5(1) of the Plan, respectively). In addition,
         notwithstanding any provision of the Plan to the contrary, the Plan
         shall not be treated as failing to satisfy the requirements of sections
         401(k)(3), 401(k)(11), 410(b), or 416 of the Code, as applicable, by
         reason of the making of any such Catch-Up Before-Tax Contributions."

                                      VII.

         Effective as of January 1, 2003, Subsection (2) of Section 4.4 of the
Plan is hereby amended by the addition of the following new sentence at the end
thereof to read as follows:

         "Notwithstanding the foregoing, for purposes of this Subsection, the
         term "Before-Tax Contributions" shall not include any Catch-Up
         Before-Tax Contributions (as defined in Section 3.6)."

                                     VIII.

         Effective as of January 1, 2002, the first sentence of Subsection (1)
of Section 5.1 of the Plan is hereby amended in its entirety to read as follows:

         "Notwithstanding the foregoing provisions of Articles III and IV, and
         except to the extent permitted under Section 3.6 of the Plan and
         section 414(v) of the Code, the sum of a Member's Before-Tax

                                       3
<PAGE>

         Contributions shall not, for any taxable year of such Member commencing
         on or after January 1, 2002, exceed $11,000 (as such amount may be
         adjusted for increases in the cost of living pursuant to section 402(g)
         of the Code)."

                                      IX.

         Effective as of January 1, 2002, Section 5.4 of the Plan is hereby
amended in its entirety to read as follows:

                  "5.4 Monitoring Procedures. (1) In order to ensure that at
         least one of the actual deferral percentages specified in Section
         5.2(1) and at least one of the contribution percentages specified in
         Section 5.3(1) are satisfied for each applicable Plan Year, the Company
         shall monitor (or cause to be monitored) the amount of Before-Tax
         Contributions and Employer Contributions being made to the Plan for
         each Eligible Employee during each Plan Year. In the event that the
         Company determines that neither of such actual deferral percentages or
         neither of such contribution percentages will be satisfied for a Plan
         Year, the Before-Tax Contributions and Employer Contributions made
         thereafter for each highly compensated Eligible Employee (as defined in
         Section 5.2(3)) shall be reduced (pursuant to non-discriminatory rules
         adopted by the Company) to the extent necessary to decrease the actual
         deferral percentage and/or the contribution percentage for highly
         compensated Eligible Employees for such Plan Year to a level which
         satisfies either of the actual deferral percentages and/or either of
         the contribution percentages.

                  (2) In order to ensure that excess deferrals (as such term is
         defined in Section 5.1(2)) shall not be made to the Plan for any
         taxable year for any Member, the Company shall monitor (or cause to be
         monitored) the amount of Before-Tax Contributions being made, or to be
         made, to the Plan for each Member during each taxable year and shall
         take such action (pursuant to non-discriminatory rules adopted by the
         Company) to prevent Before-Tax Contributions made, or to be made, for
         any Member under the Plan for any taxable year from exceeding the
         maximum amount applicable under Section 5.1(1).

                  (3) The actions permitted by Subsections (1) and (2) of this
         Section are in addition to, and not in lieu of, any other actions that
         may be taken pursuant to other Sections of the Plan or that may be
         permitted by applicable law or regulation in order to ensure that the
         limitations described in Sections 5.1, 5.2 and 5.3 are met."

                                       4
<PAGE>

                                       X.

         Effective as of January 1, 2002, Subsection (1) of Section 5.5 of the
Plan is hereby amended in its entirety to read as follows:

                  "(1) Notwithstanding any other provision of the Plan (except
         to the extent permitted under Section 3.6 of the Plan and section
         414(v) of the Code), effective as of January 1, 2002, the maximum
         annual addition (as defined in Subsection (2) of this Section) to a
         Member's account for any Plan Year (which shall be the limitation year)
         shall in no event exceed the lesser of (a) 100% of the Member's
         compensation for such Plan Year or (b) $40,000 (as such amount is
         adjusted by the Secretary of the Treasury pursuant to section 415(d) of
         the Code)."

                                      XI.

         Effective as of January 1, 2002, the second sentence of Subsection (3)
of Section 5.5 of the Plan is hereby amended in its entirety to read as follows:

         "Effective as of January 1, 2002, a Member's compensation as used in
         this Section shall not exceed $200,000 (as adjusted for cost-of-living
         increases pursuant to Code section 401(a)(17)(B)) for any Plan Year."

                                      XII.

         Effective as of November 1, 2002, the first sentence of Section 6.2 of
the Plan is hereby amended in its entirety to read as follows:

         "The Trustee shall establish and maintain an Account for each Member,
         which Account shall reflect, pursuant to Sub-Accounts established and
         maintained thereunder, the amount, if any, of the Member's (a)
         Before-Tax Contributions, (b) Employer Profit Sharing Contributions,
         (c) Employer Matching Contributions, (d) Restricted Employer Matching
         Contributions, (e) Flo-Pak Plan Employee Contributions, (f) Flo-Pak
         Plan Employer Contributions and (g) Rollover Contributions."

                                     XIII.

         Effective as of November 1, 2002, the last sentence of Subsection (2)
of Section 7.1 of the Plan is hereby amended by inserting the words "or Section
9.8" immediately following the words "Section 6.4" where they appear therein.

                                       5
<PAGE>

                                      XIV.

         Effective as of November 1, 2002, Section 8.1 of the Plan is hereby
amended in its entirety to read as follows:

                  "8.1 Nonforfeitable Member Interests. (1) Each Member's
         interest in his Account, other than a Former Flo-Pak Plan Member's
         interest in his Flo-Pak Plan Employer Contributions Sub-Account, shall
         be nonforfeitable at all times and shall be distributed and withdrawn
         only as provided in the following Sections of this Article.

                  (2) Each Former Flo-Pak Plan Member who is an Eligible
         Employee on November 1, 2002 shall have a 100% vested and
         nonforfeitable interest in his Flo-Pak Plan Employer Contributions
         Sub-Account, which shall be distributed and withdrawn only as provided
         in the following Sections of this Article.

                  (3) With respect to a Former Flo-Pak Plan Member who is not an
         Eligible Employee on November 1, 2002, the percentage of such Former
         Flo-Pak Plan Member's vested interest, if any, in his Flo-Pak Plan
         Employer Contributions Sub-Account shall be determined in accordance
         with the provisions of the Flo-Pak Plan as in effect on October 31,
         2002. Such vested interest shall be distributed and withdrawn only as
         provided in the following Sections of this Article. The unvested
         portion of such a Former Flo-Pak Plan Member's Flo-Pak Plan Employer
         Contributions Sub-Account shall be forfeited upon the earlier of (i)
         the date of distribution (or deemed distribution as provided in the
         Flo-Pak Plan) of the vested portion of such Former Flo-Pak Plan
         Member's Account or (ii) the date on which such Former Flo-Pak Plan
         Member incurs five consecutive one-year "Breaks in Service" (as defined
         in the Flo-Pak Plan), and if such Former Flo-Pak Plan Member resumes
         employment as an Eligible Employee under the Plan, the Former Flo-Pak
         Plan Member shall have the right to repay to the Plan the full amount
         of the distribution attributable to employer contributions within the
         time provided in the following sentence. If a former participant in the
         Flo-Pak Plan who, prior to November 1, 2002, forfeited all or a portion
         of his interest under the Flo-Pak Plan on account of a distribution or
         deemed distribution to him from the Flo-Pak Plan becomes an Eligible
         Employee under this Plan, such former participant shall have the right
         to repay to the Plan the full amount of the distribution attributable
         to employer contributions on or before the earlier of the date such
         participant incurs five consecutive one-year "Breaks in Service" (as
         defined in the Flo-Pak Plan) following the date of distribution or five
         years after the first date on which such

                                       6
<PAGE>

         participant is subsequently reemployed. If a former participant under
         the Flo-Pak Plan who received a deemed distribution from the Flo-Pak
         Plan is reemployed as an Eligible Employee prior to incurring five
         consecutive one-year "Breaks in Service" (as defined in the Flo-Pak
         Plan), such former participant will be deemed to have immediately
         repaid such distribution to the Plan. In the event of a repayment as
         described in this Subsection, an Account shall be established for such
         Former Flo-Pak Plan Member or such former participant with a value
         equal to such participant's account attributable to employer
         contributions at the time the distribution or deemed distribution was
         made. The sources for such restoration shall, in the discretion of the
         Employer, be income or gain to the Plan, forfeitures or Employer
         Contributions.

                  (4) Notwithstanding any provision of the Flo-Pak Plan, any
         forfeitures arising under the preceding provisions of this Plan or the
         provisions of the Flo-Pak Plan shall be applied to reduce Employer
         Contributions under this Plan."

                                      XV.

         Effective as of January 1, 2003, the last two sentences of Section 8.5
of the Plan are hereby amended to read as follows:

         "In addition, the entire Account of any other Member shall be
         distributed or commence to be distributed to him, in accordance with
         Section 8.3 or section 401(a)(9) of the Code (as elected by the
         Member), not later than April 1 of the calendar year following the
         later of (I) the calendar year in which he attains age 70 1/2 or (II)
         the calendar year of his termination of employment; provided, however,
         that a Member who attains age 70 1/2 while an Employee may elect to
         have his Account distributed or commence to be distributed to him, in
         accordance with Section 8.3 or section 401(a)(9) of the Code (as
         elected by the Member), on the April 1 of the calendar year following
         the calendar year in which he attains age 70 1/2. Distributions under
         the Plan shall be made in accordance with the provisions of section
         401(a)(9) of the Code and Treasury Regulations issued thereunder, and
         such provisions shall control to the extent that they are inconsistent
         with any other provision of the Plan."

                                      XVI.

         Effective as of November 1, 2002, Section 8.6 of the Plan is hereby
amended in its entirety to read as follows:

                                       7
<PAGE>

                  "8.6 Withdrawal of Contributions. (1) Pursuant to procedures
         prescribed by the Committee, effective as of any Valuation Date, a
         Member who has established the existence of a Hardship may withdraw in
         cash such portion of his Before-Tax Contributions Sub-Account and
         Flo-Pak Plan Employee Contributions Sub-Account (excluding any earnings
         allocated to such Sub-Accounts) as is necessary to alleviate such
         Hardship (as determined under Subsection (5) of this Section).

                  (2) Pursuant to procedures prescribed by the Committee,
         effective as of any Valuation Date, a Member who has withdrawn his
         entire Before-Tax Contributions Sub-Account and Flo-Pak Plan Employee
         Contributions Sub-Account (except any earnings allocated to such
         Sub-Accounts) and who has established the existence of a Hardship may
         withdraw in cash such part of his Employer Profit Sharing Contributions
         Sub-Account, if any, as is necessary to alleviate such Hardship (as
         determined under Subsection (5) of this Section).

                  (3) Pursuant to procedures prescribed by the Committee,
         effective as of any Valuation Date, a Member who has withdrawn his
         entire Before-Tax Contributions Sub-Account and Flo-Pak Plan Employee
         Contributions Sub-Account (except any earnings allocated to such
         Sub-Accounts) and his Employer Profit Sharing Contributions Sub-Account
         and who has established the existence of a Hardship may withdraw in
         cash such part of his Rollover Contributions Sub-Account, if any, as is
         necessary to alleviate such Hardship (as determined under Subsection
         (5) of this Section).

                  (4) Pursuant to procedures prescribed by the Committee,
         effective as of any Valuation Date, a Member who has withdrawn his
         entire Before-Tax Contributions Sub-Account and Flo-Pak Plan Employee
         Contributions Sub-Account (except any earnings allocated to such
         Sub-Accounts), his entire Employer Profit Sharing Contributions
         Sub-Account and his entire Rollover Contributions Sub-Account and who
         has established the existence of a Hardship may withdraw in cash such
         part of his Employer Matching Contributions Sub-Account and Flo-Pak
         Plan Employer Contributions Sub-Account as is necessary to alleviate
         such Hardship (as determined under Subsection (5) of this Section).

                  (5) For purposes of the Plan, a withdrawal will be treated as
         being necessary to alleviate such Hardship only if (a) the withdrawal
         does not exceed the amount necessary to meet such financial needs
         (including any amounts necessary to pay any federal, state or local
         income taxes or penalties reasonably anticipated to result from such
         distribution); (b) the Member has

                                       8
<PAGE>

         obtained all distributions, other than hardship withdrawals, and all
         nontaxable (at the time of the loan) loans currently available under
         the Plan and any other plan maintained by any Employer; and (c) the
         Member's Before-Tax Contributions (or any comparable contributions to
         any other plan maintained by any Employer) are suspended for a period
         of 6 months following receipt of the Hardship withdrawal. For purposes
         of the preceding sentence, the phrase "any other plan maintained by any
         Employer" means any other qualified or nonqualified deferred
         compensation plan maintained by any Employer, including a stock option,
         stock purchase or similar plan, or a cash or deferred arrangement that
         is part of a cafeteria plan within the meaning of Section 125 of the
         Code, and such phrase shall be interpreted in a manner consistent with
         Treasury regulations issued under Section 401(k) of the Code.

                  (6) Notwithstanding any other provision of the Plan to the
         contrary, a Former Flo-Pak Plan Member may withdraw any Rollover
         Contributions made to the Flo-Pak Plan prior to November 1, 2002. Such
         withdrawals shall be made pursuant to procedures established by the
         Committee."

                                     XVII.

         Effective as of November 1, 2002, Section 8.10 of the Plan is hereby
deleted and reserved without renumbering the remaining Sections of Article VIII.

                                     XVIII.

         Effective as of January 1, 2002, Subsection (3) of Section 8.11 of the
Plan is hereby amended in its entirety to read as follows:

                  "(3) For purposes of the Plan, the term "eligible rollover
         distribution" means any distribution of all or any portion of the
         balance to the credit of the distributee from the Plan, except (a) any
         distribution that is one of a series of substantially equal periodic
         payments (not less frequently than annually) made for the life (or life
         expectancy) of the distributee or the joint lives (or joint life
         expectancies) of the distributee and the distributee's designated
         beneficiary, or for a specified period of ten years or more, (b) any
         distribution to the extent the distribution is required under section
         401(a)(9) of the Code, (c) the portion of any distribution that is not
         includible in gross income, (d) any withdrawal on account of Hardship
         and (e) such other amounts specified in Treasury regulations or rulings
         issued under section 402(c) of the Code. For purposes of this Section,
         the term "eligible retirement plan" means an individual retirement
         account or annuity described in section 408 of the Code, a defined
         contribution plan that meets the

                                       9
<PAGE>

         requirements of section 401(a) of the Code and accepts rollovers, an
         annuity plan described in section 403(a) of the Code, or any other type
         of plan that is included within the definition of "eligible retirement
         plan" under section 401(a)(31)(D) of the Code. The term "eligible
         retirement plan" as defined in this Section shall also apply in the
         case of a distribution paid to a Spouse after a Member's death, or to a
         Spouse or former Spouse who is an alternate payee."

                                      XIX.

         Effective as of November 1, 2002, Section 9.8 of the Plan is hereby
amended by the addition of a new Subsection (3) to the end thereof to read as
follows:

                  "(3) Notwithstanding the preceding provisions of this Section,
         the Trustee shall at the direction of the Committee receive and
         thereafter hold and administer as part of the Trust Fund all cash or
         other property which may be transferred to it from the Flo-Pak Plan as
         a consequence of the merger of the Flo-Pak Plan into the Plan. With
         respect to a transfer described in the preceding sentence, (a) the
         transferred amounts shall be allocated to Flo-Pak Plan Employee
         Contributions Sub-Accounts or Flo-Pak Plan Employer Contributions
         Sub-Accounts, as applicable, and shall be invested in the Investment
         Funds in accordance with procedures established by the Committee, and
         (b) the provisions of section 411(d)(6) of the Code shall be satisfied
         with respect to the transferred amounts. A Member who has such amounts
         transferred to the Plan on his behalf may elect to transfer all or a
         portion of such amounts that have been invested in an Investment Fund
         or Funds to any other Investment Fund or Funds at the time and in the
         manner provided in Section 6.4(2)."

                                      XX.

         Effective as of November 1, 2002, the second sentence of Section 11.3
of the Plan is hereby amended in its entirety to read as follows:

         "In furtherance of, but without limiting, the foregoing, the Committee
         is hereby granted the following specific authorities, which it shall
         discharge in its sole and absolute discretion in accordance with the
         terms of the Plan (as interpreted, to the extent necessary, by the
         Committee): (1) to resolve all questions (including factual questions)
         arising under the provisions of the Plan as to any individual's
         entitlement to become a Member, and (2) to determine the amount of
         benefits, if any, payable to any person under the Plan (including, to
         the extent necessary, making any factual findings with respect
         thereto)."

                                       10
<PAGE>

                                      XXI.

         Effective as of January 1, 2002, Section 13.2 of the Plan is hereby
amended in its entirety to read as follows:

                  "13.2 Notification by Committee. If the claim is wholly or
         partially denied by the Committee, the Committee shall (within 90 days
         after such claim was filed, plus an additional period of 90 days if the
         Committee determines that special circumstances require an extension of
         time for processing the claim and if written notice of the 90-day
         extension of time indicating the specific circumstances requiring the
         extension and the date by which a decision shall be rendered is given
         to the claimant within the first 90-day period) cause written notice to
         be mailed to the claimant of the total or partial denial of such claim.
         Such notice shall be written in a manner calculated to be understood by
         the claimant and shall (a) state the specific reason(s) for the adverse
         benefit determination, (b) make reference(s) to the specific provisions
         of the Plan and/or Trust Agreement on which the determination was
         based, (c) contain a description of any additional material or
         information necessary for the claimant to perfect the claim and an
         explanation of why such material or information is necessary, and (d)
         contain a description of the Plan's review procedures under Section
         13.3 and the time limits applicable to such procedures, including a
         statement of the claimant's right to bring a civil action under section
         502(a) of ERISA following an adverse benefit determination on review."

                                     XXII.

         Effective as of January 1, 2002, Section 13.3 of the Plan is hereby
amended in its entirety to read as follows:

                  "13.3 Review Procedure. Within six months after receipt of a
         notification of an adverse benefit determination, the claimant or his
         duly authorized representative may appeal such denial by filing with
         any officer of the Company a written request for a review of the
         claimant's claim. If such an appeal is so filed within six months, a
         Named Fiduciary designated by the Company shall conduct a full and fair
         review of such claim. During such full and fair review, the claimant
         shall be provided with (a) the opportunity to submit written comments,
         documents, records, and other information relating to the claim for
         benefits, and (b) reasonable access to and copies of, upon request and
         free of charge, all documents, records, and

                                       11
<PAGE>

         other information relevant to the claimant's claim for benefits. In
         addition, such full and fair review shall take into account all
         comments, documents, records, and other information submitted by the
         claimant relating to the claim, without regard to whether such
         information was submitted or considered in the initial benefit
         determination. The Named Fiduciary shall mail or deliver to the
         claimant written notice of the benefit determination on review within a
         reasonable period of time, but not later than 60 days after the receipt
         of the request for review unless special circumstances require an
         extension of time for processing. If the Named Fiduciary determines
         that an extension of time for processing is required, written notice of
         the extension shall be furnished to the claimant setting forth the
         special circumstances requiring an extension of time and the date by
         which the Named Fiduciary expects to render a decision on review, and
         shall be furnished prior to the termination of the initial 60-day
         period. In no event shall such extension exceed a period of 60 days
         from the end of the initial period. In the case of an adverse benefit
         determination on review, the notice of the determination shall be
         written in a manner calculated to be understood by the claimant, shall
         (a) state the specific reason(s) for the adverse benefit determination,
         (b) make reference(s) to the specific provisions of the Plan and/or
         Trust Agreement on which the determination was based, (c) contain a
         statement that the claimant is entitled to receive, upon request, and
         free of charge, reasonable access to, and copies of, all documents,
         records, and other information relevant to the claimant's claim for
         benefits, and (d) contain a statement describing any voluntary appeal
         procedures offered by the Plan and the claimant's right to obtain
         information about such procedures and a statement of the claimant's
         right to bring an action under Section 502(a) of ERISA. To the extent
         permitted by applicable law, the determination on review shall be final
         and binding on all interested persons. The Named Fiduciary shall have
         the same authorities to interpret the Plan and make factual findings as
         are granted to the Committee under Section 11.3."

                                     XXIII.

                  Effective as of January 1, 2002, Subsection (7) of Section
         16.1 of the Plan is hereby amended in its entirety to read as follows:

                  "(7) Key Employee: An Employee or former Employee who, at any
         time during the current Plan Year, was (a) an officer of a Controlled
         Group member (limited to no more than 50 Employees or, if lesser, the
         greater of 3 or 10 percent of the Employees) having an annual
         Compensation greater than $130,000 (as adjusted under section 416(i)(1)
         of the Code for Plan Years beginning after December 31, 2002), (b) a
         5-percent owner (as such term is defined in section 416(i)(1)(B)(i) of
         the Code) of a

                                       12
<PAGE>

         Controlled Group member, or (c) a 1-percent owner (as such term is
         defined in section 416(i)(1)(B)(ii) of the Code) of a Controlled Group
         member having an annual Compensation of more than $150,000. For
         purposes of this Subsection, the term "Compensation" has the meaning
         given such term by section 415(c)(3) of the Code. The term "Key
         Employee" shall also include such Employee's Beneficiary in the event
         of his death. The determination of who is a Key Employee shall be made
         in accordance with Code section 416(i)(1) and the applicable Treasury
         Regulations and other guidance of general applicability issued
         thereunder."

                                     XXIV.

         Effective as of January 1, 2002, Subsection (11) of Section 16.1 of the
Plan is hereby amended in its entirety to read as follows:

                  "(11) Top-Heavy Account Balance: A Member's (including a
         Member who has received a total distribution from this Plan) or a
         Beneficiary's aggregate balance standing to his Account as of the
         Valuation Date coinciding with or immediately preceding the
         Determination Date (as adjusted by the amount of any Employer
         Contributions made or due to be made after such Valuation Date but
         before the expiration of the extended payment period in section
         412(c)(10) of the Code); provided, however, that such balance shall
         include the aggregate distributions made to such Member or Beneficiary
         during the 1-year period ending on the Determination Date (including
         distributions under a terminated plan which if it had not been
         terminated would have been included in a Required Aggregation Group)
         unless such aggregate distributions were made for a reason other than
         severance from employment, death, or disability in which case this
         Section 16.1(11) shall be applied by substituting a 5-year period for
         the 1-year period and; provided, further, that if an Employee or former
         Employee has not performed services for any Employer maintaining the
         Plan at any time during the 1-year period ending on the Determination
         Date, his Account (and/or the Account of his Beneficiary) shall not be
         taken into account."

                                      XXV.

         Effective as of January 1, 2002, Subsection (e) of Section 16.3 of the
Plan is hereby amended in its entirety to read as follows:

                  "(e) For the purpose of this Section, the term "Employer
         Contributions" shall include Before-Tax Contributions and Employer
         Matching Contributions made for an Employee;

                                       13
<PAGE>

         provided, however, that Employer Matching Contributions that are taken
         into account in satisfying the percentage minimum contribution
         requirement set forth in paragraph (a) of this Section shall be treated
         as matching contributions for purposes of the actual contribution
         percentage test and other requirements of section 401(m) of the Code."

                  EXECUTED this 30th day of October, 2002.

                                          THE GORMAN-RUPP COMPANY

                                          By: /s/ JEFFREY S. GORMAN
                                              ----------------------
                                          Name:  Jeffrey S. Gorman
                                          Title: President/CEO

                                       14
<PAGE>

                               AMENDMENT NO. 3 TO
                       THE GORMAN-RUPP COMPANY 401(K) PLAN
                 (AS AMENDED AND RESTATED AS OF AUGUST 1, 2000)

         The Gorman-Rupp Company hereby adopts this Amendment No. 3 to The
Gorman-Rupp Company 401(k) Plan (As Amended and Restated as of August 1, 2000)
(the "Plan"). Words and phrases used herein with initial capital letters that
are defined in the Plan are used herein as so defined.

                                       I.

         Effective as of November 1, 2002, Section 2.5 of the Plan, as added by
Amendment No. 2, is hereby amended by inserting the word "Former" before the
phrase "Flo-Pak Plan Member" where it appears in the first sentence thereof.

                                      II.

         Effective as of November 1, 2002, Section 8.1 of the Plan is hereby
amended in its entirety to read as follows:

                  "8.1 Nonforfeitable Member Interests. (1) Each Member's
         interest in his Account, other than his interest in his Flo-Pak Plan
         Employer Contributions Sub-Account, shall be nonforfeitable at all
         times and shall be distributed and withdrawn only as provided in the
         following Sections of this Article.

                  (2) Each Member who is a Former Flo-Pak Plan Member shall have
         a 100% vested and nonforfeitable interest in his Flo-Pak Plan Employer
         Contributions Sub-Account, which shall be distributed and withdrawn
         only as provided in the following Sections of this Article.

                  (3) If a former participant in the Flo-Pak Plan who forfeited
         all or a portion of his interest under the Flo-Pak Plan on account of a
         distribution or deemed distribution to him from the Flo-Pak Plan
         becomes an Eligible Employee under this Plan, such former participant
         shall have the right to repay to the Plan the full amount of the
         distribution attributable to employer contributions on or before the
         earlier of the date such participant incurs five consecutive one-year
         "Breaks in Service" (as defined in the Flo-Pak Plan) following the date
         of distribution or five years after the first date on which such
         participant is subsequently reemployed. If

<PAGE>

         a former participant under the Flo-Pak Plan who received a deemed
         distribution from the Flo-Pak Plan is reemployed as an Eligible
         Employee prior to incurring five consecutive one-year "Breaks in
         Service" (as defined in the Flo-Pak Plan), such former participant will
         be deemed to have immediately repaid such distribution to the Plan. In
         the event of a repayment as described in this Subsection, an Account
         shall be established for such Former Flo-Pak Plan Member or such former
         participant with a value equal to such participant's account
         attributable to employer contributions at the time the distribution or
         deemed distribution was made. The sources for such restoration shall,
         in the discretion of the Employer, be income or gain to the Plan,
         forfeitures or Employer Contributions.

                  (4) Notwithstanding any provision of the Flo-Pak Plan, any
         forfeitures arising under the provisions of the Flo-Pak Plan shall be
         applied to reduce Employer Contributions under this Plan."

                                      III.

         Effective as of February 15, 2003, Section 8.6 of the Plan is hereby
amended in its entirety to read as follows:

                  "8.6 Withdrawal of Contributions. (1) Pursuant to procedures
         prescribed by the Committee, effective as of any Valuation Date, a
         Member who has established the existence of a Hardship may withdraw in
         cash such portion of his Before-Tax Contributions Sub-Account
         (excluding any earnings allocated thereto) as is necessary to alleviate
         such Hardship (as determined under Subsection (5) of this Section).

                  (2) Pursuant to procedures prescribed by the Committee,
         effective as of any Valuation Date, a Member who has withdrawn his
         entire Before-Tax Contributions Sub-Account (except any earnings
         allocated thereto) and who has established the existence of a Hardship
         may withdraw in cash such part of his Employer Profit Sharing
         Contributions Sub-Account, if any, as is necessary to alleviate such
         Hardship (as determined under Subsection (5) of this Section).

                  (3) Pursuant to procedures prescribed by the Committee,
         effective as of any Valuation Date, a Member who has withdrawn his
         entire Before-Tax Contributions Sub-Account (except any earnings
         allocated thereto) and his Employer Profit Sharing Contributions
         Sub-Account and who has established the existence of a Hardship may
         withdraw in cash such part of his Rollover

                                       2
<PAGE>

         Contributions Sub-Account, if any, as is necessary to alleviate such
         Hardship (as determined under Subsection (5) of this Section).

                  (4) Pursuant to procedures prescribed by the Committee,
         effective as of any Valuation Date, a Member who has withdrawn his
         entire Before-Tax Contributions Sub-Account (except any earnings
         allocated thereto), his entire Employer Profit Sharing Contributions
         Sub-Account and his entire Rollover Contributions Sub-Account and who
         has established the existence of a Hardship may withdraw in cash such
         part of his Employer Matching Contributions Sub-Account as is necessary
         to alleviate such Hardship (as determined under Subsection (5) of this
         Section).

                  (5) For purposes of the Plan, a withdrawal will be treated as
         being necessary to alleviate such Hardship only if (a) the withdrawal
         does not exceed the amount necessary to meet such financial needs
         (including any amounts necessary to pay any federal, state or local
         income taxes or penalties reasonably anticipated to result from such
         distribution); (b) the Member has obtained all distributions, other
         than hardship withdrawals, and all nontaxable (at the time of the loan)
         loans currently available under the Plan and any other plan maintained
         by any Employer; and (c) the Member's Before-Tax Contributions (or any
         comparable contributions to any other plan maintained by any Employer)
         are suspended for a period of 6 months following receipt of the
         Hardship withdrawal. For purposes of the preceding sentence, the phrase
         "any other plan maintained by any Employer" means any other qualified
         or nonqualified deferred compensation plan maintained by any Employer,
         including a stock option, stock purchase or similar plan, or a cash or
         deferred arrangement that is part of a cafeteria plan within the
         meaning of Section 125 of the Code, and such phrase shall be
         interpreted in a manner consistent with Treasury regulations issued
         under Section 401(k) of the Code.

                  (6) Notwithstanding any other provision of the Plan to the
         contrary, a Former Flo-Pak Plan Member may not withdraw any amounts
         held in his Flo-Pak Plan Employee Contributions Sub-Account or his
         Flo-Pak Plan Employer Contributions Sub-Account on account of a
         Hardship. However, a Former Flo-Pak Plan Member may withdraw any
         Rollover Contributions made to the Flo-Pak Plan prior to November 1,
         2002. Such withdrawals shall be made pursuant to procedures established
         by the Committee."

                                       3
<PAGE>

         EXECUTED this 11th day of February, 2003.

                                  THE GORMAN-RUPP COMPANY

                                  By: /s/ JEFFREY S. GORMAN
                                      ----------------------
                                  Name:  Jeffrey S. Gorman
                                  Title: President/CEO

                                       4
<PAGE>

                               AMENDMENT NO. 4 TO
                       THE GORMAN-RUPP COMPANY 401(K) PLAN
                 (AS AMENDED AND RESTATED AS OF AUGUST 1, 2000)

         The Gorman-Rupp Company hereby adopts this Amendment No. 4 to The
Gorman-Rupp Company 401(k) Plan (As Amended and Restated as of August 1, 2000)
(the "Plan"). Words and phrases used herein with initial capital letters that
are defined in the Plan are used herein as so defined. The provisions of this
amendment shall be effective May 1, 2003.

                                       I.

         The second sentence of Subsection (1) of Section 6.6 of the Plan is
hereby amended in its entirety to read as follows:

         "If the Committee determines that the Member is entitled to a loan in
         accordance with the following provisions of this Section, the Committee
         shall direct the Trustee to make a loan to the Member from his
         Account."

                                      II.

         Subsection (5)(d)(v)(C) of Section 6.6 of the Plan is hereby amended by
(1) adding the word "or" to the end of clause (II), (2) deleting clause (III) in
its entirety, and (3) renumbering clause (IV) as clause (III).

                  EXECUTED this 17th day of April, 2003.

                                       THE GORMAN-RUPP COMPANY

                                       By: /s/ JEFFREY S. GORMAN
                                           ----------------------
                                       Name: Jeffrey S. Gorman
                                       Title: President/CEO

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