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                                                                Exhibit 10.1

                            GARDNER DENVER, INC.
                          LONG-TERM INCENTIVE PLAN

1.       PURPOSE

                The purpose of the Gardner Denver, Inc. Long-Term Incentive
Plan (the "Plan") is to promote the long-term financial interests of Gardner
Denver, Inc. (the "Company"), including its growth and performance, by
encouraging employees of the Company and its subsidiaries to acquire an
ownership position in the Company, enhancing the ability of the Company to
attract and retain employees of outstanding ability, and providing employees
with an interest in the Company parallel to that of the Company's
stockholders.

2.       DEFINITIONS

                2.1 "Administrative Policies" means the administrative
policies and procedures adopted and amended from time to time by the
Committee to administer the Plan.

                2.2 "Award" means any form of stock option, stock
appreciation right, restricted stock award, performance share or long-term
cash bonus granted under the Plan, whether singly, in combination, or in
tandem, to a Participant by the Committee pursuant to such terms,
conditions, restrictions and limitations, if any, as the Committee may
establish by the Award Agreement or otherwise.

                2.3 "Award Agreement" means a written agreement with respect
to an Award between the Company and a Participant establishing the terms,
conditions, restrictions and limitations applicable to an Award. To the
extent an Award Agreement is inconsistent with the terms of the Plan, the
Plan shall govern the rights of the Participant thereunder.

                2.4 "Base Salary" means the base salary paid by the Company
to the Participant, exclusive of any bonuses, commissions or other actual or
imputed income from any Company-provided benefits or perquisites, but prior
to any reductions for salary deferred pursuant to any deferred compensation
plan or for contributions to a plan qualifying under Section 401(k) of the
Code or contributions pursuant to a cafeteria plan under Section 125 of the
Code.

                2.5 "Base Salary Factor" means a multiplier expressed as a
percentage of the Executive Officer's Base Salary, as determined by the
Committee pursuant to Section 12.3 of the Plan for purposes of calculating
an Executive Officer's Long-Term Cash Bonus.

                2.6 "Board" shall mean the Board of Directors of the
Company.

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                2.7 "Business Criteria" means any one, or a combination, of
the following: (i) revenues of the Company; (ii) operating income of the
Company; (iii) net income of the Company; (iv) earnings per share of the
Company's Common Stock; (v) earnings before taxes of the Company; (vi) the
Company's return on equity; (vii) cash flow of the Company; or (viii)
Company stockholder total return.

                2.8 "Change of Control" means the occurrence of any one of
the following events:

                (i)   any "person" (as defined in Sections 13(d) and 14(d)
         of U.S. Securities Exchange Act of 1934, as amended (the "Exchange
         Act")), other than the Company, any trustee or other fiduciary
         holding securities under an employee benefit plan of the Company or
         any subsidiary of the Company, or any corporation owned, directly
         or indirectly, by the stockholders of the company in substantially
         the same proportions as their ownership of stock of the Company,
         acquires "beneficial ownership" (as defined in Rule 13d-3 under the
         Exchange Act) of securities representing 20% of the combined voting
         power of the Company; or

                (ii)  during any period of not more than two consecutive
         years, individuals who, at the beginning of such period, constitute
         the Board and any new directors (other than any director designated
         by a person who has entered into an agreement with the Company to
         effect a transaction described in subsections 2.8(i), 2.8(iii), or
         2.8(iv) of this Plan) whose election by the Board or nomination for
         election by the Company's stockholders was approved by a vote of at
         least two-thirds (2/3) of the directors then still in office who
         either were directors at the beginning of the period or whose
         election or nomination for election was previously so approved,
         cease for any reason to constitute at least a majority of the
         Board; or

                (iii) the stockholders of the Company approve and the
         Company consummates a merger other than (A) a merger that would
         result in the voting securities of the Company outstanding
         immediately prior thereto continuing to represent (either by
         remaining outstanding or by being converted into voting securities
         of the surviving entity), in combination with the ownership of any
         trustee or other fiduciary holding securities under an employee
         benefit plan of the Company and any Subsidiary, at least 50% of the
         combined voting power of all classes of stock of the Company or
         such surviving entity outstanding immediately after such merger or
         (B) a merger effected to implement a recapitalization of the
         Company (or similar transaction) in which no person acquires more
         than 50% of the combined voting power of the Company's then
         outstanding securities; or

                (iv)  the stockholders of the Company approve and the Company
         consummates a plan of complete liquidation or dissolution of the
         Company, or a sale of all or substantially all of the assets of the
         Company.

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                2.9 "Change of Control Price" means the higher of (i) the
Fair Market Value on the date of determination of the Change of Control or
(ii) the highest price per share actually paid for the Common Stock in
connection with the Change of Control of the Company.

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

                2.11 "Committee" means the Management Development and
Compensation Committee of the Board, or such other committee designated by
the Board to administer the Plan, provided that the Committee shall be
constituted so as to satisfy any applicable legal requirements, including
the requirements of Rule 16b-3 promulgated under the Exchange Act and
Section 162(m) of the Code, or any respective successor rule or statute.

                2.12 "Common Stock" means the Common Stock, par value $0.01
per share, of the Company.

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

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

                2.15 "Fair Market Value" means the average of the high and
low price of a share of Common Stock as reported on the composite tape for
securities listed on the Stock Exchange for the applicable date, provided
that if no sales of Common Stock were made on the Stock Exchange on that
date, the average of the high and low prices as reported on the composite
tape for the preceding day on which sales of Common Stock were made.

                2.16 "Long-Term Cash Bonus" means a payment in cash of an
Executive Officer's Payment Opportunity.

                2.17 "Payment Opportunity" means the amount determined
pursuant to any bonus formula established by the Committee for an Executive
Officer for a given Performance Period pursuant to Section 12.3 of the Plan,
taking into account the actual achievement of the relevant Performance
Targets and the Executive Officer's Base Salary Factor.

                2.18 "Performance Period" means a stated period over which
the Company's performance is measured for purposes of Awards under the Plan.
The duration of Performance Periods may vary with respect to different types
of Awards under the Plan, as determined by the Committee.

                2.19 "Performance Shares" means Awards in the form of shares
of Common Stock that may be earned pursuant to the terms set forth in
Section 10 of the Plan.

                2.20 "Performance Targets" means the predetermined goal or
goals established by

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the Committee in writing (which may be cumulative or alternative) based
upon one, or any combination, of the Business Criteria.

                2.21 "Participant" means an officer or employee of the
Company or its subsidiaries who is selected by the Committee to participate
in the Plan, and nonemployee directors of the Company to the extent provided
in Section 11 hereof.

                2.22 "Stock Exchange" means the composite tape of the New
York Stock Exchange ("NYSE") or, if the Common Stock is no longer included
on the NYSE, then such other market price reporting system on which the
Common Stock is traded or quoted designated by the Committee after it
determines that such other exchange is both reliable and reasonably
accessible.

3.       ADMINISTRATION

                3.1 The Plan shall be administered by the Committee. A
majority of the Committee shall constitute a quorum, and the acts of a
majority of a quorum shall be the acts of the Committee.

                3.2 Subject to the provisions of the Plan, the Committee (i)
shall select the Participants, determine the type of Awards to be made to
Participants, determine the shares or share units subject to Awards, and
(ii) shall have the authority to interpret the Plan, to establish, amend,
and rescind any Administrative Policies, to determine the terms and
provisions of any agreements entered into hereunder, and to make all other
determinations necessary or advisable for the administration of the Plan.
The Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or in any Award in the manner and to the extent it
shall deem desirable to carry it into effect. The determinations of the
Committee in the administration of the Plan, as described herein, shall be
final and conclusive, provided, however, that no action shall be taken which
will prevent the options granted under Section 11 or any Award granted under
the Plan from meeting the requirements for exemption from Section 16(b) of
the Exchange Act, or subsequent comparable statute, as set forth in Rule
16b-3 of the Exchange Act or any subsequent comparable rule; and, provided
further, that no action shall be taken which will prevent Awards that are
intended to constitute "qualified performance-based compensation," within
the meaning of Section 162(m) of the Code, from doing so.

                3.3 Notwithstanding the powers and authorities of the
Committee under the Plan, the Committee shall not permit the repricing of
stock options by any method, including by cancellation and reissuance.

                3.4 In order to enable Participants who are foreign
nationals or employed outside the United States, or both, to receive Awards
under the Plan, the Committee may adopt such amendments, Administrative
Policies, subplans and the like as are necessary or advisable, in the
opinion of the Committee, to effectuate the purposes of the Plan.

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4.       ELIGIBILITY

                All employees of the Company and its subsidiaries who have
demonstrated significant management potential or who have the capacity for
contributing in a substantial measure to the successful performance of the
Company, as determined by the Committee, are eligible to be Participants in
the Plan. Participants may receive one or more Awards under the Plan.
Directors of the Corporation other than directors who are employees of the
Corporation shall be eligible only to receive stock options pursuant to
Section 11 hereof.

5.      SHARES SUBJECT TO THE PLAN

                5.1 The aggregate number of shares of Common Stock available
for grant of Awards under the Plan shall be that number of shares remaining
available for grant under the Plan on the close of business on the date
immediately prior to the 2004 Annual Meeting of Stockholders plus 750,000,
subject to the adjustments provided for in Section 16 hereof. Shares of
Common Stock available for issuance under the Plan may be authorized and
unissued shares or treasury shares, as the Company may from time to time
determine.

                5.2 Subject to adjustment as set forth in Section 16 hereof,
the maximum aggregate number of shares of Common Stock that may be granted
under the Plan in the form of restricted stock grants shall not exceed 50%
of the aggregate shares of Common Stock available under the Plan.

                5.3 Shares of Common Stock subject to an Award that expires
unexercised or that is forfeited, terminated or canceled, in whole or in
part, or is paid in cash in lieu of Common Stock, shall thereafter again be
available for grant under the Plan, except that any such shares attributable
to a Restricted Stock Award (as defined in Section 9) shall be counted
against the restricted stock limit set forth in Section 5.2 hereof.

6.       AWARDS

                Awards under the Plan may consist of: stock options (either
incentive stock options within the meaning of Section 422 of the Code or
nonstatutory stock options), stock appreciation rights, restricted stock
grants, performance shares and long-term cash bonuses; provided that no
Participant may be granted Awards during any calendar year with respect
thereto in excess of 180,000 shares of Common Stock, subject to the
provisions of Section 16. Awards of performance shares and restricted stock
may provide the Participant with dividends or dividend equivalents and
voting rights prior to vesting (whether based on a period of time or based
on attainment of specified performance conditions). The terms, conditions
and restrictions of each Award shall be set forth in an Award Agreement.

7.       STOCK OPTIONS

                7.1 Grants. Awards may be granted in the form of stock
options. Stock options may be incentive stock options within the meaning of
Section 422 of the Code or nonstatutory stock options (i.e., stock options
which are not incentive stock options), or a combination of both, or any
particular type of tax advantage option authorized by the Code from time to
time. Awards of stock options made to Participants subject to Section 162(m)
of the Code are intended

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to qualify as "qualified performance-based compensation" under Section
162(m) and the provisions of such Awards shall be interpreted in a manner
consistent with that intent, to the extent appropriate.

                7.2 Terms and Conditions of Options. An option shall be
exercisable in whole or in such installments and at such times and upon such
terms as may be determined by the Committee; provided, however, that no
stock option shall be exercisable more than ten years after the date of
grant thereof. The option exercise price shall be established by the
Committee, but such price shall not be less than the Fair Market Value on
the date of the stock option's grant, subject to adjustment as provided in
Section 16 hereof.

                7.3 Restrictions Relating to Incentive Stock Options. Stock
options issued in the form of incentive stock options shall, in addition to
being subject to all applicable terms, conditions, restrictions and
limitations established by the Committee, comply with Section 422 of the
Code. Incentive stock options shall be granted only to full time employees
of the Company and its subsidiaries within the meaning of Section 424 of the
Code. The aggregate Fair Market Value (determined as of the date the option
is granted) of shares with respect to which incentive stock options are
exercisable for the first time by an individual during any calendar year
(under this Plan or any other plan of the Company which provides for the
granting of incentive stock options) may not exceed $100,000 or such other
number as may be applicable under the Code from time to time.

                7.4 Payment. Upon exercise, a Participant may pay the option
exercise price of a stock option in cash, shares of Common Stock, stock
appreciation rights or a combination of the foregoing, or such other
consideration as the Committee may deem appropriate. The Committee shall
establish appropriate methods for accepting Common Stock and may impose such
conditions as it deems appropriate on the use of such Common Stock to
exercise a stock option.

                7.5 Additional Terms and Conditions. The Committee may, by
way of the Award Agreement or Administrative Policies (or amendments
thereto), establish such other terms, conditions or restrictions, if any, on
any stock option award, provided they are consistent with the Plan. The
Committee may condition the vesting of stock options on the achievement of
financial performance criteria established by the Committee at the time of
grant.

8.       STOCK APPRECIATION RIGHTS

                8.1 Grants. Awards may be granted in the form of stock
appreciation rights ("SAR"). Awards of SARs made to Participants subject to
162(m) of the Code are intended to qualify as "qualified performance-based
compensation" under Section 162(m) and the provisions of such Awards shall
be interpreted in a manner consistent with that intent, to the extent
appropriate. SARs shall entitle the recipient to receive a payment equal to
the appreciation in market value of a stated number of shares of Common
Stock from the price stated in the Award Agreement to the Fair Market Value
on the date of exercise or surrender. An SAR may be granted in tandem with
all or a portion of a related stock option under the Plan ("Tandem SAR"), or
may be granted separately ("Freestanding SAR"); provided, however, that
Freestanding SARs shall be granted only to Participants who are foreign
nationals or are employed outside of the

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United States, or both, and as to whom the Committee determines the
interests of the Company could not as conveniently be served by the grant of
other forms of Awards under the Plan. A Tandem SAR may be granted either at
the time of the grant of the related stock option or at any time thereafter
during the term of the stock option. In the case of SARs granted in tandem
with stock options granted prior to the grant of such SARs, the appreciation
in value shall be appreciation from the option exercise price of such
related stock option to the Fair Market Value on the date of exercise.

                8.2 Terms and Conditions of Tandem SARs. A Tandem SAR shall
be exercisable to the extent, and only to the extent, that the related stock
option is exercisable. Upon exercise of a Tandem SAR as to some or all of
the shares covered in an Award, the related stock option shall be canceled
automatically to the extent of the number of SARs exercised, and such shares
shall not thereafter be eligible for grant under Section 5 hereof.

                8.3 Terms and Conditions of Freestanding SARs. Freestanding
SARs shall be exercisable in whole or in such installments and at such times
as may be determined by the Committee. The base price of a Freestanding SAR
shall be determined by the Committee; provided, however, that such price
shall not be less than the Fair Market Value on the date of the award of the
Freestanding SAR.

                8.4 Deemed Exercise. The Committee may provide that an SAR
shall be deemed to be exercised at the close of business on the scheduled
expiration date of such SAR, if at such time the SAR by its terms is
otherwise exercisable and, if so exercised, would result in a payment to the
Participant.

                8.5 Additional Terms and Conditions. The Committee may, by
way of the Award Agreement or Administrative Policies, determine such other
terms, conditions and restrictions, if any, on any SAR Award, provided they
are consistent with the Plan.

9.       RESTRICTED STOCK AWARDS

                9.1 Grants. Awards may be granted in the form of restricted
stock ("Restricted Stock Awards"). Restricted Stock Awards shall be awarded
in such numbers and at such times as the Committee shall determine.

                9.2 Award Restrictions. Restricted Stock Awards shall be
subject to such terms, conditions or restrictions as the Committee deems
appropriate including, but not limited to, restrictions on transferability,
requirements of continued employment, achievement of individual performance
goals or Performance Targets. The period of vesting and the forfeiture
restrictions shall be established by the Committee at the time of grant,
except that each restriction period shall not be less than 12 months. To the
extent Restricted Awards are subject to Performance Targets, it is intended
that all such Restricted Stock Awards granted to Participants subject to
Section 162(m) of the Code will qualify as "qualified performance-based
compensation" under Section 162(m) and such Awards shall be interpreted in a
manner consistent with that intent, to the extent appropriate.

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                9.3 Rights as Shareholders. During the period in which any
restricted shares of Common Stock are subject to forfeiture restrictions
imposed under the preceding paragraph, the Committee may, in its discretion,
grant to the Participant to whom such restricted shares have been awarded,
all or any of the rights of a shareholder with respect to such shares,
including, but not limited to, the right to vote such shares and to receive
dividends.

                9.4 Evidence of Award. Any Restricted Stock Award granted
under the Plan may be evidenced in such manner as the Committee deems
appropriate, including, without limitation, book entry registration or
issuance of a stock certificate or certificates.

10.      PERFORMANCE SHARES

                10.1 Grants. Awards may be granted in the form of shares of
Common Stock that are earned only after the attainment of predetermined
performance targets during a performance period as established by the
Committee ("Performance Shares").

                10.2 Performance Criteria. The Committee may grant an Award
of Performance Shares to Participants as of the first day of each
Performance Period established for Performance Shares. Performance Targets
will be established at the beginning of each Performance Period. The
Committee shall be permitted to make adjustments when determining the
attainment of the applicable Performance Targets to reflect extraordinary or
nonrecurring items or events, or unusual nonrecurring gains or losses
identified in the Company's financial statements, as long as any such
adjustments are made in a manner consistent with Section 162(m) to the
extent applicable. Awards of Performance Shares made to Participants subject
to Section 162(m) of the Code are intended to qualify under Section 162(m)
and provisions of such Awards shall be interpreted in a manner consistent
with that intent, to the extent appropriate. At the end of the Performance
Period, Performance Shares shall be converted into Common Stock (or cash or
a combination of Common Stock and cash, as determined by the Award
Agreement) and distributed to Participants based upon such entitlement.
Award payments made in cash rather than the issuance of Common Stock shall
not, by reason of such payment in cash, result in additional shares being
available for reissuance pursuant to Section 5 hereof.

                10.3 Additional Terms and Conditions. The Committee may, by
way of the Award Agreement or Administrative Policies, determine the manner
of payment of Awards of Performance Shares and other terms, conditions or
restrictions, if any, on any Award of Performance Shares, provided they are
consistent with the Plan and to the extent applicable, Section 162(m) of the
Code.

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11.      DIRECTORS' STOCK OPTIONS

                11.1 Grants. Awards may be granted to nonemployee directors
only in the form of stock options satisfying the requirements of this
Section 11 ("Director Stock Options"). Subject to Section 16 hereof, on the
date following the commencement of the Company's annual meeting of
stockholders each year, there shall be granted to each nonemployee director
an option to purchase up to a maximum of 9,000 shares of Common Stock. The
amount of shares subject to the option shall be determined in the
Committee's discretion. All such options shall be nonstatutory stock
options.

                11.2 Option Exercise Price. The option exercise price of
Director Stock Options shall be 100 percent of the Fair Market Value on the
date such options are granted. The Committee shall be authorized to compute
the price per share on the date of grant. Payment of the option exercise
price may be made in cash or in shares of Common Stock or a combination of
cash and Common Stock.

                11.3 Award Agreement. Director Stock Options shall be
evidenced by an Award Agreement in the form of a stock option agreement,
dated as of the date of the grant, which agreement shall be in such form,
consistent with the terms and requirements of this Section 11, as shall be
approved by the Committee from time to time and executed on behalf of the
Company by its Chief Executive Officer.

                11.4 Terms and Conditions of Director Stock Options.
Director Stock Options shall become fully exercisable on the first
anniversary of the date of grant and shall terminate upon the expiration of
five years from the date of grant. To the extent an option is not otherwise
exercisable at the date of the nonemployee director's retirement under a
retirement plan or policy of the Company or at the time a nonemployee
director ceases to be a director on account of disability, it shall become
fully exercisable upon such retirement or cessation of service as a director
due to disability. Upon such retirement or cessation of service due to
disability, such options shall be exercisable for a period of five years,
subject to the original term thereof. Options not otherwise exercisable at
the time of the death of a nonemployee director during service with the
Company shall become fully exercisable upon his death. Upon the death of a
nonemployee director while in service as a director or within the five-year
period during which the options are exercisable following the retirement or
disability of a nonemployee director, such options shall remain exercisable
(subject to the original term of the option) for a period of one year after
the date of death. To the extent an option is exercisable on the date a
director ceases to be a director (other than by reason of disability, death
or retirement), the option shall continue to be exercisable (subject to the
original term of the option) for a period of 90 days thereafter.

                11.5 Transferability. Except as provided in Section 15
hereof, no option shall be transferable by a nonemployee director except by
will or the laws of descent and distribution, and during the director's
lifetime options may be exercised only by him or his legal representative.

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                11.6 Change of Control. Director Stock Options not otherwise
exercisable at the time of a Change of Control shall become fully
exercisable upon such Change of Control. In the case of a Change of Control:

                (i)   The Company shall make payment to directors with respect
to Director Stock Options in cash in an amount equal to the appreciation in
the value of the Director Stock Option from the option exercise price
specified in the Award Agreement to the Change of Control Price;

                (ii)  The cash payments to directors shall be due and
payable, and shall be paid by the Company, immediately upon the occurrence
of such Change of Control; and

                (iii) After the payment provided for in (i) above,
nonemployee directors shall have no further rights under Director Stock
Options outstanding at the time of such Change in Control.

12.     LONG-TERM CASH BONUS

                12.1 Eligibility. Only Executive Officers shall be eligible
to receive a Long-Term Cash Bonus. Not later than ninety (90) days after the
commencement of a Performance Period, the Committee shall select the
Executive Officers eligible to receive a Long-Term Cash Bonus for the
Performance Period. Each Executive Officer participating in a Performance
Period shall be eligible to receive a Long-Term Cash Bonus upon completion
of a Performance Period only if Executive Officer is still employed by the
Company upon the last day of such Performance Period, provided, however,
that the Committee shall have the discretion to grant eligibility to the
Executive Officer in its discretion, notwithstanding the fact that the
Executive Officer is not still employed by the Company at such point.

                12.2 Performance Target(s); Business Criteria; Base Salary
Factors. The applicable Business Criteria and Performance Targets for a
given Performance Period shall be established by the Committee in advance of
the deadlines set forth in the regulations under Section 162(m) of the Code
and while the performance relating to the Performance Targets remains
substantially uncertain within the meaning of Section 162(m) of the Code.
The Committee shall be permitted to make adjustments when determining the
attainment of Performance Targets to reflect extraordinary or nonrecurring
items or events, or unusual nonrecurring gains or losses identified in the
Company's financial statements, as long as any such adjustments are made in
a manner consistent with Section 162(m) of the Code, to the extent
applicable.

                12.3 Calculation of Long-Term Cash Bonus. At the beginning
of each Performance Period, the Committee shall provide in terms of an
objective formula or standard for each Executive Officer: (a) the method of
computing the specific amount that will represent the Executive Officer's
Long-Term Cash Bonus; and (b) the Base Salary Factor to be used in
calculating any Executive Officer's Long-Term Cash Bonus. Subject to Section
12.4, at the first meeting of the Committee after the expiration of the
Performance Period, the Committee shall determine the extent to which the
Performance Targets have been achieved, and shall determine each Executive
Officer's Payment Opportunity based on his or her Base Salary Factor.
Notwithstanding the attainment of the Performance Targets, Long-Term Cash
Bonuses for

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individual Executive Officers may be denied or adjusted by the Committee, in
its sole judgment, based on its assessment of the Executive Officer's
performance. However, no upward adjustment may be made to a Long-Term Cash
Bonus for an Executive Officer if Section 162(m) of the Code would limit the
deduction the Company may claim for that Executive Officer's compensation.

                12.4 Maximum Long-Term Cash Bonus. Notwithstanding any other
provision in the Plan, no Executive Officer shall receive for any
Performance Period any Long-Term Cash Bonus under the Plan in excess of
$3,000,000 or, if less, three times his or her Base Salary as of the last
day of the applicable Performance Cycle. Any Payment Opportunity in excess
of the foregoing limits shall be reduced automatically to the extent of the
excess.

                12.5 Payment. Long-Term Cash Bonuses shall be paid in cash
or Restricted Stock Awards, as determined by the Committee and subject to
the remaining terms of this Plan. Payment of Long-Term Cash Bonuses shall
occur within a reasonable time after the Committee has certified in writing
the extent to which the Performance Targets have been achieved and
determined the amount of each Executive Officer's Long-Term Cash Bonus for
the given Performance Period pursuant to Sections 12.3 and 12.4 hereof.

13.      DIVIDENDS AND DIVIDEND EQUIVALENTS; DEFERRALS

                13.1 If an Award is granted in the form of a Restricted
Stock Award or Performance Shares, the Committee may choose, at the time of
the grant of the Award, to include as part of such Award an entitlement to
receive dividends or dividend equivalents, subject to such terms,
conditions, restrictions or limitations, if any, as the Committee may
establish. Dividends and dividend equivalents shall be paid in such form and
manner and at such time as the Committee shall determine.

                13.2 The Committee may permit Participants to elect to defer
the issuance of shares or the settlement of Awards in cash under
Administrative Policies established by the Committee. It may also provide
that deferred settlements include the payment or crediting of interest on
the deferral amounts or the payment or crediting of dividend equivalents on
deferred settlements denominated in shares. Notwithstanding the foregoing,
to the extent the Award being deferred is that of a Participant subject to
Section 162(m) of the Code, the Committee will ensure that any increase in
the Award will be based upon a reasonable rate of interest or on one or more
predetermined actual investments such that the amount payable at the later
date will be based upon actual returns, including any decrease or increase
in the value of the investment(s).

14.      TERMINATION OF EMPLOYMENT

                Consistent with the requirements of Section 162(m) regarding
"qualified performance-based compensation," the Committee shall adopt
Administrative Policies determining the entitlement of Participants who
cease to be employed by either the Company or its subsidiaries due to death,
disability, resignation, termination or retirement pursuant to an
established retirement plan or policy of the Company or its subsidiaries.

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15.      ASSIGNMENT AND TRANSFER

                The rights and interests of a Participant under the Plan may
not be assigned, encumbered or transferred except, in the event of the death
of a Participant, by will or the laws of descent and distribution.
Notwithstanding the foregoing, the Committee may, in its discretion, grant
stock options to one or more executive officers or nonemployee directors of
the Company (or amend existing stock options) on terms that permit the stock
options to be transferred by any such executive officer or nonemployee
director, for estate planning purposes, to (a) the executive officer's or
nonemployee director's spouse, children, grandchildren, parents, siblings,
stepchildren, stepgrandchildren or in-laws ("Family Members"), (b) entities
that are exclusively family-related, including trusts for the exclusive
benefit of Family Members and limited partnerships or limited liability
companies in which Family Members are the only partners or members, or (c)
such other persons or entities specifically approved by the Committee. The
terms and conditions applicable to the transfer of any such stock options
shall be established by the Committee, in its discretion but consistent with
this Section 15, and shall be contained in the applicable stock option
agreement (or an amendment thereto) between the Company and the executive
officer.

16.      ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

                In the event of any change in the outstanding shares of
Common Stock by reason of a reorganization, recapitalization, stock split,
stock dividend, combination or exchange of shares, merger, consolidation or
any change in the corporate structure or shares of the Company, the maximum
aggregate number and class of shares as to which Awards may be granted under
the Plan, including any limitations upon individual Participants or
regarding Director Stock Options, as well as the number and class of shares
issuable, and the related option exercise price, pursuant to then
outstanding Awards, shall be appropriately adjusted by the Committee, whose
determination shall be final.

17.      WITHHOLDING TAXES

                The Company shall have the right to deduct from any payment
to be made pursuant to the Plan the amount of any taxes required by law to
be withheld therefrom, or to require a Participant to pay to the Company
such amount required to be withheld prior to the issuance or delivery of any
shares of Stock or the payment of cash under the Plan. The Committee may, in
its discretion, permit a Participant to elect to satisfy such withholding
obligation by having the Company retain the number of shares of Common Stock
whose Fair Market Value equals the amount required to be withheld. Any
fraction of a share of Common Stock required to satisfy such obligation
shall be disregarded and the amount due shall instead be paid in cash to the
Participant.

18.      REGULATORY APPROVALS AND LISTINGS

                Notwithstanding anything contained in this Plan to the
contrary, the Company shall have no obligation to issue or deliver
certificates of Common Stock evidencing Restricted

                                     12

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Stock Awards or any other Award payable in Common Stock prior to (i) the
obtaining of any approval from any governmental agency which the Company
shall, in its sole discretion, determine to be necessary or advisable, (ii)
the admission of such shares to listing on the Stock Exchange, and (iii) the
completion of any registration or other qualification of said shares under
any state or federal law or ruling of any governmental body which the
Company shall, in its sole discretion, determine to be necessary or
advisable.

19.      NO RIGHT TO CONTINUED EMPLOYMENT OR GRANTS

                No person shall have any claim or right to be granted an
Award, and the grant of an Award shall not be construed as giving a
Participant the right to be retained in the employ of the Company or its
subsidiaries. Further, the Company and its subsidiaries expressly reserve
the right at any time to dismiss a Participant free from any liability, or
any claim under the Plan, except as provided herein or in any Award
Agreement entered into hereunder.

20.      CHANGE OF CONTROL

                In the event of a Change of Control, (i) all SARs which have
not been granted in tandem with stock options shall become exercisable in
full, (ii) the restrictions applicable to all shares of restricted stock
shall lapse and such shares shall be deemed fully vested and all restricted
stock granted in the form of share units shall be paid in cash, (iii) all
Performance Shares and Long-Term Cash Bonuses shall be deemed to be earned
in full at the Payment Opportunity associated with the achievement of 100%
of the Performance Targets assigned to such Awards, and all Performance
Shares granted in the form of share units shall be paid in cash, and (iv)
any Participant who has been granted a stock option which is not exercisable
in full shall be entitled, in lieu of the exercise of the portion of the
stock option which is not exercisable, to obtain a cash payment in an amount
equal to the difference between the option price of such stock option and
(A) in the event the Change of Control is the result of a tender offer or
exchange offer for the Common Stock, the final offer price per share paid
for the Common Stock, or such lower price as the Committee may determine
with respect to any incentive stock option to preserve its incentive stock
option status, multiplied by the number of shares of Common Stock covered by
such portion of the stock option, or (B) in the event the Change of Control
is the result of any other occurrence, the aggregate value of the Common
Stock covered by such portion of the stock option, as determined by the
Committee at such time. The Committee may, in its discretion, include such
further provisions and limitations in, any agreement documenting such Awards
as it may deem equitable and in the best interests of the Company.

                                     13

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21.      AMENDMENT

                The Board may amend, suspend or terminate the Plan or any
portion thereof at any time, provided that no amendment shall be made that
would impair the rights of a Participant under an outstanding Award without
the Participant's consent, and no amendment shall be made without
stockholder approval if such approval is necessary in order to preserve the
applicability of any exemption under Rule 16b-3 under the Exchange Act or
qualification of any Award under Section 162(m), or is otherwise required as
a matter of law. Further, no amendment to the Plan shall be effective that
would: (a) increase the maximum amount that can be paid to a Participant
under the Plan; (b) change the Business Criteria for payment of
performance-based Awards; or (c) modify the eligibility requirements for
Participants in the Plan, unless first approved by the Company's
stockholders. An Award Agreement may be amended by action of the Board or
the Committee, provided that no such amendment shall be made that would
impair the rights of a Participant under such Award Agreement without the
Participant's consent.

22.      GOVERNING LAW

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

23.      RIGHTS AS SHAREHOLDER

                Except as otherwise provided in the Award Agreement, a
Participant shall have no rights as a shareholder until he or she becomes
the holder of record. To the extent any person acquires a right to receive
payments from the Company under this Plan, such rights shall be no greater
than the rights of an unsecured creditor of the Company.

24.      EFFECTIVE DATE

                The Plan became effective on December 23, 1993. Subject to
earlier termination pursuant to Section 20, the Plan shall terminate
effective December 31, 2008. After termination of the Plan, no future Awards
may be granted but previously made Awards shall remain outstanding in
accordance with their applicable terms and conditions and the terms and
conditions of the Plan.

                                     14<PAGE>

                                                               Exhibit 10.17

                            GARDNER DENVER, INC.

                        EMPLOYEE STOCK PURCHASE PLAN

                             SECTION 1. PURPOSE

The Gardner Denver, Inc. Employee Stock Purchase Plan (the "Plan") is
designed to provide employees of Gardner Denver, Inc. (the "Company") and
its subsidiaries with the opportunity to acquire shares of common stock of
the Company ("Stock"), by granting options to such employees on such dates
not later than December 31, 2008 as the Board of Directors of the Company
(the "Board") may from time to time determine (each such date is herein
referred to as an "Offering Date"), which options shall be exercised on such
dates, in each case not later than 15 months after the related Offering
Date, as are established in accordance with the provisions of this Plan
(each such date of exercise is herein referred to as an "Exercise Date").
This Plan is intended to constitute an "employee stock purchase plan" within
the meaning of section 423 of the Internal Revenue Code of 1986, as amended
(the "Code").

SECTION 2.  ELIGIBLE EMPLOYEES

All persons who on an Offering Date are employees of the Company or of such
of its subsidiary corporations (within the meaning of Section 424(f) of the
Code) as may be designated prior to such Offering Date by the Board
("Participating Subsidiaries") will be eligible to participate in the Plan
except for:

         (a)      directors of the Company or a Participating Subsidiary
                  that are not employees;

         (b)      employees that have been continuously employed by the
                  Company, its Participating Subsidiaries or predecessors of
                  such subsidiaries for less than two months prior to such
                  Offering Date;

         (c)      employees whose customary employment is less than 20 hours
                  per week or for not more than five months in any calendar
                  year; and

         (d)      any employee who, if granted an option under the Plan,
                  would immediately after the option is granted own stock
                  equal to five percent or more of the total combined voting
                  power or value of all classes of stock of the Company or
                  of its parent or subsidiary corporations (within the
                  meaning of sections 423(b)(3) and 424(d) of the Code).

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<PAGE>

SECTION 3.  GRANT OF OPTIONS

         3.01. As of each Offering Date, each eligible employee shall be
granted an option to purchase a maximum number of shares of Stock (increased
by any fractional amount required to make a whole share), which number of
shares, when multiplied by the option price described in Section 3.02(a),
will most closely approximate a percentage fixed by the Board prior to such
Offering Date (which percentage shall not exceed 5%) of the annual
compensation of that eligible employee as in effect as of October 31 of that
calendar year, determined as follows:

         (a)      the straight-time hourly base wage rate of the employee in
                  effect on October 31 of that calendar year multiplied by
                  2,080, or by such number as the Board deems to constitute
                  the number of straight-time hours in a normal work year
                  for such employee;

         (b)      the monthly base salary of the employee in effect on
                  October 31 of that calendar year multiplied by 12; or

         (c)      if the Management Development and Compensation Committee
                  (the "Committee") believes that neither of the amounts
                  determined pursuant to the methods described in (a) and
                  (b) above would properly reflect the employee's normal
                  compensation for one year, such compensation determined in
                  a manner the Committee considers to be equitable.

The number of shares so determined is subject to possible adjustment as
provided in Sections 3.03 and 5 below.

         3.02. The option price for all shares for which options are granted
on an Offering Date will be the lesser of:

         (a)      an amount equal to 85% of the mean between the high and
                  low quoted selling prices of Stock on the composite tape
                  of the New York Stock Exchange on the Offering Date, or if
                  there is no such sale on the Offering Date, on the then
                  most recent preceding day on which any such sale occurred;
                  or

         (b)      an amount equal to 85% of the mean between the high and
                  low quoted selling prices of Stock on the composite tape
                  of the New York Stock Exchange on the Exercise Date (as
                  defined in Section 1 above), or if there is no such sale
                  on the Exercise Date, on the then most recent preceding
                  day on which any such sale occurred.

         3.03. No employee may be granted an option that permits his rights
to purchase stock under the Plan and under all other employee stock purchase
plans of the Company and its parent and subsidiary corporations to exceed
the amount provided by Section 423(b)(8) of the Code from time to time for
each calendar year in which such option is outstanding at anytime. If an
employee would become entitled to purchase a number of shares exceeding such
maximum amount, the number of shares available for purchase by the employee
shall be reduced by such excess.

                                     2

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SECTION 4.  ELECTIONS TO PURCHASE SHARES AND PAYROLL DEDUCTIONS

Subject to Section 9, not later than 45 days after the Offering Date, an
employee may elect to purchase all or part of the shares that he is entitled
to purchase with respect to that Offering Date. Such election shall be made
by the execution by the employee of an approved form authorizing uniform
payroll deductions over a 12-month period beginning on the January 1 next
following the Offering Date and ending on December 31 of that same year (the
"Offering Termination Date"). Such payroll deductions shall be in such
amounts as will in the aggregate equal the total option price described in
Section 3.02(a) of all shares that he has elected to purchase. The minimum
payroll deduction shall be $10 per month. Any election to purchase may be
changed or terminated as hereinafter set forth. With respect to shares as to
which no election to purchase is made by the employee on or before 45 days
after the Offering Date, the option granted to the employee on that Offering
Date shall expire.

SECTION 5.  NUMBER OF SHARES OFFERED

         5.01. The aggregate number of shares which may be issued under the
Plan is 1,150,000 shares of Stock, which shares may be authorized but
unissued shares or treasury shares, or both. The aggregate number of shares
for which options are to be granted on each Offering Date shall be
determined by the Board prior to such Offering Date. Should the total number
of shares specified in all employees' initial elections to purchase as
provided in Section 4 with respect to any Offering Date exceed the aggregate
number of shares for which options are granted on that Offering Date, the
Company will, on the Offering Termination Date, make a pro rata allocation
of the aggregate number of shares for which options were granted on such
Offering Date in a uniform manner to all employees who have remained
enrolled in the Plan through the Offering Termination Date. In such event,
the initial election to purchase of each such employee will be canceled with
respect to any shares in excess of the number of shares allocated to each
such employee, written notice will be given to the employee that his
election has become effective for a reduced number of shares and any excess
funds in the employee's Account (as defined in Section 6 below) will be
refunded to him.

         5.02. The aggregate number of shares that may be issued under the
Plan may be increased to reflect a change in capitalization of the Company,
such as a stock dividend or stock split.

         5.03. If, prior to the expiration of an option theretofore granted,
the Company shall effect a subdivision or consolidation of shares of Stock
or the payment of a stock dividend on Stock without receipt of consideration
by the Company, the number of shares of Stock thereafter subject to such
option (i) in the event of an increase in the number of outstanding shares
shall be proportionately increased, and the option price per share shall be
proportionately reduced, and (ii) in the event of a reduction in the number
of outstanding shares shall be proportionately reduced, and the option price
per share shall be proportionately increased.

         5.04. If (i) the Company is to be merged into or consolidated with
one or more corporations and the Company is not to be the surviving
corporation, (ii) the Company is to be dissolved and liquidated, (iii)
substantially all of the assets and business of the Company are to

                                     3

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<PAGE>

be sold, or (iv) there occurs a "change in control of the Company," then the
Board may, in its sole discretion, with respect to any or all options then
outstanding under this Plan (a) at any time on or prior to the effective
date of such merger, consolidation, dissolution and liquidation, or sale,
and, at any time on or after a change in control cause the Offering
Termination Date and Exercise Date to be accelerated to a date or dates
fixed by the Board ("Acceleration Date") and permit an employee (or his
legal representative) to make a lump-sum deposit prior to the Acceleration
Date in lieu of the remaining payroll deductions or periodic payments which
otherwise would have been made, and upon such Acceleration Date, exercise
his option to the extent of moneys deposited by the employee and cancel any
unexercised options; or (b) at any time during the 20-day period ending on
the effective date of such merger, consolidation, dissolution and
liquidation or sale or during the 20-day period beginning on the date of a
change in control or, if later, the date the Company has notice thereof,
cancel any option in whole or in part by payment in cash to the employee of
an amount equal to the excess, but only if the amount is positive, of the
fair market value of the Company's Common Stock on the date of said
cancellation over the option price per share times the number of shares
covered by the option or portion thereof so canceled. For purposes hereof, a
"change in control of the Company" shall be deemed to have occurred if (i)
any "person," as such term is used in Sections 13(d)(3) and 14(d)(2) of the
Securities Exchange Act of 1934 (the "Exchange Act") is or becomes the
"beneficial owner," as such term is used in Rule 13d-3 issued under the
Exchange Act, of securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding securities or (ii)
during any period of two consecutive years, individuals who at the beginning
of such period constitute the Board cease for any reason to constitute at
least a majority thereof unless the election, or the nomination for election
by the Company's shareholders, of each new director was approved by a vote
of at least two-thirds of the directors then still in office who were
directors at the beginning of the period.

         5.05. Any adjustment provided for in this Section 5 shall be
subject to any required shareholder action. No adjustment shall be made if
such adjustment would result in a modification of an option (within the
meaning of Section 424 of the Code), or cause such option to fail to
continue to qualify as an option granted under an employee stock purchase
plan (within the meaning of Section 423 of the Code).

SECTION 6.  APPLICATION OF FUNDS; EXERCISE OF OPTIONS

         6.01. The Company will establish a stock purchase account for each
employee who elects to purchase shares with respect to an Offering Date (an
"Account"), to which all payroll deductions or cash payments of that
employee with respect to the Offering Date will be credited. Interest will
not be accrued or credited in the Account.

         6.02. Amounts credited to all Accounts will be under the control of
the Company, may be maintained or controlled as a single fund or account,
and may be used for any corporate purpose. Amounts credited to Accounts for
employees of Participating Subsidiaries will be remitted to the Company from
time to time. The amount credited to each Account as of the close of
business on the respective Exercise Date for that Offering Date will be
applied by the Company to the payment for the shares to be purchased by such
employee on that Exercise Date, any amount not used for this purpose shall
be paid in cash to the employee, and the option granted the employee on that
Offering Date shall thereupon terminate.

                                     4

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<PAGE>

         6.03. In the event that any law or regulation, in the opinion of
counsel for the Company, may prohibit the handling or use of all or any part
of the funds in the manner contemplated by the Plan, the Company may deal
with such funds in any lawful manner it may deem advisable, including the
deposit of any such funds in individual bank accounts opened for employees.

         6.04. Promptly following an Exercise Date, the Company shall
provide all employees who remained enrolled in the Plan on the Offering
Termination Date with written notice as to the applicable option price and
the date by which such employees must notify the Company in writing with
respect to the number of shares, if any, that the employee desires to
purchase pursuant to his option. The amount credited to an employee's
Account as of the close of business on the applicable Offering Termination
Date shall be applied by the Company to the payment for the shares to be
purchased by such employee on the day next following the notification
deadline set forth in the Company's notice described immediately above. Any
amount not used for this purpose shall be paid in cash to the employee, and
the option granted the employee on that Offering Date shall thereupon
terminate. If an employee does not notify the Company by the deadline so
established by the Company, then such amount shall be applied for the
purchase of the total number of shares of Stock purchasable under the
option, and any amount not used for such purpose shall be paid in cash to
the employee and the related option shall thereupon terminate.

         6.05. An employee shall have no interest or voting rights in shares
covered by his option, and no right to receive any dividends with respect to
such shares, until such option has been exercised.

SECTION 7.  CHANGES IN ELECTION TO PURCHASE

At any time on or before the Offering Termination Date with respect to an
Offering Date, an employee may give written notice that his payroll
deductions with respect to such Offering Date shall thereafter be reduced or
shall terminate (or, if periodic cash payments for shares are being made as
permitted in Sections 9, 10 and 11, that such payments thereafter will be
reduced or will terminate) and, as the case may be:

         (a)      reduce the amount of his subsequent payroll deductions (or
                  periodic cash payments) by such amounts as will, in the
                  aggregate, be equal to a reduction of 25%, 50%, or 75% of
                  the amount of his initial payroll deduction, in which
                  event his election to purchase shall be reduced to the
                  number of shares that may be purchased, at the option
                  price described in Section 3.02(a), with the aggregate
                  amount of the payroll deductions (or periodic cash
                  payments) theretofore made and to be made thereafter;

         (b)      terminate further payroll deductions (or periodic cash
                  payments) and continue his election to purchase with
                  respect to the number of shares that may be purchased, at
                  the option price described in Section 3.02(a), with the
                  amount then credited to his Account; or

                                     5

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<PAGE>

         (c)      withdraw the entire amount in his Account and terminate
                  his election to purchase shares.

Any such reduction, termination or withdrawal shall be irrevocable.

SECTION 8.  TERMINATION OF EMPLOYMENT

         In the event that on or prior to the Exercise Date with respect to
an Offering Date, an employee leaves the employ of the Company or of a
Participating Subsidiary otherwise than by retirement under a plan of the
Company or such Participating Subsidiary, or is discharged for cause, any
election to purchase shares made by him with respect to that Offering Date
shall terminate and any amount then credited to his Account shall be paid in
cash to him. In the event that on or prior to the Exercise Date, an employee
leaves the employ of the Company in connection with the sale of a
subsidiary, division or line of business of the Company, the Company may, in
the discretion of the officer referred to in Section 14.01 hereof, terminate
the election of such employee to purchase shares (refunding any amount
credited to the employee's Account) or continue said election on any basis
deemed appropriate by said officer, including the making of arrangements for
continued payroll deductions by a successor employer willing to provide that
service.

SECTION 9.  RETIREMENT

         In the event an employee leaves the employ of the Company or of a
Participating Subsidiary by retirement under a plan of the Company or the
participating Subsidiary:

         (a)      at a time after an Offering Date but before payroll
                  deductions have commenced with respect to that Offering
                  Date, he shall not have the right to elect to purchase
                  shares of Stock under the option granted to him on that
                  Offering Date and such option shall be of no effect, or

         (b)      at a time after he has made an election to purchase shares
                  under an option granted to him and payroll deductions have
                  commenced with respect to that election, he may continue
                  his election to purchase shares by undertaking to make
                  periodic cash payments in amounts equal to the payroll
                  deductions previously authorized by him.

An employee, in lieu of making periodic payments under the circumstances
described in this Section 9, may elect to purchase (or continue his election
to purchase) shares by making a single lump-sum payment in cash in an amount
equal to the total of his future periodic payments. Such lump-sum payment
may be made either (i) within 30 days after the employee's employment
terminates, or (ii) in the case of an employee who has undertaken to make
periodic cash payments, at any time when he is not in default in such
payments.

SECTION 10.  LAYOFF, STRIKE OR AUTHORIZED LEAVE OF ABSENCE

         Payroll deductions for shares for which an election to purchase
with respect to an Offering Date has been made will be suspended during any
period of layoff, strike, or authorized

                                     6

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<PAGE>

leave of absence without pay of an employee and, in such case, if the
employee so elects, periodic payments for such shares may be made by him in
lieu thereof. If such an employee returns to active service prior to the
last payroll deduction period preceding the Offering Termination Date with
respect to that Offering Date, his payroll deductions will be resumed and,
if the employee did not make periodic cash payments during his period of
absence, he shall, by written notice within ten days after his return to
active service, elect to either:

         (a)      make up any deficiency in his Account resulting from
                  suspension of his payroll deductions by an immediate cash
                  payment; or

         (b)      not make up such deficiency, in which event the number of
                  shares to be purchased by him with respect to that
                  Offering Date shall be reduced to the number of whole
                  shares that may be purchased, at the option price
                  described in Section 3.02(a), with the amount then
                  credited to his Account plus the aggregate amount, if any,
                  of all payroll deductions with respect to that Offering
                  Date to be made thereafter.

         An employee on layoff, strike, or authorized leave of absence
without pay as of 15 days preceding such Offering Termination Date shall
give written notice prior to such Offering Termination Date specifying his
choice of one of the options described in (a) or (b) above. If such an
employee fails to give such notice, he shall be deemed to have elected the
option provided in (b). If the period of an employee's layoff, strike or
authorized leave of absence without pay shall terminate prior to such
Offering Termination Date and the employee shall not promptly resume active
employment, his election to purchase shares with respect to such Offering
Date shall terminate and the amount then credited to his Account shall be
paid in cash to him.

SECTION 11.  DEATH

         An employee may file a written designation of a beneficiary who is
to receive any shares and cash from the employee's Account under the Plan in
the event of such employee's death subsequent to an Exercise Date on which
the option is exercised but prior to delivery to such employee of such
shares and cash. In addition, an employee may file a written designation of
a beneficiary who is to receive any cash from the employee's Account under
the Plan in the event of such employee's death prior to exercise of the
option. If an employee is married and the designated beneficiary is not the
spouse, spousal consent shall be required for such designation to be
effective. Such designation of beneficiary may be changed by the employee at
any time by written notice. In the event of the death of an employee while
an election by him to purchase shares with respect to an Offering Date is in
effect, the legal representative or beneficiary of such employee may, within
90 days after his death but not later than the Offering Termination Date
with respect to such Offering Date, by written notice elect to either:

         (a)      make up any deficiency in such employee's Account and (i)
                  make periodic payments in cash for the remainder of the
                  period ending on such Offering Termination Date in the
                  amounts theretofore elected by the employee, or (ii) in
                  lieu of such future periodic payments, make an immediate
                  lump-sum payment in an amount equal to the total of such
                  periodic payments; or

                                     7

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         (b)      continue the employee's election to purchase with respect
                  to such number of shares as may be purchased, at the
                  option price described in Section 3.02(a), with the amount
                  then credited to the employee's Account, and make no
                  further payments; or

         (c)      withdraw the entire amount in the employee's Account and
                  terminate his election to purchase shares.

         In the event the legal representative or beneficiary of such an
employee shall fail to give notice within the prescribed period, the
employee's election to purchase shares shall terminate and the amount then
credited to the employee's Account shall be paid in cash to such legal
representative or beneficiary.

SECTION 12.  FAILURE TO MAKE PAYMENTS

         Under any of the circumstances contemplated by the Plan, where the
purchase of shares with respect to an Offering Date is to be made through
periodic or other cash payments in lieu of payroll deductions, the failure
to make any such payment shall reduce, to the extent of the amount unpaid,
the number of shares purchasable with respect to that Offering Date,
determined by the option price described in Section 3.02(a).

SECTION 13.  NONASSIGNABILITY

         No option granted under the Plan shall be transferable by the
employee otherwise than by will or the laws of descent and distribution.
Each option shall be exercisable, during his lifetime, only by the employee
to whom granted. Any purported assignment or transfer, whether voluntary or
by operation of law (other than by will or the laws of descent and
distribution) shall have the effect of terminating such option and the
related election to purchase shares thereunder.

SECTION 14.  ADMINISTRATION

         14.01. The Plan shall be administered by the Committee. The
Committee is authorized to interpret the Plan and from time to time to adopt
such rules and regulations, consistent with the provisions of the Plan, as
may be deemed advisable to carry out the Plan. The decision of the Committee
shall be final and binding for all purposes with respect to any question
arising under the Plan.

         14.02. Uniform policies shall be pursued in the administration of
the Plan, and there shall be no discrimination among employees or groups of
employees. The administration of the Plan shall include the authority, which
shall be exercised without discrimination, to make exceptions (available on
a uniform basis to all employees) to provisions of the Plan in the case of
unusual circumstances where strict adherence to such provisions would work
undue hardship. All eligible employees under the Plan shall have the same
rights and privileges under the Plan with respect to the number of shares
for which options may be granted as provided in Section 3.

         14.03. The Board shall have the right to amend, modify or terminate
the Plan at any time without notice; provided, that no amendment,
modification or termination may be made which

                                     8

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would impair the rights of the employee in any option theretofore granted
without the consent of such employee; and provided, further, that the Board
may not make any alteration or amendment to the Plan which would increase
the aggregate number of shares that may be issued under the Plan (other than
an increase pursuant to Section 5.02 of the Plan) or change the group from
among which Participating Subsidiaries may be designated. Without limitation
on the Board's or the Committee's authority, the Board (or the Committee)
shall be entitled to change the length of the period between the Offering
Date and the Offering Termination Date, limit the frequency and/or number of
changes in the amount withheld by an employee, permit payroll withholding in
excess of the amount designated by an employee in order to adjust for delays
or mistakes in the Company's processing of withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of shares of
Stock for each employee properly correspond with amounts withheld from the
employee's compensation, and establish such other limitations or procedures
as the Board (or Committee) determines in its sole discretion are advisable.

SECTION 15.  TERMINATION OF PLAN

         The period for payroll deductions or cash payments with respect to
any Offering Date may not be extended beyond the Offering Termination Date
for such Offering Date. If not sooner terminated by the Board, the Plan will
terminate following the delivery to employees, as soon as practicable after
the Exercise Date with respect to the last Offering Date, of stock
certificates for all shares purchased and the repayment to them of all funds
not used for the purchase of shares on that Exercise Date.

SECTION 16.  HOLIDAYS

         In the event any date specified in the Plan falls on other than a
business day of the Company at its principal office in Quincy, Illinois,
such date shall be deemed to refer to the next succeeding business day.

SECTION 17.  LIENS NOT AUTHORIZED

         There is no provision in the Plan, or in any contract in connection
therewith, whereby any person has or may create a lien on any funds,
securities or other property held under the Plan.

SECTION 18.  GOVERNING LAW

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

                                     9

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